Exhibit 10.3


 


Note:
Redacted portions have been marked with *****. The redacted portions are
subject to a request for confidential treatment that has been filed with the
Securities and Exchange Commission.


 


December 10, 2008


 


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Re:                               Revolving Credit Agreement


 


Ladies and Gentlemen:


 


1.             Please
refer to that certain Second Amended and Restated Revolving Credit Agreement dated
as of the date hereof (as amended, restated, supplemented or otherwise modified
from time to time, the “Agreement”) among CLST Asset Trust II, a
Delaware statutory trust (“Trust II”), *****,
a Delaware statutory trust (“Trust I”), *****,
a Delaware limited liability company (“*****”), *****, a Delaware limited partnership (“Originator”),
*****, a Nevada limited liability
company (“Servicer”; together with Trust I, *****,
***** and Originator, “***** Entities”), *****, the lenders party thereto as of the date hereof (“Lenders”),
*****, as the administrative agent for
the Lenders (in such capacity, “Agent”), U.S. Bank National Association,
as the collateral custodian (“Collateral Custodian”), and Lyon Financial
Services, Inc. (d/b/a U.S. Bank Portfolio Services), as the backup
servicer (“Backup Servicer).  All
capitalized terms used but not defined herein shall have the meanings ascribed
thereto in the Agreement.


 


2.             (a)           The parties hereto hereby agree that
Trust II, as a Borrower under the Agreement, may during the 364 days following
the date of this letter agreement have Loans Outstanding attributable to it of
up to a maximum amount of $15,000,000 at any one time (it being understood that
following such 364-day period Trust II shall not increase the Loans Outstanding
attributable to it).   The ***** Entities shall take such steps as
shall be commercially reasonable to assure that an aggregate of not less than
$15,000,000 of credit is available to Trust II under the Agreement at all time
prior to the passage of 365 days from the date hereof.


 


(b)           Trust II hereby
notifies the ***** Entities that it shall purchase from Trust I or *****, or a
combination thereof, at least $2,000,000 of Receivables under the Purchase Agreement
during December 2008 and January and February 2009.  Any purchases during such period in excess of
$2,000,000 in the aggregate will require the consent of CLST Financo, Inc.
(“Financo”).  Within the first
five days of each calendar month (commencing January 2009), Trust II and
Financo shall jointly notify the ***** Entities in writing of the dollar amount
of Receivables Trust II thereby commits to purchase from Trust I or *****, or a
combination thereof, under the Purchase Agreement during a period of not less
than the following two 


 

















 


calendar months; provided that during the first
three calendar months, such notice shall be of purchases in addition to those
contemplated in the first sentence of this Section 2(b).


 


In addition, unless CLST Financo, Inc. (“Financo”)
shall otherwise agree, Trust II shall not be obligated, and the ***** Entities
shall not cause it to become so obligated, to enter into transactions resulting
in Loans Outstanding to Trust II requiring contributions to the capital of
Trust II by CLST Asset II, LLC (“Asset II”) in excess of $2,000,000 in
the aggregate.


 


(c)           Trust
II shall on each Payment Date pay Trust I and ***** an amount equal to the CLST
Fee, which payment shall be divided equally between Trust I and *****; provided,
however, in the event that on any Payment Date funds are to be
distributed by Servicer to Trust II pursuant to Section 2.7 or 2.8
of the Agreement, Servicer shall direct the Collateral Custodian to pay the
applicable CLST Fee to Trust I and ***** from such funds, with only the balance
of such CLST Fee being paid directly by Trust II.


 


“CLST Fee” means, for each Accrual
Period, the sum of the products (for each day during such Accrual Period) of:


 


CFR x P x 1


                 D


 


where:


 


CFR        =              the
CLST Fee Rate on such day;


 


P              =              the
CLST Loans on such day; and


 


D             =              360.


 


“CLST Fee Rate” means (i) with
respect to that portion of the CLST Loans equal to or below $10,000,000, a per annum interest rate equal to 0.50%; and (ii) with
respect to that portion of the CLST Loans in excess of $10,000,000 a per annum interest rate equal to 1.50%.


 


“CLST Loans” means, as of any day, the
principal amount of that portion of the Loans Outstanding that is attributable
to Trust II on such day.


 


3.             Trust
II shall upon demand pay (without duplication of other amounts already paid
pursuant to this Section 3) each ***** Entity an amount equal to
the applicable CLST Amount.


 


“CLST Amount” means, as of any date of
determination for any ***** Entity, an amount equal to the product of (i) the
CLST Percentage as of such date and (ii) the CLST Costs for such *****
Entity.


 


“CLST Costs” means, for any *****
Entity, any fees, expenses, costs and amounts (including without limitation the
Servicing Fee, the Sub-Servicer Fee, the 


 


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Backup Servicing Fee, the Collateral Custodian Fee and
any indemnification obligations and any other joint and several obligations of
the Borrowers and/or Originator) that have been paid by such ***** Entity to
the Lenders, the Agent, the Servicer, any Sub-Servicer, the Backup Servicer,
the Collateral Custodian, the Sourcer or any other Person in connection with
the Agreement, the other Transaction Documents or the Sourcing and Servicing
Agreement; provided, however, CLST Costs shall in no event
include (i) any CLST Guaranteed Amounts, (ii) the Unused Fee or (iii) any
fees, expenses, costs or amounts that such ***** Entity has paid to Trust II
pursuant to the terms of this letter agreement.


 


“CLST Guaranteed Amounts” means any
Guaranteed Amounts resulting from or arising in connection with any action (or
inaction) of (i) any direct or indirect principal or equity owner of Trust
II or (ii) any Affiliate of any Person described in clause (i) or
any Responsible Officer of such Affiliate.


 


“CLST Percentage” means, as of any date
of determination, the percentage equivalent of a fraction, (i) the
numerator of which is equal to the principal amount on such date of that
portion of the Loans Outstanding that is attributable to Trust II; and (ii) the
principal amount on such date of all Loans Outstanding.


 


4.             Trust
I shall upon demand pay (without duplication of other amounts already paid
pursuant to this Section 4) Trust II an amount equal to the Trust I
Amount.


 


“Trust I Amount” means, as of any date
of determination, an amount equal to the product of (i) the Trust I
Percentage as of such date and (ii) the Trust I Costs.


 


“Trust I Percentage” means, as of any
date of determination, the percentage equivalent of a fraction, (i) the
numerator of which is equal to the principal amount on such date of that
portion of the Loans Outstanding that is attributable to Trust I; and (ii) the
principal amount on such date of all Loans Outstanding.


 


“Trust I Costs” means any fees,
expenses, costs and amounts (including without limitation any indemnification
obligations and any other joint and several obligations of the Borrowers) that
have been paid by Trust II to the Lenders, the Agent, the Servicer, any
Sub-Servicer, the Backup Servicer, the Collateral Custodian, the Sourcer or any
other Person in connection with the Agreement, the other Transaction Documents;
provided, however, Trust I Costs shall in no event include fees,
expenses, costs or amounts that Trust II has paid to Trust I pursuant to the
terms of Section 3.


 


5.             *****
shall upon demand pay (without duplication of other amounts already paid
pursuant to this Section 5) Trust II an amount equal to the ***** Amount.


 


“***** Amount” means, as of any date of
determination, an amount equal to the product of (i) the ***** Percentage
as of such date and (ii) the ***** Costs.


 


“***** Percentage” means, as of any
date of determination, the percentage equivalent of a fraction, (i) the
numerator of which is equal to the principal 


 


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amount on such date of that portion of the Loans
Outstanding that is attributable to *****; and (ii) the principal amount
on such date of all Loans Outstanding.


 


“***** Costs” means any fees, expenses,
costs and amounts (including without limitation any indemnification obligations
and any other joint and several obligations of the Borrowers) that have been paid
by Trust II to the Lenders, the Agent, the Servicer, any Sub-Servicer, the
Backup Servicer, the Collateral Custodian, the Sourcer or any other Person in
connection with the Agreement, the other Transaction Documents; provided,
however, ***** Costs shall in no event include fees, expenses, costs or
amounts that Trust II has paid to ***** pursuant to the terms of Section 3.


 


6.             Trust
II shall upon demand pay each Guarantor and any applicable ***** Entity an
amount equal to the CLST Guaranteed Amounts that have been paid or are at such
time due and payable by such Guarantor or such ***** Entity.


 


7.             All
amounts that are due pursuant to Sections 2 through 6 but unpaid
hereunder shall bear interest, payable to the applicable payee on demand,
computed at a rate equal to 10% per annum; provided
that such interest rate shall not at any time exceed the maximum rate permitted
by Applicable Law.


 


8.             In
the event that (i) the Termination Date has been declared by the
Administrative Agent following an Event of Default caused by the action (or
inaction) of any ***** Entity or arising from any Collateral owned by any *****
Entity and (ii) the Administrative Agent has thereafter realized on any
Collateral owned by Trust II (clauses (i) and (ii) together,
a “***** Default”), such ***** Entity shall upon demand pay Trust II an
amount equal to the CLST Loss.


 


“CLST Loss” means, with respect to any *****
Default, an amount equal to what Trust II would have received on the applicable
Collateral but for the occurrence of the ***** Default (including interest on
such Collateral as provided in Section 10).


 


9.             In
the event that (i) the Termination Date has been declared by the
Administrative Agent following an Event of Default caused by the action (or
inaction) of Trust II or arising from any Collateral owned by Trust II and (ii) the
Administrative Agent has thereafter realized on any Collateral owned by Trust I
or ***** (clauses (i) and (ii) together, a “CLST
Default”), Trust II shall upon demand pay Trust I and/or *****, as
applicable, an amount equal to the applicable ***** Loss.


 


“***** Loss” means, with respect to any
CLST Default, an amount equal to what Trust I or *****, as the case may be,
would have received on the applicable Collateral but for the occurrence of the
CLST Default (including interest on such Collateral as provided in Section 10).


 


10.           All
amounts that are due pursuant to Sections 8 and 9 but unpaid
hereunder shall bear interest, payable to the applicable payee on demand,
computed at a rate such that the payee shall receive from the payor an amount
(based on the internal rate of return for the applicable Receivables) equal to
what the payee would have received but for the ***** Default 


 


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or CLST
Default, as the case may be.  Notwithstanding
anything in this letter agreement to the contrary, in the event an Event of
Default was caused by the action (or inaction) of both (i) any *****
Entity and (ii) Trust II, the provisions of Sections 8 and 9
shall not apply.


 


11.           Each
demand for payment under this letter agreement shall include or be accompanied
by a written invoice setting forth in reasonable detail the basis for and the
calculation of the applicable amounts.  All
amounts due under this letter agreement shall be paid no later than 2:00 p.m.
(New York time) on the day when due in lawful money of the United States in
immediately available funds and any amount not received before such time shall
be deemed received on the next Business Day.  All interest due hereunder shall be calculated
for the actual number of days elapsed, using a daily rate determined by
dividing the annual rate by 360.


 


12.           Notwithstanding
anything to the contrary herein, if at any time any payment, or any part
thereof, made in respect of this letter agreement is rescinded or must
otherwise be restored or returned by the payee upon the insolvency, bankruptcy
or reorganization of the payor or any of its affiliates, or otherwise, the
provisions of this letter agreement will forthwith be reinstated in effect, as
though such payment had not been made.  This
letter agreement shall survive the termination of the Agreement, the other
Transaction Documents and the Sourcing and Servicing Agreement.


 


13.           During
the term of the Transaction Documents, and each of them, the ***** Entities
will not permit any amendment or modification of such Transaction Documents,
nor grant any waiver thereunder, that materially affects the rights, duties or
obligations of Trust II, without the consent of Financo, which consent will not
be unreasonably withheld or delayed, but may be withheld by Financo if such
amendment, modification or waiver could reasonably be expected to adversely
affect the financial interests of Financo.


 


14.           During
the first 364 days of the term of this letter agreement, the ***** Entities
will use commercially reasonable efforts to respond favorably to requests by
Financo that Persons become Approved Sellers or Dealers and that consumer loans
created or originated by such Persons become Receivables.


 


15.           As
reasonably requested by Financo, the parties to this letter agreement shall take
such steps as shall be commercially reasonable to assure that the Collateral
Custodian and any other Person who shall possess or control Collateral pursuant
to the Transaction Documents shall appropriately note on its books and records
the ownership by Trust II of Collateral owned by it.


 


16.           During
the term of the Transaction Documents, and for not less than 18 months
thereafter, the ***** Entities shall provide Financo and its auditors with such
access to books, records and data processing equipment as they shall reasonably
request in connection with the preparation of the financial statements of
Financo and its Affiliates, in the audit thereof or the provision of attest
services by auditors with regard thereto. 
The provisions of this Section 16 shall not modify any of the
obligations of any of the parties to this letter agreement under any
confidentiality agreement existing as of the date hereof or entered into in the
future.


 


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17.           The
***** Entities will not, without the consent of Financo, intentionally permit
the allocation of Receivables for purchase pursuant to the Transaction
Documents in a manner that, with respect to any thirty (30) day period, has the
effect of discriminating as to asset quality or material terms of such
Receivables among ***** and Trust I, on the one hand, and Trust II on the
other.


 


18.           For
the avoidance of doubt, Trust II hereby acknowledges that it is a Borrower
under the Agreement and affirms its obligations as a Borrower under the
Agreement and the other Transaction Documents (including without limitation any
provisions providing for cross-collateralization).


 


19.           This
letter agreement shall be governed by, and construed and enforced in accordance
with, the laws of the State of New York, without regard to conflict of laws and
each party hereto consents to the exclusive jurisdiction of the courts sitting
in the City of New York, Burrough of Manhattan, with respect to all disputes
arising from or related to this letter agreement.  This letter agreement may be executed in any
number of counterparts, each of which so executed shall be deemed to be an
original, but all such counterparts shall together constitute but one and the
same instrument.


 


[Signature
pages follow]


 


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Please confirm your acknowledgement
of the foregoing provisions by executing the acknowledgment on the following
signature page.


 


            Very
truly yours,


 


	
   

  	
  CLST ASSET TRUST II

  
	
   

  	
   

  
	
   

  	
  By:

  	
  *****, 

  not in its individual capacity but solely 

  as statutory trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ *****

  
	
   

  	
  Name:   *****

  
	
   

  	
  Title:     Vice
  President

  
	
   

  	
   

  
	
   

  	
  CLST FINANCO, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Robert Kaiser

  
	
   

  	
  Name:  Robert Kaiser

  
	
   

  	
  Title:    President

  
					



 


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Acknowledged
and agreed to as of the date first written above.


 


*****


 


By: *****, as
General Partner


 


By: *****, its sole
member


 


 


	
   

  	
  By:

  	
  /s/ *****

  	
   

  



Name:    *****


Title:      President


 


*****


 


By: *****, its sole
member


 


 


	
   

  	
  By:

  	
  /s/ *****

  	
   

  



Name:    *****


       Title:      President


 


*****


 


 


	
   

  	
  By:

  	
  /s/ *****

  	
   

  



Name:    *****


              Title:      President


 


*****


 


By:  *****, not in its 

individual capacity but solely as statutory trustee


 


	
  By:       

  	
  /s/ *****

  	
   

  



Name: *****


Title:  
Vice President


 


*****, individually


 


 


	
  By: 

  	
  /s/ *****

  	
   

  
	
  Name: *****

  	
   

  



 


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