Portfolio Subsidiary means any Person (a) in which the Borrower (i) has made an investment in the ordinary course of business that is accounted for under GAAP as a portfolio investment of the Borrower, (ii) has received an equity interest in connection with an REO Asset, (iii) has received an "equity kicker" in connection with its acquisition of any Loan, (iv) owns an equity interest and that is created as a "blocker" vehicle to address tax-specific issues or (v) has acquired an equity interest in connection with a relatively contemporaneous exchange or conversion of a Loan into equity interests and (b) that meets each of the requirements set forth in each of Section 5.01(b) and Section 5.02(a).
There is no action, suit, or proceeding, at law or in equity, or by or before any court or Governmental Authority, pending or threatened against or affecting any FC Entity (other than a FC Diversified Subsidiary or FC Portfolio Subsidiary), which, if adversely determined, would materially adversely affect the financial condition of any FC Entity or the ability of any FC Entity to perform its obligations as contemplated by this Agreement or the Loan Papers.
Custodial Agreement shall mean, with respect to FC Portfolio Holdings LLC and each FC Portfolio Subsidiary, that certain Custodial Agreement between FC Portfolio Holdings LLC or the FC Portfolio Subsidiary and the Bank, FirstCity Servicing Corporation, a Texas corporation, and Custodian, in a form acceptable to the Bank, and all amendments, modifications or substitutions thereof.
All Asset Net Cash Flow shall be deposited as received each month into the Lock-Box Account maintained by each FC Portfolio Subsidiary and each FC Diversified Subsidiary.
Any FC Entity (other than a FC Diversified Subsidiary or FC Portfolio Subsidiary acting in the ordinary course of its business) sells to a third party all or substantially all of its assets.
Within thirty (30) days after the acquisition of Pledged Loan by a FC Portfolio Subsidiary, the Bank and the depository bank shall enter into a deposit account control agreement related to the Lock-Box Account of the FC Portfolio Subsidiary.