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
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)
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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)
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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,
3
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
5
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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(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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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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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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(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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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.
17
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;
20
(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
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
22
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;
23
(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 judgment or decree for payment of the money due has been
obtained by the Trustee as hereinafter in this Article V provided, the
Administrative Agent (acting upon the written direction of the Majority
Noteholders) may, by written notice to the Issuer and the Trustee, rescind and
annul such declaration and its consequences if the Issuer has paid or deposited
with the Trustee a sum sufficient to pay:
(i) all payments of principal of and interest (calculated for
these purposes using the Default Applicable Margin) on the Notes, all
amounts due the Administrative Agent and the Noteholders from the
Issuer under the Basic Documents, and all other amounts that would then
be due from the Issuer hereunder, upon the Notes or under the Basic
Documents if the Event of Default giving rise to such acceleration had
not occurred; and
(ii) all sums paid or advanced by the Trustee hereunder and
the reasonable compensation, expenses, disbursements and advances of
the Trustee and its agents and counsel; and
(iii) all Events of Default, other than the nonpayment of the
principal of the Notes that has become due solely by such acceleration,
have been cured or waived as provided in Section 5.14.
No such rescission shall affect any subsequent default or impair any
right consequent thereto.
24
SECTION 5.3 COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY
TRUSTEE.
(a) The Issuer covenants that if (i) default is made in the payment of
any interest on, or principal of, the Notes, or any amount due from the Issuer
to the Administrative Agent or any Noteholder under the Basic Documents, when
the same becomes due and payable, the Issuer will, upon demand of the Trustee,
pay to it, for the benefit of the Noteholders and the Administrative Agent, as
applicable, the whole amount then due and payable on the Notes for principal and
interest, with interest upon the overdue principal, and, to the extent payment
at such rate of interest shall be legally enforceable, upon overdue installments
of interest, at the Note Interest Rate, all amounts due and owing by the Issuer
under the Basic Documents and, in each case, in addition thereto such further
amount as shall be sufficient to cover the costs and expenses of collection,
including the reasonable compensation, expenses, disbursements and advances of
the Trustee and its agents and counsel.
(b) If an Event of Default occurs and is continuing, the Trustee may in
its discretion subject to the prior written consent of the Administrative Agent
(acting upon the written direction of the Majority Noteholders) and shall, at
the direction of the Administrative Agent (acting upon the written direction of
the Majority Noteholders), proceed to protect and enforce its rights and the
rights of the Administrative Agent and the Noteholders by such appropriate
Proceedings as the Trustee, the Administrative Agent (acting upon the written
direction of the Majority Noteholders) shall deem most effective to protect and
enforce any such rights, whether for the specific enforcement of any covenant or
agreement in this Indenture, any other Basic Document or in aid of the exercise
of any power granted herein, or to enforce any other proper remedy or legal or
equitable right vested in the Trustee by this Indenture, any other Basic
Document or by law.
(c) [Reserved].
(d) In case there shall be pending, relative to the Issuer or any other
obligor upon the Notes or any Person having or claiming an ownership interest in
the Trust Estate, proceedings under Title 11 of the United States Code or any
other applicable Federal or state bankruptcy, insolvency or other similar law,
or in case a receiver, assignee or trustee in bankruptcy or reorganization,
liquidator, sequestrator or similar official shall have been appointed for or
taken possession of the Issuer or its property or such other obligor or Person,
or in case of any other comparable judicial proceedings relative to the Issuer
or other obligor upon the Notes, or to the creditors or property of the Issuer
or such other obligor, the Trustee, irrespective of whether the principal of the
Notes shall then be due and payable as therein expressed or by declaration or
otherwise and irrespective of whether the Trustee shall have made any demand
pursuant to the provisions of this Section, shall be entitled and empowered, by
intervention in such proceedings or otherwise:
(i) to file and prove a claim or claims for the whole amount
of principal and interest owing and unpaid in respect of the Notes and
the whole amount then due to the Administrative Agent or any Noteholder
by the Issuer under the Basic Documents and to file such other papers
or documents as may be necessary or advisable in order to have the
claims of the Trustee (including any claim for reasonable compensation
to the Trustee and each predecessor Trustee, and their respective
agents, attorneys and counsel, and for reimbursement of all expenses
and liabilities incurred, and all advances made, by the Trustee and
each predecessor Trustee, except as a result of negligence, bad faith
or willful misconduct) and of the Administrative Agent and the
Noteholders allowed in such proceedings;
25
(ii) unless prohibited by applicable law and regulations, to
vote on behalf of the Noteholders and the Administrative Agent in any
election of a trustee, a standby trustee or person performing similar
functions in any such proceedings;
(iii) to collect and receive any moneys or other property
payable or deliverable on any such claims and to distribute all amounts
received with respect to the claims of the Noteholders, the
Administrative Agent and of the Trustee on their behalf; and
(iv) to file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims
of the Trustee, the Administrative Agent or the Noteholders allowed in
any judicial proceedings relative to the Issuer, its creditors and its
property;
and any trustee, receiver, liquidator, custodian or other similar official in
any such proceeding is hereby authorized by the Noteholders and the
Administrative Agent to make payments to the Trustee, and, in the event that the
Trustee shall consent to the making of payments directly to the Noteholders or
the Administrative Agent, to pay to the Trustee such amounts as shall be
sufficient to cover reasonable compensation to the Trustee, each predecessor
Trustee and their respective agents, attorneys and counsel, and all other
expenses and liabilities incurred, and all advances made, by the Trustee and
each predecessor Trustee except as a result of negligence or bad faith.
(e) Nothing herein contained shall be deemed to authorize the Trustee
to authorize or consent to or vote for or accept or adopt on behalf of the
Noteholders or the Administrative Agent any plan of reorganization, arrangement,
adjustment or composition affecting the Notes or the rights of the Noteholders
or the Administrative Agent or to authorize the Trustee to vote in respect of
the claim of the Noteholders or the Administrative Agent in any such proceeding
except, as aforesaid, to vote for the election of a trustee in bankruptcy or
similar person.
(f) All rights of action and of asserting claims under this Indenture,
any other Basic Document or under the Notes, may be enforced by the Trustee
without the possession of the Notes or the production thereof in any trial or
other proceedings relative thereto, and any such action or proceedings
instituted by the Trustee shall be brought in its own name as trustee of an
express trust, and any recovery of judgment, subject to the payment of the
expenses, disbursements and compensation of the Trustee, each predecessor
Trustee and their respective agents and attorneys, shall be for the benefit of
the Noteholders and the Administrative Agent.
(g) In any proceedings brought by the Trustee (and also any proceedings
involving the interpretation of any provision of this Indenture or any other
Basic Document), the Trustee shall be held to represent the Administrative Agent
and the Noteholders, and it shall not be necessary to make the Administrative
Agent or the Noteholders a party to any such proceedings. Notwithstanding the
foregoing, nothing contained in this Indenture shall be deemed to prohibit the
Administrative Agent from representing itself in any such action or proceeding.
26
SECTION 5.4 REMEDIES. If an Event of Default shall have occurred and be
continuing, the Administrative Agent (acting upon the written direction of the
Majority Noteholders) may do one or more of the following (subject to Section
5.5):
(a) institute or direct the Trustee to institute Proceedings in its own
name and as trustee of an express trust for the collection of all amounts then
payable by the Issuer under any Basic Document, on the Notes or under this
Indenture with respect thereto, whether by declaration or otherwise, enforce any
judgment obtained, and collect from the Issuer and any other obligor upon the
Notes moneys adjudged due;
(b) institute or direct the Trustee to institute Proceedings from time
to time for the complete or partial foreclosure of this Indenture with respect
to the Trust Estate;
(c) exercise or direct the Trustee to exercise any remedies of a
secured party under the UCC and take any other appropriate action to protect and
enforce the rights and remedies of the Trustee and the Issuer Secured Parties;
and
(d) sell or direct the Trustee to sell the Trust Estate or any portion
thereof or rights or interest therein, at one or more public or private sales
(including, without limitation, the sale of the Collateral in connection with a
securitization thereof) called and conducted in any manner permitted by law.
SECTION 5.5 OPTIONAL PRESERVATION OF THE TRUST ESTATE. If the Notes
have been declared to be due and payable under Section 5.2 following an Event of
Default and such declaration and its consequences have not been rescinded and
annulled, the Trustee may, but need not, elect to maintain possession of the
Trust Estate with the prior written consent of the Administrative Agent (acting
upon the written direction of the Majority Noteholders). It is the desire of the
parties hereto and the Noteholders that there be at all times sufficient funds
for the payment of principal of and interest on the Notes, and the Trustee shall
take such desire into account when determining whether or not to maintain
possession of the Trust Estate. In determining whether to maintain possession of
the Trust Estate, the Trustee may, but need not, obtain and rely upon an opinion
of an Independent investment banking or accounting firm of national reputation
as to the feasibility of such proposed action and as to the sufficiency of the
Trust Estate for such purpose.
SECTION 5.6 DEFICIENCY. The Issuer shall remain liable for any
deficiency if the Proceeds of any sale or other disposition of the Collateral
are insufficient to pay in full all Issuer Secured Obligations, including,
without limitation, the reasonable fees and disbursements of any attorneys
employed by the Administrative Agent, the Trustee or the Noteholders to collect
such deficiency.
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SECTION 5.7 PRIORITIES.
(a) Following the occurrence of an Event of Default that has resulted
in an acceleration of the Notes pursuant to Section 5.2 hereof, if the Trustee
collects any money or property pursuant to Article V of this Indenture, it shall
pay out such money or property in the following order of priority, subject to
Section 8.3(a) hereof:
(i) FIRST: to the Trustee for amounts due under Section 6.7;
(ii) SECOND: to the Administrative Agent for amounts due under
the Basic Documents;
(iii) THIRD: to the Note Purchaser, any amounts then due and
owing to the Note Purchaser under the Basic Documents;
(iv) FOURTH: to the Class A-1 Noteholders and the Class A-2
Noteholders on a PARI PASSU basis for amounts due and unpaid on the
Class A-1 Notes and the Class A-2 Notes, respectively, in respect of
interest (including any premium), according to the amounts due and
payable on the Class A-1 Notes and the Class A-2 Notes, as applicable,
in respect of interest (including any premium);
(v) FIFTH: to the Class A-1 Noteholders for amounts due and
unpaid on the Class A-1 Notes in respect of principal, ratably, without
preference or priority of any kind, according to the amounts due and
payable on the Class A-1 Notes in respect of principal (inclusive of
any Prepayment Fees), until the outstanding principal amount of the
Class A-1 Notes is reduced to zero;
(vi) SIXTH: to the Class A-2 Noteholders for amounts due and
unpaid on the Class A-2 Notes in respect of principal, ratably, without
preference or priority of any kind, according to the amounts due and
payable on the Class A-2 Notes in respect of principal (inclusive of
any Prepayment Fees), until the outstanding principal amount of the
Class A-2 Notes is reduced to zero;
(vii) SEVENTH: any excess amounts remaining after making the
payments described in clauses FIRST through SIXTH above, to be applied
pursuant to SECTION 8.5 of this Indenture to the extent that any
amounts payable thereunder have not been previously paid pursuant to
clauses FIRST through SIXTH above.
(b) The Trustee may fix a record date and Settlement Date for any
payment to the Administrative Agent and the Noteholders pursuant to this
Section. At least 15 days before such record date the Trustee shall mail to the
Issuer, the Administrative Agent and each Noteholder a notice that states such
record date, the Settlement Date and the amount to be paid.
SECTION 5.8 LIMITATION OF SUITS. Unless the Notes shall be held by the
Administrative Agent or an Affiliate thereof, no Holder of a Note shall have any
right to institute any proceeding, judicial or otherwise, with respect to this
Indenture, or for the appointment of a receiver or trustee, or for any other
remedy hereunder, unless:
(a) the Holder has previously given written notice to the Trustee of a
continuing Event of Default;
(b) the Majority Noteholders have made a written request to the Trustee
to institute such proceeding in respect of such Event of Default in its own name
as Trustee hereunder;
(c) the Majority Noteholders have offered to the Trustee indemnity
reasonably satisfactory to it against the costs, expenses and liabilities to be
incurred in complying with such request; and
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(d) the Trustee for 60 days after its receipt of such notice, request
and offer of indemnity has failed to institute such proceedings;
it being understood and intended that no Holder of a Note shall have any right
in any manner whatever by virtue of, or by availing of, any provision of this
Indenture to affect, disturb or prejudice the rights of any other Holder of the
Notes or to obtain or to seek to obtain priority or preference over any other
Holder or to enforce any right under this Indenture, except in the manner herein
provided and it being understood that if a Note is held by the Administrative
Agent or an Affiliate thereof, the Holder may directly institute any proceeding,
judicial or otherwise, with respect to this Indenture, or for the appointment of
a receiver or trustee, or for any other remedy.
SECTION 5.9 UNCONDITIONAL RIGHTS OF THE NOTEHOLDERS TO RECEIVE
PRINCIPAL AND INTEREST. Notwithstanding any other provisions of this Indenture,
(i) each Noteholder shall have the right, which is absolute and unconditional,
to receive payments of principal of and interest, if any, on such Note on or
after the respective due dates thereof expressed in such Note or in this
Indenture, (ii) the Administrative Agent shall have the right, which is absolute
and unconditional, to receive payment of all amounts owed to it by the Issuer
under the Basic Documents when the same shall become due, and, in each case, to
institute suit for the enforcement of any such payment, and such right shall not
be impaired without the consent of the Administrative Agent or the Majority
Noteholders, as applicable.
SECTION 5.10 RESTORATION OF RIGHTS AND REMEDIES. If the Administrative
Agent or a Noteholder has instituted any proceeding to enforce any right or
remedy under this Indenture and such proceeding has been discontinued or
abandoned for any reason or has been determined adversely to the Trustee, the
Administrative Agent or to such Noteholder, then and in every such case the
Issuer, the Trustee, the Administrative Agent and the Noteholders shall, subject
to any determination in such Proceeding, be restored severally and respectively
to their former positions hereunder, and thereafter all rights and remedies of
the Trustee, the Administrative Agent and the Noteholder shall continue as
though no such proceeding had been instituted.
SECTION 5.11 RIGHTS AND REMEDIES CUMULATIVE. No right or remedy herein
conferred upon or reserved to the Administrative Agent or the Noteholders is
intended to be exclusive of any other right or remedy, and every right and
remedy shall, to the extent permitted by law, be cumulative and in addition to
every other right and remedy given hereunder or now or hereafter existing at law
or in equity or otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.
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SECTION 5.12 DELAY OR OMISSION NOT A WAIVER. No delay or omission of
the Administrative Agent or the Noteholders to exercise any right or remedy
accruing upon any Default or Event of Default shall impair any such right or
remedy or constitute a waiver of any such Default or Event of Default or an
acquiescence therein. Every right and remedy given by this Article V or by law
to the Trustee, the Administrative Agent or the Noteholders may be exercised
from time to time, and as often as may be deemed expedient, by the Trustee, the
Administrative Agent or the Noteholders, as the case may be.
SECTION 5.13 [RESERVED].
SECTION 5.14 WAIVER OF PAST DEFAULTS.
(a) Prior to the declaration of the acceleration of the maturity of the
Notes as provided in SECTION 5.2, the Administrative Agent (acting upon the
direction of the Majority Noteholders) may waive any past Default or Event of
Default and its consequences except a Default or Event of Default (i) in payment
of principal of or interest on the Notes or (ii) in respect of a covenant or
provision hereof which cannot be modified or amended without the consent of the
Administrative Agent and all of the Noteholders. In the case of any such waiver,
the Issuer, the Trustee, the Administrative Agent and the Noteholders shall be
restored to their former positions and rights hereunder, respectively; but no
such waiver shall extend to any subsequent or other Default or Event of Default
or impair any right consequent thereto.
(b) Upon any such waiver, such Default or Event of Default shall cease
to exist and be deemed to have been cured and not to have occurred, and any
Event of Default arising therefrom shall be deemed to have been cured and not to
have occurred, for every purpose of this Indenture; but no such waiver shall
extend to any subsequent or other Default or Event of Default or impair any
right consequent thereto.
SECTION 5.15 UNDERTAKING FOR COSTS. Each of the Issuer, the Trustee and
the Administrative Agent agrees, and each Noteholder by its acceptance of a Note
shall be deemed to have agreed, that any court may in its discretion require, in
any suit for the enforcement of any right or remedy under this Indenture, or in
any suit against the Trustee for any action taken, suffered or omitted by it as
Trustee, the filing by any party litigant in such suit of an undertaking to pay
the costs of such suit, and that such court may in its discretion assess
reasonable costs, including reasonable attorneys' fees, against any party
litigant in such suit, having due regard to the merits and good faith of the
claims or defenses made by such party litigant; but the provisions of this
Section shall not apply to (a) any suit instituted by the Trustee, (b) any suit
instituted by the Administrative Agent or Noteholders holding in the aggregate
more than 10% of Percentage Interests of any class of Notes or (c) any suit
instituted by the Noteholders for the enforcement of the payment of principal of
or interest on the Notes on or after the respective due dates expressed in the
Notes and in this Indenture.
SECTION 5.16 WAIVER OF STAY OR EXTENSION LAWS. The Issuer covenants (to
the extent that it may lawfully do so) that it will not at any time insist upon,
or plead or in any manner whatsoever, claim or take the benefit or advantage of,
any stay or extension law wherever enacted, now or at any time hereafter in
force, that may affect the covenants or the performance of this Indenture; and
the Issuer (to the extent that it may lawfully do so) hereby expressly waives
all benefit or advantage of any such law, and covenants that it will not hinder,
delay or impede the execution of any power and any right of the Issuer to take
such action shall be suspended.
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SECTION 5.17 SALE OF TRUST ESTATE.
(a) To the extent permitted by applicable law, the Trustee shall not in
any private sale sell to a third party the Trust Estate, or any portion thereof
unless,
(i) the Administrative Agent (acting at the direction of the
Majority Noteholders) consents to or direct the Trustee in writing to
make such sale; or
(ii) the proceeds of such sale would be not less than the sum
of (x) all amounts due on the entire unpaid principal amount of the
Notes and interest due or to become due thereon in accordance with
Section 5.7 hereof on the Settlement Date next succeeding the date of
such sale and (y) all amounts due the Administrative Agent, the Trustee
and the Noteholders from the Issuer under the Basic Documents.
(b) For any public sale of the Trust Estate, the Trustee shall have
provided the Administrative Agent and the Noteholders with notice of such sale
at least two weeks in advance of such sale which notice shall specify the date,
time and location of such sale.
(c) In connection with a sale of all or any portion of the Trust
Estate:
(i) the Administrative Agent or the Noteholders may bid for
and purchase the property offered for sale, and may hold, retain,
possess and dispose of such property, without further accountability,
and (x) the Noteholders may, in paying the purchase money therefor,
deliver in lieu of cash any Outstanding Note or claims for interest
thereon for credit in the amount that shall, upon distribution of the
net proceeds of such sale, be payable thereon, and the Note so
delivered shall be cancelled and extinguished except that, in case the
amounts so payable thereon shall be less than the amount due thereon,
such Notes shall be returned to the Noteholders after being
appropriately stamped to show such partial payment and (y) the
Administrative Agent may, in paying the purchase money therefor,
set-off against any amount owed to it by the Issuer under the Basic
Documents;
(ii) the Trustee shall execute and deliver an appropriate
instrument of conveyance transferring its interest in any portion of
the Trust Estate in connection with a sale thereof; and
(iii) the Trustee is hereby irrevocably appointed the agent
and attorney-in-fact of the Issuer to transfer and convey its interest
in any portion of the Trust Estate in connection with a sale thereof,
and to take all action necessary to effect such sale.
(d) The method, manner, time, place and terms of any sale of all or any
portion of the Trust Estate shall be commercially reasonable.
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ARTICLE VI
THE TRUSTEE
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SECTION 6.1 DUTIES OF TRUSTEE.
(a) If an Event of Default has occurred and is continuing, the Trustee
shall exercise the rights and powers vested in it by this Indenture and the
other Basic Documents and use the same degree of care and skill in their
exercise as a prudent person would exercise or use under the circumstances in
the conduct of such person's own affairs.
(b) Except during the continuance of an Event of Default:
(i) the Trustee undertakes to perform such duties and only
such duties as are specifically set forth in this Indenture and each of
the other Basic Documents to which it is a party and no implied
covenants or obligations shall be read into this Indenture against the
Trustee; and
(ii) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the requirements of
this Indenture; however, the Trustee shall examine the certificates and
opinions to determine whether or not they conform on their face to the
requirements of this Indenture.
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its own willful
misconduct, except that:
(i) this paragraph does not limit the effect of paragraph (b)
of this Section; and
(ii) the Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer unless it is proved that
the Trustee was negligent in ascertaining the pertinent facts.
(d) The Trustee shall not be liable for interest on any money received
by it except as the Trustee may agree in writing with the Issuer.
(e) Money held in trust by the Trustee need not be segregated from
other funds except to the extent required by law or the terms of this Indenture.
(f) No provision of this Indenture shall require the Trustee to expend
or risk its own funds or otherwise incur financial liability in the performance
of any of its duties hereunder or in the exercise of any of its rights or
powers, if it shall have reasonable grounds to believe that repayment of such
funds or adequate indemnity against such risk or liability is not reasonably
assured to it.
(g) Every provision of this Indenture relating to the conduct or
affecting the liability of or affording protection to the Trustee shall be
subject to the provisions of this Section.
(h) The Trustee shall permit any representative of the Administrative
Agent or the Noteholders, during the Trustee's normal business hours, to examine
all books of account, records, reports and other papers of the Trustee relating
to the Notes and the transactions contemplated by the Basic Documents, to make
copies and extracts therefrom and to discuss the Trustee's affairs and actions,
as such affairs and actions relate to the Trustee's duties with respect to the
Notes and the Administrative Agent, with the Trustee's officers and employees
responsible for carrying out the Trustee's duties with respect to the Notes and
the Administrative Agent.
(i) The Trustee shall, and hereby agrees that it will, perform all of
the obligations and duties required of it under the other Basic Documents.
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SECTION 6.2 RIGHTS OF TRUSTEE. Subject to Sections 6.1 and this Section
6.2, the Trustee shall be protected and shall incur no liability to the Issuer,
the Administrative Agent or the Noteholders in relying upon the accuracy, acting
in reliance upon the contents, and assuming the genuineness of any notice,
demand, certificate, signature, instrument or other document reasonably believed
by the Trustee to be genuine and to have been duly executed by the appropriate
signatory, and, except to the extent the Trustee has actual knowledge to the
contrary or as required pursuant to Section 6.1 the Trustee shall not be
required to make any independent investigation with respect thereto.
(a) Before the Trustee acts or refrains from acting, it may require an
Officer's Certificate. Subject to SECTION 6.1(c), the Trustee shall not be
liable for any action it takes or omits to take in good faith in reliance on the
Officer's Certificate.
(b) The Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys or a custodian or nominee, and the Trustee shall not be responsible
for any misconduct or negligence on the part of any such agent, attorney,
custodian or nominee appointed with due care by it hereunder.
(c) The Trustee shall not be liable for any action it takes or omits to
take in good faith which it believes to be authorized or within its rights or
powers; provided, however, that the Trustee's conduct does not constitute
willful misconduct, negligence or bad faith.
(d) The Trustee may consult with counsel, and the advice or opinion of
counsel with respect to legal matters relating to this Indenture and the Notes
shall be full and complete authorization and protection from liability in
respect to any action taken, omitted or suffered by it hereunder in good faith
and in accordance with the advice or opinion of such counsel.
(e) The Trustee shall be under no obligation to institute, conduct or
defend any litigation under this Indenture or in relation to this Indenture, at
the request, order or direction of the Administrative Agent or the Noteholders,
pursuant to the provisions of this Indenture, unless the Administrative Agent
and/or the Noteholders, as applicable, shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses and liabilities
that may be incurred therein or thereby; provided, however, that the Trustee
shall, upon the occurrence of an Event of Default (that has not been cured),
exercise the rights and powers vested in it by this Indenture in accordance with
Section 6.1.
(f) The Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, consent, order, approval, bond or other paper
or document, unless requested in writing to do so by the Administrative Agent or
the Majority Noteholders; provided, however, that if the payment within a
reasonable time to the Trustee of the costs, expenses or liabilities likely to
be incurred by it in the making of such investigation is, in the opinion of the
Trustee, not reasonably assured to the Trustee by the security afforded to it by
the terms of this Indenture, the Trustee may require reasonable indemnity
against such cost, expense or liability as a condition to so proceeding; the
reasonable expense of every such examination shall be paid by the Person making
such request, or, if paid by the Trustee, shall be reimbursed by the Person
making such request upon demand.
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SECTION 6.3 INDIVIDUAL RIGHTS OF TRUSTEE. The Trustee in its individual
or any other capacity may become the owner or pledgee of a Note and may
otherwise deal with the Issuer or its Affiliates with the same rights it would
have if it were not the Trustee. Any Note Paying Agent, Note Registrar,
co-registrar or co-paying agent may do the same with like rights. However, the
Trustee must comply with Section 6.11.
SECTION 6.4 TRUSTEE'S DISCLAIMER. The Trustee shall not be responsible
for and makes no representation as to the validity or adequacy of this
Indenture, the Trust Estate, the Collateral or the Notes, it shall not be
accountable for the Issuer's use of the proceeds from the Notes, and it shall
not be responsible for any statement of the Issuer in the Indenture or in any
document issued in connection with the sale of the Notes or in the Notes other
than the Trustee's certificate of authentication.
SECTION 6.5 NOTICE OF DEFAULTS. If an Event of Default occurs and is
continuing and if it is either known by, or written notice of the existence
thereof has been delivered to, a Responsible Officer of the Trustee, the Trustee
shall mail to the Administrative Agent and each Noteholder a notice of the Event
of Default within three (3) Business Days after such knowledge or notice occurs.
SECTION 6.6 REPORTS BY TRUSTEE TO THE NOTEHOLDERS. The Trustee shall on
behalf of the Issuer deliver to the Noteholders and the Administrative Agent
such information in its possession and which is requested by the Issuer as may
be reasonably required to enable the Noteholders and the Administrative Agent to
prepare their respective Federal and State income tax returns.
SECTION 6.7 COMPENSATION AND INDEMNITY.
(a) The Trustee shall be entitled to compensation for its services
hereunder, which shall be payable pursuant to SECTION 8.5 hereof. The Trustee's
compensation shall not be limited by any law on compensation of a trustee of an
express trust. The Issuer shall reimburse the Trustee, pursuant and subject to
SECTION 8.5 hereof, for all reasonable out-of-pocket expenses incurred or made
by it, including costs of collection, in addition to the compensation for its
services. Such expenses shall include the reasonable compensation and expenses,
disbursements and advances of the Trustee's agents, counsel, accountants and
experts. The Issuer shall or shall cause CPS to indemnify the Trustee against
any and all loss, liability or expense incurred by the Trustee without willful
misfeasance, negligence or bad faith on its part arising out of or in connection
with the acceptance or the administration of this trust and the performance of
its duties hereunder, including the costs and expenses of defending itself
against any claim or liability in connection therewith. The Trustee shall notify
the Issuer and CPS promptly of any claim for which it may seek indemnity.
Failure by the Trustee to so notify the Issuer and CPS shall not relieve the
Issuer of its obligations hereunder. The Trustee may have separate counsel and
the Issuer shall or shall cause CPS to pay the reasonable fees and expenses of
such counsel. Neither the Issuer nor CPS need reimburse any expense or indemnify
against any loss, liability or expense incurred by the Trustee through the
Trustee's own willful misconduct, negligence or bad faith.
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(b) The Issuer's payment obligations to the Trustee pursuant to this
Section shall survive the discharge of this Indenture. When the Trustee incurs
expenses after the occurrence of a Default specified in SECTION 5.1(f), (g) or
(h) with respect to the Issuer, the expenses are intended to constitute expenses
of administration under Title 11 of the United States Code or any other
applicable Federal or State bankruptcy, insolvency or similar law.
Notwithstanding anything else set forth in this Indenture or the other Basic
Documents, the recourse of the Trustee hereunder and under the other Basic
Documents specifically shall not be recourse to the assets of the Noteholders or
the Administrative Agent.
SECTION 6.8 REPLACEMENT OF TRUSTEE.
(a) The Issuer may, with the consent of the Administrative Agent and
the Majority Noteholders, and at the request of the Administrative Agent (acting
upon the written direction of the Majority Noteholders) shall, remove the
Trustee if:
(i) the Trustee fails to comply with SECTION 6.11 or the
Trustee fails to perform any other material covenant or agreement of
the Trustee set forth in the Basic Documents to which the Trustee is a
party and such failure continues for 45 days after written notice of
such failure from the Administrative Agent or a Noteholder;
(ii) an Insolvency Event with respect to the Trustee occurs;
or
(iii) the Trustee otherwise becomes incapable of acting.
(b) If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason (the Trustee in such event being referred to
herein as the retiring Trustee), the Issuer shall promptly appoint a successor
Trustee acceptable to the Administrative Agent and the Majority Noteholders. If
the Issuer fails to appoint such a successor Trustee, the Administrative Agent
and the Majority Noteholders may appoint a successor Trustee.
(c) A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee, the Administrative Agent, the Noteholders
and the Issuer, whereupon, the resignation or removal of the retiring Trustee
shall become effective, and the successor Trustee shall have all the rights,
powers and duties of the retiring Trustee under this Indenture. The retiring
Trustee shall promptly transfer all property held by it as Trustee to the
successor Trustee.
(d) If a successor Trustee does not take office within 60 days after
the retiring Trustee resigns or is removed, the retiring Trustee, the Issuer,
the Administrative Agent or the Majority Noteholders may petition any court of
competent jurisdiction for the appointment of a successor Trustee.
(e) Any resignation or removal of the Trustee and appointment of a
successor Trustee pursuant to any of the provisions of this Section shall not
become effective until acceptance of appointment by the successor Trustee
pursuant to SECTION 6.8.
(f) Notwithstanding the replacement of the Trustee pursuant to this
Section, the obligations of the Issuer and CPS under SECTION 6.7 shall continue
for the benefit of the retiring Trustee.
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SECTION 6.9 SUCCESSOR TRUSTEE BY MERGER.
(a) If the Trustee consolidates with, merges or converts into, or
transfers all or substantially all its corporate trust business or assets to,
another corporation or banking association, the resulting, surviving or
transferee corporation without any further act shall be the successor Trustee.
The Trustee shall provide the Noteholders and the Administrative Agent prior
written notice of any such transaction.
(b) In case at the time such successor or successors to the Trustee by
merger, conversion or consolidation shall succeed to the trusts created by this
Indenture the Notes shall have been authenticated but not delivered, any such
successor to the Trustee may adopt the certificate of authentication of any
predecessor trustee, and deliver the Notes so authenticated; and in case at that
time the Notes shall not have been authenticated, any successor to the Trustee
may authenticate the Notes either in the name of any predecessor hereunder or in
the name of the successor to the Trustee; and in all such cases such
certificates shall have the full force which it is anywhere in the Notes or in
this Indenture provided that the certificate of the Trustee shall have.
SECTION 6.10 APPOINTMENT OF CO-TRUSTEE OR SEPARATE TRUSTEE.
(a) Notwithstanding any other provisions of this Indenture, at any
time, for the purpose of meeting any legal requirement of any jurisdiction in
which any part of the Trust Estate may at the time be located, the Trustee with
the consent of the Administrative Agent and the Majority Noteholders shall have
the power and may execute and deliver all instruments to appoint one or more
Persons to act as a co-trustee or co-trustees, or separate trustee or separate
trustees, of all or any part of the Trust Estate, and to vest in such Person or
Persons, in such capacity and for the benefit of the Noteholders and the
Administrative Agent, such title to the Trust Estate, or any part thereof, and,
subject to the other provisions of this Section, such powers, duties,
obligations, rights and trusts as the Trustee may consider necessary or
desirable. No co-trustee or separate trustee hereunder shall be required to meet
the terms of eligibility as a successor trustee under Section 6.11 and no notice
to the Administrative Agent or the Noteholders of the appointment of any
co-trustee or separate trustee shall be required under Section 6.8 hereof.
(b) Every separate trustee and co-trustee shall, to the extent
permitted by law, be appointed and act subject to the following provisions and
conditions:
(i) all rights, powers, duties and obligations conferred or
imposed upon the Trustee shall be conferred or imposed upon and
exercised or performed by the Trustee and such separate trustee or
co-trustee jointly (it being understood that such separate trustee or
co-trustee is not authorized to act separately without the Trustee
joining in such act), except to the extent that under any law of any
jurisdiction in which any particular act or acts are to be performed
the Trustee shall be incompetent or unqualified to perform such act or
acts, in which event such rights, powers, duties and obligations
(including the holding of title to the Trust or any portion thereof in
any such jurisdiction) shall be exercised and performed singly by such
separate trustee or co-trustee, but solely at the direction of the
Trustee;
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(ii) no trustee hereunder shall be personally liable by reason
of any act or omission of any other trustee hereunder, including acts
or omissions of predecessor or successor trustees; and
(iii) the Trustee may at any time accept the resignation of or
remove any separate trustee or co-trustee.
(c) Any notice, request or other writing given to the Trustee shall be
deemed to have been given to each of the then separate trustees and co-trustees,
as effectively as if given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to this Indenture and the conditions
of this ARTICLE VI. Each separate trustee and co-trustee, upon its acceptance of
the trusts conferred, shall be vested with the estates or property specified in
its instrument of appointment, either jointly with the Trustee or separately, as
may be provided therein, subject to all the provisions of this Indenture,
specifically including every provision of this Indenture relating to the conduct
of, affecting the liability of, or affording protection to, the Trustee. Every
such instrument shall be filed with the Trustee.
(d) Any separate trustee or co-trustee may at any time constitute the
Trustee, its agent or attorney-in-fact with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Indenture on its behalf and in its name. If any separate trustee or co-trustee
shall die, dissolve, become insolvent, become incapable of acting, resign or be
removed, all of its estates, properties, rights, remedies and trusts shall
invest in and be exercised by the Trustee, to the extent permitted by law,
without the appointment of a new or successor trustee.
SECTION 6.11 ELIGIBILITY: DISQUALIFICATION. The Trustee shall have a
combined capital and surplus of at least $50,000,000 as set forth in its most
recent published annual report of condition and subject to supervision or
examination by federal or state authorities; and having a rating, both with
respect to long-term and short-term unsecured obligations, of not less than
investment grade by Standard & Poor's or Moody's. The Trustee shall provide
copies of such reports to the Administrative Agent and the Noteholders upon
request.
SECTION 6.12 [RESERVED].
SECTION 6.13 APPOINTMENT AND POWERS. Subject to the terms and
conditions hereof, the initial Noteholder and the Administrative Agent hereby
appoint Wells Fargo Bank, National Association as the Trustee with respect to
the Collateral, and Wells Fargo Bank, National Association hereby accepts such
appointment and agrees to act as Trustee with respect to the Collateral for the
benefit of the Noteholders and the Administrative Agent, to maintain custody and
possession of such Collateral (except as otherwise provided hereunder) and to
perform the other duties of the Trustee in accordance with the provisions of
this Indenture and the other Basic Documents. Each Noteholder, by its acceptance
of a Note, hereby authorizes the Trustee to take such action on its behalf, and
to exercise such rights, remedies, powers and privileges hereunder, as such
Noteholder may direct and as are specifically authorized to be exercised by the
Trustee by the terms hereof, together with such actions, rights, remedies,
powers and privileges as are reasonably incidental thereto. The Trustee shall
act upon and in compliance with the written instructions of the Administrative
Agent or the Majority Noteholders delivered pursuant to this Indenture promptly
following receipt of such written instructions; provided that the Trustee shall
not act in accordance with any instructions (i) which are not authorized by, or
in violation of the provisions of, this Indenture, (ii) which are in violation
of any applicable law, rule or regulation or (iii) for which the Trustee has not
received reasonable indemnity. Receipt of such instructions shall not be a
condition to the exercise by the Trustee of its express duties hereunder, except
where this Indenture provides that the Trustee is permitted to act only
following and in accordance with such instructions.
37
SECTION 6.14 PERFORMANCE OF DUTIES. The Trustee shall have no duties or
responsibilities except those expressly set forth in this Indenture and the
other Basic Documents to which the Trustee is a party or as directed by the
Noteholders or the Administrative Agent in accordance with this Indenture. The
Trustee shall not be required to take any discretionary actions hereunder except
at the written direction of the Administrative Agent or the Majority
Noteholders. The Trustee shall, and hereby agrees that it will, perform all of
the duties and obligations required of it under the Basic Documents.
SECTION 6.15 LIMITATION ON LIABILITY. Neither the Trustee nor any of
its directors, officers or employees shall be liable for any action taken or
omitted to be taken by it or them in good faith hereunder, or in connection
herewith, except that the Trustee shall be liable for its negligence, bad faith
or willful misconduct. Notwithstanding any term or provision of this Indenture,
the Trustee shall incur no liability to the Issuer, the Administrative Agent or
the Noteholders for any action taken or omitted by the Trustee in connection
with the Collateral, except for the negligence, bad faith or willful misconduct
on the part of the Trustee, and, further, shall incur no liability to the
Administrative Agent or the Noteholders except for negligence, bad faith or
willful misconduct in carrying out its duties to the Administrative Agent and
the Noteholders. The Trustee shall at all times be free independently to
establish to its reasonable satisfaction, but shall have no duty to
independently verify, the existence or nonexistence of facts that are a
condition to the exercise or enforcement of any right or remedy hereunder or
under any of the Basic Documents. The Trustee may consult with counsel, and
shall not be liable for any action taken or omitted to be taken by it hereunder
in good faith and in accordance with the written advice of such counsel. The
Trustee shall not be under any obligation to exercise any of the remedial rights
or powers vested in it by this Indenture or to follow any direction from the
Administrative Agent or the Noteholders unless it shall have received reasonable
security or indemnity satisfactory to the Trustee against the costs, expenses
and liabilities which might be incurred by it.
SECTION 6.16 [RESERVED].
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SECTION 6.17 SUCCESSOR TRUSTEE.
(a) MERGER. Any Person into which the Trustee may be converted or
merged, or with which it may be consolidated, or to which it may sell or
transfer its trust business and assets as a whole or substantially as a whole,
or any Person resulting from any such conversion, merger, consolidation, sale or
transfer to which the Trustee is a party, shall (provided it is otherwise
qualified to serve as the Trustee hereunder) be and become a successor Trustee
hereunder and be vested with all of the title to and interest in the Collateral
and all of the trusts, powers, descriptions, immunities, privileges and other
matters and have all of the obligations as its predecessor without the execution
or filing of any instrument or any further act, deed or conveyance on the part
of any of the parties hereto, anything herein to the contrary notwithstanding,
except to the extent, if any, that any such action is necessary to perfect, or
continue the perfection of, the security interest of the Trustee for the benefit
of the Administrative Agent and the Noteholders in the Collateral; provided that
any such successor shall also be the successor Trustee under SECTION 6.9.
(b) REMOVAL. The Trustee may be removed by the Administrative Agent and
the Majority Noteholders at any time, with or without cause, by an instrument or
concurrent instruments in writing delivered to the Trustee and the Issuer. A
temporary successor may be removed at any time to allow a successor Trustee to
be appointed pursuant to subsection (c) below. Any removal pursuant to the
provisions of this subsection (b) shall take effect only upon the date which is
the latest of (i) the effective date of the appointment of a successor Trustee
and the acceptance in writing by such successor Trustee of such appointment and
of its obligation to perform its duties hereunder in accordance with the
provisions hereof, and (ii) receipt by the Administrative Agent and the
Noteholders of an Opinion of Counsel to the effect described in Section 3.6.
(c) ACCEPTANCE BY SUCCESSOR. The Majority Noteholders and the
Administrative Agent shall have the sole right to appoint each successor
Trustee. Every temporary or permanent successor Trustee appointed hereunder
shall execute, acknowledge and deliver to its predecessor and to the Trustee,
the Administrative Agent, the Noteholders and the Issuer an instrument in
writing accepting such appointment hereunder and the relevant predecessor shall
execute, acknowledge and deliver such other documents and instruments as will
effectuate the delivery of all Collateral to the successor Trustee, whereupon
such successor, without any further act, deed or conveyance, shall become fully
vested with all the estates, properties, rights, powers, duties and obligations
of its predecessor. Such predecessor shall, nevertheless, on the written request
of the Majority Noteholders and the Administrative Agent or the Issuer, execute
and deliver an instrument transferring to such successor all the estates,
properties, rights and powers of such predecessor hereunder. In the event that
any instrument in writing from the Issuer or the Administrative Agent and the
Majority Noteholders is reasonably required by a successor Trustee to more fully
and certainly vest in such successor the estates, properties, rights, powers,
duties and obligations vested or intended to be vested hereunder in the Trustee,
any and all such written instruments shall at the request of the temporary or
permanent successor Trustee, be forthwith executed, acknowledged and delivered
by the Trustee or the Issuer, as the case may be. The designation of any
successor Trustee and the instrument or instruments removing any Trustee and
appointing a successor hereunder, together with all other instruments provided
for herein, shall be maintained with the records relating to the Collateral and,
to the extent required by applicable law, filed or recorded by the successor
Trustee in each place where such filing or recording is necessary to effect the
transfer of the Collateral to the successor Trustee or to protect or continue
the perfection of the security interests granted hereunder.
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SECTION 6.18 [RESERVED].
SECTION 6.19 REPRESENTATIONS AND WARRANTIES OF THE TRUSTEE. The Trustee
represents and warrants to the Issuer, the Administrative Agent and the Majority
Noteholders as follows:
(a) The Trustee is a national banking association, duly organized,
validly existing and in good standing under the laws of the United States and is
duly authorized and licensed under applicable law to conduct its business as
presently conducted.
(b) The Trustee has all requisite right, power and authority to execute
and deliver this Indenture and to perform all of its duties as Trustee
hereunder.
(c) The execution and delivery by the Trustee of this Indenture and the
other Basic Documents to which it is a party, and the performance by the Trustee
of its duties hereunder and thereunder, have been duly authorized by all
necessary corporate proceedings and no further approvals or filings, including
any governmental approvals, are required for the valid execution and delivery by
the Trustee, or the performance by the Trustee, of this Indenture and such other
Basic Documents.
(d) The Trustee has duly executed and delivered this Indenture and each
other Basic Document to which it is a party, and each of this Indenture and each
such other Basic Document constitutes the legal, valid and binding obligation of
the Trustee, enforceable against the Trustee in accordance with its terms,
except as (i) such enforceability may be limited by bankruptcy, insolvency,
reorganization and similar laws relating to or affecting the enforcement of
creditors' rights generally and (ii) the availability of equitable remedies may
be limited by equitable principles of general applicability.
(e) The Trustee is in possession of the Pledged Residual Certificates
set forth in SCHEDULE II hereto.
SECTION 6.20 WAIVER OF SETOFFS. The Trustee hereby expressly waives any
and all rights of setoff that the Trustee may otherwise at any time have under
applicable law with respect to the Collection Account and agrees that amounts in
the Collection Account shall at all times be held and applied solely in
accordance with the provisions hereof.
SECTION 6.21 CONTROL BY THE MAJORITY NOTEHOLDERS. The Trustee shall
comply with notices and instructions given by the Issuer only if accompanied by
the written consent of the Majority Noteholders, except that if any Event of
Default shall have occurred and be continuing, the Trustee shall act upon and
comply with notices and instructions given by the Majority Noteholders alone in
the place and stead of the Issuer.
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ARTICLE VII
[RESERVED]
----------
ARTICLE VIII
COLLECTION OF MONEY AND RELEASES OF TRUST ESTATE
------------------------------------------------
SECTION 8.1 COLLECTION OF MONEY. Except as otherwise expressly provided
herein, the Trustee may demand payment or delivery of, and shall receive and
collect, directly and without intervention or assistance of any fiscal agent or
other intermediary, all money and other property payable to or receivable by the
Trustee pursuant to this Indenture and the other Basic Documents. The Trustee
shall apply all such money received by it as provided in this Indenture. Except
as otherwise expressly provided in this Indenture and the other Basic Documents,
if any default occurs in the making of any payment or performance under any
agreement or instrument that is part of the Trust Estate, the Trustee may take
such action as may be appropriate to enforce such payment or performance,
including the institution and prosecution of appropriate proceedings. Any such
action shall be without prejudice to any right to claim a Default or Event of
Default under this Indenture and any right to proceed thereafter as provided in
Article V.
SECTION 8.2 ESTABLISHMENT OF COLLECTION ACCOUNT.
(a) On or prior to the Initial Closing Date, the Trustee established an
account denominated "Collection Account - Folio Funding II, LLC, Wells Fargo
Bank, National Association, as Trustee for the benefit of the Issuer Secured
Parties" (the "COLLECTION ACCOUNT").
(b) The Collection Account shall be an Eligible Account and shall
relate solely to the Notes and, if applicable, the related Eligible Investments.
The location and account number of the Collection Account as of the Effective
Date is at the Corporate Trust Office, account number 22409000. The Trustee
shall give the Issuer at least five Business Days' written notice of any change
in the location of the Collection Account and any related account identification
information. All amounts, financial assets and investment property held in,
deposited in or credited to, from time to time, the Collection Account shall be
part of the Trust Estate and shall be invested by the Trustee in Eligible
Investments pursuant to Section 8.3(b). In addition, the Trustee shall not in
any way be held liable by reason of any insufficiency in the Collection Account
held by or on behalf of the Trustee resulting from any investment loss on any
Eligible Investments.
SECTION 8.3 COLLECTION ACCOUNT.
(a) The Trustee has deposited or caused to be deposited, and agrees to
deposit, or cause to be deposited all distributions received with respect to the
Collateral from and after the Initial Closing Date into the Collection Account.
On the Business Day immediately prior to each Settlement Date, the Trustee shall
inform the Administrative Agent of the amount on deposit in the Collection
Account after all distributions in respect of the Pledged Residual Interest
Certificates have been deposited therein. Any withdrawal or distribution of any
amount on deposit in the Collection Account by the Trustee, including without
limitation, any withdrawal or distribution to be made on any Settlement Date in
accordance with the related Settlement Date Statement, in each case, shall only
be made with the Administrative Agent's prior written approval (such prior
written approval of the Administrative Agent not to be unreasonably withheld and
may be in the form of an email to the Trustee from the Administrative Agent).
(b) All funds in the Collection Account shall be invested by the
Trustee (if the Trustee maintains the Collection Account), or on behalf of the
Trustee by the depository institution maintaining such account, in Eligible
Investments only upon the written direction from the Issuer, as described below.
Subject to the limitations set forth herein, the Issuer may direct the
depository institution maintaining the Collection Account in writing (with a
copy of such direction to the Trustee, if the Trustee is not the applicable
depository institution) to invest funds in the Collection Account in Eligible
Investments. All such investments shall be in the name of the Trustee for the
benefit of the Noteholders. All income or other gain from investment of monies
deposited in or credited to the Collection Account shall be included in the
Available Funds and distributed in accordance with Section 8.5 on each
Settlement Date. The maximum permissible maturities of any investments of funds
in the Collection Account on any date shall not be later than the Business Day
immediately preceding the Settlement Date next succeeding the date of such
investment. No investment in Eligible Investments may be sold prior to its
maturity. In the absence of written direction as provided above, the Trustee
shall, to the fullest extent practicable, invest and reinvest funds held in the
Collection Account in one or more Eligible Investments described in clause (f)
of the definition thereof.
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SECTION 8.4 [RESERVED]
SECTION 8.5 DISTRIBUTIONS. On each Settlement Date, subject to Section
5.7 and Section 8.3(a) hereof, based solely on the Settlement Date Statement
upon which the Trustee may conclusively rely, the Trustee shall distribute the
Available Funds on such Settlement Date in the following amounts and order of
priority:
(i) to the Trustee, the Trustee Fees payable thereto, and
reasonable out-of-pocket expenses thereof (including counsel fees and
expenses) up to a maximum of $50,000 per annum for such Trustee Fees
and expenses, and all unpaid Trustee Fees and unpaid reasonable
out-of-pocket expenses (including counsel fees and expenses), but
subject to the $50,000 per annum cap, from prior Settlement Dates;
(ii) to the Administrative Agent, the Administrative Agent
Fees payable thereto, and reasonable out-of-pocket expenses thereof
(including counsel fees and expenses) and all unpaid Administrative
Agent Fees and unpaid reasonable out-of-pocket expenses (including
counsel fees and expenses) from prior Settlement Dates;
(iii) to the Note Purchaser, any amounts then due and owing to
the Note Purchaser under the Basic Documents;
(iv) on a PRO RATA basis in accordance with amounts owed, (x)
to the Class A-1 Noteholders, the Class A-1 Noteholders' Interest
Distributable Amount and (y) to the Class A-2 Noteholders, the Class
A-2 Noteholders' Interest Distributable Amount;
(v) to the Class A-1 Noteholders, the Class A-1 Noteholders'
Principal Distributable Amount and any Prepayment Fees then due and
owing to the Class A-1 Noteholders;
(vi) to the Class A-2 Noteholders, the Class A-2 Noteholders'
Principal Distributable Amount and any Prepayment Fees then due and
owing to the Class A-2 Noteholders;
(vii) to the Trustee, any amounts owed pursuant to the Basic
Documents, to the extent not previously paid; and
(viii) so long as no Event of Default has occurred, to the
Issuer, any remaining amounts.
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SECTION 8.6 STATEMENTS TO NOTEHOLDERS. On each Settlement Date, the
Trustee shall make available electronically to each Noteholder of record as of
the related Record Date the Settlement Date Statement prepared by CPS pursuant
to Section 3.9.
The Trustee may make the Settlement Date Statement and, with the
consent or at the direction of the Issuer, such other information regarding the
Notes and/or the Collateral as the Trustee may have in its possession, available
to the Noteholders via the Trustee's Internet website, but only with the use of
a password provided by the Trustee; PROVIDED, HOWEVER, the Trustee shall have no
obligation to provide such information described in this Section 8.6 until it
has received the requisite information from CPS. The Trustee will make no
representation or warranties as to the accuracy or completeness of such
documents and will assume no responsibility therefor.
The Trustee's Internet website shall be initially located at
"www.CTSLink.com" or at such other address as shall be specified by the Trustee
from time to time in writing to the Noteholders and the Issuer. In connection
with providing access to the Trustee's Internet website, the Trustee may require
registration and the acceptance of a disclaimer. The Trustee shall not be liable
for the dissemination of information in accordance with this Indenture.
SECTION 8.7 RELEASE OF TRUST ESTATE.
(a) Subject to the payment of its fees and expenses pursuant to SECTION
6.7, the Trustee may, and when required by the provisions of this Indenture
shall, execute instruments to release property from the lien of this Indenture,
in a manner and under circumstances that are not inconsistent with the
provisions of this Indenture. No party relying upon an instrument executed by
the Trustee as provided in this ARTICLE VIII shall be bound to ascertain the
Trustee's authority, inquire into the satisfaction of any conditions precedent
or see to the application of any moneys.
(b) The Trustee shall, at such time as there are no Notes outstanding,
all sums due and owing to the Administrative Agent and the Noteholders under any
of the Basic Documents have been paid in full, and all sums due the Trustee
pursuant to SECTION 6.7 have been paid, release any remaining portion of the
Trust Estate that secured the Notes and the other Issuer Secured Obligations
from the lien of this Indenture and release to the Issuer or any other Person
entitled thereto any funds then on deposit in the Collection Account. The
Trustee shall release property from the lien of this Indenture pursuant to this
SECTION 8.7(b) only upon receipt of an Issuer Request accompanied by an
Officer's Certificate meeting the applicable requirements of SECTION 11.1, a
copy of each of which shall be delivered to the Administrative Agent and the
Noteholders.
SECTION 8.8 OPINION OF COUNSEL. The Trustee shall receive at least
seven days' notice when requested by the Issuer to take any action pursuant to
Section 8.7(a), accompanied by copies of any instruments involved, and the
Trustee shall also require as a condition to such action, an Opinion of Counsel
in form and substance satisfactory to the Trustee, stating the legal effect of
any such action, outlining the steps required to complete the same, and
concluding that all conditions precedent to the taking of such action have been
complied with and such action will not materially and adversely affect the
security for the Notes or the rights of the Administrative Agent and/or the
Noteholders in contravention of the provisions of this Indenture or any of the
other Basic Documents; provided, however, that such Opinion of Counsel shall not
be required to express an opinion as to the fair value of the Trust Estate.
Counsel rendering any such opinion may rely, without independent investigation,
on the accuracy and validity of any certificate or other instrument delivered to
the Trustee in connection with any such action.
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ARTICLE IX
SUPPLEMENTAL INDENTURES
-----------------------
SECTION 9.1 SUPPLEMENTAL INDENTURES WITH THE CONSENT OF THE
ADMINISTRATIVE AGENT AND THE MAJORITY NOTEHOLDERS.
(a) The Issuer, the Administrative Agent and the Trustee, when
authorized by an Issuer Order, at any time and from time to time, may enter into
one or more indentures supplemental hereto, in form satisfactory to the Trustee,
for any purpose, but only with the prior written consent of the Majority
Noteholders.
(b) Unless otherwise specified by the Administrative Agent or the
Majority Noteholders, it shall be necessary for any Act of the Majority
Noteholders under this Section to approve the form and substance of any proposed
supplemental indenture.
(c) Promptly after the execution by the Issuer, the Administrative
Agent and the Trustee of any supplemental indenture pursuant to this Section,
the Trustee shall mail to each Noteholder a copy of such supplemental indenture.
Any failure of the Trustee to mail such copy shall not, however, in any way
impair or affect the validity of any such supplemental indenture.
SECTION 9.2 EXECUTION OF SUPPLEMENTAL INDENTURES. In executing, or
permitting the additional trusts created by, any supplemental indenture
permitted by this Article IX or the modifications thereby of the trusts created
by this Indenture, the Trustee shall be entitled to receive, and subject to
Sections 6.1 and 6.2, shall be fully protected in relying upon, an Opinion of
Counsel stating that the execution of such supplemental indenture is authorized
or permitted by this Indenture. The Trustee may, but shall not be obligated to,
enter into any such supplemental indenture that affects the Trustee's own
rights, duties, liabilities or immunities under this Indenture or otherwise.
SECTION 9.3 EFFECT OF SUPPLEMENTAL INDENTURE. Upon the execution of any
supplemental indenture pursuant to the provisions hereof, this Indenture shall
be and be deemed to be modified and amended in accordance therewith, and the
respective rights, limitations of rights, obligations, duties, liabilities and
immunities under this Indenture of the Trustee, the Issuer, the Administrative
Agent and the Noteholders shall thereafter be determined, exercised and enforced
hereunder subject in all respects to such modifications and amendments, and all
the terms and conditions of any such supplemental indenture shall be and be
deemed to be part of the terms and conditions of this Indenture for any and all
purposes.
ARTICLE X
REPAYMENT AND PREPAYMENT OF NOTES
---------------------------------
SECTION 10.1 REPAYMENT OF THE NOTES; OPTIONAL PREPAYMENT OF THE NOTES.
The outstanding principal balance of the Notes and all accrued and unpaid
interest thereon shall be payable in full by the Facility Termination Date and
otherwise as provided in Section 3.1, Section 8.5, and if applicable, Section
5.7, and the form of Notes attached as Exhibits A-1 and A-2. The Issuer may, at
its option, prepay the Class A-1 Invested Amount and/or the Class A-2 Invested
Amount, in whole or in part, at any time on any Business Day (such day the
"PREPAYMENT DATE") in accordance with this Section 10.1 and Section 10.2;
provided that in connection with a prepayment of the Notes, other than in
44
connection with a prepayment of the Notes pursuant to Section 3.07 of the Note
Purchase Agreement, no such prepayment may occur unless and until all amounts
due and payable in respect of clauses (i) through (vii) of Section 8.5 have been
paid in full irrespective of whether Available Funds are sufficient for this
purpose. Simultaneous with any such prepayment, the Issuer shall pay all accrued
and unpaid interest on the applicable Invested Amount to be prepaid and all
other amounts then due and owing under the Basic Documents. Any prepayment in
whole or in part of the Notes prior to the date which is 45 days prior to the
Class A-2 Facility Termination Date shall be subject to the payment of a
Prepayment Fee pursuant to Section 3.02(b) of the Note Purchase Agreement. For
the avoidance of doubt, no Collateral shall be released from the lien of the
Indenture until satisfaction and discharge of this Indenture in accordance with
Article IV hereof. Any principal amounts paid in respect of the Notes may not be
re-borrowed.
SECTION 10.2 NOTICE OF PREPAYMENT. Other than in connection with a
prepayment of the Notes pursuant to Section 3.07 of the Note Purchase Agreement,
notice of any prepayment of the Notes shall be given, upon the direction of the
Issuer, by the Trustee by facsimile transmission, courier or first class mail,
postage prepaid, mailed, faxed or couriered not less than five (5) days prior to
the related Prepayment Date, to the Administrative Agent and each Noteholder.
All notices of prepayment shall state (i) the Prepayment Date, (ii) the
applicable Invested Amount to be prepaid, (iii) the estimated accrued and unpaid
interest on the applicable Invested Amount to be prepaid and (iv) any other
amounts due and owing to the Administrative Agent under the Basic Documents.
Failure to give notice of prepayment, or any defect therein, to a Noteholder or
the Administrative Agent shall not impair or affect the validity of such
prepayment.
SECTION 10.3 GENERAL PROCEDURES. The applicable Invested Amount of a
class of Notes and amounts due to the Noteholders or the Administrative Agent by
the Issuer under the Basic Documents shall not be considered reduced by any
allocation, setting aside or distribution of any portion of the Available Funds
unless such Available Funds shall have been actually paid to the related
Noteholders or the Administrative Agent, as applicable. The applicable Invested
Amount of a class of Notes and amounts due to the Noteholders or the
Administrative Agent by the Issuer under the Basic Documents shall not be
considered repaid by any distribution of any portion of the Available Funds if
at any time such distribution is rescinded or must otherwise be returned for any
reason, in which event, if such amount has been returned by the related
Noteholders or the Administrative Agent, as applicable, such principal, interest
and/or other amount shall be reinstated in an amount equal to the amount
returned by the related Noteholders or the Administrative Agent, as applicable.
No provision of this Indenture shall require the payment or permit the
collection of interest in excess of the maximum permitted by applicable law.
45
ARTICLE XI
MISCELLANEOUS
-------------
SECTION 11.1 COMPLIANCE CERTIFICATES AND OPINIONS, ETC.
(a) Except as set forth herein, upon any application or request by the
Issuer to the Trustee to take any action under any provision of this Indenture,
the Issuer shall furnish to the Trustee, with a copy of each to the
Administrative Agent and the Noteholders, (i) an Officer's Certificate stating
that all conditions precedent, if any, provided for in this Indenture relating
to the proposed action have been complied with, and (ii) an Opinion of Counsel
stating that in the opinion of such counsel all such conditions precedent, if
any, have been complied with, except that, in the case of any such application
or request as to which the furnishing of such documents is specifically required
by any provision of this Indenture, no additional certificate or opinion need be
furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(i) a statement that each signatory of such certificate or
opinion has read or has caused to be read such covenant or condition
and the definitions herein relating thereto;
(ii) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(iii) a statement that, in the opinion of each such signatory,
such signatory has made such examination or investigation as is
necessary to enable such signatory to express an informed opinion as to
whether or not such covenant or condition has been complied with; and
(iv) a statement as to whether, in the opinion of each such
signatory such condition or covenant has been complied with.
(b) Other than with respect to Dollars, prior to the deposit of any
Collateral or other property or securities with the Trustee that is to be made
subject to the lien of this Indenture, the Issuer shall, in addition to any
obligation imposed in SECTION 11.1(a) or elsewhere in this Indenture, furnish to
the Trustee, with a copy thereof to the Administrative Agent and the
Noteholders, an Officer's Certificate certifying or stating the opinion of each
person signing such certificate as to the fair value (on the date of such
deposit) to the Issuer of the Collateral or other property or securities to be
so deposited.
(c) Notwithstanding Section 2.10 or any provision of this Section, the
Issuer may (A) collect, liquidate, sell or otherwise dispose of Collateral as
and to the extent permitted or required by the Basic Documents and (B) make cash
payments out of the Collection Account as and to the extent permitted or
required by the Basic Documents.
46
SECTION 11.2 FORM OF DOCUMENTS DELIVERED TO TRUSTEE.
(a) In any case where several matters are required to be certified by,
or covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
(b) Any certificate or opinion of an Authorized Officer of the Issuer
may be based, insofar as it relates to legal matters, upon a certificate or
opinion of, or representations by, counsel, unless such officer knows, or in the
exercise of reasonable care should know, that the certificate or opinion or
representations with respect to the matters upon which his or her certificate or
opinion is based are erroneous. Any such certificate of an Authorized Officer or
Opinion of Counsel may be based, insofar as it relates to factual matters, upon
a certificate or opinion of, or representations by, an officer or officers of
the Seller, the Purchaser or the Issuer, stating that the information with
respect to such factual matters is in the possession of the Seller, the
Purchaser or the Issuer, unless such counsel knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to such matters are erroneous.
(c) Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
(d) Whenever in this Indenture, in connection with any application or
certificate or report to the Trustee, it is provided that the Issuer shall
deliver any document as a condition of the granting of such application, or as
evidence of the Issuer's compliance with any term hereof, it is intended that
the truth and accuracy, at the time of the granting of such application or at
the effective date of such certificate or report (as the case may be), of the
facts and opinions stated in such document shall in such case be conditions
precedent to the right of the Issuer to have such application granted or to the
sufficiency of such certificate or report. The foregoing shall not, however, be
construed to affect the Trustee's right to rely upon the truth and accuracy of
any statement or opinion contained in any such document as provided in Article
VI.
47
SECTION 11.3 ACTS OF THE NOTEHOLDERS OR THE ADMINISTRATIVE AGENT.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given or taken by a
Noteholder or the Administrative Agent may be embodied in and evidenced by one
or more instruments of substantially similar tenor signed by such Noteholder or
the Administrative Agent in person or by agents duly appointed in writing; and
except as herein otherwise expressly provided such action shall become effective
when such instrument or instruments are delivered to the Trustee, and, where it
is hereby expressly required, to the Issuer. Such instrument or instruments (and
the action embodied therein and evidenced thereby) are herein sometimes referred
to as the "ACT" of the Noteholders or the Administrative Agent signing such
instrument or instruments. Proof of execution of any such instrument or of a
writing appointing any such agent shall be sufficient for any purpose of this
Indenture and (subject to Section 6.1) conclusive in favor of the Trustee and
the Issuer, if made in the manner provided in this Section.
(b) The fact and date of the execution by any person of any such
instrument or writing may be proved in any customary manner of the Trustee.
(c) The ownership of the Notes shall be proved by the Note Register.
(d) Any request, demand, authorization, direction, notice, consent,
waiver or other action by a Holder of a Note shall bind each Holder of such Note
issued upon the registration thereof or in exchange therefor or in lieu thereof,
in respect of anything done, omitted or suffered to be done by the Trustee or
the Issuer in reliance thereon, whether or not notation of such action is made
upon such Note.
SECTION 11.4 NOTICES, ETC., TO TRUSTEE, ISSUER, THE ADMINISTRATIVE
AGENT AND NOTEHOLDERS. Any request, demand, authorization, direction, notice,
consent, waiver or Act of the Noteholders or the Administrative Agent or other
documents provided or permitted by this Indenture to be made upon, given or
furnished to or filed with:
(a) the Trustee by the Administrative Agent, the Noteholders or by the
Issuer shall be sufficient for every purpose hereunder if personally delivered,
delivered by overnight courier or mailed certified mail, return receipt
requested and shall be deemed to have been duly given upon receipt of the
Trustee at its Corporate Trust Office or in the case of email, notice shall be
deemed to have been duly given when transmitted by email (evidenced by
telephonic or written confirmation of receipt of such email);
(b) the Issuer by the Trustee or by the Administrative Agent or the
Noteholders shall be sufficient for every purpose hereunder if personally
delivered, delivered by overnight courier or mailed certified mail, return
receipt requested or via email and in the case of personal delivery or overnight
courier only, shall be deemed to have been duly given upon receipt by the Issuer
or in the case of email, notice shall be deemed to have been duly given when
transmitted by email (evidenced by telephonic or written confirmation of receipt
of such email), c/o Consumer Portfolio Services, Inc. 16355 Laguna Canyon Road,
Irvine, California 92618 Attention: Mark Creatura, Esq. Confirmation: (888)
785-6691, email: mcreatura@consumerportfolio.com or at such other address
previously furnished in writing to the Trustee by the Issuer. The Issuer shall
promptly transmit any notice received by it from the Noteholders or the
Administrative Agent to the Trustee; or
48
(c) the Administrative Agent shall be sufficient for any purpose
hereunder if in writing and delivered by overnight courier or mailed certified
mail, return receipt requested, or personally delivered or, in the case of
email, notice shall be deemed to have been duly given when transmitted by email
(evidenced by telephonic or written confirmation of receipt of such email) to
the recipient as follows (or such other address previously furnished in writing
to the Trustee):
To the Administrative Agent:
Citigroup Financial Products Inc.
390 Greenwich Street
New York New York 10013
Attention: Ari Rosenberg, Managing Director
email: ari.rosenberg@citi.com
Telephone No.: 212-723-1041
Attention: Marc Daly, Vice President
Telecopier No.: 212-723-8591
Telephone No.: 212-723-4571
with a copy to:
Citigroup Global Securitized Products
450 Mamaroneck Avenue
Harrison, NY 10528
Attention: Robert Kohl, Senior Vice President
email:
Telephone No.: 914-899-7142
Attention: John Koterbay, Vice President
email:
Telephone No.: 914-899-7155
(d) the Noteholders shall be sufficient for any purpose hereunder if in
writing and delivered by overnight courier or mailed certified mail, return
receipt requested, or personally delivered or telexed or telecopied to the
recipient's contact information reflected in the Note Register.
(e) The Administrative Agent may deliver to the Noteholders any
notices, reports, statements, certificates or any other documentation delivered
to the Administrative Agent hereunder or under any Basic Document, but is under
no obligation to so deliver such documentation and shall not be liable for the
content thereof.
SECTION 11.5 WAIVER. Where this Indenture provides for notice in any
manner, such notice may be waived in writing by any Person entitled to receive
such notice with respect to itself only, either before or after the event, and
such waiver shall be the equivalent of such notice. Waivers of notice by the
Administrative Agent or a Noteholder shall be filed with the Trustee but such
filing shall not be a condition precedent to the validity of any action taken in
reliance upon such a waiver. In case, by reason of the suspension of regular
mail service as a result of a strike, work stoppage or similar activity, it
shall be impractical to mail notice of any event to the Administrative Agent or
a Noteholder when such notice is required to be given pursuant to any provision
of this Indenture, then any manner of giving such notice as shall be
satisfactory to the Trustee shall be deemed to be a sufficient giving of such
notice.
49
SECTION 11.6 ALTERNATE PAYMENT AND NOTICE PROVISIONS. Notwithstanding
any provision of this Indenture or the Notes to the contrary, the Issuer may
enter into any agreement with a Holder of a Note or the Administrative Agent
providing for a method of payment, or notice by the Trustee or the Note Paying
Agent to such Holder or the Administrative Agent, that is different from the
methods provided for in this Indenture for such payments or notices, provided
that such methods are reasonable and consented to by the Trustee (which consent
shall not be unreasonably withheld). The Issuer will furnish to the Trustee a
copy of each such agreement and the Trustee will cause payments to be made and
notices to be given in accordance with such agreements.
SECTION 11.7 EFFECT OF HEADINGS AND TABLE OF CONTENTS. The Article and
Section headings herein and the Table of Contents are for convenience only and
shall not affect the construction hereof.
SECTION 11.8 SUCCESSORS AND ASSIGNS. All covenants and agreements in
this Indenture and the Note by the Issuer shall bind its successors and assigns,
whether so expressed or not. All agreements of the Trustee in this Indenture
shall bind its successors. The Issuer may not assign any of its rights or
obligations hereunder, under the Notes or under any other Basic Document without
the prior written consent of the Administrative Agent and the Majority
Noteholders. Each Noteholder may assign, participate or otherwise transfer to
any Affiliate of such Noteholder or any other Person all or any of its rights or
obligations under its Note, this Indenture and the other Basic Documents. The
Issuer agrees to cooperate with each Noteholder in connection with any such
assignment or transfer, to execute and deliver such replacement notes, and to
enter into such restatements of, and amendments, supplements and other
modifications to, this Indenture and the other Basic Documents in order to give
effect to such assignment or transfer.
SECTION 11.9 BENEFITS OF INDENTURE. Nothing in this Indenture or in the
Notes, express or implied, shall give to any Person, other than the parties
hereto and their successors hereunder, the Administrative Agent (which shall be
a third-party beneficiary of this Indenture) and its successors and assigns, and
the Noteholders, and any other party secured hereunder, and any other Person
with an ownership interest in any part of the Trust Estate, any benefit or any
legal or equitable right, remedy or claim under this Indenture.
SECTION 11.10 SEVERABILITY. In case any provision in this Indenture or
in the Notes shall be invalid, illegal or unenforceable, the validity, legality,
and enforceability of the remaining provisions shall not in any way be affected
or impaired thereby.
SECTION 11.11 LEGAL HOLIDAYS. In any case where the date on which any
payment is due shall not be a Business Day, then (notwithstanding any other
provision of the Notes, this Indenture or any other Basic Document) payment need
not be made on such date, but may be made on the next succeeding Business Day
with the same force and effect as if made on the date on which nominally due,
and no interest shall accrue for the period from and after any such nominal
date.
SECTION 11.12 GOVERNING LAW. THIS INDENTURE SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS (OTHER THAN SECTION 5-1401 OF THE GENERAL OBLIGATIONS
LAW), AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE
DETERMINED IN ACCORDANCE WITH SUCH LAWS.
50
SECTION 11.13 COUNTERPARTS. This Indenture may be executed in any
number of counterparts, each of which so executed shall be deemed to be an
original, but all such counterparts shall together constitute but one and the
same instrument. Any signature page to this Indenture containing a manual
signature may be delivered by facsimile transmission or other electronic
communication device capable of transmitting or creating a printable written
record, and when so delivered shall have the effect of delivery of an original
manually signed signature page.
SECTION 11.14 RECORDING OF INDENTURE. If this Indenture is subject to
recording in any appropriate public recording offices, such recording is to be
effected by the Issuer and at its expense accompanied by an Opinion of Counsel
(which may be counsel to the Trustee or any other counsel reasonably acceptable
to the Trustee) to the effect that such recording is necessary either for the
protection of the Noteholders, the Administrative Agent or any other Person
secured hereunder or for the enforcement of any right or remedy granted to the
Trustee under this Indenture.
SECTION 11.15 ISSUER OBLIGATION. The obligations of the Issuer under
this Indenture and the other Basic Documents shall be full recourse obligations
of the Issuer. Notwithstanding the foregoing, except as provided for in the
Guaranty, no recourse may be taken, directly or indirectly, with respect to the
obligations of the Issuer or the Trustee on the Notes, under this Indenture, any
other Basic Document or any certificate or other writing delivered in connection
herewith or therewith, against (i) the Trustee in its individual capacity, (ii)
any owner of a beneficial interest in the Issuer or (iii) any partner, owner,
beneficiary, agent, officer, director, employee or agent of the Issuer or the
Trustee in its individual capacity, any holder of a beneficial interest in the
Issuer or the Trustee or of any successor or assign of the Trustee in its
individual capacity, except as any such Person may have expressly agreed (it
being understood that the Trustee has no such obligations in its individual
capacity) and except that any such partner, owner or beneficiary shall be fully
liable, to the extent provided by applicable law, for any unpaid consideration
for stock, unpaid capital contribution or failure to pay any installment or call
owing to such entity. Nothing contained in this Section shall limit or be deemed
to limit any obligations of the Issuer, the Purchaser or the Seller hereunder or
under any other Basic Document, as applicable, which obligations are full
recourse obligations of the Issuer, the Purchaser and the Seller.
SECTION 11.16 NO PETITION. The Trustee, by entering into this
Indenture, hereby covenants and agrees that it will not at any time institute
against the Issuer, or join in any institution against the Issuer of, any
bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings,
or other proceedings under any United States Federal or state bankruptcy or
similar law in connection with any obligations relating to the Notes, this
Indenture or any of the Basic Documents.
51
SECTION 11.17 BOOKS AND RECORDS; INSPECTION; OTHER INFORMATION.
(a) The Issuer shall maintain accurate and complete books and records
with respect to the Collateral and the Issuer's business. All accounting books
and records shall be maintained in accordance with GAAP.
(b) The Issuer shall, and shall cause each of its Affiliates to, permit
any representative of the Administrative Agent, a Noteholder or the Trustee to
visit and inspect any of the properties of the Issuer and such Affiliates to
examine the books and records of the Issuer and such Affiliates, as applicable,
and to make copies and take extracts therefrom, and to discuss the business,
operations, properties, condition (financial or otherwise) or prospects of the
Issuer and each such Affiliate, as applicable, or any of the Collateral with the
officers and independent public accountants thereof and as often as the
Administrative Agent, a Noteholder or the Trustee may reasonably request, and so
long as no Default or Event of Default shall have occurred and be continuing,
all at such reasonable times during normal business hours upon reasonable
notice; provided that, after a Default or Event of Default shall have occurred
and be continuing, the Administrative Agent, a Noteholder or the Trustee shall
make such inspections, examine such documents and conduct such discussions at
such times as it may determine in its sole discretion.
(c) The Issuer shall promptly provide to the Administrative Agent all
information regarding the Collateral, its operations and practices as the
Administrative Agent shall reasonably request.
(d) The Issuer shall furnish or cause to be furnished to the
Administrative Agent, as soon as publicly available, copies of (w) any and all
Relevant Reports that CPS or the Issuer sends to its respective shareholders or
members, (x) all reports, correspondence and other information provided by CPS
to its unsecured noteholders, (y) copies of all (if any) regular, periodic and
special reports, and all registration statements publicly filed by CPS or any
Affiliate of CPS with the Securities and Exchange Commission or any Governmental
Authority that supervises the issuance of securities by CPS, the Issuer or any
other Affiliate of CPS, and (z) any press releases concerning CPS or the Issuer.
SECTION 11.18 ENTIRE AGREEMENT. This Indenture, together with the other
Basic Documents, including the exhibits and schedules thereto, contains a final
and complete integration of all prior expressions by the parties hereto with
respect to the subject matter hereof and shall constitute the entire agreement
among the parties hereto with respect to the subject matter hereof, superseding
all previous oral statements and other writings with respect thereto.
SECTION 11.19 EFFECTIVENESS. This Agreement shall be effective as of
the Effective Date upon (i) the execution and delivery by the Issuer, the
Trustee and the Administrative Agent, (ii) receipt of the written consent of the
Administrative Agent and the Majority Noteholders and (iii) the satisfaction of
all conditions precedent set forth in Article VI of the Note Purchase Agreement.
SECTION 11.20 SPECIFIC PERFORMANCE. The Issuer expressly agrees that
any breach or threatened breach of any duty, covenant, undertaking, indemnity,
agreement or obligation hereunder or under any other Basic Document will cause
irreparable harm to the Noteholder, the Note Purchaser and the Administrative
Agent and the Noteholder, the Note Purchaser and the Administrative Agent shall
be entitled, in addition to any other rights or remedies provided hereunder,
thereunder or otherwise by law or in equity, to injunctive relief, any
application for which the Issuer shall not oppose.
[Signature Page Follows]
52
IN WITNESS WHEREOF, the Issuer, the Administrative Agent and the
Trustee have caused this Indenture to be duly executed by their respective
officers, hereunto duly authorized, all as of the day and year first above
written.
FOLIO FUNDING II, LLC, as Issuer
By: __________________________________
Name: __________________________________
Title: __________________________________
CITIGROUP FINANCIAL PRODUCTS INC.,
as Administrative Agent
By: __________________________________
Name: __________________________________
Title: __________________________________
WELLS FARGO BANK, NATIONAL ASSOCIATION,
as Trustee
By: __________________________________
Name: __________________________________
Title: __________________________________
Consented and agreed to solely for purposes of Section 9.1 of the Original
Indenture:
CITIGROUP FINANCIAL PRODUCTS, INC.,
as Administrative Agent
By: ________________________________
Name:
Title:
CITIGROUP FINANCIAL PRODUCTS, INC.,
as the Majority Noteholder
By: ________________________________
Name:
Title:
EXHIBIT A-1
AMENDED AND RESTATED CLASS A-1 TERM NOTE
REGISTERED $10,000,000
No. A-1 Percentage Interest:___ %
SEE REVERSE FOR CERTAIN CONDITIONS
THIS CLASS A-1 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 CLASS A-1 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 CLASS A-1 NOTE.
A-1
THE PRINCIPAL OF THIS CLASS A-1 NOTE IS PAYABLE IN INSTALLMENTS AND SUBJECT TO
DECREASES AS SET FORTH HEREIN AND IN THE INDENTURE. ACCORDINGLY, THE OUTSTANDING
PRINCIPAL AMOUNT OF THIS CLASS A-1 NOTE AT ANY TIME MAY BE LESS THAN THE AMOUNT
SHOWN ON THE FACE HEREOF.
THIS CLASS A-1 NOTE AMENDS AND RESTATES THE CLASS A-1 VARIABLE FUNDING NOTE,
DATED AS OF JULY 13, 2007 IN THE ORIGINAL PRINCIPAL AMOUNT OF UP TO
$60,000,000.00 ISSUED BY THE ISSUER UNDER THE INDENTURE (THE "ORIGINAL NOTE"),
AND IS NOT A NOVATION OF THE ORIGINAL NOTE.
THE CLASS A-1 NOTE REGISTRAR SHALL NOT REGISTER ANY TRANSFER OR EXCHANGE OF THIS
CLASS A-1 NOTE TO THE EXTENT THAT UPON SUCH TRANSFER OR EXCHANGE THERE WOULD BE
MORE THAN TEN (10) PERSONS REFLECTED ON THE NOTE REGISTER AS CLASS A-1
NOTEHOLDERS.
FOLIO FUNDING II, LLC
CLASS A-1 TERM NOTE
FOLIO FUNDING II, LLC, a Delaware limited liability company (herein referred to
as the "ISSUER"), for value received, hereby promises to pay to
[________________] (the "CLASS A-1 NOTEHOLDER"), or its registered assigns, such
Class A-1 Noteholder's pro rata portion (based on the Percentage Interest
reflected on the face of this Class A-1 Note) of the principal sum of TEN
MILLION DOLLARS ($10,000,000.00) or, if less, the Holders pro rata portion
(based on the Percentage Interest reflected on the face of this Class A-1 Note)
of the aggregate unpaid principal amount outstanding under all of the Class A-1
Notes (whether or not shown on the schedule attached hereto (or such electronic
counterpart maintained by the Trustee), which amount shall be payable in the
amounts and at the times set forth in Section 2.8(b) of the Indenture (in each
case based on the applicable Percentage Interest). The Issuer will pay interest
on the Holder's pro rata portion of the Class A-1 Invested Amount at the Class
A-1 Note Interest Rate. Such interest shall be due and payable on each
Settlement Date until the principal of this Class A-1 Note is paid or made
available for payment, to the extent funds will be available from the Collection
Account processed from and including the preceding Settlement Date to but
excluding each such Settlement Date in respect of (a) an amount equal to
interest accrued for the related Interest Period, which will be equal to the sum
of the products, for each day during the related Interest Period, of (i) the
Class A-1 Note Interest Rate for such date during the Interest Period, (ii) the
Class A-1 Invested Amount as of the close of business on such date divided by
360 and (iii) the applicable Percentage Interest, plus (b) an amount equal to a
pro rata portion of any accrued and unpaid Class A-1 Noteholders' Interest
Carryover Shortfall with respect to prior Interest Periods, with interest on the
amount of such Class A-1 Noteholders' Interest Carryover Shortfall at the Class
A-1 Note Interest Rate from the first Business Day of the related Interest
Period. The Issuer may, at its option, prepay the Class A-1 Invested Amount, in
whole or in part, at any time pursuant to Section 10.1 of the Indenture.
Following the occurrence of an Event of Default, the Trustee (acting upon the
written direction of the Majority Noteholders) may declare the Class A-1
Invested Amount to be immediately due and payable at par, together with accrued
interest thereon, in accordance with Section 5.2 of the Indenture. Principal of
and interest on this Class A-1 Note shall be paid in the manner specified on the
reverse hereof.
A-2
The principal of and interest on this Class A-1 Note are payable in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts. This Class A-1 Note does not
represent an interest in, or an obligation of CPS or any affiliate of CPS other
than the Issuer.
Reference is made to the further provisions of this Class A-1 Note set forth on
the reverse hereof, which shall have the same effect as though fully set forth
on the face of this Class A-1 Note. Although a summary of certain provisions of
the Indenture are set forth below and on the reverse hereof and made a part
hereof, this Class A-1 Note does not purport to summarize the Indenture and
reference is made to the Indenture for information with respect to the
interests, rights, benefits, obligations, proceeds and duties evidenced hereby
and the rights, duties and obligations of the Seller and the Trustee. A copy of
the Indenture may be requested from the Trustee by writing to the Trustee at:
Wells Fargo Bank, National Association, 6th & Marquette, MAC N9311-161,
Minneapolis, Minnesota 55479, Attention: Corporate Trust Services, -- Asset
Backed Administration. To the extent not defined herein, the capitalized terms
used herein have the meanings ascribed to them in the Indenture.
Unless the certificate of authentication hereon has been executed by the Trustee
whose name appears below by manual signature, this Class A-1 Note shall not be
entitled to any benefit under the Indenture referred to on the reverse hereof,
or be valid or obligatory for any purpose.
[Signature page follows.]
A-3
IN WITNESS WHEREOF, the Issuer has caused this instrument to be signed,
manually or in facsimile, by its Authorized Officer.
Date: [_____________] FOLIO FUNDING II, LLC
By: __________________________________
Name: __________________________________
Title: __________________________________
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is the Class A-1 Note issued under the within-mentioned Indenture.
WELLS FARGO BANK, NATIONAL
ASSOCIATION, not in its
individual capacity, but
solely as Trustee
By: ______________________________________
Authorized Signature
A-4
REVERSE OF THE CLASS A-1 TERM NOTE
This Class A-1 Note is the duly authorized Class A-1 Note of the Issuer,
designated as its Class A-1 Term Note (herein called the "CLASS A-1 NOTE"),
issued under (i) the Amended and Restated Indenture, dated as of July 10, 2008
(such Indenture, as the same may be amended, supplemented or otherwise modified
from time to time in accordance with the terms thereof, is herein called the
"INDENTURE"), among the Issuer, Citigroup Financial Products, Inc., as
administrative agent (the "ADMINISTRATIVE AGENT") and Wells Fargo Bank, National
Association, a national banking association, as trustee (the "TRUSTEE", which
term includes any successor Trustee under the Indenture), to which Indenture and
all indentures supplemental thereto reference is hereby made for a statement of
the respective rights and obligations thereunder of the Issuer, the Trustee, the
Administrative Agent and the Class A-1 Noteholders. The Class A-1 Note is
subject to all terms of the Indenture. All terms used in this Class A-1 Note
that are defined in the Indenture, as amended, supplemented or otherwise
modified from time to time in accordance with the terms thereof, shall have the
meanings assigned to them in or pursuant to the Indenture, as so amended,
supplemented or otherwise modified.
"SETTLEMENT DATE" means, the 18th day of each calendar month or, if such 18th
day is not a Business Day, the next Business Day.
The Class A-1 Notes are payable in the amounts and at times set forth in Section
2.8(b) of the Indenture. Notwithstanding the foregoing, if a Principal Coverage
Ratio Violation has occurred or an Event of Default shall have occurred and be
continuing then, in certain circumstances, principal on the Class A-1 Note may
be paid earlier, as described in the Indenture.
Payments of interest on this Class A-1 Note due and payable on each Settlement
Date, together with the installment of principal then due, and any payments of
principal made on any Business Day in respect of any prepayments, to the extent
not in full payment of this Class A-1 Note, shall be made by wire transfer to
the Holder of record of this Class A-1 Note (or any predecessor Class A-1 Note)
on the Note Register as of the close of business on each Record Date. Any
reduction in the principal amount of this Class A-1 Note (or any predecessor
Class A-1 Note) effected by any payments made on any date shall be binding upon
all future Holders of this Class A-1 Note and of any Class A-1 Note issued upon
the registration of transfer hereof or in exchange hereof or in lieu hereof,
whether or not noted thereon. Final payment of principal (together with any
accrued and unpaid interest) on this Class A-1 Note will be paid to the Class
A-1 Noteholders only upon presentation and surrender of this Class A-1 Note at
the Corporate Trust Office for cancellation by the Trustee.
The Issuer shall pay interest on overdue installments of interest at the Class
A-1 Note Interest Rate (calculated for this purpose using the Class A-1 Default
Applicable Margin) to the extent lawful.
As provided in the Indenture and subject to certain limitations set forth
therein, the transfer of this Class A-1 Note may be registered on the Note
Register upon surrender of this Class A-1 Note for registration of transfer at
the office or agency designated by the Issuer pursuant to the Indenture, duly
endorsed by, or accompanied by a written instrument of transfer in form
A-5
satisfactory to the Issuer and the Registrar duly executed by the Holder hereof
or his attorney duly authorized in writing, and thereupon one or more new Class
A-1 Notes of authorized Percentage Interest and in the same aggregate Percentage
Interest will be issued to the designated transferee or transferees. No service
charge will be charged for any registration of transfer or exchange of this
Class A-1 Note, but the transferor may be required to pay a sum sufficient to
cover any tax or other governmental charge that may be imposed in connection
with any such registration of transfer or exchange.
The obligations of the Issuer under the Indenture, this Class A-1 Note and the
other Basic Documents shall be full recourse obligations of the Issuer.
Notwithstanding the foregoing, except as provided for in the Guaranty, the Class
A-1 Noteholder, by its acceptance of this Class A-1 Note, covenants and agrees
that no recourse may be taken, directly or indirectly, with respect to the
obligations of the Issuer or the Trustee on the Class A-1 Notes, under the
Indenture, any other Basic Document or any certificate or other writing
delivered in connection herewith or therewith, against (i) the Trustee in its
individual capacity, (ii) any owner of a beneficial interest in the Issuer or
(iii) any partner, owner, beneficiary, agent, officer, director, employee or
agent of the Issuer or the Trustee in its individual capacity, any holder of a
beneficial interest in the Issuer or the Trustee or of any successor or assign
of the Trustee in its individual capacity, except as any such Person may have
expressly agreed (it being understood that the Trustee has no such obligations
in its individual capacity) and except that any such partner, owner or
beneficiary shall be fully liable, to the extent provided by applicable law, for
any unpaid consideration for stock, unpaid capital contribution or failure to
pay any installment or call owing to such entity. Nothing contained in this
Section shall limit or be deemed to limit any obligations of the Issuer, the
Purchaser or the Seller hereunder or under any other Basic Document, as
applicable, which obligations are full recourse obligations of the Issuer, the
Purchaser and the Seller.
Each Class A-1 Noteholder, by its acceptance of this Class A-1 Note, covenants
and agrees that by accepting the benefits of the Indenture that such Class A-1
Noteholder will not institute against the Issuer, or join in any institution
against the Issuer of, any bankruptcy, reorganization, arrangement, insolvency
or liquidation proceedings under any United States Federal or state bankruptcy
or similar law in connection with any obligations relating to the Class A-1
Note, the Indenture or the Basic Documents.
Prior to the due presentment for registration of transfer of this Class A-1
Note, the Trustee and any agent of the Trustee may treat the Person in whose
name the Class A-1 Note (as of the applicable Record Date) is registered as the
owner hereof for all purposes, whether or not the Class A-1 Note be overdue, and
neither the Issuer, the Trustee nor any such agent shall be affected by notice
to the contrary.
It is the intent of the Issuer and the Class A-1 Noteholders that, for Federal,
State and local income and franchise tax purposes, this Class A-1 Note will
evidence indebtedness of the Issuer secured by the Collateral. Each Class A-1
Noteholder, by its acceptance of the Class A-1 Note, agrees to treat the Class
A-1 Note for Federal, State and local income and franchise tax purposes as
indebtedness of the Issuer.
A-6
The Indenture permits in certain circumstances, with certain exceptions as
therein provided, the amendment thereof and the modification of the rights and
obligations of the Issuer and the rights of the Administrative Agent and the
Class A-1 Noteholders under the Indenture at any time by the Issuer with the
prior written consent of the Administrative Agent and the Majority Noteholders.
The Indenture also contains provisions permitting the Administrative Agent
(acting upon the written direction of the Majority Noteholders) to waive
compliance by the Issuer with certain past defaults under the Indenture and
their consequences. Any such consent or waiver by the Administrative Agent shall
be conclusive and binding upon the current Class A-1 Noteholders and all future
Class A-1 Noteholders and of any Class A-1 Note issued upon the registration of
transfer hereof or in exchange hereof or in lieu hereof whether or not notation
of such consent or waiver is made upon this Class A-1 Note.
The term "ISSUER" as used in this Class A-1 Note includes any successor to the
Issuer under the Indenture.
This Class A-1 Note is issuable only in registered form in Percentage Interests
as provided in the Indenture, subject to certain limitations set forth therein.
This Class A-1 Note and the Indenture shall be construed in accordance with the
law of the State of New York, without reference to its conflict of law
provisions (other than Section 5-1401 of the General Obligations Law), and the
obligations, rights and remedies of the parties hereunder and thereunder shall
be determined in accordance with such law.
No reference herein to the Indenture and no provision of this Class A-1 Note or
of the Indenture shall alter or impair the obligation of the Issuer, which is
absolute and unconditional, to pay the principal of and interest on this Class
A-1 Note at the times, place, and rate, and in the coin or currency herein
prescribed, subject to any duty of the Issuer to deduct or withhold any amounts
as required by law, including any applicable U.S. withholding taxes.
A-7
DECREASES
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Class A-1
Unpaid Note
Principal Interest Interest Period Notation Made
Date Amount Decrease Total Rate (if applicable) By
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A-8
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee
________________________________
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto ___________________________________________________________________________
(name and address of assignee)
the within Class A-1 Note and all rights thereunder, and hereby irrevocably
constitutes and appoints______________________, attorney, to transfer said Class
A-1 Note on the books kept for registration thereof, with full power of
substitution in the premises.
Dated: ________________________ __________________________________*
Signature Guaranteed:
_______________________________ ___________________________________
___________
* NOTE: The signature to this assignment must correspond with the name of the
registered owner as it appears on the face of the within Note in every
particular, without alteration, enlargement or any change whatsoever.
A-9
EXHIBIT A-2
AMENDED AND RESTATED CLASS A-2 TERM NOTE
REGISTERED $60,000,000
No. A-1 Percentage Interest:___ %
SEE REVERSE FOR CERTAIN CONDITIONS
THIS CLASS A-2 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 CLASS A-2 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 CLASS A-2 NOTE.
A-1
THE PRINCIPAL OF THIS CLASS A-2 NOTE IS PAYABLE IN INSTALLMENTS AND SUBJECT TO
DECREASES AS SET FORTH HEREIN AND IN THE INDENTURE. ACCORDINGLY, THE OUTSTANDING
PRINCIPAL AMOUNT OF THIS CLASS A-2 NOTE AT ANY TIME MAY BE LESS THAN THE AMOUNT
SHOWN ON THE FACE HEREOF.
THIS CLASS A-2 NOTE AMENDS AND RESTATES THE CLASS A-2 TERM NOTE, DATED AS OF
JULY 13, 2007 IN THE ORIGINAL PRINCIPAL AMOUNT OF UP TO $60,000,000.00 ISSUED BY
THE ISSUER UNDER THE INDENTURE (THE "ORIGINAL NOTE"), AND IS NOT A NOVATION OF
THE ORIGINAL NOTE.
THE CLASS A-2 NOTE REGISTRAR SHALL NOT REGISTER ANY TRANSFER OR EXCHANGE OF THIS
CLASS A-2 NOTE TO THE EXTENT THAT UPON SUCH TRANSFER OR EXCHANGE THERE WOULD BE
MORE THAN TEN (10) PERSONS REFLECTED ON THE NOTE REGISTER AS CLASS A-2
NOTEHOLDERS.
FOLIO FUNDING II, LLC
CLASS A-2 TERM NOTE
FOLIO FUNDING II, LLC, a Delaware limited liability company (herein referred to
as the "ISSUER"), for value received, hereby promises to pay to
[________________] (the "CLASS A-2 NOTEHOLDER"), or its registered assigns, such
Class A-2 Noteholder's pro rata portion (based on the Percentage Interest
reflected on the face of this Class A-2 Note) of the principal sum of SIXTY
MILLION DOLLARS ($60,000,000.00) or, if less, the Holders pro rata portion
(based on the Percentage Interest reflected on the face of this Class A-2 Note)
of the aggregate unpaid principal amount outstanding under all of the Class A-2
Notes (whether or not shown on the schedule attached hereto (or such electronic
counterpart maintained by the Trustee), which amount shall be payable in the
amounts and at the times set forth in Section 2.8(b) of the Indenture (in each
case based on the applicable Percentage Interest). The Issuer will pay interest
on the Holder's pro rata portion of the Class A-2 Invested Amount at the Class
A-2 Note Interest Rate. Such interest shall be due and payable on each
Settlement Date until the principal of this Class A-2 Note is paid or made
available for payment, to the extent funds will be available from the Collection
Account processed from and including the preceding Settlement Date to but
excluding each such Settlement Date in respect of (a) an amount equal to
interest accrued for the related Interest Period, which will be equal to the sum
of the products, for each day during the related Interest Period, of (i) the
Class A-2 Note Interest Rate for such date during the Interest Period, (ii) the
Class A-2 Invested Amount as of the close of business on such date divided by
360 and (iii) the applicable Percentage Interest, plus (b) an amount equal to a
pro rata portion of any accrued and unpaid Class A-2 Noteholders' Interest
Carryover Shortfall with respect to prior Interest Periods, with interest on the
amount of such Class A-2 Noteholders' Interest Carryover Shortfall at the Class
A-2 Note Interest Rate from the first Business Day of the related Interest
Period. The Issuer may, at its option, prepay the Class A-2 Invested Amount, in
whole or in part, at any time pursuant to Section 10.1 of the Indenture.
Following the occurrence of an Event of Default, the Trustee (acting upon the
written direction of the Majority Noteholders) may declare the Class A-2
Invested Amount to be immediately due and payable at par, together with accrued
interest thereon, in accordance with Section 5.2 of the Indenture. Principal of
and interest on this Class A-2 Note shall be paid in the manner specified on the
reverse hereof.
A-2
The principal of and interest on this Class A-2 Note are payable in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts. This Class A-2 Note does not
represent an interest in, or an obligation of CPS or any affiliate of CPS other
than the Issuer.
Reference is made to the further provisions of this Class A-2 Note set forth on
the reverse hereof, which shall have the same effect as though fully set forth
on the face of this Class A-2 Note. Although a summary of certain provisions of
the Indenture are set forth below and on the reverse hereof and made a part
hereof, this Class A-2 Note does not purport to summarize the Indenture and
reference is made to the Indenture for information with respect to the
interests, rights, benefits, obligations, proceeds and duties evidenced hereby
and the rights, duties and obligations of the Seller and the Trustee. A copy of
the Indenture may be requested from the Trustee by writing to the Trustee at:
Wells Fargo Bank, National Association, 6th & Marquette, MAC N9311-161,
Minneapolis, Minnesota 55479, Attention: Corporate Trust Services, -- Asset
Backed Administration. To the extent not defined herein, the capitalized terms
used herein have the meanings ascribed to them in the Indenture.
Unless the certificate of authentication hereon has been executed by the Trustee
whose name appears below by manual signature, this Class A-2 Note shall not be
entitled to any benefit under the Indenture referred to on the reverse hereof,
or be valid or obligatory for any purpose.
[Signature page follows.]
A-3
IN WITNESS WHEREOF, the Issuer has caused this instrument to be signed,
manually or in facsimile, by its Authorized Officer.
Date: [_____________] FOLIO FUNDING II, LLC
By: _______________________________
Name: _______________________________
Title: _______________________________
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is the Class A-2 Note issued under the within-mentioned Indenture.
WELLS FARGO BANK, NATIONAL
ASSOCIATION, not in its
individual capacity, but
solely as Trustee
By: _______________________________________
Authorized Signature
A-4
REVERSE OF THE CLASS A-2 TERM NOTE
This Class A-2 Note is the duly authorized Class A-2 Note of the Issuer,
designated as its Class A-2 Term Note (herein called the "CLASS A-2 NOTE"),
issued under (i) the Amended and Restated Indenture, dated as of July 10, 2008
(such Indenture, as the same may be amended, supplemented or otherwise modified
from time to time in accordance with the terms thereof, is herein called the
"INDENTURE"), among the Issuer, Citigroup Financial Products, Inc., as
administrative agent (the "ADMINISTRATIVE AGENT") and Wells Fargo Bank, National
Association, a national banking association, as trustee (the "TRUSTEE", which
term includes any successor Trustee under the Indenture), to which Indenture and
all indentures supplemental thereto reference is hereby made for a statement of
the respective rights and obligations thereunder of the Issuer, the Trustee, the
Administrative Agent and the Class A-2 Noteholders. The Class A-2 Note is
subject to all terms of the Indenture. All terms used in this Class A-2 Note
that are defined in the Indenture, as amended, supplemented or otherwise
modified from time to time in accordance with the terms thereof, shall have the
meanings assigned to them in or pursuant to the Indenture, as so amended,
supplemented or otherwise modified.
"SETTLEMENT DATE" means, the 18th day of each calendar month or, if such 18th
day is not a Business Day, the next Business Day.
The Class A-2 Notes are payable in the amounts and at times set forth in Section
2.8(b) of the Indenture. Notwithstanding the foregoing, if a Principal Coverage
Ratio Violation has occurred or an Event of Default shall have occurred and be
continuing then, in certain circumstances, principal on the Class A-2 Note may
be paid earlier, as described in the Indenture.
Payments of interest on this Class A-2 Note due and payable on each Settlement
Date, together with the installment of principal then due, if any, and any
payments of principal made on any Business Day in respect of any prepayments, to
the extent not in full payment of this Class A-2 Note, shall be made by wire
transfer to the Holder of record of this Class A-2 Note (or any predecessor
Class A-2 Note) on the Note Register as of the close of business on each Record
Date. Any reduction in the principal amount of this Class A-2 Note (or any
predecessor Class A-2 Note) effected by any payments made on any date shall be
binding upon all future Holders of this Class A-2 Note and of any Class A-2 Note
issued upon the registration of transfer hereof or in exchange hereof or in lieu
hereof, whether or not noted thereon. Final payment of principal (together with
any accrued and unpaid interest) on this Class A-2 Note will be paid to the
Class A-2 Noteholders only upon presentation and surrender of this Class A-2
Note at the Corporate Trust Office for cancellation by the Trustee.
The Issuer shall pay interest on overdue installments of interest at the Class
A-2 Note Interest Rate (calculated for this purpose using the Class A-2 Default
Applicable Margin) to the extent lawful.
As provided in the Indenture and subject to certain limitations set forth
therein, the transfer of this Class A-2 Note may be registered on the Note
Register upon surrender of this Class A-2 Note for registration of transfer at
the office or agency designated by the Issuer pursuant to the Indenture, duly
A-5
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Issuer and the Registrar duly executed by the Holder hereof
or his attorney duly authorized in writing, and thereupon one or more new Class
A-2 Notes of authorized Percentage Interest and in the same aggregate Percentage
Interest will be issued to the designated transferee or transferees. No service
charge will be charged for any registration of transfer or exchange of this
Class A-2 Note, but the transferor may be required to pay a sum sufficient to
cover any tax or other governmental charge that may be imposed in connection
with any such registration of transfer or exchange.
The obligations of the Issuer under the Indenture, this Class A-2 Note and the
other Basic Documents shall be full recourse obligations of the Issuer.
Notwithstanding the foregoing, except as provided for in the Guaranty, the Class
A-2 Noteholder, by its acceptance of this Class A-2 Note, covenants and agrees
that no recourse may be taken, directly or indirectly, with respect to the
obligations of the Issuer or the Trustee on the Class A-2 Notes, under the
Indenture, any other Basic Document or any certificate or other writing
delivered in connection herewith or therewith, against (i) the Trustee in its
individual capacity, (ii) any owner of a beneficial interest in the Issuer or
(iii) any partner, owner, beneficiary, agent, officer, director, employee or
agent of the Issuer or the Trustee in its individual capacity, any holder of a
beneficial interest in the Issuer or the Trustee or of any successor or assign
of the Trustee in its individual capacity, except as any such Person may have
expressly agreed (it being understood that the Trustee has no such obligations
in its individual capacity) and except that any such partner, owner or
beneficiary shall be fully liable, to the extent provided by applicable law, for
any unpaid consideration for stock, unpaid capital contribution or failure to
pay any installment or call owing to such entity. Nothing contained in this
Section shall limit or be deemed to limit any obligations of the Issuer, the
Purchaser or the Seller hereunder or under any other Basic Document, as
applicable, which obligations are full recourse obligations of the Issuer, the
Purchaser and the Seller.
Each Class A-2 Noteholder, by its acceptance of this Class A-2 Note, covenants
and agrees that by accepting the benefits of the Indenture that such Class A-2
Noteholder will not institute against the Issuer, or join in any institution
against the Issuer of, any bankruptcy, reorganization, arrangement, insolvency
or liquidation proceedings under any United States Federal or state bankruptcy
or similar law in connection with any obligations relating to the Class A-2
Note, the Indenture or the Basic Documents.
Prior to the due presentment for registration of transfer of this Class A-2
Note, the Trustee and any agent of the Trustee may treat the Person in whose
name the Class A-2 Note (as of the applicable Record Date) is registered as the
owner hereof for all purposes, whether or not the Class A-2 Note be overdue, and
neither the Issuer, the Trustee nor any such agent shall be affected by notice
to the contrary.
It is the intent of the Issuer and the Class A-2 Noteholders that, for Federal,
State and local income and franchise tax purposes, this Class A-2 Note will
evidence indebtedness of the Issuer secured by the Collateral. Each Class A-2
Noteholder, by its acceptance of the Class A-2 Note, agrees to treat the Class
A-2 Note for Federal, State and local income and franchise tax purposes as
indebtedness of the Issuer.
A-6
The Indenture permits in certain circumstances, with certain exceptions as
therein provided, the amendment thereof and the modification of the rights and
obligations of the Issuer and the rights of the Administrative Agent and the
Class A-2 Noteholders under the Indenture at any time by the Issuer with the
prior written consent of the Administrative Agent and the Majority Noteholders.
The Indenture also contains provisions permitting the Administrative Agent
(acting upon the written direction of the Majority Noteholders) to waive
compliance by the Issuer with certain past defaults under the Indenture and
their consequences. Any such consent or waiver by the Administrative Agent shall
be conclusive and binding upon the current Class A-2 Noteholders and all future
Class A-2 Noteholders and of any Class A-2 Note issued upon the registration of
transfer hereof or in exchange hereof or in lieu hereof whether or not notation
of such consent or waiver is made upon this Class A-2 Note.
The term "ISSUER" as used in this Class A-2 Note includes any successor to the
Issuer under the Indenture.
This Class A-2 Note is issuable only in registered form in Percentage Interests
as provided in the Indenture, subject to certain limitations set forth therein.
This Class A-2 Note and the Indenture shall be construed in accordance with the
law of the State of New York, without reference to its conflict of law
provisions (other than Section 5-1401 of the General Obligations Law), and the
obligations, rights and remedies of the parties hereunder and thereunder shall
be determined in accordance with such law.
No reference herein to the Indenture and no provision of this Class A-2 Note or
of the Indenture shall alter or impair the obligation of the Issuer, which is
absolute and unconditional, to pay the principal of and interest on this Class
A-2 Note at the times, place, and rate, and in the coin or currency herein
prescribed, subject to any duty of the Issuer to deduct or withhold any amounts
as required by law, including any applicable U.S. withholding taxes.
A-7
DECREASES
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Class A-1
Unpaid Note
Principal Interest Interest Period Notation Made
Date Amount Decrease Total Rate (if applicable) By
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A-8
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee
_______________________
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto ___________________________________________________________________________
(name and address of assignee)
the within Class A-2 Note and all rights thereunder, and hereby irrevocably
constitutes and appoints______________________, attorney, to transfer said Class
A-2 Note on the books kept for registration thereof, with full power of
substitution in the premises.
Dated: ________________________ __________________________________*
Signature Guaranteed:
_______________________________ ___________________________________
___________
* NOTE: The signature to this assignment must correspond with the name of the
registered owner as it appears on the face of the within Note in every
particular, without alteration, enlargement or any change whatsoever.
A-9