Exhibit 10.12
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AMENDED AND RESTATED NOTE PURCHASE AGREEMENT
(VARIABLE FUNDING NOTE, CLASS A),
dated as of January 12, 2007,
among
PAGE THREE FUNDING LLC
as Issuer and Purchaser,
CONSUMER PORTFOLIO SERVICES, INC.,
as Servicer and Seller,
and
BEAR, ▇▇▇▇▇▇▇ & CO. INC.,
as Class A Note Purchaser and as initial Class A Noteholder
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TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS ...................................................................................2
SECTION 1.01 Definitions..................................................................2
ARTICLE II PURCHASE AND SALE OF THE NOTE...............................................................2
SECTION 2.01 The Initial Note Purchase...................................................2
SECTION 2.02 Advances ....................................................................2
SECTION 2.03 Advance and Prepayment Procedures...........................................2
SECTION 2.04 The Note ....................................................................3
SECTION 2.05 Commitment Term; Optional Renewal...........................................3
ARTICLE III FEES ........................................................................................3
SECTION 3.01 Fees ........................................................................3
SECTION 3.02 Increased Costs, etc........................................................4
SECTION 3.03 Increased Capital Costs.....................................................4
SECTION 3.04 Taxes .......................................................................4
SECTION 3.05 ▇▇▇▇-to-Market Adjustments..................................................5
SECTION 3.06 Illegality; Substituted Interest Rates......................................6
ARTICLE IV OTHER PAYMENT TERMS .........................................................................7
SECTION 4.01 Time and Method of Payment..................................................7
ARTICLE V REPRESENTATIONS AND WARRANTIES................................................................7
SECTION 5.01 Representations and Warranties of the Issuer................................7
SECTION 5.02 Representations and Warranties of CPS.......................................9
SECTION 5.03 Representations, Warranties and Covenants of the Class A Note Purchaser.....11
ARTICLE VI CONDITIONS ..................................................................................12
SECTION 6.01 Conditions to Purchase.....................................................12
SECTION 6.02 Conditions to Each Advance.................................................13
ARTICLE VII COVENANTS ..................................................................................15
SECTION 7.01 Affirmative Covenants......................................................15
SECTION 7.02 Negative Covenants. Until the Class A Facility Termination Date:...........20
ARTICLE VIII MISCELLANEOUS PROVISIONS..................................................................21
SECTION 8.01 Amendments..................................................................21
SECTION 8.02 No Waiver; Remedies........................................................21
SECTION 8.03 Binding on Successors and Assigns..........................................22
SECTION 8.04 Termination; Survival......................................................22
SECTION 8.05 Indemnification.............................................................23
SECTION 8.06 Characterization as Basic Document; Entire Agreement........................23
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SECTION 8.07 Notices ....................................................................23
SECTION 8.08 Severability of Provisions.................................................23
SECTION 8.09 Tax Characterization.......................................................24
SECTION 8.10 Limited Recourse...........................................................24
SECTION 8.11 Governing Law..............................................................24
SECTION 8.12 Submission to Jurisdiction.................................................24
SECTION 8.13 Waiver of Jury Trial.......................................................24
SECTION 8.14 Counterparts................................................................24
SECTION 8.15 Set-Off ....................................................................25
SECTION 8.16 Nonpetition Covenants......................................................25
SECTION 8.17 Servicer References........................................................25
SECTION 8.18 Confidentiality.............................................................25
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AMENDED AND RESTATED NOTE PURCHASE AGREEMENT
THIS AMENDED AND RESTATED NOTE PURCHASE AGREEMENT, dated as of January 12,
2007 (as amended, supplemented, restated or otherwise modified from time to time
in accordance with the terms hereof, this "Agreement"), is made among PAGE THREE
FUNDING LLC, a Delaware limited liability company (the "Issuer"), CONSUMER
PORTFOLIO SERVICES, INC., a California corporation ("CPS" or the "Servicer"),
and BEAR, ▇▇▇▇▇▇▇ & CO. INC., a Delaware corporation, as Class A Note Purchaser
(in such capacity, together with any successors in such capacity, the "Class A
Note Purchaser").
R E C I T A L S
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1. The Issuer and ▇▇▇▇▇ Fargo Bank, National Association, a national
banking association, as trustee (together with its successors in trust
thereunder as provided in the Indenture referred to below, the "Trustee"), have
entered into an Amended and Restated Indenture of even date herewith (as the
same may be further amended, supplemented, restated or otherwise modified from
time to time in accordance with the terms thereof, the "Indenture"), pursuant to
which the Issuer has previously issued a class of notes designated as the
Issuer's Variable Funding Notes, Class A (the "Class A Notes") and pursuant to
which the Issuer will issue on the Class B Closing Date a class of notes
designated as the Issuer's Variable Funding Notes, Class B (the "Class B
Notes"). The Class B Notes will be subordinate in right of payment to the Class
A Notes and to any and all other amounts due and owing to the Class A Note
Purchaser and the Class A Noteholders pursuant to the Basic Documents. The Class
A Notes and the Class B Notes are collectively referred to herein as the
"Notes".
2. The security for the Notes includes retail installment sale contracts
secured by the new and used automobiles, vans, minivans and light trucks
financed thereby and certain other Conveyed Property. The Receivables will
initially be serviced by CPS. The Notes will be secured by the Receivables,
which will be pledged by the Issuer to the Trustee from time to time pursuant to
the Indenture.
3. From time to time prior to the Class A Facility Termination Date, the
Issuer will acquire pools of Receivables secured by the new and used
automobiles, vans, minivans and light trucks financed thereby and certain other
Conveyed Property from CPS pursuant to an Amended and Restated Sale and
Servicing Agreement of even date herewith (as the same may be further amended,
supplemented, restated or otherwise modified from time to time in accordance
with the terms thereof, the "Sale and Servicing Agreement"), among the Issuer,
as Issuer and as purchaser (in such capacity, the "Purchaser"), CPS, as seller
and servicer (in such capacities, the "Seller" and the "Servicer,"
respectively), and the Trustee. The Issuer will in turn pledge the Receivables
and the Other Conveyed Property to the Trustee for the benefit of the
Noteholders and the Note Purchasers pursuant to the Indenture. The Receivables
will be described in the schedules to one or more assignments by the Seller to
the Issuer (each, an "Assignment") dated as of the cutoff date specified therein
(such date, a "Cutoff Date" and each date of transfer, a "Funding Date", in each
case with respect to the related Receivables and other Conveyed Property).
Repayment of each class of Notes and any and all other amounts due and owing to
the Note Purchasers and the Noteholders under the Basic Documents will be
secured by a security interest in the Collateral as provided in the Indenture.
In addition, repayment of the Class B Notes and any and all other amounts due
and owing to the Class B Note Purchasers and the Class B Noteholders under the
Basic Documents will be secured by a security interest in the Additional Class B
Collateral.
4. The Issuer has issued the Class A Notes in favor of the Class A Note
Purchaser and has obtained the agreement of the Class A Note Purchaser to
purchase the Class A Notes and to purchase increases in the Class A Notes from
time to time (each, a "Class A Advance"), all of which Class A Advances
(including the initial Class A Advance) will constitute Class A Advances and
will be evidenced by the Class A Notes purchased in connection herewith. Each
Class A Advance and all Class A Advance Amounts with respect thereto will be
secured by all of the Collateral regardless of whether a particular Receivable
was pledged to the Trustee prior to, on the date of, or subsequent to the date
of such Class A Advance or Class A Advance Amount, and will be senior to all
Class B Advances, all Class B Advance Amounts and any and all other amounts due
and owing to the Class B Note Purchaser and the Class B Noteholders pursuant to
the Basic Documents, which are also secured by all of the Collateral. Subject to
the terms and conditions of this Agreement and the other Basic Documents, the
Class A Note Purchaser is willing to purchase the Class A Advances from time to
time in an aggregate outstanding amount up to the Class A Maximum Invested
Amount until the Class A Facility Termination Date. CPS has joined in this
Agreement to confirm certain representations, warranties and covenants made by
it as Servicer and as Seller for the benefit of the Class A Note Purchaser..
5. The Notes are subject to the terms and provisions of an Intercreditor
Agreement, dated as of January 12, 2007 (as the same may be amended, restated,
supplemented or otherwise modified from time to time in accordance with the
terms thereof), by and among Bear, ▇▇▇▇▇▇▇ & Co. Inc., as Class A Note Purchaser
and the initial Class A Noteholder, The Patriot Group, LLC and Waterfall Eden
Fund, LP, each as a Class B Note Purchaser and as an initial Class B Note
Purchaser, Page Three Funding LLC, as Issuer and Purchaser, Consumer Portfolio
Services, Inc., as Seller and Servicer, and ▇▇▇▇▇ Fargo Bank, National
Association, as Collateral Agent, Trustee and Note Paying Agent.
ARTICLE I
DEFINITIONS
SECTION 1.01 Definitions. As used in this Agreement and unless the context
requires a different meaning, capitalized terms used but not defined herein
(including the preamble and the recitals hereto) shall have the meanings
assigned to such terms in Annex A to the Sale and Servicing Agreement. The
definitions of such terms are applicable to the singular as well as the plural
form of such terms and to the masculine as well as the feminine and neuter
genders of such terms:
ARTICLE II
PURCHASE AND SALE OF THE NOTE
SECTION 2.01 The Initial Note Purchase. On the terms and conditions set
forth in this Agreement and the other Basic Documents, and in reliance on the
covenants, representations and agreements set forth herein and therein, the
Issuer shall issue and cause the Trustee to authenticate and deliver to the
Class A Note Purchaser an amended and restated Class A Note on the Class B
Closing Date. The amended and restated Class A Note shall be dated the Class B
Closing Date, registered in the name of "Bear ▇▇▇▇▇▇▇ Securities Corp.", the
nominee of the Note Purchaser, and duly authenticated in accordance with the
provisions of the Indenture.
SECTION 2.02 Advances. Upon the Issuer's request, delivered in accordance
with the provisions of Section 2.03, subject to the satisfaction of all
conditions precedent thereto and to the terms and conditions of the Basic
Documents, and in reliance upon the representations and warranties set forth
herein and therein, the Class A Note Purchaser shall purchase Class A Advances
from time to time during the Class A Term at the relevant Class A Advance
Amount; provided that no Class A Advance shall be required or permitted to be
purchased on any date if, after giving effect to such Class A Advance, (a) the
Class A Invested Amount would exceed the Class A Maximum Invested Amount or (b)
a Class A Borrowing Base Deficiency exists or would exist. Subject to the terms
and conditions of this Agreement and the other Basic Documents, the aggregate
principal amount of the Class A Notes outstanding may be increased, to a maximum
amount not to exceed the Class A Maximum Advance Amount, or decreased from time
to time.
SECTION 2.03 Advance and Prepayment Procedures.
(a) Whenever the Issuer wishes the Class A Note Purchaser to purchase
a Class A Advance, the Issuer shall (or shall cause the Servicer to) notify the
Class A Note Purchaser by telephone, promptly followed by written notice, with
an electronic copy of such notice sent to the Class A Note Purchaser,
substantially in the form of Exhibit B hereto (each such request, a "Class A
Advance Request"), together with the related Addition Notice, a Class A
Borrowing Base Certificate and a data tape or other electronic file containing
information regarding the Related Receivables to be transferred on such Class A
Funding Date delivered to the Class A Note Purchaser no later than 2:00 p.m.
(New York City time) four (4) Business Days prior to the proposed Class A
Funding Date. Each such Class A Advance Request shall be irrevocable and shall
in each case refer to this Agreement and specify the aggregate amount of the
requested Class A Advance to be purchased on such date, which amount shall be
not less than $2,000,000. The Class A Note Purchaser shall promptly thereafter
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(but in no event later than 11:00 a.m. New York City time on the proposed Class
A Funding Date) notify the Issuer whether the Class A Note Purchaser has
determined to purchase the requested Class A Advance. On the Class A Funding
Date specified in the Class A Advance Request, subject to the other conditions
set forth herein and in the other Basic Documents, the Class A Note Purchaser
shall pay the Class A Advance Amount for such Class A Advance to or at the
direction of the Issuer, by wire transfer in U.S. dollars of such amount in same
day funds to an account designated by the Issuer or its designee on the related
Class A Funding Date. The Issuer hereby directs the Class A Note Purchaser to
pay the Class A Advance Amount for each Class A Advance to CPS for the benefit
of the Issuer.
(b) No later than three (3) Business Days prior to a proposed Class A
Funding Date, the Seller shall either (i) transmit to the Class A Note Purchaser
or its designee in electronic format or (ii) make scanned copies available to
the Class A Note Purchaser or its designee for review by the Class A Note
Purchaser or its designee at the Seller's offices during normal business hours,
of a statistically significant sample of the credit files of the Related
Receivables, such sample size to be determined and sample selected in the
discretion of the Class A Note Purchaser.
(c) The Class A Notes may be prepaid in whole or in part in accordance
with Article X of the Indenture.
SECTION 2.04 The Class A Notes. On each date a Class A Advance is
purchased, increasing the outstanding principal amount of the Class A Notes, and
on each date the outstanding principal amount of the Class A Notes is reduced, a
duly authorized officer, employee or agent of the Class A Note Purchaser shall
make appropriate notations in its books and records of the amount of such Class
A Advance made by the Class A Note Purchaser and the amount of such reduction,
as applicable, applied by the Class A Note Purchaser. Every such notation shall
be dispositive of the accuracy of the information so recorded and shall be
conclusive and binding on the Issuer absent manifest error.
SECTION 2.05 Commitment Term; Optional Renewal.. The term of the Commitment
hereunder (the "Class A Term") shall be for a period commencing on the Class B
Closing Date and ending on the Class A Facility Termination Date. Thereafter,
the Class A Term may be extended for one or two additional 364-day periods in
the respective discretion, and upon the mutual agreement of the parties, which
agreement may take the form of changing the specified "Class A Facility
Termination Date" together with such other terms upon which the parties may
agree. Notwithstanding the foregoing, nothing contained in this Section 2.05
shall obligate any of the parties hereto to extend any Class A Term unless it
shall desire to do so in its sole discretion.
SECTION 2.06 Appointment of Trustee under Indenture.
The Class A Note Purchaser hereby acknowledges and approves the appointment
of ▇▇▇▇▇ Fargo Bank, National Association as the Trustee with respect to the
Collateral pursuant to Section 6.13 of the Indenture.
ARTICLE III
FEES
SECTION 3.01 Fees.
(a) On the Class B Closing Date, the Issuer and the Servicer jointly
and severally paid to the Class A Note Purchaser a structuring fee equal to the
sum of (I) the product of (x) 0.05% and (y) the Class A Maximum Invested Amount,
and (II) the product of (x) 1.00% and (y) the Class B Maximum Invested Amount as
of the Class B Closing Date.
(b) On each Settlement Date, the Issuer and the Servicer will, jointly
and severally, pay or cause to be paid to the Class A Note Purchaser the Class A
Commitment Fee, such payment in the case of the Issuer to be made pursuant to
Section 5.8(a)(iv) of the Sale and Servicing Agreement.
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(c) The Issuer and the Servicer shall jointly and severally pay or
reimburse the Class A Note Purchaser on the Class A Closing Date and thereafter
within 30 days following presentment of invoices for all its reasonable
out-of-pocket fees, costs and expenses incurred in connection with the
development, preparation and execution of, and any amendment, modification or
supplement to, or any waiver under, any Basic Document and any other document
prepared in connection therewith, and the consummation and administration of the
transactions contemplated thereby, including, without limitation, the reasonable
fees and disbursements of counsel to the Class A Note Purchaser with respect to
any of the foregoing, including, without limitation, such fees and disbursements
incurred in advising Class A Note Purchaser from time to time as to its rights
and remedies under any Basic Document. Such expenses related to the amendment
and restatement of this facility shall be capped at $75,000.
SECTION 3.02 Increased Costs, etc. The Issuer agrees to reimburse the Class
A Note Purchaser for an increase in the cost of, or any reduction in the amount
of any sum receivable by the Class A Note Purchaser, including reductions in the
rate of return on the Class A Note Purchaser's capital, in respect of making,
continuing or maintaining (or of its obligation to make, continue or maintain)
any Class A Advances that arise in connection with any change in, or the
introduction, adoption, effectiveness, interpretation reinterpretation or
phase-in, in each case, after the date hereof, of any law or regulation,
directive, guideline, accounting rule, decision or request (whether or not
having the force of law) of any court, central bank, regulator or other
Governmental Authority, except for such changes with respect to increased
capital costs and taxes which are governed by Sections 3.03 and 3.04,
respectively. Each such demand shall be provided to the Issuer in writing and
shall state, in reasonable detail, the reasons therefor and the additional
amount required fully to compensate the Class A Note Purchaser for such
increased cost or reduced amount or return. Such additional amounts shall be
payable by the Issuer to the Class A Note Purchaser within five (5) Business
Days of its receipt of such notice, and such notice shall, in the absence of
manifest error, be conclusive and binding on the Issuer.
SECTION 3.03 Increased Capital Costs. If any change in, or the
introduction, adoption, effectiveness, interpretation or reinterpretation or
phase-in, in each case after the date hereof, of any law or regulation,
directive, guideline, accounting rule, decision or request (whether or not
having the force of law) of any court, central bank, regulator or other
Governmental Authority affects or would affect the amount of capital required or
reasonably expected to be maintained by the Class A Note Purchaser or any Person
controlling the Class A Note Purchaser and the Class A Note Purchaser reasonably
determines that the rate of return on its or such controlling Person's capital
as a consequence of its commitment or the purchases of Advances or the
maintenance of the Class A Notes by the Class A Note Purchaser is reduced to a
level below that which the Class A Note Purchaser or such controlling Person
would have achieved but for the occurrence of any such circumstance, then, in
any such case after notice from time to time by the Class A Note Purchaser to
the Issuer, the Issuer shall pay to the Class A Note Purchaser an incremental
commitment fee sufficient to compensate the Class A Note Purchaser or such
controlling Person for such reduction in rate of return. A statement of the
Class A Note Purchaser as to any such additional amount or amounts (including
calculations thereof in reasonable detail), in the absence of manifest error,
shall be conclusive and binding on the Issuer; and provided, further, that the
initial payment of such increased commitment fee shall include a payment for
accrued amounts due under this Section 3.03 prior to such initial payment. In
determining such additional amount, the Class A Note Purchaser may use any
method of averaging and attribution that it shall reasonably deem applicable so
long as it applies such method to other similar transactions.
SECTION 3.04 Taxes. All payments by the Issuer of principal of, and
interest on, the Class A Notes and all other amounts payable by the Issuer, the
Purchaser, the Seller or the Servicer hereunder or under any other Basic
Document (including fees) and/or thereunder shall be made free and clear of and
without deduction for any present or future income, excise, stamp or franchise
taxes and other taxes, fees, duties, withholdings or other charges of any nature
whatsoever imposed by any taxing authority, but excluding in the case of the
Class A Note Purchaser, taxes imposed by the United States on or measured by its
overall net income, overall receipts or overall assets and franchise taxes
imposed on it by the jurisdiction in which the Class A Note Purchaser is
organized or is operating or any political subdivision thereof (such
non-excluded items being called "Taxes"); provided that, notwithstanding
anything herein to the contrary, the Issuer shall not be required to increase
any amounts payable to the Class A Note Purchaser with respect to any Taxes that
are imposed on the Class A Note Purchaser at the time of acquisition of the
Class A Notes by the Class A Note Purchaser. In the event that any withholding
or deduction from any payment to be made by the Issuer, the Purchaser, the
Seller or the Servicer hereunder and/or under any other Basic Document is
required in respect of any Taxes pursuant to any applicable law, rule or
regulation, then the Issuer, the Purchaser, the Seller or the Servicer, as the
case may be, will:
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(a) pay directly to the relevant authority the full amount required to
be so withheld or deducted;
(b) promptly forward to the Class A Note Purchaser or its agent an
official receipt or other documentation evidencing such payment to such
authority; and
(c) pay to the Class A Note Purchaser or its agent such additional
amount or amounts as is necessary to ensure that the net amount actually
received by the Class A Note Purchaser will equal the full amount the Class A
Note Purchaser would have received had no such withholding or deduction been
required.
Moreover, if any Taxes are directly asserted against the Class A Note
Purchaser with respect to any payment received by the Class A Note Purchaser,
the Class A Note Purchaser or such agent may pay such Taxes and the Issuer, the
Purchaser, the Seller or the Servicer will promptly upon receipt of prior
written notice stating the amount of such Taxes pay such additional amounts
(including any penalties, interest or expenses) as is necessary in order that
the net amount received by such person after the payment of such Taxes
(including any Taxes on such additional amount) shall equal the amount the Class
A Note Purchaser would have received had not such Taxes been asserted. The Class
A Note Purchaser shall make all reasonable efforts to avoid the imposition of
any Taxes that would give rise to an additional payment under this Section 3.04.
If the Issuer, the Purchaser, the Seller or the Servicer fails to pay
any Taxes when due to the appropriate taxing authority or fails to remit to the
Class A Note Purchaser the required receipts or other required documentary
evidence, the Issuer, the Purchaser, the Seller or the Servicer, as applicable,
shall indemnify the Class A Note Purchaser for any Taxes and incremental Taxes,
interest or penalties that may become payable by the Class A Note Purchaser as a
result of any such failure.
SECTION 3.05 ▇▇▇▇-to-Market Adjustments.
(a) The Servicer, the Seller, the Purchaser and the Issuer shall
cooperate with the Class A Note Purchaser and will execute and deliver, or cause
to be executed and delivered, all such documents that may be reasonably
necessary to calculate the Market Value, and will take all such other actions,
as the Class A Note Purchaser may reasonably request from time to time in order
to calculate the Market Value. On each Tuesday (provided such Tuesday is a
Business Day) of each calendar week during the Class A Term, the Class A Note
Purchaser shall advise the Servicer of the Market Value (as calculated by the
Class A Note Purchaser in its sole discretion) and, in reliance upon and subject
to Section 3.05(b), the Class A Note Purchaser consents to the Servicer advising
the Class B Note Purchaser of such Market Value.
(b) In connection with the Class A Note Purchaser's provision of the
Market Value to the Servicer and the Servicer's provision of such Market Value
to the Class B Note Purchaser, in each case pursuant to Section 3.05(a), each of
the Servicer, the Seller, the Purchaser and the Issuer expressly acknowledges
and agrees that the Class A Note Purchaser is agreeing to permit the Servicer to
furnish the Market Value to the Class B Note Purchaser solely as an
accommodation in connection with the transactions contemplated by this Agreement
and the other Basic Documents. The Class A Note Purchaser makes no
representation or warranty (whether express or implied, oral or written) as to
the accuracy or completeness, or fitness for a particular use, of the Market
Value, and assumes no responsibility whatsoever to the Servicer, the Seller, the
Purchaser, the Issuer, the Class B Note Purchasers or the Class B Noteholders in
connection with its calculation of Market Value or any use of such Market Value
by the Servicer, the Seller, the Issuer, the Purchaser, any Class B Note
Purchaser, any Class B Noteholder, any of their respective affiliates or any
other Person and, consequently, the Servicer, the Seller, the Purchaser, the
Issuer, the Class B Note Purchasers and the Class B Noteholders are not relying
upon the Class A Note Purchaser for the Market Value in such regard. In
consideration of the Class A Note Purchaser's providing the Market Value to the
Servicer and permitting the provision of such Market Value to the Class B Note
Purchasers from time to time, for which the Class A Note Purchaser is not
receiving any compensation, each of the Servicer, the Seller, the Purchaser and
the Issuer hereby unconditionally and irrevocably releases and discharges the
Class A Note Purchaser and its respective affiliates, directors, officers,
agents, employees and representatives from, and each of the initial Servicer,
the Seller, the Purchaser and the Issuer hereby agrees, jointly and severally,
to indemnify, hold harmless and reimburse the Class A Note Purchaser and its
respective affiliates, directors, officers, agents, employees and
representatives with respect to, any and all actions, liabilities, losses,
damages or claims of any kind or nature whatsoever (including, without
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limitation, reasonable attorney's fees and expenses and expenses of litigation),
as incurred, that may be imposed on or incurred by or asserted against the Class
A Note Purchaser or any such other Person or Persons in any way relating to or
arising out of (i) the Class A Note Purchaser's calculation of Market Value,
(ii) the Class A Note Purchaser's provision of such Market Value to the
Servicer, (iii) the Servicer's provision of such Market Value to the Class B
Note Purchaser, (iv) the use of such Market Value by any of the Servicer, the
Seller, the Purchaser, the Issuer, any Class B Note Purchaser, any Class B
Noteholder, any of their respective affiliates or any other Person in connection
with the transactions contemplated by this Agreement and the other Basic
Documents or otherwise, or (v) with respect to any Pledged Subordinate
Securities issued in connection with a Securitization Transaction, the lead
placement agent's calculation of the market value thereof for purposes of the
definition of Class B Borrowing Base. Indemnification under this Section 3.05(b)
shall survive the termination of this Agreement and the other Basic Documents.
These indemnity obligations shall be in addition to any obligations that the
initial Servicer, the Seller, the Purchaser or the Issuer may otherwise have
under applicable law, hereunder or under any other Basic Document.
(c) In the event that a Class A Borrowing Base Deficiency exists on
any date of determination as determined by the Class A Note Purchaser in its
sole discretion, the Issuer shall on the same Business Day of the receipt of
notice from the Class A Note Purchaser (or if notice is received after 10:01
a.m. New York time, then on the next Business Day) prepay the Class A Invested
Amount by an amount equal to such Class A Borrowing Base Deficiency by paying
such amount to or at the direction of the Class A Note Purchaser. If a Class A
Borrowing Base Deficiency is not fully paid by the Issuer pursuant to the
immediately preceding sentence, then (i) on any Class A Funding Date, the Class
A Note Purchaser shall net and set-off the amount of any outstanding Class A
Borrowing Base Deficiency against the amount of the Class A Advance to be made
on such Class A Funding Date and (ii) on each Settlement Date as of which any
portion of such Class A Borrowing Base Deficiency shall remain outstanding, any
amount otherwise payable to the Deposit Account on such Settlement Date pursuant
to Section 5.7(a)(xii) of the Sale and Servicing Agreement shall instead be paid
to the Class A Note Purchaser on such Settlement Date as a prepayment of the
Class A Invested Amount (the "Class A Margin Call").
(d) The Class A Note Purchaser will not materially change the
methodology by which it calculates the Market Value (such materiality to be
determined by the Class A Note Purchaser in its sole and absolute discretion)
without providing prior written notice of such change to the Servicer and each
Class B Note Purchaser.
SECTION 3.06 Illegality; Substituted Interest Rates.
Notwithstanding any other provisions herein, (a) if any Requirement of
Law or any change therein or in the interpretation or application thereof shall
make it unlawful for the Class A Note Purchaser to make or maintain any Class A
Notes at the LIBOR rate as contemplated by this Agreement, or (b) in the event
that the Class A Note Purchaser shall have determined (which determination shall
be conclusive and binding upon the Issuer) that by reason of circumstances
affecting the LIBOR interbank market neither adequate nor reasonable means exist
for ascertaining the LIBOR rate, or (c) the Class A Note Purchaser shall have
determined (which determination shall be conclusive and binding on the Issuer)
that the applicable LIBOR rate will not adequately and fairly reflect the cost
to the Class A Note Purchaser of maintaining or funding the Class A Notes based
on such applicable LIBOR rate (provided that the parties hereto acknowledge and
agree that the Class A Note Purchaser shall only make such determination if the
published LIBOR rate used by the Class A Note Purchaser does not accurately
reflect the actual LIBOR rate), (x) the obligation of the Class A Note Purchaser
to make or maintain the Class A Notes at the LIBOR rate shall forthwith be
suspended and the Class A Note Purchaser shall promptly notify the Issuer
thereof (by telephone confirmed in writing) and (y) each Class A Note then
outstanding, if any, shall, from and including the date that is forty-five (45)
days after the Issuer's receipt of notice from the Class A Note Purchaser of the
occurrence of any condition set forth in clauses (a), (b) or (c), or at such
earlier date as may be required by law, until payment in full thereof, bear
interest at the rate per annum equal to the greater of (i) the Prime Rate and
(ii) the rate of interest (including the Class A Applicable Margin) in effect on
the date immediately preceding the date any event described in clause (a), (b)
or (c) occurred (calculated on the basis of the actual number of days elapsed in
a year of 360 days). If subsequent to such suspension of the obligation of the
Class A Note Purchaser to make or maintain the Class A Notes at the LIBOR rate
it becomes lawful for the Class A Note Purchaser to make or maintain the Class A
Notes at the LIBOR rate, or the circumstances described in clause (b) or (c)
above no longer exist, the Class A Note Purchaser shall so notify the Issuer and
its obligation to do so shall be reinstated effective as of the date it becomes
lawful for the Class A Note Purchaser to make or maintain the Class A Notes at
the LIBOR rate or the circumstances described in clause (b) or (c) above no
longer exist.
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ARTICLE IV
OTHER PAYMENT TERMS
SECTION 4.01 Time and Method of Payment. Unless otherwise specified herein,
all amounts payable to the Class A Note Purchaser hereunder or with respect to
the Class A Notes shall be made by wire transfer of immediately available funds
in Dollars not later than 5:00 p.m., New York City time, on the due date
therefor. Any funds received after that time will be deemed to have been
received on the next Business Day.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
SECTION 5.01 Representations and Warranties of the Issuer. The Issuer makes
the following representations and warranties (references to the Issuer hereunder
include the Purchaser), on which the Class A Note Purchaser relies in purchasing
the Class A Notes and in making each Class A Advance, and on which the Trustee
relies in receiving a security interest in the Receivables and the other
Collateral related thereto under the Indenture. Such representations are made as
of the date of this Agreement and as of each Class A Funding Date, and shall
survive the issuance of the Class A Notes, the making of each Class A Advance
and the grant of a security interest in the Receivables and the other Collateral
related thereto to the Trustee for the benefit of the Note Purchasers and the
Noteholders under the Indenture.
(a) Sale and Servicing Agreement and Class B Note Purchase Agreement.
Each of the representations and warranties of the Purchaser set forth in Section
7.1 of the Sale and Servicing Agreement is true and correct. The representations
and warranties of the Servicer, the Seller, the Purchaser and the Issuer in the
Basic Documents are true and correct.
(b) Other Obligations. The Issuer is not in default in the
performance, observance or fulfillment of any obligation, covenant or condition
in any of the Basic Documents to which it is a party or in any other agreement
or instrument to which it is a party or by which it is bound.
(c) Regulations T, U and X. No proceeds of any Class A Advance will be
used, directly or indirectly, by the Issuer for the purpose of purchasing or
carrying any Margin Stock (as defined in Regulation U of the Board of Governors
of the Federal Reserve System) or for the purpose of reducing or retiring any
indebtedness that was originally incurred to purchase or carry Margin Stock or
for any other purpose which might cause any Class A Advance to be a "purpose
credit" within the meaning of Regulation U. Neither the making of any Class A
Advance hereunder, nor the use of the proceeds thereof, will violate or
otherwise conflict with the provisions of Regulations T, U or X of the Board of
Governors of the Federal Reserve System.
(d) Investment Company Status. The Issuer is not, nor will the
consummation of the transactions contemplated by the Basic Documents cause the
Issuer to be, an "investment company" or an "affiliated person" of, or
"promoter" or "principal underwriter" for, an "investment company," as such
terms are defined in the Investment Company Act of 1940, as amended (the
"Investment Company Act"), or a company "controlled" by an investment company
within the meaning of the Investment Company Act. The consummation of the
transactions contemplated by the Basic Documents will not violate any provision
of such Act or any rule, regulation or order issued by the Securities and
Exchange Commission thereunder. The Issuer is not subject to regulation under
any applicable law (other than Regulation X of the Board of Governors of the
Federal Reserve System) that limits its ability to incur Indebtedness.
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(e) Full Disclosure. The information, reports, financial statements,
exhibits, schedules, officer's certificates and other documents furnished by or
on behalf of the Issuer to the Seller, the Servicer, the Class A Note Purchaser,
the Trustee or the Backup Servicer in connection with any particular Class A
Advance or the negotiation, preparation, delivery or performance of this
Agreement, the Class A Notes, the Indenture, the Sale and Servicing Agreement
and the other Basic Documents or included herein or therein or delivered
pursuant hereto or thereto, taken as a whole, are true and correct (or, in the
case of projections, are based on good faith reasonable estimates) on the date
as of which such information is stated or certified and do not and will not
contain an untrue statement of a material fact, or omit to state any material
fact necessary to make the statements herein or therein contained, in the light
of the circumstances under which they were made, not misleading. All such
financial statements fairly present the financial condition of the Issuer as of
the date specified therein (subject to normal year-end audit adjustments) all in
accordance with GAAP. On such date, the Issuer had no material contingent
liabilities, liabilities for taxes, or unusual or anticipated losses from any
unfavorable commitments, except as referred to or reflected in such financial
statements as of such date. There is no fact known to the Issuer, after due
inquiry, that would have a Material Adverse Effect and that has not been
disclosed herein, in the other Basic Documents or in a report, financial
statement, exhibit, schedule, disclosure letter or other writing furnished to
the Class A Note Purchaser for use in connection with the transactions
contemplated hereby or thereby.
(f) Collateral Security.
(i) The Issuer owns and will own each item that it pledges as
Collateral or Bear Cross Collateral, as the case may be,, free and
clear of any and all Liens (including, without limitation, any tax
liens), other than Liens created pursuant to the Indenture. No
security agreement, financing statement or other public notice similar
in effect with respect to all or any part of the Collateral or the
Bear Cross Collateral is or will be on file or of record in any public
office or authorized by the Issuer, except (A) such as have been or
may hereinafter be filed with respect to the Collateral or the Bear
Cross Collateral pursuant to the Basic Documents, and (B) such as
shall be terminated as to the Collateral or the Bear Cross Collateral
no later than concurrently with the pledge of such Collateral or Bear
Cross Collateral under the Indenture.
(ii) (A) Granting Clause I of the Indenture is effective to
create, as collateral security for the Notes and the other obligations
to the Class A Note Purchaser, a valid and enforceable Lien on the
Collateral in favor of the Trustee for the benefit of the Note
Purchasers and the Noteholders; and (B) Granting Clause III of the
Indenture is effective to create, as collateral security for the Class
B notes issued under the UBS Indenture and the other obligations to
the Class B note purchasers under the UBS Basic Documents, a valid and
enforceable Lien on the Bear Cross Collateral in favor of the UBS
Indenture Trustee for the benefit of the Class B note purchasers and
the Class B noteholders under the UBS Basic Documents, in each case,
subject to the Intercreditor Agreements.
(iii) The Liens created pursuant to the Indenture (a) constitute
a perfected security interest in the Collateral in favor of the
Trustee for the benefit of the Note Purchasers and the Noteholders,
subject to the Intercreditor Agreement, (b) constitute a perfected
security interest in the Bear Cross Collateral in favor of the UBS
Indenture Trustee for the benefit of the Class B note purchasers and
the Class B noteholders under the UBS Basic Documents, subject to the
Intercreditor Agreement, (c) are prior to all other Liens of all other
Persons that may be perfected by filing a financing statement under
Article 9 of the Uniform Commercial Code (other than, in the case of
the Bear Cross Collateral, the Lien created by Granting Clause I of
the Indenture) and (d) are enforceable as such as against all other
Persons.
(iv) Upon delivery of Contracts evidencing the Receivables to the
Trustee in accordance with Section 2.1(a) of the Sale and Servicing
Agreement, the Lien created pursuant to the Indenture will constitute
a perfected security interest in such Contracts in favor of the
Trustee for the benefit of the Note Purchasers and the Noteholders,
which Lien will be prior to all other Liens of all other Persons that
may be perfected by possession of such Contracts under Article 9 of
the Uniform Commercial Code and which Lien is enforceable as such as
against all other Persons.
(g) Ownership of Properties. The Issuer has good and marketable title
to any and all of its properties and assets, subject only to the Liens under the
Indenture.
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(h) Legal Counsel, etc. The Issuer has consulted with its own legal
counsel and independent accountants to the extent it has deemed necessary
regarding the tax, accounting and regulatory consequences of the transactions
contemplated by this Agreement and the other Basic Documents, and the Issuer is
not participating in such transactions in reliance on any representations of the
Class A Note Purchaser or its Affiliates, or its counsel, with respect to tax,
accounting, regulatory or any other matters.
(i) The Indenture. Each of the representations and warranties of the
Issuer contained in the Indenture is true and correct. No party to any Basic
Document is in default under any of its obligations thereunder.
(j) Eligible Receivables. All of the Receivables included in the Class
A Borrowing Base are Eligible Receivables.
(k) No Fraudulent Conveyance. As of the Closing Date and immediately
after giving effect to each Class A Advance, the fair value of the assets of the
Issuer is greater than the fair value of its liabilities (including, without
limitation, contingent liabilities of the Issuer), and the Issuer is and will be
solvent, does and will pay its debts as they mature and does not and will not
have an unreasonably small capital to engage in the business in which it is
engaged and proposes to engage. The Issuer does not intend to incur, or believe
that it has incurred, debts beyond its ability to pay such debts as they mature.
The Issuer is not in default under any material obligation to pay money to any
Person. The Issuer is not contemplating the commencement of insolvency,
bankruptcy, liquidation or consolidation proceedings or the appointment of a
receiver, liquidator, conservator, trustee or similar official in respect of the
Issuer or any of its assets. The Issuer is not transferring any Collateral or
any Bear Cross Collateral with any intent to hinder, delay or defraud any of its
creditors. The Issuer will not use the proceeds from the transactions
contemplated by this Agreement or any other Basic Document to give any
preference to any creditor or class of creditors. The Issuer has given fair
consideration and reasonably equivalent value in exchange for the sale of the
Receivables by CPS under the Sale and Servicing Agreement.
(l) No Other Business. The Issuer engages in no business activities
other than the purchase or acquisition of the Collateral and the Pledged
Subordinate Securities, pledging the Collateral, and the Pledged Subordinate
Securities and the Bear Cross Collateral under the Indenture, transferring the
Collateral in connection with Securitization Transactions and in connection with
whole-loan or other asset sales, issuing the Notes and other activities relating
to the foregoing to the extent permitted by the organizational documents of the
Issuer as in effect on the date hereof, or as amended with the prior written
consent of the Controlling Note Purchaser. Without limitation of the foregoing,
the Issuer is not an issuer of securities other than the Notes or a borrower
under any loan or financing agreement, facility or other arrangement other than
the facility established pursuant to this Agreement and the other Basic
Documents.
(m) No Indebtedness. The Issuer has no Indebtedness, other than
Indebtedness incurred under (or contemplated by) the terms of the Basic
Documents.
(n) ERISA. The Issuer does not maintain any Plans, and the Issuer
agrees to notify the Class A Note Purchaser in advance of forming any Plans.
Neither the Issuer nor any Affiliate of the Issuer (other than MFN under the MFN
Financial Corporation Pension Plan and CPS under its defined contribution
(401(k)) plan) has any obligations or liabilities with respect to any Plans or
Multiemployer Plans, nor have any such Persons had any obligations or
liabilities with respect to any such Plans during the five year period prior to
the date this representation is made or deemed made. The Issuer will give notice
to the Class A Note Purchaser if at any time it or any Affiliate has any
obligations or liabilities with respect to any Plan or Multiemployer Plan. All
Plans maintained by the Issuer or any Affiliate are in substantial compliance
with all applicable laws (including ERISA). The Issuer is not an employer under
any Multiemployer Plan.
SECTION 5.02 Representations and Warranties of CPS. CPS makes the following
representations and warranties, on which the Issuer relies in purchasing the
Receivables and the Other Conveyed Property related thereto, and on which the
Class A Note Purchaser relies in purchasing its Class A Notes. Such
representations and warranties are made as of the date of this Agreement and as
of each Class A Funding Date, and shall survive the sale by CPS to the Purchaser
of the Receivables and the Other Conveyed Property related thereto under the
Sale and Servicing Agreement, the issuance of the Class A Notes, the purchase of
each Class A Advance and the grant of a security interest in the Receivables and
the other Collateral related thereto by the Issuer to the Trustee for the
benefit of the Note Purchasers and the Noteholders under the Indenture.
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(a) Sale and Servicing Agreement and Class B Note Purchase Agreement.
Each of the representations, warranties and covenants of the Seller and the
Servicer in the Sale and Servicing Agreement and the Basic Documents is true and
correct.
(b) Investment Company Status. CPS is not, nor will the consummation
of the transactions contemplated by the Basic Documents cause CPS to be, an
"investment company" or an "affiliated person" of, or "promoter" or "principal
underwriter" for, an "investment company," as such terms are defined in the
Investment Company Act or a company "controlled by" an investment company within
the meaning of the Investment Company Act. The consummation of the transactions
contemplated by this Agreement and each other Basic Document to which CPS is a
party will not violate any provision of such Act or any rule, regulation or
order issued by the Securities and Exchange Commission thereunder. CPS is not
subject to regulation under any applicable law (other than Regulation X of the
Board of Governors of the Federal Reserve System) that limits its ability to
incur Indebtedness.
(c) No Material Adverse Effect; No Default. (i) CPS is not a party to
any indenture, loan or credit agreement or any lease or other agreement or
instrument or subject to any charter or corporate restriction that could have,
and no provision of applicable law or governmental regulation has had or would
have a Material Adverse Effect and (ii) CPS is not in default under or with
respect to any contract, agreement, lease or other instrument to which CPS is a
party and which is material to CPS's condition (financial or otherwise),
business, operations or properties, and CPS has not delivered or received any
notice of default thereunder, other than such defaults as have been waived.
(d) Regulations T, U and X. No proceeds of any Class A Advance will be
used, directly or indirectly, by CPS for the purpose of purchasing or carrying
any Margin Stock (as defined in Regulation U of the Board of Governors of the
Federal Reserve System) or for the purpose of reducing or retiring any
indebtedness that was originally incurred to purchase or carry Margin Stock or
for any other purpose which might cause any Class A Advance to be a "purpose
credit" within the meaning of Regulation U. Neither the making of any Class A
Advance hereunder, nor the use of the proceeds thereof, will violate or
otherwise conflict with the provisions of Regulations T, U or X of the Board of
Governors of the Federal Reserve System.
(e) Security Interest. Notwithstanding the intent of the parties set
forth in Section 2.2 of the Sale and Servicing Agreement, the Sale and Servicing
Agreement is effective to create a valid and enforceable Lien on the Receivables
and the Other Conveyed Property in favor of the Issuer. The Lien created
pursuant to the Sale and Servicing Agreement (a) constitutes a first priority
perfected security interest in the Receivables and the Other Conveyed Property
in favor of the Purchaser, (b) is prior to all other Liens, if any, on the
Receivables and the Other Conveyed Property, and (c) is enforceable as such as
against all Persons.
(f) Full Disclosure. The information, reports, financial statements,
exhibits, schedules, officer's certificates and other documents furnished by or
on behalf of CPS, the Servicer, the Seller or any of their respective Affiliates
to the Issuer, the Purchaser, the Class A Note Purchaser, the Trustee or the
Backup Servicer in connection with any particular Class A Advance or the
negotiation, preparation, delivery or performance of this Agreement, the Class A
Notes and the other Basic Documents or included herein or therein or delivered
pursuant hereto or thereto, taken as a whole, are true and correct in every
material respect (or, in the case of projections, are based on good faith
reasonable estimates) on the date as of which such information is stated or
certified and do not and will not contain an untrue statement of a material
fact, or omit to state any material fact necessary to make the statements herein
or therein contained, in the light of the circumstances under which they were
made, not misleading. All such financial statements fairly present the financial
condition of CPS or such Affiliates as of the date specified therein (subject to
normal year-end audit adjustments) all in accordance with GAAP. On such date,
neither CPS nor any of its Affiliates had any material contingent liabilities,
liabilities for taxes, or unusual or anticipated losses from any unfavorable
commitments, except as referred to or reflected in such financial statements as
of such date. There is no fact known to CPS or any of its Affiliates, after due
inquiry, that would have a Material Adverse Effect and that has not been
disclosed herein, in the other Basic Documents or in a report, financial
statement, exhibit, schedule, disclosure letter or other writing furnished to
the Class A Note Purchaser for use in connection with the transactions
contemplated hereby or thereby.
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(g) ERISA. Neither CPS nor any of its Affiliates maintain any Plans
(other than CPS's defined contribution (401(k)) plan and the MFN Financial
Corporation Pension Plan), and CPS agrees to notify the Class A Note Purchaser
in advance of forming any Plans. Neither CPS nor any of its Affiliates has any
obligations or liabilities with respect to any Plans or Multiemployer Plans
(other than CPS's defined contribution (401(k)) plan and the MFN Financial
Corporation Pension Plan), nor have any such Persons had any obligations or
liabilities with respect to any such Plans during the five year period prior to
the date this representation is made or deemed made. CPS will give notice to the
Class A Note Purchaser if at any time it or any Affiliate has any obligations or
liabilities with respect to any Plan or Multiemployer Plan. All Plans maintained
by CPS or any of its Affiliates are in substantial compliance with all
applicable laws (including ERISA). CPS is not an employer under any
Multiemployer Plan.
(h) Insurance. During the Class A Term, CPS shall maintain such
insurance as is generally acceptable to prudent institutional investors and
usual and customary for similar companies in its industry.
SECTION 5.03 Representations, Warranties and Covenants of the Class A Note
Purchaser. The Class A Note Purchaser hereby covenants to the Issuer and the
Servicer that it will perform the obligations required of it under the Basic
Documents in accordance with the terms of the Basic Documents. In addition, the
Class A Note Purchaser represents and warrants to the Issuer and the Servicer,
as of the date hereof (or as of a subsequent date on which a successor or
assignee of the Class A Note Purchaser shall become a party hereto, in which
case such successor or assignee hereby represents and warrants to the Issuer and
the Servicer), that:
(a) it has had an opportunity to discuss the Issuer's and the
Servicer's business, management and financial affairs, and the terms and
conditions of the transactions contemplated by the Basic Documents, with the
Issuer and the Servicer and their respective representatives;
(b) it is a "qualified purchaser" (as defined in Section 2(a)(51) of
the Investment Company Act) that is either (i) a "qualified institutional buyer"
as such term is defined under Rule 144A of the Securities Act or (ii) an
"accredited investor" within the meaning of Rule 501(a)(1), (2), (3) or (7) of
Regulation D under the Securities Act and has sufficient knowledge and
experience in financial and business matters to be capable of evaluating the
merits and risks of investing in, and is able and prepared to bear the economic
risk of investing in, the Class A Notes;
(c) it is purchasing the Class A Notes for its own account, or for the
account of one or more "qualified purchasers" (as defined in Section 2(a)(51) of
the Investment Company Act) that are either (i) "qualified institutional buyers"
within the meaning of Rule 144A of the Securities Act or (ii) "accredited
investors" within the meaning of Rule 501(a)(1), (2), (3) or (7) of Regulation D
under the Securities Act that meet the criteria described in subsection (b), and
for which it is acting with complete investment discretion, for investment
purposes only and not with a view to distribution, subject, nevertheless, to the
understanding that the disposition of its property shall at all times be and
remain within its control;
(d) it understands that the Class A Notes have not been and will not
be registered or qualified under the Securities Act or any applicable state
securities laws or the securities laws of any other jurisdiction and are being
offered only in a transaction not involving any public offering within the
meaning of the Securities Act and may not be resold or otherwise transferred
unless so registered or qualified or unless an exemption from registration or
qualification is available, that the Issuer is not required to register the
Class A Notes, and that any transfer must comply with provisions of Section 2.5
of the Indenture and Section 8.03(b) of this Agreement;
(e) it understands that the Class A Notes will bear the legend set out
in the form of Class A Note attached as Exhibit A-1 to the Indenture and be
subject to the restrictions on transfer described in such legend;
(f) it will comply with all applicable federal and state securities
laws in connection with any subsequent resale of the Class A Notes;
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(g) it understands that the Class A Notes may be offered, resold,
pledged or otherwise transferred only (A) to the Issuer, (B) in a transaction
meeting the requirements of Rule 144A under the Securities Act, (C) outside the
United States to a foreign person in a transaction meeting the requirements of
Regulation S under the Securities Act, or (D) in a transaction complying with or
exempt from the registration requirements of the Securities Act and in
accordance with any applicable securities laws of any state of the United States
or any other jurisdiction;
(h) if it desires to offer, sell or otherwise transfer, pledge or
hypothecate the Class A Notes as described in clause (B), (C) or (D) of the
preceding paragraph, the transferee of the Class A Notes will be required to
deliver a certificate and may under certain circumstances be required to deliver
an opinion of counsel, in each case, as described in the Indenture, reasonably
satisfactory in form and substance to the Trustee, that an exemption from the
registration requirements of the Securities Act applies to such offer, sale,
transfer or hypothecation. The Class A Note Purchaser understands that the
registrar and transfer agent for the Class A Notes will not be required to
accept for registration of transfer the Class A Notes acquired by it unless the
terms and conditions of Sections 2.4 and 2.5 of the Indenture have been
satisfied;
(i) it will obtain from any purchaser of the Class A Notes
substantially the same representations and warranties contained in the foregoing
paragraphs; and
(j) this Agreement has been duly and validly authorized, executed and
delivered by it and constitutes a legal, valid, binding obligation of it,
enforceable against it in accordance with its terms, except as enforceability
may be limited by bankruptcy, insolvency, reorganization or other similar laws
affecting the enforcement of creditors' rights generally and by equitable
limitations on the availability of specific remedies, regardless of whether such
enforcement is considered in a proceeding in equity or at law.
ARTICLE VI
CONDITIONS
SECTION 6.01 Conditions to Purchase. The Class A Note Purchaser will have
no obligation to purchase the amended and restated Class A Notes hereunder
unless:
(a) each of the Basic Documents shall be in full force and effect and
all consents, waivers and approvals necessary for the consummation of the
transactions contemplated by the Basic Documents shall have been obtained and
shall be in full force and effect;
(b) at the time of such issuance, all conditions to the issuance of
the Class A Notes under the Indenture and under Section 2.1(b) of the Sale and
Servicing Agreement shall have been satisfied and all conditions to the initial
Class A Advance set forth under Section 6.02 hereof have been satisfied;
(c) the Class A Note Purchaser shall have received a duly executed,
authorized and authenticated Class A Note registered as provided in Section 2.01
and stating that the principal amount thereof shall not exceed the Class A
Maximum Invested Amount;
(d) the Issuer shall have paid all fees required to be paid by it on
or prior to the date hereof, including all fees required under Section 3.01
hereof;
(e) the Class A Notes purchased by the Class A Note Purchaser
hereunder shall be entitled to the benefit of the security provided in the
Indenture and shall constitute the legal, valid and binding obligations of the
Issuer, enforceable against the Issuer in accordance with their terms;
(f) no Material Adverse Change shall have occurred with respect to CPS
or the Issuer since September 30, 2006;
(g) the Class A Note Purchaser shall have received:
(i) a duly executed and delivered original counterpart of each
Basic Document (other than any Basic Document that contemplates
delivery on a date that is after the Class B Closing Date), each such
document being in full force and effect;
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(ii) certified copies of charter documents and each amendment
thereto, and resolutions of (A) the Board of Directors of each of the
Issuer and the Servicer authorizing or ratifying the execution,
delivery and performance, respectively, of all Basic Documents to
which it is a party, (B) the issuance of Class A Notes contemplated
hereunder and the issuance of the Class B Notes contemplated under the
Class B Note Purchase Agreement and (C) the granting of the security
interests contemplated under the Basic Documents, certified by the
Secretary or an Assistant Secretary of each of the Issuer and the
Servicer as of the Class A Closing Date, which certificate shall state
that the resolutions thereby certified have not been amended,
modified, revoked or rescinded as of the date of such certificate;
(iii) a certificate of the Secretary or an Assistant Secretary of
the Issuer and the Servicer, as applicable, certifying the names and
the signatures of its officer or officers authorized to sign all
transaction documents to which it is a party;
(iv) a certificate of a senior officer of CPS to the effect that
the representations and warranties of the Seller and the Servicer in
this Agreement and the other Basic Documents to which it is a party
are true and correct as of the date hereof, and that the Seller and
the Servicer have complied in all material respects with all
agreements and satisfied all conditions on their part to be performed
or satisfied at or prior to the date hereof;
(v) a certificate of a senior officer of the Issuer to the effect
that the representations and warranties of the Issuer and the
Purchaser in this Agreement and the other Basic Documents to which it
is a party are true and correct as of the Class A Closing Date and
that the Issuer and the Purchaser have complied in all material
respects with all agreements and satisfied all conditions on their
part to be performed or satisfied at or prior to the date hereof;
(vi) legal opinions (including opinions relating to true sale,
non-consolidation, UCC, enforceability and corporate matters, any of
which may take the form of a "bring-down" opinion from the opinions
issued on the Class A Closing Date) in form and substance satisfactory
to the Class A Note Purchaser;
(vii) evidence satisfactory to the Class A Note Purchaser of
completion of all necessary UCC filings and search reports;
(viii) payment of Class A Note Purchaser's reasonable
out-of-pocket fees and expenses in accordance with Section 3.01(c)
hereof;
(ix) copies of certificates (long form) or other evidence from
the Secretary of State or other appropriate authority of the States of
Delaware and California, evidencing the good standing of the Issuer
and the Servicer in the States of Delaware and California, in each
case, dated no earlier than 15 days prior to the Class B Closing Date;
(x) copies (which may be delivered in electronic format) of any
commitment or agreement between the Issuer and the Servicer and any
lender or other financial institution, other than any such commitment
or agreement (or portion thereof) which the Class A Note Purchaser
specifically agrees are not required to be delivered hereunder; and
(xi) such other documents, opinions and information as the Class
A Note Purchaser may reasonably request; and
(h) the Class A Note Purchaser shall have completed to its
satisfaction its due diligence review of the Issuer and the Servicer and its
respective management, controlling stockholders, systems, underwriting,
servicing and collection operations, static pool performance and its loan files.
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SECTION 6.02 Conditions to Each Class A Advance. The obligation of the
Class A Note Purchaser to fund any Class A Advance on any day (including the
initial Class A Advance) shall be subject to the conditions precedent that on
the date of such Class A Advance, before and after giving effect thereto and to
the application of any proceeds therefrom, the following statements shall be
true:
(a) no Class A Funding Termination Event shall have occurred and be
continuing;
(b) the Class A Facility Termination Date shall not have occurred and
will not occur as a result of making such Class A Advance and no default under
or breach of the Sale and Servicing Agreement or any other Basic Document exists
or will exist;
(c) no later than four (4) Business Days prior to the requested Class
A Funding Date, the Class A Note Purchaser shall have received a properly
completed Class A Borrowing Base Certificate from the Servicer in the form of
Exhibit A hereto;
(d) no later than four (4) Business Days prior to the requested Class
A Funding Date, the Class A Note Purchaser shall have received a properly
completed and executed Class A Advance Request, together with timely receipt of
each other item required pursuant to Section 2.03 hereof;
(e) the Servicer shall have delivered to the Class A Note Purchaser
the Servicer's Certificate for the immediately preceding Accrual Period pursuant
to Section 4.9 of the Sale and Servicing Agreement;
(f) such Class A Advance shall be in an amount not less than
$2,000,000;
(g) no more than two Class A Advances shall be made in the same week;
(h) after giving effect to such Class A Advance, the Class A Invested
Amount will not exceed the Class A Maximum Invested Amount;
(i) the representations and warranties made by the Servicer, the
Seller, the Purchaser, the Issuer and the Class B Note Purchaser in the Basic
Documents are true and correct as of the date of such requested Class A Advance,
with the same effect as though made on the date of such Class A Advance, and the
Class A Note Purchaser shall have received (I) a certificate from the Servicer
and the Seller to such effect with respect to its representations and warranties
and that the Servicer and the Seller have complied in all material respects with
all agreement and satisfied all conditions on their part to be performed or
satisfied at or prior to the related Class A Funding Date, and (II) a
certificate from the Issuer and the Purchaser to such effect with respect to its
representations and warranties and that the Issuer and the Purchaser have
complied in all material respects with all agreement and satisfied all
conditions on their part to be performed or satisfied at or prior to the related
Class A Funding Date, which certifications, in each case, may be included in the
related Class A Advance Request;
(j) the Trustee shall (in accordance with the procedures contemplated
in Section 3.4 of the Sale and Servicing Agreement) have confirmed receipt of
the related Receivable File for each Eligible Receivable included in the Class A
Borrowing Base calculation and shall have delivered to the Controlling Note
Purchaser (with a copy thereof to each other Note Purchaser) a Trust Receipt
with respect to the Receivable Files related to the Related Receivables to be
purchased on such Class A Funding Date, or if requested by the Class A Note
Purchaser, an aggregate Trust Receipt with respect to the Receivable Files for
all of the Receivables;
(k) after giving effect to such Class A Advance, there shall be no
Class A Borrowing Base Deficiency;
(l) all limitations and conditions specified in Section 2.02 of this
Agreement and in Section 2.1(b) of the Sale and Servicing Agreement shall have
been satisfied with respect to the making of such Class A Advance;
(m) after giving effect to such Class A Advance, no Material Adverse
Change with respect to CPS or the Issuer shall have occurred and there shall
have been no Material Adverse Effect;
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(n) none of the Issuer, the Purchaser, the Seller or the Servicer
shall have breached any of its covenants under the Basic Documents in any
material respect;
(o) the Issuer shall have provided the Class A Note Purchaser with all
other information that the Class A Note Purchaser may reasonably require, if the
Class A Note Purchaser shall have given the Issuer reasonable advance notice of
such requirements;
(p) all amounts due and owing to the Class A Noteholders and the Class
A Note Purchaser under this Agreement or any of the other Basic Documents shall
have been paid in full;
(q) after giving effect to such Class A Advance and the application of
proceeds therefrom, no Default or Event of Default shall have occurred and be
continuing on and as of the requested Class A Funding Date; and
(r) on and as of the requested Class A Funding Date, each of the
representations and warranties set forth in Section 3.1 of the Sale and
Servicing Agreement is true and correct for all Related Receivables being
pledged by the Issuer to the Trustee for the benefit of the Noteholders and the
Note Purchasers under the Indenture on such date and each Related Receivable is
an Eligible Receivable. No such Related Receivable was originated in any
jurisdiction in which the Seller is required to be licensed in order to own such
Related Receivable unless the Seller has obtained such license prior to owning
such Related Receivable. With respect to each such Related Receivable, the
applicable Dealer or Consumer Lender (if such Consumer Lender is not the
Seller), as applicable, has either been paid or received credit from Seller for
all proceeds from the sale of such Related Receivable to the Seller.
The giving of any notice pursuant to Section 2.03 shall constitute a
representation and warranty by the Issuer and the Servicer that all conditions
precedent to such Class A Advance have been satisfied.
ARTICLE VII
COVENANTS
SECTION 7.01 Affirmative Covenants
Until the Class A Facility Termination Date:
(a) Notice of Defaults, Other Funding Termination Events, Litigation,
Adverse Judgments, Etc. CPS or the Issuer, as applicable, shall give notice to
each Note Purchaser promptly:
(i) upon CPS or the Issuer, as the case may be, becoming aware
of, and in any event within three (3) Business Days after, the
occurrence of any Event of Default or Default or any Class B Event of
Default or Class B Default or any event of default or default under
any other Basic Document or any other material agreement of CPS;
(ii) upon CPS or the Issuer, as the case may be, becoming aware
of, and in any event within three (3) Business Days after, the
occurrence of any Funding Termination Event,
(iii) upon, and in any event within three (3) Business Days
after, service of process on CPS or the Issuer, as the case may be, or
any agent thereof for service of process, in respect of any legal or
arbitrable proceedings affecting CPS or the Issuer (x) that questions
or challenges the validity or enforceability of any of the Basic
Documents, (y) in which the amount in controversy exceeds $1,000,000
or (z) that, if adversely determined, would cause a Material Adverse
Effect;
(iv) upon, and in any event within three (3) Business Days after,
CPS or the Issuer, as the case may be, becoming aware of any event or
change in circumstances that could have a Material Adverse Effect,
constitute a Material Adverse Change or cause an Event of Default or a
Class B Event of Default; and
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(v) upon, and in any event within three (3) Business Days after,
CPS or the Issuer, as the case may be, becoming aware of entry of a
judgment or decree in respect of CPS or the Issuer, its respective
assets or any of the Collateral in an amount in excess of $1,000,000.
Each notice pursuant to this subsection (a) shall be accompanied by a
statement of an officer of CPS or the Issuer, as applicable, setting
forth details of the occurrence referred to therein and stating what
action CPS and the Issuer, as the case may be, have taken or propose
to take with respect thereto.
(b) Taxes. Each of CPS and the Issuer shall pay and discharge all
taxes and governmental charges upon it or against any of its properties or
assets or its income prior to the date after which penalties attach for failure
to pay, except to the extent that CPS or the Issuer, as applicable, shall be
contesting in good faith in appropriate proceedings its obligation to pay such
taxes or charges, adequate reserves having been set aside for the payment
thereof in accordance with GAAP.
(c) Continuity of Business and Compliance With Agreement and Law. Each
of CPS and the Issuer shall:
(i) preserve and maintain its legal existence;
(ii) comply with the requirements of all applicable laws, rules,
regulations and orders of governmental authorities and other
Requirements of Law (including, without limitation, Consumer Laws and
all environmental laws);
(iii) keep adequate records and books of account, in which
complete entries will be made in accordance with GAAP consistently
applied;
(iv) not move its chief executive office or chief operating
office from the addresses referred to herein or change its
jurisdiction of organization unless it shall have provided the Class A
Note Purchaser 30 days prior written notice of such change;
(v) pay and discharge all taxes, assessments and governmental
charges or levies imposed on it or on its income or profits or on any
of its property prior to the date on which penalties attach thereto,
except for any such tax, assessment, charge or levy the payment of
which is being contested in good faith and by proper proceedings and
against which adequate reserves are being maintained; and
(vi) continue in business in a prudent, reasonable and lawful
manner with all licenses, rights, permits, franchises and
qualifications necessary to perform its respective obligations under
this Agreement, the Sale and Servicing Agreement, the Notes and the
other Basic Documents.
(d) Ownership of the Issuer. CPS shall own beneficially and of record
100% of the membership interests in the Issuer free and clear of all Liens other
than the Lien created pursuant to the Pledge Agreement.
(e) Class A Borrowing Base Certificates. The Issuer shall deliver to
the Class A Note Purchaser, together with each Class A Advance Request, a Class
A Borrowing Base Certificate in accordance with Section 2.03(a) hereof.
(f) Collateral Statements. The Issuer will furnish or cause to be
furnished to the Class A Note Purchaser from time to time statements and
schedules further identifying and describing the Collateral and the Bear Cross
Collateral and such other reports in connection with the Collateral or the Bear
Cross Collateral as the Class A Note Purchaser may reasonably request, all in
reasonable detail, including without limitation each statement, certificate and
report required to be delivered to the Trustee or the Noteholders under any
Basic Document.
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(g) Actions to Enforce Rights under Contracts. CPS and the Issuer
shall take such reasonable and lawful actions as the Controlling Note Purchaser
shall request to enforce the rights of the Note Purchasers and the Noteholders
under the Basic Documents with respect to the Collateral, and, following the
occurrence of an Event of Default, shall take such reasonable and lawful actions
as are necessary to enable the Controlling Note Purchaser to exercise such
rights in its own name.
(h) Hedging Strategy. The Issuer shall implement and maintain a
hedging strategy that is reasonably acceptable to the Controlling Note
Purchaser; provided, that, for purposes of this subparagraph (h), a hedging
strategy consisting of the Seller sponsoring one or more securitizations of
pools of Receivables at least every 120 days during the term of the Class A
Notes shall be deemed acceptable to the Controlling Note Purchaser.
(i) Monthly Servicer's Certificate. The Issuer shall, or shall cause
the Servicer (so long as CPS is Servicer) to, deliver to the Note Purchasers,
the Trustee and the Backup Servicer, no later than 12:00 noon, New York City
time, on each Determination Date, in a computer-readable format reasonably
acceptable to each such Person, a Servicer's Certificate executed by a
Responsible Officer or agent of Servicer containing all information required to
be included in such Servicer's Certificate under Section 4.9 of the Sale and
Servicing Agreement and related monthly data. The Issuer shall, or shall cause
the Servicer (so long as the CPS is Servicer) to, deliver to each Note
Purchaser, the Trustee and the Backup Servicer a hard copy of any such
Servicer's Certificate upon request of such Person.
(j) Separate Existence; No Commingling. During each Class A Term, the
Issuer shall limit its activities to such activities as are incident to and
necessary or convenient to accomplish the following purposes: (i) to acquire,
own, hold, pledge, finance and otherwise deal with Receivables to be pledged to
the Trustee for the benefit of the Note Purchasers and the Noteholders pursuant
to the Indenture and (ii) to sell, securitize or otherwise liquidate all or any
portion of such Receivables in accordance with the provisions of the Basic
Documents. In addition, during each Class A Term, the Issuer shall observe and
comply with the applicable legal requirements for the recognition of the Issuer
as a legal entity separate and apart from its Affiliates, including without
limitation, those requirements set forth in Section 9(b)(iv) of the Issuer's
Limited Liability Company Agreement. Without limiting the foregoing, the Issuer
shall, and CPS shall cause itself and any other Affiliates of the Issuer to,
maintain the truth and accuracy of all facts assumed by ▇▇▇▇▇▇▇ ▇▇▇▇▇ LLP in the
true sale and non consolidation opinions of ▇▇▇▇▇▇▇ ▇▇▇▇▇ LLP; provided that in
the event that any request is made for the Class A Note Purchaser to consent to
or approve any matter that, if effectuated or consummated, would result in a
change to the continuing truth and accuracy of any of the factual assumptions in
the true sale or non-consolidation opinions of ▇▇▇▇▇▇▇ ▇▇▇▇▇ LLP, such request
shall be accompanied by an opinion of ▇▇▇▇▇▇▇ ▇▇▇▇▇ LLP, or such other counsel
as may be reasonably satisfactory to the Class A Note Purchaser, that the
conclusions set forth in the true sale and non- consolidation opinions of
▇▇▇▇▇▇▇ ▇▇▇▇▇ LLP will be unaffected by such change.
(k) Other Liens or Interests. Except for the conveyances under the
Sale and Servicing Agreement and the other Basic Documents, CPS shall not sell,
pledge, assign or transfer to any other Person, or grant, create, incur, assume
or suffer to exist any lien on or any interest in, the Receivables or the Other
Conveyed Property. Except for the pledges pursuant to the Indenture and the
other Basic Documents, the Issuer shall not sell, pledge, assign or transfer to
any other Person, or grant, create, incur, assume or suffer to exist any lien on
or any interest in, the Collateral or the Bear Cross Collateral (other than, in
the case of the Bear Cross Collateral, the lien created pursuant to Granting
Clause I of the Indenture), subject to the Intercreditor Agreement. CPS and the
Issuer shall, at their own expense and in each case subject to the Intercreditor
Agreement, defend (i) the Collateral and the Bear Cross Collateral against, and
will take such other action as is necessary to remove, any Lien, security
interest or claim on, in or to the Collateral or the Bear Cross Collateral,
other than the security interests created under the Basic Documents, (ii) the
right, title and interest of each Note Purchaser and each Noteholder in and to
any of the Collateral, and (iii) subject to the Lien created pursuant to
Granting Clause I of the Indenture, the right, title and interest of the UBS
Indenture Trustee, each Class B note purchaser and each Class B noteholder under
the UBS Basic Documents in and to any of the Bear Cross Collateral, in each case
against the claims and demands of all Persons whomsoever.
(l) Books and Records; Other Information.
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(i) Each of CPS and the Issuer shall maintain accounts and
records as to each Receivable accurately and in sufficient detail to
permit the reader thereof to know at any time the status of such
Receivable, including payments and recoveries made and payments owing
(and the nature of each). CPS shall maintain accurate and complete
books and records with respect to the Receivables and the Other
Conveyed Property and with respect to CPS's business. The Issuer shall
maintain accurate and complete books and records with respect to the
Collateral and the Issuer's business. All accounting books and records
shall be maintained in accordance with GAAP.
(ii) CPS and the Issuer shall, and shall cause each of their
respective Affiliates to, permit any representative of the Class A
Note Purchaser to visit and inspect any of the properties of the
Issuer and such Affiliates and to examine the books and records of CPS
or the Issuer and such Affiliates, as applicable, and to make copies
and take extracts therefrom, and to discuss the business, operations,
properties, condition (financial or otherwise) or prospects of CPS or
the Issuer and each such Affiliate, as applicable, or any of the
Collateral with the officers and independent public accountants
thereof and as often as the Class A Note Purchaser may reasonably
request, and so long as no Default or Event of Default shall have
occurred and be continuing, all at such reasonable times during normal
business hours upon reasonable written notice; provided that, after a
Default or Event of Default shall have occurred and be continuing, the
Class A Note Purchaser may make such inspections, examine such
documents, make such copies, take such extracts and conduct such
discussions at such times as it may determine in its sole discretion
during CPS's and the Issuer's normal business hours.
(iii) Each of CPS and the Issuer shall promptly provide to the
Class A Note Purchaser all information regarding its respective
operations and practices and the Collateral as the Class A Note
Purchaser shall reasonably request.
(iv) CPS shall maintain its computer systems so that, from and
after the time of each sale of Receivables under the Sale and
Servicing Agreement to the Issuer, CPS's master computer records
(including any back-up archives) that refer to a Receivable shall
indicate clearly that such Receivable has been sold by CPS to the
Issuer and that such Receivable has been pledged by the Issuer to the
Trustee for the benefit of the Note Purchasers and the Noteholders.
Indication of the Trustee's interest in such Receivable shall be
deleted from or modified on CPS's computer systems when, and only
when, the Receivable shall have been released from the Lien of the
Indenture in accordance with the terms of the Indenture, and
indication of the Issuer's interest in such Receivable shall be
deleted from or modified on CPS's computer systems when, and only
when, the Receivable shall have been paid in full or repurchased from
the Issuer by CPS.
(v) Upon request, CPS shall furnish to the Class A Note
Purchaser, within five (5) Business Days, (x) a list of all
Receivables (by contract number and name of Obligor) then owned by the
Issuer, together with a reconciliation of such list to the Schedule of
Receivables, and (y) such other information as the Class A Note
Purchaser may reasonably request.
(vi) If at any time CPS shall propose to sell, grant a security
interest in, or otherwise transfer any interest in any automobile,
van, sport utility vehicle or light duty truck receivables (other than
the Receivables) to any prospective purchaser, lender, or other
transferee, and if CPS shall give to such prospective purchaser,
lender or other transferee computer tapes, records, or print-outs
(including any restored from back-up archives, collectively "data
records") that refer in any manner whatsoever to any Receivable, such
data records shall indicate clearly that such Receivable has been sold
by CPS to the Issuer and pledged by the Issuer to Trustee for the
benefit of the Note Purchasers and the Noteholders unless such
Receivable shall have been released from the Lien of the Indenture in
accordance with the terms of the Indenture and shall have been paid in
full or repurchased from the Issuer by CPS.
(m) Fulfillment of Obligations. Each of CPS and the Issuer shall pay
and perform, as and when due, all of its obligations of whatever nature, except
where the amount or validity thereof is currently being contested in good faith
by appropriate proceedings and reserves in conformity with GAAP with respect
thereto have been provided on the books of CPS or the Issuer, as applicable.
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(n) Compliance with Laws, Etc. Each of CPS and the Issuer shall, and
CPS shall cause each of its Subsidiaries to, comply (i) in all material respects
with all Requirements of Law and any change therein or in the application,
administration or interpretation thereof (including, without limitation any
request, directive, guideline or policy, whether or not having the force of law)
by any Governmental Authority charged with the administration or interpretation
thereof; and (ii) with all indentures, mortgages, deeds of trust, agreements, or
other instruments or contractual obligations to which it is a party, including
without limitation, each Basic Document to which it is a party, or by which it
or any of its properties may be bound or affected, or which may affect the
Receivables.
(o) Compliance with Basic Documents. CPS, in its capacity as Seller
and Servicer, or otherwise, shall comply with each of its covenants contained in
the Basic Documents.
(p) Financing Statements. At the request of the Controlling Note
Purchaser, CPS and the Issuer shall file such financing statements as the
Controlling Note Purchaser determines may be required by law to perfect,
maintain and protect the interest of the Note Purchasers and the Noteholders in
the Collateral and the proceeds thereof.
(q) Payment of Fees and Expenses. CPS and the Issuer shall pay to the
Class A Note Purchaser, on demand, any and all fees, costs or expenses that the
Class A Note Purchaser pays to a bank or other similar institution arising out
of or in connection with the return of payments from CPS or the Issuer deposited
for collection by the Class A Note Purchaser.
(r) Financial Statements and Access to Records. CPS shall provide the
Class A Note Purchaser with quarterly unaudited financial statements within
sixty (60) days of the end of each of CPS's first three fiscal quarters, and CPS
will provide the Class A Note Purchaser with audited financial statements within
one hundred twenty (120) days of each of CPS's fiscal year-end audited by a
nationally recognized independent certified public accounting firm. Upon request
of the Class A Note Purchaser, CPS shall provide the Class A Note Purchaser with
unaudited monthly financial statements. CPS shall deliver to the Class A Note
Purchaser with each financial statement a certificate by CPS's chief financial
officer, certifying that such financial statements are complete and correct in
all material respects and that, except as noted in such certificate, such chief
financial officer has no knowledge of any Default, Event of Default, Funding
Termination Event or Servicer Termination Event. Notwithstanding the foregoing,
CPS shall have no obligation to deliver any of the foregoing financial
statements to the Class A Note Purchaser for so long as CPS is subject to, and
in compliance with, the reporting requirements under Section 13(a) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"). In connection
with each report filed by CPS under Section 13(a) of the Exchange Act during the
Class A Term, CPS shall be deemed to have represented and warranted to the Class
A Note Purchaser that, as of the related filing date, the financial statements
contained in such report are complete and correct in all material respects and
that, unless otherwise specified in such report, CPS has no knowledge of any
Default, Event of Default, Funding Termination Event or Servicer Termination
Event as of such filing date.
(s) Litigation Matters. CPS shall notify the Class A Note Purchaser in
writing, promptly upon its learning thereof, of any litigation, arbitration or
administrative proceeding which may reasonably be expected to have a Material
Adverse Effect or result in a Material Adverse Change.
(t) Notice of Change of Chief Executive Office. CPS and the Issuer
shall provide the Controlling Note Purchaser with not less than thirty (30) days
prior written notice of any change in the chief executive office or jurisdiction
of incorporation or organization of CPS or the Issuer to permit the Controlling
Note Purchaser to make any additional filings necessary to continue the
Trustee's perfected security interest in the Collateral for the benefit of the
Note Purchasers and the Noteholders.
(u) Consolidated Total Adjusted Equity. CPS shall maintain minimum
Consolidated Total Adjusted Equity of $60,000,000 as of the end of each fiscal
quarter.
(v) Maximum Leverage Ratio. CPS shall maintain a maximum leverage
ratio (total liabilities less all non-recourse debt/Consolidated Total Adjusted
Equity) of less than six times as of the end of each fiscal quarter.
(w) Liquidity. CPS shall maintain cash and cash equivalents of at
least $8.5 million as of the end of each calendar month.
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(x) Deposit Account. All distributions made by the Issuer to CPS in
respect of CPS's equity interest in the Issuer shall be deposited directly into
the Deposit Account.
SECTION 7.02 Negative Covenants. Until the Class A Facility Termination
Date:
(a) Adverse Transactions. Neither CPS nor the Issuer shall enter into
any transaction that adversely affects the Collateral, the Bear Cross
Collateral, the Class A Note Purchaser's rights under this Agreement, the Notes
or any other Basic Document, the Issuer's interest in the Receivables and the
Other Conveyed Property pursuant to the Sale and Servicing Agreement, the
Trustee's security interest in the Collateral pursuant to the Indenture, or that
could reasonably be expected to result in a Material Adverse Change with respect
to the Issuer or CPS or a Material Adverse Event.
(b) Guarantees. The Issuer shall not guarantee or otherwise in any way
become liable with respect to the obligations or liabilities of any other
Person.
(c) Dividends. The Issuer shall not declare or pay any dividends
except (i) to the extent of funds legally available therefor from payments
received by the Issuer pursuant to Section 5.7(a) of the Sale and Servicing
Agreement, or (ii) pursuant to Section 5.10 of the Sale and Servicing Agreement,
in each case in compliance with Section 7.01(x) of this Agreement.
Notwithstanding the foregoing, the Issuer shall not declare or pay any dividends
on any date as of which a Default or an Event of Default or a Class B Default or
a Class B Event of Default shall have occurred and is continuing.
(d) Investments. The Issuer shall not make any investment in any
Person through the direct or indirect holding of securities or otherwise, other
than in the ordinary course of business or in connection with the future
securitization of Receivables.
(e) Changes in Capital Structure or Business Objectives of the Issuer.
The Issuer shall not do any of the following if it will adversely affect the
payment or performance of, or the Issuer's ability to pay and/or perform, its
obligations to the Class A Note Purchaser with respect to this Agreement or any
other Basic Document to which it is a party, or the Notes, or if it could
reasonably be expected to result in a Material Adverse Change with respect to
the Issuer or CPS or a Material Adverse Event: (i) cancel any of the membership
interests in the Issuer, (ii) make any change in the capital structure of the
Issuer, or (iii) make any material change in any of its business objectives,
purposes or operations that would adversely affect the payment or performance
of, or the Issuer's ability to pay and/or perform, its obligations to Class A
Note Purchaser with respect to this Agreement or any other Basic Document to
which it is a party, or the Notes.
(f) Asset Sales. The Issuer will not sell any Receivables or other
Collateral related thereto if, following such sale, the Class A Invested Amount
would exceed the Class A Borrowing Base after giving effect to the application
of proceeds of such sale; provided that the foregoing shall not prohibit a
foreclosure sale by or on behalf of the Class A Noteholders or the Class A Note
Purchaser upon the occurrence of an Event of Default; provided further that in
the event that the Issuer or CPS shall intend to sell any Receivables in a
whole-loan transfer to any third party, the Issuer or CPS shall inform Class A
Note Purchaser of such prospective sale and Class A Note Purchaser shall be
permitted to bid on such Receivables in the same bidding process as that in
which any third party is permitted to bid on such Receivables.
(g) No Liens on Equity Interests in the Issuer. Other than the Lien
created pursuant to the Pledge Agreement, CPS shall not grant or otherwise
create any Lien on the membership interests in the Issuer (or any other equity
interest in the Issuer) without the prior written consent of the Controlling
Note Purchaser.
(h) No Indebtedness. The Issuer will not at any time incur any
Indebtedness, other than Indebtedness incurred under (or contemplated by) the
terms of the Basic Documents.
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(i) No Other Business. The Issuer will not at any time engage in any
other business activities than the purchase of the Receivables and the Other
Conveyed Property, pledging the Receivables and the other Collateral to the
Trustee for the benefit of the Note Purchasers and the Noteholders pursuant to
Granting Clause I of the Indenture, pledging the Pledged Subordinate Securities
to the Trustee for the benefit of the Class B Note Purchasers and the Class B
Noteholders pursuant to Granting Clause II of the Indenture, pledging the Bear
Cross Collateral, subject to the Intercreditor Agreement, to the UBS Indenture
Trustee for the benefit of the Class B note purchasers and the Class B
noteholders under the UBS Basic Documents pursuant to Granting Clause III of the
Indenture, transferring the Receivables and the Other Conveyed Property in
connection with Securitization Transactions and in connection with whole-loan
sales, acquiring the Pledged Subordinate Securities in connection with
Securitization Transactions, issuing the Notes and other activities relating to
the foregoing to the extent permitted by the organizational documents of the
Issuer as in effect on the date hereof, or as amended with the prior written
consent of the Controlling Note Purchaser. Without limitation of the foregoing,
the Issuer will not at any time be an issuer of securities other than the Notes
or a borrower under any loan or financing agreement, facility or other
arrangement other than the facilities established pursuant to this Agreement and
the other Basic Documents.
(j) No Amendment to Issuer's Operating Agreement or any Basic Document
without Consent. Neither the Limited Liability Company Agreement of the Issuer,
nor any Basic Document, shall be amended, supplemented or otherwise modified
without the prior written consent of the Controlling Note Purchaser.
(k) Transactions with Affiliates. The Issuer shall not enter into, or
be a party to, any transaction with any of its Affiliates, except in accordance
with the requirements set forth in Section 9(b)(iv) of the LLC Agreement.
(l) Nonpetition. Notwithstanding any prior termination of this
Agreement, neither the Servicer nor the Seller will, prior to the date that is
one year and one day after the day upon which the outstanding principal amount
of each class of Notes has been reduced to zero and all Secured Obligations and
any and all other amounts due and owing to the Class A Note Purchaser and the
Class A Noteholders pursuant to the Basic Documents have been paid in full,
acquiesce, petition or otherwise invoke or cause the Issuer to invoke the
process of any court or government authority for the purpose of commencing or
sustaining a case against the Issuer under any federal or state bankruptcy,
insolvency or similar law or appointing a receiver, liquidator, assignee,
trustee, custodian, sequestrator or other similar official of the Issuer or any
substantial part of its property, or ordering the winding up or liquidation of
the affairs of the Issuer.
(m) Protection of Title to Collateral. None of the Seller, the
Servicer, the Purchaser or the Issuer shall change its name, identity,
jurisdiction of organization, form of organization or corporate structure in any
manner that would, could or might make any financing statement or continuation
statement filed with respect to the Collateral, the Bear Cross Collateral or the
Deposit Account seriously misleading within the meaning of Section 9-506(a) of
the UCC, unless it shall have given each Note Purchaser at least 30 days' prior
written notice thereof and shall have promptly filed appropriate amendments to
all previously filed financing statements or continuation statements.
ARTICLE VIII
MISCELLANEOUS PROVISIONS
SECTION 8.01 Amendments. No amendment to or waiver of any provision of this
Agreement, nor consent to any departure by CPS, the Issuer or the Class A Note
Purchaser therefrom, shall in any event be effective unless the same shall be in
writing and signed by CPS, the Issuer and the Class A Note Purchaser.
SECTION 8.02 No Waiver; Remedies. Any waiver, consent or approval given by
the Controlling Note Purchaser or any party hereto (other than any waiver,
consent or approval which is contemplated by the express terms of this Agreement
or any other Basic Document) shall be effective only in the specific instance
and for the specific purpose for which given, and no waiver by a party of any
breach or default under this Agreement or any other Basic Document shall be
deemed a waiver of any other breach or default. No failure on the part of the
Controlling Note Purchaser or any party hereto to exercise, and no delay in
exercising, any right hereunder shall operate as a waiver thereof; nor shall any
single or partial exercise of any right hereunder, or any abandonment or
discontinuation of steps to enforce the right, power or privilege, preclude any
other or further exercise thereof or the exercise of any other right. Any waiver
consent or approval given by the Controlling Note Purchaser under this Agreement
or any other Basic Document shall be binding upon each Class A Noteholder and
each Class B Noteholder and their respective successors and permitted assigns.
No notice to or demand on any party hereto in any case shall entitle such party
to any other or further notice or demand in the same, similar or other
circumstances. The remedies herein provided are cumulative and not exclusive of
any remedies provided by law.
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SECTION 8.03 Binding on Successors and Assigns.
(a) This Agreement shall be binding upon, and inure to the benefit of,
the Issuer, the Purchaser, the Seller, the Servicer, the Class A Note Purchaser
and their respective successors and assigns; provided, however, that none of the
Issuer, the Purchaser, the Seller or the Servicer may assign its rights or
obligations hereunder or in connection herewith or any interest herein
(voluntarily, by operation of law or otherwise) without the prior written
consent of the Class A Note Purchaser. Nothing expressed herein is intended or
shall be construed to give any Person other than the Persons referred to in the
preceding sentence any legal or equitable right, remedy or claim under or in
respect of this Agreement.
(b) The Class A Note Purchaser may at any time grant a security
interest in and Lien on all of its interests under this Agreement, the Class A
Notes and all Basic Documents to any Person who, at any time now or in the
future, provides program liquidity or credit enhancement, including without
limitation, a surety bond or financial guaranty insurance policy for the benefit
of the Class A Note Purchaser. The Class A Note Purchaser may assign the Class A
Commitment or all of its interest under the Class A Notes, this Agreement and
the Basic Documents to (i) any Affiliate of the Class A Note Purchaser at any
time, (ii) to any other Person at any time that a Default has occurred and is
continuing and (iii) at any other time with the prior written consent of the
Issuer; provided that as a condition precedent to any such assignment, the
assignee of the Class A Note Purchaser shall execute an agreement pursuant to
which it agrees to assume and perform all of the obligations of the Class A Note
Purchaser under the Basic Documents. Notwithstanding the foregoing, it is
understood and agreed by the Issuer that the Class A Notes may be sold,
transferred or pledged without the consent of the Issuer and without the
execution of any such assumption agreement in compliance with, and as provided
for under, Section 5.03(g). Notwithstanding any other provisions set forth in
this Agreement, the Class A Note Purchaser may at any time create a security
interest in all of its rights under this Agreement, the Class A Notes and the
Basic Documents in favor of any Federal Reserve Bank in accordance with
Regulation A of the Board of Governors of the Federal Reserve System.
(c) If, on or after the date of this Agreement, the Class A Note
Purchaser reasonably determines that the adoption of any applicable law, rule or
regulation, or any change in any applicable law, rule or regulation or any
change in the interpretation or administration thereof by any Governmental
Authority, central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by the Class A Note Purchaser with any
request or directive issued on or after the date of this Agreement (whether or
not having the force of law) of any such authority, central bank or comparable
agency, has made or would be likely to make it unlawful for the Class A Note
Purchaser to purchase the Class A Advances, hold the Class A Notes or otherwise
to perform the transactions contemplated to be performed by it pursuant to this
Agreement and those contemplated to be performed by it pursuant to the Basic
Documents to which the Class A Note Purchaser is a party, then (i) the Class A
Note Purchaser shall so notify the Issuer; (ii) the obligation of the Class A
Note Purchaser to purchase the Class A Advances from time to time as
contemplated hereunder shall be suspended; and (iii) the Class A Note Purchaser
may assign its rights and obligations hereunder and under the Basic Documents,
the Class A Notes and its interests therein pursuant to and in compliance with
Section 8.03(b); provided that a Class A Funding Termination Event shall occur
if the Issuer or the Servicer fails to accept the proposed assignee chosen by
the Class A Note Purchaser.
SECTION 8.04 Termination; Survival. The obligations and responsibilities of
the Class A Note Purchaser created hereby shall terminate on the Class A
Facility Termination Date. Notwithstanding the foregoing, all covenants,
agreements, representations, warranties and indemnities made by the Servicer,
the Seller, the Purchaser and/or the Issuer herein and/or in the Class A Notes
delivered pursuant hereto shall survive the purchase and the repayment of the
Class A Advances and the execution and delivery of this Agreement and the Class
A Notes and shall continue in full force and effect until all interest and
principal on the Class A Notes and other amounts owed hereunder and under the
other Basic Documents have been paid in full and the commitment of the Class A
Note Purchaser hereunder has been terminated. In addition, the obligations of
the Issuer, the Purchaser, the Seller and the Servicer under Sections 3.02,
3.03, 3.04, 3.05(b), 8.05, 8.11, 8.12 and 8.13 shall survive the termination of
this Agreement.
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SECTION 8.05 Indemnification. In consideration of the Class A Note
Purchaser's execution and delivery of this Agreement, the Issuer, the Purchaser,
the Seller and the Servicer, jointly and severally, hereby agree to indemnify
and hold the Class A Note Purchaser and each of its officers, directors,
employees and agents (collectively, the "Indemnified Parties") harmless from and
against any and all actions, causes of action, suits, losses, costs, liabilities
and damages, and reasonable expenses incurred in connection therewith, as
incurred (irrespective of whether any such Indemnified Party is a party to the
action for which indemnification hereunder is sought and including, without
limitation, any liability in connection with the offering and sale of the
Notes), including reasonable attorneys' fees and disbursements (collectively,
the "Indemnified Liabilities"), incurred by the Indemnified Parties or any of
them (whether in prosecuting or defending against such actions, suits or claims)
as a result of, or arising out of, or relating to:
(i) any transaction financed or to be financed in whole or in
part (including, without limitation, any Receivable constituting part
of the Collateral), directly or indirectly, with the proceeds of any
Class A Advance including, without limitation, any claim, suit or
action related to such transaction, which claim is based on a
violation of Consumer Laws or any applicable vicarious liability
statutes, or the use or operation of any Financed Vehicle by any
Person; or
(ii) this Agreement or any other Basic Document, or the entering
into and performance of this Agreement or any other Basic Document by
any of the Indemnified Parties,
except for any such Indemnified Liabilities arising for the account of a
particular Indemnified Party by reason of the relevant Indemnified Party's gross
negligence, bad faith or willful misconduct and, with respect to the Servicer,
excluding any Indemnified Liabilities that would constitute recourse to the
Servicer for loss by reason of the bankruptcy, insolvency (or other credit
condition) of, or credit-related default by the related Obligor on any
Receivable and not arising from defaults by the related Obligor arising from a
claim by the related Obligor that any part of the debt evidenced by the
Receivables is not due as a result of wrongful action by any Person, such as a
breach of Consumer Laws. If and to the extent that the foregoing undertaking may
be unenforceable for any reason, the Issuer and the Servicer hereby jointly and
severally agree to make the maximum contribution to the payment and satisfaction
of each of the Indemnified Liabilities which is permissible under applicable
law. The indemnity set forth in this Section 8.05 shall in no event include
indemnification for any Taxes (which indemnification is provided in Section
3.04). Upon the written request of the Class A Note Purchaser pursuant to this
Section 8.05, the Issuer and the Servicer shall promptly reimburse the Class A
Note Purchaser for the amount of any such Indemnified Liabilities incurred by
the Class A Note Purchaser.
SECTION 8.06 Characterization as Basic Document; Entire Agreement. This
Agreement shall be deemed to be a Basic Document for all purposes of the
Indenture and the other Basic Documents. This Agreement, together with the
Indenture, the Sale and Servicing Agreement, the documents delivered pursuant to
Section 6.01 and the other Basic Documents, including the exhibits and schedules
thereto, contains a final and complete integration of all prior expressions by
the parties hereto with respect to the subject matter hereof and shall
constitute the entire agreement among the parties hereto with respect to the
subject matter hereof, superseding all previous oral statements and other
writings with respect thereto.
SECTION 8.07 Notices. All notices, amendments, waivers, consents and other
communications provided to any party hereto under this Agreement shall be in
writing and addressed, delivered or transmitted to such party at its address or
facsimile number set forth below its signature hereto or at such other address
or facsimile number as may be designated by such party in a notice to the other
parties. Any notice, if mailed and properly addressed with postage prepaid or if
properly addressed and sent by pre-paid courier service, shall be deemed given
when received; any notice, if transmitted by facsimile, shall be deemed given
when transmitted and accompanied by telephonic confirmation of receipt.
SECTION 8.08 Severability of Provisions. Any covenant, provision, agreement
or term of this Agreement that is prohibited or is held to be void or
unenforceable in any jurisdiction shall, as to that jurisdiction, be ineffective
to the extent of the prohibition or unenforceability without invalidating the
remaining provisions of this Agreement.
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SECTION 8.09 Tax Characterization. Each party to this Agreement (a)
acknowledges that it is the intent of the parties to this Agreement that, for
accounting purposes and for all Federal, state and local income and franchise
tax purposes, the Class A Notes will be treated as evidence of indebtedness
issued by the Issuer, (b) agrees to treat the Class A Notes for all such
purposes as indebtedness and (c) agrees that the provisions of the Basic
Documents shall be construed to further these intentions.
SECTION 8.10 Full Recourse to Issuer. The obligations of the Issuer under
this Agreement and the other Basic Documents shall be full recourse obligations
of the Issuer. Notwithstanding the foregoing, no recourse shall be had for the
payment of any amount owing in respect of this Agreement, including the payment
of any fee hereunder or any other obligation or claim arising out of or based
upon this Agreement, against any certificateholder, member, employee, officer,
manager, director, affiliate or trustee of the Issuer; provided, however,
nothing in this Section 8.10 shall relieve any of the foregoing Persons from any
liability that any such Person may otherwise have as expressly set forth in any
Basic Document or for its gross negligence, bad faith or willful misconduct.
Nothing contained in this Section shall limit or be deemed to limit any
obligations of the Issuer, the Purchaser, the Seller or the Servicer hereunder
or under any other Basic Document, which obligations are full recourse
obligations of the Issuer, the Purchaser, the Seller and the Servicer,
respectively.
SECTION 8.11 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK,
WITHOUT REGARD TO ITS CONFLICT OF LAW PROVISIONS (OTHER THAN SECTION 5-1401 OF
THE GENERAL OBLIGATIONS LAW), AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
SECTION 8.12 Submission to Jurisdiction. ANY LEGAL ACTION OR PROCEEDING
WITH RESPECT TO THIS AGREEMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW
YORK OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK, AND BY
EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH OF THE PARTIES HERETO CONSENTS,
FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE EXCLUSIVE JURISDICTION OF
THOSE COURTS. EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES ANY OBJECTION,
INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM
NON CONVENIENS, OR ANY LEGAL PROCESS WITH RESPECT TO ITSELF OR ANY OF ITS
PROPERTY, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR
PROCEEDING IN SUCH JURISDICTION IN RESPECT OF THIS AGREEMENT OR ANY DOCUMENT
RELATED HERETO. EACH OF THE PARTIES HERETO WAIVES PERSONAL SERVICE OF ANY
SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS
PERMITTED BY NEW YORK LAW.
SECTION 8.13 Waiver of Jury Trial. THE PARTIES HERETO EACH WAIVE THEIR
RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED UPON
OR ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY, IN ANY ACTION, PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY
PARTY AGAINST THE OTHER PARTY, WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORT
CLAIMS OR OTHERWISE. THE PARTIES HERETO EACH AGREE THAT ANY SUCH CLAIM OR CAUSE
OF ACTION SHALL BE TRIED BY A COURT TRIAL WITHOUT A JURY. WITHOUT LIMITING THE
FOREGOING, THE PARTIES FURTHER AGREE THAT THEIR RESPECTIVE RIGHT TO A TRIAL BY
JURY IS WAIVED BY OPERATION OF THIS SECTION AS TO ANY ACTION, COUNTERCLAIM OR
OTHER PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE THE VALIDITY OR
ENFORCEABILITY OF THIS AGREEMENT OR ANY PROVISION HEREOF. THIS WAIVER SHALL
APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO
THIS AGREEMENT.
SECTION 8.14 Counterparts. This Agreement may be executed in any number of
counterparts (which may include facsimile) and by the different parties hereto
in separate counterparts, each of which when so executed shall be deemed to be
an original, and all of which together shall constitute one and the same
instrument. Any signature page to this Agreement containing a manual signature
may be delivered by facsimile transmission or other electronic communication
device capable of transmitting or creating a printable written record, and when
so delivered shall have the effect of delivery of an original manually signed
signature page.
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SECTION 8.15 Set-Off. The obligations of the Issuer, the Purchaser, the
Seller and the Servicer hereunder are absolute and unconditional and each of the
Issuer, the Purchaser, the Seller and the Servicer expressly waives any and all
rights of set-off, abatement, diminution or deduction that the Issuer, the
Purchaser, the Seller or the Servicer may otherwise at any time have under
applicable law.
(b) In addition to any rights now or hereafter granted under
applicable law and not by way of limitation of such rights, during the
continuance of any Event of Default hereunder:
(i) the Class A Note Purchaser is hereby authorized at any time
and from time to time, without notice to the Purchaser or the Issuer,
such notice being hereby expressly waived, to set-off any obligation
owing by the Class A Note Purchaser or any of its Affiliates to the
Purchaser or the Issuer, or against any funds or other property of the
Purchaser or the Issuer, held by or otherwise in the possession of the
Class A Note Purchaser or any of its Affiliates, the respective
obligations of the Purchaser and the Issuer to the Class A Note
Purchaser under this Agreement and the other Basic Documents and
irrespective of whether or not the Class A Note Purchaser shall have
made any demand hereunder or thereunder; and
(ii) the Class A Note Purchaser is hereby authorized at any time
and from time to time, without notice to the Seller or the Servicer,
such notice being hereby expressly waived, to set-off any obligation
owing by the Class A Note Purchaser or any of its Affiliates to the
Seller or the Servicer, or against any funds or other property of the
Seller or the Servicer held by or otherwise in the possession of the
Class A Note Purchaser or any of its Affiliates, the respective
obligations of the Seller and the Servicer to the Class A Note
Purchaser under this Agreement and the other Basic Documents and
irrespective of whether or not the Class A Note Purchaser shall have
made any demand hereunder or thereunder.
SECTION 8.16 Nonpetition Covenants. Notwithstanding any prior termination
of this Agreement, the Servicer and the Seller shall not, prior to the date that
is one year and one day after the day upon which the outstanding principal
amount of each class of Notes has been reduced to zero and all Secured
Obligations and any and all other amounts due and owing to the Note Purchasers
and the Noteholders pursuant to the Basic Documents have been paid in full,
acquiesce, petition or otherwise invoke or cause the Purchaser or the Issuer to
invoke the process of any court or government authority for the purpose of
commencing or sustaining a case against the Purchaser or the Issuer under any
federal or state bankruptcy, insolvency or similar law or appointing a receiver,
liquidator, assignee, trustee, custodian, sequestrator or other similar official
of the Purchaser of the Issuer or any substantial part of its property, or
ordering the winding up or liquidation of the affairs of the Purchaser or the
Issuer.
SECTION 8.17 Servicer References. All references to the Servicer herein
shall apply to CPS, in its capacity as the initial Servicer, and not to a
successor Servicer.
SECTION 8.18 Confidentiality; Press Releases. Unless required by law or
regulation to do so or otherwise expressly permitted by the Basic Documents,
neither the Class A Note Purchaser on the one hand, nor any of the Seller, the
Servicer, the Purchaser or the Issuer on the other hand, shall publish or
otherwise disclose any information relating to the material terms of the Class A
Commitment or the Class B Commitment (including, without limitation, the Market
Value calculations), any of the Basic Documents or the transactions contemplated
hereby or thereby to any Person (other than its own advisors to the extent
reasonably necessary) without the prior written consent of the other; provided
that nothing herein shall be construed to prohibit any party from issuing a
press release announcing the consummation of the transactions contemplated by
the Basic Documents. Any party hereto issuing any such press release hereby
agrees to provide the other parties hereto with a reasonable opportunity to
review and comment on such press release prior to the issuance thereof. No party
shall publish any press release naming the other party to which such other
parties shall have reasonably objected. For avoidance of doubt, it is agreed
that Seller is required by law (i) to report its entry into this Agreement and
the other Basic Documents in a current report on Form 8-K of the Securities and
Exchange Commission, which report must file as exhibits at least this Agreement,
the Sale and Servicing Agreement, and the Indenture, and (ii) to make reference
to such agreements and the Commitment in its periodic reports to be filed
respecting time periods that include all or part of the Class A Term. This
confidentiality agreement shall apply to any and all information relating to the
Commitment, any of the Basic Documents and the transactions contemplated hereby
and thereby at any time on or after the date hereof.
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SECTION 8.19 Intercreditor Agreement to Control. The rights, obligations
and remedies of the parties to this Agreement and under the other Basic
Documents are subject in all respects to the terms and provisions of the
Intercreditor Agreement; provided, however that to the extent such rights,
obligations and remedies relate to the UBS Cross Collateral, such rights,
obligations and remedies are subject in all respects to the terms and provisions
of the UBS Intercreditor Agreement. In the event of any conflict between the
terms of this Agreement or any other Basic Document and the Intercreditor
Agreement, the Intercreditor Agreement shall control. In addition, in the event
of any conflict between the terms of this Agreement or any other Basic Document
and the UBS Intercreditor Agreement that relates to the UBS Cross Collateral,
the UBS Intercreditor Agreement shall control.
[Remainder of Page Intentionally Blank]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their duly authorized officers and delivered as of the day
and year first above written.
PAGE THREE FUNDING LLC, as Issuer and
Purchaser
By:_________________________________________
Name:_______________________________________
Title:______________________________________
Address: ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Company Secretary
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
CONSUMER PORTFOLIO SERVICES, INC., as CPS,
Seller and Servicer
By:_________________________________________
Name:_______________________________________
Title:______________________________________
Address: ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Secretary
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
BEAR, ▇▇▇▇▇▇▇ & CO. INC., as Class A Note
Purchaser and as initial Class A Noteholder
By:_________________________________________
Name:_______________________________________
Title:______________________________________
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇., ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
w/ a copy to:
Bear, ▇▇▇▇▇▇▇ & Co. Inc.,
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇.
Attention: General Counsel
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Annex-1
