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EXHIBIT B
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement dated as of February 9, 1999
(this "Agreement"), among Prairie Boy's Investments, Inc., a Florida corporation
(the "Buyer"), III Global Ltd., a Cayman Islands corporation ("III Global"), and
III Fund Ltd., a Cayman Islands corporation ("III Fund") (III Global and III
Fund being sometimes collectively referred to herein as the "Sellers"),
WHEREAS, III Fund is the record and beneficial owner of
7,286,926 shares of Common Stock, par value $.01 per share (the "Common Stock"),
of The Aegis Consumer Funding Group, Inc., a Delaware corporation (the
"Company");
WHEREAS, III Fund is the record and beneficial owner of 12
shares of Series C Preferred Stock, par value $.10 per share, of the Company
(the "Preferred Stock");
WHEREAS, III Global is the record and beneficial owner of
5,849,061 shares of the Common Stock and nine shares of the Preferred Stock;
WHEREAS, the Buyer desires to purchase all of such Common
Stock and an aggregate of 12 shares of the Preferred Stock (sometimes
collectively referred to herein as the "Securities")
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from the Sellers and III Fund and III Global, respectively, desire to sell to
the Buyer such Common Stock and Preferred Stock, on the terms and conditions
hereinafter set forth in this Agreement;
WHEREAS, as more fully hereinafter set forth, it is the
intention of the parties that, as a result of the transactions provided for
herein, Buyer shall become the beneficial owner of or have the right to acquire
(upon the conversion of the Preferred Stock) not less than an aggregate of 50.1%
of the outstanding Common Stock of the Company and that the sale and assignment
of Common Stock and Preferred Stock by the Sellers to the Buyer shall be without
any express or implied representation or warranty by either of the Sellers (with
regard to Aegis, its financial condition, financial statements, business,
assets, liabilities, prospects or any other matter) except as expressly
hereinafter set forth.
NOW THEREFORE, in consideration of the foregoing and other
good and valuable consideration, the receipt of which is acknowledged, it is
agreed as follows:
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ARTICLE I
SALE AND PURCHASE OF THE SECURITIES
Section 1.1 Sale and Purchase of the Securities. On the date
hereof:
(a) III Fund shall deliver to the Buyer (i) a certificate or
certificates representing an aggregate of 7,286,926 shares of Common Stock
accompanied by a duly executed stock power with signatures guaranteed
transferring and assigning such Common Stock to Buyer subject only to the lien
created by the Pledge Agreement (as such term is defined herein) and (ii) a
certificate representing an aggregate of seven shares of Preferred Stock
accompanied by a duly executed stock power with signatures guaranteed
transferring such Preferred Stock to the Buyer subject only to the lien created
by the Pledge Agreement.
(b) III Global shall deliver to the Buyer (i) a certificate or
certificates representing an aggregate of 5,849,061 shares of Common Stock
accompanied by a duly executed stock power with signatures guaranteed
transferring and assigning such Common Stock to Buyer subject only to the lien
created by the Pledge Agreement and (ii) a certificate representing an aggregate
of five shares of Preferred Stock accompanied by a duly executed stock power
with signatures guaranteed transferring such Preferred Stock to the Buyer
subject only to the lien created by the Pledge Agreement.
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(c) In payment of the purchase price for the Common Stock and
Preferred Stock, the Buyer shall deliver (i) to III Fund a duly executed
promissory note in the form attached hereto as Exhibit I in the principal amount
of $1,892,753.40 (a "Note"); (ii) to III Global a duly executed Note in the
principal amount of $1,496,376.60; and (iii) to III Fund and III Global a duly
executed Pledge Agreement in the form attached hereto as Exhibit II creating a
security interest in the Securities in favor of the Sellers to secure the
payment of the principal and interest on the Notes when due and payable in
accordance therewith and (iv) to the Sellers, certificates representing the
Securities accompanied by the stock power referred to in Section 1(a) of the
Pledge Agreement, to be held by Sellers pursuant to the terms of the Pledge
Agreement to secure the payment of principal and interest due and payable on the
Notes.
(d) The Sellers shall deliver to the Buyer and the Company a
duly executed copy of the form of Confirmation Agreement attached hereto as
Exhibit III pertaining to certain indebtedness owed by the Company to the
Sellers and their Affiliates and the liens securing such indebtedness.
Section 1.2 General. The parties acknowledge that:
(a) the Preferred Stock is convertible into Common Stock of
the Company; on the date hereof the 12 shares of Preferred Stock being sold,
transferred and assigned by the
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Sellers to the Buyer on the date hereof are convertible into an aggregate of
3,809,663 shares of Common Stock;
(b) it is intended by the parties that the aggregate number of
shares of Common Stock being sold, assigned and transferred to the Buyer on the
date hereof (the "Existing Shares") plus the number of shares of Common Stock
into which the Preferred Stock being sold, assigned and transferred to the Buyer
on the date hereof is convertible (the "Conversion Shares"), will equal that
number of shares of Common Stock of the Company equal to 50.1% (the "Required
Percentage") of the outstanding shares of Common Stock of the Company, after
giving effect to such conversion (the "Outstanding Common Stock") on the date
hereof;
(c) it is acknowledged that, prior to any conversion of the
Preferred Stock, the Buyer will be required to make the filings required by the
Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 0000 (xxx "XXX Xxx") and the
regulations thereunder, and delay conversion until the expiration of the waiting
period or periods therein provided. Provided that the Buyer shall have made, or
caused to be made, such HSR Act filing within 30 days of the date of this
Agreement and such waiting period shall have expired not later than 60 days
after the date of this Agreement (the "Expiration Date"), if on the Expiration
Date the sum of the Existing Shares plus the Conversion Shares divided by the
Outstanding Common Stock on the Expiration Date is less than the Required
Percentage, (i) the Sellers shall sell, transfer and
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assign to the Buyer that number of additional shares of Preferred Stock so that
upon conversion thereof the Buyers will have or be entitled to receive the
Required Percentage of the Outstanding Common Stock on the Expiration Date and
(ii) the Buyer shall execute and deliver to the Sellers such documents as may be
reasonably necessary to amend the Notes to increase the principal amount thereof
by an amount equal to $0.20 times the number of additional shares of Common
Stock into which such additional Preferred Stock shall then be convertible.
It is understood that on the date hereof III Fund owns of
record five shares of Preferred Stock and III Global owns of record four shares
of Preferred Stock which are not being sold, transferred and assigned to the
Buyer pursuant to Section 1.1. Nothing in this Section 1.2 shall obligate III
Fund or III Global to sell, assign and transfer to Buyer more than five and four
additional shares of Preferred Stock, respectively.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE SELLERS
Section 2.1 Representations and Warranties of III Global. As
an inducement to the Buyer to enter into this Agreement and to consummate the
transactions contemplated hereby, III Global represents and warrants to the
Buyer as follows:
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(a) Organization and Authority of III Global. III Global is a
corporation duly organized, validly existing and in good standing under the laws
of the Cayman Islands. III Global has full corporate power and authority to own
or lease and to operate and use its properties and to carry on its business as
now conducted.
III Global has full corporate power and authority to execute,
deliver and perform this Agreement and each of the Seller Ancillary Agreements.
This Agreement and each of the Seller Ancillary Agreements have been duly
authorized, executed and delivered by III Global and is the legal, valid and
binding obligation of III Global enforceable in accordance with its terms,
except as enforceability may be limited by applicable bankruptcy, insolvency,
moratorium or other laws affecting the rights of creditors generally and by
general principles of equity.
Neither the execution and delivery by III Global of this
Agreement or the Seller Ancillary Agreements or the consummation by III Global
of any of the transactions contemplated hereby or thereby nor compliance with or
fulfillment of the terms, conditions and provisions hereof or thereof will:
(A) conflict with, result in a breach of the terms, conditions
or provisions of, or constitute a default, an event of default or an
event creating rights of
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acceleration, termination or cancellation or a loss of rights under, or
result in the creation or imposition of any Encumbrance upon any of the
assets or properties of III Global under (1) its memorandum or articles
of association or by-laws, (2) any note, instrument, agreement,
mortgage, lease, license, franchise, permit or other authorization,
right, restriction or obligation to which is a party or any of the
assets or properties of III Global is subject or by which III Global is
bound, (3) any Court Order to which III Global is a party or any of the
assets or properties of III Global is subject or by which III Global is
bound, or (4) any Requirements of Laws affecting III Global or its
assets or properties; provided that no representation or warranty is
made in this clause (A) with respect to any matter concerning III
Global that individually could not reasonably be expected to have a
Material Adverse Effect with respect to III Global; or
(B) require the approval, consent, authorization or act of, or
the making by III Global of any declaration, filing or registration
with, any Person.
(b) III Global is the record and beneficial owner of 5,849,061
shares of Common Stock and nine shares of Preferred Stock. All of such Common
Stock and Preferred Stock is validly issued, fully paid and nonassessable and
was not issued in violation of any preemptive or similar rights. All of such
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shares are owned by III Global free from all Encumbrances of any kind except for
Permitted Encumbrances.
(c) No Finder. Neither III Global nor any Person acting on its
behalf has paid or become obligated to pay any fee or commission to any broker,
finder or intermediary for or on account of the transactions contemplated by
this Agreement.
(d) Litigation. There is no action, suit or proceeding
pending, or, to the knowledge of III Global, threatened which questions the
legality or propriety of the transactions contemplated by this Agreement.
(e) Distribution. Since June 30, 1998, no dividends or other
cash distributions have been paid or made with respect to the equity securities
of the Company and the Company has not paid any amounts to its officers or
employees other than regular salaries and employee benefits payable in the
ordinary course of the Company's business.
Section 2.2 Representations and Warranties of III Fund. As an
inducement to the Buyer to enter into this Agreement and to consummate the
transactions contemplated hereby, III Fund represents and warrants to the Buyer
as follows:
(a) Organization and Authority of III Fund. III Fund is a
corporation duly organized, validly existing and in good
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standing under the laws of the Cayman Islands. III Fund has full corporate power
and authority to own or lease and to operate and use its properties and to carry
on its business as now conducted.
III Fund has full corporate power and authority to execute,
deliver and perform this Agreement and each of the Seller Ancillary Agreements.
This Agreement and each of the Seller Ancillary Agreements have been duly
authorized, executed and delivered by III Fund and is the legal, valid and
binding obligation of III Fund enforceable in accordance with its terms, except
as enforceability may be limited by applicable bankruptcy, insolvency,
moratorium or other laws affecting the rights of creditors generally and by
general principles of equity.
Neither the execution and delivery by III Fund of this
Agreement or the Seller Ancillary Agreements or the consummation by III Fund of
any of the transactions contemplated hereby or thereby nor compliance with or
fulfillment of the terms, conditions and provisions hereof or thereof will:
(A) conflict with, result in a breach of the terms, conditions
or provisions of, or constitute a default, an event of default or an
event creating rights of acceleration, termination or cancellation or a
loss of rights under, or result in the creation or imposition of any
Encumbrance upon any of the assets or properties of III Fund under (1)
its memorandum or articles of association or by-laws, (2)
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any note, instrument, agreement, mortgage, lease, license, franchise,
permit or other authorization, right, restriction or obligation to
which III Fund is a party or any of the respective assets or properties
of III Fund is subject or by which III Fund is bound, (3) any Court
Order to which III Fund is a party or any of the assets or properties
of III Fund is subject or by which III Fund is bound, or (4) any
Requirements of Laws affecting III Fund or its assets or properties;
provided that no representation or warranty is made in this clause (A)
with respect to any matter concerning III Fund that individually could
not reasonably be expected to have a Material Adverse Effect with
respect to III Fund; or
(B) require the approval, consent, authorization or act of, or
the making by III Fund of any declaration, filing or registration with,
any Person.
(b) III Fund is the record and beneficial owner of 7,286,926
shares of Common Stock and 12 shares of Preferred Stock. All of such Common and
Preferred Stock is validly issued, fully paid and nonassessable and was not
issued in violation of any preemptive or similar rights. All of such shares are
owned by III Fund free from all Encumbrances of any kind except for Permitted
Encumbrances.
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(c) No Finder. Neither III Fund nor any Person acting on its
behalf has paid or become obligated to pay any fee or commission to any broker,
finder or intermediary for or on account of the transactions contemplated by
this Agreement.
(d) Litigation. There is no action, suit or proceeding
pending, or, to the knowledge of III Fund, threatened which questions the
legality or propriety of the transactions contemplated by this Agreement.
(e) Distributions and Payments. Since June 30, 1998, no
dividends or other cash distributions have been paid or made with respect to the
equity securities of the Company and the Company has not paid any amounts to its
officers or employees other than regular salaries and employee benefits payable
in the ordinary course of the Company's business.
Section 2.3 No Other Representations and Warranties of
Sellers. The Buyer acknowledges and agrees that, except as expressly set forth
in Sections 2.1 and 2.2 of this Agreement, neither of the Sellers has made or is
making any representation or warranty, express or implied, oral or written, with
respect to the Common Stock, the Preferred Stock, the Company, the Company's
business and prospects, the Company's past or present financial condition, any
of the Company's financial statements, assets, liabilities (fixed or
contingent), its past or present compliance or failure to comply with applicable
laws and regulations, the
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status of its relationship with third parties, including, without limitation,
parties to contracts or agreements to which the Company is a party or by which
it is bound, employees, federal, state or local regulatory agencies, or any
other matter or matters with respect to the Company or which have affected or
may effect its operations, results of operations, continuing viability or
ability to conduct business. The Securities being sold to the Buyer hereunder
are sold, except as stated in the preceding sentence, "as is" and "where is."
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE BUYER
As an inducement to the Sellers to enter into this Agreement
and to consummate the transactions contemplated hereby, the Buyer hereby
represents and warrants to each of the Sellers and agrees as follows:
Section 3.1 Organization of the Buyer. The Buyer is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Florida and has full corporate power and authority to own or
lease and to operate and use its properties and assets and to carry on its
business as now conducted.
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Section 3.2 Authority of the Buyer. The Buyer has full power
and authority to execute, deliver and perform this Agreement and the Buyer
Ancillary Agreements. The execution, delivery and performance of this Agreement
and the Buyer Ancillary Agreements by the Buyer have been duly authorized and
approved by Buyer's Board of Directors. This Agreement, and the Buyer Ancillary
Agreements, have each been duly authorized, executed and delivered by the Buyer
and is the legal, valid and binding agreement of the Buyer enforceable in
accordance with its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, moratorium or other laws affecting the rights of
creditors generally and by general principles of equity.
Neither the execution and delivery of this Agreement or the
Buyer Ancillary Agreements or the consummation of any of the transactions
contemplated hereby or thereby nor compliance with or fulfillment of the terms,
conditions and provisions hereof or thereof will:
(i) conflict with, result in a breach of the terms, conditions
or provisions of, or constitute a default, an event of default or an
event creating rights of acceleration, termination or cancellation or a
loss of rights under (1) the articles of incorporation or by-laws of
the Buyer, (2) any material note, instrument, agreement, mortgage,
lease, license, franchise, permit or other authorization,
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right, restriction or obligation to which the Buyer is a party or any
of its properties is subject or by which the Buyer is bound, (3) any
Court Order to which the Buyer is a party or by which it is bound or
(4) any Requirements of Laws affecting the Buyer; or
(ii) require the approval, consent, authorization or act of,
or the making by the Buyer of any declaration, filing or registration
with, any Person.
Section 3.3 No Finder. Neither the Buyer nor any Person acting
on its behalf has paid or become obligated to pay any fee or commission to any
broker, finder or intermediary for or on account of the transactions
contemplated by this Agreement.
Section 3.4 Investment Representations. The Buyer (a) is
acquiring the Securities for its own account for investment, and not with a view
to resale or distribution, in whole or in part, in violation of the Securities
Act of 1933, as amended (the "Act"); (b) is not acquiring the Securities
pursuant to any pre-existing agreement, plan or intention to purchase the
Securities and neither the Buyer nor its Affiliates nor any Person acting on its
or their behalf entered into any option, short position, equity swap or other
similar instrument or position with respect to any of the Securities; (c)
acknowledges and agrees that the Securities have not been registered under the
Act and may be resold only (i) pursuant to an effective Registration Statement
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under the Act and any applicable state securities laws ("State Acts"), (ii)
pursuant to an exemption from registration under the Act and any applicable
State Acts or (iii) in accordance with Rule 903 or/and 904 of Regulation S under
the Act; (d) understands that the Securities are being transferred to it in
reliance on specific exemptions from the registration requirements of the United
States federal and state securities laws and that the Sellers are relying upon
the truth and accuracy of, and the Buyer's compliance with, the representations,
warranties, agreements, acknowledgments, and understandings set forth in this
Section 3.4 in order to determine the availability of such exemptions and the
eligibility of the Buyer to acquire the Securities; (e) will not make any sale,
transfer or other disposition of the Securities in violation of the Act, the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), any State
Acts, or the rules and regulations of the SEC or any state securities
commission, promulgated under any of the foregoing, and that its purchase of the
Securities does not violate the Act, the Exchange Act, any State Acts, or the
rules and regulations of the SEC or any state securities commission promulgated
thereunder, and that all offers or sales of the Securities will be made in
compliance with the foregoing or in accordance with the provisions of Rules 903
or/and 904 of Regulation S; (f) has relied solely upon an independent
investigation of the Company, its business, assets, liabilities and condition
made by it and its representatives and has, prior to the date hereof, been given
access to and the opportunity to
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examine all books and records of the Company, and all material contracts and
documents of the Company; (g) in making its investment decision to purchase the
Securities, is not relying on any oral or written representations, warranties or
assurances from the Sellers (other than as expressly set forth herein) or any
other Person or any representation by the Company; (h) has such experience in
business and financial matters that it is capable of evaluating the risk of its
investment in the Company and determining the suitability of its investment; (i)
is an accredited investor as defined in Rule 501 of Regulation D under the Act;
and (j) understands and acknowledges that an investment in the Securities
involves a high degree of risk. The Buyer further acknowledges (A) that there
are limitations on the liquidity of the Securities and there is no public market
for the Preferred Stock; and (B) that the Buyer is able to bear the economic
risk of an investment in the Securities, including a possible total loss of such
investment.
Section 3.5 Litigation. There is no action, suit or proceeding
pending, or, to the knowledge of the Buyer, threatened which questions the
legality or propriety of the transactions contemplated by this Agreement.
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ARTICLE IV
ADDITIONAL AGREEMENTS
Section 4.1 Release of Sellers and Affiliates; Insurance. (a)
The Buyer hereby releases each of (a) the Sellers and III Finance, III
Associates, III Offshore Advisors, Xxxxx River Capital Corp. and their
respective Affiliates, stockholders, partners, directors, officers, employees
and agents and (b) each of the current directors, officers and employees of the
Company (collectively, the "Released Parties"), from and against any debt,
liability, obligation, cause of action, claim, damage, cost, Loss or Expense
which (x) the Company may have, or be owed or have incurred or (y) the Buyer may
have, or be owed or have incurred or be entitled to as a stockholder of the
Company (whether in its own right or derivatively on behalf of the Company) in
either case arising out of any act or action authorized by this Agreement or any
act, failure to act or breach of duty by the Released Parties or any of them
with regard to the Company or its subsidiaries at any time or prior to the date
hereof (including, without limitation, the sale of the SST Shares by the Company
to AVM and III Associates pursuant to the SST Stock Purchase Agreement and the
expiration of the Repurchase Option), provided that nothing herein shall release
any of the Released Parties with respect to any breach by any of them of the
obligations set forth in this Agreement or any of the Seller Ancillary
Agreements or with regard to any other acts or events
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occurring after the date hereof (other than acts authorized by this Agreement).
(b) The Buyer shall use its best efforts to cause the Company
to maintain continuously in effect, for six years after the date hereof,
directors' and officers' liability insurance covering those persons currently
covered by the Company's policy for acts or omissions occurring at or prior to
the date hereof on terms no less favorable than current coverages. The Buyer
shall use its best efforts to cause the Company to pay any deductible specified
by such insurance. The Buyer shall also use its best efforts to cause the
Company to indemnify and hold harmless (and advance expenses to) all past and
current directors, officers and employees of the Company and of its
subsidiaries, for claims made within six years after the date hereof arising out
of acts or omissions occurring at or prior to the date hereof, to the same
extent such persons are currently indemnified by the Company pursuant to the
Company's Amended and Restated Certificate of Incorporation, its By-laws and/or
applicable Delaware law.
Section 4.2 Rights Under Existing Loan Agreements. Nothing in
this Agreement or any of the Seller Ancillary Agreements shall be deemed to bar
any investment fund (including, but not limited to, III Finance) advised or
managed by III Associates, III Offshore Advisors or their respective Affiliates
(or bar III Associates, AVM or III Offshore Advisors as agent of any such fund)
from exercising any right or taking or refraining
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from taking any action as lender or otherwise pursuant to the Existing Loan
Agreements (including, without limitation, the foreclosure of any lien or any
security interest or the right to accelerate any loan or loans to the Company
outstanding under any such Existing Loan Agreements or the exercise of any other
right which may arise upon the occurrence or continuance of an event of default
thereunder) or otherwise or subject either of the Sellers or their respective
Affiliates to any liability to the Company or the Buyer in the event of the
exercise of any such right or taking or refraining from taking any such action.
(b) The Buyer acknowledges and agrees that, except as provided
in the last sentence of this clause (b), the Sellers and their Affiliates shall
not be required, after the date hereof, to make any further advances to the
Company under any of the Existing Loan Agreements or under or by reason of any
other written or oral arrangement or course of conduct. The Buyer represents to
Sellers that it has obtained or will obtain financing for the Company adequate
to permit the Company to continue its present level of operations for at least
12 months. It is contemplated that III Finance shall continue, for a period not
to exceed 30 days from the date hereof, to fund the acquisition of automobile
finance receivables by Aegis pursuant to the terms of the Loan Warehouse
Agreement (as such term is defined in the Confirmation Agreement); provided that
(i) the underwriting and other credit quality standards applied during such 30
day period shall be the same as those being applied on
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the date hereof and, in any event, shall be reasonably satisfactory to III
Finance and (ii) the receivables generated with the proceeds of such financing
shall be subject to the lien created by the Loan Warehouse Agreement in favor of
III Finance.
Section 4.3 Repurchase Options. The Buyer acknowledges that
the Repurchase Options, as amended, have expired by their terms and the Company
has no financial or equity interest in SST or right to acquire SST or any of
SST's outstanding securities or assets.
Section 4.4 No Changes in Company Capitalization. (a) The
Buyer agrees that unless and until all amounts of principal and interest due and
payable with respect to the Notes have been paid in full, it shall not permit
the Company or any of its subsidiaries to issue (i) any equity securities (other
than upon the conversion of preferred shares of the Company outstanding on the
date hereof) except at a cash price (net of all related expenses) of not less
than $.20 per share, or (ii) any debt or equity securities, or options, warrants
or similar rights, which are convertible into, or exchangeable for, or permit
the holder thereof to acquire, any equity securities of the Company or any of
its subsidiaries unless the Company shall be entitled to receive upon such
conversion, exchange or acquisition a cash price (net of all related expenses)
of not less than $.20 per share.
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(b) The Buyer further agrees that, unless and until all
amounts of principal and interest due and payable with respect to the Notes have
been paid in full, it shall not sell short any of the Securities or sell or
purchase any put or call with respect thereto.
(c) The Buyer agrees that the full amount of any cash
dividends received by it from Aegis with respect to the Securities shall be
promptly paid to Sellers, pro rata, in repayment of (i) first, any accrued but
unpaid interest on the Notes, and (ii) the balance, if any, any unpaid principal
amount of the Notes.
ARTICLE V
DEFINITIONS
5.1. Definitions. In this Agreement, the following terms have
the meanings specified or referred to in this Section 5.1 and shall be equally
applicable to both the singular and plural forms.
"AFFILIATE" means, with respect to any Person, any other
Person which directly or indirectly controls, is controlled by or is under
common control with such Person; provided that the Company shall not be deemed
an Affiliate of Seller.
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"AVM" means Xxxxx, Xxxxx & Mosler, Ltd., a limited partnership
organized under the law of Illinois.
"BUYER" has the meaning specified in the first paragraph of
this Agreement.
"BUYER ANCILLARY AGREEMENTS" means the Notes, the Pledge
Agreement and all other agreements, instruments and documents being or to be
executed and delivered the Buyer under this Agreement or in connection herewith.
"COMPANY" has the meaning specified in the second paragraph of
this Agreement.
"CONFIRMATION AGREEMENT" means the form of agreements attached
have to as Exhibit III.
"CONVERSION SHARES" has the meaning set forth in Section
1.2(b)
"COURT ORDER" means any judgment, order, award or decree of
any foreign, federal, state, local or other court or tribunal and any award in
any arbitration proceeding.
"ENCUMBRANCE" means any lien (statutory or other), claim,
charge, security interest, mortgage, deed of trust, pledge, hypothecation,
assignment, conditional sale or other
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title retention agreements, preference, priority or other security agreements or
preferential arrangement of any kind or nature, and any easement, encroachment,
covenant, restriction, right of way, defect in title or other encumbrance of any
kind.
"EXCHANGE ACT" has the meaning specified in Section 3.4.
"EXISTING LOAN AGREEMENTS" means the following agreements:
Loan and Security Agreement dated March 14, 1997 between Aegis Consumer Finance,
Inc., Aegis Acceptance Corp. and III Finance Ltd., as amended, the Amended and
Restated Master Loan Agreement dated April 30, 1997 among Aegis Auto Finance,
Inc., Aegis Consumer Finance, Inc. and III Finance Ltd., as amended, and the
Loan and Security Agreement dated as of March 14, 1997 between Aegis Auto
Finance, Inc. and III Finance Ltd., as amended.
"EXISTING SHARES" has the meaning set forth in Section 1.2(b).
"EXPENSES" means any and all expenses incurred by the Buyer,
the Company or any of their respective Affiliates in connection with
investigating, defending or asserting any claim, action, suit or proceeding
incident to any matter indemnified against hereunder by the Buyer (including
court filing fees, court costs, arbitration fees or costs, witness fees, and
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reasonable fees and disbursements of legal counsel, investigators, expert
witnesses, consultants, accountants and other professionals).
"GOVERNMENTAL BODY" means any foreign, federal, state, local
or other governmental authority or regulatory body.
"HSR ACT" has the meaning specified in Section 1.2(c).
"LOSSES" means any and all losses, costs, obligations,
liabilities, settlement payments, awards, judgments, fines, penalties, damages,
expenses, deficiencies or other charges.
"MATERIAL ADVERSE EFFECT" means any condition, circumstance,
change or effect (or any development that, insofar as can be reasonably
foreseen, would result in any condition, circumstance, change or effect) that is
materially adverse to the assets, business, financial condition, or results of
operations of the Company, Sellers or the Buyer, as applicable.
"OUTSTANDING COMMON STOCK" has the meaning set forth in
Section 1.2(b).
"PERMITTED ENCUMBRANCES" means liens for taxes and other
governmental charges and assessments arising in the ordinary course of business
which are not yet due and payable.
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"PERSON" means any individual, corporation, partnership, joint
venture, limited liability company, association, joint-stock company, trust,
unincorporated organization or Governmental Body.
"REPURCHASE OPTIONS" means the options to repurchase SST
Shares provided in Section 7.8 of the SST Stock Purchase Agreement.
"RELEASED PARTIES" has the meaning specified in Section 4.2.
"REQUIREMENTS OF LAWS" means any foreign, federal, state and
local laws, statutes, regulations, rules, codes or ordinances enacted, adopted,
issued or promulgated by any Governmental Body (including those pertaining to
electrical, building, zoning, subdivision, land use, environmental and
occupational safety and health requirements) or common law.
"REQUIRED PERCENTAGE" means 50.1% with reference to the
Outstanding Common Stock.
"SECURED LOANS" means the indebtedness of the Company issued
under or pursuant to the Existing Loan Agreements and secured by, among other
things, a lien upon the SST Shares.
"SEC" means the Securities and Exchange Commission or any
successor agency.
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"SECURITIES" has the meaning specified in the preambles to
this Agreement.
"SELLERS" has the meaning specified in the first paragraph of
this Agreement.
"SELLERS ANCILLARY AGREEMENTS" means the Pledge Agreement, the
Confirmation Agreement, and all other agreements, instruments and documents
being or to be executed and delivered by the Sellers under this Agreement or in
connection herewith.
"SST" means Systems & Services Technologies, Inc., a Delaware
corporation.
"SST SHARES" means the Common Stock of SST owned on the date
hereof by AVM and III Associates, which was subject to the Repurchase Options.
"SST STOCK PURCHASE AGREEMENT" means the Stock Purchase
Agreement dated as of January 28, 1998 among the Company, AVM and III
Associates.
"STATE ACTS" has the meaning specified in Section 3.4.
"III ASSOCIATES" means III Associates, a general partnership
organized under the laws of Nevada.
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"III FINANCE" means III Finance Ltd., a Cayman Islands
corporation.
"III FUND" has the meaning set forth in the first paragraph of
this Agreement.
"III GLOBAL" has the meaning set forth in the first paragraph
of this Agreement.
"III OFFSHORE ADVISORS" means III Offshore Advisors, a Nevada
general partnership.
5.2. Interpretation. As used in this Agreement, the word
"including" means without limitation, the word "or" is not exclusive and the
words "herein", "hereof", "hereby", "hereto" and "hereunder" refer to this
Agreement as a whole. Unless the context otherwise requires, references herein:
(i) to Articles, Sections and Exhibits mean the Articles and Sections of and the
Exhibits attached to this Agreement; (ii) to an agreements, instrument or other
document means such agreements, instrument or other document as amended,
supplemented and modified from time to time to the extent permitted by the
provisions thereof and by this Agreement; and (iii) to a statute means such
statute as amended from time to time and includes any successor legislation
thereto. The Exhibits referred to herein shall be construed with and as an
integral part of this Agreement to the same extent as if they were set forth
verbatim herein. Titles to Articles and headings of Sections are inserted for
convenience of reference
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only and shall not be deemed a part of or to affect the meaning or
interpretation of this Agreement. References herein to the knowledge of a party
or matters or information known to a party mean the actual knowledge of the
officers of such party.
ARTICLE VI
GENERAL PROVISIONS
Section 6.1 Notices. All notices or other communications
required or permitted hereunder shall be in writing and shall be deemed given or
delivered (i) when delivered personally, (ii) if transmitted by facsimile when
confirmation of transmission is received, or (iii) if sent by registered or
certified mail, return receipt requested, or by private courier when received;
and shall be addressed as follows:
If to Buyer, to:
Prairie Boy's Investments, Inc.
0000 Xxxxxxxx Xxxx
Xxxxx, Xxxxxxx 00000
Facsimile No.:
Attention:
with a copy to:
Xxxxx, Xxxxx & Kiefner
City Center, North Tower
000 Xxxxxx Xxxxxx Xxxxx
Xxxxx 000
Xx. Xxxxxxxxxx, Xxxxxxx 00000-0000
Facsimile No.: 000-000-0000
Attention: Xxxxxxxx Xxxx, Esq.
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If to Sellers, to:
III Global Ltd.
III Fund Ltd.
c/o III Offshore Advisors
000 Xxxxxxxxxx Xxxxxx Xxxxx
Xxxx Xxxx Xxxxx, Xxxxxxx 00000
Facsimile No.:
Attention: Xxxxxx Xxxxxx
with a copy to:
Sidley & Austin
Xxx Xxxxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Facsimile No.: (000) 000-0000
Attention: Xxxxxxx Xxxx, Esq.
or to such other address as such party may indicate by a notice delivered to the
other party hereto.
Section 6.2 Successors and Assigns. (a) The rights of any
party under this Agreement shall not be assignable by such party without the
written consent of the other parties.
(b) This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their successors and permitted assigns. The
successors and permitted assigns hereunder shall include, without limitation, in
the case of Buyer, any permitted assignee as well as the successors in interest
to such permitted assignee (whether by merger, liquidation (including successive
mergers or liquidations) or otherwise). Nothing in this Agreement, expressed or
implied, is intended or shall be construed to confer upon any Person other than
the parties and
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31
successors and assigns permitted by this Section 6.2 any right, remedy or claim
under or by reason of this Agreement.
Section 6.3 Entire Agreement; Amendments. This Agreement and
the Exhibits referred to herein and the documents delivered pursuant hereto
contain the entire understanding of the parties hereto with regard to the
subject matter contained herein or therein, and supersede all prior agreements,
understandings or letters of intent between or among any of the parties hereto.
This Agreement shall not be amended, modified or supplemented except by a
written instrument signed by an authorized representative of each of the parties
hereto.
Section 6.4 Waivers. Any term or provision of this Agreement
may be waived, or the time for its performance may be extended, by the party or
parties entitled to the benefit thereof. Any such waiver shall be validly and
sufficiently given for the purposes of this Agreement if, as to any party, it is
in writing signed by an authorized representative of such party. The failure of
any party hereto to enforce at any time any provision of this Agreement shall
not be construed to be a waiver of such provision, nor in any way to affect the
validity of this Agreement or any part hereof or the right of any party
thereafter to enforce each and every such provision. No waiver of any breach of
this Agreement shall be held to constitute a waiver of any other or subsequent
breach.
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32
Section 6.5 Survival of Representations and Warranties. The
representations and warranties included herein shall survive the consummation of
the purchase and sale of the Securities hereunder.
Section 6.6 Partial Invalidity. Wherever possible, each
provision hereof shall be interpreted in such manner as to be effective and
valid under applicable law, but in case any one or more of the provisions
contained herein shall, for any reason, be held to be invalid, illegal or
unenforceable in any respect, such provision shall be ineffective to the extent,
but only to the extent, of such invalidity, illegality or unenforceability
without invalidating the remainder of such provision or provisions or any other
provisions hereof, unless such a construction would be unreasonable.
Section 6.7 Execution in Counterparts. This Agreement may be
executed in two or more counterparts, each of which shall be considered an
original instrument, but all of which shall be considered one and the same
agreements, and shall become binding when one or more counterparts have been
signed by each of the parties hereto and delivered to each of Seller and Buyers.
Section 6.8 Governing Law. This Agreement shall be governed by
and construed in accordance with the internal laws (as opposed to the conflicts
of law provisions) of the State of Florida.
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33
Section 6.9 Submission to Jurisdiction. Sellers and Buyer
hereby irrevocably submit in any suit, action or proceeding arising out of or
related to this Agreement or any of the transactions contemplated hereby to the
non-exclusive jurisdiction of the United States District Court for the Middle
District of Florida (Tampa Division) and the jurisdiction of any court of the
State of Florida located in Pinellas County and waive any and all objections to
jurisdiction that they may have and any claim or objection that any such court
is an inconvenient forum.
Each party consents to service of process upon it with respect
to any such action or proceeding by registered mail, return receipt requested,
and by any other means permitted by applicable laws and rules.
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed the day and year first above written.
III GLOBAL LTD.
By: /s/ Xxxx X. Xxxxxxxx
----------------------------
Name: Xxxx X. Xxxxxxxx
Title: Director
III FUND LTD.
/s/ Xxxx X. Xxxxxxxx
----------------------------
By: Name: Xxxx X. Xxxxxxxx
Title: Director
PRAIRIE BOY'S INVESTMENTS, INC.
By: /s/ Xxxxxx Xxxxxx
----------------------------
Name: Xxxxxx Xxxxxx
Title: Agent
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EXHIBIT I
PROMISSORY NOTE
THIS PROMISSORY NOTE HAS NOT AND WILL NOT
BE REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT")
OR ANY APPLICABLE STATE SECURITIES LAWS
AND CANNOT BE SOLD, ASSIGNED OR
TRANSFERRED UNLESS IT IS REGISTERED UNDER
THE SECURITIES ACT AND APPLICABLE STATE
SECURITIES LAWS OR PURSUANT TO A
TRANSACTION EXEMPT FROM SUCH REGISTRATION
REQUIREMENTS.
February 9, 1999 $_______
For value received, subject to Section 4(b)(iii) hereof Prairie Boy's
Investments, Inc., a Florida corporation (the "Company"), hereby promises to pay
to the order of [III Global Ltd., a Cayman Islands corporation] [III Fund Ltd.,
a Cayman Islands corporation] ("Payee"), or permitted registered assigns, the
principal amount of ____________ ($________), together with interest thereon
calculated in accordance with the provisions of this Note.
This Note is issued pursuant to the Stock Purchase Agreement, dated as
of February 9, 1999, among the Company, _________, and Payee (the "Purchase
Agreement") and secured by the Collateral pledged and assigned under the Pledge
Agreement, dated February 9, 1999, between the Company, ___________ and Payee
(the "Pledge Agreement"). This Note and the holder hereof are entitled to all
the benefits provided thereby or referred to therein. Any defined terms used
herein and not defined herein shall have the same meanings as such terms have in
the Purchase Agreement.
1. Rate of Interest; Payment. Interest (computed on the basis of a
360-day year and the actual number of days elapsed) shall accrue from and after
the Maturity Date (as hereinafter defined) at the rate of six percent (6%) per
annum on the unpaid principal amount of this Note outstanding from time to time
on and after such date. No interest shall be payable hereunder with respect to
the period from the date hereof to the Maturity Date. Thereafter interest shall
be paid by the Company to Payee on the first day of each month while any
principal remains outstanding under this Note.
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36
Interest shall accrue (unless prohibited under applicable law) on
any interest which has not been paid on the date on which it is payable (at the
same rate at which interest is then accruing on the principal amount of this
Note), until such time as payment therefor is actually made to the holder of
this Note. Any accrued interest which has not theretofore been paid shall be
paid in full on the date on which all remaining principal on this Note is paid.
2. Payment of Principal.
(a) Scheduled Payment. Unless earlier paid, the principal of this
Note shall be due and payable on February 10, 2000 (the "Maturity Date").
(b) Prepayments.
(i) The Company may prepay without penalty all or a portion of the
outstanding principal amount of this Note and shall prepay such principal amount
to the extent required by Section 4.4(c) of the Purchase Agreement.
(ii) The Company shall send written notice of its election to make a
prepayment on this Note to the holder of this Note by registered or certified
mail, return receipt requested, at least fifteen (15) Business Days prior to the
date of prepayment. Such notice shall state the amount and the date of the
prepayment. On or before the date of prepayment, the Company shall deliver to
the holder of this Note the full amount which the Company intends to prepay plus
interest accrued, if any, on the outstanding principal amount of this Note
through the date of prepayment specified in the Company's notice.
(c) Time of Payment. If any payment of principal or interest on this
Note shall become due on a Saturday, Sunday, or legal holiday under the laws of
the State of Florida, such payment shall be made on the next succeeding Business
Day and such extension of time shall in such case be included in computing
interest in connection with such payment.
3. Form of Payments. Any payment to be made hereunder shall be made
by wire transfer of immediately available federal funds to any account
designated by the holder (or by any other manner reasonably designated by the
holder).
4. Default.
(a) Events of Default. An Event of Default shall mean the occurrence
of one or more of the following described events:
(i) the Company shall default in the payment of principal of or
interest on this Note when due, whether at maturity, by acceleration or
otherwise; or
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(ii) the Company shall default in the performance of any other
covenant, condition or provision of this Note, the Purchase Agreement or the
Pledge Agreement and such default shall continue for 30 days after notice
thereof to the Company from the holder of this Note; or
(iii) a proceeding shall have been instituted in a court having
jurisdiction seeking a decree or order for relief in respect of the Company in
an involuntary case under any applicable bankruptcy, insolvency or other similar
law now or hereafter in effect, or for the appointment of a receiver,
liquidator, assignee, custodian, trustee, sequestrator (or similar official) of
the Company or for any substantial part of its property, or for the winding-up
or liquidation of its affairs, and such proceeding shall remain undismissed or
unstayed and in effect for a period of 90 consecutive days or such court shall
enter a decree or order granting the relief sought in such proceeding; or
(iv) the Company shall commence a voluntary case under any applicable
bankruptcy, insolvency or other similar law now or hereafter in effect, shall
consent to the entry of an order for relief in an involuntary case under any
such law, or shall consent to the appointment of or taking possession by a
receiver, liquidator, assignee, trustee, custodian, sequestrator (or other
similar official) of the Company or for any substantial part of its property, or
shall make a general assignment for the benefit of creditors, or shall fail
generally to pay its debts as they become due, or shall take any corporate
action in furtherance of any of the foregoing; or
(v) the acceleration of the due date of indebtedness under any other
obligation of the Company or any subsidiary of the Company when such accelerated
indebtedness in the aggregate exceeds $1 million.
(b) Consequences of Event of Default.
(i) Bankruptcy. If an Event of Default specified in paragraphs (iii) or
(iv) of Section 4(a) shall occur, then the unpaid balance of this Note and
interest accrued thereon shall be immediately due and payable, without
presentment, demand, protest or notice of any kind, all of which are hereby
expressly waived.
(ii) Other Defaults. If any other Event of Default shall occur and be
continuing, then the holder of this Note may at its option declare the entire
unpaid balance of the Note and interest accrued thereon to be forthwith due and
payable, and the same shall thereupon become immediately due and payable,
without presentment, demand, protest or notice of any kind, all of which are
hereby expressly waived, provided that promptly after such declaration, the
holder of this Note shall provide the Company with written notice of such
declaration.
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38
(iii) Upon any such Event of Default and acceleration, the holders of
this Note shall be entitled to recover the principal and interest due on this
Note only from the Collateral and the proceeds thereof in accordance with the
Pledge Agreement. Without limiting the generality of the foregoing, the holder
of this Note shall have no recourse to or against the Company or its assets and
property (other than the Collateral) with regard to any amounts due and payable
under this Note.
5. Amendment and Waiver. Except as otherwise expressly provided herein,
the provisions of this Note may be amended and the Company may take any action
herein prohibited, or omit to perform any act herein required to be performed by
it, only if the Company has obtained the written consent of the holder of this
Note.
6. Cancellation. After all principal of and accrued interest at any
time owed on this Note has been paid in full, this Note shall be surrendered to
the Company for cancellation and will not be reissued.
7. Notices. Any notices or other communications required or permitted
hereunder shall be sufficiently given if in writing and delivered personally or
sent by telecopier, Federal Express, or registered or certified mail, postage
prepaid, addressed as follows:
If to the Payee, to
it at: c/o III Offshore Advisors
000 Xxxxxxxxxx Xxxxxx Xxxxx
Xxxx Xxxx Xxxxx, Xxxxxxx 00000
Attention: Xx. Xxxxxx Xxxxxx
with copies to: Sidley & Austin
Xxx Xxxxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx Xxxx, Esq.
If to the Company, to: Prairie Boy's Investments, Inc.
0000 Xxxxxxxx Xxxx
Xxxxx, Xxxxxxx 00000
Attention:
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with copies to: Ridan, Xxxxx & Kiefnar
City Center, North Tower
000 Xxxxxx Xxxxxx
Xxxxx 000
Xx. Xxxxxxxxxx, Xxxxxxx 00000
Attention: Xxxxxxxx Xxxx, Esq.
Unless otherwise specified herein, such notices or other communications shall be
deemed received (a) on the date delivered, if delivered personally, (b) two
Business Days after being sent by Federal Express, if sent by Federal Express,
(c) one Business Day after being delivered, if delivered by telecopier and (d)
three Business Days after being sent, if sent by registered or certified mail.
Each of the parties hereto shall be entitled to specify a different address by
giving notice as aforesaid to each of the other parties hereto.
8. Severability; Waiver of Notice. Whenever possible, each provision of
this Note shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Note is held to be prohibited by or
invalid under applicable law in any jurisdiction, such provision shall be
ineffective only to the extent of such prohibition or invalidity, without
invalidating any other provision of this Note. To the extent permitted by law,
the Company hereby waives presentment, demand, notice, protest and all other
demands and notices in connection with the delivery, acceptance, performance,
default or enforcement of this Note, the Purchase Agreement and the Pledge
Agreement.
9. Governing Law. This Note is being delivered and is intended to be
performed in the State of Florida, and shall be construed and enforced in
accordance with the internal laws (but not the law of conflicts) of such State.
PRAIRIE BOY'S INVESTMENTS, INC.
By_____________________________
Name
Title
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EXHIBIT II
PLEDGE AGREEMENT
BETWEEN
PRAIRIE BOY'S INVESTMENTS, INC.
AS PLEDGOR
AND
III FUND, LTD.
AND
III GLOBAL, LTD.,
AS SECURED PARTIES
DATED AS OF FEBRUARY 9, 1999
41
TABLE OF CONTENTS
1. Pledge............................................................ 1
2. Security for Liabilities.......................................... 2
3. Pledged Collateral Adjustments.................................... 2
4. Subsequent Changes Affecting Pledged Collateral................... 3
5. Representations and Warranties.................................... 3
6. Voting Rights..................................................... 4
7. Dividends and Other Distributions................................. 4
8. Transfers and Other Liens......................................... 6
9. Remedies.......................................................... 6
10. Security Interest Absolute........................................ 7
11. Lenders Appointed Attorney-in-Fact................................ 8
12. Waivers........................................................... 8
13. Term.............................................................. 8
14. Definitions....................................................... 9
15. Successors and Assigns............................................ 9
16. GOVERNING LAW..................................................... 9
17. Consent to Jurisdiction; Counterclaims;
Forum Non Conveniens.............................................. 9
18. WAIVER OF JURY TRIAL.............................................. 9
19. Waiver of Bond.................................................... 10
20. Advice of Counsel................................................. 10
21. Severability...................................................... 10
22. Further Assurances................................................ 10
23. The Lenders' Duty of Care......................................... 10
24. Notices........................................................... 11
25. Amendments, Waivers and Consents.................................. 11
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42
26. Section Headings........................................ 12
27. Execution in Counterparts............................... 12
28. Merger.................................................. 12
29. Bailment, Agency for Possession......................... 12
EXHIBITS
EXHIBIT A -- Note
EXHIBIT B -- Pledged Stock Certificates
EXHIBIT C -- Form of Stock Power
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PLEDGE AGREEMENT
THIS PLEDGE AGREEMENT (the "Pledge Agreement"), dated as of
February 9, 1999, is executed by and among PRAIRIE BOY'S INVESTMENT, INC., a
Florida corporation (the "Pledgor"), III FUND, LTD., a Cayman Islands
corporation ("Fund"), and III GLOBAL, LTD., a Cayman Islands corporation
("Global" and together with Fund, the "Lenders" and each individually a
"Lender"). Capitalized terms used herein and not otherwise defined herein shall
have the respective meanings ascribed to such terms in the "Stock Purchase
Agreement" (as defined below).
WITNESSETH:
WHEREAS, pursuant to a Stock Purchase Agreement dated February
9, 1999 (the "Stock Purchase Agreement") among Prairie Boy's Investment, Inc.,
as buyer, and III Fund, Ltd. and III Global, Ltd., as sellers, sellers sold and
transferred to buyer certain shares of common and preferred stock (the
"Securities") of The Aegis Consumer Funding Group, Inc., a Delaware corporation
("Aegis");
WHEREAS, Lender paid the purchase price for such shares with
promissory notes (the "Notes") payable to the Lenders, copies of which are
attached hereto as Exhibit A; and
WHEREAS, the Lenders required, as a condition to their
entering into the Stock Purchase Agreement and consummating the sale and
transfer of the Securities to Pledgor, that the Pledgor enter into this Pledge
Agreement in order to create a security interest in the Securities to secure the
prompt payment, when due, all of amounts which become due, and payable to
Lenders on the Notes;
NOW, THEREFORE, for and in consideration of the foregoing and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the Pledgor and the Lenders hereby agree as follows:
1. Pledge. The Pledgor hereby pledges to the Lenders, and
grants to the Lenders a security interest in, the following (collectively, the
"Pledged Collateral"):
(a) The Securities, and the certificates representing the
Securities (the Securities being identified on Exhibit C), all options
and warrants issued by Aegis for the purchase of shares of the stock of
Aegis now or hereafter held in the name of the Pledgor (all of said
capital stock, options and warrants and all capital stock held in the
name of the Pledgor as a result of the exercise of such options
44
or warrants or the conversion of the Preferred Stock being hereinafter
collectively referred to as the "Pledged Stock"), herewith or hereafter
delivered to the Lenders accompanied by stock powers in the form of
Exhibit B attached hereto and made a part hereof (the "Powers") duly
executed in blank, and all instruments and other property from time to
time received, receivable or otherwise distributed in respect of, or in
exchange for, any or all of the Pledged Stock;
(b) The property and interests in property described in
Section 3 below; and
(c) All proceeds of the foregoing.
2. Security for Liabilities. The Pledged Collateral secures
the prompt payment, performance and observance of (i) the Pledgor's obligations
and liabilities under the Notes, the Stock Purchase Agreement and each
agreement, document or instrument executed pursuant to or in connection with the
Stock Purchase Agreement and (ii) the Pledgor's obligations and liabilities
under this Pledge Agreement and each agreement, document or instrument executed
pursuant to or in connection with this Pledge Agreement (all such obligations
and liabilities of the Pledgor now or hereafter existing being hereinafter
referred to as the "Liabilities").
3. Pledged Collateral Adjustments. If, during the term of this
Pledge Agreement:
(a) Any stock dividend, reclassification, readjustment or
other change is declared or made in the capital structure of Aegis, or
(b) Any subscription, warrants or any other rights or options
shall be issued by Aegis in connection with the Pledged Collateral,
then all new, substituted and additional shares, warrants, rights, options or
other securities, issued by reason of any of the foregoing, shall be immediately
delivered to and held by the Lenders under the terms of this Pledge Agreement
and shall constitute Pledged Collateral hereunder.
4. Subsequent Changes Affecting Pledged Collateral. The
Pledgor represents and warrants that it has made its own arrangements for
keeping itself informed of changes or potential changes affecting the Pledged
Collateral (including, but not limited to, rights to convert, rights to
subscribe, payment of dividends, reorganization or other exchanges, tender
offers and voting rights), and the Pledgor agrees that the Lenders shall have no
obligation to inform the Pledgor of any such changes or potential changes or to
take any action or omit to take any
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45
action with respect thereto. The Lenders may, after the occurrence of an Event
of Default, without notice and at their option, transfer or register the Pledged
Collateral or any part thereof into their respective or their respective
nominee's name with or without any indication that such Pledged Collateral is
subject to the security interest hereunder. In addition, the Lenders may at any
time exchange certificates or instruments representing or evidencing Pledged
Shares for certificates or instruments of smaller or larger denominations.
5. Representations and Warranties. The Pledgor represents and
warrants that the pledge of the Pledged Collateral pursuant to this Pledge
Agreement creates a valid and perfected first priority security interest in the
Pledged Collateral, in favor of the Lenders, securing the payment and
performance of the Liabilities.
6. Voting Rights. During the term of this Pledge Agreement,
and except as provided in this Section 7(b) below, the Pledgor shall have the
right to vote the Pledged Stock on all corporate questions in a manner not
inconsistent with the terms of this Pledge Agreement and the Notes. After the
occurrence of an Event of Default, the Lenders or either of the Lenders'
nominees may, at the Lenders' or such nominee's option and following written
notice from the Lenders to the Pledgor, exercise all voting powers pertaining to
the Pledged Collateral, including the right to take action by shareholder
consent. Such authorization shall constitute an irrevocable voting proxy from
the Pledgor to the Lenders or, at the Lenders' option, to the Lenders' nominees.
7. Dividends and Other Distributions. (a) So long as no Event
of Default shall have occurred:
(i) The Pledgor shall be entitled to receive and retain any
and all dividends and interest paid in respect of the Pledged
Collateral, provided, however, that any and all
(A) dividends and interest paid or payable other than in cash
with respect to, and instruments and other property received,
receivable or otherwise distributed with respect to, or in exchange
for, any of the Pledged Collateral;
(B) dividends and other distributions paid or payable in cash
with respect to any of the Pledged Collateral on account of a partial
or total liquidation or dissolution or in connection with a reduction
of capital, capital surplus or paid-in surplus; and
(C) cash paid, payable or otherwise distributed with respect
to principal of, or in redemption of, or in exchange for, any of the
Pledged Collateral;
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shall be Pledged Collateral, and shall be forthwith delivered to the Lenders to
hold as Pledged Collateral and shall, if received by the Pledgor, be received in
trust for the Lenders, be segregated from the other property or funds of the
Pledgor, and be delivered immediately to the Lenders as Pledged Collateral in
the same form as so received (with any necessary endorsement); and
(ii) The Lenders shall execute and deliver (or cause to be
executed and delivered) to the Pledgor all such proxies and other instruments as
the Pledgor may reasonably request for the purpose of enabling the Pledgor to
receive the dividends or interest payments which it is authorized to receive and
retain pursuant to clause (i) above.
(b) After the occurrence of an Event of Default:
(i) All rights of the Pledgor to receive the dividends and
interest payments which it would otherwise be authorized to receive and retain
pursuant to Section 7(a)(i) hereof shall cease, and all such rights shall
thereupon become vested in the Lenders, which shall thereupon have the sole
right to receive and hold as Pledged Collateral such dividends and interest
payments;
(ii) All dividends and interest payments which are received by
the Pledgor contrary to the provisions of clause (i) of this Section 7(b) shall
be received in trust for the Lenders, shall be segregated from other funds of
the Pledgor and shall be paid over immediately to the Lenders as Pledged
Collateral in the same form as so received (with any necessary endorsements);
(iii) The Pledgor shall, upon the request of the Lenders, at
Pledgor's expense, use its best efforts to obtain all necessary governmental
approvals for the sale of the Pledged Collateral, as requested by the Lenders;
(iv) The Pledgor shall, upon the request of the Lenders, at
the Pledgor's expense, do or cause to be done all such other acts and things as
may be necessary to make such sale of the Pledged Collateral or any part thereof
valid and binding and in compliance with applicable law.
The Pledgor will reimburse the Lenders for all expenses incurred by the Lenders,
including, without limitation, reasonable attorneys' and accountants' fees and
expenses in connection with the foregoing. The Pledgor agrees that, in light of
the fact that federal and state securities laws impose certain restrictions on
the method by which the Pledged Collateral may be sold, it will be commercially
reasonable if a private sale, upon at least ten (10) days' notice to the
Pledgor, is arranged so as to avoid a public offering, even though the sales
price established and/or obtained at such private sale may be substantially less
than prices which could have been obtained for
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47
such security on any market or exchange or in any other public sale.
(c) As used in this Pledge Agreement, the term "Event of
Default" shall have the meaning specified in the Notes.
8. Transfers and Other Liens. The Pledgor agrees that it will
not (i) sell or otherwise dispose of, or grant any option with respect to, any
of the Pledged Collateral without the prior written consent of the Lenders or
(ii) create or permit to exist any Lien upon or with respect to any of the
Pledged Collateral, except for the security interest under this Pledge
Agreement.
9. Remedies. (a) The Lenders shall have, in addition to any
other rights given under this Pledge Agreement or by law, all of the rights and
remedies with respect to the Pledged Collateral of a secured party under the
Uniform Commercial Code as in effect in the State of Florida. After the
occurrence of an Event of Default and following written notice to the Pledgor,
the Lenders (personally or through an agent) are hereby authorized and empowered
to transfer and register in their name or in the name of their nominee the whole
or any part of the Pledged Collateral, to exercise all voting rights with
respect thereto, to collect and receive all cash dividends and other
distributions made thereon, and to otherwise act with respect to the Pledged
Collateral as though the Lenders were the outright owners thereof. The Pledgor
hereby irrevocably constitutes and appoints each Lender as the proxy and
attorney-in-fact of the Pledgor, with full power of substitution to do so, such
proxy becoming effective upon the occurrence of an Event of Default and
following written notice thereof; provided, however, that the Lenders shall have
no duty to exercise any such right or to preserve the same and shall not be
liable for any failure to do so or for any delay in doing so. In addition, after
the occurrence of an Event of Default, the Lenders shall have such powers of
sale and other powers as may be conferred by applicable law. With respect to the
Pledged Collateral or any part thereof which shall then be in or shall
thereafter come into the possession or custody of the Lenders or which the
Lenders shall otherwise have the ability to transfer under applicable law, each
Lender may, in its sole discretion, without notice except as specified below,
after the occurrence of an Event of Default, sell or cause the same to be sold
at any exchange, broker's board or at public or private sale, in one or more
sales or lots, at such price as such Lender may deem best, for cash or on credit
or for future delivery, without assumption of any credit risk, and the purchaser
of any or all of the Pledged Collateral so sold shall thereafter own the same,
absolutely free from any claim, encumbrance or right of any kind whatsoever. The
Lenders may, in their own name, or in the name of a designee or nominee, buy the
Pledged Collateral at any public sale and, if permitted by applicable law, buy
the Pledged Collateral at any private sale. The Pledgor will pay to the Lenders
all reasonable expenses
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(including, without limitation, court costs and reasonable attorneys' and
paralegals' fees and expenses) of, or incidental to, the enforcement of any of
the provisions hereof.
(b) Unless any of the Pledged Collateral threatens to decline
speedily in value or is or becomes of a type sold on a recognized market, the
Lenders will give the Pledgor reasonable notice of the time and place of any
public sale thereof, or of the time after which any private sale or other
intended disposition is to be made. Any sale of the Pledged Collateral conducted
in conformity with reasonable commercial practices of banks, commercial finance
companies, insurance companies or other financial institutions disposing of
property similar to the Pledged Collateral shall be deemed to be commercially
reasonable. Notwithstanding any provision to the contrary contained herein, the
Pledgor agrees that any requirements of reasonable notice shall be met if such
notice is received by the Pledgor as provided in Section 25 below at least ten
(10) days before the time of the sale or disposition; provided, however, that
the Lenders may give any shorter notice that is commercially reasonable under
the circumstances. Any other requirement of notice, demand or advertisement for
sale is waived, to the extent permitted by law.
(c) In view of the fact that federal and state securities laws
may impose certain restrictions on the method by which a sale of the Pledged
Collateral may be effected after an Event of Default, the Pledgor agrees that
after the occurrence of an Event of Default, the Lenders may, from time to time,
attempt to sell all or any part of the Pledged Collateral by means of a private
placement restricting the bidders and prospective purchasers to those who are
qualified and will represent and agree that they are purchasing for investment
only and not for distribution. In so doing, the Lenders may solicit offers to
buy the Pledged Collateral, or any part of it, from a limited number of
investors deemed by the Lenders, in their reasonable judgment, to be financially
responsible parties who might be interested in purchasing the Pledged
Collateral. If the Lenders solicit such offers from not less than three (3) such
investors, then the acceptance by the Lenders of the highest offer obtained
therefrom shall be deemed to be a commercially reasonable method of disposing of
such Pledged Collateral; provided, however, that this Section does not impose a
requirement that the Lenders solicit offers from three or more investors in
order for the sale to be commercially reasonable.
10. Security Interest Absolute. All rights of the Lenders and
security interests hereunder, and all obligations of the Pledgor hereunder,
shall be absolute and unconditional irrespective of:
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(a) Any lack of validity or enforceability of the Stock
Purchase Agreement, the Note or any other agreement or instrument
relating thereto;
(b) Any change in the time, manner or place of payment of, or
in any other term of, all or any part of the Liabilities, or any other
amendment or waiver of or any consent to any departure from the Stock
Purchase Agreement or the Note;
(c) Any exchange, release or non-perfection of any other
collateral, or any release or amendment or waiver of or consent to
departure from any guaranty, for all or any part of the Liabilities; or
(d) any other circumstance which might otherwise constitute a
defense available to, or a discharge of, the Pledgor in respect of the
Liabilities or of this Pledge Agreement.
11. Lenders Appointed Attorney-in-Fact. The Pledgor hereby
appoints each Lender its attorney-in-fact, with full authority, in the name of
the Pledgor or otherwise, after the occurrence of an Event of Default, from time
to time in such Lender's sole discretion, to take any action and to execute any
instrument which such Lender may deem necessary or advisable to accomplish the
purposes of this Pledge Agreement, including, without limitation, to receive,
endorse and collect all instruments made payable to the Pledgor representing any
dividend, interest payment or other distribution in respect of the Pledged
Collateral or any part thereof and to give full discharge for the same and to
arrange for the transfer of all or any part of the Pledged Collateral on the
books of Aegis to the name of the Lenders or their nominees.
12. Waivers. The Pledgor waives presentment and demand for
payment of any of the Liabilities, protest and notice of dishonor or Event of
Default with respect to any of the Liabilities and all other notices to which
the Pledgor might otherwise be entitled except as otherwise expressly provided
herein or in the Note.
(b) The Pledgor hereby expressly waives the benefits of any
laws purporting to allow a guarantor or pledgor to revoke a continuing guaranty
or pledge with respect to any transactions occurring after the date of the
guaranty or pledge.
13. Term. This Pledge Agreement shall remain in full force and
effect until the Liabilities have been fully and indefeasibly paid in cash. Upon
the termination of this Pledge Agreement as provided above (other than as a
result of the sale of the Pledged Collateral), the Lenders will release the
security interest created hereunder and, if they then have possession of
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the Pledged Stock, will deliver the Pledged Stock and the Powers to the Pledgor.
14. Definitions. The singular shall include the plural and
vice versa and any gender shall include any other gender as the context may
require.
15. Successors and Assigns. This Pledge Agreement shall be
binding upon and inure to the benefit of the Pledgor, the Lenders and their
respective successors and assigns. The Pledgor's successors and assigns shall
include, without limitation, a receiver, trustee or debtor-in-possession of or
for the Pledgor.
16. GOVERNING LAW. THIS PLEDGE AGREEMENT HAS BEEN EXECUTED AND
DELIVERED BY THE PARTIES HERETO IN FLORIDA. ANY DISPUTE BETWEEN THE LENDERS AND
THE PLEDGOR ARISING OUT OF OR RELATED TO THE RELATIONSHIP ESTABLISHED BETWEEN
THEM IN CONNECTION WITH THIS PLEDGE AGREEMENT, AND WHETHER ARISING IN CONTRACT,
TORT, EQUITY, OR OTHERWISE, SHALL BE RESOLVED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF FLORIDA WITHOUT REGARD TO CONFLICTS OF LAWS PROVISIONS.
17. Consent to Jurisdiction; Counterclaims; Forum Non
Conveniens. (a) Exclusive Jurisdiction. Except as provided in subsection (b) of
this Section 17, the Lenders and the Pledgor agree that all disputes between
them arising out of or related to the relationship established between them in
connection with this Pledge Agreement, whether arising in contract, tort,
equity, or otherwise, shall be resolved only by state or federal courts located
in Florida, but the parties acknowledge that any appeals from those courts may
have to be heard by a court located outside of Florida.
(b) Other Jurisdictions. The Lenders shall have the right to
proceed against the Pledgor or its property in a court in any location to enable
the Lenders to obtain personal jurisdiction over the Pledgor, to realize on the
Pledged Collateral or any other security for the Liabilities or to enforce a
judgment or other court order entered in favor of the Lenders. The Pledgor shall
not assert any permissive counterclaims in any proceeding brought by the Lenders
arising out of or relating to this Pledge Agreement.
(c) Venue; Forum Non Conveniens. Each of the Pledgor and each
of the Lenders waives any objection that it may have (including, without
limitation, any objection to the laying of venue or based on forum non
conveniens) to the location of the court in which any proceeding is commenced in
accordance with this Section 17.
18. WAIVER OF JURY TRIAL. EACH OF THE PLEDGOR AND THE LENDERS
WAIVES ANY RIGHT TO TRIAL BY JURY IN ANY DISPUTE, WHETHER
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51
SOUNDING IN CONTRACT, TORT, OR OTHERWISE, BETWEEN THE LENDERS AND THE PLEDGOR
ARISING OUT OF OR RELATED TO THE TRANSACTIONS CONTEMPLATED BY THIS PLEDGE
AGREEMENT OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED
IN CONNECTION HEREWITH. EITHER THE PLEDGOR OR A LENDER MAY FILE AN ORIGINAL
COUNTERPART OR A COPY OF THIS PLEDGE AGREEMENT WITH ANY COURT AS WRITTEN
EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO
TRIAL BY JURY.
19. Waiver of Bond. The Pledgor waives the posting of any bond
otherwise required of the Lenders in connection with any judicial process or
proceeding to realize on the Collateral or any other security for the
Liabilities, to enforce any judgment or other court order entered in favor of
the Lenders, or to enforce by specific performance, temporary restraining order,
or preliminary or permanent injunction, this Pledge Agreement or any other
agreement or document between the Lenders and the Pledgor.
20. Advice of Counsel. The Pledgor represents and warrants to
the Lenders that it has consulted with its legal counsel regarding all waivers
under this Pledge Agreement, including without limitation those under Section 12
and Sections 17 through 19 hereof, that it believes that it fully understands
all rights that it is waiving and the effect of such waivers, that it assumes
the risk of any misunderstanding that it may have regarding any of the
foregoing, and that it intends that such waivers shall be a material inducement
to the Lenders to extend the indebtedness secured hereby.
21. Severability. Whenever possible, each provision of this
Pledge Agreement shall be interpreted in such manner as to be effective and
valid under applicable law, but, if any provision of this Pledge Agreement shall
be held to be prohibited or invalid under applicable law, such provision shall
be ineffective only to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of this
Pledge Agreement.
22. Further Assurances. The Pledgor agrees that it will
cooperate with the Lenders and will execute and deliver, or cause to be executed
and delivered, all such other stock powers, proxies, instruments and documents,
and will take all such other actions, including, without limitation, the
execution and filing of financing statements, as the Lenders may reasonably
request from time to time in order to carry out the provisions and purposes of
this Pledge Agreement.
23. The Lenders' Duty of Care. The Lenders shall not be liable
for any acts, omissions, errors of judgment or mistakes of fact or law
including, without limitation, acts, omissions, errors or mistakes with respect
to the Pledged Collateral, except for those arising out of or in connection with
the Lenders' (i) gross negligence or willful misconduct, or (ii) failure to use
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52
reasonable care with respect to the safe custody of the Pledged Collateral in
the Lenders' possession. Without limiting the generality of the foregoing, the
Lenders shall be under no obligation to take any steps necessary to preserve
rights in the Pledged Collateral against any other parties but may do so at its
option. All expenses incurred in connection therewith shall be for the sole
account of the Pledgor, and shall constitute part of the Liabilities secured
hereby.
24. Notices. All notices and other communications required or
desired to be served, given or delivered hereunder shall be made in writing or
by a telecommunications device capable of creating a written record and shall be
addressed to the party to be notified as follows:
if to the Pledgor, at
Prairie Boy's Investments, Inc.
0000 Xxxxxxxx Xxxx
Xxxxx, Xxxxxxx 00000
Attention:
if to the Lender, at
III Fund Ltd.
III Global, Ltd.
c/o Admiral Administration Ltd.
Anchorage Center, 2nd Floor
Grand Cayman, Cayman Islands
British West Indies
Attention: Xxxxx Bree
Telecopy: (000) 000-0000
with a copy to
III Offshore Advisors
000 Xxxxx Xxxxxxxxxx Xxxxxx, Xxxxx 000
Xxxx Xxxx Xxxxx, Xxxxxxx 00000
Attention: Xxxxxx Xxxxxx
Telecopy: (000) 000-0000
or, as to each party, at such other address as designated by such party in a
written notice to the other party. All such notices and communications shall be
deemed to be validly served, given or delivered (i) three (3) days following
deposit in the United States mails, with proper postage prepaid; (ii) upon
delivery thereof if delivered by hand to the party to be notified; (iii) one
Business Day after delivery thereof to a reputable overnight courier service,
with delivery charges prepaid; or (iv) upon transmission thereof with
confirmation of successful transmission from the sending telecommunications
device, if sent by telecommunications device.
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25. Amendments, Waivers and Consents. No amendment or waiver
of any provision of this Pledge Agreement nor consent to any departure by the
Pledgor herefrom, shall in any event be effective unless the same shall be in
writing and signed by each of the Lenders and then such amendment, waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given.
26. Section Headings. The section headings herein are for
convenience of reference only, and shall not affect in any way the
interpretation of any of the provisions hereof.
27. Execution in Counterparts. This Pledge Agreement may be
executed in any number of counterparts, each of which shall be an original, but
all of which shall together constitute one and the same agreement.
28. Merger. This Pledge Agreement represents the final
agreement of the Pledgor with respect to the matters contained herein and may
not be contradicted by evidence of prior or contemporaneous agreements, or
subsequent oral agreements, between the Pledgor and the Lenders.
29. Bailment, Agency for Possession. Each of the Lenders
hereby appoints [III Offshore Advisors] as their agent for purposes of
perfecting their respective security interests and liens on the Pledged
Collateral. To the extent that either Lender obtains possession of the Pledged
Collateral, such Lender shall hold such Pledged Collateral as agent for itself
and the other Lender.
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IN WITNESS WHEREOF, the Pledgor and the Lenders have executed
this Pledge Agreement as of the date set forth above.
PRAIRIE BOY'S INVESTMENTS, INC.
By:
---------------------------
Name:
----------------------
Title:
---------------------
III FUND, LTD.
By:
---------------------------
Name:
----------------------
Title:
---------------------
III GLOBAL, LTD.
By:
---------------------------
Name:
----------------------
Title:
---------------------
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ACKNOWLEDGMENT
The undersigned hereby acknowledges receipt of a copy of the
foregoing Pledge Agreement, agrees promptly to note on its books the security
interests granted under such Pledge Agreement, and waives any rights or
requirement at any time hereafter to receive a copy of such Pledge Agreement in
connection with the registration of any Pledged Collateral in the name of the
Lenders or its nominee or the exercise of voting rights by the Lenders or their
nominees.
THE AEGIS CONSUMER FUNDING GROUP,
INC.
By:
-------------------------------
Name:
--------------------------
Title:
-------------------------
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EXHIBIT B
to
PLEDGE AGREEMENT
dated as of February 9, 1999
Pledged Stock Certificates
--------------------------
57
EXHIBIT C
to
PLEDGE AGREEMENT
dated as of February 9, 1999
Form of Stock Power
-------------------
STOCK POWER
-----------
FOR VALUE RECEIVED, the undersigned does hereby sell, assign
and transfer to _____________________________ _____ Shares of ______ Stock of
The Aegis Consumer Funding Group, Inc., a Delaware corporation, represented by
Certificate No. __ (the "Stock"), standing in the name of the undersigned on the
books of said corporation and does hereby irrevocably constitute and appoint
___________________________________ as the undersigned's true and lawful
attorney, for it and in its name and stead, to sell, assign and transfer all or
any of the Stock, and for that purpose to make and execute all necessary acts of
assignment and transfer thereof; and to substitute one or more persons with like
full power, hereby ratifying and confirming all that said attorney or substitute
or substitutes shall lawfully do by virtue hereof.
Dated: _______________
PRAIRIE BOY'S INVESTMENTS, INC.
By:
----------------------------
Title:
58
EXHIBIT III
CONFIRMATION AGREEMENT
THIS CONFIRMATION AGREEMENT (this "Agreement") is entered into
as of February 9, 1999 by and among AEGIS AUTO FINANCE, INC., a Delaware
corporation ("AAF"), AEGIS CONSUMER FINANCE, INC. ("ACF"), a Delaware
corporation, AEGIS ACCEPTANCE CORP., a Delaware corporation ("AAC"), (AAF, ACF
and AAC are sometimes referred to hereinafter individually as a "Borrower" and
collectively as the "Borrowers"), THE AEGIS CONSUMER FUNDING GROUP, INC. (the
"Company") and III FINANCE LTD., a Cayman Islands company (the "Lender").
WHEREAS, pursuant to those certain "Existing Loan Agreements"
described hereinbelow, Lender has extended various loans, advances and other
extensions of credit to the Borrowers and/or their Affiliates, all of which have
been guaranteed by the Company;
WHEREAS, pursuant to a stock purchase agreement dated as of
February 9, 1999 (the "Stock Purchase Agreement") certain Affiliates of Lender
have agreed to sell to Prairie Boy's Investments Inc. (the "Buyer") certain
Common and Preferred Stock of the Company; and
WHEREAS, the Buyer has required, as a condition precedent to
consummating the purchases under the Stock Purchase Agreement, that the Lender
and the Borrowers and the Company enter into this Agreement in order to evidence
the agreement of the parties hereto that, from and after the effectiveness
hereof, Lender's sole recourse for payment of the Borrowers obligations under
the Existing Loan Agreements shall be to the Remaining Collateral hereinafter
described and that Lender shall have no continuing obligations to advance any
extensions of credit under the Existing Loan Agreements; and
WHEREAS, each of the Lender, the Borrowers and the Company
acknowledge and agree that they will benefit from the sale to Buyer of the
Preferred Stock and the Common Stock and the transactions contemplated by this
Agreement;
NOW THEREFORE, in consideration of the foregoing and for other
good and valuable consideration, the receipt of which is hereby acknowledged, it
is agreed as follows:
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ARTICLE I
DEFINITIONS
1.1 Definitions. All capitalized terms used in this Agreement
which are defined in the foregoing recitals shall have the meaning set forth in
such recitals and all other capitalized terms used herein without definition
herein shall have the meanings set forth in the Stock Purchase Agreement. In
addition to the foregoing, the following terms shall have the following
meanings:
"ACM" means Aegis Capital Markets, Inc. (d/b/a Markets).
"Collateral" means all "Collateral" as such term is defined in
each and any of the Existing Loan Agreements and all other property and
interests of property in which a Grantor has granted or purported to grant a
security interest to Lender to secure any of the Obligations, in each case
together with all proceeds and products of the foregoing property and interests
in property and shall include, without limitation, all "Collateral" pledged
under the Lease Warehouse Agreement, all "Collateral" pledged under the Loan
Warehouse Agreement and all "Collateral" or "Pledged Collateral" in which a
security interest has been granted in any Security Agreement or Pledge
Agreement, in each case together with all proceeds and products.
"Effective Date" means the date on which the conditions
precedent set forth in Article III have been satisfied.
"Existing Loan Agreements" means the Lease Warehouse
Agreement, the Loan Warehouse Agreement and the Retained Yield Loan Agreement.
"Financing Agreements" means the Existing Loan Agreements, the
Pledge Agreements, the Security Agreements and all other promissory notes,
guaranties, documents, instruments, UCC financing statements and similar
documents or instruments executed in favor of the Lender in connection with the
foregoing.
"Grantor" means each of the Company, the Borrowers and any
other subsidiaries of the Company which have executed in favor of the Lender a
Security Agreement or Pledge Agreement.
"Lease Warehouse Agreement" means that certain Loan and
Security Agreement among ACF, AAC and the Lender dated as of February 28, 1994,
as amended by that certain Amendment No. 1 dated as of dated as of May 25, 1994,
that certain Amendment No. 2 dated as of August 23, 1994, that certain Master
Amendment to Loan and Security Agreements dated as of August 24, 1995, that
certain Amendment No. 4 dated as of September 13, 1995, that certain Amendment
No. 5 dated as of October 18, 1995, that certain Amendment No. 6 dated as of
March 12, 1997 and that
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60
certain Amendment No. 7 dated as of December 3, 1997.
"Loan Warehouse Agreement" means that certain Loan and
Security Agreement between AAF and the Lender dated as of March 14, 1997, as
amended by that certain Assignment and Amendment Agreement, dated as of April
30, 1997, that certain Amendment No. 2, dated as of May 21, 1997, that certain
Amendment No. 3 dated as of February 26, 1998, that certain Amendment No. 4
dated as of May 5, 1998 and that certain Amendment No. 5 dated as of July 17,
1998.
"Obligations" means all of the payment obligations of the
Borrowers under the Existing Loan Agreements.
"Pledge Agreements" means the following agreements:
(1) those certain Pledge Agreements executed by the Company in
favor of the Lender dated as of March 14, 1997 and April 30, 1997,
respectively;
(2) those certain Pledge Agreements executed by each of AAF,
ACF and ACM in favor of the Lender dated as of March 14, 1997.
"Prairie Pledge Agreement" shall mean that certain Pledge
Agreement executed by Buyer in favor of the Sellers pursuant to the Stock
Purchase Agreement.
'Released Stock" means all of the Company's right, title and
interest in and to the capital stock of any Borrower.
"Remaining Collateral" means all of the Collateral other than
the Released Stock.
"Retained Yield Loan Agreement" means that Amended and
Restated Master Loan Agreement dated as of April 30, 1997 among ACF, AAF and the
Lender, as heretofore modified by that certain Amendment No. 5 to the Loan
Warehouse Agreement referred to above.
"Security Agreements" means (i) that certain Security
Agreement from AAC and ACF in favor of the Lender dated as of March 14, 1997
granting to Lender, as collateral for the obligations of AAF under the Loan
Warehouse Agreement, a security interest in the Collateral previously granted
under the Lease Warehouse Agreement and (ii) that certain Master Security
Agreement and Amendment dated as of April 30, 1997 from AAF, ACF, ACM and the
Company in favor of the Lender.
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"Special Purpose Entities" means (i) Aegis Auto Funding Corp.,
Aegis Auto Funding Corp. II, and Aegis Auto Funding Corp. IV, each a Delaware
corporation; (ii) Aegis Auto Receivables 0000-X, Xxxxx Auto Receivables 0000-0,
Xxxxx Auto Receivables 1994-3 and Aegis Auto Receivables 1995-1, each a Delaware
limited partnership; (iii) all of the grantor trusts or similar trusts
established by one of the foregoing Special Purpose Entities pursuant to a
master trust agreement, pooling and servicing agreement or similar agreement
entered into in connection with the sales of pass-through certificates or other
asset-backed securities issued by such trust or another Special Purpose Entity.
1.2 Interpretation. As used in this Agreement, the word
"including" means without limitation, the word "or" is not exclusive and the
words "herein", "hereof", "hereby", "hereto" and "hereunder" refer to this
Agreement as a whole. Unless the context otherwise requires, references herein:
(i) to an agreement, instrument or other document means such agreement,
instrument or other document as amended, supplemented and modified from time to
time to the extent permitted by the provisions thereof and by this Agreement;
and (iii) to a statute means such statute as amended from time to time and
includes any successor legislation thereto. Section headings are inserted for
convenience of reference only and shall not be deemed a part of or to affect the
meaning or interpretation of this Agreement. All words used herein shall be
construed to be of such gender or number as the context may require.
ARTICLE II
RELEASE OF LIENS AND CLAIMS
2.1 Release of Liens. Effective upon the Effective Date, the
Lender hereby releases, discharges, retransfers and reassigns, without warranty
or recourse of any kind, from the liens created under or evidenced by any of the
Financing Agreements, all of Lender's right, title and interest in and to the
Released Stock.
2.2 No Recourse. (a) Except as provided in clause (b) below,
effective upon the Effective Date and anything contained in the Financing
Agreements to the contrary notwithstanding, all payments to be made by any of
the Borrowers for repayment of the Obligations shall be payable solely from the
Remaining Collateral. If and to the extent that such Remaining Collateral is
insufficient to pay all of the Obligations, then, except as otherwise expressly
provided hereunder, the Lender shall have no claim in respect of such
insufficiency against the Grantors or any of their respective assets or
properties. Without limiting the generality of the foregoing and subject to the
terms of this Agreement, the parties intend that the sole source of repayment to
Lender (a) of amounts payable under the
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Loan Warehouse Agreement shall be the automobile finance receivables (and other
Collateral of Aegis specified therein) pledged thereunder, (b) of amounts
payable under the Lease Warehouse Agreement shall be the retail automobile
leases of Aegis (and other Collateral specified therein) pledged thereunder, and
(c) of amounts payable under the Retained Yield Loan Agreement shall be the
retained interests in certain securitizations, and automobile finance
receivables (and other Collateral specified therein) pledged thereunder, except
that the parties acknowledge that the Existing Loan Agreements are
cross-collateralized. Nothing in this Agreement shall be construed as a waiver
or other impairment of (i) any right of Lender to bring a foreclosure action, an
action for specific performance or any other appropriate action or proceeding
against any Grantor to enable Lender to enforce and realize upon its interests
in the Remaining Collateral; (ii) the enforcement of the security interests and
rights and remedies of Lender described in the Security Agreements and the
Pledge Agreements with respect to the Remaining Collateral; (iii) any right that
Lender may have under Sections 506(a), 506(b), 1111(b) or any other provisions
of the Bankruptcy Code to file a claim for the full amount of the Obligations or
to require that all Remaining Collateral shall continue to secure all of the
Obligations; or (iv) any rights Lender or any Seller may have under the Prairie
Pledge Agreement. Additionally, nothing in this Agreement shall be construed to
waive any claim arising from and after the date hereof by reason of or in
connection with (1) any fraud or breach of trust by any Grantor or Affiliate
thereof; (2) the misappropriation by any Grantor or Affiliate of any proceeds of
insurance or other proceeds of the Remaining Collateral; (3) the failure of any
Grantor or Affiliate to direct or pay to Lender all receipts received by
Grantors with respect to the Remaining Collateral; (4) the misapplication by any
Grantor or Affiliate of any proceeds of the Remaining Collateral; (5) any damage
or destruction of the Remaining Collateral or any part thereof due to fire or
other casualty to the extent not covered by required insurance, but only to the
extent the same would have been covered by insurance if Grantors had obtained
and maintained the insurance required under the Financing Agreements; (6) the
amount of any Lien voluntarily placed by any Grantor of Affiliate on any
Remaining Collateral; or (7) any Grantor or Affiliate contesting or in any way
interfering with, directly or indirectly any foreclosure action, Uniform
Commercial Code sale and/or similar enforcement proceeding or transaction
commenced by Lender with respect to the Remaining Collateral or Lender's rights,
powers or remedies under any of the Financing Agreements as amended hereby with
respect to the Remaining Collateral.
(b) The foregoing clause (a) shall have no force or effect
with respect to Lender in the event that the Sellers shall reacquire the
Securities pursuant to the Prairie Pledge Agreement.
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2.3 No Effect on Special Purpose Entities or Securitizations.
It is expressly understood and agreed that nothing in the foregoing Sections of
this Article II shall be deemed to limit Lender's or any Affiliate's rights and
remedies as against any Special Purpose Entity or any assets of such Special
Purpose Entity in connection with purchases by Lender or any Affiliate of Lender
of pass-through certificates or other asset-backed securities issued by or on
behalf of such Special Purpose Entity and that nothing in the foregoing sections
of this Article II shall be deemed to limit any rights of subrogation Lender may
have with respect to any claims such Special Purpose Entity may have as against
any Grantor.
2.4 Further Funding Obligations. Each of the Borrowers hereby
acknowledges and agrees that, notwithstanding anything to the contrary in the
Financing Agreements or any other agreements executed before the date hereof
between Lender and any of Borrowers or Borrowers' Affiliates, Lender shall,
effective upon the Effective Date, have no further obligations (except as
provided in Section 4.2(b) of the Stock Purchase Agreement) (i) to advance any
loans or make any other extensions of credit under the Existing Loan Agreements
nor (ii) to purchase any asset-backed securities issued by Borrowers or any of
their Affiliates.
2.5 Effect of Bankruptcy. Notwithstanding the foregoing
provisions of this Section II, to the extent that the Lender receives payments
on, or proceeds of any Remaining Collateral for, the Obligations which are
subsequently invalidated, declared to be fraudulent or preferential, set aside
and/or required to be repaid to a trustee, receiver or any other party under any
bankruptcy law, state or federal law, common law, or equitable cause, then, to
the extent of such payment or proceeds so set aside and/or required to be
repaid, the Obligations, or part thereof, intended to be satisfied by such
payment or proceeds shall be revived and continue in full force and effect as
against the Grantor or Grantors for whose benefit such payment or proceeds were
recovered to the same extent as if (i) such payments or proceeds had not been
received by Lender and (ii) the Lender had not agreed to limit its recourse
hereunder in respect of the portion of the Obligations intended to be satisfied
by such payment or proceeds.
ARTICLE III
CONDITIONS PRECEDENT
3.1 Conditions Precedent. This Agreement shall become
effective upon satisfaction of the following conditions precedent:
(a) Lender shall have received duly executed originals of this
Agreement executed by all parties hereto;
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(b) All conditions precedent under the Stock Purchase
Agreement to Buyer's purchase of the Common Stock and the Preferred Stock shall
have been satisfied and all payments and/or deliveries required to be made by
Buyer thereunder in consideration of the Securities shall have been made; and
(c) AAF shall have entered into certain transactions in form
and substance satisfactory to Lender whereby AAF shall have sold to Aegis Auto
Funding Corp. IV ("AAF IV") certain of the Receivables pledged under the Loan
Warehouse Agreement and certain related property and AAF IV shall have sold such
Receivables and related property to a newly created trust created under the
terms of that certain Amended and Restated Master Trust Agreement dated as of
May 1, 1997 by and between AAF and Norwest Bank Minnesota, National Association,
as Trustee.
ARTICLE IV
COVENANTS, REPRESENTATIONS AND WARRANTIES
4.l Upon the effectiveness of this Agreement, each of the
Borrowers hereby reaffirms all covenants, representations and warranties made by
it in any of the Existing Loan Agreements to the extent the same are not amended
hereby and agrees that all such covenants, representations and warranties shall
be deemed to have been re-made as of the effective date of this Agreement.
4.2 Each of the Borrowers and the Lender each hereby
represents and warrants that this Agreement constitutes its legal, valid and
binding obligation, enforceable against each such party in accordance with its
terms.
ARTICLE V
MISCELLANEOUS
SECTION 5.1. Reference to and Effect on the Existing Loan
Agreements.
5.l Upon the effectiveness of this Agreement, each reference
in any Existing Loan Agreement to "this Agreement", "hereunder", "hereof",
"herein" or words of like import shall mean and be a reference to such
Existing Loan Agreement as amended hereby, and each reference to any Existing
Loan Agreement in any Financing Agreement executed and/or delivered in
connection with such Existing Loan Agreement shall mean and be a reference to
such Existing Loan Agreement as amended hereby.
5.2 Except as specifically amended above, the Existing Loan
Agreements and all of the Financing Agreements
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executed and/or delivered in connection therewith shall remain in full force and
effect and are hereby ratified and confirmed.
5.3 The execution, delivery and effectiveness of this
Agreement shall not operate as a waiver of any right, power or remedy of the
Lender under any Existing Loan Agreement or any other agreement executed and/or
delivered in connection therewith, nor constitute a waiver of any provision
contained therein, except as specifically set forth herein.
SECTION 5.2 Execution in Counterparts. This Agreement may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed and delivered shall be
deemed to be an original and all of which taken together shall constitute but
one and the same instrument.
SECTION 5.3 Governing Law. This Agreement shall be governed by
and construed in accordance with the laws of the State of New York.
SECTION 5.4 Headings. Section headings in this Agreement are
included herein for convenience of reference only and shall not constitute a
part of this Agreement for any other purpose.
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective officers thereunto duly authorized,
as of the date first above written.
AEGIS AUTO FINANCE, INC.,
By:_____________________________
Name:
Title:
AEGIS CONSUMER FINANCE, INC.,
By:_____________________________
Name:
Title:
AEGIS ACCEPTANCE CORP. INC.,
By:_____________________________
Name:
Title:
THE AEGIS CONSUMER FUNDING GROUP, INC.
By:_____________________________
Name:
Title:
III FINANCE LTD, as Lender
By:_____________________________
Name:
Title:
