Exhibit 10.16
EXECUTION COPY
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TRANSFER AND SERVICING AGREEMENT
Dated as of April 25, 2000
by and between
APPLE RIDGE SERVICES CORPORATION
as transferor,
CENDANT MOBILITY SERVICES CORPORATION
as originator and servicer,
CENDANT MOBILITY FINANCIAL CORPORATION
as originator,
APPLE RIDGE FUNDING LLC
as transferee
and
BANK ONE, NATIONAL ASSOCIATION
as Indenture Trustee
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TABLE OF CONTENTS
PAGE
ARTICLE I
DEFINITIONS
Section 1.01 Definitions......................................................1
Section 1.02 Other Definitional Provisions....................................9
ARTICLE II
SALE AND PURCHASE OF ASSETS
Section 2.01 Sale and Purchase...............................................10
Section 2.02 Representations and Warranties of the Transferor................12
Section 2.03 Representations and Warranties of the Issuer....................16
Section 2.04 No Assumption of Obligations Relating to Transferred Assets;
Excess Home Sale Proceeds.......................................17
Section 2.05 Affirmative Covenants of the Transferor.........................17
Section 2.06 Negative Covenants of the Transferor............................20
ARTICLE III
ADMINISTRATION AND SERVICING OF RECEIVABLES
Section 3.01 Acceptance of Appointment and Other Matters Relating to the
Servicer........................................................22
Section 3.02 Duties of the Servicer and the Issuer...........................22
Section 3.03 Servicing Compensation..........................................25
Section 3.04 Representations and Warranties of the Servicer..................25
Section 3.05 Affirmative Covenants of Servicer...............................28
Section 3.06 Negative Covenants of Servicer..................................30
Section 3.07 Records of the Servicer and Reports to be Prepared by the
Servicer........................................................31
Section 3.08 Annual Certificate of Servicer..................................32
Section 3.09 Annual Servicing Report of Independent Public Accountants;
Copies of Reports Available.....................................32
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Section 3.10 Adjustments; Modifications......................................33
Section 3.11. Escrow Agents...................................................34
Section 3.12. Servicer Advances...............................................34
Section 3.13. Calculations....................................................34
Section 3.14. Application of Collections......................................34
ARTICLE IV
ACCOUNTS AND POOL COLLECTIONS
Section 4.01 Establishment of Collection Account.............................36
Section 4.02 Pool Collections and Allocations................................36
Section 4.03 Withdrawals from the Collection Account.........................37
ARTICLE V
SECURITY INTEREST
Section 5.01 Security Interest...............................................38
Section 5.02 Enforcement of Rights...........................................38
ARTICLE VI
OTHER MATTERS RELATING TO THE TRANSFEROR
Section 6.01 Liability of the Transferor.....................................39
Section 6.02 Indemnification by the Transferor...............................39
ARTICLE VII
OTHER MATTERS RELATING TO THE SERVICER
Section 7.01 Liability of the Servicer.......................................41
Section 7.02 Merger or Consolidation of, or Assumption of the Obligations of,
the Servicer....................................................41
Section 7.03 Limitation on Liability of the Servicer and Others..............41
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Section 7.04 Indemnification by the Servicer.................................42
Section 7.05 Resignation of the Servicer.....................................42
Section 7.06 Access to Certain Documentation and Information Regarding the
Receivables.....................................................43
ARTICLE VIII
TERMINATION
Section 8.01 Transfer Termination Events.....................................44
Section 8.02 Transfer Termination............................................45
ARTICLE IX
SERVICER DEFAULTS
Section 9.01 Servicer Defaults...............................................46
Section 9.02 Performance by Issuer...........................................48
Section 9.03 Indenture Trustee To Act; Appointment of Successor..............48
Section 9.04 Notification to Holders.........................................50
Section 9.05 Marketing Expenses Account......................................50
ARTICLE X
TERMINATION
Section 10.01 Termination....................................................52
ARTICLE XI
MISCELLANEOUS PROVISIONS
Section 11.01 Amendment......................................................53
Section 11.02 Governing Law..................................................53
Section 11.03 Notices; Payments..............................................53
Section 11.04 Severability of Provisions.....................................54
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Section 11.05 Further Assurances.............................................54
Section 11.06 Nonpetition Covenant...........................................54
Section 11.07 No Waiver; Cumulative Remedies.................................54
Section 11.08 Counterparts...................................................54
Section 11.09 Third-Party Beneficiaries......................................55
Section 11.10 Merger and Integration.........................................55
Section 11.11 Headings.......................................................55
Section 11.12 Confidentiality................................................55
Section 11.13 Costs, Expenses and Taxes......................................55
Section 11.14 Submission to Jurisdiction.....................................55
Section 11.15 Waiver of Jury Trial...........................................56
Section 11.16 Acknowledgment and Consent.....................................57
Section 11.17 No Partnership or Joint Venture................................57
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SCHEDULES
SCHEDULE 2.02(m) Principal Place of Business and Chief Executive Office
of the Transferor and List of Offices Where the Servicer
Keeps Records Related to the Transferred Assets
SCHEDULE 2.02(o) List of Legal Names
SCHEDULE 3.04(l) List of Lockbox Banks
EXHIBIT
EXHIBIT A Form of Annual Servicer's Certificate
EXHIBIT B Forms of Lockbox Agreements
EXHIBIT C List of Servicing Officers
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THIS TRANSFER AND SERVICING AGREEMENT (this "AGREEMENT") dated as of
April 25, 2000 is made by and between APPLE RIDGE SERVICES CORPORATION, a
Delaware corporation, as transferor, CENDANT MOBILITY SERVICES CORPORATION, a
Delaware corporation, as originator and servicer ("CMSC" or the "SERVICER"),
CENDANT MOBILITY FINANCIAL CORPORATION, a Delaware corporation, as originator
("CMF"), APPLE RIDGE FUNDING LLC, a Delaware limited liability company (the
"ISSUER"), as transferee, and BANK ONE, NATIONAL ASSOCIATION, as Indenture
Trustee.
In consideration of the mutual agreements herein contained, each
party agrees as follows for the benefit of the other parties, the Indenture
Trustee and the holders of any Notes issued by the Issuer from time to time
under the Indenture to the extent provided herein:
ARTICLE I
DEFINITIONS
Section 1.01 DEFINITIONS. Capitalized terms used in this Agreement
but not defined herein shall have the meanings assigned to them in the
Receivables Purchase Agreement or Purchase Agreement, as applicable. Whenever
used in this Agreement, the following words and phrases shall have the following
meanings, and the definitions of such terms 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.
"AGREEMENT" shall mean this Transfer and Servicing Agreement and all
amendments hereof and supplements hereto.
"ARF PURCHASE PRICE" shall have the meaning set forth in Section
2.01(i).
"ARSC INDEMNIFIED LOSSES" shall have the meaning set forth in
Section 6.02.
"ARSC INDEMNIFIED PARTY" shall have the meaning set forth in Section
6.02.
"ASSET DEFICIENCY" shall have the meaning set forth in the
Indenture.
"CASH EQUIVALENTS" shall mean (i) investments in commercial paper
maturing in not more than 270 days from the date of issuance which at the time
of acquisition is rated at least A-1 or the equivalent thereof by Standard &
Poor's or P-1 or the equivalent thereof by Moody's, (ii) investments in direct
obligations or obligations that are guaranteed or insured by the United States
or any agency or instrumentality thereof (PROVIDED that the full faith and
credit of the United States is pledged in support thereof) having a maturity of
not more than three years from the date of acquisition, (iii) investments in
certificates of deposit maturing not more than one year from the date of origin
issued by a bank or trust company organized or licensed under the laws of the
United States or any state or territory thereof having capital, surplus and
undivided profits aggregating at least $500,000,000 and rated A or better by
Standard & Poor's or A2 or better by Moody's, (iv) money market mutual funds
having assets in excess of $2,000,000,000, (v) investments in asset-backed or
mortgage-backed securities, including investments in collateralized, adjustable
rate mortgage securities and those mortgage-backed securities that are rated at
least AA by Standard & Poor's or Aa by Moody's or are of comparable quality at
the
time of investment and (vi) banker's acceptances maturing not more than one year
from the date of origin issued by a bank or trust company organized or licensed
under the laws of the United States or any state or territory thereof and having
capital, surplus and undivided profits aggregating at least $500,000,000, and
rated A or better by Standard & Poor's or A2 or better by Moody's.
"CODE" shall mean the Internal Revenue Code of 1986, as amended.
"COLLECTION ACCOUNT" shall have the meaning provided in Section
4.01.
"CONSOLIDATED NET INCOME" shall mean, for any period for which such
amount is being determined, the net income (or loss) of PHH and its Consolidated
Subsidiaries during such period determined on a consolidated basis for such
period taken as a single accounting period in accordance with GAAP, PROVIDED
that there shall be excluded (i) income (or loss) of any Person (other than a
Consolidated Subsidiary) in which PHH or any of its Consolidated Subsidiaries
has an equity investment or comparable interest, except to the extent of the
amount of dividends or other distributions actually paid to PHH or its
Consolidated Subsidiaries by such Person during such period, (ii) the income (or
loss) of any Person accrued prior to the date it becomes a Consolidated
Subsidiary or is merged into or consolidated with PHH or any of its Consolidated
Subsidiaries or the Person's assets are acquired by PHH or any of its
Consolidated Subsidiaries, (iii) the income of any Consolidated Subsidiary to
the extent that the declaration or payment of dividends or similar distributions
by the Consolidated Subsidiary of the income is not at the time permitted by
operation of the terms of its charter or any agreement, instrument, judgment,
decree, order, statute, rule or governmental regulation applicable to that
Consolidated Subsidiary, (iv) any extraordinary after-tax gains and (v) any
extraordinary pretax losses but only to the extent attributable to a write-down
of financing costs relating to any existing and future indebtedness.
"CONSOLIDATED NET WORTH" shall mean, at any date of determination,
all amounts that would be included on a balance sheet of PHH and its
Consolidated Subsidiaries under stockholders' equity as of such date in
accordance with GAAP.
"CONSOLIDATED SUBSIDIARIES" shall mean all subsidiaries of PHH that
are required to be consolidated with PHH for financial reporting purposes in
accordance with GAAP.
"DISTRIBUTION DATE" shall mean, with respect to any Series, the date
specified in the applicable Supplement for payments to holders of the Notes of
that Series.
"DOLLARS," "$" or "U.S. $" shall mean United States dollars.
"ELIGIBLE ACCOUNT" shall mean an account that is (i) maintained with
a depository institution whose short-term debt obligations at the time of any
deposit therein are rated in the highest short-term debt rating categories by
Moody's and Standard & Poor's, (ii) one or more accounts maintained with a
depository institution, which accounts are fully insured by the FDIC, with a
minimum long-term unsecured debt rating of "A3" by Moody's and "BBB+" by
Standard & Poor's, (iii) a segregated trust account maintained with the
corporate trust office of the Indenture Trustee or an Affiliate of the Indenture
Trustee, in either case in its fiduciary capacity
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or (iv) an account otherwise acceptable to each Rating Agency as evidenced by
the delivery of a rating letter by each Rating Agency on the Closing Date.
"ELIGIBLE INVESTMENTS" shall mean the following instruments,
investment property, or other property, other than securities issued by or
obligations of CMSC or any of its Affiliates:
(a) direct obligations of, or obligations fully guaranteed as to
timely payment by, the United States of America;
(b) demand deposits, time deposits or certificates of deposit
(having original maturities of no more than 365 days) of depository institutions
or trust companies incorporated under the laws of the United States of America
or any state thereof, including the District of Columbia (or domestic branches
of foreign banks) and subject to supervision and examination by federal or state
banking or depository institution authorities, PROVIDED that, at the time of the
Issuer's investment or contractual commitment to invest therein, the short-term
debt rating of such depository institution or trust company shall be A-1+ by
Standard & Poor's and P-1 by Moody's;
(c) commercial paper (having original or remaining maturities of no
more than 30 days) having, at the time of the Issuer's investment or contractual
commitment to invest therein, a short-term debt rating of A-1+ by Standard &
Poor's and P-1 by Moody's;
(d) demand deposits, time deposits and certificates of deposit that
are fully insured by the FDIC having, at the time of the Issuer's investment
therein, a short-term debt rating of A-1+ by Standard & Poor's and P-1 by
Moody's;
(e) bankers' acceptances (having original maturities of no more than
365 days) issued by any depository institution or trust company referred to in
clause (b) above;
(f) money market funds having, at the time of the Issuer's
investment therein, a rating of AAAm or AAAm-G by Standard & Poor's or Aaa by
Moody's (including funds for which the Indenture Trustee or any of its
Affiliates is investment manager or advisor);
(g) time deposits and eurodollar deposits (having maturities not
later than the succeeding Distribution Date) other than as referred to in clause
(d) above, with a Person the commercial paper of which has a credit rating of at
least A-1+ by Standard & Poor's and P-1 by Moody's; or
(h) any other investment of a type or rating that satisfies the
Rating Agency Condition.
"ELIGIBLE RECEIVABLES" shall have the meaning provided in the
Receivables Purchase Agreement.
"ELIGIBLE SERVICER" shall mean CMSC or, if CMSC is not acting as
Servicer, an entity that, at the time of its appointment as Servicer, (a) is
servicing a portfolio of relocation services accounts and is acceptable to the
Indenture Trustee, each Series Enhancer and the Rating Agencies, (b) is legally
qualified and has the capacity to service the Receivables, (c) in
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the determination of the Majority Investors, has demonstrated the ability to
service professionally and competently a portfolio of similar accounts in
accordance with high standards of skill and care, (d) is qualified to use the
software that is then being used to service the Receivables or obtains the right
to use or has its own software that is adequate to perform its duties under this
Agreement and (e) has a net worth of at least $ 25,000,000 as of the end of its
most recent fiscal quarter (or such lesser net worth as may be approved by the
Majority Investors).
"FDIC" shall mean the Federal Deposit Insurance Corporation or any
successor.
"FINAL STATED MATURITY DATE" shall have the meaning set forth in the
Indenture.
"HOME PURCHASE PRICE" shall mean, with respect to any Home, the
appraised or other value set forth in the related Home Purchase Contract as the
purchase price for such Home.
"INDEBTEDNESS" shall mean, with respect to any Person, in the
aggregate, without duplication, (i) all indebtedness, obligations and other
liabilities of such Person that are, at the date as of which Indebtedness is to
be determined, includable as liabilities in a balance sheet of such Person,
other than (x) accounts payable and accrued expenses and (y) current and
deferred income taxes and other similar liabilities, (ii) the maximum aggregate
amount of all liabilities of such Person or under any Guaranty, indemnity or
similar undertaking given or assumed of or in respect of, the indebtedness,
obligations or other liabilities, assets, revenues, income or dividends of any
Person other than such Person and (iii) all other obligations or liabilities of
such Person with respect to the discharge of the obligations of any Person other
than itself. For purposes of the Transaction Documents, the Indebtedness of any
Person includes the Indebtedness of any partnership or joint venture in which
such Person is a general partner or a joint venturer.
"INDENTURE" shall mean the master indenture dated as of April 25,
2000, by and between the Issuer, the Indenture Trustee and The Bank of New York,
as Paying Agent, Authentication Agent and Transfer Agent and Registrar.
"INDENTURE TRUSTEE" shall mean Bank One, National Association,
acting in its capacity as Indenture Trustee under the Indenture.
"INVESTMENT COMPANY ACT" shall mean the Investment Company Act of
1940, as amended.
"LOCKBOX" shall mean any post office box to which the Obligors remit
Pool Collections.
"LOCKBOX ACCOUNT" shall mean each lockbox account and associated
demand deposit account established pursuant to the Lockbox Agreement and such
other lockbox accounts and associated demand deposit accounts that the Servicer
may establish from time to time pursuant to a Lockbox Agreement.
"LOCKBOX AGREEMENT" shall mean each lockbox agreement attached as
Exhibit B and any other lockbox agreement pursuant to which the Servicer
establishes a Lockbox Account in the name of the Indenture Trustee.
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"LOCKBOX BANK" shall mean any institution at which a Lockbox or
Lockbox Account is maintained.
"MAJORITY INVESTORS" shall have the meaning set forth in the
Indenture.
"MARKETING EXPENSES ACCOUNT" shall mean the account established
pursuant to Section 9.05.
"MATERIAL ADVERSE EFFECT" shall mean, with respect to any Person and
any event or circumstance, a material adverse effect on (a) the business,
financial condition, operations or assets of such Person, (b) the ability of
such Person to perform its obligations under any Transaction Document to which
it is a party or, if applicable, all or any substantial portion of the
Contracts, (c) the validity or enforceability of, or collectibility of, amounts
payable by such Person under any Transaction Document to which it is a party,
(d) the status, existence, perfection or priority of the interest of the Issuer
and its assignees in the Transferred Assets, taken as a whole, in each case free
and clear of any Lien (other than a Permitted Lien) or (e) the validity,
enforceability or collectibility of all or any substantial portion of the
Transferred Assets.
"MOODY'S" shall mean Xxxxx'x Investors Service or its successor.
"NONRECOVERABLE ADVANCE" shall mean any Servicer Advance previously
made in respect of a Home the Receivable arising from which has become a
Defaulted Receivable.
"NOTE" shall have the meaning provided in the Indenture.
"OFFICER'S CERTIFICATE" shall mean, unless otherwise specified in
this Agreement, a certificate delivered as provided herein, signed:
(a) by the President, any Vice President or the chief financial
officer of the Transferor or the Servicer, as the case may be, or
(b) by the President, any Vice President or the financial controller
of any Successor Servicer
(or by an officer holding an office with equivalent or more senior
responsibilities or, in the case of the Servicer or Successor Servicer, a
Servicing Officer, and, in the case of the Transferor, any executive of the
Transferor designated in writing by a Vice President or more senior officer of
the Transferor for this purpose).
"OPINION OF COUNSEL" shall mean a written opinion of counsel, who
may be counsel for, or an employee of, the Person providing the opinion and who
shall be reasonably acceptable to the Issuer and the Indenture Trustee.
"OUTSTANDING" shall have the meaning set forth in the Indenture.
"OUTSTANDING AMOUNT" shall have the meaning set forth in the
Indenture.
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"PHH INDEBTEDNESS" shall mean (i) all indebtedness, obligations and
other liabilities of PHH and its Consolidated Subsidiaries that are, at the date
as of which PHH Indebtedness is to be determined, includable as liabilities in a
consolidated balance sheet of PHH and its Consolidated Subsidiaries, other than
(x) accounts payable and accrued expenses, (y) advances from clients obtained in
the ordinary course of the relocation management services business of PHH and
its Consolidated Subsidiaries and (z) current and deferred income taxes and
other similar liabilities, PLUS (ii) without duplicating any items included in
PHH Indebtedness pursuant to the foregoing clause (i), the maximum aggregate
amount of all liabilities of PHH or any of its Consolidated Subsidiaries under
any guaranty, indemnity or similar undertaking given or assumed of, or in
respect of, the indebtedness, obligations or other liabilities, assets,
revenues, income or dividends of any person other than PHH or one of its
Consolidated Subsidiaries and (iii) all other obligations or liabilities of PHH
or any of its Consolidated Subsidiaries in relation to the discharge of the
obligations of any Person other than PHH or one of its Consolidated
Subsidiaries.
"POSSESSION DATE" shall have, with respect to any Home, the meaning
provided in the related Home Purchase Contract.
"PURCHASE" shall mean each purchase of Receivables, Related Assets
and other ARSC Purchased Assets by the Issuer from ARSC hereunder.
"PURCHASE AGREEMENT" shall mean the purchase agreement dated as of
April 25, 2000, between CMSC and CMF, as amended from time to time.
"RATING AGENCY" shall mean, with respect to any outstanding Series,
each rating agency, if any, specified in the applicable Supplement, selected by
the Issuer to rate the Notes of such Series.
"RATING AGENCY CONDITION" shall mean, with respect to any action,
that each Rating Agency shall have notified the Transferor, the Servicer, the
Indenture Trustee and the Issuer in writing that such action will not result in
a reduction, qualification or withdrawal of the then existing rating of any
outstanding Series with respect to which it is a Rating Agency (or, in the case
of any Series covered by a financial insurance policy or surety bond, the
reduction, qualification or withdrawal of the then existing rating of such
Series without giving effect to such insurance policy or surety bond, with such
notice also addressed to the issuer of the applicable insurance policy or surety
bond) or, with respect to any outstanding Series not rated by any Rating Agency,
the required consent specified in the Supplement for such Series.
"RECEIVABLES ACTIVITY REPORT" shall have the meaning provided in
Section 3.07(c).
"RECEIVABLES PURCHASE AGREEMENT" shall mean the receivables purchase
agreement dated as of April 25, 2000, between CMF and the Transferor, as amended
from time to time.
"REQUIRED MARKETING EXPENSES ACCOUNT AMOUNT" shall mean, on any
Distribution Date, an amount equal to:
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(i) zero, if the average number of days the Homes relating to
outstanding Pool Receivables have been owned by CMSC and CMF (excluding
any such Homes relating to Self-Funding Obligors) as of the close of
business on the last Business Day of the immediately preceding Monthly
Period was 150 days or less;
(ii) 2.5% of the aggregate Home Purchase Price for all Homes owned
by CMSC and CMF (excluding any Homes relating to Self-Funding Obligors) as
of the close of business on the last Business Day of the immediately
preceding Monthly Period, if the average number of days such Homes have
been owned by CMSC and CMF as of the close of business on the last day of
the immediately preceding Monthly Period was greater than 150 days but
less than or equal to 160 days;
(iii) 3.0% of the aggregate Home Purchase Price for all Homes owned
by CMSC and CMF (excluding any Homes relating to Self-Funding Obligors) as
of the close of business on the last Business Day of the immediately
preceding Monthly Period, if the average number of days such Homes have
been owned by CMSC and CMF as of the close of business on the last day of
the immediately preceding Monthly Period was greater than 160 days but
less than or equal to 170 days;
(iv) 4.0% of the aggregate Home Purchase Price for all Homes owned
by CMSC and CMF (excluding any Homes relating to Self-Funding Obligors) as
of the close of business on the last Business Day of the immediately
preceding Monthly Period, if the average number of days such Homes have
been owned by CMSC and CMF as of the close of business on the last day of
the immediately preceding Monthly Period was greater than 170 days but
less than or equal to 180 days; and
(v) 5.0% of the aggregate Home Purchase Price for all Homes owned by
CMSC and CMF (excluding any Homes relating to Self-Funding Obligors) as of
the close of business on the last Business Day of the immediately
preceding Monthly Period, if the average number of days such Homes have
been owned by CMSC and CMF as of the close of business on the last day of
the immediately preceding Monthly Period was greater than 180 days.
"SERIES ACCOUNT" shall mean any account or accounts established
pursuant to the Supplement for any Series of Notes.
"SERVICE TRANSFER" shall have the meaning specified in Section 9.01.
"SERVICER" shall mean CMSC, in its capacity as the Servicer under
this Agreement, and any successor thereto in such capacity appointed pursuant to
Article IX of this Agreement.
"SERVICER ADVANCE" shall mean any out-of-pocket payments made by the
Servicer with respect to a CMF Home, including but not limited to maintenance,
repairs, utilities, insurance, taxes, assessments, Mortgage Payoffs, Mortgage
Payments, Other Reimbursable Expenses, homeowners or association dues and other
costs of ownership.
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"SERVICER DEFAULT" shall have the meaning set forth in Section 9.01.
"SERVICER DILUTION ADJUSTMENT" shall have the meaning set forth in
Section 3.10(a).
"SERVICING FEE" shall have the meaning specified in Section 3.03.
"SERVICING OFFICER" shall mean any officer of the Servicer or an
attorney-in-fact of the Servicer who in either case is involved in, or
responsible for, the administration and servicing of the Receivables and whose
name appears on a list of servicing officers furnished to the Issuer and the
Indenture Trustee by the Servicer, as such list may from time to time be
amended. The initial list of Servicing Officers is set forth in Exhibit C.
"STANDARD & POOR'S" shall mean Standard & Poor's Ratings Services or
its successor.
"SUB-SERVICER" shall have the meaning set forth in Section 3.01(b).
"SUCCESSOR SERVICER" shall have the meaning provided in Section
9.03(a).
"SUPPLEMENT" shall mean, with respect to any Series, a supplement to
the Indenture, executed and delivered in connection with the original issuance
of the Notes of such Series, including all amendments thereof and supplements
thereto.
"TERMINATION NOTICE" shall have the meaning set forth in Section
9.01.
"TRANSFER TERMINATION DATE" shall mean the date specified by the
Indenture Trustee at the direction of the Majority Investors following the
occurrence of a Transfer Termination Event; PROVIDED, HOWEVER, that if an Event
of Bankruptcy has occurred with respect to either ARSC or the Issuer, the
Transfer Termination Date shall be deemed to have occurred automatically without
any such notice.
"TRANSFER TERMINATION EVENT" shall have the meaning set forth in
Section 8.01.
"TRANSFEROR" shall mean Apple Ridge Services Corporation, a wholly
owned special purpose subsidiary of CMF incorporated in the State of Delaware,
or its successor under this Agreement.
"TRANSFERRED ASSETS" shall have the meaning set forth in Section
2.01(a).
"UNMATURED SERVICER DEFAULT" shall mean any event that, with the
giving of notice or lapse of time, or both, would become a Servicer Default.
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Section 1.02 OTHER DEFINITIONAL PROVISIONS.
(a) All terms defined in this Agreement shall have the defined
meanings when used in any certificate or other document made or delivered
pursuant hereto unless otherwise defined therein.
(b) OTHER TERMS. All accounting terms not specifically defined
herein shall be construed in accordance with GAAP or with United States
generally accepted regulatory accounting principles, as applicable. To the
extent that the definitions of accounting terms in this Agreement are
inconsistent with the meanings of such terms under GAAP or regulatory accounting
principles, the definitions contained in this Agreement shall control. All terms
used in Article 9 of the UCC in the State of New York and not specifically
defined herein are used herein as defined in such Article 9.
(c) AGREEMENTS, REPRESENTATIONS AND WARRANTIES. The agreements,
representations and warranties of ARSC and CMSC in this Agreement in each of
their respective capacities as Transferor and Servicer shall be deemed to be the
agreements, representations and warranties of ARSC and CMSC solely in each such
capacity for so long as ARSC and CMSC act in each such capacity under this
Agreement, PROVIDED that nothing in this paragraph shall be deemed to limit the
survival of such agreements, representations and warranties.
(d) COMPUTATION OF TIME PERIODS. Unless otherwise stated in this
Agreement with respect to computation of a period of time from a specified date
to a later specified date, the word "from" means "from and including" and each
of the words "to" and "until" means "to but excluding".
(e) REFERENCES TO AMOUNTS. Unless otherwise specified, references to
any amount as on deposit or outstanding on any particular date shall mean such
amount at the close of business on such day.
(f) REFERENCE. The word "hereof", "herein" and "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; and references to
"SECTION", "SUBSECTION", "APPENDIX", "SCHEDULE" and "EXHIBIT" in this Agreement
are references to Sections, subsections, Appendices, Schedules and Exhibits in
or to this Agreement unless otherwise specified in this Agreement.
[END OF ARTICLE I]
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ARTICLE II
SALE AND PURCHASE OF ASSETS
Section 2.01 SALE AND PURCHASE.
(a) AGREEMENT. Upon the terms hereof, the Issuer agrees to buy, and
the Transferor agrees to sell, all of the Transferor's right, title and interest
in and to the following:
(i) all Pool Receivables and other ARSC Purchased Assets owned
by the Transferor on the Closing Date or thereafter purchased, or any
other Receivables purchased under the Receivables Purchase Agreement, and
all rights of the Transferor under the Receivables Purchase Agreement with
respect to the ARSC Purchased Assets;
(ii) all Pool Collections; and
(iii) all proceeds of and earnings on the foregoing.
The Pool Receivables and all other property described in the
foregoing sentence are sometimes collectively referred to herein as the
"TRANSFERRED ASSETS."
(b) TREATMENT OF CERTAIN RECEIVABLES AND RELATED PROPERTY. It is
expressly understood that each Pool Receivable sold to the Issuer hereunder,
together with all other Transferred Assets then existing or thereafter created
and arising with respect thereto, will thereafter be the property of the Issuer
(or its assignees), without the necessity of any further purchase or other
action by the Issuer (other than satisfaction of the conditions set forth
herein).
(c) NO RECOURSE. Except as specifically provided in this Agreement,
the sale and purchase of the Transferred Assets under this Agreement shall be
without recourse. CMSC acknowledges that its representations, warranties,
covenants and indemnities as originator pursuant to the terms of the Purchase
Agreement have been assigned to the Issuer hereunder, and CMF acknowledges that
its representations, warranties, covenants and indemnities as originator
pursuant to the terms of the Receivables Purchase Agreement have been assigned
to the Issuer hereunder.
(d) FINANCING STATEMENTS. In connection with the transfer described
above, the Transferor agrees, at the expense of the Transferor:
(i) to record and file financing statements (and continuation
statements when applicable) with respect to the Transferred Assets
conveyed by the Transferor meeting the requirements of applicable
law in such manner and in such jurisdictions as are necessary to
perfect and maintain the perfection of the transfer and assignment
of its interest in the Transferred Assets to the Issuer, and to
deliver a file stamped copy of each such financing statement or
other evidence of such filing to the Issuer and the Indenture
Trustee as soon as practicable after the Closing Date.
Notwithstanding the other provisions of this Section 2.01(d), the
Transferor shall not, and shall not cause the Servicer to, record
any Home Deeds or any documents evidencing the conveyance of Home
Purchase Contracts
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in the applicable real estate records; PROVIDED, HOWEVER, that the
Transferor (or the Servicer on its behalf) may record Home Deeds
and/or Home Purchase Contracts in such manner and in the names of
CMSC (but only with respect to CMSC Homes) or CMF, as applicable, or
such transferees and in such capacities as the Issuer may require
(w) upon request by the relevant Obligor to record such Home Deeds
and/or Home Purchase Contracts, (x) upon or after the lapse of one
year from the Possession Date under the related Home Purchase
Contract, (y) upon the bankruptcy or insolvency of the relevant
Obligor or (z) otherwise as required or as deemed advisable in the
judgment of the Servicer in the best interests of the Issuer and its
assignees; and
(ii) to promptly execute and deliver (or cause the Servicer or
the related Sub-Servicer to execute and deliver) all further
instruments and documents, and take all further action, that the
Indenture Trustee may reasonably request in order to perfect,
protect or more fully evidence the conveyances hereunder, or to
enable the Indenture Trustee to exercise or enforce any of its
rights under the Indenture.
The Servicer shall record and file financing statements, cause Home Deeds and
Home Purchase Contracts to be recorded and deliver other instruments and
documents pursuant to this Section 2.01(d) at the direction of the Transferor.
(e) TRUE SALES. The Transferor and the Issuer intend the transfers
of Transferred Assets hereunder to be true sales by the Transferor to the Issuer
that are absolute and irrevocable and to provide the Issuer with the full
benefits of ownership of the Transferred Assets, and neither the Transferor nor
the Issuer intends the transactions contemplated hereunder to be, or for any
purpose to be characterized as, loans from the Issuer to the Transferor, secured
by the Transferred Assets.
(f) MARKING OF RECORDS. In connection with the transfer described
herein, (i) the Transferor agrees to indicate clearly and unambiguously in its
computer files, books and records on or prior to the Closing Date that the Pool
Receivables and other Transferred Assets have been conveyed to the Issuer
pursuant to this Agreement by so marking such computer files, books and records,
and (ii) the Servicer agrees to indicate clearly and unambiguously in its
computer files, books and records on or prior to the Closing Date that the Pool
Receivables and other Transferred Assets have been conveyed to the Issuer
pursuant to this Agreement by so marking such computer files, books and records,
including the master data processing records evidencing the Transferred Assets.
(g) ADJUSTMENTS. The Transferor shall pay to the Issuer in cash, on
the date of receipt by the Transferor, any payment received by the Transferor in
respect of Originator Adjustments made by CMSC to CMF pursuant to the Purchase
Agreement or Seller Adjustments made by CMF to the Transferor pursuant to the
Receivables Purchase Agreement. The Transferor shall instruct CMSC and CMF to
deposit all payments in respect of Originator Adjustments and Seller Adjustments
directly in the Collection Account.
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(h) PURCHASES. On the Closing Date, the Issuer shall purchase all of
the Transferor's right, title and interest in and to all Pool Receivables
existing at the close of business on the immediately preceding Business Day,
together with all other Transferred Assets related thereto. On each Business Day
thereafter, until the Transfer Termination Date, the Issuer shall purchase all
of the Transferor's right, title and interest in and to all Pool Receivables
existing as of the close of business on the immediately preceding Business Day
and all Transferred Assets related thereto that were not previously purchased by
the Issuer hereunder. Notwithstanding the foregoing, if an Insolvency Proceeding
is pending with respect to either the Transferor or the Issuer prior to the
Transfer Termination Date, the Transfer shall not sell, and the Issuer shall not
buy, any Transferred Assets hereunder unless and until such Insolvency
Proceeding is dismissed or otherwise terminated.
(i) PAYMENT OF ARF PURCHASE PRICE. With respect to the Purchase of
any Transferred Assets by the Issuer from the Transferor pursuant to this
Article II, the Issuer shall pay to the Transferor an agreed purchase price (the
"ARF PURCHASE PRICE"). The ARF Purchase Price paid by the Issuer on the Closing
Date and on each subsequent Business Day on which any Transferred Assets are
purchased by the Issuer shall be paid (i) by paying such amount in cash or (ii)
by means of capital contributed by the Transferor to the Issuer in the form of a
contribution of the Transferred Assets. To the extent funds are released to it
from the Collection Account, the Issuer agrees that it will use such released
funds to the extent necessary to pay the ARF Purchase Price.
Section 2.02 REPRESENTATIONS AND WARRANTIES OF THE TRANSFEROR. The
Transferor hereby makes the representations and warranties set forth in this
Section 2.02, in each case as of the date hereof, as of the Closing Date, as of
the date of each transfer by the Transferor of the Transferred Assets hereunder
and as of any other date specified in such representation or warranty.
(a) ORGANIZATION AND GOOD STANDING. The Transferor is a corporation
duly organized and validly existing in good standing under the laws of the State
of Delaware and has full power and authority to own its properties and to
conduct its business as such properties are presently owned and such business is
presently conducted. The Transferor had at all relevant times, and now has, all
necessary power, authority and legal right to own and sell the Transferred
Assets.
(b) DUE QUALIFICATION. The Transferor is duly qualified to do
business, is in good standing as a foreign corporation, 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 requires such qualification,
licenses or approvals and in which the failure so to qualify or to obtain such
licenses and approvals or to preserve and maintain such qualification, licenses
or approvals could reasonably be expected to give rise to a Material Adverse
Effect with respect to the Transferor.
(c) POWER AND AUTHORITY: DUE AUTHORIZATION. The Transferor (i) has
all necessary corporate power and authority (A) to execute and deliver this
Agreement and the other Transaction Documents to which it is a party, (B) to
perform its obligations under this Agreement and the other Transaction Documents
to which it is a party and (C) to sell and assign
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the Transferred Assets on the terms and subject to the conditions herein and
therein provided and (ii) has duly authorized by all necessary corporate action
such sale and assignment and the execution, delivery and performance of, and the
consummation of the transactions provided for in, this Agreement and the other
Transaction Documents to which it is a party.
(d) VALID SALE; BINDING OBLIGATIONS. This Agreement constitutes
either a valid sale, transfer, set-over and conveyance, or the grant of a first
perfected security interest, to the Issuer of all of the Transferor's right,
title and interest in, to and under the Transferred Assets, which is perfected
and of first priority (subject to Permitted Liens and Permitted Exceptions)
under the UCC and other applicable law, enforceable against creditors of, and
purchasers from, the Transferor, free and clear of any Lien (other than
Permitted Liens); and this Agreement constitutes, and each other Transaction
Document to which the Transferor is a party when duly executed and delivered
will constitute, a legal, valid and binding obligation of the Transferor,
enforceable against the Transferor in accordance with its terms, except (i) as
such enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement of
creditors' rights generally and (ii) as such enforceability may be limited by
general principles of equity, regardless of whether such enforceability is
considered in a proceeding in equity or at law.
(e) NO CONFLICT OR VIOLATION. The execution, delivery and
performance of, and the consummation of the transactions contemplated by, this
Agreement and the other Transaction Documents to be signed by the Transferor,
and the fulfillment of the terms hereof and thereof, will not (i) conflict with,
result in any breach of any of the terms and provisions of, or constitute (with
or without notice or lapse of time or both) a material default under (A) the
certificate of incorporation or the by-laws of the Transferor or (B) any
material indenture, loan agreement, mortgage, deed of trust or other material
agreement or instrument to which the Transferor is a party or by which it or any
of its properties is bound, (ii) result in the creation or imposition of any
Lien on any of the Transferred Assets pursuant to the terms of any such material
indenture, loan agreement, mortgage, deed of trust or other material agreement
or instrument other than this Agreement and the other Transaction Documents or
(iii) conflict with or violate any federal, state, local or foreign law or any
decision, decree, order, rule or regulation applicable to the Transferor or of
any federal, state, local or foreign regulatory body, administrative agency or
other governmental instrumentality having jurisdiction over the Transferor,
which conflict or violation described in this clause (iii), individually or in
the aggregate, could reasonably be expected to have a Material Adverse Effect
with respect to the Transferor.
(f) LITIGATION AND OTHER PROCEEDINGS. (i) There is no action, suit,
proceeding or investigation pending, or to the best knowledge of the Transferor
threatened, against the Transferor before any court, arbitrator, regulatory
body, administrative agency or other tribunal or governmental instrumentality
and (ii) the Transferor is not subject to any order, judgment, decree,
injunction, stipulation or consent order of or with any court or other
Government Authority that, in the case of either of the foregoing clauses (i) or
(ii), (A) asserts the invalidity of this Agreement or any other Transaction
Document, (B) seeks to prevent the sale of any Transferred Asset by the
Transferor to the Issuer, the creation of a material amount of Pool Receivables
or the consummation of any of the transactions contemplated by this Agreement or
13
any other Transaction Document, (C) seeks any determination or ruling that, in
the reasonable judgment of the Transferor, would materially and adversely affect
the performance by the Transferor of its obligations under this Agreement or any
other Transaction Document to which it is a party or the validity or
enforceability of this Agreement or any other Transaction Document to which it
is a party or (D) individually or in the aggregate for all such actions, suits,
proceedings and investigations could reasonably be expected to have a Material
Adverse Effect with respect to the Transferor.
(g) GOVERNMENTAL APPROVALS. Except where the failure to obtain or
make such authorization, consent, order, approval or action could not reasonably
be expected to have a Material Adverse Effect with respect to the Transferor,
(i) all authorizations, consents, orders and approvals of, or other actions by,
any Governmental Authority that are required to be obtained by the Transferor in
connection with the conveyance of the Transferred Assets or the due execution,
delivery and performance by the Transferor of this Agreement or any other
Transaction Document to which it is a party and the consummation of the
transactions contemplated by this Agreement have been obtained or made and are
in full force and effect and (ii) all filings with any Governmental Authority
that are required to be obtained in connection with such conveyances and the
execution and delivery by the Transferor of this Agreement have been made;
PROVIDED, HOWEVER, that prior to recordation pursuant to Section 2.01(d)(i) or
upon the sale of a Home to an Ultimate Buyer, record title to such Home may
remain in the name of the related Transferred Employee and no recordation in
real estate records of the conveyance of the related Home Purchase Contract or
Home Sale Contract shall be made except as otherwise required or permitted under
Section 2.01(d)(i).
(h) MARGIN REGULATIONS. The Transferor is not engaged, principally
or as one of its important activities, in the business of extending credit for
the purpose of purchasing or carrying margin stock (within the meanings of
Regulations T, U and X of the Board of Governors of the Federal Reserve System).
The Transferor has not taken and will not take any action to cause the use of
proceeds of the sales hereunder to violate said Regulations T, U or X.
(i) TAXES. The Transferor has filed (or there have been filed on its
behalf as a member of a consolidated group) all tax returns and reports required
by law to have been filed by it and has paid all taxes, assessments and
governmental charges thereby shown to be owing by it, other than any such taxes,
assessments or charges (i) that are being diligently contested in good faith by
appropriate proceedings, for which adequate reserves in accordance with GAAP
have been set aside on its books and that have not given rise to any Liens
(other than Permitted Liens) or (ii) the amount of which, either singly or in
the aggregate, would not have a Material Adverse Effect with respect to the
Transferor.
(j) SOLVENCY. After giving effect to each conveyance of Transferred
Assets hereunder, the Transferor is solvent and able to pay its debts as they
come due, and has adequate capital to conduct its business as presently
conducted.
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(k) QUALITY OF TITLE/VALID TRANSFERS.
(i) Immediately before each transfer hereunder to the Issuer,
each Transferred Asset to be sold to the Issuer shall be owned by
the Transferor free and clear of any Lien (other than any Permitted
Lien), and the Transferor shall have made all filings and shall have
taken all other action under applicable law in each relevant
jurisdiction in order to protect and perfect the ownership or
security interest of the Issuer and its assignees in such
Transferred Assets against all creditors of, and purchasers from,
the Transferor (subject to Permitted Exceptions).
(ii) With respect to each Pool Receivable transferred
hereunder on such date, the Issuer shall acquire a valid and
(subject to Permitted Exceptions) perfected ownership or security
interest in such Pool Receivable and any identifiable proceeds
thereof, free and clear of any Lien (other than any Permitted
Liens).
(iii) As of the date of transfer of a Transferred Asset to the
Issuer, no effective financing statement or other instrument similar
in effect that covers all or part of such Transferred Asset or any
interest therein is on file in any recording office except such as
may be filed (A) in favor of CMSC in accordance with the Pool
Relocation Management Agreements, (B) in favor of CMF pursuant to
the Purchase Agreement, (C) in favor of the Transferor pursuant to
the Receivables Purchase Agreement, (D) in favor of the Issuer
pursuant to this Agreement or otherwise filed by or at the direction
of the Issuer, (E) in favor of the Indenture Trustee under the
Indenture and (F) to evidence any Mortgage on a Home created by a
Transferred Employee.
(l) ACCURACY OF INFORMATION. All written information furnished by
the Transferor to the Issuer or its successors and assigns pursuant to or in
connection with any Transaction Documents or any transaction contemplated herein
or therein with respect to the Transferred Assets transferred hereunder on such
date is true and correct in all material respects on such date.
(m) OFFICES. The principal place of business and chief executive
office of the Transferor is located, and the offices where the Servicer keeps
all Records related to the Transferred Assets (and all original documents
relating thereto) are located at the addresses specified in Schedule 2.02(m),
except that (i) Home Deeds and related documents necessary to close Home sale
transactions, including powers of attorney, may be held by local attorneys or
escrow agents acting on behalf of CMF (with respect to CMF Homes) or CMSC (with
respect to CMSC Homes) in connection with the sale of Homes to Ultimate Buyers,
so long as such local attorneys are notified of the interest of the Issuer, the
Indenture Trustee and the holders of any Notes therein and (ii) Records relating
to any Pool Relocation Management Agreement and the Transferred Assets arising
thereunder or in connection therewith may be maintained at the offices of the
related Employer.
15
(n) INVESTMENT COMPANY ACT. The Transferor is not, and is not
controlled by, an "investment company" registered or required to be registered
under the Investment Company Act.
(o) LEGAL NAMES. Except as otherwise set forth in Schedule 2.02(o),
since January 1, 1995, the Transferor (i) has not been known by any legal name
other than its corporate name as of the date hereof, (ii) has not been the
subject of any merger or other corporate reorganization that resulted in a
change of name, identity or corporate structure and (iii) has not used any trade
names other than its actual corporate name.
(p) COMPLIANCE WITH APPLICABLE LAWS. The Transferor is in compliance
with the requirements of all applicable laws, rules, regulations and orders of
all governmental authorities (federal, state, local or foreign, including
without limitation Environmental Laws), a violation of any of which,
individually or in the aggregate for all such violations, is reasonably likely
to have a Material Adverse Effect with respect to the Transferor.
(q) BUSINESS AND INDEBTEDNESS OF TRANSFEROR. The Transferor has no
Indebtedness except as contemplated by Section 4.2 of the Receivables Purchase
Agreement and under this Agreement. The Transferor has not engaged in any
business other than the Purchase of Pool Receivables and other ARSC Purchased
Assets under the Receivables Purchase Agreement and the transfer of Pool
Receivables and other Transferred Assets under this Agreement.
The representations and warranties set forth in this Section 2.02 shall survive
the transfers and assignments of the Pool Receivables and other Transferred
Assets to the Issuer and the issuance of the Notes under the Indenture. Upon
discovery by the Transferor, the Servicer or the Issuer of a breach of any of
the representations and warranties set forth in this Section 2.02, the party
discovering such breach shall give notice to the other parties within three
Business Days following such discovery, PROVIDED that the failure to give notice
within three Business Days shall not preclude subsequent notice.
Section 2.03 REPRESENTATIONS AND WARRANTIES OF THE ISSUER. The
Issuer hereby represents and warrants, on and as of the date hereof and on and
as of the Closing Date, that (a) this Agreement has been duly authorized,
executed and delivered by the Issuer and constitutes the Issuer's valid, binding
and legally enforceable obligation, except (i) as such enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium or other similar
laws affecting the enforcement of creditors' rights generally and (ii) as such
enforceability may be limited by general principles of equity, regardless of
whether such enforceability is considered in a proceeding in equity or at law,
(b) the execution, delivery and performance of this Agreement does not violate
any federal, state, local or foreign law applicable to the Issuer or any
agreement to which the Issuer is a party and (c) all of the membership interests
of the Issuer are directly or indirectly owned by the Transferor, and all such
membership interests are fully paid and nonassessable.
16
Section 2.04 NO ASSUMPTION OF OBLIGATIONS RELATING TO TRANSFERRED
ASSETS; EXCESS HOME SALE PROCEEDS.
(a) The sales and Purchases of Transferred Assets do not constitute
and are not intended to result in a creation or an assumption by the Issuer, the
Indenture Trustee or any holder of the Notes of any obligation of CMSC, CMF, the
Transferor or any other Person in connection with the Pool Receivables or the
other Transferred Assets or under the related Contracts or any other agreement
or instrument relating thereto, including without limitation any obligation to
any Obligors or Transferred Employees. None of the Issuer, the Indenture Trustee
or any holder of the Notes shall have any obligation or liability to any
Obligor, Transferred Employee or other customer or client of CMSC (including
without limitation any obligation to perform any of the obligations of CMSC or
CMF under any Relocation Management Agreement, Home Purchase Contract, Related
Property or any other agreement). Except as expressly provided in Section
3.05(j), no such obligation or liability is intended to be assumed by the
Servicer or its successors and assigns.
(b) Notwithstanding Section 2.04(a), upon a reasonable showing by
CMSC or CMF that any Home Sale Proceeds received by the Servicer must be
returned to the related Obligor pursuant to the related Pool Relocation
Management Agreement, the Servicer shall turn over to the applicable Obligor
such Home Sale Proceeds. Each such payment pursuant to this Section 2.04(b)
shall be made pursuant to Section 4.03.
Section 2.05 AFFIRMATIVE COVENANTS OF THE TRANSFEROR. From the
Closing Date until the termination of this Agreement in accordance with Section
10.01, the Transferor hereby agrees that it will perform the covenants and
agreements set forth in this Section 2.05.
(a) COMPLIANCE WITH LAWS, ETC. The Transferor will comply in all
material respects with all applicable laws, rules, regulations, judgments,
decrees and orders (including without limitation those relating to the Pool
Receivables and all Environmental Laws), in each case to the extent that the
failure to comply, individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect with respect to the Transferor.
(b) PRESERVATION OF CORPORATE EXISTENCE. The Transferor (i) will
preserve and maintain its corporate existence, rights, franchises and privileges
in the jurisdiction of its incorporation and (ii) will qualify and remain
qualified in good standing as a foreign corporation in each jurisdiction in
which the failure to preserve and maintain such qualification as a foreign
corporation could reasonably be expected to have a Material Adverse Effect with
respect to the Transferor.
(c) KEEPING OF RECORDS AND BOOKS OF ACCOUNT. The Transferor will
maintain at all times accurate and complete books, records and accounts relating
to the Transferred Assets and all Pool Collections thereon in which timely
entries will be made. The Transferor's master data processing records will be
marked to indicate the sales of all Transferred Assets hereunder.
(d) LOCATION OF RECORDS AND OFFICES. The Transferor will keep its
principal place of business and chief executive office at the addresses
specified in Schedule 2.02(m) or, upon not less than 30 days' prior written
notice given by the Transferor to the Issuer, at such
17
other locations in jurisdictions in the United States of America where all
action required by Section 2.01(d) has been taken and completed.
(e) SEPARATE CORPORATE EXISTENCE OF THE TRANSFEROR. The Transferor
hereby acknowledges that the parties to the Transaction Documents are entering
into the transactions contemplated by the Transaction Documents in reliance on
the Transferor's identity as a legal entity separate from CMSC and the other CMS
Persons. From and after the date hereof until one year and one day after the
Final Payout Date:
(i) The Transferor will conduct its business in office space
allocated to it and for which it pays an appropriate rent and overhead
allocation;
(ii) The Transferor will maintain corporate records and books
of account separate from those of CMSC and each other CMS Person and
telephone numbers and stationery that are separate and distinct from those
of CMSC and each other CMS Person;
(iii) The Transferor's assets will be maintained in a manner
that facilitates their identification and segregation from those of CMSC
and any other CMS Person;
(iv) The Transferor will strictly observe corporate
formalities in its dealings with the public and with CMSC and each other
CMS Person, and funds or other assets of the Transferor will not be
commingled with those of CMSC or any other CMS Person. The Transferor will
at all times, in its dealings with the public and with CMSC and each other
CMS Person, hold itself out and conduct itself as a legal entity separate
and distinct from CMSC and each other CMS Person. The Transferor will not
maintain joint bank accounts or other depository accounts to which CMSC or
any other CMS Person (other than the Servicer) has independent access;
(v) The duly elected board of directors of the Transferor and
duly appointed officers of the Transferor will at all times have sole
authority to control decisions and actions with respect to the daily
business affairs of the Transferor;
(vi) Not less than one member of the Transferor 's board of
directors will be an Independent Director. The Transferor will observe
those provisions in its certificate of incorporation that provide that the
Transferor's board of directors will not approve, or take any other action
to cause the filing of, a voluntary bankruptcy petition with respect to
the Transferor unless the Independent Director and all other members of
the Transferor's board of directors unanimously approve the taking of such
action in writing prior to the taking of such action;
(vii) The Transferor will compensate each of its employees,
consultants and agents from its own funds for services provided to the
Transferor; and
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(viii) The Transferor will not hold itself out to be
responsible for the debts of CMSC or any other CMS Person.
(ix) The Transferor will take all actions necessary on its
part to be taken in order to ensure that the facts and assumptions
relating to the Transferor set forth in the opinion of Xxxxxx, Xxxxxxxxxx
& Sutcliffe LLP of even date herewith relating to substantive
consolidation matters with respect to CMSC and the Transferor will be true
and correct at all times.
(f) SEGREGATION OF COLLECTIONS. To the extent that any funds other
than Pool Collections are deposited into any of the Lockbox Accounts, the
Transferor promptly will identify any such funds or will cause such funds to be
so identified to the Servicer.
(g) COMPUTER SOFTWARE, HARDWARE AND SERVICES. The Transferor will
provide the Issuer and its successors with such licenses, sublicenses and/or
assignments of contracts as the Servicer, the Issuer or its successors require
with respect to all services and computer hardware or software that relate to
the servicing of the Pool Receivables or the other Transferred Assets; PROVIDED,
HOWEVER, that with respect to any computer software licensed from a third party,
the Transferor will be required to provide such licenses, sublicenses and/or
assignments of such software only to the extent that provision of the same would
not violate the terms of any contracts of CMSC or the Transferor with such third
party.
(h) ENVIRONMENTAL CLAIMS. The Transferor will use commercially
reasonable efforts to promptly cure and have dismissed with prejudice to the
satisfaction of the Issuer any actions and any proceedings relating to
compliance with Environmental Laws relating to any Home, but only to the extent
that the conditions that gave rise to such proceedings were in existence as of
the date on which the Issuer acquired the related Pool Receivable.
(i) TURNOVER OF COLLECTIONS. If the Transferor or any of its agents
or representatives at any time receives any cash, checks or other instruments
constituting Pool Collections, such recipient will segregate and hold such
payments in trust for, and in a manner acceptable to, the Servicer and will,
promptly upon receipt (and in any event within one Business Day following
receipt) remit all such cash, checks and instruments, duly endorsed or with duly
executed instruments of transfer, to a Lockbox Account.
(j) MAINTENANCE OF PROPERTY. The Transferor will not sell, lease or
otherwise transfer, directly or indirectly, all or substantially all of the
property of the Transferor, other than any such sale, lease or transfer in the
ordinary course of business and the transfer of the Transferred Assets as
contemplated by the Transaction Documents.
(k) PERFORMANCE OF OBLIGATIONS. The Transferor will timely and fully
perform and comply with all provisions, covenants and other promises required to
be observed by it under the Transaction Documents to which it is a party.
(l) FILING OF TAX RETURNS AND PAYMENT OF TAXES AND OTHER
LIABILITIES. The Transferor will file (or will cause to be filed on its behalf
as a member of a consolidated group) all tax returns and reports required by law
to be filed by it and will pay all taxes, assessments and
19
governmental charges shown to be owing by it, except for any such taxes,
assessments or charges (i) that are being diligently contested in good faith by
appropriate proceedings, for which adequate reserves in accordance with GAAP
have been set aside on its books and that not have given rise to any Liens
(other than Permitted Liens) or (ii) the amount of which, either singly or in
the aggregate, would not have a Material Adverse Effect with respect to the
Transferor.
Section 2.06 NEGATIVE COVENANTS OF THE TRANSFEROR. From the Closing
Date until the termination of this Agreement in accordance with Section 10.01,
the Transferor agrees that it will not:
(a) CHANGES IN ACCOUNTING TREATMENT AND REPORTING PRACTICES. Change
or permit any change in accounting principles or financial reporting practices
applied to the Transferor, except in accordance with GAAP, if such change would
have a Material Adverse Effect with respect to the Transferor.
(b) INDEBTEDNESS. Create, incur or permit to exist any Indebtedness
or other liabilities or give any guarantee or indemnity in respect of any
Indebtedness, except for (i) liabilities created or incurred by the Transferor
pursuant to the Transaction Documents to which it is a party or contemplated by
such Transaction Documents and (ii) other reasonable and customary operating
expenses;
(c) SALES, LIENS, ETC. Sell, assign (by operation of law or
otherwise) or otherwise dispose of, or create or suffer to exist any Lien (other
than Permitted Liens) of anyone claiming by or through it on or with respect to,
any Transferred Asset or any interest therein, any Lockbox or Lockbox Account,
other than sales of Transferred Assets pursuant to this Agreement;
(d) NO MERGERS, ETC. Consolidate with or merge with or into any
other Person or convey, transfer or sell all or substantially all of its
properties and assets to any Person;
(e) LIMITATIONS ON AGREEMENTS. Permit the validity or effectiveness
of any Transaction Document to which it is a party or the rights and obligations
created thereby or pursuant thereto to be amended, terminated, postponed or
discharged, or permit any amendment to any Transaction Document to which it is a
party without the consent of the Issuer and the Indenture Trustee, or permit any
Person whose obligations form part of the Transferred Assets to be released from
such obligations, except in accordance with the terms of such Transaction
Document;
(f) CHANGE IN NAME. Change its corporate name or the name under or
by which it does business or the jurisdiction in which it is incorporated unless
the Transferor has given the Issuer and its successors at least 30 days' prior
written notice thereof and unless, prior to any such change, the Transferor has
taken and completed all action required by Section 2.01(d);
(g) CHARTER AMENDMENTS. Amend any provision of its certificate of
incorporation or by-laws unless (i) the Issuer shall have received not less than
five Business (h) Days' prior written notice thereof and (ii) the certificate of
incorporation of the Transferor, as in
20
effect on the date hereof, provides that such amendment can be made without the
vote of the Transferor's Independent Directors;
(h) CAPITAL EXPENDITURES. Make any expenditure (by long-term or
operating lease or otherwise) for capital assets (either realty or personalty);
(i) NO OTHER BUSINESS OR AGREEMENTS. Engage in any business other
than financing, purchasing, owning and selling and managing the Transferred
Assets in the manner contemplated by this Agreement and the other Transaction
Documents and all activities incidental thereto, or enter into or be a party to
any agreement or instrument other than any Transaction Document or documents and
agreements incidental thereto;
(j) GUARANTEES, LOANS, ADVANCES AND OTHER LIABILITIES. Except as
contemplated by this Agreement or the other Transaction Documents, incur any
Indebtedness or make any loan or advance or credit to, or guarantee (directly or
indirectly or by an instrument having the effect of assuring another's payment
or performance on any obligation or capability of so doing or otherwise),
endorse or otherwise become contingently liable, directly or indirectly, in
connection with the obligations, stocks or dividends of, or own, purchase,
repurchase or acquire (or agree contingently to do so) any stock, obligations,
assets or securities of, or any other interest in, or make any capital
contribution to, any other Person;
(k) PAYMENT INSTRUCTIONS TO OBLIGORS. Give any payment instructions
to Obligors except through the Servicer as contemplated by Section 3.05(f); or
(l) EXTENSION OR AMENDMENT OF TRANSFERRED ASSETS. Extend, amend or
otherwise modify the terms of any Receivable included in the Transferred Assets,
or amend, modify or waive any material term or condition related thereto, except
in accordance with Section 3.10.
(m) DIVIDEND RESTRICTIONS. Declare or pay any distributions on any
of its common stock or make any purchase redemption or other acquisition of, any
common stock if, after giving effect thereto, (i) the aggregate principal amount
outstanding under the ARSC Subordinated Note would exceed five times the net
worth of the Transferor or (ii) the net worth of the Transferor would be less
than $40,000,000.
[END OF ARTICLE II]
21
ARTICLE III
ADMINISTRATION AND SERVICING
OF RECEIVABLES
Section 3.01 ACCEPTANCE OF APPOINTMENT AND OTHER MATTERS RELATING TO
THE SERVICER.
(a) The servicing, administration and collection of the Pool
Receivables and the other Transferred Assets shall be conducted by the Person
designated as the Servicer hereunder from time to time in accordance with this
Section 3.01. Until the Indenture Trustee gives a Termination Notice to CMSC
pursuant to Section 9.01, CMSC is hereby designated, and CMSC hereby agrees to
act, as the Servicer under this Agreement and the other Transaction Documents
with respect to the Pool Receivables and the other Transferred Assets, and each
of CMSC, CMF, the Transferor, and the Issuer consents to CMSC acting as the
Servicer.
(b) In the ordinary course of business, the Servicer, with prior
written notice to the Indenture Trustee, may at any time delegate part or all of
its duties hereunder with respect to the Receivables and the other Transferred
Assets to any Affiliates of PHH that agree to conduct such duties in accordance
with the Credit and Collection Policy and this Agreement. Each such Subsidiary
to whom any such duties are delegated in accordance with this Section 3.01(b) is
referred to herein as a "SUB-SERVICER." Notwithstanding any such delegation by
the Servicer, the Servicer shall remain liable for the performance of all duties
and obligations of the Servicer pursuant to the terms of this Agreement and the
other Transaction Documents, and such delegation shall not relieve the Servicer
of its liability and responsibility with respect to such duties. The fees and
expenses of any such Sub-Servicers shall be as agreed between the Servicer and
such Sub-Servicers from time to time, and none of the Issuer, the Indenture
Trustee or the holders of any Notes issued by the Issuer under the Indenture
shall have any responsibility therefor. Upon any termination of a Servicer
pursuant to Section 9.01, all Sub-Servicers designated pursuant to this Section
3.01(b) by such Servicer also shall be automatically terminated.
(c) The designation of the Servicer (and each Sub-Servicer) under
this Agreement (and, in the case of any Sub-Servicer, under the agreement or
other document pursuant to which the Servicer makes a delegation of servicing
duties to such Sub-Servicer) shall automatically cease and terminate on the
Final Payout Date.
Section 3.02 DUTIES OF THE SERVICER AND THE ISSUER.
(a) Each of CMSC, CMF, the Transferor, the Issuer and the 1Indenture
Trustee hereby appoints the Servicer from time to time designated pursuant to
Section 3.01(a) as Servicer hereunder to take all actions authorized below or
elsewhere in this Agreement and to enforce its respective rights and interests
in and under the Pool Receivables and the other Transferred Assets.
22
(b) As Servicer hereunder, the Servicer shall service and administer
the Pool Receivables and the other Transferred Assets, shall collect and deposit
into the Collection Account payments due under the Pool Receivables and shall
charge-off as uncollectible Pool Receivables, all in accordance with its
customary and usual servicing procedures and the Credit and Collection Policy.
As Servicer hereunder, the Servicer shall have full power and authority, acting
alone or through any party properly designated by it hereunder, to do any and
all things it may deem necessary or appropriate in connection with such
servicing and administration. CMSC, CMF, the Issuer, the Transferor and the
Indenture Trustee shall furnish the Servicer with any documents necessary or
appropriate to enable the Servicer to carry out its servicing and administrative
duties hereunder. The Servicer shall exercise the same care and apply the same
policies with respect to the collection, administration and servicing of the
Pool Receivables and other Transferred Assets that it would exercise and apply
if it owned such Pool Receivables and other Transferred Assets, all in
substantial compliance with applicable law and in accordance with the Credit and
Collection Policy. The Servicer shall take or cause to be taken all such actions
as it deems necessary or appropriate to collect each Pool Receivable and other
Transferred Asset (and shall cause each Sub-Servicer, if any, to take or cause
to be taken all such actions as the Servicer deems necessary or appropriate to
collect each Pool Receivable and other Transferred Asset for which such
Sub-Servicer is responsible in its capacity as Sub-Servicer) from time to time,
all in accordance with applicable law and in accordance with the Credit and
Collection Policy.
(c) Without limiting the generality of the foregoing and subject to
Section 3.02(e) and Section 9.01, each of CMSC, CMF, the Transferor, the Issuer
and the Indenture Trustee hereby authorizes and empowers the Servicer or its
designee as follows, except to the extent any such power and authority is
revoked or limited by the Indenture Trustee on account of the occurrence of an
Unmatured Servicer Default or a Servicer Default or otherwise pursuant to
Section 9.01:
(i) to give instructions to the Indenture Trustee for withdrawals
and payments from the Collection Account and to take any other action
necessary or appropriate to service the Pledged Assets as set forth in the
Indenture,
(ii) to enter into Home Sale Contracts and all related documents,
instruments and agreements on behalf of CMSC (with respect to CMSC Homes)
and on behalf of CMF (with respect to CMF Homes) and to take all necessary
actions, including with respect to the maintenance and marketing of the
related Homes, to carry out the terms of such Home Sale Contracts and
related agreements; PROVIDED, HOWEVER, that the Servicer shall not be a
party to any Home Sale Contract or any other document, instrument, or
agreement relating to the sale by CMF of a Home, unless it is expressly
disclosed on the face of such document, instrument, or agreement that the
Servicer is acting as Servicer for CMF,
(iii) to execute and deliver any and all instruments of satisfaction
or cancellation, or of partial or full release or discharge, and all other
comparable instruments, with respect to the Pool Receivables and the other
Transferred Assets on the Issuer's behalf,
23
(iv) after the delinquency of any Pool Receivable or any default in
connection with any other Transferred Asset and to the extent permitted
under and in compliance with the Credit and Collection Policy and with all
applicable laws, rules, regulations, judgments, orders and decrees of
courts and other Governmental Authorities and all other tribunals, to
commence or settle collection proceedings with respect to such Pool
Receivable or other Transferred Asset and otherwise to enforce the rights
and interests of the Issuer in, to and under such Pool Receivable or other
Transferred Asset (as applicable), unless the Indenture Trustee otherwise
revokes such authority in writing,
(v) to make all filings and take all other actions necessary for the
Issuer to maintain a perfected security and/or ownership interest in the
Pool Receivables (subject to Permitted Exceptions) have been taken or
made,
(vi) to determine on each Business Day whether any funds in the
Lockbox Accounts represent collections on CMSC Noncomplying Assets or CMF
Noncomplying Assets and to promptly return such funds to CMSC or CMF, as
applicable, and
(vii) to determine on each day whether each CMF Receivable being
conveyed to ARSC on such day is an Eligible Receivable and to identify on
such day all CMF Receivables sold to ARSC on such date that are not
Eligible Receivables.
PROVIDED, HOWEVER, that:
(A) following the appointment of a Servicer other than CMSC,
or when a Servicer Default has occurred and is continuing, the
Indenture Trustee on behalf of the Issuer shall have the absolute
and unlimited right to direct the Servicer to commence or settle any
legal action to enforce collection of, or otherwise exercise rights
with respect to, any Pool Receivable transferred to the Issuer or to
foreclose upon or repossess or otherwise exercise rights with
respect to, any other Transferred Assets transferred to the Issuer,
and
(B) the Servicer shall not, under any circumstances, be
entitled to make the Issuer or any assignee thereof a party to any
litigation without the prior written consent of the Issuer or such
assignee, as applicable.
(d) The Servicer shall pay out of its own funds, without
reimbursement, all expenses incurred in connection with its servicing activities
hereunder, including expenses related to enforcement of the Pool Receivables,
fees and disbursements of its outside counsel and independent accountants and
all other fees and expenses, including the costs of filing UCC continuation
statements.
(e) In addition to its other obligations provided for hereunder, the
Servicer shall hold and maintain all Records in trust, for the benefit of the
Issuer, the Indenture Trustee and the holders of the Notes, which Records shall
be held separate and apart from the other property of the Servicer and
maintained in files marked to show that such Records have been pledged to the
Indenture Trustee pursuant to the Indenture; PROVIDED, HOWEVER, that the
Servicer shall be entitled (i) to release any Equity Loan Notes that have been,
or concurrent with such
24
release will be, repaid, satisfied or otherwise cancelled and (ii) to release
any Home Purchase Contracts and Home Deeds for Homes with respect to which a
Home Sale Contract has been executed in order to facilitate the prompt closing
thereof, including without limitation by delivery of such documents to escrow
agents (with a notice to such escrow agents of the interest of the Issuer and
the Indenture Trustee therein).
Section 3.03 SERVICING COMPENSATION. The Issuer hereby agrees to pay
to the Servicer, as full compensation for its servicing activities hereunder and
under the other Transaction Documents and as reimbursement for any expense
incurred by it in connection therewith, a servicing fee (the "SERVICING FEE")
with respect to each Monthly Period, payable in arrears on the related
Distribution Date, in an amount equal to the PRODUCT of 0.75% MULTIPLIED BY the
weighted average over such Monthly Period of the daily sums of the Aggregate
Employer Balances for each Employer under the Pool Relocation Management
Agreements, subject to adjustment at the direction of the Indenture Trustee
(upon satisfaction of the Rating Agency Condition) to provide additional
servicing compensation to any Successor Servicer if necessary to reflect
then-current market rates for servicing of comparable receivables at any time
that CMSC is replaced as Servicer hereunder. The share of the Servicing Fee
allocable to the holders of the Notes issued from time to time by the Issuer
under the Indenture with respect to any Monthly Period shall be set forth in the
Indenture. The Servicing Fee shall be payable solely out of Pool Collections
available for such purpose pursuant to, and subject to the priority of payments
set forth in, the Indenture. Notwithstanding the preceding sentence, the portion
of the Servicing Fee with respect to any Monthly Period not payable out of the
Pool Collections allocated to the holders of the Notes shall be payable out of
the Pool Collections allocable to the Issuer on the related Distribution Date as
set forth in the Indenture or by the Issuer, and in no event shall the holders
of the Notes be liable for the share of the Servicing Fee with respect to any
Payment Period to be payable out of the Pool Collections allocable to the Issuer
or by the Issuer. The Servicer shall pay the fees and expenses of, and agrees to
indemnify the Indenture Trustee, the Paying Agent, the Authentication Agent and
the Transfer Agent and Registrar out of the Servicing Fee in accordance with the
terms of the Indenture.
Section 3.04 REPRESENTATIONS AND WARRANTIES OF THE SERVICER. CMSC,
as initial Servicer, hereby makes, and any Successor Servicer by its appointment
hereunder shall make with respect to itself, on the Closing Date (and on the
date of any such appointment), on the date of each issuance of Notes by the
Issuer and on the date of any increases in Outstanding Amount of any Series of
Notes, the following representations, warranties and covenants, on which the
Issuer, the Transferor, CMSC and CMF shall be deemed to have relied:
(a) ORGANIZATION AND GOOD STANDING. The Servicer is a corporation
duly organized and validly existing in good standing under the laws of the State
of its incorporation and has full power and authority to own its properties and
to conduct its business as such properties are presently owned and such business
is presently conducted.
(b) DUE QUALIFICATION. The Servicer is duly qualified to do
business, is in good standing as a foreign corporation, 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 requires such qualification,
licenses or approvals and in which the failure so to qualify or to obtain such
licenses and approvals or to preserve and maintain such qualification, licenses
or
25
approvals could reasonably be expected to give rise to a Material Adverse Effect
with respect to the Servicer.
(c) POWER AND AUTHORITY; DUE AUTHORIZATION. The Servicer (i) has all
necessary corporate power and authority (A) to execute and deliver this
Agreement and the other Transaction Documents to which it is a party and (B) to
perform its obligations under this Agreement and the other Transaction Documents
to which it is a party and (ii) has duly authorized by all necessary corporate
action the execution, delivery and performance of, and the consummation of the
transactions provided for in, this Agreement and the other Transaction Documents
to which it is a party.
(d) BINDING OBLIGATIONS. This Agreement constitutes, and each other
Transaction Document to which the Servicer is a party when duly executed and
delivered will constitute, a legal, valid and binding obligation of the
Servicer, enforceable against the Servicer in accordance with its terms, except
(i) as such enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement of
creditors' rights generally and (ii) as such enforceability may be limited by
general principles of equity, regardless of whether such enforceability is
considered in a proceeding in equity or at law.
(e) NO CONFLICT OR VIOLATION. The execution, delivery and
performance of, and the consummation of the transactions contemplated by, this
Agreement and the other Transaction Documents to which the Servicer is a party,
and the fulfillment of the terms hereof and thereof, will not (i) conflict with,
result in any breach of any of the terms and provisions of, or constitute (with
or without notice or lapse of time or both) a material default under (A) the
certificate of incorporation or the by-laws of the Servicer or (B) any material
indenture, loan agreement, mortgage, deed of trust or other material agreement
or instrument to which the Servicer is a party or by which it or any of its
respective properties is bound, (ii) result in the creation or imposition of any
Lien on any of the Transferred Assets pursuant to the terms of any such material
indenture, loan agreement, mortgage, deed of trust or other material agreement
or instrument, other than this Agreement and the other Transaction Documents to
which the Servicer is a party or (iii) conflict with or violate any federal,
state, local or foreign law or any decision, decree, order, rule or regulation
applicable to the Servicer or of any federal, state, local or foreign regulatory
body, administrative agency or other governmental instrumentality having
jurisdiction over the Servicer, which conflict or violation described in this
clause (iii), individually or in the aggregate, could reasonably be expected to
have a Material Adverse Effect with respect to the Servicer.
(f) LITIGATION AND OTHER PROCEEDINGS. (i) There is no action, suit,
proceeding or investigation pending, or to the best knowledge of the Servicer
threatened, against the Servicer before any court, regulatory body,
administrative agency or other tribunal or governmental instrumentality and (ii)
the Servicer is not subject to any order, judgment, decree, injunction,
stipulation or consent order of or with any court or other Governmental
Authority that, in the case of either of the foregoing clauses (i) and (ii), (A)
asserts the invalidity of this Agreement or any other Transaction Document to
which the Servicer is a party, (B) seeks any determination or ruling that, in
the reasonable judgment of the Servicer, would materially and adversely affect
the
26
performance by the Servicer of its obligations under this Agreement or any other
Transaction Document to which the Servicer is a party or the validity or
enforceability of this Agreement or any other Transaction Document to which the
Servicer is a party or (C) individually or in the aggregate for all such
actions, suits, proceedings and investigations could reasonably be expected to
have a Material Adverse Effect with respect to the Servicer.
(g) GOVERNMENTAL APPROVALS. Except where the failure to obtain or
make such authorization, consent, order, approval or action could not reasonably
be expected to have a Material Adverse Effect with respect to the Servicer, all
authorizations, consents, orders and approvals of, or other actions by, any
Governmental Authority that are required to be obtained by the Servicer in
connection with the due execution, delivery and performance by the Servicer of
this Agreement or any other Transaction Document to which it is a party and the
consummation of the transactions contemplated by this Agreement have been
obtained or made and are in full force and effect; PROVIDED, HOWEVER, that prior
to recordation pursuant to Section 2.01(d)(i) or upon the sale of a Home to an
Ultimate Buyer, record title to such Home may remain in the name of the related
Transferred Employee and no recordation in real estate records of the conveyance
of the related Home Purchase Contract or Home Sale Contract shall be made except
as otherwise required under Section 2.01(d)(i).
(h) TAXES. The Servicer has filed (or there have been filed on its
behalf as a member of a consolidated group) all tax returns and reports required
by law to have been filed by it and has paid all taxes, assessments and
governmental charges thereby shown to be owing by it, except for any such taxes,
assessments or charges (i) that are being diligently contested in good faith by
appropriate proceedings, for which adequate reserves in accordance with GAAP
have been set aside on its books and that have not given rise to any Liens
(other than Permitted Liens) or (ii) the amount of which, either singly or in
the aggregate, would not have a Material Adverse Effect with respect to the
Servicer.
(i) ACCURACY OF INFORMATION. All written information furnished by
the Servicer to CMSC, CMF or the Issuer pursuant to or in connection with any
Transaction Document or any transaction contemplated herein or therein with
respect to the Servicer is true and correct in all material respects on such
date.
(j) OFFICES. The principal place of business and chief executive
office of the Servicer is located at the address specified in Schedule 2.02(m).
(k) COMPLIANCE WITH APPLICABLE LAWS. The Servicer is in compliance
with the requirements of all applicable laws, rules, regulations and orders of
all Governmental Authorities (federal, state, local or foreign, including
without limitation Environmental Laws), a violation of any of which,
individually or in the aggregate for all such violations, is reasonably likely
to have a Material Adverse Effect with respect to the Servicer.
(l) LOCKBOX BANKS. The names and addresses of all Lockbox Banks,
together with the account numbers of the Lockbox Accounts at such Lockbox Banks
into which the Pool Collections are paid, are accurately set forth in Schedule
3.04(l). Each Lockbox and each
27
Lockbox Account is subject to a Lockbox Agreement duly executed and delivered by
the parties thereto.
Section 3.05 AFFIRMATIVE COVENANTS OF SERVICER. As long as it is the
Servicer hereunder, the Servicer hereby agrees that it will perform the
covenants and agreements set forth in this Section 3.05.
(a) COMPLIANCE WITH LAWS, ETC. The Servicer will comply in all
material respects with all applicable laws, rules, regulations, judgments,
decrees and orders (including without limitation those relating to the Pool
Receivables, Home Purchase Contracts and Related Assets and all Environmental
Laws), in each case to the extent that the failure to comply, individually or in
the aggregate, could reasonably be expected to have a Material Adverse Effect
with respect to the Servicer.
(b) PRESERVATION OF CORPORATE EXISTENCE. The Servicer (i) will
preserve and maintain its corporate existence, rights, franchises and privileges
in the jurisdiction of its incorporation, other than any change in corporate
status by reason of a merger or consolidation permitted by Section 7.02 and (ii)
will qualify and remain qualified in good standing as a foreign corporation in
each jurisdiction in which the failure to preserve and maintain such
qualification as a foreign corporation could reasonably be expected to have a
Material Adverse Effect with respect to the Servicer.
(c) KEEPING OF RECORDS AND BOOKS OF ACCOUNT. The Servicer will
maintain and implement administrative and operating procedures (including
without limitation an ability to recreate records evidencing the Transferred
Assets in the event of the destruction of the originals thereof), and will keep
and maintain all documents, books, records and other information that are
necessary or advisable, in the reasonable determination of CMSC, CMF, the
Transferor, the Issuer or the Indenture Trustee, for the collection of all
amounts due under any or all Transferred Assets. Upon the reasonable request of
the Issuer or the Indenture Trustee made at any time after the occurrence and
continuance of a Servicer Default, the Servicer will deliver copies of all
Records in its possession or under its control to the Issuer or its designee.
The Servicer will maintain at all times accurate and complete books, records and
accounts relating to the Transferred Assets and all Pool Collections thereon in
which timely entries will be made.
(d) LOCATION OF RECORDS AND OFFICES. The Servicer will keep its
principal place of business and chief executive office at the address specified
in Schedule 2.02(m) or, upon not less than 30 days' prior written notice given
by the Servicer to the Transferor, the Issuer and the Indenture Trustee, at
other locations in jurisdictions in the United States.
(e) SEPARATE CORPORATE EXISTENCE OF THE TRANSFEROR. The Servicer
hereby acknowledges that the parties to the Transaction Documents are entering
into the transactions contemplated by the Transaction Documents in reliance upon
the Transferor's identity as a legal entity separate from the Servicer. As long
as it is the Servicer hereunder, the Servicer will take such actions as shall be
required in order that:
(i) The Transferor's operating expenses will not be paid by
the Servicer, except that certain organizational expenses of the
Transferor and the Issuer and
28
expenses relating to creation and initial implementation of the
Transaction Documents have been or will be paid by CMSC;
(ii) Any financial statements of the Servicer that are
consolidated to include the Transferor will contain appropriate footnotes
clearly stating that (A) all of the Transferor's assets are owned by the
Transferor and (B) the Transferor is a separate corporate entity with its
own separate creditors that will be entitled to be satisfied out of the
Transferor's assets prior to any value in the Transferor becoming
available to the Transferor's equity holders;
(iii) Any transaction between the Transferor and the Servicer
will be fair and equitable to the Transferor, will be the type of
transaction that would be entered into by a prudent Person in the position
of the Transferor with the Servicer, and will be on terms that are at
least as favorable as may be obtained from a Person that is not a CMS
Person; and
(iv) The Servicer will not be, or will not hold itself out to
be, responsible for the debts of the Transferor.
(f) PAYMENT INSTRUCTION TO OBLIGORS. The Servicer will (i) instruct
all Obligors to submit all payments on the Transferred Assets either (A) to one
of the Lockboxes maintained at the Lockbox Banks for deposit in a Lockbox
Account or (B) directly to one of the Lockbox Accounts and (ii) instruct all
Persons receiving Home Sale Proceeds to deposit such Home Sale Proceeds in one
of the Lockbox Accounts within two Business Days after such receipt, except to
the extent a longer escrow period is required under applicable law, in which
case such Home Sale Proceeds will be deposited into one of the Lockbox Accounts
within one Business Day after the expiration of such period. The Servicer will
direct all Obligors with respect to any receivables and related assets that are
not included in the Transferred Assets to deposit all collections in respect of
such receivables and related assets to an account that is not a Lockbox or
Lockbox Account and will take such other steps as the Issuer reasonably may
request to ensure that all collections on such receivables and related assets
will be segregated from Pool Collections on Transferred Assets.
(g) SEGREGATION OF COLLECTIONS. The Servicer will use reasonable
efforts to minimize the deposit of any funds other than Pool Collections into
any of the Lockbox Accounts and, to the extent that any such funds nevertheless
are deposited into any of such Lockbox Accounts, will promptly identify any such
funds.
(h) COMPUTER SOFTWARE, HARDWARE AND SERVICES. The Servicer will
provide the Issuer with such licenses, sublicenses and/or assignments of
contracts as the Issuer requires with regard to all services and computer
hardware or software that relate to the servicing of the Pool Receivables or the
other Transferred Assets; PROVIDED, HOWEVER, that with respect to any computer
software licensed from a third party, the Servicer will be required to provide
such licenses, sublicenses and/or assignments of such software only to the
extent that provision of the same would not violate the terms of any contracts
of the Servicer with such third party.
29
(i) TURNOVER OF COLLECTIONS. If the Servicer or any of its agents or
representatives at any time receives any cash, checks or other instruments
constituting Pool Collections, such recipient will segregate and hold such
payments in trust for, and in a manner acceptable to, the Issuer and will,
promptly upon receipt (and in any event within one Business Day following
receipt) remit all such cash, checks and instruments, duly endorsed or with duly
executed instruments of transfer, to a Lockbox Account or the Collection
Account.
(j) PERFORMANCE OF OBLIGATIONS. The Servicer will, at its expense,
market the CMSC Homes and CMF Homes and pay the related expenses of such
marketing and of the sale of CMSC Homes and CMF Homes to Ultimate Buyers in
accordance with the practices of CMSC in effect on the Closing Date (as such
practices have been modified either (x) in the ordinary course of CMSC's
business or (y) with the prior written consent of the Issuer).
(k) BILLING OF RECEIVABLES. The Servicer will xxxx all Receivables
(i) in the case of Receivables with respect to a Home purchased under a Home
Purchase Contract, within 60 days (on average) of the sale of the related Home
to an Ultimate Buyer and (ii) in the case of all other Receivables, within 60
days (on average) after the Receivable arises.
(l) FILING OF TAX RETURNS AND PAYMENT OF TAXES AND OTHER
LIABILITIES. The Servicer will file (or will cause to be filed on its behalf as
a member of a consolidated group) all tax returns and reports required by law to
be filed by it and will pay all taxes, assessments and governmental charges
shown to be owing by it, except for any such taxes, assessments or charges (i)
that are being diligently contested in good faith by appropriate proceedings,
for which adequate reserves in accordance with GAAP shall have been set aside on
its books and that shall not have given rise to any Liens (other than Permitted
Liens) or (ii) the amount of which, either singly or in the aggregate, shall not
have a Material Adverse Effect with respect to the Servicer.
Section 3.06 NEGATIVE COVENANTS OF SERVICER. As long as it is the
Servicer hereunder, the Servicer hereby covenants that the Servicer shall not:
(a) CHANGES IN ACCOUNTING TREATMENT AND REPORTING PRACTICES. Change
or permit any change in any accounting principles or financial reporting
practices applied to the Servicer, except in accordance with GAAP, if such
change would have a Material Adverse Effect with respect to the Servicer;
(b) CHANGE IN CREDIT AND COLLECTION POLICY. (i) Make any material
change in the Credit and Collection Policy or (ii) make any material
change in the character of its business or engage in any business
unrelated to such business as currently conducted that, in either case,
individually or in the aggregate with all other such changes, would be
reasonably likely to have a material adverse effect on the performance of
the ARSC Purchased Assets;
(c) CHANGE IN NAME. Change its corporate name or the name under or
by which it does business unless the Servicer has given CMSC, CMF, the
Transferor, the Issuer and the Issuer's successors and assigns at least 30
days' prior written notice thereof;
30
(d) CHANGE IN PAYMENT INSTRUCTION TO OBLIGORS. Make any change in
the instructions to Obligors or other Persons regarding payments to be
made to it or payments to be made to any Lockbox Account, which payments
relate to the Transferred Assets, unless the Servicer has given the Issuer
and its successors and assigns prior written notice thereof, and then only
in compliance with Section 3.05(f) or add or terminate any bank as a
Lockbox Bank from those listed in Schedule 3.04(l) unless (i) the
Indenture Trustee has received copies of a Lockbox Agreement with each new
Lockbox Bank duly executed by the parties thereto and (ii) in the case of
any termination, the Issuer or its successors and assigns have received
evidence to their satisfaction that the Obligors that were making payments
into a terminated Lockbox Account have been instructed in writing to make
payments into another Lockbox Account then in use;
(e) HOME DEEDS. Record any Home Deeds except as permitted by Section
2.01(d)(i);
(f) ESTABLISHMENT OF LOCKBOX ACCOUNTS. Enter into a Lockbox
Agreement (other than as set forth in Exhibit B) without the prior written
consent of the Issuer and the Indenture Trustee; or
(g) INSTRUCTIONS TO INDENTURE TRUSTEE. Instruct the Indenture
Trustee to release any Collections to the Issuer pursuant to Section 8.07
of the Indenture on any day on which an Asset Deficiency exists.
Section 3.07 RECORDS OF THE SERVICER AND REPORTS TO BE PREPARED BY
THE SERVICER.
(a) The Servicer shall maintain at all times accurate and complete
books, records and accounts relating to the Pool Receivables, the other
Transferred Assets and the Pool Relocation Management Agreements and all Pool
Collections thereon, in which timely entries shall be made. The Servicer shall
maintain and implement administrative and operating procedures (including
without limitation an ability to recreate Records evidencing Pool Receivables
and the other Transferred Assets in the event of the destruction of the
originals thereof), and shall keep and maintain all documents, books, records
and other information that the Servicer deems reasonably necessary for the
identification of Eligible Receivables and for the collection of all Pool
Receivables and other Transferred Assets. Upon the reasonable request of the
Indenture Trustee or the Issuer after the occurrence and continuance of an
Unmatured Servicer Default or a Servicer Default or other termination under
Section 9.01, the Servicer will deliver copies of all books and records
maintained pursuant to this Section 3.07(a) to the Indenture Trustee.
(b) During regular business hours upon reasonable prior notice, the
Servicer shall permit CMSC, CMF, the Issuer, the Transferor, the Indenture
Trustee (or such other Person whom the Indenture Trustee or the Issuer may
designate from time to time), or their agents or representatives (including
without limitation certified public accountants or other auditors), at the
expense of the Servicer and to the extent reasonably necessary to protect the
interests of the holders of the Notes, (i) to examine and make copies of and
abstracts from, and to conduct accounting reviews of, all Records in the
possession or under the control of the Servicer,
31
including without limitation the related Contracts, invoices and other documents
related thereto, and (ii) to visit the offices and properties of the Servicer
for the purpose of examining the materials described in clause (i) above, and to
discuss matters relating to the Pool Receivables or the other Transferred Assets
or the performance by the Servicer of its obligations under any Transaction
Document to which it is a party with any Authorized Officer of the Servicer
having knowledge of such matters and with its certified public accountants or
other auditors. The Indenture Trustee may conduct, or cause its agents or
representatives to conduct, reviews of the types described in this Section
3.07(b) whenever the Indenture Trustee reasonably deems any such review
appropriate, and the Indenture Trustee shall conduct, or cause its agents or
representatives to conduct, such a review if requested by the Issuer.
(c) No later than four Business Days prior to the Distribution Date
with respect to any Outstanding Series, the Servicer shall prepare and deliver
to CMSC, CMF, the Transferor, the Issuer, the Indenture Trustee, each Rating
Agency and each Series Enhancer a report with respect to the Monthly Period then
most recently ended and such Outstanding Series of Notes, substantially in the
form provided in the related Supplement or in such other form as is reasonably
acceptable to the Issuer (each such report, a "RECEIVABLES ACTIVITY REPORT").
Such Receivables Activity Report shall include (i) a certification that, to the
best of the Servicer's knowledge, no Unmatured Servicer Default or Servicer
Default has occurred and is continuing and (ii) a listing of all new Pool
Relocation Management Agreements as identified pursuant to Section 2.1(a) of the
Purchase Agreement.
Section 3.08 ANNUAL CERTIFICATE OF SERVICER. The Servicer shall
deliver to CMSC, CMF, the Issuer, the Indenture Trustee, each Rating Agency and
any Series Enhancer on or before April 30 of each calendar year, beginning with
April 30, 2001, an Officer's Certificate substantially in the form of Exhibit A.
Section 3.09 ANNUAL SERVICING REPORT OF INDEPENDENT PUBLIC
ACCOUNTANTS; COPIES OF REPORTS AVAILABLE. On or before April 30 of each calendar
year, beginning with April 30, 2001, the Servicer shall cause a firm of
nationally recognized independent public accountants (who also may render other
services to the Servicer, the Issuer, CMSC, CMF or the Transferor) to furnish a
report (addressed to the Issuer and any Series Enhancer) to CMSC, CMF, the
Issuer, the Transferor, the Indenture Trustee and any Series Enhancer to the
effect that they have applied certain procedures agreed upon with the Servicer
and substantially in the form previously provided to the Rating Agencies and
examined certain documents and records relating to the servicing of the
Receivables and other Transferred Assets under this Agreement and that, on the
basis of such agreed-upon procedures, nothing has come to the attention of such
accountants that caused them to believe that the servicing (including the
allocation of Pool Collections) has not been conducted in compliance with the
terms and conditions as set forth in Articles III and IV of this Agreement,
other than such exceptions as they believe to be immaterial and such other
exceptions as shall be set forth in such statement. Such report shall set forth
the agreed-upon procedures performed.
Section 3.10 ADJUSTMENTS; MODIFICATIONS.
(a) If on any day the Unpaid Balance of any Pool Receivable is
reduced by the Servicer as a result of any incorrect xxxxxxxx, allowances,
chargebacks, credits or any other
32
reductions or cancellations, in each case that result from the acts or omissions
of the Servicer, that are unrelated to the ability of the related Obligor to pay
such Pool Receivable (each such reduction, a "SERVICER DILUTION ADJUSTMENT"),
then the Servicer shall deposit the amount of such Servicer Dilution Adjustment
in cash in the Collection Account and shall report such amount on the next
Receivables Activity Report.
(b) So long as no Unmatured Servicer Default or Servicer Default
shall have occurred and be continuing, the Servicer may adjust, and may permit
each Sub-Servicer appointed by it pursuant to Section 3.01(b) to adjust, the
outstanding unpaid balance of any Pool Receivable in accordance with the Credit
and Collection Policy and the terms of this Agreement, PROVIDED that (i) such
adjustment would not cause or result in an Eligible Receivable becoming
ineligible and (ii) either the Servicer makes the related Servicer Dilution
Adjustment payment pursuant to this Section 3.10 or CMSC or CMF makes the
related Originator Adjustment payment pursuant to Section 4.3(b) of the Purchase
Agreement or Section 4.3(b) of the Receivables Purchase Agreement, as
applicable. The Servicer shall, or shall cause the applicable Sub-Servicer to,
write off Pool Receivables from time to time in accordance with the terms of
this Agreement and the terms of the Credit and Collection Policy, and such a
write-off shall not give rise to any obligation to make a Servicer Dilution
Adjustment. Notwithstanding the foregoing, the maturity date of an Equity Loan
may be extended beyond the original due date in accordance with the Credit and
Collection Policy, and such Equity Loan shall, notwithstanding clause (j) of the
definition of Eligible Receivable, be an Eligible Receivable so long as (i) such
extension was made for reasons unrelated to the creditworthiness of the Obligor,
(ii) the extension period ends not later than (A) the time of sale or (B) the
expiration of the offering period for the Homeowner's acceptance of an offer for
sale or (C) the date that is 12 months prior to the Final Stated Maturity Date,
whichever first occurs, and (iii) all other requirements for such Receivable to
be an Eligible Receivable are satisfied.
(c) If (i) the Servicer makes a deposit into the Collection Account
in respect of a Collection of a Pool Receivable and such Collection was received
by the Servicer in the form of a check that is not honored for any reason or
(ii) the Servicer makes an error with respect to the amount of any Collection
and deposits an amount that is less than or more than the actual amount of such
Collection, the Servicer shall appropriately adjust the amount subsequently
deposited into the Collection Account to reflect such dishonored check or error.
Any Pool Receivable in respect of which a dishonored check is received shall be
deemed not to have been paid. Notwithstanding the first two sentences of this
paragraph, adjustments made pursuant to this Section 3.10(c) shall not require
any change in any report previously delivered pursuant to Section 3.07(c).
(d) The Servicer shall not extend, amend or otherwise modify the
terms of any Pool Receivable, or amend, modify or waive any material term or
condition related thereto, except as provided in this Section 3.10.
Section 3.11. ESCROW AGENTS. The Servicer shall cause all Home
Purchase Contracts and Home Deeds to be delivered to an escrow agent in the
applicable jurisdiction, with a notice to such agent of the interests of the
Issuer and Indenture Trustee therein.
33
Section 3.12. SERVICER ADVANCES.
(a) In accordance with the Credit and Collection Policy, the
Servicer shall make Servicer Advances in connection with the maintenance and
marketing of Homes the Receivables relating to which are included in the
Transferred Assets, but only to the extent that the Servicer has determined in
its reasonable judgment that such advances will be recoverable out of
Collections on the Receivable arising as a result of such Servicer Advance.
(b) All Servicer Advances, the Receivables arising from which have
not been sold to CMF under the Purchase Agreement, shall be reimbursable in the
first instance from Pool Collections relating to the Homes with respect to which
such Servicer Advances were made (PROVIDED that Home Sale Proceeds will only be
applied to reimburse Servicer Advances consistent with CMSC's practices as of
the Closing Date) and, further, to the extent such Servicer Advance has been
determined to be a Nonrecoverable Advance, as provided in Section 4.03 of this
Agreement and Section 8.04(c)(i) of the Indenture. In consideration of the
Issuer's obligation to reimburse the Servicer from Collections for Servicer
Advances, the Receivables arising under the Pool Relocation Management
Agreements in respect of such Servicer Advances which have not been sold to CMF
under the Purchase Agreement shall be automatically conveyed by the Servicer to
the Issuer and included in the Pool Receivables and the Transferred Assets.
Section 3.13. CALCULATIONS. Without limiting the generality of the
foregoing provisions of this Article III, the Servicer shall perform all
calculations necessary in order to determine payments to be made to holders of
Notes and deposits to be made to reserves and other Series Accounts in
accordance with the Indenture and any Supplement. For the purposes of such
calculations, on each Business Day the Servicer shall calculate the Aggregate
Employer Balance for each Employer by determining the aggregate Unpaid Balance
of the Pool Receivables due from such Employer and then reducing such amount
(without duplication) by the amounts described in the definition of Aggregate
Employer Balance, including the total amount of Advance Payments received from
such Employer, regardless of whether such Advance Payment is related to a Pool
Receivable.
Section 3.14. APPLICATION OF COLLECTIONS. (a) In accordance with the
Credit and Collection Policy, the Servicer shall apply all monies received by or
on behalf of any Employer in accordance with the directions of such Employer.
The Servicer shall contact the Employer if necessary to obtain such directions,
or if such directions cannot be obtained, the Servicer shall apply Pool
Collections of such Employer in the order that such Pool Receivables were
originated, with the oldest Pool Receivable being paid first. The Servicer shall
allocate any collections received under a single Billed Receivable that contains
both Receivables included in the Transferred Assets and other amounts owed to
CMSC first, to amounts owed in respect of Transferred Assets and then to other
receivables.
34
(b) If at any time the Servicer shall determine that any amount on
deposit in the Collection Account does not constitute Pool Collections or the
proceeds thereof, the Servicer shall instruct the Indenture Trustee to withdraw
such amounts from the Collection Account and to pay such amounts to the Person
that the Servicer determines is the Person entitled thereto, as provided in
Section 8.04 of the Indenture.
[END OF ARTICLE III]
35
ARTICLE IV
ACCOUNTS AND POOL COLLECTIONS
Section 4.01 ESTABLISHMENT OF COLLECTION ACCOUNT. The Servicer, for
the benefit of the Indenture Trustee and the holders of the Notes, shall
establish and maintain an Eligible Account (including any subaccount thereof) in
the name of the Indenture Trustee, bearing a designation clearly indicating that
the funds and other property credited thereto are held for the benefit of the
Indenture Trustee and the holders of the Notes (the "COLLECTION ACCOUNT").
The Collection Account shall be under the sole dominion and control
of the Indenture Trustee for the benefit of the holders of the Notes. Except as
expressly provided in this Agreement or the Indenture, the Servicer agrees that
it shall have no right of setoff or banker's lien against, and no right to
otherwise deduct from, any funds held in the Collection Account for any amount
owed to it by the Issuer, CMSC, CMF, the Indenture Trustee or any holder of the
Notes. If the Collection Account at any time ceases to be an Eligible Account
then, within 10 Business Days of the Issuer's or Servicer's knowledge thereof,
the Issuer or the Servicer shall establish a new Collection Account meeting the
conditions specified above, transfer any monies, documents, instruments,
investment property, certificates of deposit and other property to such new
Collection Account and from the date such new Collection Account is established,
it shall be the Collection Account. Pursuant to the authority granted to the
Servicer in Section 3.02, the Servicer shall have the power, revocable by the
Indenture Trustee, to instruct the Indenture Trustee to make withdrawals and
payments from the Collection Account for the purposes of carrying out the
Servicer's duties hereunder.
At the written direction of the Servicer, funds on deposit in the
Collection Account shall be invested in Eligible Investments selected by the
Servicer. All such Eligible Investments shall be held by the Indenture Trustee
for the benefit of the holders of the Notes. Investments of funds representing
Pool Collections collected during any Monthly Period shall be invested in
Eligible Investments that will mature so that such funds will be available no
later than the close of business on the day preceding the monthly Distribution
Date following such Monthly Period, in amounts sufficient to the extent of such
funds to make the required distributions on such Distribution Date. On each
Distribution Date, all interest and other investment earnings (net of losses and
investment expenses) on funds on deposit in the Collection Account shall be paid
to the Servicer as additional servicing compensation. The Servicer shall bear no
responsibility or liability for any losses resulting from investment or
reinvestment of any funds in accordance with this Section 4.01 or for the
selection of Eligible Investments in accordance with the provisions of this
Agreement.
Section 4.02 POOL COLLECTIONS AND ALLOCATIONS. The Servicer shall
instruct the Indenture Trustee to apply all funds on deposit in the Collection
Account as described in the Indenture and each Supplement. Except as otherwise
provided below, the Servicer shall transfer all Pool Collections and other
Transferred Assets consisting of cash or cash equivalents from the Lockbox
Accounts into the Collection Account as promptly as possible after the date of
receipt of such Pool Collections, but in no event later than the second Business
Day following the date of receipt.
36
Section 4.03 WITHDRAWALS FROM THE COLLECTION ACCOUNT. On each day
the Servicer shall determine the amounts payable to it as reimbursement of any
Nonrecoverable Advances pursuant to Section 3.12(b) and the Servicer shall
instruct the Indenture Trustee to pay such amounts over to the Servicer pursuant
to Section 8.07 of the Indenture. The determination by the Servicer that it has
made a Nonrecoverable Advance shall be evidenced by an Officer's Certificate of
the Servicer delivered to the Indenture Trustee and the Issuer. The Indenture
Trustee shall be entitled to conclusively rely on the Servicer's determination
that a Servicer Advance is a Nonrecoverable Advance.
[END OF ARTICLE IV]
37
ARTICLE V
SECURITY INTEREST
Section 5.01 SECURITY INTEREST. Without prejudice to the provisions
of Section 2.01 providing for the absolute transfer of the Transferor's interest
in the Pool Receivables and other Transferred Assets to the Issuer, the
Transferor hereby assigns and grants to the Issuer a first priority security
interest in the Transferor's right, title and interest, if any, in, to and under
all of the following, whether now or hereafter existing: all Pool Receivables,
all other Transferred Assets and all proceeds thereof.
Section 5.02 ENFORCEMENT OF RIGHTS. The Transferor acknowledges that
the Transferred Assets include all rights acquired by the Transferor under the
Receivables Purchase Agreement. Accordingly, the Transferor agrees that the
Issuer and its assigns (including without limitation the Indenture Trustee)
shall have the sole right to enforce the Transferor's rights and remedies under
the Receivables Purchase Agreement (including the rights and remedies of CMF
under the Purchase Agreement and the PHH Guarantee).
[END OF ARTICLE V]
38
ARTICLE VI
OTHER MATTERS RELATING TO THE TRANSFEROR
Section 6.01 LIABILITY OF THE TRANSFEROR. The Transferor shall be
liable for all obligations, covenants, representations and warranties of the
Transferor arising under or related to this Agreement. Except as provided in the
preceding sentence, the Transferor shall be liable only to the extent of the
obligations specifically undertaken by it in its capacity as a Transferor.
Section 6.02 INDEMNIFICATION BY THE TRANSFEROR. Without limiting the
foregoing and any other rights that any ARSC Indemnified Party may have
hereunder or under applicable law, the Transferor hereby agrees to indemnify the
Issuer, each holder of the Notes, the Indenture Trustee and each of the
successors, permitted transferees and assigns of the foregoing, and all
officers, directors, shareholders, controlling Persons, employees and agents of
any of the foregoing (each of the foregoing Persons, an "ARSC INDEMNIFIED
PARTY"), from and against any and all damages, losses, claims (whether on
account of settlements or otherwise, and whether or not the applicable ARSC
Indemnified Party is a party to any action or proceeding that gives rise to any
ARSC Indemnified Losses), actions, suits, demands, judgments, liabilities
(including penalties), obligations or disbursements of any kind or nature and
related costs and expenses (including reasonable attorneys' fees and
disbursements) awarded against or incurred by any of them arising out of or as a
result of any of the following (all of the foregoing, collectively, "ARSC
INDEMNIFIED LOSSES"):
(a) (i) any representation or warranty made or deemed made by the
Transferor (or any of its respective Authorized Officers) (whether or not
made or delivered to the ARSC Indemnified Party) under any of the
Transaction Documents contains any untrue statement of a material fact or
omits to state material facts necessary to make the statements made, in
the light of the circumstances under which such statements were made, not
misleading;
(b) the failure by the Transferor to comply with any law, rule or
regulation applicable to it with respect to any Transferred Asset;
(c) the failure to vest and maintain vested in the Issuer a first
priority perfected ownership or security interest in the Transferred
Assets, free and clear of any Lien (other than any Permitted Lien),
whether existing at the time of the sale of such Transferred Asset or at
any time thereafter;
(d) any failure of the Transferor to perform its duties or
obligations in accordance with the provisions of the Transaction
Documents;
(e) the failure to file, or any delay in filing, financing
statements or other similar instruments or documents under the UCC of any
applicable jurisdiction or other applicable laws with respect to the
transfer of any Transferred Asset to the Issuer, whether at the time of
any sale or at any subsequent time;
(f) any tax or governmental fee or charge (other than franchise
taxes and taxes on or measured by the net income of any holder of the
Notes issued by the Issuer
39
under the Indenture), all interest and penalties thereon or with respect
thereto, and all out-of-pocket costs and expenses (including the
reasonable fees and expenses of counsel in defending against the same)
that arise by reason of the purchase or ownership of the Transferred
Assets;
(g) any investigation, litigation or proceeding related to any use
of the proceeds of any purchase made hereunder; and
(h) any investigation or defense of, or participation in, any legal
proceeding relating to the execution, delivery, enforcement, performance
or administration of the Transaction Documents or any other document
related thereto (whether or not such ARSC Indemnified Party is a party
thereto).
Notwithstanding anything to the contrary in this Agreement, any
representations, warranties and covenants made by the Transferor in this
Agreement or the other Transaction Documents that are qualified by or limited to
events or circumstances that have, or are reasonably likely to have, given rise
to a Material Adverse Effect (or words of like import) shall (solely for
purposes of the indemnification obligations set forth in this Section 6.01) be
deemed not to be so qualified or limited.
If for any reason the indemnification provided in this Section 6.02
is unavailable to an ARSC Indemnified Party or is insufficient to hold an ARSC
Indemnified Party harmless, then the Transferor shall contribute to the amount
paid by such ARSC Indemnified Party as a result of such loss, claim, damage or
liability in such proportion as is appropriate to reflect not only the relative
benefits received by such ARSC Indemnified Party on the one hand, and the
Transferor on the other hand, but also the relative fault (if any) of such ARSC
Indemnified Party and the Transferor and any other relevant equitable
considerations.
Notwithstanding the foregoing, no indemnification payments shall be
payable by the Transferor pursuant to this Section 6.02 until all amounts owing
by the Issuer under the Indenture have been paid in full and all amounts payable
by the Transferor to CMSC under the ARSC Subordinated Note have been paid in
full.
Notwithstanding the foregoing, and without prejudice to the rights
that the Issuer may have pursuant to the other provisions of this Agreement or
the provisions of any of the other Transaction Documents, in no event shall any
ARSC Indemnified Party be indemnified for any ARSC Indemnified Losses (i)
resulting from negligence or willful misconduct on the part of such ARSC
Indemnified Party (or the negligence or willful misconduct on the part of any of
such ARSC Indemnified Party's officers, directors, employees or agents) or (ii)
to the extent the same includes ARSC Indemnified Losses in respect of
Transferred Assets and reimbursement therefor that would constitute credit
recourse to the Transferor, CMSC or CMF (without limiting any rights under the
Purchase Agreement) for the amount of any Receivable or other Transferred Asset
not paid by the related Obligor.
[END OF ARTICLE VI]
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ARTICLE VII
OTHER MATTERS RELATING TO THE SERVICER
Section 7.01 LIABILITY OF THE SERVICER. The Servicer shall be liable
under this Article VII only to the extent of the obligations specifically
undertaken by the Servicer in its capacity as Servicer.
Section 7.02 MERGER OR CONSOLIDATION OF, OR ASSUMPTION OF THE
OBLIGATIONS OF, THE SERVICER. The Servicer shall not consolidate with or merge
into any other Person or convey, transfer or sell its properties and assets
substantially as an entirety to any Person, unless:
(a) (i) the corporation formed by such consolidation or into which
the Servicer is merged or the Person that acquires by conveyance, transfer
or sale the properties and assets of the Servicer substantially as an
entirety is, if the Servicer is not the surviving entity, a corporation
organized and existing under the laws of the United States of America or
any State or the District of Columbia, and, if the Servicer is not the
surviving entity, such corporation expressly assumes, by an agreement
supplemental hereto, executed and delivered to the Issuer and the
Transferor, in form satisfactory to the Issuer, the performance of every
covenant and obligation of the Servicer hereunder;
(ii) the Servicer has delivered to the Issuer and the
Transferor an Officer's Certificate stating that such consolidation,
merger, conveyance, transfer or sale complies with this Section 7.02
and that all conditions precedent herein provided for relating to
such transaction have been complied with;
(iii) the Servicer has given the Issuer, the Transferor, CMF,
CMSC, and the Indenture Trustee notice of such consolidation, merger
or transfer of assets;
(iv) immediately after giving effect to such transaction, no
representation or warranty made pursuant to Section 3.04 has been
breached in any material respect; and
(v) no Unmatured Servicer Default or Servicer Default has
occurred and is continuing or would result from the contemplated
transaction; and
(vi) any necessary consents of each applicable Series Enhancer
have been obtained.
(b) the corporation formed by such consolidation or into which the
Servicer is merged or the Person that acquires by conveyance or transfer
the properties and assets of the Servicer substantially as an entirety is
an Eligible Servicer.
Section 7.03 LIMITATION ON LIABILITY OF THE SERVICER AND OTHERS.
Except as provided in Section 7.04, neither the Servicer nor any of the
directors, officers, employees or agents of the Servicer in its capacity as
Servicer shall be under any liability to the Transferor, the
41
Issuer, the Indenture Trustee, the holders of the Notes or any other Person for
any action taken or for refraining from the taking of any action in good faith
in its capacity as Servicer pursuant to this Agreement; PROVIDED, HOWEVER, that
this provision shall not protect the Servicer or any such Person against any
liability that otherwise would be imposed by reason of willful misfeasance, bad
faith or gross negligence in the performance of duties or by reason of reckless
disregard of obligations and duties hereunder. The Servicer and any director,
officer, employee or agent of the Servicer may rely in good faith on any
document of any kind prima facie properly executed and submitted by any Person
(other than the Servicer) with respect to any matters arising hereunder. The
Servicer shall not be under any obligation to appear in, prosecute or defend any
legal action that is not incidental to its duties as Servicer in accordance with
this Agreement and that in its reasonable judgment may involve it in any expense
or liability. Subject to the terms of the Transaction Documents, the Servicer
may, in its sole discretion, undertake any such legal action that it may deem
necessary or desirable for the benefit of the holders of the Notes with respect
to this Agreement and the rights and duties of the parties hereto and the
interests of the holders of the Notes issued by the Issuer under the Indenture.
Section 7.04 INDEMNIFICATION BY THE SERVICER. The Servicer shall
indemnify and hold harmless each of CMSC, CMF, the Transferor, the Issuer, the
Indenture Trustee and its directors, officers, employees and agents from and
against any and all loss, liability, claim, expense, actions, suits, demands,
damage or injury suffered or sustained by reason of (i) any representation or
warranty made by the Servicer under any of the Transaction Documents, any
Receivables Activity Report or any other information or report delivered by the
Servicer with respect to the Servicer or the Transferred Assets having been
untrue or incorrect in any material respect when made or deemed to have been
made; or (ii) any acts or omissions of the Servicer pursuant to this Agreement
(other than such as may arise from the negligence or willful misconduct of CMSC,
CMF, the Transferor, the Issuer and the Indenture Trustee, respectively, and
their respective directors, officers, employees and agents), including any
judgment, award, settlement, reasonable attorneys' fees and other costs or
expenses incurred in connection with the defense of any action, proceeding or
claim, that in each case arises from or relates to a breach by the Servicer of
its representations, warranties, covenants or agreements hereunder; or (iii) any
reduction in the Unpaid Balance of any Pool Receivable as a result of any cash
discount or any adjustment by the Servicer, including any such adjustment that
gives rise to a Servicer Dilution Adjustment (but not including any write-off of
any Receivable) or (iv) any failure of the Servicer to comply with any material
applicable law, rule or regulation applicable to it and which relates to the
servicing or administration of the Transferred Assets. Indemnification pursuant
to this Section 7.04 shall not be payable from the Transferred Assets. The
Servicer's obligations under this Section 7.04 shall survive the termination of
this Agreement, the resignation or removal of the Indenture Trustee or the
earlier removal or resignation of the Servicer.
Section 7.05 RESIGNATION OF THE SERVICER. The Servicer shall not
resign from the obligations and duties hereby imposed on it except (a) upon
determination that (i) the performance of its duties hereunder is no longer
permissible under applicable law and (ii) there is no reasonable action that the
Servicer could take to make the performance of its duties hereunder permissible
under applicable law or (b) upon the assumption, by an agreement supplemental
hereto, executed and delivered to the Issuer and the Transferor, in form
satisfactory to the Issuer and the Majority Investors, of the obligations and
duties of the Servicer hereunder by (i) any of its Affiliates that is a direct
or indirect wholly owned subsidiary of the Performance Guarantor,
42
subject to reaffirmation by the Performance Guarantor of the PHH Guarantee with
respect to such Successor Servicer, or (ii) with the consent of the Majority
Investors, by any other entity that qualifies as an Eligible Servicer. Any
determination permitting the resignation of the Servicer shall be evidenced as
to clause (a) above by an Opinion of Counsel to such effect delivered to the
Issuer, the Indenture Trustee and the Transferor. No resignation shall become
effective until a Successor Servicer shall have assumed the responsibilities and
obligations of the Servicer in accordance with Section 9.02. If, as of the date
of the determination that the Servicer may no longer act as Servicer under
clause (a) above, the Issuer is unable to appoint a Successor Servicer, the
Indenture Trustee shall serve as Successor Servicer. Notwithstanding the
foregoing, if it is legally unable so to act, the Indenture Trustee shall
petition a court of competent jurisdiction to appoint any Eligible Servicer as
the Successor Servicer hereunder.
Section 7.06 ACCESS TO CERTAIN DOCUMENTATION AND INFORMATION
REGARDING THE RECEIVABLES. In addition to the access rights provided under
Section 3.07(b), the Servicer shall provide to the Issuer and the Indenture
Trustee access to the documentation regarding the Lockbox Accounts and the Pool
Receivables if the Issuer or the Indenture Trustee is required in connection
with the enforcement of the rights of holders of the Notes or by applicable
statutes or regulations to review such documentation, such access being afforded
without charge but only (a) upon reasonable request (but in no event less than
five Business Days), (b) during normal business hours, (c) subject to the
Servicer's normal security and confidentiality procedures and (d) at reasonably
accessible offices in the continental United States designated by the Servicer.
Nothing in this Section 7.06 shall derogate from the obligation of CMSC, CMF,
the Transferor, the Issuer, the Indenture Trustee and the Servicer to observe
any applicable law prohibiting disclosure of information regarding the
Transferred Employees, and the failure of the Servicer to provide access as
provided in this Section 7.06 as a result of such obligation shall not
constitute a breach of this Section 7.06.
[END OF ARTICLE VII]
43
ARTICLE VIII
TERMINATION
Section 8.01 TRANSFER TERMINATION EVENTS. The following events shall
be "TRANSFER TERMINATION EVENTS":
(a) The occurrence of an Event of Default or an Amortization Event
with respect to all Series of Notes; or
(b) Any representation or warranty made by the Transferor under any
of the Transaction Documents shall prove to have been untrue or incorrect in any
material respect when made or deemed to have been made, such failure could
reasonably be expected to have a Material Adverse Effect with respect to the
Transferor or the interest of the Issuer or its assigns in the Transferred
Assets and such failure remains unremedied for 30 days; or
(c) The Transferor shall fail to perform or observe, as and when
required, (i) any term, covenant or agreement contained in this Agreement or any
of the other Transaction Documents to which it is a party, and such failure
shall remain unremedied for: in the case of a failure to maintain its separate
corporate existence pursuant to Section 2.05(e), the covenant to segregate Pool
Collections pursuant to Section 2.05(f), the covenant to provide records
pursuant to Section 7.1(k), the covenant to file financing or continuation
statements pursuant to Section 2.01(d) or the negative covenants of the
Transferor set forth in Section 2.06, ten days, or (ii) any other term, covenant
or agreement contained in this Agreement or any of the other Transaction
Documents to which it is a party, which failure could reasonably be expected to
have a Material Adverse Effect with respect to the Transferor or the interest of
the Issuer or its assigns in the Transferred Assets, 30 days; or
(d) An Event of Bankruptcy shall have occurred with respect to the
Transferor; or
(e) The Transferor's representation and warranty in Section 2.02(k)
shall not be true at any time with respect to a substantial portion of the
Transferred Assets; or
(f) Either (i) the Internal Revenue Service shall file notice of a
Lien pursuant to Section 6323 of the Code with respect to any of the Transferred
Assets and such Lien shall not have been released within five days or, if
released, proved to the satisfaction of the Rating Agencies or (ii) the PBGC
shall, or shall indicate its intention to, file notice of a Lien pursuant to
Section 4068 of the Employee Retirement Income Security Act of 1974 with respect
to any of the Transferred Assets; or
(g) A CMF Purchase Termination Event or an ARSC Purchase Termination
Event shall have occurred; or
(h) This Agreement shall cease to be in full force and effect for
any reason other than in accordance with its terms.
44
If a Transfer Termination Event occurs, the Transferor shall promptly give
notice to the Issuer and the Indenture Trustee of such Transfer Termination
Event.
Section 8.02 TRANSFER TERMINATION. (a) On the Transfer Termination
Date, the Transferor shall cease transferring Pool Receivables to the Issuer,
PROVIDED that any right, title and interest of the Transferor in and to any CMF
Designated Receivables arising from any Servicer Advances made thereafter,
including any Related Property relating thereto and proceeds thereof, shall
continue to be transferred. Notwithstanding any cessation of the transfer to the
Issuer of additional Pool Receivables, Pool Receivables transferred to the
Issuer prior to the Termination Date and Pool Collections in respect of such
Pool Receivables and the related Finance Charges, whenever accrued in respect of
such Pool Receivables, shall continue to be property of the Issuer available for
pledge by the Issuer under the Indenture.
(b) Upon the occurrence of a Transfer Termination Event, the Issuer
and its assignees shall have, in addition to all other rights and remedies under
this Agreement or otherwise, all other rights and remedies provided under the
UCC of each applicable jurisdiction and other applicable laws, which rights
shall be cumulative. Without limiting the foregoing, the occurrence of a
Transfer Termination Event shall not deny to the Issuer or its assignees any
remedy in addition to termination of its obligation to make Purchases hereunder
to which the Issuer or its assignees may be otherwise appropriately entitled,
whether by statute or applicable law, at law or in equity.
[END OF ARTICLE VIII]
45
ARTICLE IX
SERVICER DEFAULTS
Section 9.01 SERVICER DEFAULTS. If any one of the following events
(a "SERVICER DEFAULT") shall occur and be continuing:
(a) any failure on the part of the Servicer to deliver the
Receivables Activity Reports required under Section 3.07(c), to make any
payment, transfer or deposit, or to give instructions or to give notice to the
Issuer or the Indenture Trustee to make such payment, transfer or deposit on or
before the date occurring five Business Days after the date such payment,
transfer or deposit or such instruction or notice is required to be made or
given, as the case may be, under the terms of this Agreement;
(b) (i) failure on the part of the Servicer duly to observe and
perform its covenants to give payment instructions to Obligors pursuant to
Section 3.05(f); to segregate Pool Collections pursuant to Section 3.05(g), to
provide records pursuant to Section 3.07, to file financing or continuation
statements provided to it pursuant to Section 3.02, or breach by the Servicer of
any of its negative covenants set forth in Section 3.06, which failure or breach
continues unremedied for ten calendar days, or (ii) failure on the part of the
Servicer duly to observe or perform in any material respect any other covenants
or agreements of the Servicer set forth in this Agreement, which failure has a
Material Adverse Effect on the rights of the holders of any Series of Notes
(determined without giving effect to any third-party credit enhancement) and
continues unremedied for a period of 30 days, in each case, after the date on
which written notice of such failure, requiring the same to be remedied, has
been given to the Servicer by the Issuer, or to the Servicer and the Issuer on
behalf of the Majority Investors, or the Servicer shall assign or delegate its
duties under this Agreement except as permitted by Sections 3.01(b) and 7.02;
(c) any representation, warranty or certification made by the
Servicer in this Agreement or in any other Transaction Document or in any
certificate delivered pursuant to this Agreement proves to have been incorrect
in any material respect when made, which failure has a Material Adverse Effect
on the rights of the holders of any Series of Notes (determined without giving
effect to any third-party credit enhancement) and which failure continues
unremedied for a period of 30 days after the date on which notice thereof,
requiring the same to be remedied, has been given to the Servicer by the Issuer,
or to the Servicer and the Issuer on behalf of the Majority Investors; or
(d) an Event of Bankruptcy occurs with respect to the Servicer;
then, in the event of any such Servicer Default, so long as the Servicer Default
shall not have been remedied the Indenture Trustee may, or at the direction of
the Majority Investors, the Indenture Trustee shall, by written notice then
given to the Servicer (and to the Indenture Trustee if given by the Majority
Investors) (a "TERMINATION NOTICE"), terminate all or any part of the rights and
obligations of the Servicer as Servicer under this Agreement. Notwithstanding
the foregoing, a delay in or failure of performance referred to in clause (a),
(b) or (c) for a period of 10 Business Days after the applicable grace period
shall not constitute a Servicer Default if such
46
delay or failure could not be prevented by the exercise of reasonable diligence
by the Servicer and such delay or failure was caused by an act of God or the
public enemy, acts of declared or undeclared war, public disorder, rebellion or
sabotage, epidemics, landslides, lightning, fire, hurricanes, earthquakes,
floods or similar causes not within the Servicer's control. The preceding
sentence does not relieve the Servicer from using all commercially reasonable
efforts to perform its obligations in a timely manner in accordance with the
terms of this Agreement.
(e) The Indenture Trustee acting at the direction of the Majority
Investors shall be entitled, by giving a Termination Notice to the Servicer, to
terminate all or any part of the rights and obligations of CMSC as Servicer if:
(i) the Consolidated Net Worth of PHH on the last day of any
fiscal quarter is less than the SUM of (i) $500,000,000 PLUS (ii) 50% of
Consolidated Net Income, if positive, for each fiscal quarter after
September 30, 1999; or
(ii) PHH Indebtedness less Cash Equivalents (owned by PHH or
any of its Consolidated Subsidiaries and free of liens (other than liens
securing Indebtedness)) exceeds six times Consolidated Net Worth; or
(iii) PHH fails to maintain a long-term unsecured debt rating
of at least "BBB-" by Standard & Poor's and "Baa3" by Xxxxx'x' PROVIDED
that if PHH has no outstanding long-term unsecured debt, then a shadow
rating of PHH may be used to determine compliance with the foregoing
rating requirement.
After receipt by the Servicer of a Termination Notice, and on the
date that a Successor Servicer is appointed by the Indenture Trustee pursuant to
Section 9.03, all authority and power of the Servicer under this Agreement (or,
in the case of a partial transfer, such authority and power and a proportional
portion of the Servicing Fee as is described in the Termination Notice) shall
pass to and be vested in the Successor Servicer (a "SERVICE TRANSFER"); and the
Indenture Trustee is hereby authorized and empowered, upon the failure of the
Servicer to cooperate, to execute and deliver, on behalf of the Servicer, as
attorney-in-fact or otherwise, all documents and other instruments and to do and
accomplish all other acts or things necessary or appropriate to effect the
purposes of such Service Transfer. The Servicer agrees to cooperate with the
Indenture Trustee and such Successor Servicer in effecting the termination of
the responsibilities and rights of the Servicer to conduct servicing hereunder,
including the transfer to such Successor Servicer of authority of the Servicer
to service the Pool Receivables provided for under this Agreement, including (to
the extent transferred) all authority over all Pool Collections that on the date
of transfer are held by the Servicer for deposit, or which have been deposited
by the Servicer in the Collection Account, or which thereafter are received with
respect to the Receivables, and in assisting the Successor Servicer. The
Servicer shall within 20 Business Days of such Termination Notice transfer its
electronic records relating to the Pool Receivables to the Successor Servicer in
such electronic form as the Successor Servicer may reasonably request and shall
promptly transfer to the Successor Servicer all other records, correspondence
and documents necessary for the continued servicing of the Receivables in the
manner and at such times as the Successor Servicer shall reasonably request. To
the extent that compliance with this Section 9.01 requires the Servicer to
disclose to the Successor Servicer information of any kind that the Servicer
deems to be confidential, the Successor Servicer shall
47
be required to enter into such customary licensing and confidentiality
agreements as the Servicer deems reasonably necessary to protect its interests.
The Servicer being terminated (or replaced in part) shall bear all costs of the
appointment of a Successor Servicer hereunder, including but not limited to
those of the Indenture Trustee reasonably allocable to specific employees and
overhead, legal fees and expenses, accounting and financial consulting fees and
expenses, and costs of amending the Transaction Documents, if necessary.
Section 9.02 PERFORMANCE BY ISSUER. If (i) the Transferor or the
Servicer fails to perform any of its agreements or obligations under any
Transaction Document to which it is a party and does not remedy such failure
within the applicable cure period, if any, and (ii) the Issuer in good faith
reasonably believes that the performance of such agreements and obligations is
necessary or appropriate to protect the interests of the holders of the Notes
issued by the Issuer under the Indenture, then the Issuer or its designee shall
have the right to perform, or cause performance of, such agreement or
obligation, and the reasonable expenses of the Issuer or its designee incurred
in connection therewith shall be payable by the Servicer as provided in Section
7.04 (if the Servicer has failed to perform its obligations) or by the
Transferor as provided in Section 6.04 (if the Transferor has failed to perform
its obligations). If the Transferor or the Servicer fails to file at any time
any financing statement or continuation statement or amendment thereto or
assignment thereof that it is required to file pursuant to this Agreement or any
of the other Transaction Documents to which it is a party, the Issuer or its
assigns shall have the right to file, and the Transferor and the Servicer hereby
authorize the Issuer or its assigns to file, at the expense of the Transferor,
such financing or continuation statements and amendments thereto and assignments
thereof with respect to all or any of the Receivables or the other Transferred
Assets now existing or hereafter arising in the name of the Transferor.
Section 9.03 INDENTURE TRUSTEE TO ACT; APPOINTMENT OF SUCCESSOR.
(a) On and after the receipt by the Servicer of a Termination Notice
pursuant to Section 9.01, the Servicer shall continue to perform all servicing
functions under this Agreement until the date specified in the Termination
Notice or otherwise specified by the Indenture Trustee or until a date mutually
agreed upon by the Servicer and Indenture Trustee. The Issuer shall select, as
promptly as possible after the giving of a Termination Notice, and the Indenture
Trustee shall appoint, an Eligible Servicer as a successor servicer (the
"SUCCESSOR SERVICER"), and such Successor Servicer shall accept its appointment
by a written assumption in a form acceptable to the Issuer. If a Successor
Servicer has not been appointed or has not accepted its appointment at the time
when the Servicer ceases to act as Servicer, the Indenture Trustee without
further action automatically shall be appointed the Successor Servicer.
Notwithstanding the foregoing, the Issuer shall, if the Indenture Trustee is
legally unable so to act, petition at the expense of the Servicer a court of
competent jurisdiction to appoint any established institution qualifying as an
Eligible Servicer as the Successor Servicer hereunder.
(b) Upon its appointment, the Successor Servicer shall be the
successor in all respects to the Servicer with respect to servicing functions
under this Agreement and shall be subject to all the responsibilities, duties
and liabilities relating thereto placed on the Servicer by the terms and
provisions hereof, and all references in this Agreement to the Servicer shall be
deemed to refer to the Successor Servicer. Notwithstanding the foregoing, or
anything in this Section 9.03 to the contrary, the Successor Servicer shall have
no responsibility or obligation
48
(i) for any representation or warranty of the predecessor Servicer or any other
Successor Servicer hereunder or (ii) for any act or omission of either a
predecessor or any other Successor Servicer. The Indenture Trustee may conduct
any activity required of it as Servicer hereunder through an Affiliate or
through an agent. Neither the Indenture Trustee nor any other Successor Servicer
shall be deemed to be in default hereunder due to any act or omission of a
predecessor Servicer, including but not limited to failure to timely deliver to
the Indenture Trustee any instructions pursuant to Section 4.02, any funds
required to be deposited with or transferred to the Indenture Trustee, or any
breach of its duty to cooperate with a Service Transfer.
(c) All authority and power granted to the Servicer under this
Agreement shall automatically cease and terminate upon termination of this
Agreement pursuant to Section 10.01, and shall pass to and be vested in the
Transferor, and the Transferor is hereby authorized and empowered to execute and
deliver, on behalf of the Servicer, as attorney-in-fact or otherwise, all
documents and other instruments, and to do and accomplish all other acts or
things necessary or appropriate to effect the purposes of such transfer of
servicing rights. The Servicer agrees to cooperate with the Transferor in
effecting the termination of the responsibilities and rights of the Servicer to
conduct servicing of the Receivables and the other Transferred Assets. The
Servicer shall transfer its electronic records relating to the Receivables and
the other Transferred Assets to the Transferor or its designee in such
electronic form as it may reasonably request and shall transfer all other
records, correspondence and documents to it in the manner and at such times as
it shall reasonably request.
(d) POWER OF ATTORNEY. The Transferor hereby irrevocably appoints
the Issuer to act as the Transferor's attorney-in-fact, with full authority in
the place and stead of the Transferor and in the name of the Transferor or
otherwise, from time to time after the occurrence and during the continuance of
an Unmatured Servicer Default or a Servicer Default or other termination of the
Servicer under Section 9.01 or a Transfer Termination Event, to take at the
direction of the Issuer any action and to execute any instrument or document
that the Issuer may deem necessary to accomplish the purposes of this Agreement
including without limitation:
(i) to ask, demand, collect, xxx for, recover, compromise,
receive and give acquittance and receipts for moneys due and to
become due under or in respect of any Pool Receivable or any other
Transferred Asset;
(ii) to receive, endorse, and collect any drafts or other
instruments, documents and chattel paper, in connection with clause
(i) above;
(iii) to file any claims or take any action or institute any
proceedings that the Issuer in its reasonable determination deems
necessary or appropriate for the collection of any of the Pool
Receivables or any other Transferred Asset or otherwise to enforce
the rights of the Issuer and the holders of the Notes issued by the
Issuer under the Indenture with respect to any of the Pool
Receivables or any other Transferred Asset;
(iv) to perform affirmative obligations of the Transferor
under any Transaction Document; and
49
(v) to enforce the rights and remedies of the Transferor under
any Transaction Document.
The Transferor hereby acknowledges, consents and agrees that the power of
attorney granted pursuant to this Section 9.03(d) is irrevocable and coupled
with an interest. The Transferor further agrees that the Issuer may delegate to
the Indenture Trustee any of the above-referenced powers to the extent the
Issuer, in its sole and absolute discretion, without liability, deems advisable
and, upon such delegation, the Indenture Trustee shall, to the extent of any
power so delegated, be entitled to exercise the powers herein granted to the
Issuer.
Section 9.04 NOTIFICATION TO HOLDERS. Within five Business Days
after the Servicer becomes aware of any Servicer Default, the Servicer shall
give notice thereof to CMSC, CMF, the Transferor, the Issuer, the Indenture
Trustee and any Series Enhancer. Upon any termination or appointment of a
Successor Servicer pursuant to this Article IX, the Indenture Trustee shall give
prompt notice thereof to the holders of the Notes, CMSC, CMF, the Transferor and
the Issuer.
Section 9.05 MARKETING EXPENSES ACCOUNT. If (a) CMSC is the
Servicer, (b) the long-term unsecured debt rating of PHH falls below "BBB-" by
Standard & Poor's or "Baa3" by Moody's and (c) the average number of days the
Homes relating to outstanding Pool Receivables have been owned by CMSC and CMF
is more than 150 days, the Servicer shall establish and fund an Eligible Account
(the "MARKETING EXPENSES ACCOUNT") in the name of the Indenture Trustee, bearing
a designation clearly indicating that the funds and other property credited
thereto are held for the benefit of the Indenture Trustee and, to the extent
provided in Section 9.05(b), any Successor Servicer. Upon establishment of the
Marketing Expenses Account, the Servicer shall maintain an amount equal to the
Required Marketing Expenses Account Amount on deposit therein. On any Business
Day after the Marketing Expenses Account has been established, if the amount on
deposit in the Marketing Expenses Account is less than the Required Marketing
Expenses Account Amount, the Servicer shall deposit into the Marketing Expenses
Account an amount equal to the EXCESS of the Required Marketing Expenses Account
Amount OVER the amount on deposit in the Marketing Expenses Account. On each
Distribution Date after the Marketing Expenses Account has been established, the
Servicer shall be entitled to instruct the Indenture Trustee to withdraw from
the Marketing Expenses Account an amount equal to the EXCESS of the amount on
deposit in the Marketing Expenses Account OVER the Required Marketing Expenses
Account Amount. If so instructed, the Indenture Trustee shall withdraw such
excess amount from the Marketing Expenses Account and shall pay such amount to
or at the direction of the Servicer.
(b) The Indenture Trustee may withdraw funds from the Marketing
Expenses Account (i) if CMSC is the Servicer, to pay for the cost of maintaining
and marketing the Homes to the extent CMSC as Servicer has failed to pay such
costs, (ii) to reimburse a Successor Servicer for the cost of maintaining and
marketing the Homes, but only to the extent such costs were actually incurred,
but not paid, by CMSC while acting as the Servicer, or to cover any costs of
maintaining and marketing the Homes attributable to CMSC's breach of its duties
as the Servicer prior to the appointment of such Successor Servicer or (iii) to
cover the costs of transition of servicing from CMSC to such Successor Servicer.
Funds on deposit in the
50
Marketing Expenses Account shall not be used to fund any payments to holders of
Notes of any Series.
[END OF ARTICLE IX]
51
ARTICLE X
TERMINATION
Section 10.01 TERMINATION. This Agreement and the respective
obligations and responsibilities of CMSC, CMF, the Transferor, the Servicer, the
Issuer and the Indenture Trustee created hereby shall terminate, except with
respect to the duties described in Section 6.03, Section 7.04 and Section 11.06,
on the Final Payout Date.
[END OF ARTICLE X]
52
ARTICLE XI
MISCELLANEOUS PROVISIONS
Section 11.01 AMENDMENT.
(a) The provisions of this Agreement may be amended, modified or
waived from time to time by the parties hereto, by a written instrument signed
by each of them. Notwithstanding the preceding sentence, this Agreement shall be
amended by the parties hereto at the direction of the Transferor without the
consent of any of the holders of the Notes issued by the Issuer under the
Indenture to add, modify or eliminate such provisions as may be necessary or
advisable in order to enable all or a portion of the Transferred Assets (i) to
qualify as, and to permit an election to be made to cause the Issuer to be
treated as, a "financial asset securitization investment trust" as described in
the provisions of Section 860L of the Code, and (ii) to avoid the imposition of
state or local income or franchise taxes imposed on the Issuer's property or its
income, PROVIDED that (i) the Transferor delivers to the Issuer an Officer's
Certificate to the effect that the proposed amendments meet the requirements set
forth in this Section 11.01(a) and (ii) such amendment does not affect the
rights, duties or obligations of the Issuer hereunder.
(b) Promptly after the execution of any such amendment or consent,
the Issuer shall furnish notification of the substance of such amendment to each
Rating Agency.
Section 11.02 GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, INCLUDING SS. 5-1401 OF THE
NEW YORK GENERAL OBLIGATIONS LAW, BUT OTHERWISE WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PRINCIPLES.
Section 11.03 NOTICES; PAYMENTS. All demands, notices, instructions,
directions and communications under this Agreement shall be in writing and shall
be deemed to have been duly given if personally delivered at, mailed by
certified mail, return receipt requested, or sent by facsimile transmission (i)
in the case of CMSC or CMF, to the address provided in the Purchase Agreement or
the Receivables Purchase Agreement, respectively, (ii) in the case of the
Transferor, to 00 Xxxxx Xxxxx Xxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxxxxx 00000
(telecopier no. (000) 000-0000), with a copy to: Xxxx Xxxxxx, Esq. at 00 Xxxxxxx
Xxxxxxx Xxxx, Xxxxxxx, Xxxxxxxxxxx 00000 (telecopier no. (000) 000-0000), (iii)
in the case of the Servicer, to 00 Xxxxx Xxxxx Xxxx, Xxxxxxx Xxxxxxxxxxx 00000,
Attention: Chief Financial Officer (telecopier no. (000) 000-0000), (iv) in the
case of the Issuer, 00 Xxxxx Xxxxx Xxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxxxxx 00000,
Attention: Chief Financial Officer (telecopier no. (000) 000-0000), (v) in the
case of the Indenture Trustee 000 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000
(telecopier no. (000) 000-0000) and (vi) to any other Person as specified in any
Supplement; or, as to each party, at such other address or facsimile number as
shall be designated by such party in a written notice to each other party.
53
Section 11.04 SEVERABILITY OF PROVISIONS. If any one or more of the
covenants, agreements, provisions or terms of this Agreement shall for any
reason whatsoever be held invalid, then such provisions shall be deemed
severable from the remaining provisions of this Agreement and shall in no way
affect the validity or enforceability of the remaining provisions or of the
rights of the parties to the Transaction Documents.
Section 11.05 FURTHER ASSURANCES. The parties hereto agree to do and
perform, from time to time, any and all acts and to execute any and all further
instruments required or reasonably requested by the Issuer or any other party
hereto more fully to effect the purposes of this Agreement, including the
execution of any financing statements or continuation statements relating to the
Receivables and the other Transferred Assets for filing under the provisions of
the UCC or other applicable law of any applicable jurisdiction.
Section 11.06 NONPETITION COVENANT. (a) Notwithstanding any prior
termination of this Agreement, CMSC, CMF, the Indenture Trustee, the Servicer,
the Transferor and any assignee of the Issuer shall not, prior to the date that
is one year and one day after the termination of this Agreement with respect to
the Issuer, acquiesce, petition or otherwise invoke or cause the Issuer to
invoke the process of any Governmental Authority for the purpose of commencing
or sustaining a case against the Issuer under any Federal or state bankruptcy,
insolvency or similar law or appointing a receiver, liquidator, assignee,
trustee, custodian, sequestrator or other similar official of the Issuer or any
substantial part of its property or ordering the winding-up or liquidation of
the affairs of the Issuer.
(b) Notwithstanding any prior termination of this Agreement, CMSC,
CMF, the Servicer, the Indenture Trustee, the Issuer and any assignee of the
Issuer shall not, prior to the date that is one year and one day after the
termination of this Agreement with respect to the Transferor, acquiesce,
petition or otherwise invoke or cause the Transferor to invoke the process of
any Governmental Authority for the purpose of commencing or sustaining a case
against the Transferor 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 Transferor or any substantial part
of its property or ordering the winding-up or liquidation of the affairs of the
Transferor.
Section 11.07 NO WAIVER; CUMULATIVE REMEDIES. No failure to
exercise, and no delay in exercising, any right, remedy, power or privilege on
the part of any party under this Agreement shall operate as a waiver thereof;
nor shall any single or partial exercise of any right, remedy, power or
privilege under this Agreement, preclude any other or further exercise thereof
or the exercise of any other right, remedy, power or privilege. The rights,
remedies, powers and privileges provided under this Agreement are cumulative and
not exhaustive of any rights, remedies, powers and privileges provided by law.
Section 11.08 COUNTERPARTS. This Agreement may be executed in two or
more counterparts (and by different parties on separate counterparts), each of
which shall be an original, but all of which together shall constitute one and
the same instrument.
54
Section 11.09 THIRD-PARTY BENEFICIARIES. This Agreement will inure
to the benefit of and be binding upon the parties hereto, the holders of the
Notes and their respective successors and permitted assigns. Except as otherwise
expressly provided in this Agreement, no other Person will have any right or
obligation hereunder.
Section 11.10 MERGER AND INTEGRATION. Except as specifically stated
otherwise herein, this Agreement 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. This Agreement may not be
modified, amended, waived or supplemented except as provided herein.
Section 11.11 HEADINGS. The headings herein are for purposes of
reference only and shall not otherwise affect the meaning or interpretation of
any provision hereof.
Section 11.12 CONFIDENTIALITY. The Issuer and the Transferor each
agrees to maintain the confidentiality of any information regarding CMSC,
Cendant Corporation and PHH obtained in accordance with the terms of this
Agreement that is not publicly available; PROVIDED, HOWEVER, that the Issuer or
the Transferor may reveal such information (a) as necessary or appropriate in
connection with the administration or enforcement of this Agreement or the
Issuer's issuance of Notes under the Indenture or (b) as required by law,
government regulation, court proceeding or subpoena. Notwithstanding anything
herein to the contrary, none of CMSC, Cendant Corporation nor PHH shall have any
obligation to disclose to the Issuer or its assignees and assigns any personal
and confidential information relating to a Transferred Employee.
Section 11.13 COSTS, EXPENSES AND TAXES. In addition to the
obligations of the Transferor under ARTICLE VI, the Transferor agrees to pay on
demand:
(a) all reasonable costs and expenses incurred by the Issuer and its
assignees in connection with the negotiation, preparation, execution and
delivery of, the administration (including periodic auditing), the
preservation of any rights under, or the enforcement of, or any breach of,
this Agreement (including any amendment, supplement or modification
hereto), including without limitation (i) the reasonable fees, expenses
and disbursements of counsel to any such Persons incurred in connection
with any of the foregoing or in advising such Persons as to their
respective rights and remedies under this Agreement and (ii) all
reasonable out-of-pocket expenses (including reasonable fees and expenses
of independent accountants) incurred in connection with any review of the
Transferor's books and records prior to the execution and delivery hereof,
and
(b) all stamp and other taxes and fees payable or determined to be
payable in connection with the execution, delivery, filing and recording
of this Agreement or any amendment, supplement or modification thereto,
and agrees to indemnify each ARSC Indemnified Party against any
liabilities with respect to, or resulting from, any delay in paying or
omission to pay such taxes and fees.
Section 11.14 SUBMISSION TO JURISDICTION. EACH PARTY HERETO HEREBY
IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY NEW
55
YORK STATE OR FEDERAL COURT SITTING IN THE BOROUGH OF MANHATTAN IN THE CITY OF
NEW YORK, NEW YORK, OVER ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO
THIS AGREEMENT, AND HEREBY (a) IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF
SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW YORK STATE OR
FEDERAL COURT; (b) IRREVOCABLY WAIVES, TO THE FULLEST EXTENT IT MAY EFFECTIVELY
DO SO, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR
PROCEEDING; AND (c) IRREVOCABLY APPOINTS CT CORPORATION SYSTEM (THE "PROCESS
AGENT"), WITH AN OFFICE ON THE DATE HEREOF AT 000 XXXXXX XXXXXX, XXX XXXX, XXX
XXXX 00000, XXXXXX XXXXXX OF AMERICA, AS ITS AGENT TO RECEIVE ON BEHALF OF IT
AND ITS PROPERTY SERVICE OF COPIES OF THE SUMMONS AND COMPLAINT AND ANY OTHER
PROCESS THAT MAY BE SERVED IN ANY SUCH ACTION OR PROCEEDING. SUCH SERVICE MAY BE
MADE BY MAILING OR DELIVERING A COPY OF SUCH PROCESS IN CARE OF THE PROCESS
AGENT AT THE PROCESS AGENT'S ABOVE ADDRESS, AND EACH PARTY HERETO HEREBY
IRREVOCABLY AUTHORIZES AND DIRECTS THE PROCESS AGENT TO ACCEPT SUCH SERVICE ON
ITS BEHALF. EACH PARTY HERETO AGREES TO ENTER INTO ANY AGREEMENT RELATING TO
SUCH APPOINTMENT THAT THE PROCESS AGENT MAY CUSTOMARILY REQUIRE AND TO PAY THE
PROCESS AGENT'S CUSTOMARY FEES UPON DEMAND. AS AN ALTERNATIVE METHOD OF SERVICE,
EACH PARTY HERETO ALSO IRREVOCABLY CONSENTS TO THE SERVICE OF ANY AND ALL
PROCESS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES OF SUCH
PROCESS TO SUCH PARTY AT ITS ADDRESS SPECIFIED PURSUANT TO SECTION 11.03.
NOTHING IN THIS SECTION 11.14 SHALL AFFECT THE RIGHT OF EITHER PARTY HERETO TO
SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR AFFECT THE RIGHT OF
EITHER PARTY HERETO TO BRING ANY ACTION OR PROCEEDING AGAINST THE OTHER PARTY
HERETO OR ANY OF ITS PROPERTIES IN THE COURTS OF ANY OTHER JURISDICTION.
Section 11.15 WAIVER OF JURY TRIAL. EACH PARTY HERETO WAIVES ANY
RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY
RIGHTS UNDER OR RELATING TO THIS AGREEMENT OR ANY AMENDMENT, INSTRUMENT,
DOCUMENT OR AGREEMENT DELIVERED OR THAT MAY IN THE FUTURE BE DELIVERED IN
CONNECTION HEREWITH OR THEREWITH OR ARISING FROM ANY COURSE OF CONDUCT, COURSE
OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN), ACTIONS OF EITHER OF THE
PARTIES HERETO OR ANY OTHER RELATIONSHIP EXISTING IN CONNECTION WITH THIS
AGREEMENT, AND AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A
COURT AND NOT BEFORE A JURY.
56
Section 11.16 ACKNOWLEDGMENT AND CONSENT.
(a) The Transferor acknowledges that, from time to time prior to the
Termination Date, the Issuer intends to pledge the Transferred Assets to the
Indenture Trustee pursuant to the Indenture. The Transferor acknowledges and
agrees to each such pledge by the Issuer and consents to the assignment by the
Issuer of all or any portion of its right, title and interest in, to and under
the Transferred Assets, this Agreement and the other Transaction Documents and
all of the Issuer's rights, remedies, powers and privileges and all claims of
the Issuer against the Transferor under or with respect to this Agreement and
the other Transaction Documents (whether arising pursuant to the terms of this
Agreement or otherwise available at law or in equity), including without
limitation (whether or not an Unmatured Servicer Default or a Servicer Default
has occurred and is continuing) (i) the right of the Issuer at any time to
enforce this Agreement against the Transferor and the obligations of the
Transferor hereunder and (ii) the right at any time to give or withhold any and
all consents, requests, notices, directions, approvals, demands, extensions or
waivers under or with respect to this Agreement, any other Transaction Document
or the obligations in respect of the Transferor thereunder, all of which rights,
remedies, powers, privileges and claims may be exercised and/or enforced by the
Issuer's successors ands assigns to the same extent as the Issuer may do.
Section 11.17 NO PARTNERSHIP OR JOINT VENTURE. Nothing contained in
this Agreement shall be deemed or construed by the parties hereto or by any
third Person to create the relationship of principal and agent or of partnership
or of joint venture.
[END OF ARTICLE XI]
57
IN WITNESS WHEREOF, the Transferor, CMSC, CMF, the Servicer, the
Indenture Trustee and the Issuer have caused this Transfer and Servicing
Agreement to be duly executed by their respective officers as of the day and
year first above written.
APPLE RIDGE SERVICES CORPORATION,
as Transferor,
by /s/ Xxxxxx X'Xxxx
----------------------------------------
Name: Xxxxxx X'Xxxx
Title: SVP, CFO
CENDANT MOBILITY SERVICES CORPORATION,
as originator and Servicer,
by /s/ Xxxxxx X'Xxxx
----------------------------------------
Name: Xxxxxx X'Xxxx
Title: SVP, CFO
CENDANT MOBILITY FINANCIAL CORPORATION,
as originator,
by /s/ Xxxx X. Xxxxxx
-----------------------------------------
Name: Xxxx X. Xxxxxx
Title: VP, Controller
APPLE RIDGE FUNDING LLC,
as transferee,
by /s/ Xxxx X. Xxxxxx
------------------------------------------
Name: Xxxx X. Xxxxxx
Title: VP, Controller
[Signature page to Transfer and Servicing Agreement]
BANK ONE, NATIONAL ASSOCIATION,
as Indenture Trustee,
by /s/ Xxxxx X. Xxxxxxxx
-----------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Assistant Vice President
[Signature page to Transfer and Servicing Agreement]
SCHEDULE 2.02(m)
to
TRANSFER AND SERVICING AGREEMENT
Dated as of April 25, 0000
Xxxxxxxxx Xxxxx of Business and
Chief Executive Office of the Transferor
APPLE RIDGE SERVICES CORPORATION
00 Xxxxx Xxxxx Xxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Tel: (000) 000-0000
List of Offices Where
the Servicer Keeps Records
CENDANT MOBILITY SERVICES CORPORATION
00 Xxxxx Xxxxx Xxxx
Xxxxxxx, XX 00000
CENDANT MOBILITY SERVICES CORPORATION
0000 Xxxxx Xxxxx Xxxxxxx
Xxxxx 000
Xxxxxx, XX 00000
CENDANT MOBILITY SERVICES CORPORATION
00000 Xxx Xxxxxxx
Xxxxxxx Xxxxx, XX 00000
CENDANT MOBILITY SERVICES CORPORATION
0000 Xxxxxx Xxxxx
Xxxxxxxx, XX 00000
CENDANT MOBILITY SERVICES CORPORATION
000 Xxxxxx Xxxx
Xxxxx 000
Xxxxxx Xxxxx, XX 00000
S-2.02(m)-1
SCHEDULE 2.02(o)
to
TRANSFER AND SERVICING AGREEMENT
Dated as of April 25, 2000
List of Legal Names
None.
S-2.02(o)-1
SCHEDULE 3.04(l)
to
TRANSFER AND SERVICING AGREEMENT
Dated as of April 25, 2000
List of Lockbox Banks
Bank One, National Association
Attn.: Xxxxxx Xxxxx
000 Xxxxx Xxxxxx Xxxxx
Xxxxxxxx, XX0-0000
Xxxxxxx, XX 00000
Demand Deposit Account Number and Associated Lockbox Numbers
DDA No.: 52-69938 Lockbox Nos.: 93358/73049
Mellon Bank, N.A.
Document Control Manager
Three Mellon Bank Center
Room 3119
Xxxxxxxxxx, XX 00000
Demand Deposit Account Number and Associated Lockbox Number
1. DDA No.: 005-7883 Lockbox No.: 360956
2. DDA No.: 144-6397 Lockbox No.: 360287
S-3.04(l)-1
EXHIBIT A
to
TRANSFER AND SERVICING AGREEMENT
Dated as of April 25, 2000
FORM OF ANNUAL SERVICER'S CERTIFICATE
(To be delivered on or before April 30 of each calendar year
beginning with April 30, 2001 pursuant to Section 3.09 of the
Transfer and Servicing Agreement referred to below)
CENDANT MOBILITY SERVICES CORPORATION
The undersigned, a duly authorized representative of Cendant
Mobility Services Corporation, as Servicer ("CMSC"), pursuant to the Transfer
and Servicing Agreement dated as of April 25, 2000 (as amended and supplemented,
the "AGREEMENT"), by and between Apple Ridge Services Corporation as Transferor,
CMSC as originator and Servicer, Cendant Mobility Financial Corporation as
originator, Apple Ridge Funding, LLC as transferee, and Bank One, National
Association, as Indenture Trustee does, hereby certify that:
1. CMSC is, as of the date hereof, the Servicer under the Agreement.
2. The undersigned is a Servicing Officer who is duly authorized
pursuant to the Agreement to execute and deliver this Certificate to the Issuer.
3. A review of the activities of the Servicer during the year ended
December 31, ____, and of its performance under the Agreement was conducted
under my supervision.
4. Based on such review, the Servicer has, or has caused to be, to
the best of my knowledge, performed its obligations under the Agreement in all
material respects throughout such year and no default in the performance of such
obligations has occurred or is continuing except as set forth in paragraph 5
below.
5. The following is a description of each default in the performance
of the Servicer's obligations under the provisions of the Agreement known to me
to have been made by the Servicer during the year ended December 31, _____ which
sets forth in detail (i) the nature of each such default, (ii) the action taken
by the Servicer, if any, to remedy each such default and (iii) the current
status of each such default: [If applicable, insert "None."]
Capitalized terms used in this Certificate have their respective
meanings as set forth in the Agreement.
E-A-1
IN WITNESS WHEREOF, the undersigned has duly executed this
Certificate this ____ day of _____________, 20___.
CENDANT MOBILITY SERVICES CORPORATION,
as Servicer,
By
----------------------------------------------
Name:
Title:
X-X-0
XXXXXXX X
to
TRANSFER AND SERVICING AGREEMENT
Dated as of April 25, 2000
FORMS OF LOCKBOX AGREEMENTS
E-B-1
EXHIBIT C
SERVICING OFFICERS
Xxxx Xxxxxx
Xxxxxx Xxxxxxx
Xxxx X. Xxxxxxx
Xxxxxx X'Xxxx
Xxxx Xxxxxxxx
E-C-1
