EXHIBIT 10.2
PLEDGE AND SECURITY AGREEMENT
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PLEDGE AND SECURITY AGREEMENT (this "Agreement") dated as of April 30, 1998
by and among Consumer Portfolio Services, Inc., a California corporation having
its principal place of business at 0 Xxx Xxxxx, Xxxxxx, Xxxxxxxxxx 00000 (the
"Company"), and State Street Bank and Trust Company ("State Street"), The
Structured Finance High Yield Fund, LLC ("Structured Finance") and The
Prudential Insurance Company of America ("Prudential") (collectively,
Prudential, Structured Finance and State Street shall be referred to herein as
the "Secured Parties", and each individually a "Secured Party"). State Street,
in its capacity as agent for the Secured Parties hereunder, is sometimes
hereinafter referred to as the "Agent", which term shall also be deemed to
include any successor(s) as Agent under the Loan Agreement (as hereinafter
defined) and any other party acting as agent for the Secured Parties hereunder.
W I T N E S S E T H :
WHEREAS, the Company and the Secured Parties have entered into a Residual
Interest in Securitizations Revolving Credit and Term Loan Agreement dated as of
the date hereof (as amended, modified and/or supplemented from time to time, the
"Loan Agreement") pursuant to which the Secured Parties have agreed, subject to
the terms and conditions set forth therein, to make revolving credit loans and
term loans to the Company (collectively, the "Loans"), such Loans to be
evidenced by the Company's Revolving Credit and Term Notes payable to the order
of the respective Secured Parties (collectively, as amended, modified and/or
supplemented from time to time, the "Notes");
WHEREAS, the obligations of the Secured Parties to make the Loans are
subject to the condition, among others, that the Company shall execute and
deliver this Agreement and grant the security interests hereinafter described;
NOW, THEREFORE, in consideration of the willingness of the Secured Parties
to enter into the Loan Agreement and to agree, subject to the terms and
conditions set forth therein, to make the Loans to the Company pursuant thereto,
and for other good and valuable consideration, receipt and sufficiency of which
is hereby acknowledged, it is hereby agreed as follows:
(S)1. Certain Definitions. Capitalized terms used but not defined in this
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Agreement shall have the meanings given to them in the Loan Agreement. In
addition to the descriptions contained in '2 hereof, the items of Collateral
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referred to therein shall have all of the meanings ascribed to them in the
Uniform Commercial Code (the "UCC") as in effect from time to time in The
Commonwealth of Massachusetts.
(S)2. Security Interest. As security for the Secured Obligations
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described in Section 3 hereof, the Company hereby grants, mortgages,
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hypothecates, pledges, collaterally assigns, sets over and delivers to the Agent
for the benefit of each of the Secured Parties and creates a continuing security
interest in and lien on, all of the Company's right, title and interest in and
to all assets and properties of the Company of every kind and nature, now owned
or hereafter acquired by the Company, or in which the Company now or hereafter
has any rights, together with any and all additions and accessions thereto and
proceeds and products thereof (hereinafter referred to collectively as the
"Collateral") including without limitation the following:
(A) All Tangible and Intangible Personal Property. (a) all inventory,
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goods, merchandise, raw materials, supplies, goods or work in process, finished
goods and other tangible personal property held by the Company for processing,
sale or lease or furnished or to be furnished by the Company under contracts of
service or to be used or consumed in the Company's business; (b) all accounts,
including, but not limited to, the Cash Collateral Account, accounts receivable
and notes, drafts, acceptances, letters of credit, bills of exchange and other
instruments representing or evidencing a right to payment for goods sold or
leased or for services rendered whether or not earned by performance, as well as
all right, title and interest of the Company in the goods which have given rise
thereto, including the right of stoppage in transit; (c) all contract rights
including on-line service agreement contract rights and all rights to payment
under any contract not yet earned by
performance and not evidenced by an instrument or chattel paper; (d) all general
intangibles of the Company, including without limitation, going concern value,
goodwill and all present and future intellectual property rights of the Company,
including without limitation, all trademark, trade name and "dba" rights, all
service marks and service names, all copyright rights, all patent rights, all
trade secrets, all know-how, and all causes of action arising under all such
intellectual property rights; (e) all of the Company's chattel paper of every
kind and description provided that, the Secured Party's lien on specific chattel
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paper shall be deemed to be automatically released in connection with the sale
of such chattel paper as part of the Company's warehouse financings or
securitizations; (f) all other rights of the Company to the payment of money of
every kind and nature, howsoever evidenced, including without limitation,
amounts due from affiliates, all tax refunds and/or abatements of every kind and
nature, insurance proceeds, proceeds from factoring agreements, interest rate
hedge, swap or other interest rate protection agreements, tort claims, causes of
action of every kind and description and all rights to deposits or advance
payments and repayments; (g) all books, customer lists, contract lists,
advertiser lists, subscriber lists, files, records (including without limitation
computer programs, disks, tapes and related electronic data processing media),
general ledger sheets, books of account, invoices, bills, certificates or
documents of ownership, bills of sale, business papers, correspondence, cards,
data and data storage systems, and writings of the Company or in which the
Company has an interest in any way relating to the Collateral and all rights of
the Company to retrieval from third parties of all such books and records
including electronically processed and recorded information pertaining to any
Collateral; (h) all of the Company's documents, documents of title, policies and
certificates of insurance, securities and instruments (whether negotiable or
non-negotiable); (i) all cash, funds and investments in any collateral account
or accounts maintained from time to time by the Company with the Secured Party
(or any Lender) and all deposits and/or deposit accounts maintained by the
Company, and all money, deposits, funds and instruments relating to the
foregoing; (j) all liens, rights, remedies, privileges, guaranties, indemnities,
warranties, claims, security interests, mortgages, securities and other
encumbrances in favor of or assigned to the Company for any of the foregoing;
(k) all of the Company's equipment, machinery, fixtures, furniture, office
supplies and vehicles, (l) all of the Company's rights under all present and
future authorizations, permits, licenses and franchises, to the fullest extent
permitted by applicable law, (m) all Investment Property and (n) all other
personal property, assets and things of value of every kind and nature, tangible
or intangible, absolute or contingent, legal or equitable including, with
respect to all Collateral described in clauses (a) through (n), any such
Collateral hereafter acquired; and
(B) All Rights to Payments Under Securitization Transactions. Without
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limiting any provision of clause (A) above, (i) all of the Company's rights to
payment of money, (whether such rights are classified under the applicable UCC
as general intangibles, accounts, certificated securities, uncertificated
securities or otherwise) arising out of, related to or created in connection
with any securitization transaction, now existing or hereafter arising or
entered into, including but not limited to, Xxxxx Xxxxxxx Xxxxx 0000-0, Xxxxx
Grantor Trust 0000-0, Xxxxx Xxxxxxx Xxxxx 0000-0, Xxxxx Grantor Trust 1993-4,
CPS Auto Grantor Trust 1994-1, CPS Auto Grantor Trust 1994-2, CPS Auto Grantor
Trust 1994-3, CPS Auto Grantor Trust 1994-4, CPS Auto Grantor Trust 1995-1, CPS
Auto Grantor Trust 1995-2, CPS Auto Grantor Trust 1995-3, CPS Auto Grantor Trust
1995-4, CPS Auto Grantor Trust 1996-1, FASCO Auto Grantor Trust 1996-1, CPS Auto
Grantor Trust 1996-2, CPS Auto Grantor Trust 1996-3, CPS Auto Grantor Trust
1997-1, CPS Auto Grantor Trust 1997-2, CPS Auto Receivables Trust 1997-3, CPS
Auto Receivables Trust 1997-4, CPS Auto Receivables Trust 1997-5 and CPS Grantor
Trust 1998-1 and any future securitization transaction to which the Company is a
party in any capacity including, without limitation, all servicing fees
(including Base Servicing Fees receivable from the Company's aggregate servicing
portfolio), Net Interest Receivable and other amounts of every kind and
description payable to the Company from any source whatsoever in connection with
any securitization transaction, including but not limited to, amounts due the
Company pursuant to any pooling and servicing agreement, reinsurance agreement,
agreement with any credit enhancer, agreement with any provider of interest rate
xxxxxx, swaps or other interest rate protection agreements of every kind and
description and (ii) all of the Company's rights (but none of its obligations or
liabilities), to receive payments under any Eligible Securitization Transaction
Document, and any and all other agreements, documents or instruments of the
Company or to which the Company is a party or in which the Company has an
interest, now existing or hereafter arising in connection with any
securitization transaction; and
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(C) Pledged Stock/Pledged Collateral. The shares of capital stock of CPS
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Receivables Corp. ("CPSRC"), CPS Funding Corporation ("FundCo") and CPS
Warehouse Corp. ("WareCo") and all dividends and distributions of every kind or
nature attributable thereto as well as all other proceeds, income and profits
thereof and all other property received in substitution therefor (collectively,
the "Pledged Stock"), together with any dividends or other amounts of any kind
or nature from time to time made or paid from CPSRC to the Company relating to
the Pledged Stock or otherwise and any and all promissory notes (including,
without limitation any other promissory notes and other instruments evidencing
an obligation for payment of money payable to the Company), or additional
securities or collateral executed or acquired hereafter (such Pledged Stock,
dividends and other amounts, promissory notes, additional securities or
collateral hereinafter collectively referred to as the "Pledged Collateral")
issued to the Company; and
(D) Proceeds and Products. All proceeds, including without limitation,
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insurance proceeds, and products of the items of Collateral described or
referenced in the foregoing clauses (A), (B) and (C).
The Company acknowledges and agrees that, in applying the law of any
jurisdiction that has heretofore enacted or hereafter enacts all or
substantially all of the uniform revisions of Article 8 of the Uniform
Commercial Code, with new provisions added to Article 9 as contemplated by such
revision, all as approved in 1994 by the American Law Institute and the National
Conference of Commissioners on Uniform State Laws, the foregoing definitions of
Collateral and Pledged Collateral shall be deemed to include "investment
property", as applicable, as defined in such new provisions of Article 9, it
being the intent of the Company, the Agent and each of the Secured Parties that
such property be included in the foregoing definition of Collateral, whether
prior to or after the effectiveness of such revision in any such jurisdiction.
(S)3. Secured Obligations. The security interest hereby granted shall
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secure the due and punctual payment and performance of the following
indebtedness, liabilities and obligations of the Company (herein called the
"Secured Obligations"): (a) principal of and premium, if any, and interest on
the Notes (including, without limitation, the payment of interest and other
amounts that would accrue and become due but for the filing of a petition in
bankruptcy or the operation of the automatic stay under Section 362(a) of Title
11 of the United States Code, as amended, or similar laws, as now or hereafter
in effect); and (b) any and all other obligations of any kind or nature
whatsoever of the Company to the Agent and/or the Secured Parties under the Loan
Agreement, the Notes, the Security Documents, the other Loan Documents or under
any agreement or instrument relating thereto, all as amended from time to time
and whether executed on or after the date hereof.
(S)4. Special Warranties and Covenants of Company. The Company hereby
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represents, warrants and covenants to the Agent and the Secured Parties that:
(a) The Company is and will remain the legal and equitable owner of
the Collateral. Except for the security interest created hereunder and security
interests expressly permitted under the Loan Agreement, the Collateral is and
will remain free from any lien, security interest or encumbrance, and the
Company will defend the Collateral against all claims and demands of all Persons
at any time claiming the same or any interest therein. All items of Collateral
have been validly pledged, collaterally assigned and granted to the Agent for
the benefit of the Secured Parties, subject to no liens except as expressly
permitted under the Loan Agreement and, except for such liens expressly
permitted thereunder, the Agent has a first priority perfected lien on the
Collateral within the meaning of the applicable Uniform Commercial Code. The
Company has the full corporate and legal right, power and authority to pledge,
collaterally assign and grant a security interest in the Collateral to the Agent
for the benefit of the Lenders hereunder.
(b) The address shown at the beginning of this Agreement is the
principal place of business and chief executive office of the Company, and the
address at which its books and records are kept. Except for such principal
place of business, and the locations listed on Schedule I attached hereto, the
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Company has no additional places of business or other locations at which
Collateral is stored. The Company will not change its principal or any other
place of business, or the location of any Collateral, or make any
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change in the Company's name or conduct the Company's business operations under
any fictitious business or trade name, without, in any such case, at least
thirty (30) days' prior written notice to the Agent.
(c) The Company will not sell, offer to sell, lease or otherwise
transfer or dispose of any of the Collateral or any interest therein except as
may be permitted by the Loan Agreement.
(d) The Company will keep the Collateral insured as provided in the
Loan Agreement. The Company will comply with all of its material obligations
under each of the Eligible Securitization Transaction Documents. The Company
will not use or otherwise deal with the Collateral in violation of the Loan
Agreement, the Eligible Securitization Transaction Documents, any insurance
policy covering the Collateral or applicable law. The Company will pay promptly
when due all taxes, assessments and governmental charges on the Collateral or
for its use or operation, except for taxes and assessments permitted to be
contested as provided in the Loan Agreement. The Agent and/or the Secured
Parties may at its/their option upon the failure of the Company so to do in
compliance with the terms of this Agreement and the Loan Agreement, discharge
any taxes, liens, security interests or other encumbrances to which any
Collateral is at any time subject (including in respect of FICA and withholding
taxes) and the Company agrees to reimburse the Agent and/or the Secured Parties
(as the case may be) on demand for any payments made or expenses reasonably
incurred by the Agent and/or the Secured Parties pursuant to the foregoing
authorization, and any unreimbursed amounts shall constitute Secured Obligations
for all purposes hereof.
(e) The Company will promptly execute and deliver to the Agent for the
benefit of the Secured Parties such financing statements, certificates, and
other documents or instruments as the Agent and/or the Secured Parties may deem
reasonably necessary or advisable to enable the Agent and/or the Secured Parties
to perfect or from time to time renew the security interest granted hereby, and
to comply with all applicable laws and regulations, including, without
limitation, such financing statements, certificates and other documents as the
Agent and/or the Secured Parties may deem reasonably necessary or advisable to
perfect a security interest in any additional Collateral hereafter acquired by
the Company or in any replacements or proceeds thereof. The Company hereby
irrevocably authorizes and appoints the Agent, on behalf of the Agent and/or the
Secured Parties, to the fullest extent permitted by applicable law, to execute
such financing statements, certificates and other documents in its stead, with
full power of substitution, as the Company's attorney-in-fact. The Company
further agrees that a carbon, photographic or other reproduction of a security
agreement or financing statement is sufficient as a financing statement under
this Agreement.
(f) The Company will give the Agent on behalf of the Secured Parties
prior notice of each office of the Company at which records of the Company
pertaining to all items of Collateral are kept. Except as such notice is given
and unless otherwise permitted by the Loan Agreement, the Company's records
concerning all Collateral are and will be kept at the address shown at the
beginning of this Agreement as the principal place of business of the Company.
(g) The Company shall accord the Agent and the Secured Parties and
their representatives with such access as any Secured Party may from time to
time require, upon reasonable notice and at reasonable times, to all properties
owned or leased by the Company. The Agent and each Secured Party and its
representatives shall have the right, and the Company will permit the Agent and
any Secured Party and such representatives (at such times as they may reasonably
request) to examine, inspect, copy and make extracts from any and all of the
Collateral, subject to the confidentiality provisions of the Loan Agreement.
(h) If any Collateral is in the possession of any third party,
including but not limited to, trustees or paying agents on any Eligible
Securitization Transactions and/or the Company's agents or Affiliates, the
Company shall notify such third parties of the security interest of the Agent
and the Secured Parties therein and instruct them to hold the same for the
account of the Agent and the Secured Parties and (subject to the Agent's
instructions) deliver such Collateral to the Blocked Account, and will deliver
such other notices and instructions to, and obtain waivers (including but not
limited to waivers of setoff and recoupment), acknowledgments and financing
statements from such third parties as the Agent and/or the Secured Parties deem
necessary.
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(i) The Eligible Securitization Transaction Documents (x) are valid,
legally binding contracts, enforceable in accordance with their terms , and no
default on the part of the Company or any other party thereto has occurred and
is continuing, and (y) have not been amended or otherwise modified except as
disclosed in writing to the Secured Parties prior to the date hereof. The
Company has no knowledge of any condition, event, defect or circumstance which
would impair the Company's rights under the Eligible Securitization Transaction
Documents or the Company's right to receive payments in respect of the
Collateral, or any other event or condition which could reasonably be expected
to have a Material Adverse Effect. Notwithstanding the grant of the security
interest hereunder, the Company shall remain liable under each contract or
agreement included in the Collateral (including but not limited to the Eligible
Securitization Transaction Documents) to be observed or performed by the Company
thereunder. Neither the Agent nor the Secured Parties shall have any obligation
or liability under any such contract or agreement by reason of or arising out of
this Agreement or the receipt by the Agent or the Secured Parties of any payment
relating to any of the Collateral, nor shall the Agent or the Secured Parties be
obligated in any manner to perform any of the obligations of the Company under
or pursuant to any such contract or agreement, to make inquiry as to the nature
or sufficiency of any payment received by the Agent or the Secured Parties in
respect of the Collateral or as to the sufficiency of any performance by any
party under any such contract or agreement, to present or file any claim, to
take any action to enforce any performance or to collect the payment of any
amounts which may have been assigned to the Agent or the Secured Parties or to
which the Agent or the Secured Parties may be entitled at any time or times.
The Agent's (on behalf of the Secured Parties) sole duty with respect to the
custody, safe keeping and physical preservation of the Collateral in its
possession, under (S)9-207 of the UCC or otherwise, shall be to deal with such
Collateral in the same manner as the Agent deals with similar property for its
own account.
(j) The Pledged Stock has been duly and validly issued and is fully
paid and non-assessable. The Pledged Stock listed in Schedule II attached
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hereto constitutes and shall at all times continue to constitute one hundred
percent (100%) of the presently issued and outstanding capital stock of CPSRC,
FundCo and WareCo. These are outstanding or issued no options, warrants or
other rights of any nature (or any options to acquired any such rights) to
acquire shares of the capital stock of CPSRC, FundCo or WareCo.
(k) If any additional shares of capital stock of any class of stock of
CPSRC, FundCo or WareCo or if any promissory notes of CPSRC, FundCo or WareCo or
other securities of CPSRC, FundCo or WareCo are issued to or otherwise acquired
by the Company after the date hereof, the same shall constitute Pledged
Collateral and shall be deposited and pledged with the Agent, for the benefit of
the Secured Parties, simultaneously with such acquisition. The Company will not
consent to or approve the issuance of any additional shares of capital stock of
any class of CPSRC, FundCo, WareCo.
(S)5. Delivery of Pledged Collateral. Pursuant to the terms hereof, the
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Company has endorsed, assigned and delivered to the Agent (for the benefit of
the Secured Parties) all negotiable and non-negotiable instruments (including,
without limitation, the Pledge Collateral and any other certificated securities)
and chattel paper, if any, included in the Collateral pledged by it hereunder,
together with instruments of transfer or assignment duly executed in blank. All
negotiable or non-negotiable instruments (including, without limitation, the
Pledged Collateral and any other certificated securities) or chattel paper
constituting Collateral and hereafter acquired by the Company shall be promptly
delivered to the Agent (for the benefit of the Secured Parties) pursuant hereto,
shall be in suitable form for transfer by delivery, or shall be accompanied by
duly executed instruments of transfer or assignments in blank, and accompanied
in each case by any required transfer tax stamps, all in form and substance
satisfactory to the Agent. To the extent that any securities are
uncertificated, appropriate book-entry transfers reflecting the pledge of such
securities created hereby have been or, in the case of uncertificated securities
hereafter acquired by the Company, will at the time of such acquisition be, duly
made for the account of the Agent or one or more nominees of the Secured
Parties, with the issuer of such securities or other appropriate book-entry
facility or financial intermediary with the Agent having at all times the right
to obtain definitive certificates (in the Agent's name or in the name of one or
more of its nominees) where the issuer customarily or otherwise issues
certificates, all to be held as Collateral
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hereunder. The Company hereby acknowledges that the Agent and/or the Secured
Parties may, in its/their discretion, appoint one or more financial institutions
to act as the agent for the Agent or the Secured Parties in holding (in one or
more custodial account(s)) instruments or other financial assets in which the
Agent and the Secured Parties are granted a security interest hereunder.
(S)6. Special Provisions Concerning Future Servicing Cash Flows;
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Distributions in Respect of Pledged Collateral.
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(a) The Company will execute and cause to be executed by all necessary
parties all such agreements or instruments as may be deemed necessary by the
Agent to ensure (i) that CPSRC is authorized by the Company to pay any and all
dividends payable to the Company to the Blocked Account and (ii) that each
spread account trustee or other paying agent under each transaction in the
Company's aggregate servicing portfolio is authorized and directed to pay all
Base Servicing Fees directly to the Blocked Account. The Company hereby
irrevocably appoints the Agent as the true and lawful attorney-in-fact of the
Company with full power of substitution, in the name of the Agent for the
benefit of the Secured Parties or in the name of the Company or otherwise, for
the sole benefit of the Secured Parties but at the sole expense of the Company,
after the occurrence of an Event of Default and without notice to or demand upon
the Company: (i) to demand, collect, receive payment of, receipt for, settle,
compromise or adjust, and give discharges and releases in respect of amounts
payable to the Company constituting Collateral (including without limitation the
Pledged Collateral) (the "Receivables") or any of them; (ii) to commence and
prosecute any suits, actions or proceedings at law or in equity in any court of
competent jurisdiction to collect the Receivables or any of them and to enforce
any other rights in respect thereof or in respect of the goods which have given
rise thereto; (iii) to defend any suit, action or proceeding brought against the
Company with respect to any Receivables; (iv) to settle, compromise or adjust
any suit, action or proceeding described in clause (ii) or (iii) above, and, in
connection therewith, to give such discharges or releases as the Agent may
reasonably deem appropriate; (v) to endorse checks, notes, drafts, acceptances,
money orders, bills of lading, warehouse receipts or other instruments or
documents evidencing or securing the Receivables or any of them; and (vi)
generally to sell, assign, transfer, pledge, make any agreement in respect of or
otherwise deal with any Receivables or the goods which have given rise thereto
as fully and completely as though the Agent and the Secured Parties were the
Company for such purposes. The powers conferred on the Agent and the Secured
Parties by this Agreement are solely to protect any interest of the Agent and
the Secured Parties and shall not impose any duty upon the Agent or the Secured
Parties to exercise any such power, and if the Agent or the Secured Parties
shall exercise any such power, they shall be accountable only for amounts they
actually receive as a result thereof and shall not be responsible to the Company
except for willful misconduct or gross negligence. Neither the Agent nor the
Secured Parties shall be under any obligation to take steps necessary to
preserve the rights in any Collateral against third parties but may do so at
its/their option. The Agent may at its option at any time after an Event of
Default shall have occurred transfer to itself or to its nominee the Pledged
Stock, and receive the income thereon and hold the same as Collateral hereunder.
(b) The Company represents and warrants that all Collateral consisting
of the Residual Interest in Securitizations and all other of the Company's
rights to payment relating to the Eligible Securitization Transactions (whether
direct or indirect through distributions from Eligible Subsidiaries) are and
will at all times hereafter remain free of and not be subject to any security
interests, liens or encumbrances of any nature (other than security interests,
liens or encumbrances in favor of the Secured Parties).
(c) All powers of attorney set forth in this Agreement are coupled
with an interest and shall be irrevocable until the Secured Obligations have
been indefeasibly paid in full. To the extent permitted by law, the Company
hereby ratifies all that said attorneys shall lawfully do or cause to be done by
virtue thereof.
(d) In case, upon the dissolution, winding up, liquidation or
reorganization of CPSRC, FundCo or WareCo whether in bankruptcy, insolvency or
receivership proceedings or upon an assignment for the benefit of creditors or
any other marshalling of the assets and liabilities of CPSRC, FundCo or WareCo
or
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any voluntary proceedings for the liquidation of the assets of CPSRC, FundCo
or WareCo or otherwise, any sum shall be paid or any property shall be
distributed upon or with respect to any of the Pledged Collateral, such sum
shall be paid over to the Agent to be applied in payment of the Secured
Obligations in accordance with the Loan Agreement. In case any stock dividend
shall be declared on any of the Pledged Collateral, or any share of stock or
fraction thereof shall be issued pursuant to any stock split involving any of
the Pledged Collateral, or any distribution of capital (including, without
limitation, payments in respect of Excess Servicing Receivables or any other
payment arising from or relating to any Eligible Securitization Transaction)
shall be made on any of the Pledged Collateral, or any property shall be
distributed upon or with respect to the Pledged Collateral pursuant to
recapitalization or reclassification of the capital of CPSRC, FundCo or WareCo,
or otherwise the shares or other property so distributed shall be delivered to
the Agent to be applied in payment of (in the case of cash or Cash Equivalents)
or held as additional collateral for (in the case of other property) the Secured
Obligations in accordance with the Loan Agreement.
(e) Right to Transfer into Name of Agent, etc. In case there shall
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exist an Event of Default, but subject to the provisions of the Uniform
Commercial Code or other applicable law, the Agent may cause all or any of the
Pledged Collateral to be transferred into its name or into the name of its
nominee or nominees. So long as no Event of Default shall exist, the Company
shall be entitled to exercise as the Company shall deem fit, but in a manner not
inconsistent with the terms hereof or of the Secured Obligations (including but
not limited to the Loan Agreement and the other Loan Documents and the
Intercreditor Agreement dated the date hereof between and among the Company, FSA
and the Lenders), the voting power with respect to the Pledged Collateral.
(f) Right of Agent to Exercise Voting Power, etc. In case there shall
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exist an Event of Default, which shall not have been remedied or cured in
accordance with the Loan Agreement, the Agent shall be entitled to exercise the
voting power with respect to the Pledged Collateral, and to exercise any and all
rights of payment, conversion, exchange, subscription or any other rights,
privileges or options pertaining to the Pledged Collateral as if it were the
absolute owner thereof, including without limitation, the right to exchange, at
its discretion, any and all of the Pledged Collateral upon the merger,
consolidation, reorganization, recapitalization or other readjustment of CPSRC,
FundCo or WareCo or, upon the exercise of any such right, privilege or option
pertaining to the Pledged Collateral, and in connection therewith, to deposit
and deliver any and all of the Pledged Collateral with any committee,
depositary, transfer agent, registrar or other designated agency upon such terms
and conditions as the Agent may determine, all without liability except to
account for property actually received, but the Agent shall have no duty to
exercise any of the aforesaid rights, privileges or options and shall not be
responsible for any failure to do so or delay in so doing.
(S)7. Fixtures, etc. It is the intention of the parties hereto that none
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of the Collateral shall become fixtures and the Company will take all such
reasonable actions as may be necessary to prevent any of the Collateral from
becoming fixtures. Without limiting the generality of the foregoing, the
Company will, if requested by the Agent, use its best efforts to obtain waivers
of lien, in form satisfactory to the Agent, from each lessor of real property on
which any of the Collateral is or is to be located unless such Collateral is
also located in the Company's Irvine, California headquarters.
(S)8. Events of Default. The Company shall be in default under this
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Agreement upon the happening of any of the following events or conditions
(herein called "Events of Default"):
(a) Default shall be made in the due and punctual payment of principal
of or premium, if any, or interest on any of the Secured Obligations as and when
the same shall become due and payable (whether at maturity or at a date fixed
for any prepayment or installment or by demand, declaration or acceleration or
otherwise) and such default shall continue beyond the expiration of the
applicable period of grace, if any ("Payment Default"); or
(b) Any other Event of Default (as defined or provided in the Loan
Agreement or in any other Loan Document) shall occur; or
7
(c) There shall be a material breach of any representation, warranty,
covenant, term or provision contained herein, or any representation or warranty
made in this Agreement or in any certificate, document or instrument executed or
delivered from time to time in connection herewith or with any other Loan
Document proves to be untrue or misleading in any material respect when made.
(S)9. Rights and Remedies of Secured Parties; Consent to Appointment of
---- -----------------------------------------------------------------
Receiver.
--------
(a) In the event that any Event of Default shall have occurred, such
default not having previously been remedied or cured in accordance with the Loan
Agreement, the Agent may, and at the direction of the Majority Banks the Agent
shall, declare all of the Secured Obligations to be immediately due and payable
and shall thereafter have the following rights and remedies: (a) all rights and
remedies provided by law, including, without limitation, those provided by the
UCC; (b) all rights and remedies provided in this Agreement; and (c) all rights
and remedies provided in the Loan Agreement, the Notes, the Security Documents
or in any other Loan Document or agreement, document or instrument pertaining to
the Secured Obligations.
(b) WITHOUT LIMITING THE GENERALITY OF THE FOREGOING (S)9(A) AND
WITHOUT DEROGATING FROM ANY RIGHT, REMEDY OR OTHER PROVISION CONTAINED IN THE
LOAN AGREEMENT OR ANY OTHER SECURITY DOCUMENT, AT ANY TIME FROM AND AFTER THE
OCCURRENCE OF A PAYMENT DEFAULT (AS DEFINED IN (S)8(a)), THE SECURED PARTY SHALL
------
HAVE THE RIGHT TO APPLY FOR AND HAVE A RECEIVER APPOINTED BY A COURT OF
COMPETENT JURISDICTION IN ANY ACTION TAKEN BY THE SECURED PARTY TO ENFORCE ITS
RIGHTS AND REMEDIES HEREUNDER IN ORDER TO MANAGE, PROTECT AND PRESERVE THE
COLLATERAL AND CONTINUE THE OPERATION OF THE BUSINESS OF THE COMPANY, OR TO SELL
OR DISPOSE OF THE COLLATERAL, AND TO COLLECT ALL REVENUES AND PROFITS THEREOF
AND APPLY THE SAME TO THE PAYMENT OF ALL EXPENSES AND OTHER CHARGES OF SUCH
RECEIVERSHIP, INCLUDING THE COMPENSATION OF THE RECEIVER, SAID EXPENSES TO
CONSTITUTE PART OF THE SECURED OBLIGATIONS, AND TO THE PAYMENT OF THE SECURED
OBLIGATIONS AS AFORESAID. TO THE EXTENT NOT PROHIBITED BY APPLICABLE LAW, THE
COMPANY HEREBY IRREVOCABLY CONSENTS TO AND WAIVES ANY RIGHT TO OBJECT TO OR
OTHERWISE CONTEST THE APPOINTMENT OF RECEIVER AS PROVIDED ABOVE. THE COMPANY
(I) GRANTS SUCH WAIVER AND CONSENT KNOWINGLY AFTER HAVING DISCUSSED THE
IMPLICATIONS THEREOF WITH COUNSEL, (II) ACKNOWLEDGES THAT (A) THE UNCONTESTED
RIGHT TO HAVE A RECEIVER APPOINTED FOR THE FOREGOING PURPOSES IS CONSIDERED
ESSENTIAL BY THE SECURED PARTY IN CONNECTION WITH THE ENFORCEMENT OF ITS RIGHTS
AND REMEDIES HEREUNDER AND UNDER THE LOAN DOCUMENTS, AND (B) THE AVAILABILITY OF
SUCH APPOINTMENT AS A REMEDY UNDER THE FOREGOING CIRCUMSTANCES WAS A MATERIAL
FACTOR IN INDUCING SECURED PARTY TO MAKE THE LOANS TO THE COMPANY; AND (III) TO
THE EXTENT NOT PROHIBITED BY APPLICABLE LAW, AGREES TO ENTER INTO ANY AND ALL
STIPULATIONS IN ANY LEGAL ACTIONS, OR AGREEMENTS OR OTHER INSTRUMENTS IN
CONNECTION WITH THE FOREGOING AND TO COOPERATE FULLY WITH THE SECURED PARTY IN
CONNECTION WITH THE ASSUMPTION AND EXERCISE OF CONTROL BY THE RECEIVER OVER ALL
OR ANY PORTION OF THE COLLATERAL.
(S)10. Right of Secured Parties to Dispose of Collateral, etc.;
--------------------------------------------------------
Restrictions on Transfer; etc.
-----------------------------
(a) Without limiting the scope of (S)9 hereof, upon the occurrence of
----
any Event of Default, such default not having previously been remedied or cured
in accordance with the Loan Agreement, but subject to the provisions of the UCC
or other applicable law, the Agent may, and at the direction of the Majority
Banks, the Agent shall, take possession of the Collateral and, in addition
thereto, enter upon any
8
premises on which the Collateral or any part thereof may be situated and remove
the same therefrom. The Agent may require the Company to make the Collateral (to
the extent the same is moveable) available to the Agent at a place to be
designated by the Agent which is reasonably convenient to both parties. Unless
the Collateral is perishable or threatens to decline speedily in value or is of
a type customarily sold on a recognized market, the Agent will give the Company
at least ten (10) days' prior written notice at the address of the Company set
forth in the Loan Agreement (or at such other address or addresses as the
Company shall specify in writing to the Agent) of the time and place of any
public sale thereof or of the time after which any private sale or any other
intended disposition thereof is to be made. Any such notice shall be deemed to
meet any requirement hereunder or under any applicable law (including the UCC)
that reasonable notification be given of the time and place of such sale or
other disposition. After deducting all reasonable costs and expenses of
collection, safekeeping, storage, custody, sale or other disposition and
delivery (including reasonable legal costs and attorneys' fees) and all other
charges against the Collateral, the residue of the proceeds of any such sale or
disposition shall be applied to the payment of the Secured Obligations in such
order of priority as the Secured Parties shall determine and any surplus shall
be returned to the Company or to any person or party lawfully entitled thereto.
In the event the proceeds of any sale, lease or other disposition of the
Collateral hereunder are insufficient to pay all of the Secured Obligations in
full, the Company will be liable for the deficiency, together with interest
thereon, at the maximum rate provided in the Loan Agreement, and for the costs
and expenses of collection of such deficiency, including, without limitation,
reasonable attorneys' fees, expenses and disbursements.
(b) Upon the occurrence of an Event of Default, such Event of Default
not having previously been remedied or cured in accordance with the Loan
Agreement, and without limiting in any manner the rights and remedies granted to
the Secured Party elsewhere in this Agreement, the Agent shall have the right at
any time or times thereafter to sell, resell, assign and deliver all or any of
the Pledged Collateral in one or more parcels at any exchange or broker's board
or at public or private sale. Unless the Pledged Collateral is perishable or
threatens to decline speedily in value or is of a type customarily sold on a
recognized market, the Secured Party will give the Company at least ten (10)
days' prior written notice (delivered in the manner specified in the Loan
Agreement) of the time and place of any public sale thereof or of the time after
which any private sale or any other intended disposition thereof is to be made.
Any such notice shall be deemed to meet any requirement hereunder or under any
applicable law (including the Uniform Commercial Code) that reasonable
notification be given of the time and place of such sale or other disposition.
Such notice may be given without any demand of performance or other demand, all
such demands being hereby expressly waived by the Company. All such sales shall
be at such commercially reasonable price or prices as the Secured Party shall
deem best and either for cash or on credit or for future delivery (without
assuming any responsibility for credit risk). At any such sale or sales the
Secured Party may purchase any or all of the Pledged Collateral to be sold
thereat upon such terms as the Secured Party may deem best. Upon any such sale
or sales the Pledged Collateral so purchased shall be held by the purchaser
absolutely free from any claims or rights of the Company of whatsoever kind or
nature, including any equity of redemption and any similar rights, all such
equity of redemption and any similar rights being hereby expressly waived and
released by the Company. In the event any consent, approval or authorization of
any governmental agency or other third party will be necessary to effectuate any
such sale or sales, the Company shall execute, and hereby agrees to cause CPSRC,
FundCo or WareCo to execute, all such applications or other instruments as may
be required. The proceeds of any such sale or sales, together with any other
additional collateral security at the time received and held hereunder, shall be
received and applied: first, to the payment of all costs and expenses of such
sale, including reasonable attorneys' fees; second, to the payment of the
Secured Obligations in such order of priority as the Secured Parties shall
determine, and any surplus thereafter remaining shall be paid to the Company or
to whomever may be legally entitled thereto.
The Company recognizes that the Secured Parties may be unable to
effect a public sale of all or a part of the Pledged Collateral by reason of
certain prohibitions contained in the Securities Act of 1933, but may be
compelled to resort to one or more private sales to a restricted group of
purchasers, each of whom will be obligated to agree, among other things, to
acquire such Pledged Collateral for its own account, for investment and not with
a view to the distribution or resale thereof. The Company acknowledges that
private
9
sales so made may be at prices and upon other terms less favorable to the seller
than if such Pledged Collateral were sold at public sale, and that the Secured
Parties have no obligation to delay sale of any such Pledged Collateral for the
period of time necessary to permit such Pledged Collateral to be registered for
public sale under the Securities Act of 1933. Without limiting the foregoing,
the Company acknowledges and understands that compliance with the Securities Act
of 1933 or similar or successor Federal Securities Laws or applicable State
securities and blue sky laws might strictly limit the course of conduct of the
Secured Parties in attempting to dispose of all or any of the Pledged
Collateral. Accordingly, the Company acknowledges and understands that the
Secured Parties may solicit offers to buy the Pledged Collateral, or any part
thereof, for cash, from a limited number of investors deemed by the Secured
Parties, in their sole judgment, to be responsible parties who might be
interested in purchasing such Pledged Collateral. The Company understands and
agrees that any such sale under such circumstances may not yield a price equal
to the price which might otherwise be obtained, and agrees that a sale under
such circumstances shall be deemed fair and reasonable under the circumstances,
and waives, to the fullest extent permitted by applicable law, any right to
contest or challenge such sale or the results thereof. The Company agrees that
any such private sales shall not be deemed to have been made in a commercially
unreasonable manner solely because they shall have been made under the foregoing
circumstances.
(c) To the extent that any restrictions imposed by the charter or by-
laws of CPSRC, FundCo or WareCo or any agreement to which any of CPSRC, FundCo
or WareCo is a party or any other document or instrument would in any way affect
or impair the pledge of the Pledged Collateral hereunder or the exercise by the
Secured Parties of any right granted hereunder, including, without limitation,
the right of the Secured Parties to dispose of the Pledged Collateral upon the
occurrence of any Event of Default, the Company hereby waives such restrictions,
and represents and warrants that it has caused CPSRC, FundCo or WareCo to take
all necessary action to waive such restrictions, and the Company hereby agrees
that it will take any further action which the Secured Parties may reasonably
request in order that the Secured Parties may obtain and enjoy the full rights
and benefits granted to the Secured Party by this Agreement free of any such
restrictions. The Agent is hereby appointed the attorney-in-fact, with full
power of substitution, of the Company for the purpose of carrying out the
provisions of this Pledge and Security Agreement and taking any action
including, without limitation, executing, delivering and filing applications,
certificates, instruments and other documents and papers with governmental
authorities and other third parties, and executing any and all instruments
including, without limitation, conveyances, assignments and transfers which are
required to be taken or executed by the Company under this Pledge and Security
Agreement, in the name of the Agent or on behalf of and in the name of the
Company. This appointment is coupled with an interest, is irrevocable and
durable and shall survive any subsequent dissolution of the Company.
(d) All of the rights and remedies of the Agent and the Secured
Parties hereunder are cumulative, not exclusive, and enforceable successively,
alternatively or concurrently, at such time or times as the Agent and/or the
Secured Parties deem expedient.
(S)11. Right of Secured Parties to Use and Operate Collateral, etc. Upon
----- -----------------------------------------------------------
the occurrence and during the continuance of any Event of Default, such default
not having previously been remedied or cured in accordance with the Loan
Agreement, but subject to the provisions of the UCC or other applicable law, the
Agent shall have the right and power (but not the obligation) to take possession
of all or any part of the Collateral, and to exclude the Company and all persons
claiming under the Company wholly or partly therefrom, and thereafter to hold,
store, and/or use, operate, manage and control the same. In any such case the
Agent shall have all of the Company's right to manage and control the Collateral
and to carry on the business and to exercise all rights and powers of the
Company in respect thereto as the Agent shall deem best, including the right to
enter into any and all such agreements with respect to the operation of the
Collateral or any part thereof as the Agent may see fit; and the Agent shall be
entitled to collect and receive all rents, issues, profits, fees, revenues and
other income of the same and every part thereof. Such rents, issues, profits,
fees, revenues and other income shall be applied to pay the expenses of holding
and operating the Collateral and of conducting the business thereof, and of all
maintenance, repairs, replacements, alterations, additions and improvements, and
to make all payments which the Secured Parties may be required or may elect to
make, if
10
any, for taxes, assessments, insurance and other charges upon the Collateral or
any part thereof, and all other payments which the Agent may be required or
authorized to make under any provision of this Agreement (including reasonable
legal costs and attorneys' fees). The remainder of such rents, issues, profits,
fees, revenues and other income shall be applied to the payment of the Secured
Obligations in such order of priority as the Secured Parties shall determine
and, unless otherwise provided by law or by a court of competent jurisdiction,
any surplus shall be returned to the Company or to any person or party lawfully
entitled thereto. Without limiting the generality of the foregoing (and without
derogating from any provision contained in the Loan Agreement or any other
Security Document), upon the occurrence of an Event of Default, the Agent shall
have the right to apply for and have a receiver appointed by a court of
competent jurisdiction in any action taken by the Agent and/or the Secured
Parties to enforce its/their rights and remedies hereunder in order to manage,
protect and preserve the Collateral and continue the operation of the business
of the Company, or to sell or dispose of the Collateral, and to collect all
revenues and profits thereof and apply the same to the payment of all expenses
and other charges of such receivership, including the compensation of the
receiver, said expenses to constitute part of the Secured Obligations, and to
the payment of the Secured Obligations as aforesaid.
(S)12. Waivers, etc. The Company hereby waives presentment, demand,
----- ------------
notice, protest and, except as is otherwise provided herein, all other demands
and notices in connection with this Agreement or the enforcement of the Agent's
and/or the Secured Parties' rights hereunder or in connection with any Secured
Obligations or any Collateral; consents to and waives notice of the granting of
renewals, extensions of time for payment or other indulgences to the Company or
to any account debtor in respect of any Receivable, or substitution, release or
surrender of any Collateral, the addition or release of persons primarily or
secondarily liable on any Secured Obligation or on any Receivable or other
Collateral, the acceptance of partial payments on any Secured Obligation or on
any Receivable or other Collateral and/or the settlement or compromise thereof.
The Company also hereby waives any rights and/or defenses the Company may have
under any anti-deficiency laws or other laws limiting, qualifying or discharging
the Secured Obligations and/or the remedies of the Agent and/or the Secured
Parties against the Company. No delay or omission on the part of the Agent
and/or the Secured Parties in exercising any right hereunder shall operate as a
waiver of such right or of any other right hereunder. Any waiver of any such
right on any one occasion shall not be construed as a bar to or waiver of any
such right on any such future occasion. The Company further waives any right it
may have under the constitution of The Commonwealth of Massachusetts, the States
of California and Delaware and under the constitution of any other state in
which any of the Collateral may be located, or under the Constitution of the
United States of America, to notice (other than any requirement of notice
provided herein) or to a judicial hearing prior to the exercise of any right or
remedy provided by this Agreement to the Agent and/or the Secured Parties and
waives its rights, if any, to set aside or invalidate any sale duly consummated
in accordance with the foregoing provisions hereof on the grounds (if such be
the case) that the sale was consummated without a prior judicial hearing. The
Company's waivers under this section have been made voluntarily, intelligently
and knowingly and after the Company has been apprised and counseled by its
attorneys as to the nature thereof and its possible alternative rights. Neither
the Agent nor the Secured Parties shall be required to marshal any present or
future collateral security (including but not limited to the Collateral) for, or
other assurances of payment of, the Secured Obligations or any of them or to
resort to such collateral security or other assurances of payment in any
particular order, and all of the Agent's and the Secured Parties rights
hereunder and in respect of such collateral security and other assurances of
payment shall be cumulative and in addition to all other rights, however
existing or arising. To the extent that it lawfully may, the Company hereby
agrees that it will not invoke any law relating to the marshaling of collateral
which might cause delay in or impede the enforcement of the rights of the Agent
and/or the Secured Parties under this Agreement or under any other instrument
creating or evidencing any of the Secured Obligations or under which any of the
Secured Obligations is outstanding or by which any of the Obligations is secured
or payment thereof is otherwise assured, and, to the extent that it lawfully
may, the Company hereby irrevocably waives the benefits of all such laws.
(S)13. Termination; Assignment, etc. Subject to (S)14, this Agreement and
----- ---------------------------- -----
the security interest in the Collateral created hereby shall terminate when all
of the Secured Obligations have been indefeasibly paid in
11
full (provided that the Secured Parties are no longer obligated to make Loans
-------- ----
under the Loan Agreement). No waiver by the Agent and/or the Secured Parties or
by any other holder of Secured Obligations of any default shall be effective
unless in writing nor operate as a waiver of any other default or of the same
default on a future occasion. In the event of a sale or assignment by any
Secured Party of all or any of the Secured Obligations held by it, the Secured
Party may assign or transfer its rights and interests under this Agreement in
whole or in part to the purchaser or purchasers of such Secured Obligations,
whereupon such purchaser or purchasers shall become vested with all of the
powers and rights of the Secured Party hereunder, and the Secured Party shall
thereafter be forever released and fully discharged from any liability or
responsibility hereunder arising from and after the effective time of such
assignment or transfer with respect to the rights and interests so assigned.
(S)14. Reinstatement. Notwithstanding the provisions of (S)13, this
----- ------------- -----
Agreement shall continue to be effective or be reinstated, as the case may be,
if at any time any amount received by any Secured Party in respect of the
Collateral is rescinded or must otherwise be restored or returned by the Secured
Party upon the insolvency, bankruptcy, dissolution, liquidation or
reorganization of the Company or any Affiliate of the Company or otherwise or
upon the appointment of any intervenor or conservator of, or trustee or similar
official for, the Company or any Affiliate of the Company or any substantial
part of its or their properties, or otherwise, all as though such payments had
not been made.
(S)15. Governmental and Other Third Party Approvals, etc. Upon the
----- -------------------------------------------------
occurrence of an Event of Default and the exercise by the Agent and/or the
Secured Parties of (or decision by the Agent and/or the Secured Parties to
exercise) any power, right, privilege or remedy pursuant to this Agreement which
requires any consent, approval, registration, qualification or authorization of
any governmental or regulatory authority or instrumentality, or any other third
party (including but not limited to rating agencies and third parties to the
Eligible Securitization Transaction Documents) the Company will execute and
deliver, or will cause the execution and delivery of, all applications,
certificates, instruments and other documents and papers that may be required
for such governmental, regulatory or other third party consent, approval,
registration, qualification or authorization. In the event the Company fails to
take any such action, the Company hereby irrevocably authorizes and appoints the
Agent to execute and deliver such documents in its stead, with full power of
substitution, as the Company's attorney-in-fact.
(S)16. Notices. Except as otherwise provided herein, notice to the
----- -------
Company or to the Agent or the Secured Parties shall be deemed to have been
sufficiently given or served for all purposes hereof if given to the parties and
in the manner specified in the Loan Agreement.
(S)17. Agency. The terms "Secured Party" or "Secured Parties" as used
----- ------
herein shall be deemed to include any and all lenders now or hereafter party to
the Loan Agreement as a "Lender", and any other holder of any Secured
Obligation, and shall also be deemed to include the Agent acting on behalf of
all or any one or more of the Secured Parties in accordance with the Agency
provisions of the Loan Agreement. The Company shall not be a third party
beneficiary of such provisions. The Secured Parties acknowledge that the
security interest in the Collateral granted hereby secures the Secured
Obligations owing to the Agent and to each Secured Party. State Street Bank and
Trust Company may resign or be removed as Agent hereunder, and may be replaced
as Agent hereunder, in the same manner as is prescribed for resignation, removal
and replacement of the Agent in the Loan Agreement, and any successor Agent
shall succeed to all of the Agent's rights hereunder with respect to the
Collateral. The term "Agent" as used herein shall be deemed to include any such
other party acting as agent for the Secured Parties hereunder.
The Agent shall not be liable to any Secured Party for any error of
judgment or mistake of fact or for any acts of omission or commission, unless
the same are caused by the Agent's willful misconduct or gross negligence. The
Agent may act in reliance upon all instruments, documents or signatures believed
by it to be genuine and may assume that any person purporting to act or give
notices, writings, advice or instructions in connection with this Agreement is
duly authorized by the appropriate party so to do. The Agent will be reimbursed
or properly indemnified by each Secured Party in the event the Agent is
requested by the Secured
12
Parties to take or omit to take any action with respect to the Collateral (any
such reimbursement or indemnification to be on the same basis as set forth in
the Loan Agreement). The Agent shall have the right to retain counsel to advise
it as to any action or decision with respect to the Collateral and shall be
reimbursed by the Secured Parties for the cost of the same (to the extent the
Agent is not reimbursed by the Company) prior to distributing any of the
Collateral or any proceeds thereof and the cost of such reimbursement of the
Agent shall constitute part of the Secured Obligations.
The provisions of this (S)17 shall apply to all other Security Documents in
-----
which State Street Bank and Trust Company is serving as Agent for the Secured
Parties, and in which no specific agency provision is included, in the same
manner as this (S)17 applies to this Security Agreement.
-----
(S)18. Miscellaneous. This Agreement shall inure to the benefit of and be
----- -------------
binding upon the Agent, the Secured Parties and the Company and their respective
successors and assigns (provided that the Company may not assign its rights and
-------- ----
obligations hereunder without the prior consent of the Secured Parties), and the
term "Lender" shall be deemed to include any other holder or holders of any of
the Secured Obligations. In case any provision of this Agreement shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
References in this Agreement to the "Secured Parties" are references to the
Secured Parties severally, jointly and jointly and severally. The section
headings in this Agreement are for convenience of reference only and shall not
be considered in construing this Agreement. This Agreement may be executed in
any number of counterparts and by the different parties hereto on separate
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.
(S)19. Governing Law; Jurisdiction; Waiver of Jury Trial. This Agreement
----- -------------------------------------------------
shall be governed by the internal laws of The Commonwealth of Massachusetts
(without reference to conflicts of law principles). The Company, to the extent
that it may lawfully do so, hereby consents to service of process, and to be
sued, in The Commonwealth of Massachusetts and consents to the jurisdiction of
the courts of The Commonwealth of Massachusetts and the United States District
Court for the District of Massachusetts, as well as to the jurisdiction of all
courts to which an appeal may be taken from such courts, for the purpose of any
suit, action or other proceeding arising out of this Agreement or any of its
obligations hereunder or with respect to the transactions contemplated hereby,
and expressly waives any and all objections it may have as to venue in any such
courts. The Company further agrees that a summons and complaint commencing an
action or proceeding in any of such courts shall be properly served and shall
confer personal jurisdiction if served personally or by certified mail to it at
its address set forth above or as otherwise provided under the laws of The
Commonwealth of Massachusetts. The Company irrevocably waives all right to a
trial by jury in any suit, action or other proceeding instituted by or against
the Company in respect of its obligations hereunder or the transactions
contemplated hereby.
(S)20. Indemnification. The Company shall indemnify, defend and hold the
----- ---------------
Secured Parties and the Agent harmless of and from any claim brought or
threatened against the Secured Parties and/or the Agent by the Company, any
guarantor or endorser of the Secured Obligations, or any other Person (as well
as from reasonable attorneys' fees and expenses in connection therewith) in
accordance with the Loan Agreement.
(S)21. Specific Performance. The Company stipulates that the remedies of
----- --------------------
the Agent and the Secured Parties at law, in the event of any demand (following
notice to the extent expressly provided herein), or Event of Default by the
Company in the performance of or compliance with any of the terms and provisions
of this Agreement on its part to be observed or performed, are not and will not
be adequate, and that such terms may be specifically enforced by a decree for
the specific performance of any agreement or provision contained herein or by an
injunction against a violation of any of the terms of provisions hereof or
otherwise.
13
IN WITNESS WHEREOF, the parties have executed this Agreement as a sealed
instrument as of the date first above written.
CONSUMER PORTFOLIO SERVICES, INC.
By:
----------------------------------------
(Title)
STATE STREET BANK AND TRUST COMPANY,
for Itself and as Agent
By:----------------------------------------
(Title)
THE STRUCTURED FINANCE HIGH YIELD FUND, LLC
By:----------------------------------------
(Title)
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA
By:----------------------------------------
(Title)
14
