CREDIT AGREEMENT dated as of August 6, 2011 among CPS FENDER RECEIVABLES LLC as Borrower CONSUMER PORTFOLIO SERVICES, INC., FORTRESS CREDIT CORP., as Administrative Agent, Collateral Agent, a Lead Agent, and a Lender GOLDMAN SACHS BANK USA, as a Lender and a Lead Agent ________________________________________________________ $210,000,000 Senior Secured Credit Facility ________________________________________________________ CREDIT AGREEMENT

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

This CREDIT AGREEMENT, dated as of August 6, 2011, is entered into by and among CPS Fender Receivables LLC, a Delaware limited liability company (the “Borrower”), CONSUMER PORTFOLIO SERVICES, INC., a California corporation, (“CPS”), FORTRESS CREDIT CORP. (“Fortress”), as a Lender, Administrative Agent (in such capacity, the “Administrative Agent”), Collateral Agent (in such capacity, the “Collateral Agent”), and as a Lead Agent (in such capacity, a “Lead Agent”), and GOLDMAN SACHS BANK USA (“Goldman Sachs Bank”), as a Lender and as a Lead Agent (in such capacity, a “Lead Agent”).

 

 

WHEREAS, the Lenders have agreed to extend a credit facility (the “Facility”) to the Borrower, consisting of up to $210,000,000 aggregate principal amount of Term Loans, the proceeds of which will be used by the Borrower to acquire a portfolio of Receivables pursuant to the Purchase Agreement and to pay fees and expenses related to the foregoing; and

 

WHEREAS, the Borrower has agreed to secure all of its Obligations by granting to the Collateral Agent, for the benefit of the Secured Parties, a first priority Lien on all of its assets;

 

NOW, THEREFORE, in consideration of the premises and the agreements, provisions and covenants herein contained, the parties hereto agree as follows:

 

SECTION 1.

DEFINITIONS AND INTERPRETATION

 

1.1. Definitions

 

.  The following terms used herein, including in the preamble, recitals, exhibits and schedules hereto, shall have the following meanings:

 

“Act” as defined in Section 4.23.

 

“Adjusted LIBOR Rate” means, for any Interest Period and any LIBOR Rate Loan made or continued during such Interest Period, the per annum rate equal to the greater of (i) 1% per annum and (ii) the rate obtained by dividing (a)(i) the rate per annum (rounded to the nearest 1/100 of 1%) equal to the rate determined by the Administrative Agent to be the offered rate which appears on the page of the Reuters Screen which displays an average British Bankers Association Interest Settlement Rate (such page currently being Reuters Screen LIBOR01 Page) for deposits (for delivery on the first day of such period) for a one-month period in Dollars, determined as of approximately 11:00 a.m. (London, England time) on the related Interest Rate Reset Date, or (ii) in the event the rate referenced in the preceding clause (i) does not appear on such page or service or if such page or service shall cease to be available, the rate per annum (rounded to the nearest 1/100 of 1%) equal to the rate determined by the Administrative Agent to be the offered rate on such other page or other service which displays an average British Bankers Association Interest Settlement Rate for deposits (for delivery on the first day of such period) for a one-month period in Dollars, determined as of approximately 11:00 a.m. (London, England time) on the related Interest Rate Reset Date, or (iii) in the event the rates referenced in the preceding clauses (i) and (ii) are not available, the rate per annum (rounded to the nearest 1/100 of 1%) equal to the offered quotation rate to first class banks in the London interbank market for deposits by Goldman Sachs Bank or any other Lender selected by Administrative Agent (for delivery on the first day of the relevant period) in Dollars of amounts in same day funds comparable to the principal amount of the applicable Term Loan for which the Adjusted LIBOR Rate is then being determined with maturities equal to a one-month period as of approximately 11:00 a.m. (London, England time) on such Interest Rate Reset Date by (b) an amount equal to (i) one, minus (ii) the Applicable Reserve Requirement.

 

“Administrative Agent” as defined in the preamble hereto.

 

“Adverse Proceeding” means, with respect to any Person, any action, suit, proceeding (whether administrative, judicial or otherwise), governmental investigation or arbitration (whether or not purportedly on behalf of such Person) at law or in equity, or before or by any Governmental Authority, domestic or foreign, whether pending or, to the knowledge of such Person, threatened against or affecting such Person or its properties.

 

“Affected Lender” as defined in Section 2.16(b).

 

“Affected Loans” as defined in Section 2.16(b).

 

“Affected Person” as defined in Section 2.17(c)(iii).

 

“Affiliate” means, as applied to any Person, any other Person directly or indirectly controlling (including any member of senior management of such Person), controlled by, or under common control with, that Person. For the purposes of this definition, “control” (including, with correlative meanings, the terms “controlling,” “controlled by” and “under common control with”), as applied to any Person, means the possession, directly or indirectly, of the power (a) to vote 20% or more of the Securities having ordinary voting power for the election of directors of such Person or (b) to direct or cause the direction of the management and policies of that Person, whether through the ownership of voting securities or by contract or otherwise.

 

“Agent” means each of the Administrative Agent and the Collateral Agent.

 

“Aggregate Amounts Due” as defined in Section 2.15.

 

“Agreement” means this Credit Agreement, dated as of August 6, 2011.

 

“Applicable Margin” as defined in the Fee Letter.

 

“Applicable Reserve Requirement” means, at any time, for any LIBOR Rate Loan, the maximum rate, expressed as a decimal, at which reserves (including, without limitation, any basic marginal, special, supplemental, emergency or other reserves) are required to be maintained with respect thereto against “Eurocurrency liabilities” (as such term is defined in Regulation D of the Board of Governors of the Federal Reserve System) under regulations issued from time to time by the Board of Governors of the Federal Reserve System or other applicable banking regulator.  Without limiting the effect of the foregoing, the Applicable Reserve Requirement shall reflect any other reserves required to be maintained by member banks with respect to (i) any category of liabilities which includes deposits by reference to which the applicable Adjusted LIBOR Rate or any other interest rate of a Term Loan is to be determined, or (ii) any category of extensions of credit or other assets which include LIBOR Rate Loans.  A LIBOR Rate Loan shall be deemed to constitute Eurocurrency liabilities and as such shall be deemed subject to reserve requirements without benefits of credit for proration, exceptions or offsets that may be available from time to time to the applicable Lender.  The rate of interest on LIBOR Rate Loans shall be adjusted automatically on and as of the effective date of any change in the Applicable Reserve Requirement.

 

“APR” means, with respect to a Receivable, the annual percentage rate of finance charges stated in such Receivable; provided that if the annual percentage rate with respect to such Receivable is reduced (i) as a result of an insolvency proceeding involving the related Obligor as debtor or (ii) pursuant to the Servicemembers Civil Relief Act, the APR shall refer to such reduced rate.

 

“Assignment Agreement” means an Assignment and Assumption Agreement substantially in the form of Exhibit C, with such amendments or modifications as may be approved by the Administrative Agent.

 

“Authorized Officer” means, as applied to any Person, any individual holding the position of chairman of the board (if an officer), chief executive officer, president or one of its vice presidents (or the equivalent thereof), and such Person's chief financial officer or treasurer.

 

“Average Delinquency Rate” means, with respect to any Reporting Date, the arithmetic average of the Delinquency Rate for each of the three (3) Collection Periods immediately preceding the month in which such Reporting Date occurs.

 

“Backup Servicer” means Wells Fargo Bank, National Association, or any independent third party selected by the Lead Agents, in their reasonable discretion, to perform monitoring functions with respect to the Receivables.

 

“Backup Servicing Agreement” means that certain Backup Servicing Agreement, to be dated as of the Closing Date, and to be entered into by and among the Backup Servicer, the Servicer and the Lead Agents, as Controlling Party, in a form substantially similar to that certain Backup Servicing Agreement dated as of December 23, 2010 entered into by CPS, the Lead Agents and Wells Fargo Bank, National Association in connection with the Page Six Credit Agreement.

 

“Backup Servicing Fees” means the backup servicing fee as set forth in the Backup Servicing Agreement or as otherwise agreed by the Backup Servicer and the Lead Agents in their reasonable discretion.

 

“Bankruptcy Code” means Title 11 of the United States Code entitled “Bankruptcy,” as now and hereafter in effect, or any successor statute.

 

“Base Rate” means, for any day, a rate per annum equal to the greater of (i) 5% per annum, (ii) the Prime Rate in effect on such day, and (iii) the Federal Funds Effective Rate in effect on such day plus ½ of 1%.  Any change in the Base Rate due to a change in the Prime Rate or the Federal Funds Effective Rate shall be effective on the effective day of such change in the Prime Rate or the Federal Funds Effective Rate, respectively.

 

“Base Rate Loan” means a Term Loan bearing interest at a rate determined by reference to the Base Rate.

 

“Borrower” as defined in the preamble hereto.

 

“Business Day” means (a) any day excluding Saturday, Sunday and any day which is a legal holiday under the laws of the State of New York, the State of Minnesota, the State of Texas, or the State of California or is a day on which banking institutions located in any such state are authorized or required by law or other governmental action to close, and (b) with respect to all notices, determinations, fundings and payments in connection with the Adjusted LIBOR Rate or any LIBOR Rate Loans, the term “Business Day” shall mean any day which is a Business Day described in clause (a) and which is also a day for trading by and between banks in Dollar deposits in the London interbank market.

 

“Buyout Closing Date” as defined in Section 9.25(b).

 

“Buyout Notice” as defined in Section 9.25(a).

 

“Buyout Option” as defined in Section 9.25(a).

 

“Capital Contribution Amount” means 2% of the Purchase Price.

 

“Capital Lease” means, as applied to any Person, any lease of any property (whether real, personal or mixed) by that Person (a) as lessee that, in conformity with GAAP, is or should be accounted for as a capital lease on the balance sheet of that Person or (b) as lessee which is a transaction of a type commonly known as a “synthetic lease” (i.e., a transaction that is treated as an operating lease for accounting purposes but with respect to which payments of rent are intended to be treated as payments of principal and interest on a loan for Federal income tax purposes).

 

“Capital Stock” means any and all shares, interests, participations or other equivalents (however designated) of capital stock of a corporation, any and all equivalent ownership interests in a Person (other than a corporation), including, without limitation, partnership interests and membership interests, and any and all warrants, rights or options to purchase or other arrangements or rights to acquire any of the foregoing.

 

“Cash” means money, currency or a credit balance in any demand or deposit account.

 

“Cash Equivalents” means, as at any date of determination, (a) marketable securities (i) issued or directly and unconditionally guaranteed as to interest and principal by the United States Government, or (ii) issued by any agency of the United States the obligations of which are backed by the full faith and credit of the United States, in each case maturing within one (1) year after such date; (b) marketable direct obligations issued by any state of the United States of America or any political subdivision of any such state or any public instrumentality thereof, in each case maturing within one (1) year after such date and having, at the time of the acquisition thereof, a rating of at least A-1 from S&P or at least P-1 from Moody's; (c) commercial paper maturing no more than one (1) year from the date of creation thereof and having, at the time of the acquisition thereof, a rating of at least A-1 from S&P or at least P-1 from Moody's; (d) certificates of deposit or bankers’ acceptances maturing within one (1) year after such date and issued or accepted by any Lender or by any commercial bank organized under the laws of the United States of America or any state thereof or the District of Columbia that (i) is at least “adequately capitalized” (as defined in the regulations of its primary Federal banking regulator), and (ii) has Tier 1 capital (as defined in such regulations) of not less than $100,000,000; and (e) shares of any money market mutual fund that (i) has substantially all of its assets invested continuously in the types of investments referred to in clauses (a) and (b) above, (ii) has net assets of not less than $500,000,000, and (iii) has the highest rating obtainable from either S&P or Moody's.

 

“Change of Control” means, at any time, (i) with respect to the Borrower, CPS shall cease to beneficially own and control 100% on a fully diluted basis of the economic and voting interest in the Capital Stock of the Borrower and (ii) with respect to CPS or the Servicer, the acquisition by any Person, or two (2) or more Persons acting in concert, of beneficial ownership (within the meaning of Rule 13d-3 of the Securities and Exchange Commission under the Securities Exchange Act of 1934) of outstanding shares of voting stock of CPS or the Servicer, as applicable, at any time if after giving effect to such acquisition such Person or Persons owns fifty percent (50%) or more of such outstanding voting stock.

 

“Charge-Off Receivable” means any Receivable with respect to which the earlier of any of the following shall have occurred (without duplication): (i) the Receivable has been liquidated by the Servicer through the sale of the Financed Vehicle, (ii) the related Obligor has failed to make a Scheduled Receivable Payment with respect to 10% or more of any such Scheduled Receivable Payment by its due date, and such failure continues for one hundred and twenty (120) days (or, if the related Financed Vehicle has been repossessed, two hundred and ten (210) days), (iii) ninety (90) days following the repossession of the related Financed Vehicle by the Servicer, (iv) the related Obligor is subject to a proceeding under the Bankruptcy Code or other applicable Debtor Relief Laws and the related Receivable is not a performing Contract, (v) the related Obligor is deceased, (vi) proceeds have been received which, in the Servicer's good faith judgment, constitute the final amounts recoverable in respect of such Receivable, or (vii) the Servicer has otherwise determined, in accordance with its Loan Servicing Policy, that the related Receivable should be charged-off.

 

“Closing Date” means the date on which the Term Loans are made.

 

“Closing Date Certificate” means a Closing Date Certificate substantially in the form of Exhibit D-1.

 

“Closing Date Material Adverse Change” means a material adverse change in (i) the business operations, assets, condition (financial or otherwise), liabilities or prospects of any Credit Party since March 31, 2011, other than as disclosed in writing to the Administrative Agent and the Lead Agents prior to the date hereof; (ii) the ability of the Borrower to fully and timely perform its material Obligations under any of the Credit Documents to which it is a party, or the legality, validity, binding effect, or enforceability against the Borrower of any such Credit Documents; or (iii) the ability of CPS to fully and timely perform its material obligations under the Credit Documents to which it is a party, or the legality, validity, binding effect, or enforceability against CPS of any such Credit Documents.

 

“Collateral” means, collectively, all of the real, personal and mixed property in which Liens are purported to be granted pursuant to the Collateral Documents as security for the Obligations.

 

“Collateral Agent” as defined in the preamble hereto.

 

“Collateral Assignment” means the Collateral Assignment of the Transaction Agreements and Dealer Agreements to be dated as of the Closing Date and to be entered into by and between the Borrower and the Collateral Agent on behalf of the Secured Parties in form, scope and substance reasonably acceptable to the Borrower and the Lead Agents.

 

“Collateral Documents” means the Security Agreement, the Control Agreements, the Collateral Assignment and all other instruments, documents and agreements delivered by any Credit Party pursuant to this Agreement or any of the other Credit Documents in order to grant to the Collateral Agent, for the benefit of Secured Parties, a Lien on any real, personal or mixed property of that Credit Party, as the case may be, as security for the Obligations.

 

“Collection Account” as defined in the Security Agreement.

 

“Collection Period” means, (i) with respect to the initial Settlement Date, the period beginning on the Closing Date and ending on the last day of the calendar month immediately preceding such Settlement Date and (ii) with respect to any other Settlement Date, the immediately preceding calendar month.

 

“Collections” means all collections on or related to the Receivables, including, without limitation, all Scheduled Receivable Payments, all non-scheduled payments, all prepayments, all late fees, all other fees, all insurance proceeds, all Liquidation Proceeds, all proceeds from Dealer recourse under each Dealer Agreement, all Recoveries, investment earnings, rental payments, residual proceeds, payments received under any personal guaranty with respect to a Receivable and all other payments received with respect to the Receivables, and all payments received by the Borrower from Fireside, Unitrin or the Interim Servicer under the Transaction Agreements, including any payments in respect of adjustments to the Purchase Price, collections during the Interim Servicing Period, indemnification claims and claims under the Unitrin Guaranty, but, in each case, excluding sales and property tax payments and, with respect to payments under the Transaction Agreement, excluding costs and expenses of collection and defense paid or reimbursed by Fireside, Unitrin or the Interim Servicer.

 

“Contract” means a motor vehicle retail installment sale contract or an installment promissory note and security agreement, in each case relating to the sale or refinancing of a Financed Vehicle.

 

“Contractual Obligation” means, as applied to any Person, any provision of any Security issued by that Person or of any indenture, mortgage, deed of trust, contract, undertaking, agreement or other instrument to which that Person is a party or by which it or any of its properties is bound or to which it or any of its properties is subject.

 

“Control Agreements” means, collectively, the Lockbox Account Control Agreement and the Controlled Account Control Agreement.

 

“Controlled Account” as defined in Section 2.12(a).

 

“Controlled Account Bank” means Wells Fargo Bank, National Association, in its capacity as account bank under the Controlled Account Control Agreement, and its successors and assigns or such other national bank designated by Borrower and acceptable to the Lead Agents in their sole discretion.

 

“Controlled Account Bank Fee” means the controlled account bank fee as set forth in the Controlled Account Control Agreement or as otherwise agreed by the Controlled Account Bank and the Lead Agents in their reasonable discretion.

 

“Controlled Account Control Agreement” means the agreement to be dated as of the Closing Date and titled the “Controlled Account Control Agreement” among the Controlled Account Bank, the Borrower and the Collateral Agent, in a form substantially similar to that certain Controlled Account Control Agreement dated as of December 23, 2010 entered into by Wells Fargo Bank, National Association, Page Six Funding LLC and Goldman Sachs Bank, as Collateral Agent in connection with the Page Six Credit Agreement.

 

“CPS” means Consumer Portfolio Services, Inc., a California corporation.

 

“CPS Guaranty” as defined in the Purchase Agreement.

 

“CPS Serviced Receivables” means all automobile receivables, including the Receivables, serviced by CPS from time to time (whether or not purchased or originated by CPS).

 

“Credit Document” means any of (a) this Agreement, the Fee Letter, the Notes, if any, the Collateral Documents, the Limited Guaranty, the Tax Matters Letter and the Related Agreements and (b) all other documents, instruments or agreements executed and delivered by a Credit Party for the benefit of any Agent or any Lender in connection herewith.

 

“Credit Extension” means the making of a Term Loan.

 

“Credit Party” means the Borrower and CPS.

 

“Cumulative Net Loss Rate” means, as of any Reporting Date, a rate, expressed as a percentage equal to a fraction, (i) the numerator of which is the Cumulative Net Losses with respect to all Receivables (ii) the denominator of which is the aggregate principal balance of all Receivables as of the Cut-off Date.

 

“Cumulative Net Losses” means, as of any date of determination, the aggregate cumulative principal amount of Receivables that have become Charge-Off Receivables during the period beginning on the Cut-off Date through the end of the Collection Period immediately preceding the month in which such date of determination occurs, net of all Liquidation Proceeds and Recoveries with respect to such Receivables as of the end of the Collection Period immediately preceding the month in which such date of determination occurs.

 

“Custodial Agreement” means that certain Custodial and Collateral Agency Agreement to be dated as of the Closing Date by and among the Borrower, the Servicer, Custodian, the Collateral Agent and the Lead Agents, in a form substantially similar to that certain Custodial and Collateral Agency Agreement dated as of December 23, 2010 entered into by Wells Fargo Bank, National Association, Page Six Funding LLC, CPS, and the Lead Agents in connection with the Page Six Credit Agreement.

 

“Custodian” means Wells Fargo Bank, National Association, in its capacity as custodian under the Custodial Agreement, or any successor thereto acceptable to the Lead Agents in their sole discretion or such other national bank designated by the Borrower and acceptable to the Lead Agents in their sole discretion.

 

“Custodian Fee” means the custodian fee agreed by the Lead Agents and the Borrower to be paid to the Custodian and to be defined in the Custodial Agreement.

 

“Custodian Fee and Expenses” means the custodian fee and expenses agreed by the Lead Agents and the Borrower to be paid to the Custodian and to be defined in the Custodial Agreement.

 

“Cut-off Date” means July 31, 2011.

 

“Dealer” as defined in the Purchase Agreement.

 

“Dealer Agreement” as defined in the Purchase Agreement.

 

“Debtor Relief Laws” means the Bankruptcy Code, and all other applicable liquidation, conservatorship, bankruptcy, moratorium, rearrangement, receivership, insolvency, reorganization, suspension of payments, readjustment of debt, marshalling of assets, assignment for the benefit of creditors or similar debtor relief laws of the United States, any state or any foreign country from time to time in effect, affecting the rights of creditors generally or the rights of creditors of banks.

 

“Default” means a condition or event that, after notice or lapse of time or both, would constitute an Event of Default.

 

“Delinquency Rate” means, with respect to any date of determination, a rate, expressed as a percentage, equal to a fraction (i) the numerator of which is the aggregate outstanding principal balance of all Delinquent Receivables as of the last day of the most recently ended Collection Period and (ii) the denominator of which is the aggregate outstanding principal balance of all Receivables as of the last day of the most recently ended Collection Period.

 

“Delinquent Receivable” means, with respect to any date of determination, any Receivable (i) with respect to which the related Obligor is more than thirty (30) days past due with respect to 10% or more of any Scheduled Receivable Payment and (ii) that is not a Charge-off Receivable.

 

“Deposit Account” means a demand, time, savings, passbook or like account with a bank, savings and loan association, credit union or like organization, other than an account evidenced by a negotiable certificate of deposit and includes all balances and deposits held therein and all certificates and instruments, if any, representing or evidencing such Deposit Account.

 

“Depository Institution” means, collectively, any “depository institution” or any “subsidiary” of a depository institution, as such terms are defined in the Federal Deposit Insurance Act of 1950, as amended to date.

 

“Dollars” and the sign “$” mean the lawful money of the United States of America.

 

“Elapsed Period” means, with respect to any Reporting Date, the number of months elapsed between (x) the first day of the month following the Cut-off Date and (y) the first day of the month in which such Reporting Date occurs.

 

“Eligible Assignee” means, (1) prior to the Closing Date (a) any Lender or any Lender Affiliate (other than a natural person) of a Lender, (b) any commercial bank organized under the laws of the United States, or any state thereof, and having total assets or net worth in excess of $100,000,000, (c) a commercial bank organized under the laws of any other country which is a member of the Organization for Economic Cooperation and Development or a political subdivision of any such country and which has total assets or net worth in excess of $100,000,000, provided that such bank is acting through a branch or agency located in the United States, and (d) a finance company, insurance company, or other financial institution or fund that is engaged in making, purchasing, or otherwise investing in commercial loans in the ordinary course of its business and having (together with its Lender Affiliates) total assets or net worth in excess of $100,000,000, (2) after the Closing Date and the termination of the Term Loan Commitments, (a) any Lender or any Lender Affiliate (other than a natural person) of a Lender and (b) any Person other than a natural person that is (A) an accredited investor (as defined in Regulation D under the Securities Act) and (B) in the business of extending credit or buying loans, and (3) any other Person (other than a natural person) approved by the Borrower (as long as no Default or Event of Default has occurred and is continuing) and Administrative Agent; provided, in the case of each of clause (1), (2) and (3), (x) no Credit Party nor any Affiliate of a Credit Party shall, in any event, be an Eligible Assignee and (y) no Person owning or controlling any trade debt or Indebtedness of any Credit Party other than the Obligations or any Capital Stock of any Credit Party (in each case, unless approved by the Administrative Agent) shall, in any event, be an Eligible Assignee.

 

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to time, and any successor thereto.

 

“Event of Default” means the occurrence of any Tier 1 Event of Default or Tier 2 Event of Default.

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended to the date hereof and from time to time hereafter, and any successor statute.

 

“Facility” as defined in the preamble hereto.

 

“Federal Funds Effective Rate” means for any day, the rate per annum (expressed, as a decimal, rounded upwards, if necessary, to the next higher 1/100 of 1%) equal to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers on such day, as published by the Federal Reserve Bank of New York on the next succeeding Business Day; provided, (a) if such day is not a Business Day, the Federal Funds Effective Rate for such day shall be such rate on such transactions on the next preceding Business Day as so published on the next succeeding Business Day, and (b) if no such rate is so published on such next succeeding Business Day, the Federal Funds Effective Rate for such day shall be the average rate charged to Fortress on such day on such transactions as determined by the Administrative Agent.

 

“Fee Letter” means the letter agreement, dated as of the date hereof, by and among the Lead Agents, the Borrower and CPS.

 

“Financed Vehicle” means a new or used automobile, together with all accessions thereto, securing an Obligor's indebtedness under a Receivable.

 

“Fiscal Quarter” means, with respect to a particular Fiscal Year, a fiscal quarter corresponding to such Fiscal Year.

 

“Fireside” means Fireside Bank, a California corporation.

 

“Fiscal Year” means for the Borrower, the period beginning on the Closing Date and ending on December 31, 2011 and any consecutive twelve-month period commencing on the date following the last day of the previous Fiscal Year and ending on December 31.

 

“Fortress” as defined in the Preamble hereto.

 

“Funding Notice” means a notice substantially in the form of Exhibit A.

 

“Funding Termination Event” means any two (2) Key Employees have ceased to be involved in the day to day operations of CPS and have not been replaced by successors acceptable to the Administrative Agent in its sole discretion.

 

“GAAP” means, subject to the limitations on the application thereof set forth in Section 1.2, United States generally accepted accounting principles in effect as of the date of determination thereof.

 

“Goldman Sachs Bank” as defined in the preamble hereto.

 

“Governmental Authority” means any federal, state, municipal, national or other government, governmental department, commission, board, bureau, court, agency or instrumentality or political subdivision thereof or any entity or officer exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to any government or any court, in each case whether associated with a state of the United States, the United States, or a foreign entity or government.

 

“Governmental Authorization” means any permit, license, authorization, plan, directive, consent order or consent decree of or from any Governmental Authority.

 

“Grantor” as defined in the Security Agreement.

 

“Guarantor” means CPS.

 

“Highest Lawful Rate” means the maximum lawful interest rate, if any, that at any time or from time to time may be contracted for, charged, or received under the laws applicable to any Lender which are presently in effect or, to the extent allowed by law, under such applicable laws which may hereafter be in effect and which allow a higher maximum nonusurious interest rate than applicable laws now allow.

 

“Increased-Cost Lender” as defined in Section 2.20.

 

“Indebtedness,” as applied to any Person, means, without duplication, (a) all indebtedness for borrowed money; (b) that portion of obligations with respect to Capital Leases that is properly classified as a liability on a balance sheet in conformity with GAAP; (c) notes payable and drafts accepted representing extensions of credit whether or not representing obligations for borrowed money; (d) any obligation owed for all or any part of the deferred purchase price of property or services (excluding any such obligations incurred under ERISA), which purchase price is (i) due more than six (6) months from the date of incurrence of the obligation in respect thereof or (ii) evidenced by a note or similar written instrument; (e) all indebtedness secured by any Lien on any property or asset owned or held by that Person regardless of whether the indebtedness secured thereby shall have been assumed by that Person or is nonrecourse to the credit of that Person; (f) the face amount of any letter of credit issued for the account of that Person or as to which that Person is otherwise liable for reimbursement of drawings; (g) the direct or indirect guaranty, endorsement (otherwise than for collection or deposit in the ordinary course of business), co-making, discounting with recourse or sale with recourse by such Person of the obligation of another; (h) any obligation of such Person the primary purpose or intent of which is to provide assurance to an obligee that the obligation of the obligor thereof will be paid or discharged, or any agreement relating thereto will be complied with, or the holders thereof will be protected (in whole or in part) against loss in respect thereof; (i) any liability of such Person for an obligation of another through any agreement (contingent or otherwise) (A) to purchase, repurchase or otherwise acquire such obligation or any security therefor, or to provide funds for the payment or discharge of such obligation (whether in the form of loans, advances, stock purchases, capital contributions or otherwise) or (B) to maintain the solvency or any balance sheet item, level of income or financial condition of another if, in the case of any agreement described under subclauses (A) or (B) of this clause (i), the primary purpose or intent thereof is as described in clause (h) above; and (j) all obligations of such Person in respect of any exchange traded or over the counter derivative transaction, whether entered into for hedging or speculative purposes.

 

“Indemnified Liabilities” means, collectively, any and all liabilities, obligations, losses, damages, penalties, claims, costs, expenses and disbursements of any kind or nature whatsoever (including the reasonable, documented, out-of-pocket fees and disbursements of counsel for Indemnitees in connection with any investigative, administrative or judicial proceeding commenced by any Person, whether or not any such Indemnitee shall be designated as a party or a potential party thereto, and any reasonable, documented, out-of-pocket fees or expenses incurred by Indemnitees in enforcing the indemnification provisions of Section 9.3), whether direct, indirect or consequential and whether based on any federal, state or foreign laws, statutes, rules or regulations (including securities and commercial laws, statutes, rules or regulations, on common law or equitable cause or on contract or otherwise) that may be imposed on, incurred by, or asserted against any such Indemnitee, in any manner relating to or arising out of this Agreement or the other Credit Documents or the transactions contemplated hereby or thereby (including the Lenders’ agreement to make Credit Extensions or the use or intended use of the proceeds thereof, or any enforcement of any of the Credit Documents (including any sale of, collection from, or other realization upon any of the Collateral or the enforcement of the Limited Guaranty); provided, however, that “Indemnified Liabilities” shall not include any liabilities, obligations, losses, damages, penalties, claims, costs, expenses and disbursements resulting from the origination or servicing of the Receivables prior to the Servicing Transfer Date or credit losses on or diminution in value of Receivables or other Collateral unless such credit loss or diminution in value was a result of the action or inaction of the Borrower or the Servicer in contravention of the Credit Documents or any costs, expenses and disbursements that have been expressly allocated under the Credit Documents to a Person other than a Credit Party.

 

“Indemnitee” as defined in Section 9.3(a).

 

“Independent Accountants” means (a) Crowe Horwath LLP or (b) a firm of independent certified public accountants registered with the Public Company Accounting Oversight Board and otherwise acceptable to the Administrative Agent.

 

“Independent Manager” means an employee of Lord Securities Corporation, or another natural person meeting the qualifications set forth in Section 6.15 and otherwise acceptable to the Lead Agents in their sole discretion.

 

“Insolvency Event” means, with respect to a specified Person, (a) the institution of a proceeding or the filing of a petition against such Person seeking the entry of a decree or order for relief by a court having jurisdiction in the premises in respect of such Person or any substantial part of its property in an involuntary case under any applicable federal or state bankruptcy, insolvency or other similar law now or hereafter in effect, seeking the appointment of a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official for such Person or for any substantial part of its property, or ordering the winding-up or liquidation of such Person’s affairs, and such proceeding or petition, decree or order shall remain unstayed or undismissed for a period of 60 consecutive days or an order or decree for the requested relief is earlier entered or issued; or (b) the commencement by such Person of a voluntary case under any applicable federal or state bankruptcy, insolvency or other similar law now or hereafter in effect, or the consent by such Person to the entry of an order for relief in an involuntary case under any such law, or the consent by such Person to the appointment of or taking possession by, a receiver, liquidator, assignee, custodian, trustee, sequestrator, or similar official for such Person or for any substantial part of its property, or the making by such Person of any general assignment for the benefit of creditors, or the failure by such Person generally to pay its debts as such debts become due, or the taking of action by such Person in furtherance of any of the foregoing.

 

“Interest Period” means, with respect to any Term Loans and any Settlement Date, (a) with regard to the first such period, the period commencing on (and including) the Closing Date to but excluding such Settlement Date; and (b) thereafter, the period commencing on the immediately preceding Settlement Date to but excluding such Settlement Date; provided, no Interest Period shall extend beyond the Maturity Date.

 

“Interest Rate” means, with respect to (i) any Term Loan that is a LIBOR Rate Loan and any Interest Period, the Adjusted LIBOR Rate plus the Applicable Margin for such Interest Period and (ii) any Term Loan that is a Base Rate Loan and any Interest Period, the Base Rate plus the Applicable Margin for such Interest Period.

 

“Interest Rate Reset Date” means, with respect to any Interest Period, the date that is two (2) Business Days prior to the first day of such Interest Period.

 

“Interim Servicing Agreement” as defined in the Purchase Agreement.

 

“Interim Servicing Period” means the period during which Fireside is providing “Services” (as defined in the Interim Servicing Agreement) as Interim Servicer pursuant to the Interim Servicing Agreement, which period shall commence on the Closing Date and end on the Servicing Transfer Date.

 

“Internal Revenue Code” means the Internal Revenue Code of 1986, as amended to the date hereof and from time to time hereafter, and any successor statute.

 

“Investment” means (a) any direct or indirect purchase or other acquisition by the Borrower of, or of a beneficial interest in, any of the Securities of any other Person; (b) any direct or indirect redemption, retirement, purchase or other acquisition for value, from any Person, of any Capital Stock of such Person; and (c) any direct or indirect loan, advance or capital contributions by the Borrower to any other Person, including all indebtedness and accounts receivable from that other Person that are not current assets or did not arise from sales to that other Person in the ordinary course of business. The amount of any Investment shall be the original cost of such Investment plus the cost of all additions thereto, without any adjustments for increases or decreases in value, or write-ups, write-downs or write-offs with respect to such Investment.

 

“Key Employee” means each of Charles Bradley, Jr., Robert Riedl and Chris Terry or any successor thereto approved by the Administrative Agent in its sole discretion.

 

“Lead Agents” means (i) Fortress, so long as not less than 25% of the outstanding principal balance of the Term Loans is owing to Fortress and its Affiliates and (ii) Goldman Sachs Bank, so long as not less than 25% of the outstanding principal balance of the Term Loans is owing to Goldman Sachs Bank and its Affiliates; provided that, if there are no Lead Agents, the voting and control rights held by the Lead Agents herein shall be exercised by the Administrative Agent.

 

“Lead Agent Affiliate Lender” as defined in Section 9.6(k).

 

“Lender” means each financial institution listed on the signature pages hereto as a Lender, and any other Person that becomes a party hereto pursuant to an Assignment Agreement.

 

“Lender Affiliate” means, as applied to any Lender or Agent, any Person directly or indirectly controlling (including any member of senior management of such Person), controlled by, or under common control with, such Lender.  For the purposes of this definition, “control” (including, with correlative meanings, the terms “controlling,” “controlled by” and “under common control with”), as applied to any Person, means the possession, directly or indirectly, of the power (a) to vote 10% or more of the Securities having ordinary voting power for the election of directors of such Person or (b) to direct or cause the direction of the management and policies of that Person, whether through the ownership of voting securities or by contract or otherwise.

 

“LIBOR Rate Loan” means a Term Loan bearing interest at a rate determined by reference to the Adjusted LIBOR Rate and maturing on the last day of each Interest Period (unless otherwise continued pursuant to Section 2.6).

 

“LIBOR Unavailability” as defined in Section 2.16(a).

 

“Lien” means (a) any lien, mortgage, pledge, assignment, security interest, charge or encumbrance of any kind (including any agreement to give any of the foregoing, any conditional sale or other title retention agreement, and any lease in the nature thereof) and any option, trust or other preferential arrangement having the practical effect of any of the foregoing and (b) in the case of Securities, any purchase option, call or similar right of a third party with respect to such Securities.

 

“Limited Guaranty” means the Guaranty and Pledge Agreement to be dated as of the Closing Date by CPS in favor of the Administrative Agent and the Lead Agents, on behalf of the Lenders in a form substantially similar to that certain Guaranty dated as of December 23, 2010 entered into by CPS in connection with the Page Six Credit Agreement.

 

“Liquidation Proceeds” as defined in the Servicing Agreement.

 

“Loan Servicing Policy” as defined in the Servicing Agreement.

 

“Lockbox Account” means the Deposit Account to be maintained by the Lockbox Account Bank in the name of the Borrower and designated in the Security Agreement as the “Lockbox Account”.

 

“Lockbox Account Bank” means Wells Fargo Bank, National Association, in its capacity as account bank under the Controlled Account Control Agreement, and its successors and assigns or such other national bank designated by Borrower and acceptable to the Lead Agents in their sole discretion.

 

“Lockbox Account Control Agreement” means the agreement to be dated as of the Closing Date and titled the “Lockbox Account Control Agreement” among the Lockbox Account Bank, the Borrower and the Collateral Agent, in a form substantially similar to that certain Lockbox Account Control Agreement dated as of December 23, 2010 entered into by Wells Fargo Bank, National Association, Page Six Funding LLC and Goldman Sachs Bank, as Collateral Agent in connection with the Page Six Credit Agreement.

 

“Lockbox System” as defined in Section 5.9(a)(i).

 

“Margin Stock” as defined in Regulation U of the Board of Governors of the Federal Reserve System as in effect from time to time.

 

“Material Adverse Effect” means, a material adverse effect on (a) the business operations, assets, condition (financial or otherwise), liabilities or prospects of a Credit Party, (b) the ability of a Credit Party to fully and timely perform its obligations under the Credit Documents (including, without limitation, the Obligations of the Borrower); (c) the legality, validity, binding effect, or enforceability against a Credit Party of any Credit Document to which it is a party; or (d) the rights, remedies and benefits available to, or conferred upon, any Agent, any Lead Agent, any Lender or any Secured Party under any Credit Document.

 

“Material Contract” means any contract or other arrangement to which a Credit Party is a party (other than the Credit Documents) for which breach, nonperformance, cancellation or failure to renew could reasonably be expected to have a Material Adverse Effect.

 

“Maturity Date” means the 42nd month anniversary of the Closing Date.

 

“Maximum Availability” means the lesser of (i) $210,000,000 and (ii) an amount equal to the Purchase Price paid by the Borrower to Fireside for Receivables pursuant to the Purchase Agreement multiplied by 98%.

 

“Monthly Servicing Report” means that Monthly Servicing Report in the form attached as Exhibit A to the Servicing Agreement.

 

“Moody’s” means Moody's Investor Services, Inc., and any successor thereto.

 

“Net Insurance Proceeds” means an amount equal to: (a) any Cash payments or proceeds received by the Borrower under any casualty, business interruption or “key man” insurance policies in respect of any covered loss thereunder, minus (b) any actual and reasonable costs incurred by the Borrower in connection with the adjustment or settlement of any claims of the Borrower in respect thereof.

 

“Note” means a promissory note substantially in the form of Exhibit B.

 

“Obligations” means all obligations of every nature of the Borrower from time to time owed to the Agents (including former Agents), the Lead Agents, the Lenders, the Indemnitees or any of them, under any Credit Document, whether for principal, interest (including interest which, but for the filing of a petition in bankruptcy with respect to the Borrower, would have accrued on any Obligation, whether or not a claim is allowed against the Borrower for such interest in the related bankruptcy proceeding), fees, expenses, indemnification or otherwise.

 

“Obligor” means, with respect to a Receivable, the purchaser or co-purchasers of the related Financed Vehicle or any other Person who owes or may be liable for payments under such Receivable.

 

“Organizational Documents” means (a) with respect to any corporation, its certificate or articles of incorporation or organization, as amended, and its by-laws, as amended, (b) with respect to any limited partnership, its certificate of limited partnership, as amended, and its partnership agreement, as amended, (c) with respect to any general partnership, its partnership agreement, as amended, and (d) with respect to any limited liability company, its articles of organization, as amended, and its operating agreement, as amended.  In the event any term or condition of this Agreement or any other Credit Document requires any Organizational Document to be certified by a secretary of state or similar governmental official, the reference to any such “Organizational Document” shall only be to a document of a type customarily certified by such governmental official.

 

“Page Six Credit Agreement” means that certain Revolving Credit Agreement dated as of December 23, 2010 by and between Page Six Funding LLC, CPS, Goldman Sachs Bank, as administrative agent, collateral agent, a lender and a lead agent, and Fortress, as a lender and a lead agent., and the other lenders party thereto from time to time.

 

“Performance Trigger” means the breach of any of the collateral performance tests set forth on Appendix C hereto.

 

“Permitted Investments” means the following, subject to qualifications hereinafter set forth:

 

(i) obligations of, or obligations guaranteed as to principal and interest by, the U.S. government or any agency or instrumentality thereof, when such obligations are backed by the full faith and credit of the United States of America;

 

(ii) federal funds, unsecured certificates of deposit, time deposits, banker's acceptances, and repurchase agreements having maturities of not more than 365 days of any bank, the short-term debt obligations of which are rated A-1+ (or the equivalent) by each of the Rating Agencies and, if it has a term in excess of three (3) months, the long-term debt obligations of which are rated AAA (or the equivalent) by each of the Moody's and S&P;

 

(iii) deposits that are fully insured by the Federal Deposit Insurance Corp. (FDIC);

 

(iv) investments in money market funds (including those owned or managed by the Controlled Account Bank) rated in the highest investment category by each of the Moody's and S&P; and

 

(v) such other investments as to which each of the Lead Agents consents.

 

Notwithstanding the foregoing, “Permitted Investments” (i) shall exclude any security with the S&P's “r” symbol (or any other Rating Agency's corresponding symbol) attached to the rating (indicating high volatility or dramatic fluctuations in their expected returns because of market risk), as well as any mortgage-backed securities and any security of the type commonly known as “strips”; (ii) shall not have maturities in excess of one (1) year; (iii) shall be limited to those instruments that have a predetermined fixed dollar of principal due at maturity that cannot vary or change; and (iv) shall exclude any investment where the right to receive principal and interest derived from the underlying investment provides a yield to maturity in excess of 120% of the yield to maturity at par of such underlying investment.  Interest may either be fixed or variable, and any variable interest must be tied to a single interest rate index plus a single fixed spread (if any), and move proportionately with that index.  No investment shall be made which requires a payment above par for an obligation if the obligation may be prepaid at the option of the issuer thereof prior to its maturity.  All investments shall mature or be redeemable upon the option of the holder thereof on or prior to the earlier of (x) three (3) months from the date of their purchase or (y) the Business Day preceding the day before the date the amounts invested in those investments are required to be applied hereunder.

 

“Permitted Liens” means:

 

(i)           Liens imposed by law for taxes, assessments or other governmental charges payable by the Borrower that are not yet due or are being contested in compliance with Section 5.3;

 

(ii) Liens arising in favor of the applicable financial institution under the Lockbox Account Control Agreement or the Controlled Account Control Agreement; and

 

(iii) Liens on Financed Vehicles that are junior in right to the Lien of the Borrower, or that are possessory liens (such as for storage or repair), tax liens (such as property taxes or registration fees), or statutory enforcement liens (such as for parking tickets).

 

“Person” means and includes natural persons, corporations, limited partnerships, general partnerships, limited liability companies, limited liability partnerships, joint stock companies, joint ventures, associations, companies, trusts, banks, trust companies, land trusts, business trusts or other organizations, whether or not legal entities, and Governmental Authorities.

 

“Preferred Return” means 16% per annum.

 

“Prime Rate” means the rate of interest quoted in The Wall Street Journal, Money Rates Section as the Prime Rate (currently defined as the base rate on corporate loans posted by at least 75% of the nation's 30 largest banks), as in effect from time to time.

 

“Principal Office” means, for the Administrative Agent, 1345 Avenue of the Americas, New York, New York 10105 (or such other location in the United States of America as the Administrative Agent may from time to time designate in writing to the Borrower and each Lender).

 

“Pro Rata Share” means with respect to all payments, computations and other matters relating to the Term Loans of any Lender, the percentage obtained by dividing (i) the Term Loan Exposure of that Lender, by (ii) the aggregate Term Loan Exposure of all Lenders.

 

“Purchase Agreement” means that certain Purchase Agreement dated as of the date hereof, by and between Fireside and the Borrower, as it may be further amended, modified or supplemented from time to time in accordance with the terms thereof.

 

“Purchase Price” means the purchase price payable by Borrower to Fireside on the Closing Date for the Receivables pursuant to the Purchase Agreement.

 

“Rating Agencies” means each of Moody's and S&P.

 

“Receivable” means each Contract that was sold by Fireside to the Borrower pursuant to the Purchase Agreement.

 

“Receivable File” as defined in the Purchase Agreement.

 

“Receivable Repurchase Event” means any event or circumstance as a result of which the Borrower has the right to require the repurchase of a Receivable pursuant to Section 4.2(c) of the Purchase Agreement.

 

“Receivable Repurchase Price” means, with respect to any Receivable subject to a Receivable Repurchase Event, the amount paid by Fireside or Unitrin to repurchase such Receivable in accordance with the Purchase Agreement.

 

“Recoveries” means, with respect to a Receivable that is a Charge-Off Receivable, the monies collected from whatever source during any Collection Period following the Collection Period in which such Receivable became a Charge-Off Receivable, net of any amounts required by law to be remitted to the Obligor.

 

“Register” as defined in Section 2.4(a).

 

“Related Agreements” means, collectively, the Servicing Agreement, the Custodial Agreement and the Backup Servicing Agreement.

 

“Replacement Person” as defined in Section 2.17(c).

 

“Reporting Date” means the tenth (10th) calendar day of each month (or if such day is not a Business Day, the immediately succeeding Business Day).

 

“Requisite Lenders” means one (1) or more Lenders having or holding Term Loan Exposure and representing more than 50% of the aggregate Term Loan Exposure of all Lenders.

 

“S&P” means Standard & Poor's Ratings Services, Inc., a Standard & Poor's Financial Services, LLC business, and any successor thereto.

 

“Scheduled Receivable Payment” means, for any Collection Period and for any Receivable, the amount indicated in such Receivable as required to be paid by the Obligor in such Collection Period.  If after the Closing Date the Obligor's obligation under such Receivable with respect to a Collection Period has been modified so as to differ from the amount specified in such Receivable as a result of (i) the order of a court in an insolvency proceeding involving the Obligor, (ii) pursuant to the Servicemembers Civil Relief Act or (iii) modifications or extensions of the Receivable permitted by the Credit Documents and the Servicing Agreement, the Scheduled Receivable Payment with respect to such Collection Period shall refer to the Obligor's payment obligation with respect to such Collection Period as so modified.

 

“Secured Party” means each of the Agents (including former Agents), the Lead Agents, the Lenders, the Indemnitees or any of them.

 

“Securities” means any stock, shares, partnership interests, limited liability company interests, voting trust certificates, certificates of interest or participation in any profit-sharing agreement or arrangement, options, warrants, bonds, debentures, notes, or other evidences of indebtedness, secured or unsecured, convertible, subordinated or otherwise, or in general any instruments commonly known as “securities” or any certificates of interest, shares or participations in temporary or interim certificates for the purchase or acquisition of, or any right to subscribe to, purchase or acquire, any of the foregoing.

 

“Securities Act” means the Securities Act of 1933, as amended to the date hereof and from time to time hereafter, and any successor statute.

 

“Security Agreement” means the Security Agreement, to be dated as of the Closing Date, by and between the Borrower and the Collateral Agent on behalf of the Secured Parties, in a form substantially similar to that certain Security Agreement dated as of December 23, 2010 entered into by Page Six Funding LLC and Goldman Sachs Bank, as collateral agent thereunder, in connection with the Page Six Credit Agreement.

 

“Servicer” means, during the Interim Servicing Period, Fireside, and after the Servicing Transfer Date, CPS, subject to removal pursuant to the terms of the Servicing Agreement, and thereafter shall mean the Backup Servicer, or any successor servicer appointed pursuant to the Servicing Agreement.

 

“Servicer Default” as defined in the Servicing Agreement.

 

“Servicing Agreement” means that certain Servicing Agreement to be dated as of the Closing Date by and among the Borrower, the Servicer, the Administrative Agent and the Lead Agents in the form attached hereto as Exhibit E.

 

“Servicing Fee” means, during the Interim Servicing Period, the Interim Servicing Fee as defined in the Interim Servicing Agreement and, after the Servicing Transfer Date, the amount equal to, for each Settlement Date, the sum of (1) the product of (x) one-twelfth times (y) the Servicing Fee Rate times (z) the outstanding principal balance of the Receivables on the first date of the related Collection Period, plus (2) all administrative fees, expenses and charges paid by or on behalf of Obligors, including late fees collected on the Contracts during the related Collection Period plus (3) $275 per Financed Vehicle repossessed during the related Collection Period plus (4) any auction or other expenses paid by Servicer (and not reimbursed) in connection with any Financed Vehicle repossessed or liquidated, pro rated, as applicable, for partial months plus (5) expenses incurred by Servicer in accordance with Section 2.05 of the Servicing Agreement.

 

“Servicing Fee Rate” shall be 2.5% per annum.

 

“Servicing Transfer Date” means the date servicing is transferred from Fireside to the Servicer in accordance with the Interim Servicing Agreement or the obligation of Fireside to perform the “Services” under the Interim Servicing Agreement terminates.

 

“Settlement Date” means (a) the fifteenth (15th) calendar day of each month (or if such day is not a Business Day, the immediately succeeding Business Day) beginning in the month following the Closing Date, (b) the Maturity Date and (c) the Termination Date.

 

“Solvency Certificate” means a Solvency Certificate of the chief financial officer of CPS or the Borrower, as the case may be, substantially in the form of Exhibit D-2.

 

“Solvent” means, with respect the Borrower or CPS, that as of the date of determination, both (a) (i) the sum of such entity's debt (including contingent liabilities) does not exceed the present fair saleable value of such entity's present assets; (ii) such entity's capital is not unreasonably small in relation to its business as contemplated on the Closing Date; and (iii) such entity has not incurred and does not intend to incur, or believe (nor should it reasonably believe) that it will incur, debts beyond its ability to pay such debts as they become due (whether at maturity or otherwise); and (b) such entity is “solvent” within the meaning given that term and similar terms under applicable laws relating to fraudulent transfers and conveyances.  For purposes of this definition, the amount of any contingent liability at any time shall be computed as the amount that, in light of all of the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability (irrespective of whether such contingent liabilities meet the criteria for accrual under Statement of Financial Accounting Standard No. 5).

 

“Subsidiary” means, with respect to any Person, any corporation, partnership, limited liability company, association, joint venture or other business entity of which more than 50% of the total voting power of shares of stock or other ownership interests entitled (without regard to the occurrence of any contingency) to vote in the election of the Person or Persons (whether directors, managers, trustees or other Persons performing similar functions) having the power to direct or cause the direction of the management and policies thereof is at the time owned or controlled, directly or indirectly, by that Person or one or more of the other Subsidiaries of that Person or a combination thereof; provided, in determining the percentage of ownership interests of any Person controlled by another Person, no ownership interest in the nature of a “qualifying share” of the former Person shall be deemed to be outstanding.

 

“Tax” means any present or future tax, levy, impost, duty, assessment, charge, fee or deduction or withholding in respect thereof of any similar nature and whatever called, imposed by a Governmental Authority, on whomsoever and wherever imposed, levied, collected, withheld or assessed; provided, “Tax on the overall net income” of a Person shall be construed as a reference to a Tax imposed by the jurisdiction in which that Person is organized or in which that Person's applicable principal office (and/or, in the case of a Lender, its lending office) is located or in which that Person (and/or, in the case of a Lender, its lending office) is deemed to be doing business on all or part of the net income, profits or gains (whether worldwide, or only insofar as such income, profits or gains are considered to arise in or to relate to a particular jurisdiction, or otherwise) of that Person (and/or, in the case of a Lender, its applicable lending office) and shall include any backup or other withholding tax that shall be eligible to be credited against any such Tax.

 

“Tax Matters Letter” means that certain tax matters letter to be dated as of the Closing Date by and among CPS, the Borrower and the Lead Agents, in substantially the form attached hereto as Exhibit F.

 

“Tier 1 Event of Default” shall mean the occurrence of any of the conditions or events set forth in Section 7.1(b), Section 7.1(e)(ii), Section 7.1(g), Section 7.1(l)(i), Section 7.1(q) or Section 7.1(s).

 

“Tier 2 Event of Default” shall mean the occurrence of any of the conditions or events set forth in Section 7.1(a), Section 7.1(e)(i), Section 7.1(f), Section 7.1(h), Section 7.1(i), Section 7.1(j), Section 7.1(k), Section 7.1(l)(ii), Section 7.1(m), or Section 7.1(o).

 

“Term Loan” means a loan made by a Lender to the Borrower pursuant to Section 2.1(a).

 

“Term Loan Commitment” means the commitment of a Lender to make or otherwise fund a Term Loan and “Term Loan Commitments” means such commitments of all Lenders in the aggregate.  The amount of each Lender’s Term Loan Commitment, if any, is set forth on Appendix A or the applicable Assignment Agreement, subject to adjustment or reduction pursuant to the terms and conditions hereof.  The Term Loan Commitments as of the date hereof are $210,000,000.

 

“Term Loan Exposure” means, with respect to any Lender, as of any date of determination, the outstanding principal amount of the Term Loans of such Lender.

 

“Termination Date” means the first date on which (a) all Receivables have been paid in full or liquidated (along with the relevant Financed Vehicle) in accordance with the Loan Servicing Policy and no further Collections are realizable on the Receivables, (b) all payment obligations of Fireside and Unitrin under the Transaction Documents have terminated and (c) there are no pending, potential or unpaid claims of the Borrower or the Lenders under the Transaction Documents.

 

“Transaction Agreements” means, collectively, the Purchase Agreement, the Interim Servicing Agreement and the Unitrin Guaranty.

 

“UCC” means the Uniform Commercial Code (or any similar or equivalent legislation) as in effect in any applicable jurisdiction.

 

“Unitrin” means Unitrin, Inc., a Delaware corporation.

 

“Unitrin Guaranty” means the Parent Guaranty (as defined in the Purchase Agreement).

 

“Upfront Fee” as defined in the Fee Letter.

 

“Unreturned Capital Contribution Amount” means the excess, if any, of the Capital Contribution Amount over the aggregate amounts paid to CPS under Section 2.11(d) and Section 2.13(i).

 

1.2. Accounting Terms.

 

(a) Generally.  All accounting terms not specifically or completely defined herein shall be construed in conformity with, and all financial data (including financial ratios and other financial calculations) required to be submitted pursuant to this Agreement shall be prepared in conformity with, GAAP applied on a consistent basis, as in effect from time to time, applied in a manner consistent with that used in preparing CPS’ audited financial statements, except as otherwise specifically prescribed herein.

 

(b) Changes in GAAP.  If at any time any change in GAAP would affect the computation of any financial ratio or requirement set forth in any Credit Document, and either the Borrower, CPS or the Lenders shall so request, the Administrative Agent, the Lenders, CPS and the Borrower shall negotiate in good faith to amend such ratio or requirement to preserve the original intent thereof in light of such change in GAAP; provided that, until so amended, (i) such ratio or requirement shall continue to be computed in accordance with GAAP prior to such change therein and (ii) CPS and the Borrower shall provide to the Administrative Agent and the Lenders financial statements and other documents required under this Agreement or as reasonably requested hereunder setting forth a reconciliation between calculations of such ratio or requirement made before and after giving effect to such change in GAAP.

 

1.3. Interpretation, etc.

 

  Any of the terms defined herein may, unless the context otherwise requires, be used in the singular or the plural, depending on the reference.  References herein to any Section, Appendix, Schedule or Exhibit shall be to a Section, an Appendix, a Schedule or an Exhibit, as the case may be, hereof unless otherwise specifically provided.  The use herein of the word “include” or “including,” when following any general statement, term or matter, shall not be construed to limit such statement, term or matter to the specific items or matters set forth immediately following such word or to similar items or matters, whether or not no limiting language (such as “without limitation” or “but not limited to” or words of similar import) is used with reference thereto, but rather shall be deemed to refer to all other items or matters that fall within the broadest possible scope of such general statement, term or matter.  The words “hereof”, “herein”, “hereunder” and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement. Unless the context requires otherwise or otherwise specified in any applicable Credit Document, (a) reference to any Person include that Person's successors and assignees, (b) any definition of or reference to any Credit Document, agreement, instrument or other document herein shall be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements, or modifications set forth herein or therein), and (c) any reference to any law or regulation herein shall refer to such law or regulation as amended, modified or supplemented from time to time.

 

SECTION 2.

TERM LOANS

 

2.1. Term Loans.

 

(a) Term Loan Commitments.  Subject to the terms and conditions hereof, each Lender severally agrees to make, on the Closing Date, a Term Loan to the Borrower in an amount equal to such Lender’s Term Loan Commitment up to its Pro Rata Share of the Maximum Availability.  The Borrower may make only one borrowing under the Term Loan Commitments which shall be on the Closing Date.  Any amount borrowed under this Section 2.1(a) and subsequently repaid or prepaid may not be reborrowed.  Subject to Section 2.10 and Section 2.11, all amounts owed hereunder with respect to the Term Loans shall be paid in full no later than the Maturity Date.  Each Lender’s Term Loan Commitment shall terminate immediately and without further action on the Closing Date after giving effect to the funding of such Lender’s Term Loan Commitment on such date.

 

(b) Borrowing Mechanics for Term Loans.

 

(i) The Borrower shall deliver to the Administrative Agent and the Lead Agents a fully executed and delivered Funding Notice no later than 1:00 p.m. (New York City time) at least two (2) Business Days in advance of the proposed Closing Date together with a schedule of Receivables to be transferred to the Borrower on the Closing Date and certifying the Purchase Price.

 

(ii) Notice of receipt of the Funding Notice, together with the amount of each Lender's Pro Rata Share thereof, if any, together with the applicable Interest Rate, shall be provided by the Administrative Agent to each applicable Lender by telefacsimile with reasonable promptness, but not later than 2:00 p.m. (New York City time) on the same day as the Administrative Agent's receipt of such Funding Notice from the Borrower (provided the Administrative Agent shall have received such notice from the Borrower by 1:00 p.m. (New York City time)).

 

(iii) Each Lender shall make the amount of its Term Loan available to the Administrative Agent not later than 12:00 p.m. (New York City time) on the Closing Date by wire transfer of same day funds in Dollars, at the Administrative Agent's Principal Office.  Except as provided herein, upon satisfaction or waiver by the Lead Agents of the conditions precedent specified herein, the Administrative Agent shall make the proceeds of such Term Loans available to the Borrower on the Closing Date by causing an amount of same day funds in Dollars equal to the proceeds of all such Term Loans received by the Administrative Agent from the Lenders to be credited to the account of the Borrower at the Administrative Agent's Principal Office or such other account as may be designated in writing to the Administrative Agent by the Borrower.

 

2.2. Pro Rata Shares.

 

(a) All Term Loans shall be made, and all participations purchased, by the Lenders simultaneously and proportionately to their respective Pro Rata Shares, it being understood that no Lender shall be responsible for any default by any other Lender in such other Lender’s obligation to make a Term Loan requested hereunder or purchase a participation required hereby nor shall any Term Loan of any Lender be increased or decreased as a result of a default by any other Lender in such other Lender’s obligation to make a Term Loan requested hereunder or purchase a participation required hereby.

 

(b) [Reserved].

 

2.3. Use of Proceeds

 

.  The proceeds of the Term Loans made on the Closing Date shall be applied by the Borrower to finance 98% of the Purchase Price paid to Fireside for the acquisition of Receivables from Fireside pursuant to the Purchase Agreement. No portion of the proceeds of any Term Loan shall be used in any manner that causes such Term Loan or the application of such proceeds to violate Regulation T, Regulation U or Regulation X of the Board of Governors of the Federal Reserve System or any other regulation thereof or to violate the Exchange Act.

 

2.4. Register; Notes.

 

(a) Register.  The Administrative Agent shall maintain at its Principal Office a register for the recordation of the names and addresses of the Lenders and the Term Loan Commitments and Term Loans from time to time (the “Register”).  The Register shall be available for inspection by the Borrower or any Lender at any reasonable time and from time to time upon reasonable prior notice to the Administrative Agent.  The Administrative Agent shall record in the Register the Term Loan Commitments and the Term Loans, and each repayment or prepayment in respect of the principal amount of the Term Loans, and any such recordation shall be conclusive and binding on the Borrower and each Lender, absent manifest error; provided, failure to make any such recordation, or any error in such recordation, shall not affect the Term Loan Commitments or the Borrower's Obligations in respect of any Term Loan.  The Borrower hereby designates the entity serving as Administrative Agent to serve as the Borrower's agent solely for purposes of maintaining the Register as provided in this Section 2.4, and the Borrower hereby agrees that, to the extent such entity serves in such capacity, the entity serving as Administrative Agent and its officers, directors, employees, agents and affiliates shall constitute “Indemnitees.”

 

(b) Notes.  If so requested by any Lender prior to the Closing Date, or upon two (2) Business Days prior written notice at any time after the Closing Date, the Borrower shall execute and deliver to such Lender (and/or, if applicable and if so specified in such notice, to any Person who is an assignee of such Lender pursuant to Section 9.6) on the Closing Date (or, if such notice is delivered after the Closing Date, promptly after the Borrower's receipt of such notice) a Note or Notes, as so requested, to evidence the Term Loan.

 

2.5. Interest on Term Loans.

 

(a) Except as otherwise set forth herein, each Term Loan shall bear interest on the unpaid principal amount thereof from the date made through repayment (whether by acceleration or otherwise) as follows: (i) if a Base Rate Loan, at the Base Rate plus the Applicable Margin; or (ii) if a LIBOR Rate Loan, at the Adjusted LIBOR Rate plus the Applicable Margin.  Borrower shall indicate in the Funding Notice whether a Term Loan shall be a Base Rate Loan or a LIBOR Rate Loan, provided, however, that so long as, in the good faith judgment of the Administrative Agent, adequate and fair means exist for ascertaining the interest rate applicable to LIBOR Rate Loans on the basis provided for in the definition of Adjusted LIBOR Rate, the Borrower shall indicate on the Funding Notice that any requested Term Loan shall be a LIBOR Rate Loan.

 

(b) Interest payable pursuant to Section 2.5(a) shall be computed on the basis of a 360-day year, in each case for the actual number of days elapsed in the period during which it accrues.  In computing interest on any Term Loan, the Closing Date or the first day of an Interest Period applicable to such Term Loan shall be included, and the date of payment of such Term Loan or the expiration date of an Interest Period applicable to such Term Loan shall be excluded.

 

(c) Except as otherwise set forth herein, interest on each Term Loan shall be payable in arrears on (i) each Settlement Date applicable to that Term Loan; (ii) with respect to any prepayment in whole or in part of such Term Loan, whether voluntary or mandatory, the Settlement Date immediately following such prepayment in an amount equal to the interest accrued and unpaid on the amount so prepaid to the date of prepayment; and (iii) at maturity.

 

2.6. Continuation

 

. Subject to Section 2.16 and provided that (i) no Tier 2 Event of Default has occurred and is continuing and (ii) the Lenders shall not have exercised the Buyout Option following a Tier 1 Event of Default, upon the expiration of any Interest Period applicable to any LIBOR Rate Loan, such LIBOR Rate Loan shall automatically continue for an additional Interest Period at the Adjusted LIBOR Rate calculated as of the most recent Interest Rate Reset Date.

 

2.7. [Reserved]

 

.

 

2.8. Fees; Certain Expenses.

 

(a) 

 

(a) On the Closing Date, CPS shall pay each Lender its Pro Rata Share of the Upfront Fee.

 

(b) On the Closing Date, CPS shall pay to the Custodian and Backup Servicer 1/3 (one-third) of the upfront fees due and payable to the Custodian and the Backup Servicer on the Closing Date.  On the Closing Date, each Lender shall pay its Pro Rata Share of the remaining upfront fees due and payable to the Custodian and the Backup Servicer on the Closing Date.  Each of CPS and each Lender shall pay its own costs and expenses, including the costs and expenses of legal counsel, incurred by it prior to the Closing Date (subject to, with respect to any Lenders, any agreement between or among such Lenders).

 

2.9. Call Protection.

 

(a) The Borrower and CPS may not prepay or repay any Term Loan in whole or in part except with Collections in the ordinary course of business and through the application of proceeds as set forth in Section 2.11 or Section 2.13.

 

2.10. Mandatory Prepayments.

 

(a) Insurance Proceeds.  No later than the first Business Day following the date of receipt by the Borrower, or Collateral Agent as loss payee, of any Net Insurance Proceeds, the Borrower shall prepay the Term Loans in an aggregate amount equal to such Net Insurance Proceeds.

 

(b) Issuance of Equity Securities.  On the date of receipt by the Borrower of any Cash proceeds from the issuance of any Capital Stock of the Borrower other than (a) issuances of Capital Stock of the Borrower to CPS or (b) for purposes approved in writing by Lead Agents, the Borrower shall prepay the Term Loans in an aggregate amount equal to 100% of such proceeds, net of underwriting discounts and commissions and other reasonable costs and expenses associated therewith, including reasonable legal fees and expenses.

 

(c) Issuance of Debt.  On the date of receipt by the Borrower of any Cash proceeds from the incurrence of any Indebtedness of the Borrower (other than with respect to any Indebtedness permitted to be incurred pursuant to Section 6.1), the Borrower shall prepay the Term Loans in an aggregate amount equal to 100% of such proceeds, net of underwriting discounts and commissions and other reasonable costs and expenses associated therewith, in each case, paid to non-Affiliates, including reasonable legal fees and expenses.

 

(d) Tax Refunds.  On the date of receipt by the Borrower of any tax refunds, the Borrower shall prepay the Term Loans in the amount of such tax refunds.

 

(e) Prepayment Certificate.  Concurrently with any prepayment of the Term Loans pursuant to clauses (a)-(d) of this Section 2.10, the Borrower shall deliver, or cause to be delivered, to the Administrative Agent and the Lead Agents a certificate of an Authorized Officer demonstrating the calculation of the amount of the applicable net proceeds.

 

2.11. Payments During a Tier 2 Event of Default

 

.  Upon (x) the occurrence and during the continuance of a Tier 2 Event of Default or (y) the occurrence of a Tier 1 Event of Default and the exercise by the Lenders of the Buyout Option, on each Settlement Date (a) all payments made hereunder and under the other Credit Documents (including in respect of proceeds from any Collateral) and (b) all amounts on deposit in the Collection Account and any income and gains from investment of funds in the Collection Account that accrued during the immediately preceding Collection Period shall be applied by the Controlled Account Bank at the written direction of the Collateral Agent as follows (subject to Section 2.14(h)):

 

(a) First, to the payment of, and in the same priority as, items (a) through (e) in Section 2.13 below;

 

(b) Second, to the Administrative Agent, for the ratable benefit of the Lenders and, if applicable, the Indemnitees, until the outstanding principal balance on the Term Loans is reduced to zero, all remaining Obligations are paid in full and all Indemnified Liabilities, if any, owing to any Indemnitee are paid in full;

 

(c) Third, unless the Buyout Option has been exercised by the Lenders, to CPS to pay an amount equal to the Preferred Return on the Unreturned Capital Contribution Amount for the relevant Collection Period;

 

(d) Fourth, unless the Buyout Option has been exercised by the Lenders, to CPS, until the Unreturned Capital Contribution Amount equals $0;

 

(e) Fifth, to the payment of item (j) in Section 2.13 below; and

 

(f) Sixth, unless the Buyout Option has been exercised by the Lenders, 80% to the Administrative Agent, for the ratable benefit of the Lenders and 20% to CPS.

 

2.12. Collection Account and Amounts.

 

(a) On or prior to the date hereof, the Borrower shall cause to be established and maintained, (i) a securities account at the Controlled Account Bank in the name of the Borrower designated as the Collection Account as to which the Collateral Agent for the benefit of the Lenders has control over such account within the meaning of Section 9-106 of the UCC pursuant to the Controlled Account Control Agreement, and (ii) deposit account at the Lockbox Account Bank in the name of the Borrower designated as the Lockbox Account (together with the Collection Account, the “Controlled Accounts,” and each a “Controlled Account”)as to which the Collateral Agent has control over such account for the benefit of the Lenders within the meaning of Section 9-104(a)(2) of the UCC pursuant to the Lockbox Account Control Agreement.

 

(b) So long as no Event of Default has occurred and shall be continuing, the Borrower or the Servicer shall be permitted to direct the investment of the funds from time to time held in the Collection Account in Permitted Investments and to sell or liquidate such Permitted Investments and reinvest proceeds from such sale or liquidation in other Permitted Investments (but none of the Collateral Agent, the Administrative Agent, or the Lenders shall have liability whatsoever in respect of any failure by the Controlled Account Bank to do so), with all such proceeds and reinvestments to be held in the Collection Account; provided, however, that the maturity of the Permitted Investments on deposit in the Collection Account shall be no later than the Business Day immediately preceding the date on which such funds are required to be withdrawn therefrom pursuant to this Agreement; and, provided further, that the Borrower shall remit into the Collection Account an amount equal to any losses realized on Permitted Investments contained therein.  No Permitted Investment shall be liquidated at a loss at the direction of the Borrower except to the extent necessary to make a required payment as described herein. All income and gains from the investment of funds in the Collection Account shall be retained in the Collection Account from which they were derived, until the next Settlement Date, at which time such income and gains shall be applied in accordance with Section 2.11 or Section 2.13, as the case may be.  As between the Borrower and the Collateral Agent, the Borrower shall treat all income, gains and losses from the investment of amounts in the Collection Account as its income or loss for federal, state and local income tax purposes.

 

(c) The Control Agreements will provide that all funds in the Lockbox will be swept daily into the Collection Account.

 

2.13. Application of Collections.

 

  Except if (x) a Tier 2 Event of Default has occurred and is continuing or (y) a Tier 1 Event of Default has occurred and the Lenders have exercised the Buyout Option, the Collateral Agent will instruct the Controlled Account Bank (or will instruct the Interim Servicer during the Interim Servicing Period, or thereafter the Servicer, to instruct the Controlled Account Bank pursuant to the Interim Servicing Agreement or the Servicing Agreement, as applicable), on each Settlement Date, to transfer collected funds held by the Controlled Account Bank in the Collection Account, in the following amounts and priority (subject to Section 2.14(h)) in accordance with the Monthly Servicing Report:

 

(a) on a pari passu basis, (1) to the Custodian, the Custodian Fees and Expenses accrued and unpaid as of the last day of the preceding month, (2) to the Backup Servicer, the Backup Servicing Fees and reimbursable expenses (including, without limitation, any transition costs) of the Backup Servicer accrued and unpaid as of the last day of the preceding month, and (3) to the Controlled Account Bank, the Controlled Account Bank Fees accrued and unpaid as of the last day of the preceding month;

 

(b) to the Servicer or the Interim Servicer, as applicable, any unpaid Servicing Fees;

 

(c) to the Administrative Agent, to pay any costs or fees due to the Administrative Agent, the Collateral Agent or the Lead Agents;

 

(d) to the Administrative Agent, for the ratable benefit of the Lenders, to pay any accrued but unpaid interest, fees and expenses in connection with this Agreement and any other Credit Document;

 

(e) to CPS, in an amount equal to payments made by CPS under the CPS Guaranty in respect of its indemnification obligations under the Interim Servicing Agreement, provided, that such indemnification obligation did not arise from any act or omission of CPS;

 

(f) to CPS, to pay an amount equal to the Preferred Return on the Unreturned Capital Contribution Amount for the relevant Collection Period;

 

(g) to the Administrative Agent, for the ratable benefit of the Lenders and, if applicable, the Indemnitees, to repay principal and all remaining Obligations (other than the obligation to pay amounts to the Lenders pursuant to Section 2.13(k)) and to pay any Indemnified Liabilities, if any, owing to any Indemnitee until the Term Loans, such Obligations and such Indemnified Liabilities are repaid or paid in full and;

 

(h) to the extent not paid pursuant to clause (f) above, to CPS, to pay any accrued but unpaid Preferred Return on the Unreturned Capital Contribution Amount;

 

(i) to CPS, until the Unreturned Capital Contribution Amount equals $0;

 

(j) on a pari passu basis, (1) to the Custodian, any other amounts payable to the Custodian in its capacity as Custodian pursuant to this Agreement or the Custodial Agreement to the extent unpaid by the Borrower and not covered under item (a) above, (2) to the Backup Servicer, any other amounts payable to the Backup Servicer pursuant to this Agreement or the Backup Servicing Agreement to the extent unpaid by the Borrower and not covered under item (a) above, and (3) to the Controlled Account Bank, any other amounts payable to the Controlled Account Bank pursuant to this Agreement or the Control Agreements to the extent unpaid by the Borrower hereunder and not covered under item (a) above; and

 

(k) 80% to the Administrative Agent, for the ratable benefit of the Lenders and 20% to CPS.

 

2.14. General Provisions Regarding Payments.

 

(a) All payments by the Borrower of principal, interest, fees and other Obligations shall be made in Dollars in immediately available funds, without defense, recoupment, setoff or counterclaim, free of any restriction or condition, and delivered to the Administrative Agent, for the account of the Lenders, not later than 3:00 p.m. (New York City time) on the date due via wire transfer of immediately available funds to account number  ###-###-#### maintained by the Administrative Agent with Bank of America (ABA No. 026009593) in New York City (or at such other location or bank account within the City and State of New York as may be designated by the Administrative Agent from time to time); funds received by the Administrative Agent after that time on such due date shall be deemed to have been paid by the Borrower on the next Business Day (except to the extent such delay in payment results solely from the Controlled Account Bank's failure to distribute funds on deposit in the Collection Account and available for distribution as of 3:00 p.m. on such Business Day in accordance with Section 2.11 or 2.13).

 

(b) All payments in respect of the principal amount of any Term Loan (other than voluntary or mandatory prepayments of any Term Loan as provided in Section 2.5(c)) shall be accompanied by payment of accrued interest on the principal amount being repaid or prepaid.

 

(c) The Administrative Agent shall promptly distribute to each Lender at such address or via wire transfer as such Lender shall indicate in writing, such Lender's applicable Pro Rata Share of all payments and prepayments of principal and interest due hereunder, together with all other amounts due with respect thereto, including, without limitation, all fees payable with respect thereto, to the extent received by the Administrative Agent.

 

(d) Notwithstanding the foregoing provisions hereof, if any Affected Lender makes Base Rate Loans in lieu of its Pro Rata Share of any LIBOR Rate Loans, the Administrative Agent shall give effect thereto in apportioning payments received thereafter.

 

(e) Subject to the proviso set forth in the definition of “Interest Period,” whenever any payment to be made hereunder shall be stated to be due on a day that is not a Business Day, such payment shall be made on the next succeeding Business Day and such extension of time shall be included in the computation of the payment of interest hereunder.

 

(f) The Borrower hereby authorizes the Administrative Agent to charge the Borrower's accounts with the Administrative Agent or any of its Affiliates in order to cause timely payment to be made to the Administrative Agent of all principal, interest, fees and expenses due hereunder (subject to sufficient funds being available in its accounts for that purpose).

 

(g) The Administrative Agent shall give prompt telephonic notice to the Borrower and each Lender (confirmed in writing) if any payment is not made in conformity with this Section 2.14.  Interest shall continue to accrue on any principal as to which a non-conforming payment is made until such funds become available funds (but in no event less than the period from the date of such payment to the next succeeding applicable Business Day) from the date such amount was due and payable until the date such amount is paid in full.

 

(h) The Collateral Agent will instruct the Controlled Account Bank (or will instruct the Interim Servicer during the Interim Servicing Period, or thereafter the Servicer, to instruct the Controlled Account Bank pursuant to the Interim Servicing Agreement or the Servicing Agreement, as applicable) to transfer collected funds held by the Controlled Account Bank in the Collection Account to Fireside to the extent of any amounts finally determined to be owed to Fireside by the Borrower pursuant to clause (ii) of Section 3.(1)(a) of the Purchase Agreement.

 

2.15. Ratable Sharing

 

.  The Lenders hereby agree among themselves that, except as otherwise provided in the Credit Documents, with respect to amounts realized from the exercise of rights with respect to Liens on the Collateral, if any of them shall, whether by voluntary payment (other than a voluntary prepayment of Term Loans made and applied in accordance with the terms hereof), through the exercise of any right of set-off or banker’s lien, by counterclaim or cross action or by the enforcement of any right under the Credit Documents or otherwise, or as adequate protection of a deposit treated as cash collateral under the Bankruptcy Code, receive payment or reduction of a proportion of the aggregate amount of principal, interest, fees and other amounts then due and owing to such Lender hereunder or under the other Credit Documents (collectively, the “Aggregate Amounts Due” to such Lender) which is greater than the proportion received by any other Lender in respect of the Aggregate Amounts Due to such other Lender, then the Lender receiving such proportionately greater payment shall (a) notify the Administrative Agent and each other Lender of the receipt of such payment and (b) apply a portion of such payment to purchase participations (which it shall be deemed to have purchased from each seller of a participation simultaneously upon the receipt by such seller of its portion of such payment) in the Aggregate Amounts Due to the other Lenders so that all such recoveries of Aggregate Amounts Due shall be shared by all Lenders in their proportions of Aggregate Amounts Due; provided, if all or part of such proportionately greater payment received by such purchasing Lender is thereafter recovered from such Lender upon the bankruptcy or reorganization of the Borrower or otherwise, those purchases shall be rescinded and the purchase prices paid for such participations shall be returned to such purchasing Lender ratably to the extent of such recovery, but without interest.  The Borrower expressly consents to the foregoing arrangement and agrees that any holder of a participation so purchased may exercise any and all rights of banker’s lien, set-off or counterclaim with respect to any and all monies owing by the Borrower to that holder with respect thereto as fully as if that holder were owed the amount of the participation held by that holder.

 

2.16. Making or Maintaining LIBOR Rate Loans.

 

(a) Inability to Determine Applicable Interest Rate.  In the event that the Administrative Agent shall have reasonably determined in good faith (which determination shall be final and conclusive and binding upon all parties hereto), on any Interest Rate Reset Date with respect to any LIBOR Rate Loans, that by reason of circumstances affecting the London interbank market adequate and fair means do not exist for ascertaining the interest rate applicable to such LIBOR Rate Loans on the basis provided for in the definition of Adjusted LIBOR Rate (“LIBOR Unavailability”), the Administrative Agent shall on such date give notice (by telefacsimile or by telephone confirmed in writing) to the Borrower and each Lender of such determination, whereupon (i) no Term Loans may be made as LIBOR Rate Loans until such time as the Administrative Agent notifies the Borrower and the Lenders that the circumstances giving rise to such notice no longer exist, (ii) the Borrower shall have the right to rescind any Funding Notice previously given by the Borrower with respect to the Term Loans in respect of which such determination was made by giving notice (by telefacsimile or by telephone confirmed in writing) to the Administrative Agent of such rescission on the date on which the Administrative Agent gives notice of its determination as described above (which notice of rescission the Administrative Agent shall promptly transmit to the Lenders) and (iii) all then-existing Term Loans shall convert automatically to Base Rate Loans at the end of the then-applicable Interest Period if such circumstances still exist at such time.  At such time as the Administrative Agent shall notify the Borrower and the Lenders that any period of LIBOR Unavailability has ended, on the first day of the Interest Period next following such determination, all Base Rate Loans carried by the Lenders as a consequence of this Section 2.16(a) shall automatically convert to LIBOR Rate Loans having an initial Interest Period commencing on the first day of such Interest Period.

 

(b) Illegality or Impracticability of LIBOR Rate Loans.  In the event that on any date any Lender shall have reasonably determined in good faith (which determination shall be final and conclusive and binding upon all parties hereto but shall be made only after consultation with the Borrower and the Administrative Agent) that the making or maintaining of its LIBOR Rate Loans (i) has become unlawful after the date hereof as a result of compliance by such Lender in good faith with any law, treaty, governmental rule, regulation, guideline or order (or would conflict with any such treaty, governmental rule, regulation, guideline or order not having the force of law even though the failure to comply therewith would not be unlawful), or (ii) has become impracticable, as a result of contingencies occurring after the date hereof which materially and adversely affect the London interbank market or the position of such Lender in that market, then, and in any such event, such Lender shall be an “Affected Lender” and it shall on that day give notice (by telefacsimile or by telephone confirmed in writing) to the Borrower and the Administrative Agent of such determination (which notice the Administrative Agent shall promptly transmit to each other Lender).  Thereafter (1) the obligation of the Affected Lender to make Term Loans as LIBOR Rate Loans shall be suspended until such notice shall be withdrawn by the Affected Lender at such time as the circumstances giving rise to such notice no longer exist, (2) to the extent such determination by the Affected Lender relates to a LIBOR Rate Loan then being requested by the Borrower pursuant to a Funding Notice, the Affected Lender shall make such Term Loan (or continue such Term Loan) as a Base Rate Loan, (3) the Affected Lender's obligation to maintain its outstanding LIBOR Rate Loans (the “Affected Loans”) shall be terminated at the earlier to occur of the expiration of the Interest Period then in effect with respect to the Affected Loans or when required by law, and (4) the Affected Loans shall automatically convert into Base Rate Loans on the date of such termination.  Notwithstanding the foregoing, to the extent a determination by an Affected Lender as described above relates to a LIBOR Rate Loan then being requested by the Borrower pursuant to a Funding Notice, the Borrower shall have the option, notwithstanding anything to the contrary in Section 2.1(b)(ii), to rescind such Funding Notice as to all Lenders by giving notice (by telefacsimile or by telephone confirmed in writing) to the Administrative Agent of such rescission on the date on which the Affected Lender gives notice of its determination as described above (which notice of rescission the Administrative Agent shall promptly transmit to each Lender).  Except as provided in the immediately preceding sentence, nothing in this Section 2.16(b) shall affect the obligation of any Lender other than an Affected Lender to make or maintain Term Loans as LIBOR Rate Loans in accordance with the terms hereof.

 

(c) Compensation for Breakage or Non-Commencement of Interest Periods.  The Borrower shall compensate each Lender, upon written request by such Lender (which request shall set forth the basis for requesting such amounts), for all reasonable losses, expenses and liabilities (including any interest paid or calculated to be due and payable by such Lender to lenders of funds borrowed by it to make or carry its LIBOR Rate Loans and any loss, expense or liability sustained by such Lender in connection with the liquidation or re-employment of such funds but excluding loss of anticipated profits) which such Lender would sustain: (i) if for any reason (other than a default by such Lender) a borrowing of any LIBOR Rate Loan does not occur on a date specified therefor in a Funding Notice; (ii) if any prepayment or other principal payment of any of its LIBOR Rate Loans occurs on any day other than the last day of an Interest Period applicable to that Term Loan (whether voluntary, mandatory, automatic, by reason of acceleration, or otherwise) or on the Maturity Date; or (iii) if any prepayment of any of its LIBOR Rate Loans is not made on any date specified in a notice of prepayment given by the Borrower.

 

(d) Booking of LIBOR Rate Loans.  Any Lender may make, carry or transfer LIBOR Rate Loans at, to, or for the account of any of its branch offices or the office of an Affiliate of such Lender.

 

2.17. Increased Costs; Capital Adequacy.

 

(a) Compensation For Increased Costs and Taxes.  Subject to the provisions of Section 2.18 (which shall be controlling with respect to the matters covered thereby), in the event that any Lender shall determine (which determination shall, absent manifest error, be final and conclusive and binding upon all parties hereto) that any law, treaty or governmental rule, regulation or order, or any change therein or in the interpretation, administration or application thereof (including the introduction of any new law, treaty or governmental rule, regulation or order), or any determination of a court or governmental authority, in each case that becomes effective after the date hereof, or compliance by such Lender with any guideline, request or directive issued or made after the date hereof by any central bank or other governmental or quasi-governmental authority (whether or not having the force of law): (i) subjects such Lender (or its applicable lending office) to any additional Tax (other than any Tax on the overall net income of such Lender) with respect to this Agreement or any of the other Credit Documents or any of its obligations hereunder or thereunder or any payments to such Lender (or its applicable lending office) of principal, interest, fees or any other amount payable hereunder; (ii) imposes, modifies or holds applicable any reserve (including any marginal, emergency, supplemental, special or other reserve), special deposit, compulsory loan, FDIC insurance or similar requirement against assets held by, or deposits or other liabilities in or for the account of, or advances or loans by, or other credit extended by, or any other acquisition of funds by, any office of such Lender (other than any such reserve or other requirements); or (iii) imposes any other condition (other than with respect to a Tax matter) on or affecting such Lender (or its applicable lending office) or its obligations hereunder or the London interbank market; and the result of any of the foregoing is to increase the cost to such Lender of agreeing to make, making or maintaining Term Loans hereunder or to reduce any amount received or receivable by such Lender (or its applicable lending office) with respect thereto; then, in any such case, the Borrower shall pay to such Lender within ten (10) Business Days of receipt of the statement referred to in the next sentence, such additional amount or amounts (in the form of an increased rate of, or a different method of calculating, interest or otherwise as such Lender in its sole discretion shall determine) as may be necessary to compensate such Lender for any such increased cost or reduction in amounts received or receivable hereunder.  Such Lender shall deliver to the Borrower (with a copy to the Administrative Agent and each Lead Agent) a written statement, setting forth in reasonable detail the basis for calculating the additional amounts owed to such Lender under this Section 2.17(a), which statement shall be conclusive and binding upon all parties hereto absent manifest error.

 

(b) Capital Adequacy Adjustment.  In the event that any Lender shall have determined that the adoption, effectiveness, phase-in or applicability after the Closing Date of any law, rule or regulation (or any provision thereof) regarding capital adequacy, or any change therein or in the interpretation or administration thereof by any Governmental Authority, central bank or comparable agency charged with the interpretation or administration thereof, or compliance by any Lender (or its applicable lending office) with any guideline, request or directive regarding capital adequacy (whether or not having the force of law) of any such Governmental Authority, central bank or comparable agency, has or would have the effect of reducing the rate of return on the capital of such Lender or any corporation controlling such Lender as a consequence of, or with reference to, such Lender's Term Loans or Term Loan Commitments or participations therein or other obligations hereunder with respect to the Term Loans to a level below that which such Lender or such controlling corporation could have achieved but for such adoption, effectiveness, phase-in, applicability, change or compliance (taking into consideration the policies of such Lender or such controlling corporation with regard to capital adequacy), then from time to time, within ten (10) Business Days after receipt by the Borrower from such Lender of the statement referred to in the next sentence, the Borrower shall pay to such Lender such additional amount or amounts as will compensate such Lender or such controlling corporation on an after-tax basis for such reduction. Such Lender shall deliver to the Borrower (with a copy to the Administrative Agent and each Lead Agent) a written statement, setting forth in reasonable detail the basis for calculating the additional amounts owed to such Lender under this Section 2.17(b), which statement shall be conclusive and binding upon all parties hereto absent manifest error.

 

(c) Borrower Rights.  If any Lender other than a Lead Agent demands payment with respect to amounts owed under Section 2.17(a) or (b), the Borrower shall have the right, if no Default or Event of Default has occurred and is then continuing, within ninety (90) days after receipt of such demand, to remove such Lender (the “Affected Person”) and to designate another lender (the “Replacement Person”) reasonably acceptable to the Lead Agents to purchase the Affected Person’s outstanding Term Loans and to assume the Affected Person’s obligations under this Agreement; provided that increased costs incurred by such Lender prior to the date of its replacement shall have been paid as provided herein.  The Affected Person agrees to sell to the Replacement Person its outstanding Loans (at par, with accrued interest through the date of purchase, in immediately available funds) and to delegate to the Replacement Person its obligations to the Borrower under this Agreement.  Upon such sale and delegation by the Affected Person and the purchase and assumption by the Replacement Person, and compliance with the provisions of Section 9.6, the Affected Person shall cease to be a Lender hereunder and the Replacement Person shall become a Lender under this Agreement.  Each Affected Person shall continue to be entitled to receive from the Borrower its share of interest, fees, costs and other sums which have not been assigned by the Affected Person to the Replacement Person.

 

2.18. Taxes; Withholding, etc.

 

(a) Payments to Be Free and Clear.  All sums payable by each Credit Party hereunder and under the other Credit Documents shall (except to the extent required by law) be paid free and clear of, and without any deduction or withholding on account of, any Tax (other than a Tax on the overall net income of any Lender) imposed, levied, collected, withheld or assessed by or within the United States of America or any political subdivision in or of the United States of America or any other jurisdiction from or to which a payment is made by or on behalf of a Credit Party or by any federation or organization of which the United States of America or any such jurisdiction is a member at the time of payment.

 

(b) Withholding of Taxes.  If a Credit Party or any other Person is required by law to make any deduction or withholding on account of any such Tax from any sum paid or payable by any Credit Party in respect of interest paid or payable by the Borrower to the Administrative Agent or any Lender under any of the Credit Documents: (i) the Borrower shall notify the Administrative Agent as soon as practicable of any such requirement or any change in any such requirement as soon as the Borrower becomes aware of it; (ii) the Borrower shall pay any such Tax before the date on which penalties attach thereto, such payment to be made (if the liability to pay is imposed on any Credit Party) for its own account or (if that liability is imposed on the Administrative Agent or such Lender, as the case may be) on behalf of and in the name of the Administrative Agent or such Lender; (iii) the sum payable by any Credit Party in respect of which the relevant deduction, withholding or payment is required shall be increased to the extent necessary to ensure that, after the making of that deduction, withholding or payment, the Administrative Agent or such Lender, as the case may be, receives on the due date a net sum equal to what it would have received had no such deduction, withholding or payment been required or made; and (iv) within thirty (30) days (or as soon as practicable thereafter) after paying any sum from which it is required by law to make any deduction or withholding, and within thirty (30) days (or as soon as practicable thereafter) after the due date of payment of any Tax which it is required by clause (ii) above to pay, the Borrower shall use commercially reasonable efforts to deliver to the Administrative Agent evidence satisfactory to the other affected parties of such deduction, withholding or payment and of the remittance thereof to the relevant taxing or other authority; provided, no such additional amount shall be required to be paid to any Lender under clause (iii) above (and in the case of any payment required under clause (ii) above, such payment shall be treated as a payment under the Credit Documents to the Borrower, the Administrative Agent or the Lender(s) as the case may be) except to the extent that any change after the date hereof in any such requirement for a deduction, withholding or payment as is mentioned therein shall result in an increase in the rate of such deduction, withholding or payment from that in effect at the date hereof, in respect of payments to such Lender.

 

(c) The Borrower shall not be required to pay any additional amounts to any Lender in respect of United States federal withholding taxes pursuant to Section 2.18(b) above if the obligation to pay such additional amounts would not have arisen but for a failure by such Lender to comply with the provisions of Section 2.18(d) hereof.  In the event the Borrower has actual knowledge that it is required to, or there arises, in the Borrower’s reasonable opinion, a substantial likelihood that the Borrower will be required to, pay an increased amount or otherwise indemnify such Lender for or on account of any Taxes pursuant to Section 2.18(b), the Borrower shall promptly notify such Lender of the nature of such Taxes and shall furnish such information to such Lender as it may reasonably request.  In the event the Borrower provides the notice described in the previous sentence, such Lender shall consult with the Borrower in good faith to determine what action may be required to avoid or reduce such Taxes and shall use reasonable efforts to avoid or reduce such Taxes, provided that no action shall be required to be taken that would be disadvantageous to such Lender and would result in significantly increased cost to such Lender.

 

(d) If any Lender is not incorporated under the laws of the United States, any state thereof or the District of Columbia, prior to the first payment to such Lender under this Agreement, such Lender shall deliver to the Borrower and Administrative Agent (i) two duly completed copies of United States Internal Revenue Service Form W-8BEN or Form W-8ECI (or applicable successor form and any related forms as may from time to time be adopted to document a claim to which such form relates), and (ii) a duly completed copy of United States Internal Revenue Service Form W-8 or W-9 (or applicable successor form and any related forms as may from time to time be adopted to document a claim to which such form relates).  Such Lender shall certify that (x) in the case of any form provided pursuant to clause (i) of the preceding sentence it is entitled to receive payments hereunder without deduction or withholding of any United States federal income taxes and (y) in the case of any form provided pursuant to clause (ii) of the preceding sentence it is entitled to receive payments hereunder without deduction or withholding of any United States federal backup withholding taxes.  Such Lender also agrees to deliver further copies of said Form W-8BEN, W-8ECI or W-9 (or applicable successor form and any related forms as may from time to time be adopted to document a claim to which such form relates), and any related certification as described in the preceding sentence, as the case may be, (i) on or before the date that any such form previously provided expires or becomes obsolete, (ii) after the occurrence of any event requiring a change in the most recent form previously provided unless a change in a treaty, law or regulation has occurred prior to the date on which delivery would otherwise be required that renders all such forms inapplicable or that would prevent such Lender from duly completing and delivering any such form with respect to it and such Lender so advises the Borrower and Administrative Agent and (iii) upon reasonable request of the Borrower and Administrative Agent from time to time.

 

2.19. Obligation to Mitigate.

 

(a) Each Lender agrees that, as promptly as practicable after the officer of such Lender responsible for administering its Term Loans becomes aware of the occurrence of an event or the existence of a condition that would cause such Lender to become an Affected Lender or that would entitle such Lender to receive payments under Section 2.16, 2.17 or 2.18, it will, to the extent not inconsistent with the internal policies of such Lender and any applicable legal or regulatory restrictions, use commercially reasonable efforts to (a) make, issue, fund or maintain its Credit Extensions, including any Affected Loans, through another office of such Lender, or (b) take such other measures as such Lender may deem reasonable if, as a result thereof, the circumstances which would cause such Lender to be an Affected Lender would cease to exist or the additional amounts which would otherwise be required to be paid to such Lender pursuant to Section 2.16, 2.17 or 2.18 would be materially reduced and if, as determined by such Lender in its sole discretion, the making, issuing, funding or maintaining of such Term Loan Commitments or Term Loans through such other office or in accordance with such other measures, as the case may be, would not otherwise adversely affect such Term Loan Commitments or Term Loans or the interests of such Lender; provided, such Lender will not be obligated to utilize such other office pursuant to this Section 2.19 unless the Borrower agrees to pay all reasonable, documented, out-of-pocket incremental expenses incurred by such Lender as a result of utilizing such other office as described above.  A certificate as to the amount of any such expenses payable by the Borrower pursuant to this Section 2.19 (setting forth in reasonable detail the basis for requesting such amount) submitted by such Lender to the Borrower (with a copy to the Administrative Agent) shall be conclusive absent manifest error.

 

(b) If the Administrative Agent or any Lender determines, in its sole and reasonable discretion, that it has received a refund of any Taxes as to which it has been indemnified by the Borrower or with respect to which the Borrower has paid additional amounts pursuant to Section 2.18, it shall pay to the Borrower an amount equal to such refund, as determined in good faith by the Administrative Agent or such Lender in its sole and reasonable discretion (but only to the extent of indemnity payments made, or additional amounts paid, by the Borrower under Section 2.18 with respect to the Taxes giving rise to such refund), net of all out-of-pocket expenses incurred by the Administrative Agent or such Lender, as the case may be, and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund); provided that the Borrower, upon the request of the Administrative Agent or such Lender, agrees to repay the amount paid over to the Borrower (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) to the Administrative Agent or such Lender in the event the Administrative Agent or such Lender is required to repay such refund to such governmental authority.  This subsection shall not be construed to require the Administrative Agent or such Lender to make available its tax returns (or any other information relating to its taxes that it deems confidential) to the Borrower or any other Person.

 

2.20. Removal or Replacement of a Lender

 

2.21. .

 

Anything contained herein to the contrary notwithstanding, in the event that: (a) (i) any Lender other than a Lead Agent (an “Increased-Cost Lender”) shall give notice to the Borrower that such Lender is an Affected Lender or that such Lender is entitled to receive payments under Section 2.16, 2.17(c) or 2.18, (ii) the circumstances which have caused such Lender to be an Affected Lender or which entitle such Lender to receive such payments shall remain in effect, and (iii) such Lender shall fail to withdraw such notice within five (5) Business Days after the Borrower's request for such withdrawal; or (b) in connection with any proposed amendment, modification, termination, waiver or consent with respect to any of the provisions hereof as contemplated by Section 9.5(b), the consent of the Administrative Agent, Lead Agents and Requisite Lenders shall have been obtained but the consent of one (1) or more of such other Lenders (each a “Non-Consenting Lender”) whose consent is required shall not have been obtained; then, with respect to each such Increased-Cost Lender or Non-Consenting Lender (the “Terminated Lender”), the Administrative Agent (y) shall, if requested by the Borrower in writing, which notice shall identify a Replacement Lender (as defined below) and (z) may (but in the case of an Increased-Cost Lender, only after receiving written request from the Borrower to remove such Increased-Cost Lender), in each case, by giving written notice to the Borrower and any Terminated Lender of the Borrower's or the Administrative Agent’s election to do so, instruct such Terminated Lender (and such Terminated Lender hereby irrevocably agrees) to assign its outstanding Term Loans and its Term Loan Commitments, if any, in full to one (1) or more Eligible Assignees designated by the Borrower or the Administrative Agent, as the case may be, (each a “Replacement Lender”) in accordance with, and subject to the provisions of, Section 9.6 and such Terminated Lender shall pay any fees payable thereunder in connection with such assignment; provided, (1) on the date of such assignment, the Replacement Lender shall pay to such Terminated Lender an amount equal to the principal of, and all accrued interest on, all outstanding Term Loans of such Terminated Lender; (2) on the date of such assignment, the Borrower shall pay any amounts payable to such Terminated Lender pursuant to Section 2.17(c) or 2.18; and (3) in the event such Terminated Lender is a Non-Consenting Lender, each Replacement Lender shall consent, at the time of such assignment, to each matter in respect of which such Terminated Lender was a Non-Consenting Lender.  Upon the prepayment of all amounts owing to any Terminated Lender and the termination of such Terminated Lender’s Term Loan Commitments, if any, such Terminated Lender shall no longer constitute a “Lender” for purposes hereof; provided, any rights of such Terminated Lender to indemnification hereunder shall survive as to such Terminated Lender.

 

SECTION 3.

CONDITIONS PRECEDENT

 

3.1. Closing Date

 

.  The obligation of each Lender to make a Term Loan on the Closing Date is subject to the satisfaction, or waiver in accordance with Section 9.5, of the following conditions on or before the Closing Date:

 

(a) Credit Documents.  The Administrative Agent shall have received copies of each Credit Document originally executed and delivered by each applicable Credit Party.

 

(b) Organizational Documents; Incumbency.  The Administrative Agent shall have received copies of (i) each Organizational Document executed and delivered by each Credit Party, as applicable, and, to the extent applicable, certified as of a recent date by the appropriate governmental official, each dated the Closing Date or a recent date prior thereto, including, but not limited to an amended and restated limited liability company operating agreement of the Borrower, in substantially the form of the Amended and Restated Limited Liability Company Operating Agreement of Page Six Funding, LLC delivered in connection with the Page Six Credit Agreement, with such modifications as the parties hereto agree to take into account the Tax Matters Letter; (ii) signature and incumbency certificates of the officers of such Person executing the Credit Documents to which it is a party; (iii) resolutions of the board of directors, board of managers or similar governing body of each Credit Party approving and authorizing the execution, delivery and performance of this Agreement and the other Credit Documents to which it is a party or by which it or its assets may be bound as of the Closing Date, certified as of the Closing Date by its secretary or an assistant secretary as being in full force and effect without modification or amendment; (iv) a good standing certificate from the applicable Governmental Authority of each Credit Party's jurisdiction of incorporation, organization or formation, each dated a recent date prior to the Closing Date; and (v) such other documents as the Administrative Agent or the Lead Agents may reasonably request.

 

(c) Consummation of Transactions Contemplated by Related Agreements. The Administrative Agent shall have received a fully executed or conformed copy of each Related Agreement and any documents executed in connection therewith.  Each Related Agreement shall be in full force and effect, shall include terms and provisions reasonably satisfactory to the Lead Agents and no provision thereof shall have been modified or waived in any respect determined by the Lead Agents to be material, in each case without the consent of the Lead Agents.

 

(d) Consummation of transactions contemplated by the Transaction Agreements.

 

(i) Administrative Agent shall have received a fully executed copy of each Transaction Agreement and any documents or instruments executed or delivered in connection therewith.  Each Transaction Agreement shall be in full force and effect and no provision thereof shall have been modified or waived in any respect, without the consent of the Lead Agents.

 

(ii) All conditions set forth in the Purchase Agreement to the obligations of the Borrower under the Purchase Agreement shall have been satisfied or the fulfillment of such condition shall have been waived with the consent of the Lead Agents.

 

(iii) The acquisition by the Borrower of the Receivables shall become effective in accordance with the terms of the Purchase Agreement, subject only to the payment of the Purchase Price and the funding of the Term Loans on the terms and conditions hereof.

 

(iv) CPS shall have made a capital contribution to the Borrower in an amount not less than the Capital Contribution Amount.

 

(v) The closing of the acquisition of the Receivables by the Borrower under the Purchase Agreement shall have occurred by November 30, 2011.

 

(e) Governmental Authorizations and Consents.  Each Credit Party shall have obtained all Governmental Authorizations and all consents of other Persons, in each case that are necessary or advisable in connection with the transactions contemplated by the Credit Documents and each of the foregoing shall be in full force and effect and in form and substance reasonably satisfactory to the Lead Agents.  All applicable waiting periods shall have expired without any action being taken or threatened by any competent authority which would restrain, prevent or otherwise impose adverse conditions on the transactions contemplated by the Credit Documents or the financing thereof and no action, request for stay, petition for review or rehearing, reconsideration, or appeal with respect to any of the foregoing shall be pending, and the time for any applicable agency to take action to set aside its consent on its own motion shall have expired.

 

(f) Collateral.  In order to create in favor of the Collateral Agent, for the benefit of Secured Parties, a valid, perfected first priority Lien in the Collateral and in the Capital Stock of the Borrower, the Collateral Agent shall have received:

 

(i) evidence satisfactory to the Lead Agents of the compliance by the Borrower of its obligations under the Security Agreement and the other Collateral Documents (including, without limitation, their obligations to authorize or execute, as the case may be, and deliver UCC financing statements, originals of securities, instruments and chattel paper and any agreements governing deposit accounts as provided therein);

 

(ii) the results of a recent search of all effective UCC financing statements (or equivalent filings) made with respect to any personal or mixed property of the Borrower in Delaware together with copies of all such filings disclosed by such search, which shall be provided by CPS;

 

(iii) UCC termination statements (or similar documents) duly approved by all applicable Persons for filing in all applicable jurisdictions as may be necessary to terminate any effective UCC financing statements (or equivalent filings) disclosed in such search with respect to the Collateral;

 

(iv) evidence that the Borrower shall have taken or caused to be taken any other action, executed and delivered or caused to be executed and delivered any other agreement, document and instrument and made or caused to be made any other filing and recording (other than as set forth herein) reasonably required by the Collateral Agent or the Lead Agents, including, without limitation, the filing of a UCC financing statement in favor of the Borrower naming Fireside as debtor/seller therein;

 

(v) opinions of counsel (which counsel shall be reasonably satisfactory to the Collateral Agent) with respect to the creation and perfection of the security interests in favor of the Collateral Agent in such Collateral and such other matters governed by the laws of each jurisdiction in which the Borrower or the Collateral is located as the Lead Agents may reasonably request, in each case in form and substance reasonably satisfactory to the Lead Agents; and

 

(vi) evidence that any Indebtedness (other than the Obligations) secured by the Collateral has been paid in full.

 

(g) Financial Statements; Forecasts.  The Lead Agents shall have received from CPS (i) any historical financial information regarding the Credit Parties reasonably requested by the Lead Agents, (ii) any financial projections with respect to the Credit Parties reasonably requested by the Lead Agents and (iii) any other financial information regarding the Credit Parties as the Lead Agents may reasonably request.

 

(h) Evidence of Insurance.  The Collateral Agent shall have received a certificate from the Servicer's insurance broker, or other evidence satisfactory to it that all insurance required to be maintained hereunder and under the Servicing Agreement is in full force and effect, and the Lead Agents shall have completed its review of the insurance coverage for CPS and the Borrower and the results of such review shall be satisfactory to the Lead Agents.

 

(i) Opinions of Counsel to Credit Parties.  The Lead Agents shall have received originally executed copies of the favorable written opinions of Andrews Kurth LLP, counsel for CPS and the Borrower, and internal counsel for CPS and the Borrower, and as to such matters (including but not limited to non consolidation) as the Lead Agents may reasonably request, dated as of the Closing Date and otherwise in form and substance reasonably satisfactory to the Lead Agents and their counsel (and CPS and the Borrower hereby instruct counsel for CPS and the Borrower to deliver such opinions to the Agents and the Lenders).

 

(j) Upfront Fee.  CPS shall have paid to each Lender, pro rata based on their Term Loan Commitments, the Upfront Fee.

 

(k) Solvency Certificates.  On the Closing Date, the Administrative Agent shall have received Solvency Certificates from the Borrower and CPS dated as of the Closing Date and addressed to the Administrative Agent and Lenders, substantially in the form of Exhibit D-2, attesting that before and after giving effect to the consummation of the transactions contemplated by the Credit Documents, each of the Borrower and CPS, as the case may be, is Solvent.

 

(l) Closing Date Certificates.  Each of CPS and the Borrower shall have delivered to the Lead Agents an originally executed Closing Date Certificate, together with all attachments thereto.

 

(m) No Litigation.  There shall not exist any action, suit, investigation, litigation or proceeding or other legal or regulatory developments, pending or threatened in any court or before any arbitrator or Governmental Authority that, in the reasonable opinion of the Lead Agents, singly or in the aggregate, materially impairs the transactions contemplated by the Credit Documents, or that could reasonably be expected to have a Material Adverse Effect, except (i) as has been previously disclosed in writing to the Administrative Agent or in CPS’ public reports filed under the Exchange Act, provided that CPS has notified the Lead Agents of such filing or (ii) is identified in any Transaction Agreement.

 

(n) No Closing Date Material Adverse Change.  A Closing Date Material Adverse Change shall not have occurred.

 

(o) No New Information.  Neither of the Lead Agents shall have become aware, since the date of this Agreement, of any new information or other matters not previously disclosed to such Lead Agent relating to the Borrower, CPS or its Subsidiaries or the transactions contemplated herein which such Lead Agent, in its reasonable judgment, deems inconsistent in a material and adverse manner with the information or other matters previously disclosed to such Lead Agent relating to the Borrower, CPS or its Subsidiaries.

 

(p) Delivery of Receivable Files to Custodian; Collateral Receipt.  In accordance with the terms of the Custodial Agreement, the Borrower shall have delivered, or caused to be delivered, to the Custodian, the related Receivable File in each case to the extent received from Fireside.

 

(q) Service of Process.  On the Closing Date, the Administrative Agent shall have received evidence that each of CPS and the Borrower has appointed an agent in New York City for the purpose of service of process in New York City and such agent shall agree in writing to give the Administrative Agent notice of any resignation of such service agent or other termination of the agency relationship.

 

(r) Reserved.

 

(s) Servicing Report.  The Lead Agents shall have received a pro forma Monthly Servicing Report as of August 31, 2011, reasonably acceptable to the Lead Agents in a form substantially similar to Exhibit B to the Servicing Agreement.

 

(t) Reserved.

 

(u) Reserved.

 

(v) Reserved.

 

(w) Funding Notice.  The Lead Agents shall have received a fully executed and delivered Funding Notice two (2) Business Days prior to the Closing Date;

 

(x) Representations and Warranties.  As of the Closing Date, the representations and warranties made by the Credit Parties contained herein and in the other Credit Documents shall be true and correct in all respects on and as of the Closing Date to the same extent as though made on and as of that date, except to the extent such representations and warranties specifically relate to an earlier date, in which case such representations and warranties shall have been true and correct in all respects on and as of such earlier date and except for any failures of such representations or warranties to be true and correct that in the aggregate would not have a Material Adverse Effect;

 

(y) No Default; No Event of Default.  As of the Closing Date, after giving effect to such Term Loan and the other transactions contemplated hereby, no event shall have occurred and be continuing or would result from the consummation of the applicable Credit Extension that would constitute an Event of Default or a Default;

 

(z) Controlled Account; Controlled Account Control Agreements.  Lenders shall have a first priority perfected security interest in each Controlled Account and all proceeds thereof.  Administrative Agent shall have received Control Agreements in form and substance satisfactory to the Administrative Agent with respect to each Controlled Account;

 

(aa) Funding Termination Event.  A Funding Termination Event shall not have occurred; and

 

(bb) Delivery of Documents.  The Administrative Agent shall have received copies of each of the documents listed on Schedule 3.1(bb) originally executed and delivered by the parties thereto, where applicable.

 

Any Agent or Lead Agent shall be entitled, but not obligated to, request and receive, prior to the making of any Credit Extension, additional information reasonably satisfactory to the requesting party confirming the satisfaction of any of the foregoing if, in the good faith judgment of such Agent or Lead Agent such request is warranted under the circumstances.

 

Any Funding Notice shall be executed by an Authorized Officer of the Borrower and delivered to the Lead Agents.  In lieu of delivering a Funding Notice, the Borrower may give the Administrative Agent telephonic notice by the required time of any proposed borrowing; provided each such notice shall be promptly confirmed in writing by delivery of the applicable Funding Notice to the Lead Agents on or before the Closing Date.  Neither the Administrative Agent nor any Lender shall incur any liability to the Borrower in acting upon any telephonic notice referred to above that the Administrative Agent believes in good faith to have been given by a duly Authorized Officer of the Borrower.

 

SECTION 4.

REPRESENTATIONS AND WARRANTIES

 

In order to induce the Agents, the Lead Agents and the Lenders to enter into this Agreement and to make the Credit Extension to be made hereby, each of the Borrower and CPS (with respect to itself) represents and warrants, to each Agent, each Lead Agent and each Lender, and with respect to Sections 4.1 - 4.23 on the Closing Date that the following statements contained in Section 4.1, Section 4.2, Section 4.3, Section 4.4 (solely with respect to the execution and delivery of this Agreement), Section 4.5 (solely with respect to the execution and delivery of this Agreement) and Section 4.6 (solely with respect to this Agreement) are true and correct on the date hereof and the following statements are true and correct on the Closing Date (it being understood and agreed that the representations and warranties made on the Closing Date are deemed to be made concurrently with the consummation of the transactions contemplated by the Credit Documents):

 

4.1. Organization; Requisite Power and Authority; Qualification; Other Names

 

.  Each of the Borrower and CPS (a) is duly organized or formed, validly existing and in good standing under the laws of the State of its organization, (b) has all requisite power and authority to own and operate its properties, to carry on its business as now conducted and as proposed to be conducted, to enter into the Credit Documents to which it is a party, and to carry out the transactions contemplated thereby and fulfill its Obligations thereunder, (c) is qualified to do business and in good standing in every jurisdiction where its assets are located and wherever necessary to carry out its business and operations, except in jurisdictions where the failure to be so qualified or in good standing has not had, and could not be reasonably expected to have, a Material Adverse Effect.  The Borrower does not operate or do business under any assumed, trade or fictitious name.  The Borrower has no Subsidiaries.

 

4.2. Capital Stock and Ownership

 

.  CPS owns all of the outstanding and issued Capital Stock of the Borrower.  The Capital Stock of the Borrower has been duly authorized and validly issued and is fully paid and non-assessable.  There is no existing option, warrant, call, right, commitment or other agreement to which the Borrower is a party requiring, and there is no Capital Stock of the Borrower outstanding which upon conversion or exchange would require, the issuance by the Borrower of Capital Stock of the Borrower or other Securities convertible into, exchangeable for or evidencing the right to subscribe for or purchase, Capital Stock of the Borrower.

 

4.3. Due Authorization

 

.  The execution, delivery and performance of the Credit Documents to which each Credit Party is a party have been duly authorized by all necessary action on the part of such Credit Party.

 

4.4. No Conflict

 

.  The execution, delivery and performance by each Credit Party of the Credit Documents to which it is a party and the consummation of the transactions contemplated by the Credit Documents do not and will not (a) (i) violate any provision of any law or any governmental rule or regulation applicable to such Credit Party, (ii) violate any of the Organizational Documents of such Credit Party, or (iii) violate any order, judgment or decree of any court or other agency of government binding on such Credit Party; (b) conflict with, result in a breach of or constitute (with due notice or lapse of time or both) a default under any Contractual Obligation of such Credit Party, except as could not reasonably be expected to result in a Material Adverse Effect; (c) result in or require the creation or imposition of any Lien upon any of the properties or assets of such Credit Party (other than any Liens created under any of the Credit Documents in favor of the Collateral Agent, on behalf of the Secured Parties); or (d) require any approval of stockholders, members or partners or any approval or consent of any Person under any Contractual Obligation of such Credit Party, except for such approvals or consents which will be obtained on or before the Closing Date and disclosed in writing to the Lead Agents.

 

4.5. Governmental Consents

 

.  The execution, delivery and performance by each Credit Party of the Credit Documents to which it is a party and the consummation of the transactions contemplated by the Credit Documents do not and will not require any registration with, consent or approval of, or notice to, or other action to, with or by, any Governmental Authority, except for filings and recordings with respect to the Collateral to be made, or otherwise delivered to the Collateral Agent for filing and/or recordation, as of the Closing Date.

 

4.6. Binding Obligation

 

.  Each Credit Document to which each Credit Party is a party has been duly executed and delivered by such Credit Party and is the legally valid and binding obligation of such Credit Party and is in full force and effect, enforceable against such Credit Party in accordance with its respective terms, except as may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws relating to or limiting creditors’ rights generally or by equitable principles relating to enforceability.

 

4.7. [Reserved]

 

.

 

4.8. [Reserved]

 

.

 

4.9. No Material Adverse Effect.

 

Since March 31, 2011, no event, circumstance or change has occurred that has caused or evidences, either individually or in the aggregate, a Material Adverse Effect, other than as disclosed in writing to the Administrative Agent and the Lead Agents prior to the date hereof.

 

4.10. Adverse Proceedings, etc.

 

  There are no Adverse Proceedings pending, individually or in the aggregate, (i) related to any Credit Party or (ii) to the best knowledge of each Credit Party, related to Fireside or the Receivables, that in each case could reasonably be expected to have a Material Adverse Effect, except as identified in any Transaction Agreement.  No Credit Party is (a) in violation of any applicable laws that, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect, or (b) subject to or in default with respect to any final judgments, writs, injunctions, decrees, rules or regulations of any court or any federal, state, municipal or other governmental department, commission, board, bureau, agency or instrumentality, domestic or foreign, that, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect.

 

4.11. Payment of Taxes

 

.  Except as otherwise permitted under Section 5.3, all tax returns and reports of the Borrower required to be filed have been timely filed, and all taxes shown on such tax returns to be due and payable and all assessments, fees and other governmental charges upon the Borrower and upon its properties, assets, income, businesses and franchises which are due and payable have been paid when due and payable.  The Borrower knows of no proposed tax assessment against it which is not being actively contested by the Borrower in good faith and by appropriate proceedings; provided, such reserves or other appropriate provisions, if any, as shall be required in conformity with GAAP shall have been made or provided therefor.

 

4.12. Title to Assets

 

.  The Borrower has good and valid title to each Receivable.  Except as permitted by this Agreement, all such Receivables are free and clear of Liens, other than Permitted Liens and Liens created by Fireside.  The Borrower does not own any real property.

 

4.13. No Indebtedness

 

.  The Borrower does not have any Indebtedness, other than Indebtedness incurred under (or contemplated by) the terms of this Agreement, the other Credit Documents or otherwise permitted hereunder.

 

4.14. No Defaults

 

.  Other than the defaults set forth on Schedule 1 hereto, after giving effect to the Term Loans being made on the Closing Date and the consummation of the transactions contemplated hereunder as occurring on the Closing Date. no Credit Party is in default in the performance, observance or fulfillment of any of the obligations, covenants or conditions contained in any of its Contractual Obligations, and to each Credit Party's knowledge no condition exists which, with the giving of notice or the lapse of time or both, could constitute such a default, except where, (a) such defaults have been waived, or (b) individually or in the aggregate, the consequences, direct or indirect, of such default or defaults, if any, could not reasonably be expected to have a Material Adverse Effect.

 

4.15. Governmental Regulation

 

.  The Borrower is not subject to regulation under the Investment Company Act of 1940 or under any other federal or state statute or regulation which may limit its ability to incur Indebtedness or which may otherwise render all or any portion of the Obligations unenforceable.  The Borrower is not a “registered investment company” or a company “controlled” by a “registered investment company” or a “principal underwriter” of a “registered investment company” as such terms are defined in the Investment Company Act of 1940.

 

4.16. Margin Stock

 

.  The Borrower is not engaged in the business of extending credit for the purpose of purchasing or carrying any Margin Stock.  No part of the proceeds of the Term Loans made to the Borrower will be used directly or indirectly to purchase or carry any such Margin Stock, for the purpose of reducing or retiring any Indebtedness which was originally incurred to purchase or carry Margin Stock, to extend credit to others for the purpose of purchasing or carrying any such Margin Stock or for any purpose that violates, or is inconsistent with, the provisions of Regulation T, U or X of the Board of Governors of the Federal Reserve System.

 

4.17. [Reserved].

 

 

4.18. Certain Fees

 

.  No broker's or finder's fee or commission will be payable by the Borrower with respect hereto or any of the transactions contemplated hereby.

 

4.19. Solvency and Fraudulent Conveyance

 

.  The Borrower is and, upon the incurrence of any Credit Extension by the Borrower on the Closing Date, will be, Solvent.  Neither the Borrower nor CPS is transferring any Collateral with any intent to hinder, delay or defraud any of its creditors.  Neither the Borrower nor CPS shall use the proceeds from the transactions contemplated by this Agreement to give preference to any class of creditors.  The Borrower has given fair consideration and reasonably equivalent value in exchange for the purchase of the Receivables under the Purchase Agreement.

 

4.20. Credit Documents; Related Documents and Transaction Agreements.

 

(a) Delivery.  The Borrower has delivered, or caused to be delivered, to the Administrative Agent complete and correct copies of (i) each Credit Document, Related Document and Transaction Agreement and of all exhibits and schedules thereto as of the date hereof, and (ii) copies of any material amendment, restatement, supplement or other modification to or waiver of each Credit Document, Related Document and Transaction Agreement entered into after the date hereof.

 

(b) Representations and Warranties.  Except to the extent otherwise expressly set forth herein or in the schedules hereto, and subject to the qualifications set forth therein, each of the representations and warranties given by each of the Borrower and CPS in any Credit Document or Transaction Agreement is true and correct in all material respects as of the Closing Date (or as of any earlier date to which such representation and warranty specifically relates).  Notwithstanding anything in the Credit Documents or the Transaction Agreements to the contrary, the representations and warranties of each of the Borrower and CPS set forth in any Credit Document or Transaction Agreement shall, solely for purposes hereof, survive the Closing Date for the benefit of the Lenders.

 

(c) Governmental Approvals.  All Governmental Authorizations and all other authorizations, approvals and consents of any other Person required by the Credit Documents, Related Documents and Transaction Agreements or to consummate the transactions contemplated therein have been obtained and are in full force and effect.

 

(d) Conditions Precedent.  On the Closing Date, all of the conditions to effecting or consummating the transactions described herein and set forth in the Credit Documents and the Transaction Agreements have been duly satisfied or, with the consent of the Lead Agents, waived, and the transactions described set forth in the Credit Documents, have been consummated in accordance with the Related Documents and the Transaction Agreements.

 

4.21. Compliance with Statutes, etc.

 

  Each Credit Party is in compliance with all applicable statutes, regulations and orders of, and all applicable restrictions imposed by, all Governmental Authorities, in respect of the conduct of its business and the ownership of its property, except such non-compliance that, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect.

 

4.22. Disclosure

 

.  The representations and warranties of each of the Borrower and CPS contained in any Credit Document or in any other documents, certificates or written statements furnished to any Lender by or on behalf of CPS or any of its Subsidiaries (excluding any documents, certificates and written statements prepared by or furnished by or on behalf of Fireside or Unitrin) for use in connection with the transactions contemplated hereby, taken as a whole, do not contain any untrue statement of a material fact or omit to state a material fact (known to CPS or the Borrower, in the case of any document not furnished by either of them) necessary in order to make the statements contained herein or therein not misleading in light of the circumstances in which the same were made.  Any projections and pro forma financial information contained in such materials are based upon good faith estimates and assumptions by the preparer thereof believed to be reasonable at the time made, it being recognized by the Lenders that such projections as to future events are not to be viewed as facts and that actual results during the period or periods covered by any such projections may differ from the projected results.  There are no facts known (or which should upon the reasonable exercise of diligence be known) to the Borrower (other than matters of a general economic nature) that, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect and that have not been disclosed herein or in such other documents, certificates and statements furnished to the Lenders for use in connection with the transactions contemplated hereby.

4.23. Money Control Acts/FCPA

 

.  To the extent applicable, each of the Borrower and CPS is in compliance, in all material respects, with the (a) Trading with the Enemy Act, as amended, and each of the foreign assets control regulations of the United States Treasury Department (31 C.F.R., Subtitle B, Chapter V, as amended) and any other enabling legislation or executive order relating thereto, and (b) Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA Patriot Act of 2001) (the “Act”).  No part of the proceeds of the Term Loans will be used, directly or indirectly, for any payments to any governmental official or employee, political party, official of a political party, candidate for political office, or anyone else acting in an official capacity, in order to obtain, retain or direct business or obtain any improper advantage, in violation of the United States Foreign Corrupt Practices Act of 1977, as amended.

 

SECTION 5.

AFFIRMATIVE COVENANTS

 

Each of CPS and the Borrower covenants and agrees that until the Termination Date, CPS and/or the Borrower, as applicable, shall perform all covenants in this Section 5.

 

5.1. Reports

 

.  Unless otherwise provided below, the Borrower shall deliver, or cause to be delivered, to the Administrative Agent and the Lead Agents:

 

(a) CPS shall deliver the reports required to be delivered by it pursuant to the Servicing Agreement;

 

(b) Notice of Default.  Promptly upon any Authorized Officer of CPS or the Borrower obtaining knowledge (i) of any condition or event that constitutes a Default or an Event of Default; (ii) that any Person has given any notice to CPS or the Borrower or taken any other action with respect to any event or condition set forth in Section 5.01(a)(xii) of the Servicing Agreement; or (iii) of the occurrence of any event or change that has caused or evidences, either individually or in the aggregate, a Material Adverse Effect, a certificate of its Authorized Officers specifying the nature and period of existence of such condition, event or change, or specifying the notice given and action taken by any such Person and the nature of such claimed Event of Default, Default, default, event or condition, and what action CPS or the Borrower, as applicable, has taken, is taking and proposes to take with respect thereto;

 

(c) Notice of Litigation.  Promptly upon any Authorized Officer of CPS or the Borrower obtaining knowledge of (i) the institution of, or non-frivolous threat of, any Adverse Proceeding not previously disclosed in writing by CPS or the Borrower to the Lenders, or (ii) any material development in any Adverse Proceeding that, in the case of either clause (i) or (ii) if adversely determined, is reasonably likely to result in a judgment in an amount in excess of $250,000, or seeks to enjoin or otherwise prevent the consummation of, or to recover any damages or obtain relief as a result of, the transactions contemplated hereby, written notice thereof together with such other information as may be reasonably available to CPS or the Borrower, as applicable, to enable the Lenders and its counsel to evaluate such matters;

 

(d) [Reserved];

 

(e) Breach of Representations and Warranties.  Promptly upon CPS or the Borrower becoming aware of a material breach with respect to any representation or warranty made or deemed made by CPS or the Borrower in any Credit Document or in any certificate at any time given by CPS or the Borrower in writing pursuant hereto or thereto or in connection herewith or therewith, a certificate of its Authorized Officers specifying the nature and period of existence of such breach and what action CPS or the Borrower, as applicable, has taken, is taking and proposes to take with respect thereto;

 

(f) Information Regarding Collateral.  The Borrower will furnish to the Collateral Agent prior written notice of any change (i) in its corporate name, (ii) in its identity, corporate structure or jurisdiction of organization, or (iii) in its Federal Taxpayer Identification Number.  The Borrower agrees not to effect or permit any change referred to in the preceding sentence unless all filings have been made under the UCC or otherwise that are required in order for the Collateral Agent to continue at all times following such change to have a valid, legal and perfected security interest in all the Collateral.  The Borrower also agrees promptly to notify the Collateral Agent if any material portion of the Collateral is damaged or destroyed; and

 

(g) Tax Returns.  As soon as practicable and in any event within fifteen (15) days following the filing thereof, the Borrower shall provide to the Administrative Agent copies of each federal income tax return filed by or on behalf of the Borrower.

 

5.2. Existence

 

.  Each of CPS and the Borrower shall at all times preserve and keep in full force and effect its existence and all rights and franchises, licenses and permits material to its business.

 

5.3. Payment of Taxes and Claims

 

.  The Borrower shall pay all Taxes imposed upon it or any of its properties or assets or in respect of any of its income, businesses or franchises before any penalty or fine accrues thereon, and all claims (including claims for labor, services, materials and supplies) for sums that have become due and payable and that by law have or may become a Lien upon any of its properties or assets, prior to the time when any penalty or fine shall be incurred with respect thereto; provided, no such Tax or claim need be paid if it is being contested in good faith by appropriate proceedings promptly instituted and diligently conducted, so long as (a) adequate reserve or other appropriate provision, as shall be required in conformity with GAAP shall have been made therefor, and (b) in the case of a Tax or claim which has or may become a Lien against any of the Collateral, such contested proceedings conclusively operate to stay the sale of any portion of the Collateral to satisfy such Tax or claim.  The Borrower shall not file or consent to the filing of any consolidated income tax return with any Person (other than CPS or any of its Subsidiaries).

 

5.4. Reserved.

 

5.5. Annual Meetings.

 

Each of CPS and the Borrower will, upon the request of the Administrative Agent, Lead Agents or Requisite Lenders, participate in a meeting of the Administrative Agent and the Lenders once during each Fiscal Year to be held at the Borrower's corporate offices (or at such other location as may be agreed to by CPS, the Borrower, the Administrative Agent and the Lenders) at such time as may be agreed to by CPS, the Borrower, the Administrative Agent and the Lenders.

 

5.6. Compliance with Laws

 

.  Each of CPS and the Borrower shall comply with the requirements of all applicable laws, rules, regulations and orders of any Governmental Authority noncompliance with which could reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

 

5.7. Further Assurances

 

.  At any time or from time to time upon the request of the Administrative Agent, each of CPS and the Borrower will, at its expense, promptly execute, acknowledge and deliver such further documents and do such other acts and things as the Lead Agents, the Administrative Agent or the Collateral Agent may reasonably request in order to effect fully the purposes of the Credit Documents, including providing the Lenders with any information reasonably requested pursuant to Section 9.19.

 

5.8. Separateness

 

.  The Borrower acknowledges that the Lenders are entering into this Agreement in reliance upon the Borrower's identity as a legal entity that is separate from any other Person.  Therefore, from and after the date of this Agreement, the Borrower shall take all reasonable steps, including without limitation, all steps that the Lenders may from time to time reasonably request, to maintain the Borrower's identity as a separate legal entity and to make it manifest to third parties that the Borrower is a separate legal entity.  Without limiting the generality of the foregoing, the Borrower agrees that it has not and shall not:

 

(a) engage, either directly or indirectly, in any business or activity other than the acquisition, ownership, financing and disposition of the Receivables in accordance with the Credit Documents and activities incidental thereto;

 

(b) acquire or own any material asset other than the Collateral and proceeds thereof;

 

(c) merge into or consolidate with any Person or entity or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets or change its legal structure, without in each case, to the extent permitted by law, the Lead Agents’ consent;

 

(d) fail to preserve its existence as an entity duly organized, validly existing and in good standing (if applicable) under the laws of the jurisdiction of its formation, or without the prior written consent of the Lead Agents, amend, modify, change, repeal, terminate or fail to comply with the provisions of the Borrower's certificate of formation, or its limited liability company agreement, as the case may be; provided, however, the Borrower may amend its operating agreement without the Lead Agents’ consent (i) to cure any ambiguity, (ii) with respect to administrative matters, or (iii) to convert or supplement any provision in a manner consistent with the intent of this Agreement or the other Credit Documents;

 

(e) own any Subsidiary or make any investment in, any Person or entity without the consent of the Lead Agents;

 

(f) commingle its assets with the assets of any of its general partners, members, Affiliates, principals or any other Person or entity;

 

(g) incur any Indebtedness except the Obligations;

 

(h) fail to remain Solvent;

 

(i) fail to maintain its records, books of account and bank accounts, separate and apart from those of the general partners, members, principals and Affiliates of the Borrower or the Affiliates of a general partner or member of the Borrower or any other Person;

 

(j) except for the Credit Documents, and as otherwise expressly permitted by the Credit Documents, enter into any contract or agreement with any general partner, member, principal or Affiliate of the Borrower, CPS, or any general partner, member, principal or Affiliate thereof, except with the Lead Agents’ consent and upon terms and conditions that are intrinsically fair and substantially similar to those that would be available on an arms-length basis with third parties other than any general partner, member, principal or affiliate of the Borrower, CPS, or any general partner, member, principal or Affiliate thereof or fail to maintain separate financial statements from those of its general partners, members, principles and Affiliates; provided, however, the Borrower's financial position, assets, liabilities, net worth and operating results may be included in the consolidated financial statements of CPS and its Affiliates; provided that such consolidated financial statements disclose that the Borrower is a separate legal entity and that its assets are not generally available to satisfy the claims of creditors of CPS;

 

(k) seek the dissolution or winding up, in whole or in part, of the Borrower or take any action that would cause the Borrower to become insolvent;

 

(l) fail to take reasonable efforts to correct any misunderstanding known to the Borrower regarding the separate identity of the Borrower;

 

(m) maintain its assets in such a manner that it will be costly or difficult to segregate, ascertain or identify its individual assets from those of any other Person;

 

(n) except as provided in the Credit Documents, assume or guaranty the debts of any other Person, hold itself out to be responsible for the debts of any other Person, or otherwise pledge its assets for the benefit of any other Person or hold out its credit as being available to satisfy the obligations of any other Person;

 

(o) except as provided in the Credit Documents, make any loans or advances to any third party, including any general partner, member, principal or affiliate of the Borrower, or any general partner, member, principal or Affiliate thereof;

 

(p) fail either to hold itself out to the public as a legal entity separate and distinct from any other entity or Person or to conduct its business solely in its own name in order not (i) to mislead others as to the identity with which such other party is transacting business, or (ii) to suggest that the Borrower is responsible for the debts of any third party (including any general partner, member, principal or Affiliate of the Borrower, or any general partner, member, principal or Affiliate thereof);

 

(q) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;

 

(r) file or consent to the filing of any petition, either voluntary or involuntary, to take advantage of any applicable insolvency, bankruptcy, liquidation or reorganization statute, or make an assignment for the benefit of creditors;

 

(s) hold itself out as or be considered as a department or division (other than for tax purposes) of any general partner, principal, member or Affiliate of the Borrower or any other Person or entity;

 

(t) fail to allocate fairly and reasonably shared expenses (including, without limitation, shared office space and services performed by an employee of an Affiliate) among the Persons sharing such expenses and to use separate stationery, invoices and checks;

 

(u) acquire obligations or securities of its partners, members, shareholders of other Affiliates, as applicable;

 

(v) violate or cause to be violated the assumptions made with respect to the Borrower in any opinion letter pertaining to substantive consolidation delivered to the Lenders in connection with the Credit Documents;

 

(w) [Reserved];

 

(x) fail to have Organizational Documents that provide that, so long as the Obligations of the Borrower shall be outstanding, the Borrower shall not (i) seek the dissolution or winding up in whole, or in part, of the Borrower or (ii) file or consent to the filing of any petition, either voluntary or involuntary, or commence a case under any applicable insolvency, bankruptcy, liquidation or reorganization statute, or make an assignment for the benefit of creditors without the consent of the Independent Manager;

 

(y) fail to observe all requisite organizational formalities under Delaware law;

 

(z) account for or treat (whether in financial statements or otherwise) the transactions contemplated by the Purchase Agreement in any manner other than the sale of the Receivables to the Borrower or in any other respect account for or treat the transactions contemplated therein in any manner other than as a sale of Receivables to the Borrower; provided, that the Receivables may be reflected on the consolidated balance sheets of CPS in accordance with GAAP.

 

(aa) make any revision or amendment to the Purchase Agreement without the consent of the Lead Agents; and

 

(bb) fail to cause its members, managers, directors, officers, agents and other representatives to act at all times with respect to the Borrower consistently and in furtherance of the foregoing and in the best interests of the Borrower.

 

In the event of any inconsistency between the covenants set forth in this Section 5.8 or the other covenants set forth in this Agreement, or in the event that any covenant set forth in this Section 5.8 poses a greater restriction or obligation than is set forth elsewhere in this Agreement, the covenants set forth in this Section 5.8 shall control.

 

5.9. Cash Management Systems

 

.  The Borrower shall establish and maintain cash management systems as set forth below.

 

(a) Lockbox System.

 

(i) The Borrower has established, or has caused the Servicer to establish, pursuant to the Control Agreements for the benefit of the Collateral Agent, on behalf of the Secured Parties, a lockbox and Lockbox Account as described in Section 2.12 (the “Lockbox System”) into which all Collections shall be deposited.

 

(ii) The Borrower shall not establish any new lockbox or lockbox arrangement without consent of the Lead Agents in their sole discretion, and prior to establishing any such new lockbox or lockbox arrangement, the Borrower shall cause each bank or financial institution with which it seeks to establish such a lockbox or lockbox arrangement to enter into a control agreement with respect thereto.

 

(iii) Without the prior written consent of the Lead Agents, the Borrower shall not, in a manner adverse to the Lenders, (A) change the general instructions given to the Servicer in respect of payments on account of Receivables to be deposited in the Lockbox System or (B) change any instructions given to any bank or financial institution which in any manner redirects the proceeds of any collections in the Lockbox System to any account which is not a Collection Account.

 

(iv) The Borrower acknowledges and agrees that (A) the funds on deposit in the Lockbox System shall continue to be collateral security for the Obligations secured thereby, (B) upon the occurrence and during the continuance of a Tier 2 Event of Default or upon the occurrence of a Tier 1 Event of Default and the exercise of the Lenders of the Buyout Option, the funds on deposit in the Lockbox System shall be applied as provided in Section 2.11 and (C) the Control Agreements will provide that all funds in the Lockbox will be swept daily into the Collection Account.

 

(b) Payment Collection.  The Borrower has directed, and will at all times hereafter direct, the Servicer to direct each of the Obligors to forward all payments on account of Receivables directly to the Lockbox System in accordance with Section 2.12.  The Borrower agrees (i) to instruct the Servicer to instruct each Obligor to make all payments with respect to Receivables directly to the Lockbox System and (ii) promptly (and, except as set forth in the proviso to this Section 5.9(b), in no event later than two (2) Business Days following receipt) to deposit all payments received by it on account of Receivables, whether in the form of cash, checks, notes, drafts, bills of exchange, money orders or otherwise, in the Lockbox System in precisely the form in which they are received (but with any endorsements of the Borrower necessary for deposit or collection), and until they are so deposited to hold such payments in trust for and as the property of the Collateral Agent; provided, however, that with respect to any payment received that does not contain sufficient identification of the account number to which such payment relates or cannot be processed due to an act beyond the control of the Servicer, such deposit shall be made no later than the second Business Day following the date on which such account number is identified or such payment can be processed, as applicable.

 

5.10. Insurance

 

.  From the period commencing on the Closing Date until the Termination Date, CPS shall maintain in force an “errors and omissions” insurance policy and an employee fidelity insurance policy, in each case, (i) in an amount not less than $1,000,000, (ii) in a form reasonably acceptable to the Administrative Agent and the Lead Agents, (iii) with an insurance company reasonably acceptable to the Administrative Agent and the Lead Agents and (iv) naming the Administrative Agent, for the benefit of the Lenders, as beneficiary and loss payee. Unless otherwise directed by the Administrative Agent and the Lead Agents, CPS shall prepare and present, on behalf of itself, the Administrative Agent and the Lenders, claims under any such policy in a timely fashion in accordance with the terms of such policy, and upon the filing of any claim on any policy described in this Section 5.10, CPS shall promptly notify the Administrative Agent of such claim and deposit, or cause to be deposited, the proceeds of any such claim into the Collection Account.  CPS shall deliver copies of such policies to the Administrative Agent on or prior to the Closing Date together with a certification from the applicable insurance company that such policy is in force on such date.  CPS shall deliver proof of maintenance of such policies and payment of premiums no less frequently than annually, in form and substance reasonably acceptable to the Administrative Agent, on the six-month anniversary from the Closing Date and on each succeeding twelve month anniversary thereafter (or if such day is not a Business Day, the next succeeding Business Day).

 

5.11. Financial Statements.

 

(a) As soon as available and no later than ninety (90) days after the end of each fiscal year of the Borrower, the Borrower shall deliver to the Administrative Agent one (1) copy of: (A) the audited balance sheet of the Borrower as of the end of the fiscal year, setting forth in comparative form the figures for the previous fiscal year and accompanied by an opinion of the Independent Accountants stating that such balance sheet presents fairly the financial condition of the companies being reported upon and has been prepared in accordance with GAAP consistently applied (except for changes in application in which such accountants concur); and (B) audited statements of income, stockholders’ equity and cash flow of the Borrower for such fiscal year; in each case setting forth in comparative form the figures for the previous fiscal year and accompanied by an opinion of the Independent Accountants stating that such financial statements present fairly the financial condition of the Borrower and have been prepared in accordance with GAAP consistently applied (except for changes in application in which such accountants concur).

 

(b) As soon as available and no later than thirty (30) days after the end of each fiscal month in each fiscal year of CPS, the Borrower shall deliver, or cause to be delivered, to the Administrative Agent one (1) copy of: (A) the unaudited consolidated balance sheet of CPS and its consolidated Subsidiaries (including the Borrower) as of the end of such fiscal month, which balance sheet shall be prepared and presented in accordance with, and provide all necessary disclosure required by, GAAP and shall be accompanied by a certificate signed by the financial vice president, treasurer, chief financial officer, chief investment officer or controller of CPS stating that such balance sheet presents fairly the financial condition of CPS and has been prepared in accordance with GAAP consistently applied; and (B) the unaudited consolidated statements of income, stockholders’ equity and cash flow of CPS and its consolidated Subsidiaries (including the Borrower) for such fiscal month, which such statements shall be prepared and presented in accordance with, and provide all necessary disclosure required by, GAAP and shall be accompanied by a certificate signed by the financial vice president, treasurer, chief financial officer, chief investment officer or controller of CPS stating that such financial statements present fairly the financial condition and results of operations of CPS and have been prepared in accordance with GAAP consistently applied.

 

(c) As soon as available and no later than forty-five (45) days after the end of each fiscal quarter in each fiscal year of CPS, the Borrower shall deliver, or cause to be delivered, to the Administrative Agent one (1) copy of: (A) the unaudited consolidated balance sheet of CPS and its consolidated Subsidiaries (including the Borrower) as of the end of such fiscal quarter, which such balance sheet shall be prepared and presented in accordance with, and provide all necessary disclosure required by GAAP and shall be accompanied by a certificate signed by the financial vice president, treasurer, chief financial officer, chief investment officer or controller of CPS or another officer of CPS acceptable to the Administrative Agent stating that such balance sheet presents fairly the financial condition of the companies being reported upon and has been prepared in accordance with GAAP consistently applied; and (B) the unaudited consolidated statements of income, stockholders’ equity and cash flow of CPS and its consolidated Subsidiaries (including the Borrower) for such fiscal quarter, which such statements shall be prepared and presented in accordance with, and provide all necessary disclosure required by, GAAP and shall be accompanied by a certificate signed by the financial vice president, treasurer, chief financial officer, chief investment officer or controller of CPS or another officer of CPS acceptable to the Administrative Agent stating that such financial statements present fairly the financial condition and results of operations of the companies being reported upon and have been prepared in accordance with GAAP consistently applied;

 

(d) As soon as available and no later than ninety (90) days after the end of each fiscal year of CPS, the Borrower shall deliver, or cause to be delivered, to the Administrative Agent one (1) copy of: (A) the audited consolidated balance sheet of CPS and its consolidated Subsidiaries (including the Borrower) as of the end of the fiscal year, setting forth in comparative form the figures for the previous fiscal year and accompanied by an opinion of the Independent Accountants stating that such balance sheet presents fairly the financial condition of the companies being reported upon and has been prepared in accordance with GAAP consistently applied (except for changes in application in which such accountants concur); and (B) the audited consolidated statements of income, stockholders’ equity and cash flow of CPS and its consolidated Subsidiaries (including the Borrower) for such fiscal year; in each case setting forth in comparative form the figures for the previous fiscal year and accompanied by an opinion of the Independent Accountants stating that such financial statements present fairly the financial condition of the companies being reported upon and have been prepared in accordance with GAAP consistently applied (except for changes in application in which such accountants concur).

 

(e) For so long as CPS is subject to the periodic reporting obligations of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, Borrower and CPS may comply with the covenants set forth in the preceding paragraphs (c) and (d) by electronic filing of the annual and quarterly reports required by such act; provided, that the Borrower and/or CPS shall notify, or cause to be notified, the Administrative Agent promptly upon any such electronic filing.

 

5.12. Due Diligence; Access to Certain Documentation

 

.  The Lead Agents and the Administrative Agent (and their respective agents or professional advisors) shall have the right under this Agreement, from time to time, at their discretion and upon reasonable prior notice to the relevant party, to visit and inspect any of the properties of any Credit Party and to examine, and audit, during business hours or at such other times as might be reasonable under applicable circumstances, any and all of the books, records, financial statements, collection policies, legal and regulatory compliance, operating and reporting procedures and information systems, their respective directors, officers and employees, or other information and information systems (including without limitation customer service and/or whistleblower hotlines) of the Credit Parties, or held by another for a Credit Party or on its behalf, concerning or otherwise affecting the Receivables, CPS, the Borrower or any Credit Document. The Lead Agents and the Administrative Agent (and their respective agents and professional advisors) shall treat as confidential any information obtained during the aforementioned examinations which is not already publicly known or available; provided, however, that the Lead Agents and the Administrative Agent (and their respective agents or professional advisors) may disclose such information if required to do so by law or by any regulatory authority.

 

Upon notice and during regular business hours, each Credit Party agrees to promptly provide the Lead Agents and the Administrative Agent (and their respective agents or professional advisors) with access to, copies of and extracts from any and all documents, records, agreements, instruments or information (including, without limitation, any of the foregoing in computer data banks and computer software systems) the Lead Agents and the Administrative Agent (and their respective agents or professional advisors) may reasonably require in order to conduct periodic due diligence relating to the Credit Parties in connection with the Receivables and the Credit Documents.

 

Each Credit Party will make available to the Lead Agents and the Administrative Agent (and their respective agents or professional advisors) knowledgeable financial, accounting, legal and compliance officers for the purpose of answering questions with respect to the Credit Parties and the Receivables and to assist in the Lead Agents’ and Administrative Agent's diligence.  In addition, the Borrower shall provide, or shall cause the Servicer to provide, the Lead Agents and the Administrative Agent with remote access to any electronic Receivable Files and any related documents to the extent CPS or the Borrower provides such access to any Person.  Each of CPS and the Borrower agrees that the Lead Agents and the Administrative Agent will have the right to confirm any information relating to the Receivables directly with the applicable Obligors.

 

All reasonable costs and expenses incurred by a Lead Agent or the Administrative Agent (and their respective agents or professional advisors) in connection with the due diligence and other matters outlined in this Section 5.12, following an Event of Default, shall be paid by the Borrower or reimbursed to the Lead Agents or the Administrative Agent, as the case may be.

 

Without limiting the generality of the foregoing, the Borrower acknowledges that the Lenders shall make Term Loans to the Borrower based solely upon the information provided by the Credit Parties to the Administrative Agent and the Lead Agents and the representations, warranties and covenants contained herein, and that the Administrative Agent and the Lead Agents shall have the right at any time and from time to time to conduct a partial or complete due diligence review, at their option and, unless an Event of Default has occurred and is continuing, at their expense, on some or all of the Receivables, including, without limitation, re-generating the information used to originate such Receivables.

 

5.13. [Reserved].

 

5.14. Facility Financing.

 

The Lead Agents intend and reserve the right to obtain third party financing for this Facility and the Term Loans.  Each Lead Agent may elect, at any time, upon written notice to the Borrower, to seek such third party financing.  Each of CPS and the Borrower agree to use commercially reasonable efforts to assist such Lead Agent in achieving a successful financing and to cooperate in connection with the preparation of information packages regarding the Receivables and otherwise in Lead Agent’s efforts to obtain such financing, and shall provide any potential financing source (either directly or through distribution to applicable Lead Agent), access to its books, records, financial statements, policies, directors, officers and employees, or other information, in each case, as requested by such financing source for the purpose of evaluating and monitoring such financing; provided, however, that in no event shall the Borrower or CPS have any obligation to pay any costs, fees or expenses payable to such financing source for providing such financing, and the payment of any and all costs, fees and expenses payable to any such financing source for providing such financing or incurred by CPS or the Borrower in connection with such cooperation shall be the sole obligation of such Lead Agent.  For the avoidance of doubt and without limiting the obligations of CPS and Borrower under this Section 5.14, no Lead Agent’s Term Loan Commitment is conditioned upon the successful completion of any such third party financing.

 

5.15. Servicer; Backup Servicer.

 

(a) Borrower may not, without Lenders’ prior written consent, (i) amend the Interim Servicing Agreement, Servicing Agreement, or the Backup Servicing Agreement, including the provisions relating to the fees payable thereunder, (ii) terminate the Servicing Agreement, the Backup Servicing Agreement or Custodial Agreement, provided, however, that upon the payment in full of the Term Loans, Borrower may terminate the Backup Servicing Agreement or the Custodial Agreement with the prior consent of the Lead Agents and the Administrative Agent or (iii) subcontract out any portion of the servicing or permit third party servicing (other than the Backup Servicer and, during the Interim Servicing Period, the Interim Servicer) without Lenders’ approval; provided, that CPS, in its capacity as Servicer, may delegate discrete servicing functions to a subcontractor from time to time consistent with the terms and conditions of the Servicing Agreement.  Borrower shall cause (or in the case of the Backup Servicer and Interim Servicer to the extent it is able to cause) Servicer, Backup Servicer and Interim Servicer to provide the reports required to be provided by Servicer, Backup Servicer and Interim Servicer in accordance with the Interim Servicing Agreement, Servicing Agreement and Backup Servicing Agreement, as the case may be, to Lenders and written reports to Lenders, the Backup Servicer or the Lenders’ other designee in the manner and form reasonably requested by the Lenders.  Borrower shall cause (or in the case of the Interim Servicer to the extent it is able to cause) Servicer and Interim Servicer to permit the Lenders, the Backup Servicer or the Lenders’ other designees to inspect its books, records and operations at any time during normal business hours upon ten (10) Business Days prior written notice.

 

(b) Lenders at any time may designate any Backup Servicer to act on its behalf with respect to the Receivables and other Collateral and may in their sole discretion name a new Backup Servicer at any time.  Borrower agrees that such Backup Servicer shall be able to monitor the Collateral, Borrower, Servicer and Interim Servicer.  Borrower agrees to cooperate fully with the Backup Servicer and not to interfere with Backup Servicer’s performance of its duties hereunder or to take any action that would be inconsistent with the Backup Servicer providing such services to the Lenders.  Borrower covenants and agrees to use commercially reasonable efforts to provide promptly to Backup Servicer any and all information and data reasonably requested by Backup Servicer in the manner and form reasonably requested by Backup Servicers.  Borrower shall pay all fees, costs and expenses of Backup Servicer pursuant to Section 2.11 or Section 2.13, as applicable, provided that if (i) the Lenders have designated a new Backup Servicer after the Closing Date and (ii) no breach or default under the Backup Servicing Agreement has occurred or is continuing, no Servicer Default has occurred or is continuing and no Event of Default has occurred or is continuing, all upfront fees and set-up costs of such new Backup Servicer shall be paid by the Lenders.

 

5.16. Tax Reporting.

 

  The parties hereto agree that, as more fully described in the Tax Matters Letter, (i) any payments made in accordance with Section 2.11(f) or Section 2.13(k), or with respect to CPS, Sections 2.11(c), (d) and (f), and Sections 2.13(f), (h), (i) and (k), shall be treated for tax purposes as an interest in a partnership and not as contingent interest or principal in the Term Loans; (ii) each Lender shall receive partnership allocations of income and gain from the Borrower in proportion to, and until each such Lender has been allocated income and gain in an aggregate amount equal to the amounts received by such Person pursuant to Section 2.11(f) or Section 2.13(k); (iii) the Borrower shall furnish each Lender with an IRS Schedule K-1 which reflects the allocation specified in clause (ii); and (iv) each party agrees to file its tax returns in a manner that is consistent and shall not take any positions that are inconsistent with the foregoing unless required by applicable law.  The parties hereto from time to time, including assignees of any Lender pursuant to Section 9.6, agree to the matters set forth in the Tax Matters Letter.

5.17. Transaction Agreements.

 

CPS and the Borrower shall promptly notify the Lead Agents of any breach or potential breach of the Transaction Agreements by Unitrin or Fireside.  If requested by the Lead Agents, the Borrower will put back to Fireside, on a timely basis, any Receivable that is eligible for repurchase under the Purchase Agreement and to promptly and vigorously enforce its other rights under the Transaction Agreements.  The Borrower shall not exercise any of its rights or waive or fail to exercise any of its rights under the Transaction Agreements without the consent of the Lead Agents.

 

SECTION 6.

NEGATIVE COVENANTS

 

Each of CPS and the Borrower covenants and agrees that until the Termination Date, CPS and/or the Borrower, as applicable, shall perform all covenants in this Section 6.

 

6.1. Indebtedness

 

.  The Borrower shall not directly or indirectly, create, incur, assume or guaranty, or otherwise become or remain directly or indirectly liable with respect to any Indebtedness, except the Obligations.

 

6.2. Liens

 

.  The Borrower shall not, directly or indirectly, create, incur, assume or permit to exist any Lien on or with respect to any property or asset of any kind (including any document or instrument in respect of goods or accounts receivable) of the Borrower, whether now owned or hereafter acquired, or any income or profits therefrom, or file or permit the filing of, or permit to remain in effect, any financing statement or other similar notice of any Lien with respect to any such property, asset, income or profits under the UCC of any State or under any similar recording or notice statute, except (i) Liens in favor of the Collateral Agent for the benefit of Secured Parties granted pursuant to any Credit Document; (ii) Permitted Liens, and (iii) Liens evidenced by financing statements naming CPS Fender Receivables LLC as debtor and Fortress Credit Corp., as Collateral Agent, as the secured party in accordance with the Security Agreement or filed in connection with other Permitted Liens.

 

6.3. [Reserved].

 

 

6.4. Investments

 

.  The Borrower shall not make or own any Investment, except Investments in Cash, Cash Equivalents and Receivables, and Permitted Investments in the Collection Account.

 

6.5. Fundamental Changes; Disposition of Assets; Acquisitions

 

.  The Borrower shall not (i) enter into any transaction of merger or consolidation, or liquidate, wind-up or dissolve itself (or suffer any liquidation or dissolution), or (ii) convey, sell, lease or sub-lease (as lessor or sublessor), exchange, transfer or otherwise dispose of, in one transaction or a series of transactions, all or any part of its business, assets (including, but not limited to, the Receivables) or property of any kind whatsoever, whether real, personal or mixed and whether tangible or intangible, whether now owned or hereafter acquired, except in connection with which a prepayment is made as required by Section 2.10, or (iii) acquire by purchase or otherwise the business, property or fixed assets of, or stock or other evidence of beneficial ownership of, any Person or any division or line of business or other business unit of any Person, except Investments made in accordance with Section 6.4.  CPS shall not enter into any transaction of merger or consolidation in which CPS is not the surviving entity, liquidate, wind-up or dissolve itself (or suffer any liquidation or dissolution) without the prior written consent of the Administrative Agent (such consent not to be unreasonably withheld or delayed).

 

6.6. Material Contracts and Organizational Documents

 

.  The Borrower shall not (a) enter into any Material Contract with any Person; (b) agree to any material amendment, restatement, supplement or other modification to, or waiver of, any of its material rights under any Related Agreement after the Closing Date or (c) amend or permit any amendments to its Organizational Documents (other than as permitted by Section 5.8(d)), without in each case obtaining the prior written consent of each of the Lead Agents to such entry, amendment, restatement, supplement, modification or waiver, as the case may be.

 

6.7. Sales and Lease-Backs

 

.  The Borrower shall not directly or indirectly become or remain liable as lessee or as a guarantor or other surety with respect to any lease of any property (whether real, personal or mixed), whether now owned or hereafter acquired, which the Borrower (a) has sold or transferred or is to sell or to transfer to any other Person, or (b) intends to use for substantially the same purpose as any other property which has been or is to be sold or transferred by the Borrower to any Person in connection with such lease.

 

6.8. Transactions with Shareholders and Affiliates

 

.  The Borrower shall not directly or indirectly, enter into or permit to exist any transaction (including the purchase, sale, lease or exchange of any property or the rendering of any service) with CPS, any holder of 5% or more of any class of Capital Stock of CPS or any of its Subsidiaries or with any Affiliate of CPS or of any such holder other than the transactions contemplated by the Credit Documents.

 

6.9. Conduct of Business

 

.  From and after the Closing Date, the Borrower shall not engage in any business other than the businesses engaged in by the Borrower on the Closing Date.

 

6.10. Fiscal Year

 

.  The Borrower shall not change its Fiscal Year-end.

 

6.11. Accounts

 

.  The Borrower and CPS shall not establish or maintain a deposit account or a securities account for or on behalf of the Borrower that is not the Lockbox Account or a Collection Account and the Borrower shall not, nor direct any Person to, deposit Collections in a deposit account or a securities account that is not the Lockbox Account or a Collection Account.

 

6.12. Amendments or Waivers of Transaction Agreements

 

.  The Borrower shall not agree to any amendment, restatement, supplement or other modification to, or waiver of, any of its rights under any Transaction Agreement without the prior written consent of the Lead Agents.

 

6.13. Prepayments of Certain Indebtedness

 

.  The Borrower shall not, directly or indirectly, voluntarily purchase, redeem, defease or prepay any principal of, premium, if any, interest or other amount payable in respect of any Indebtedness prior to its scheduled maturity, other than the Obligations.

 

6.14. [Reserved].

 

6.15. Independent Manager

 

.  The Borrower shall not fail at any time to have at least one (1) Independent Manager that is provided by a nationally recognized provider of independent directors and such Independent Manager is not and has not been for at least five (5) years, either (i) a shareholder (or other equity owner) of, or an officer, director, partner, manager, member (other than as a special member in the case of single member Delaware limited liability companies), employee, attorney or counsel of, the Borrower or any of its Affiliates; (ii) a customer or creditor of, or supplier to, the Borrower or any of its Affiliates who derives any of its purchases or revenue from its activities with the Borrower or any Affiliate thereof (other than a de minimis amount); (iii) employed by Borrower or any of its Affiliates pursuant to a personal services contract under which fees and other compensation received by the person pursuant to such contract would exceed 5% of his or her gross revenues during the preceding calendar year; (iv) a person who controls or is under common control with any such officer, director, partner, manager, member, employee, supplier, creditor or customer; (v) a member of the immediate family of any such officer, director, partner, manager, member, employee, supplier, creditor or customer, (vi) affiliated with a tax-exempt entity that receives, or has received within the five years prior to such appointment as an Independent Manager, contributions from Borrower or any of its Affiliates, in excess of the lesser of (1) 3% of the consolidated gross revenues of Borrower and its Affiliates during such fiscal year and (2) 5% of the contributions received by the tax-exempt entity during such fiscal year; or (vii) a financial institution to which Borrower or any of its Affiliates owes outstanding indebtedness for borrowed money in a sum exceeding more than 5% of Borrower’s or CPS’ total consolidated assets.; provided that the foregoing subclause (i) shall not apply to any Person who serves as an independent director or an independent manager for any Affiliate of the Borrower; provided, further, that upon the death or incapacity of such Independent Manager, the Borrower will have a period of ten (10) Business Days following such event to appoint a replacement Independent Manager; provided, further, that the Borrower shall cause the Independent Manager not to resign until a replacement independent manager has been appointed; and provided, further, that before any Independent Manager is replaced, removed, resigns or otherwise ceases to serve (for any reason other than the death of incapacity of such Independent Manager), the Borrower shall provide written notice to the Lenders no later than two (2) Business Days prior to such replacement, removal or effective date of cessation of service and of the identity and affiliations of the proposed replacement Independent Manager.

 

6.16. Sales of Receivables.

 

(a)           The Borrower shall not sell Receivables, except to Fireside or Unitrin in connection with a Receivables Repurchase Event, in connection with which the proceeds of such sale are deposited in the Collection Account.

 

6.17. Changes in Collection Policies

 

.  CPS shall not make any material changes or modifications to the Collection Policies without the prior written consent of the Lead Agents (such consent not to be unreasonably withheld or delayed).  CPS shall provide written notice to the Lead Agents of any other change or modification to the Collection Policies within ten (10) Business Days of the implementation of any such change or modification.

 

SECTION 7.

EVENTS OF DEFAULT

 

7.1. Events of Default

 

.  If any one or more of the following conditions or events shall occur:

 

(a) Failure to Make Payments When Due.  The failure by Borrower to make payments of any principal or interest due to the Administrative Agent, the Collateral Agent, the Lead Agents or the Lenders under any Credit Documents within two (2) Business Days of the date such payment is due or, if any such payment is due on the Maturity Date, such failure to make that payment on the Maturity Date; or

 

(b) Failure to Make Other Payments When Due.  The failure by CPS, the Borrower or the Servicer to make any payment or deposit required of it (other than payments of any principal and interest due to the Administrative Agent, the Collateral Agent, the Lead Agents or the Lenders under any Credit Document) within ten (10) Business Days of the date on which written notice of the same being due was delivered to CPS, the Borrower or the Servicer, as the case may be; or

 

(c) [Reserved]; or

 

(d) [Reserved]; or

 

(e) Breach of Certain Covenants.  Failure of a Credit Party to perform or comply with any covenant or other agreement contained in (i) Section 5.2, Section 5.6, Section 5.8, Section 5.9 or (ii) Section 5.11 or Section 6; or

 

(f) Breach of Representations, etc.  Any intentional material misrepresentation of any material representation, certification or other statement made or deemed made by any Credit Party in any Credit Document or in any statement or certificate at any time given by any Credit Party or any of its Subsidiaries in writing pursuant hereto or thereto or in connection herewith or therewith as of the date made or deemed made; or

 

(g) Other Defaults Under Credit Documents.  Any Credit Party shall default in the performance of or compliance with any covenant or other term contained herein or any of the other Credit Documents, other than any such term referred to in any other provision of this Section 7.1, and such default materially and adversely affects the interests of any Lender or any Agent and shall not have been remedied or waived within ten (10) Business Days after the earlier of (i) an Authorized Officer of such Credit Party becoming aware of such default, or (ii) receipt by the Borrower of written notice from the Administrative Agent or any Lender of such default; or

 

(h) Involuntary Bankruptcy; Appointment of Receiver, etc.  (i) A court of competent jurisdiction shall enter a decree or order for relief (other than a decree or order described in clause (ii)) in respect of any Credit Party or the Servicer in an involuntary case under the Bankruptcy Code or under any other applicable bankruptcy, insolvency or similar law now or hereafter in effect, which decree or order is not stayed; or any other similar relief shall be granted under any applicable federal or state law; or (ii) an involuntary case shall be commenced against any Credit Party or the Servicer under the Bankruptcy Code or under any other applicable bankruptcy, insolvency or similar law now or hereafter in effect; or a decree or order of a court having jurisdiction in the premises for the appointment of a receiver, liquidator, sequestrator, trustee, custodian or other officer having similar powers over such Credit Party or the Servicer, as applicable, shall have been entered; or there shall have occurred the involuntary appointment of an interim receiver, trustee or other custodian of such Credit Party or the Servicer, as applicable, and any such event described in this clause (ii) shall continue for sixty (60) days without having been dismissed, bonded or discharged; or

 

(i) Voluntary Bankruptcy; Appointment of Receiver, etc.  (i) Any Credit Party or the Servicer shall commence a voluntary case under the Bankruptcy Code or under any other applicable bankruptcy, insolvency or similar law now or hereafter in effect, or shall consent to the entry of an order for relief in an involuntary case, or to the conversion of an involuntary case to a voluntary case, under any such law, or shall consent to the appointment of or taking possession by a receiver, trustee or other custodian for all or a substantial part of its property; or the Borrower shall make any assignment for the benefit of creditors; or (ii) any Credit Party or the Servicer shall be unable, or shall fail generally, or shall admit in writing its inability, to pay its debts as such debts become due; or the board of directors (or similar governing body) of such Credit Party or the Servicer, as applicable, (or any committee thereof) shall adopt any resolution or otherwise authorize any action to approve any of the actions referred to herein or in Section 7.1(h); or

 

(j) With respect to the Borrower, any money judgment, writ or warrant of attachment or similar process involving in the aggregate at any time an amount in excess of $250,000 (to the extent not adequately covered by insurance as to which a solvent and unaffiliated insurance company has not denied coverage) shall be entered or filed against the Borrower or any of its assets and (A) shall remain undischarged, unvacated, unbonded or unstayed for a period of sixty (60) days (or in any event later than five (5) days prior to the date of any proposed sale thereunder in connection with any enforcement proceedings commenced by a creditor upon such judgment, writ, warrant of attachment or similar process) or (B) a decree or order is entered for the appointment of a receiver, liquidator, sequestrator, trustee, custodian assignee for the benefit of creditors (or other officer having similar powers) over such assets; or

 

(k) Dissolution.  Any order, judgment or decree shall be entered against any Credit Party decreeing the dissolution or split up of the Borrower and such order shall remain undischarged or unstayed for a period in excess of sixty (60) days; or

 

(l) Change of Control.  A Change of Control shall occur with (i) respect to CPS or the Servicer or (ii) respect to the Borrower, in each case, without the prior written consent of the Lead Agents; or

 

(m) Collateral Documents and other Credit Documents.  At any time after the execution and delivery thereof, (i) this Agreement or any Collateral Document ceases to be in full force and effect (other than by reason of a release of Collateral in accordance with the terms hereof or thereof or the satisfaction in full of the Obligations in accordance with the terms hereof) or shall be declared null and void or the enforceability thereof shall be impaired in any material respect, or the Collateral Agent shall not have or shall cease to have a valid and perfected Lien in any Collateral purported to be covered by the Collateral Documents with the priority required by the relevant Collateral Document, in each case for any reason other than the failure of the Collateral Agent or any Secured Party to take any action within its control; or (ii) any of the Credit Documents identified in clause (a) of the definition thereof for any reason, other than the satisfaction in full of all Obligations (other than contingent indemnification obligations), shall cease to be in full force and effect (other than in accordance with its terms) or shall be declared to be null and void or a party thereto, as the case may be, shall repudiate its obligations thereunder or shall contest the validity or enforceability of any Credit Document in writing; or

 

(n) [Reserved]; or

 

(o) Defaults Under Limited Guaranty. A default in CPS’ obligations under the Limited Guaranty shall have occurred; or

 

(p) [Reserved]; or

 

(q) Maturity Date.  Failure of the Borrower to pay the unpaid principal amount of and accrued interest on the Term Loans and all other Obligations on the Maturity Date; or

 

(r) [Reserved]; or

 

(s) Performance Triggers.  The breach of a Performance Trigger; or

 

(t) [Reserved];

 

THEN:

 

(A) upon the occurrence of any Tier 2 Event of Default described in Section 7.1(h), 7.1(i) or 7.1(k) automatically, and (B) upon the occurrence of (I) any other Tier 2 Event of Default or (II) any Tier 1 Event of Default and the exercise by the Lenders of the Buyout Option in accordance with Section 9.25, at the request of (or with the consent of) the Lead Agents and the Requisite Lenders, in the case of clause I and II, upon written notice to the Borrower and the Backup Servicer by the Administrative Agent, (x) the Term Loan Commitments, if any, shall immediately terminate; (y) each of the following shall immediately become due and payable, in each case without presentment, demand, protest or other requirements of any kind, all of which are hereby expressly waived by each Credit Party: (1) the unpaid principal amount of and accrued interest on the Term Loans and (2) all other Obligations; and (z) the Administrative Agent shall cause the Collateral Agent to enforce any and all Liens and security interests created pursuant to the Collateral Documents.

 

SECTION 8.

AGENTS

 

8.1. Appointment of Agents

 

.  Fortress is hereby appointed Administrative Agent and Collateral Agent hereunder and under the other Credit Documents and each Lender hereby authorizes Fortress, in such capacity, to act as its agent in accordance with the terms hereof and the other Credit Documents; provided, that Administrative Agent will not exercise any remedies under the Servicing Agreement following a Servicer Default, or waive any such remedies or rights of the Lenders thereunder, without the consent of the Lead Agents.  Each Agent hereby agrees to act upon the express conditions contained herein and the other Credit Documents, as applicable.  The provisions of this Section 8 are solely for the benefit of Agents and the Lenders and the Borrower shall not have any rights as a beneficiary of any of the provisions thereof.  In performing its functions and duties hereunder, each Agent shall act solely as an agent of the Lenders and does not assume and shall not be deemed to have assumed any obligation towards or relationship of agency or trust with or for the Borrower.

 

8.2. Powers and Duties

 

.  Each Lender irrevocably authorizes each Agent to take such action on such Lender's behalf and to exercise such powers, rights and remedies hereunder and under the other Credit Documents as are specifically delegated or granted to such Agent by the terms hereof and thereof, together with such powers, rights and remedies as are reasonably incidental thereto.  Each Agent shall have only those duties and responsibilities that are expressly specified herein and the other Credit Documents.  Each Agent may exercise such powers, rights and remedies and perform such duties by or through its agents or employees.  No Agent shall have, by reason hereof or any of the other Credit Documents, a fiduciary relationship in respect of any Lender; and nothing herein or any of the other Credit Documents, expressed or implied, is intended to or shall be so construed as to impose upon any Agent any obligations in respect hereof or any of the other Credit Documents except as expressly set forth herein or therein.

 

8.3. Collateral Documents and Guaranties

 

.  Each Lender hereby further authorizes the Administrative Agent or the Collateral Agent, as applicable, on behalf of and for the benefit of the Lenders, to be the agent for and representative of the Lenders with respect to the Limited Guaranty, the Collateral and the Collateral Documents.  Subject to Section 9.5, without further written consent or authorization from the Lenders, the Administrative Agent or the Collateral Agent, as applicable may execute any documents or instruments necessary to release any Lien encumbering any item of Collateral that is the subject of a sale or other disposition of assets permitted hereby or to which the Requisite Lenders (or such other Lenders as may be required to give such consent under Section 9.5) have otherwise consented, or with respect to which the Requisite Lenders or the Lead Agents (or such other Lenders as may be required to give such consent under Section 9.5) have otherwise consented.

 

SECTION 9.

MISCELLANEOUS

 

9.1. Notices

 

.  Unless otherwise specifically provided herein, any notice or other communication herein required or permitted to be given to CPS, the Borrower, any other Credit Party, the Collateral Agent or the Administrative Agent shall be sent to such Person's address as set forth on Appendix B or in the other relevant Credit Document, and in the case of any Lender, the address as indicated on Appendix B or otherwise indicated to the Administrative Agent in writing.  Each notice hereunder shall be in writing and may be personally served, sent by telefacsimile (with telephonic confirmation of receipt) or courier service and shall be deemed to have been given when delivered in person or by courier service and signed for against receipt thereof, upon receipt of telefacsimile; provided, no notice to any Agent shall be effective until received by such Agent.

 

9.2. Expenses

 

.  The Borrower agrees to pay promptly (a) all the Agents’ and Lead Agents’ actual and reasonable, documented, out-of-pocket costs and expenses of any consents, amendments, waivers or other modifications of the Credit Documents; (b) all the reasonable, documented fees, expenses and disbursements of counsel to the Agents and the Lead Agents in connection with any consents, amendments, waivers or other modifications of the Credit Documents and any other documents or matters requested by the Borrower; (c) all the actual costs and reasonable, documented, out-of-pocket expenses of creating and perfecting Liens in favor of the Collateral Agent, for the benefit of the Secured Parties, including filing and recording fees, expenses and taxes, stamp or documentary taxes, search fees, title insurance premiums and reasonable fees, expenses and disbursements of counsel to each Agent, in each case incurred after the occurrence of a Default or an Event of Default; (d) each of the Agent's or Lead Agents’ actual costs and reasonable documented, out-of-pocket fees, expenses for, and disbursements of any of such Agent's or Lead Agents’, auditors, accountants, consultants or appraisers whether internal or external, and all reasonable, documented attorneys’ fees (including expenses and disbursements of outside counsel) incurred by such Agent or Lead Agent after a Default or Event of Default; (e) all the actual costs and reasonable, documented, out-of-pocket expenses (including the reasonable fees, expenses and disbursements of any appraisers, consultants, advisors and agents employed or retained by the Collateral Agent and its counsel) in connection with the custody or preservation of any of the Collateral; (f) all of the actual costs and documented, out-of-pocket expenses of the Controlled Account Bank and (g) after the occurrence of a Default or an Event of Default, all documented costs and expenses, including reasonable attorneys’ fees and costs of settlement, incurred by any Agent and the Lenders in enforcing any Obligations of or in collecting any payments due from any Credit Party hereunder or under the other Credit Documents by reason of such Default or Event of Default (including in connection with the sale of, collection from, or other realization upon any of the Collateral or the enforcement of the Limited Guaranty) or in connection with any refinancing or restructuring of the credit arrangements provided hereunder in the nature of a “work-out” or pursuant to any insolvency or bankruptcy cases or proceedings.

 

9.3. Indemnity.

 

(a) IN ADDITION TO THE PAYMENT OF EXPENSES PURSUANT TO SECTION 9.2, WHETHER OR NOT THE TRANSACTIONS CONTEMPLATED HEREBY SHALL BE CONSUMMATED, EACH OF CPS AND THE BORROWER AGREES, SEVERALLY BUT NOT JOINTLY, TO DEFEND (SUBJECT TO INDEMNITEES’ SELECTION OF COUNSEL), INDEMNIFY, PAY AND HOLD HARMLESS, EACH AGENT, EACH LEAD AGENT AND EACH LENDER, THEIR AFFILIATES AND THEIR RESPECTIVE OFFICERS, PARTNERS, DIRECTORS, TRUSTEES, EMPLOYEES AND AGENTS OF EACH AGENT, EACH LEAD AGENT AND EACH LENDER (EACH, AN “INDEMNITEE”), FROM AND AGAINST ANY AND ALL INDEMNIFIED LIABILITIES (PROVIDED, THAT IN THE CASE OF CPS, SUCH INDEMNIFIED LIABILITY RESULTED FROM AN ACTION OF CPS OR BREACH BY CPS OF ANY OF ITS REPRESENTATIONS, WARRANTIES, AGREEMENTS, COVENANTS OR OTHER OBLIGATIONS UNDER ANY CREDIT DOCUMENT), IN ALL CASES, WHETHER OR NOT CAUSED BY OR ARISING, IN WHOLE OR IN PART, OUT OF THE COMPARATIVE, CONTRIBUTORY, OR SOLE NEGLIGENCE OF SUCH INDEMNITEE; PROVIDED, NEITHER CPS NOR THE BORROWER SHALL HAVE ANY OBLIGATION TO ANY INDEMNITEE HEREUNDER WITH RESPECT TO ANY INDEMNIFIED LIABILITIES TO THE EXTENT SUCH INDEMNIFIED LIABILITIES ARISE FROM THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF SUCH INDEMNITEE, AS DETERMINED BY A COURT OF COMPETENT JURISDICTION IN A FINAL NON-APPEALABLE ORDER OR JUDGMENT.  TO THE EXTENT THAT THE UNDERTAKINGS TO DEFEND, INDEMNIFY, PAY AND HOLD HARMLESS SET FORTH IN THIS SECTION 9.3 MAY BE UNENFORCEABLE IN WHOLE OR IN PART BECAUSE THEY ARE VIOLATIVE OF ANY LAW OR PUBLIC POLICY, CPS OR THE BORROWER, AS APPLICABLE, SHALL CONTRIBUTE THE MAXIMUM PORTION THAT IT IS PERMITTED TO PAY AND SATISFY UNDER APPLICABLE LAW TO THE PAYMENT AND SATISFACTION OF ALL INDEMNIFIED LIABILITIES INCURRED BY INDEMNITEES OR ANY OF THEM.

 

(b) To the extent permitted by applicable law, neither CPS nor the Borrower shall assert, and each of CPS and the Borrower hereby waives, any claim against the Lenders, the Agents and their respective Affiliates, directors, employees, attorneys or agents, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) (whether or not the claim therefor is based on contract, tort or duty imposed by any applicable legal requirement) arising out of, in connection with, as a result of, or in any way related to, this Agreement or any Credit Document or any agreement or instrument contemplated hereby or thereby or referred to herein or therein, the transactions contemplated hereby or thereby, any Term Loan or the use of the proceeds thereof or any act or omission or event occurring in connection therewith, and each of CPS and the Borrower hereby waives, releases and agrees not to sue upon any such claim or any such damages, whether or not accrued and whether or not known or suspected to exist in its favor.

 

(c) Amounts paid or payable by CPS or Borrower pursuant to the CPS Guaranty or the Purchase Agreement as a result of any Lender’s breach of this Agreement are direct damages.

 

9.4. Set-Off

 

.  In addition to any rights now or hereafter granted under applicable law and not by way of limitation of any such rights, upon the occurrence of any Event of Default, each Lender and its Affiliates each is hereby authorized by the Borrower at any time or from time to time subject to the consent of the Administrative Agent, without notice to the Borrower or to any other Person (other than the Administrative Agent) except to the extent required by applicable law, any such notice being hereby expressly waived to the maximum extent under applicable law, and subject to any requirements or limitations imposed by applicable law, to set off and to appropriate and to apply any and all deposits (general or special, including Indebtedness evidenced by certificates of deposit, whether matured or unmatured, but not including trust accounts (in whatever currency)) and any other Indebtedness at any time held or owing by such Lender to or for the credit or the account of the Borrower (in whatever currency) against and on account of the obligations and liabilities of the Borrower to such Lender arising hereunder or under the other Credit Documents, including all claims of any nature or description arising out of or connected hereto or with any other Credit Document, irrespective of whether or not (a) such Lender shall have made any demand hereunder, (b) the principal of or the interest on the Term Loans or any other amounts due hereunder shall have become due and payable pursuant to Section 2 and although such obligations and liabilities, or any of them, may be contingent or unmatured or (c) such obligation or liability is owed to a branch or office of such Lender different from the branch or office holding such deposit or obligation or such Indebtedness.

 

9.5. Amendments and Waivers.

 

(a) Requisite Lenders’ Consent.  Subject to Sections 9.5(b) and 9.5(c), no amendment, modification, termination or waiver of any provision of the Credit Documents, or consent to any departure by any Credit Party therefrom, shall in any event be effective without the written concurrence of each Credit Party that is party thereto, the Administrative Agent, the Requisite Lenders, and the Lead Agents (for so long as any Lead Agent exists).

 

(b) Affected Lenders’ Consent.  Without the written consent of each Lender that would be affected thereby, no amendment, modification, termination, or consent shall be effective if the effect thereof would:

 

(i) extend the scheduled final maturity of any Term Loan or Note;

 

(ii) waive, reduce or postpone any scheduled repayment;

 

(iii) reduce the rate of interest on any Term Loan or any fee payable hereunder;

 

(iv) extend the time for payment of any such interest or fees;

 

(v) reduce the principal amount of any Term Loan;

 

(vi) amend, modify, terminate or waive any provision of this Section 9.5(b) or Section 9.5(c);

 

(vii) amend the definition of “Lead Agents”, “Requisite Lenders” or “Pro Rata Share”; provided, with the consent of the Administrative Agent and the Requisite Lenders, additional extensions of credit pursuant hereto may be included in the determination of “Requisite Lenders” or “Pro Rata Share” on substantially the same basis as the Term Loan Commitments and the Term Loans are included on the Closing Date;

 

(viii) release all or substantially all of the Collateral or the Guarantor from the Limited Guaranty, except as expressly provided in the Credit Documents; or

 

(ix) consent to the assignment or transfer by any Credit Party of any of its rights and obligations under any Credit Document.

 

(c) Other Consents.  No amendment, modification, termination or waiver of any provision of the Credit Documents, or consent to any departure by any Credit Party therefrom, shall:

 

(i) increase the Term Loan Commitment of any Lender without the consent of such Lender;

 

(ii) amend, modify, terminate or waive any provision of Section 3.1 with regard to any Credit Extension without the consent of the Lenders;

 

(iii) amend, modify, terminate or waive any provision of Section 8 as the same applies to any Agent, or any other provision hereof as the same applies to the rights or obligations of any Agent, in each case without the consent of such Agent; or

 

(iv) adversely affect the Controlled Account Bank, the Lockbox Account Bank, the Backup Servicer or the Custodian without the consent of such affected party.

 

(d) Execution of Amendments, etc.  The Administrative Agent may, but shall have no obligation to, with the concurrence of any Lender, execute amendments, modifications, waivers or consents on behalf of such Lender.  Any waiver or consent shall be effective only in the specific instance and for the specific purpose for which it was given.  No notice to or demand on a Credit Party in any case shall entitle such Credit Party to any other or further notice or demand in similar or other circumstances.  Any amendment, modification, termination, waiver or consent effected in accordance with this Section 9.5 shall be binding upon each Lender at the time outstanding, each future Lender and, if signed by a Credit Party, upon such Credit Party.  Notwithstanding anything to the contrary contained in this Section 9.5, if the Lead Agents and the Credit Parties shall have jointly identified an obvious error or any error or omission of a technical nature, in each case that is immaterial (as determined by the Lead Agents in their sole discretion), in any provision of the Credit Documents, then the Lead Agents (as applicable, and in their respective applicable capacities thereunder as Lead Agent, the Administrative Agent or Collateral Agent) and the Credit Parties shall be permitted to amend such provision and such amendment shall become effective without any further action or consent by the Requisite Lenders if the same is not objected to in writing by the Requisite Lenders within five (5) Business Days following receipt of notice thereof.

 

9.6. Successors and Assigns; Participations.

 

(a) Generally.  This Agreement shall be binding upon the parties hereto and their respective successors and assigns and shall inure to the benefit of the parties hereto and the successors and assigns of the Lenders.  None of CPS’ nor the Borrower's rights or obligations hereunder nor any interest herein may be assigned or delegated without the prior written consent of all Lenders, provided however, that Borrower may assign any of its rights hereunder to receive Term Loans and such other rights assigned pursuant to Section 9.17 of the Purchase Agreement on the terms and conditions hereof in accordance with and subject to Section 9.17 of the Purchase Agreement.  Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, Indemnitees under Section 9.3, their respective successors and assigns permitted hereby and, to the extent expressly contemplated hereby, Lender Affiliates of each of the Agents and the Lenders) any legal or equitable right, remedy or claim under or by reason of this Agreement.

 

(b) Register.  The Borrower, CPS, the Administrative Agent and the Lenders shall deem and treat the Persons listed as “Lenders” in the Register as the holders and owners of the corresponding Term Loan Commitments and Term Loans listed therein for all purposes hereof, and no assignment or transfer of any such Term Loan Commitment or Term Loan shall be effective, in each case, unless and until an Assignment Agreement effecting the assignment or transfer thereof shall have been delivered to and accepted by the Administrative Agent and recorded in the Register as provided in Section 9.6(f).  Prior to such recordation, all amounts owed with respect to the applicable Term Loan Commitment or Term Loan shall be owed to the Lender listed in the Register as the owner thereof, and any request, authority or consent of any Person who, at the time of making such request or giving such authority or consent, is listed in the Register as a Lender shall be conclusive and binding on any subsequent holder, assignee or transferee of the corresponding Term Loan Commitments or Term Loans.

 

(c) Right to Assign.  Subject to Section 9.6(l), each Agent and each Lender shall have the right at any time to sell, assign or transfer all or a portion of its rights and obligations under this Agreement, including, without limitation, all or a portion of its Term Loan Commitment or Term Loans owing to it or other Obligations:

 

(i) to any Person meeting the criteria of clause (1)(a) or (2)(a) of the definition of the term of “Eligible Assignee” upon the giving of notice to the Borrower and Administrative Agent; and

 

(ii) to any Person otherwise constituting an Eligible Assignee with the consent of the Administrative Agent; provided, each such sale, assignment or transfer pursuant to this Section shall be in an aggregate amount of not less than $1,000,000 (or such lesser amount as may be agreed to by the Borrower and Administrative Agent or as shall constitute the aggregate amount of the Term Loan Commitments and Term Loans of the assigning Lender).

 

(d) Mechanics.  The assigning Lender and the assignee thereof shall execute and deliver to Administrative Agent and, if the assignee is not a Lender Affiliate, the Borrower an Assignment Agreement, together with such forms, certificates or other evidence, if any, with respect to United States federal income tax withholding matters as the assignee under such Assignment Agreement may be required to deliver to Administrative Agent.

 

(e) Rating Agencies.  Each of the Borrower and CPS agrees that the Lenders and the Administrative Agent shall have the right to disclose the terms of this Agreement and the transactions contemplated hereby to any Rating Agency.  In addition, each of the Borrower and CPS agrees to provide, or cause to be provided, to the Rating Agencies any information, books, records, financial statements or other documents as reasonably requested by the Rating Agencies.

 

(f) Notice of Assignment.  Upon its receipt and acceptance of a duly executed and completed Assignment Agreement, any forms, certificates or other evidence required by this Agreement in connection therewith, the Administrative Agent shall record the information contained in such Assignment Agreement in the Register, shall give prompt notice thereof to CPS and the Borrower and shall maintain a copy of such Assignment Agreement.

 

(g) Representations and Warranties of Assignee.  Each assignee of any Lender, upon executing and delivering an Assignment Agreement, represents and warrants as of the applicable Effective Date (as defined in the applicable Assignment Agreement) that (i) it has experience and expertise in the making of or investing in commitments or loans such as the applicable Term Loan Commitments or Term Loans, as the case may be; (ii) it will make or invest in, as the case may be, its Term Loan Commitments or Term Loans for its own account in the ordinary course of its business and without a view to distribution of such Term Loan Commitments or Term Loans within the meaning of the Securities Act or the Exchange Act or other federal securities laws (it being understood that, subject to the provisions of this Section 9.6, the disposition of such Term Loan Commitments or Term Loans or any interests therein shall at all times remain within its exclusive control); (iii) such assignee does not own or control, or own or control any Person owning or controlling, any trade debt or Indebtedness of CPS or the Borrower other than the Obligations or any Capital Stock of CPS or the Borrower and (iv) such assignee is a “United States person” within the meaning of Internal Revenue Code Section 7701(a)(30).

 

(h) Effect of Assignment.  Subject to the terms and conditions of this Section 9.6, as of the “Effective Date” specified in the applicable Assignment Agreement: (i) the assignee thereunder shall have the rights and obligations of a “Lender” hereunder to the extent such rights and obligations hereunder have been assigned to it pursuant to such Assignment Agreement and shall thereafter be a party hereto and a “Lender” for all purposes hereof; (ii) the assigning Lender thereunder shall, to the extent that rights and obligations hereunder have been assigned thereby pursuant to such Assignment Agreement, relinquish its rights (other than any rights which survive the termination hereof under Section 9.8) and be released from its obligations hereunder (and, in the case of an Assignment Agreement covering all or the remaining portion of an assigning Lender's rights and obligations hereunder, such Lender shall cease to be a party hereto; provided, anything contained in any of the Credit Documents to the contrary notwithstanding, such assigning Lender shall continue to be entitled to the benefit of all indemnities hereunder as specified herein with respect to matters arising out of the prior involvement of such assigning Lender as a Lender hereunder); (iii) the Term Loan Commitments shall be modified to reflect the Term Loan Commitment of such assignee and any Term Loan Commitment of such assigning Lender, if any; and (iv) if any such assignment occurs after the issuance of any Note hereunder, the assigning Lender shall, upon the effectiveness of such assignment or as promptly thereafter as practicable, surrender its applicable Notes to the Administrative Agent for cancellation, and thereupon the Borrower shall issue and deliver new Notes, if so requested by the assignee and/or assigning Lender, to such assignee and/or to such assigning Lender, with appropriate insertions, to reflect the new Term Loan Commitments and/or outstanding Term Loans of the assignee and/or the assigning Lender.

 

(i) Participations.  Subject to Section 9.6(l), each Lender shall have the right at any time to sell one or more participations to any Person (other than CPS, any of its Subsidiaries or any of its Affiliates) in all or any part of its rights and obligations under this Agreement, including, without limitation, all or a portion of its Term Loan Commitment or Term Loans owing to it or other Obligations; provided, however, that notwithstanding the foregoing, no participations may be sold to any Person acquiring such participation with the assets of, or for the benefit of, any employee benefit plan subject to Title I of ERISA, any “plan” subject to Section 4975 of the Internal Revenue Code, or any entity whose underlying assets include plan assets by reason of a plan's investment in such entity.  The holder of any such participation, other than a Lender Affiliate of the Lender granting such participation, shall not be entitled to require such Lender to take or omit to take any action hereunder except with respect to any amendment, modification or waiver that would (i) extend the final scheduled maturity of any Term Loan or Note in which such participant is participating, or reduce the rate or extend the time of payment of interest or fees thereon (except in connection with a waiver of applicability of any post-default increase in interest rates) or reduce the principal amount thereof, or increase the amount of the participant's participation over the amount thereof then in effect (it being understood that a waiver of any Default or Event of Default or of a mandatory reduction in the Term Loan Commitment shall not constitute a change in the terms of such participation, and that an increase in any Term Loan Commitment or Term Loan shall be permitted without the consent of any participant if the participant's participation is not increased as a result thereof), (ii) consent to the assignment or transfer by CPS or the Borrower of any of its rights and obligations under this Agreement, or (iii) release all or substantially all of the Collateral under the Collateral Documents or the Guarantor from the Limited Guaranty (in each case except as expressly provided in the Credit Documents) supporting the Term Loans hereunder in which such participant is participating.  Each of CPS and the Borrower agrees that each participant shall be entitled to the benefits of Sections 2.17 and 2.18 to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to clause (c) of this Section 9.6; provided, (i) a participant shall not be entitled to receive any greater payment under Section 2.17 and 2.18 than the applicable Lender would have been entitled to receive with respect to the participation sold to such participant, unless the sale of the participation to such participant is made with the Borrower's prior written consent, (ii) such participant is a “United States person” within the meaning of Internal Revenue Code Section 7701(a)(30) and (iii) such participant complies with the written statement and notice requirements therein.  To the extent permitted by law, each participant also shall be entitled to the benefits of Section 9.4 as though it were a Lender.  Notwithstanding any participation made hereunder (i) such selling Lender's obligations under this Agreement shall remain unchanged, (ii) such Lender shall remain solely responsible to the Borrower for the performance of its obligations hereunder, and (iii) except as set forth above, the Credit Parties, the Agents and the other Lenders shall continue to deal solely and directly with such Lender in connection with such Lender's rights and obligations under this Agreement, and such Lender shall retain the sole right to enforce the obligations of the Credit Parties relating to the Obligations and to approve, without the consent of or consultation with any participant, any amendment, modification or waiver of any provision of this Agreement.  Each Lender that sells a participation shall maintain a register on which it enters the name and address of each participant and the amounts of each participant's participation (the “Participant Register”).  The entries in the Participant Register shall be conclusive, absent manifest error, and such Lender shall treat each Person whose name is recorded in the Participant Register as the owner of such participation for all purposes of this Agreement notwithstanding any notice to the contrary.

 

(j) Certain Other Assignments.  Subject to Section 9.6(l), in addition to any other assignment permitted pursuant to this Section 9.6, any Lender may assign, pledge and/or grant a security interest in, all or any portion of its Term Loans, the other Obligations owed by or to such Lender, and its Term Loan Notes, if any, to secure obligations of such Lender including, without limitation, any Federal Reserve Bank as collateral security pursuant to Regulation A of the Board of Governors of the Federal Reserve System and any operating circular issued by such Federal Reserve Bank; provided, such Lender, as between the Borrower and the Lender, shall not be relieved of any of its obligations hereunder as a result of any such assignment and pledge, and provided further, in no event shall the applicable Federal Reserve Bank, pledgee or trustee be considered to be a “Lender” or be entitled to require the assigning Lender (except if such assigning Lender is a Lead Agent) to take or omit to take any action hereunder.

 

(k) Lead Agent Affiliate Lenders.  Notwithstanding anything to the contrary set forth in Sections 9.6(a) through (j), but subject to Section 9.6(l), each party hereto acknowledges and agrees that (a) each Lead Agent and/or its Lender Affiliates may, in its sole discretion, at any time, and from time to time, in connection with any assignment to be made hereunder to any of its Lender Affiliates (each such Lender Affiliate, a “Lead Agent Affiliate Lender”), (i) assign to any Lead Agent Affiliate Lender all or any portion of such Lead Agent’s or any such Lead Agent Affiliate Lender’s Term Loans then existing and/or such Lead Agent’s or any such Lead Agent Affiliate Lender’s Term Loan Commitments then outstanding in such percentages or fixed dollar amounts as such Lead Agent or any such Lead Agent Affiliate Lender shall determine in their respective sole discretion, and (ii) in furtherance of the foregoing, request the Borrower to, and the Borrower shall, execute and deliver to such Lead Agent or such Lead Agent Affiliate Lender, as the case may be, any Note (or replacement therefor) requested pursuant to Section 2.4(b) to reflect such assignment and (b) such Lead Agent and one or more Lead Agent Affiliate Lenders may enter into agreements by and among such Lead Agent and such Lead Agent Affiliate Lenders and (if applicable) the Administrative Agent with respect to such assignments, including, without limitation, the ability to create a sequential pay feature amongst such Lead Agent and such Lead Agent Lenders; provided that the terms of any such agreements do not affect the terms of the Credit Documents (other than the Assignment Agreement to the extent required to reflect such agreements) or the Borrower’s rights or obligations under any Credit Document; provided, further, that (1) the percentage or fixed dollar amount of such assignment is set forth in the related Assignment Agreement, (2) the aggregate Term Loan Commitment amongst such Lead Agent and such Lead Agent Affiliate Lenders immediately following any such assignment remains unchanged from the aggregate Term Loan Commitments of such Lead Agent and such Lead Agent Affiliate Lenders immediately prior to such assignment and (3) no such assignment shall increase any of the Borrower’s Obligations hereunder; and provided, further, that (x) any such Lead Agent Affiliate Lender subject to any such assignment for any such percentage or fixed dollar amount (whether such assignment is solely of the existing Term Loans or the outstanding Term Loan Commitments, or both) shall be a “Lender” for all purposes hereunder, under the other Credit Documents subject, solely as among such Lead Agent and such Lead Agent Affiliate Lenders, to such restrictions set forth amongst such Lead Agent and such Lead Agent Affiliate Lenders set forth in the related Assignment Agreement (including the ability for any such assignee to not be assigned any future funding obligations in respect of Term Loan Commitments other than to the extent of any repayments received by such assignee on the principal balance of the assigned Term Loan (provided that such Assignment Agreement shall also provide that the relevant assignor expressly retains any such future funding obligations beyond principal repayments to such assignee on the principal balance of such assigned Term Loan)) and (y) following any such assignment of solely an existing Term Loan, (1) such assignee’s “Term Loan Exposure” for purposes of clause (a) of such definition shall be deemed equal to the outstanding amount of such Term Loan as of the date of such assignment and (2) the related assignor's Term Loan Exposure for purposes of clause (a) of such definition shall be reduced by the amount of such Term Loan as of the date of such assignment.

 

(l) Non-U.S. Person Transfer Restriction.  Notwithstanding anything herein to the contrary, in no event shall any portion of any Lender’s rights or interests under this Agreement be held by, or transferred, assigned, participated, or otherwise disposed of to, any Person unless such Person is a “United States person” within the meaning of Internal Revenue Code Section 7701(a)(30).   Each Lender and any assignee of such Lender shall deliver to the Administrative Agent an IRS Form W-9 prior to the receipt of the first payment hereunder to such Lender or assignee.  In the event of any conflict between this Section 9.6(l) and any other provision in any Credit Document, this Section 9.6(l) shall control.   

 

9.7. Independence of Covenants

 

.  All covenants hereunder shall be given independent effect so that if a particular action or condition is not permitted by any of such covenants, the fact that it would be permitted by an exception to, or would otherwise be within the limitations of, another covenant shall not avoid the occurrence of a Default or an Event of Default if such action is taken or condition exists.

 

9.8. Survival of Representations, Warranties and Agreements

 

.  All representations, warranties and agreements made herein shall survive the execution and delivery hereof and the making of any Credit Extension.  Notwithstanding anything herein or implied by law to the contrary, the agreements of the Borrower and CPS shall survive the payment of the Term Loans until the Termination Date and the obligations and the agreements of the Borrower and CPS set forth in Sections 2.17, 2.18, 9.2, 9.3, 9.4, 9.10, 9.13 and 9.14 shall survive the Termination Date and the payment in full of the Obligations.

 

9.9. No Waiver; Remedies Cumulative

 

.  No failure or delay on the part of any Agent or any Lender in the exercise of any power, right or privilege hereunder or under any other Credit Document shall impair such power, right or privilege or be construed to be a waiver of any default or acquiescence therein, nor shall any single or partial exercise of any such power, right or privilege preclude other or further exercise thereof or of any other power, right or privilege.  The rights, powers and remedies given to each Agent and each Lender hereby are cumulative and shall be in addition to and independent of all rights, powers and remedies existing by virtue of any statute or rule of law or in any of the other Credit Documents.  Any forbearance or failure to exercise, and any delay in exercising, any right, power or remedy hereunder shall not impair any such right, power or remedy or be construed to be a waiver thereof, nor shall it preclude the further exercise of any such right, power or remedy.

 

9.10. Marshalling; Payments Set Aside

 

.  Neither any Agent nor any Lender shall be under any obligation to marshal any assets in favor of the Borrower or any other Person or against or in payment of any or all of the Obligations.  To the extent that any Credit Party makes a payment or payments to the Administrative Agent or the Lenders (or to the Administrative Agent, on behalf of the Lenders), or the Administrative Agent, the Collateral Agent or the Lenders enforce any security interests or exercise their rights of setoff, and such payment or payments or the proceeds of such enforcement or setoff or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside and/or required to be repaid to a trustee, receiver or any other party under any bankruptcy law, any other state or federal law, common law or any equitable cause, then, to the extent of such recovery, the obligation or part thereof originally intended to be satisfied, and all Liens, rights and remedies therefor or related thereto, shall be revived and continued in full force and effect as if such payment or payments had not been made or such enforcement or setoff had not occurred.

 

9.11. Severability

 

.  In case any provision or obligation hereunder or any Note or other Credit Document shall be invalid, illegal or unenforceable in any jurisdiction, the validity, legality and enforceability of the remaining provisions or obligations, or of such provision or obligation in any other jurisdiction, shall not in any way be affected or impaired thereby.

 

9.12. Headings

 

.  Section headings herein are included herein for convenience of reference only and shall not constitute a part hereof for any other purpose or be given any substantive effect.

 

9.13. APPLICABLE LAW

 

.  THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES (OTHER THAN SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW) THEREOF.

 

9.14. CONSENT TO JURISDICTION.

 

(a) ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST                                                                                                CPS OR THE BORROWER ARISING OUT OF OR RELATING HERETO OR ANY OTHER CREDIT DOCUMENT, OR ANY OF THE OBLIGATIONS, MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION IN THE STATE, COUNTY AND CITY OF NEW YORK.  BY EXECUTING AND DELIVERING THIS AGREEMENT, EACH OF CPS AND THE BORROWER, FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES, IRREVOCABLY (i) ACCEPTS GENERALLY AND UNCONDITIONALLY THE NONEXCLUSIVE JURISDICTION AND VENUE OF SUCH COURTS; (ii) WAIVES ANY DEFENSE OF FORUM NON CONVENIENS; (iii) AGREES THAT SERVICE OF ALL PROCESS IN ANY SUCH PROCEEDING IN ANY SUCH COURT MAY BE MADE BY REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT REQUESTED, TO THE APPLICABLE CREDIT PARTY AT ITS ADDRESS PROVIDED IN ACCORDANCE WITH SECTION 9.1 AND TO ANY PROCESS AGENT SELECTED IN ACCORDANCE WITH SECTION 3.1(q) ABOVE IS SUFFICIENT TO CONFER PERSONAL JURISDICTION OVER CPS OR THE BORROWER, AS APPLICABLE, IN ANY SUCH PROCEEDING IN ANY SUCH COURT, AND OTHERWISE CONSTITUTES EFFECTIVE AND BINDING SERVICE IN EVERY RESPECT; AND (iv) AGREES THAT AGENTS AND THE LENDERS RETAIN THE RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO BRING PROCEEDINGS AGAINST CPS OR THE BORROWER, AS APPLICABLE, IN THE COURTS OF ANY OTHER JURISDICTION.

 

(b) EACH OF CPS AND THE BORROWER HEREBY AGREES THAT PROCESS MAY BE SERVED ON IT BY CERTIFIED MAIL, RETURN RECEIPT REQUESTED, TO THE ADDRESSES PERTAINING TO IT AS SPECIFIED IN SECTION 9.1, AND HEREBY APPOINTS CT CORPORATION SYSTEM, 111 8TH AVENUE, NEW YORK, NEW YORK 10011, AS ITS AGENT TO RECEIVE SUCH SERVICE OF PROCESS.  ANY AND ALL SERVICE OF PROCESS AND ANY OTHER NOTICE IN ANY SUCH ACTION, SUIT OR PROCEEDING SHALL BE EFFECTIVE AGAINST CPS OR THE BORROWER, AS APPLICABLE, IF GIVEN BY REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT REQUESTED, OR BY ANY OTHER MEANS OR MAIL WHICH REQUIRES A SIGNED RECEIPT, POSTAGE PREPAID, MAILED AS PROVIDED ABOVE.  IN THE EVENT CT CORPORATION SYSTEM. SHALL NOT BE ABLE TO ACCEPT SERVICE OF PROCESS AS AFORESAID AND IF CPS OR THE BORROWER, AS APPLICABLE, SHALL NOT MAINTAIN AN OFFICE IN NEW YORK CITY, SUCH CREDIT PARTY SHALL PROMPTLY APPOINT AND MAINTAIN AN AGENT QUALIFIED TO ACT AS AN AGENT FOR SERVICE OF PROCESS WITH RESPECT TO THE COURTS SPECIFIED IN THIS SECTION 9.14 ABOVE, AND ACCEPTABLE TO THE ADMINISTRATIVE AGENT, AS CPS’ OR THE BORROWER'S, AS APPLICABLE, AUTHORIZED AGENT TO ACCEPT AND ACKNOWLEDGE ON THE BORROWER'S BEHALF SERVICE OF ANY AND ALL PROCESS WHICH MAY BE SERVED IN ANY SUCH ACTION, SUIT OR PROCEEDING.

 

9.15. WAIVER OF JURY TRIAL

 

.  EACH OF CPS AND THE BORROWER HEREBY AGREES TO WAIVE ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING HEREUNDER OR UNDER ANY OF THE OTHER CREDIT DOCUMENTS OR ANY DEALINGS BETWEEN IT RELATING TO THE SUBJECT MATTER OF THIS LOAN TRANSACTION OR THE LENDER/BORROWER RELATIONSHIP THAT IS BEING ESTABLISHED.  THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS TRANSACTION, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS.  EACH OF CPS AND THE BORROWER ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP, THAT IT HAS ALREADY RELIED ON THIS WAIVER IN ENTERING INTO THIS AGREEMENT, AND THAT IT WILL CONTINUE TO RELY ON THIS WAIVER IN ITS RELATED FUTURE DEALINGS.  EACH OF CPS AND THE BORROWER FURTHER WARRANTS AND REPRESENTS THAT IT HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL AND THAT IT KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL.  THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING (OTHER THAN BY A MUTUAL WRITTEN WAIVER SPECIFICALLY REFERRING TO THIS SECTION 9.15 AND EXECUTED BY EACH OF THE PARTIES HERETO), AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS HERETO OR ANY OF THE OTHER CREDIT DOCUMENTS OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THE TERM LOANS MADE HEREUNDER.  IN THE EVENT OF LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.

 

9.16. Usury Savings Clause

 

.  Notwithstanding any other provision herein, the aggregate interest rate charged or agreed to be paid with respect to any of the Obligations, including all charges or fees in connection therewith deemed in the nature of interest under applicable law shall not exceed the Highest Lawful Rate.  If the rate of interest (determined without regard to the preceding sentence) under this Agreement at any time exceeds the Highest Lawful Rate, the outstanding amount of the Term Loans made hereunder shall bear interest at the Highest Lawful Rate until the total amount of interest due hereunder equals the amount of interest which would have been due hereunder if the stated rates of interest set forth in this Agreement had at all times been in effect.  In addition, if when the Term Loans made hereunder are repaid in full the total interest due hereunder (taking into account the increase provided for above) is less than the total amount of interest which would have been due hereunder if the stated rates of interest set forth in this Agreement had at all times been in effect, then to the extent permitted by law, the Borrower shall pay to the Administrative Agent an amount equal to the difference between the amount of interest paid and the amount of interest which would have been paid if the Highest Lawful Rate had at all times been in effect.  Notwithstanding the foregoing, it is the intention of the Lenders and the Borrower to conform strictly to any applicable usury laws.  Accordingly, if any Lender contracts for, charges, or receives any consideration which constitutes interest in excess of the Highest Lawful Rate, then any such excess shall be cancelled automatically and, if previously paid, shall at such Lender's option be applied to the outstanding amount of the Term Loans made hereunder or be refunded to the Borrower. In determining whether the interest contracted for, charged, or received by the Administrative Agent or a Lender exceeds the Highest Lawful Rate, such Person may, to the extent permitted by applicable law, (a) characterize any payment that is not principal as an expense, fee, or premium rather than interest, (b) exclude voluntary prepayments and the effects thereof, and (c) amortize, prorate, allocate, and spread in equal or unequal parts the total amount of interest, throughout the contemplated term of the Obligations hereunder.

 

9.17. Counterparts

 

.  This Agreement may be executed in any number of counterparts, each of which when so executed and delivered shall be deemed an original, but all such counterparts together shall constitute but one and the same instrument.  Delivery of an executed signature page to this Agreement by facsimile transmission or other electronic image scan transmission (e.g., “PDF” or “tif” via email) shall be as effective as delivery of a manually signed counterpart of this Agreement.

 

9.18. [Reserved]

 

.

 

9.19. Money Control Act

 

.  Each Lender and the Administrative Agent (for itself and not on behalf of the Lenders) hereby notifies CPS and the Borrower that pursuant to the requirements of the Act, it is required to obtain, verify and record information that identifies CPS and the Borrower, which information includes the name and address of each of CPS and the Borrower and other information that will allow the Lenders or the Administrative Agent, as applicable, to identify CPS and the Borrower in accordance with the Act.

 

9.20. Prior Agreements

 

.  This Agreement and the other Credit Documents contain the entire agreement of the parties hereto and thereto in respect of the transactions contemplated hereby and thereby, and all prior agreements among or between such parties, whether oral or written, are superseded by the terms of this Agreement and the other Credit Documents and unless specifically set forth in a writing contemporaneous herewith the terms, conditions and provisions of any and all such prior agreements do not survive execution of this Agreement.

 

9.21. Third Party Beneficiaries

 

.  The Backup Servicer, the Custodian, the Controlled Account Bank and the Lockbox Account Bank shall be express third party beneficiaries of the provisions of Section 2.11(a), Section 2.11(e), Section 2.13(a) and Section 2.13(j).  Fireside shall be an express third party beneficiary of the provisions of Section 9.3(c) and Section 9.6.

 

9.22. Confidentiality

 

.  Each Credit Party agrees that the terms included in this Agreement and disclosed in connection with the consummation of the transactions contemplated hereby shall be kept strictly confidential, shall not be reproduced or disclosed (except as required by law, including, without limitation, the filing requirements of the Exchange Act), and shall not be used by either Credit Party other than in connection with the transaction described herein except with the prior written consent of the Lead Agents; provided, however, that the Lead Agents hereby consents to each Credit Party's disclosure of (i) this Agreement to its respective officers, directors, employees, attorneys, accountants, agents and advisors who are directly involved in the implementation of the terms and conditions of this Agreement to the extent such persons agree to hold the same in confidence, (ii) this Agreement, to any prospective Subordinated Noteholder and its counsel and other advisors, (iii) this Agreement as required by applicable law or compulsory legal process (in which case each Credit Party agrees to inform the Lead Agents promptly thereof) and (iv) the terms of this Agreement upon and after its filing by CPS in accordance with the Exchange Act.

 

9.23. Related Agreements.

 

Each of the Lead Lenders and CPS agrees to use commercially reasonably efforts to agree on the form, scope and substance of the Related Agreements prior to the Closing Date.

 

9.24. Effectiveness of this Agreement.

 

This Agreement shall become effective only upon the satisfaction of each of the following conditions:

 

(a) the Lead Agents shall have received copies of this Agreement and the Fee Letter originally executed and delivered by each applicable Credit Party;

 

(b) the Lead Agents shall have received fully executed copies of each Transaction Agreement, including terms and provisions satisfactory to the Lead Agents in their sole discretion.

 

(c) the Lead Agents shall have received evidence reasonably satisfactory to each of them that all of the conditions to the effectiveness of the Purchase Agreement, the Interim Servicing Agreement and the Unitrin Guaranty have been satisfied; and

 

(d) the representations and warranties made by each of the Credit Parties as of the date hereof contained herein shall be true and correct on and as of the date hereof.

 

9.25. Buyout Option.

 

 

(a) as long as (i) a Tier 1 Event of Default has occurred and is continuing and (ii) any Term Loan or other Obligation hereunder remains outstanding (other than contingent indemnification obligations), the Administrative Agent, on behalf of the Lenders, will have the right (but not the obligation) to purchase all, but not less than all, of CPS’ interest in the Borrower and the Receivables (the “Buyout Option”) by giving written notice (a “Buyout Notice”) to CPS of its election to exercise the Buyout Option.

 

(b) on the Business Day designated by the Administrative Agent (the “Buyout Closing Date”) in the Buyout Notice (which such Buyout Closing Date may be as soon as the third (3rd) Business Day following the delivery of such Buyout Notice and shall not be later than the tenth (10th) Business Day following the delivery of such Buyout Notice), upon the payment by the Lenders in immediately available funds to CPS of an amount equal to the Unreturned Capital Contribution Amount as of the Buyout Closing Date plus any accrued and unpaid Preferred Return on such amount, any and all of CPS’ rights with respect to the Receivables or the Borrower shall terminate and, if requested by the Administrative Agent, all of CPS’ interest in the Borrower shall be transferred to the Lenders, in each case without further action on the part of CPS.

 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered by their respective officers thereunto duly authorized as of the date first written above.

 

	CPS FENDER RECEIVABLES LLC By: ____________________________ Name: Title:
	CONSUMER PORTFOLIO SERVICES, INC. By: ____________________________ Name: Title:
	GOLDMAN SACHS BANK USA,a New York State-Chartered Bank, as a Lead Agent and as a Lender       By: ____________________________ Name: Jason P. Gelberd Title: Authorized Signatory
	FORTRESS CREDIT CORP., as Administrative Agent, Collateral Agent, a Lender and a Lead Agent By: ____________________________ Name: Title:

 

This AMENDMENT NO. 1 TO THE CREDIT AGREEMENT (this “Amendment”), dated as of September 14, 2011, is entered into by and among CPS FENDER RECEIVABLES LLC, a Delaware limited liability company (the “Borrower”), CONSUMER PORTFOLIO SERVICES, INC., a California corporation, (“CPS”), DBGS FRANKLIN LLC, as a Lender (“DBGS”), FORTRESS CREDIT CORP. (“Fortress”), as Administrative Agent (in such capacity, the “Administrative Agent”), Collateral Agent (in such capacity, the “Collateral Agent”), and as a Lead Agent (in such capacity, a “Lead Agent”), MTGLQ INVESTORS, L.P. (“MTGLQ”), as a Lead Agent (in such capacity, a “Lead Agent”) and DBGS FRANKLIN HOLDINGS LLC (“Holdings”).

 

WHEREAS, Borrower, CPS, Fortress, as Administrative Agent, Collateral Agent, a Lead Agent and a Lender and Goldman Sachs Bank USA (“GS Bank”), as Lead Agent and Lender, entered into a Credit Agreement dated as of August 6, 2011 (the “Credit Agreement”), pursuant to which the Lenders agreed to make advances and other financial accommodations to Borrower upon the satisfaction of the terms and conditions set forth therein.  Capitalized terms not otherwise defined in this Amendment have the same meanings as specified in the Credit Agreement; and

 

WHEREAS, Borrower, CPS, Administrative Agent, Holdings (as successor in interest to each of GS Bank and Fortress with respect to their respective rights under Section 2.11(f) and Section 2.13(k) of the Credit Agreement), DBGS (as successor in interest to GS Bank, as a lender under the Credit Agreement and Fortress, as a lender under the Credit Agreement) and MTGLQ (as successor in interest to GS Bank, as a Lead Agent under the Credit Agreement) have agreed to amend the Credit Agreement, as set forth herein.

 

NOW, THEREFORE, in consideration of the premises and the agreements, provisions and covenants herein contained, the parties hereto agree as follows:

 

· DEFINITIONS AND INTERPRETATION

 

· Additional Definitions.  The following terms used herein, including in the preamble, recitals, appendices, schedules and exhibits hereto, shall have the following meanings.  Section 1.1 of the Credit Agreement and the other Credit Documents, as appropriate, are hereby amended to include the following additional definitions in alphabetical order:

 

“Side Letter” means that certain agreement, dated as of the date hereof, by and among Borrower, CPS, Fireside and Kemper Corporation relating to, among other matters, electronic titles and Receivables subject to exceptions.

 

· Amendment to Definitions.  The following definitions set forth in Section 1.1 of the Credit Agreement are hereby amended in their entirety to read as follows:

 

“Maximum Availability” means the lesser of (i) $210,000,000 and (ii) an amount equal to 98% of  the sum of (A) the Purchase Price paid by the Borrower to Fireside for Receivables pursuant to the Purchase Agreement and (B) all amounts due to the Interim Servicer on the Closing Date under Section 2.4 of the Interim Servicing Agreement .

“Servicing Fee” means, during the Interim Servicing Period, the Interim Servicing Fee as defined in the Interim Servicing Agreement and, after the Servicing Transfer Date, the amount equal to, for each Settlement Date, the sum of (1) the product of (x) one-twelfth times (y) the Servicing Fee Rate times (z) the outstanding principal balance of the Receivables on the first date of the related Collection Period, plus (2) all administrative fees, expenses and charges paid by or on behalf of Obligors, including late fees collected on the Contracts during the related Collection Period plus (3) $275 per Financed Vehicle repossessed during the related Collection Period plus (4) any auction or other expenses paid by Servicer (and not reimbursed) in

connection with any Financed Vehicle repossessed or liquidated, pro rated, as applicable, for

partial months plus (5) expenses incurred by Servicer in accordance with Section 2.05 of the

Servicing Agreement, provided that if the Backup Servicer becomes the Servicer pursuant to Section 2.1(b) of the Backup Servicing Agreement, the “Servicing Fee” shall mean the fees set forth in Section 2.1(h) of the Backup Servicing Agreement.

 

“Transaction Agreements” means, collectively, the Purchase Agreement, the Interim Servicing Agreement, the Unitrin Guaranty and the Side Letter.

 

· AMENDMENTS TO THE CREDIT AGREEMENT

 

The Credit Agreement is, subject to Section 3.1, effective as of the date hereof, hereby amended as follows:

· Appendix F (Form of Tax Matters Letter) to the Credit Agreement shall be replaced in its entirety by the appendix attached hereto as Appendix 1.

 

· Amendment to Section 2.3 of the Credit Agreement.  Section 2.3 of the Credit Agreement is amended in full to read as follows:

 

“Use of Proceeds. The proceeds of the Term Loans made on the Closing Date shall be applied by the Borrower to finance 98% of the sum of (i) the Purchase Price paid to Fireside for the acquisition of Receivables from Fireside pursuant to the Purchase Agreement and (ii) all amounts due to the Interim Servicer on the Closing Date under Section 2.4 of the Interim Servicing Agreement.  No portion of the proceeds of any Term Loan shall be used in any manner that causes such Term Loan or the application of such proceeds to violate Regulation T, Regulation U or Regulation X of the Board of Governors of the Federal Reserve System or any other regulation thereof or to violate the Exchange Act.”

 

· AFFIRMATIVE COVENANTS

 

· Post Closing Matters.  Within ten (10) Business Days after the Closing Date, the Credit Parties shall have delivered to the Administrative Agent and Lead Agents, copies of (a) endorsements naming the Administrative Agent as loss payee under CPS’ fiduciary liability insurance policy and (b) endorsements naming Administrative Agent as an additional insured on CPS’ errors & omissions insurance policy.

 

· MISCELLANEOUS

 

· Conditions of Effectiveness.  This Amendment shall become effective as of the date first written above when, and only when, Administrative Agent shall have received counterparts of this Amendment executed by Borrower, CPS, DBGS, Holdings and MTGLQ.

 

· Reference to and Effect on the Credit Agreement and the Other Credit Documents.

 

 

 

 

· Binding Effect.  This Amendment shall be binding upon and inure to the benefit of each of the parties hereto and their respective successors and assigns.

 

· Costs and Expenses. Notwithstanding anything to the contrary in the Credit Agreement, as between the Borrower and CPS, on the one hand, and Holdings, the Agents, Lead Agents and Lenders on the other hand, each party shall be responsible for its own expenses.

 

· Governing Law.  This Amendment and the rights and obligations of the parties hereunder shall be governed by, and shall be construed and enforced in accordance with, the laws of the State of New York without regard to conflict of laws principles (other than Sections 5-1401 and 5-1402 of the New York General Obligations Law) thereof.

 

· Execution in Counterparts.  This Amendment may be executed in any number of counterparts, each of which when so executed and delivered shall be deemed an original, but all such counterparts together shall constitute but one and the same instrument.  Delivery of an executed counterpart of a signature page of this Amendment by fax or other electronic imaging means shall be effective as delivery of a manually executed counterpart of this Amendment.

 

· Headings.  Section headings herein are included herein for convenience of reference only and shall not constitute a part hereof for any other purpose or be given any substantive effect.

 

· Prior Agreements.  This Amendment, the Credit Documents (as amended hereby) and the Related Agreements represents the entire agreement and understanding concerning the subject matter hereof among the parties hereto, and supersedes all other prior agreements, understandings, negotiations, representations, warranties, commitments, proposals, offers and contracts concerning the subject matter hereof, whether oral or written.

 

 

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IN WITNESS THEREOF, the parties hereto have caused this Amendment to be executed by their respective officers thereunto duly authorized, as of the date first above written.

 

	CPS FENDER RECEIVABLES LLC By: ____________________________ Name:  Title:
	CONSUMER PORTFOLIO SERVICES, INC. By: ____________________________ Name:  Title:
	DBGS FRANKLIN LLC, as a Lender By: ____________________________ Name:       Title:
	FORTRESS CREDIT CORP., as Administrative Agent, Collateral Agent and a Lead Agent By: ____________________________ Name: Title:
	MTGLQ INVESTORS, L.P., as a Lead Agent By: MLQ, LLC, its general partner By: ____________________________ Name: Title:
	DBGS FRANKLIN HOLDINGS LLC By: ____________________________ Name:       Title: