EXHIBIT 10.5
THIRD AMENDED AND RESTATED SALE AND SERVICING AGREEMENT
AMONG
PAGE FUNDING LLC, AS
PURCHASER AND ISSUER,
CONSUMER PORTFOLIO SERVICES, INC. AS
SELLER AND SERVICER,
AND
XXXXX FARGO BANK, NATIONAL ASSOCIATION,
AS
BACKUP SERVICER AND TRUSTEE,
DATED AS OF
FEBRUARY 14, 2007
TABLE OF CONTENTS
PAGE
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ARTICLE I DEFINITIONS.............................................................................................1
SECTION 1.1. Definitions.......................................................................................1
SECTION 1.2. Other Definitional Provisions.....................................................................1
SECTION 1.3. Calculations......................................................................................2
ARTICLE II CONVEYANCE OF RECEIVABLES..............................................................................2
SECTION 2.1. Conveyance of Receivables.........................................................................2
SECTION 2.2. Transfers Intended as Sales.......................................................................6
SECTION 2.3. Further Encumbrance of Receivables and Other Conveyed Property....................................6
ARTICLE III THE RECEIVABLES.......................................................................................7
SECTION 3.1. Representations and Warranties of Seller..........................................................7
SECTION 3.2. Repurchase Upon Breach; Section 341 Meeting.....................................................14
SECTION 3.3. Custody of Receivable Files and Pledged Subordinate Securities...................................15
SECTION 3.4. Acceptance of Receivable Files by Trustee; Missing Certificates of Title.........................16
SECTION 3.5. Access to Receivable Files and Pledged Subordinate Securities....................................16
SECTION 3.6. Trustee to Obtain Fidelity Insurance.............................................................17
SECTION 3.7. Trustee to Maintain Secure Facilities............................................................17
ARTICLE IV ADMINISTRATION AND SERVICING OF RECEIVABLES...........................................................17
SECTION 4.1. Duties of the Servicer...........................................................................17
SECTION 4.2. Collection of Receivable Payments; Modifications of Receivables; Lockbox Agreements..............18
SECTION 4.3. Realization Upon Receivables.....................................................................19
SECTION 4.4. Insurance........................................................................................19
SECTION 4.5. Maintenance of Security Interests in Vehicles....................................................20
SECTION 4.6. Additional Covenants of Servicer.................................................................21
SECTION 4.7. Purchase of Receivables Upon Breach of Covenant..................................................21
SECTION 4.8. Servicing Fee....................................................................................22
SECTION 4.9. Servicer's Certificate...........................................................................22
SECTION 4.10. Annual Statement as to Compliance, Notice of Servicer Termination Event.........................22
SECTION 4.11. Independent Accountants' Reports................................................................22
SECTION 4.12. Independent Accountants' Review of Receivable Files.............................................23
SECTION 4.13. Access to Certain Documentation and Information Regarding Receivables...........................23
SECTION 4.14. Verification of Servicer's Certificate..........................................................23
SECTION 4.15. Retention and Termination of Servicer...........................................................25
SECTION 4.16. Errors and Omissions Policy and Fidelity Bond...................................................25
SECTION 4.17. Subservicing Arrangements.......................................................................25
ARTICLE V ACCOUNTS; DISTRIBUTIONS; STATEMENTS TO THE NOTEHOLDER..................................................26
SECTION 5.1. Establishment of Pledged Accounts................................................................26
SECTION 5.2. Establishment of Deposit Account.................................................................27
SECTION 5.3. Certain Reimbursements to the Servicer...........................................................28
SECTION 5.4. Application of Collections.......................................................................28
SECTION 5.5. [Reserved].......................................................................................28
SECTION 5.6. Deposits Into the Collection Account.............................................................28
SECTION 5.7. Distributions....................................................................................28
SECTION 5.8. Note Distribution Account........................................................................30
SECTION 5.9. Statements to Noteholders........................................................................33
SECTION 5.10. Dividend of Ineligible Receivables..............................................................34
ARTICLE VI [RESERVED]............................................................................................35
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TABLE OF CONTENTS
(continued)
ARTICLE VII THE PURCHASER........................................................................................35
SECTION 7.1. Representations of Purchaser.....................................................................35
ARTICLE VIII THE SELLER..........................................................................................37
SECTION 8.1. Representations of Seller........................................................................37
SECTION 8.2. Additional Covenants of the Seller...............................................................40
SECTION 8.3. Liability of Seller; Indemnities.................................................................41
SECTION 8.4. Merger or Consolidation Of, or Assumption of the Obligations Of, Seller..........................42
SECTION 8.5. [Reserved].......................................................................................43
SECTION 8.6. Reporting Requirements...........................................................................43
ARTICLE IX THE SERVICER..........................................................................................43
SECTION 9.1. Representations and Covenants of Servicer........................................................43
SECTION 9.2. Liability of Servicer; Indemnities...............................................................45
SECTION 9.3. Merger or Consolidation Of, or Assumption of the Obligations of the Servicer or Backup Servicer..46
SECTION 9.4. [Reserved].......................................................................................47
SECTION 9.5. Delegation of Duties.............................................................................47
SECTION 9.6. Servicer and Backup Servicer Not to Resign.......................................................47
ARTICLE X DEFAULT................................................................................................48
SECTION 10.1. Servicer Termination Events.....................................................................48
SECTION 10.2. Consequences of a Servicer Termination Event or Non-extension of Term of Servicer...............49
SECTION 10.3. Appointment of Successor........................................................................50
SECTION 10.4. Notification to the Noteholders and Note Purchasers.............................................51
SECTION 10.5. Waiver of Past Defaults.........................................................................51
SECTION 10.6. Action Upon Certain Failures of the Servicer....................................................51
SECTION 10.7. Continued Errors................................................................................51
ARTICLE XI MISCELLANEOUS PROVISIONS..............................................................................51
SECTION 11.1. Amendment.......................................................................................51
SECTION 11.2. Protection of Title to Property.................................................................52
SECTION 11.3. Notices.........................................................................................54
SECTION 11.4. Assignment......................................................................................55
SECTION 11.5. Limitations On Rights of Others.................................................................55
SECTION 11.6. Severability....................................................................................55
SECTION 11.7. Separate Counterparts...........................................................................55
SECTION 11.8. Headings........................................................................................55
SECTION 11.9. Governing Law...................................................................................55
SECTION 11.10. Assignment to Trustee..........................................................................56
SECTION 11.11. Nonpetition Covenants..........................................................................56
SECTION 11.12. Limitation of Liability of Trustee.............................................................56
SECTION 11.13. Independence of the Servicer...................................................................56
SECTION 11.14. No Joint Venture...............................................................................56
SECTION 11.15. Intention of Parties Regarding Delaware Securitization Act.....................................56
SECTION 11.16. Special Supplemental Agreement.................................................................57
SECTION 11.17. Full Recourse to the Issuer and the Purchaser.................................................57
SECTION 11.18. Acknowledgement of Roles.......................................................................57
SECTION 11.19. Termination....................................................................................57
SECTION 11.20. Submission to JurisdictioN.....................................................................57
SECTION 11.21. Waiver of Trial by Jury........................................................................58
SECTION 11.22. Process Agent..................................................................................58
SECTION 11.23. Set-off........................................................................................58
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SECTION 11.24. No Waiver; Cumulative Remedies.................................................................59
SECTION 11.25. Merger and Integration.........................................................................59
SECTION 11.26. Intercreditor Agreement to Control.............................................................59
SECTION 11.27. Controlling Note Purchaser; Majority Noteholders of Highest Priority Class.....................59
SECTION 11.28. No Novation....................................................................................60
SECTION 11.29. Survival of Representations, Warranties and Indemnities........................................60
ANNEXES
Annex A Defined Terms
Annex B List of Non-Certificated Title States
SCHEDULES
Schedule A - Schedule of Receivables
Schedule B - Location for Delivery of Receivable Files
EXHIBITS
Exhibit A - Form of Servicer's Certificate
Exhibit B - Form of Trust Receipt
Exhibit C - Form of Release Request
Exhibit D - [Reserved]
Exhibit E - Form of TFC Assignment
Exhibit F - Form of Assignment
Exhibit G - Form of Addition Notice
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THIRD AMENDED AND RESTATED SALE AND SERVICING AGREEMENT (this
"AGREEMENT") dated as of February 14, 2007, among PAGE FUNDING LLC, a Delaware
limited liability company (in its capacities as Purchaser, the "PURCHASER" and
as Issuer, the "ISSUER"), CONSUMER PORTFOLIO SERVICES, INC., a California
corporation (in its capacities as Seller, the "SELLER" and as Servicer, the
"SERVICER," respectively), XXXXX FARGO BANK, NATIONAL ASSOCIATION, a national
banking association (in its capacities as Backup Servicer, the "BACKUP SERVICER"
and as Trustee, the "TRUSTEE," respectively).
WHEREAS, the Purchaser desires to purchase, from time to time,
portfolios of receivables arising in connection with motor vehicle retail
installment sale contracts acquired by Consumer Portfolio Services, Inc., from
motor vehicle dealers and independent finance companies;
WHEREAS, the Purchaser intends to finance such purchases by issuing
Class A Notes and Class B Notes, each of which shall be secured by, among other
assets, the Receivables and the Other Conveyed Property, pursuant to the
Indenture (as defined below);
WHEREAS, the Seller is willing to sell such Receivables and the Other
Conveyed Property to the Purchaser from time to time;
WHEREAS the Servicer is willing to service all such Receivables; and
WHEREAS, the Purchaser, the Issuer, the Servicer, the Seller, the
Backup Servicer, the Trustee and the Noteholders desire to amend and restate the
Original Sale and Servicing Agreement as hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the parties hereto agree as follows:
ARTICLE I
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DEFINITIONS
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SECTION 1.1 DEFINITIONS. Capitalized terms used in this Agreement and not
otherwise defined in this Agreement, shall have the meanings set forth in Annex
A attached hereto.
SECTION 1.2 OTHER DEFINITIONAL PROVISIONS.
(a) All terms defined in this Agreement shall have the defined
meanings when used in any instrument governed hereby and in any certificate
or other document made or delivered pursuant hereto unless otherwise
defined therein.
(b) Accounting terms used but not defined or partly defined in this
Agreement, in any instrument governed hereby or in any certificate or other
document made or delivered pursuant hereto, to the extent not defined,
shall have the respective meanings given to them under GAAP as in effect on
the date of determination or any such instrument, certificate or other
document, as applicable. To the extent that the definitions of accounting
terms in this Agreement or in any such instrument, certificate or other
document are inconsistent with the meanings of such terms under GAAP, the
definitions contained in this Agreement or in any such instrument,
certificate or other document shall control.
(c) The words "HEREOF," "HEREIN," "HEREUNDER" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole
and not to any particular provision of this Agreement.
(d) Section, Schedule and Exhibit references contained in this
Agreement are references to Sections, Schedules and Exhibits in or to this
Agreement unless otherwise specified; and the term "INCLUDING" shall mean
"INCLUDING WITHOUT LIMITATION."
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(e) The definitions contained in this Agreement are applicable to the
singular as well as the plural forms of such terms and to the masculine as
well as to the feminine and neuter genders of such terms.
(f) Any agreement, instrument or statute defined or referred to herein
or in any instrument or certificate delivered in connection herewith means
such agreement, instrument or statute as the same may from time to time be
amended, modified or supplemented in accordance with the terms thereof and
includes (in the case of agreements or instruments) references to all
attachments and instruments associated therewith; all references to a
Person include its permitted successors and assigns.
SECTION 1.3. CALCULATIONS. Other than as expressly set forth herein or in
any of the other Basic Documents, all calculations of the amount of the
Servicing Fee, Backup Servicing Fee and the Trustee Fee shall be made on the
basis of a 360-day year consisting of twelve 30-day months. All calculations of
the Class A Unused Facility Fee, the Class A Noteholders' Monthly Interest
Distributable Amount and the Class B Noteholders' Monthly Interest Distributable
Amount shall be made on the basis of the actual number of days in the Accrual
Period and 360 days in the calendar year. All references to the Principal
Balance of a Receivable as of the last day of an Accrual Period shall refer to
the close of business on such day.
ARTICLE II
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CONVEYANCE OF RECEIVABLES
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SECTION 2.1. CONVEYANCE OF RECEIVABLES.
(a) In consideration of the Purchaser's delivery to or upon the order
of the Seller on any Funding Date of the Purchase Price therefor, the
Seller does hereby sell, transfer, assign, set over and otherwise convey to
the Purchaser, without recourse (subject to the obligations set forth
herein) all right, title and interest of the Seller, whether now existing
or hereafter arising, in, to and under:
(i) the Receivables listed in Schedule A to each Assignment
executed and delivered by the Seller on such Funding Date;
(ii) all monies received under the Receivables on and after the
related Cutoff Date and all Net Liquidation Proceeds received with
respect to the Receivables on and after the related Cutoff Date;
(iii) the security interests in the Financed Vehicles and any
accessions thereto granted by Obligors pursuant to the related
Contracts and any other interest of the Seller in such Financed
Vehicles, including, without limitation, the certificates of title or,
with respect to such Receivables that finance a vehicle in the States
listed in ANNEX B, other evidence of title issued by the applicable
Department of Motor Vehicles or similar authority in such States, with
respect to such Financed Vehicles;
(iv) any proceeds from claims on any Receivables Insurance
Policies or certificates relating to the Financed Vehicles securing
the Receivables or the Obligors thereunder;
(v) all proceeds from recourse against Dealers or Consumer
Lenders with respect to the Receivables and all other rights (but none
of the obligations) of the Seller arising out of or with respect to
the Receivables under any agreements with Dealers or Consumer Lenders;
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(vi) refunds for the costs of extended service contracts with
respect to Financed Vehicles securing the Receivables, refunds of
unearned premiums with respect to credit life and credit accident and
health insurance policies or certificates covering an Obligor or
Financed Vehicle under a Receivable or his or her obligations with
respect to a Financed Vehicle and any recourse to Dealers or Consumer
Lenders for any of the foregoing;
(vii) the Receivable File related to each Receivable and all
other documents that the Seller keeps on file in accordance with its
customary procedures relating to the Receivables for Obligors of the
Financed Vehicles;
(viii) all amounts and property from time to time held in or
credited to the Collection Account or the Lockbox Accounts;
(ix) all property (including the right to receive future Net
Liquidation Proceeds) that secures a Receivable that has been acquired
by or on behalf of the Seller or the Purchaser pursuant to a
liquidation of such Receivable;
(x) the proceeds from any Servicer's errors and omissions policy
or fidelity bond, to the extent such proceeds relate to any
Receivable, Financed Vehicle or other Collateral;
(xi) each TFC Assignment; and
(xii) all present and future claims, demands, causes and choses
in action in respect of any or all of the foregoing and all payments
on or under and all proceeds of every kind and nature whatsoever in
respect of any or all of the foregoing, including all proceeds of the
conversion, voluntary or involuntary, into cash or other liquid
property, all cash proceeds, accounts, accounts receivable, notes,
drafts, acceptances, chattel paper, checks, deposit accounts,
insurance proceeds, condemnation awards, rights to payment of any and
every kind and other forms of obligations and receivables, instruments
and other property which at any time constitute all or part of or are
included in the proceeds of any of the foregoing.
(b) The Seller shall transfer to the Purchaser the Receivables and the
Other Conveyed Property described in PARAGRAPH (A) above only upon the
satisfaction of each of the conditions set forth below on or prior to the
related Funding Date. In addition to constituting conditions precedent to
any purchase hereunder and under each Assignment, the following shall also
be conditions precedent to any Advance on any Funding Date under the terms
of the applicable Note Purchase Agreement:
(i) the Seller shall have provided the Purchaser, Trustee, the
applicable Note Purchaser and the applicable Noteholders with an
Addition Notice substantially in the form of EXHIBIT G hereto (which
shall include a supplement to the Schedule of Receivables) not later
than three (3) Business Days prior to such Funding Date and shall have
provided any information reasonably requested by any of the foregoing
with respect to the Issuer, the Servicer and the Related Receivables;
(ii) the Seller shall, to the extent required by SECTION 4.2 of
this Agreement, have deposited in the Collection Account all
collections received on and after the Cutoff Date in respect of the
Related Receivables to be purchased on such Funding Date;
(iii) as of each Funding Date, (A) the Seller shall not be
insolvent and shall not become insolvent as a result of the transfer
of Related Receivables on such Funding Date, (B) the Seller shall not
intend to incur or believe that it shall incur debts that would be
beyond its ability to pay as such debts mature, (C) such transfer
shall not have been made with actual intent to hinder, delay or
defraud any Person and (D) the assets of the Seller shall not
constitute unreasonably small capital to carry out its business as
then conducted;
(iv) if such Funding Date is a Class A Funding Date, the Class A
Facility Termination Date shall not have occurred;
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(v) if such Funding Date is a Class B Funding Date, the Class B
Facility Termination Date shall not have occurred;
(vi) the Servicer shall have established one or more Lockbox
Accounts acceptable to the Controlling Note Purchaser;
(vii) each of the representations and warranties made by the
Seller pursuant to SECTION 3.1 and the other Basic Documents with
respect to the Related Receivables to be purchased on such Funding
Date shall be true and correct as of the related Funding Date and the
Seller shall have performed all obligations to be performed by it
hereunder or in any Assignment on or prior to such Funding Date;
(viii) the Seller shall, at its own expense, on or prior to the
Funding Date, indicate in its computer files that the Related
Receivables to be purchased on such Funding Date have been sold to the
Purchaser pursuant to this Agreement or an Assignment, as applicable,
and have been pledged by the Purchaser to the Trustee for the benefit
of the Note Purchasers and the Noteholders under the Indenture;
(ix) the Seller shall have taken all action required to maintain
(A) the first priority perfected ownership interest of the Purchaser
in the Related Receivables and Other Conveyed Property, (B) subject to
the terms and provisions of the Intercreditor Agreement, the first
priority perfected security interest of the Trustee in the Collateral
for the benefit of the Note Purchasers and the Noteholders, (C) the
first priority perfected security interest of the Trustee in the
Pledged Subordinate Securities for the benefit of the Class B Note
Purchasers and the Class B Noteholders, and (D) subject to the terms
and provisions of the Intercreditor Agreement, the second priority
perfected security interest of the Bear Indenture Trustee in the UBS
Cross Collateral (subject only to the Lien granted pursuant to
Granting Clause I of the Indenture) for the benefit of the Class B
note purchasers and the Class B noteholders under the Bear Basic
Documents;
(x) no selection procedures adverse to the interests of any Note
Purchaser or any Noteholder shall have been utilized in selecting the
Related Receivables to be sold on such Funding Date;
(xi) the addition of any such Related Receivables to be purchased
on such Funding Date shall not result in a material adverse tax
consequence to any Noteholder, any Note Purchaser or the Purchaser;
(xii) the Seller shall have delivered to each Noteholder, the
applicable Note Purchaser and the Trustee an Officers' Certificate
confirming the satisfaction of each condition precedent specified in
this paragraph (b);
(xiii) if such Funding Date is a Class A Funding Date, no Class A
Funding Termination Event, Servicer Termination Event, or any event
that, with the giving of notice or the passage of time, or both, would
constitute a Class A Funding Termination Event or Servicer Termination
Event, shall have occurred and be continuing;
(xiv) if such Funding Date is a Class B Funding Date, no Class B
Funding Termination Event, Servicer Termination Event, or any event
that, with the giving of notice or the passage of time, or both, would
constitute a Class B Funding Termination Event or Servicer Termination
Event, shall have occurred and be continuing;
(xv) the Trustee shall have confirmed receipt of the related
Receivable File for each Related Receivable included in the applicable
Borrowing Base calculation and shall have delivered an original Trust
Receipt to the Controlling Note Purchaser and a copy thereof to the
applicable Noteholders and the other Note Purchasers with respect to
the Receivable Files related to the Related Receivables to be
purchased on such Funding Date;
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(xvi) the Seller shall have filed or caused to be filed all
necessary UCC-l financing statements (or amendments thereto) necessary
to maintain (in each case assuming for purposes of this clause (xvi)
that such perfection may be achieved by making the appropriate
filings), and taken any other steps necessary to maintain, (A) the
first priority perfected ownership interest of Purchaser and (B)
subject to the terms and provisions of the Intercreditor Agreement,
the first priority, perfected security interest of the Trustee for the
benefit of the Note Purchasers and the Noteholders, with respect to
the Related Receivables and Other Conveyed Property and the
Collateral, respectively, to be transferred on such Funding Date;
(xvii) the Seller shall have filed or caused to be filed all
necessary UCC-l financing statements (or amendments thereto) necessary
to maintain (in each case assuming for purposes of this clause (xvii)
that such perfection may be achieved by making the appropriate
filings), and taken any other steps necessary to maintain, (A) the
first priority perfected security interest of the Trustee for the
benefit of the Class B Note Purchasers and the Class B Noteholders,
with respect to the Pledged Subordinate Securities and (B) subject to
the terms and provisions of the Intercreditor Agreement, the second
priority perfected security interest of the Bear Indenture Trustee for
the benefit of the Class B note purchasers and the Class B noteholders
under the Bear Basic Documents, with respect to the UBS Cross
Collateral (subject only to the Lien created pursuant to Granting
Clause I of the Indenture);
(xviii) the Seller shall have executed and delivered an
Assignment in the form of EXHIBIT F with respect to such Related
Receivables and the Other Conveyed Property related thereto;
(xix) each of the conditions precedent to such Advance set forth
in this Agreement, the Indenture and the applicable Note Purchase
Agreement shall have been satisfied;
(xx) if such Funding Date is a Class A Funding Date, such Class A
Funding Date shall not occur in the same calendar week as any prior
Class A Funding Date;
(xxi) if such Funding Date is a Class B Funding Date, such Class
B Funding Date shall also be a Class A Funding Date and no more than
two Class B Funding Dates shall occur during any one calendar month;
and
(xxii) if such Funding Date is a Class B Funding Date, such Class
B Funding Date shall not be a funding date for the Class B notes
issued under the Bear Warehouse Facility.
Unless waived by the Controlling Note Purchaser (or the Class B Note
Purchasers, in the case of ITEM (v), ITEM (ix)(C) AND (D), ITEM (xiv), ITEM
(xvii)(A) AND (B), ITEM (xxi) and ITEM (xxii) above) in writing, the Seller
covenants that in the event any of the foregoing conditions precedent are
not satisfied with respect to any Related Receivable on the date required
as specified above, the Seller will immediately repurchase such Related
Receivable from the Purchaser, at a price equal to the Purchase Amount
thereof, in the manner specified in SECTION 3.2 and SECTION 4.7. Except
with respect to ITEM (xvi) above, the Trustee may rely on the accuracy of
the Officers' Certificate delivered pursuant to ITEM (xii) above without
independent inquiry or verification.
(c) PAYMENT OF PURCHASE PRICE. In consideration for the sale of the
Related Receivables and Other Conveyed Property described in SECTION 2.1(a)
or the related Assignment, the Purchaser shall, on each Funding Date on
which Related Receivables are transferred hereunder, pay to or upon the
order of the Seller the applicable Purchase Price in the following manner:
(i) cash in an amount equal to the amount of each Advance received by the
Purchaser under the Notes on such Funding Date and (ii) to the extent the
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Purchase Price for the related Receivables and Other Conveyed Property
exceeds the aggregate amount of cash described in (i), such excess shall be
treated as a capital contribution by the Seller to the Purchaser. On any
Funding Date on which funds are on deposit in the Principal Funding
Account, the Purchaser may direct the Trustee to withdraw therefrom an
amount equal to the lesser of (i) the Purchase Price to be paid to the
Seller for Related Receivables and Other Conveyed Property to be conveyed
to the Purchaser and pledged to the Trustee on such Funding Date (or a
portion thereof) and (ii) the amount on deposit in the Principal Funding
Account, and, subject to the satisfaction of the conditions set forth in
SECTION 2.1(b) after giving effect to such withdrawal, pay such amount to
or upon the order of the Seller in consideration for the sale of the
Related Receivables and Other Conveyed Property on such Funding Date.
SECTION 2.2. TRANSFERS INTENDED AS SALES. It is the intention of the
Seller and the Purchaser that each transfer and assignment contemplated by
this Agreement and each Assignment shall constitute a sale of the Related
Receivables and Other Conveyed Property from the Seller to the Purchaser
free and clear of all liens and rights of others and it is intended that
the beneficial interest in and title to the Related Receivables and Other
Conveyed Property shall not be part of the Seller's estate in the event of
the filing of a bankruptcy petition by or against the Seller under any
bankruptcy law. In the event that, notwithstanding the intent of the Seller
and the Purchaser, the transfer and assignment contemplated hereby or by
any Assignment is held not to be a sale, this Agreement and each Assignment
shall constitute a security agreement under applicable law and the Seller
hereby grants to the Purchaser a security interest in the Receivables and
Other Conveyed Property, which security interest has been assigned to the
Trustee, acting on behalf of the Noteholders and Note Purchasers.
SECTION 2.3. FURTHER ENCUMBRANCE OF RECEIVABLES AND OTHER CONVEYED
PROPERTY.
(a) Immediately upon the conveyance to the Purchaser by the
Seller of the Related Receivables and any item of the related Other
Conveyed Property pursuant to SECTION 2.1 and the related Assignment,
all right, title and interest of the Seller in and to such Related
Receivables and Other Conveyed Property shall terminate, and all such
right, title and interest shall vest in the Purchaser.
(b) Immediately upon the vesting of any Related Receivables and
the related Other Conveyed Property in the Purchaser, the Purchaser
shall have the sole right to pledge or otherwise encumber such Related
Receivables and the related Other Conveyed Property. Pursuant to the
Indenture, (i) subject to the terms and provisions of the
Intercreditor Agreement, the Purchaser shall grant a security interest
in the Collateral to secure the repayment of the Notes, the other
Secured Obligations and any and all other amounts due and owing to the
Note Purchasers and the Noteholders pursuant to the Basic Documents,
(ii) the Purchaser shall grant a security interest in the Pledged
Subordinate Securities to secure the repayment of the Class B Notes,
the other Secured Obligations and any and all other amounts due and
owing, in each case, to the Class B Note Purchasers and the Class B
Noteholders pursuant to the Basic Documents, and (iii) subject to the
terms and provisions of the Intercreditor Agreement, the Purchaser
shall grant a second priority security interest in the UBS Cross
Collateral to secure the repayment of the Class B notes and any and
all other amounts due and owing, in each case, to the Class B note
purchasers and the Class B noteholders under the Bear Basic Documents
pursuant to the Bear Basic Documents, subject only to the Lien Granted
pursuant to Granting Clause I of the Indenture.
(c) The Trustee shall, at such time as (i) each Facility
Termination Date has occurred, (ii) the payment in full of the Secured
Obligations has occurred, (iii) each Note Purchase Agreement shall
have been terminated pursuant to its terms, (iv) there are no Notes
Outstanding, (v) all sums due to the Trustee, the Note Purchasers and
the Noteholders pursuant to the Basic Documents and all sums due to
the Bear Indenture Trustee, the Class B note purchasers and the Class
B noteholders under the Bear Basic Documents have been paid in full,
and (vi) all other conditions precedent under the Indenture shall have
been satisfied, release any remaining portion of the Collateral, the
Pledged Subordinate Securities and the UBS Cross Collateral to the
Purchaser.
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ARTICLE III
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THE RECEIVABLES
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SECTION 3.1. REPRESENTATIONS AND WARRANTIES OF SELLER. (a) The Seller makes
the following representations and warranties as to the Receivables to the
Purchaser, to the Trustee for the benefit of the Note Purchasers and the
Noteholders, to each Note Purchaser and to each Noteholder, on which the
Purchaser relies in acquiring the Receivables, on which the Trustee relies in
accepting a pledge of the Receivables under the Indenture, on which the
Noteholders have relied in purchasing the Notes and on which each Note Purchaser
will rely in paying the Advance Amounts to the Purchaser. Such representations
and warranties speak as of the Class A Closing Date (with respect to the Class A
Note Purchaser and the Class A Noteholders) and the Class B Closing Date (with
respect to the Class B Note Purchasers and the Class B Noteholders) and as of
each Funding Date; PROVIDED that to the extent such representations and
warranties relate to the Receivables conveyed on any Funding Date, such
representations and warranties shall speak as of the related Funding Date, but
shall survive the sale, transfer and assignment of the Receivables to the
Purchaser and the pledge thereof by the Purchaser hereunder to the Trustee
pursuant to the Indenture.
(i) CHARACTERISTICS OF RECEIVABLES. Each Receivable (1) is evidenced
either by (i) a retail installment sale contract or (ii) an installment
promissory note and security agreement; (2) if such Receivable is evidenced
by a retail installment sale contract, has been originated in the United
States of America by a Dealer for the retail sale of a Financed Vehicle in
the ordinary course of such Dealer's business and without any fraud or
misrepresentation on the part of the Dealer, such Dealer had all necessary
licenses and permits to originate such Receivables in the state where such
Dealer was located, has been fully and properly executed by the parties
thereto, has been purchased by the Seller or TFC, as applicable, directly
from the Dealer in connection with the sale of Financed Vehicles by the
Dealer and has been validly assigned without any intervening assignments by
such Dealer to the Seller or TFC, as applicable, in accordance with its
terms; (3) if such Receivable is evidenced by an installment promissory
note and security agreement, has been originated in the United States of
America by a Consumer Lender in the ordinary course of such Consumer
Lender's business and without any fraud or misrepresentation on the part of
such Consumer Lender or the Dealer, and such Consumer Lender had all
necessary licenses and permits to originate such Receivable in the State
where such Receivable was originated and where such Consumer Lender was
located, and such Receivable has been fully and properly executed by the
parties thereto, has been purchased by the Seller directly from the
Consumer Lender (if the Consumer Lender is not the Seller) in connection
with the sale of Financed Vehicles by the Dealer and has been validly
assigned by such Consumer Lender without any intervening assignments by
such Consumer Lender to the Seller (if the Consumer Lender is not the
Seller); (4) has created a valid, subsisting, and enforceable first
priority perfected security interest in favor of the Seller, TFC or the
Consumer Lender, as applicable, in the Financed Vehicle, which security
interest has been validly assigned by the Seller or TFC, as applicable, to
the Purchaser or by the Consumer Lender to the Seller (if the Consumer
Lender is not the Seller) and by the Seller to the Purchaser, as
applicable, and by the Purchaser to the Trustee; (5) contains customary and
enforceable provisions such that the rights and remedies of the holder or
assignee thereof shall be adequate for realization against the collateral
of the benefits of the security including without limitation a right of
repossession following a default; (6) provides for level weekly, bi-weekly,
semi-monthly or monthly payments that fully amortize the Amount Financed
over the original term (except for the last payment, which may be different
from the level payment but in no event shall exceed three times such level
payment) and yields interest at the Annual Percentage Rate; (7) is a Rule
of 78's Receivable or a Simple Interest Receivable; (8) if such Receivable
is a Rule of 78's Receivable, provides for, in the event that such contract
is prepaid, a prepayment that fully pays the Principal Balance and includes
a full month's interest, in the month of prepayment, at the APR of the
Receivable; (9) if such Receivable is a Simple Interest Receivable,
provides, in the case of prepayment, for the full payment of the Principal
Balance thereof plus accrued interest through the date of prepayment based
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on the APR of the Receivable; (10) if such Receivable is evidenced by a
retail installment sale contract, was originated by a Dealer to an Obligor
and was sold by the Dealer to the Seller or TFC, as applicable, or if such
Receivable is evidenced by an installment promissory note and security
agreement, was originated by a Consumer Lender to an Obligor and, if not
originated by the Seller, has been sold by such Consumer Lender to the
Seller, in each case without any fraud or misrepresentation on the part of
the Seller, TFC, such Consumer Lender, such Dealer or the related Obligor;
(11) is denominated in U.S. dollars; and (12) contains no obligation to
lend more money to the related Obligor in the future.
(ii) ADDITIONAL RECEIVABLES CHARACTERISTICS. As of the related Funding
Date, as applicable:
(A) each Related Receivable that is a CPS Receivable has (1) an
original term of 24 to 72 months; (2) an original Amount Financed of
at least $3,000 and not more than $35,000; and (3) had an APR of at
least 8% and not more than 30% (subject to applicable laws);
(B) each Related Receivable that is a TFC Receivable has (1) an
original term of 9 to 60 months; (2) an original Amount Financed of at
least $1,000 and not more than $25,000; (3) had an APR of at least
9.90% and not more than 30% (subject to applicable laws); (4) when
originated, had an Obligor that was a member of the U.S. armed forces;
and (5) no Obligor that has been the subject of a Section 341 Meeting;
(C) each Related Receivable is not more than 30 days past due
with respect to more than 10% of any Scheduled Receivable Payment as
of the related Cutoff Date and no funds have been advanced by the
Seller, any Dealer, any Consumer Lender or anyone acting on their
behalf in order to cause any Related Receivable to satisfy such
requirement;
(D) no Related Receivable has been extended beyond its original
term, except in accordance with the applicable Contract Purchase
Guidelines regarding deferments or extensions; and
(E) each Related Receivable satisfies in all material respects
the applicable Contract Purchase Guidelines as in effect on the Class
A Closing Date or as otherwise amended from time to time; provided,
that such amendments do not have a material adverse effect on the
Noteholders or the Note Purchasers.
(iii) SCHEDULE OF RECEIVABLES. The information with respect to the
Related Receivables set forth in Schedule A to the related Assignment is
true and correct in all material respects as of the close of business on
the related Cutoff Date, and no selection procedures adverse to any
Noteholder or any Note Purchaser have been utilized in selecting the
Related Receivables to be sold hereunder and thereunder.
(iv) COMPLIANCE WITH LAW. Each Related Receivable, the sale of the
Financed Vehicle and the sale of any physical damage, credit life and
credit accident and health insurance and any extended warranties or service
contracts complied at the time the Related Receivable was originated or
made and at the execution of the applicable Assignment complies in all
material respects with all requirements of applicable Federal, State, and
local laws, including, without limitation, Consumer Laws. Each Receivable
has been serviced in compliance with all applicable requirements of law.
(v) NO GOVERNMENT OBLIGOR. None of the Related Receivables are due
from the United States of America or any State or from any agency,
department, or instrumentality of the United States of America or any
State.
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(vi) NO FLEET SALES. None of the Receivables have been included in a
"fleet" sale (i.e., a sale to any single Obligor of more than five Financed
Vehicles).
(vii) SECURITY INTEREST IN FINANCED VEHICLE. Immediately subsequent to
the sale, assignment and transfer thereof to the Purchaser, each Related
Receivable shall be secured by a validly perfected first priority security
interest in the Financed Vehicle in favor of the Seller as secured party
which security interest has been validly assigned to the Purchaser and
subsequently validly pledged to the Trustee for the benefit of the
Noteholders and Note Purchasers, and such assigned security interest is
prior to all other liens upon and security interests in such Financed
Vehicle which now exist or may hereafter arise or be created (except, as to
priority, for any tax liens or mechanics' liens which may arise after the
related Funding Date as a result of an Obligor's failure to pay its
obligations, as applicable).
(viii) RECEIVABLES IN FORCE. No Related Receivable has been satisfied,
subordinated or rescinded, nor has any related Financed Vehicle been
released from the lien granted by the related Receivable in whole or in
part.
(ix) NO WAIVER. Except as permitted under SECTION 4.2 and CLAUSE (X)
below, no provision of a Related Receivable has been waived, altered or
modified in any respect since its origination. No Related Receivable has
been modified as a result of application of the Servicemembers Civil Relief
Act, as amended.
(x) NO AMENDMENTS. Except as permitted under Section 4.2, no Related
Receivable has been amended, modified, waived or refinanced except as such
Related Receivable may have been amended in accordance with the Servicing
Guidelines.
(xi) NO DEFENSES. No right of rescission, setoff, counterclaim or
defense exists or has been asserted or threatened with respect to any
Related Receivable. The operation of the terms of any Related Receivable or
the exercise of any right thereunder will not render such Related
Receivable unenforceable in whole or in part and such Receivable is not
subject to any such right of rescission, setoff, counterclaim, or defense.
(xii) NO LIENS. As of the related Cutoff Date, (a) there are no liens
or claims existing or which have been filed for work, labor, storage or
materials relating to a Financed Vehicle financed under a Related
Receivable that shall be liens prior to, or equal or coordinate with, the
security interest in the Financed Vehicle granted by the Related Receivable
and (b) there is no lien against the Financed Vehicle financed under a
Related Receivable for delinquent taxes.
(xiii) NO DEFAULT; REPOSSESSION. Except for payment delinquencies
described in Section 3.1(a)(ii)(C) hereof, no default, breach, violation or
event permitting acceleration under the terms of any Related Receivable has
occurred; and no continuing condition that with notice or the lapse of
time, or both, would constitute a default, breach, violation or event
permitting acceleration under the terms of any Related Receivable has
arisen; and neither the Seller nor TFC shall waive or has waived any of the
foregoing (except in a manner consistent with SECTION 4.2) and no Financed
Vehicle financed under a Related Receivable shall have been repossessed.
(xiv) INSURANCE; OTHER. (A) Each Obligor under the Related Receivables
has obtained an insurance policy covering the Financed Vehicle as of the
execution of such Receivable insuring against loss and damage due to fire,
theft, transportation, collision and other risks generally covered by
comprehensive and collision coverage, and either the Seller or TFC,. as
applicable, and its respective successors and assigns are named the loss
payee or an additional insured of such insurance policy, such insurance
policy is in an amount at least equal to the lesser of (i) the Financed
Vehicle's actual cash value or (ii) the remaining Principal Balance of the
Related Receivable, and each Related Receivable requires the Obligor to
obtain and maintain such insurance naming either the Seller or TFC, as
applicable, and its respective successors and assigns as loss payee or an
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additional insured, (B) each Related Receivable that finances the cost of
premiums for credit life and credit accident and health insurance is
covered by an insurance policy or certificate of insurance naming either
the Seller or TFC, as applicable, as policyholder (creditor) under each
such insurance policy and certificate of insurance and (C) as to each
Related Receivable that finances the cost of an extended service contract,
the respective Financed Vehicle which secures the Related Receivable is
covered by an extended service contract. As of the related Cutoff Date, no
Financed Vehicle is or had previously been insured under a policy of
forced-placed insurance.
(xv) TITLE. It is the intention of the Seller that each transfer and
assignment herein contemplated constitutes a sale of the Related
Receivables and the related Other Conveyed Property from the Seller to the
Purchaser and that the beneficial interest in and title to such Related
Receivables and related Other Conveyed Property not be part of the Seller's
estate in the event of the filing of a bankruptcy petition by or against
the Seller under any bankruptcy law. No Related Receivable or related Other
Conveyed Property has been sold, transferred, assigned, or pledged by the
Seller to any Person other than the Purchaser and by the Purchaser to any
Person other than the Trustee. Immediately prior to each transfer and
assignment herein contemplated, the Seller had good and marketable title to
each Related Receivable and related Other Conveyed Property and was the
sole owner thereof, free and clear of all liens, claims, encumbrances,
security interests, and rights of others, and, immediately upon the
transfer thereof to the Purchaser and the Purchaser shall have good and
marketable title to the Receivables and the other Conveyed Property and
shall be the sole owner thereof, free and clear of all Liens and,
immediately upon the pledge thereof to the Trustee under the Indenture, the
Trustee for the benefit of the Noteholders and the Note Purchasers, subject
to the terms and provisions of the Intercreditor Agreement, shall have a
valid and enforceable security interest in the Collateral, free and clear
of all liens, encumbrances, security interests, and rights of others, and
each such transfer and pledge has been perfected under the UCC. No Dealer
or Consumer Lender (unless such Consumer Lender is the Seller) has a
participation in, or other right to receive, proceeds of any Receivable.
(xvi) LAWFUL ASSIGNMENT; NO CONSENT REQUIRED. No Related Receivable
has been originated in, or is subject to the laws of, any jurisdiction
under which the sale, transfer, and assignment of such Related Receivable
under this Agreement or the pledge of such Related Receivable under the
Indenture or pursuant to transfers of the Notes shall be unlawful, void, or
voidable. Neither the Seller nor TFC has entered into any agreement with
any account debtor that prohibits, restricts or conditions the assignment
of any portion of the Related Receivables. For the validity of such sales,
transfers, assignments and pledges, no consent by any Dealer, Consumer
Lender, Obligor or any other Person is required under any agreement or
applicable law.
(xvii) ALL FILINGS MADE. All filings (including, without limitation,
UCC filings or other actions) necessary in any jurisdiction to give: (a)
the Purchaser a first priority perfected ownership interest in the
Receivables and the Other Conveyed Property, including, without limitation,
the proceeds of the Receivables (to the extent that the Purchaser can
obtain such first priority perfected security interest pursuant to one or
more filings), (b) subject to the terms and provisions of the Intercreditor
Agreement, the Trustee, for the benefit of the Noteholders and the Note
Purchasers, a first priority perfected security interest in the Collateral,
(c) the Trustee, for the benefit of the Class B Note Purchasers and the
Class B Noteholders, a first priority perfected security interest in the
Pledged Subordinate Securities, and (d) subject to the terms and provisions
of the Intercreditor Agreement, the Bear Indenture Trustee, for the benefit
of the Class B note purchasers and the Class B noteholders under the Bear
Basic Documents, a second priority perfected security interest in the UBS
Cross Collateral (subject only to the Lien granted pursuant to Granting
Clause I of the Indenture), have been made, taken or performed.
(xviii) RECEIVABLE FILE; ONE ORIGINAL. The Seller has delivered to the
Trustee, at the location specified in SCHEDULE B hereto, a complete
Receivable File with respect to each Related Receivable, and the Trustee
has delivered an original Trust Receipt therefor to the Controlling Note
Purchaser and a copy thereof to the Purchaser, the other Note Purchasers
and the Noteholders. There is only one original executed copy of each
Receivable. The Servicer has in its possession all other relevant documents
with respect to the Receivables, including without limitation the related
credit application and verification of insurance.
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(xix) CHATTEL PAPER. Each Related Receivable constitutes "TANGIBLE
CHATTEL PAPER" under the UCC.
(xx) TITLE DOCUMENTS. (A) If the Related Receivable was originated in
a State in which notation of a security interest on the title document of
the related Financed Vehicle is required or permitted to perfect such
security interest, the title document of the related Financed Vehicle for
such Related Receivable shows, or if a new or replacement title document is
being applied for with respect to such Financed Vehicle the title document
(or, with respect to Related Receivables that finance a vehicle in the
States listed in ANNEX B, other evidence of title issued by the -------
applicable Department of Motor Vehicles or similar authority in such
States) will be received within 180 days of the origination date and will
show, the Seller (or, in the case of a TFC Receivable purchased from a
Dealer by TFC, TFC) named as the original secured party under the Related
Receivable as the holder of a first priority security interest in such
Financed Vehicle, and (B) if the Related Receivable was originated in a
State in which the filing of a financing statement under the UCC is
required to perfect a security interest in motor vehicles, such filings or
recordings have been duly made and show the Seller (or, in the case of a
TFC Receivable purchased from a Dealer by TFC, TFC) named as the original
secured party under the Related Receivable, and in either case, the Trustee
has the same rights as such secured party has or would have (if such
secured party were still the owner of the Receivable) against all parties
claiming an interest in such Financed Vehicle, and such rights have been
validly pledged, subject to the terms and provisions of the Intercreditor
Agreement, to the Trustee for the benefit of the Noteholders and the Note
Purchasers pursuant to the Indenture. With respect to each Related
Receivable for which the title document has not yet been returned from the
Registrar of Titles, the Seller has received written evidence from the
related Dealer that such title document showing the Seller (or, in the case
of a TFC Receivable purchased from a Dealer by TFC, TFC) as first
lienholder has been applied for.
(xxi) VALID AND BINDING OBLIGATION OF OBLIGOR. Each Related Receivable
is the legal, valid and binding obligation in writing of the Obligor
thereunder and is enforceable in accordance with its terms, except only as
such enforcement may be limited by bankruptcy, insolvency or similar laws
affecting the enforcement of creditors' rights generally, and all parties
to such contract had full legal capacity to execute and deliver such
contract and all other documents related thereto and to grant the security
interest purported to be granted thereby. Each Related Receivable is not
subject to any right of set-off by the Obligor.
(xxii) CHARACTERISTICS OF OBLIGORS. As of the date of each Obligor's
application for credit from which the Related Receivable that is a CPS
Receivable arises, such Obligor (a) did not have any material past due
credit obligations or any personal or real property repossessed or wages
garnished within one year prior to the date of such application, unless
such amounts have been repaid or discharged through bankruptcy, (b) was not
the subject of any Federal, State or other bankruptcy, insolvency or
similar proceeding pending on the date of application that has not been
discharged, (c) had not been the subject of more than one Federal, State or
other bankruptcy, insolvency or similar proceeding that has not completed a
Xxxxxxx 000 Xxxxxxx, (x) was domiciled in the United States and (e) was not
self-employed. During the period from the date of each Obligor's
application for financing of the Financed Vehicle from which the related
Receivable arises to the applicable Funding Date, no Obligor is or has been
the subject of any Federal, State or other bankruptcy, insolvency or
similar proceeding that has not completed a Section 341 Meeting.
(xxiii) POST-OFFICE BOX. On or prior to the next billing period after
the related Cutoff Date, the Servicer will notify each Obligor to make
payments with respect to its respective Related Receivables after the
related Cutoff Date directly to the Post-Office Box, and will provide each
Obligor with a monthly statement in order to enable such Obligor to make
payments directly to the Post-Office Box.
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(xxiv) CASUALTY AND IMPOUNDING. No Financed Vehicle financed under a
Related Receivable has suffered a Casualty and the Seller has not received
any notice that any Financed Vehicle has been impounded.
(xxv) NO AGREEMENT TO LEND. The Obligor with respect to each Related
Receivable does not have any option under the Receivable to borrow from any
person any funds secured by the Financed Vehicle.
(xxvi) OBLIGATION TO DEALERS OR OTHERS. The Purchaser and its
assignees will assume no obligation to Dealers, Consumer Lenders or other
originators or holders of the Related Receivables (including, but not
limited to under dealer reserves) as a result of its purchase of the
Related Receivables.
(xxvii) NO IMPAIRMENT. Neither Seller nor the Purchaser has done
anything to convey any right to any Person that would result in such Person
having a right to payments due under any Related Receivables or otherwise
to impair the rights of the Purchaser, the Trustee, any Noteholder or any
Note Purchaser in any Related Receivable or the proceeds thereof.
(xxviii) RECEIVABLES NOT ASSUMABLE. No Related Receivable is assumable
by another Person in a manner which would release the Obligor thereof from
such Obligor's obligations to the Purchaser or Seller with respect to such
Related Receivable.
(xxix) SERVICING. The servicing of each Related Receivable and the
collection practices relating thereto have been lawful and in accordance
with the standards set forth in this Agreement; and other than Seller, TFC
and the Back-up Servicer pursuant to the Basic Documents, no other person
has the right to service the Receivable.
(xxx) CREATION OF SECURITY INTEREST. This Agreement creates a valid
and continuing security interest (as defined in the UCC) in the Receivables
and the Other Conveyed Property in favor of the Purchaser, which security
interest is prior to all other Liens (other than the Liens of the Trustee
and the Bear Indenture Trustee under the Indenture) and is enforceable as
such as against creditors of and purchasers from the Seller. The Indenture
creates a valid and continuing security interest (as defined in the UCC) in
(x) subject to the terms and provisions of the Intercreditor Agreement, the
Collateral in favor of the Trustee for the benefit of the Noteholders and
the Note Purchasers, which security interest is prior to all other Liens,
(y) the Pledged Subordinate Securities in favor of the Trustee for the
benefit of the Class B Note Purchasers and the Class B Noteholders, which
security interest is prior to all other Liens, and (z) subject to the terms
and provisions of the Intercreditor Agreement, the UBS Cross Collateral in
favor of the Bear Indenture Trustee for the benefit of the Class B note
purchasers and the Class B noteholders under the Bear Basic Documents,
which security interest is prior to all Liens, other than the Lien created
pursuant to Granting Clause I of the Indenture, and such security interests
are, in each case, enforceable as such as against creditors of and
purchasers from the Issuer.
(xxxi) PERFECTION OF SECURITY INTEREST IN RECEIVABLES AND OTHER
CONVEYED PROPERTY. The Seller has caused the filing of all appropriate
financing statements in the proper filing office in the appropriate
jurisdictions under applicable law in order to perfect the first priority
security interest in the Receivables and the Other Conveyed Property
granted to the Purchaser hereunder pursuant to SECTION 2.1 and the related
Assignment.
(xxxii) PERFECTION OF SECURITY INTEREST IN TRUST ESTATE. The Purchaser
has caused the filing of all appropriate financing statements in the proper
filing office in the appropriate jurisdictions under applicable law in
order to perfect (i) the first priority security interest in the
Receivables and the other Collateral granted to the Trustee for the benefit
of the Noteholders and the Note Purchasers pursuant to Granting Clause I of
the Indenture; (ii) the security interest in the Pledged Subordinate
Securities granted to the Trustee for the benefit of the Class B
Noteholders and the Class B Note Purchasers pursuant to Granting Clause II
of the Indenture, and (iii) the security interest in the UBS Cross
Collateral granted to the Bear Indenture Trustee for the benefit of the
Class B noteholders and the Class B note purchasers under the Bear Basic
Documents pursuant to Granting Clause III of the Indenture.
(xxxiii) PERFECTION OF SECURITY INTERESTS IN FINANCED VEHICLES. The
Seller has taken all steps necessary to perfect its security interest
against the Obligors in the Financed Vehicles securing the Receivables and
such security interest has been validly assigned by the Seller to the
Purchaser and pledged by the Purchaser to the Trustee for the benefit of
the Noteholders and the Note Purchasers.
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(xxxiv) NO OTHER SECURITY INTERESTS - SELLER. Other than the security
interest granted to the Purchaser pursuant to SECTION 2.1 and the related
Assignment, the Seller has not pledged, assigned, sold, granted a security
interest in, or otherwise conveyed any of the Receivables or the Other
Conveyed Property, other than such security interests as are released at or
before the conveyance thereof. The Seller has not authorized the filing of
and is not aware of any financing statements filed against the Seller that
include a description of collateral covering any portion of the Receivables
and the Other Conveyed Property other than any financing statement relating
to the security interest granted to the Purchaser hereunder or that has
been terminated or released as to the Receivables and the Other Conveyed
Property. The Seller is not aware of any judgment or tax lien filings
against the Seller.
(xxxv) NO OTHER SECURITY INTERESTS - PURCHASER. Other than (A) the
security interest in the Collateral granted to the Trustee for the benefit
of the Noteholders and Note Purchasers pursuant to Granting Clause I of the
Indenture, (B) the security interest in the Pledged Subordinate Securities
granted 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,
and (C) the security interest in the UBS Cross Collateral granted to the
Bear Indenture Trustee for the benefit of the Class B note purchasers and
the Class B noteholders under the Bear Basic Documents pursuant to Granting
Clause III of the Indenture, the Purchaser has not pledged, assigned, sold,
granted a security interest in, or otherwise conveyed any of the
Collateral, the Pledged Subordinate Securities or the UBS Cross Collateral.
The Purchaser has not authorized the filing of and is not aware of any
financing statements filed against the Purchaser that include a description
of collateral covering any portion of the Collateral, the Pledged
Subordinate Securities or the UBS Cross Collateral other than any financing
statement relating to the security interests described in the preceding
clauses (A), (B) and (C), or a security interest that has been terminated
or released with respect to the Collateral, the Pledged Subordinate
Securities or the UBS Cross Collateral. The Purchaser is not aware of any
judgment or tax lien filings against the Purchaser.
(xxxvi) NOTATIONS ON CONTRACTS; FINANCING STATEMENT DISCLOSURE. The
Servicer has in its possession copies of all Contracts that constitute or
evidence the Receivables. The Contracts that constitute or evidence the
Receivables do not have any marks or notations indicating that they have
been pledged, assigned or otherwise conveyed to any Person other than the
Purchaser and/or the Trustee for the benefit of the Noteholders and the
Note Purchasers. All financing statements filed or to be filed against the
Seller in favor of the Purchaser in connection herewith describing the
Trust Estate contain a statement to the following effect: "A purchase of or
security interest in any collateral described in this financing statement
will violate the rights of the secured party."
(xxxvii) RECORDS. On or prior to each Funding Date, the Seller will
have caused its records (including electronic ledgers) relating to each
Related Receivable to be conveyed by it on such Funding Date to be clearly
and unambiguously marked to reflect that such Related Receivable was
conveyed by it to the Purchaser and pledged by the Purchaser to the Trustee
for the benefit of the Noteholders and the Note Purchasers.
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(xxxviii) COMPUTER INFORMATION. The computer diskette, computer tape
or other electronic transmission made available by the Seller to the
Purchaser on each Funding Date is, as of the related Cutoff Date, complete
and accurate and includes a description of the same Receivables described
in Schedule A to the related Assignment.
(xxxix) NO MFN OR SEAWEST RECEIVABLES. None of the Related Receivables
was originated by MFN, SeaWest or any of their respective Subsidiaries.
(xl) REMAINING PRINCIPAL BALANCE. As of the related Cutoff Date, each
Related Receivable has a remaining Principal Balance of at least $3,000 and
the Principal Balance of each Receivable set forth in Schedule A to the
related Assignment is true and accurate in all respects.
(xli) DELIVERY OF RECEIVABLE FILES. A complete Receivable File (other
than, if applicable, a certificate of title missing from the related
Receivable File as described in SECTION 3.4(B)) with respect to each
Receivable has been, prior to the Funding Date, delivered to the Trustee at
the location listed in SCHEDULE B hereof.
(xlii) FULL AMOUNT ADVANCED. The full amount of each Receivable has
been advanced to each Obligor, and there are no requirements for future
advances thereunder.
(xliii) ILLINOIS RECEIVABLES. (a) The Seller does not own a
substantial interest in the business of a Dealer within the meaning of
Illinois Sales Finance Agency Act Rules and Regulations, Section 160.230(1)
and (b) with respect to each Receivable originated in the State of
Illinois, (i) the printed or typed portion of the related Form of
Receivable complies with the requirements of 815 ILCS 375/3(b) and (ii) the
Seller has not, and for so long as such Receivable is outstanding shall
not, place or cause to be placed on the related Financed Vehicle any
collateral protection insurance in violation of 815 ILCS 180/10.
(xliv) CALIFORNIA RECEIVABLES. Each Receivable originated in the State
of California has been, and at all times during the term of the Sale and
Servicing Agreement will be, serviced by the Servicer in compliance with
Cal. Civil Code ss. 2981, et seq.
(xlv) CONSUMER LENDERS. Each Consumer Lender has obtained all
necessary licenses and approvals in all jurisdictions in which the
origination and purchase of installment promissory notes and security
agreements and the sale thereof to the Seller (if the Seller is not the
Consumer Lender) requires or shall require such licenses or approvals,
except where the failure to obtain such licenses or approvals would not
result in a Material Adverse Effect or have a material adverse effect on
the value or marketability of any Receivable (including, without
limitation, the enforceability or collectibility of any Receivable).
SECTION 3.2. REPURCHASE UPON BREACH; SECTION 341 MEETING(a) . The Seller,
the Servicer, any Noteholder, any Note Purchaser or the Trustee, as the case may
be, shall inform the other parties to this Agreement and the Note Purchasers
promptly, in writing, upon the discovery of any breach of the Seller's
representations and warranties made pursuant to SECTION 3.1 with respect to a
Receivable (without regard to any limitations therein as to the Seller's
knowledge). Unless the breach shall have been cured by the last day of the next
Accrual Period following the discovery thereof by the Trustee or receipt by the
Trustee of notice from the Seller, the Servicer, any Noteholder or any Note
Purchaser of such breach, the Seller shall repurchase any Receivable if the
value of such Receivable is materially and adversely affected by the breach as
of the last day of such next Accrual Period (or, at the Seller's option, the
last day of the first Accrual Period following the discovery). In consideration
of the purchase of any Receivable, the Seller shall remit the Purchase Amount,
in the manner specified in SECTION 5.6. The sole remedies of the Purchaser, the
Trustee, the Note Purchasers or the Noteholders with respect to any Receivables
as to which a breach of representations and warranties pursuant to SECTION 3.1
has occurred shall be to enforce the Seller's obligation to purchase such
Receivables and the indemnity provided by SECTION 8.3(a) . Upon receipt of the
Purchase Amount in respect of any Defective Receivables and written instructions
from the Servicer, the Trustee shall release to the Seller or its designee the
related Receivable File and shall execute and deliver all reasonable instruments
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of transfer or assignment, without recourse, as are prepared by the Seller and
delivered to the Trustee and necessary to vest in the Seller or such designee
title to such Defective Receivables. The parties hereto hereby acknowledge that
the Controlling Note Purchaser and the Majority Noteholders of the Highest
Priority Class shall each have the right to enforce directly against the Seller
the Seller's repurchase and indemnity obligations pursuant to this SECTION 3.2
and SECTION 8.3.
(b) If the Insolvency Event related to a Section 341 Meeting has not
been discharged by the bankruptcy court or other similar court presiding
over such Insolvency Event within 90 days of the conveyance of the related
Receivable by the Seller to the Purchaser pursuant to SECTION 2.1(A), the
Seller shall repurchase such Receivable as of the last day of such next
Accrual Period.
SECTION 3.3. CUSTODY OF RECEIVABLE FILES AND PLEDGED SUBORDINATE
SECURITIES.
(a) In connection with each sale, transfer and assignment of
Receivables and related Other Conveyed Property to the Purchaser pursuant
to this Agreement and each Assignment, and each pledge thereof by the
Purchaser to the Trustee for the benefit of the Noteholders and the Note
Purchasers pursuant to the Indenture, the Trustee shall act as custodian of
the following documents or instruments in its possession which shall be
delivered to the Trustee on or before the Class A Closing Date or the
related Funding Date in accordance with SECTION 3.4 (with respect to each
Receivable):
(i) The fully executed original of the Receivable (together with
any agreements modifying or assigning the Receivable, including
without limitation any extension agreements); and
(ii) The original certificate of title in the name of the Obligor
with a notation on such certificate of title evidencing Seller's or
TFC's, as applicable, security interest therein or such documents that
the Seller shall keep on file, in accordance with its customary
procedures, evidencing the security interest of the Seller or TFC, as
applicable, in the Financed Vehicle or, if not yet received, a copy of
the application therefor showing the Seller or TFC, as applicable, as
secured party, or a dealer guarantee of title.
(b) Upon payment in full of any Receivable, the Servicer will notify
the Trustee pursuant to a certificate of a Servicing Officer in the form of
EXHIBIT C and shall request delivery of the Receivable and Receivable File
to the Servicer.
(c) If a Class B Borrowing Base Deficiency would exist upon the
release of Receivables under Article X of the Indenture in connection with
a Securitization Transaction, the Issuer shall pledge the related Pledged
Subordinate Securities to the Trustee, for the benefit of the Class B
Noteholders and the Class B Note Purchasers pursuant to Granting Clause II
of the Indenture, the Issuer shall deliver such Pledged Subordinate
Securities to the Trustee on the related Securitization Closing Date and
the Trustee shall act as custodian of such Pledged Subordinate Securities.
Each Pledged Subordinate Security delivered to the Trustee pursuant to this
subparagraph (c) shall be endorsed in blank by the record holder thereof
with a medallion-guaranteed signature. By virtue of its delivery of any
Pledged Subordinate Securities to the Trustee on a Securitization Closing
Date pursuant to this Section 3.3(c), the Issuer shall be deemed to have
confirmed, for the benefit of the Class B Note Purchasers and the Class B
Noteholders, that, as of such Securitization Closing Date, the
representations and warranties with respect to each such Pledged
Subordinate Security set forth in the Basic Documents are true and correct
in all material respects. In addition, the Issuer shall deliver or shall
cause to be delivered to the Class B Note Purchasers and the Class B
Noteholders all true sale opinions issued by counsel to CPS in connection
with any Securitization Transaction for which Pledged Subordinate
Securities are delivered to the Trustee pursuant to this Section 3.3(c)
(which true sale opinions shall either be addressed to the Class B Note
Purchasers and the Class B Noteholders or shall specifically authorize
their reliance thereon). Upon delivery of any such Pledged Subordinate
Securities to the Trustee in the manner provided herein and upon the
Trustee's acknowledgment of receipt thereof, such Pledged Subordinate
Securities shall become subject to the Lien created by Granting Clause II
of the Indenture. The Trustee shall release any such Pledged Subordinate
Securities upon the prepayment of the related Class B Invested Amount in
accordance with Section 10.1 of the Indenture.
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SECTION 3.4. ACCEPTANCE OF RECEIVABLE FILES BY TRUSTEE; MISSING
CERTIFICATES OF TITLE (a) In connection with any Funding Date, the Seller shall
cause to be delivered to the Trustee the Receivable Files for the Related
Receivables to be purchased on such Funding Date not less than four Business
Days prior to the related Funding Date. The Trustee declares that it will hold
and will continue to hold such files and any amendments, replacements or
supplements thereto and all Other Conveyed Property as Trustee, custodian, agent
and bailee in trust for the use and benefit of the Noteholders and the Note
Purchasers. The Trustee shall within three Business Days after receipt of such
files, execute and deliver to the Controlling Noteholder a receipt substantially
in the form of EXHIBIT B hereto (a "TRUST RECEIPT") for the Receivable Files
received by the Trustee and a copy thereof to the other Note Purchasers and the
Noteholders. By its delivery of a Trust Receipt, the Trustee shall be deemed to
have (a) acknowledged receipt of the files (or the Receivables) which the Seller
has represented are and contain the Receivable Files for the Related Receivables
to be purchased by the Purchaser on the related Funding Date as indicated on
Schedule A to the Addition Notice, (b) reviewed such files or Receivables and
(c) determined that it has received the items referred to in SECTION 3.3(A)(I)
and (II) for each Related Receivable identified on Schedule A to the Addition
Notice, except, in each case, as may otherwise be noted in Schedule I to the
Trust Receipt. Unless such defect noted on Schedule I of the related Trust
Receipt with respect to such Receivable to be transferred on the related Funding
Date shall have been cured by the Seller or waived by the Controlling Note
Purchaser, in its sole and absolute discretion, and the Trustee shall have
executed a Trust Receipt reflecting that such Receivable is no longer on
Schedule I thereto prior to 11 a.m. New York time on the related Funding Date,
the Purchaser shall not purchase such Receivable from the Seller on such Funding
Date. The Trustee shall return to, or otherwise handle at the direction of, the
Seller those files relating to any Receivable not so purchased on a Funding Date
and any file unrelated to a Receivable identified in Schedule A to the related
Addition Notice (it being understood that the Trustee's obligation to review the
contents of any Receivable File shall be limited as set forth in the preceding
sentence).
(b) The Trustee shall make a list of Receivables for which an
application for a certificate of title but not an original certificate of
title or, with respect to Receivables that finance a vehicle in the States
listed in ANNEX B, other evidence of title issued by the applicable
Department of Motor Vehicles or similar authority in such States, is
included in the Receivable File as of the date of its review of the
Receivable Files and deliver a copy of such list to the Servicer, each
Noteholder and each Note Purchaser. On the date which is 180 days following
the related Funding Date, and monthly thereafter, the Trustee shall inform
the Seller, the Purchaser, each Noteholder and each Note Purchaser of any
Receivable for which the related Receivable File on such date does not
include an original certificate of title or, with respect to Financed
Vehicles in the States listed in ANNEX B, other evidence of title issued by
the applicable Department of Motor Vehicles or similar authority in such
States, and the Seller shall repurchase any such Receivable as of the last
Business Day of the Accrual Period in which the expiration of such 180 days
occurs. In consideration of the purchase of the Receivable, the Seller
shall remit the Purchase Amount for such Receivable, in the manner
specified in SECTION 5.6. Upon receipt of the Purchase Amount for a
Receivable and written instructions from the Servicer, the Trustee shall
release to the Seller or its designee the related Receivable File and shall
execute and deliver all reasonable instruments of transfer or assignment,
without recourse, as are prepared by the Seller and delivered to the
Trustee and are necessary to vest in the Seller or such designee title to
the Receivable.
(c) For those Receivable Files that do not contain an original
certificate of title or, with respect to Receivables that finance a vehicle
in the States listed in ANNEX B, other evidence of title issued by the
applicable Department of Motor Vehicles or similar authority in such
States, upon receipt of such original title documents, the Seller shall
promptly deliver or cause to be delivered to the Trustee such original
title documents to the Trustee to place in the applicable Receivable File.
SECTION 3.5. ACCESS TO RECEIVABLE FILES AND PLEDGED SUBORDINATE SECURITIES.
The Trustee shall permit the Servicer, the Note Purchasers and the Noteholders
access to the Receivable Files and the Pledged Subordinate Securities at all
reasonable times during the Trustee's normal business hours. The Trustee shall,
within two Business Days of the request of the Servicer, any Note Purchaser or
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any Noteholder, execute such documents and instruments as are prepared by the
Servicer, such Note Purchaser or such Noteholder and delivered to the Trustee,
as the Servicer, such Note Purchaser or such Noteholder deems necessary to
permit the Servicer, in accordance with its customary servicing procedures, to
enforce the Receivable on behalf of the Purchaser and any related insurance
policies covering the Obligor, the Receivable or Financed Vehicle so long as
such execution in the Trustee's sole discretion does not conflict with the
Indenture or any other Basic Document and will not cause it undue risk or
liability. The Trustee shall not release any document from any Receivable File
unless it receives a release request signed by a Servicing Officer in the form
of EXHIBIT C hereto (the "RELEASE REQUEST"); PROVIDED, HOWEVER, if a Servicer
Termination Event or Event of Default shall have occurred and is continuing, the
Trustee shall not release any such Receivable File to the Servicer without the
prior written consent of the Controlling Note Purchaser. Such Release Request
shall obligate the Servicer to return such document(s) to the Trustee when the
need therefor no longer exists unless the Receivable shall be liquidated, in
which case, the Servicer shall certify in the Release Request that all amounts
required to be deposited in the Collection Account with respect to such
Receivable have been so deposited. Each Release Request delivered to the Trustee
pursuant to this SECTION 3.5 shall be forwarded by the Servicer to the
Controlling Note Purchaser electronically or by facsimile within one (1)
Business Day of delivery to the Trustee together with a list of all Receivables
to be released by the Trustee pursuant to such Release Request.
SECTION 3.6. TRUSTEE TO OBTAIN FIDELITY INSURANCE. The Trustee shall
maintain a fidelity bond in the form and amount as is customary for entities
acting as a trustee of funds and documents in respect of consumer contracts on
behalf of institutional investors.
SECTION 3.7. TRUSTEE TO MAINTAIN SECURE FACILITIES. The Trustee shall
maintain or cause to be maintained continuous custody of the Receivable Files
and the Pledged Subordinate Securities in secure and fire resistant facilities
segregated from any other receivables or securities of the Seller, the Purchaser
or any of their Affiliates in accordance with customary standards for such
custody.
ARTICLE IV
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ADMINISTRATION AND SERVICING OF RECEIVABLES
-------------------------------------------
SECTION 4.1. DUTIES OF THE SERVICER. The Servicer, as agent for the
Purchaser, the Note Purchasers and the Noteholders, shall manage, service,
administer and make collections on the Receivables with reasonable care, using
that degree of skill and attention customary and usual for institutions that
service motor vehicle retail installment sale contracts or installment
promissory note and security agreements similar to the Receivables and, to the
extent more exacting, that the Servicer exercises with respect to all comparable
automotive receivables that it services for itself or others. In performing such
duties, the Servicer shall comply with its current servicing policies and
procedures, as such servicing policies and procedures may be amended from time
to time, so long as such amendments will not materially adversely affect the
interests of any Note Purchaser or any Noteholder, or otherwise with the prior
written consent of the Controlling Note Purchaser and the Majority Noteholders
of the Highest Priority Class (which consent shall not be unreasonably
withheld), and notice of such amendments is given to each Note Purchaser and
each Noteholder affected thereby prior to the effectiveness thereof. The
Servicer's duties shall include, without limitation, collection and posting of
all payments, responding to inquiries of Obligors on such Receivables,
investigating delinquencies, sending payment statements to Obligors, reporting
tax information to Obligors, accounting for collections, furnishing monthly and
annual statements to the Trustee and the Noteholders with respect to
distributions. Without limiting the generality of the foregoing, and subject to
the servicing standards set forth in this Agreement including, without
limitation, the restrictions set forth in SECTION 4.6, the Servicer is
authorized and empowered by the Purchaser to execute and deliver, on behalf of
itself, the Purchaser, the Note Purchasers and the Noteholders, any and all
instruments of satisfaction or cancellation, or partial or full release or
discharge, and all other comparable instruments, with respect to such
Receivables or to the Financed Vehicles securing such Receivables and/or the
certificates of title or, with respect to Financed Vehicles in the States listed
in ANNEX B, other evidence of title issued by the applicable Department of Motor
Vehicles or similar authority in such States with respect to such Financed
Vehicles. If the Servicer shall commence a legal proceeding to enforce a
Receivable, the Purchaser shall thereupon be deemed to have automatically
assigned, solely for the purpose of collection, such Receivable to the Servicer.
If in any enforcement suit or legal proceeding it shall be held that the
Servicer may not enforce a Receivable on the ground that it shall not be a real
party in interest or a holder entitled to enforce such Receivable, the Purchaser
shall, at the Servicer's expense and direction, take steps to enforce such
Receivable, including bringing suit in its name or the name of one or more Note
Purchasers or Noteholders. The Servicer shall prepare and furnish, and the
Trustee shall execute, any powers of attorney and other documents reasonably
necessary or appropriate to enable the Servicer to carry out its servicing and
administrative duties hereunder.
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SECTION 4.2. COLLECTION OF RECEIVABLE PAYMENTS; MODIFICATIONS OF
RECEIVABLES; LOCKBOX AGREEMENTS.
(a) Consistent with the standards, policies and procedures required by
this Agreement, the Servicer shall make reasonable efforts to collect all
payments called for under the terms and provisions of the Receivables as
and when the same shall become due and shall follow such collection
procedures as it follows with respect to all comparable automotive
receivables that it services for itself or others; PROVIDED, --------
HOWEVER, that promptly after the Class A Closing Date (or the related
Funding Date, as applicable), but in ------- no event more than 30 days
thereafter, the Servicer shall notify each Obligor to make all payments
with respect to the Receivables to the applicable Post-Office Box. The
Servicer will provide each Obligor with a monthly statement in order to
notify such Obligors to make payments directly to the applicable
Post-Office Box. The Servicer shall allocate collections between principal
and interest in accordance with the customary servicing procedures it
follows with respect to all comparable automotive receivables that it
services for itself or others and in accordance with the terms of this
Agreement. Except as provided below, the Servicer, for as long as the
Seller is the Servicer, may grant extensions on a Receivable in accordance
with the applicable Contract Purchase Guidelines, if any; PROVIDED,
HOWEVER, that the Servicer -------- ------- may not grant (x) more than one
(1) extension per calendar year with respect to a CPS Receivable or grant
an extension with respect to a CPS Receivable for more than one (1)
calendar month or grant more than four (4) extensions in the aggregate with
respect to a CPS Receivable and (y) more than two (2) extensions per
calendar year with respect to a TFC Receivable or grant an extension with
respect to a TFC Receivable for more than one (1) calendar month or grant
more than four (4) extensions in the aggregate with respect to a TFC
Receivable, in each case without the prior written consent of the
Controlling Note Purchaser (which shall not be unreasonably withheld). In
no event shall the principal balance of a Receivable be reduced, except in
connection with a settlement in the event the Receivable becomes a
Defaulted Receivable. If the Servicer is not the Seller or the Backup
Servicer, the Servicer may not make any extension on a Receivable without
the prior written consent of the Controlling Note Purchaser (which consent
shall not unreasonably be withheld). The Servicer may in its discretion
waive any prepayment charge, late payment charge or any other similar fees
that may be collected in the ordinary course of servicing a Receivable.
Notwithstanding anything to the contrary contained herein, the Servicer
shall not agree to any alteration of the interest rate on any Receivable or
of the amount of any Scheduled Receivable Payment on Receivables, other
than to the extent that such alteration is required by applicable law.
(b) The Servicer shall establish and maintain each Lockbox Account in
the name of the Purchaser for the benefit of the Trustee for the further
benefit of the Noteholders and the Note Purchasers. Pursuant to each
Lockbox Agreement, the Trustee has authorized the Servicer to direct
dispositions of funds on deposit in the related Lockbox Account to the
Collection Account (but not to any other account), and no other Person,
except the Lockbox Processor and the Trustee, has authority to direct
disposition of funds on deposit in such Lockbox Account. However, each
Lockbox Agreement shall provide that the Lockbox Bank will comply with
instructions originated by the Trustee relating to the disposition of the
funds in the related Lockbox Account without further consent by the Seller,
the Servicer or the Purchaser. The Trustee shall have no liability or
responsibility with respect to the Lockbox Processor's directions or
activities as set forth in the preceding sentence. Each Lockbox Account
shall be established pursuant to and maintained in accordance with the
related Lockbox Agreement and shall be a demand deposit account established
and maintained with Xxxxx Fargo Bank, National Association, or at the
request of the Controlling Note Purchaser an Eligible Account satisfying
clause (i) of the definition thereof; PROVIDED, HOWEVER, that the Trustee
shall give the Servicer prior written notice of any change made at the
request of the Controlling Note Purchaser in the location of a Lockbox
Account. The Servicer shall establish and maintain each Post-Office Box at
a United States Post Office Branch in the name of the Purchaser for the
benefit of the Trustee for the further benefit of the Noteholders and the
Note Purchasers.
(c) Notwithstanding any Lockbox Agreement, or any of the provisions of
this Agreement relating to the Lockbox Agreement, the Servicer shall remain
obligated and liable to the Purchaser, the Trustee, the Note Purchasers and
the Noteholders for servicing and administering the Receivables and the
Other Conveyed Property in accordance with the provisions of this Agreement
without diminution of such obligation or liability by virtue thereof.
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(d) In the event the Seller shall for any reason no longer be acting
as the Servicer hereunder, the Backup Servicer or another successor
Servicer shall thereupon assume all of the rights and obligations of the
outgoing Servicer under each Lockbox Agreement. In such event, the Backup
Servicer or such other successor Servicer shall be deemed to have assumed
all of the outgoing Servicer's interest therein and to have replaced the
outgoing Servicer as a party to a Lockbox Agreement to the same extent as
if such Lockbox Agreement had been assigned to the Backup Servicer or such
other successor Servicer, except that the outgoing Servicer shall not
thereby be relieved of any liability or obligations on the part of the
outgoing Servicer to the Lockbox Bank under such Lockbox Agreement. The
outgoing Servicer shall, upon request of the Controlling Note Purchaser or
the Trustee, but at the expense of the outgoing Servicer, deliver to the
Backup Servicer or such other successor Servicer all documents and records
relating to the Lockbox Agreements and an accounting of amounts collected
and held by the Lockbox Bank and otherwise use its best efforts to effect
the orderly and efficient assignment of the Lockbox Agreements to the
Backup Servicer or such other successor Servicer. In the event that the
Controlling Note Purchaser shall elect to change the identity of the
Lockbox Bank, the Servicer, at its expense, shall cause the Lockbox Bank to
deliver, at the direction of the Controlling Note Purchaser, to the Trustee
or a successor Lockbox Bank, all documents and records relating to the
Receivables and all amounts held (or thereafter received) by the Lockbox
Bank (together with an accounting of such amounts) and shall otherwise use
its best efforts to effect the orderly and efficient transfer of the
Lockbox arrangements.
(e) On each Business Day, pursuant to the Lockbox Agreements, the
Lockbox Processor will transfer any payments from Obligors received in the
Post-Office Boxes to the applicable Lockbox Account. Within two (2)
Business Days of receipt of funds into a Lockbox Account, the Servicer
shall cause the Lockbox Bank to transfer cleared funds from such Lockbox
Account to the Collection Account. In addition, the Servicer shall remit
all payments by or on behalf of the Obligors received by the Servicer with
respect to the Receivables (other than Purchased Receivables) and all Net
Liquidation Proceeds no later than two (2) Business Days following receipt
directly (without deposit into any intervening account) into the related
Lockbox Account or the Collection Account. The Servicer shall not commingle
its assets and funds with those on deposit in the Lockbox Accounts.
SECTION 4.3. REALIZATION UPON RECEIVABLES. On behalf of the Purchaser, the
Trustee, the Note Purchasers and the Noteholders, the Servicer shall use its
best efforts, consistent with the servicing procedures set forth herein, to
repossess or otherwise convert the ownership of the Financed Vehicle securing
any Receivable as to which the Servicer shall have determined eventual payment
in full is unlikely. The Servicer shall commence efforts to repossess or
otherwise convert the ownership of a Financed Vehicle on or prior to the date
that an Obligor has failed to make more than 90% of a Scheduled Receivable
Payment thereon in excess of $10 for 120 days or more; PROVIDED, HOWEVER, that
the Servicer may elect not to commence such efforts within such time period if
in its good faith judgment it determines either that it would be impracticable
to do so or that the proceeds ultimately recoverable with respect to such
Receivable would be increased by forbearance. The Servicer shall follow such
customary and usual practices and procedures as it shall deem necessary or
advisable in its servicing of automotive receivables, consistent with the
standards of care set forth in Section 4.2, which may include reasonable efforts
to realize upon any recourse to Dealers or Consumer Lenders (if such Consumer
Lender is not the Seller) and selling the Financed Vehicle at public or private
sale. The foregoing shall be subject to the provision that, in any case in which
the Financed Vehicle shall have suffered damage, the Servicer shall not expend
funds in connection with the repair or the repossession of such Financed Vehicle
unless it shall determine in its discretion exercised in good faith that such
repair and/or repossession will increase the proceeds ultimately recoverable
with respect to such Receivable by an amount greater than the amount of such
expenses.
SECTION 4.4. INSURANCE.
(a) The Servicer, in accordance with the servicing procedures and
standards set forth herein, shall require that (i) each Obligor shall have
obtained insurance covering the Financed Vehicle, as of the date of the
execution of the Receivable, insuring against loss and damage due to fire,
theft, transportation, collision and other risks generally covered by
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comprehensive and collision coverage and each Receivable requires the
Obligor to maintain such physical loss and damage insurance naming the
Seller and its successors and assigns as an additional insured, (ii) each
Receivable that finances the cost of premiums for credit life and credit
accident and health insurance is covered by an insurance policy or
certificate naming the Seller as policyholder (creditor) and (iii) as to
each Receivable that finances the cost of an extended service contract, the
respective Financed Vehicle which secures the Receivable is covered by an
extended service contract (each, a "RECEIVABLES INSURANCE POLICY").
(b) To the extent applicable, the Servicer shall not take any action
which would result in noncoverage under any Receivables Insurance Policy
which, but for the actions of the Servicer, would have been covered
thereunder. The Servicer, on behalf of the Purchaser, the Note Purchasers
and the Noteholders, shall take such reasonable action as shall be
necessary to permit recovery under each Receivables Insurance Policy. Any
amounts collected by the Servicer under any Receivables Insurance Policy,
including, without limitation, proceeds thereof, shall be deposited in the
Collection Account within two (2) Business Days of receipt.
SECTION 4.5. MAINTENANCE OF SECURITY INTERESTS IN VEHICLES.
(a) Consistent with the policies and procedures required by this Agreement,
the Servicer shall take such steps on behalf of the Purchaser, the Note
Purchasers and the Noteholders as are necessary to maintain perfection of the
security interest created by each Receivable in the related Financed Vehicle,
including but not limited to obtaining the authorization or execution by the
Obligors and the recording, registering, filing, re-recording, re-registering
and re-filing of all security agreements, financing statements and continuation
statements or instruments as are necessary to maintain the security interest
granted by the Obligors under the respective Receivables. The Trustee hereby
authorizes the Servicer, and the Servicer agrees, to take any and all steps
necessary to re-perfect or continue the perfection of such security interest on
behalf of the Purchaser and Trustee for the benefit of the Noteholders and Note
Purchasers as necessary because of the relocation of a Financed Vehicle or for
any other reason. In the event that the assignment of a Receivable to the
Purchaser, and the pledge thereof by the Purchaser to the Trustee for the
benefit of the Noteholders and Note Purchasers is insufficient, without a
notation on the related Financed Vehicle's certificate of title, or without
fulfilling any additional administrative requirements under the laws of the
state in which the Financed Vehicle is located, to perfect a security interest
in the related Financed Vehicle in favor of the Trustee for the benefit of the
Noteholders and the Note Purchasers, each of the Trustee and the Seller hereby
agrees that the designation of the Seller or TFC, as applicable, as the secured
party on the certificate of title is in respect of the Seller's capacity as
Servicer and TFC's capacity as subservicer, as applicable, as agent of the
Trustee for the benefit of the Noteholders and the Note Purchasers.
(b) Upon the occurrence and continuance of a Servicer Termination Event,
the Trustee and the Servicer shall take or cause to be taken such action as may,
in the opinion of counsel to the Trustee, which opinion shall be an expense of
the Servicer and shall not be an expense of the Trustee, be necessary to perfect
or re-perfect the security interests in the Financed Vehicles securing the
Receivables in the name of the Trustee on behalf of the Noteholders and the Note
Purchasers by amending the title documents of such Financed Vehicles or by such
other reasonable means as may, in the opinion of counsel to the Trustee, which
opinion shall be an expense of the Servicer and shall not be an expense of the
Trustee, be necessary or prudent.
(c) The Seller hereby agrees to pay all expenses related to such perfection
or re-perfection in accordance with clauses (a) and (b) above and to take all
action necessary therefor. In addition, the Controlling Note Purchaser or the
Trustee may instruct the Servicer to take or cause to be taken, and the Servicer
shall take or cause to be taken, such action as may, in the judgment of the
Trustee or the Note Purchaser, be necessary to perfect or re-perfect the
security interest in the Financed Vehicles underlying the Receivables in the
name of the Trustee on behalf of the Noteholders and the Note Purchasers,
including by amending the title documents of such Financed Vehicles or by such
other reasonable means as may, in the judgment of the Trustee or the Controlling
Note Purchaser, be necessary or prudent; PROVIDED, HOWEVER, that if the
Controlling Note Purchaser or the Trustee requests that the title documents be
amended prior to the occurrence of a Servicer Termination Event, the Servicer
shall carry out such action only to the extent that the out-of-pocket expenses
of the Servicer shall be reimbursed by the Note Purchasers or the Noteholders,
respectively, on a PRO RATA basis (based upon the applicable outstanding
Invested Amounts).
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SECTION 4.6. ADDITIONAL COVENANTS OF SERVICER.
(a) The Servicer shall not release the Financed Vehicle securing any
Receivable from the security interest granted by such Receivable in whole
or in part except in the event of payment in full by the Obligor thereunder
or repossession or other liquidation of the Financed Vehicle, nor shall the
Servicer impair the rights of any Noteholder, any Note Purchaser or the
Trustee in such Receivables, nor shall the Servicer amend or otherwise
modify a Receivable, except as permitted in accordance with SECTION 4.2.
(b) The Servicer shall obtain and/or maintain all necessary licenses,
approvals, authorizations, orders or other actions of any person,
corporation or other organization, or of any court, governmental agency or
body or official, required in connection with the execution, delivery and
performance of this Agreement and the other Basic Documents.
(c) The Servicer shall not make any material changes to its collection
policies unless the Controlling Note Purchaser expressly consents in
writing prior to such changes (which consent shall not be unreasonably
withheld).
(d) The Servicer shall provide written notice to the Noteholders and
the Note Purchasers of any default, event of default, trigger event or
servicer termination event under any other warehouse financing facility or
securitization that has occurred and which default, event of default,
trigger event or servicer termination shall not have been waived or
otherwise cured within the applicable cure period.
(e) The Servicer shall reimburse each Note Purchaser and each
Noteholder for any and all fees or expenses that such Note Purchaser or
such Noteholder, as applicable, pay to a bank arising out of a return of
payments from the Purchaser or the Seller deposited for collection by or
for the benefit of such Note Purchaser or such Noteholder, as applicable.
(f) The Servicer will not (i) create, incur or suffer to exist, or
agree to create, incur or suffer to exist, or consent to cause or permit in
the future (upon the happening of a contingency or otherwise) the creation,
incurrence or existence of any lien, security interest, charge, pledge,
equity, encumbrance or restriction on transferability of the Receivables
and the Other Conveyed Property except (x) for the lien in favor of the
Trustee for the benefit of the Noteholders and the Note Purchasers and the
restrictions on transferability imposed by this Agreement or any other
Basic Document or (y) with respect to any portion of the Receivables and
the Other Conveyed Property released in a manner permitted by the Basic
Documents from the lien in favor of the Trustee for the benefit of the
Noteholders and the Note Purchasers, or (ii) sign or file under the UCC of
any jurisdiction any financing statement which names the Seller, the
Servicer or the Purchaser as a debtor, or sign any security agreement
authorizing any secured party thereunder to file such financing statement,
with respect to the Receivables and Other Conveyed Property, except in each
case any such instrument solely securing the rights and preserving the lien
of the Trustee for the benefit of the Noteholders and the Note Purchasers.
SECTION 4.7. PURCHASE OF RECEIVABLES UPON BREACH OF COVENANT. Upon
discovery by any of the Servicer, the Purchaser, the Trustee, any Note Purchaser
or any Noteholder of a breach of any of the covenants of the Servicer set forth
in SECTION 4.2(a), 4.4, 4.5 or 4.6, the party discovering such breach shall give
prompt written notice to the others; PROVIDED, HOWEVER, that the failure to give
any such notice shall not affect any obligation of the Servicer under this
SECTION 4.7. Unless the breach shall have been cured by the last day of the next
Accrual Period following such discovery, the Servicer shall purchase any
Receivable materially and adversely affected by such breach. In consideration of
the purchase of such Receivable, the Servicer shall remit the Purchase Amount
for such Receivable in the manner specified in SECTION 5.6. The sole remedy of
the Trustee, the Purchaser, the Note Purchasers or the Noteholders hereunder
with respect to a breach of SECTION 4.2(a), 4.4, 4.5 or 4.6 shall be to require
the Servicer to repurchase Receivables pursuant to this SECTION 4.7; PROVIDED,
HOWEVER, that the Servicer shall indemnify the Trustee, the Backup Servicer, the
Purchaser, the Note Purchasers and the Noteholders against all costs, expenses,
losses, damages, claims and liabilities, including reasonable fees and expenses
of counsel, which may be asserted against or incurred by any of them as a result
of third party claims arising out of the events or facts giving rise to such
breach.
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SECTION 4.8. SERVICING FEE. The "SERVICING FEE" for each Settlement Date
shall be equal to the product of one-twelfth times the Servicing Fee Percentage
times the average of the Aggregate Principal Balance of the Eligible Receivables
on the first day of the related Accrual Period and on the last day of such
Accrual Period. The Servicing Fee shall also include all late fees, prepayment
charges including, in the case of a Rule of 78's Receivable that is prepaid in
full, to the extent not required by law to be remitted to the related Obligor,
the difference between the Principal Balance of such Rule of 78's Receivable
(plus accrued interest to the date of prepayment) and the principal balance of
such Receivable computed according to the "Rule of 78's", and other
administrative fees or similar charges allowed by applicable law with respect to
Receivables, collected (from whatever source) on the Receivables. If the Backup
Servicer becomes the successor Servicer, the "Servicing Fee" payable to the
Backup Servicer as successor Servicer shall be determined in accordance with the
Servicing Assumption Agreement.
SECTION 4.9. SERVICER'S CERTIFICATE. No later than 12:00 noon New York City
time on each Determination Date, the Servicer shall deliver (in
computer-readable format reasonably acceptable to each such Person) to the
Trustee, each Note Purchaser, the Backup Servicer and the Purchaser, a
certificate substantially in the form of EXHIBIT A hereto (a "SERVICER'S
CERTIFICATE") containing among other things, (i) all information necessary to
enable the Trustee to make the distributions required by SECTION 5.7, (ii) all
information necessary for the Trustee to send statements to the Noteholders and
the Note Purchasers pursuant to SECTION 5.8(B) and 5.9, (iii) a listing of all
Purchased Receivables purchased as of the related Accounting Date, identifying
the Receivables so purchased, (iv) the calculation of the Class A Borrowing Base
(including the CPS Borrowing Base and the TFC Borrowing Base) and the Class B
Borrowing Base, in each case as of the last day of the related Accrual Period
and (v) all information necessary to enable the Backup Servicer to verify the
information specified in SECTION 4.14(B) and to complete the accounting required
by SECTION 5.9. In addition to the information set forth in the preceding
sentence, each Servicer's Certificate shall also contain the following
information: (a) whether a Servicer Termination Event or any other Funding
Termination Event has occurred; (b) the Servicer Delinquency Ratio as of the end
of the Related Accrual Period; (c) the Servicer Loss Ratio as of such
Determination Date; (d) so long as the Servicer is CPS, a certification that the
Servicer is in compliance with the financial covenants contained in Sections
10.1(i), (j), (k) and (l) of this Agreement; and (e) such other information
reasonably requested by any Note Purchaser or any Noteholder. The Servicer shall
deliver to the Trustee, the Noteholders, the Note Purchasers, the Backup
Servicer and the Purchaser a hard copy (which may be a facsimile) of any such
Servicer's Certificate upon request of such Person.
SECTION 4.10. ANNUAL STATEMENT AS TO COMPLIANCE, NOTICE OF SERVICER
TERMINATION EVENT.
(a) The Servicer shall deliver to the Purchaser, to the Trustee, the
Note Purchasers and to the Noteholders and the Backup Servicer, on or
before February 28 of each year beginning February 28, 2007 (in the case of
the Class A Note Purchaser and the Class A Noteholders) or February 28,
2008 (in the case of each Class B Note Purchaser and the Class B
Noteholders), an Officer's Certificate, dated as of December 31 of the
preceding year, stating that (i) a review of the activities of the Servicer
during the preceding 12-month period (or in the case of the first such
certificate for the Class B Note Purchasers and the Class B Noteholders,
the period from the initial Cutoff Date for the first Class B Funding Date
to December 31, 2007) and of its performance under this Agreement has been
made under such officer's supervision and (ii) to the best of such
officer's knowledge, based on such review, the Servicer has fulfilled all
its obligations under this Agreement throughout such year (or, in the case
of the first such certificate, such shorter period), or, if there has been
a default in the fulfillment of any such obligation, specifying each such
default known to such officer and the nature and status thereof.
(b) The Servicer shall deliver to the Trustee, the Noteholders, the
Note Purchasers and the Backup Servicer, promptly after having obtained
knowledge thereof, but in no event later than two (2) Business Days
thereafter, written notice in an Officer's Certificate of any event which
with the giving of notice or lapse of time, or both, would become a
Servicer Termination Event under SECTION 10.1.
SECTION 4.11. INDEPENDENT ACCOUNTANTS' REPORTS. The Servicer shall cause a
firm of nationally recognized independent certified public accountants (the
"INDEPENDENT ACCOUNTANTS"), who may also render other services to the Servicer
or to the Purchaser, to deliver to the Trustee, the Backup Servicer, the Note
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Purchasers and the Noteholders, on or before March 31 of each year beginning
March 31, 2007, a report dated as of December 31 of the preceding year in form
and substance reasonably acceptable to the Note Purchasers (the "ACCOUNTANTS'
REPORT") and reviewing the Servicer's activities during the preceding 12-month
period, addressed to the Board of Directors of the Servicer, to the Trustee, the
Backup Servicer, the Note Purchasers and the Noteholders, to the effect that
such firm has examined the financial statements of the Servicer and issued its
report therefor and that such examination (1) was made in accordance with
generally accepted auditing standards, and accordingly included such tests of
the accounting records and such other auditing procedures as such firm
considered necessary in the circumstances; (2) included tests relating to auto
loans serviced for others in accordance with the requirements of the Uniform
Single Attestation Program for Mortgage Bankers (the "PROGRAM"), to the extent
the procedure in the Program are applicable to the servicing obligations set
forth in this Agreement; (3) included an examination of the delinquency and loss
statistics relating to the Servicer's portfolio of automobile and light truck
installment sale contracts and promissory notes and security agreements; and (4)
except as described in the report, disclosed no exceptions or errors in the
records relating to automobile and light truck loans serviced for others that,
in the firm's opinion, paragraph four of the Program requires such firm to
report. The accountant's report shall further state that (1) a review in
accordance with agreed upon procedures was made of two randomly selected
Servicer's Certificates; (2) except as disclosed in the report, no exceptions or
errors in the Servicer's Certificates were found; and (3) the delinquency and
loss information relating to the Receivables and the stated amount of Liquidated
Receivables, if any, contained in the Servicer's Certificates were found to be
accurate. In the event such firm requires the Trustee and/or the Backup Servicer
to agree to the procedures performed by such firm, the Servicer shall direct the
Trustee and/or the Backup Servicer, as applicable, in writing to so agree; it
being understood and agreed that the Trustee and/or the Backup Servicer will
deliver such letter of agreement in conclusive reliance upon the direction of
the Servicer, and neither the Trustee nor the Backup Servicer makes any
independent inquiry or investigation as to, and shall have no obligation or
liability in respect of, the sufficiency, validity or correctness of such
procedures. The Report will also indicate that the firm is independent of the
Servicer within the meaning of the Code of Professional Ethics of the American
Institute of Certified Public Accountants.
SECTION 4.12. INDEPENDENT ACCOUNTANTS' REVIEW OF RECEIVABLE FILES.
Commencing on March 31, 2007 and, thereafter on each June 30, September 30,
December 31 and March 31 (or, with respect to each such date, upon the date of
the closing of Seller's next occurring "CPS Auto Receivables Trust" (or similar)
term securitization transaction, provided that such review is not made more than
120 days after the immediately preceding review) prior to the Class A Final
Scheduled Settlement Date, to the extent that the Class A Invested Amount on any
day in the calendar quarter then ending was greater than $25 million (or such
other dates as the Controlling Note Purchaser may determine in its reasonable
discretion from time to time by prior written notice to the Seller, the Servicer
and the Trustee), the Seller at its own expense shall cause Independent
Accountants reasonably acceptable to the Controlling Note Purchaser to conduct a
post-funding review of the Seller's compliance with its stated underwriting
policies and verify certain characteristics of the Receivables as of each
Funding Date. The Independent Accountants shall within ten Business Days
complete such physical inspection and limited review and execute and deliver to
Seller, the Servicer, the Trustee, each Note Purchaser and each Noteholder a
report summarizing the findings, which report shall be delivered in any case
within 120 days of the previous report delivered in accordance with this Section
4.12. If such review reveals, in the Controlling Note Purchaser's reasonable
opinion, an unsatisfactory number of exceptions, the Controlling Note Purchaser,
in its reasonable discretion, may require a full review of a larger sample of
the Receivables by the Independent Accountants at the expense of the Seller.
SECTION 4.13. ACCESS TO CERTAIN DOCUMENTATION AND INFORMATION REGARDING
RECEIVABLES. The Servicer shall provide to representatives of the Trustee, the
Backup Servicer, each Note Purchaser and each Noteholder reasonable access to
the documentation regarding the Receivables. In each case, such access shall be
afforded without charge but only upon reasonable request and during normal
business hours. Nothing in this Section shall derogate from the obligation of
the Servicer to observe any applicable law prohibiting disclosure of information
regarding the Obligors, and the failure of the Servicer to provide access as
provided in this Section as a result of such obligation shall not constitute a
breach of this Section.
SECTION 4.14. VERIFICATION OF SERVICER'S CERTIFICATE.
(a) Concurrently with the delivery by the Servicer of the Servicer's
Certificate each month, the Servicer will deliver to the Trustee and the
Backup Servicer and each Note Purchaser a computer diskette (or other
electronic transmission) in a format acceptable to the Trustee and the
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Backup Servicer containing information with respect to the Receivables as
of the close of business on the last day of the preceding Accrual Period
which information is necessary for preparation of the Servicer's
Certificate. The Backup Servicer shall use such computer diskette (or other
electronic transmission) to verify certain information specified in SECTION
4.14(b) contained in the Servicer's Certificate delivered by the Servicer,
and the Backup Servicer shall notify the Servicer, the Note Purchasers and
the Noteholders of any discrepancies on or before the second Business Day
following the Determination Date. In the event that the Backup Servicer
reports any discrepancies, the Servicer and the Backup Servicer shall
attempt to reconcile such discrepancies by the related Settlement Date, but
in the absence of a reconciliation, the Servicer's Certificate shall
control for the purpose of calculations and distributions pursuant to
clauses (i) through (xi) of Section 5.7(a) hereof and clauses (i) through
(iii) of Section 5.7(b) hereof, in each case with respect to the related
Settlement Date. No payments shall be made to the Deposit Account pursuant
to clause (xii) of Section 5.7(a) hereof or clause (iv) of Section 5.7(b)
hereof, in each case until any discrepancies shall have been reconciled. In
the event that the Backup Servicer and the Servicer are unable to reconcile
discrepancies with respect to a Servicer's Certificate by the related
Settlement Date, the Backup Servicer shall notify the Note Purchasers and
the Noteholders of such discrepancy in writing and the Servicer shall cause
a firm of Independent Accountants, at the Servicer's expense, to audit the
Servicer's Certificate and, prior to the fifth day of the following
calendar month, reconcile the discrepancies. The effect, if any, of such
reconciliation shall be reflected in the Servicer's Certificate for such
next succeeding Determination Date. Other than the duties specifically set
forth in this Agreement, the Backup Servicer shall have no obligations
hereunder, including, without limitation, to supervise, verify, monitor or
administer the performance of the Servicer. The Backup Servicer shall have
no liability for any actions taken or omitted by the Servicer. The duties
and obligations of the Backup Servicer shall be determined solely by the
express provisions of this Agreement and no implied covenants or
obligations shall be read into this Agreement against the Backup Servicer.
(b) The Backup Servicer shall review each Servicer's Certificate
delivered pursuant to Section 4.14(a) and shall:
(i) confirm that such Servicer's Certificate is complete on its face;
(ii) load the computer diskette (which shall be in a format acceptable
to the Backup Servicer) received from the Servicer pursuant to SECTION
4.14(A) hereof, confirm that such computer diskette is in a readable form
and calculate and confirm the Aggregate Principal Balance of the
Receivables for the most recent Settlement Date; and
(iii) confirm that the Available Funds, the Class B Available Funds,
the Class A Noteholder's Principal Distributable Amount, the Class A
Noteholder's Interest Distributable Amount, the Class B Noteholder's
Principal Distributable Amount, the Class B Noteholder's Interest
Distributable Amount, the Servicing Fee, the Backup Servicing Fee, the
Trustee Fee, the Servicer Delinquency Ratio and the Servicer Loss Ratio in
the Servicer's Certificate are accurate based solely on the recalculation
of the Servicer's Certificate.
(c) Within 30 days of the effective date of any renewal of the Term of
the Class A Commitment pursuant to Section 2.05 of the Class A Note
Purchase Agreement, the Backup Servicer will cause an affiliate of the
Backup Servicer to data map to its servicing system all servicing/loan file
information, including all relevant borrower contact information such as
address and phone numbers as well as loan balance and payment information,
including comment histories and collection notes. On or before the fifth
calendar day of each month, the Servicer will provide to an affiliate of
the Backup Servicer and to each Note Purchaser an electronic transmission
of all servicing/loan information, including all relevant borrower contact
information such as address and phone numbers as well as loan balance and
payment information, including comment histories and collection notes, and
the Backup Servicer will cause such affiliate to review each file to ensure
that it is in readable form and verify that the data balances conform to
the trial balance reports received from the Servicer. Additionally, the
Backup Servicer shall cause such affiliate to store each such file.
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SECTION 4.15. RETENTION AND TERMINATION OF SERVICER. The Servicer hereby
covenants and agrees to act as such under this Agreement for monthly terms
commencing on the Class A Closing Date, with the most recent of such terms
commencing as of the date hereof and ending on February 28, 2007, which term may
be extended by the Controlling Note Purchaser for successive monthly terms
pursuant to written instructions delivered by the Controlling Note Purchaser to
the Servicer and the Trustee (or, at the discretion of the Controlling Note
Purchaser exercised pursuant to revocable written standing instructions from
time to time to the Servicer and the Trustee, for any specified number of terms
greater than one), until such time as the Notes, all other Secured Obligations
and any and all other amounts due and payable to the Note Purchasers and the
Noteholders pursuant to the Basic Documents have been paid in full (each such
notice, including each notice pursuant to standing instructions, which shall be
deemed delivered at the end of successive terms for so long as such instructions
are in effect, a "SERVICER EXTENSION NOTICE"). The Servicer hereby agrees that,
upon its receipt of any such Servicer Extension Notice or other extension of its
term as Servicer, the Servicer shall become bound, for the duration of the term
covered by such Servicer Extension Notice or for the monthly term, as
applicable, to continue as the Servicer subject to and in accordance with the
other provisions of this Agreement. The Trustee agrees that if as of the
Business Day succeeding the Settlement Date occurring during any term of the
Servicer, the Trustee shall not have received any Servicer Extension Notice as
of such date, the Trustee shall, within five days thereafter, give written
notice of such non-receipt to each Note Purchaser and the Servicer and the
Servicer's term shall not be extended unless a Servicer Extension Notice is
received on or before the last day of such term. The Controlling Note Purchaser
shall have no liability to the other Note Purchasers or the Noteholders arising
out of or relating to any renewal or non-renewal of the term of the Servicer
pursuant to this Section 4.15.
SECTION 4.16. ERRORS AND OMISSIONS POLICY AND FIDELITY BOND. The Servicer
shall maintain an errors and omissions insurance policy and a fidelity bond in
such form and amount as is customary for comparable servicers engaged in the
business of servicing motor vehicle receivables.
SECTION 4.17. SUBSERVICING ARRANGEMENTS. The Servicer may arrange for the
subservicing of all or any portion of the Receivables by a subservicer;
provided, however, that such subservicing arrangement must provide for the
servicing of such Receivables in a manner consistent with the servicing
arrangements contemplated hereunder; provided, further, that any such
subservicing arrangement with a Person that is not an Affiliate of CPS shall
require the prior written consent of the Controlling Note Purchaser and prior
written notice to the Class B Note Purchasers. Unless the context otherwise
requires, references in this Agreement to actions taken or to be taken by the
Servicer in servicing the Receivables include actions taken or to be taken by a
subservicer on behalf of the Servicer. Notwithstanding the provisions of any
subservicing agreement, any of the provisions of this Agreement relating to
agreements or arrangements between the Servicer and a subservicer or reference
to actions taken through a subservicer or otherwise, the Servicer shall remain
obligated and liable to the Purchaser, the Trustee, the Backup Servicer, the
Note Purchasers and the Noteholders for the servicing and administration of the
Receivables in accordance with the provisions of this Agreement without
diminution of such obligation or liability by virtue of such subservicing
agreements or arrangements or by virtue of indemnification from the subservicer
and to the same extent and under the same terms and conditions as if the
Servicer alone were servicing and administering the Receivables. All actions of
each subservicer performed pursuant to a subservicing arrangement shall be
performed as an agent of the Servicer with the same force and effect as if
performed directly by the Servicer. The subservicer under each subservicing
arrangement shall be engaged by the Servicer upon terms consistent with the
engagement of the Servicer hereunder. Each subservicer shall be simultaneously
terminated in the event that the Servicer is terminated hereunder. In addition,
if a subservicing arrangement relates to TFC Managed Receivables, the related
subservicer may be terminated by the Controlling Note Purchaser upon the
occurrence of a TFC Funding Termination Event. The fees paid by the Servicer to
the related subservicer under each subservicing arrangement shall not exceed the
Servicing Fees paid to the Servicer hereunder.
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ARTICLE V
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ACCOUNTS; DISTRIBUTIONS; STATEMENTS TO THE NOTEHOLDERS
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SECTION 5.1. ESTABLISHMENT OF PLEDGED ACCOUNTS.
(a) The Trustee, on behalf of the Noteholders and the Note Purchasers,
shall establish and maintain in its own name an Eligible Account (the
"COLLECTION ACCOUNT"), bearing a designation clearly indicating that the
funds deposited therein are held for the benefit of the Trustee on behalf
of the Noteholders and the Note Purchasers. The Collection Account shall
initially be established with the Trustee.
(b) The Trustee, on behalf of the Noteholders and the Note Purchasers,
shall establish and maintain in its own name an Eligible Account (the "NOTE
DISTRIBUTION ACCOUNT"), bearing a designation clearly indicating that the
funds deposited therein are held for the benefit of the Trustee on behalf
of the Noteholders and the Note Purchasers. The Note Distribution Account
shall initially be established with the Trustee.
(c) The Trustee, on behalf of the Noteholders and the Note Purchasers,
shall maintain in its own name an Eligible Account (the "PRINCIPAL FUNDING
ACCOUNT"), bearing a designation clearly indicating that the funds
deposited therein are held for the benefit of the Trustee on behalf of the
Noteholders and the Note Purchasers. The Principal Funding Account shall
initially be established with the Trustee.
(d) Funds on deposit in the Collection Account, the Note Distribution
Account and the Principal Funding Account (collectively, the "PLEDGED
ACCOUNTS") shall be invested by the Trustee (or any custodian with respect
to funds on deposit in any such account) in Eligible Investments selected
in writing by the Servicer or, after the resignation or termination of CPS
as Servicer, by the Controlling Note Purchaser (pursuant to standing
instructions or otherwise) or, with respect to Eligible Investments related
solely to the Class B Available Funds, the Class B Note Purchasers. All
such Eligible Investments shall be held by or on behalf of the Trustee for
the benefit of the applicable Noteholders and the applicable Note
Purchasers. Other than as permitted by the Controlling Note Purchaser,
funds on deposit in any Pledged Account shall be invested in Eligible
Investments that will mature so that such funds will be available at the
close of business on the Business Day immediately preceding the following
Settlement Date. Funds deposited in a Pledged Account on the day
immediately preceding a Settlement Date upon the maturity of any Eligible
Investments are not required to be invested overnight. All Eligible
Investments will be held to maturity. Notwithstanding anything herein to
the contrary, none of the Class A Note Purchaser or the Class A Noteholders
shall have any right, title or interest in, or any right to direct the
Trustee with respect to, any Class B Available Funds (or Eligible
Investments or Investment Earnings related thereto) on deposit from time to
time in the Pledged Accounts.
(e) All investment earnings of moneys deposited in the Pledged
Accounts shall be deposited (or caused to be deposited) by the Trustee in
the Collection Account for distribution pursuant to SECTION 5.7(a) and,
with respect to Investment Earnings related solely to the Class B Available
Funds, SECTION 5.7(b), as applicable, and any loss resulting from such
investments shall be charged to such account. The Servicer will not direct
the Trustee to make any investment of any funds held in any of the Pledged
Accounts unless the security interest granted and perfected in such account
will continue to be perfected in such investment, in either case without
any further action by any Person, and, in connection with any direction to
the Trustee to make any such investment, if requested by the Trustee, the
Servicer shall deliver to the Trustee an Opinion of Counsel, acceptable to
the Trustee, to such effect.
(f) The Trustee shall not in any way be held liable by reason of any
insufficiency in any of the Pledged Accounts resulting from any loss on any
Eligible Investment included therein except for losses attributable to the
Trustee's negligence or bad faith or its failure to make payments on such
Eligible Investments issued by the Trustee, in its commercial capacity as
principal obligor and not as trustee, in accordance with their terms.
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(g) If (i) the Servicer or the Controlling Note Purchaser or, solely
with respect to the Class B Available Funds, the Class B Note Purchasers,
as applicable, shall have failed to give investment directions for any
funds on deposit in the Pledged Accounts to the Trustee by 1:00 p.m.
Eastern Time (or such other time as may be agreed by the Purchaser and
Trustee) on any Business Day; or (ii) an Event of Default shall have
occurred and be continuing under the Indenture but the Notes shall not have
been declared due and payable, or, if the Notes shall have been declared
due and payable following an Event of Default, amounts collected or
receivable from the Receivables and the Other Conveyed Property are being
applied as if there had not been such a declaration; then the Trustee
shall, to the fullest extent practicable, invest and reinvest funds in the
Pledged Accounts in an Eligible Investment described in PARAGRAPH (a) OR
(f) of the definition thereof.
(h) The Trustee shall possess all right, title and interest in all
funds on deposit from time to time in the Pledged Accounts and in all
proceeds thereof (including all Investment Earnings on the Pledged
Accounts) and all such funds, investments, proceeds and income shall be
part of the Other Conveyed Property and the Collateral, except that any
such funds, investments, proceeds and income that relate to the Class B
Available Funds shall be solely part of the Additional Class B Collateral.
Except as otherwise provided herein, the Pledged Accounts shall be under
the sole dominion and control of the Trustee for the benefit of the
Noteholders and the Note Purchasers; provided, however, that none of the
Class A Note Purchaser or the Class A Noteholders shall have any right,
title or interest in any Class B Available Funds (or Eligible Investments
or Investment Earnings related thereto) on deposit from time to time in the
Pledged Accounts. If at any time any of the Pledged Accounts ceases to be
an Eligible Account, the Trustee with the consent of the Controlling Note
Purchaser shall within five Business Days establish a new Pledged Account
as an Eligible Account and shall transfer any cash and/or any investments
from the Pledged Account that is no longer an Eligible Account to such new
Pledged Account. The Trustee shall promptly notify the Servicer, each Note
Purchaser and each Noteholder of any change in the location of any of the
aforementioned accounts. In connection with the foregoing, the Trustee
agrees that, in the event that any of the Pledged Accounts are not accounts
with the Trustee, the Trustee shall notify the Servicer, each Note
Purchaser and each Noteholder in writing promptly upon any of such Pledged
Accounts ceasing to be an Eligible Account.
(i) Notwithstanding anything to the contrary herein or in any other
document relating to a Trust Account, the "securities intermediary's
jurisdiction" (within the meaning of Section 8-110 of the UCC) or the
"bank's jurisdiction" (with the meaning of 9-304 of the UCC) as applicable,
with respect to each Pledged Account shall be the State of New York.
(j) With respect to the Pledged Account Property, the Trustee agrees that:
(i) any Pledged Account Property that is held in deposit accounts
shall be held solely in an Eligible Account; and, except as otherwise
provided herein, each such Eligible Account shall be subject to the
exclusive custody and control of the Trustee and the Trustee shall
have sole signature authority with respect thereto;
(ii) any Pledged Account Property shall be delivered to the
Trustee in accordance with the definition of "DELIVERY";
(iii) except as provided in clause (iv) below, the Servicer shall
have the power, revocable by the Controlling Note Purchaser, to
instruct the Trustee to make withdrawals and payments from the Pledged
Accounts for the purpose of permitting the Servicer and the Trustee to
carry out their respective duties hereunder; and
(iv) the Servicer shall have the power, revocable by the Class B
Note Purchasers, to instruct the Trustee to make withdrawals and
payments of Class B Available Funds from the Pledged Accounts for the
purpose of permitting the Servicer and the Trustee to carry out their
respective duties hereunder.
SECTION 5.2. ESTABLISHMENT OF DEPOSIT ACCOUNT
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The Trustee shall establish and maintain the Deposit Account in the name of
CPS. The Deposit Account shall be established with the Trustee as the Deposit
Account Bank (as defined in the Account Control Agreement) and governed and
maintained in accordance with the provisions of the Account Control Agreement.
All distributions made by the Issuer, the Purchaser, the Seller or the Servicer
to CPS in respect of CPS's equity interest in the Issuer shall be deposited
directly into the Deposit Account. Amounts on deposit in the Deposit Account
shall be invested by the Trustee (or any custodian with respect to funds on
deposit in any such account) in Eligible Investments selected in writing by CPS
(pursuant to standing instructions or otherwise). All investment earnings of
moneys deposited in the Deposit Account shall be held in the Deposit Account
until withdrawn by CPS (unless otherwise provided pursuant to Section 2 of the
Account Control Agreement) or, upon foreclosure, the party entitled thereto
pursuant to the Account Control Agreement, and any loss resulting from such
investments shall be charged to the Deposit Account.
SECTION 5.3. CERTAIN REIMBURSEMENTS TO THE SERVICER. The Servicer will be
entitled to be reimbursed from amounts on deposit in the Collection Account with
respect to an Accrual Period for amounts previously deposited in the Collection
Account but later determined by the Servicer to have resulted from mistaken
deposits or postings or checks returned for insufficient funds. The amount to be
reimbursed hereunder shall be paid to the Servicer on the related Settlement
Date pursuant to SECTION 5.7(A)(II) upon certification by the Servicer of such
amounts prior to such Settlement Date and the provision of such information to
the Trustee and the Note Purchasers prior to such Settlement Date as may be
necessary in the opinion of the Controlling Note Purchaser to verify the
accuracy of such certification; provided, however, that the Servicer must
provide such certification within three months of it becoming aware of such
mistaken deposit, posting or returned check. In the event that the Controlling
Note Purchaser has not received evidence satisfactory to it of the Servicer's
entitlement to reimbursement pursuant to this Section prior to such Settlement
Date, the Controlling Note Purchaser shall give the Trustee notice to such
effect, following receipt of which the Trustee shall not make a distribution to
the Servicer in respect of such amount pursuant to SECTION 5.7, or if prior
thereto the Servicer has been reimbursed pursuant to SECTION 5.7, the Trustee
shall withhold such amounts from amounts otherwise distributable to the Servicer
on the next succeeding Settlement Date.
SECTION 5.4. APPLICATION OF COLLECTIONS. All collections for each Accrual
Period shall be applied by the Servicer as follows:
With respect to each Receivable (other than a Purchased Receivable),
payments by or on behalf of the Obligor shall be applied, in the case of a Rule
of 78's Receivable, first, to the Scheduled Receivable Payment of such Rule of
78's Receivable and, second, to any late fees accrued with respect to such Rule
of 78's Receivable and, in the case of a Simple Interest Receivable, to interest
and principal in accordance with the Simple Interest Method.
SECTION 5.5. [RESERVED].
SECTION 5.6. DEPOSITS INTO THE COLLECTION ACCOUNT. The Servicer, the
Issuer, the Purchaser or the Seller, as the case may be, shall each deposit or
cause to be deposited in the Collection Account (i) the Available Funds and the
Class B Available Funds, and (ii) any amounts due the Trustee, any Noteholder,
any Note Purchaser, the Backup Servicer, the Purchaser (in each case, to the
extent not paid directly thereto) in respect of any indemnification obligation
of the Servicer, the Issuer, the Purchaser or the Seller under the Basic
Documents.
SECTION 5.7. DISTRIBUTIONS.
(a) On each Settlement Date prior to the acceleration of the Notes
following an Event of Default, the Trustee (based on the information
contained in the Servicer's Certificate delivered on the related
Determination Date) shall make the following distributions (without
duplication) in the following order of priority from the Available Funds on
deposit in the Collection Account:
(i) to the Backup Servicer and the Trustee, as applicable, pro
rata, in respect of the Backup Servicing Fee (so long as the Backup
Servicer is not acting as successor Servicer), the Trustee Fee,
reasonable expenses incurred in connection with transitioning the
servicing to the Backup Servicer and all other reasonable
out-of-pocket expenses thereof (including counsel fees and expenses)
and all unpaid Backup Servicing Fees (so long as the Backup Servicer
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is not acting as successor Servicer), Trustee Fees, reasonable
expenses incurred in connection with transitioning the servicing to
the Backup Servicer and all other reasonable out-of-pocket expenses
(including counsel fees and expenses) from prior Accrual Periods;
PROVIDED, HOWEVER, that expenses payable to each of the Backup
Servicer and Trustee pursuant to this clause (i), excluding amounts
paid to the Backup Servicer in respect of transition expenses, shall
be limited to a total of $25,000 per annum (calculated from July 1,
2006 to June 30, 2007, and each succeeding 364-day period to the
extent the Term of the Class A Notes is extended pursuant to the Class
A Note Purchase Agreement); PROVIDED, FURTHER, that the amount of
transition expenses distributed to the Backup Servicer during the term
of this Agreement pursuant to this clause (i) shall in no case exceed
$50,000 in the aggregate;
(ii) to the Servicer in respect of the Servicing Fee and all
unpaid Servicing Fees from prior Accrual Periods and all
reimbursements to which the Servicer is entitled pursuant to SECTION
5.3 and an amount, not to exceed $35,000 per annum, for payment to the
taxing authority of the State of Texas on behalf of the Issuer for any
Texas franchise or similar tax due and owing by the Issuer (or with
respect to the Receivables) and not timely paid by the Servicer in
accordance with Section 9.1(m);
(iii) to the Note Distribution Account, the Class A Noteholders'
Interest Distributable Amount for such Accrual Period and the Class A
Unused Facility Fee for such Settlement Date;
(iv) to the Note Distribution Account, the Class A Noteholders'
Principal Distributable Amount (including without limitation that
portion thereof arising out of any Class A Margin Call) for such
Settlement Date;
(v) to the Note Distribution Account, any and all other fees,
expenses, indemnity payments (to the extent not paid directly) and all
other amounts owing to the Class A Note Purchaser and/or any Class A
Noteholder under the Basic Documents;
(vi) to the Note Distribution Account, the Class B Noteholders'
Interest Distributable Amount for such Accrual Period;
(vii) to the Note Distribution Account, the Class B Noteholders'
Principal Distributable Amount (including without limitation that
portion thereof arising out of any Class B Margin Call) for such
Settlement Date;
(viii) to the Servicer for payment to the taxing authority of the
State of Texas on behalf of the Issuer for any Texas franchise or
similar tax due and owing by the Issuer (or with respect to the
Receivables), the amount, if any, to be paid to such taxing authority
after giving effect to the distribution pursuant to clause (ii) above
and not timely paid by the Servicer in accordance with Section 9.1(m);
(ix) to any successor Servicer, its servicing fees in excess of
the Servicing Fee and, to the extent not previously paid by the
predecessor Servicer pursuant to this Agreement, reasonable transition
expenses (up to a maximum of $50,000 in the aggregate over the term of
this Agreement) incurred in becoming the successor Servicer;
(x) to the Backup Servicer and the Trustee, as applicable, pro
rata, in respect of reasonable out-of-pocket expenses thereof
(including counsel fees and expenses) and reasonable out-of-pocket
expenses (including counsel fees and expenses) from prior Accrual
Periods to the extent not paid thereto pursuant to SECTION 5.7(A)(I)
above;
(xi) to the Note Distribution Account, the Class B Commitment Fee
and all other fees, expenses, indemnity payments (to the extent not
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paid directly) and all other amounts owing to a Class B Note Purchaser
and/or any Class B Noteholder under the Basic Documents and a Class B
note purchaser and/or any Class B noteholder under the Bear Basic
Documents (including without limitation, all Bear Secured
Obligations); and
(xii) to the Deposit Account, the remaining amount, if any;
provided that no amounts shall be paid to the Issuer pursuant to this
priority (xii) until any amounts owed to any Noteholder and any Note
Purchaser pursuant to the Basic Documents and any Class B noteholder
and any Class B note purchaser under the Bear Basic Documents have
been paid in full and any discrepancies in the Servicer's Certificate
shall have been reconciled pursuant to Section 4.14(a) hereof.
(b) On each Settlement Date prior to the acceleration of the Notes
following an Event of Default, the Trustee (based on the information
contained in the Servicer's Certificate delivered on the related
Determination Date) shall make the following distributions (without
duplication) in the following order of priority from the Class B Available
Funds on deposit in the Collection Account:
(i) to the Note Distribution Account, the Class B Noteholders'
Interest Distributable Amount for such Accrual Period, to the extent
not previously distributed pursuant to Section 5.7(a)(vi);
(ii) to the Note Distribution Account, the Class B Noteholders'
Principal Distributable Amount (including without limitation that
portion thereof arising out of any Class B Margin Call) for such
Settlement Date, to the extent not previously distributed pursuant to
Section 5.7(a)(vii);
(iii) to the Note Distribution Account, the Class B Commitment
Fee and all other fees, expenses, indemnity payments (to the extent
not paid directly) and all other amounts owing to a Class B Note
Purchaser and/or any Class B Noteholder under the Basic Documents and
a Class B note purchaser and/or any Class B noteholder under the Bear
Basic Documents (including without limitation, all Bear Secured
Obligations), to the extent not previously distributed pursuant to
Section 5.7(a)(xi); and
(iv) to the Deposit Account, any remaining amounts; provided that
no amounts shall be paid to the Issuer pursuant to this priority (iv)
until any amounts owed to any Class B Noteholder and any Class B Note
Purchaser pursuant to the Basic Documents and any Class B noteholder
and any Class B note purchaser under the Bear Basic Documents have
been paid in full and any discrepancies in the Servicer's Certificate
shall have been reconciled pursuant to Section 4.14(a) hereof.
(c) Following an acceleration of the Notes after an Event of Default,
any money or property that the Trustee collects pursuant to Article V of
the Indenture shall be paid pursuant to Section 5.6(a) of the Indenture;
provided, however, that Available Funds and Class B Available Funds shall
be applied in the order of priority specified in SECTION 5.7(a) and SECTION
5.7(b) above, respectively.
(d) In the event that the Collection Account is maintained with an
institution other than the Trustee, the Servicer shall instruct and cause
such institution to make all deposits and distributions pursuant to
SECTIONS 5.7(a) and 5.7(b) on the related Settlement Date.
SECTION 5.8. NOTE DISTRIBUTION ACCOUNT.
(a) On each Settlement Date (based solely on the information contained
in the Servicer's Certificate), the Trustee shall distribute all Available
Funds on deposit in the Note Distribution Account to the Noteholders in
respect of the Notes to the extent of amounts due and unpaid on the Notes
for principal and interest, and to the Note Purchasers and the Noteholders
in respect of other amounts due and owing under the Basic Documents (and
the Class B note purchasers and the Class B noteholders in respect of
amounts due and owing under the Bear Basic Documents, as applicable), in
the following amounts and in the following order of priority (without
duplication):
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(i) to the Class A Noteholders, the Class A Noteholders' Interest
Distributable Amount and the Class A Unused Facility Fee; PROVIDED
that if there are not sufficient Available Funds in the Note
Distribution Account to pay the entire Class A Noteholders' Interest
Distributable Amount and Class A Unused Facility Fee then due on the
Class A Notes, the amount in the Note Distribution Account shall be
applied to the payment of such Class A Noteholders Interest
Distributable Amount and the Class A Unused Facility Fee, pro rata,
among the Holders of the Class A Notes;
(ii) to the Class A Noteholders, in reduction of the Class A
Invested Amount, the Class A Noteholders' Principal Distributable
Amount (including without limitation that portion thereof arising out
of any Class A Margin Call) to pay principal on the Class A Notes
until the outstanding principal amount of the Class A Notes has been
reduced to zero; PROVIDED that if there are not sufficient Available
Funds remaining in the Note Distribution Account after application of
clause (i) above to pay the entire Class A Noteholders' Principal
Distributable Amount (including without limitation that portion
thereof arising out of any Class A Margin Call) then due on the Class
A Notes, the Available Funds remaining in the Note Distribution
Account shall be applied to the payment of such Class A Noteholders'
Principal Distributable Amount (including without limitation that
portion thereof arising out of any Class A Margin Call), pro rata,
among the Holders of the Class A Notes;
(iii) sequentially, to the Class A Note Purchaser and the Class A
Noteholders, in that order, any other amounts due the Class A Note
Purchaser and the Class A Noteholders, respectively, pursuant to any
of the Basic Documents; PROVIDED that if there are not sufficient
Available Funds remaining in the Note Distribution Account after
application of clauses (i) and (ii) above to pay all of the other
amounts due to the Class A Note Purchaser and the Class A Noteholders,
respectively, pursuant to the Basic Documents, the Available Funds
remaining in the Note Distribution Account shall be applied to the
payment of such other amounts first, to the Class A Note Purchaser,
until the amounts due and owing to the Class A Note Purchaser have
been reduced to zero, and thereafter, pro rata among the Holders of
the Class A Notes;
(iv) to the Class B Noteholders, the Class B Noteholders'
Interest Distributable Amount; PROVIDED that if there are not
sufficient Available Funds remaining in the Note Distribution Account
after application of clauses (i) through (iii) above to pay the entire
Class B Noteholders' Interest Distributable Amount then due on the
Class B Notes, the Available Funds remaining in the Note Distribution
Account shall be applied to the payment of such Class B Noteholders'
Interest Distributable Amount pro rata among the Holders of the Class
B Notes;
(v) to the Class B Noteholders, in reduction of the Class B
Invested Amount, the Class B Noteholders' Principal Distributable
Amount (including without limitation that portion thereof arising out
of any Class B Margin Call) to pay principal on the Class B Notes
until the outstanding principal amount of the Class B Notes has been
reduced to zero; PROVIDED that if there are not sufficient Available
Funds remaining in the Note Distribution Account after application of
clauses (i) through (iv) above to pay the entire Class B Noteholders'
Principal Distributable Amount (including without limitation that
portion thereof arising out of any Class B Margin Call) then due on
the Class B Notes, the Available Funds remaining in the Note
Distribution Account shall be applied to the payment of such Class B
Noteholders' Principal Distributable Amount (including without
limitation that portion thereof arising out of any Class B Margin
Call) pro rata among the Holders of the Class B Notes;
(vi) to each Class B Note Purchaser, its respective pro rata
portion of the Class B Commitment Fee; PROVIDED that if there are not
sufficient Available Funds remaining in the Note Distribution Account
after application of clauses (i) through (v) above to pay the entire
amount of the Class B Commitment Fee, the Available Funds remaining in
the Note Distribution Account shall be applied to the payment of such
Class B Commitment Fee pro rata among the Class B Note Purchasers; and
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(vii) sequentially, to each Class B Note Purchaser and the Class
B Noteholders (or each Class B note purchaser and the Class B
noteholders under the Bear Basic Documents, as applicable), in that
order, any other amounts due each Class B Note Purchaser and the Class
B Noteholders (or each Class B note purchaser and the Class B
noteholders under the Bear Basic Documents, as applicable),
respectively, pursuant to any of the Basic Documents and the Bear
Basic Documents (including, without limitation, the Bear Secured
Obligations); PROVIDED that if there are not sufficient Available
Funds remaining in the Note Distribution Account after application of
clauses (i) through (vi) above to pay all of the other amounts due to
the Class B Note Purchaser and the Class B Noteholders (or each Class
B note purchaser and the Class B noteholders under the Bear Basic
Documents, as applicable), respectively, pursuant to the Basic
Documents and the Bear Basic Documents, the Available Funds remaining
in the Note Distribution Account shall be applied to the payment of
such other amounts FIRST, pro rata to each Class B Note Purchaser,
until the amounts due and owing to each Class B Note Purchaser have
been reduced to zero, SECOND, pro rata among the Holders of the Class
B Notes, until the amounts due and owing to each Class B Noteholder
have been reduced to zero, THIRD, pro rata to each Class B note
purchaser under the Bear Basic Documents until the amounts due and
owing to each Class B note purchaser thereunder have been reduced to
zero, and FOURTH, pro rata, among the Class B noteholders under the
Bear Basic Documents, until the amounts due and outstanding thereunder
have been reduced to zero.
(b) On each Settlement Date (based solely on the information
contained in the Servicer's Certificate), the Trustee shall distribute all
Class B Available Funds on deposit in the Note Distribution Account to the
Class B Noteholders in respect of the Class B Notes to the extent of
amounts due and unpaid on the Class B Notes for principal and interest, and
to the Class B Note Purchasers and the Class B Noteholders in respect of
other amounts due and owing under the Basic Documents, and to the Class B
note purchasers and the Class B noteholders in respect of other amounts due
and owing under the Bear Basic Documents (including without limitation, the
Bear Secured Obligations), in the following amounts and in the following
order of priority (without duplication):
(i) to the Class B Noteholders, the Class B Noteholders'
Interest Distributable Amount, to the extent not distributed pursuant
to Section 5.8(a)(iv); PROVIDED that if there are not sufficient Class
B Available Funds in the Note Distribution Account to pay the entire
Class B Noteholders' Interest Distributable Amount then due on the
Class B Notes, the Class B Available Funds in the Note Distribution
Account shall be applied to the payment of such Class B Noteholders'
Interest Distributable Amount pro rata among the Holders of the Class
B Notes;
(ii) to the Class B Noteholders, in reduction of the Class B
Invested Amount, the Class B Noteholders' Principal Distributable
Amount (including without limitation that portion thereof arising out
of any Class B Margin Call), to the extent not distributed pursuant to
Section 5.8(a)(v), to pay principal on the Class B Notes until the
outstanding principal amount of the Class B Notes has been reduced to
zero; PROVIDED that if there are not sufficient Class B Available
Funds remaining in the Note Distribution Account after application of
clause (i) above to pay the entire Class B Noteholders' Principal
Distributable Amount (including without limitation that portion
thereof arising out of any Class B Margin Call) then due on the Class
B Notes, the Class B Available Funds remaining in the Note
Distribution Account shall be applied to the payment of such Class B
Noteholders' Principal Distributable Amount (including without
limitation that portion thereof arising out of any Class B Margin
Call) pro rata among the Holders of the Class B Notes;
(iii) to each Class B Note Purchaser, its respective pro rata
portion of the Class B Commitment Fee, to the extent not distributed
pursuant to Section 5.8(a)(vi); PROVIDED that if there are not
sufficient Class B Available Funds remaining in the Note Distribution
Account after application of clauses (i) and (ii) above to pay the
entire amount of the Class B Commitment Fee, the Class B Available
Funds remaining in the Note Distribution Account shall be applied to
the payment of such Class B Commitment Fee pro rata among the Class B
Note Purchasers; and
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(iv) sequentially, to each Class B Note Purchaser and the Class B
Noteholders (or each Class B note purchaser and the Class B
noteholders under the Bear Basic Documents, as applicable), in that
order, any other amounts due each Class B Note Purchaser and the Class
B Noteholders (or each Class B note purchaser and the Class B
noteholders under the Bear Basic Documents, as applicable),
respectively, pursuant to any of the Basic Documents and the Bear
Basic Documents (including without limitation, the Bear Secured
Obligations), to the extent not previously distributed pursuant to
Section 5.8(a)(vii); PROVIDED that if there are not sufficient Class B
Available Funds remaining in the Note Distribution Account after
application of clauses (i) through (iii) above to pay all of the other
amounts due to the Class B Note Purchaser and the Class B Noteholders
(or each Class B note purchaser and the Class B noteholders under the
Bear Basic Documents, as applicable), respectively, pursuant to the
Basic Documents and the Bear Basic Documents, the Class B Available
Funds remaining in the Note Distribution Account shall be applied to
the payment of such other amounts FIRST, pro rata to each Class B Note
Purchaser, until the amounts due and owing to each Class B Note
Purchaser have been reduced to zero, SECOND, pro rata among the
Holders of the Class B Notes, until the amounts due and owing to each
Class B Noteholder have been reduced to zero, THIRD, pro rata to each
Class B note purchaser under the Bear Basic Documents until the
amounts due and owing to each Class B note purchaser thereunder have
been reduced to zero, and FOURTH, pro rata, among the Class B
noteholders under the Bear Basic Documents, until the amounts due and
outstanding thereunder have been reduced to zero.
(c) On each Settlement Date, the Trustee shall provide or make
available electronically (or, upon written request, by first class mail or
facsimile) to the Noteholders and the Note Purchasers the statement or
statements provided to the Trustee by the Servicer pursuant to SECTION 5.9
hereof on such Settlement Date; PROVIDED HOWEVER, the Trustee shall have no
obligation to provide such information described in this SECTION 5.8(B)
until it has received the requisite information from the Servicer.
SECTION 5.9. STATEMENTS TO NOTEHOLDERS. (a) On the Determination Date (in
accordance with Section 4.9), the Servicer shall provide to the Trustee, the
Note Purchasers and the Noteholders on the related Record Date a copy of the
Servicer's Certificate setting forth at least the following information as to
the Notes to the extent applicable in the form attached hereto as EXHIBIT A:
(i) the amount of such distribution allocable to principal of
each class of Notes;
(ii) the amount of such distribution allocable to interest on or
with respect to each class of Notes;
(iii) the Aggregate Principal Balance as of the close of business
on the last day of the preceding Accrual Period;
(iv) the Class A Invested Amount and the Class B Invested Amount;
(v) the amount of the Servicing Fee paid to the Servicer with
respect to the related Accrual Period, and the amount of any unpaid
Servicing Fees and the change in such amount from the prior Settlement
Date;
(vi) (A) the amount of each of the Backup Servicing Fee and the
Trustee Fee paid to the Backup Servicer and the Trustee as applicable,
with respect to the related Accrual Period, (B) the amount of any
unpaid Backup Servicing Fees and Trustee Fees and the change in such
amounts from the prior Settlement Date, (C) the amount of all expenses
paid to the Trustee and the Backup Servicer, with respect to the
related Accrual Period, and (D) the difference between the maximum per
annum amount payable to the Trustee and Backup Servicer in respect of
expenses (other than servicing transition expenses) as set forth in
Section 5.7(a)(i) and the amount paid to the Backup Servicer and
Trustee year-to-date (to and including the related Settlement Date) in
respect of such expenses;
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(vii) the Class A Noteholders' Interest Carryover Shortfall, the
Class A Noteholders' Principal Carryover Shortfall, the Class B
Noteholders' Interest Carryover Shortfall, and the Class B
Noteholders' Principal Carryover Shortfall, if any;
(viii) the number of Receivables and the aggregate gross amount
scheduled to be paid thereon, including unearned finance and other
charges, for which the related Obligors are delinquent in making
Scheduled Receivable Payments for (a) 31 to 45 days and (b) 46 days or
more, in each case as of the last day of the related Accrual Period;
(ix) the amount of aggregate Realized Losses, if any, for the
related Accrual Period;
(x) the number of, and the aggregate Purchase Amounts for,
Receivables, if any, that were repurchased during the related Interest
Period and summary information as to losses and delinquencies with
respect to the Receivables as of the end of the related Accrual
Period;
(xi) the amount of any Texas Franchise Tax due and owing by the
Issuer to the taxing authority of the State of Texas on or prior to
the related Settlement Date or paid by the Servicer on behalf of the
Issuer since the prior Settlement Date;
(xii) the cumulative amount of Realized Losses from the initial
Cutoff Date to the last day of the related Accrual Period; and
(xiii) the Servicer Delinquency Ratio as of the end of the
related Accrual Period and the Servicer Loss Ratio as of the related
Determination Date.
(b) Within 60 days after the end of each calendar year, commencing
February 28, 2007, the Servicer shall deliver to the Trustee, and the
Trustee shall, provided it has received the necessary information from the
Servicer, promptly thereafter furnish to each Noteholder (a) a report
(prepared by the Servicer) as to the aggregate of the amounts reported
pursuant to subclauses (i), (ii), (v) and (vi) of Section 5.9(a) for such
preceding calendar year, and (b) such information as may be reasonably
requested by any Noteholder or required by the Code and regulations
thereunder, to enable such Noteholder to prepare its Federal and State
income tax returns. The obligation of the Trustee set forth in this
paragraph shall be deemed to have been satisfied to the extent that
substantially comparable information shall be provided by the Servicer to
such Noteholder pursuant to any requirements of the Code.
(c) The Trustee may make available to the Note Purchasers and the
Noteholders via the Trustee's Internet Website, all statements described
herein and, with the consent or at the direction of the Seller, such other
information regarding the Notes and/or the Receivables as the Trustee may
have in its possession, but only with the use of a password provided by the
Trustee. The Trustee will make no representation or warranties as to the
accuracy or completeness of such documents accurately posted and will
assume no responsibility therefor. The Trustee's Internet Website shall be
initially located at XXX.XXXXXXX.XXX or at such other address as shall be
specified by the Trustee from time to time in writing to the Noteholders
and the Note Purchasers. In connection with providing access to the
Trustee's Internet Website, the Trustee may require registration and the
acceptance of a disclaimer. The Trustee shall not be liable for the
dissemination of information in accordance with this Agreement.
SECTION 5.10. DIVIDEND OF INELIGIBLE RECEIVABLES. The Issuer may on the
last day of the month in which any Receivables are sold into a securitization
transaction distribute any Ineligible Receivables to the Seller as a dividend,
free of the deemed security interest referred to in Section 2.2 hereof; PROVIDED
THAT there is no Borrowing Base Deficiency immediately after such dividend.
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ARTICLE VI
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[RESERVED]
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ARTICLE VII
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THE PURCHASER
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SECTION 7.1. REPRESENTATIONS OF PURCHASER. The Purchaser makes the
following representations on which the Noteholders shall be deemed to have
relied in purchasing the Notes and the applicable Note Purchasers shall have
been deemed to have relied in making each Advance. The representations speak as
of the execution and delivery of this Agreement and as of each Funding Date, and
shall survive the sale of the Receivables to the Purchaser and the pledge
thereof to the Trustee for the benefit of the Note Purchasers and the
Noteholders pursuant to the Indenture.
(a) ORGANIZATION AND GOOD STANDING. The Purchaser has been duly
formed and is validly existing as a limited liability company solely under
the laws of the state of Delaware and is in good standing under the laws of
the State of Delaware, with power and authority to own its properties and
to conduct its business as such properties are currently owned and such
business is currently conducted, and had at all relevant times, and now
has, power, authority and legal right to acquire, own and pledge the
Receivables and the Other Conveyed Property pledged to the Trustee for the
benefit of the Note Purchasers and the Noteholders and to enter into and
perform its other obligations under this Agreement and each other Basic
Document to which it is a party.
(b) DUE QUALIFICATION. The Purchaser is duly qualified to do business
as a foreign limited liability company in good standing, and has obtained
all necessary licenses and approvals in all jurisdictions in which the
ownership or lease of property or the conduct of its business (including,
without limitation, (i) the purchase of Receivables from CPS, (ii) the
pledge of Collateral to the Trustee for the benefit of the Note Purchasers
and the Noteholders pursuant to Granting Clause I of the Indenture, (iii)
the pledge of 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, (iv) the pledge of the UBS Cross
Collateral to the Bear Indenture Trustee for the benefit of the Class B
note purchasers and the Class B noteholders under the Bear Basic Documents
pursuant to Granting Clause III of the Indenture, and (v) the performance
of its other obligations under this Agreement and each other Basic
Document) shall require such qualifications.
(c) POWER AND AUTHORITY. The Purchaser has the power (limited
liability company and other) and authority, and has all material government
licenses, authorizations, consents and approvals necessary to own its
assets and carry on its business as now being conducted, to execute and
deliver this Agreement and the other Basic Documents to which it is a party
and to carry out its terms and their terms, respectively; the Purchaser has
full power and authority to pledge (x) the Collateral to be pledged to the
Trustee for the benefit of the Note Purchasers and the Noteholders by it
pursuant to Granting Clause I of the Indenture, (y) the Pledged Subordinate
Securities to be pledged to the Trustee for the benefit of the Class B Note
Purchasers and the Class B Noteholders by it pursuant to Granting Clause II
of the Indenture, and (z) the UBS Cross Collateral to be pledged to the
Bear Indenture Trustee for the benefit of the Class B note purchasers and
the Class B noteholders under the Bear Basic Documents by it pursuant to
Granting Clause III of the Indenture, and has duly authorized such pledges
to the Trustee and the Bear Indenture Trustee, as applicable, for the
benefit of the applicable Persons by all necessary corporate action; and
the execution, delivery and performance of this Agreement and the Basic
Documents to which the Purchaser is a party have been duly authorized by
the Purchaser by all necessary action.
(d) VALID SALE. BINDING OBLIGATIONS. (A) This Agreement effects a
valid sale of the Receivables and the Other Conveyed Property, enforceable
against the Seller and creditors of and purchasers from the Seller, (B)
Granting Clause I of the Indenture constitutes a valid pledge of the
Collateral which constitutes a first priority perfected security interest
in the Collateral, subject to the terms and provisions of the Intercreditor
Agreement, in favor of the Trustee for the benefit of the Noteholders and
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the Note Purchasers, (C) Granting Clause II of the Indenture constitutes a
valid pledge of the Pledged Subordinate Securities which constitutes a
first priority perfected security interest in the Pledged Subordinate
Securities in favor of the Trustee for the benefit of the Class B
Noteholders and the Class B Note Purchasers, and (D) Granting Clause III of
the Indenture constitutes a valid pledge of the UBS Cross Collateral,
subject to the terms and provisions of the Intercreditor Agreement, which
constitutes a second priority perfected security interest in the UBS Cross
Collateral (subject only to the Lien Granted pursuant to Granting Clause I
of the Indenture) in favor of the Bear Indenture Trustee for the benefit of
the Class B noteholders and the Class B note purchasers under the Bear
Basic Documents, in each case enforceable against the Issuer and creditors
of and purchasers from the Issuer, and this Agreement and the other Basic
Documents to which the Purchaser is a party, when duly executed and
delivered, shall constitute legal, valid and binding obligations of the
Purchaser enforceable in accordance with their respective 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 enforceability is considered in a proceeding in
equity or at law.
(e) NO VIOLATION. The consummation of the transactions contemplated
by this Agreement and the other Basic Documents and the fulfillment of the
terms of this Agreement and the other Basic Documents shall not conflict
with, result in any breach of any of the terms and provisions of or
constitute (with or without notice, lapse of time or both) a default under
the Certificate of Formation or the LLC Agreement, or any indenture,
agreement, mortgage, deed of trust or other instrument to which the
Purchaser is a party or by which it is bound, or result in the creation or
imposition of any Lien upon any of its properties pursuant to the terms of
any such indenture, agreement, mortgage, deed of trust or other instrument,
other than the Basic Documents, or violate any law, order, rule,
regulation, ordinance or directive of any Governmental Authority applicable
to the Purchaser of any court or of any federal or state regulatory body,
administrative agency or other governmental instrumentality having
jurisdiction over the Purchaser or any of its properties.
(f) NO PROCEEDINGS. There are no proceedings or investigations
pending or, to the Purchaser's knowledge after due inquiry, threatened
against the Purchaser, before any court, regulatory body, administrative
agency or other tribunal or governmental instrumentality having
jurisdiction over the Purchaser or its properties (A) asserting the
invalidity of this Agreement, any class of Notes or any of the Basic
Documents, (B) seeking to prevent the issuance of any class of Notes or the
consummation of any of the transactions contemplated by this Agreement or
any of the Basic Documents, (C) seeking any determination or ruling that
might materially and adversely affect the performance by the Purchaser of
its obligations under, or the validity or enforceability of, this Agreement
or any of the Basic Documents or otherwise have a Material Adverse Effect
or result in a Material Adverse Change in respect of the Receivables or the
business, operations, financial condition, properties, assets or prospects
of Purchaser, or (D) relating to the Purchaser, the Collateral, the Pledged
Subordinate Securities or the UBS Cross Collateral and which might
adversely affect the federal or State income, excise, franchise or similar
tax attributes of the Notes.
(g) NO CONSENTS. The Purchaser is not required to obtain the consent
of any other Person and no consent, approval, authorization or order of or
declaration or filing with any governmental authority is required for
conduct of the Purchaser's business, the issuance or sale of the Notes or
the consummation of the other transactions contemplated by this Agreement
and the other Basic Documents, except such as have been duly made or
obtained or as may be required by the Basic Documents.
(h) TAX RETURNS. The Purchaser has filed all federal and state tax
returns that are required to be filed and paid all taxes, including any
assessments received by it, to the extent that such taxes have become due.
Any taxes, fees and other governmental charges payable by the Purchaser in
connection with consummation of the transactions contemplated by this
Agreement and the other Basic Documents to which the Purchaser is a party
and the fulfillment of the terms of this Agreement and the other Basic
Documents to which the Purchaser is a party have been paid or shall have
been paid at or prior to the Closing Date and as of each Funding Date.
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(i) OTHER OBLIGATIONS. The Purchaser 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 the result of which would have a Material Adverse Effect or result in
a Material Adverse Change.
(j) CHIEF EXECUTIVE OFFICE. The chief executive office of the
Purchaser is at 00000 Xxxxxx Xxxxxx Xxxx, Xxxxxx, XX 00000.
(k) CERTIFICATE, STATEMENTS AND REPORTS. The officer's certificates,
statements, reports and other documents prepared by the Purchaser and
furnished by the Purchaser to the Trustee, any Note Purchaser or any
Noteholder pursuant to this Agreement or any other Basic Document to which
it is a party, or otherwise in connection with the transactions
contemplated hereby or thereby, when taken as a whole, do not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements contained herein or therein not
misleading.
(l) LEGAL COUNSEL, ETC. The Purchaser consulted with its own legal
counsel and independent accountants to the extent it deems necessary
regarding the tax, accounting and regulatory consequences of the
transactions contemplated hereby, the Purchaser is not participating in
such transactions in reliance on any representations of any other party,
their affiliates, or their counsel with respect to tax, accounting,
regulatory or any other matters.
(m) NO DEFAULT. The Purchaser is not in default in the performance,
observance or fulfillment of any of the obligations, covenants or
conditions contained in, and is not otherwise in default under (i) any law
or statute applicable to it, including, without limitation, any Consumer
Law, (ii) any judgment, decree, writ, injunction, order, award or other
action of any court or governmental authority or arbitrator or any order,
rule or regulation of any federal, state, county, municipal or other
governmental or public authority or agency having or asserting jurisdiction
over it or any of its properties or (iii) (x) any indebtedness or any
instrument or agreement under or pursuant to which any such indebtedness
has been, or could be, issued or incurred or (y) any other instrument or
agreement to which it is a party or by which it is bound or any of its
properties is affected, including, without limitation, the Basic Documents,
that either individually or in the aggregate, (A) would result in a
Material Adverse Change with respect to the Purchaser, or in any impairment
of the right or ability of the Purchaser to carry on its business
substantially as now conducted or (B) would result in a Material Adverse
Effect.
(n) ERISA. The Purchaser does not maintain any Plans, and the
Purchaser agrees to notify each Note Purchaser in advance of forming any
Plans. Neither the Issuer nor any Affiliate of the Purchaser (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 Purchaser will give notice to each Note Purchaser and each
Noteholder 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 Purchaser or any Affiliate are in substantial compliance
with all applicable laws (including ERISA). The Purchaser is not an
employer under any Multiemployer Plan.
(o) COMPLIANCE WITH LAWS. The Purchaser has complied and will comply
in all material respects with all applicable laws, rules, regulations,
judgments, agreements, decrees and orders with respect to its business and
properties.
ARTICLE VIII
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THE SELLER
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SECTION 8.1. REPRESENTATIONS OF SELLER. The Seller makes the following
representations on which the Purchaser shall be deemed to have relied in
acquiring the Receivables, the Noteholders shall be deemed to have relied in
purchasing the Notes and the applicable Note Purchasers shall have been deemed
to have relied in making each Advance. The representations speak as of the
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execution and delivery of this Agreement, as of the Closing Date and as of each
Funding Date, and shall survive the sale of the Receivables to the Purchaser and
the pledge thereof by the Purchaser to the Trustee for the benefit of the
Noteholders and the Note Purchasers pursuant to the Indenture.
(a) ORGANIZATION AND GOOD STANDING. The Seller has been duly
organized and is validly existing as a corporation solely under the laws of
the State of California and is in good standing under the laws of the State
of California, with power and authority to own its properties and to
conduct its business as such properties are currently owned and such
business is currently conducted, and had at all relevant times, and now
has, power, authority and legal right to acquire, own and sell the
Receivables and the Other Conveyed Property transferred to the Purchaser
and to perform its other obligations under this Agreement or any other
Basic Documents to which it is a party.
(b) DUE QUALIFICATION. The Seller is duly qualified to do business as
a foreign corporation in good standing and has obtained all necessary
licenses and approvals, in all jurisdictions in which the ownership or
lease of property or the conduct of its business (including, without
limitation, the origination or purchase of motor vehicle retail installment
sale contracts or installment promissory note and security agreements, the
sale of the Receivables to the Purchaser hereunder, the servicing of the
Receivables as required by this Agreement, and its other obligations
hereunder and under the other Basic Documents) requires or shall require
such qualification except where the failure to so qualify or obtain such
licenses or consents would not result in a Material Adverse Effect or a
Material Adverse Change.
(c) POWER AND AUTHORITY. The Seller has the power (corporate and
other) and authority, and has all material government licenses,
authorizations, consents and approvals necessary to own its assets and
carry on its business as now being conducted, to execute and deliver this
Agreement and the other Basic Documents to which it is a party and to carry
out its terms and their terms, respectively; the Seller has full power and
authority to sell and assign the Receivables and the Other Conveyed
Property to be sold and assigned to and deposited with the Purchaser by it
and has duly authorized such sale and assignment to the Purchaser by all
necessary corporate action; and the execution, delivery and performance of
this Agreement and the Basic Documents to which the Seller is a party have
been duly authorized by the Seller by all necessary corporate action.
(d) VALID SALE; BINDING OBLIGATIONS. This Agreement effects a valid
sale, transfer and assignment of the Receivables and the Other Conveyed
Property to the Purchaser, enforceable against the Seller and creditors of
and purchasers from the Seller; and this Agreement and the Basic Documents
to which the Seller is a party, when duly executed and delivered, shall
constitute legal, valid and binding obligations of the Seller enforceable
in accordance with their respective 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 enforceability is considered in a proceeding in equity or at law.
(e) NO VIOLATION. The consummation of the transactions contemplated
by this Agreement and the Basic Documents and the fulfillment of the terms
of this Agreement and the Basic Documents does not conflict with, result in
any breach of any of the terms and provisions of or constitute (with or
without notice, lapse of time or both) a default under the certificate of
incorporation or by-laws of the Seller, or any indenture, agreement,
mortgage, deed of trust or other instrument to which the Seller is a party
or by which it is bound, or result in the creation or imposition of any
Lien upon any of its properties pursuant to the terms of any such
indenture, agreement, mortgage, deed of trust or other instrument, other
than the Basic Documents, or violate any law, order, rule, regulation,
ordinance or directive of any Governmental Authority applicable to the
Seller of any court or of any federal or state regulatory body,
administrative agency or other governmental instrumentality having
jurisdiction over the Seller or any of its properties.
(f) NO PROCEEDINGS. There are no proceedings or investigations
pending or, to the Seller's knowledge, threatened against the Seller,
before any court, regulatory body, administrative agency or other tribunal
or governmental instrumentality having jurisdiction over the Seller or its
properties (A) asserting the invalidity of this Agreement or any of the
Basic Documents, (B) seeking to prevent the issuance of the Notes or the
consummation of any of the transactions contemplated by this Agreement or
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any of the Basic Documents, or (C) seeking any determination or ruling that
might materially and adversely affect the performance by the Seller of its
obligations under, or the validity or enforceability of, this Agreement or
any of the other Basic Documents or otherwise have a Material Adverse
Effect or result in a Material Adverse Change in respect of the Seller or
(D) relating to the Seller or the Receivables or Other Conveyed Property
and which might adversely affect the federal or State income, excise,
franchise or similar tax attributes of the Notes.
(g) NO CONSENTS. No consent, approval, authorization or order of or
declaration or filing with any governmental authority is required for the
conduct of the Seller's business, the issuance or sale of the Notes or the
consummation of the other transactions contemplated by this Agreement and
the Basic Documents, except such as have been duly made or obtained.
(h) FINANCIAL CONDITION. The Seller has a positive net worth and is
able to and does pay its liabilities as they mature. The Seller is not in
default under any obligation to pay money to any Person except for matters
being disputed in good faith which do not involve an obligation of the
Seller on a promissory note. The Seller will not use the proceeds from the
transactions contemplated by the Basic Documents to give any preference to
any creditor or class of creditors, and such transactions will not leave
the Seller with remaining assets which are unreasonably small compared to
its ongoing operations.
(i) FRAUDULENT CONVEYANCE. The Seller is not selling the Receivables
to the Purchaser with any intent to hinder, delay or defraud any of its
creditors; the Seller will not be rendered insolvent as a result of the
sale of the Receivables to the Purchaser.
(j) TAX RETURNS. The Seller has filed all material federal and state
tax returns that are required to be filed and paid all material taxes,
including any assessments received by it, to the extent that such taxes
have become due (other than taxes, the amount or validity of which are
currently being contested in good faith by appropriate proceedings and with
respect to which reserves in conformity with GAAP have been provided on the
books of the Seller). Any taxes, fees and other governmental charges
payable by the Seller in connection with consummation of the transactions
contemplated by this Agreement and the other Basic Documents to which the
Seller is a party and the fulfillment of the terms of this Agreement and
the other Basic Documents to which the Seller is a party have been paid or
shall have been paid as of each Funding Date.
(k) CHIEF EXECUTIVE OFFICE. The Seller has more than one place of
business, and the chief executive office of the Seller is at 00000 Xxxxxx
Xxxxxx Xxxx, Xxxxxx, XX 00000 and its organizational number is 1682500.
(l) CERTIFICATE, STATEMENTS AND REPORTS. The officer's certificates,
statements, reports and other documents prepared by Seller and furnished by
Seller to the Purchaser, the Trustee, any Note Purchaser or any Noteholder
pursuant to this Agreement or any other Basic Document to which it is a
party, or otherwise in connection with the transactions contemplated hereby
or thereby, when taken as a whole, do not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the
statements contained herein or therein not misleading.
(m) LEGAL COUNSEL, ETC. Seller consulted with its own legal counsel
and independent accountants to the extent it deems necessary regarding the
tax, accounting and regulatory consequences of the transactions
contemplated hereby, Seller is not participating in such transactions in
reliance on any representations of any other party, their affiliates, or
their counsel with respect to tax, accounting and regulatory matters.
(n) NO MATERIAL ADVERSE CHANGE AS OF SEPTEMBER 30, 2006. No Material
Adverse Change has occurred with respect to the Seller since the end of the
quarter reported on in the Seller's Form 10-Q filed with the Commission on
October 27, 2006.
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(o) NO DEFAULT. The Seller is not in default in the performance,
observance or fulfillment of any of the obligations, covenants or
conditions contained in, and is not otherwise in default under (i) any law
or statute applicable to it, including, without limitation, any Consumer
Law, (ii) any judgment, decree, writ, injunction, order, award or other
action of any court or governmental authority or arbitrator or any order,
rule or regulation of any federal, state, county, municipal or other
governmental or public authority or agency having or asserting jurisdiction
over it or any of its properties or (iii) (x) any indebtedness or any
instrument or agreement under or pursuant to which any such indebtedness
has been, or could be, issued or incurred or (y) any other instrument or
agreement to which it is a party or by which it is bound or any of its
properties is affected, including, without limitation, the Basic Documents,
that either individually or in the aggregate, (A) would result in a
Material Adverse Change with respect to the Seller, or in any impairment of
the right or ability of the Seller to carry on its business substantially
as now conducted or (B) would result in a Material Adverse Effect.
(p) OTHER OBLIGATIONS. The Seller 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
agreement or instrument to which it is a party or by which it is bound the
result of which would have a Material Adverse Effect or result in a
Material Adverse Change.
(q) ERISA. The Seller does not maintain any Plans (other than its
defined contribution (401(k)) plan and the MFN Financial Corporation
Pension Plan), and the Seller agrees to notify each Note Purchaser in
advance of forming any Plans. Neither the Seller nor any Affiliate of the
Seller (other than MFN under the MFN Financial Corporation Pension 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 Seller
will give notice to each Note Purchaser and each Noteholder 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 Seller or any
Affiliate are in substantial compliance with all applicable laws (including
ERISA). The Seller is not an employer under any Multiemployer Plan.
(r) COMPLIANCE WITH LAWS. The Seller has complied and will comply in
all material respects with all applicable laws, rules, regulations,
judgments, agreements, decrees and orders with respect to its business and
properties.
SECTION 8.2. ADDITIONAL COVENANTS OF THE SELLER.
(a) SALE. The Seller agrees to treat the conveyances hereunder as
financings for tax and accounting purposes and as sales for all other
purposes (including without limitation legal and bankruptcy purposes) on
all relevant books, records, tax returns, financial statements and other
applicable documents.
(b) NON-PETITION. In the event of any breach of a representation and
warranty made by the Purchaser hereunder, the Seller covenants and agrees
that it will not take any action to pursue any remedy that it may have
hereunder, in law, in equity or otherwise, until a year and a day have
passed since the date on which each class of Notes issued by the Issuer and
any and all other amounts due and owing to the Noteholders and the Note
Purchasers pursuant to the Basic Documents have been paid in full. The
Purchaser and the Seller agree that damages will not be an adequate remedy
for breach of this covenant and that this covenant may be specifically
enforced by the Purchaser, by the Trustee on behalf of the Noteholders and
the Note Purchasers, by any Note Purchaser or by any Noteholder.
(c) CHANGES TO CONTRACT PURCHASE GUIDELINES. The Seller covenants
that it will not make any material credit-related changes to the Contract
Purchase Guidelines or allow any material credit-related changes to TFC's
Contract Purchase Guidelines without the prior written consent of the
Controlling Note Purchaser (which consent shall not unreasonably be
withheld). The Seller covenants to provide prompt prior written notice to
each Note Purchaser upon any material change made to the Seller's or TFC's
Contract Purchase Guidelines.
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(d) COOPERATION. If an Event of Default shall have occurred and be
continuing, Seller shall cooperate with and provide all information and
access requested by the Trustee, any Note Purchaser and/or any Noteholder
in connection with any actions taken pursuant to SECTION 5.4 of the
Indenture.
(e) CONSENTS TO WAIVERS, AMENDMENTS OR MODIFICATIONS OF BASIC
DOCUMENTS. The Seller shall not consent to any waiver, amendment or
modification of the Basic Documents that could reasonably be expected to
have a Material Adverse Effect on any Note Purchaser or any Noteholder
without the prior written consent of (i) the Controlling Noteholder and the
Majority Noteholders of the Highest Priority Class or (ii) if any such
waiver, amendment or modification relates solely to the Pledged Subordinate
Securities, without the prior written consent of the Class B Note
Purchasers and the Class B Majority Noteholders, or (iii) if any such
waiver, amendment or modification relates solely to the application of
proceeds from the UBS Cross Collateral, without the prior written consent
of the Class B note purchasers and the Class B majority noteholders under
the Bear Basic Documents.
(f) OTHER LIENS OR INTERESTS. Except for the conveyances hereunder
and any other Lien created under any Basic Document, the Seller will not
sell, pledge, assign or transfer to any other Person, or grant, create,
incur, assume or suffer to exist any lien on any interest therein,
including, without limitation, any lien levied upon the Conveyed Property
by the State of Texas (or any taxing authority or governmental agency of
the State of Texas) as a result of the non-payment of any Texas Franchise
Tax, and the Seller shall defend the right, title, and interest of the
Purchaser in, to and under the Receivables and the other Conveyed Property
against all claims of third parties claiming through or under the Seller.
SECTION 8.3. LIABILITY OF SELLER; INDEMNITIES.
(a) The Seller shall indemnify the Purchaser, the Backup Servicer,
the Trustee, each Noteholder, each Note Purchaser and their respective
officers, directors, agents and employees for any liability as a result of
the failure of a Receivable to be originated in compliance with all
requirements of law and for any breach of any of its representations,
warranties, covenants or other agreements contained herein.
(b) The Seller shall defend, indemnify, and hold harmless the
Purchaser, the Backup Servicer, the Trustee, each Noteholder, each Note
Purchaser and their respective officers, directors, agents and employees
from and against any and all costs, expenses, losses, damages, claims, and
liabilities, arising out of or resulting from the use, ownership, or
operation by the Seller, any Affiliate thereof or any of their respective
agents or subcontractors, of a Financed Vehicle.
(c) The Seller shall indemnify, defend and hold harmless the
Purchaser, the Backup Servicer, the Trustee, each Noteholder, each Note
Purchaser and their respective officers, directors, agents and employees
from and against any taxes that may at any time be asserted against any
such Person with respect to the transactions contemplated in this Agreement
and any of the Basic Documents (except any income taxes arising out of fees
paid to the Trustee and the Backup Servicer and except any taxes to which
the Trustee may otherwise be subject), including without limitation any
sales, gross receipts, general corporation, tangible personal property,
privilege or license taxes (but, in the case of the Purchaser, not
including any taxes asserted with respect to federal or other income taxes
arising out of distributions on the Notes) and costs and expenses in
defending against the same.
(d) The Seller shall indemnify, defend and hold harmless the
Purchaser, the Backup Servicer, the Trustee, each Noteholder, each Note
Purchaser and their respective officers, directors, agents and employees
from and against any loss, liability or expense incurred by reason of (i)
the Seller's willful misfeasance, bad faith or negligence in the
performance of its obligations or duties under this Agreement, or by reason
of reckless disregard of its obligations or duties under this Agreement
and/or (ii) the Seller's or the Purchaser's violation of federal or State
securities laws in connection with the offering and sale of the Notes.
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(e) The Seller shall indemnify, defend and hold harmless the Trustee
and the Backup Servicer and its officers, directors, employees and agents
from and against any and all costs, expenses, losses, claims, damages and
liabilities arising out of, or incurred in connection with the acceptance
or performance of the trusts and duties set forth herein and in the Basic
Documents except to the extent that such cost, expense, loss, claim, damage
or liability shall be due to the willful misfeasance, bad faith or
negligence (except for errors in judgment) of the Trustee or the Backup
Servicer.
(f) The Seller shall indemnify, defend and hold harmless the
Purchaser, the Backup Servicer, the Trustee, each Noteholder, each Note
Purchaser and their respective officers, directors, agents and employees
from and against any and all costs, expenses, losses, claims, damages and
liabilities arising out of or relating to the failure of a Receivable to be
originated in compliance with all requirements of law, including without
limitation all Consumer Laws, and for any breach of any of the Seller's
representations and warranties, covenants or other agreements contained
herein (including, without limitation, the representations contained in
SECTION 3.1 hereof) or in any other Basic Document to which the Seller is a
party.
Indemnification under this Section shall survive the resignation or removal
of the Servicer or the Trustee and the termination of this Agreement and the
other Basic Documents and shall include reasonable fees and expenses of counsel
and other expenses of litigation. These indemnity obligations shall be in
addition to any obligation that the Seller may otherwise have under applicable
law, hereunder or under any other Basic Document. If the Seller shall have made
any indemnity payments pursuant to this Section and the Person to or on behalf
of whom such payments are made thereafter shall collect any of such amounts from
others, such Person shall promptly repay such amounts to the Seller, without
interest.
Notwithstanding any provision of this Section 8.3 or any other provision of
this Agreement, nothing herein shall be construed as to require the Seller to
provide any indemnification hereunder or under any other Basic Document for any
costs, expenses, losses, claims, damages or liabilities arising solely out of,
or incurred solely in connection with, credit losses with respect to the
Receivables.
SECTION 8.4. MERGER OR CONSOLIDATION OF, OR ASSUMPTION OF THE OBLIGATIONS
OF, SELLER. Seller shall not merge or consolidate with any other person, convey,
transfer or lease substantially all its assets as an entirety to another Person,
or permit any other Person to become the successor to Seller's business unless,
after the merger, consolidation, conveyance, transfer, lease or succession, the
successor or surviving entity shall be capable of fulfilling the duties of
Seller contained in this Agreement and the other Basic Documents to which it is
a party. Any corporation or other Person (i) into which Seller may be merged or
consolidated, (ii) resulting from any merger or consolidation to which Seller
shall be a party, (iii) which acquires by conveyance, transfer, or lease
substantially all of the assets of Seller, or (iv) succeeding to the business of
Seller, in any of the foregoing cases shall execute an agreement of assumption
to perform every obligation of Seller under this Agreement and the other Basic
Documents to which it is a party and, whether or not such assumption agreement
is executed, shall be the successor to Seller under this Agreement and the other
Basic Documents to which it is a party without the execution or filing of any
paper or any further act on the part of any of the parties to this Agreement,
anything in this Agreement to the contrary notwithstanding; PROVIDED, HOWEVER,
that nothing contained herein shall be deemed to release Seller from any
obligation. Seller shall provide notice of any merger, consolidation or
succession pursuant to this Section to the Trustee, each Note Purchaser and each
Noteholder. Notwithstanding the foregoing, Seller shall not merge or consolidate
with any other Person or permit any other Person to become a successor to
Seller's business, unless (x) immediately after giving effect to such
transaction, no representation or warranty made pursuant to SECTION 8.1 shall
have been breached (for purposes hereof, such representations and warranties
shall be deemed made as of the date of the consummation of such transaction) and
no event that, after notice or lapse of time, or both, would become an Event of
Default shall have occurred and be continuing, (y) Seller shall have delivered
to the Trustee, each Note Purchaser and each Noteholder an Officer's Certificate
and an Opinion of Counsel each stating that such consolidation, merger or
succession and such agreement of assumption comply with this Section and that
all conditions precedent, if any, provided for in this Agreement relating to
such transaction have been complied with, and (z) Seller shall have delivered to
the Trustee, each Note Purchaser and each Noteholder an Opinion of Counsel,
stating in the opinion of such counsel, either (A) all financing statements and
continuation statements and amendments thereto have been authorized and filed
that are necessary to preserve and protect the interest of the Purchaser and the
Trustee for the benefit of the Noteholders and the Note Purchasers in the
Opinion Collateral and reciting the details of the filings or (B) no such action
shall be necessary to preserve and protect such interest.
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SECTION 8.5. [RESERVED].
SECTION 8.6. REPORTING REQUIREMENTS. (a) The Seller shall furnish, or cause
to be furnished to each Noteholder and each Note Purchaser:
(i) AUDIT REPORT. As soon as available and in any event within
90 days after the end of each fiscal year of the Seller, a copy of the
consolidated balance sheet of the Seller and its Affiliates as at the
end of such fiscal year, together with the related statements of
earnings, stockholders' equity and cash flows for such fiscal year,
prepared in reasonable detail and in accordance with GAAP certified by
independent certified public accountants of recognized national
standing as shall be selected by the Seller.
(ii) QUARTERLY STATEMENTS. As soon as available, but in any event
within 45 days after the end of each fiscal quarter (except the fourth
fiscal quarter) of the Seller, copies of the unaudited condensed
consolidated balance sheet of the Seller and its Affiliates as at the
end of such fiscal quarter and the related unaudited statements of
earnings, stockholders' equity and cash flows for the portion of the
fiscal year through such fiscal quarter (and as to the statements of
earnings for such fiscal quarter) in each case setting forth in
comparative form the figures for the corresponding periods of the
previous fiscal year, prepared in reasonable detail and in accordance
with GAAP applied consistently throughout the periods reflected
therein and certified by the chief financial or accounting officer of
the Seller as presenting fairly the financial condition and results of
operations of the Seller and its Affiliates (subject to normal
year-end adjustments).
(b) For so long as Seller is subject to the reporting requirements of
Section 13(a) of the Exchange Act, its filing of the annual and quarterly
reports required under said act, on a timely basis, shall be deemed
compliance with this Section 8.6.
ARTICLE IX
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THE SERVICER
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SECTION 9.1. REPRESENTATIONS AND COVENANTS OF SERVICER. The Servicer (and
the Backup Servicer, in the case of clause (j) below) makes the following
representations and covenants on which the Purchaser shall be deemed to have
relied in acquiring the Receivables, on which the Noteholders shall be deemed to
have relied in purchasing the Notes and on which the applicable Note Purchasers
shall be deemed to have relied in making each Advance. The representations speak
as of the execution and delivery of this Agreement and as of the Closing Date,
in the case of Receivables conveyed by the Closing Date, and as of the
applicable Funding Date, in the case of Receivables conveyed by such Funding
Date, and the representations and covenants shall survive the sale of the
Receivables to the Purchaser and the pledge thereof to the Trustee for the
benefit of the Noteholders and the Note Purchasers pursuant to the Indenture.
(a) ORGANIZATION AND GOOD STANDING. The Servicer has been duly
organized and is validly existing as a corporation and in good standing
under the laws of the State of California, with power, authority and legal
right to own its properties and to conduct its business as such properties
are currently owned and such business is presently conducted, and had at
all relevant times, and shall have, power, authority and legal right to
acquire, own and service the Receivables.
(b) DUE QUALIFICATION. The Servicer is duly qualified to do business
as a foreign corporation in good standing and has obtained all necessary
licenses and approvals, in all jurisdictions in which the ownership or
lease of property or the conduct of its business (including the servicing
of the Receivables as required by this Agreement) requires or shall require
such qualification except where the failure to so qualify or obtain such
licenses or consents would not result in a Material Adverse Effect or a
Material Adverse Change.
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(c) POWER AND AUTHORITY. The Servicer has the power and authority to
execute and deliver this Agreement and the Basic Documents to which it is a
party and to carry out its terms and their terms, respectively, and the
execution, delivery and performance of this Agreement and the Basic
Documents to which it is a party have been duly authorized by the Servicer
by all necessary corporate action.
(d) BINDING OBLIGATION. This Agreement and the Basic Documents to
which the Servicer is a party shall constitute legal, valid and binding
obligations of the Servicer enforceable in accordance with their respective
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
enforceability is considered in a proceeding in equity or at law.
(e) NO VIOLATION. The consummation of the transactions contemplated
by this Agreement and the Basic Documents to which to the Servicer is a
party, and the fulfillment of the terms of this Agreement and the Basic
Documents to which the Servicer is a party, shall not conflict with, result
in any breach of any of the terms and provisions of, or constitute (with or
without notice or lapse of time) a default under, the articles of
incorporation or bylaws of the Servicer, or any indenture, agreement,
mortgage, deed of trust or other instrument to which the Servicer is a
party or by which it is bound or any of its properties are subject, or
result in the creation or imposition of any Lien upon any of its properties
pursuant to the terms of any such indenture, agreement, mortgage, deed of
trust or other instrument, other than the Basic Documents, or violate any
law, order, rule or regulation applicable to the Servicer of any court or
of any federal or state regulatory body, administrative agency or other
governmental instrumentality having jurisdiction over the Servicer or any
of its properties.
(f) NO PROCEEDINGS. There are no proceedings or investigations
pending or, to the Servicer's knowledge, threatened against the Servicer,
before any court, regulatory body, administrative agency or other tribunal
or governmental instrumentality having jurisdiction over the Servicer or
its properties (A) asserting the invalidity of this Agreement or any of the
Basic Documents, (B) seeking to prevent the issuance of the Notes or the
consummation of any of the transactions contemplated by this Agreement or
any of the Basic Documents, or (C) seeking any determination or ruling that
might materially and adversely affect the performance by the Servicer of
its obligations under, or the validity or enforceability of, this Agreement
or any of the other Basic Documents or otherwise have a Material Adverse
Effect or result in a Material Adverse Change, or (D) relating to the
Servicer and which might adversely affect the federal or state income,
excise, franchise or similar tax attributes of the Notes.
(g) NO CONSENTS. No consent, approval, authorization or order of or
declaration or filing with any governmental authority is required for the
issuance or sale of the Notes or the consummation of the other transactions
contemplated by this Agreement and the other Basic Documents, except such
as have been duly made or obtained.
(h) TAXES. The Servicer has filed all federal and state tax returns
that are required to be filed and paid all taxes, including any assessments
received by it, to the extent that such taxes have become due (other than
taxes, the amount or validity of which are currently being contested in
good faith by appropriate proceedings and with respect to which reserves in
conformity with GAAP have been provided on the books of the Servicer). Any
taxes, fees and other governmental charges payable by the Servicer in
connection with consummation of the transactions contemplated by this
Agreement and the other Basic Documents to which the Servicer is a party
and the fulfillment of the terms of this Agreement and the other Basic
Documents to which the Servicer is a party have been paid or shall have
been paid as of each Funding Date.
(i) CHIEF EXECUTIVE OFFICE. The Servicer hereby represents and
warrants to the Trustee that the Servicer's principal place of business and
chief executive office is 00000 Xxxxxx Xxxxxx Xxxx, Xxxxxx, Xxxxxxxxxx
00000.
(j) DATA MAPPING. Neither the Servicer nor the Backup Servicer is
aware of any fact that would cause such Person reasonably to believe that
the Servicer's servicing data cannot be mapped from the Servicer's system
to the Backup Servicer's system.
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(k) CHANGES TO SERVICING GUIDELINES. The Servicer covenants that it
will not make any material changes to the Servicing Guidelines prior to the
Termination Date without the prior written consent of the Controlling Note
Purchaser (which consent shall not unreasonably be withheld) and prior
written notice to each Class B Note Purchaser.
(l) COOPERATION. If an Event of Default shall have occurred and be
continuing, Servicer shall cooperate with and provide all information and
access reasonably requested by the Trustee, any Note Purchaser or any
Noteholder in connection with any actions taken pursuant to SECTION 5.4 of
the Indenture.
(m) TEXAS FRANCHISE TAX. The Servicer agrees to make timely payment,
when due, of any Texas Franchise Tax that may be imposed, assessed or
levied by the taxing authority of the State of Texas on or in respect of
the Conveyed Property, the Seller, the Servicer, the Purchaser or the
Issuer.
SECTION 9.2. LIABILITY OF SERVICER; INDEMNITIES.
(a) The Servicer (in its capacity as such) shall be liable hereunder
only to the extent of the obligations in this Agreement specifically
undertaken by the Servicer and the representations made by the Servicer in
the Basic Documents to which it is a party.
(i) The Servicer shall defend, indemnify and hold harmless the
Purchaser, the Trustee, the Backup Servicer, each Noteholder, each
Note Purchaser and their respective officers, directors, agents and
employees from and against any and all costs, expenses, losses,
damages, claims and liabilities, arising out of or resulting from the
use, ownership, repossession or operation by the Servicer or any
Affiliate or agent or sub-contractor thereof of any Financed Vehicle.
(ii) The Servicer, so long as CPS is the Servicer, shall
indemnify, defend and hold harmless the Purchaser, the Trustee, the
Backup Servicer, each Noteholder, each Note Purchaser and their
respective officers, directors, agents and employees from and against
any taxes that may at any time be asserted against any of such parties
with respect to the transactions contemplated in this Agreement and
the other Basic Documents, including, without limitation, any sales,
gross receipts, general corporation, tangible personal property,
privilege or license taxes (but not including any federal or other
income taxes, including franchise taxes (other than as set forth in
subparagraph (vi) below) asserted with respect to, and as of the date
of, the sale of the Receivables and the Other Conveyed Property to the
Purchaser, the pledge thereof to the Trustee for the benefit of the
Note Purchasers and the Noteholders or the issuance and original sale
of the Notes) and costs and expenses in defending against the same.
(iii) The Servicer shall indemnify, defend and hold harmless the
Purchaser, the Trustee, the Backup Servicer, each Noteholder, each
Note Purchaser and their respective officers, directors, agents and
employees from and against any and all costs, expenses, losses,
claims, damages, and liabilities to the extent that such cost,
expense, loss, claim, damage, or liability arose out of, or was
imposed upon the Purchaser, the Trustee, the Backup Servicer, such
Noteholder or such Note Purchaser through the negligence, willful
misfeasance or bad faith of the Servicer in the performance of its
obligations or duties under this Agreement or by reason of reckless
disregard of its obligations or duties under this Agreement or as a
result of a breach of any representation, warranty, covenant or other
agreement made by the Servicer in this Agreement or in any other Basic
Document to which it is a party.
(iv) The Servicer shall indemnify, defend, and hold harmless the
Trustee and the Backup Servicer from and against all costs, expenses,
losses, claims, damages, and liabilities arising out of or incurred in
connection with the acceptance or performance of the trusts and duties
herein contained, except to the extent that such cost, expense, loss,
claim, damage or liability: (A) shall be due to the willful
misfeasance, bad faith, or negligence (except for errors in judgment)
of the Trustee or the Backup Servicer, as applicable or (B) relates to
any tax other than the taxes with respect to which the Servicer shall
be required to indemnify the Trustee or the Backup Servicer.
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(v) The Servicer shall indemnify, defend and hold harmless the
Purchaser, the Backup Servicer, the Trustee, each Noteholder, each
Note Purchaser and their respective officers, directors, agents and
employees from and against any and all costs, expenses, losses,
claims, damages and liabilities arising out of or relating to the
failure of a Receivable to be serviced in compliance with all
requirements of law, including without limitation all Consumer Laws,
and for any breach of any of the Servicer's representations and
warranties, covenants or other agreements contained herein or in any
other Basic Document to which the Servicer is a party.
(vi) The Servicer, so long as CPS is the Servicer, shall
indemnify, defend and hold harmless the Purchaser, the Trustee, the
Backup Servicer, each Noteholder, each Note Purchaser and their
respective officers, directors, agents and employees from and against
any Texas Franchise Tax asserted against any of such parties with
respect to the transactions contemplated in this Agreement and the
other Basic Documents and costs and expenses in defending against the
same.
(b) Notwithstanding the foregoing, the Servicer shall not be
obligated to defend, indemnify, and hold harmless any Noteholder or any
Note Purchaser for any losses, claims, damages or liabilities incurred by
such Noteholder or such Note Purchaser arising out of claims, complaints,
actions and allegations relating to Section 406 of ERISA or Section 4975 of
the Code as a result of the purchase or holding of any Note by such
Noteholder or the Note Purchaser with the assets of a plan subject to such
provisions of ERISA or the Code.
(c) For purposes of this SECTION 9.2, in the event of the termination
of the rights and obligations of the Servicer (or any successor thereto
pursuant to SECTION 9.3) as Servicer pursuant to SECTION 10.1, or a
resignation by such Servicer pursuant to this Agreement, such Servicer
shall be deemed to be the Servicer pending appointment of a successor
Servicer pursuant to SECTION 10.2. The provisions of this SECTION 9.2(C)
shall in no way affect the survival pursuant to SECTION 9.2(D) of the
indemnification by the Servicer provided by SECTION 9.2(A).
(d) Indemnification under this SECTION 9.2 shall survive the
termination of this Agreement and the other Basic Documents and any
resignation or removal of CPS or any successor Servicer as Servicer and
shall include reasonable fees and expenses of counsel and expenses of
litigation. These indemnity obligations shall be in addition to any
obligation that the Servicer may otherwise have under applicable law,
hereunder or under any other Basic Document. If the Servicer shall have
made any indemnity payments pursuant to this Section and the recipient
thereafter collects any of such amounts from others, the recipient shall
promptly repay such amounts to the Servicer, without interest.
SECTION 9.3. MERGER OR CONSOLIDATION OF, OR ASSUMPTION OF THE OBLIGATIONS
OF THE SERVICER OR BACKUP SERVICER.
(a) The Servicer shall not merge or consolidate with any other
Person, convey, transfer or lease all or substantially all of its assets as
an entirety to another Person, or permit any other Person to become the
successor to the Servicer's business unless, after the merger,
consolidation, conveyance, transfer, lease or succession, the successor or
surviving entity shall be capable of fulfilling the duties of the Servicer
contained in this Agreement and the other Basic Documents to which it is a
party. Any corporation or other Person (i) into which the Servicer may be
merged or consolidated, (ii) resulting from any merger or consolidation to
which the Servicer shall be a party, (iii) which acquires by conveyance,
transfer, or lease substantially all of the assets of the Servicer, or (iv)
succeeding to the business of the Servicer, in any of the foregoing cases
shall execute an agreement of assumption to perform every obligation of the
Servicer under this Agreement and the other Basic Documents to which it is
a party and, whether or not such assumption agreement is executed, shall be
the successor to the Servicer under this Agreement and the other Basic
Documents to which it is a party without the execution or filing of any
paper or any further act on the part of any of the parties to this
Agreement, anything in this Agreement to the contrary notwithstanding;
PROVIDED, HOWEVER, that nothing contained herein shall be deemed to release
the Servicer from any obligation. The Servicer shall provide notice of any
merger, consolidation or succession pursuant to this Section to the
Trustee, each Note Purchaser and each Noteholder. Notwithstanding the
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foregoing, the Servicer shall not merge or consolidate with any other
Person or permit any other Person to become a successor to the Servicer's
business, unless (x) immediately after giving effect to such transaction,
no representation or warranty made pursuant to SECTION 9.1 shall have been
breached (for purposes hereof, such representations and warranties shall be
deemed made as of the date of the consummation of such transaction) and no
event that, after notice or lapse of time, or both, would become Event of
Default shall have occurred and be continuing, (y) the Servicer shall have
delivered to the Trustee, each Note Purchaser and each Noteholder an
Officer's Certificate and an Opinion of Counsel each stating that such
consolidation, merger or succession and such agreement of assumption comply
with this Section and that all conditions precedent, if any, provided for
in this Agreement relating to such transaction have been complied with, and
(z) the Servicer shall have delivered to the Trustee, each Note Purchaser
and each Noteholder an Opinion of Counsel, stating in the opinion of such
counsel, either (A) all financing statements and continuation statements
and amendments thereto have been executed and filed that are necessary to
preserve and protect the interest of the Purchaser and the Trustee for the
benefit of the Noteholders and the Note Purchasers in the Opinion
Collateral and reciting the details of the filings or (B) no such action
shall be necessary to preserve and protect such interest.
(b) Any Person (i) into which the Backup Servicer (in its capacity as
Backup Servicer or successor Servicer) may be merged or consolidated, (ii)
resulting from any merger or consolidation to which the Backup Servicer
shall be a party, (iii) which acquires by conveyance, transfer or lease
substantially all of the assets of the Backup Servicer, or (iv) succeeding
to the business of the Backup Servicer, in any of the foregoing cases shall
execute an agreement of assumption to perform every obligation of the
Backup Servicer under this Agreement and, whether or not such assumption
agreement is executed, shall be the successor to the Backup Servicer under
this Agreement without the execution or filing of any paper or any further
act on the part of any of the parties to this Agreement, anything in this
Agreement to the contrary notwithstanding; PROVIDED, HOWEVER, that nothing
contained herein shall be deemed to release the Backup Servicer from any
obligation.
SECTION 9.4. [RESERVED]
SECTION 9.5. DELEGATION OF DUTIES. The Servicer may at any time delegate
duties under this Agreement to sub-contractors who are in the business of
servicing automotive receivables with the prior written consent of the
Controlling Note Purchaser; PROVIDED, HOWEVER, that no such delegation or
subcontracting of duties by the Servicer shall relieve the Servicer of its
responsibility with respect to such duties.
SECTION 9.6. SERVICER AND BACKUP SERVICER NOT TO RESIGN. Subject to the
provisions of SECTION 9.3, neither the Servicer nor the Backup Servicer shall
resign from the obligations and duties imposed on it by this Agreement as
Servicer or Backup Servicer except (i) upon a determination that by reason of a
change in legal requirements the performance of its duties under this Agreement
would cause it to be in violation of such legal requirements in a manner which
would have a material adverse effect on the Servicer or the Backup Servicer, as
the case may be, and the Controlling Note Purchaser does not elect to waive the
obligations of the Servicer or the Backup Servicer, as the case may be, to
perform the duties which render it legally unable to act or to delegate those
duties to another Person or, (ii) in the case of the Backup Servicer, upon the
prior written consent of the Controlling Note Purchaser. Any such determination
permitting the resignation of the Servicer or Backup Servicer pursuant to clause
(i) in the immediately preceding sentence shall be evidenced by an Opinion of
Counsel to such effect delivered and acceptable to the Trustee and the
Controlling Note Purchaser. No resignation of the Servicer shall become
effective until the Backup Servicer or an entity acceptable to the Controlling
Note Purchaser shall have assumed the responsibilities and obligations of the
Servicer. No resignation of the Backup Servicer shall become effective until an
entity acceptable to the Controlling Note Purchaser shall have assumed the
responsibilities and obligations of the Backup Servicer; provided, however, that
in the event a successor Backup Servicer is not appointed within 60 days after
the Backup Servicer has given notice of its resignation and has provided the
Opinion of Counsel required by this SECTION 9.6, the Backup Servicer may
petition a court for its removal.
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ARTICLE X
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DEFAULT
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SECTION 10.1. SERVICER TERMINATION EVENTS. For purposes of this Agreement
and the other Basic Documents, each of the following shall constitute a
"SERVICER TERMINATION EVENT":
(a) Any failure by the Servicer or, for so long as the Seller or an
Affiliate of the Purchaser is the Servicer, the Purchaser, to deliver or
cause to be delivered any proceeds or payment required to be so delivered
under this Agreement or any other Basic Document that continues unremedied
for a period of two Business Days (or one Business Day with respect to
payment of Purchase Amounts) after written notice is received by the
Servicer from the Trustee or a Noteholder of the Highest Priority Class or
after discovery of such failure by a Responsible Officer of the Servicer;
(b) Failure by the Servicer to deliver, or cause to be delivered, to
each Noteholder, each Note Purchaser, the Trustee and the Backup Servicer,
any Servicer's Certificate by 12:00 noon New York City time on the second
Business Day after the date on which such Servicer's Certificate is
required to be delivered;
(c) Failure by the Servicer or, for so long as the Seller or an
Affiliate of the Purchaser is the Servicer, the Purchaser, to perform or
observe any term, covenant or agreement of the Servicer or the Purchaser,
as applicable, set forth in this Agreement or any other Basic Document
(other than any term, covenant or agreement referred to in another
subparagraph of this SECTION 10.1), which failure (i) materially and
adversely affects the rights of the Controlling Note Purchaser or the
Noteholders of the Highest Priority Class and (ii) except for covenants
relating to merger and consolidation or preservation of ownership or
security interests in the Financed Vehicles, continues unremedied for a
period of 30 days after the earlier of knowledge thereof by the Servicer or
after the date on which written notice of such failure, requiring the same
to be remedied, shall have been given to the Servicer by the Controlling
Note Purchaser or a Noteholder of the Highest Priority Class;
(d) The occurrence of an Insolvency Event with respect to the
Servicer (or, for so long as the Seller or an Affiliate of the Purchaser is
the Servicer, the Purchaser);
(e) Any representation, warranty or statement of the Servicer made in
this Agreement or any other Basic Document to which it is a party or any
certificate, report or other writing delivered pursuant hereto or thereto
shall prove to be incorrect as of the time when the same shall have been
made (excluding, however, any representation or warranty set forth in this
Agreement relating to the characteristics of the Receivables), and such
incorrectness materially and adversely affects the Purchaser, the
Controlling Note Purchaser or the Noteholders of the Highest Priority Class
and is not cured within 30 calendar days after the earlier of knowledge
thereof by the Servicer or, after written notice thereof shall have been
given to the Servicer by the Trustee, the Controlling Note Purchaser or a
Noteholder of the Highest Priority Class, the circumstances or condition in
respect of which such representation, warranty or statement was incorrect
shall have not been eliminated or otherwise cured;
(f) The three-month rolling average Servicer Loss Ratio exceeds (1)
7.50% during the Accrual Periods from May to October or (2) 8.25% during
the Accrual Periods from November to April;
(g) The Controlling Note Purchaser shall not have delivered a
Servicer Extension Notice pursuant to SECTION 4.15;
(h) An Event of Default shall have occurred (so long as CPS is
Servicer);
(i) The three-month rolling average Servicer Delinquency Ratio
exceeds (A) 6.00% during the Accrual Periods from April to September or (B)
6.50% during the Accrual Periods from October to March;
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(j) The Servicer fails to maintain minimum Consolidated Total
Adjusted Equity of $60,000,000 as of the end of any fiscal quarter;
(k) The Servicer exceeds a maximum leverage ratio (total liabilities
less all non-recourse debt/Consolidated Total Adjusted Equity) of six times
as of the end of any fiscal quarter; and
(l) The Servicer fails to maintain cash and cash equivalents of at
least $8.5 million as of the end of any calendar month.
In the event that the Servicer, the Seller, the Issuer, the Purchaser or
the Trustee gains knowledge of the occurrence of a Servicer Termination Event,
the Servicer, the Seller, the Issuer, the Purchaser or the Trustee, as
applicable, shall promptly notify each Note Purchaser and each Noteholder in
writing of such occurrence; PROVIDED, THAT, the Servicer shall be deemed to
satisfy such obligation upon its delivery of an Officer's Certificate in
accordance with SECTION 4.10 hereof.
SECTION 10.2. CONSEQUENCES OF A SERVICER TERMINATION EVENT OR NON-EXTENSION
OF TERM OF SERVICER. If a Servicer Termination Event shall occur and be
continuing, the Controlling Note Purchaser and the Majority Noteholders of the
Highest Priority Class, by notice given in writing to the Backup Servicer, each
other Noteholder, each other Note Purchaser and the Servicer, may terminate all
of the rights and obligations of the Servicer under this Agreement. The outgoing
Servicer shall be entitled to its pro rata share of the Servicing Fee for the
number of days in the Accrual Period prior to the effective date of its
termination. On or after the receipt by the Servicer of such written notice or
upon non-extension of the servicing term as referred to in SECTION 4.15, all
authority, power, obligations and responsibilities of the Servicer under this
Agreement, whether with respect to the Notes or the Receivables and Other
Conveyed Property or otherwise, automatically shall pass to, be vested in and
become obligations and responsibilities of the Backup Servicer (or such other
successor Servicer appointed by the Controlling Note Purchaser and the Majority
Noteholders of the Highest Priority Class under SECTION 10.3); PROVIDED,
HOWEVER, that the successor Servicer shall have no liability with respect to any
obligation which was required to be performed by the outgoing Servicer prior to
the date that the successor Servicer becomes the Servicer or any claim of a
third party based on any alleged action or inaction of the outgoing Servicer,
which obligations and claims shall remain those of the outgoing Servicer. The
successor Servicer is authorized and empowered by this Agreement to execute and
deliver, on behalf of the outgoing Servicer, as attorney-in-fact or otherwise,
any and all documents and other instruments and to do or accomplish all other
acts or things necessary or appropriate to effect the purposes of such notice of
termination, whether to complete the transfer and endorsement of the Receivables
and the Other Conveyed Property and related documents to show the Purchaser as
lienholder or secured party on the related Lien Certificates, or otherwise. The
outgoing Servicer agrees to cooperate with the successor Servicer in effecting
the termination of the responsibilities and rights of the outgoing Servicer
under this Agreement, including, without limitation, the transfer to the
successor Servicer for administration by it of all cash amounts that shall at
the time be held by the outgoing Servicer for deposit, or have been deposited by
the outgoing Servicer, in the Collection Account or thereafter received with
respect to the Receivables and the delivery to the successor Servicer of all
Receivable Files that shall at the time be held by the outgoing Servicer and a
computer tape in readable form as of the most recent Business Day containing all
information necessary to enable the successor Servicer to service the
Receivables and the Other Conveyed Property. All reasonable costs and expenses
(including reasonable attorneys' fees) incurred in connection with transferring
any Receivable Files to the successor Servicer and amending this Agreement to
reflect such succession as Servicer pursuant to this SECTION 10.2 shall be paid
by the predecessor Servicer upon presentation of reasonable documentation of
such costs and expenses. In addition, any successor Servicer shall be entitled
to payment from the immediate predecessor Servicer for reasonable transition
expenses incurred in connection with acting as successor Servicer, and to the
extent not so paid, such payment shall be made pursuant to SECTION 5.7 hereof.
Upon receipt of notice of the occurrence of a Servicer Termination Event or the
non-extension of the Servicer's term, the Trustee shall give notice thereof to
each Noteholder and each Note Purchaser. If requested by the Controlling Note
Purchaser and the Majority Noteholders of the Highest Priority Class, the
successor Servicer shall terminate the Lockbox Agreement and direct the Obligors
to make all payments under the Receivables directly to the successor Servicer
(in which event the successor Servicer shall process such payments in accordance
with SECTION 4.2(E)), or to a lockbox established by the successor Servicer at
the direction of the Controlling Note Purchaser, at the successor Servicer's
expense. The outgoing Servicer shall grant the Trustee, the successor Servicer,
each Note Purchaser and each Noteholder reasonable access to the outgoing
Servicer's premises at the outgoing Servicer's expense.
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SECTION 10.3. APPOINTMENT OF SUCCESSOR.
(a) On and after the time the Servicer receives a notice of
termination pursuant to SECTION 10.2, upon non-extension of the servicing
term as referred to in SECTION 4.15, or upon the resignation of the
Servicer pursuant to SECTION 9.6, the outgoing Servicer shall continue to
perform its functions as Servicer under this Agreement, in the case of
termination, only until the date specified in such termination notice or,
if no such date is specified in a notice of termination, until receipt of
such notice and, in the case of expiration and non-renewal of the term of
the Servicer upon the expiration of such term, and, in the case of
resignation, until (i) the later of (x) the date 45 days from the delivery
to the Trustee of written notice of such resignation (or written
confirmation of such notice) in accordance with the terms of this Agreement
and (y) the date upon which the predecessor Servicer shall become unable to
act as Servicer, as specified in the notice of resignation and accompanying
Opinion of Counsel or (ii) such time as a successor Servicer shall assume
all of the rights and obligations of the predecessor Servicer hereunder and
under any other Basic Document; PROVIDED, HOWEVER, that the outgoing
Servicer shall not be relieved of its duties, obligations and liabilities
as Servicer until a successor Servicer has assumed such duties, obligations
and liabilities. Notwithstanding the preceding sentence, if the Backup
Servicer or any other successor Servicer shall not have assumed the duties,
obligations and liabilities of the Servicer within 45 days of the
termination, non-extension or resignation described in this SECTION 10.3,
the outgoing Servicer may petition a court of competent jurisdiction to
appoint any Eligible Servicer as the successor to the outgoing Servicer.
Pending appointment as successor Servicer, the Backup Servicer (or such
other Person as shall have been appointed by the Controlling Note Purchaser
and the Majority Noteholders of the Highest Priority Class) shall act as
successor Servicer unless it is legally unable to do so, in which event the
outgoing Servicer shall continue to act as Servicer until a successor has
been appointed and accepted such appointment. In the event of termination
of the Servicer, Xxxxx Fargo Bank, National Association, as the Backup
Servicer shall assume the obligations of Servicer hereunder on the date
(the "ASSUMPTION DATE") specified in the written notice delivered by the
Trustee to the Backup Servicer and the Servicer pursuant to SECTION 10.2
or, in the event that the Controlling Note Purchaser and the Majority
Noteholders of the Highest Priority Class shall have determined that a
Person other than the Backup Servicer shall be the successor Servicer in
accordance with SECTION 10.2, on the date of the execution of a written
assumption agreement by such Person to serve as successor Servicer.
Notwithstanding the Backup Servicer's assumption of, and its agreement to
perform and observe, all duties, responsibilities and obligations of the
Seller as Servicer, or any successor Servicer, under this Agreement arising
on and after the Assumption Date, the Backup Servicer shall not be deemed
to have assumed or to become liable for, or otherwise have any liability
for any duties, responsibilities, obligations or liabilities of the Seller
or any other Servicer arising on or before the Assumption Date, whether
provided for by the terms of this Agreement, arising by operation of law or
otherwise, including, without limitation, any liability for any duties,
responsibilities, obligations or liabilities of the Seller or any other
Servicer arising on or before the Assumption Date under SECTION 4.7 or 9.2
of this Agreement, regardless of when the liability, duty, responsibility
or obligation of the Seller or any other Servicer therefor arose, whether
provided by the terms of this Agreement, arising by operation of law or
otherwise. Notwithstanding the above, if the Backup Servicer shall be
legally unable or unwilling to act as Servicer, the Backup Servicer, the
Trustee or the Controlling Note Purchaser and the Majority Noteholders of
the Highest Priority Class may petition a court of competent jurisdiction
to appoint any Eligible Servicer as the successor to the outgoing Servicer.
Pending appointment pursuant to the preceding sentence, the Backup Servicer
shall act as successor Servicer unless it is legally unable to do so, in
which event the outgoing Servicer shall continue to act as Servicer until a
successor has been appointed and accepted such appointment. Subject to
SECTION 9.6, no provision of this Agreement shall be construed as relieving
the Backup Servicer of its obligation to succeed as successor Servicer upon
the termination of the Servicer pursuant to SECTION 10.2, the non-extension
of the Servicer's term pursuant to SECTION 4.15 or the resignation of the
Servicer pursuant to SECTION 9.6. If upon the termination of the Servicer
pursuant to SECTION 10.2, the non-extension of the Servicer's term pursuant
to SECTION 4.15 or the resignation of the Servicer pursuant to SECTION 9.6,
the Controlling Note Purchaser and the Majority Noteholders of the Highest
Priority Class appoint a successor Servicer other than the Backup Servicer,
the Backup Servicer shall not be relieved of its duties as Backup Servicer
hereunder.
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(b) Any successor Servicer shall be entitled to such compensation
(whether payable out of the Collection Account or otherwise) as the
outgoing Servicer would have been entitled to under this Agreement if the
outgoing Servicer had not resigned or been terminated hereunder or had been
renewed for an additional servicing term hereunder.
SECTION 10.4. NOTIFICATION TO THE NOTEHOLDERS AND NOTE PURCHASERS. Upon any
termination of, or appointment of a successor to, the Servicer, the Trustee
shall give prompt written notice thereof to each Noteholder and each Note
Purchaser.
SECTION 10.5. WAIVER OF PAST DEFAUlTS. The Controlling Note Purchaser and
the Majority Noteholders of the Highest Priority Class may waive in writing any
default by the Servicer in the performance of its obligations under this
Agreement and the consequences thereof. Upon any such waiver of a past default,
such default shall cease to exist, and any Servicer Termination Event arising
therefrom shall be deemed to have been remedied for every purpose of this
Agreement. No such waiver shall extend to any subsequent or other default or
impair any right consequent thereto.
SECTION 10.6. ACTION UPON CERTAIN FAILURES OF THE SERVICER. In the event
that the Trustee shall have knowledge of any failure of the Servicer specified
in SECTION 10.1 that would give rise to a right of termination under such
Section upon the Servicer's failure to remedy the same after notice, the Trustee
shall give notice thereof to the Servicer, each Note Purchaser and each
Noteholder. For all purposes of this Agreement (including, without limitation,
this SECTION 10.6), the Trustee shall not be deemed to have knowledge of any
failure of the Servicer as specified in SECTIONS 10.1(C) through (H) unless
notified thereof in writing by the Servicer, any Note Purchaser or any
Noteholder. The Trustee shall be under no duty or obligation to investigate or
inquire as to any potential failure of the Servicer specified in SECTION 10.1.
SECTION 10.7. CONTINUED ERRORS. Notwithstanding anything contained herein
to the contrary, if the Backup Servicer becomes successor Servicer it is
authorized to accept and rely on all of the accounting, records (including
computer records) and work of the prior Servicer relating to the Receivables
(collectively, the "PREDECESSOR SERVICER WORK PRODUCT") without any audit or
other examination thereof, and the Backup Servicer as successor Servicer shall
have no duty, responsibility, obligation or liability for the acts and omissions
of the prior Servicer. If any error, inaccuracy, omission or incorrect or
non-standard practice or procedure (collectively, "ERRORS") exist in any
Predecessor Servicer Work Product and such Errors make it materially more
difficult to service or should cause or materially contribute to the Backup
Servicer as successor Servicer making or continuing any Errors (collectively,
"CONTINUED ERRORS"), the Backup Servicer as successor Servicer shall have no
duty or responsibility for such Continued Errors; PROVIDED, HOWEVER, that the
Backup Servicer as successor Servicer agrees to use its best efforts to prevent
further Continued Errors. In the event that the Backup Servicer as successor
Servicer becomes aware of Errors or Continued Errors, the Backup Servicer as
successor Servicer shall, with the prior consent of the Controlling Note
Purchaser, use its best efforts to reconstruct and reconcile such data as is
commercially reasonable to correct such Errors and Continued Errors and to
prevent future Continued Errors. The Backup Servicer as successor Servicer shall
be entitled to recover its costs thereby expended in accordance with SECTIONS
5.7(A)(I) and 5.7(A)(X) hereof.
ARTICLE XI
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MISCELLANEOUS PROVISIONS
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SECTION 11.1. AMENDMENT.
(a) This Agreement may not be waived, amended or otherwise modified
except in a writing signed by the parties hereto, the Controlling Note
Purchaser and the Majority Noteholders of the Highest Priority Class;
PROVIDED, HOWEVER, that, no such amendment shall, without the prior written
consent of each Note Purchaser and each Noteholder, (i) modify or have the
effect of modifying Sections 5.7 or 5.8 or this SECTION 11.1 or (ii)
eliminate or materially alter any party's delivery or notice obligations to
the Noteholders; PROVIDED, FURTHER, that no such waiver, amendment or
modification shall, without the prior written consent of the affected Note
Purchaser and each Noteholder of a class of Notes affected thereby:
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(i) change the date of payment of any installment of principal
of or interest on a class of Notes or any other amount owed by the
Issuer, the Purchaser, the Servicer or the Seller under the Basic
Documents, or reduce the Percentage Interest of the Notes, the
interest rate thereon, change the provision of this Agreement relating
to the application of collections on, or the proceeds of the sale of,
the Collateral, the Pledged Subordinate Securities or, subject to the
terms and provisions of the Intercreditor Agreement, the UBS Cross
Collateral to payment of principal of or interest on a class of Notes
or any other amount owed by the Issuer, the Purchaser, the Servicer or
the Seller under the Basic Documents, or change any place of payment
where, or the coin or currency in which, a class of Notes or the
interest thereon or any other amount owed by the Issuer, the
Purchaser, the Seller or the Servicer under the Basic Documents is
payable;
(ii) impair the right to institute suit for the enforcement of
the provisions of this Agreement requiring the application of funds
available therefor, as provided in SECTION 5.8, to the payment of any
such amount due on a class of Notes or any other amount owed by the
Issuer, the Purchaser, the Servicer or the Seller under the Basic
Documents on or after the respective due dates thereof;
(iii) reduce the Percentage Interest, the consent of the Holders
of which is required for any such amendment, waiver or modification,
or eliminate the requirement that the applicable Note Purchaser
consent thereto, or the consent of the Holders of which or the
applicable Note Purchaser is required for any waiver of compliance
with certain provisions of this Agreement or certain defaults
hereunder and their consequences provided for in this Agreement;
(iv) modify or alter the provisions of the proviso to the
definition of the term "OUTSTANDING";
(v) modify any provision of this Section or to provide that
certain additional provisions of this Agreement or the other Basic
Documents cannot be modified or waived without the consent of the
Controlling Note Purchaser and the Majority Noteholders of the Highest
Priority Class; or
(vi) modify any of the provisions of this Agreement in such
manner as to affect the calculation of the amount or timing of any
payment of (x) interest or principal due on a class of Notes on any
Settlement Date (including the calculation of any of the individual
components of such calculation) or (y) any amount due to any Note
Purchaser from the Issuer, the Purchaser, the Servicer or the Seller
under the Basic Documents.
(b) Prior to the execution of any amendment, waiver or consent to
this Agreement the Trustee shall be entitled to receive and rely upon an
Opinion of Counsel stating that the execution of such amendment, waiver or
consent is authorized or permitted by this Agreement and the Opinion of
Counsel referred to in SECTION 11.2(I)(I).
(c) The Trustee may, but shall not be obligated to, enter into any
such amendment, waiver or consent which affects the Trustee's own rights,
duties or immunities under this Agreement or otherwise.
(d) Upon the termination of CPS as Servicer and the appointment of
the Backup Servicer as Servicer hereunder, all amendments to the terms of
this Agreement specified in the Servicing Assumption Agreement shall become
a part of this Agreement, as if this Agreement was amended to reflect such
changes in accordance with this SECTION 11.1.
SECTION 11.2. PROTECTION OF TITLE TO PROPERTY.
(a) The Seller, the Purchaser, the Issuer or the Servicer or each of
them shall authorize, execute (if necessary) and file such financing
statements and cause to be authorized, executed (if necessary) and filed
such continuation statements, all in such manner and in such places and
take such other action as may be required by law fully to preserve,
maintain and protect the interest of the Purchaser and the interests of (i)
subject to the terms and provisions of the Intercreditor Agreement, the
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Trustee for the benefit of the Noteholders and the Note Purchasers in the
Collateral and in the proceeds thereof, (ii) the Class B Note Purchasers
and the Class B Noteholders in the Pledged Subordinate Securities and in
the proceeds thereof, and (iii) subject to the terms and provisions of the
Intercreditor Agreement, the Bear Indenture Trustee in the UBS Cross
Collateral and the proceeds thereof for the benefit of the Class B note
purchasers and the Class B noteholders under the Bear Basic Documents. The
Seller shall deliver (or cause to be delivered) to each Noteholder, each
Note Purchaser and the Trustee file-stamped copies of, or filing receipts
for, any document filed as provided above, as soon as available following
such filing.
(b) None of the Seller, the Purchaser, the Issuer or the Servicer
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 in
accordance with PARAGRAPH (A) above seriously misleading within the meaning
of Section 9-506(a) of the UCC, unless it shall have given each Noteholder,
each Note Purchaser and the Trustee at least thirty (30) days' prior
written notice thereof and shall have promptly filed appropriate amendments
to all previously filed financing statements or continuation statements.
Promptly upon such filing, the Purchaser, the Seller, the Issuer or the
Servicer, as the case may be, shall deliver an Opinion of Counsel to the
Trustee, each Note Purchaser, each Noteholder and the Bear Indenture
Trustee, in a form and substance reasonably satisfactory to the Controlling
Note Purchaser, stating either (A) all financing statements and
continuation statements have been authorized, executed and filed that are
necessary fully to preserve and protect the interest of the Purchaser and
(i) subject to the terms and provisions of the Intercreditor Agreement, the
Trustee for the benefit of the Noteholders and the Note Purchasers in the
Collateral and the proceeds thereof, (ii) the Class B Noteholders and the
Class B Note Purchasers in the Pledged Subordinate Securities and the
proceeds thereof, and (iii) subject to the terms and provisions of the
Intercreditor Agreement, the Bear Indenture Trustee in the UBS Cross
Collateral and the proceeds thereof for the benefit of the Class B note
purchasers and the Class B noteholders under the Bear Basic Documents, and
reciting the details of such filings or referring to prior Opinions of
Counsel in which such details are given, or (B) no such action shall be
necessary to preserve and protect such interest.
(c) Each of the Seller, the Purchaser, the Issuer and the Servicer
shall have an obligation to give each Noteholder, each Note Purchaser and
the Trustee at least 60 days' prior written notice of any relocation of its
chief executive office or a change in its corporate structure, jurisdiction
of organization or name and shall file amendments, continuation statements
and new financing statements if, as a result of such relocation or change,
the applicable provisions of the UCC would require the filing of any
amendment of any previously filed financing or continuation statement or of
any new financing statement to fully preserve and protect the interest of
the Purchaser and (i) subject to the terms and provisions of the
Intercreditor Agreement, the Trustee on behalf of the Noteholders and the
Note Purchasers in the Collateral and the proceeds thereof, (ii) the Class
B Noteholders and the Class B Note Purchasers in the Pledged Subordinate
Securities and the proceeds thereof, and (iii) subject to the terms and
provisions of the Intercreditor Agreement, the Bear Indenture Trustee in
the UBS Cross Collateral and the proceeds thereof for the benefit of the
Class B note purchasers and the Class B noteholders under the Bear Basic
Documents. The Servicer shall at all times be organized under the laws of
the United States (or any State thereof) and maintain its chief executive
office and jurisdiction of organization, within the United States of
America.
(d) The Servicer shall maintain accounts and records as to each
Receivable accurately and in sufficient detail to permit (i) 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)
and (ii) reconciliation between payments or recoveries on (or with respect
to) each Receivable and the amounts from time to time deposited in the
Collection Account in respect of such Receivable.
(e) The Servicer shall maintain its computer systems so that, from
and after the time of sale under this Agreement of the Receivables and the
Other Conveyed Property to the Purchaser, the Servicer's master computer
records (including any backup archives) that refer to a Receivable shall
indicate clearly the interest of the Purchaser in such Receivable and that
such Receivable is owned by the Purchaser and pledged to the Trustee for
the benefit of the Note Purchasers and the Noteholders. Indication of the
Purchaser's and the Trustee's interest in a Receivable shall be deleted
from or modified on the Servicer's computer systems when, and only when,
the related Receivable shall have been paid in full or repurchased.
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(f) If at any time the Seller or the Servicer shall propose to sell,
grant a security interest in or otherwise transfer any interest in
automotive receivables to any prospective purchaser, lender or other
transferee, the Servicer shall give to such prospective purchaser, lender
or other transferee computer tapes, records or printouts (including any
restored from backup archives) that, if they shall refer in any manner
whatsoever to any Receivable, shall indicate clearly that such Receivable
has been sold and is owned by the Purchaser and pledged to the Trustee for
the benefit of the Noteholders and the Note Purchasers.
(g) The Servicer shall permit the Trustee, the Backup Servicer, each
Note Purchaser and each Noteholder and their respective agents upon
reasonable notice and at any time during normal business hours to inspect,
audit, and make copies of and abstracts from the Servicer's records
regarding any Receivable.
(h) Upon request, the Servicer shall furnish to any Noteholder or any
Note Purchaser or to the Trustee, within five Business Days, a list of all
Receivables (by contract number and name of Obligor) then pledged to the
Trustee for the benefit of the Note Purchasers and the Noteholders,
together with a reconciliation of such list to the Schedule of Receivables
and to each of the Servicer's Certificates furnished before such request
indicating removal of Receivables from the lien of the Indenture.
(i) The Servicer shall deliver to each Note Purchaser, each
Noteholder and the Trustee:
(i) promptly after the execution and delivery of this Agreement
and, if required pursuant to SECTION 11.1, of each amendment, waiver,
or consent, an Opinion of Counsel, in form and substance satisfactory
to the Controlling Note Purchaser and (to the extent such Opinion of
Counsel relates to Opinion Collateral consisting of Pledged
Subordinate Securities) the Class B Note Purchasers and (to the extent
such Opinion of Counsel relates to Opinion Collateral consisting of
UBS Cross Collateral) the Class B note purchasers under the Bear Basic
Documents, stating that in the opinion of such counsel, either (A) all
financing statements and continuation statements have been authorized,
executed and filed that are necessary fully to preserve and protect
the interest of the Purchaser and the Trustee for the benefit of the
applicable Noteholders and the applicable Note Purchasers in the
Opinion Collateral, and reciting the details of such filings or
referring to a prior Opinion of Counsel in which such details are
given, or (B) no such action shall be necessary to preserve and
protect such interest; and
(ii) within 90 days after the beginning of each calendar year
beginning with the first calendar year beginning more than three
months after the Closing Date, an Opinion of Counsel, dated as of a
date during such 90-day period, stating that, the opinion of such
counsel, either (a) all financing statements and continuation
statement have been authorized, executed and filed that are necessary
fully to preserve and protect the interest of the Purchaser and the
Trustee for the benefit of the applicable Noteholders and the
applicable Note Purchasers in the Receivables and the Opinion
Collateral, and reciting the details of such filings or referring to
prior Opinions of Counsel in which such details are given, or (b) no
such action shall be necessary to preserve and protect such interest.
Each Opinion of Counsel referred to in clause (i) or (ii) above shall
specify any action necessary (as of the date of such opinion) to be taken in the
following year to preserve and protect such interest.
Subject to SECTION 4.5, the Seller hereby authorizes the Controlling Note
Purchaser, the Trustee and their respective agents to file such financing
statements and continuation statements and take such other actions as the
Controlling Note Purchaser or the Trustee may deem advisable in connection with
the security interest granted by the Seller pursuant to SECTION 2.2 to the
extent permitted by applicable law. Any such financing statements and
continuation statements shall be prepared by the Issuer or the Controlling Note
Purchaser.
SECTION 11.3. NOTICES. All demands, notices and communications upon or to
the Seller, the Backup Servicer, the Servicer, the Purchaser, the Trustee, the
Backup Servicer, any Note Purchaser or any Noteholder under this Agreement shall
be in writing, via facsimile (with telephonic confirmation of receipt),
personally delivered, or mailed by certified mail, return receipt requested, and
shall be deemed to have been duly given upon receipt (a) in the case of the
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Seller, to Consumer Portfolio Services, Inc., 00000 Xxxxxx Xxxxxx Xxxx, Xxxxxx,
XX 00000, Attention: General Counsel, Telecopy: (000) 000-0000; (b) in the case
of the Servicer, to Consumer Portfolio Services, Inc., 00000 Xxxxxx Xxxxxx Xxxx,
Xxxxxx, XX 00000, Attention: General Counsel, Telecopy: (000) 000-0000; (c) in
the case of the Purchaser, to Page Funding LLC, 00000 Xxxxxx Xxxxxx Xxxx,
Xxxxxx, XX 00000, Attention: General Counsel, Telecopy: (000) 000-0000; (d) in
the case of the Trustee or the Backup Servicer at the Corporate Trust Office;
(e) in the case of the initial Class A Noteholder and the Class A Note
Purchaser, to UBS Real Estate Securities Inc., 1285 Avenue of the Xxxxxxxx, 00xx
Xxxxx, Xxx Xxxx, Xxx Xxxx, 00000; Attn: Xxxxxxxx xxXxxxxxxx; Telephone: (212)
000-0000; Telecopy: (000) 000-0000; (f) in the case of the initial Class B
Noteholders and the Class B Note Purchasers, to The Patriot Group, LLC, Xxx
Xxxxxxxx Xxxxxx, Xxxxxx, XX 00000, Attention: Xxxxx Xxxx, Telecopy (203)
656-4483; and to Waterfall Eden Fund, LP, 0000 Xxxxxx xx xxx Xxxxxxxx, 00xx
Xxxxx, Xxx Xxxx, XX 00000; Attention: Xxxx Xxxx; Telecopy: (000) 000-0000; and
(g) in the case of any subsequent Noteholders, at the address reflected on the
Note Register. Any Note Purchaser may deliver to the Noteholders any notices,
reports, Servicer's Certificates or any other documentation delivered to such
Note Purchaser hereunder or under any other Basic Document, but is under no
obligation to so deliver such documentation and shall not be liable for the
content thereof. Any notice so mailed within the time prescribed in this
Agreement shall be conclusively presumed to have been duly given, whether or not
the Noteholders or Note Purchasers shall receive such notice.
SECTION 11.4. ASSIGNMENT. This Agreement shall inure to the benefit of and
be binding upon the parties hereto and their respective successors and permitted
assigns. Notwithstanding anything to the contrary contained herein, except as
provided in SECTIONS 8.4, 9.3 and this SECTION 11.4 and as provided in the
provisions of this Agreement concerning the resignation of the Servicer, this
Agreement may not be assigned by the Purchaser, the Seller, the Issuer or the
Servicer without the prior written consent of the Trustee, the Backup Servicer,
the Controlling Note Purchaser and the Majority Noteholders of the Highest
Priority Class; PROVIDED HOWEVER THAT, notwithstanding the foregoing, the Issuer
may pledge all of its right, title and interest herein to the Trustee for the
benefit of the Noteholders and the Note Purchasers without the prior written
consent of the Trustee, the Backup Servicer, the Controlling Note Purchaser and
the Majority Noteholders of the Highest Priority Class.
SECTION 11.5. LIMITATIONS ON RIGHTS OF OTHERS. The provisions of this
Agreement are solely for the benefit of the parties hereto and for the benefit
of each Note Purchaser and each Noteholder as a third-party beneficiary. Except
as provided in the following sentence, nothing in this Agreement, whether
express or implied, shall be construed to give to any other Person any legal or
equitable right, remedy or claim in the Collateral, the Pledged Subordinate
Securities or the UBS Cross Collateral or under or in respect of this Agreement
or any covenants, conditions or provisions contained herein. Notwithstanding the
foregoing, each of the Bear Indenture Trustee, each Class B note purchaser and
each Class B noteholder under the Bear Basic Documents shall be deemed to be a
third-party beneficiary with respect to this Agreement to the same extent as if
it was a party hereto, subject to the terms of the Intercreditor Agreements.
SECTION 11.6. SEVERABILITY. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
SECTION 11.7. SEPARATE COUNTERPARTS. This Agreement may be executed by the
parties hereto in separate counterparts, each of which when so executed and
delivered shall be an original, but all such counterparts shall together
constitute but 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.
SECTION 11.8. HEADINGS. The headings of the various Articles and Sections
herein are for convenience of reference only and shall not define or limit any
of the terms or provisions hereof.
SECTION 11.9. GOVERNING LAW. THIS AGREEMENT (OTHER THAN SECTIONS 2.1(A) AND
2.2 HEREOF) SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS (OTHER THAN SECTION
5-1401 OF THE GENERAL OBLIGATIONS LAW), AND THE OBLIGATIONS, RIGHTS AND REMEDIES
OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
SECTIONS 2.1(A) AND 2.2 OF THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF DELAWARE AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF
THE PARTIES UNDER SUCH SECTIONS SHALL BE DETERMINED IN ACCORDANCE WITH SUCH
LAWS.
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SECTION 11.10. ASSIGNMENT TO TRUSTEE. The Seller hereby acknowledges and
consents to any mortgage, pledge, assignment and grant of a security interest by
the Purchaser to the Trustee pursuant to the Indenture for the benefit of the
Noteholders and the Note Purchasers of all right, title and interest of the
Purchaser in, to and under the Receivables and Other Conveyed Property and/or
the assignment of any or all of the Purchaser's rights and obligations hereunder
to the Trustee for the benefit of the Noteholders and the Note Purchasers.
SECTION 11.11. NONPETITION COVENANTS. Notwithstanding any prior termination
of this Agreement, the Servicer and the Seller shall not, prior to the date
which 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, all Secured Obligations
and all other amounts due and payable 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 to invoke the process of any court or
government authority for the purpose of commencing or sustaining a case against
the Purchaser 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 or any substantial part of its
property, or ordering the winding up or liquidation of the affairs of the
Purchaser.
SECTION 11.12. LIMITATION OF LIABILITY OF TRUSTEE. Notwithstanding anything
contained herein to the contrary, this Agreement has been executed and delivered
by Xxxxx Fargo Bank, National Association, not in its individual capacity but
solely as Trustee and Backup Servicer and in no event shall Xxxxx Fargo Bank,
National Association, have any liability for the representations, warranties,
covenants, agreements or other obligations of the Purchaser hereunder or in any
of the certificates, notices or agreements delivered pursuant hereto, as to all
of which recourse shall be had solely to the assets of the Purchaser.
SECTION 11.13. INDEPENDENCE OF THE SERVICER. For all purposes of this
Agreement, the Servicer shall be an independent contractor and shall not be
subject to the supervision of the Purchaser, the Trustee and Backup Servicer
with respect to the manner in which it accomplishes the performance of its
obligations hereunder. Unless expressly authorized by this Agreement, the
Servicer shall have no authority to act for or represent the Purchaser in any
way and shall not otherwise be deemed an agent of the Purchaser.
SECTION 11.14. NO JOINT VENTURE. Nothing contained in this Agreement (i)
shall constitute the Servicer and the Purchaser as members of any partnership,
joint venture, association, syndicate, unincorporated business or other separate
entity, (ii) shall be construed to impose any liability as such on any of them
or (iii) shall be deemed to confer on any of them any express, implied or
apparent authority to incur any obligation or liability on behalf of the others,
except as expressly provided in this Agreement and the other Basic Documents.
SECTION 11.15. INTENTION OF PARTIES REGARDING DELAWARE SECURITIZATION ACT.
It is the intention of the Purchaser and the Seller that the transfer and
assignment of the property contemplated by SECTION 2.1(A) of this Agreement
shall constitute a sale of property from the Seller to the Purchaser, conveying
good title thereto free and clear of any liens, and the beneficial interest in
and title to such assets shall not be part of the Seller's estate in the event
of the filing of a bankruptcy petition by or against the Seller under any
bankruptcy or similar law. In addition, for purposes of complying with the
requirements of the Asset-Backed Securities Facilitation Act of the State of
Delaware, 6 Del. C. ss. 2701A, et seq. (the "SECURITIZATION ACT"), each of the
parties hereto hereby agrees that:
(a) any property, assets or rights purported to be transferred, in
whole or in part, by the Seller to the Purchaser pursuant to this Agreement
shall be deemed to no longer be the property, assets or rights of the
Seller;
(b) none of the Seller, its creditors or, in any insolvency
proceeding with respect to the Seller or the Seller's property, a
bankruptcy trustee, receiver, debtor, debtor in possession or similar
person, to the extent the issue is governed by Delaware law, shall have any
rights, legal or equitable, whatsoever to reacquire (except pursuant to a
provision of this Agreement), reclaim, recover, repudiate, disaffirm,
redeem or recharacterize as property of the Seller any property, assets or
rights purported to be transferred, in whole or in part, by the Seller to
the Purchaser pursuant to this Agreement;
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(c) in the event of a bankruptcy, receivership or other insolvency
proceeding with respect to the Seller or the Seller's property, to the
extent the issue is governed by Delaware law, such property, assets and
rights shall not be deemed to be part of the Seller's property, assets,
rights or estate; and
(d) the transaction contemplated by this Agreement shall constitute a
"securitization transaction" as such term is used in the Securitization
Act.
SECTION 11.16. SPECIAL SUPPLEMENTAL AGREEMENT. If any party to this
Agreement is unable to sign any amendment or supplement due to its dissolution,
winding up or comparable circumstances, then the consent of the Controlling Note
Purchaser and the Majority Noteholders of the Highest Priority Class shall be
sufficient to amend this Agreement without such party's signature.
SECTION 11.17. FULL RECOURSE TO THE ISSUER AND THE PURCHASER. The
obligations of the Issuer and the Purchaser under this Agreement and the other
Basic Documents to which it is a party shall be full recourse obligations of the
Issuer and the Purchaser. Notwithstanding the foregoing, no recourse shall be
had for the payment of any amount owing hereunder or for the payment of any fee
hereunder or any other obligation of, or claim against, the Issuer or the
Purchaser arising out of or based upon any provision herein or under any other
Basic Document, against any member, employee, officer, agent, director or
authorized person of the Issuer or the Purchaser or any Affiliate thereof except
as the Issuer or the Purchaser may have expressly agreed and except that any
such partner, owner or beneficiary shall be fully liable, to the extent provided
by applicable law, for any unpaid consideration for stock, unpaid capital
contribution or failure to pay any installment or call owing to such entity;
PROVIDED, HOWEVER, that the foregoing shall not relieve any such person or
entity of any liability they might otherwise have as a result of fraudulent
actions or omissions taken by them. 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 11.18. ACKNOWLEDGEMENT OF ROLES. The parties expressly acknowledge
and consent to Xxxxx Fargo Bank, National Association acting in the multiple
capacities of Backup Servicer and Trustee. The parties agree that Xxxxx Fargo
Bank, National Association in such multiple capacities shall not be subject to
any claim, defense or liability arising from its performance in any such
capacity based on conflict of interest principles, duty of loyalty principles or
other breach of fiduciary duties to the extent that any such conflict or breach
arises from the performance by Xxxxx Fargo Bank, National Association of any
other such capacity or capacities in accordance with this Agreement or any other
Basic Documents to which it is a party.
SECTION 11.19. TERMINATION. Except as otherwise provided herein, the
respective obligations and responsibilities of the Seller, the Purchaser, the
Issuer, the Servicer, the Backup Servicer and the Trustee created hereby shall
terminate on the Termination Date; PROVIDED, HOWEVER, in any case there shall be
delivered to the Trustee, each Note Purchaser and each Noteholder an Opinion of
Counsel that all applicable preference periods under federal, State and local
bankruptcy, insolvency and similar laws have expired with respect to the
payments pursuant to this SECTION 11.19. The Servicer shall promptly notify the
Trustee, the Seller, the Issuer, each Note Purchaser and each Noteholder of any
prospective termination pursuant to this SECTION 11.19.
SECTION 11.20. 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, ANY OTHER BASIC
DOCUMENT OR ANY DOCUMENT RELATED HERETO OR THERETO. 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.
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SECTION 11.21. WAIVER OF TRIAL BY JURY. 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, ANY OTHER BASIC DOCUMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, 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, ANY
OTHER BASIC DOCUMENT OR ANY PROVISION HEREOF OR THEREOF. THIS WAIVER SHALL APPLY
TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS
AGREEMENT OR ANY OTHER BASIC DOCUMENT.
SECTION 11.22. PROCESS AGENT. Each of the Purchaser, Seller, Servicer and
Trustee agrees that the process by which any proceedings in the State of New
York are begun may be served on it by being delivered by certified mail at the
chief executive office or corporate trust office, as applicable, or at its
registered office for the time being. If such person is not or ceases to be
effectively appointed to accept service of process on the Purchaser's, Seller's,
Servicer's or Trustee's behalf, the Purchaser, Seller, Servicer or Trustee, as
applicable, shall, on the written demand of the process agent, appoint a further
person in the State of New York to accept service of process on its behalf and,
failing such appointment within 15 days, the process agent shall be entitled to
appoint such a person by written notice to the Purchaser, Seller, Servicer or
Trustee, as applicable. Nothing in this sub-clause shall affect the right of the
process agent to serve process in any other manner permitted by law.
SECTION 11.23. SET-OFF.(a) Each of the Seller, the Purchaser, the Issuer
and the Servicer agrees that it shall have no right of set-off or banker's lien
against, and no right to otherwise deduct from, any funds held in any account
described herein or in the Basic Documents for any amount owed to it by any Note
Purchaser or any Noteholder.
(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) each 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 such 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 such Note
Purchaser or any of its Affiliates, the respective obligations of the
Purchaser or the Issuer to such Note Purchaser under this Agreement
and the other Basic Documents and irrespective of whether or not such
Note Purchaser shall have made any demand hereunder or thereunder;
provided that if a Class B Note Purchaser elects to exercise its right
of set-off pursuant to this clause (i) at any time that it is not the
Controlling Note Purchaser, such Class B Note Purchaser shall pay the
amount of any such set-off to the Trustee for deposit into the
Collection Account for application pursuant to Section 5.7 hereof; and
(ii) each 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 such 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 such Note Purchaser
or any of its Affiliates, the respective obligations of the Seller or
the Servicer to such Note Purchaser under this Agreement and the other
Basic Documents and irrespective of whether or not such Note Purchaser
shall have made any demand hereunder or thereunder; provided that if a
Class B Note Purchaser elects to exercise its right of set-off
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pursuant to this clause (ii) at any time that it is not the
Controlling Note Purchaser, such Class B Note Purchaser shall pay the
amount of any such set-off to the Trustee for deposit into the
Collection Account for application pursuant to Section 5.7 hereof.
SECTION 11.24. NO WAIVER; CUMULATIVE REMEDIES. No failure to exercise and
no delay in exercising any right, remedy, power or privilege hereunder, shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right, remedy, power or privilege hereunder preclude any other or further
exercise hereof or the exercise of any other right, remedy, power or privilege.
The rights, remedies, powers and privileges herein provided are cumulative and
not exhaustive of any rights, remedies, powers and privileges provided by law.
SECTION 11.25. MERGER AND INTEGRATION. Except as specifically stated
otherwise herein, this Agreement and the other Basic Documents sets forth the
entire understanding of the parties relating to the subject matter hereof, and
all prior understandings, written or oral, are superseded by this Agreement and
the other Basic Documents. This Agreement may not be modified, amended, waived
or supplemented except as provided herein.
SECTION 11.26. 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 Agreements; provided, however that to the extent such rights,
obligations and remedies relate to the Bear Cross Collateral, such rights,
obligations and remedies are subject in all respects to the terms and provisions
of the Bear 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 Bear Intercreditor Agreement that relates to the Bear Cross Collateral,
the Bear Intercreditor Agreement shall control.
SECTION 11.27. CONTROLLING NOTE PURCHASER; MAJORITY NOTEHOLDERS OF HIGHEST
PRIORITY CLASS. Notwithstanding anything contained in this Agreement or the
other Basic Documents to the contrary, in taking or refraining from taking any
action with respect to this Agreement or any other Basic Document, (i) the Class
A Note Purchaser, when acting as Controlling Note Purchaser, will be acting
solely for its own benefit, and (ii) any Class A Noteholder, when acting as one
of the Majority Noteholders of the Highest Priority Class, shall be acting
solely for its own benefit, and in each case not as agent, fiduciary or in any
other capacity on behalf of the Issuer, the Purchaser, the Seller, the Servicer,
any Class B Note Purchaser, any Class B Noteholder or any other Person. The
interests of the Class A Note Purchaser and the Class A Noteholders may be
adverse to the interests of the Issuer, the Purchaser, the Seller, the Servicer,
the Class B Note Purchasers and the Class B Noteholders (or any of them), and
the Class A Note Purchaser and the Class A Noteholders are not obligated to
consider the interests of the Issuer, the Purchaser, the Seller, the Servicer,
any Class B Note Purchaser, any Class B Noteholder or any other Person in taking
or refraining from taking any action under this Agreement or any other Basic
Document (including without limitation making any determination of Market Value,
making any determination of market value of Pledged Subordinate Securities,
determining whether or not to extend the Servicer's term, declaring an Event of
Default, declaring a Class A Funding Termination Event, declaring a Servicer
Termination Event, agreeing to any amendments to or waivers under any Basic
Document, accelerating the Class A Notes or exercising any other rights or
remedies under any Basic Document or applicable law). Accordingly, any action
taken or omitted by the Class A Note Purchaser or any Class A Noteholder under
this Agreement or any other Basic Document may not be in the interests of, and
may be directly adverse to the interests of, the Issuer, the Purchaser, the
Seller, the Servicer, the Class B Note Purchasers and the Class B Noteholders
(or any of them). In addition, except as otherwise expressly provided in this
Agreement or the other Basic Documents, the Class A Note Purchaser or any Class
A Noteholder may waive or modify the terms of this Agreement or any other Basic
Document from time to time without the consent of any Class B Note Purchaser or
any Class B Noteholder, and shall, if an Event of Default, a Class A Funding
Termination Event or a Servicer Termination Event shall occur, have the sole and
absolute discretion to exercise rights and remedies under the Basic Documents
(except with respect to the Pledged Subordinate Securities, the Bear Cross
Collateral (subject to the Bear Intercreditor Agreement) and the Class B
Available Funds), including without limitation to terminate the Servicer and/or
to cause an acceleration of the Class A Notes and the liquidation of the
Collateral, in each case without regard to the interests of the Issuer, the
Purchaser, the Seller, the Servicer, any Class B Note Purchaser, any Class B
Noteholder or any other Person. The Issuer, the Purchaser, the Seller, the
Servicer, the Class B Note Purchasers and the Class B Noteholders hereby waive
any and all conflicts of interest (if any) that may arise in respect of the
exercise of any such rights or remedies by the Class A Note Purchaser or any
Class A Noteholder.
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SECTION 11.28. NO NOVATION. It is expressly understood and agreed by the
parties hereto that the amendment and restatement of this Agreement is in no way
intended to and shall not be deemed to constitute a novation or repayment of the
outstanding Class A Advances and the other obligations and liabilities existing
under the Original Basic Documents and the security interest of the Trustee in
the Collateral for the benefit of the Noteholders and the Note Purchasers shall
remain in full force and effect after giving effect to the amendment and
restatement of this Agreement.
SECTION 11.29. SURVIVAL OF REPRESENTATIONS, WARRANTIES AND INDEMNITIES. The
representations, warranties and indemnity obligations of the Issuer, the
Purchaser, the Servicer, the Seller and CPS made in the Original Sale and
Servicing Agreement and each other Original Basic Document prior to the Class B
Closing Date shall survive the Class B Closing Date and the execution and
delivery of this Agreement, and each such representation and warranty so made is
true and correct as of the date originally made and as of the date hereof.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their respective duly authorized officers as of
the day and the year first above written.
PAGE FUNDING LLC, as Purchaser and Issuer
By:
---------------------------------------------
Name:
Title:
CONSUMER PORTFOLIO SERVICES, INC., as
Seller and Servicer
By:
---------------------------------------------
Name:
Title:
XXXXX FARGO BANK, NATIONAL ASSOCIATION, not in
its individual capacity, but solely as Backup
Servicer and Trustee
By:
---------------------------------------------
Name:
Title:
CONSENTED TO BY:
UBS REAL ESTATE SECURITIES, INC.,
as Class A Noteholder and Class A Note Purchaser
By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
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ACKNOWLEDGEMENT
---------------
TFC, in its capacity as a subservicer with respect to the TFC Managed
Receivables hereby acknowledges and agrees to the provisions set forth in
Sections 4.5 and 4.17 of the foregoing Agreement.
THE FINANCE COMPANY
By:____________________________
Name:__________________________
Title:_________________________
ANNEX A---DEFINED TERMS
"ACCOUNT CONTROL AGREEMENT" means that Amended and Restated Deposit Account
Control Agreement dated as of February 14, 2007, by and among CPS, the Note
Purchasers and Xxxxx Fargo Bank, National Association, as such agreement may be
further amended, supplemented or otherwise modified from time to time in
accordance with the terms thereof.
"ACCOUNTING DATE" means, with respect to any Determination Date, the close
of business on the day immediately preceding such Determination Date.
"ACCOUNTANTS' REPORT" means the report of a firm of nationally recognized
independent accountants described in SECTION 4.11 of the Sale and Servicing
Agreement.
"ACCRUAL PERIOD" means a calendar month; provided that the initial Accrual
Period for the Class A Notes shall be the period from and including the day
after the Cutoff Date for the initial Class A Funding Date to and including July
31, 2004, and the initial Accrual Period for the Class B Notes shall be the
period from and including the day after the Cutoff Date for the initial Class B
Funding Date to and including March 15, 2007.
"ACT" has the meaning specified in SECTION 11.3 of the Indenture.
"ADDITIONAL CLASS B COLLATERAL" means, collectively, the collateral granted
pursuant to Granting Clause II of the Indenture and Granting Clause III of the
Bear Indenture.
"ADDITION NOTICE" means, with respect to any transfer of Receivables to the
Purchaser pursuant to SECTION 2.1 of the Sale and Servicing Agreement, notice of
the Seller's election to transfer Receivables to the Purchaser, such notice to
designate the related Funding Date and the aggregate principal amount of
Receivables to be transferred on such Funding Date, substantially in the form of
EXHIBIT G to the Sale and Servicing Agreement.
"ADVANCE" means, with respect to the Class A Notes, a Class A Advance and
with respect to the Class B Notes, a Class B Advance.
"ADVANCE AMOUNT" means, with respect to the Class A Notes, the Class A
Advance Amount and with respect to the Class B Notes, the Class B Advance
Amount.
"AFFILIATE" of any Person means any Person who directly or indirectly
controls, is controlled by, or is under direct or indirect common control with
such Person. For purposes of this definition, the term "CONTROL" when used with
respect to any Person means the power to direct the management and policies of
such Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms "controlling", "CONTROLLED
BY" and "UNDER COMMON CONTROL WITH" have meanings correlative to the foregoing.
In addition, for purposes of this definition, any fund or investment vehicle,
whether existing as of the Class B Closing Date or thereafter formed, which is
managed by any Person, shall be deemed to by an "AFFILIATE" of such Person.
"AGGREGATE PRINCIPAL BALANCE" means, with respect to any date of
determination and with respect to the Receivables, the Eligible Receivables or
any specified portion thereof, as the case may be, the sum of the Principal
Balances for all Receivables, the Eligible Receivables or any specified portion
thereof, as the case may be (other than (i) any Receivable that became a
Liquidated Receivable prior to the end of the most recently ended Accrual Period
and (ii) any Receivable that became a Purchased Receivable prior to the end of
the most recently ended Accrual Period) as of the date of determination.
"AMOUNT FINANCED" means, with respect to a Receivable, the aggregate amount
advanced under such Receivable toward the purchase price of the Financed Vehicle
and any related costs, including amounts advanced in respect of accessories,
insurance premiums, service and warranty contracts, other items customarily
financed as part of a Contract, and related costs.
"ANNUAL PERCENTAGE RATE" or "APR" of a Receivable means the annual
percentage rate of finance charges or service charges, as stated in the related
Contract.
"ASSIGNMENT" means an assignment from the Seller to the Purchaser with
respect to the Receivables and Other Conveyed Property to be conveyed by the
Seller to the Purchaser on any Funding Date, in substantially the form of
EXHIBIT F to the Sale and Servicing Agreement.
"ASSUMPTION DATE" has the meaning set forth in SECTION 10.3(A) of the Sale
and Servicing Agreement.
"AUTHORIZED OFFICER" means, with respect to the Servicer or the Issuer, any
officer or agent acting pursuant to a power of attorney of the Servicer or the
Issuer, as the case may be, who is authorized to act therefor and who is
identified on the list of Authorized Officers delivered by such Person to the
Trustee and each Note Purchaser on the Class B Closing Date (as such list may be
modified or supplemented from time to time thereafter).
"AVAILABLE FUNDS" means, for each Settlement Date, the sum of the following
amounts with respect to the preceding Accrual Period, without duplication: (i)
all collections on the Receivables; (ii) all Net Liquidation Proceeds received
during such Accrual Period with respect to Liquidated Receivables; (iii) the
Purchase Amount of each Receivable repurchased by the Seller or the Purchaser
during such Accrual Period; (iv) Investment Earnings in respect of Available
Funds for the related Settlement Date; (v) all amounts received during such
Accrual Period pursuant to Receivable Insurance Policies with respect to any
Financed Vehicles; (vi) cash received from a Class A Margin Call and/or a Class
B Margin Call; (vii) any amounts received during such Accrual Period (including,
without limitation, all proceeds from any Securitization Transaction) in respect
of Collateral that is released from the Lien Granted by Granting Clause I and
Granting Clause III of the Indenture in connection with an optional prepayment
of a class of Notes in accordance with Section 10.1 of the Indenture; (viii) any
amounts received during such Accrual Period from a Class B Note Purchaser
pursuant to Section 11.23(b) of the Sale and Servicing Agreement; and (ix) all
proceeds received during such Accrual Period in connection with the sale of any
TFC Receivables pursuant to Section 5.17 of the Indenture.
"BACKUP SERVICER" means Xxxxx Fargo Bank, National Association in its
capacity as Backup Servicer pursuant to the terms of the Servicing Assumption
Agreement or such Person as shall have been appointed Backup Servicer pursuant
to Section 9.3(b) or 9.6 of the Sale and Servicing Agreement.
"BACKUP SERVICING FEE" means (A) the fee payable to the Backup Servicer so
long as the Seller or any successor Servicer (other than the Backup Servicer) is
the Servicer, on each Settlement Date in the amount equal to $1,800 per monthly
data transmission received by the Backup Servicer pursuant to Section 4.14 of
the Sale and Servicing Agreement and (B) any other amounts payable to the Backup
Servicer pursuant to the Fee Schedule.
"BANKRUPTCY CODE" means the Bankruptcy Reform Act of 1978, as amended from
time to time, and as codified as 11 U.S.C. Section 101 ET SEQ.
"BASIC DOCUMENTS" means the Notes, the Indenture, the Sale and Servicing
Agreement (including this Annex A), the Lockbox Agreements, each Note Purchase
Agreement, the LLC Agreement, each Assignment, the Pledge Agreement, the
Servicing Assumption Agreement, the Engagement Letter, the Consent and
Agreement, the Servicer Termination Side Letter, the Account Control Agreement,
the Intercreditor Agreement, the Bear Intercreditor Agreement and other
documents and certificates delivered in connection therewith.
"BEAR BASIC DOCUMENTS" has the meaning assigned to the term "Basic
Documents" in Annex A to the Bear Sale and Servicing Agreement.
"BEAR CROSS COLLATERAL" has the meaning specified in Granting Clause III of
the Bear Indenture.
"BEAR INDENTURE" means the Amended and Restated Indenture dated as of
January 12, 2007 between Page Three Funding LLC and Xxxxx Fargo Bank, National
Association, as trustee, as the same may be amended, supplemented or otherwise
modified from time to time in accordance with the terms thereof.
"BEAR INDENTURE TRUSTEE" means Xxxxx Fargo Bank, National Association, a
national banking association, not in its individual capacity but as trustee
under the Bear Indenture, or any successor trustee under the Bear Indenture.
"BEAR INTERCREDITOR AGREEMENT" means the Intercreditor Agreement by and
among Bear, Xxxxxxx & Co. Inc., The Patriot Group, LLC, Waterfall Eden Fund, LP,
Page Three Funding, LLC, CPS and the Bear Indenture Trustee, as the same may be
amended, supplemented or otherwise modified from time to time in accordance with
the terms thereof.
"BEAR SALE AND SERVICING AGREEMENT" means the Amended and Restated Sale and
Servicing Agreement dated as of January 12, 2007, by and among Page Three
Funding LLC, as Purchaser and Issuer, CPS, as Seller and Servicer, and Xxxxx
Fargo Bank, National Association, as the Backup Servicer and the Trustee, as the
same may be amended, supplemented or otherwise modified from time to time in
accordance with the terms thereof.
"BEAR SECURED OBLIGATIONS" means all amounts and obligations which Page
Three Funding LLC may at any time owe under the Bear Warehouse Facility to, or
on behalf of, the holders of the Class B notes issued thereunder, the Class B
note purchasers thereunder and/or the Bear Indenture Trustee for the benefit of
the holders of the Class B notes issued thereunder and the Class B note
purchasers thereunder, in each case whether now owed or hereafter arising.
"BEAR WAREHOUSE FACILITY" means the transactions contemplated by the Bear
Basic Documents.
"BEAR WAREHOUSE FACILITY TERMINATION DATE" means the date on which the
commitment of the Class A note purchaser under the Bear Warehouse Facility to
make advances under the Bear Basic Documents is terminated in accordance with
the terms of the Bear Basic Documents, unless such commitment is extended by the
Class A note purchaser under the Bear Warehouse Facility in accordance with the
terms of the Bear Basic Documents.
"BORROWING BASE" means, with respect to the Class A Notes, the Class A
Borrowing Base and with respect to the Class B Notes, the Class B Borrowing
Base.
"BORROWING BASE DEFICIENCY" means, with respect to the Class A Notes, a
Class A Borrowing Base Deficiency and with respect to the Class B Notes, a Class
B Borrowing Base Deficiency.
"BUSINESS DAY" means any (i) day other than a Saturday, a Sunday or other
day on which commercial banks located in the states of Minnesota, California or
New York are authorized or obligated to be closed and (ii) if the applicable
Business Day relates to the determination of LIBOR, a day which is a day
described in clause (i) above which is also a day for trading by and between
banks in the London interbank eurodollar market.
"CASUALTY" means, with respect to a Financed Vehicle, the total loss or
destruction of such Financed Vehicle.
"CHANGE OF CONTROL" means a change resulting when (i) the Seller no longer
owns 100% of the membership interests in the Purchaser, (ii) the Seller or the
Purchaser merges or consolidates with, or sells all or substantially all of its
assets to any other Person, or (iii) any Unrelated Person or any Unrelated
Persons, acting together, that would constitute a Group together with any
Affiliates or Related Persons thereof (in each case also constituting Unrelated
Persons) shall at any time Beneficially Own more than 50% of the aggregate
voting power of all classes of Voting Stock of the Seller. As used herein, (a)
"Beneficially Own" shall mean "beneficially own" as defined in Rule 13d-3 of the
Exchange Act, or any successor provision thereto; provided, however, that, for
purposes of this definition, a Person shall not be deemed to Beneficially Own
securities tendered pursuant to a tender or exchange offer made by or on behalf
of such Person or any of such Person's Affiliates until such tendered securities
are accepted for purchase or exchange; (b) "Group" shall mean a "group" for
purposes of Section 13(d) of the Exchange Act; (c) "Unrelated Person" shall mean
at any time any Person other than the Seller or any of its Subsidiaries and
other than any trust for any employee benefit plan of the Seller or any of its
Subsidiaries; (d) "Related Person" shall mean any other Person owning (1) 5% or
more of the outstanding common stock of such Person, or (2) 5% or more of the
Voting Stock of such Person; and (e) "Voting Stock" of any Person shall mean the
capital stock or other indicia of equity rights of such Person which at the time
has the power to vote for the election of one or more members of the Board of
Directors (or other governing body) of such Person.
"CLASS A ADVANCE" has the meaning assigned to the term "Advance" in
paragraph 4 of the recitals to the Class A Note Purchase Agreement.
"CLASS A ADVANCE AMOUNT" means, as of any Class A Funding Date, an amount
not less than $2,000,000 and not more than the lesser of (i) the excess of the
Class A Maximum Invested Amount over the Class A Invested Amount as of such
Class A Funding Date and (ii) the excess of the Class A Net Borrowing Base
(taking into account the Receivables to be purchased on such Class A Funding
Date) over the Class A Invested Amount as of such Class A Funding Date.
"CLASS A ADVANCE RATE" means (a) with respect to each TFC Receivable, 70%
and (b) with respect to each CPS Receivable, 83%.
"CLASS A ADVANCE REQUEST" has the meaning given to such term in Section
2.03(a) of the Class A Note Purchase Agreement.
"CLASS A AMORTIZATION PERIOD" means the period beginning on the Class A
Facility Termination Date and ending on the Class A Final Scheduled Settlement
Date.
"CLASS A APPLICABLE MARGIN" means (a) with respect to any day prior to the
commencement of the Amortization Period, 2.00%, and (b) with respect to any day
on or after which the Amortization Period commences, the Class A Default
Applicable Margin.
"CLASS A BORROWING BASE" means, as of any date of determination, an amount
equal to the sum of (i) the CPS Borrowing Base, (ii) the lesser of (A) the TFC
Borrowing Base and (B) $25,000,000 and (iii) Available Funds allocable to
principal payments made by Obligors (including any Eligible Investments) on
deposit in the Collection Account.
"CLASS A BORROWING BASE CERTIFICATE" means, with respect to any transfer of
Receivables, the certificate of the Servicer setting forth the calculation of
the Class A Borrowing Base, substantially in the form of EXHIBIT A to the Class
A Note Purchase Agreement.
"CLASS A BORROWING BASE DEFICIENCY" means, as of any date of determination,
the positive excess, if any, of the Class A Invested Amount over the Class A
Borrowing Base, after application of funds, if any, by the Trustee in reduction
of the Class A Invested Amount as contemplated by Section 3.05 of the Class A
Note Purchase Agreement.
"CLASS A CLOSING DATE" means June 30, 2004.
"CLASS A COMMITMENT" means the obligation of the Class A Note Purchaser to
make Class A Advances to the Issuer pursuant to the terms and subject to the
conditions of the Class A Note Purchase Agreement and the other Basic Documents,
which obligation shall be deemed terminated following the occurrence and
continuance of a Class A Funding Termination Event if any and all amounts due to
the Class A Note Purchaser and/or the Class A Noteholders pursuant to the Basic
Documents have been paid in full.
"CLASS A DEFAULT APPLICABLE MARGIN" means 4.00%.
"CLASS A FACILITY TERMINATION DATE" means the earlier of (I) the first to
occur of (A) the Class A Scheduled Maturity Date or (B) the date of the
occurrence of a Class A Funding Termination Event specified in clauses (iv)
through (vi) of the definition thereof, (II) the date of the occurrence of a
Class A Funding Termination Event specified in clauses (i) through (iii) of the
definition thereof, and (III) any anniversary of the Class A Closing Date to the
extent that the Class A Note Purchaser, the Issuer or CPS has delivered notice
of termination to the other parties to the Class A Note Purchase Agreement and
the Class B Note Purchasers no earlier than 90 days and no later than 30 days
prior to such anniversary.
"CLASS A FINAL SCHEDULED SETTLEMENT DATE" means the Settlement Date
occurring on or after the date that is four months after the Class A Facility
Termination Date.
"CLASS A FUNDING DATE" means the Business Day on which a Class A Advance
occurs.
"CLASS A FUNDING TERMINATION EVENT" means the occurrence of any one of the
following events, unless waived in writing by the Class A Note Purchaser: (i) an
Event of Default; (ii) failure by the Seller or the Servicer to repurchase any
Receivable in accordance with the terms of the Sale and Servicing Agreement;
(iii) CPS or an Affiliate thereof shall no longer be the Servicer under the Sale
and Servicing Agreement; (iv) CPS is terminated as servicer under any other sale
and servicing agreement relating to a term securitization or warehouse financing
facility (other than a term securitization or a warehouse financing facility,
with respect to which CPS is only in the capacity of a third-party servicer and
owns no residual interest therein and the related retail motor vehicle
installment sale contracts of which were not originated or purchased by CPS or
its Affiliates); (v) failure by the Issuer or the Servicer to accept the
proposed assignee in accordance with Section 8.03(c)(iii) of the Class A Note
Purchase Agreement; and (vi) Xxxxxxx X. Xxxxxxx, Xx. becomes an officer,
director or employee of the Seller.
"CLASS A HOLDERS" or "CLASS A NOTEHOLDERS" means the Persons in whose name
the Class A Notes are registered on the Note Register, which on the Class B
Closing Date shall be UBS Real Estate Securities Inc. or an Affiliate thereof.
"CLASS A INITIAL ADVANCE" means the first Class A Advance that is funded on
or after the Closing Date.
"CLASS A INVESTED AMOUNT" means, with respect to any date of determination,
the aggregate principal amount (including all Class A Advance Amounts as of such
date) of the Class A Notes at such date of determination.
"CLASS A MAJORITY NOTEHOLDERS" means Holders of Class A Notes that in the
aggregate constitute more than 50% of the Percentage Interests of all Class A
Notes.
"CLASS A MARGIN CALL" has the meaning given to such term in Section 3.06(c)
of the Class A Note Purchase Agreement.
"CLASS A MAXIMUM INVESTED AMOUNT" means $200,000,000.
"CLASS A NET BORROWING BASE" means, as of any date of determination, an
amount equal to the Class A Borrowing Base, less any Available Funds (including
any Eligible Investments) on deposit in the Collection Account.
"CLASS A NOTES" means the Floating Rate Variable Funding Notes, Class A,
each substantially in the form set forth in EXHIBIT A-1 to the Indenture.
"CLASS A NOTE INTEREST RATE" means for any day during any Interest Period
the sum of (i) LIBOR for such day and (ii) the Class A Applicable Margin for
such day; PROVIDED, HOWEVER, that the Class A Note Interest Rate will in no
event be higher than the maximum rate permitted by law.
"CLASS A NOTE PURCHASE AGREEMENT" means the Second Amended and Restated
Note Purchase Agreement dated as of February 14, 2007 among UBS Real Estate
Securities Inc., the Issuer, the Purchaser, the Seller and the Servicer, as the
same may be amended, supplemented or otherwise modified from time to time in
accordance with the terms thereof.
"CLASS A NOTE PURCHASER" means UBS Real Estate Securities Inc. and its
successors and permitted assigns.
"CLASS A NOTEHOLDERS' INTEREST CARRYOVER SHORTFALL" means, with respect to
any Settlement Date, the excess of the Class A Noteholders' Interest
Distributable Amount for the preceding Settlement Date over the amount that was
actually deposited in the Note Distribution Account on such preceding Settlement
Date on account of the Class A Noteholders' Interest Distributable Amount.
"CLASS A NOTEHOLDERS' INTEREST DISTRIBUTABLE AMOUNT" means, with respect to
any Settlement Date, the sum of the Class A Noteholders' Monthly Interest
Distributable Amount for such Settlement Date and the Class A Noteholders'
Interest Carryover Shortfall for such Settlement Date, if any, plus interest on
the Class A Noteholders' Interest Carryover Shortfall, to the extent permitted
by law, at the Class A Note Interest Rate for the related Interest Period(s),
from and including the preceding Settlement Date to, but excluding, the current
Settlement Date.
"CLASS A NOTEHOLDERS' MONTHLY INTEREST DISTRIBUTABLE AMOUNT" means, with
respect to any Settlement Date, the sum of the interest amounts accrued on the
Class A Notes on each day during the related Interest Period. The interest
amount accrued on the Class A Notes on any day during any Interest Period shall
equal the product of (i) the Class A Note Interest Rate for such day and (ii)
the Class A Invested Amount on such day and (iii) 1/360.
"CLASS A NOTEHOLDERS' PRINCIPAL DISTRIBUTABLE AMOUNT" means, with respect
to any Settlement Date (other than the Class A Final Scheduled Settlement Date)
(A) (i) prior to the Class A Facility Termination Date or (ii) upon and after
the Class A Facility Termination Date that results upon the occurrence of any
event specified in clause (I) or (III) of the definition thereof, the Class A
Borrowing Base Deficiency, if any, and (B) upon and after the Class A Facility
Termination Date that results upon the occurrence of any event specified in
clause (II) of the definition thereof, the aggregate outstanding principal
amount of the Class A Notes. The Class A Noteholders' Principal Distributable
Amount on the Class A Final Scheduled Settlement Date will equal the aggregate
outstanding principal amount of the Class A Notes.
"CLASS A SCHEDULED MATURITY DATE" means June 30, 2007 or such later date as
agreed upon pursuant to SECTION 2.05 of the Class A Note Purchase Agreement.
"CLASS A TERM" has the meaning given to such term in SECTION 2.05 of the
Class A Note Purchase Agreement.
"CLASS A UNUSED FACILITY FEE" has the meaning set forth in Section 3.02(c)
of the Class A Note Purchase Agreement.
"CLASS B ADVANCE" has the meaning set forth in paragraph 4 of the recitals
to the Class B Note Purchase Agreement.
"CLASS B ADVANCE AMOUNT" means, as of any Class B Funding Date, an amount
not less than $250,000 and not more than the lesser of (i) the excess of the
Class B Maximum Invested Amount over the Class B Invested Amount as of such
Class B Funding Date and (ii) the excess of the Class B Borrowing Base over the
Class B Invested Amount as of such Class B Funding Date.
"CLASS B ADVANCE REQUEST" has the meaning set forth in Section 2.03(a) of
the Class B Note Purchase Agreement.
"CLASS B APPLICABLE MARGIN" means 5.50%; provided that on any day on which
an Event of Default shall exist, the Class B Applicable Margin shall be the
Class B Default Applicable Margin.
"CLASS B AVAILABLE FUNDS" means, for each Settlement Date, (i) all amounts
collected during the related Accrual Period in respect of the Additional Class B
Collateral; (ii) Investment Earnings in respect of Class B Available Funds for
the related Settlement Date; (iii) any amounts received during the related
Accrual Period in respect of Additional Class B Collateral that are released
from the Lien Granted by Granting Clause II of the Indenture in connection with
an optional prepayment of the Class B Notes in accordance with Section 10.1 of
the Indenture, (iv) any amounts received during the related Accrual Period in
respect of Bear Cross Collateral that is released from the Lien Granted by
Granting Clause III of the Bear Indenture in connection with an optional
prepayment of the Class B notes issued pursuant to the Bear Indenture in
accordance with Section 10.1 thereof; and (v) any Pre-Funding Proceeds deposited
by the Issuer into the Collection Account pursuant to Section 10.1 of the
Indenture.
"CLASS B BORROWING BASE" means, as of any date of determination, an amount
equal to the sum of (1) the lesser of (A) the excess of (I) 96% of the Market
Value (excluding for purposes of this calculation the TFC Receivables) over (II)
the Class A Invested Amount (calculated without regard to Class A Advances made
with respect to the TFC Receivables) and (B) the excess of (I) the product of
(a) the Net Eligible Receivables Balance (excluding for purposes of this
calculation the TFC Receivables) and (b) the Maximum Advance Rate over (II) the
Class A Invested Amount (calculated without regard to Class A Advances made with
respect to the TFC Receivables), and (2) 50% of the market value (as determined
by the lead placement agent of the related Securitization Transaction) of any
Pledged Subordinate Securities (excluding, for purposes of such calculation, any
Pledged Subordinate Securities that constitute residual interest securities);
provided, however, that for purposes of this definition, the market value of any
Pledged Subordinate Securities shall be deemed to equal zero from and after 31
days after the related Securitization Closing Date, and the Pledged Subordinate
Securities shall only support the Class B Advances in respect of CPS Receivables
that have been sold into the related Securitization Transaction.
"CLASS B BORROWING BASE CERTIFICATE" means, with respect to any transfer of
Receivables, the certificate of the Servicer setting forth the calculation of
the Class B Borrowing Base, substantially in the form of EXHIBIT A to the Class
B Note Purchase Agreement.
"CLASS B BORROWING BASE DEFICIENCY" means, as of any date of determination,
the positive excess, if any, of the Class B Invested Amount over the Class B
Borrowing Base, after application of funds, if any, by the Trustee in reduction
of the Class B Invested Amount as contemplated by Section 3.05 of the Class B
Note Purchase Agreement.
"CLASS B CLOSING DATE" means February 14, 2007.
"CLASS B COMMITMENT" means the collective obligation of the Class B Note
Purchasers to make their respective pro rata portion of the Class B Advances to
the Issuer pursuant to the terms and subject to the conditions of the Class B
Note Purchase Agreement and the other Basic Documents.
"CLASS B COMMITMENT FEE" means, with respect to any Settlement Date, for so
long as no Funding Termination Event shall have occurred and be continuing, a
fee in an amount equal to the product of (a) a fraction, the numerator of which
is the actual number of days elapsed in the related Accrual Period and the
denominator of which is 360, (b) twenty-five basis points (0.25%) and (c) the
excess, if any, of (i) $25,000,000 over (ii) the greater of (1) $6,250,000 and
(2) the sum of (x) the daily average of the Class B Invested Amount for the
immediately preceding Accrual Period set forth in the related Servicer's
Certificate as and to the extent verified by each Class B Note Purchaser, and
(y) the daily average of the "Class B Invested Amount" under the Bear Warehouse
Facility for the immediately preceding accrual period set forth in the related
servicer's certificate delivered under the Bear Basic Documents as and to the
extent verified by each Class B note purchaser thereunder.
"CLASS B DEFAULT" means any occurrence that is, or with notice or the lapse
of time or both would become, a Class B Event of Default.
"CLASS B DEFAULT APPLICABLE MARGIN" means 7.50%.
"CLASS B EVENT OF DEFAULT" means (i) a default in the payment of any
interest or principal on the Class B Notes or any other amount due with respect
to the Class B Notes or any amount due to any Class B Note Purchaser under any
Basic Document when the same becomes due and payable, which default continues
for a period of one (1) Business Day, (ii) the occurrence and continuance of a
Class B Borrowing Base Deficiency that is not cured within one (1) Business Day,
(iii) the Trustee shall for any reason cease to have a first priority perfected
security interest in the Pledged Subordinate Securities for the benefit of the
Class B Noteholders and the Class B Note Purchasers, (iv) the Trustee shall for
any reason cease to have a second priority perfected security interest in the
Bear Cross Collateral (subject only to the prior Liens granted pursuant to the
Bear Basic Documents), for the benefit of the Class B Noteholders and the Class
B Note Purchasers; or (v) the failure by the Issuer, the Purchaser, the Servicer
or the Seller to perform or observe any term, covenant, or agreement under the
Basic Documents, which failure materially and adversely affects the rights of
the Class B Note Purchasers and/or the Class B Noteholders (as determined by a
Class B Note Purchaser or the Class B Majority Noteholders in their sole
discretion) and is not cured within 30 calendar days after written notice is
received by the Issuer, the Purchaser, the Servicer or the Seller, as
applicable, from the Trustee, a Class B Note Purchaser or a Class B Noteholder
or after discovery of such failure by a Responsible Officer of the Issuer, the
Purchaser, the Servicer or the Seller, as applicable. "CLASS B FACILITY RENEWAL
FEE" has the meaning specified in Section 2.05(a) of the Class B Note Purchase
Agreement.
"CLASS B FACILITY TERMINATION DATE" means the earlier of (a) the Class B
Scheduled Maturity Date, (b) the date of the occurrence of an Event of Default
specified in Section 5.1(a)(v) of the Indenture, and (c) the date of the
occurrence of any Event of Default (other than an Event of Default specified in
Section 5.1(a)(v) of the Indenture) if the Class B Note Purchaser is the
Controlling Note Purchaser on such date.
"CLASS B FUNDING DATE" means the Business Day on which a Class B Advance
occurs.
"CLASS B FUNDING TERMINATION EVENT" means the occurrence and continuance of
(i) a Class A Funding Termination Event, or (ii) a Class B Event of Default.
"CLASS B HOLDERS" or "CLASS B NOTEHOLDERS" means the Persons in whose name
the Class B Notes are registered on the Note Register, which shall initially be
The Patriot Group, LLC and Waterfall Eden Fund, LP.
"CLASS B INITIAL ADVANCE" means the first Class B Advance that is funded on
or after the Closing Date.
"CLASS B INVESTED AMOUNT" means, with respect to any date of determination,
the aggregate principal amount (including all outstanding Class B Advances as of
such date) of the Class B Notes at such date of determination.
"CLASS B MAJORITY NOTEHOLDERS" means Holders of Class B Notes that in the
aggregate constitute more than 50% of the Percentage Interests of all Class B
Notes.
"CLASS B MARGIN CALL" has the meaning given to such term in Section 3.05(c)
of the Class B Note Purchase Agreement.
"CLASS B MAXIMUM INVESTED AMOUNT" means, as of any date, $25,000,000, less
the outstanding principal amount of any Bear Secured Obligations on such date.
"CLASS B NOTES" means the Floating Rate Variable Funding Notes, Class B,
each substantially in the form set forth in EXHIBIT A-2 to the Indenture.
"CLASS B NOTE INTEREST RATE" means for any day during any Interest Period
the sum of (i) LIBOR for such day and (ii) the Class B Applicable Margin for
such day; PROVIDED, HOWEVER, that the Class B Note Interest Rate will in no
event be higher than the maximum rate permitted by law.
"CLASS B NOTE PURCHASE AGREEMENT" means the Note Purchase Agreement dated
as of February 14, 2007 among each Class B Note Purchaser, the Issuer, the
Purchaser, the Seller and the Servicer, as the same may be amended, supplemented
or otherwise modified from time to time in accordance with the terms thereof.
"CLASS B NOTE PURCHASER" means each of The Patriot Group, LLC and Waterfall
Eden Fund, LP and their respective successors and permitted assigns.
"CLASS B NOTEHOLDERS' INTEREST CARRYOVER SHORTFALL" means, with respect to
any Settlement Date, the excess of the Class B Noteholders' Interest
Distributable Amount for the preceding Settlement Date over the amount that was
actually deposited in the Note Distribution Account on such preceding Settlement
Date on account of the Class B Noteholders' Interest Distributable Amount.
"CLASS B NOTEHOLDERS' INTEREST DISTRIBUTABLE AMOUNT" means, with respect to
any Settlement Date, the sum of the Class B Noteholders' Monthly Interest
Distributable Amount for such Settlement Date and the Class B Noteholders'
Interest Carryover Shortfall for such Settlement Date, if any, plus interest on
the Class B Noteholders' Interest Carryover Shortfall, to the extent permitted
by law, at the Class B Note Interest Rate for the related Interest Period(s),
from and including the preceding Settlement Date to, but excluding, the current
Settlement Date.
"CLASS B NOTEHOLDERS' MONTHLY INTEREST DISTRIBUTABLE AMOUNT" means, with
respect to any Settlement Date, the sum of the interest amounts accrued on the
Class B Notes on each day during the related Interest Period. The interest
amount accrued on the Class B Notes on any day during any Interest Period shall
equal the product of (i) the Class B Note Interest Rate for such day and (ii)
the greater of (x) the Class B Invested Amount on such day and (y) the lesser of
(A) the positive excess, if any, of (I) $6,250,000 over (II) the "Class B
Invested Amount" under the Bear Warehouse Facility on such day, and (B)
$3,125,000 (which is 12.5% of the Class B Maximum Invested Amount) and (iii)
1/360.
"CLASS B NOTEHOLDERS' PRINCIPAL DISTRIBUTABLE AMOUNT" means, with respect
to any Settlement Date (A) prior to the Class B Facility Termination Date, the
Class B Borrowing Base Deficiency, if any, and (B) upon and after the Class B
Facility Termination Date, the Class B Invested Amount.
"CLASS B SCHEDULED MATURITY DATE" means January 11, 2008 or such later date
as agreed upon pursuant to SECTION 2.05 of the Class B Note Purchase Agreement.
"CLASS B TERM" has the meaning given to such term in SECTION 2.05 of the
Class B Note Purchase Agreement.
"CLEARING AGENCY" means an organization registered as a "clearing agency"
pursuant to Section 17A of the Exchange Act, or any successor provision thereto.
The initial Clearing Agency shall be The Depository Trust Company.
"CLOSING DATE" means, with respect to the Class A Notes, the Class A
Closing Date and with respect to the Class B Notes, the Class B Closing Date.
"CODE" means the Internal Revenue Code of 1986, as amended from time to
time, and Treasury Regulations promulgated thereunder.
"COLLATERAL" has the meaning specified in the Granting Clause I of the
Indenture.
"COLLECTION ACCOUNT" means the account designated as such, established and
maintained pursuant to SECTION 5.1 of the Sale and Servicing Agreement.
"COMMISSION" means the United States Securities and Exchange Commission.
"COMMITMENT" means, with respect to the Class A Notes, the Class A
Commitment and with respect to the Class B Notes, the Class B Commitment.
"CONCENTRATION LIMITS" means with respect to Eligible Receivables:
(i) CPS Receivables the Obligors of which are the subject of
Insolvency Events under Chapter 7 of the Bankruptcy Code and have
completed a 341 Hearing shall not at any time represent more than 5%
of the Aggregate Principal Balance of the CPS Receivables;
(ii) CPS Receivables originated under the Seller's "Delta
Program" and "First Time Buyer Program" shall not in the aggregate at
any time represent more than 15% of the Aggregate Principal Balance of
the CPS Receivables;
(iii) TFC Receivables with respect to which more than 10% of a
Scheduled Receivable Payment is more than 31 days contractually
delinquent as of the end of the immediately preceding Accrual Period
shall not in the aggregate represent more than 10% of the Aggregate
Principal Balance of the TFC Receivables;
(iv) TFC Receivables originated under TFC's "E-1 Program" and
"E-2 Program" shall not at any time represent more than 30% of the
Aggregate Principal Balance of the TFC Receivables;
(v) Unless an Opinion of Counsel, in form and substance
satisfactory to the Controlling Note Purchaser, has been delivered to
the Trustee and the Controlling Note Purchaser addressing (i) the form
of Contract used by Seller in such State and (ii) the security
interest of the Trustee in the Financed Vehicles titled in such State
in the absence of any retitling of such Financed Vehicles, Eligible
Receivables originated in any one State shall not in the aggregate at
any time represent more than 10% of the aggregate Principal Balance of
Eligible Receivables; and
(vi) Receivables evidenced by installment promissory note and
security agreements (i.e. direct loans) shall not at any time
represent more than 10% of the Aggregate Principal Balance of the
Eligible Receivables.
"CONSENT AND AGREEMENT" means that Amended and Restated Consent and
Agreement dated as of February 14, 2007, made by the Issuer, as such agreement
may be further amended, supplemented or otherwise modified from time to time in
accordance with the terms thereof.
"CONSOLIDATED TOTAL ADJUSTED EQUITY" of any Person means, with respect to
any fiscal quarter, the total shareholders' equity of such Person and its
consolidated Subsidiaries that, in accordance with GAAP, is reflected on the
consolidated balance sheet of such Person and its consolidated Subsidiaries for
such fiscal quarter, MINUS the aggregate amount of such Person's and its
consolidated Subsidiaries intangible assets, including without limitation,
goodwill, franchises, licenses, patents, trademarks, tradenames, copyrights and
service marks.
"CONSUMER LAWS" means federal and State usury laws, the Federal
Truth-in-Lending Act, the Equal Credit Opportunity Act, the Fair Credit
Reporting Act, the Fair Debt Collection Practices Act, the Federal Trade
Commission Act, the Xxxxxxxx-Xxxx Warranty Act, the Federal Reserve Board's
Regulations B and Z, the Servicemembers Civil Relief Act, the California
Military Reservist Relief Act, the Texas Consumer Credit Code, the California
Automobile Sales Finance Act, State adaptations of the National Consumer Act and
of the Uniform Consumer Credit Code and all other federal, State and local
consumer credit laws and equal credit opportunity and disclosure laws and
regulations thereunder.
"CONSUMER LENDER" means a Person that is licensed under applicable law to
originate loans to natural persons resident in one or more of the United States
of America and authorized by CPS to participate in its direct lending program,
and includes the Seller.
"CONTRACT" means a motor vehicle retail installment sale contract or, in
the case of a Contract originated by a Consumer Lender, an installment
promissory note and security agreement, in each case relating to the sale or
refinancing of new or used automobiles, light duty trucks, vans or minivans, and
any other documents related thereto from time to time.
"CONTRACT PURCHASE GUIDELINES" means (a) with respect to the CPS
Receivables, CPS' established "Contract Purchase Guidelines" and (b) with
respect to the TFC Receivables, TFC's established "Contract Purchase
Guidelines", in each case as the same may be amended from time to time in
accordance with Section 8.2(c) of the Sale and Servicing Agreement.
"CONTROLLING NOTE PURCHASER" means solely the Class A Note Purchaser until
the Class A Notes and all other amounts then due and owing to the Class A Note
Purchaser and the Class A Noteholders under the Basic Documents have been paid
in full and the Class A Commitment has terminated, and thereafter, the Class B
Note Purchasers, acting together.
"CORPORATE TRUST OFFICE" means with respect to the Trustee, the principal
office of the Trustee at which at any particular time its corporate trust
business shall be administered which office is located at Sixth Street and
Marquette Avenue, MAC N9311-161, Xxxxxxxxxxx, Xxxxxxxxx 00000, or at such other
address as the Trustee may designate from time to time by notice to the Note
Purchasers, the Servicer, the Issuer, or the principal corporate trust office of
any successor Trustee (the address of which the successor Trustee will notify
the Note Purchaser).
"CPS" means Consumer Portfolio Services, Inc., a California corporation.
"CPS BORROWING BASE" means, as of any date of determination and with
respect to the CPS Receivables, an amount equal to the least of (A) the excess
of (I) 96% of the Market Value over (II) the Net Class B Invested Amount, (B)
the excess of (I) the product of (a) the Net Eligible Receivables Balance and
(b) the Maximum Advance Rate over (II) the Net Class B Invested Amount, (C) 87%
of the Market Value, and (D) the product of (a) the applicable Class A Advance
Rate and (b) the Net Eligible Receivables Balance.
"CPS RECEIVABLES" means Eligible Receivables that were acquired from
Dealers or Consumer Lenders by the Seller.
"CRAM DOWN LOSS" means, with respect to a Receivable, if a court of
appropriate jurisdiction in an insolvency proceeding shall have issued an order
reducing the amount owed on a Receivable or otherwise modifying or restructuring
Scheduled Receivable Payments to be made on a Receivable, an amount equal to
such reduction in the Principal Balance of such Receivable or the reduction in
the net present value (using as the discount rate the lower of the contract rate
or the rate of interest specified by the court in such order) of the Scheduled
Receivable Payments as so modified or restructured. A "CRAM DOWN LOSS" shall be
deemed to have occurred on the date such order is entered.
"CUTOFF DATE" means, with respect to a Receivable or Receivables, the date
specified as such for such Receivable or Receivables in the Schedule of
Receivables attached to the Sale and Servicing Agreement or to the applicable
Assignment.
"DEALER" means, with respect to a Receivable, the seller of the related
Financed Vehicle, who originated and assigned such Receivable to the Seller,
which Dealer shall not be an Affiliate of the Seller (including, without
limitation, MFN Financial Corporation and TFC Enterprises, Inc.).
"DEFAULT" means any occurrence that is, or with notice or the lapse of time
or both would become, an Event of Default.
"DEFAULT APPLICABLE MARGIN" means, with respect to the Class A Notes, the
Class A Default Applicable Margin and with respect to the Class B Notes, the
Class B Default Applicable Margin.
"DEFAULTED RECEIVABLE" means, with respect to any Receivable as of any
date, a Receivable with respect to which: (i) more than 10% of its Scheduled
Receivable Payment is more than 90 days past due as of the end of the
immediately preceding Accrual Period, (ii) the Servicer has repossessed the
related Financed Vehicle (and any applicable redemption or acceleration period
has expired) as of the end of the immediately preceding Accrual Period, or (iii)
such Receivable has been written off by the Servicer as uncollectible in
accordance with the Servicer's policies or the Servicer has determined in good
faith that payments thereunder are not likely to be resumed.
"DEFECTIVE RECEIVABLE" means a Receivable that is subject to repurchase
pursuant to SECTION 3.2 or SECTION 4.7 of the Sale and Servicing Agreement.
"DELIVERY" means, when used with respect to Pledged Account Property:
(i) the perfection and priority of a security interest in such Pledged
Account Property which is governed by the law of a jurisdiction which has
adopted the 1978 Revision to Article 8 of the UCC (and not the 1994 Revision to
Article 8 of the UCC as referred to in (II) below):
(a) with respect to bankers' acceptances, commercial paper,
negotiable certificates of deposit and other obligations that constitute
"INSTRUMENTS" within the meaning of Section 9-102(a)(47) of the UCC and are
susceptible of physical delivery, transfer thereof to the Trustee or its
nominee or custodian by physical delivery to the Trustee or its nominee or
custodian endorsed to, or registered in the name of, the Trustee or its
nominee or custodian or endorsed in blank, and, with respect to a
certificated security (as defined in Section 8-102 of the UCC), transfer
thereof (1) by delivery of such certificated security endorsed to, or
registered in the name of, the Trustee or its nominee or custodian or
endorsed in blank to a financial intermediary (as defined in Section 8-313
of the UCC) and the making by such financial intermediary of entries on its
books and records identifying such certificated securities as belonging to
the Trustee or its nominee or custodian and the sending by such financial
intermediary of a confirmation of the purchase of such certificated
security by the Trustee or its nominee or custodian, or (2) by delivery
thereof to a "CLEARING CORPORATION" (as defined in Section 8-102(3) of the
UCC) and the making by such clearing corporation of appropriate entries on
its books reducing the appropriate securities account of the transferor and
increasing the appropriate securities account of a financial intermediary
by the amount of such certificated security, the identification by the
clearing corporation of the certificated securities for the sole and
exclusive account of the financial intermediary, the maintenance of such
certificated securities by such clearing corporation or a "CUSTODIAN BANK"
(as defined in Section 8-102(4) of the UCC) or the nominee of either
subject to the clearing corporation's exclusive control, the sending of a
confirmation by the financial intermediary of the purchase by the Trustee
or its nominee or custodian of such securities and the making by such
financial intermediary of entries on its books and records identifying such
certificated securities as belonging to the Trustee or its nominee or
custodian (all of the foregoing, "PHYSICAL PROPERTY"), and, in any event,
any such Physical Property in registered form shall be in the name of the
Trustee or its nominee or custodian; and such additional or alternative
procedures as may hereafter become appropriate to effect the complete
transfer of ownership of any such Pledged Account Property to the Trustee
or its nominee or custodian, consistent with changes in applicable law or
regulations or the interpretation thereof;
(b) with respect to any security issued by the U.S. Treasury, the
Federal Home Loan Mortgage Corporation or by the Federal National Mortgage
Association that is a book-entry security held through the Federal Reserve
System pursuant to Federal book-entry regulations, the following
procedures, all in accordance with applicable law, including applicable
Federal regulations and Articles 8 and 9 of the UCC: book-entry
registration of such Pledged Account Property to an appropriate book-entry
account maintained with a Federal Reserve Bank by a financial intermediary
which is also a "DEPOSITORY" pursuant to applicable Federal regulations and
issuance by such financial intermediary of a deposit advice or other
written confirmation of such book-entry registration to the Trustee or its
nominee or custodian of the purchase by the Trustee or its nominee or
custodian of such book-entry securities; the making by such financial
intermediary of entries in its books and records identifying such
book-entry security held through the Federal Reserve System pursuant to
Federal book-entry regulations as belonging to the Trustee or its nominee
or custodian and indicating that such custodian holds such Pledged Account
Property solely as agent for the Trustee or its nominee or custodian; and
such additional or alternative procedures as may hereafter become
appropriate to effect complete transfer of ownership of any such Pledged
Account Property to the Trustee or its nominee or custodian, consistent
with changes in applicable law or regulations or the interpretation
thereof; and
(c) with respect to any item of Pledged Account Property that is an
uncertificated security under Article 8 of the UCC and that is not governed
by CLAUSE (B) above, registration on the books and records of the issuer
thereof in the name of the financial intermediary, the sending of a
confirmation by the financial intermediary of the purchase by the Trustee
or its nominee or custodian of such uncertificated security, the making by
such financial intermediary of entries on its books and records identifying
such uncertificated securities as belonging to the Trustee or its nominee
or custodian; or
(ii) the perfection and priority of a security interest in such Pledged
Account Property which is governed by the law of a jurisdiction which has
adopted the 1994 Revision to Article 8 of the UCC:
(a) with respect to bankers' acceptances, commercial paper,
negotiable certificates of deposit and other obligations that constitute
"INSTRUMENTS" within the meaning of Section 9-102(a)(47) of the UCC (other
than certificated securities) and are susceptible of physical delivery,
transfer thereof to the Trustee by physical delivery to the Trustee,
indorsed to, or registered in the name of, the Trustee or its nominee or
indorsed in blank and such additional or alternative procedures as may
hereafter become appropriate to effect the complete transfer of ownership
of any such Pledged Account Property to the Trustee free and clear of any
adverse claims, consistent with changes in applicable law or regulations or
the interpretation thereof;
(b) with respect to a "CERTIFICATED SECURITY" (as defined in Section
8-102(a)(4) of the UCC), transfer thereof:
(1) by physical delivery of such certificated security to the
Trustee, PROVIDED that if the certificated security is in registered
form, it shall be indorsed to, or registered in the name of, the
Trustee or indorsed in blank;
(2) by physical delivery of such certificated security in
registered form to a "SECURITIES INTERMEDIARY" (as defined in Section
8-102(a)(l4) of the UCC) acting on behalf of the Trustee if the
certificated security has been specially indorsed to the Trustee by an
effective indorsement.
(c) with respect to any security issued by the U.S. Treasury, the
Federal Home Loan Mortgage Corporation or by the Federal National Mortgage
Association that is a book-entry security held through the Federal Reserve
System pursuant to Federal book entry regulations, the following
procedures, all in accordance with applicable law, including applicable
federal regulations and Articles 8 and 9 of the UCC: book-entry
registration of such property to an appropriate book-entry account
maintained with a Federal Reserve Bank by a securities intermediary which
is also a "DEPOSITARY" pursuant to applicable federal regulations and
issuance by such securities intermediary of a deposit advice or other
written confirmation of such book-entry registration to the Trustee of the
purchase by the securities intermediary on behalf of the Trustee of such
book-entry security; the making by such securities intermediary of entries
in its books and records identifying such book-entry security held through
the Federal Reserve System pursuant to Federal book-entry regulations as
belonging to the Trustee and indicating that such securities intermediary
holds such book-entry security solely as agent for the Trustee; and such
additional or alternative procedures as may hereafter become appropriate to
effect complete transfer of ownership of any such Pledged Account Property
to the Trustee free of any adverse claims, consistent with changes in
applicable law or regulations or the interpretation thereof;
(d) with respect to any item of Pledged Account Property that is an
"UNCERTIFICATED SECURITY" (as defined in Section 8-102(a)(18) of the UCC)
and that is not governed by CLAUSE (C) above, transfer thereof:
(1)(A) by registration to the Trustee as the registered owner
thereof, on the books and records of the issuer thereof;
(B) by another Person (not a securities intermediary) who either
becomes the registered owner of the uncertificated security on behalf
of the Trustee, or having become the registered owner acknowledges
that it holds for the Trustee;
(2) the issuer thereof has agreed that it will comply with
instructions originated by the Trustee without further consent of the
registered owner thereof;
(e) with respect to a "SECURITY ENTITLEMENT" (as defined in Section
8-102(a)(17) of the UCC):
(1) if a securities intermediary (A) indicates by book entry
that a "FINANCIAL ASSET" (as defined in Section 8-102(a)(9) of the
UCC) has been credited to the Trustee's "SECURITIES ACCOUNT" (as
defined in Section 8-501(a) of the UCC), (B) receives a financial
asset (as so defined) from the Trustee or acquires a financial asset
for the Trustee, and in either case, accepts it for credit to the
Trustee's securities account (as so defined), (C) becomes obligated
under other law, regulation or rule to credit a financial asset to the
Trustee's securities account, or (D) has agreed that it will comply
with "ENTITLEMENT ORDERS" (as defined in Section 8-102(a)(8) of the
UCC) originated by the Trustee, without further consent by the
"ENTITLEMENT HOLDER" (as defined in Section 8-l02(a)(7) of the UCC),
of a confirmation of the purchase and the making by such securities
intermediary of entries on its books and records identifying as
belonging to the Trustee of (I) a specific certificated security in
the securities intermediary's possession, (II) a quantity of
securities that constitute or are part of a fungible bulk of
certificated securities in the securities intermediary's possession,
or (III) a quantity of securities that constitute or are part of a
fungible bulk of securities shown on the account of the securities
intermediary on the books of another securities intermediary;
(f) in each case of delivery contemplated pursuant to CLAUSES (A)
through (E) of SUBSECTION (II) hereof, the Trustee shall make appropriate
notations on its records, and shall cause the same to be made on the
records of its nominees, indicating that such Trust Property which
constitutes a security is held in trust pursuant to and as provided in the
Sale and Servicing Agreement.
"DEPOSIT ACCOUNT" means that deposit account established pursuant to the
Account Control Agreement.
"DETERMINATION DATE" means, with respect to any Settlement Date, the fourth
Business Day preceding such Settlement Date.
"DOLLAR" means lawful money of the United States.
"ELIGIBLE ACCOUNT" means either (i) a segregated trust account that is
maintained with a depository institution acceptable to the Controlling Note
Purchaser, or (ii) a segregated direct deposit account maintained with a
depository institution or trust company organized under the laws of the United
States of America, or any of the States thereof, or the District of Columbia,
having a certificate of deposit, short-term deposit or commercial paper rating
of at least "A-1+" by Standard & Poor's and "P-1" by Moody's and acceptable to
the Controlling Note Purchaser.
"ELIGIBLE INVESTMENTS" mean book-entry securities, negotiable instruments
or securities represented by instruments in bearer or registered form which
evidence:
(a) direct obligations of, and obligations fully guaranteed as to the
full and timely payment by, the United States of America;
(b) demand deposits, time deposits or certificates of deposit of any
depository institution or trust company incorporated under the laws of the
United States of America or any State thereof (or any domestic branch of a
foreign bank) and subject to supervision and examination by Federal or
State banking or depository institution authorities; PROVIDED, HOWEVER,
that at the time of the investment or contractual commitment to invest
therein, the commercial paper or other short-term unsecured debt
obligations (other than such obligations the rating of which is based on
the credit of a Person other than such depository institution or trust
company) thereof shall be rated "A-1+" or better by Standard & Poor's and
"P-1" by Moody's;
(c) commercial paper that, at the time of the investment or
contractual commitment to invest therein, is rated "A-1+" or better by
Standard & Poor's and "P-1" by Moody's;
(d) bankers' acceptances issued by any depository institution or
trust company referred to in CLAUSE (B) above;
(e) repurchase obligations with respect to any security that is a
direct obligation of, or fully guaranteed as to the full and timely payment
by, the United States of America or any agency or instrumentality thereof
the obligations of which are backed by the full faith and credit of the
United States of America, in either case entered into with (i) a depository
institution or trust company (acting as principal) described in CLAUSE (B)
or (ii) a depository institution or trust company whose commercial paper or
other short term unsecured debt obligations are rated "A-1+" or better by
Standard & Poor's and "P-1" by Moody's and long term unsecured debt
obligations are rated "AAA" by Standard & Poor's and "AAA" by Moody's;
(f) with the prior written consent of the Controlling Note Purchaser,
money market mutual funds registered under the Investment Company Act of
1940, as amended, having a rating, at the time of such investment, from
each of Standard & Poor's and Moody's in the highest investment category
granted thereby; and
(g) any other investment as may be acceptable to the Controlling Note
Purchaser, as evidenced by a writing to that effect, as may from time to
time be confirmed in writing to the Trustee by the Controlling Note
Purchaser.
Any of the foregoing Eligible Investments may be purchased by or through
the Trustee or any of its Affiliates.
"ELIGIBLE RECEIVABLES" means, as of any date of determination, Receivables
(a) with respect to each of which no more than 10% of its Scheduled Receivable
Payment is no more than 45 days contractually delinquent as of the end of the
immediately preceding Accrual Period, (b) that are not Liquidated Receivables,
(c) that are not Repossessed Receivables, (d) that are not Defective
Receivables; (e) that are not listed on Schedule A to the Trust Receipt (unless
subsequently cured); (f) that have the characteristics set forth in SECTION 3.1
of the Sale and Servicing Agreement; (g) that have not been in the CPS Borrowing
Base for more than 180 days or until May 15, 2007, whichever is later (in the
case of CPS Receivables), or in the TFC Borrowing Base for more than 360 days or
until May 15, 2007, whichever is later (in the case of TFC Receivables).
"ELIGIBLE SERVICER" means a Person approved to act as "SERVICER" under the
Sale and Servicing Agreement by the Note Purchaser.
"ENGAGEMENT LETTER" means the letter agreement dated as of April 27, 2004,
entered between CPS and UBS Securities LLC.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"EVENT OF DEFAULT" has the meaning specified in SECTION 5.1 of the
Indenture.
"EXCESS CONCENTRATION AMOUNT" means the aggregate amount by which (without
duplication) the Aggregate Principal Balance of Eligible Receivables sold to the
Purchaser under the Sale and Servicing Agreement exceeds any of the
Concentration Limits; provided, however, that in determining which Receivables
to exclude for purposes of complying with any Concentration Limit, the Purchaser
shall exclude Receivables starting with those having the most recent origination
dates.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"EXECUTIVE OFFICER" means, with respect to any corporation, the Chief
Executive Officer, Chief Operating Officer, Chief Financial Officer, President,
Senior Vice President, any Vice President, the Secretary or the Treasurer of
such corporation; with respect to any limited liability company, the manager and
any individuals appointed to any of the preceding offices by the manager; and
with respect to any partnership, any general partner thereof.
"FACILITY TERMINATION DATE" means, with respect to the Class A Notes, the
Class A Facility Termination Date and with respect to the Class B Notes, the
Class B Facility Termination Date.
"FDIC" means the Federal Deposit Insurance Corporation.
"FEE SCHEDULE" means that certain notice captioned "Schedule of Fees for
CPS - UBS Warehouse" from Xxxxx Fargo Bank, National Association, as
acknowledged by the Servicer as of June 30, 2004.
"FINANCED VEHICLE" means a new or used automobile, light truck, van or
minivan, together with all accessions thereto, securing an Obligor's
indebtedness under a Receivable.
"FUNDING DATE" means, with respect to the Class A Notes, a Class A Funding
Date and with respect to the Class B Notes, a Class B Funding Date.
"FUNDING TERMINATION EVENT" means, with respect to the Class A Notes, a
Class A Funding Termination Event and with respect to the Class B Notes, a Class
B Funding Termination Event.
"FUNDING TRUST" means CPS Receivables Funding Trust, a Delaware statutory
trust.
"FUNDING TRUST CERTIFICATE" means a certificate issued by Funding Trust
that evidences a 100% fractional undivided ownership interest in one or more
instruments or certificates, each of which evidences not less than 99.00% of the
residual interest in a securitization trust for a Securitization Transaction and
represents the right to receive amounts to be distributed or paid to the holders
of the residual interests pursuant to the related Securitization Documents.
"GAAP" means U.S. generally accepted accounting principles occasioned by
the promulgation of rules, regulations, pronouncements or opinions by the
Financial Accounting Standards Board, the American Institute of Certified Public
Accountants or the Securities and Exchange Commission (or successors thereto or
agencies with similar functions) from time to time.
"GOVERNMENTAL AUTHORITY" means the United States of America, any state,
local or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory, or administrative functions
thereof pertaining thereto.
"GRANT" means to mortgage, pledge, bargain, sell, warrant, alienate,
remise, release, convey, assign, transfer, create, xxxxx x xxxx upon and a
security interest in and right of set-off against, deposit, set over and confirm
pursuant to the Indenture or the Pledge Agreement, as applicable. A Grant of the
Collateral, Pledged Subordinate Securities, UBS Cross Collateral or Pledged
Collateral, as the case may be, or of any other agreement or instrument shall
include all rights, powers and options (but none of the obligations) of the
granting party thereunder, including, as and to the extent provided in the Basic
Documents, the immediate and continuing right (after an Event of Default) to
claim for, collect, receive and give receipt for principal and interest payments
in respect of the Collateral, Pledged Subordinate Securities, UBS Cross
Collateral or Pledged Collateral, as the case may be, and all other moneys
payable thereunder, to give and receive notices and other communications, to
make waivers or other agreements, to exercise all rights and options, to bring
proceedings in the name of the granting party or otherwise and generally to do
and receive anything that the granting party is or may be entitled to do or
receive thereunder or with respect thereto.
"HIGHEST PRIORITY CLASS" means (i) the Class A Notes, for so long as they
are Outstanding and the Class A Commitment has not been terminated, and (ii) if
the Class A Notes are no longer Outstanding and all amounts owed to the Class A
Noteholders and the Class A Note Purchaser pursuant to the Basic Documents have
been paid in full and the Class A Commitment has been terminated, the Class B
Notes.
"HOLDER" or "NOTEHOLDER" means a Class A Noteholder or a Class B
Noteholder, as the context may require.
"INDEBTEDNESS" means, with respect to any Person at any time, any (a)
indebtedness or liability of such Person for borrowed money whether or not
evidenced by bonds, debentures, notes, repurchase agreements and similar
arrangements, or other instruments, or for the deferred purchase price of
property or services (including trade obligations); (b) obligations of such
Person as lessee under leases which should be, in accordance with GAAP, recorded
as capital leases; (c) current liabilities of such Person in respect of unfunded
vested benefits under plans covered by Title IV of ERISA; (d) obligations issued
for or liabilities incurred on the account of such Person; (e) obligations or
liabilities of such Person arising under acceptance facilities; (f) obligations
of such Person under any guarantees, endorsements (other than for collection or
deposit in the ordinary course of business) and other contingent obligations to
purchase, to provide funds for payment, to supply funds to invest in any Person
or otherwise to assure a creditor against loss; (g) obligations of others
secured by any lien on property or assets of such Person, whether or not the
obligations have been assumed by such Person; or (h) obligations of such Person
under any interest rate or currency exchange agreement.
"INDENTURE" means the Second Amended and Restated Indenture dated as of
February 14, 2007, between the Issuer and Xxxxx Fargo Bank, National
Association, as Trustee, as the same may be further amended, supplemented or
otherwise modified from time to time in accordance with the terms thereof.
"INDEPENDENT" means, when used with respect to any specified Person, that
the person (a) is in fact independent of the Issuer, any other obligor upon the
Notes, the Seller, the Purchaser, the Servicer and any Affiliate of any of the
foregoing persons, (b) does not have any direct financial interest or any
material indirect financial interest in the Issuer, any other obligor on the
Notes, the Seller, the Purchaser, the Servicer or any Affiliate of any of the
foregoing Persons and (c) is not connected with the Issuer, any other obligor on
the Notes, the Seller, the Purchaser, the Servicer or any Affiliate of any of
the foregoing Persons as an officer, employee, promoter, underwriter, trustee,
partner, director or Person performing similar functions.
"INELIGIBLE RECEIVABLE" means any Receivable other than an Eligible
Receivable.
"INSOLVENCY EVENT" means, with respect to a specified Person, (a) the
institution of a proceeding or the filing of a petition against such Person
seeking the entry of a decree or order for relief by a court having jurisdiction
in the premises in respect of such Person or any substantial part of its
property in an involuntary case under any applicable federal or state
bankruptcy, insolvency or other similar law now or hereafter in effect, seeking
the appointment of a receiver, liquidator, assignee, custodian, trustee,
sequestrator or similar official for such Person or for any substantial part of
its property, or ordering the winding-up or liquidation of such Person's
affairs, and such proceeding or petition, decree or order shall remain unstayed
or undismissed for a period of 60 consecutive days or an order or decree for the
requested relief is earlier entered or issued; or (b) the commencement by such
Person of a voluntary case under any applicable federal or state bankruptcy,
insolvency or other similar law now or hereafter in effect, or the consent by
such Person to the entry of an order for relief in an involuntary case under any
such law, or the consent by such Person to the appointment of or taking
possession by, a receiver, liquidator, assignee, custodian, trustee,
sequestrator, or similar official for such Person or for any substantial part of
its property, or the making by such Person of any general assignment for the
benefit of creditors, or the failure by such Person generally to pay its debts
as such debts become due, or the taking of action by such Person in furtherance
of any of the foregoing.
"INTERCREDITOR AGREEMENT" means that certain Intercreditor Agreement dated
as of February 14, 2007 by and among the Class A Note Purchaser, the Class A
Noteholder, the Class B Note Purchasers, the Class B Noteholders, the Issuer,
the Purchaser, the Seller, the Servicer and the Trustee.
"INTERCREDITOR AGREEMENTS" means the Intercreditor Agreement and the Bear
Intercreditor Agreement.
"INTEREST PERIOD" means, with respect to a class of Notes and any
Settlement Date, the period from, and including, the immediately preceding
Settlement Date (or from and including the initial Funding Date for such class
of Notes, in the case of the first Settlement Date for a class of Notes) to, but
excluding, such Settlement Date.
"INVESTED AMOUNT" means, with respect to the Class A Notes, the Class A
Invested Amount and with respect to the Class B Notes, the Class B Invested
Amount.
"INVESTMENT COMPANY ACT" has the meaning set forth in SECTION 5.01(D) of
each Note Purchase Agreement.
"INVESTMENT EARNINGS" means, with respect to any Settlement Date and any
Pledged Account, the investment earnings on Pledged Account Property and
deposited into such Pledged Account during the related Accrual Period pursuant
to SECTION 5.1(D) of the Sale and Servicing Agreement.
"ISSUER" means Page Funding LLC until a successor replaces it in accordance
with the terms of the Indenture and, thereafter, means the successor and, for
purposes of any provision contained herein, each other obligor on the Notes.
"ISSUER ORDER" and "ISSUER REQUEST" means a written order or request signed
in the name of the Issuer by any one of its Authorized Officers and delivered to
the Trustee.
"LIBOR" means the rate for one-month deposits in U.S. dollars, which rate
is determined on a daily basis by the Controlling Note Purchaser by reference to
the British Bankers' Association LIBOR Rates on Bloomberg (or such other service
or services as may be nominated by the British Bankers' Association for the
purpose of displaying London interbank offered rates for U.S. dollar deposits)
on such date (or, if such date is not a Business Day, on the immediately
preceding Business Day) at or about 11 a.m. New York City time; PROVIDED,
HOWEVER, that if no rate appears on Bloomberg on any date of determination,
LIBOR shall mean the rate for one-month deposits in U.S. Dollars which appears
on the Telerate Page 3750 on any such date of determination; PROVIDED FURTHER,
that if no rate appears on either Bloomberg or such Telerate Page 3750, on any
such date of determination LIBOR shall be determined as follows:
LIBOR will be determined at approximately 11:00 a.m., New York City time,
on such day on the basis of (a) the arithmetic mean of the rates at which
one-month deposits in U.S. dollars are offered to prime banks in the London
interbank market by four (4) major banks in the London interbank market selected
by the Controlling Note Purchaser and in a principal amount of not less than
$200,000,000 that is representative for a single transaction in such market at
such time, if at least two (2) such quotations are provided, or (b) if fewer
than two (2) quotations are provided as described in the preceding clause (a),
the arithmetic mean of the rates, as requested by the Controlling Note
Purchaser, quoted by three (3) major banks in New York City, selected by the
Controlling Note Purchaser, at approximately 11:00 A.M., New York City time, on
such day, one-month deposits in United States dollars to leading European banks
and in a principal amount of not less than $200,000,000 that is representative
for a single transaction in such market at such time.
"LIEN" means a security interest, lien, charge, pledge, equity, or
encumbrance of any kind, other than tax liens, mechanics' liens and any liens
that attach to the respective Receivable by operation of law as a result of an
Obligor's failure to pay an obligation.
"LIEN CERTIFICATE" means, with respect to a Financed Vehicle, an original
certificate of title, certificate of lien or other notification issued by the
Registrar of Titles of the applicable state to a secured party which indicates
that the lien of the secured party on the Financed Vehicle is recorded on the
original certificate of title. In any jurisdiction in which the original
certificate of title is required to be given to the obligor, the term "LIEN
CERTIFICATE" shall mean only a certificate or notification issued to a secured
party.
"LIQUIDATED RECEIVABLE" means any Receivable (i) which has been liquidated
by the Servicer through the sale of the Financed Vehicle or (ii) for which the
related Financed Vehicle has been repossessed and 90 days have elapsed since the
date of such repossession or (iii) as to which an Obligor has failed to make
more than 90% of a Scheduled Receivable Payment of more than ten dollars for 120
(or, if the related Financed Vehicle has been repossessed, 210) or more days as
of the end of a Accrual Period or (iv) with respect to which proceeds have been
received which, in the Servicer's judgment, constitute the final amounts
recoverable in respect of such Receivable. For purposes of this definition, a
Receivable shall be deemed a "Liquidated Receivable" upon the first to occur of
the events specified in items (i) through (iv) of the previous sentence.
"LLC AGREEMENT" means the Amended and Restated Limited Liability Company
Agreement of Page Funding, LLC dated as of June 30, 2004, entered into by CPS,
as amended by the First Amendment thereto thereto dated as of April 18, 2006,
and the Second Amendment thereto dated as of February 14, 2007, and as such
agreement may be further amended, supplemented or otherwise modified from time
to time in accordance with the terms thereof.
"LOCKBOX ACCOUNTS" means the accounts maintained on behalf of the Trustee
for the further benefit of the Noteholders and the Note Purchasers by the
Lockbox Bank pursuant to SECTION 4.2(B) of the Sale and Servicing Agreement.
"LOCKBOX AGREEMENT" means (a) in the case of CPS Receivables, the Amended
and Restated Multiparty Agreement Relating to Lockbox Services and Blocked
Account - Page Funding LLC - [CPS Receivables], dated as of February 14, 2007,
by and among the Lockbox Processor, the Purchaser, the Servicer and the Trustee,
and (b) in the case of TFC Receivables, the Multiparty Agreement Relating to
Lockbox Services and Blocked Account - Page Funding LLC - [TFC Receivables],
dated as of February 14, 2007, by and among the Lockbox Processor, the
Purchaser, the Servicer and the Trustee, in each case as such agreements may be
further amended, supplemented or otherwise modified from time to time in
accordance with the terms thereof, unless the Trustee shall cease to be a party
thereunder, or such agreement shall be terminated in accordance with its terms,
in which event "LOCKBOX AGREEMENTS" shall mean such other agreement(s), in form
and substance acceptable to the Controlling Note Purchaser, among the Servicer,
the Purchaser, and the Lockbox Processor and any other appropriate parties.
"LOCKBOX BANK" means as of any date a depository institution named by the
Servicer and acceptable to the Majority Noteholders of the Highest Priority
Class of Notes and the Controlling Note Purchaser at which the Lockbox Account
is established and maintained as of such date.
"LOCKBOX PROCESSOR" means Xxxxx Fargo Bank, National Association (as
successor to Regulus West, LLC) and its successors and assigns.
"MAJORITY NOTEHOLDERS" means, in the case of the Class A Notes, the Class A
Majority Noteholders and in the case of the Class B Notes, the Class B Majority
Noteholders.
"MARGIN CALL" means, in the case of the Class A Notes, a Class A Margin
Call and in the case of the Class B Notes, a Class B Margin Call.
"MARKET VALUE" means, on any Business Day, the value of the Receivables as
determined by the periodic market value report as calculated by the Controlling
Note Purchaser in its sole and absolute discretion.
"MATERIAL ADVERSE CHANGE" means (a) in respect of any Person, a material
adverse change in (i) the business, financial condition, results of operations,
prospects or properties of such Person, or (ii) the ability of such Person to
perform its obligations under any of the Basic Documents to which it is a party,
in each case in a manner that materially and adversely affects any Noteholder,
any Note Purchaser or the value, collectibility or marketability of any class of
Notes, (b) in respect of any Receivable, a material adverse change in (i) the
value or marketability of such Receivable, or (ii) the probability that amounts
now or hereafter due in respect of such Receivable will be collected on a timely
basis, in each case in a manner that materially and adversely affects the
Noteholders of the Highest Priority Class, the Controlling Note Purchaser or the
value, collectibility or marketability of the Highest Priority Class of Notes,
or the ability of the Trustee on behalf of the Noteholders and the Note
Purchasers to realize the benefits of the security afforded under the Basic
Documents.
"MATERIAL ADVERSE EFFECT" means an effect on (a) the value or marketability
of the Receivables or any of the other Collateral (including, without
limitation, the enforceability or collectibility of the Receivables); (b) the
business, operations, properties, condition (financial or otherwise) or
prospects of the Seller, the Servicer, the Purchaser or the Issuer, in each
case, individually or taken as a whole; (c) the validity or enforceability of
this or any of the other Basic Documents or the rights or remedies of the
Trustee, any Note Purchaser or any Noteholder hereunder or thereunder or the
validity, perfection or priority of any Lien in favor of any Note Purchaser, any
Noteholder or the Trustee for the benefit of any Note Purchaser and any
Noteholder granted thereunder; (d) the timely payment of the principal of or
interest on any Advances or other amounts payable under the Basic Documents; or
(e) the ability of the Seller, the Servicer, the Purchaser or the Issuer to
perform its obligations under any Basic Document to which it is a party, in each
case that materially and adversely affects any Noteholder, any Note Purchaser or
the value, collectability or marketability of any class of Notes.
"MAXIMUM ADVANCE RATE" means 93%.
"MAXIMUM INVESTED AMOUNT" means, in the case of the Class A Notes, the
Class A Maximum Invested Amount and in the case of the Class B Notes, the Class
B Maximum Invested Amount.
"MFN" means MFN Financial Corporation, a Delaware corporation.
"MOODY'S" means Xxxxx'x Investors Service, Inc., or its successor.
"MULTIEMPLOYER PLAN" means a Plan which is a multiemployer plan as defined
in Xxxxxxx 0000(x)(0) of ERISA.
"NET CLASS B INVESTED AMOUNT" means, as of any date of determination, the
excess of (x) the Class B Invested Amount, over (y) 50% of the market value of
any Pledged Subordinate Securities as provided by the Servicer to the Class B
Note Purchasers pursuant to Section 3.05(a) of the Class B Note Purchase
Agreement.
"NET ELIGIBLE RECEIVABLES BALANCE" means, as of any date of determination,
the excess of (a) the aggregate Principal Balance of all Eligible Receivables as
of such date of determination (after giving effect to any Available Funds
allocable to principal payments made by the related Obligors) over (b) the
Excess Concentration Amount for the Eligible Receivables.
"NET LIQUIDATION PROCEEDS" means, with respect to a Liquidated Receivable,
all amounts realized with respect to such Receivable net of (i) reasonable
expenses incurred by the Servicer in connection with the collection of such
Receivable and the repossession and disposition of the Financed Vehicle and the
reasonable cost of legal counsel with the enforcement of a Liquidated Receivable
and (ii) amounts that are required to be refunded to the Obligor on such
Receivable; PROVIDED, HOWEVER, that the Net Liquidation Proceeds with respect to
any Receivable shall in no event be less than zero.
"NOTES" means the Class A Notes and/or the Class B Notes, as the context
may require.
"NOTE DISTRIBUTION ACCOUNT" means the account designated as such,
established and maintained pursuant to SECTION 5.1(B) of the Sale and Servicing
Agreement.
"NOTE INTEREST RATE" means, with respect to the Class A Notes, the Class A
Note Interest Rate, and with respect to the Class B Notes, the Class B Note
Interest Rate.
"NOTE PAYING AGENT" means the Trustee or any other Person that meets the
eligibility standards for the Trustee specified in SECTION 6.11 of the Indenture
and is authorized by the Issuer to make the payments to and distributions from
the Collection Account and the Note Distribution Account, including payment of
principal of or interest on each class of Notes on behalf of the Issuer.
"NOTE PURCHASE AGREEMENT" means the Class A Note Purchase Agreement, in the
case of the Class A Notes, or the Class B Note Purchase Agreement, in the case
of the Class B Notes.
"NOTE PURCHASER" means the Class A Note Purchaser, in the case of the Class
A Notes, or a Class B Note Purchaser, in the case of the Class B Notes.
"NOTE REGISTER" and "NOTE REGISTRAR" have the respective meanings specified
in Section 2.4 of the Indenture.
"OBLIGOR" on a Receivable means the purchaser or co-purchasers of the
Financed Vehicle and any other Person who owes payments under the Receivable.
"OFFICER'S CERTIFICATE" means a certificate signed by the chairman of the
board, the president, any vice chairman of the board, any vice president, the
treasurer, the controller or assistant treasurer or any assistant controller,
secretary or assistant secretary of the Seller, the Purchaser or the Servicer,
as appropriate.
"OPINION COLLATERAL" has the meaning set forth in Section 3.6(a) of the
Indenture.
"OPINION OF COUNSEL" means a written opinion of counsel who may be but need
not be counsel to the Purchaser, the Seller or the Servicer, which counsel shall
be reasonably acceptable to the Trustee and the applicable Note Purchaser and
which opinion shall be acceptable in form and substance to the Trustee and to
the applicable Note Purchaser.
"ORIGINAL BASIC DOCUMENTS" has the meaning assigned to such term in Annex A
to the Second Amended and Restated Sale and Servicing Agreement dated as of
April 18, 2006, among Page Funding LLC, as Purchaser and Issuer, CPS, as Seller
and Servicer, and Xxxxx Fargo Bank, National Association, as the Backup Servicer
and the Trustee.
"ORIGINAL INDENTURE" has the meaning assigned to such term in Annex A to
the Second Amended and Restated Sale and Servicing Agreement dated as of April
18, 2006, among Page Funding LLC, as Purchaser and Issuer, CPS, as Seller and
Servicer, and Xxxxx Fargo Bank, National Association, as the Backup Servicer and
the Trustee.
"ORIGINAL NOTE PURCHASE AGREEMENT" has the meaning assigned to such term in
Annex A to the Second Amended and Restated Sale and Servicing Agreement dated as
of April 18, 2006, among Page Funding LLC, as Purchaser and Issuer, CPS, as
Seller and Servicer, and Xxxxx Fargo Bank, National Association, as the Backup
Servicer and the Trustee.
"ORIGINAL SALE AND SERVICING AGREEMENT" means the Sale and Servicing
Agreement dated as of June 30, 2004, as amended and restated by the Amended and
Restated Sale and Servicing Agreement dated as of June 29, 2005, as amended by
Amendment No. 1 thereto dated as of August 31, 2005 and Amendment No. 2 thereto,
dated as of February 28, 2006, and as further amended and restated by the Second
Amended and Restated Sale and Servicing Agreement dated as of April 18, 2006, in
each case by and among Page Funding LLC, as Purchaser, CPS, as Seller and
Servicer, and Xxxxx Fargo Bank, National Association, as the Backup Servicer and
the Trustee.
"OTHER CONVEYED PROPERTY" means all property conveyed by the Seller to the
Purchaser pursuant to SECTIONS 2.1 (A)(II) through (XII) of the Sale and
Servicing Agreement and Section 2 of each Assignment.
"OUTSTANDING" means, as of the date of determination, the Notes theretofore
authenticated and delivered under the Indenture except:
(i) Notes theretofore canceled by the Note Registrar or delivered to
the Note Registrar for cancellation;
(ii) Notes the payment for which money in the necessary amount has
been theretofore deposited with the Trustee or any Note Paying Agent in
trust for the Holders of such Notes (provided, however, that if such Notes
are to be prepaid, notice of such prepayment has been duly given pursuant
to the Indenture, satisfactory to the Trustee); and
(iii) Notes in exchange for or in lieu of one or more other Notes
which have been authenticated and delivered pursuant to the Indenture
unless proof satisfactory to the Trustee is presented that any such Note is
held by a bona fide purchaser.
"PERCENTAGE INTEREST" means, with respect to any Class A Note or Class B
Note, the percentage interest as specified on the face of such Note, which when
multiplied by the applicable Invested Amount outstanding on any date of
determination shall equal the principal amount outstanding on such Note as of
such date.
"PERSON" means any individual, corporation, estate, partnership, limited
liability company, joint venture, association, joint stock company, trust
(including any beneficiary thereof), unincorporated organization or government
or any agency or political subdivision thereof.
"PHYSICAL PROPERTY" has the meaning given to such term in the definition of
"Delivery" above.
"PLAN" means any Person that is (i) an "employee benefit plan" (as defined
in Section 3(3) of ERISA) that is subject to the provisions of Title I of ERISA,
(ii) a "plan" (as defined in Section 4975(e)(1) of the Code) that is subject to
Section 4975 of the Code or (ii) any entity whose underlying assets include
assets of a plan described in (i) or (ii) above by reason of such plan's
investment in the entity.
"PLEDGE AGREEMENT" means the Amended and Restated Pledge and Security
Agreement dated as of February 14, 2007 by and among CPS, the Class A Note
Purchaser and each Class B Note Purchaser, as such agreement may be further
amended, supplemented or otherwise modified from time to time in accordance with
the terms thereof.
"PLEDGED ACCOUNT PROPERTY" means the Pledged Accounts, all amounts and
investments held from time to time in any Pledged Account (whether in the form
of deposit accounts, Physical Property, book-entry securities, uncertificated
securities or otherwise), and all proceeds of the foregoing.
"PLEDGED ACCOUNTS" has the meaning assigned thereto in SECTION 5.1(D) of
the Sale and Servicing Agreement.
"PLEDGED COLLATERAL" has the meaning assigned thereto in the Pledge
Agreement.
"PLEDGED SUBORDINATE SECURITY" means any subordinate classes of
asset-backed securities (including, without limitation, residual interest
securities) issued pursuant to a Securitization Transaction that are not sold on
the related Securitization Closing Date and which are paid to the Issuer as part
of the consideration for the sale of the related Receivables in such
Securitization Transaction, and that are delivered by the Issuer, as the owner
thereof, to the Trustee pursuant to Section 3.3 of the Sale and Servicing
Agreement and pledged by the Issuer 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.
"POST-OFFICE BOX" means the separate post-office box established and
maintained by the Servicer in the name of the Purchaser for the benefit of the
Trustee for the further benefit of the Noteholders and the Note Purchasers,
established and maintained pursuant to SECTION 4.2 of the Sale and Servicing
Agreement.
"PRE-FUNDING PROCEEDS" has the meaning assigned thereto in Section 10.1 of
the Indenture.
"PRIME RATE" for any date of determination means the highest rate of
interest (or if a range is given, the highest prime rate) published in THE WALL
STREET JOURNAL on such date as constituting the "prime rate" or "base rate" in
such publication's table of Money Rates or, if THE WALL STREET JOURNAL is not
published on such date, then in THE WALL STREET JOURNAL most recently published.
"PRINCIPAL BALANCE" of a Receivable, as of the close of business on the
last day of an Accrual Period, means the Amount Financed minus the sum of the
following amounts without duplication: (i) in the case of a Rule of 78's
Receivable, that portion of all Scheduled Receivable Payments actually received
on or prior to such day allocable to principal using the actuarial or constant
yield method; (ii) in the case of a Simple Interest Receivable, that portion of
all Scheduled Receivable Payments actually received on or prior to such day
allocable to principal using the Simple Interest Method; (iii) any payment of
the Purchase Amount with respect to the Receivable allocable to principal; (iv)
any Cram Down Loss in respect of such Receivable; and (v) any prepayment in full
or any partial prepayment applied to reduce the principal balance of the
Receivable.
"PRINCIPAL FUNDING ACCOUNT" has the meaning specified in SECTION 5.1(C) of
the Sale and Servicing Agreement.
"PROCEEDING" means any suit in equity, action at law or other judicial or
administrative proceeding.
"PROGRAM" has the meaning specified in SECTION 4.11 of the Sale and
Servicing Agreement.
"PURCHASE AMOUNT" means, on any date with respect to a Defective
Receivable, the sum of (a) the Principal Balance of such Receivable as of the
date of purchase and (b) all accrued and unpaid interest on the Receivable as of
such date (which in the case of a Rule 78's Receivable shall include, without
limitation, a full month's interest in the month of purchase at the related
APR), after giving effect to the receipt of any moneys collected (from whatever
source) on such Receivable, if any, as of such date.
"PURCHASE PRICE" means, with respect to each Receivable and related Other
Conveyed Property transferred to the Purchaser on the Closing Date or on any
Funding Date, an amount equal to the Principal Balance of such Receivable as of
the Closing Date or such Funding Date, as applicable.
"PURCHASED RECEIVABLE" means a Receivable purchased as of the close of
business on the last day of an Accrual Period by the Servicer pursuant to
SECTION 4.7 of the Sale and Servicing Agreement or repurchased by the Seller
pursuant to SECTION 3.2 or Section 3.4 of the Sale and Servicing Agreement.
"PURCHASER" means Page Funding LLC.
"PURCHASER PROPERTY" means the Receivables and Other Conveyed Property,
together with certain monies received after the related Cutoff Date, the
Receivables Insurance Policies, the Collection Account (including all Eligible
Investments therein and all proceeds therefrom), each Lockbox Account and
certain other rights under the Sale and Servicing Agreement.
"RATING AGENCY" means each of Moody's and Standard & Poor's, and any
successors thereof. If no such organization or successor maintains a rating on a
class of Notes, "Rating Agency" shall be a nationally recognized statistical
rating organization or other comparable Person designated by the Controlling
Noteholder, notice of which designation shall be given to the Trustee and the
Servicer.
"REALIZED LOSSES" means, with respect to any Receivable that becomes a
Liquidated Receivable, the excess of the Principal Balance of such Liquidated
Receivable over Net Liquidation Proceeds allocable to principal thereof.
"RECEIVABLE" means each Contract listed on the Schedule of Receivables and
all rights and obligations thereunder, except for Receivables that have become
Purchased Receivables and, for the avoidance of doubt, shall include all Related
Receivables (other than Related Receivables that have become Purchased
Receivables).
"RECEIVABLE FILES" means the documents specified in SECTION 3.3(A) of the
Sale and Servicing Agreement.
"RECEIVABLES INSURANCE POLICY" means, with respect to a Receivable, any
insurance policy (including the insurance policies described in SECTION 4.4 of
the Sale and Servicing Agreement) benefiting the holder of the Receivable
providing loss or physical damage, credit life, credit accident, health, credit
disability, theft, mechanical breakdown or similar coverage with respect to the
Financed Vehicle or the Obligor, including without limitation any GAP, vendor's
single interest or other collateral protection insurance policy or coverage.
"RECORD DATE" means, with respect to a Settlement Date, the close of
business on the day immediately preceding such Settlement Date.
"REGISTRAR OF TITLES" means, with respect to any state, the governmental
agency or body responsible for the registration of, and the issuance of
certificates of title relating to, motor vehicles and liens thereon.
"RELATED RECEIVABLES" means, with respect to a Funding Date, the
Receivables listed on SCHEDULE A to the applicable Assignment executed and
delivered by the Seller with respect to such Funding Date.
"RELEASE REQUEST" has the meaning specified in SECTION 3.5 of the Sale and
Servicing Agreement.
"REPOSSESSED RECEIVABLE" means a Receivable with respect to which the
earliest of the following shall have occurred: (i) the date the Financed Vehicle
is actually repossessed and (ii) 30 days after the date the Financed Vehicle is
authorized for repossession.
"REQUIREMENT OF LAW" means as to any Person, the certificate of
incorporation and bylaws or other organizational or governing documents of such
Person, and any law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its property or to which such Person or
property is subject.
"RESPONSIBLE OFFICER" means, in the case of the Trustee, the chairman or
vice-chairman of the board of directors, the chairman or vice-chairman of the
executive committee of the board of directors, the president, vice-president,
assistant vice-president or managing director, the secretary, and assistant
secretary or any other officer of the Trustee customarily performing functions
similar to those performed by any of the above designated officers and also
means, with respect to a particular corporate trust matter, any other officer to
whom such matter is referred because of such officer's knowledge of and
familiarity with the particular subject.
"RULE 144A INFORMATION" has the meaning set forth in SECTION 3.26 of the
Indenture.
"RULE OF 78'S RECEIVABLE" means any Receivable under which the portion of a
payment allocable to earned interest (which may be referred to in the related
retail installment sale contract as an add-on finance charge) and the portion
allocable to the Amount Financed is determined according to the method commonly
referred to as the "RULE OF 78'S" method or the "SUM OF THE MONTHS' DIGITS"
method or any equivalent method.
"SALE AND SERVICING AGREEMENT" means the Third Amended and Restated Sale
and Servicing Agreement dated as of February 14, 2007, among Page Funding LLC,
as Purchaser and Issuer, CPS, as Seller and Servicer, and Xxxxx Fargo Bank,
National Association, as the Backup Servicer and the Trustee, as the same may be
further amended, supplemented or otherwise modified from time to time in
accordance with the terms thereof.
"SCHEDULED MATURITY DATE" means, with respect to the Class A Notes, the
Class A Scheduled Maturity Date and with respect to the Class B Notes, the Class
B Scheduled Maturity Date.
"SCHEDULED RECEIVABLE PAYMENT" means, with respect to any Accrual Period
for any Receivable, the amount set forth in such Receivable as required to be
paid by the Obligor in such Accrual Period. If after the Class A Closing Date,
the Obligor's obligation under a Receivable with respect to an Accrual Period
has been modified so as to differ from the amount specified in such Receivable
(i) as a result of the order of a court in an insolvency proceeding involving
the Obligor, (ii) pursuant to the Servicemembers Civil Relief Act, or (iii) as a
result of modifications or extensions of the Receivable permitted by Section 4.2
of the Sale and Servicing Agreement, the Scheduled Receivable Payment with
respect to such Accrual Period shall refer to the Obligor's payment obligation
with respect to such Accrual Period as so modified.
"SCHEDULE OF RECEIVABLES" means the schedule of all Receivables purchased
by the Purchaser pursuant to the Sale and Servicing Agreement and each
Assignment, which is attached as Schedule A to the Sale and Servicing Agreement,
as amended or supplemented from time to time upon each Assignment of Receivables
or in accordance with the terms of the Sale and Servicing Agreement.
"SEAWEST" means SeaWest Financial Corporation, a California corporation.
"SECTION 341 MEETING" means a meeting held pursuant to Section 341(a) of
the United States Bankruptcy Code (as the same may be amended from time to time)
in which an Obligor subject to a Insolvency Event under Chapter 7 of the United
States Bankruptcy Code has presented his/her plan to the bankruptcy court and
all of his/her creditors.
"SECTION 341 RECEIVABLE" means a Receivable, the Obligor of which has
completed a Section 341 Meeting as of the applicable Cutoff Date.
"SECURED OBLIGATIONS" means all amounts and obligations which the Issuer or
the Purchaser may at any time owe under the Basic Documents to, or on behalf of
the Noteholders, the Note Purchasers and/or the Trustee for the benefit of the
Noteholders and the Note Purchasers (or any of them), in each case whether now
owed or hereafter arising.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SECURITIZATION CLOSING DATE" shall mean the closing date for a
Securitization Transaction.
"SECURITIZATION DOCUMENTS" shall mean, collectively, all agreements,
documents, instruments and certificates executed and delivered in connection
with any Securitization Transaction.
"SECURITIZATION TRANSACTION" means a securitization of Receivables.
"SELLER" means Consumer Portfolio Services, Inc., and its successors in
interest to the extent permitted hereunder.
"SERVICER" means, initially, Consumer Portfolio Services, Inc., as the
servicer of the Receivables, and each successor Servicer pursuant to SECTION
10.3 of the Sale and Servicing Agreement.
"SERVICER DELINQUENCY RATIO" means, as of the end of any Accrual Period, a
percentage equal to (i) the aggregate outstanding principal balance as of the
end of any Accrual Period of all automobile receivables serviced by the Servicer
or any Affiliate thereof (excluding automobile receivables acquired by CPS or
its Affiliates in merger or acquisition transactions and TFC Managed
Receivables) as to which more than 10% of the scheduled receivable payment is
more than 30 days contractually delinquent as of the end of the immediately
preceding Accrual Period, including all receivables for which the related
financed vehicle has been repossessed and the proceeds thereof have not yet been
realized by the Servicer divided by (ii) the aggregate outstanding principal
balance of all automobile receivables serviced by the Servicer or any Affiliate
thereof as of the end of the relevant Accrual Period (excluding automobile
receivables acquired by CPS or its Affiliates in merger or acquisition
transactions and TFC Managed Receivables).
"SERVICER EXTENSION NOTICE" has the meaning specified in SECTION 4.15 of
the Sale and Servicing Agreement.
"SERVICER LOSS RATIO" means, as of any date, the average of the loss ratios
(expressed as a percentage) for the three Accrual Periods immediately preceding
such date, as computed based on the methodology set forth in the Servicer's then
most recent report on Form 10-Q or Form 10-K, as applicable, for calculation of
net losses on automobile receivables originated and serviced by the Servicer
(excluding all automobile receivables originated or acquired by CPS or its
Affiliates in merger or acquisition transactions).
"SERVICER TERMINATION EVENT" means an event specified in SECTION 10.1 of
the Sale and Servicing Agreement.
"SERVICER TERMINATION SIDE LETTER" means the Amended and Restated Servicer
Termination Side Letter dated February 14, 2007, from the Controlling Note
Purchaser to the Servicer, as the same may be further amended, supplemented or
otherwise modified from time to time in accordance with the terms thereof.
"SERVICER'S CERTIFICATE" means a certificate completed and executed by a
Servicing Officer and delivered pursuant to SECTION 4.9 of the Sale and
Servicing Agreement, substantially in the form of EXHIBIT A to the Sale and
Servicing Agreement.
"SERVICING ASSUMPTION AGREEMENT" means the Second Amended and Restated
Servicing Assumption Agreement, dated as of February 14, 2007, among CPS, as
Seller and Servicer, the Backup Servicer and the Trustee, as the same may be
further amended, supplemented or otherwise modified from time to time in
accordance with the terms thereof.
"SERVICING FEE" has the meaning specified in SECTION 4.8 of the Sale and
Servicing Agreement.
"SERVICING FEE PERCENTAGE" means (a) with respect to the CPS Receivables,
2.50%, and (b) with respect to the TFC Receivables, 3.50%, provided that if
Backup Servicer is the Servicer, the Servicing Fee Percentage shall be
determined in accordance with Servicing Assumption Agreement.
SERVICING GUIDELINES" means CPS's established servicing guidelines, as the
same may be amended from time to time in accordance with Section 9.1(k) of the
Sale and Servicing Agreement.
"SERVICING OFFICER" means any Person whose name appears on a list of
Servicing Officers delivered to the Trustee and the Note Purchasers, as the same
may be amended, modified or supplemented from time to time.
"SETTLEMENT DATE" means, with respect to each Accrual Period, the 15th day
of the following calendar month, or if such day is not a Business Day, the
immediately following Business Day.
"SIMPLE INTEREST METHOD" means the method of allocating a fixed level
payment between principal and interest, pursuant to which the portion of such
payment that is allocated to interest is equal to the product of the APR
multiplied by the unpaid balance multiplied by the period of time (expressed as
a fraction of a year, based on the actual number of days in the calendar month
and the actual number of days in the calendar year) elapsed since the preceding
payment of interest was made and the remainder of such payment is allocable to
principal.
"SIMPLE INTEREST RECEIVABLE" means a Receivable under which the portion of
the payment allocable to interest and the portion allocable to principal is
determined in accordance with the Simple Interest Method.
"STANDARD & POOR'S" means Standard & Poor's Ratings Services, a division of
The XxXxxx-Xxxx Companies, Inc., or its successor.
"STATE" means any one of the 50 states of the United States of America or
the District of Columbia.
"SUBSIDIARY" means, with respect to any Person, any corporation,
partnership, association or other business entity of which a majority of the
outstanding shares of capital stock or other equity interests having ordinary
voting power for the election of directors or their equivalent is at the time
owned by such Person directly or through one or more Subsidiaries.
"TAXES" has the meaning set forth in SECTION 3.04 of each Note Purchase
Agreement.
"TERM" means, with respect to the Class A Notes, the Class A Term and with
respect to the Class B Notes, the Class B Term.
"TERMINATION DATE" means the date on which the Trustee shall have received
payment and performance of all Secured Obligations and disbursed such payments
in accordance with the Basic Documents and any and all other amounts due and
payable to the Note Purchasers and the Noteholders pursuant to the Basic
Documents have been paid in full.
"TEXAS FRANCHISE TAX" means any tax imposed by the State of Texas pursuant
to Tex. Tax Code Xxx. ss. 171.001 (Xxxxxx 2005), as amended by Tex. H.B. 3, 79th
Leg., 3d C.S. (2006).
"TFC" means The Finance Company, Inc., a Virginia corporation.
"TFC ASSIGNMENT" means an assignment in substantially the form attached as
EXHIBIT E to the Sale and Servicing Agreement pursuant to which TFC transfers
and conveys TFC Receivables to CPS from time to time.
"TFC BORROWING BASE" means, as of any date of determination and with
respect to the TFC Receivables, an amount equal to the lesser of (I) the product
of (a) the applicable Class A Advance Rate and (b) the excess of (i) the
Aggregate Principal Balance of the TFC Receivables over (ii) the Excess
Concentration Amount for the TFC Receivables, and (II) 80% of the Market Value
of the TFC Receivables; provided that on or after the occurrence of a TFC
Funding Termination Event, the TFC Borrowing Base shall equal zero.
"TFC DELINQUENCY RATIO" means, at any time of determination for the TFC
Managed Receivables, a percentage, equal to the aggregate Principal Balance of
the TFC Managed Receivables constituting TFC Delinquent Receivables as of such
date of determination divided by the aggregate Principal Balance of all TFC
Managed Receivables as of such date of determination.
"TFC DELINQUENT RECEIVABLE" means any TFC Managed Receivable (other than a
Defaulted Receivable) with respect to which more than 10% of a Scheduled
Receivable Payment is more than 30 days contractually delinquent as of the end
of the immediately preceding Accrual Period.
"TFC FUNDING TERMINATION EVENT" shall mean the occurrence and continuance
of any one or more of the following events: (a) the three-month rolling average
TFC Delinquency Ratio for all TFC Managed Receivables exceeds 11.25%; (b) the
TFC Three-Month Rolling Average Net Loss Test is breached; or (c) TFC shall no
longer be an Affiliate of CPS.
"TFC MANAGED RECEIVABLES" means a Receivable subserviced by TFC, whether a
TFC Receivable, a Receivable owned by TFC or otherwise.
"TFC RECEIVABLES" means Eligible Receivables acquired from Dealers by (i)
TFC, or (ii) CPS under its "Military Program".
"TFC THREE-MONTH ROLLING AVERAGE NET LOSS TEST" means that for each month
specified in the following table, the TFC Three-Month Rolling Average Net Loss
Rate, determined as of the last day of such month, does not exceed the "Maximum
TFC Three-Month Rolling Average Net Loss Rate" specified by the following table:
--------------------------- -----------------------------------
MONTH MAXIMUM TFC THREE-MONTH ROLLING
AVERAGE NET LOSS RATE
--------------------------- -----------------------------------
January 24.00%
--------------------------- -----------------------------------
February 22.00%
--------------------------- -----------------------------------
March 20.00%
--------------------------- -----------------------------------
April 18.00%
--------------------------- -----------------------------------
May 18.00%
--------------------------- -----------------------------------
June 18.00%
--------------------------- -----------------------------------
July 18.00%
--------------------------- -----------------------------------
August 18.00%
--------------------------- -----------------------------------
September 18.00%
--------------------------- -----------------------------------
October 18.00%
--------------------------- -----------------------------------
November 20.00%
--------------------------- -----------------------------------
December 22.00%
--------------------------- -----------------------------------
Conversely if such Maximum Three-Month Rolling Average Net Loss Rate is equaled
or exceeded, the TFC Three-Month Rolling Average Net Loss Test shall be
breached.
"TFC THREE-MONTH ROLLING AVERAGE NET LOSS RATE" means, as of any date of
determination, (x) the sum of the fractions, expressed as a PERCENTAGE
(annualized) for each of the three most recently ended Accrual Periods, the
numerator of which is the amount of gross charge-offs of TFC Managed Receivables
(less liquidation proceeds and recoveries) and the denominator of which is the
average outstanding aggregate principal amount of the TFC Managed Receivables
during such Accrual Period divided by (y) three.
"TRUST ESTATE" means all money, instruments, rights and other property that
are subject or intended to be subject to the lien and security interest of the
Indenture for the benefit of the Noteholders and the Note Purchasers, including
all Collateral Granted to the Trustee for the benefit of the Noteholders and the
Note Purchasers pursuant to Granting Clause I of the Indenture, all Pledged
Subordinate Securities Granted to the Trustee for the benefit of the Class B
Noteholders and the Class B Note Purchasers pursuant to Granting Clause II of
the Indenture, and all Bear Cross Collateral Granted to the Trustee for the
benefit of the Class B Noteholders and the Class B Note Purchasers pursuant to
Granting Clause III of the Bear Indenture.
"TRUST RECEIPT" means a trust receipt in substantially the form of EXHIBIT
B to the Sale and Servicing Agreement.
"TRUSTEE" means Xxxxx Fargo Bank, National Association, a national banking
association, not in its individual capacity but as trustee under the Indenture,
or any successor trustee under the Indenture.
"TRUSTEE FEE" means (A) the fee payable to the Trustee on each Settlement
Date in an amount equal to the greater of $2,000 and (b) one-twelfth of 0.04% of
the aggregate outstanding principal amount of the Notes on the first day of the
related Accrual Period, and (B) any other amounts payable to the Trustee
pursuant to the Fee Schedule, including Custodial Fees.
"UBS CROSS COLLATERAL" has the meaning specified in Granting Clause III of
the Indenture.
"UBS WAREHOUSE FACILITY" means the transactions contemplated by the Basic
Documents.
"UCC" means the Uniform Commercial Code as in effect in the relevant
jurisdiction, as amended from time to time.
