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EXHIBIT 10.21
AMENDED AND RESTATED INDENTURE
DATED JULY 10, 2008
AMONG
FOLIO FUNDING II, LLC, AS ISSUER
CITIGROUP
FINANCIAL PRODUCTS INC., AS ADMINISTRATIVE AGENT
AND
WELLS FARGO BANK, NATIONAL ASSOCIATION, AS TRUSTEE
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TABLE OF CONTENTS
PAGE
ARTICLE I
Definitions and Incorporation by
Reference............................2
SECTION 1.1
Definitions..................................................2
SECTION 1.2
[Reserved]...................................................2
SECTION 1.3
Other Definitional Provisions................................2
ARTICLE II
The
Notes.............................................................3
SECTION 2.1
Form.........................................................3
SECTION 2.2
Execution, Authentication and Delivery.......................3
SECTION 2.3
[Reserved]...................................................4
SECTION 2.4
Registration; Registration of Transfer and Exchange..........4
SECTION 2.5
Restrictions on Transfer and Exchange........................5
SECTION 2.6
Mutilated, Destroyed, Lost or Stolen Notes...................7
SECTION 2.7
Persons Deemed Owner.........................................8
SECTION 2.8
Payment of Principal and Interest; Defaulted Interest........8
SECTION 2.9
Cancellation.................................................9
SECTION 2.10
No Release of Collateral.....................................9
SECTION
2.11
[Reserved]...................................................9
SECTION 2.12
Custody of Residual Interest Certificates by Trustee........10
ARTICLE III
Covenants............................................................11
SECTION 3.1
Payment of Principal and Interest...........................11
SECTION 3.2
Maintenance of Office or Agency.............................11
SECTION 3.3
Money for Payments to be Held in Trust......................11
SECTION 3.4
Existence...................................................13
SECTION 3.5
Protection of Trust Estate..................................13
SECTION 3.6
Opinions as to Trust Estate.................................14
SECTION 3.7
Performance of Obligations..................................14
SECTION 3.8
Negative Covenants..........................................15
SECTION 3.9
Reporting by CPS............................................16
SECTION 3.10
Annual Statement as to Compliance...........................16
SECTION 3.11
Issuer May Consolidate, Etc. Only with Consent..............17
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TABLE OF CONTENTS
(CONTINUED)
PAGE
SECTION 3.12
Successor or Transferee.....................................17
SECTION 3.13
No Other Business...........................................17
SECTION 3.14
No Borrowing................................................17
SECTION 3.15
Guarantees, Loans, Advances and Other Liabilities...........17
SECTION 3.16
Capital Expenditures........................................18
SECTION 3.17
Compliance with Laws........................................18
SECTION 3.18
Restricted Payments.........................................18
SECTION 3.19
Notice of Events of Default.................................18
SECTION 3.20
Further Instruments and Acts................................18
SECTION 3.21
Income Tax Characterization.................................18
SECTION 3.22
Separate
Existence of the Issuer............................18
SECTION 3.23
Amendment of the Issuer's Organizational Documents..........18
SECTION 3.24
Other Agreements............................................18
SECTION 3.25
Rule 144A Information.......................................19
SECTION 3.26
Change of Control...........................................19
ARTICLE IV
Satisfaction and
Discharge...........................................19
SECTION 4.1
Satisfaction and Discharge of Indenture.....................19
SECTION 4.2
Application of Trust Money..................................20
SECTION 4.3
Repayment of Moneys Held by Note Paying Agent...............20
ARTICLE V
Remedies.............................................................20
SECTION 5.1
Events of Default...........................................20
SECTION 5.2
Rights Upon Event of Default................................24
SECTION 5.3
Collection of Indebtedness and Suits for
Enforcement by Trustee......................................25
SECTION 5.4
Remedies....................................................27
SECTION 5.5
Optional Preservation of the Trust Estate...................27
SECTION 5.6
Deficiency..................................................27
SECTION 5.7
Priorities..................................................28
SECTION 5.8
Limitation of Suits.........................................28
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TABLE OF CONTENTS
(CONTINUED)
PAGE
SECTION 5.9
Unconditional Rights of the Noteholders To
Receive Principal and Interest..............................29
SECTION 5.10
Restoration of Rights and Remedies..........................29
SECTION 5.11
Rights and Remedies Cumulative..............................29
SECTION 5.12
Delay or Omission Not a Waiver..............................30
SECTION 5.13
[Reserved]..................................................30
SECTION 5.14
Waiver of Past Defaults.....................................30
SECTION 5.15
Undertaking for Costs.......................................30
SECTION 5.16
Waiver of Stay or Extension Laws............................30
SECTION 5.17
Sale of Trust Estate........................................31
ARTICLE VI
The
Trustee..........................................................32
SECTION 6.1
Duties of Trustee...........................................32
SECTION 6.2
Rights of Trustee...........................................33
SECTION 6.3
Individual Rights of Trustee................................34
SECTION
6.4
Trustee's Disclaimer........................................34
SECTION 6.5
Notice of Defaults..........................................34
SECTION 6.6
Reports by Trustee to the Noteholders.......................34
SECTION 6.7
Compensation and Indemnity..................................34
SECTION 6.8
Replacement of Trustee......................................35
SECTION 6.9
Successor Trustee by Merger.................................36
SECTION 6.10
Appointment of Co-Trustee or Separate Trustee...............36
SECTION 6.11
Eligibility: Disqualification...............................37
SECTION 6.12
[Reserved]..................................................37
SECTION 6.13
Appointment and Powers......................................37
SECTION 6.14
Performance of Duties.......................................38
SECTION 6.15
Limitation on Liability.....................................38
SECTION 6.16
[Reserved]..................................................38
SECTION 6.17
Successor Trustee...........................................39
SECTION 6.18
[Reserved]..................................................40
SECTION 6.19
Representations and Warranties of the Trustee...............40
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TABLE OF CONTENTS
(CONTINUED)
PAGE
SECTION 6.20
Waiver of Setoffs...........................................40
SECTION 6.21
Control by the Majority Noteholders.........................40
ARTICLE VII
[Reserved]...........................................................41
ARTICLE VIII
Collection of Money and Releases of Trust
Estate.....................41
SECTION 8.1
Collection of Money.........................................41
SECTION 8.2
Establishment of Collection Account.........................41
SECTION 8.3
Collection Account..........................................41
SECTION 8.4
[Reserved]..................................................42
SECTION 8.5
Distributions...............................................42
SECTION 8.6
Statements to Noteholders...................................43
SECTION 8.7
Release of Trust Estate.....................................43
SECTION 8.8
Opinion of Counsel..........................................43
ARTICLE IX
Supplemental
Indentures..............................................44
SECTION 9.1
Supplemental Indentures With the Consent of the
Administrative Agent and the Majority Noteholders...........44
SECTION 9.2
Execution of Supplemental Indentures........................44
SECTION 9.3
Effect of Supplemental Indenture............................44
ARTICLE X
REPAYMENT AND PREPAYMENT OF
NOTES....................................44
SECTION 10.1
Repayment of the Notes; Optional Prepayment of
the Notes...................................................44
SECTION 10.2
Notice of Prepayment........................................45
SECTION 10.3
General Procedures..........................................45
ARTICLE XI
MISCELLANEOUS........................................................46
SECTION 11.1
Compliance Certificates and Opinions, etc...................46
SECTION 11.2
Form of Documents Delivered to Trustee......................47
SECTION 11.3
Acts of the Noteholders or the Administrative Agent.........48
SECTION 11.4
Notices, etc., to Trustee, Issuer, the Administrative
Agent and Noteholders.......................................48
SECTION 11.5
Waiver......................................................49
SECTION 11.6
Alternate Payment and Notice Provisions.....................50
SECTION 11.7
Effect of Headings and Table of Contents....................50
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TABLE OF CONTENTS
(CONTINUED)
PAGE
SECTION 11.8
Successors and Assigns......................................50
SECTION 11.9
Benefits of Indenture.......................................50
SECTION 11.10
Severability................................................50
SECTION 11.11
Legal Holidays..............................................50
SECTION 11.12
Governing Law...............................................50
SECTION 11.13
Counterparts................................................51
SECTION 11.14
Recording of Indenture......................................51
SECTION 11.15
Issuer
Obligation...........................................51
SECTION 11.16
No Petition.................................................51
SECTION 11.17
Books and Records; Inspection; Other Information............52
SECTION 11.18
Entire Agreement............................................52
SECTION 11.19
Effectiveness...............................................52
SECTION 11.20
Specific Performance........................................52
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EXHIBIT A-1
Form of Class A-1 Note
EXHIBIT A-2
Form of Class A-2 Note
EXHIBIT B
Form of Transferor's Certificate
EXHIBIT C
Form of Transferee Representation Letter (QIB)
EXHIBIT D
Form of Transferee Representation Letter (IAI)
EXHIBIT E
Form of Settlement Date Statement
EXHIBIT F
Form of Trust Receipt
Schedule I
Initial Pledged Residual Interest Certificates
Schedule II
Pledged Residual Interest Certificates
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AMENDED AND RESTATED INDENTURE dated July 10, 2008, among FOLIO
FUNDING
II, LLC, a Delaware limited liability company (the "ISSUER"),
CITIGROUP
FINANCIAL PRODUCTS INC., a Delaware corporation (the
"ADMINISTRATIVE AGENT") and
WELLS FARGO BANK, NATIONAL ASSOCIATION, a national banking
association, as
trustee (the "TRUSTEE").
In connection with a securitization transaction, the Issuer,
the
Administrative Agent and the Trustee have entered into that certain
Indenture,
dated as of July 11, 2007 (the "ORIGINAL INDENTURE") pursuant to
which the
Issuer issued two classes of notes designated as Class A-1 Variable
Funding
Notes (the "INITIAL CLASS A-1 NOTES") and Class A-2 Term Notes (the
"INITIAL
CLASS A-2 NOTES").
Section 9.1 of the Original Indenture permits the Issuer, the
Administrative Agent and the Trustee, when authorized by an Issuer
Order, to
amend the Original Indenture with the prior written consent of
the
Administrative Agent and the Majority Noteholders.
The Issuer, the Administrative Agent and the Trustee intend to
change
certain terms of the securitization transaction and amend and
restate the
Original Indenture in its entirety to, among other things, reflect
(i) the
amendment and restatement of the Initial Class A-1 Notes in order
to redesignate
them as Class A-1 Term Notes (the "CLASS A-1 NOTES") and the
amendment and
restatement of the Initial Class A-2 Term Notes (the "CLASS A-2
NOTES" and,
together with the Class A-1 Notes, the "NOTES"), (ii) a prepayment
of the
Initial Class A-1 Notes in order to reduce the outstanding
principal amount of
the Initial Class A-1 Notes to $10,000,000, such prepayment to be
comprised of
Warrants and one or more cash payments and (iii) the continuation
of the
Trustee's original security interest in the Collateral (as defined
below) for
the benefit of the Issuer Secured Parties (as defined below).
The Administrative Agent and the Majority Noteholders desire to
consent
to the amendment and restatement of the Original Indenture in its
entirety.
In consideration of the foregoing, other good and valuable
consideration, and the mutual covenants and agreements contained
herein, the
parties hereto desire to amend and restate the Original Indenture
and agree as
follows:
As security for the payment and performance by the Issuer of
its
obligations under this Indenture and the Notes, the Issuer has
assigned the
Collateral (as defined below) as collateral to the Trustee for the
benefit of
the Issuer Secured Parties (as defined below).
GRANTING CLAUSE
As collateral security for the prompt payment in full when due of
all
the Issuer's obligations to the Administrative Agent and the
Noteholders
(collectively, the "ISSUER SECURED PARTIES") under this Indenture,
the Notes and
the other Basic Documents (collectively, the "ISSUER SECURED
OBLIGATIONS"), the
Issuer hereby Grants (as of the date of the Original Indenture) to
the Trustee,
for the benefit of the Issuer Secured Parties, a continuing
security interest in
favor of the Trustee, for the benefit of the Issuer Secured
Parties, in all of
the Issuer's right, title and interest in, to and under (in each
case, whether
now owned or existing, or hereafter acquired or arising) all
accounts, payment
intangibles, general intangibles, chattel paper, tangible chattel
paper,
electronic chattel paper, instruments, certificated securities,
uncertificated
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securities, financial assets, security entitlements, cash and
currency, deposit
accounts, letter-of-credit rights, investment property, and any and
all other
property of any type or nature owned by it, including without
limitation: (1)
each Residual Interest Certificate sold or contributed to, or
otherwise acquired
by, it pursuant to the Sale and Contribution Agreement (each, a
"PLEDGED
RESIDUAL INTEREST CERTIFICATE") and the right to receive all monies
remitted,
recovered or otherwise recovered in respect thereof after the
Initial Funding
Date, (2) all other Residual Interest Assets owned by it
(collectively with the
Pledged Residual Interest Certificates, the "PLEDGED RESIDUAL
INTEREST ASSETS"),
(3) the Collection Account and all investments, obligations and
other property
from time to time credited thereto, (4) the Issuer's rights in
respect of the
Sale and Contribution Agreement, and (5) all proceeds of, all
accessions to and
substitutions and replacements for, any of the foregoing, and all
rents, profits
and products of any thereof (all such property described in this
Granting Clause
collectively constituting the "COLLATERAL").
The Trustee hereby acknowledges such Grant, accepts the trusts
under
this Indenture in accordance with the provisions of this Indenture
and agrees to
perform its duties as required in this Indenture. The Trustee
hereby further
acknowledges that it has received the Residual Interest
Certificates described
in SCHEDULE I hereto (the "INITIAL PLEDGED RESIDUAL INTEREST
CERTIFICATES"),
each duly endorsed by the Seller to "Wells Fargo Bank, National
Association, as
Trustee for the benefit of the Administrative Agent and the holders
of the Notes
issued by Folio Funding II, LLC", and agrees to maintain continuous
possession
of the Pledged Residual Certificates in the State of Minnesota for
the benefit
of the Issuer Secured Parties, subject to the terms and conditions
of this
Indenture.
For the avoidance of doubt, the Issuer hereby confirms its Grant to
the
Trustee on behalf of the Issuer Secured Parties of a security
interest in the
Collateral pursuant to the Original Indenture and notwithstanding
anything to
the contrary contained in this Indenture, the security interest
Granted by the
Issuer hereunder is an extension and continuation of the security
interest
Granted under the Original Indenture.
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
------------------------------------------
SECTION 1.1 DEFINITIONS. Capitalized terms used herein and not
otherwise defined herein shall have the meanings assigned to them
in ANNEX A to
the Amended and Restated Note Purchase Agreement dated as of July
10, 2008 by
and between Folio Funding II, LLC, Consumer Portfolio Services,
Inc. and
Citigroup Financial Products Inc. (the "NOTE PURCHASE
AGREEMENT").
SECTION 1.2 [RESERVED]
SECTION
1.3 OTHER DEFINITIONAL PROVISIONS.
(a) All terms defined in this Indenture shall have the defined
meanings
when used in any instrument governed hereby and in any certificate
or other
document made or delivered pursuant hereto unless otherwise defined
therein.
(b) Accounting terms used but not defined or partly defined in
this
Indenture, in any instrument governed hereby or in any certificate
or other
document made or delivered pursuant hereto, to the extent not
defined, shall
have the respective meanings given to them under GAAP or any such
instrument,
certificate or other document, as applicable. To the extent that
the definitions
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of accounting terms in this Indenture or in any such instrument,
certificate or
other document are inconsistent with the meanings of such terms
under GAAP, the
definitions contained in this Indenture or in any such instrument,
certificate
or other document shall control.
(c) The words "HEREOF," "HEREIN," "HEREUNDER" and words of
similar
import when used in this Indenture shall refer to this Indenture as
a whole and
not to any particular provision of this Indenture.
(d) Section, Schedule and Exhibit references contained in this
Indenture are references to Sections, Schedules and Exhibits in or
to this
Indenture unless otherwise specified; and the term "INCLUDING"
shall mean
"INCLUDING WITHOUT LIMITATION."
(e) The definitions contained in this Indenture are applicable to
the
singular as well as the plural forms of such terms and to the
masculine as well
as to the feminine and neuter genders of such terms.
(f) Any agreement, instrument or statute defined or referred to
herein
or in any instrument or certificate delivered in connection
herewith means such
agreement, instrument or statute as the same may from time to time
be amended,
modified or supplemented and includes (in the case of agreements or
instruments)
references to all attachments and instruments associated therewith;
all
references to a Person include its permitted successors and
assigns.
(g) The singular form of the terms "NOTE" and "NOTEHOLDER" shall
not
preclude issuance of more than one Note or ownership of Notes by
more than one
Noteholder. The singular forms of such terms shall also mean the
plural forms of
such terms and the plural form of such terms shall also mean the
singular form
thereof, in each case as the context requires.
ARTICLE II
THE NOTES
---------
SECTION 2.1 FORM.
(a) The Class A-1 Notes and the Class A-2 Notes, each together with
the
Trustee's certificate of authentication, shall be in substantially
the form set
forth in EXHIBITS A-1 AND A-2, respectively, with such appropriate
insertions,
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omissions, substitutions and other variations as are required or
permitted by
this Indenture and may have such letters, numbers or other marks
of
identification and such legends or endorsements placed thereon as
may,
consistently herewith, be determined by the officers executing such
Notes, as
evidenced by their execution of the Notes. Any portion of the text
of any Note
may be set forth on the reverse thereof, with an appropriate
reference thereto
on the face of the Note. The Initial Class A-1 Notes and the
Initial Class A-2
Notes were issued on the Initial Funding Date. On the terms and
conditions set
forth in the Note Purchase Agreement, the Sale and Contribution
Agreement and
this Agreement, and in reliance on the covenants, representations
and agreements
set forth herein and therein, the Initial Class A-1 Notes and the
Initial Class
A-2 Notes shall be amended and restated as of the Effective Date
and the Issuer
shall cause the Trustee to authenticate and deliver to the Note
Purchaser the
Notes on the Effective Date. The Class A-1 Notes shall be term in
nature and
shall be fully drawn in the Class A-1 Facility Amount on the
Effective Date. The
Class A-2 Notes shall be term in nature and were fully drawn in the
Class A-2
Facility Amount on the Initial Funding Date. Any amounts prepaid
under the Class
A-1 Notes or the Class A-2 Notes may not be reborrowed.
(b) The Notes shall be typewritten, printed, lithographed or
engraved
or produced by any combination of these methods (with or without
steel engraved
borders), all as determined by the officers executing the Notes, as
evidenced by
their execution of the Notes.
(c) The terms of the Class A-1 Notes and Class A-2 Notes set forth
in
EXHIBITS A-1 AND A-2, respectively, are part of the terms of this
Indenture.
SECTION 2.2 EXECUTION, AUTHENTICATION AND DELIVERY.
(a) The Notes shall be executed on behalf of the Issuer by any of
its
Authorized Officers. The signature of any such Authorized Officer
on the Notes
may be manual or facsimile.
(b) Notes bearing the manual or facsimile signature of individuals
who
were at any time Authorized Officers of the Issuer shall bind the
Issuer,
notwithstanding that such individuals or any of them have ceased to
hold such
offices prior to the authentication and delivery of such Notes or
did not hold
such offices at the date of such Note.
(c) Upon receipt of (i) the Initial Class A-1 Notes and the
Initial
Class A-2 Notes for cancellation and (ii) an Issuer Order for
authentication and
delivery, the Trustee shall authenticate and deliver (i) Class A-1
Notes in an
aggregate principal amount equal to the Class A-1 Facility Amount
and (ii) Class
A-2 Notes in an aggregate principal amount equal to the Class A-2
Facility
Amount.
(d) Each Note shall be dated the date of its authentication.
(e) No Note shall be entitled to any benefit under this Indenture
or be
valid or obligatory for any purpose, unless there appears attached
to such Note
a certificate of authentication substantially in the form provided
for herein,
executed by the Trustee by the manual signature of one of its
authorized
signatories, and such certificate attached to any Note shall be
conclusive
evidence, and the only evidence, that such Note has been duly
authenticated
hereunder.
SECTION 2.3 [RESERVED]
SECTION 2.4 REGISTRATION; REGISTRATION OF TRANSFER AND
EXCHANGE.
(a) The Issuer shall cause the Trustee to keep a register (the
"NOTE
REGISTER") in which, subject to such reasonable regulations as it
may prescribe
and subject to the provisions of SECTION 2.5, the Trustee shall
provide for the
registration of the Notes, and the registration of transfers and
exchanges of
the Notes. The Trustee is, and shall be "NOTE REGISTRAR" for the
purpose of
registering the Notes and transfers of the Notes as herein
provided. Upon any
resignation or removal of any Note Registrar, the Issuer shall
promptly appoint
a successor.
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(b) If a Person other than the Trustee is appointed by the Issuer
as
Note Registrar, such Person must be acceptable to the
Administrative Agent and,
in addition, the Issuer will give the Trustee, the Administrative
Agent and the
Noteholders prompt written notice of the appointment of such Note
Registrar
(once approved by the Administrative Agent) and of the location,
and any change
in the location, of the Note Register, and the Trustee and the
Administrative
Agent shall have the right to inspect the Note Register at all
reasonable times
and to obtain copies thereof. The Trustee shall have the right to
conclusively
rely upon a certificate executed on behalf of the Note Registrar by
an Executive
Officer thereof as to the name and address of each Holder of the
Note and the
Percentage Interest and number of each Note.
(c) Subject to SECTION 2.5 hereof, upon surrender for registration
of
transfer of a Note at the office or agency of the Issuer to be
maintained as
provided in SECTION 3.2, if the requirements of Section 8-401(a) of
the UCC are
met, the Trustee shall have the Issuer execute and the Trustee
shall
authenticate and deliver, in the name of the designated transferee
or
transferees, one or more new Notes in the minimum Percentage
Interest of 1%
representing in the aggregate the Percentage Interest on the face
of the Note to
be transferred.
(d) At the option of a Holder, a Note may be exchanged for another
Note
in any authorized Percentage Interest, of the same class and a like
aggregate
Percentage Interest, upon surrender of the Note to be exchanged at
such office
or agency. Whenever a Note is so surrendered for exchange, subject
to SECTION
2.5 hereof, if the requirements of Section 8-401(a) of the UCC are
met, the
Issuer shall execute, and upon request by the Issuer the Trustee
shall
authenticate, and the Noteholder shall obtain from the Trustee, the
Note which
the Noteholder making the exchange is entitled to receive.
(e) Any Note issued upon any registration of transfer or exchange
of a
Note shall be the valid obligation of the Issuer, evidencing, in
the aggregate,
the same debt, and entitled to the same benefits under this
Indenture, as the
Note surrendered upon such registration of transfer or
exchange.
(f) Every Note presented or surrendered for registration of
transfer or
exchange shall be (i) duly endorsed by, or accompanied by a written
assignment
in substantially the forms attached to EXHIBITS A-1 AND A-2 duly
executed by,
the Holder thereof or such Holder's attorney, duly authorized in
writing, with
such signature guaranteed by an "eligible guarantor institution"
meeting the
requirements of the Note Registrar which requirements include
membership or
participation in Securities Transfer Agents Medallion Program
("STAMP") or such
other "signature guarantee program" as may be determined by the
Note Registrar
in addition to, or in substitution for, STAMP, all in accordance
with the
Securities Exchange Act of 1934, as amended, and (ii) accompanied
by such other
documents as the Trustee may require.
(g) No service charge shall be made to a Holder for any
registration of
transfer or exchange of a Note, but the Note Registrar may require
payment of a
sum sufficient to cover any tax or other governmental charge that
may be imposed
in connection with any registration of transfer or exchange of a
Note.
(h) The preceding provisions of this SECTION 2.4 notwithstanding,
the
Issuer shall not be required to make and the Note Registrar shall
not register
transfers or exchanges of a Note selected for redemption or of any
Note for a
period of two (2) Business Days preceding the due date for any
payment with
respect to such Note.
SECTION 2.5 RESTRICTIONS ON TRANSFER AND EXCHANGE.
(a) No transfer of a Note shall be made unless the transferor
thereof
has provided a representation letter substantially in the form of
EXHIBIT B that
such transfer is (i) to the Issuer or an Affiliate of the Issuer,
or (ii) in
compliance with Section 2.5(b) hereof, to a qualified institutional
buyer (as
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defined in Rule 144A under the Securities Act) in a transaction
meeting the
requirements of Rule 144A under the Securities Act, or (iii) in
compliance with
Section 2.5(c) hereof, (A) to an institutional investor that is an
"ACCREDITED
INVESTOR" as defined in Rule 501(a)(1), (2), (3) or (7) of
Regulation D
promulgated under the Securities Act, or (iv) in a transaction
complying with or
exempt from the registration requirements of the Securities Act and
in
accordance with any applicable securities laws of any state of the
United States
or any other jurisdiction; PROVIDED, that, in the case of CLAUSE
(IV) the
Trustee or the Issuer may require an Opinion of Counsel to the
effect that such
transfer may be effected without registration under the Securities
Act, which
Opinion of Counsel, if so required, shall be addressed to the
Issuer and the
Trustee and shall be secured at the expense of the Holder. Each
prospective
purchaser by its acquisition of a Note, acknowledges that such Note
will contain
a legend substantially to the effect set forth in SECTION 2.5(f)
(unless the
Issuer determines otherwise in accordance with applicable law).
(b) Any transfer or exchange of a Note to a proposed transferee
shall
be conducted in accordance with the provisions of Section 2.4, and
shall be
contingent upon receipt by the Note Registrar of (A) such Note
properly endorsed
for assignment or transfer, (B) written instruction from such
transferring
Holder directing the Note Registrar to cause the transfer to such
transferees,
in such Percentage Interests (not to exceed the Percentage Interest
on the face
of the Note to be transferred) as the transferring Holder shall
specify in such
instructions; and (C) such certificates or signatures as may be
required under
such Note or this Section 2.5, in each case, in form and substance
satisfactory
to the Note Registrar. The Note Registrar shall cause any such
transfers and
related cancellations or increases and related reductions, as
applicable, to be
properly recorded in its books in accordance with the requirements
of Section
2.4.
(c) If a Note is sold to a "qualified institutional buyer" as
defined
in Rule 144A of the Securities Act purchasing for its own account
or for the
account of another "qualified institutional buyer," such Note shall
be issued as
a certificated Note in definitive, fully registered form without
interest
coupons with the applicable legends set forth in the form of the
Note registered
in the name of the beneficial owner or a nominee thereof, duly
executed by the
Issuer and authenticated by the Trustee as hereinafter provided.
Any transfer to
an "qualified institutional buyer" is expressly conditioned upon
the requirement
that such transferee shall deliver a representation letter in the
form of
EXHIBIT C.
(d) If the Note is sold in the United States to U.S. Persons
under
Section 4(2) of the Securities Act to institutional "ACCREDITED
INVESTORS" (as
defined in Rule 501(a)(1), (2), (3) or (7) under the Securities
Act), it shall
be issued in the form of a certificated Note in definitive, fully
registered
form without interest coupons with the applicable legends set forth
in the form
of the Note registered in the name of the beneficial owner or a
nominee thereof,
duly executed by the Issuer and authenticated by the Trustee as
hereinafter
provided. Any transfer to an institutional "ACCREDITED INVESTOR" is
expressly
conditioned upon the requirement that such transferee shall deliver
a
representation letter in the form of EXHIBIT D.
(e) The Note Registrar shall not register any transfer or exchange
of
any Note to the extent that upon such transfer or exchange there
would be more
than ten (10) Noteholders of each class then reflected on the Note
Register. For
purposes of determining the number of Noteholders, a Person
(beneficial owner)
owning an interest in a partnership (including any entity treated
as a
partnership for federal income tax purposes), grantor trust, or S
corporation
(flow-through entity), that owns, directly or through other
flow-through
entities, an interest in the Notes, is treated as a Noteholder
if:
(i) Substantially all of the value of the beneficial owner's
interest in the flow-through entity is attributable to the
flow-through
entity's interest (direct or indirect) in the Notes; and
(ii) A principal purpose of the use of the tiered arrangement
is to permit the satisfaction of the ten (10) Noteholder
limitation.
(f) Unless the Issuer determines otherwise in accordance with
applicable law, each Note shall have the following legend:
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THIS NOTE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR
ANY STATE SECURITIES LAWS OR "BLUE SKY" LAWS AND MAY BE
RESOLD, PLEDGED OR TRANSFERRED ONLY TO (I) THE ISSUER (UPON
REDEMPTION THEREOF OR OTHERWISE) OR AN AFFILIATE OF THE ISSUER
(AS CERTIFIED BY THE ISSUER) OR (2) AN INSTITUTIONAL INVESTOR
THAT IS AN "ACCREDITED INVESTOR" AS DEFINED IN RULE 501(A)(1),
(2), (3) OR (7) OF REGULATION D PROMULGATED UNDER THE
SECURITIES ACT THAT EXECUTES A CERTIFICATE, SUBSTANTIALLY IN
THE FORM SPECIFIED IN THE INDENTURE, TO THE EFFECT THAT IT IS
AN INSTITUTIONAL ACCREDITED INVESTOR ACTING FOR ITS OWN
ACCOUNT (AND NOT FOR THE ACCOUNT OF OTHERS) OR AS A FIDUCIARY
OR AGENT FOR OTHERS (WHICH OTHERS ALSO ARE INSTITUTIONAL
ACCREDITED INVESTORS UNLESS THE HOLDER IS A BANK ACTING IN ITS
FIDUCIARY CAPACITY) (3) SO LONG AS THIS NOTE IS ELIGIBLE FOR
RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT, IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A TO A PERSON
THAT EXECUTES A CERTIFICATE, SUBSTANTIALLY IN THE FORM
SPECIFIED IN THE INDENTURE, TO THE EFFECT THAT SUCH PERSON IS
A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A),
ACTING FOR ITS OWN ACCOUNT, OR AS A FIDUCIARY OR AGENT FOR
OTHERS (WHICH OTHERS ALSO ARE QUALIFIED INSTITUTIONAL BUYERS)
TO WHOM NOTICE IS GIVEN THAT THE SALE, PLEDGE, OR TRANSFER IS
BEING MADE IN RELIANCE ON RULE 144A, OR (4) IN A TRANSACTION
OTHERWISE EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT, APPLICABLE SECURITIES LAWS OF ANY STATE OF THE
UNITED STATES OR ANY OTHER JURISDICTION, IN EACH SUCH CASE, IN
COMPLIANCE WITH THE INDENTURE AND ALL APPLICABLE SECURITIES
LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER
JURISDICTION: PROVIDED, THAT, IN THE CASE OF CLAUSE (4), THE
TRUSTEE OR THE ISSUER MAY REQUIRE AN OPINION OF COUNSEL TO THE
EFFECT THAT SUCH TRANSFER MAY BE EFFECTED WITHOUT REGISTRATION
UNDER THE SECURITIES ACT, WHICH OPINION OF COUNSEL, IF SO
REQUIRED, SHALL BE ADDRESSED TO THE ISSUER AND THE TRUSTEE AND
SHALL BE SECURED AT THE EXPENSE OF THE HOLDER. NO
REPRESENTATION IS MADE AS TO THE AVAILABILITY OF THE EXEMPTION
PROVIDED BY RULE 144A FOR RESALES OF THIS NOTE.
THE NOTE REGISTRAR SHALL NOT REGISTER ANY TRANSFER OR EXCHANGE
OF THIS NOTE TO THE EXTENT THAT UPON SUCH TRANSFER OR EXCHANGE
THERE WOULD BE MORE THAN TEN (10) NOTEHOLDERS THEN REFLECTED
ON THE NOTE REGISTER.
SECTION 2.6 MUTILATED, DESTROYED, LOST OR STOLEN NOTES.
(a) If (i) any mutilated Note is surrendered to the Trustee, or
the
Trustee receives evidence to its satisfaction of the destruction,
loss or theft
of any Note, and (ii) there is delivered to the Trustee such
security or
indemnity as may be required by it to hold the Issuer and the
Trustee harmless,
then, in the absence of notice to the Issuer, the Note Registrar or
the Trustee
that such Note has been acquired by a protected purchaser, and,
provided that
the requirements of Section 8-405 and 8-406 of the UCC are met, the
Issuer shall
execute, and upon request by the Issuer, the Trustee shall
authenticate and
deliver in exchange for or in lieu of any such mutilated,
destroyed, lost or
stolen Note, a replacement Note; provided, however, that if any
such destroyed,
lost or stolen Note, but not a mutilated Note, shall have become,
or within
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seven days shall be, due and payable or shall have been called for
redemption,
instead of issuing a replacement Note, the Issuer may direct the
Trustee, in
writing, to pay such destroyed, lost or stolen Note when so due or
payable
without surrender thereof. If, after the delivery of such
replacement Note or
payment of a destroyed, lost or stolen Note pursuant to the
preceding sentence,
a protected purchaser of the original Note in lieu of which such
replacement
Note was issued, presents for payment such original Note, the
Issuer and the
Trustee shall be entitled to recover such replacement Note (or such
payment)
from the Person to whom it was delivered or any assignee of such
Person, except
a protected purchaser, and shall be entitled to recover upon the
security or
indemnity provided therefor to the extent of any loss, damage, cost
or expense
incurred by the Issuer or the Trustee in connection therewith.
(b) Upon the issuance of any replacement Note under this Section,
the
Issuer may require the payment by the Holder of such Note of a sum
sufficient to
cover any tax or other governmental charge that may be imposed in
relation
thereto and any other reasonable expenses (including the fees and
expenses of
the Trustee) connected therewith.
(c) Every replacement Note issued pursuant to this Section in
replacement of any mutilated, destroyed, lost or stolen Note shall
constitute an
original additional contractual obligation of the Issuer, whether
or not the
mutilated, destroyed, lost or stolen Note shall be at any time
enforceable by
anyone, and shall be entitled to all the benefits of this Indenture
equally and
proportionately with any and all other Notes duly issued
hereunder.
(d) The provisions of this Section are exclusive and shall preclude
(to
the extent lawful) all other rights and remedies with respect to
the replacement
or payment of any mutilated, destroyed, lost or stolen Note.
SECTION 2.7 PERSONS DEEMED OWNER. Prior to due presentment for
registration of transfer of any Note, the Trustee and any agent of
the Trustee
may treat the Person in whose name such Note is registered (as of
the applicable
Record Date) as the owner of such Note for the purpose of receiving
payments of
principal of and interest, if any, on such Note, for all other
purposes
whatsoever and whether or not such Note be overdue, and none of the
Trustee or
any agent of the Trustee shall be affected by notice to the
contrary.
SECTION 2.8 PAYMENT OF PRINCIPAL AND INTEREST; DEFAULTED
INTEREST.
(a) The Class A-1 Notes and the Class A-2 Notes shall accrue
interest
as provided in the forms of Class A-1 Notes and Class A-2 Notes set
forth in
EXHIBITS A-1 AND A-2, respectively, and such interest shall be due
and payable
on each Settlement Date as specified therein. Any installment of
interest or
principal, if any, payable on any Note which is punctually paid or
duly provided
for by the Issuer on the applicable Settlement Date shall be paid
to the Person
in whose name such Note (or one or more Predecessor Notes) is
registered on the
related Record Date either (i) by wire transfer in immediately
available funds
to such Person's account as it appears on the Note Register on such
Record Date
if (A) such Noteholder has provided to the Note Registrar
appropriate written
instructions at least five Business Days prior to such Settlement
Date and such
Holder's Note in the aggregate evidences a Percentage Interest of
not less than
1% or (B) such Noteholder is the Seller, or an Affiliate thereof,
or if not,
(ii) by check mailed to such Noteholder at the address of such
Noteholder
appearing on the Note Register, except for the final installment of
principal
payable with respect to such Note on a Settlement Date or on the
Facility
Termination Date, which shall be payable as provided below.
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(b) (i) The principal of the Class A-1 Notes shall be payable on
each
Settlement Date as set forth in Section 8.5 hereof and if a
Collateral
Deficiency exists, a prepayment of principal shall be made pursuant
to the terms
of Section 3.07 of the Note Purchase Agreement and (ii) the
principal of the
Class A-2 Notes shall be payable on each Settlement Date as set
forth in Section
8.5 hereof after the Class A-1 Invested Amount has been reduced to
zero and if a
Collateral Deficiency exists, a prepayment of principal shall be
made pursuant
to the terms of Section 3.07 of the Note Purchase Agreement. The
entire unpaid
principal amount of the Notes shall become immediately due and
payable, upon the
declaration of acceleration of maturity by the Trustee pursuant to
Section 5.2
hereof. In addition, the Aggregate Invested Amount and all accrued
and unpaid
interest on the Notes shall be due and payable in full on the
Facility
Termination Date and otherwise as provided in SECTION 3.1, SECTION
8.5 and if
applicable, SECTION 5.7, and the forms of Notes attached hereto as
EXHIBITS A-1
AND A-2. The principal amount outstanding under the Notes of any
class at any
time shall be equal to the related Invested Amount. All principal
payments on
the Notes of a class shall be made pro rata to the Noteholders of
such class
entitled thereto based on their respective Percentage Interests of
the related
Invested Amount. Upon written notice from the Issuer, the Trustee
shall notify
the Person in whose name a Note is registered at the close of
business on the
Record Date preceding the Settlement Date on which the Issuer
expects that the
final installment of principal of and interest on such Note will be
paid. Such
notice shall be transmitted by facsimile prior to such final
Settlement Date and
shall specify that such final installment will be payable only upon
presentation
and surrender of such Note and shall specify the place where such
Note may be
presented and surrendered for payment of such installment.
(c) If the Issuer defaults in a payment of interest on a class
of
Notes, the Issuer shall pay defaulted interest (plus interest on
such defaulted
interest to the extent lawful) at the applicable Note Interest Rate
in any
lawful manner. The Issuer shall pay such defaulted interest to the
Noteholders
on the immediately following Settlement Date. At least three (3)
days before any
such Settlement Date, the Issuer shall mail to the Noteholders and
the Trustee a
notice that states the Settlement Date and the amount of defaulted
interest to
be paid.
SECTION 2.9 CANCELLATION. Any Note surrendered for payment,
registration of transfer, exchange or redemption shall, if
surrendered to any
Person other than the Trustee, be delivered to the Trustee and
shall be promptly
canceled by the Trustee. The Issuer may at any time deliver to the
Trustee for
cancellation any Note previously authenticated and delivered
hereunder which the
Issuer may have acquired in any manner whatsoever, and the Note so
delivered
shall be promptly canceled by the Trustee. No Note shall be
authenticated in
lieu of or in exchange for any Note canceled as provided in this
Section, except
as expressly permitted by this Indenture. A canceled Note may be
held or
disposed of by the Trustee in accordance with its standard
retention or disposal
policy as in effect at the time unless the Issuer shall direct by
an Issuer
Order that they be destroyed or returned to it; provided that such
Issuer Order
is timely and such Note has not been previously disposed of by the
Trustee.
SECTION 2.10 NO RELEASE OF COLLATERAL. No Collateral shall be
released
from the lien of this Indenture until satisfaction and discharge of
this
Indenture in accordance with Article IV hereof.
SECTION 2.11 [Reserved].
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SECTION 2.12 CUSTODY OF RESIDUAL INTEREST CERTIFICATES BY TRUSTEE.
In
connection with any Funding Date prior to the Effective Date, the
Issuer
delivered to the Trustee the Residual Interest Certificates set
forth in
SCHEDULE II thereto acquired by the Issuer pursuant to the Sale and
Contribution
Agreement. Each such Residual Interest Certificate was indorsed by
the
registered owner thereof to the Trustee or in blank, and included
an assignment
executed by the registered owner thereof in the form attached to
such Residual
Interest Certificate. The Trustee currently holds and will continue
to hold each
Residual Interest Certificate delivered to it as Trustee,
custodian, agent and
bailee in trust for the use and benefit of the Issuer Secured
Parties until such
Residual Interest Certificate is released from the Lien of this
Indenture in
accordance with the terms hereof. The Trustee executed and
delivered to the
Administrative Agent a receipt substantially in the form of EXHIBIT
F hereto (a
"TRUST RECEIPT") for such Residual Interest Certificate(s) received
by the
Trustee. By its delivery of a Trust Receipt, the Trustee is deemed
to have
acknowledged receipt of each Residual Interest Certificate that the
Seller has
represented was purchased by the Purchaser on the related Funding
Date as
indicated in the related Confirmation Statement, (b) reviewed each
such Residual
Interest Certificate and (c) determined that each such Residual
Interest
Certificate has been properly indorsed to it or in blank and
contains an
assignment executed by the registered owner thereof in the form
attached to such
Residual Interest Certificate.
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ARTICLE III
COVENANTS
---------
SECTION 3.1 PAYMENT OF PRINCIPAL AND INTEREST. The Issuer will duly
and
punctually pay the principal of and interest on the Notes in
accordance with the
terms of the Notes and this Indenture. Without limiting the
foregoing, the
Issuer will cause to be distributed on each Settlement Date all
amounts
deposited in the Collection Account to which the Noteholders are
entitled under
this Indenture. Amounts properly withheld under the Code by the
Trustee from a
payment to any Noteholder of interest and/or principal shall be
considered as
having been paid by the Issuer to such Noteholder for all purposes
of this
Indenture.
SECTION 3.2 MAINTENANCE OF OFFICE OR AGENCY. The Issuer has
maintained
and will maintain in Minneapolis, Minnesota, an office or agency
where Notes may
be surrendered for registration of transfer or exchange, and where
notices and
demands to or upon the Issuer in respect of the Notes and this
Indenture may be
served. The Issuer has appointed the Trustee to serve as its agent
for the
foregoing purposes. The Issuer will give prompt written notice to
the Trustee,
the Administrative Agent and the Noteholders of the location, and
of any change
in the location, of any such office or agency. If at any time the
Issuer shall
fail to maintain any such office or agency or shall fail to furnish
the Trustee
with the address thereof, such surrenders, notices and demands may
be made or
served at the Corporate Trust Office, and the Issuer hereby
appoints the Trustee
as its agent to receive all such surrenders, notices and
demands.
SECTION 3.3 MONEY FOR PAYMENTS TO BE HELD IN TRUST.
(a) Except as provided in SECTION 3.3(C) hereof, all payments
of
amounts due and payable with respect to the Notes that are to be
made from
amounts withdrawn from the Collection Account shall be made on
behalf of the
Issuer by the Trustee or by the Note Paying Agent.
(b) The Issuer shall cause each Note Paying Agent other than
the
Trustee to execute and deliver to the Trustee an instrument in
which such Note
Paying Agent shall agree with the Trustee and the Administrative
Agent (and if
the Trustee acts as Note Paying Agent, it hereby so agrees),
subject to the
provisions of this Section, that such Note Paying Agent shall:
(i) hold all sums held by it for the payment of amounts due
with respect to the Notes in trust for the benefit of the
Persons
entitled thereto until such sums shall be paid to such Persons
or
otherwise
disposed of as herein provided and pay such sums to such
Persons as herein provided;
(ii) give the Trustee notice of any default by the Issuer (or
any other obligor upon the Notes) of which it has actual knowledge
in
the making of any payment required to be made with respect to
the
Notes;
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<PAGE>
(iii) at any time during the continuance of any such default,
upon the written request of the Trustee, forthwith pay to the
Trustee
all sums so held in trust by such Note Paying Agent;
(iv) immediately resign as a Note Paying Agent and forthwith
pay to the Trustee all sums held by it in trust for the payment of
the
Notes if at any time it ceases to meet the standards required to be
met
by a Note Paying Agent at the time of its appointment; and
(v) comply with all requirements of the Code with respect to
the
withholding from any payments made by it on the Notes of any
applicable withholding taxes imposed thereon and with respect to
any
applicable reporting requirements in connection therewith.
(c) The Issuer may at any time, for the purpose of obtaining
the
satisfaction and discharge of this Indenture or for any other
purpose, by Issuer
Order direct any Note Paying Agent to pay to the Trustee all sums
held in trust
by such Note Paying Agent, such sums to be held by the Trustee upon
the same
trusts as those upon which the sums were held by such Note Paying
Agent; and
upon such a payment by any Note Paying Agent to the Trustee, such
Note Paying
Agent shall be released from all further liability with respect to
such money.
(d)
Subject to applicable laws with respect to the escheat of
funds,
any money held by the Trustee or any Note Paying Agent in trust for
the payment
of any amount due with respect to the Notes and remaining unclaimed
for two
years after such amount has become due and payable shall be
discharged from such
trust and be paid to the Issuer on Issuer Request and shall be
deposited by the
Trustee in the Collection Account; and the Noteholders shall
thereafter, as
unsecured general creditors, look only to the Issuer for payment
thereof (but
only to the extent of the amounts so paid to the Issuer), and all
liability of
the Trustee or such Note Paying Agent with respect to such trust
money shall
thereupon cease; provided, however, that the Trustee or such Note
Paying Agent,
before being required to make any such repayment, shall at the
expense of the
Issuer cause to be published once, in a newspaper published in the
English
language, customarily published on each Business Day and of general
circulation
in the City of New York, notice that such money remains unclaimed
and that,
after a date specified therein, which shall not be less than 30
days from the
date of such publication, any unclaimed balance of such money then
remaining
will be repaid to the Issuer. The Trustee shall also adopt and
employ, at the
expense of the Issuer, any other reasonable means of notification
of such
repayment (including, but not limited to, mailing notice of such
repayment to
the Holder whose Notes have been called but have not been
surrendered for
redemption or whose right to or interest in moneys due and payable
but not
claimed is determinable from the records of the Trustee or of any
Note Paying
Agent, at the last address of record for each such Holder).
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<PAGE>
SECTION 3.4 EXISTENCE. Except as otherwise permitted by the
provisions
of Section 3.11, the Issuer has kept and will keep in full effect
its existence,
rights and franchises as a limited liability company under the laws
of the State
of Delaware (unless it becomes, or any successor Issuer hereunder
is or becomes,
organized under the laws of any other state or of the United States
of America,
in which case the Issuer has kept and will keep in full effect its
existence,
rights and franchises under the laws of such other jurisdiction)
and will obtain
and preserve its qualification to do business in each jurisdiction
in which such
qualification is or shall be necessary to protect the validity
and
enforceability of this Indenture, the Notes, the Collateral and
each other
instrument or agreement included in the Trust Estate.
SECTION 3.5 PROTECTION OF TRUST ESTATE. The Issuer intends the
security
interest granted pursuant to this Indenture in favor of the Trustee
for the
benefit of the Issuer Secured Parties to be prior to all other
liens in respect
of the Trust Estate, and the Issuer has taken and shall take all
actions
necessary to obtain and maintain, in favor of the Trustee, for the
benefit of
the Issuer Secured Parties, a first lien on and a first priority,
perfected
security interest in the Trust Estate. The Issuer will from time to
time prepare
(or shall cause to be prepared), execute and deliver all such
supplements and
amendments hereto and all such financing statements, continuation
statements,
instruments of further assurance and other instruments, and will
take such other
action necessary or advisable to:
(i) Grant more effectively all or any portion of the Trust
Estate;
(ii) maintain or preserve the lien and security interest (and
the priority thereof) in favor of the Trustee for the benefit of
the
Issuer Secured Parties created by this Indenture or carry out
more
effectively the purposes hereof;
(iii) perfect, publish notice of or protect the validity of
any Grant made or to be made by this Indenture;
(iv) enforce any of the Collateral;
(v) preserve and defend title to the Trust Estate and the
rights of the Issuer Secured Parties in such Trust Estate against
the
claims of all persons and parties; and
(vi) pay all taxes or assessments levied or assessed upon the
Trust Estate when due.
The
Issuer hereby designates the Trustee its agent and
attorney-in-fact
to execute any financing statement, continuation statement or other
instrument
required by the Trustee pursuant to this Section.
The Issuer hereby authorizes the Administrative Agent, the Trustee
and
their respective agents to file such financing statements and
continuation
statements and take such other actions as the Administrative Agent
or the
Trustee may deem advisable in connection with the security interest
granted by
the Issuer under the Indenture to the extent permitted by
applicable law. Any
such financing statements and continuation statements shall be
prepared by the
Issuer.
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<PAGE>
SECTION 3.6 OPINIONS AS TO TRUST ESTATE.
(a) On the Initial Funding Date, the Effective Date, and on the
date of
execution of each indenture supplemental hereto, the Issuer shall
furnish to the
Trustee and the Administrative Agent an Opinion of Counsel either
stating that,
in the opinion of such counsel, such action has been taken with
respect to the
recording and filing of this Indenture, any indentures supplemental
hereto, and
any other requisite documents, and with respect to the execution
and filing of
any financing statements and continuation statements, as are
necessary to
perfect and make effective the first priority lien and security
interest in
favor of the Trustee, for the benefit of the Issuer Secured
Parties, created by
this Indenture and reciting the details of such action, or stating
that, in the
opinion of such counsel, no such action is necessary to make such
lien and
security interest effective.
(b) Within 90 days after the beginning of each calendar year,
beginning
with the first calendar year beginning more than three months after
the
Effective Date, the Issuer shall furnish to the Trustee and the
Administrative
Agent an Opinion of Counsel either stating that, in the opinion of
such counsel,
such action has been taken with respect to the recording, filing,
re-recording
and re-filing of this Indenture, any indentures supplemental hereto
and any
other requisite documents and with respect to the execution and
filing of any
financing statements and continuation statements as are necessary
to maintain
the lien and security interest in the Collateral created by this
Indenture and
reciting the details of such action or stating that in the opinion
of such
counsel no such action is necessary to maintain such lien and
security interest.
Such Opinion of Counsel shall also describe any action necessary
(as of the date
of such opinion) to be taken in the following year to maintain the
lien and
security interest of this Indenture in the Collateral.
SECTION 3.7 PERFORMANCE OF OBLIGATIONS.
(a) The Issuer has not taken, will not take any action and will use
its
best efforts not to permit any action to be taken by others that
would release
any Person from any of such Person's material covenants or
obligations under any
instrument or agreement included in the Trust Estate or that would
result in the
amendment, hypothecation, subordination, termination or discharge
of or impair
the validity or effectiveness of, any such instrument or agreement,
except as
ordered by any bankruptcy or other court or as expressly provided
in this
Indenture, the other Basic Documents or such other instrument or
agreement.
(b) The Issuer may contract with other Persons acceptable to
the
Administrative Agent to assist it in performing its duties under
this Indenture,
and any performance of such duties by a Person identified to the
Trustee in an
Officer's Certificate of the Issuer shall be deemed to be action
taken by the
Issuer.
(c) The Issuer has punctually performed and observed, and will
punctually perform and observe all of its obligations and
agreements contained
in this Indenture, the other Basic Documents and in the instruments
and
agreements included in the Trust Estate, including but not limited
to preparing
(or causing to be prepared) and filing (or causing to be filed) all
UCC
financing statements and continuation statements required to be
filed by the
terms of this Indenture and the Sale and Contribution Agreement in
accordance
with and within the time periods provided for herein and therein.
Except as
otherwise expressly provided therein, the Issuer has not, and shall
not waive,
amend, modify, supplement or terminate any Basic Document or any
provision
thereof without the prior written consent of the Administrative
Agent and the
Majority Noteholders.
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<PAGE>
(d) If a responsible officer of the Issuer shall have written
notice or
actual knowledge of the occurrence of an Event of Default, the
Issuer shall
promptly notify the Trustee, the Administrative Agent and the
Noteholders
thereof in accordance with SECTION 11.4, and shall specify in such
notice the
action, if any, the Issuer is taking in respect of such
default.
(e) The Issuer agrees that it shall not have any right to waive,
and
shall not waive, timely performance or observance by CPS or the
Seller of their
respective duties under the Basic Documents without the prior
written consent of
the Administrative Agent and the Majority Noteholders.
SECTION 3.8 NEGATIVE COVENANTS. So long as any Note is Outstanding
or
any amounts are due and owing to the Issuer Secured Parties, the
Issuer shall
not:
(i) except as expressly permitted by this Indenture or the
Basic Documents, sell, transfer, exchange or otherwise dispose of
any
of the properties or assets of the Trust Estate, unless directed to
do
so by the Administrative Agent (acting at the written direction of
the
Majority Noteholders) or unless the Administrative Agent (acting at
the
written direction of the Majority Noteholders) has approved
such
disposition; or
(ii) claim any credit on, or make any deduction from the
principal or interest payable in respect of, the Notes (other
than
amounts properly withheld from such payments under the Code) or
assert
any claim against the Administrative Agent or any present or
former
Noteholder by reason of the payment of the taxes levied or
assessed
upon any part of the Trust Estate; or
(iii) (A) permit the validity or effectiveness of this
Indenture to be impaired, or permit the lien in favor of the
Trustee
for the benefit of the Issuer Secured Parties created by this
Indenture
to be amended, hypothecated, subordinated, terminated or
discharged, or
permit any Person to be released from any covenants or
obligations
under this Indenture or any other Basic Document except as may
be
expressly permitted hereby or thereby, (B) permit any lien,
charge,
excise, claim, security interest, mortgage or other encumbrance
(other
than the lien of this Indenture) to be created on or extend to
or
otherwise arise upon or burden the Trust Estate or any part thereof
or
any interest therein or the proceeds thereof, (C) permit the lien
of
this Indenture not to constitute a valid first priority
security
interest in the Trust Estate or (D) amend, modify or fail to
comply
with the provisions any of the Basic Documents or any ABS
Issuance
Agreement relating thereto without the prior written consent of
the
Administrative Agent and the Majority Noteholders; or
(iv) in its capacity as holder of a Residual Interest
Certificate, consent to the taking of any action under any
Securitization Transaction Document which requires the consent of
the
holder of a Residual Interest Certificate unless it has received
the
prior written consent of the Administrative Agent and the
Majority
Noteholders; or
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(v) take any action that would result in the Issuer becoming
taxable as a corporation for United States federal income tax
purposes
or for the purposes of any applicable State tax; or
(vi) engage in any business or activity other than as
permitted by the LLC Agreement; or
(vii) incur or assume any indebtedness or guarantee any
indebtedness of any Person, except for such indebtedness
incurred
pursuant to Section 3.14; or
(viii) dissolve or liquidate in whole or in part or merge or
consolidate with any other Person, other than in compliance
with
Section 3.11; or
(ix) unless it has received the prior written consent of the
Administrative Agent and the Majority Noteholders, the Issuer
shall
not, in its capacity as a holder of any Pledged Residual
Interest
Certificate or otherwise, take any action, fail to take any
action,
give any consent, permit any action, enter into or permit any
amendment, waiver, supplement or other modification under or in
respect
of any Pledged Residual Interest Certificate or any other
Collateral,
or enter into or permit any amendment, waiver, supplement or
other
modification of any agreement, document or instrument governing
the
rights of any Pledged Residual Interest Certificate, that could
reasonably be expected to, or would, (i) reduce in any manner
the
amount of, or accelerate or delay the timing of, distributions that
are
required to be made on the Pledged Residual Interest Certificates
or
any other Collateral, (ii) cause or permit amounts on deposit in
the
spread account for any Securitization Transaction pursuant to which
a
Pledged Residual Interest Certificate has been issued or proceeds
or
distributions in respect of any Pledged Residual Interest
Certificate
or any other Collateral to be available to fund deficiencies in
any
other spread account relating to another Securitization Transaction
or
(iii) otherwise have a Material Adverse Effect.
SECTION 3.9 REPORTING BY CPS. No later than 3:00 p.m. New York
City
time on each Determination Date, the Issuer shall cause CPS to
deliver (by
telex, facsimile, electronic transmission, first class mail,
overnight courier
or personal delivery) to the Issuer, the Administrative Agent and
the Trustee a
statement (the "SETTLEMENT DATE STATEMENT") in substantially the
form attached
hereto as Exhibit E(1). The Issuer shall deliver, or cause CPS to
deliver, to
the Administrative Agent and the Trustee a hard copy of any such
Settlement Date
Statement upon request of such Person.
SECTION 3.10 ANNUAL STATEMENT AS TO COMPLIANCE. The Issuer has
delivered, and will deliver to the Trustee, the Administrative
Agent and the
Noteholders, on or before March 31 of each year, beginning March
31, 2008, an
Officer's Certificate, dated as of December 31 of the preceding
year, stating,
as to the Authorized Officer signing such Officer's Certificate,
that
(i) a review of the activities of the Issuer during the
preceding year (or portion of such year from the Initial Funding
Date
through December 31, 2007) and of performance under this Indenture
has
been made under such Authorized Officer's supervision; and
(ii) to the best of such Authorized Officer's knowledge, based
on such review, the Issuer has complied with all conditions and
covenants under this Indenture throughout such year (or portion of
such
year from the Initial Funding Date through December 31, 2007) and
no
Event of Default has occurred and is continuing, or, if there has
been
a default in the compliance of any such condition or covenant,
specifying each such default known to such Authorized Officer and
the
nature and status thereof.
------------------
(1) Citi to provide current form of Exhibit E and to confirm
whether any changes
need to be made.
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<PAGE>
SECTION 3.11 ISSUER MAY CONSOLIDATE, ETC. ONLY WITH CONSENT. The
Issuer
shall not consolidate or merge with or into any other Person, or
convey or
transfer all or substantially all of its properties to any Person
without the
prior written consent of the Administrative Agent and the Majority
Noteholders.
SECTION 3.12 SUCCESSOR OR TRANSFEREE. (A) Upon any consolidation
or
merger of the Issuer with the prior written consent of the
Administrative Agent
and the Majority Noteholders in accordance with Section 3.11, the
Person formed
by or surviving such consolidation or merger (if other than the
Issuer) shall
succeed to, and be substituted for, and may exercise every right
and power of,
and be obligated to meet the requirements of the Issuer under this
Indenture and
the other Basic Documents with the same effect as if such Person
had been named
as the Issuer herein.
(b) Upon a conveyance or transfer of all the assets and properties
of
the Issuer with the prior written consent of the Administrative
Agent and the
Majority Noteholders in accordance with SECTION 3.11, the Issuer
will be
released from every covenant and agreement of this Indenture to be
observed or
performed on the part of the Issuer with respect to the Notes
immediately upon
the delivery of written notice to the Trustee, the Administrative
Agent and the
Noteholders stating that the Issuer is to be so released.
SECTION 3.13 NO OTHER BUSINESS. The Issuer has not engaged, and
shall
not engage in, any business other than financing, purchasing,
owning, selling
and managing the Residual Interest Assets in the manner
contemplated by this
Indenture and the other Basic Documents and activities incidental
thereto. After
the Effective Date, the Issuer shall not purchase any additional
Residual
Interest Assets.
SECTION 3.14 NO BORROWING. The Issuer has not issued, incurred,
assumed, guaranteed, or otherwise become liable, and shall not
issue, incur,
assume, guarantee or otherwise become liable, directly or
indirectly, for any
Indebtedness except for (i) the Notes, and (ii) any other
Indebtedness permitted
by or arising under the Basic Documents. The proceeds of the Notes
have been
used solely to fund the Issuer's purchase of the Residual Interest
Assets and to
pay the Issuer's organizational, transactional and start-up
expenses.
SECTION 3.15 GUARANTEES, LOANS, ADVANCES AND OTHER LIABILITIES.
Except
as contemplated by the Basic Documents, the Issuer has not made,
and shall not
make, any loan or advance or credit to, or guarantee (directly or
indirectly or
by an instrument having the effect of assuring another's payment or
performance
on any obligation or capability of so doing or otherwise), endorse
or otherwise
become contingently liable, directly or indirectly, in connection
with the
obligations, stocks or dividends of, or own, purchase, repurchase
or acquire (or
agree contingently to do so) any stock, obligations, assets or
securities of, or
any other interest in, or make any capital contribution to, any
other Person.
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SECTION 3.16 CAPITAL EXPENDITURES. The Issuer has not made, and
shall
not make, any expenditure (by long-term or operating lease or
otherwise) for
capital assets (either realty or personalty).
SECTION 3.17 COMPLIANCE WITH LAWS. The Issuer has complied, and
shall
comply, with the requirements of all Requirements of Law.
SECTION 3.18 RESTRICTED PAYMENTS. The Issuer has not, directly
or
indirectly, and shall not, directly or indirectly, (i) pay any
dividend or make
any distribution (by reduction of capital or otherwise), whether in
cash,
property, securities or a combination thereof, to any owner of a
beneficial
interest in the Issuer or otherwise with respect to any ownership
or equity
interest or security in or of the Issuer, (ii) redeem, purchase,
retire or
otherwise acquire for value any such ownership or equity interest
or security or
(iii) set aside or otherwise segregate any amounts for any such
purpose;
provided, however, that the Issuer may make, or cause to be made,
distributions
to the Trustee and to any owner of a beneficial interest in the
Issuer as
permitted by, and to the extent funds are available for such
purpose from
distributions under this Indenture. The Issuer will not, directly
or indirectly,
make payments to or distributions from the Collection Account
except in
accordance with this Indenture and the Basic Documents.
SECTION 3.19 NOTICE OF EVENTS OF DEFAULT. Upon a responsible
officer of
the Issuer having notice or actual knowledge thereof, the Issuer
agrees to give
each of the Trustee, the Administrative Agent and the Noteholders
prompt written
notice of each Event of Default hereunder and each other Default on
the part of
the Issuer, the Purchaser or the Seller of its obligations under
any Basic
Document.
SECTION 3.20 FURTHER INSTRUMENTS AND ACTS. Upon request of the
Trustee,
the Administrative Agent or the Majority Noteholders, the Issuer
will execute
and deliver such further instruments and do such further acts as
may be
reasonably necessary or proper to carry out more effectively the
purpose of this
Indenture.
SECTION 3.21 INCOME TAX CHARACTERIZATION.It is the intent of the
Issuer
and the Noteholders that, for Federal, state and local income and
franchise tax
purposes, the Notes will evidence indebtedness of the Issuer
secured by the
Collateral. Each Noteholder, by its acceptance of a Note, agrees to
treat such
Note for Federal, state and local income and franchise tax purposes
as
indebtedness of the Issuer.
SECTION 3.22 SEPARATE EXISTENCE OF THE ISSUER. During the term of
the
Indenture, the Issuer shall observe and comply with the applicable
legal
requirements for the recognition of the Issuer as a legal entity
separate and
apart from its Affiliates, including without limitation, those
requirements set
forth in Section 9(b) of the Issuer's Limited Liability Company
Agreement.
SECTION 3.23 AMENDMENT OF THE ISSUER'S ORGANIZATIONAL DOCUMENTS.
During
the term of the Indenture, the Issuer shall not amend its Limited
Liability
Company Agreement except in accordance with the provisions thereof
and with the
prior written consent of the Administrative Agent.
SECTION 3.24 OTHER AGREEMENTS. The Issuer shall not enter into
any
agreement other than the Basic Documents without the prior written
consent of
the Administrative Agent and the Majority Noteholders. The Issuer
shall not
enter into any agreement that does not contain non-petition or
limited recourse
language acceptable to the Administrative Agent with respect to the
Issuer.
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SECTION 3.25 RULE 144A INFORMATION. At any time when the Issuer is
not
subject to Section 13 or 15(d) of the Securities Exchange Act of
1934, as
amended, upon the request of a Noteholder, the Issuer shall
promptly furnish to
such Noteholder or to a prospective purchaser of a Note designated
by such
Noteholder, as the case may be, the information required to be
delivered
pursuant to Rule 144A(d)(4) under the Securities Act ("Rule 144A
Information")
in order to permit compliance by such Noteholder with Rule 144A in
connection
with the resale of a Note by such Noteholder; provided, however,
that the Issuer
shall not be required to furnish Rule 144A Information in
connection with any
request made on or after the date which is three years from the
later of (i) the
most recent renewal of the Term pursuant to Section 2.02 of the
Note Purchase
Agreement, (ii) the date such Note (or any predecessor Note) was
acquired from
the Issuer or (iii) the date such Note (or any predecessor Note)
was last
acquired from an "affiliate" of the Issuer within the meaning of
Rule 144 under
the Securities Act; and provided further that the Issuer shall not
be required
to furnish such information at any time to a prospective purchaser
located
outside of the United States who is not a "United States Person"
within the
meaning of Regulation S under the Securities Act if such Note may
then be sold
to such prospective purchaser in accordance with Rule 904 under the
Securities
Act (or any successor provision thereto).
SECTION 3.26 CHANGE OF CONTROL. CPS has been and shall at all times
be
the legal and beneficial owner of all of the issued and outstanding
membership
interests of the Issuer.
ARTICLE IV
SATISFACTION AND DISCHARGE
--------------------------
SECTION 4.1 SATISFACTION AND DISCHARGE OF INDENTURE. This
Indenture
shall cease to be of further effect with respect to the Notes
except as to (i)
rights of registration of transfer and exchange, (ii) substitution
of mutilated,
destroyed, lost or stolen Notes, (iii) rights of the Noteholders to
receive
payments of principal thereof and interest thereon and the rights
of the
Administrative Agent to receive payments in respect of amounts owed
by the
Issuer to the Administrative Agent under the Basic Documents, (iv)
Sections 3.3,
3.4, 3.5, 3.6, 3.8, 3.11, 3.12, 3.18, 3.19, 3.20, 3.22, 3.23 and
11.17, (v) the
rights, obligations and immunities of the Trustee hereunder
(including the
rights of the Trustee under Section 6.7 and the obligations of the
Trustee under
Section 4.2) and (vi) the rights of the Issuer Secured Parties as
beneficiaries
hereof with respect to the property so deposited with the Trustee
payable to all
or any of them, and the Trustee, on demand of and at the expense of
the Issuer,
shall execute proper instruments acknowledging satisfaction and
discharge of
this Indenture with respect to the Notes, when:
(a) the Notes theretofore authenticated and delivered (other than
(i)
Notes that have been destroyed, lost or stolen and that have been
replaced or
paid as provided in Section 2.6 and (ii) Notes for which payment of
money has
theretofore been deposited in trust or segregated and held in trust
by the
Issuer and thereafter repaid to the Issuer or discharged from such
trust, as
provided in Section 3.3) have been delivered to the Trustee for
cancellation;
(b) the Issuer has paid or caused to be paid all Issuer Secured
Obligations; and
(c) the Issuer has delivered to the Trustee, the Administrative
Agent
and the Noteholders an Officer's Certificate meeting the applicable
requirements
of Section 11.1(a) and stating that all conditions precedent herein
provided for
relating to the satisfaction and discharge of this Indenture have
been complied
with.
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SECTION 4.2 APPLICATION OF TRUST MONEY. All moneys deposited with
the
Trustee pursuant to Section 4.1 or Section 4.3 hereof shall be held
in trust and
applied by it, in accordance with the provisions of the Notes and
this
Indenture, to the payment, either directly or through the Note
Paying Agent, as
the Trustee may determine, to the Noteholders and the
Administrative Agent for
the payment or redemption of which such moneys have been deposited
with the
Trustee, of all sums due and to become due thereon for principal
and interest
(in the case of the Noteholders) and all sums due and payable by
the Issuer
under the Basic Documents (in the case of the Administrative
Agent); but such
moneys need not be segregated from other funds except to the extent
required
herein or in the other Basic Documents or required by law. Any
funds remaining
with the Trustee or on deposit in the Collection Account following
the repayment
in full of the Notes and the other Issuer Secured Obligations, the
payment in
full of all other amounts owed to the Noteholders and all amounts
owed by the
Issuer to the Administrative Agent and the Trustee under the Basic
Documents,
and the satisfaction and discharge of this Indenture, shall be
remitted to the
Issuer.
SECTION 4.3 REPAYMENT OF MONEYS HELD BY NOTE PAYING AGENT. In
connection with the satisfaction and discharge of this Indenture
with respect to
the Notes, all moneys then held by any Note Paying Agent other than
the Trustee
under the provisions of this Indenture with respect to such Notes
shall, upon
demand of the Issuer, be remitted to the Trustee to be held and
applied
according to Section 4.2 and thereupon such Note Paying Agent shall
be released
from all further liability with respect to such moneys.
ARTICLE V
REMEDIES
--------
SECTION 5.1 EVENTS OF DEFAULT. "Event of Default" wherever used
herein,
means any one of the following events (whatever the reason for such
Event of
Default and whether it shall be voluntary or involuntary or be
effected by
operation of law or pursuant to any judgment, decree or order of
any court or
any order, rule or regulation of any administrative or governmental
body):
(a) (i) Subject to Section 5.1(b), any payment by or on behalf of
the
Issuer, CPS or any Affiliate shall fail to be made to the
Administrative Agent
or the Noteholders when due of principal, including any Collateral
Deficiency,
or interest on the Notes in each case within one (1) Business Day
after its due
date; PROVIDED, that the failure to pay principal in connection
with a
Collateral Deficiency shall only be subject to the applicable grace
period set
forth in Section 3.07 of the Note Purchase Agreement and shall not
be subject to
any additional grace period under this Section 5.1(a), or (ii) any
payment by or
on behalf of the Issuer, CPS or any Affiliate of any other amount
in addition to
(i) above shall fail to be made to the Noteholders when due, within
fifteen (15)
days after its due date;
(b) as of the close of the Scheduled Maturity Date with respect to
each
Class of Notes, there are any amounts due and owing on the
applicable Class of
Notes;
(c) The Issuer, CPS or any Affiliate shall fail to perform or
observe
any term or covenant of this Indenture or any other Basic Document
(other than
the financial covenants set forth in Section 7.01(u) of the Note
Purchase
Agreement) to which it is a party, which failure materially and
adversely
affects the Administrative Agent or the Noteholders and is (i)
curable by
payment of money and continues unremedied for a period of five (5)
Business Days
from the earlier of knowledge of, or written notice to, the Issuer,
CPS or any
Affiliate, (ii) curable by means other than payment of money and
continues
unremedied for a period of fifteen (15) Business Days from the
earlier of
knowledge of, or written notice to, the Issuer, CPS or any
Affiliate; or (iii)
not curable;
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(d) Any representation or warranty made or deemed to be made by
the
Issuer, CPS or any Affiliate or any of their respective officers,
under or in
connection with this Indenture or any other Basic Document, any
Settlement Date
Statement or other information or report delivered pursuant hereto
or any other
Basic Document shall prove to have been false or incorrect in any
respect when
made which failure materially and adversely affects the
Administrative Agent or
the Noteholders and is (i) curable by payment of money and
continues unremedied
for a period of five (5) Business Days from the earlier of
knowledge of, or
written notice to, the Issuer, CPS or any Affiliate, (ii) curable
by means other
than payment of money and continues unremedied for a period of
fifteen (15)
Business Days from the earlier of knowledge of, or written notice
to, the
Issuer, CPS or any Affiliate; or (iii) not curable;
(e) The Issuer, CPS or any Specified Affiliate shall fail to pay
any
money due under any other agreement, note, indenture or instrument
evidencing,
securing, guaranteeing or otherwise relating to indebtedness of the
Issuer, CPS
or such Specified Affiliate, which failure to pay constitutes an
event of
default under any such agreement, note, indenture or instrument or
constitutes a
default thereunder and such default (i) results in the acceleration
of any debt
owed by the Issuer, CPS or such Specified Affiliate, and (ii)
continues
unremedied for a period of three (3) Business Days after the cure
period for the
related indebtedness; or the Issuer, CPS or any Specified Affiliate
shall
otherwise fail to perform or observe any term, covenant, agreement
or
representation and warranty under any such other agreement, note,
indenture or
instrument, which failure constitutes an event of default under any
such
agreement, note, indenture or instrument or constitutes a default
thereunder and
such default shall result in the acceleration of such indebtedness;
or any other
event under any such agreement or instrument shall occur or
condition shall
exist if the effect of such event or condition is to accelerate the
maturity of
such indebtedness; provided that, if such indebtedness is solely
indebtedness of
CPS (and not in whole or in part indebtedness of the Issuer or any
Specified
Affiliate), such accelerated indebtedness must be in an aggregate
amount of at
least $1,000,000 in order for an event described in this clause (e)
to
constitute an Event of Default;
(f) (i)(a) The Collateral or any other material assets of the
Issuer,
CPS or any Specified Affiliate are attached, seized, levied upon or
subjected to
a writ or distress warrant, or come within the possession of any
receiver,
trustee, custodian or assignee in an amount less than $100,000, for
the benefit
of the Issuer, CPS or any Specified Affiliate and the same is not
paid,
dissolved or dismissed within sixty (60) days thereafter or (b)
after service on
CPS of notice thereof, an application is made by any Person other
than the
Issuer, CPS or any Specified Affiliate for the appointment of a
receiver,
trustee, or custodian for the Collateral or a material portion of
the assets of
the Issuer, CPS or any Specified Affiliate in an amount less than
$100,000 and
the same is not dismissed within sixty (60) days after the
application thereof;
(ii) (a) the Collateral or any other material assets of the Issuer,
CPS or any
Specified Affiliate are attached, seized, levied upon or subjected
to a writ or
distress warrant, or come within the possession of any receiver,
trustee,
custodian or assignee in an amount greater than $100,000 for the
benefit of the
Issuer, CPS or any Specified Affiliate and the same is not paid,
dissolved or
21
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dismissed within thirty (30) days thereafter or (b) after service
on CPS of
notice thereof, an application is made by any Person other than the
Issuer, CPS
or any Specified Affiliate for the appointment of a receiver,
trustee, or
custodian for the Collateral or a material portion of the assets of
the Issuer,
CPS or any Specified Affiliate in an amount greater than $100,000
and the same
is not dismissed within thirty (30) days after the application
thereof; or (iii)
the Issuer, CPS or any Specified Affiliate shall have concealed,
removed or
permitted to be concealed or removed any portion of its property
with intent to
hinder, delay or defraud its creditors or made or suffered a
transfer of any of
its property which is fraudulent under any bankruptcy, fraudulent
conveyance or
other similar law;
(g) An application is made by the Issuer, CPS or any Specified
Affiliate for the appointment of a receiver, trustee or custodian
for the
Collateral or any other material assets of the Issuer, CPS or any
Specified
Affiliate; a petition under any section or chapter of the
Bankruptcy Code or
federal or state law or regulation shall be filed by the Issuer,
CPS or any
Specified Affiliate; the Issuer, CPS or any Specified Affiliate
shall make an
assignment for the benefit of its creditors; any case or proceeding
shall be
filed by the Issuer, CPS or any Specified Affiliate for its
dissolution,
liquidation, or termination; or the Issuer or CPS ceases to conduct
its
business;
(h) the Issuer, CPS or any Specified Affiliate is enjoined,
restrained
or prevented by court order from conducting all or any material
part of its
business affairs, or a petition under any section or chapter of the
Bankruptcy
Code or any similar federal or state law or regulation is filed
against the
Issuer, CPS or any Specified Affiliate or any case or proceeding is
filed
against the Issuer, CPS or any Specified Affiliate for its
dissolution or
liquidation, and such injunction, restraint, petition, case or
proceeding is not
dismissed within sixty (60) days after the entry of filing
thereof;
(i) the Issuer, CPS or any Specified Affiliate admits in writing to
its
inability to pay its debts as they mature;
(j) the Trustee, for the benefit of the Issuer Secured Parties,
shall
for any reason cease to have a first priority perfected security
interest in any
of the Pledged Residual Interest Certificates or in any portion of
the
Collateral, free and clear of all Liens;
(k) the Issuer becoming taxable as an association (or publicly
traded
partnership) taxable as a corporation for federal or state income
tax purposes;
(l) the Administrative Agent, in its reasonable, good faith
judgment,
has cause to believe that there has been a Material Adverse Effect
or a Material
Adverse Change;
(m) (i) the Issuer, CPS or any Affiliate shall have at any time
during
the Term been in default or termination under any servicing
agreements which
resulted in termination of servicing with respect to more than one
(1) Eligible
Committed Securitization, or (ii) the Issuer, CPS or any Affiliate
shall have at
any time during the Term resigned as servicer on any outstanding
Securitization
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Transaction in its total managed portfolio, other than any
Securitization
Transaction sponsored by SeaWest Financial Corporation or its
Affiliates;
(n) without the prior written consent of the Administrative Agent
and
the Majority Noteholders, CPS, the Issuer or any other Affiliate of
CPS takes
any action, fails to take any action, gives any consent, permits
any action,
enters into or permits any amendment, waiver, supplement or other
modification
under or in respect of any Pledged Residual Interest Certificate or
any other
Collateral, or enters into or permits any amendment, waiver,
supplement or other
modification of any agreement, document or instrument governing the
rights of
any Pledged Residual Interest Certificate, that could reasonably be
expected to,
or would, (i) reduce in any manner the amount of, or accelerate or
delay the
timing of, distributions that are required to be made on the
Pledged Residual
Interest Certificates or any other Collateral, (ii) cause or permit
amounts on
deposit in the spread account for any Securitization Transaction
pursuant to
which a Pledged Residual Interest Certificate has been issued or
proceeds or
distributions in respect of any Pledged Residual Interest
Certificate or any
other Collateral to be available to fund deficiencies in any other
spread
account relating to another Securitization Transaction, (iii)
otherwise
materially adversely affect the Collateral, the Administrative
Agent, the Note
Purchaser or the Noteholders or (iv) otherwise have a Material
Adverse Effect;
(o) The Issuer, CPS or any Affiliate becomes an "investment
company" or
company "controlled" by an investment company within the meaning of
the
Investment Company Act of 1940, as amended;
(p) Any Change of Control shall occur with respect to the Issuer,
CPS
or any Specified Affiliate unless the Administrative Agent and the
Majority
Noteholders shall have expressly consented to such Change of
Control in writing
or unless the Issuer Secured Obligations shall have been
indefeasibly repaid in
full and the Basic Documents have been terminated;
(q) A final, nonappealable judgment by any competent court in
the
United States of America for the payment of money in an amount in
excess of
$1,000,000 shall be rendered against the Issuer, CPS or any
Specified Affiliate
and the same remains undischarged and unstayed for a period of
thirty (30) days
after the entry thereof;
(r) The Issuer, CPS or any Affiliate shall pay an amount in excess
of
the applicable Litigation Threshold in connection with the
settlement of any
action filed in any competent court in the United States of
America;
(s) Any Basic Document shall be terminated or cease to be in full
force
and effect, or the enforceability thereof shall be (A) reasonably
contested by
the Administrative Agent and the Majority Noteholders or its
respective
assignees, (B) contested by any other party thereto, or (C)
contested by an
indenture trustee on behalf of unsecured noteholders of CPS;
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(t) The Issuer, CPS or any Affiliate shall fail to pay to
Administrative Agent, within 30 days following the presentment of
invoices, any
and all fees, costs or expenses which the Administrative Agent pays
to a bank or
other similar institution arising out of or in connection with the
return of
payments from Issuer, CPS or any Affiliate deposited for collection
by
Administrative Agent; or
(u) CPS shall fail to comply with the financial covenants set forth
in
Section 7.01(u) of the Note Purchase Agreement.
SECTION 5.2 RIGHTS UPON EVENT OF DEFAULT.
(a) If an Event of Default shall have occurred and be continuing,
the
Trustee may, and at the direction of the Administrative Agent
(acting upon the
written direction of the Majority Noteholders, which direction
shall be deemed
given automatically upon the occurrence of an Event of Default
specified in
paragraph (g), (h) or (i) of Section 5.1) shall declare immediately
due and
payable all principal, interest (which shall be calculated for
these purposes
using the Default Applicable Margin) and other Issuer Secured
Obligations
payable hereunder and under the Notes by the Issuer that would
otherwise be due
after the date specified in the notice (or the date such notice is
deemed
given), whereupon all those amounts shall become immediately due
and payable,
all without further diligence, presentment, demand of payment,
protest or notice
of any kind, all of which are expressly waived by the Issuer. In
addition, if an
Event of Default shall have occurred and be continuing, the Trustee
may, and at
the direction of the Administrative Agent (acting upon the written
direction of
the Majority Noteholders) shall, exercise any of the remedies
specified in
SECTION 5.4.
(b) At any time after such declaration of acceleration of maturity
has
been made and before a judgmen
