Document:

Exhibit 4.1

 

OPTIMER PHARMACEUTICALS, INC.

WARRANT TO PURCHASE COMMON STOCK

 

To Purchase [                    ] Shares of Common Stock

 

Date of Issuance: March   ,
2009

 

VOID AFTER MARCH  
, 2014

 

THIS
CERTIFIES THAT, for value received, [                    ],
or permitted registered assigns (the “Holder”),
is entitled to subscribe for and purchase at the Exercise Price (defined below)
from Optimer Pharmaceuticals, Inc., a Delaware corporation (the “Company”), up to [                    ]
shares of the common stock of the Company, par value $0.001 per share (the “Common Stock”). This warrant is one of a
series of warrants issued by the Company as of the date hereof (individually a “Warrant”, and collectively, the “Warrants”) pursuant to the Common Stock and Warrant Purchase
Agreement between the Company and the Holder, dated as of March  , 2009
(the “Purchase Agreement”).

 

1. DEFINITIONS.
Capitalized terms used herein but not otherwise defined herein shall have their
respective meanings as set forth in the Purchase Agreement. As used herein, the
following terms shall have the following respective meanings:

 

(A) “Eligible Market” means any of the New York
Stock Exchange, the American Stock Exchange, The NASDAQ Global Market, The
NASDAQ Global Select Market or The NASDAQ Capital Market.

 

(B) “Exercise Period” shall mean the period
commencing six (6) months after the date hereof and ending 5:00 P.M.
New York City time on March  , 2014, unless sooner terminated as provided
below.

 

(C) “Exercise Price” shall mean $10.93 per
share, subject to adjustment pursuant to Section 4 below.

 

(D) “Exercise Shares” shall mean the shares of
Common Stock issuable upon exercise of this Warrant.

 

(E) “Trading Day” shall mean (a) any day on
which the Common Stock is listed or quoted and traded on its primary Trading
Market, (b) if the Common Stock is not then listed or quoted and traded on
any Eligible Market, then a day on which trading occurs on the OTC Bulletin
Board (or any successor thereto), or (c) if trading does not occur on the
OTC Bulletin Board (or any successor thereto), any business day.

 

(F) “Trading Market” shall mean the NASDAQ
Global Market or any other Eligible Market, or any national securities
exchange, market or trading or quotation facility on which the Common Stock is
then listed or quoted.

 

2. EXERCISE
OF WARRANT. The rights represented by this Warrant may be exercised in
whole or in part at any time during the Exercise Period, by delivery of the
following to the Company at its address set forth on the signature page hereto
(or at such other address as it may designate by notice in writing to the
Holder):

 

(A) An executed Notice
of Exercise in the form attached hereto;

 

(B) Payment of the
Exercise Price either (i) in cash or by check, or (ii) pursuant to Section 2.1
below; and

 

(C) This Warrant.

 

Execution and delivery of
the Notice of Exercise shall have the same effect as cancellation of the
original Warrant and issuance of a new Warrant evidencing the right to purchase
the remaining number of Exercise Shares, if any.

 

1

 

Anything
to the contrary notwithstanding, the Company shall not be under any obligation
to issue cash upon exercise of this Warrant, except as explicitly provided in
Sections 4, 5, 6 and except for the payment of any taxes and expenses required
to be paid by the Company pursuant to Section 2.3

 

Certificates
for shares purchased hereunder shall be transmitted by the Company’s transfer
agent (the “Transfer Agent”) to
the Holder by crediting the account of the Holder’s prime broker with the
Depository Trust Company through its Deposit Withdrawal Agent Commission system
if the Company is a participant in such system, or, if the Company reasonably
determines that the Holder is an affiliate of the Company at the time of
exercise or the Holder otherwise requests, by physical delivery to the address
specified by the Holder in the Notice of Exercise within three (3) business
days from the delivery to the Company of the Notice of Exercise, surrender of
this Warrant and payment of the aggregate Exercise Price as set forth above.
This Warrant shall be deemed to have been exercised on the date the Exercise
Price is received by the Company.

 

The
person in whose name any certificate or certificates for Exercise Shares are to
be issued upon exercise of this Warrant shall be deemed to have become the
holder of record of such shares on the date on which this Warrant was
surrendered and payment of the Exercise Price was made, irrespective of the
date of delivery of such certificate or certificates, except that, if the date
of such surrender and payment is a date when the stock transfer books of the
Company are closed, such person shall be deemed to have become the holder of
such shares at the close of business on the next succeeding date on which the
stock transfer books are open.

 

Subject
to Section 2.4, to the extent permitted by law, the Company’s
obligations to issue and deliver Exercise Shares in accordance with the terms
hereof are absolute and unconditional, irrespective of any action or inaction
by the Holder to enforce the same, any waiver or consent with respect to any
provision hereof, the recovery of any judgment against any person or entity or
any action to enforce the same, or any setoff, counterclaim, recoupment,
limitation or termination, or any breach or alleged breach by the Holder or any
other person or entity of any obligation to the Company or any violation or
alleged violation of law by the Holder or any other person or entity, and
irrespective of any other circumstance which might otherwise limit such
obligation of the Company to the Holder in connection with the issuance of
Exercise Shares. Nothing herein shall limit a Holder’s right to pursue any
other remedies available to it hereunder, at law or in equity including,
without limitation, a decree of specific performance and/or injunctive relief
with respect to the Company’s failure to timely deliver Exercise Shares upon
exercise of this Warrant as required pursuant to the terms hereof.  If, at the time the Holder exercises this
Warrant, the Company is not permitted to issue the Exercise Shares pursuant to
the Registration Statement (or any other registration statement that the
Company may have filed for such purpose), then nothing in this Warrant shall
obligate the Company to register the issuance of the Exercise Shares or their
subsequent resale.

 

2.1 NET EXERCISE. If
during the Exercise Period, the Company is not permitted to issue the Exercise
Shares pursuant to the Registration Statement, as defined in the Purchase
Agreement, and the fair market value of one share of the Common Stock is
greater than the Exercise Price (at the date of calculation as set forth
below), in lieu of exercising this Warrant by payment of cash or by check, the
Holder may elect to receive shares equal to the value (as determined below) of
this Warrant (or the portion thereof being canceled) by surrender of this
Warrant at the principal office of the Company together with the properly
endorsed Notice of Exercise in which event the Company shall issue to the
Holder a number of shares of Common Stock computed using the following formula:

 

X
= Y (A-B)

A

 

	
  Where

  	
   

  	
  X =

  	
   

  	
  the number of shares of
  Common Stock to be issued to the Holder

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Y
  =

  	
   

  	
  the
  number of shares of Common Stock purchasable under the Warrant or, if only a
  portion of the Warrant is being exercised, the portion of the Warrant being
  canceled (at the date of such calculation)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  A
  =

  	
   

  	
  the
  fair market value of one share of the Company’s Common Stock (at the date of
  such calculation)

  

 

2

 

	
   

  	
   

  	
  B
  =

  	
   

  	
  Exercise
  Price (as adjusted to the date of such calculation)

  

 

For
purposes of the above calculation, the “fair market value” of one share of
Common Stock shall mean (i) the average of the closing sales prices for
the shares of Common Stock on the Nasdaq Global Market or other Eligible Market
where the Common Stock is listed or traded as reported by Bloomberg Financial
Markets (or a comparable reporting service of national reputation selected by
the Company and reasonably acceptable to the Holder if Bloomberg Financial
Markets is not then reporting sales prices of such security) (collectively, “Bloomberg”) for the five (5) consecutive
trading days immediately prior to the Exercise Date, or (ii) if the Nasdaq
Global Market is not the principal Trading Market for the shares of Common
Stock, the average of the reported sales prices reported by Bloomberg on the
principal Trading Market for the Common Stock during the same period, or, if
there is no sales price for such period, the last sales price reported by
Bloomberg for such period, or (iii) if neither of the foregoing applies,
the last sales price of such security in the over-the-counter market on the
pink sheets or bulletin board for such security as reported by Bloomberg, or if
no sales price is so reported for such security, the last bid price of such
security as reported by Bloomberg or (iv) if fair market value cannot be
calculated as of such date on any of the foregoing bases, the fair market value
shall be as determined by the Board of Directors of the Company in the exercise
of its good faith judgment.

 

2.2 ISSUANCE OF NEW
WARRANTS. Upon any partial exercise of this Warrant, the Company, at its
expense, will forthwith and, in any event within five business days, issue and
deliver to the Holder a new warrant or warrants of like tenor, registered in
the name of the Holder, exercisable, in the aggregate, for the balance of the
number of shares of Common Stock remaining available for purchase under this
Warrant.

 

2.3 PAYMENT OF TAXES AND
EXPENSES. The Company shall pay any recording, filing, stamp or similar tax
which may be payable in respect of any transfer involved in the issuance of,
and the preparation and delivery of certificates (if applicable) representing, (i) any
Exercise Shares purchased upon exercise of this Warrant and/or (ii) new or
replacement warrants in the Holder’s name or the name of any transferee of all
or any portion of this Warrant; provided,
however, that the Company shall not be required to pay any tax which
may be payable in respect of any transfer involved in the issuance, delivery or
registration of any certificates for Exercise Shares or Warrants in a name
other than that of the Holder. The Holder shall be responsible for all other
tax liability that may arise as a result of holding or transferring this
Warrant or receiving Exercise Shares upon exercise hereof.

 

2.4 EXERCISE LIMITATIONS;
HOLDER’S RESTRICTIONS. A Holder shall not have the right to exercise any
portion of this Warrant, pursuant to Section 2 or otherwise, to the
extent that after giving effect to such issuance after exercise, such Holder
(together with such Holder’s affiliates), as set forth on the applicable Notice
of Exercise, would beneficially own in excess of 9.9% of the number of shares
of the Common Stock outstanding immediately after giving effect to such
issuance. For purposes of this Section 2.4, the number of shares of
Common Stock beneficially owned by such Holder and its affiliates shall include
the number of shares of Common Stock issuable upon exercise of this Warrant
with respect to which the determination of such sentence is being made, but
shall exclude the number of shares of Common Stock which would be issuable upon
(A) exercise of the remaining, nonexercised portion of this Warrant
beneficially owned by such Holder or any of its affiliates and (B) exercise
or conversion of the unexercised or nonconverted portion of any other
securities of the Company (including, without limitation, any other shares of
Common Stock or Warrants) subject to a limitation on conversion or exercise
analogous to the limitation contained herein beneficially owned by such Holder
or any of its affiliates. Except as set forth in the preceding sentence, for
purposes of this Section 2.4, beneficial ownership shall be
calculated in accordance with Section 13(d) of the Exchange Act, it
being acknowledged by a Holder that the Company is not representing to such
Holder that such calculation is in compliance with Section 13(d) of
the Exchange Act and such Holder is solely responsible for any schedules
required to be filed in accordance therewith. To the extent that the limitation
contained in this Section 2.4 applies, the determination of whether
this Warrant is exercisable (in relation to other securities owned by such
Holder) and of which a portion of this Warrant is exercisable shall be in the
sole discretion of a Holder, and the submission of a Notice of Exercise shall
be deemed to be each Holder’s determination of whether this Warrant is
exercisable (in relation to other securities owned by such Holder) and of which
portion of this Warrant is exercisable, in each case subject to such aggregate
percentage limitation, and the Company shall have no obligation to verify or
confirm the accuracy of such determination. For purposes of this Section 2.4,
in determining the number of outstanding shares of Common Stock, a Holder may
rely on the number of outstanding shares of Common Stock as reflected in (x) the
Company’s most recent Form 10-Q or Form 10-K, as 

 

3

 

the
case may be, (y) a more recent public announcement by the Company or (z) any
other notice by the Company or the Company’s Transfer Agent setting forth the
number of shares of Common Stock outstanding. Upon the written or oral request
of a Holder, the Company shall within two Trading Days confirm orally and in
writing to such Holder the number of shares of Common Stock then outstanding.
In any case, the number of outstanding shares of Common Stock shall be
determined after giving effect to the conversion or exercise of securities of
the Company, including this Warrant, by such Holder or its affiliates since the
date as of which such number of outstanding shares of Common Stock was
reported. The provisions of this Section 2.4 may be waived by such
Holder, at the election of such Holder, upon not less than 61 days’ prior
notice to the Company, and the provisions of this Section 2.4 shall
continue to apply until such 61st day (or such later date, as determined by
such Holder, as may be specified in such notice of waiver).

 

3. COVENANTS
OF THE COMPANY.

 

3.1 COVENANTS AS TO
EXERCISE SHARES. The Company covenants and agrees that all Exercise Shares
that may be issued upon the exercise of the rights represented by this Warrant
will, upon issuance, be validly issued and outstanding, fully paid and
nonassessable, and free from all taxes, liens and charges with respect to the
issuance thereof. The Company further covenants and agrees that the Company
will at all times during the Exercise Period, have authorized and reserved,
free from preemptive rights, a sufficient number of shares of Common Stock to
provide for the exercise of the rights represented by this Warrant. If at any time
during the Exercise Period the number of authorized but unissued shares of
Common Stock shall not be sufficient to permit exercise of this Warrant, the
Company will take such corporate action as may, in the opinion of its counsel,
be necessary to increase its authorized but unissued shares of Common Stock to
such number of shares as shall be sufficient for such purposes.

 

3.2 NO IMPAIRMENT.
Except and to the extent as waived or consented to by the holder of the
Warrants representing a majority of the number of shares of Common Stock then
subject to outstanding Warrants, the Company will not, by amendment of its
Certificate of Incorporation or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities or any other
voluntary action, avoid or seek to avoid the observance or performance of any
of the terms to be observed or performed hereunder by the Company, but will at
all times in good faith assist in the carrying out of all the provisions of
this Warrant and in the taking of all such action as may be necessary or
appropriate in order to protect the exercise rights of the Holder against
impairment.

 

3.3 NOTICES OF RECORD
DATE AND CERTAIN OTHER EVENTS. In the event of any taking by the Company of
a record of the holders of any class of securities for the purpose of
determining the holders thereof who are entitled to receive any dividend or
other distribution, the Company shall mail to the Holder, at least ten (10) days
prior to the date on which any such record is to be taken for the purpose of
such dividend or distribution, a notice specifying such date. In the event of
any voluntary dissolution, liquidation or winding up of the Company, the
Company shall mail to the Holder, at least ten (10) days prior to the date
of the occurrence of any such event, a notice specifying such date. In the
event the Company authorizes or approves, enters into any agreement
contemplating, or solicits stockholder approval for any Fundamental
Transaction, as defined in Section 6 herein, the Company shall mail
to the Holder, at least ten (10) days prior to the date of the occurrence
of such event, a notice specifying such date.

 

4. ADJUSTMENT
OF EXERCISE PRICE AND SHARES.

 

(A) In the event of
changes in the outstanding Common Stock of the Company by reason of stock
dividends, split-ups, recapitalizations, reclassifications, combinations or
exchanges of shares, separations, reorganizations, liquidations, consolidation,
acquisition of the Company (whether through merger or acquisition of
substantially all the assets or stock of the Company), or the like, the number,
class and type of shares available under this Warrant in the aggregate and the
Exercise Price shall be correspondingly adjusted to give the Holder of this
Warrant, on exercise for the same aggregate Exercise Price, the total number,
class, and type of shares or other property as the Holder would have owned had
this Warrant been exercised prior to the event and had the Holder continued to
hold such shares until the event requiring adjustment. The form of this Warrant
need not be changed because of any adjustment in the number of Exercise Shares
subject to this Warrant.

 

4

 

               (B) Upon
the occurrence of each adjustment pursuant to this Section 4, the
Company at its expense will, at the written request of the Holder, promptly
compute such adjustment in accordance with the terms of this Warrant and
prepare a certificate setting forth such adjustment, including a statement of
the adjusted Exercise Price and adjusted number or type of Exercise Shares or
other securities issuable upon exercise of this Warrant (as applicable),
describing the transactions giving rise to such adjustments and showing in
detail the facts upon which such adjustment is based. Upon written request, the
Company will promptly deliver a copy of each such certificate to the Holder and
to the Transfer Agent.

 

     5. FRACTIONAL
SHARES. No fractional shares shall be issued upon the exercise of this
Warrant as a consequence of any adjustment pursuant hereto. All Exercise Shares
(including fractions) issuable upon exercise of this Warrant may be aggregated
for purposes of determining whether the exercise would result in the issuance
of any fractional share. If, after aggregation, the exercise would result in
the issuance of a fractional share, the Company shall, in lieu of issuance of
any fractional share, pay the Holder otherwise entitled to such fraction a sum
in cash equal to the product resulting from multiplying the then current fair
market value of an Exercise Share by such fraction.

 

     6. FUNDAMENTAL
TRANSACTIONS. If, at any time while this Warrant is outstanding, (i) the
Company effects any merger of the Company with or into another entity, (ii) the
Company effects any sale of all or substantially all of its assets in one or a
series of related transactions, (iii) any tender offer or exchange offer
(whether by the Company or another individual or entity) is completed pursuant
to which holders of Common Stock are permitted to tender or exchange their
shares for other securities, cash or property or (iv) the Company effects
any reclassification of the Common Stock or any compulsory share exchange pursuant
to which the Common Stock is effectively converted into or exchanged for other
securities, cash or property (other than as a result of a subdivision or
combination of shares of Common Stock covered by Section 4 above)
(in any such case, a “Fundamental Transaction”),
then, upon any subsequent exercise of this Warrant, the Holder shall have the
right to receive, for each share underlying this Warrant that would have been
issuable upon such exercise immediately prior to the occurrence of such
Fundamental Transaction (disregarding any limitation on exercise contained
herein solely for the purpose of such determination), the number of shares of
Common Stock of the successor or acquiring corporation or of the Company, if it
is the surviving corporation, and any additional consideration (the “Alternate Consideration”) receivable upon
or as a result of such reorganization, reclassification, merger, consolidation
or disposition of assets by a Holder of the number of shares of Common Stock
for which this Warrant is exercisable immediately prior to such event
(disregarding any limitation on exercise contained herein solely for the
purpose of such determination). For purposes of any such exercise, the
determination of the Exercise Price shall be appropriately adjusted to apply to
such Alternate Consideration based on the amount of Alternate Consideration
issuable in respect of one share of Common Stock in such Fundamental
Transaction, and the Company shall apportion the Exercise Price among the
Alternate Consideration in a reasonable manner reflecting the relative value of
any different components of the Alternate Consideration. If holders of Common
Stock are given any choice as to the securities, cash or property to be
received in a Fundamental Transaction, then the Holder shall be given the same
choice as to the Alternate Consideration it receives upon any exercise of this
Warrant following such Fundamental Transaction. To the extent necessary to
effectuate the foregoing provisions, any successor to the Company or surviving
entity in such Fundamental Transaction shall issue to the Holder a new warrant
consistent with the foregoing provisions and evidencing the Holder’s right to
exercise such warrant into Alternate Consideration. The terms of any agreement
pursuant to which a Fundamental Transaction is effected shall include terms
requiring any such successor or surviving entity to comply with the provisions
of this Section 6 and ensuring that this Warrant (or any such
replacement security) will be similarly adjusted upon any subsequent
transaction analogous to a Fundamental Transaction.

 

     7. NO
STOCKHOLDER RIGHTS. Other than as provided in Section 3.3 or
otherwise herein, this Warrant in and of itself shall not entitle the Holder to
any voting rights or other rights as a stockholder of the Company.

 

     8. TRANSFER
OF WARRANT. Subject to applicable laws and the restriction on transfer set
forth in the Purchase Agreement, this Warrant and all rights hereunder are
transferable, by the Holder in person or by duly authorized attorney, upon
delivery of this Warrant and the form of assignment attached hereto to any
transferee designated by Holder. The transferee shall sign an investment letter
in form and substance reasonably satisfactory to the Company and its counsel. Any
proposed transfer of all or any portion of this Warrant in violation of the
provisions of this warrant or the Purchase Agreement shall be null and void.
Upon surrender of this Warrant and 

 

5

 

delivery
of an assignment, the Company shall execute and deliver a new Warrant or
Warrants in the name of the transferee or transferees, as applicable, and in
the denomination or denominations specified in such instrument of assignment,
and shall issue to the transferor a new Warrant evidencing the portion of this
Warrant not so assigned, and this Warrant shall promptly be cancelled.

 

     9. LOST,
STOLEN, MUTILATED OR DESTROYED WARRANT. If this Warrant is lost, stolen,
mutilated or destroyed, the Company may, on such terms as to indemnity or
otherwise as it may reasonably impose (which shall, in the case of a mutilated
Warrant, include the surrender thereof), issue a new Warrant of like
denomination and tenor as this Warrant so lost, stolen, mutilated or destroyed.
Any such new Warrant shall constitute an original contractual obligation of the
Company.

 

     10. NOTICES,
ETC. All notices required or permitted hereunder shall be in writing and
shall be deemed effectively given: (a) upon personal delivery to the party
to be notified, (b) when sent by confirmed telex or facsimile if sent
during normal business hours of the recipient, if not, then on the next
business day, (c) five days after having been sent by registered or
certified mail, return receipt requested, postage prepaid, or (d) one day
after deposit with a nationally recognized overnight courier, specifying next
day delivery, with written verification of receipt. All communications shall be
sent to the Company at the address listed on the signature page hereto and
to Holder at the applicable address set forth on the applicable signature page to
the Purchase Agreement or at such other address as the Company or Holder may
designate by ten (10) days advance written notice to the other parties
hereto.

 

     11. ACCEPTANCE.
Receipt of this Warrant by the Holder shall constitute acceptance of and
agreement to all of the terms and conditions contained herein.

 

     12. GOVERNING
LAW. This Warrant and all rights, obligations and liabilities hereunder
shall be governed by, and construed in accordance with, the internal laws of
the State of New York, without giving effect to the principles of conflicts of
law that would require the application of the laws of any other jurisdiction.

 

     13. AMENDMENT
OR WAIVER. Any term of this Warrant may be amended or waived (either
generally or in a particular instance and either retroactively or
prospectively) with the written consent of the Company and the holders of the
Warrants representing a majority of the number of shares of Common Stock then
subject to outstanding Warrants. Notwithstanding the foregoing, (a) this
Warrant may be amended and the observance of any term hereunder may be waived
without the written consent of the Holder only in a manner which applies to all
Warrants in the same fashion and (b) the number of Exercise Shares subject
to this Warrant and the Exercise Price of this Warrant may not be amended, and
the right to exercise this Warrant may not be waived, without the written
consent of the Holder. The Company shall give prompt written notice to the
Holder of any amendment hereof or waiver hereunder that was effected without
the Holder’s written consent. No waivers of any term, condition or provision of
this Warrant, in any one or more instances, shall be deemed to be, or construed
as, a further or continuing waiver of any such term, condition or provision.

 

[REMAINDER OF PAGE INTENTIONALLY
LEFT BLANK]

 

6

 

     IN
WITNESS WHEREOF, the Company has caused this Warrant to be executed by its duly
authorized officer as of March  , 2009.

 

	
   

  	
  OPTIMER PHARMACEUTICALS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
  Address:

  	
  10110
  Sorrento Valley Road, Suite C

  
	
   

  	
   

  	
  San
  Diego, California 92121

  
						

 

 

NOTICE OF EXERCISE

 

TO:
OPTIMER PHARMACEUTICALS, INC.

 

     (1) 
[_] The undersigned hereby elects to purchase                     
shares of the common stock, par value $0.001 (the “Common Stock”), of OPTIMER PHARMACEUTICALS, INC. (the “Company”) pursuant to the terms of the
attached Warrant, and tenders herewith payment of the exercise price in full,
together with all applicable transfer taxes, if any.

 

           [_]
The undersigned hereby elects to purchase                     
shares of Common Stock of the Company pursuant to the terms of the net exercise
provisions set forth in Section 2.1 of the attached Warrant, and
shall tender payment of all applicable transfer taxes, if any.

 

     (2) Please
issue the certificate for shares of Common Stock in the name of, and pay any
cash for any fractional share to:

 

	
   

  	
   

  	
   

  
	
   

  	
  Print or type name

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Social Security or other Identifying Number

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Street Address

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  City, State, Zip Code

  	
   

  

 

     (3) If
such number of shares shall not be all the shares purchasable upon the exercise
of the Warrants evidenced by this Warrant, a new warrant certificate for the
balance of such Warrants remaining unexercised shall be registered in the name
of and delivered to:

 

     Please
insert social security or other identifying number:                          

 

 

	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  (Please print name and address)

  	
   

  

 

 

	
   

  	
   

  	
   

  
	
  (Date)

  	
   

  	
  (Signature)  

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (Print name)

  

 

 

ASSIGNMENT FORM

 

(To assign the foregoing
Warrant, execute this form and supply required information.  Do not use this form to purchase shares.)

 

FOR VALUE RECEIVED, the
foregoing Warrant and all rights evidenced thereby are hereby assigned to

 

	
  Name:

  	
   

  
	
  (Please Print)

  
	
   

  
	
  Address:

  	
   

  
	
  (Please Print)

  
			

 

 

Dated:                      ,
20  

 

	
  Holder’s

  	
   

  
	
  Signature:

  	
   

  	
   

  
			

 

	
  Holder’s

  	
   

  
	
  Address:

  	
   

  	
   

  
			

 

 

NOTE:  The
signature to this Assignment Form must correspond with the name as it
appears on the face of the Warrant, without alteration or enlargement or any
change whatever.  Officers of
corporations and those acting in a fiduciary or other representative capacity should
file proper evidence of authority to assign the foregoing Warrant.Exhibit 10.1

 

EXECUTION
VERSION

 

 

PURCHASE AGREEMENT

 

between

 

DRAWBRIDGE SPECIAL OPPORTUNITIES FUND LP

 

and

 

CLST ASSET I, LLC

 

 

Dated as of November 10, 2008

 

 

 

TABLE OF CONTENTS

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  ARTICLE I

  	
  PURCHASE AND
  SALE OF THE FCC EQUITY INTERESTS

  	
  1

  
	
   

  	
   

  	
   

  
	
  SECTION 1.01.

  	
  Purchase and
  Sale of the FCC Equity Interests

  	
  1

  
	
  SECTION 1.02.

  	
  Transactions
  To Be Effected on the Purchase Date

  	
  1

  
	
  SECTION 1.03.

  	
  Purchase
  Price

  	
  2

  
	
  SECTION 1.04.

  	
  Certain
  Payments from Obligors

  	
  2

  
	
   

  	
   

  	
   

  
	
  ARTICLE II

  	
  REPRESENTATIONS
  AND WARRANTIES RELATING TO THE SELLER AND THE FCC EQUITY INTERESTS

  	
  2

  
	
   

  	
   

  	
   

  
	
  SECTION 2.01.

  	
  Organization,
  Standing and Power

  	
  2

  
	
  SECTION 2.02.

  	
  Authority;
  Execution and Delivery; Enforceability

  	
  2

  
	
  SECTION 2.03.

  	
  No
  Conflicts; Consents

  	
  3

  
	
  SECTION 2.04.

  	
  The FCC
  Equity Interests

  	
  3

  
	
  SECTION 2.05.

  	
  Receivables

  	
  3

  
	
  SECTION 2.06.

  	
  Breach of
  Certain Representations and Warranties; Purchase

  	
  3

  
	
  SECTION 2.07.

  	
  Solvency

  	
  4

  
	
  SECTION 2.08.

  	
  Nature of
  Purchases

  	
  4

  
	
  SECTION 2.09.

  	
  Brokers or
  Finders

  	
  4

  
	
  SECTION 2.10.

  	
  Proceedings

  	
  4

  
	
   

  	
   

  	
   

  
	
  ARTICLE III

  	
  REPRESENTATIONS
  AND WARRANTIES RELATING TO THE COMPANY

  	
  4

  
	
   

  	
   

  	
   

  
	
  SECTION 3.01.

  	
  Organization
  and Standing

  	
  4

  
	
  SECTION 3.02.

  	
  Equity of
  the Company

  	
  5

  
	
  SECTION 3.03.

  	
  No
  Conflicts; Consents

  	
  5

  
	
  SECTION 3.04.

  	
  [Reserved]

  	
  5

  
	
  SECTION 3.05.

  	
  Assets of
  the Company

  	
  5

  
	
  SECTION 3.06.

  	
  Contracts

  	
  6

  
	
  SECTION 3.07.

  	
  Employees
  and Benefit Plans

  	
  6

  
	
  SECTION 3.08.

  	
  Taxes

  	
  6

  
	
  SECTION 3.09.

  	
  Proceedings

  	
  6

  
	
  SECTION 3.10.

  	
  Solvency

  	
  6

  
	
  SECTION 3.11.

  	
  Organizational
  Documents

  	
  7

  
	
  SECTION 3.12.

  	
  Financial
  Statements

  	
  7

  
	
  SECTION 3.13.

  	
  Compliance
  with Applicable Law

  	
  7

  
	
  SECTION 3.14.

  	
  No
  Undisclosed Liabilities

  	
  7

  
	
  SECTION 3.15.

  	
  Reports
  Accurate

  	
  7

  
	
  SECTION 3.16.

  	
  Location of
  Offices

  	
  7

  
	
  SECTION 3.17.

  	
  Lockbox
  Accounts

  	
  7

  
	
  SECTION 3.18.

  	
  Trade Names

  	
  7

  
	
  SECTION 3.19.

  	
  Sale
  Agreement

  	
  7

  
	
   

  	
   

  	
   

  
	
  ARTICLE IV

  	
  REPRESENTATIONS
  AND WARRANTIES OF THE PURCHASER

  	
  8

  
					

 

i

 

TABLE OF CONTENTS

(continued)

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  SECTION 4.01.

  	
  Organization,
  Standing and Power

  	
  8

  
	
  SECTION 4.02.

  	
  Authority;
  Execution and Delivery; Enforceability

  	
  8

  
	
  SECTION 4.03.

  	
  No
  Conflicts; Consents

  	
  8

  
	
  SECTION 4.04.

  	
  Brokers or
  Finders

  	
  9

  
	
  SECTION 4.05.

  	
  Availability
  of Funds

  	
  9

  
	
   

  	
   

  	
   

  
	
  ARTICLE V

  	
  COVENANTS

  	
  9

  
	
   

  	
   

  	
   

  
	
  SECTION 5.01.

  	
  Covenants
  Relating to Conduct of Business of the Company

  	
  9

  
	
  SECTION 5.02.

  	
  Covenants
  Relating to Conduct of Business of the Purchaser

  	
  10

  
	
  SECTION 5.03.

  	
  Reasonable
  Efforts

  	
  10

  
	
  SECTION 5.04.

  	
  Expenses

  	
  10

  
	
  SECTION 5.05.

  	
  Tax Matters

  	
  10

  
	
  SECTION 5.06.

  	
  Further
  Assurances

  	
  11

  
	
  SECTION 5.07.

  	
  Public
  Announcements

  	
  12

  
	
  SECTION 5.08.

  	
  Existing
  Loan Agreement

  	
  12

  
	
   

  	
   

  	
   

  
	
  ARTICLE VI

  	
  CONDITIONS
  PRECEDENT

  	
  12

  
	
   

  	
   

  	
   

  
	
  SECTION 6.01.

  	
  Conditions
  to Each Party’s Obligation

  	
  12

  
	
  SECTION 6.02.

  	
  Conditions
  to Obligation of the Purchaser

  	
  12

  
	
  SECTION 6.03.

  	
  Conditions
  to Obligation of the Seller

  	
  13

  
	
  SECTION 6.04.

  	
  Frustration
  of Conditions Precedent

  	
  14

  
	
   

  	
   

  	
   

  
	
  ARTICLE VII

  	
  TERMINATION,
  AMENDMENT AND WAIVER

  	
  14

  
	
   

  	
   

  	
   

  
	
  SECTION 7.01.

  	
  Termination

  	
  14

  
	
  SECTION 7.02.

  	
  Effect of
  Termination

  	
  15

  
	
  SECTION 7.03.

  	
  Amendments
  and Waivers

  	
  15

  
	
   

  	
   

  	
   

  
	
  ARTICLE VIII

  	
  INDEMNIFICATION

  	
  15

  
	
   

  	
   

  	
   

  
	
  SECTION 8.01.

  	
  Indemnification
  by the Seller

  	
  15

  
	
  SECTION 8.02.

  	
  Indemnification
  by Purchaser

  	
  15

  
	
  SECTION 8.03.

  	
  Limits on
  Indemnification

  	
  16

  
	
  SECTION 8.04.

  	
  Procedures

  	
  16

  
	
  SECTION 8.05.

  	
  Survival of
  Representations

  	
  17

  
	
  SECTION 8.06.

  	
  No
  Additional Representations

  	
  17

  
	
  SECTION 8.07.

  	
  Indemnification
  If Negligence Of Indemnified Party

  	
  18

  
	
   

  	
   

  	
   

  
	
  ARTICLE IX

  	
  GENERAL
  PROVISIONS

  	
  18

  
	
   

  	
   

  	
   

  
	
  SECTION 9.01.

  	
  Assignment

  	
  18

  
	
  SECTION 9.02.

  	
  No
  Third-Party Beneficiaries

  	
  18

  
	
  SECTION 9.03.

  	
  Notices

  	
  19

  
	
  SECTION 9.04.

  	
  Interpretation;
  Exhibits and Schedules

  	
  19

  
	
  SECTION 9.05.

  	
  Counterparts

  	
  19

  
					

 

ii

 

TABLE OF CONTENTS

(continued)

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  SECTION 9.06.

  	
  Entire
  Agreement

  	
  20

  
	
  SECTION 9.07.

  	
  Severability

  	
  20

  
	
  SECTION 9.08.

  	
  Consent to
  Jurisdiction

  	
  20

  
	
  SECTION 9.09.

  	
  Governing
  Law

  	
  20

  
	
  SECTION 9.10.

  	
  Waiver of
  Jury Trial

  	
  20

  
				

 

iii

 

EXHIBITS

 

	
  Exhibit A — Certain Definitions

  	
   

  
	
   

  	
   

  
	
  Exhibit B — Form of Assignment of
  the FCC Equity Interests

  	
   

  

 

iv

 

PURCHASE AGREEMENT

 

PURCHASE AGREEMENT dated as of November 10, 2008 (this “Agreement”),
between CLST Asset I, LLC, a Delaware limited liability company (the “Purchaser”),
and Drawbridge Special Opportunities Fund LP, a Delaware limited partnership
(the “Seller”).

 

WHEREAS, the Seller owns one hundred percent
(100%) of the equity interests in FCC Investment Trust I, a Delaware statutory
trust (the “Company”), the only assets of which are a portfolio of
receivables (which, for the avoidance of doubt, shall not include certain
charged-off receivables previously identified in writing by the Seller to the
Purchaser and which charged-off receivables have been sold to a third party
prior to the date hereof) (individually, each a “Receivable” and
collectively, the “Receivables”);

 

WHEREAS, the Purchaser desires to purchase
from the Seller, and the Seller desires to sell to the Purchaser, all the
equity interests (and all ancillary rights and benefits in connection
therewith) in the Company (the “FCC Equity Interests”); and

 

WHEREAS, certain capitalized terms used herein
are defined in Exhibit A hereto, which Exhibit is incorporated
into this Agreement and made a part hereof.

 

Accordingly, the parties hereby agree as follows:

 

ARTICLE I

 

Purchase and Sale of the FCC Equity Interests

 

SECTION 1.01.      Purchase and Sale of the FCC Equity
Interests.  At least three (3) Business
Days in advance of the proposed purchase date, the Purchaser shall provide the
Seller a purchase notice specifying (a) the proposed purchase date, (b) the
cut-off date with respect to the Receivables, and (c) the proposed
Purchase Price (the “Purchase Notice”). 
Within one (1) Business Day of receipt of the Purchase Notice, the
Seller shall provide the Purchaser an accurate and complete listing of all
Receivables held by the Company as of the cut-off date specified in the
Purchase Notice (the “Receivables List”).  Upon the terms and subject to the conditions
of this Agreement, the Seller shall sell, transfer and deliver to the
Purchaser, and the Purchaser shall purchase from the Seller, the FCC Equity
Interests for the Purchase Price (as defined below) in cash, on or before the
proposed purchase date.  The date on
which the consummation of the Transactions actually occurs shall be referred to
as the “Purchase Date”.

 

SECTION 1.02.      Transactions To Be Effected on the
Purchase Date.  On the Purchase Date
subject to the terms and conditions of this Agreement:

 

(a)  The
Seller shall deliver to the Purchaser a duly executed instrument of assignment
of the FCC Equity Interests, in substantially the form of Exhibit B
hereto (the “Assignment”);

 

(b)  The
Purchaser shall deliver, or cause to be delivered, to the Seller payment, by
wire transfer to a bank account designated in writing by the Seller (which
designation shall be 

 

 

made at least two (2) Business
Days prior to the Purchase Date) in immediately available funds, an amount
equal to the Purchase Price; and

 

(c)  The
Seller shall deliver to the Purchaser (or its designated custodian) the
Required Receivable File with respect to each Receivable.

 

SECTION 1.03.      Purchase
Price.  With respect to the purchase
of the FCC Equity Interests, the Purchaser shall pay a purchase price on the
Purchase Date equal to the amount determined based on the Eligible Receivables
owned by the Company as of the cut-off date specified in the Purchase Notice
and approved by the Purchaser as of the Purchase Date (the “Purchase Price”).

 

SECTION 1.04.      Certain Payments from Obligors.  If the Seller receives any payment from an
Obligor following the Purchase Date with respect to any Receivable, it shall
hold all such amounts in trust for the Company and shall forward such payment
to the Company within two (2) Business Days after receipt thereof.

 

ARTICLE II

 

Representations and Warranties

Relating to the Seller and the FCC Equity Interests

 

The Seller
hereby represents and warrants to the Purchaser as of the date of this
Agreement and as of the Purchase Date, as follows:

 

SECTION 2.01.      Organization, Standing and Power.  The Seller is a limited partnership duly
organized, validly existing and in good standing under the laws of the State of
Delaware and has full power and authority and possesses all governmental
franchises, licenses, permits, authorizations and approvals necessary to enable
it to own, lease or otherwise hold its properties and assets, including the FCC
Equity Interests, and to conduct its business as currently conducted, other
than such franchises, licenses, permits, authorizations and approvals the lack
of which, individually or in the aggregate, would not reasonably be expected to
have a Seller Material Adverse Effect.

 

SECTION 2.02.      Authority; Execution and Delivery;
Enforceability.  The Seller has full
power and authority to execute, deliver and perform this Agreement and the
other agreements and instruments executed and delivered in connection with this
Agreement (the “Ancillary Agreements”) to which it is a party and to
consummate the Transactions.  The
execution and delivery by the Seller of this Agreement and the Ancillary
Agreements to which it is a party and the consummation by the Seller of the
Transactions have been duly authorized by all necessary limited partnership
action.  The Seller has duly executed and
delivered this Agreement, and prior to the Purchase Date, will have duly executed
and delivered each Ancillary Agreement to which it is a party, and this
Agreement constitutes, and each Ancillary Agreement to which it is a party
will,  on and after the Purchase Date,
constitute, its valid and legally binding obligation, enforceable against it in
accordance with its respective terms, subject to bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance, fraudulent transfer and
other similar laws relating to or affecting creditors’ rights generally and to
general equitable 

 

2

 

principles (regardless of
whether considered in a proceeding in equity or at law), including concepts of
commercial reasonableness, good faith and fair dealing and the possible
unavailability of specific performance or injunctive relief.

 

SECTION 2.03.      No Conflicts; Consents.  The execution and delivery by the Seller of
this Agreement do not, the execution and delivery by the Seller of each
Ancillary Agreement to which it is a party do not and will not, and the
consummation of the Transactions and compliance by the Seller with the terms
hereof and thereof do not and will not conflict with, or result in any
violation of or default (with or without notice or lapse of time, or both)
under, or give rise to a right of termination, cancellation or acceleration of
any obligation or to loss of a material benefit under, or result in the
creation of any Lien upon any of the properties or assets of the Seller under,
any provision of (a) the Seller’s organizational documents, (b) any
legally binding contract, lease, license, indenture or agreement, or other
legally binding arrangement, to which the Seller is a party or by which any of
its properties or assets is bound or (c) any stay, judgment, order or
decree or statute, law, ordinance, rule or regulation, domestic or
foreign, applicable to the Seller or its properties or assets, other than, in
the case of clauses (b) and (c) above, any such items that,
individually or in the aggregate, would not reasonably be expected to have a
Seller Material Adverse Effect.  No
consent, approval, waiver, license, permit, order or authorization of, or
registration, declaration, notification or filing with, any Federal, state,
local or foreign government or any court of competent jurisdiction,
administrative agency or commission or other governmental authority or
instrumentality, domestic or foreign is required to be obtained or made by or
with respect to the Seller in connection with the execution, delivery and
performance of this Agreement or any Ancillary Agreement or the consummation of
the Transactions, other than those which if not obtained or made would not
reasonably be expected to have a Seller Material Adverse Effect.

 

SECTION 2.04.      The FCC Equity Interests.  The FCC Equity Interests represent one
hundred percent (100%) of the equity interests in the Company.  Except for the FCC Equity Interests, there
are no equity interests of the Company issued, reserved for issuance or
outstanding.  The Seller has good and
valid title to the FCC Equity Interests, free and clear of all Liens.  Upon completion of the transactions to be
effected on the Purchase Date, good and valid title to the FCC Equity Interests
will pass to the Purchaser, free and clear of any Liens, other than those arising
from acts of the Purchaser or its Affiliates.

 

SECTION 2.05.      Receivables.  (i)  The Receivables List is an accurate
and complete listing of all the Receivables held by the Company on the cut-off
date specified in the Purchase Notice and the information contained therein
with respect to the identity of such Receivables and the amounts owing
thereunder is true, correct and complete as of the Purchase Date, and (ii) all
Receivables held by the Company on the cut-off date specified in the Purchase
Notice constitute Eligible Receivables as of such cut-off date.

 

SECTION 2.06.      Breach of Certain Representations and
Warranties; Purchase.  The parties
hereto hereby agree that if there is a breach of any representation or warranty
made by the Seller in Section 2.05 relating to whether a Receivable
is an Eligible Receivable on the cut-off date, the party discovering such
breach shall promptly notify the other party that such breach has
occurred.  Unless such breach shall have
been remedied within thirty (30) business days of delivery of any such notice,
the Seller hereby agrees to purchase such Receivable no later than 

 

3

 

five (5) Business
Days thereafter, in cash, for a purchase price equal to that portion of the Purchase
Price allocable to such Receivable (less any principal payments received by the
Purchaser thereon since the cut-off date). 
Each of the Seller and the Purchaser agrees to execute and deliver from
time to time such documents and instruments as reasonably requested by the
other party hereto to give effect to the provisions of this Section 2.06.  The exclusive remedy for a breach of any
representation or warranty made by the Seller in Section 2.05 shall
be the remedy provided in this Section 2.06.

 

SECTION 2.07.      Solvency.  The Seller is not subject to any Insolvency
Proceedings or Insolvency Event.  After
giving effect to the Transaction, the Seller is and will be Solvent and able to
pay its debts as they come due, and has and will have adequate capital in light
of its business.

 

SECTION 2.08.      Nature of Purchases.  On the Purchase Date, the Purchaser has given
reasonably equivalent value to the Seller in consideration for the Transaction.

 

SECTION 2.09.      Brokers or Finders.  No agent, broker, investment banker or other
firm or Person is or will be entitled to any broker’s or finder’s fee or any
other commission or similar fee in connection with the Transactions based upon
arrangements made by or on behalf of the Seller.

 

SECTION 2.10.      Proceedings.  There are no actions, suits, arbitrations,
mediations, proceedings, investigations or inquiries, whether civil, criminal
or administrative, pending or, to the knowledge of the Seller, threatened
against the Seller that (i) assert the invalidity of this Agreement or any
Ancillary Agreement to which the Seller is a party or (ii) would prevent
it from performing its duties under this Agreement or any Ancillary Agreement
to which the Seller is a party.  The
Seller is not a party or subject to or in default under any stay, judgment,
order or decree.

 

ARTICLE III

 

Representations and Warranties

Relating to the Company

 

The Seller
hereby represents and warrants to the Purchaser as of the date of this
Agreement and as of the Purchase Date, as follows:

 

SECTION 3.01.      Organization and Standing.  The Company is a Delaware statutory trust
duly organized, validly existing and in good standing under the laws of the
State of Delaware.  The Company has full
power and authority and possesses all governmental franchises, licenses, permits,
authorizations and approvals necessary to enable it to own, lease or otherwise
hold its properties and assets (including the Receivables) and to carry on its
business as currently conducted, other than such franchises, licenses, permits,
authorizations and approvals the lack of which, individually or in the
aggregate, would not reasonably be expected to have a Company Material Adverse
Effect.  The Company is duly qualified
and in good standing to do business as a foreign entity in each jurisdiction in
which the conduct or nature of its business or the ownership, leasing or
holding of its properties makes such qualification 

 

4

 

necessary, except such
jurisdictions where the failure to be so qualified or in good standing,
individually or in the aggregate, would not reasonably be expected to have a
Company Material Adverse Effect.

 

SECTION 3.02.      Equity of the Company.  The FCC Equity Interests owned by the Seller
represent one hundred percent (100%) of the equity interests in the
Company.  Except for the FCC Equity
Interests, there are no equity interests of the Company issued, reserved for
issuance or outstanding.  The FCC Equity
Interests are not subject to or issued in violation of any purchase option, call
option, right of first refusal, preemptive right, subscription right or any
similar right under any provision of agreement to which the Company is a party
or otherwise bound.  As of the date of
this Agreement, there are not any options, warrants, rights, convertible or
exchangeable securities, “phantom” stock rights, stock appreciation rights,
stock-based performance units, commitments, contracts, arrangements or
undertakings of any kind to which the Company is a party or by which it is
bound (a) obligating the Company to issue, deliver or sell, or cause to be
issued, delivered or sold, directly or indirectly, additional equity interests
in, or any security convertible or exercisable for or exchangeable into any
equity interest in, the Company or (b) obligating the Company to issue,
grant, extend or enter into, directly or indirectly, any such option, warrant,
right, unit, commitment, contract, arrangement or undertaking.  As of the date of this Agreement, there are
not any outstanding contractual obligations of the Company to repurchase,
redeem or otherwise acquire any equity interests of the Company.

 

SECTION 3.03.      No Conflicts; Consents.  The consummation of the Transactions do not
and will not conflict with, or result in any violation of or default (with or
without notice or lapse of time, or both) under, or give rise to a right of
termination, cancellation or acceleration of any obligation or to loss of a
material benefit under, or result in the creation of any Lien upon any of the
properties or assets of the Company under, any provision of (a) the
Certificate of Trust or the Trust Agreement (as defined in the Credit
Agreement) of the Company, (b) any legally binding contract, lease,
license, indenture or agreement, or other legal binding arrangement, to which
the Company is a party or by which any of its properties or assets is bound or (c) any
stay, judgment, order or decree or statute, law, ordinance, rule or
regulation, domestic or foreign, applicable to the Company or its properties or
assets, other than, in the case of clauses (b) and (c) above,
any such items that, individually or in the aggregate, would not reasonably be
expected to have a Company Material Adverse Effect.  No consent, approval, waiver, license,
permit, order or authorization of, or registration, declaration, notification
or filing with, any Federal, state, local or foreign government or any court of
competent jurisdiction, administrative agency or commission or other
governmental authority or instrumentality, domestic or foreign, is required to
be obtained or made by the Company in connection with the consummation of the
Transactions, other than those which if not obtained or made would not
reasonably be expected to have a Company Material Adverse Effect.

 

SECTION 3.04.      [Reserved].

 

SECTION 3.05.      Assets of the Company.  The Company does not hold or own any assets
other than the Receivables and the other Company Assets.  The Company has good and valid title to the
Receivables and all other Company Assets, in each case free and clear of all
mortgages, liens, security interests, charges, easements, leases, subleases,
covenants, rights of

 

5

 

way, options, claims,
restrictions or encumbrances of any kind (collectively, “Liens”).  None of the Mortgage Contracts or
Non-Mortgage Contracts that constitute or evidence the Receivables has any
marks or notations indicating that they have been pledged, assigned or
otherwise conveyed to any Person (other than the Administrative Agent).

 

SECTION 3.06.      Contracts.  As of the date of this Agreement, the Company
is not party to any contract or agreement except that certain Receivables Loan
and Security Agreement, dated as of November 2, 2006, by and among the
Company, Fortress Credit Corp., as a lender and as the agent, and U.S. Bank
National Association, as the custodian and the agent’s bank (the “Existing
Loan Agreement”); it being understood
that such agreement shall be terminated by the proceeds of the Transactions and
any Liens arising thereunder shall be released.

 

SECTION 3.07.      Employees and Benefit Plans.  Since the date of formation of the Company,
and as of the date of this Agreement, the Company has not had and does not have
any employees. The Company has not sponsored, maintained or contributed to any
employee benefit plan within the meaning of Section 3(3) of ERISA or
any employee pension benefit plan within the meaning of Section 3(2) of
ERISA the Company does not have any liability for life, health, medical or
other welfare benefits to present or former employees or beneficiaries or
dependents thereof.

 

SECTION 3.08.      Taxes.

 

(a)  The
Company has not filed any Tax Returns on a separate entity basis.  The Seller has, in respect of the Company,
the FCC Equity Interests and the Receivables, filed all Tax Returns which are
required to be filed and has timely paid all Taxes shown to be due on such Tax
Returns and has paid all other material Taxes for which the Company is liable
on or prior to the date hereof.

 

(b)  No Tax
Return of the Company is under audit or examination by any taxing authority to
the knowledge of the Seller.  No written
notice of an audit or examination has been received by the Company.

 

(c)  The
Company is not party to or bound by any tax sharing agreement, tax indemnity
obligation or similar contract with respect to Taxes (including any advance
pricing agreement, closing agreement or other contract relating to Taxes with
any taxing authority).

 

(d)  The
Company is not and has never been treated as a “corporation” within the meaning
of Treas. Reg. § 301.7701-2(b).

 

SECTION 3.09.      Proceedings.  There are no actions, suits, arbitrations,
mediations, proceedings, investigations or inquiries, whether civil, criminal
or administrative pending or, to the knowledge of the Seller, threatened
against the Seller or the Company.  To
the knowledge of the Seller, neither the Seller nor the Company is a party or subject
to or in default under any stay, judgment, order or decree.

 

SECTION 3.10.      Solvency.  Neither the Company nor the Seller is the
subject of any Insolvency Proceedings or Insolvency Event.  The transactions under this Agreement and any

 

6

 

other Ancillary Document
to which the Seller is a party do not and will not render the Seller not
Solvent.

 

SECTION 3.11.      Organizational Documents.  The Company has delivered full, accurate and
complete copies of its Certificate of Trust, the Trust Agreement and all of its
other organizational documents to the Purchaser.

 

SECTION 3.12.      Financial Statements.  The Company has submitted to the Purchaser
all consolidated unaudited financial statements and any other financial
statements that the Purchaser has requested prior to the Purchase Date (the “Financial
Statements”) and there has been no Company Material Adverse Effect since
the date of the most recent Financial Statements submitted to the Purchaser.

 

SECTION 3.13.      Compliance with Applicable Law.  To the knowledge of the Seller, the Company
is in compliance with all Applicable Laws and has all permits necessary for the
conduct of its business, except for instances of noncompliance that,
individually or in the aggregate, would not reasonably be expected to have a
Company Material Adverse Effect.  The
Company has not received any written notice from any governmental authority
that alleges that the Company is not in compliance in any material respect with
any Applicable Law.

 

SECTION 3.14.      No Undisclosed Liabilities.  To the knowledge of the Seller, other than as
disclosed in the Financial Statements, the Company has no liabilities or
obligations that would be required to be disclosed in the Financial Statements
except liabilities and obligations incurred in the ordinary course of business
since the date of the most recent Financial Statements.

 

SECTION 3.15.      Reports Accurate.  To the knowledge of the Seller, all
information, exhibits, schedules, financial statements, documents, books,
records, contracts or reports furnished by or on behalf of the Seller or the
Company to the Purchaser pursuant to or in connection with this Agreement are
true, correct and complete in all material respects.

 

SECTION 3.16.      Location of Offices.  The Company’s location (within the meaning of
Article 9 of the UCC) is Delaware. 
The complete legal name of the Company is “FCC Investment Trust I” and
the Company has not changed its name (whether by amendment of its certificate
of formation, by reorganization or otherwise) or its jurisdiction of
organization and has not changed its location for purposes of the applicable
UCC within the four (4) months preceding the Purchase Date.

 

SECTION 3.17.      Lockbox Accounts.  The only accounts to which Obligors have been
directed to send collections on the Receivables are the “Lockbox Accounts” (as
defined in the Credit Agreement).

 

SECTION 3.18.      Trade Names.  The Company has no trade names, fictitious
names, assumed names or “doing business as” names or other names under which it
has done or is doing business.

 

SECTION 3.19.      Sale Agreement.  This Agreement is the only agreement or
arrangement pursuant to which the Seller has contracted to sell the FCC Equity
Interests.

 

7

 

ARTICLE IV

 

Representations and Warranties of the Purchaser

 

The Purchaser
hereby represents and warrants to the Seller as of the date of this Agreement
and as of the Purchase Date, as follows:

 

SECTION 4.01.      Organization, Standing and Power.  The Purchaser is a limited liability company
duly organized, validly existing and in good standing under the laws of the
State of Delaware and has full power and authority and possesses all
governmental franchises, licenses, permits, authorizations and approvals
necessary to enable it to own, lease or otherwise hold its properties and
assets and to carry on its business as currently conducted, other than such
franchises, licenses, permits, authorizations and approvals the lack of which,
individually or in the aggregate, would not reasonably be expected to have a
Purchaser Material Adverse Effect.

 

SECTION 4.02.      Authority; Execution and Delivery;
Enforceability.  The Purchaser has
full power and authority to execute, deliver and perform this Agreement and the
Ancillary Agreements to which it is a party and to consummate the
Transactions.  The execution and delivery
by the Purchaser of this Agreement and the Ancillary Agreements to which it is
a party and the consummation by the Purchaser of the Transactions have been
duly authorized by all necessary limited liability company action.  The Purchaser has duly executed and delivered
this Agreement and, prior to the Purchase Date, will have duly executed and
delivered each Ancillary Agreement to which it is a party, and this Agreement
constitutes, and each Ancillary Agreement to which it is a party will, on and
after the Purchase Date, constitute, its valid and legally binding obligation,
enforceable against it in accordance with its respective terms, subject to
bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance,
fraudulent transfer and other similar laws relating to or affecting creditors’
rights generally and to general equitable principles (regardless of whether
considered in a proceeding in equity or at law), including concepts of commercial
reasonableness, good faith and fair dealing and the possible unavailability of
specific performance or injunctive relief.

 

SECTION 4.03.      No Conflicts; Consents.  The execution and delivery by the Purchaser
of this Agreement do not, the execution and delivery by the Purchaser of each
Ancillary Agreement to which it is a party do not and will not, and the
consummation of the Transactions and compliance by the Purchaser with the terms
hereof and thereof do not and will not conflict with, or result in any
violation of or default (with or without notice or lapse of time, or both)
under, or give rise to a right of termination, cancellation or acceleration of
any obligation or to loss of a material benefit under, or result in the
creation of any Lien upon any of the properties or assets of the Purchaser
under, any provision of (a) the Purchaser’s organizational documents, (b) any
legally binding contract, lease, license, indenture or agreement, or other
legally binding arrangement to which the Purchaser is a party or by which any
of its properties or assets is bound or (c) any stay, judgment, order or
decree or statute, law, ordinance, rule or regulation, domestic or
foreign, applicable to the Purchaser or its properties or assets, other than,
in the case of clauses (b) and (c) above, any such items that,
individually or in the aggregate, would not reasonably be expected to have a
Purchaser Material Adverse Effect.  No
material consent, approval, waiver, license, permit, order or authorization of,
or registration, declaration, notification or filing with, any Federal, state,
local or foreign government or any 

 

8

 

court of competent
jurisdiction, administrative agency or commission or other governmental
authority or instrumentality, domestic or foreign is required to be obtained or
made by the Purchaser in connection with the execution, delivery and
performance of this Agreement or any Ancillary Agreement or the consummation of
the Transactions, other than (i) those that may be required solely by
reason of the Seller’s (as opposed to any other third party’s) participation in
the Transaction or (ii) those which if not obtained or made would not
reasonably be expected to have a Purchaser Material Adverse Effect.

 

SECTION 4.04.      Brokers or Finders.  No agent, broker, investment banker or other
firm or Person is or will be entitled to any broker’s or finder’s fee or any
other commission or similar fee in connection with the Transactions based upon
arrangements made by or on behalf of the Purchaser.

 

SECTION 4.05.      Availability of Funds.  Subject to the execution and delivery of the
Credit Agreement by the parties thereto, on the Purchase Date, the Purchaser
will have cash available or has existing borrowing facilities that together are
sufficient to enable it to consummate the Transactions.

 

ARTICLE V

 

Covenants

 

SECTION 5.01.      Covenants Relating to Conduct of
Business of the Company.  (a) 
In the event the date of this Agreement is not the Purchase Date, then at all
times prior to the Purchase Date the Seller shall cause the business of the
Company to be conducted in the ordinary course in substantially the same manner
as previously conducted.  The Seller
shall not, and shall not permit the Company to, take any action that would
reasonably be expected to result in any of the conditions to the purchase and
sale of the FCC Equity Interests set forth in Article VI not being
satisfied.  In addition, from the date
hereof until the Purchase Date, the Seller shall not permit the Company to do
any of the following without the prior written consent of the Purchaser:

 

(i)            amend the Company’s organizational
documents or governing instruments;

 

(ii)           incur or assume any liabilities,
obligations or indebtedness or guarantee any such liabilities, obligations or
indebtedness, other than in the ordinary course of business and consistent with
past practice;

 

(iii)          waive any claims or rights of material
value;

 

(iv)          acquire by merging or consolidating
with, or by purchasing all or substantially all the assets of, by purchasing a
majority of the voting securities of or a majority equity interest in, or by
any other manner, any business or any other Person;

 

(v)           sell, lease, license or otherwise
dispose of any Receivables or any of its other assets that are material to the
Company or sell, pledge, assign, transfer, grant, create, incur, assume or
suffer to exist any Lien on any Receivables;

 

9

 

(vi)          enter into any lease of real property;
or

 

(vii)         authorize or commit to take the
foregoing actions.

 

(b)  Advise
of Changes.  The Seller shall
promptly (and in any event within two (2) Business Days of discovery)
advise the Purchaser in writing of the occurrence of any matter or event that
after the date of this Agreement would reasonably be expected to result in a
Company Material Adverse Effect or a Seller Material Adverse Effect.

 

SECTION 5.02.      Covenants Relating to Conduct of
Business of the Purchaser.

 

(a)  The
Purchaser shall not take any action that would reasonably be expected to result
in any of the conditions to the purchase and sale of the FCC Equity Interests
set forth in Article VI not being satisfied.

 

(b)  Advise
of Changes.  The Purchaser shall
promptly advise the Seller in writing of the occurrence of any matter or event
after the date of this Agreement that would reasonably be expected to result in
a Purchaser Material Adverse Effect.

 

SECTION 5.03.      Reasonable Efforts.  On the terms and subject to the conditions of
this Agreement, each party shall cooperate with the other party, and use all
reasonable efforts (except where a different standard is otherwise
established), to cause the Transactions to occur, including taking all
reasonable actions necessary to comply promptly with all legal requirements.

 

SECTION 5.04.      Expenses.  Whether or not the Transaction is consummated
and except as set forth in Article VIII, all costs and expenses
incurred in connection with this Agreement, the Ancillary Agreements and the
Transaction shall be paid by the party incurring such expense.

 

SECTION 5.05.      Tax Matters.

 

(a)  Tax
Indemnification.  The Seller shall be
liable for and pay (and shall indemnify Purchaser and the Company against) all
Taxes applicable to the Company, the FCC Equity Interests and the Receivables,
in each case attributable to taxable years or periods ending on or prior to the
close of business on the Purchase Date and, with respect to any taxable year or
period beginning before and ending after the Purchase Date, (any such period, a
“Straddle Period”), the portion of such Straddle Period ending on the
close of business on the Purchase Date. 
The Purchaser shall be liable for and pay (and shall indemnify the
Seller against) all Taxes applicable to the Company, the FCC Equity Interests
and the Receivables, in each case attributable to taxable years or periods
beginning after the close of business on the Purchase Date and, with respect to
any Straddle Period, the portion of such Straddle Period beginning after the
close of business on the Purchase Date. 
For purposes of this Section 5.05(a), any Straddle Period
shall be treated on a “closing of the books” basis as two partial periods, one
ending at the close of business on the Purchase Date, and the other beginning
immediately thereafter, provided that
property Taxes and similar ad valorem Taxes shall be allocated on a daily
basis.

 

(b)  Tax
Returns.  The Seller will, and shall
cause its affiliates to, report all U.S. federal and applicable state and local
income and franchise Tax items (“Income Tax Items”) 

 

10

 

attributable to its
ownership of the FCC Equity Interests and related Receivables up to and
including the Purchase Date on its timely filed (after taking into account any
extensions) U.S. federal and applicable state and local income and franchise
Tax returns.  The Purchaser or the
Company, as the case may be, will, and shall cause its controlled affiliates
to, report all Income Tax Items attributable to its ownership of the FCC Equity
Interests and related Receivables, as the case may be, after the Purchase Date
on its timely filed (after taking into account any extensions) U.S. federal and
applicable state and local income and franchise Tax returns.

 

(c)  Transfer
Taxes.  Notwithstanding Section 5.05(a) or
(b), any sales Tax, use Tax, real property transfer or gains Tax, asset
transfer Tax, documentary stamp Tax or similar Tax attributable to the sale or
transfer of the Company or the FCC Equity Interests shall be borne equally by
the Purchaser and the Seller.  The
Purchaser, on the one hand, and the Seller, on the other hand, agree to timely
sign and deliver such certificates or forms as may be necessary or appropriate
to establish an exemption from (or otherwise reduce), or file Tax Returns with
respect to, such Taxes.

 

(d)  Tax
Contest.  The Purchaser shall
promptly notify the Seller in writing upon receipt by the Purchaser or any of
its affiliates of notice of any pending or threatened U.S. federal, state,
local or foreign Tax audits, examinations or assessments which may materially
affect the Tax liabilities for which the Seller would be required to indemnify
any Purchaser Indemnitee pursuant to this Section 5.05.  The Seller shall have the sole right to
control any such Tax audit or administrative or court proceeding with respect
to Tax liabilities for which it would be required to indemnify the
Purchaser.  Neither the Purchaser nor any
of its affiliates may settle any Tax claim which may be the subject of indemnification
by the Seller under this Section 5.05 without the prior written
consent of the Seller, which consent may be withheld in the sole discretion of
the Seller.  If there shall be any
conflicts between the provisions of this Section 5.05(d) and
any other provision of this Agreement, the provisions of this Section 5.05(d) shall
control with respect to Tax contests.

 

(e)  Cooperation.  Each of the Seller and the Purchaser shall
(and shall cause their respective controlled affiliates to):  (i) provide reasonable assistance to the
other party in preparing any Tax Returns which such other party is responsible
for preparing and filing; (ii) reasonably cooperate in preparing for any
audits of, or disputes with taxing authorities regarding, any Tax Returns
relating to the Company, the FCC Equity Interests or the Receivables; (iii) make
available to the other party and to any taxing authority, as reasonably
requested, all information, records, and documents relating to Taxes (or copies
of the relevant portions thereof) relating to the Company, the FCC Equity
Interests or the Receivables; (iv) provide timely notice to the other
party in writing of any pending or threatened Tax audits, examinations or
assessments relating to the Company, the FCC Equity Interests or the
Receivables for taxable periods for which the other party may have a liability
under this Section 5.05; and (v) furnish the other party with
copies of all correspondence (or relevant portions thereof) received from any
taxing authority in connection with any Tax audit or information request with
respect to any taxable period for which the other party may have a liability
under this Section 5.05.

 

SECTION 5.06.      Further Assurances.  During the one-year period immediately
following the Purchase Date, as and when requested by any party, each party
shall execute and 

 

11

 

deliver, or cause to be
executed and delivered, all such documents and instruments and shall take, or
cause to be taken, all such further or other actions, as such other party may
reasonably request to consummate the Transactions, including, in the case of
the Seller, executing and delivering to the Purchaser such assignments, deeds,
bills of sale, consents and other instruments as the Purchaser may reasonably
request to effect the Transactions, the filing of all financing statements (or
amendments thereto) or other similar instruments or documents necessary under
the Uniform Commercial Code or any comparable law of all appropriate
jurisdictions, to perfect the Purchaser’s ownership interest in the FCC Equity
Interests and the Company’s ownership interest in the Receivables and such
other action to perfect, protect or more fully evidence the interest of the
Purchaser or the Company therein.  Upon
discovery by a party to this Agreement of an inaccuracy in any of its
representations and warranties, such party shall give the other party prompt
written notice thereof.

 

SECTION 5.07.      Public Announcements.  The parties hereto each agree to (a) consult
with each other before issuing any press release or otherwise making any public
statement with respect to the Transactions, (b) provide to each other
party for review a copy of any such press release or public statement and (c) not
issue any such press release or make any such public statement prior to such
consultation and review and, unless such issuance is required by law, the
receipt of the prior consent of the other parties to this Agreement.

 

SECTION 5.08.      Existing Loan Agreement.  The Seller will use the proceeds of the
Transactions to pay off in full any indebtedness under the Existing Loan
Agreement and will secure the complete and unconditional release by the lender(s) thereunder
of all Liens thereunder.

 

ARTICLE VI

 

Conditions Precedent

 

SECTION 6.01.      Conditions to Each Party’s Obligation.  The obligation of the Purchaser and the
Seller to complete the Transactions is subject to the satisfaction or waiver by
both the Purchaser and the Seller on or prior to the Purchase Date, of each of
the following conditions:

 

(a)  Governmental
Approvals.  All material consents of,
or filings with, any governmental authority necessary for the consummation of
the Transactions shall have been obtained or made.

 

(b)  No
Injunctions or Restraints.  No
Applicable Law or injunction enacted, entered, promulgated, enforced or issued
by any governmental authority or other legal restraint or prohibition
preventing the consummation of the Transactions shall be in effect.

 

SECTION 6.02.      Conditions to Obligation of the
Purchaser.  The obligation of the
Purchaser to complete the Transactions is subject to the satisfaction (or
waiver by the Purchaser) on or prior to the Purchase Date, of each of the
following conditions:

 

(a)  Representations
and Warranties.  The representations
and warranties of the Seller made in this Agreement and the Ancillary
Agreements shall be true and correct in all 

 

12

 

material respects as of
the date of this Agreement and as of the Purchase Date, except to the extent
such representations and warranties expressly relate to another date (in which
case such representations and warranties shall be true and correct as of such
other date), and except to the extent that such representations and warranties
are qualified by materiality or by reference to a “Material Adverse Effect”
(in which case such representations and warranties shall be true and correct in
all respects).

 

(b)  Performance
of Obligations of the Seller and the Company.  The Seller shall have performed or complied
in all material respects with all obligations and covenants required by this
Agreement to be performed or complied with by the Seller.

 

(c)  Material
Adverse Effect.  Since the date of
this Agreement, there shall not have occurred a Company Material Adverse Effect
or a Seller Material Adverse Effect.

 

(d)  The
Seller (i) shall have duly executed and delivered to the Purchaser the
Assignment and any certificates representing all of the FCC Equity Interests
with duly executed powers attached in proper form for transfer to the Purchaser
and (ii) shall have duly executed and delivered any other documents that
are necessary to transfer record title to the FCC Equity Interests to the
Purchaser pursuant to Section 3.2 of the Trust Agreement or otherwise.

 

(e)  U.S.
Bank Trust National Association, as Owner Trustee, the Seller and the Purchaser
shall have executed and delivered the Amended and Restated Trust Agreement of
the Company, whereby the Purchaser is named as substitute owner participant.

 

(f)   The Credit Agreement shall have been duly executed and
delivered by the parties thereto and the conditions precedent to the closing
thereof shall have been fulfilled.

 

(g)  The
Seller shall have delivered to the purchaser an officer’s certificate executed
by an authorized representative of the Seller, to which is attached the
formation and governing documents of the Seller, certified as to their
completeness and correctness by the signing officer.

 

SECTION 6.03.      Conditions to Obligation of the Seller.  The obligation of the Seller to complete the
Transactions is subject to the satisfaction (or written waiver by the Seller)
on or prior to the Purchase Date, of each of the following conditions:

 

(a)  Representations
and Warranties.  The representations
and warranties of the Purchaser made in this Agreement and the Ancillary
Agreements shall be true and correct in all material respects as of the date of
this Agreement and as of the Purchase Date, except to the extent such
representations and warranties expressly relate to another date (in which case
such representations and warranties shall be true and correct as of such other
date) and except to the extent that such representations and warranties are
qualified by materiality or by reference to a “Material Adverse Effect”
(in which case such representations and warranties shall be true and correct in
all respects).

 

(b)  Performance
of Obligations of the Purchaser.  The
Purchaser shall have performed or complied in all material respects with all
obligations and covenants required by this Agreement to be performed or
complied with by the Purchaser.

 

13

 

(c)  Purchaser
Material Adverse Effect.  Since the
date of this Agreement, there shall not have occurred a Purchaser Material
Adverse Effect.

 

SECTION 6.04.      Frustration of Conditions Precedent.  Neither the Purchaser nor the Seller may rely
on the failure of any condition set forth in this Article VI to be
satisfied if such failure was caused by such party’s failure to act in good
faith.

 

ARTICLE VII

 

Termination, Amendment and Waiver

 

SECTION 7.01.      Termination.

 

(a) 
Notwithstanding anything to the contrary in this Agreement, this Agreement may
be terminated and the unconsummated Transactions abandoned on any date (the “Termination
Date”) upon or after which any of the following shall have occurred:

 

(i)            by mutual written consent of the
Seller and the Purchaser;

 

(ii)           by the Seller if (A) any of the
conditions set forth in Sections 6.01 or 6.03 shall have
become incapable of fulfillment and shall not have been waived by the Seller or
(B) if the Purchaser breaches or fails to perform in any material respect
its agreements or covenants contained in this Agreement or any Ancillary
Agreement, which breach or failure to perform (x) would give rise to the
failure of a condition set forth in Section 6.01 or 6.03 and
(y) cannot be or has not been cured within thirty (30) days after the
giving of written notice to the Purchaser of such breach; or

 

(iii)          by the Purchaser if (A) any of
the conditions set forth in Sections 6.01 or 6.02 shall have
become incapable of fulfillment and shall not have been waived by the Purchaser
or (B) if the Seller breaches or fails to perform in any material respect
its agreements or covenants contained in this Agreement or any Ancillary Agreement,
which breach or failure to perform (x) would give rise to the failure of a
condition set forth in Section 6.01 or 6.02 and (y) cannot
be or has not been cured within thirty (30) days after the giving of written
notice to the Seller of such breach;

 

provided that (x) the
party seeking termination pursuant to clause (ii) or (iii) is
not then in material breach of any of its representations, warranties,
covenants or agreements contained in this Agreement.

 

(b)  In the
event of termination by the Seller or the Purchaser pursuant to this Section 7.01,
written notice thereof shall forthwith be given to the other and, to the extent
they have not been previously consummated, the Transactions shall be
terminated, without further action by any party.  If the Transactions are terminated as
provided herein prior to consummation, each party shall return all documents
and other material received from or on behalf of the other party relating to
the Transactions, whether so obtained before or after the execution hereof, to
such other party.

 

14

 

SECTION 7.02.      Effect of Termination.  If this Agreement is terminated and the
Transactions are abandoned as described in Section 7.01, this
Agreement shall become null and void and of no further force and effect, except
for the provisions of Article VIII and this Section 7.02.  Nothing in this Section 7.02
shall be deemed to release any party from any liability for any breach by such
party of the terms and provisions of this Agreement or to impair the right of
any party to compel specific performance by any other party of its obligations
under this Agreement.

 

SECTION 7.03.      Amendments and Waivers.  This Agreement may not be amended except by
an instrument in writing signed on behalf of each of the parties hereto.  By an instrument in writing, the Purchaser,
on the one hand, or the Seller, on the other hand, may waive compliance by the
other with any term or provision of this Agreement that such other party (or
any of its subsidiaries) was or is obligated to comply with or perform.

 

ARTICLE VIII

 

Indemnification

 

SECTION 8.01.      Indemnification by the Seller.

 

(a)  From and
after the date of this Agreement, the Seller shall be liable for, and shall
indemnify each of the Purchaser and its Affiliates, and their respective
officers, directors, managers, employees, agents and representatives including,
after the Purchase Date, the Company (each, a “Purchaser Indemnitee”),
against and hold it harmless from, any loss, liability, claim, damage or
expense including reasonable legal fees and expenses (collectively, “Losses”),
suffered or incurred by such Purchaser Indemnitee to the extent arising from:

 

(i)            any breach of any representation or
warranty of the Seller contained in this Agreement; and

 

(ii)           any breach of any agreement or
covenant of the Seller contained in this Agreement.

 

(b)  Except
as otherwise specifically provided in this Agreement, including, without
limitation, Section 2.06, or in any Ancillary Agreement, the
Purchaser acknowledges that its sole and exclusive remedy with respect to any
and all claims relating to this Agreement, the Ancillary Agreements and the
Transactions, the Company and its assets and liabilities (other than claims of,
or causes of action arising from, fraud or criminal activity) shall be pursuant
to the indemnification provisions set forth in this Article VIII.

 

SECTION 8.02.      Indemnification
by Purchaser.

 

(a)  From and
after the date of this Agreement, the Purchaser shall indemnify each of the
Seller and its Affiliates and their respective officers, directors, managers,
employees, agents and representatives (each, a “Seller Indemnitee”),
against and hold it harmless from any Loss suffered or incurred by such Seller
Indemnitee to the extent arising from:

 

15

 

(i)            any breach of any representation or
warranty of the Purchaser contained in this Agreement; and

 

(ii)           any breach of any agreement or
covenant of the Purchaser contained in this Agreement.

 

SECTION 8.03.      Limits on Indemnification.  In no event shall any indemnifying party have
liability for any consequential, incidental, indirect, punitive, special or
exemplary damages, lost profits, diminution in value or similar items, or any
other damages that are not a reasonably foreseeable consequence of the breach
giving rise to the claim for indemnification. 
A party shall not be required to indemnify, and shall not have any
liability, under this Article VIII, to the extent the liability or
obligation arises as a result of the gross negligence or willful misconduct of
the other party or any of the other party’s Affiliates.

 

SECTION 8.04.      Procedures.

 

(a)  Third
Party Claims.  In order for a Person
(the “indemnified party”) to be entitled to any indemnification provided
under Sections 8.01 or 8.02 in respect of, arising out of or
involving a claim made by any Person against the indemnified party (a “Third
Party Claim”), such indemnified party must notify the indemnifying party in
writing (and in reasonable detail) of the Third Party Claim within ten (10) Business
Days after receipt by such indemnified party of notice of the Third Party
Claim; provided that failure to give such
notification shall not affect the indemnification provided hereunder except to
the extent the indemnifying party shall have been actually prejudiced as a
result of such failure.  Thereafter, the
indemnified party shall deliver to the indemnifying party, as promptly as
practicable and in any event within five (5) Business Days’ time after the
indemnified party’s receipt thereof, copies of all notices and material
documents (including court papers) received by the indemnified party relating
to the Third Party Claim.

 

(b)  Assumption.  If a Third Party Claim is made against an
indemnified party, the indemnifying party shall be entitled to participate in
the defense thereof and, if it so chooses, to assume the defense thereof with
counsel selected by the indemnifying party; provided that
such counsel is not reasonably objected to by the indemnified party.  Should the indemnifying party so elect to
assume the defense of a Third Party Claim, the indemnifying party shall not be
liable to the indemnified party for any legal expenses subsequently incurred by
the indemnified party in connection with the defense thereof provided that if (i) the indemnifying party fails to
take reasonable steps necessary to defend diligently such matter or (ii) a
reasonable likelihood exists of a conflict of interest between the indemnifying
party and the indemnified party, the indemnified party may assume its own
defense, and the indemnifying party shall be liable for all reasonable costs or
expenses paid or incurred by the indemnified party in connection
therewith.  If the indemnifying party
assumes such defense, the indemnified party shall have the right to participate
in the defense thereof and to employ counsel, at its own expense, separate from
the counsel employed by the indemnifying party, it being understood that the
indemnifying party shall control such defense. 
The indemnifying party shall be liable for the fees and expenses of
counsel employed by the indemnified party for any period during which the
indemnifying party has not assumed the defense thereof.  If the indemnifying party elects to assume
the defense of a Third Party Claim, all the indemnified parties shall cooperate
(at the indemnifying party’s 

 

16

 

request) in the defense
thereof.  Such cooperation shall include
the retention and (upon the indemnifying party’s request) the provision to the
indemnifying party of records and information that are reasonably relevant to
such Third Party Claim, and making employees available on a mutually convenient
basis to provide additional information and explanation of any material
provided hereunder.  Whether or not the
indemnifying party assumes the defense of a Third Party Claim, the indemnified
party shall not admit any liability with respect to, or settle, compromise or
discharge, such Third Party Claim without the indemnifying party’s prior
written consent (such consent not to be unreasonably withheld).  If the indemnifying party assumes the defense
of a Third Party Claim, the indemnifying party shall be authorized to consent
to any settlement, judgment, compromise or discharge of such Third Party Claim,
without the consent of any indemnified party, provided
that such settlement, judgment, compromise or discharge involves solely the
payment of money and obligates the indemnifying party to pay the full amount of
any damages in connection therewith.

 

(c)  Other
Claims.  In the event any indemnified
party should have a claim against any indemnifying party under Sections 8.01
or 8.02  that does not involve a
Third Party Claim being asserted against or sought to be collected from such
indemnified party, the indemnified party shall deliver written notice of such
claim with reasonable promptness to the indemnifying party.  The failure by any indemnified party so to
notify the indemnifying party shall not relieve the indemnifying party from any
liability that it may have to such indemnified party under Section 8.01
or 8.02, except to the extent that the indemnifying party has been
prejudiced by such failure.  All the
indemnified parties shall cooperate in the investigation by the indemnifying
party of any such claim.  Such cooperation
shall include the retention and (upon the indemnifying party’s request) the
provision to the indemnifying party of records and information that are
reasonably relevant to such claim, and making employees available on a mutually
convenient basis to provide additional information and explanation of any
material provided hereunder.

 

(d)  Mitigation.  The Purchaser and the Seller shall cooperate
with each other with respect to resolving any claim or liability with respect
to which one party is obligated to indemnify the other party hereunder,
including by using all reasonable efforts to mitigate or resolve any such claim
or liability.

 

SECTION 8.05.      Survival of Representations.  The representations and warranties, covenants
and agreements contained in this Agreement and in any document delivered in
connection herewith shall survive indefinitely solely for purposes of this Article VIII
and Section 2.06.

 

SECTION 8.06.      No Additional Representations.  The Purchaser acknowledges that it and its
representatives have been permitted full and complete access to the books and
records, facilities, tax returns, contracts and other properties and assets of
the Company that it and its representatives have desired or requested to see or
review, and that it and its representatives have had a full opportunity to meet
with the officers and employees of the Seller to discuss the business of the
Company.  The Purchaser acknowledges and
agrees that (a) it has made its own inquiry and investigation into, and,
based thereon, has formed an independent judgment concerning, the Company and
its business, (b) none of the Seller, the Company, their representatives
or any other Person has made any representation or warranty, expressed or 

 

17

 

implied, as to the
Company or its business or the accuracy or completeness of any information
regarding the Company or its business furnished or made available to Purchaser
and its representatives, except as expressly set forth in this Agreement or the
Ancillary Agreements, (c) the Purchaser has not relied on any
representation or warranty from the Seller, the Company, their representatives
or any other Person in determining to enter into this Agreement, except as
expressly set forth in this Agreement or the Ancillary Agreements, and (d) none
of the Seller or any other Person shall have or be subject to any liability to
the Purchaser or any other Person resulting from the distribution to the
Purchaser, or the Purchaser’s use of, any such information, including any
information, documents or material made available to the Purchaser in any
physical or electronic “data rooms”, management presentations or in any other
form in expectation of the Transactions. 
The Purchaser acknowledges that, should the Purchase Date occur, the
Purchaser shall acquire the assets of the Company without any representation or
warranty as to merchantability or fitness for any particular purpose, in an “as
is” condition and on a “where is” basis, except as otherwise expressly set
forth in this Agreement and the Ancillary Agreements.

 

SECTION 8.07.      Indemnification If Negligence Of
Indemnified Party.  THE
INDEMNIFICATION PROVISIONS IN THIS ARTICLE VIII SHALL BE ENFORCEABLE REGARDLESS
OF WHETHER THE LIABILITY IS BASED ON PAST, PRESENT OR FUTURE ACTS, CLAIMS OR
LEGAL REQUIREMENTS AND REGARDLESS OF WHETHER ANY PERSON (INCLUDING THE PERSON
FROM WHOM  INDEMNIFICATION IS SOUGHT)
ALLEGES OR PROVES THE SOLE, CONCURRENT, CONTRIBUTORY OR COMPARATIVE NEGLIGENCE
OF THE PERSON SEEKING INDEMNIFICATION OR THE SOLE OR CONCURRENT STRICT
LIABILITY IMPOSED ON THE PERSON SEEKING INDEMNIFICATION.  THE PARTIES AGREE THE PRECEDING SENTENCE IS
COMMERCIALLY CONSPICUOUS.  Each
Indemnified Party’s rights and remedies set forth in this Agreement will not be
deemed waived by such Indemnified Party’s consummation of the Transactions and
will be effective regardless of any inspection or investigation conducted, or
the awareness of any matters acquired (or capable or reasonably capable of
being acquired), by or on behalf of such indemnified party or by its directors,
officers, employees or representatives or at any time (regardless of whether
notice of such knowledge has been given to indemnifying party), whether before
or after the date of this Agreement or the Purchase Date with respect to any
circumstances constituting a condition under this Agreement, unless any waiver
specifically so states.

 

ARTICLE IX

 

General Provisions

 

SECTION 9.01.      Assignment.  This Agreement and the rights and obligations
hereunder shall not be assignable or transferable by the Seller or the
Purchaser without the prior written consent of the other party.  Any attempted assignment in violation of this
Section 9.01 shall be void.

 

SECTION 9.02.      No Third-Party Beneficiaries.  Except as provided in Section 5.05
and Article VIII, this Agreement is for the sole benefit of the
parties hereto and their permitted 

 

18

 

assigns and nothing
herein expressed or implied shall give or be construed to give to any Person,
other than the parties hereto and such assigns, any legal or equitable rights
hereunder.

 

SECTION 9.03.      Notices.  All notices and other communications required
and permitted to be given hereunder shall be in writing and shall be delivered
by hand, sent by facsimile, electronic mail or sent, postage prepaid, by
registered, certified or express mail or overnight courier service and shall be
deemed given when received, as follows:

 

(a)  if to
the Purchaser,

 

815 East Market Street

Akron, Ohio 44305

Fax No.: (330) 376-2527

Attention: John Head

Email: johnh@fairfinance.com

 

with a mandatory copy to:

 

Jackson Walker L.L.P.

901 Main Street, Suite 6000

Dallas, Texas 75202

Fax No.: (214) 661-6697

Attention: Jeffrey M. Sone

Email: jsone@jw.com

 

(b)  if to
the Seller,

 

1345 Avenue of the Americas,
46th Floor

New York, NY 10105

Attention:  Lance Sherer

 

SECTION 9.04.      Interpretation; Exhibits and Schedules.  The headings contained in this Agreement, in
any Exhibit or Schedule hereto and in the table of contents to this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement. 
All Exhibits and Schedules annexed hereto or referred to herein are
hereby incorporated in and made a part of this Agreement as if set forth in
full herein.  Any capitalized terms used
in any Schedule or Exhibit, but not otherwise defined therein, shall have the
meaning as defined in this Agreement. 
When a reference is made in this Agreement to an Article, Section, Exhibit or
Schedule, such reference shall be to an Article or Section of, or an Exhibit or
Schedule to, this Agreement unless otherwise indicated.  Each party hereto has participated in the
drafting of this Agreement, which each party acknowledges and agrees is the
result of extensive negotiations between the parties hereto, and no party shall
be construed as having drafted this Agreement.

 

SECTION 9.05.      Counterparts.  This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement, and
shall become effective when each of the parties has signed and delivered to the
other parties one or more such 

 

19

 

counterparts.  Delivery of a copy of this Agreement bearing
an original signature by facsimile transmission or by electronic mail in “portable
document format” form shall have the same effect as physical delivery of the
paper document bearing the original signature.

 

SECTION 9.06.      Entire Agreement.  This Agreement and the Ancillary Agreements,
along with the Schedules and Exhibits hereto and thereto, contain the entire
agreement and understanding among the parties hereto with respect to the
subject matter hereof and supersede all prior agreements and understandings
relating to such subject matter.

 

SECTION 9.07.      Severability.  If any provision of this Agreement (or any
portion thereof) or the application of any such provision (or any portion
thereof) to any Person or circumstance shall be held invalid, illegal or
unenforceable in any respect by a court of competent jurisdiction, such
invalidity, illegality or 
unenforceability shall not affect any other provision hereof (or the
remaining portion thereof) or the application of such provision to any other
Persons or circumstances.

 

SECTION 9.08.      Consent to Jurisdiction.  Each party irrevocably submits to the
non-exclusive jurisdiction of (a) the Supreme Court of the State of New
York, New York County, and (b) the United States District Court for the
Southern District of New York, for the purposes of any proceeding arising out
of this Agreement, any Ancillary Agreement or any transaction contemplated
hereby or thereby.  Each party agrees to
commence any such proceeding either in the United States District Court for the
Southern District of New York or if such proceeding may not be brought in such
court for jurisdictional reasons, in the Supreme Court of the State of New
York, New York County.  Each party
further agrees that service of any process, summons, notice or document by
registered mail to such party’s respective address set forth above shall be
effective service of process for any proceeding in New York with respect to any
matters to which it has submitted to jurisdiction in this Section 9.08.  Each party irrevocably and unconditionally
waives any objection to the laying of venue of any proceeding arising out of
this Agreement, any Ancillary Agreement or the Transactions in (i) the
Supreme Court of the State of New York, New York County, or (ii) the
United States District Court for the Southern District of New York, and hereby
and thereby further irrevocably and unconditionally waives and agrees not to
plead or claim in any such court that any such proceeding brought in any such
court has been brought in an inconvenient forum.

 

SECTION 9.09.      Governing Law.  THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK
APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE.

 

SECTION 9.10.      Waiver of Jury Trial.  EACH PARTY HEREBY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN RESPECT TO ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER
OR IN CONNECTION WITH THIS AGREEMENT, ANY ANCILLARY AGREEMENT OR ANY
TRANSACTION CONTEMPLATED HEREBY OR THEREBY. 
EACH PARTY (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY
OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER
PARTY WOULD 

 

20

 

NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT
IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT
AND THE ANCILLARY AGREEMENTS, AS APPLICABLE, BY, AMONG OTHER THINGS, THE MUTUAL
WAIVERS AND CERTIFICATIONS IN THIS SECTION 9.10.

 

[SIGNATURE PAGES FOLLOW]

 

21

 

IN WITNESS
WHEREOF, the Seller, and the Purchaser have duly executed this Agreement as of
the date first written above.

 

	
   

  	
  DRAWBRIDGE SPECIAL

  
	
   

  	
  OPPORTUNITIES FUND LP

  
	
   

  	
   

  
	
   

  	
  BY:

  	
  DRAWBRIDGE SPECIAL

  OPPORTUNITIES GP LLC, General

  Partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Constantine M. Dakoljas

  
	
   

  	
  Name:

  	
  Constantine M. Dakoljas

  
	
   

  	
  Title:

  	
  President

  

 

Trust Purchase Agreement

 

 

IN WITNESS
WHEREOF, the Seller, and the Purchaser have duly executed this Agreement as of
the date first written above.

 

	
   

  	
  PURCHASER:

  
	
   

  	
   

  
	
   

  	
  CLST ASSET I, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Robert Kaiser

  
	
   

  	
  Name:

  	
  Robert Kaiser

  
	
   

  	
  Title:

  	
  Chief Executive Officer

  

 

Trust Purchase Agreement

 

 

Exhibit A

 

Certain Definitions

 

“Administrative
Agent” has the meaning set forth in the Credit Agreement.

 

“Affiliate”
of any Person means any other Person that, directly or indirectly, through one
or more intermediaries, controls, or is controlled by, or is under common
control with, the first Person.  The
terms “control” or “controlled”, as used in the immediately preceding sentence,
mean the possession, directly or indirectly, of the power, directly or
indirectly, to direct or cause the direction of the management or policies of
the controlled Person through the ownership of fifty percent (50%) or more of
the voting rights attributable to the equity interests in such Person, by
contract, by the general partner of a Person that is a partnership, or
otherwise.

 

“Agreement”
has the meaning provided in the introductory paragraph hereof.

 

“Ancillary
Agreements” shall have the meaning set forth in Section 2.02.

 

“Applicable
Law” is defined in the Credit Agreement.

 

“Assignment”
shall have the meaning set forth in Section 1.02(a).

 

“Bankruptcy
Code” means the United States bankruptcy code, as set forth in Title 11 of
the United States Code, as amended from time to time.

 

“Benefit
Plan” means any “employee benefit plan” as defined in Title IV of ERISA in
respect of which the Seller or the Company or any ERISA Affiliate of the Seller
or the Company is, or at any time during the preceding six years was, and “employer”
as defined in Title IV of ERISA.

 

“Business Day” means any day (other
than a Saturday or Sunday) on which banking institutions in New York, New York
are not authorized or required to be closed.

 

“Code”
means the Internal Revenue Code of 1986, as amended.

 

“Company”
shall have the meaning set forth in the second paragraph of this Agreement.

 

“Company Assets” means all right,
title, and interest (whether now owned or hereafter acquired or arising, and
wherever located) of the Company in the property identified in clauses (a) through
(c) below and all accounts, cash and currency, chattel paper,
tangible chattel paper, electronic chattel paper, copyrights, copyright
licenses,  equipment, fixtures, contract
rights, general intangibles, instruments, certificates of deposit, certificated
securities, uncertificated securities, financial assets, securities
entitlements, commercial tort claims, deposit accounts, inventory, investment
property, letter of credit rights, software, supporting obligations,
accessions, and other property of the Company consisting of, arising out of, or
related to any of the following:

 

 

(a)           the
Receivables and all monies due or to become due tin payment under such
Receivables, including, but not limited to, all Collections (as such term is
defined in the Credit Agreement);

 

(b)           all
Related Security with respect to the Receivables referred to in clause (a) above;
and

 

(c)           all
income and Proceeds of the foregoing.

 

“Company Material Adverse Effect”
means any circumstance, event, occurrence, change or effect that, individually
or in the aggregate, is materially adverse to the business, assets, financial
condition or results of operations of the Company.

 

“Contract” means a
Mortgage Contract, a Non-Mortgage Contract or any other form of retail
installment contract.

 

“Contractor” means the
Person that enters into a Contract with an Obligor to provide the home
improvement services specified therein.

 

“Contractor Sale Agreement”
means a “Continuous Buy-Sell Agreement”, entered into by First Consumer
Credit, Inc. (or FCC Finance, LLC as successor thereto) with a Contractor,
whereby First Consumer Credit, Inc. (or FCC Finance, LLC as successor
thereto) agreed to advance the purchase price of a Contract to such Contractor,
for the benefit of the original lender thereunder, together with all schedules,
supplements and amendments thereto and each other document and instrument
related thereto.

 

“Credit Agreement” means
that certain credit agreement, dated as of November 6, 2008, by and among
FCC Finance, LLC, as the servicer, the Company, as the borrower, Fortress
Credit Co LLC, as a lender and as the administrative agent, U.S. Bank National
Association, as the collateral custodian, and Lyon Financial Services, Inc.
(d/b/a U.S. Bank Portfolio Services), as the backup servicer (as such agreement
may be amended, modified, waived, supplemented, restated or replaced from time
to time).

 

“Credit and Collections
Policy” is defined in the Credit Agreement.

 

“Defaulted Receivable”
means a Receivable as to which any of the following has occurred:  (a) all or any portion of a contractual
payment due under such Receivable is 121 or more days past due, (b) the
payment terms related to such Receivable have been restructured or modified in
any way due to credit reasons or for the purpose of preventing such Receivable
from becoming a Defaulted Receivable prior to the Purchase Date, (c) a
charge-off has been taken with respect to such Receivable as a result of a
bankruptcy proceeding or otherwise or (d) the servicer of the Receivable
has determined (or should have determined) in accordance with the its credit
and collection policy, servicing standard or otherwise that such Receivable is
not collectible.

 

“Dollar”, “Dollars”, “U.S.
Dollars” and the symbol “$” means the lawful currency of the United
States of America.

 

 

“Eligible Obligor” means any Obligor
that:

 

(i)            is a natural person;

 

(ii)           is not an employee, principal,
director or equity holder of the Seller or the Company; and

 

(iii)          is not a government authority.

 

“Eligible
Receivable” means each Receivable that satisfies each of the following
eligibility requirements:

 

(a)  such
Receivable, together with the Underlying Instruments related thereto, (i) is
in full force and effect and constitutes the legal, valid and binding
obligation of the related Obligor enforceable against such Obligor in
accordance with its terms, except as such enforceability may be limited by
Insolvency Laws and by principles of equity (whether considered in a suit at
law or in equity), (ii) is not subject to any litigation, material dispute
or offset and (iii) contains provisions substantially to the effect that
the Obligor’s payment obligations thereunder are absolute and unconditional
without any right of rescission, setoff, counterclaim or defense for any reason
(except as required by Applicable Law) against the applicable Contractor (if
applicable), originator or any assignee thereof;

 

(b)  such
Receivable is denominated and payable only in Dollars (and not in another
currency or in kind) in the United States and does not permit the currency or
country in which such Receivable is payable to be changed;

 

(c)  such
Receivable is not a Defaulted Receivable;

 

(d)  such
Receivable has an original term to maturity that does not exceed two hundred
and forty (240) months;

 

(e)  no
participation interests have been granted to any Person with respect to such
Receivable;

 

(f)  such
Receivable was originated in compliance with all Applicable Laws and the
related Underlying Instruments comply in all material respects with all
Applicable Laws;

 

(g)  such Receivable
is eligible (giving effect to the provisions of Sections 9-406 and 9-408 of the
UCC) to have a security interest therein granted to the Purchaser, and such
Receivable does not contain any restrictions that would prohibit the assignment
or transfer of such Receivable;

 

(h)  such
Receivable does not contain a confidentiality provision that restricts or
purports to restrict the ability of the Purchaser to exercise its rights under
this Agreement, including, without limitation, its rights to review the related
Servicing File and Underlying Instruments;

 

 

(i)  such
Receivable provides for (i) periodic payments of accrued and unpaid
interest on a current basis, no less frequently than monthly and (ii) such
Receivable is fully amortizing over its term and provides for a fixed,
non-usurious rate of interest (simple interest);

 

(j)  all
consents, licenses, approvals or authorizations of, or registrations or
declarations with, any governmental authority or any other Person required to
be obtained, effected or given in connection with the making, acquisition,
transfer or performance of such Receivable have, to the Seller’s knowledge,
been duly obtained, effected or given and are in full force and effect;

 

(k)  such
Receivable has not had any of its terms, conditions or provisions amended,
modified or waived in any manner inconsistent with the Seller’s or the Company’s
credit and collection policy;

 

(l)  the
related Obligor has been instructed to make all payments into a Lockbox
Account;

 

(m)  there
are no facts, events or occurrences existing which materially impair the
validity, enforceability or collectability of such Receivable or reduce the
amount payable or delay payment thereunder;

 

(n)  (i) the
Company has good and marketable title to, and is the sole owner of, such
Receivable, and (ii) the Required Receivable File required to be delivered
to U.S. Bank National Association, as the collateral custodian, with respect to
such Receivable, has been delivered to the collateral custodian;

 

(o)  the
Obligor with respect to such Receivable is an Eligible Obligor;

 

(p)  all
information, representations and warranties provided in writing by the Seller
and the Company with respect to such Receivable are true, correct and complete
in all material respects;

 

(q)  the Contract
with respect to the Receivable relates to a property located in one of the
states of the United States or the District of Columbia;

 

(r)  the home
improvements related to the Contract with respect to the Receivable have been
fully completed to the satisfaction of the related Obligor, as evidenced by a
completion certificate with respect to such Contract;

 

(s)  the
Contract with respect to the Receivable is not a revolving home equity line of
credit;

 

(t)  the
proceeds of the Contract with respect to the Receivable have been fully
disbursed and the related Obligor has no additional right to further fundings
thereunder;

 

(u)  if the
Contract with respect to the Receivable is a Mortgage Contract, the mortgage
related to such Mortgage Contract creates a valid, subsisting and enforceable
first, 

 

 

second, third or fourth
priority lien (as applicable) on the related mortgaged property and the lien
created thereby has been or will be duly recorded;

 

(v)  such
Receivable constitutes an “instrument”, “general intangible”, “tangible chattel
paper” or an “account” (each as defined in the applicable UCC); and

 

(w)  such
Receivable consists of (A) notes, drafts, acceptances, open accounts
receivable, and other obligations representing part or all of the sales price
of merchandise, insurance, or services or (B) notes or other evidence of
indebtedness resulting from loans to manufacturers, wholesalers, and retailers
of, and to prospective purchasers of, specified merchandise, insurance or
services.

 

“Existing
Loan Agreement” has the meaning set forth in Section 3.06.

 

“Financial
Statements” has the meaning set forth in Section 3.12.

 

“FCC Equity
Interests” has the meaning provided in the third paragraph of this
Agreement.

 

“including” (and, with correlative
meaning, “include,” “included” and “includes”) means
including, without limitation.

 

“Income Tax Items” shall have the
meaning set forth in Section 5.05(b).

 

“indemnified party” shall have the
meaning set forth in Section 8.04(a).

 

“Insolvency
Event” means, with respect to a specified Person, (a) the filing of a
decree or order (i) for relief by a court having jurisdiction over such
Person or any substantial part of its property in an involuntary case under any
applicable Insolvency Law now or hereafter in effect, or (ii) appointing a
receiver, liquidator, assignee, custodian, trustee, sequestrator or similar
official for such Person or for any substantial part of its property, or (iii) ordering
the winding-up or liquidation of such Person’s affairs, provided
that such decree or order shall remain unstayed and in effect for a period of
60 consecutive days, (b) the commencement by such Person of a voluntary
case under any applicable Insolvency 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, (c) 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, (d) the failure by such Person generally to
pay its debts as such debts become due, or (e) the taking of action by
such Person in furtherance of any of the foregoing.

 

“Insolvency
Laws” means the Bankruptcy Code and all other applicable liquidation,
conservatorship, bankruptcy, moratorium, rearrangement, receivership,
insolvency, reorganization, suspension of payments, or similar debtor relief
laws from time to time in effect affecting the rights of creditors generally.

 

“Insolvency
Proceeding” means any case, action or proceeding before any court or other
governmental authority relating to any Insolvency Event.

 

 

“Liens”
shall have the meaning set forth in Section 3.05.

 

“Lockbox
Accounts” is defined in the Credit Agreement.

 

“Losses”
shall have the meaning set forth in Section 8.01(a).

 

“Mortgage”
means any mortgage, deed of trust or other instrument creating a first, second
or other lien on a fee simple estate in the Mortgaged Property securing a
Mortgage Contract.

 

“Mortgage
Contract” means a retail installment contract between a Contractor and one
or more Obligors which (i) evidences the obligations of such Obligors to
pay for the home improvements sold and/or installed by a Contractor and (ii) is
secured by a mortgage on the related mortgaged property, together with all
schedules, supplements and amendments thereto and each other document and
instrument related thereto.

 

“Mortgaged
Property” means the property which is subject to a Mortgage (including,
without limitation, all buildings, improvements and fixtures thereon and all
additions, alterations and replacements made at any time with respect to the
foregoing) securing a Mortgage Contract.

 

“Non-Mortgage
Contract” means a retail installment contract between a Contractor and one
or more Obligors which is not secured by a mortgage and evidences the
obligations of such Obligors to pay for the home improvements sold and/or
installed by a Contractor together with all schedules, supplements and
amendments thereto and each other document and instrument related thereto.

 

“Obligor”
means, with respect to any Receivable, any Person or Persons obligated to make
payments pursuant to or with respect to such Receivable, including any
guarantor thereof.

 

“Owner
Participant” is defined in the Trust Agreement.

 

“Owner
Trustee” is defined in the Trust Agreement.

 

“Person” means any individual, firm,
corporation, partnership, limited liability company, trust, joint venture,
governmental entity or other entity.

 

“Proceeds” means, with respect to any
Company Assets, all property that is receivable or received when such Company
Asset is collected, sold, liquidated, foreclosed, exchanged, or otherwise
disposed of, whether such disposition is voluntary or involuntary, and includes
all rights to payment with respect to any insurance relating to such Company
Asset.

 

“Purchase Date” shall have the meaning
set forth in Section 1.01.

 

“Purchase Notice” shall have the
meaning set forth in Section 1.01.

 

“Purchase Price” shall have the
meaning set forth in Section 1.03.

 

“Purchaser” shall have the meaning
provided in the introductory paragraph hereof.

 

 

“Purchaser Indemnitee” shall have the
meaning set forth in Section 8.01(a).

 

“Purchaser Material Adverse Effect”
means a material adverse effect on the ability of the Purchaser to perform its
obligations under this Agreement and the Ancillary Agreements and to consummate
the Transactions.

 

“Receivable” and “Receivables”
shall have the meaning set forth in the second paragraph of this Agreement.

 

“Receivables List” shall have the
meaning set forth in Section 1.01.

 

“Records”
means all documents relating to the Receivables, including books, records and
other information executed in connection with the origination or acquisition of
the Receivables and Related Security or maintained with respect to the
Receivables and Related Security and the related Obligors that the Company or
its designated services have generated, in which the Company has acquired an
interest or in which the Company or its designated servicer have otherwise
obtained an interest.

 

“Related
Security” means all right, title and interest of the Company in and to the
following:

 

(a) any and
all recoveries related to a Defaulted Receivable, all payments paid in respect
thereof and all monies due, to become due and paid in respect thereof and all
liquidation proceeds;

 

(b) the
Required Receivable Files and Servicing Files related to any Receivable, any
Records, and the documents, agreements, and instruments included in the
Servicing File or Records;

 

(c) all
Liens, guaranties, indemnities, warranties, letters of credit, accounts, bank
accounts and property subject thereto from time to time purporting to secure or
support payment of any Receivable (including any applicable mortgages),
together with all UCC financing statements, mortgages or similar filings signed
or authorized by an Obligor relating thereto;

 

(d) all
lockbox accounts or other accounts of the Company, to the extent amounts on
deposit therein or credited thereto relate to the Company Assets, together with
all cash and investments in each of the foregoing other than amounts earned on
investments therein;

 

(e) the
Contractor Sale Agreements and the assignment of such Contractor Sale
Agreements;

 

(f) all
records (including computer records) with respect to the foregoing; and

 

(g) all
collections, income, payments, proceeds and other benefits of each of the
foregoing.

 

“Required
Receivable File” means, for each Receivable, a file containing each of the
following items:

 

 

(a)           if such Receivable is related to a
Non-Mortgage Contract:

 

(i)            an executed copy of
the commitment letter issued by First Consumer Credit, Inc. (or FCC
Finance, LLC) to the applicable Contractor relating to such Non-Mortgage
Contract;

 

(ii)           the sole original,
executed copy of the related Non-Mortgage Contract (including any amendments,
extensions, modifications or waivers with respect thereto) with original
assignments of such Contract showing a complete chain of assignments from the
applicable Contractor to the Company;

 

(iii)          an executed copy of
the Completion Certificate related to such Non-Mortgage Contract;

 

(iv)          a copy of the
original credit application of the Obligor related to such Non-Mortgage
Contract; and

 

(v)           true and complete
copies of all other agreements, documents, any insurance policies and
instruments evidencing, securing or guarantying, or required by Applicable Law
with respect to, such Non-Mortgage Contract; and

 

(b)           if such Receivable is related to a
Mortgage Contract:

 

(i)            an executed copy of
the commitment letter issued by First Consumer Credit, Inc. (or FCC
Finance, LLC) to the applicable Contractor relating to such Mortgage Contract;

 

(ii)           the sole original,
executed copy of the related Mortgage Contract (including any amendments,
extensions, modifications or waivers with respect thereto) with original
assignments of such Contract showing a complete chain of assignments from the
applicable Contractor to the Company;

 

(iii)          a copy of the
Mortgage related to such Mortgage Contract (together with evidence of
transmittal of such Mortgage to the appropriate recording office, evidence that
all related mortgage taxes have been paid and, promptly after receipt thereof
by the servicer thereof and, in any case, within 365 days of the date of such
Mortgage Contract, evidence, in form satisfactory to the Purchaser, of
recordation of such Mortgage at the appropriate recording office) and original
assignments of such Mortgage showing a complete chain of assignments of such
Mortgage from origination to the Company (in each case, together with evidence
of transmittal of such assignments of mortgage to the appropriate recording
office, evidence that all related mortgage tax has been paid and, promptly
after receipt thereof by such servicer and, in any case, within 365 days of the
pledge of such Mortgage Contract hereunder, evidence, in form satisfactory to
the Purchaser, of recordation of such assignments of mortgage at the
appropriate recording office);

 

(iv)          a copy of the title
report related to the underlying collateral related to such Mortgage Contract;

 

 

(v)           a copy of the
original credit application of the Obligor related to such Contract; and

 

(vi)          true and complete
copies of all other agreements, documents, any insurance policies and
instruments evidencing, securing or guarantying, or required by Applicable Law
with respect to, such Mortgage Contract.

 

“Seller”
shall have the meaning provided in the first paragraph of this Agreement.

 

“Seller
Indemnitee” shall have the meaning set forth in Section 8.02(a).

 

“Seller Material Adverse Effect” means
a material adverse effect on the business, assets, financial condition or
results of operations of the Seller, or on the ability of the Seller to perform
its obligations under this Agreement and the Ancillary Agreements and to
consummate the Transactions.

 

“Servicing File” means for each
Receivable, (a) copies (as opposed to originals) of each of the documents
included in the Required Receivable File definition, (b) to the extent
applicable for the related Receivable, the original executed (i) guaranty,
(ii) credit agreement, (iii) loan agreement, (iv) note purchase
agreement, (v) promissory note, (vi) acquisition agreement (or
similar agreement), (vii) security agreement and (viii) UCC financing
statement(s), in each case as set forth on the Receivables List, (c) a
copy of each Contractor Sale Agreement related to such Receivable, and (d) true
and complete copies of all other agreements, documents and instruments
evidencing, securing or guarantying, or required by Applicable Law with respect
to any Contractor Sale Agreement related to such Receivable.

 

“Solvent”
means, as to any Person at any time, having a state of affairs such that all of
the following conditions are met:  (a) the
fair value of the property of such Person is greater than the amount of such
Person’s liabilities (including disputed, contingent and unliquidated
liabilities) as such value is established and liabilities evaluated for
purposes of Section 101(32) of the Bankruptcy Code; (b) the present
fair saleable value of the property of such Person in an orderly liquidation of
such Person is not less than the amount that will be required to pay the
probable liability of such Person on its debts and other liabilities as they
become absolute and matured; (c) such Person is able to realize upon its
property and pay its debts and other liabilities (including disputed,
contingent and unliquidated liabilities) as they mature in the normal course of
business; (d) such Person does not intend to, and does not believe that it
will, incur debts or liabilities beyond such Person’s ability to pay as such
debts and liabilities mature; and (e) such Person is not engaged in a
business or a transaction, and does not propose to engage in a business or a
transaction, for which such Person’s property would constitute unreasonably
small capital.

 

“Straddle
Period” shall have the meaning set forth in Section 5.05(a).

 

“subsidiary” of any Person means another
Person, an amount of the voting securities, other voting ownership or voting
partnership interests of which is sufficient to elect at least a majority of
its Board of Directors or other governing body (or, if there are no such voting
interests, 50% or more of the equity interests of which) is owned directly or
indirectly by such first Person or by another subsidiary of such first Person.

 

 

“Tax”
(and, with correlative meaning, “Taxes”) means any U.S. federal, state,
local or foreign net income, gross income, gross receipts, property, sales,
use, license, excise, franchise, employment, payroll, withholding, alternative
or add-on minimum, ad valorem, value-added, transfer or excise tax, windfall
profit, severance, production, stamp, environmental (including taxes under Code
Section 59A) or any other tax, custom, duty, governmental fee or other
like assessment or charge of any kind whatsoever, together with any interest or
penalty, imposed by any governmental authority.

 

“Tax Return”
means any return, report or similar statement required to be filed with respect
to any Tax (including any attached schedules), including any information
return, claim for refund, amended return or declaration of estimated Tax.

 

“Third
Party Claim” shall have the meaning set forth in Section 8.04(a).

 

“Transactions” means the transactions
contemplated by this Agreement and the Ancillary Agreements.

 

“Trust Agreement” means the Amended
and Restated Trust Agreement, by and among U.S. Bank Trust National
Association, as the owner trustee, CLST Asset I, LLC, as the owner participant,
and Seller dated as of November 10, 2008, as amended from time to time.

 

“Underlying Instruments” means the
Mortgage Contract or Non-Mortgage Contract and each other agreement that
governs the terms of or secures the obligations represented by such Receivable
or of which the holders of such Receivable are the beneficiaries.

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