SECTION 4.10
FINANCIAL STATEMENTS. DURING THE PERIOD WHEN ANY LOANS
REMAIN OUTSTANDING, SELLERS SHALL PROVIDE TO PURCHASER, UPON REQUEST, UNAUDITED
MONTHLY FINANCIAL
ASSET PURCHASE AGREEMENT - PAGE 10
STATEMENTS (OR QUARTERLY STATEMENTS IN ANY INSTANCE IN WHICH MONTHLY STATEMENTS
ARE NOT ROUTINELY PREPARED BY SELLERS) AND ANNUAL FINANCIAL STATEMENTS INCLUDING
AN ACCOMPANYING AUDIT REPORT IF ONE IS DELIVERED TO SELLERS, IN EACH CASE
PRESENTING THE FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF SELLERS ON A
SEPARATE COMPANY AND CONSOLIDATED GROUP BASIS AND PREPARED IN ACCORDANCE WITH
GAAP.
SECTION 4.11
NO SALE, TRANSFER, OR OTHER BIDS. EXCEPT AS PROVIDED IN
SECTION 1.5, DURING THE PERIOD FROM THE EFFECTIVE DATE TO THE CLOSING DATE,
SELLERS SHALL NOT SELL, TRANSFER, OR OTHERWISE DISPOSE OF OR ENCUMBER, OR
AUTHORIZE OR PERMIT ANY OFFICER, DIRECTOR, EMPLOYEE, INVESTMENT BANKER,
ATTORNEY, ACCOUNTANT OR OTHER AGENT OR REPRESENTATIVE TO ENTERTAIN, SOLICIT OR
ENCOURAGE ANY INQUIRIES OR THE MAKING OF ANY PROPOSAL WHICH MAY REASONABLY BE
EXPECTED TO LEAD TO ANY PROPOSAL FOR A PURCHASE, SALE, DISPOSITION, FINANCING,
OR ANY SIMILAR TRANSACTION WITH RESPECT TO THE SBLC LICENSE OR THE LOAN
SERVICING RIGHTS.
SECTION 4.12
INSURANCE. AT ALL TIMES AFTER THE CLOSING DATE, PURCHASER
SHALL MAINTAIN AN ENFORCEABLE CRIME AND ERRORS AND OMISSIONS INSURANCE POLICY
WITH A $100,000 MAXIMUM DEDUCTIBLE AND A MINIMUM LIMIT OF $1,500,000 PER
OCCURRENCE.
SECTION 4.13
AMENDMENTS TO SERVICING AGREEMENTS. PURCHASER MAY NOT, AT
ANY TIME (INCLUDING AFTER THE CLOSING DATE), TERMINATE, AMEND, MODIFY,
SUPPLEMENT OR CHANGE THE SUBSERVICER AGREEMENT OR ANY POOLING AND SERVICING
AGREEMENT WITHOUT THE PRIOR WRITTEN CONSENT OF SELLERS AND ANY PURPORTED
AMENDMENT, MODIFICATION, SUPPLEMENT OR CHANGE MADE WITHOUT SUCH PRIOR WRITTEN
CONSENT SHALL BE NULL AND VOID AND OF NO FORCE OR EFFECT.
SECTION 4.14
EQUITY CONTRIBUTION. IMMEDIATELY AFTER THE PURCHASER HAS
OBTAINED APPROVAL FROM THE SBA FOR THE ACQUISITION OF THE SBLC LICENSE:
(A)
FIRSTCITY BLC WILL CONTRIBUTE (I) $960,000 (OR SUCH OTHER AMOUNT
APPROVED BY THE SBA), TO THE PURCHASER IN EXCHANGE FOR NINETY-SIX PERCENT (96%)
OF THE COMMON EQUITY OF PURCHASER ON A FULLY-DILUTED BASIS (SUBJECT TO DILUTION
BY THE ISSUANCE OF STOCK OPTIONS TO MANAGEMENT FOR 16% OF THE COMMON EQUITY OF
PURCHASER, ON A FULLY DILUTED BASIS), AND (II) $2,000,000 (OR SUCH OTHER AMOUNT
APPROVED BY THE SBA) TO THE PURCHASER IN EXCHANGE FOR ONE-HUNDRED PERCENT (100%)
OF THE PREFERRED EQUITY OF PURCHASER ON A FULLY DILUTED BASIS, IN EACH CASE OF
SUBCLAUSES (I) AND (II) ON TERMS AND CONDITIONS SATISFACTORY TO SELLERS. THE
PARTIES AGREE THAT THE PREFERRED EQUITY RECEIVED BY PURCHASER WILL ACCRUE
DIVIDENDS ON THE LIQUIDATION AMOUNT OF THE PREFERRED EQUITY AT A VARIABLE RATE
EQUAL TO THE PRIME RATE +4%.
(b)
Sellers will contribute $40,000 in exchange for four percent (4%)
of the common equity of Purchaser on a fully diluted basis (subject to dilution
by the issuance of stock options to management for 16% of the common equity of
Purchaser, on a fully diluted basis)
SECTION 4.15
OPERATIONAL ADVANCES. AT ALL TIMES AFTER THE CLOSING
DATE, FIRSTCITY BLC SHALL