EXHIBIT 10.20
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AMENDED AND RESTATED NOTE PURCHASE AGREEMENT
(CLASS A-1 TERM NOTES AND CLASS A-2 TERM NOTES),
dated as of July 10, 2008,
among
FOLIO FUNDING II, LLC
as Issuer and Purchaser,
CONSUMER PORTFOLIO SERVICES, INC.,
as Seller,
CITIGROUP FINANCIAL PRODUCTS INC.,
as Note Purchaser and Administrative Agent
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AMENDED AND RESTATED NOTE PURCHASE AGREEMENT
THIS AMENDED AND RESTATED NOTE PURCHASE AGREEMENT, dated as of
July 10, 2008 (as further amended, supplemented, restated or otherwise modified
from time to time in accordance with the terms hereof, this "AGREEMENT"), is
made among FOLIO FUNDING II, LLC, a Delaware limited liability company (the
"ISSUER"), CONSUMER PORTFOLIO SERVICES, INC., a California corporation ("CPS" or
the "SELLER"), and CITIGROUP FINANCIAL PRODUCTS INC., a Delaware corporation, as
Note Purchaser (in such capacity, together with any successors in such capacity,
the "NOTE PURCHASER") and Administrative Agent (in such capacity, together with
any successors in such capacity, the "ADMINISTRATIVE AGENT").
BACKGROUND
1. In connection with a securitization transaction, the
Issuer, the Seller, the Note Purchaser and the Administrative Agent have
previously entered into that certain Note Purchase Agreement, dated as of July
11, 2007 (the "ORIGINAL NOTE PURCHASE AGREEMENT").
2. Section 9.01 of the Original Note Purchase Agreement
permits the Issuer, the Seller, the Administrative Agent and the Note Purchaser
to amend the Original Note Purchase Agreement.
3. The Issuer, the Seller, the Note Purchaser and the
Administrative Agent intend to change certain terms of the securitization
transaction and to amend and restate the Original Note Purchase Agreement in its
entirety to, among other things, reflect a prepayment of the Initial Class A-1
Notes (as defined below) in order to reduce the outstanding principal amount of
the Initial Class A-1 Notes to $10,000,000, such prepayment to be comprised of
one or more cash payments and Warrants. For purposes of determining the value of
the Warrants with respect to such prepayment, the value of such shares will be
calculated using the average closing price of CPS common stock for the seven
days prior to the Effective Date.
4. On the Initial Closing Date, the Issuer and Xxxxx Fargo
Bank, National Association, a national banking association, as trustee (together
with its successors in trust thereunder as provided in the Indenture referred to
below, the "TRUSTEE"), entered into the Indenture, dated as of July 11, 2007
(the "ORIGINAL INDENTURE"), pursuant to which the Issuer issued two classes of
notes designated as Class A-1 Variable Funding Notes (the "INITIAL CLASS A-1
NOTES") and Class A-2 Term Notes (the "INITIAL CLASS A-2 NOTES").
5. Contemporaneously with the execution and delivery of this
Agreement, the Original Indenture shall be amended and restated by the parties
thereto (as the same may be further amended, supplemented, restated or otherwise
modified from time to time in accordance with the terms thereof, the
"INDENTURE") in order to provide for, among other things, the amendment and
restatement of the Initial Class A-1 Notes in order to redesignate them as Class
A-1 Term Notes (the "CLASS A-1 NOTES") and the amendment and restatement of the
Initial Class A-2 Term Notes (the "CLASS A-2 NOTES" and, together with the Class
A-1 Notes, the "NOTES").
6. The security for the Notes includes Residual Interest
Assets representing residual interests in securitizations of motor vehicle
retail installment contracts and installment promissory notes. The Notes are
secured by the Residual Interest Assets together with the other Collateral,
which have been pledged by the Issuer to the Trustee pursuant to the Indenture.
7. The Issuer acquired the Residual Interest Assets together
with the other Conveyed Property from CPS pursuant to the Sale and Contribution
Agreement dated as of July 11, 2007 (the "ORIGINAL SALE AND CONTRIBUTION
AGREEMENT"), by and between the Issuer, as purchaser, CPS, as seller (in such
capacity, the "SELLER").
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8. Contemporaneously with the execution and delivery of this
Agreement, the Original Sale and Contribution Agreement shall also be amended
and restated by the parties thereto (as the same may be further amended,
supplemented, restated or otherwise modified from time to time in accordance
with the terms thereof, the "SALE AND CONTRIBUTION AGREEMENT").
9. CPS has joined in this Agreement to confirm certain
representations, warranties and covenants made by it as Seller for the benefit
of the Note Purchaser, the Noteholders and the Administrative Agent.
Now, therefore, in consideration of the foregoing, other good
and valuable consideration, and the mutual covenants and agreements contained
herein, the parties hereto desire to amend and restate the Original Note
Purchase Agreement and agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01 DEFINITIONS. As used in this Agreement and unless the
context requires a different meaning, capitalized terms used but not defined
herein (including the preamble and the recitals hereto) shall have the meanings
assigned to such terms in Annex A hereto. The definitions of such terms are
applicable to the singular as well as the plural form of such terms and to the
masculine as well as the feminine and neuter genders of such terms:
ARTICLE II
PURCHASE AND SALE OF THE NOTES
SECTION 2.01 PURCHASE OF NOTES. On the terms and conditions set forth
in the Original Indenture, the Original Sale and Contribution Agreement and the
Original Note Purchase Agreement, and in reliance on the covenants,
representations and agreements set forth therein, the Issuer issued and caused
the Trustee to authenticate and deliver to the Note Purchaser the Initial Class
A-1 Notes and the Initial Class A-2 Notes on the Initial Funding Date. On the
terms and conditions set forth in the Indenture, the Sale and Contribution
Agreement and this Agreement, and in reliance on the covenants, representations
and agreements set forth herein and therein, the Initial Class A-1 Notes and the
Initial Class A-2 Notes shall be amended and restated as of the Effective Date
and the Issuer shall cause the Trustee to authenticate and deliver to the Note
Purchaser the Notes on the Effective Date. The Notes shall be dated the
Effective Date, registered in the name of the Note Purchaser, and duly
authenticated in accordance with the provisions of the Indenture.
SECTION 2.02 TERM. The term of the Class A-1 Notes (the "CLASS A-1
TERM") shall be for a period commencing on the Initial Closing Date and ending
on the Class A-1 Scheduled Maturity Date. The term of the Class A-2 Notes (the
"CLASS A-2 TERM") shall be for a period commencing on the Initial Closing Date
and ending on the Class A-2 Scheduled Maturity Date. The Class A-1 Term (if the
Class A-1 Invested Amount has not previously been reduced to zero) and the Class
A-2 Term may be extended one time by the Issuer for only an additional twelve
months (a) upon written notice to the Administrative Agent, the Note Purchaser
and the Trustee given not (i) more than 45 days' prior to the Originally
Scheduled Termination Date and (ii) less than 20 days' prior to the Originally
Scheduled Termination Date (such written notice to include an Officer's
Certificate of each of the Issuer and CPS certifying that an Extension Breach
shall not have occurred as of the date of such notice) ("EXTENSION NOTICE"), (b)
upon the payment of a renewal fee in the amount equal to 1.00% of the Aggregate
Invested Amount as of the Originally Scheduled Facility Termination Date, (c) so
long as the following conditions precedent are satisfied on and as of the
Originally Scheduled Facility Termination Date: (i) there shall not have
occurred as of the Originally Scheduled Facility Termination Date any Extension
Breach; (ii) there shall not have occurred since the date of this Agreement a
Material Adverse Change; and (iii) there shall not have occurred since the date
of this Agreement a Material Adverse Effect and (d) if, as of the Originally
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Scheduled Facility Termination Date, neither the Issuer nor CPS has received
notice from the Administrative Agent to the effect that all conditions precedent
set forth in this Section 2.02 have not been satisfied. In addition, if within 5
Business Days after the delivery of the Extension Notice to the Administrative
Agent, the Note Purchaser and the Trustee, the Issuer does not receive a
confirmation from the Administrative Agent that it agrees that no Extension
Breach has occurred as of the date of such Extension Notice, an Extension Breach
shall be deemed to have occurred. Upon the extension of the Class A-1 Term and
the Class A-2 Term pursuant to this Section 2.02, each of the Issuer and CPS
shall be deemed to have made a representation and warranty to the effect that
all conditions precedent to such extension have been satisfied as of the
Originally Scheduled Termination Date.
ARTICLE III
INTEREST AND FEES
SECTION 3.01 INTEREST.
(a) The Class A-1 Notes shall bear interest during each
Interest Period at the Class A-1 Note Interest Rate.
(b) The Class A-2 Notes shall bear interest during each
Interest Period at the Class A-2 Note Interest Rate.
(c) Interest on the Notes with respect to each Interest Period
shall be due and payable on the Settlement Date occurring immediately subsequent
to such Interest Period in accordance with the provisions of the Indenture.
All computations of interest shall be made on the basis of a
year of 360 days and the actual number of days elapsed. Whenever any payment of
interest on or principal of any Note shall be due on a day other than a Business
Day, such payment shall be made on the next succeeding Business Day and such
extension of time shall be included in the computation of the amount of interest
owed.
SECTION 3.02 FEES.
(a) The Issuer and the Seller shall jointly and severally pay
or cause to be paid to the reasonable out-of-pocket expenses of the Note
Purchaser and the Administrative Agent, including legal fees and disbursements,
in accordance with and subject to SECTION 9.05. In addition, the Issuer shall
pay or cause to be paid to the Administrative Agent a monthly fee equal to
$2,083 (the "ADMINISTRATIVE AGENT FEE") pursuant to SECTION 8.5 of the
Indenture, and when applicable, pursuant to Section 5.7 of the Indenture.
(b) If the Issuer prepays the Notes in whole or in part on or
prior to the date which is 45 days prior to the Class A-2 Facility Termination
Date, the Issuer shall pay or cause to be paid to the Noteholders a prepayment
fee equal to 2.00% of the Invested Amount so prepaid (any such prepayment fee,
an "PREPAYMENT Fee"). For the avoidance of doubt, the payment of the Required
Noteholders' Principal Distributable Amount on any Settlement Date shall not
constitute a prepayment for purposes of this Section.
SECTION 3.03 INCREASED COSTS, ETC. The Issuer agrees to reimburse the
Note Purchaser for an increase in the cost of, or any reduction in the amount of
any sum receivable by the Note Purchaser, including reductions in the rate of
return on the Note Purchaser's capital, in respect of the Notes that arise in
connection with any change in, or the introduction, adoption, effectiveness,
interpretation reinterpretation or phase-in, in each case, after the Initial
Funding Date, of any law or regulation, directive, guideline, decision or
request (whether or not having the force of law) of any court, central bank,
regulator or other Governmental Authority, except for such changes with respect
to increased capital costs and taxes which are governed by SECTIONS 3.05 and
3.06, respectively. Each such demand shall be provided to the Issuer in writing
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and shall state, in reasonable detail, the reasons therefor and the additional
amount required fully to compensate the Note Purchaser for such increased cost
or reduced amount or return.
SECTION 3.04 FUNDING LOSSES. The Issuer agrees to indemnify each Party
and to hold each Party harmless from any loss or reasonable expense (to the
extent not otherwise paid as interest on the Notes) which such Party may sustain
or incur as a consequence of the making of a principal payment with respect to a
Note on a day that is not a Settlement Date or the making of any prepayment with
respect to a Note with less than five (5) days prior written notice. This
covenant shall survive the termination of this Note Purchase Agreement and the
payment of all other amounts payable hereunder.
SECTION 3.05 INCREASED CAPITAL COSTS. If any change in, or the
introduction, adoption, effectiveness, interpretation or reinterpretation or
phase-in, in each case after the date hereof, of any law or regulation,
directive, guideline, decision or request (whether or not having the force of
law) of any court, central bank, regulator or other Governmental Authority
affects or would affect the amount of capital required or reasonably expected to
be maintained by the Note Purchaser or any Person controlling the Note Purchaser
and the Note Purchaser reasonably determines that the rate of return on its or
such controlling Person's capital as a consequence of its commitment is reduced
to a level below that which the Note Purchaser or such controlling Person would
have achieved but for the occurrence of any such circumstance, then, in any such
case after notice from time to time by the Note Purchaser to the Issuer, the
Issuer shall pay to the Note Purchaser an incremental commitment fee sufficient
to compensate the Note Purchaser or such controlling Person for such reduction
in rate of return.
SECTION 3.06 TAXES. All payments by the Issuer of principal of, and
interest on, the Notes and all other amounts payable hereunder (including fees)
shall be made free and clear of and without deduction for any present or future
income, excise, stamp or franchise taxes and other taxes, fees, duties,
withholdings or other charges of any nature whatsoever imposed by any taxing
authority, but excluding in the case of the Note Purchaser, taxes imposed on or
measured by its overall net income, overall receipts or overall assets and
franchise taxes imposed on it by the jurisdiction in which the Note Purchaser is
organized or is operating or any political subdivision thereof, in each case
other than as a result of its entering into the Basic Documents (such
non-excluded items being called "TAXES"). In the event that any withholding or
deduction from any payment to be made by the Issuer hereunder is required in
respect of any Taxes pursuant to any applicable law, rule or regulation, then
the Issuer will:
(a) pay directly to the relevant authority the full amount
required to be so withheld or deducted;
(b) promptly forward to the Note Purchaser or its agent an
official receipt or other documentation evidencing such payment to such
authority; and
(c) pay to the Note Purchaser or its agent such additional
amount or amounts as is necessary to ensure that the net amount actually
received by the Note Purchaser will equal the full amount the Note Purchaser
would have received had no such withholding or deduction been required.
Moreover, if any Taxes are directly asserted against the Note
Purchaser with respect to any payment received by the Note Purchaser or its
agent, the Note Purchaser or such agent may pay such Taxes and the Issuer will
promptly upon receipt of prior written notice stating the amount of such Taxes
pay such additional amounts (including any penalties, interest or expenses) as
is necessary in order that the net amount received by such person after the
payment of such Taxes (including any Taxes on such additional amount) shall
equal the amount the Note Purchaser would have received had not such Taxes been
asserted. The Note Purchaser shall make all reasonable efforts to avoid the
imposition of any Taxes that would give rise to an additional payment under this
SECTION 3.06.
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In addition, the Issuer, agrees to pay, and authorizes the
Administrative Agent to pay in its name, any stamp, documentary, excise or
property tax, charges or similar levies imposed by any applicable Requirement of
Law or Governmental Authority and all Liabilities with respect thereto
(including by reason of any delay in payment thereof), in each case arising from
the execution, delivery or registration of, or otherwise with respect to, any
Basic Document or any transaction contemplated therein, but excluding in the
case of the Note Purchaser, taxes imposed on or measured by its overall net
income, overall receipts or overall assets and franchise taxes imposed on it by
the jurisdiction in which the Note Purchaser is organized or is operating or any
political subdivision thereof (such non-excluded items being called,
collectively, "OTHER TAXES").
The Issuer shall reimburse and indemnify, within 30 days after
receipt of demand therefor (with copy to the Administrative Agent), each Note
Purchaser for all Taxes and Other Taxes (including any Taxes and Other Taxes
imposed by any jurisdiction on amounts payable under this Section) paid by such
Note Purchaser and any Liabilities arising therefrom or with respect thereto,
whether or not such Taxes or Other Taxes were correctly or legally asserted. A
certificate of the Note Purchaser (or of the Administrative Agent on behalf of
such Note Purchaser) claiming any compensation under this clause, setting forth
the amounts to be paid thereunder and delivered to the Issuer with copy to the
Administrative Agent, shall be conclusive, binding and final for all purposes,
absent manifest error. In determining such amount, the Administrative Agent and
such Note Purchaser may use any reasonable averaging and attribution methods.
If the Issuer fails to pay any Taxes when due to the
appropriate taxing authority or fails to remit to the Note Purchaser or its
agent the required receipts or other required documentary evidence, the Issuer
shall indemnify the Note Purchaser and its agent, if any, for any incremental
Taxes, interest or penalties that may become payable by the Note Purchaser or
its agent as a result of any such failure. For purposes of this SECTION 3.06, a
distribution hereunder by the agent for the Note Purchaser shall be deemed a
payment by the Issuer.
Upon the request of the Issuer, the Note Purchaser, if it is
organized under the laws of a jurisdiction other than the United States, shall,
prior to the initial due date of any payments hereunder and to the extent
permissible under then current law, execute and deliver to the Issuer on or
about the first scheduled payment date in each calendar year thereafter, one or
more (as the Issuer may reasonably request) United States Internal Revenue
Service Forms W-8ECI or Forms W-8BEN or such other forms or documents (or
successor forms or documents), appropriately completed, as may be applicable to
establish the extent, if any, to which a payment to the Note Purchaser is exempt
from withholding or deduction of Taxes. The Issuer shall not, however, be
required to pay any increased amount under this SECTION 3.06 to the Note
Purchaser if the Note Purchaser fails to comply with the requirements set forth
in this paragraph.
SECTION 3.07 DETERMINATION OF MARKET VALUE; MANDATORY PREPAYMENT. On
any Business Day, (i) if the Aggregate Invested Amount of the Notes is equal to
or greater than $65 million, (ii) upon and subsequent to the occurrence of any
Event of Default or Principal Coverage Ratio Violation, (iii) upon and
subsequent to a Shadow Rating Failure or (iv) upon the occurrence of any of the
events set forth in Section 10(b) of the Warrant (each such Business Day, a
"VALUATION DATE"), the Administrative Agent will have the right to value the
Pledged Residual Interest Certificates on a xxxx-to-market basis. On any
Valuation Date, on which (i) a Collateral Deficiency exists, (ii) the Aggregate
Invested Amount of the Notes is equal to or greater than $65 million and (iii)
there shall not have occurred on or prior to such date an Event of Default, a
Principal Coverage Ratio Violation, a Shadow Rating Failure or any of the events
set forth in Section 10(b) of the Warrant, the Issuer shall, not later than ten
Business Days after its receipt of notice from the Administrative Agent of such
Collateral Deficiency, prepay the Aggregate Invested Amount of the Notes
sequentially by an amount equal to such Collateral Deficiency. On any other
Valuation Date, in the event a Collateral Deficiency exists on such Valuation
Date, the Issuer shall, not later than one Business Day after its receipt of
notice from the Administrative Agent of such Collateral Deficiency, prepay the
Aggregate Invested Amount of the Notes by an amount equal to such Collateral
Deficiency. For the avoidance of doubt, the Administrative Agent shall have the
right in its sole discretion, absent manifest error, to determine whether a
Principal Coverage Ratio Violation has occurred and to calculate the Class A
Principal Coverage Ratio and the Collateral Deficiency.
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SECTION 3.08 ILLEGALITY; SUBSTITUTED INTEREST RATES. Notwithstanding
any other provisions herein, (a) if any Requirement of Law or any change therein
or in the interpretation or application thereof shall make it unlawful for the
Note Purchaser to make or maintain any Notes at the LIBOR rate as contemplated
by this Agreement, or (b) in the event that the Note Purchaser shall have
determined (which determination shall be conclusive and binding upon the Issuer)
that by reason of circumstances affecting the LIBOR interbank market neither
adequate nor reasonable means exist for ascertaining the LIBOR rate, or (c) the
Note Purchaser shall have determined (which determination shall be conclusive
and binding on the Issuer) that the applicable LIBOR rate will not adequately
and fairly reflect the cost to the Note Purchaser of maintaining or funding the
Notes based on such applicable LIBOR rate (provided that the parties hereto
acknowledge and agree that the Note Purchaser shall only make such determination
if the published LIBOR rate used by the Note Purchaser does not accurately
reflect the actual LIBOR rate), (x) the obligation of the Note Purchaser to make
or maintain the Notes at the LIBOR rate shall forthwith be suspended and the
Note Purchaser shall promptly notify the Issuer thereof (by telephone confirmed
in writing) and (y) each Note then outstanding, if any, shall, from and
including the date that is forty-five (45) days after the Issuer's receipt of
notice from the Note Purchaser of the occurrence of any condition set forth in
clauses (a), (b) or (c), or at such earlier date as may be required by law,
until payment in full thereof, bear interest at the rate per annum equal to the
greater of (i) the Prime Rate and (ii) the rate of interest (including the
Applicable Margin) in effect on the date immediately preceding the date any
event described in clause (a), (b) or (c) occurred (calculated on the basis of
the actual number of days elapsed in a year of 360 days). If subsequent to such
suspension of the obligation of the Note Purchaser to make or maintain the Notes
at the LIBOR rate it becomes lawful for the Note Purchaser to make or maintain
the Notes at the LIBOR rate, or the circumstances described in clause (b) or (c)
above no longer exist, the Note Purchaser shall so notify the Issuer and its
obligation to do so shall be reinstated effective as of the date it becomes
lawful for the Note Purchaser to make or maintain the Notes at the LIBOR rate or
the circumstances described in clause (b) or (c) above no longer exist.
ARTICLE IV
OTHER PAYMENT TERMS
SECTION 4.01 TIME AND METHOD OF PAYMENT. All amounts payable to the
Note Purchaser hereunder or with respect to the Notes shall be made by wire
transfer of immediately available funds in Dollars not later than 4:00 p.m., New
York City time, on the date due. Any funds received after that time will be
deemed to have been received on the next Business Day.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
SECTION 5.01 REPRESENTATIONS AND WARRANTIES OF THE ISSUER. (I) The
Issuer made certain representations and warranties, on which (i) the Note
Purchaser relied in purchasing the Notes, (ii) the Trustee relied in receiving a
security interest in the Residual Interest Assets and the other Collateral
related thereto under the Indenture and (iii) the Administrative Agent and the
Note Purchaser relied in executing the Original Note Purchase Agreement on the
Initial Closing Date. Such representations and warranties were made as of the
Initial Closing Date, as of the Initial Funding Date and as of each Funding Date
after the Initial Funding Date. In addition, the Issuer will make the following
representations and warranties as of the Effective Date and as of each
Settlement Date (other than Section 5.01(I)(l)), on which (i) the Administrative
Agent and the Note Purchaser relied in executing this Agreement on the Effective
Date and (ii) the Trustee relied in executing the Indenture on the Effective
Date.
(a) SALE AND CONTRIBUTION AGREEMENT. Each of the
representations and warranties of the Purchaser set forth in the Sale and
Contribution Agreement is true and correct.
(b) OTHER OBLIGATIONS. The Issuer is not in default in the
performance, observance or fulfillment of any obligation, covenant or condition
in any of the Basic Documents to which it is a party or in any other agreement
or instrument to which it is a party or by which it is bound.
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(c) NO PUBLIC OFFERING OF THE NOTES. Neither the Issuer nor,
to the best of the Issuer's knowledge after due inquiry, anyone acting on the
Issuer's behalf, has offered, pledged, sold or otherwise disposed of any Note or
any interest therein or solicited any offer to buy or accept a transfer, pledge
or other disposition of any Note or any interest therein or otherwise approached
or negotiated with respect to any Note or any interest therein, with any person
in any manner, or made any general solicitation by means of general advertising
or in any other manner, or taken any other action, which would constitute a
public distribution of the Notes under the Securities Act, or which would render
the disposition of any Note a violation of Section 5 of the Securities Act or
any State securities laws, or require registration or qualification pursuant
thereto.
(d) NO REGISTRATION UNDER THE SECURITIES ACT. Assuming the
Note Purchaser is not purchasing the Notes with a view toward further
distribution and that the Note Purchaser has not engaged in any general
solicitation or general advertising within the meaning of the Securities Act,
the offer and sale of the Notes in the manner contemplated by this Agreement is
a transaction exempt from the registration requirements of the Securities Act,
and the Indenture is not required to be qualified under the Trust Indenture Act.
(e) REGULATIONS T, U AND X. No proceeds of any Note will be
used, directly or indirectly, by the Issuer for the purpose of purchasing or
carrying any Margin Stock (as defined in Regulation U of the Board of Governors
of the Federal Reserve System) or for the purpose of reducing or retiring any
indebtedness that was originally incurred to purchase or carry Margin Stock or
for any other purpose which might cause any Note to be a "purpose credit" within
the meaning of Regulation U. The use of the proceeds from any Note will not
violate or otherwise conflict with the provisions of Regulations T, U or X of
the Board of Governors of the Federal Reserve System.
(f) INVESTMENT COMPANY STATUS. The Issuer is not, nor will the
consummation of the transactions contemplated by the Basic Documents cause the
Issuer to be, an "investment company" or an "affiliated person" of, or
"promoter" or "principal underwriter" for, an "investment company," as such
terms are defined in the Investment Company Act of 1940, as amended (the
"INVESTMENT COMPANY ACT"), or a company "controlled" by an investment company
within the meaning of the Investment Company Act. The consummation of the
transactions contemplated by the Basic Documents will not violate any provision
of the Investment Company Act or any rule, regulation or order issued by the
Securities and Exchange Commission thereunder. The Issuer is not subject to
regulation under any applicable law (other than Regulation X of the Board of
Governors of the Federal Reserve System) that limits its ability to incur
Indebtedness.
(g) FULL DISCLOSURE. The information, reports, financial
statements, exhibits, schedules, officer's certificates and other documents
furnished by or on behalf of the Issuer to the Seller, the Note Purchaser, the
Administrative Agent or the Trustee in connection with the negotiation,
preparation, delivery or performance of this Agreement, the Notes, the
Indenture, the Sale and Contribution Agreement and the other Basic Documents or
included herein or therein or delivered pursuant hereto or thereto, taken as a
whole, are true and correct (or, in the case of projections, are based on good
faith reasonable estimates) on the date as of which such information is stated
or certified and do not and will not contain an untrue statement of a material
fact, or omit to state any material fact necessary to make the statements herein
or therein contained, in the light of the circumstances under which they were
made, not misleading. All such financial statements fairly present the financial
condition of the Issuer as of the date specified therein (subject to normal
year-end audit adjustments) all in accordance with GAAP.
(h) COLLATERAL SECURITY.
(i) The Issuer owns and will own, and has and will
have good title to each item that it pledges as Collateral, free and
clear of any and all Liens (including, without limitation, any tax
liens), other than Liens created in favor of the Trustee pursuant to
the Indenture or Liens that are released immediately prior to such
pledge.
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(ii) The Indenture is effective to create, as
collateral security for the Notes, a valid and enforceable Lien on the
Collateral in favor of the Trustee. No security agreement, financing
statement or other public notice similar in effect with respect to all
or any part of the Collateral is or will be on file or of record in any
public office, except such as have been or may hereinafter be filed
pursuant to this Agreement evidencing the Issuer Secured Parties' first
priority Lien therein, or except such as shall be terminated as to the
Collateral no later than immediately prior to the pledge of such
Collateral to the Trustee in favor of the Issuer Secured Parties under
this Agreement.
(iii) Upon filing of the financing statement
delivered to the Administrative Agent and the Trustee by the Issuer on
or prior to the Initial Funding Date with the Secretary of State of the
State of Delaware (which financing statement was in proper form for
filing in such jurisdiction and accurately described the Collateral),
the Lien created pursuant to the Indenture constituted, and such Lien
currently constitutes a perfected security interest in the Collateral
in favor of the Trustee for the benefit of the Issuer Secured Parties,
which Lien is and will be prior to all other Liens of all other Persons
that may be perfected by filing a financing statement under Article 9
of the Uniform Commercial Code and which Lien is enforceable as such as
against all other Persons.
(iv) Upon delivery of Residual Interest Certificates
to the Trustee in accordance with Section 2.1(a) of the Sale and
Contribution Agreement, the Lien created pursuant to the Indenture
constituted, and such Lien currently constitutes, a perfected security
interest in such Residual Interest Certificates in favor of the Trustee
for the benefit of the Issuer Secured Parties, which Lien is and will
be prior to all other Liens of all other Persons that may be perfected
by possession of such Residual Interest Certificates under Article 9 of
the Uniform Commercial Code and which Lien is enforceable as such as
against all other Persons.
(i) NO DEFAULT OR EVENT OF DEFAULT. No Default or Event of
Default has occurred and is continuing.
(j) OWNERSHIP OF PROPERTIES. The Issuer has good and
marketable title to any and all of its properties and assets, subject only to a
Lien under the Indenture.
(k) LEGAL COUNSEL, ETC. The Issuer has consulted with its own
legal counsel and independent accountants to the extent it has deemed necessary
regarding the tax, accounting and regulatory consequences of the transactions
contemplated by this Agreement and the other Basic Documents, and the Issuer is
not participating in such transactions in reliance on any representations of the
Note Purchaser, the Administrative Agent or their respective Affiliates, or its
counsel, with respect to tax, accounting, regulatory or any other matters.
(l) BASIC DOCUMENTS. The Issuer has furnished to the Note
Purchaser true, accurate and complete copies of all other Basic Documents to
which it is a party as of the Closing Date, all of which Basic Documents are in
full force and effect as of the Closing Date and no terms of any such agreements
or documents have been amended, modified or otherwise waived as of such date. No
party to any Basic Document is in default under any of its obligations
thereunder.
(m) RESIDUAL INTEREST CERTIFICATES. Each Residual Interest
Certificate was issued pursuant to an Eligible Committed Securitization.
(n) NO FRAUDULENT CONVEYANCE. As of the Initial Funding Date
and as of each Funding Date, the fair value of the assets of the Issuer was
greater than the fair value of its liabilities (including, without limitation,
contingent liabilities of the Issuer), and the Issuer was, is and will be
solvent, does and will pay its debts as they mature and does not and will not
have an unreasonably small capital to engage in the business in which it is
engaged and proposes to engage. The Issuer does not intend to incur, or believe
that it has incurred, debts beyond its ability to pay such debts as they mature.
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The Issuer is not in default under any material obligation to pay money to any
Person. The Issuer is not contemplating the commencement of insolvency,
bankruptcy, liquidation or consolidation proceedings or the appointment of a
receiver, liquidator, conservator, trustee or similar official in respect of the
Issuer or any of its assets. The Issuer has not transferred any Collateral with
any intent to hinder, delay or defraud any of its creditors. The Issuer has not
used, and will not use, the proceeds from the transactions contemplated by this
Agreement or any other Basic Document to give any preference to any creditor or
class of creditors. The Issuer has given fair consideration and reasonably
equivalent value in exchange for the sale of the Residual Interest Assets by CPS
under the Sale and Contribution Agreement.
(o) NO OTHER BUSINESS. The Issuer engages in no business
activities other than the purchase of the Residual Interest Assets, pledging the
Collateral to the Trustee under the Indenture, transferring Residual Interest
Assets in connection with securitizations or third-party sales, issuing the
Notes and other activities relating to the foregoing to the extent permitted by
the organizational documents of the Issuer as in effect on the date such
activity is engaged in, or as amended with the prior written consent of the
Administrative Agent. Without limitation of the foregoing, the Issuer is not an
issuer of securities other than the Notes or a borrower under any loan or
financing agreement, facility or other arrangement other than the facility
established pursuant to this Agreement and the other Basic Documents.
(p) NOTES ENTITLED TO BENEFIT OF THE INDENTURE. The Notes
purchased by the Note Purchaser hereunder will be entitled to the benefit of the
security provided in the Indenture.
(q) NO INDEBTEDNESS. The Issuer has no Indebtedness, other
than Indebtedness incurred under (or contemplated by) the terms of the Basic
Documents.
(r) ERISA. The Issuer does not maintain any Plans, and the
Issuer agrees to notify the Administrative Agent in advance of forming any
Plans. Neither the Issuer nor any Affiliate of the Issuer (other than MFN under
the MFN Financial Corporation Pension Plan and CPS under its defined
contribution (401(k)) plan) has any obligations or liabilities with respect to
any Plans or Multiemployer Plans, nor have any such Persons had any obligations
or liabilities with respect to any such Plans during the five year period prior
to the date this representation is made or deemed made. The Issuer will give
written notice to the Administrative Agent if at any time it or any Affiliate
has any obligations or liabilities with respect to any Plan or Multiemployer
Plan. All Plans maintained by the Issuer or any Affiliate are in substantial
compliance with all applicable laws (including ERISA). The Issuer is not an
employer under any Multiemployer Plan.
(s) OWNERSHIP OF ISSUER. CPS owns beneficially and of record
100% of membership interests in the Issuer free and clear of all Liens. The
Issuer is a disregarded entity for federal income tax purposes and no election
has been made or will be made to treat the Issuer as a corporation or an
association taxable as a corporation for federal income tax purposes. Each
Residual Interest Certificate represents an interest in a Trust with respect to
which an opinion of counsel was rendered that such Trust is not taxable as a
corporation for federal income tax purposes and to the Issuer's knowledge such
opinion is still correct.
(II) In addition to the representations and warranties set
forth in Section 5.01(I) above, the Issuer makes the following representations
and warranties on which each of the Note Purchaser, the Administrative Agent and
the Trustee are relying upon in entering in the Basic Documents as of the
Effective Date (other than Section 5.01(I)(l) and Section 5.01(II)(b)). In
addition, the Issuer will make the following representations and warranties as
of each Settlement Date.
(a) MAINTENANCE OF SECURITY INTEREST. All financing statements
and continuation statements and amendments thereto, if any, have been executed
and filed that are necessary to continue and maintain the perfection of the
first priority security interest of the Trustee for the benefit of the Issuer
Secured Parties in the Collateral and their proceeds.
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(b) NO PRINCIPAL COVERAGE RATIO VIOLATION. Except as otherwise
disclosed to the Administrative Agent on the Settlement Date Statement relating
to any Settlement Date, no Principal Coverage Ratio Violation has occurred.
(c) BASIC DOCUMENTS. The Issuer has furnished to the Note
Purchaser true, accurate and complete copies of all other Basic Documents to
which it is a party as of the Effective Date, all of which Basic Documents are
in full force and effect as of the Effective Date and no terms of any such
agreements or documents have been amended, modified or otherwise waived as of
such date. No party to any Basic Document is in default under any of its
obligations thereunder.
SECTION 5.02 REPRESENTATIONS AND WARRANTIES OF CPS. (I) CPS made
certain representations and warranties, on which the Issuer relied in purchasing
the Residual Interest Assets, on which the Note Purchaser relied in purchasing
the Notes, on which the Note Purchaser and the Administrative Agent relied in
executing the Original Note Purchase Agreement and on which the Trustee relied
in executing the Original Indenture. Such representations and warranties were
made as of the Initial Closing Date and as of each Funding Date after the
Initial Funding Date. In addition, CPS will make the following representations
and warranties as of the Effective Date and as of each Settlement Date, on which
(i) the Administrative Agent and the Note Purchaser relied in executing this
Agreement on the Effective Date and (ii) the Trustee relied in executing the
Indenture on the Effective Date.
(a) SALE AND CONTRIBUTION AGREEMENT. Each of the
representations and warranties of the Seller in the Sale and Contribution
Agreement is true and correct.
(b) INVESTMENT COMPANY STATUS. CPS is not, nor will the
consummation of the transactions contemplated by the Basic Documents cause CPS
to be, an "investment company" or an "affiliated person" of, or "promoter" or
"principal underwriter" for, an "investment company," as such terms are defined
in the Investment Company Act or a company "controlled by" an investment company
within the meaning of the Investment Company Act. The consummation of the
transactions contemplated by this Agreement and each other Basic Document to
which CPS is a party will not violate any provision of such Act or any rule,
regulation or order issued by the Securities and Exchange Commission thereunder.
CPS is not subject to regulation under any applicable law (other than Regulation
X of the Board of Governors of the Federal Reserve System) that limits its
ability to incur Indebtedness.
(c) NO MATERIAL ADVERSE EFFECT; NO DEFAULT. (i) Neither CPS
nor any of its Affiliates is a party to any indenture, loan or credit agreement
or any lease or other agreement or instrument or subject to any charter or
corporate restriction that could have, and no provision of applicable law or
governmental regulation has had or could reasonably be expected to have a
Material Adverse Effect and (ii) neither CPS nor any of its Affiliates is in
default under or with respect to any contract, agreement, lease or other
instrument to which CPS or any of its Affiliates is a party and which is
material to CPS's or such Affiliate's condition (financial or otherwise),
business, operations or properties, and neither CPS nor any of its Affiliates
has delivered or received any notice of default thereunder, other than such
defaults as have been waived.
(d) REPRESENTATIONS AND WARRANTIES OF CPS UNDER BASIC
DOCUMENTS. Each representation and warranty made by it in each Basic Document to
which it is a party (including any representation and warranties made by it as
Seller) is true and correct as of the date originally made, as of the Initial
Funding Date, as of each Funding Date, as of the Effective Date and as of each
Settlement Date.
(e) NO PUBLIC OFFERING OF NOTES. Neither CPS nor, to the best
of CPS's knowledge after due inquiry, anyone acting on CPS's behalf, has
offered, transferred, pledged, sold or otherwise disposed of any Note or any
interest therein, or solicited any offer to buy or accept a transfer, pledge or
other disposition of any Note or any interest therein or otherwise approached or
negotiated, with respect to any Note or any interest therein, with any person in
any manner, or made any general solicitation by means of general advertising or
in any other manner, or taken any other action, which would constitute a public
distribution of the Notes under the Securities Act, or which would render the
disposition of any Note a violation of Section 5 of the Securities Act or any
state securities laws, or require registration or qualification pursuant
thereto.
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(f) REGULATIONS T, U AND X. No proceeds of any sale hereunder
will be used, directly or indirectly, by CPS for the purpose of purchasing or
carrying any Margin Stock (as defined in Regulation U of the Board of Governors
of the Federal Reserve System) or for the purpose of reducing or retiring any
indebtedness that was originally incurred to purchase or carry Margin Stock or
for any other purpose which might cause any sale hereunder to be a "purpose
credit" within the meaning of Regulation U. The use of the proceeds from the
issuance of the Notes will not violate or otherwise conflict with the provisions
of Regulations T, U or X of the Board of Governors of the Federal Reserve
System.
(g) SECURITY INTEREST. Notwithstanding the intent of the
parties set forth in Section 6.3 of the Sale and Contribution Agreement, the
Sale and Contribution Agreement is effective to create valid and enforceable
Liens on the Conveyed Property in favor of the Issuer. Upon filing of the
financing statement delivered to the Administrative Agent and the Trustee by CPS
on or prior to the Initial Funding Date in each jurisdiction (including, without
limitation, the State of California) in which required by applicable law (which
financing statement was in proper form for filing in each such jurisdiction and
accurately describes the Collateral), the Lien created pursuant to the Sale and
Contribution Agreement constituted, and such Lien currently constitutes a first
priority perfected security interest in the Conveyed Property in favor of the
Issuer, which Lien is and will be prior to all other Liens and which Lien is
enforceable as such as against all Persons.
(h) FULL DISCLOSURE. The information, reports, financial
statements, exhibits, schedules, officer's certificates and other documents
furnished by or on behalf of CPS, the Seller or any of their respective
Affiliates to the Issuer, the Purchaser, the Note Purchaser, the Administrative
Agent or the Trustee in connection with the negotiation, preparation, delivery
or performance of the Original Note Purchase Agreement, the Initial Class A-1
Notes, the Initial Class A-2 Notes, the Original Sale and Contribution
Agreement, the Original Indenture and the other Basic Documents or included
herein or therein or delivered pursuant hereto or thereto, taken as a whole, are
true and correct in every material respect (or, in the case of projections, are
based on good faith reasonable estimates) on the date as of which such
information is stated or certified and do not and will not contain an untrue
statement of a material fact, or omit to state any material fact necessary to
make the statements herein or therein contained, in the light of the
circumstances under which they were made, not misleading. All such financial
statements fairly present the financial condition of CPS or such Affiliates as
of the date specified therein (subject to normal year-end audit adjustments) all
in accordance with GAAP. On such date, neither CPS nor any of its Affiliates had
any material contingent liabilities, liabilities for taxes, or unusual or
anticipated losses from any unfavorable commitments, except as referred to or
reflected in such financial statements as of such date. There is no fact known
to CPS or any of its Affiliates, after due inquiry, that could reasonably be
expected to have a Material Adverse Effect and that has not been disclosed
herein, in the other Basic Documents or in a report, financial statement,
exhibit, schedule, disclosure letter or other writing furnished to the Note
Purchaser or the Administrative Agent for use in connection with the
transactions contemplated hereby or thereby.
(i) ERISA. Neither CPS nor any of its Affiliates maintain any
Plans (other than CPS's defined contribution (401(k)) plan and the MFN Financial
Corporation Pension Plan), and CPS agrees to notify the Administrative Agent in
writing in advance of forming any Plans. Neither CPS nor any of its Affiliates
has any obligations or liabilities with respect to any Plans or Multiemployer
Plans (other than CPS's defined contribution (401(k)) plan and the MFN Financial
Corporation Pension Plan), nor have any such Persons had any obligations or
liabilities with respect to any such Plans during the five year period prior to
the date this representation is made or deemed made. CPS will give prior written
notice to the Administrative Agent if at any time it or any Affiliate has any
obligations or liabilities with respect to any Plan or Multiemployer Plan. All
Plans maintained by CPS or any of its Affiliates are in substantial compliance
with all applicable laws (including ERISA). CPS is not an employer under any
Multiemployer Plan.
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(j) [RESERVED].
(k) [RESERVED].
(l) Each of CPS and its Affiliates is in compliance in all
material respects with all agreements to which it is bound under all applicable
ABS Issuance Agreements. The Issuer has made available to the Administrative
Agent true and complete copies of all ABS Issuance Agreements and related
transaction and other closing documents. Each party to the applicable ABS
Issuance Agreements has performed in all material respects all of its respective
obligations thereunder, and there is no pending or threatened cancellation of
any ABS Issuance Agreement, and neither CPS nor any of its Affiliates has
received any notice to the effect that any party to any ABS Issuance Agreement
intends to cease doing business with CPS or any of its Affiliates.
(m) Neither CPS nor any of its Affiliates, including any
issuer or depositor in any Securitization (a "SECURITIZATION ISSUER"), and no
servicer with respect to a Securitization, has taken any action which would
cause any trust, corporation, partnership or other entity ("SECURITIZATION
ENTITY") to be registered as an investment company pursuant to the Investment
Company Act, or which would cause any Securitization Entity to be "controlled
by" an investment company within the meaning of the Investment Company Act.
(n) Each Securitization Issuer and each servicer with respect
to a Securitization has made all filings required to be made by or under the
Securities Exchange Act of 1934, as amended. There is no pending or threatened
claim that any private placement memorandum or other offering document, or any
amendments or supplements thereto contained, as of the date on which it was
issued by a Securitization Entity in any Securitization, any untrue statement of
a material fact or omitted to state any material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. No securities were
issued or sold by CPS or any of its Affiliates in violation of Section 5 of the
Securities Act of 1933, as amended, in any Securitization.
(o) No Securitization Issuer, no depositor or servicer with
respect to a Securitization and no entity serving as trustee for any
Securitization has taken any action which would adversely affect the
characterization or tax treatment for federal, state or local income or
franchise tax purposes of any Securitization Entity or any securities issued in
a Securitization, and all required federal, state and local tax and information
returns relating to any Securitization have been properly filed.
(p) Since June 30, 2007, no rating agency has downgraded, or
given the CPS any indication that it is considering a downgrading of any
securities issued in any Securitization Transaction that has not been disclosed
in writing to the Administrative Agent, other than a downgrade resulting solely
from a downgrade in the rating of the related monoline insurer.
(q) Except as would not, individually or in the aggregate,
reasonably be expected to result in a Material Adverse Effect, neither CPS nor
any of its Affiliates has done or failed to do, or has caused to be done or
omitted to be done, any act, the effect of which would operate to invalidate or
materially impair (x) any approvals of any rating agency, insurer, investor or
other party to any ABS Issuance Agreement, or (y) any fidelity bond, direct
surety bond, or errors and omissions insurance policy required by any agency,
insurer or investor, or other party to any ABS Issuance Agreement.
(r) Each Transferred Residual Interest Certificate and each
Pledged Residual Interest Certificate are substantially the form of the Residual
Interest Certificates transferred by CPS to the Issuer and pledged by the Issuer
to the Trustee, for the benefit of the Issuer Secured Parties, on the Initial
Funding Date and on each Funding Date.
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(II) In addition to the representations and warranties set
forth in Section 5.02(I) above, CPS makes the following representations and
warranties on which each of the Note Purchaser, the Administrative Agent and the
Trustee are relying upon in entering in the Basic Documents as of the Effective
Date. In addition, CPS will make the following representations and warranties as
of each Settlement Date.
(a) MAINTENANCE OF SECURITY INTEREST. As of the Effective Date
and as of each Settlement Date, all financing statements and continuation
statements and amendments thereto have been executed and filed that are
necessary to continue and maintain the perfection of the first priority security
interest of the Issuer in the Conveyed Property.
(b) FULL DISCLOSURE. The information, reports, financial
statements, exhibits, schedules, officer's certificates and other documents
furnished by or on behalf of CPS, the Seller or any of their respective
Affiliates to the Issuer, the Purchaser, the Note Purchaser, the Administrative
Agent or the Trustee in connection with the negotiation, preparation, delivery
or performance of this Agreement, the Class A-1 Notes, the Class A-2 Notes, the
Sale and Contribution Agreement, the Indenture and the other Basic Documents or
included herein or therein or delivered pursuant hereto or thereto, taken as a
whole, are true and correct in every material respect (or, in the case of
projections, are based on good faith reasonable estimates) on the date as of
which such information is stated or certified and do not and will not contain an
untrue statement of a material fact, or omit to state any material fact
necessary to make the statements herein or therein contained, in the light of
the circumstances under which they were made, not misleading. All such financial
statements fairly present the financial condition of CPS or such Affiliates as
of the date specified therein (subject to normal year-end audit adjustments) all
in accordance with GAAP. On such date, neither CPS nor any of its Affiliates had
any material contingent liabilities, liabilities for taxes, or unusual or
anticipated losses from any unfavorable commitments, except as referred to or
reflected in such financial statements as of such date. There is no fact known
to CPS or any of its Affiliates, after due inquiry, that could reasonably be
expected to have a Material Adverse Effect and that has not been disclosed
herein, in the other Basic Documents or in a report, financial statement,
exhibit, schedule, disclosure letter or other writing furnished to the Note
Purchaser or the Administrative Agent for use in connection with the
transactions contemplated hereby or thereby.
SECTION 5.03 REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE NOTE
PURCHASER. The Note Purchaser hereby covenants to the Issuer and the Seller that
it will perform the obligations required of it under the Basic Documents in
accordance with the terms of the Basic Documents. In addition, the Note
Purchaser represents and warrants to the Issuer and the Seller, (i) with respect
to clauses (a) through (e) below, as of the Initial Funding Date and (ii) with
respect to clauses (f) and (g) below, as of the Effective Date (or, with respect
to (i) and (ii), as of a subsequent date on which a successor or assignee of the
Note Purchaser shall become a party hereto, in which case such successor or
assignee hereby represents and warrants to the Issuer and the Seller), that:
(a) it has had an opportunity to discuss the Issuer's and the
Seller's business, management and financial affairs, and the terms and
conditions of the transactions contemplated by the Basic Documents, with the
Issuer and the Seller and their respective representatives;
(b) it is either (i) a "qualified institutional buyer" within
the meaning of Rule 144A under the Securities Act or (ii) an "accredited
investor" within the meaning of Rule 501(a)(1), (2), (3) or (7) of Regulation D
under the Securities Act, and has sufficient knowledge and experience in
financial and business matters to be capable of evaluating the merits and risks
of investing in, and is able and prepared to bear the economic risk of investing
in, the Notes;
(c) it is purchasing the Notes for its own account, or for the
account of one or more (i) "qualified institutional buyers" within the meaning
of Rule 144A under the Securities Act or (ii) "accredited investors" within the
meaning of Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities
Act that meet the criteria described in SUBSECTION (b) and for which it is
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acting with complete investment discretion, for investment purposes only and not
with a view to distribution, subject, nevertheless, to the understanding that
the disposition of its property shall at all times be and remain within its
control;
(d) it understands that the Notes have not been and will not
be registered or qualified under the Securities Act or any applicable state
securities laws or the securities laws of any other jurisdiction and are being
offered only in a transaction not involving any public offering within the
meaning of the Securities Act and may not be resold or otherwise transferred
unless so registered or qualified or unless an exemption from registration or
qualification is available, that the Issuer is not required to register the
Notes, and that any transfer must comply with provisions of Section 2.5 of the
Indenture and SECTION 9.17 hereof;
(e) it understands that the Notes will bear the legend set out
in the forms of Notes attached as EXHIBITS A-1 AND A-2 to the Indenture and be
subject to the restrictions on transfer described in such legend;
(f) it will comply with all applicable federal and state
securities laws in connection with any subsequent resale of the Notes; and
(g) this Agreement has been duly and validly authorized,
executed and delivered by the Note Purchaser and constitutes a legal, valid,
binding obligation of the Note Purchaser, enforceable against the Note Purchaser
in accordance with its terms except as enforceability may be limited by
bankruptcy, insolvency, reorganization or other similar laws affecting the
enforcement of creditors' rights generally and by equitable limitations on the
availability of specific remedies, regardless of whether such enforceability is
considered in a proceeding in equity or at law.
ARTICLE VI
CONDITIONS
SECTION 6.01 CONDITIONS PRECEDENT TO THE EFFECTIVENESS. This Agreement
shall be effective as of the Effective Date upon the satisfaction of the
following conditions precedent:
(a) the issuance of the duly executed and authorized Warrants
pursuant to this Agreement, substantially in the form attached as EXHIBIT A
hereto, registered in the name of Citigroup Global Markets Inc.;
(b) receipt by the Administrative Agent of (i) one or more
cash prepayments in respect of principal of the Initial Class A-1 Note in the
aggregate amount of $12,765,243.93 and (ii) one or more cash prepayments in
respect of interest on the Initial Class A-1 Note in the aggregate amount of
$145,376.77;
(c) all consents, waivers and approvals necessary for the
consummation of the transactions contemplated by the Basic Documents shall have
been obtained and shall be in full force and effect;
(d) confirmation satisfactory to the Administrative Agent that
all conditions to the amendment and restatement of the Initial Class A-1 Notes
and the Initial Class A-2 Notes under the Indenture and the other Basic
Documents have been satisfied;
(e) the Note Purchaser shall have received (i) a duly
executed, authorized and authenticated Class A-1 Note registered in its name and
stating that the principal amount thereof is equal to the Class A-1 Facility
Amount, and (ii) a duly executed, authorized and authenticated Class A-2 Note
registered in its name and stating that the principal amount thereof is equal to
the Class A-2 Facility Amount;
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(f) CPS shall have paid all fees and expenses required to be
paid by CPS and the Issuer on or prior to the Effective Date, including all fees
and expenses required under SECTION 9.05(a) hereof;
(g) confirmation satisfactory to the Administrative Agent that
the Notes purchased by the Note Purchaser hereunder shall be entitled to the
benefit of the security provided in the Indenture and shall constitute the
legal, valid and binding agreement of the Issuer, enforceable against the Issuer
in accordance with its terms except as enforceability may be limited by
bankruptcy, insolvency, reorganization or other similar laws affecting the
enforcement of creditors' rights generally and by equitable limitations on the
availability of specific remedies, regardless of whether such enforceability is
considered in a proceeding in equity or at law;
(h) no Material Adverse Change shall have occurred since June
15, 2008;
(i) the Administrative Agent shall have received:
(i) a duly executed and delivered original
counterpart of each Basic Document, including the Guaranty, in the form
of which is attached as EXHIBIT B hereto, each such document being in
full force and effect;
(ii) certified copies of charter documents and each
amendment thereto, and resolutions of the Board of Directors or other
governing authority of each of the Issuer and the Seller authorizing or
ratifying the execution, delivery and performance of all Basic
Documents to which it is a party, certified by the Secretary or an
Assistant Secretary of each of the Issuer and the Seller as of the
Effective Date, which certificate shall state that the resolutions
thereby certified have not been amended, modified, revoked or rescinded
as of the date of such certificate;
(iii) a certificate of the Secretary or an Assistant
Secretary of the Issuer and the Seller, as applicable, certifying the
names and the signatures of its officer or officers authorized to sign
all transaction documents to which it is a party;
(iv) a certificate of a senior officer of CPS to the
effect that the representations and warranties of CPS and the Seller in
this Agreement and the other Basic Documents to which either of them is
a party are true and correct as of the Effective Date, and that each of
CPS and the Seller has complied in all material respects with all
agreements and satisfied all conditions on its part to be performed or
satisfied at or prior to the Effective Date;
(v) a certificate of a senior officer of the Issuer
to the effect that the representations and warranties of the Issuer and
the Purchaser in this Agreement and the other Basic Documents to which
either of them is a party are true and correct as of the Effective Date
and that each of the Issuer and the Purchaser have complied in all
material respects with all agreements and satisfied all conditions on
their part to be performed or satisfied at or prior to the Effective
Date;
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(vi) legal opinions (including opinions relating to
true sale, non-consolidation and other bankruptcy matters, tax, UCC
with respect to perfection and priority of the Trustee's security
interest in the Collateral, securities law relating to the Class A-1
Notes, the Class A-2 Notes and the Warrants, Investment Company Act
relating to Investment Company Act matters, enforceability, corporate
matters, an opinion pursuant to Section 9.2 of the Original Indenture
and an opinion from the Trustee with respect to general matters) in
form and substance satisfactory to the Note Purchaser and its counsel;
(vii) confirmation satisfactory to the Administrative
Agent that all necessary UCC filings have been made and delivery to the
Administrative Agent and its legal counsel of applicable UCC search
reports dated as of July 3, 2008;
(viii) payment of reasonable out-of-pocket fees and
expenses of the Note Purchaser and the Administrative Agent in
accordance with SECTION 3.02(a) hereof;
(ix) copies of certificates or other evidence from
the Secretary of State or other appropriate authority of the States of
Delaware and California, evidencing the good standing of the Issuer and
the Seller in the States of Delaware and California, in each case,
dated no earlier than 5 days prior to the Effective Date;
(x) confirmation satisfactory to the Administrative
Agent that a Trust Receipt was issued by the Trustee pursuant to
SECTION 2.12 of the Indenture with respect to the Pledged Residual
Interest Certificates funded on each Funding Date;
(xi) such other documents, opinions and information
as the Note Purchaser may reasonably request;
(j) confirmation satisfactory to the Administrative Agent that
the Issuer has irrevocably instructed the trustee and/or paying agent under the
ABS Issuance Agreements related to any Pledged Residual Interest Assets funded
on each Funding Date, providing for, among other things, all payments payable in
respect of the related Pledged Residual Interest Assets to be paid directly to
the Collection Account for the benefit of the Issuer Secured Parties;
(k) an update satisfactory to the Administrative Agent with
respect to litigation matters relating to CPS or any Affiliates of CPS; and
(l) CPS and the Administrative Agent shall have mutually
agreed upon the form of the Settlement Date Statement attached as EXHIBIT E to
the Indenture.
ARTICLE VII
COVENANTS
SECTION 7.01 AFFIRMATIVE COVENANTS. Prior to the termination of this
Agreement and each other Basic Document and the indefeasible payment of all
obligations hereunder and thereunder:
(a) NOTICE OF DEFAULTS, LITIGATION, ADVERSE JUDGMENTS, ETC.
CPS or the Issuer, as applicable, shall give notice to Administrative Agent
promptly in writing:
(i) upon CPS or the Issuer, as the case may be,
becoming aware of, and in any event within two (2) Business Days after,
the occurrence of any Event of Default or Default or any event of
default or default under any other Basic Document or any other material
agreement of CPS or any Specified Affiliate of CPS;
(ii) upon, and in any event within two (2) Business
Days after, service of process on CPS or the Issuer, as the case may
be, or any agent thereof for service of process, in respect of any
legal or arbitrable proceedings affecting CPS, the Issuer or any other
Specified Affiliate of CPS (x) that questions or challenges the
validity or enforceability of any of the Basic Documents, (y) in which
the amount in controversy exceeds $1,000,000 or (z) that could
reasonably be expected to have a Material Adverse Effect;
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(iii) upon, and in any event within two (2) Business
Days after, CPS or the Issuer, as the case may be, becoming aware of
any event or change in circumstances that could reasonably be expected
to (A) have a Material Adverse Effect, (B) constitute a Material
Adverse Change or (C) cause an Event of Default;
(iv) upon, and in any event within two (2) Business
Days after, CPS or the Issuer, as the case may be, becoming aware of
entry of a judgment or decree in respect of CPS, the Issuer or any
other Specified Affiliate of CPS, its respective assets or any of the
Collateral in an amount in excess of $1,000,000; and
(v) upon any governmental inquiry, whether formal or
informal, or the initiation of any legal process, litigation,
arbitration, or administrative, regulatory or judicial investigation
against or concerning the CPS, the Issuer or any other Specified
Affiliate of CPS potentially involving an amount (i) in excess of
$1,000,000 or (ii) less than $1,000,000 and is otherwise material,
including without limitation any putative class action.
Each notice pursuant to this subsection (a) shall be accompanied by a
statement of an officer of CPS or the Issuer, as applicable, setting
forth details of the occurrence referred to therein and stating what
action CPS and the Issuer, as the case may be, have taken or propose to
take with respect thereto.
(b) TAXES. Each of CPS and the Issuer shall pay and discharge
all taxes and governmental charges upon it (including as a result of being a
member of any consolidated or unitary tax group) or against any of its
properties or assets or its income prior to the date after which penalties
attach for failure to pay, except to the extent that CPS or the Issuer, as
applicable, shall be contesting in good faith in appropriate proceedings its
obligation to pay such taxes or charges, adequate reserves having been set aside
for the payment thereof in accordance with GAAP.
(c) CONTINUITY OF BUSINESS AND COMPLIANCE WITH AGREEMENT AND
LAW. Each of CPS and the Issuer shall:
(i) preserve and maintain its legal existence;
(ii) comply with the requirements of all applicable
laws, rules, regulations and orders of governmental authorities and
other Requirements of Law (including, without limitation, Consumer Laws
and all environmental laws);
(iii) keep adequate records and books of account, in
which complete entries will be made in accordance with GAAP
consistently applied;
(iv) not move its chief executive office or chief
operating office from the addresses referred to herein or change its
jurisdiction of organization unless it shall have provided the
Administrative Agent 30 days prior written notice of such change;
(v) pay and discharge all taxes, assessments and
governmental charges or levies imposed on it or on its income or
profits or on any of its property prior to the date on which penalties
attach thereto, except for any such tax, assessment, charge or levy the
payment of which is being contested in good faith and by proper
proceedings and against which adequate reserves are being maintained;
and
(vi) continue in business in a prudent, reasonable
and lawful manner with all licenses, rights, permits, franchises and
qualifications necessary to perform its respective obligations under
this Agreement, the Sale and Contribution Agreement, the Notes and the
other Basic Documents.
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(d) OWNERSHIP OF THE ISSUER. CPS shall own beneficially and of
record 100% of the membership interests in the Issuer free and clear of all
Liens.
(e) [RESERVED.]
(f) COLLATERAL STATEMENTS. The Issuer will furnish or cause to
be furnished to the Administrative Agent from time to time statements and
schedules further identifying and describing the Collateral and such other
reports in connection with the Collateral as Administrative Agent may reasonably
request, all in reasonable detail, including without limitation each statement,
certificate and report required to be delivered to the Trustee or the
Noteholders under any Basic Document.
(g) COMPLIANCE CERTIFICATE. Each of CPS and the Issuer shall
deliver or cause to be delivered a Compliance Certificate to the Administrative
Agent within 75 days after the end of each fiscal year and within 30 days after
the end of each other fiscal quarter or, if such day is not a Business Day, the
immediately preceding Business Day.
(h) ACTIONS TO ENFORCE RIGHTS UNDER CONTRACTS. CPS and the
Issuer shall take such reasonable and lawful actions as the Administrative Agent
shall request to enforce Administrative Agent's rights under the Collateral,
and, following the occurrence of an Event of Default, shall take such reasonable
and lawful actions as are necessary to enable Administrative Agent to exercise
such rights in Administrative Agent's own name.
(i) MONTHLY SERVICER'S CERTIFICATE. CPS shall deliver to the
Note Purchaser, the Administrative Agent and the Trustee, in a computer-readable
format reasonably acceptable to each such Person (i) the monthly servicer's
certificate (each, a "MONTHLY SERVICER'S CERTIFICATE") with respect to each
Eligible Committed Securitization for which a Residual Interest Certificate has
been pledged to the Trustee pursuant to the Indenture at the same time such
Monthly Servicer's Certificate is required to be delivered pursuant to the
applicable Securitization Transaction Documents and (ii) a Settlement Date
Statement pursuant to Section 3.9(a) of the Indenture no later than 12:00 noon,
New York City time, on each Determination Date. CPS shall deliver to the
Administrative Agent and the Trustee a hard copy of any such Monthly Servicer's
Certificate or Settlement Date Statement upon request of such Person.
(j) SEPARATE EXISTENCE; NO COMMINGLING. Until the Notes are
repaid in full and all of the Basic Documents are terminated, the Issuer shall
limit its activities to such activities as are incident to and necessary or
convenient to accomplish the following purposes: (i) to acquire, own, hold,
pledge, finance and otherwise deal with Residual Interest Assets to be pledged
to the Trustee for the benefit of the Issuer Secured Parties pursuant to the
Indenture and (ii) to sell, securitize or otherwise liquidate all or any portion
of such Residual Interest Assets in accordance with the provisions of the Basic
Documents. In addition, prior to the payment of the Notes in full and
termination of all of the Basic Documents, the Issuer shall observe and comply
with the applicable legal requirements for the recognition of the Issuer as a
legal entity separate and apart from its Affiliates, including without
limitation, those requirements set forth in SECTION 9(b)(iv) of the Issuer's
Limited Liability Company Agreement. Without limiting the foregoing, the Issuer
shall, and CPS shall cause itself and any other Affiliates of the Issuer to,
maintain the truth and accuracy of all facts assumed by Xxxxxxx Xxxxx LLP in the
true sale and non consolidation opinions of Xxxxxxx Xxxxx LLP; provided that in
the event that any request is made for the Administrative Agent to consent to or
approve any matter that, if effectuated or consummated, would result in a change
to the continuing truth and accuracy of any of the factual assumptions in the
true sale or non consolidation opinions of Xxxxxxx Xxxxx LLP, such request shall
be accompanied by an opinion of Xxxxxxx Xxxxx LLP, or such other counsel as may
be reasonably satisfactory to the Administrative Agent, that the conclusions set
forth in the true sale and non consolidation opinions of Xxxxxxx Xxxxx LLP will
be unaffected by such change.
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(k) OTHER LIENS OR INTERESTS. Except for the conveyances under
the Sale and Contribution Agreement prior to the Effective Date, CPS shall not
sell, pledge, assign or transfer to any other Person, or grant, create, incur,
assume or suffer to exist any lien on or any interest in, the Residual Interest
Assets or any other Collateral. Except for the pledge pursuant to the Indenture,
the Issuer shall not sell, pledge, assign or transfer to any other Person, or
grant, create, incur, assume or suffer to exist any lien on or any interest in,
the Residual Interest Assets or any other Collateral. CPS and the Issuer shall,
at their own expense, defend the Collateral against, and will take such other
action as is necessary to remove, any Lien, security interest or claim on, in or
to the Collateral, other than the security interests created under the Sale and
Contribution Agreement and the Indenture, respectively, and CPS and the Issuer
will defend the right, title and interest of the Issuer Secured Parties in and
to any of the Collateral against the claims and demands of all Persons
whomsoever. From time to time, each of CPS and the Issuer shall cause to be
taken such actions as are necessary to continue and maintain the perfection of
the first priority security interest of the Trustee on behalf of the Issuer
Secured Parties in the Collateral, including, without limitation, the filing of
financing statements, amendments thereto and continuation statements.
(l) BOOKS AND RECORDS; OTHER INFORMATION.
(i) Each of CPS and the Issuer shall maintain
accounts and records as to each of the Pledged Residual Interest
Certificates accurately and in sufficient detail to permit the reader
thereof to know at any time the status of such Pledged Residual
Interest Certificate, including all distributions made in respect of
such Pledged Residual Interest Certificate. CPS shall maintain accurate
and complete books and records with respect to the Pledged Residual
Interest Certificates and with respect to CPS's business. The Issuer
shall maintain accurate and complete books and records with respect to
the Collateral and the Issuer's business. All accounting books and
records shall be maintained in accordance with GAAP.
(ii) Each of CPS and the Issuer shall, and shall
cause each of its Affiliates to, permit any representative of the
Administrative Agent, a Noteholder or the Trustee to visit and inspect
any of the properties of CPS, the Issuer and such Affiliates to examine
the books and records of CPS, the Issuer and such Affiliates, as
applicable, and to make copies and take extracts therefrom, and to
discuss the business, operations, properties, condition (financial or
otherwise) or prospects of CPS, the Issuer and each such Affiliate, as
applicable, or any of the Collateral with the officers and independent
public accountants thereof and as often as the Administrative Agent, a
Noteholder or the Trustee may reasonably request, and so long as no
Default or Event of Default shall have occurred and be continuing, all
at such reasonable times during normal business hours upon reasonable
notice; provided that, after a Default or Event of Default shall have
occurred and be continuing, the Administrative Agent, a Noteholder or
the Trustee shall make such inspections, examine such documents and
conduct such discussions at such times as it may determine in its sole
discretion.
(iii) Each of CPS and the Issuer shall promptly
provide to the Administrative Agent all information regarding its
respective operations and practices and the Collateral as the
Administrative Agent shall reasonably request.
(iv) Each of CPS and the Issuer shall furnish or
cause to be furnished to the Administrative Agent, as soon as publicly
available, copies of (w) any and all Relevant Reports that CPS or the
Issuer sends to its respective shareholders or members, (x) all
reports, correspondence and other information provided by CPS to its
unsecured noteholders, (y) copies of all (if any) regular, periodic and
special reports, and all registration statements publicly filed by CPS
or any Affiliate of CPS with the Securities and Exchange Commission or
any Governmental Authority that supervises the issuance of securities
by CPS, the Issuer or any other Affiliate of CPS, and (z) any press
releases concerning CPS or the Issuer.
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(m) FULFILLMENT OF OBLIGATIONS. Each of CPS and the Issuer
shall pay and perform, as and when due, all of its obligations of whatever
nature, except where the amount or validity thereof is currently being contested
in good faith by appropriate proceedings and reserves in conformity with GAAP
with respect thereto have been provided on the books of CPS or the Issuer, as
applicable.
(n) COMPLIANCE WITH LAWS, ETC. Each of CPS and the Issuer
shall, and CPS shall cause each of its Subsidiaries to, comply (i) in all
material respects with all Requirements of Law and any change therein or in the
application, administration or interpretation thereof (including, without
limitation any request, directive, guideline or policy, whether or not having
the force of law) by any Governmental Authority charged with the administration
or interpretation thereof; and (ii) with all indentures, mortgages, deeds of
trust, agreements, or other instruments or contractual obligations to which it
is a party, including without limitation, each Basic Document to which it is a
party, or by which it or any of its properties may be bound or affected, or
which may affect the Collateral.
(o) COMPLIANCE WITH BASIC DOCUMENTS. CPS, in its capacity as
Seller or otherwise, shall comply with each of its covenants contained in the
Basic Documents.
(p) FINANCING STATEMENTS. Each of CPS and the Issuer shall
defend the Collateral against, and shall take such other action as is necessary
to remove, any Lien, security interest or claim on or to the Collateral, other
than the security interests created under the this Agreement, and each of CPS
and the Issuer will defend the right, title and interest of the Issuer Secured
Parties in and to any of the Collateral against the claims and demands of all
Persons whomsoever. From time to time, CPS and the Issuer shall cause to be
taken such actions as are necessary to continue and maintain the perfection of
the first priority security interest of the Trustee for the benefit of the
Issuer Secured Parties in the Collateral, including, without limitation, the
filing of financing statements, amendments thereto and continuation statements
as the Administrative Agent determines may be required by law to perfect,
maintain and protect the first priority security interest of the Issuer Secured
Parties in the Collateral.
(q) PAYMENT OF FEES AND EXPENSES. CPS and the Issuer shall pay
to the Note Purchaser and the Administrative Agent, on demand, any and all fees,
costs or expenses that the Note Purchaser and the Administrative Agent pays to a
bank or other similar institution arising out of or in connection with the
return of payments from CPS or the Issuer deposited for collection by the Note
Purchaser and the Administrative Agent.
(r) FINANCIAL STATEMENTS AND ACCESS TO RECORDS. CPS shall
provide the Administrative Agent with quarterly unaudited financial statements
within forty-five (45) days of the end of each of CPS's first three fiscal
quarters, and CPS will provide the Administrative Agent with audited financial
statements within ninety (90) days of each of CPS's fiscal year-end audited by a
nationally recognized independent certified public accounting firm. Within 30
days after the end of each calendar month prior to the termination of the Basic
Documents, CPS shall provide the Administrative Agent with unaudited monthly
financial statements for the immediately preceding calendar month. CPS shall
deliver to the Administrative Agent with each financial statement a certificate
by CPS's chief financial officer, certifying that such financial statements are
complete and correct in all material respects and that, except as noted in such
certificate, such chief financial officer has no knowledge of any Default or
Event of Default. In connection with each report filed by CPS under Section
13(a) of the Exchange Act during the Term, CPS shall be deemed to have
represented and warranted to the Administrative Agent that, as of the related
filing date, the financial statements contained in such report are complete and
correct in all material respects and that, unless otherwise specified in such
report, CPS has no knowledge of any Default or Event of Default as of such
filing date.
(s) LITIGATION MATTERS. CPS shall notify the Administrative
Agent in writing, promptly upon its learning thereof, of the assertion of any
governmental claim, whether formal or informal, or the initiation of any legal
process, litigation, arbitration, or administrative, regulatory or judicial
investigation against or concerning CPS, the Issuer or any other Affiliate of
CPS, in each case potentially involving an amount (i) in excess of $1,000,000 or
(ii) less than $1,000,000 if otherwise material, including without limitation
any putative class action.
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(t) NOTICE OF CHANGE OF CHIEF EXECUTIVE OFFICE. CPS and the
Issuer shall provide the Administrative Agent with not less than thirty (30)
days prior written notice of any change in the chief executive office or
jurisdiction of incorporation or organization of CPS or the Issuer to permit the
Administrative Agent to make any additional filings necessary to continue the
perfected security interest of the Issuer Secured Parties in the Collateral.
(u) FINANCIAL COVENANTS. CPS shall satisfy each of the
financial covenants set forth on SCHEDULE I hereto; provided that compliance
with the financial covenant set forth in clause 3 of SCHEDULE I shall be
reported to the Administrative Agent on a quarterly basis at the end of each
fiscal quarter, unless the Administrative Agent otherwise notifies CPS to report
compliance with such covenant to the Administrative Agent on a monthly basis.
(v) NOTICE OF BREACH OF SECURITIZATION TRIGGERS AND FINANCIAL
COVENANTS. CPS shall promptly notify the Administrative Agent in writing upon
the occurrence of a breach of any performance trigger or financial covenant
related to any Securitization Transaction.
(w) CHANGES TO SERVICING POLICIES. CPS will notify the
Administrative Agent in writing promptly after making any material changes to
its servicing policies.
(x) DATA FILES FOR SECURITIZATION TRANSACTIONS. On or prior to
the Determination Date each month, CPS will provide the Administrator with
electronic data files for each Securitization Transaction related to a Pledged
Residual Interest Certificate, together with an Officer's Certificate of CPS
certifying that such data files are complete and correct in all material
respects and that, except as noted in such certificate, such officer has no
knowledge of any Default or Event of Default.
(y) INSURANCE. Prior to the termination of the Basic
Documents, CPS shall maintain such insurance as is generally acceptable to
prudent institutional investors and usual and customary for similar companies in
its industry.
(z) SERVICING. CPS, as servicer for each Securitization
Transaction related to a Pledged Residual Interest Certificate, shall manage,
service, administer and make collections with respect to each such
Securitization Transaction with reasonable care, using that degree of skill and
attention customary and usual for institutions which service motor vehicle
retail installment contracts similar to such Securitization Transaction and, to
the extent more exacting, that CPS exercises with respect to all comparable
automotive receivables that it services for itself or others.
(aa) RATINGS OF ELIGIBLE COMMITTED SECURITIZATIONS. CPS shall
use commercially reasonable best efforts to have the securities issued by each
Securitization Issuer pursuant to its Securitization Transaction Documents rated
by Xxxxx'x and S&P (without giving effect to any insurance policy issued by a
monoline insurer).
(bb) CONTINUATION OF AND CHANGE IN BUSINESSES. CPS shall cause
each of its Excluded Subsidiaries to continue to engage in the same business or
businesses it engaged in on the Effective Date; PROVIDED, HOWEVER, any of such
Excluded Subsidiaries may be dissolved or liquidated by CPS at any time.
SECTION 7.02 NEGATIVE COVENANTS. Prior to the termination of this
Agreement and each other Basic Document and the indefeasible payment of all
obligations hereunder and thereunder:
(a) ADVERSE TRANSACTIONS. None of CPS, the Issuer or any other
Affiliate of CPS shall enter into or permit any transaction that adversely
affects the Collateral or the Note Purchaser's interest therein, the Note
Purchaser's or the Administrative Agent's rights under this Agreement, the Notes
or any other Basic Document, the Issuer's interest in the Conveyed Property
pursuant to the Sale and Contribution Agreement, or the Trustee's security
interest in the Collateral pursuant to the Indenture.
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(b) GUARANTEES. The Issuer shall not guarantee or otherwise in
any way become liable with respect to the obligations or liabilities of any
other Person.
(c) DIVIDENDS. The Issuer shall not declare or pay any
dividends except to the extent of funds legally available therefor from payments
received by the Issuer pursuant to SECTION 8.5 of the Indenture. Notwithstanding
the foregoing, the Issuer shall not declare or pay any dividends on any date as
of which a Principal Coverage Ratio Violation, a Default or an Event of Default
shall have occurred and is continuing. CPS shall not declare or pay any cash
dividends if the amount of such dividends would exceed the quarterly and annual
earnings of CPS (on an annualized basis) before taking into account income
taxes, or if such dividend (either before or after giving effect thereto) would
cause CPS to breach any financial covenant set forth in SECTION 7.01(u) hereof.
(d) INVESTMENTS. The Issuer shall not make any investment in
any Person through the direct or indirect holding of securities or otherwise.
(e) CHANGES IN CAPITAL STRUCTURE OR BUSINESS OBJECTIVES OF THE
ISSUER. The Issuer shall not do any of the following if it will adversely affect
the payment or performance of, or the Issuer's ability to pay and/or perform,
its obligations to the Note Purchaser with respect to this Agreement or any
other Basic Document to which it is a party, or the Notes, or if it could be
reasonably expected to: (i) cancel any of the membership interests in the
Issuer, (ii) make any change in the capital structure of the Issuer, or (iii)
make any material change in any of its business objectives, purposes or
operations that could reasonably be expected to adversely affect the payment or
performance of, or the Issuer's ability to pay and/or perform, its obligations
to Note Purchaser or the Administrative Agent with respect to this Agreement or
any other Basic Document to which it is a party, or the Notes.
(f) NO RELEASES OF COLLATERAL. Neither CPS or the Issuer shall
permit the Collateral to be released from the lien of the Indenture, except upon
satisfaction and release of the Indenture in accordance with Article IV thereof.
(g) NO LIENS ON EQUITY INTERESTS IN THE ISSUER. CPS shall not
grant or otherwise create any Lien on the membership interests in the Issuer (or
any other equity interest in the Issuer) without the prior written consent of
the Administrative Agent.
(h) NO INDEBTEDNESS. The Issuer will not at any time incur any
Indebtedness, other than Indebtedness incurred under (or contemplated by) the
terms of the Basic Documents.
(i) NO OTHER BUSINESS. The Issuer will not at any time engage
in any other business activities than the purchase of the Residual Interest
Assets, pledging the Collateral to the Trustee under the Indenture, issuing the
Notes and other activities relating to the foregoing to the extent permitted by
the organizational documents of the Issuer as in effect on the date hereof, or
as amended with the prior written consent of the Administrative Agent. Without
limitation of the foregoing, the Issuer will not at any time be an issuer of
securities other than the Notes or a borrower under any loan or financing
agreement, facility or other arrangement other than the facility established
pursuant to this Agreement and the other Basic Documents.
(j) NO AMENDMENT TO ISSUER'S OPERATING AGREEMENT OR ANY BASIC
DOCUMENT WITHOUT CONSENT. Neither the Limited Liability Company Agreement of the
Issuer, nor any Basic Document, shall be amended, supplemented or otherwise
modified without the prior written consent of the Administrative Agent.
(k) TRANSACTIONS WITH AFFILIATES. The Issuer shall not enter
into, or be a party to, any transaction with any of its Affiliates, except in
accordance with the requirements set forth in Section 9(b)(iv) of its Limited
Liability Company Agreement.
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(l) NONPETITION. Notwithstanding any prior termination of this
Agreement, the Seller will not, prior to the date that is one year and one day
after the day upon which the outstanding principal amount of the Notes has been
reduced to zero and all Issuer Secured Obligations have been paid in full,
acquiesce, petition or otherwise invoke or cause the Issuer to invoke the
process of any court or government authority for the purpose of commencing or
sustaining a case against the Issuer under any federal or state bankruptcy,
insolvency or similar law or appointing a receiver, liquidator, assignee,
trustee, custodian, sequestrator or other similar official of the Issuer or any
substantial part of its property, or ordering the winding up or liquidation of
the affairs of the Issuer.
(m) PROTECTION OF TITLE TO COLLATERAL. None of the Seller, the
Purchaser or the Issuer shall change its name, identity, jurisdiction of
organization, form of organization or corporate structure in any manner that
would, could or might make any financing statement or continuation statement
filed with respect to the Collateral seriously misleading within the meaning of
Section 9-506(a) of the UCC, unless it shall have given the Administrative Agent
at least 30 days' prior written notice thereof and shall have promptly filed
appropriate amendments to all previously filed financing statements or
continuation statements.
(n) FURTHER COVENANTS. Without prior written consent of the
Administrative Agent, none of CPS, the Issuer or any other Affiliate of CPS
will: (i) assign, sell, transfer, pledge or grant any security interest in or
Lien on any of the Collateral to anyone except the Trustee for the benefit of
the Issuer Secured Parties, permit any financing statement or assignment (except
for any assignments in favor of the Trustee for the benefit of the Issuer
Secured Parties) to be on file in any public office with respect thereto, (ii)
permit or suffer to exist any security interest, lien, charge, encumbrance or
right of others to attach to any of the Collateral, except as contemplated by
this Agreement, or (iii) consent to any amendment or supplement to any ABS
Issuance Agreement that would have a Material Adverse Effect.
(o) SHARE REPURCHASES. CPS shall not repurchase more than five
percent (5.0%) of the issued and outstanding shares of its common stock (on a
fully-diluted basis) during the period from the Initial Closing Date through the
first anniversary thereof; CPS shall not repurchase more than five percent
(5.0%) of the issued and outstanding shares of its common stock (on a
fully-diluted basis) during the period from the first anniversary of the Initial
Closing Date through the second anniversary thereof. CPS's purchase of shares of
its common stock from Xxxxxx Xxxxxxxxx Capital Partners II, L.P. for an
aggregate purchase price not to exceed $10,000,000 is excluded from the
foregoing restrictions.
(p) ACTIONS WITH RESPECT TO THE PLEDGED RESIDUAL INTEREST
CERTIFICATES AND ANY OTHER COLLATERAL. Unless it has received the prior written
consent of the Administrative Agent and the Majority Noteholders, none of CPS,
the Issuer or any other Affiliate of CPS shall take any action, fail to take any
action, give any consent, permit any action, enter into or permit any amendment,
waiver, supplement or other modification under or in respect of any Pledged
Residual Interest Certificate or any other Collateral, or enter into or permit
any amendment, waiver, supplement or other modification of any agreement,
document or instrument governing the rights of any Pledged Residual Interest
Certificate, that could reasonably be expected to, or would, (i) reduce in any
manner the amount of, or accelerate or delay the timing of, distributions that
are required to be made on the Pledged Residual Interest Certificates or any
other Collateral, (ii) cause or permit amounts on deposit in the spread account
for any Securitization Transaction pursuant to which a Pledged Residual Interest
Certificate has been issued or proceeds or distributions in respect of any
Pledged Residual Interest Certificate or any other Collateral to be available to
fund deficiencies in any other spread account relating to another Securitization
Transaction or (iii) otherwise have a Material Adverse Effect.
ARTICLE VIII
ADMINISTRATIVE AGENT
SECTION 8.01 AUTHORIZATION AND ACTION. Each party hereto and each
Noteholder hereby accepts the appointment of and authorizes the Administrative
Agent to take such action as agent on its behalf and to exercise such powers as
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are delegated to the Administrative Agent by the terms of this Note Purchase
Agreement or the other Basic Documents, together with such powers as are
reasonably incidental thereto. The Administrative Agent reserves the right, in
its sole discretion, to take any actions and exercise any rights or remedies
under this Note Purchase Agreement, any other Basic Document and any related
agreements and documents. Except for actions which the Administrative Agent is
expressly required to take pursuant to this Note Purchase Agreement or any other
Basic Document, the Administrative Agent shall not be required to take any
action which exposes the Administrative Agent to personal liability or which is
contrary to applicable law unless the Administrative Agent shall receive further
assurances to its satisfaction from the parties hereto of the indemnification
obligations under Section 1.04 hereof against any and all liability and expense
which may be incurred in taking or continuing to take such action.
SECTION 8.02 ADMINISTRATIVE AGENT'S RELIANCE, ETC.. Neither the
Administrative Agent nor any of its respective directors, officers, agents or
employees shall be liable to any Indemnified Party for any action taken or
omitted to be taken by the Administrative Agent or any of its respective
directors, officers, agents or employees as Administrative Agent under or in
connection with this Note Purchase Agreement, any other Basic Document or any
related agreement or document, except for its or their own gross negligence or
willful misconduct as determined by a court of competent jurisdiction in a final
and non-appealable decision. Without limiting the foregoing, the Administrative
Agent: (i) may consult with legal counsel, independent public accountants and
other experts selected by it and shall not be liable for any action taken or
omitted to be taken in good faith by it in accordance with the advice of such
counsel, accountants or experts; (ii) makes no warranty or representation to any
party hereto or any Noteholder, and shall not be responsible to any Noteholder,
for any recitals, statements, warranties or representations made by the Issuer
or CPS in connection with this Note Purchase Agreement or any other Basic
Document or in any certificate, report, statement or other document referred to
or provided for in, or received under or in connection with, this Note Purchase
Agreement or any other Basic Document; (iii) shall not have any duty to
ascertain or to inquire as to the performance or observance of any of the terms,
covenants or conditions of this Note Purchase Agreement or any other Basic
Document on the part of the Issuer or CPS or to inspect the property (including
the books and records) of the Issuer or CPS; (iv) shall not be responsible to
any party hereto or any Noteholder for the due execution, legality, validity,
enforceability, genuineness, sufficiency or value of this Note Purchase
Agreement, any other Basic Document or any other instrument or document
furnished pursuant hereto; and (v) shall incur no liability under or in respect
of this Note Purchase Agreement or any other Basic Document by acting upon any
notice (including notice by telephone), consent, certificate or other instrument
or writing (which may be by telex) believed by it in good faith to be genuine
and signed or sent by the proper party or parties. The Administrative Agent
shall not be deemed to have knowledge of any Default or Event of Default unless
the Administrative Agent has received notice thereof from the Issuer, CPS or any
Noteholder.
SECTION 8.03 ADMINISTRATIVE AGENT AND AFFILIATES. The Administrative
Agent and its Affiliates may generally engage in any kind of business with the
Issuer or CPS, any of their respective Affiliates and any Person who may do
business with or own securities of the Issuer or CPS or any of their respective
Affiliates, all as if such entity were not the Administrative Agent and without
any duty to account therefor to the Noteholders, as the case may be.
SECTION 8.04 INDEMNIFICATION. Each Noteholder agrees to indemnify the
Administrative Agent (to the extent not reimbursed by the Issuer), from and
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind or
nature whatsoever which may be imposed on, incurred by, or asserted against the
Administrative Agent in any way relating to or arising out of this Note Purchase
Agreement or any other Basic Document or any action taken or omitted by the
Administrative Agent under this Note Purchase Agreement or any other Basic
Document; provided that no Noteholder shall be liable for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting or arising from the Administrative
Agent's gross negligence or willful misconduct as is determined by a court of
competent jurisdiction in a final and non-appealable decision. Without
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limitation of the generality of the foregoing, each Noteholder agrees to
reimburse the Administrative Agent, promptly upon demand, for any reasonable
out-of-pocket expenses (including reasonable counsel fees) incurred by the
Administrative Agent in connection with the administration, modification,
amendment or enforcement (whether through negotiations, legal proceedings or
otherwise) of, or legal advice in respect of rights or responsibilities under,
this Note Purchase Agreement or any other Basic Document, provided that no
Noteholder shall be responsible for the costs and expenses of the Administrative
Agent in defending itself against any claim alleging the gross negligence or
willful misconduct of the Administrative Agent to the extent such gross
negligence or willful misconduct is determined by a court of competent
jurisdiction in a final and non-appealable decision.
SECTION 8.05 PURCHASE DECISION. Each party hereto and each Noteholder
acknowledges that it has, independently and without reliance upon the
Administrative Agent, any other party hereto or any of their respective
Affiliates, and based on such documents and information as it has deemed
appropriate, made its own evaluation and decision to enter into this Note
Purchase Agreement and undertake the obligations of such party hereunder.
SECTION 8.06 RELIANCE. The Administrative Agent shall in all cases be
entitled to rely, and shall be fully protected in relying, upon any document or
conversation believed by it to be genuine and correct and to have been signed,
sent or made by the proper Person or Persons and upon advice and statements of
legal counsel (including, without limitation, counsel to the Issuer and/or CPS),
independent accountants and other experts selected by the Administrative Agent.
The Administrative Agent shall in all cases be fully justified in failing or
refusing to take any action under this Agreement or any other document furnished
in connection herewith unless it shall first receive such advice or concurrence
of any Noteholder as it deems appropriate or it shall first be indemnified to
its satisfaction by any Noteholder, provided that unless and until the
Administrative Agent shall have received such advice, the Administrative Agent
may take or refrain from taking any action, as the Administrative Agent shall
deem advisable and in the best interests of the Noteholders. The Administrative
Agent shall in all cases be fully protected in acting, or in refraining from
acting, in accordance with a request of the Majority Noteholders and such
request and any action taken or failure to act pursuant thereto shall be binding
upon the Noteholders.
SECTION 8.07 NON-RELIANCE ON ADMINISTRATIVE AGENT. Each of the
Noteholders expressly acknowledge that neither the Administrative Agent nor any
of its officers, directors, employees, agents, attorneys-in-fact or affiliates
has made any representations or warranties to it and that no act by the
Administrative Agent hereafter taken, including, without limitation, any review
of the affairs of the Issuer or CPS, shall be deemed to constitute any
representation or warranty by the Administrative Agent. Each of the Noteholders
represent and warrant to the Administrative Agent that they have and will,
independently and without reliance upon the Administrative Agent and based on
such documents and information as they have deemed appropriate, made their own
appraisal of and investigation into the business, operations, property,
prospects, financial and other conditions and creditworthiness of the Issuer and
CPS and made its own decision to enter into this Note Purchase Agreement.
SECTION 8.08 SUCCESSOR ADMINISTRATIVE AGENT. The Administrative Agent
may resign at any time by giving 30 days' written notice thereof to the Note
Purchaser, the Issuer and CPS. Upon any such resignation by the Administrative
Agent, the Majority Noteholders shall have the right to appoint a successor
Administrative Agent. If no successor Administrative Agent shall have been so
appointed by the Majority Noteholders, and shall have accepted such appointment,
within 30 days after the retiring Administrative Agent's giving of notice or
resignation, then the retiring Administrative Agent may, on behalf of the Note
Purchaser, the Issuer and CPS, appoint a successor Administrative Agent. If for
any reason a successor Administrative Agent is not appointed by the retiring
Administrative Agent, the Noteholders shall perform all of the duties of the
retiring Administrative Agent and the Issuer shall for all purposes shall deal
directly with the Noteholders. Upon the acceptance of any appointment as
Administrative Agent hereunder by a successor Administrative Agent, such
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successor Administrative Agent shall thereupon succeed to and become vested with
all of the rights, powers, privileges and duties of the retiring Administrative
Agent, and the retiring Administrative Agent shall be discharged from its duties
and obligations under this Note Purchase Agreement. After any Administrative
Agent's resignation hereunder as Administrative Agent, the provisions of this
ARTICLE VIII shall inure to its benefit as to any actions taken or omitted to be
taken by it while it was the Administrative Agent under this Note Purchase
Agreement.
ARTICLE IX
MISCELLANEOUS PROVISIONS
SECTION 9.01 AMENDMENTS. No amendment to or waiver of any provision of
this Agreement, nor consent to any departure by the Seller, the Issuer, the
Administrative Agent or the Note Purchaser therefrom, shall in any event be
effective unless the same shall be in writing and signed by the Seller, the
Issuer, the Administrative Agent and the Note Purchaser.
SECTION 9.02 NO WAIVER; REMEDIES. Any waiver, consent or approval given
by any party hereto shall be effective only in the specific instance and for the
specific purpose for which given, and no waiver by a party of any breach or
default under this Agreement or any other Basic Document shall be deemed a
waiver of any other breach or default. No failure on the part of any party
hereto to exercise, and no delay in exercising, any right hereunder shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right hereunder, or any abandonment or discontinuation of steps to enforce the
right, power or privilege, preclude any other or further exercise thereof or the
exercise of any other right. No notice to or demand on any party hereto in any
case shall entitle such party to any other or further notice or demand in the
same, similar or other circumstances. The remedies herein provided are
cumulative and not exclusive of any remedies provided by law.
SECTION 9.03 BINDING ON SUCCESSORS AND ASSIGNS. This Agreement shall be
binding upon, and inure to the benefit of, the Issuer, the Purchaser, the
Seller, the Note Purchaser, the Administrative Agent and their respective
successors and assigns; PROVIDED, HOWEVER, that none of the Issuer, the
Purchaser or the Seller may assign its rights or obligations hereunder or in
connection herewith or any interest herein (voluntarily, by operation of law or
otherwise) without the prior written consent of the Administrative Agent.
Nothing expressed herein is intended or shall be construed to give any Person
other than the Persons referred to in the preceding sentence any legal or
equitable right, remedy or claim under or in respect of this Agreement.
SECTION 9.04 TERMINATION; SURVIVAL OF AGREEMENT. The obligations and
responsibilities of the Note Purchaser created hereby shall terminate on the
Facility Termination Date. All covenants, agreements, representations and
warranties made herein and in the Notes delivered pursuant hereto shall survive
the execution and delivery of this Agreement and the Notes and shall continue in
full force and effect until all interest and principal on the Notes and other
amounts owed hereunder and under the Basic Documents have been paid in full and
the commitment of the Note Purchaser hereunder has been terminated. In addition,
the obligations of the Issuer, the Seller and the Note Purchaser under SECTIONS
3.03, 3.04, 3.05 and 9.05, 9.11, 9.12, 9.13 and 9.16 shall survive the
termination of this Agreement.
SECTION 9.05 PAYMENT OF COSTS AND EXPENSES; INDEMNIFICATION.
(a) PAYMENT OF COSTS AND EXPENSES.
(i) The Seller and the Issuer jointly and severally
agree to pay on demand the reasonable expenses of the Administrative
Agent and the Note Purchaser (including the reasonable out-of-pocket
and legal expenses of the Administrative Agent and the Note Purchaser,
if any) in connection with:
(A) the negotiation, preparation, execution,
delivery and administration of this Agreement and of
each other Basic Document, including schedules and
exhibits, and the consummation of the transactions
contemplated by this Agreement and the other Basic
Documents; and
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(B) any amendments, waivers, consents,
supplements or other modifications to this Agreement
or any other Basic Document as may from time to time
hereafter be proposed.
(ii) The Issuer and the Seller further jointly and
severally agree to (A) pay upon demand any stamp, documentary or other
taxes which may be payable by the Note Purchaser in connection with the
execution or delivery of this Agreement, or the issuance of the Notes
or any other Basic Documents; and (B) hold and save the Administrative
Agent and the Note Purchaser harmless from all liability for any breach
by the Issuer of its obligations under this Agreement.
(iii) The Issuer shall pay on demand all reasonable
out-of-pocket costs and expenses of the Administrative Agent and each
Noteholder, including without limitation the reasonable fees and
disbursements of counsel to the Administrative Agent and each
Noteholder, in connection with the occurrence or continuance of a
Default or Event of Default and the enforcement, collection, protection
or preservation (whether through negotiations, legal proceedings or
otherwise) of this Agreement or any other Basic Document, the
Collateral, any Obligation or any right, remedy, power or privilege of
the Administrative Agent or each Noteholder hereunder or under any
other Basic Document.
(b) INDEMNIFICATION. In consideration of the execution and
delivery of this Agreement by the Note Purchaser and the Administrative Agent,
the Issuer and the Seller, jointly and severally, hereby indemnify and hold the
Note Purchaser and each of their respective officers, directors, employees and
agents (collectively, the "INDEMNIFIED PARTIES") harmless from and against any
and all actions, claims, penalties, judgments, causes of action, suits, losses,
costs, liabilities and damages, and reasonable expenses incurred in connection
therewith (irrespective of whether any such Indemnified Party is a party to the
action for which indemnification hereunder is sought and including, without
limitation, any liability in connection with the offering and sale of the
Notes), including reasonable attorneys' fees and disbursements (collectively,
the "INDEMNIFIED LIABILITIES"), incurred by the Indemnified Parties or any of
them (whether in prosecuting or defending against such actions, suits or claims)
in connection with, arising out of or in any way relating to any investigation,
claim, litigation or other proceeding, pending or threatened (whether or not any
of them is designated a party thereto) in connection with, as a result of, or
arising out of, or relating to:
(i) any transaction financed or to be financed in
whole or in part (including, without limitation, any Residual Interest
Certificate constituting part of the Collateral), directly or
indirectly, with the proceeds from the Notes including, without
limitation, any claim, suit or action related to such transaction,
which claim is based on a violation of Consumer Laws or any applicable
vicarious liability statutes, or the use or operation of any financed
vehicle relating to a Securitization Transaction by any Person;
(ii) this Agreement or any other Basic Document, or
the entering into and performance of this Agreement or any other Basic
Document by any of the Indemnified Parties;
(iii) the Issuer making any payment or prepayment of
principal on any Note on a day which is not a Business Day;
(iv) any default by the Issuer in making any payment
on the Notes on the due date therefore; or
(v) any acceleration of the maturity of any Notes by
the Noteholders in accordance with the terms of this Agreement and the
Indenture, including, but not limited to, any cost, loss or expense
arising in liquidating the Notes and from interest or fees payable by
the Noteholders to lenders of funds obtained by it in order to maintain
the Notes hereunder;
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except for any such Indemnified Liabilities arising for the account of a
particular Indemnified Party by reason of the relevant Indemnified Party's gross
negligence or willful misconduct, as determined by a court of competent
jurisdiction in a final non-appealable judgment. If and to the extent that the
foregoing undertaking may be unenforceable for any reason, the Issuer and the
Seller hereby jointly and severally agree to make the maximum contribution to
the payment and satisfaction of each of the Indemnified Liabilities which is
permissible under applicable law. The indemnity set forth in this SECTION
9.05(b) shall in no event include indemnification for any Taxes (which
indemnification is provided in Section 3.05). Upon the written request of the
Note Purchaser or the Administrative Agent pursuant to this SECTION 9.05(b), the
Issuer and the Seller shall promptly reimburse the Note Purchaser or the
Administrative Agent for the amount of any such Indemnified Liabilities incurred
by the Note Purchaser or the Administrative Agent.
SECTION 9.06 CHARACTERIZATION AS BASIC DOCUMENT; ENTIRE AGREEMENT. This
Agreement shall be deemed to be a Basic Document for all purposes of the
Indenture and the other Basic Documents. This Agreement, together with the
Indenture, the Sale and Contribution Agreement, the Warrants, the Guaranty, the
documents delivered pursuant to SECTION 6.01 and the other Basic Documents,
including the exhibits and schedules thereto, contains a final and complete
integration of all prior expressions by the parties hereto with respect to the
subject matter hereof and shall constitute the entire agreement among the
parties hereto with respect to the subject matter hereof, superseding all
previous oral statements and other writings with respect thereto.
SECTION 9.07 NOTICES. All notices, amendments, waivers, consents and
other communications provided to any party hereto under this Agreement shall be
in writing and addressed, delivered or transmitted to such party at its address
or email address set forth below its signature hereto or at such other address
or email address as may be designated by such party in a notice to the other
parties. Any notice, if mailed and properly addressed with postage prepaid or if
properly addressed and sent by pre-paid courier service, shall be deemed given
when received by the intended recipient thereof, if transmitted by email, notice
shall be deemed to have been duly given when transmitted by email (evidenced by
telephonic or written confirmation of receipt of such email). Without limiting
the obligation of the Issuer or CPS to deliver such information, if any
information that is required to be delivered by the Issuer or CPS under this
Agreement or any of the Basic Documents is material non-public information, the
Issuer or CPS, as applicable, shall notify the Note Purchaser and the
Administrative Agent in writing one Business Day prior to the delivery of such
information.
SECTION 9.08 SEVERABILITY OF PROVISIONS. Any covenant, provision,
agreement or term of this Agreement that is prohibited or is held to be void or
unenforceable in any jurisdiction shall, as to that jurisdiction, be ineffective
to the extent of the prohibition or unenforceability without invalidating the
remaining provisions of this Agreement.
SECTION 9.09 TAX CHARACTERIZATION. Each party to this Agreement (a)
acknowledges that it is the intent of the parties to this Agreement that, for
accounting purposes and for all Federal, State and local income and franchise
tax purposes, the Notes will be treated as evidence of indebtedness issued by
the Issuer, (b) agrees to treat the Notes for all such purposes as indebtedness
and (c) agrees that the provisions of the Basic Documents shall be construed to
further these intentions.
SECTION 9.10 FULL RECOURSE TO ISSUER. The obligations of the Issuer
under this Indenture and the other Basic Documents shall be full recourse
obligations of the Issuer. Notwithstanding the foregoing, except as provided for
in the Guaranty, no recourse shall be had for the payment of any amount owing in
respect of this Agreement, including the payment of any fee hereunder or any
other obligation or claim arising out of or based upon this Agreement, against
any certificateholder, member, employee, officer, manager, director, affiliate
or trustee of the Issuer; PROVIDED, HOWEVER, nothing in this SECTION 9.10 shall
relieve any of the foregoing Persons from any liability that any such Person may
otherwise have as expressly set forth in any Basic Document or for its gross
negligence, bad faith or willful misconduct. Nothing contained in this Section
shall limit or be deemed to limit any obligations of the Issuer, the Purchaser
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or the Seller hereunder or under any other Basic Document, as applicable, which
obligations are full recourse obligations of the Issuer, the Purchaser and the
Seller.
SECTION 9.11 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK,
WITHOUT REGARD TO ITS CONFLICT OF LAW PROVISIONS (OTHER THAN SECTION 5-1401 OF
THE GENERAL OBLIGATIONS LAW), AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
SECTION 9.12 JURISDICTION. ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST ANY
OF THE PARTIES HEREUNDER WITH RESPECT TO THIS AGREEMENT MAY BE BROUGHT IN ANY
STATE OR (TO THE EXTENT PERMITTED BY LAW) FEDERAL COURT OF COMPETENT
JURISDICTION IN THE STATE OF NEW YORK AND BY EXECUTION AND DELIVERY OF THIS
AGREEMENT, ALL PARTIES HEREUNDER ACCEPT FOR THEMSELVES AND IN CONNECTION WITH
THEIR PROPERTIES, GENERALLY AND UNCONDITIONALLY, THE NONEXCLUSIVE JURISDICTION
OF THE AFORESAID COURTS, AND IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT
RENDERED THEREBY IN CONNECTION WITH THIS AGREEMENT.
SECTION 9.13 WAIVER OF JURY TRIAL. ALL PARTIES HEREUNDER HEREBY
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHTS THEY MAY HAVE TO A
TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF,
UNDER, OR IN CONNECTION WITH, THIS NOTE PURCHASE AGREEMENT, OR ANY COURSE OF
CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF
THE PARTIES IN CONNECTION HEREWITH OR THEREWITH. ALL PARTIES ACKNOWLEDGE AND
AGREE THAT THEY HAVE RECEIVED FULL AND SIGNIFICANT CONSIDERATION FOR THIS
PROVISION AND THAT THIS PROVISION IS A MATERIAL INDUCEMENT FOR ALL PARTIES TO
ENTER INTO THIS AGREEMENT.
SECTION 9.14 COUNTERPARTS. This Agreement may be executed in any number
of counterparts (which may include facsimile) and by the different parties
hereto in separate counterparts, each of which when so executed shall be deemed
to be an original, and all of which together shall constitute one and the same
instrument.
SECTION 9.15 SET-OFF. The obligations of the Issuer, the Purchaser and
the Seller hereunder are absolute and unconditional and each of the Issuer, the
Purchaser and the Seller expressly waives any and all rights of set-off,
abatement, diminution or deduction that the Issuer, the Purchaser or the Seller
may otherwise at any time have under applicable law.
(a) In addition to any rights now or hereafter granted under
applicable law and not by way of limitation of such rights, during the
continuance of any Event of Default under the Indenture:
(i) the Note Purchaser is hereby authorized at any
time and from time to time, without notice to the Purchaser or the
Issuer, such notice being hereby expressly waived, to set-off any
obligation owing by the Note Purchaser or any of its Affiliates to the
Purchaser or the Issuer, or against any funds or other property of the
Purchaser or the Issuer, held by or otherwise in the possession of the
Note Purchaser or any of its Affiliates, the respective obligations of
the Purchaser and the Issuer to the Note Purchaser under this Agreement
and the other Basic Documents and irrespective of whether or not the
Note Purchaser shall have made any demand hereunder or thereunder;
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(ii) each of the Administrative Agent, the
Noteholders and the Note Purchaser is hereby authorized at any time and
from time to time, without notice to the Seller, such notice being
hereby expressly waived, to set-off (a) any obligation owing by the
Administrative Agent, any Noteholder or the Note Purchaser or any of
its Affiliates to the Seller or (b) against any funds or other property
of the Seller held by or otherwise in the possession of the
Administrative Agent, any Noteholder or the Note Purchaser or any of
its Affiliates, in each case, the respective obligations of the Seller
to the Administrative Agent, any Noteholder or the Note Purchaser under
this Agreement and the other Basic Documents and irrespective of
whether or not the Administrative Agent, such Noteholder or the Note
Purchaser shall have made any demand hereunder or thereunder; and
(iii) without limitation of the foregoing, each of
the Administrative Agent, the Noteholders, the Note Purchaser and any
Affiliate of the Administrative Agent, the Noteholders or the Note
Purchaser is hereby authorized at any time and from time to time, to
the fullest extent permitted by law, to set off and apply any and all
deposits (general or special, time or demand, provisional or final) at
any time held and other Indebtedness at any time owing by any of the
Administrative Agent, the Noteholders, the Note Purchaser or any of
their respective Affiliates to or for the credit or the account of the
Seller or the Issuer against any and all of the obligations now or
hereafter existing whether or not the Administrative Agent, the
Noteholders or the Note Purchaser shall have made any demand under this
Agreement or any other Basic Document and even though such obligations
may be unmatured. Each of the Administrative Agent, the Noteholders
and, the Note Purchaser agrees promptly to notify the Issuer after any
such set-off and application made by any of the Administrative Agent,
the Noteholders or the Note Purchaser; PROVIDED, HOWEVER, that the
failure to give such notice shall not affect the validity of such
set-off and application.
The rights of each of the Administrative Agent, the
Noteholders and the Note Purchaser under this SECTION 9.15 are in
addition to the other rights and remedies (including other rights of
set-off) that any of the Administrative Agent, the Noteholders and the
Note Purchaser may have.
SECTION 9.16 NONPETITION COVENANTS. Notwithstanding any prior
termination of this Agreement, the Seller shall not, prior to the date that is
one year and one day after the day upon which the outstanding principal amount
of the Notes has been reduced to zero and all Issuer Secured Obligations have
been paid in full, acquiesce, petition or otherwise invoke or cause the
Purchaser or the Issuer to invoke the process of any court or government
authority for the purpose of commencing or sustaining a case against the
Purchaser or the Issuer under any federal or state bankruptcy, insolvency or
similar law or appointing a receiver, liquidator, assignee, trustee, custodian,
sequestrator or other similar official of the Purchaser of the Issuer or any
substantial part of its property, or ordering the winding up or liquidation of
the affairs of the Purchaser or the Issuer.
SECTION 9.17 ASSIGNMENT; PARTICIPATIONS. This Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and permitted assigns. Neither CPS nor the Issuer may assign any of
its respective rights or obligations hereunder, under the Notes or under any
other Basic Document without the prior written consent of the Administrative
Agent. The Note Purchaser may assign, participate or otherwise transfer to any
Affiliate of the Note Purchaser or any other Person all or any of its rights or
obligations under this Agreement and the other Basic Documents. CPS and the
Issuer agree to cooperate with the Note Purchaser in connection with any such
assignment or transfer, to execute and deliver such replacement notes, and to
enter into such restatements of, and amendments, supplements and other
modifications to, this Agreement and the other Basic Documents in order to give
effect to such assignment or transfer.
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SECTION 9.18 NOTE PURCHASER'S RIGHT TO PLEDGE. Nothing in this
Agreement shall preclude the Note Purchaser from engaging in transactions with
third parties involving the selling pursuant to a repurchase arrangement,
pledging or hypothecating of the Collateral, but no such transaction shall
relieve the Note Purchaser of its obligations hereunder. Notwithstanding any
such sale, pledge or hypothecation of the Collateral, the Issuer shall be
entitled to deal solely with the Note Purchaser with respect to such Collateral
and shall not be required to deal with any such third party unless a Default or
Event of Default shall have occurred and be continuing. The Note Purchaser
hereby grants to Issuer the right to perform in the Note Purchaser's stead under
any repurchase, reverse repurchase, loan or similar transaction in which the
Note Purchaser has sold, pledged or otherwise transferred any Pledged Residual
Interest Assets in the event that the Note Purchaser has defaulted on its
obligations to repurchase or accept redelivery of such Pledged Residual Interest
Assets in conformity with the terms of any such transaction and so long as an
Event of Default hereunder by the Issuer shall not have occurred and be
continuing.
SECTION 9.19 SPECIFIC PERFORMANCE. Each of the Seller and the Issuer
expressly agrees that any breach or threatened breach of any duty, covenant,
undertaking, indemnity, agreement or obligation hereunder or under any other
Basic Document will cause irreparable harm to the Noteholder, the Note Purchaser
and the Administrative Agent and the Noteholder, the Note Purchaser and the
Administrative Agent shall be entitled, in addition to any other rights or
remedies provided hereunder, thereunder or otherwise by law or in equity, to
injunctive relief, any application for which neither the Seller nor the Issuer
shall oppose.
[Remainder of Page Intentionally Blank]
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their duly authorized officers and delivered as
of the day and year first above written.
FOLIO FUNDING II, LLC
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
Address: 00000 Xxxxxx Xxxxxx Xxxx
Xxxxxx, Xxxxxxxxxx 00000
Attention: General Counsel
Telephone: (000) 000-0000
Email address: xxxxxxxxx@xxxxxxxxxxxxxxxxx.xxx
CONSUMER PORTFOLIO SERVICES, INC.
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
Address: 00000 Xxxxxx Xxxxxx Xxxx
Xxxxxx, Xxxxxxxxxx 00000
Attention: General Counsel
Telephone: (000) 000-0000
Email address: xxxxxxxxx@xxxxxxxxxxxxxxxxx.xxx
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CITIGROUP FINANCIAL PRODUCTS INC.,
AS NOTE PURCHASER AND ADMINISTRATIVE AGENT
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
Citigroup Financial Products Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx Xxx Xxxx 00000
Attention: Xxx Xxxxxxxxx, Managing Director
email: xxx.xxxxxxxxx@xxxx.xxx
Telephone No.: 000-000-0000
Attention: Xxxx Xxxx, Vice President
email:
Telephone No.: 000-000-0000
with a copy to:
Citigroup Global Securitized Products
000 Xxxxxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Attention: Xxxxxx Xxxx, Senior Vice President
email:
Telephone No.: 000-000-0000
Attention: Xxxx Xxxxxxxx, Vice President
email:
Telephone No.: 000-000-0000
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ANNEX A
TO NOTE PURCHASE AGREEMENT
DEFINED TERMS
-------------
"ABS ISSUANCE AGREEMENTS" means, for any Pledged Residual
Interest Certificates, the agreements pursuant to which such Pledged Residual
Interest Certificates have been issued, including without limitation any
agreements relating to the payment or distribution of amounts to the holder of
such Pledged Residual Interest Certificates.
"ACT" has the meaning specified in SECTION 11.3 of the
Indenture.
"ADMINISTRATIVE AGENT" means Citigroup Financial Products Inc.
or any successor thereto under the Basic Documents.
"ADMINISTRATIVE AGENT FEE" has the meaning specified in
SECTION 3.02(a), of the Note Purchase Agreement.
"AFFILIATE" of any Person means any Person who directly or
indirectly controls, is controlled by, or is under direct or indirect common
control with such Person. For purposes of this definition, the term "CONTROL"
when used with respect to any Person means the power to direct the management
and policies of such Person, directly or indirectly, whether through the
ownership of voting securities, by contract or otherwise; and the terms
"CONTROLLING", "CONTROLLED BY" and "UNDER COMMON CONTROL WITH" have meanings
correlative to the foregoing. In addition, for purposes of this definition, any
fund or investment vehicle, whether existing as of the Initial Closing Date or
thereafter formed, which is managed by any Person, shall be deemed to by an
"AFFILIATE" of such Person. Furthermore, for purposes of this definition, none
of (i) Xxxxxx Xxxxxxxxx Capital Partners, IV, (ii) Citigroup Financial Products,
Inc. or (iii) Xxxxxxx X. Xxxxxxx, Xx. shall be deemed to be an "AFFILIATE" of
CPS or any of its Subsidiaries.
"AGGREGATE INVESTED AMOUNT" means, as of any date of
determination, the sum of the Class A-1 Invested Amount and the Class A-2
Invested Amount.
"ASSIGNMENT" means an assignment from the Seller to the
Purchaser with respect to the Residual Interest Assets conveyed by the Seller to
the Purchaser on a Transfer Date, in substantially the form of EXHIBIT B to the
Sale and Contribution Agreement.
"AUTHORIZED OFFICER" means the Chief Executive Officer, the
Chief Financial Officer or the Chief Investment Officer of the Seller, the
Purchaser or the Issuer, as applicable.
"AVAILABLE FUNDS" means, for each Settlement Date, the sum of
the following amounts with respect to the related Interest Period, without
duplication: (i) all amounts paid or received in respect of the Collateral and
deposited into the Collection Account; (ii) all income from Eligible Investments
or other amounts held in the Collection Account; (iii) all other proceeds of the
Collateral to the extent received by the Issuer, CPS or the Trustee.
"BANKRUPTCY CODE" means the Bankruptcy Reform Act of 1978, as
amended from time to time, and as codified as 11 U.S.C. Section 101 ET SEQ.
"BASIC DOCUMENTS" means the Note Purchase Agreement (including
this Annex A), the Notes, the Indenture, the Sale and Contribution Agreement,
the LLC Agreement, each Assignment, the Guaranty, the Warrants and any other
documents and certificates delivered in connection therewith, as any of the
foregoing may be amended, supplemented or otherwise modified from time to time
in accordance with the terms thereof.
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"BUSINESS DAY" means any (i) day other than a Saturday, a
Sunday or other day on which commercial banks located in the states of
Minnesota, California or New York are authorized or obligated to be closed and
(ii) if the applicable Business Day relates to the determination of LIBOR, a day
which is a day described in clause (i) above which is also a day for trading by
and between banks in the London interbank eurodollar market.
"CHANGE OF CONTROL" means a change resulting when (i) the
Seller no longer owns 100% of the membership interests in the Purchaser, (ii)
the Seller or the Purchaser merges or consolidates with, or sells all or
substantially all of its assets to any other Person, or (iii) any Unrelated
Person or any Unrelated Persons, acting together, that would constitute a Group
together with any Affiliates or Related Persons thereof (in each case also
constituting Unrelated Persons) shall at any time Beneficially Own more than 50%
of the aggregate voting power of all classes of Voting Stock of the Seller. As
used herein, (a) "Beneficially Own" shall mean "beneficially own" as defined in
Rule 13d-3 of the Exchange Act, or any successor provision thereto; provided,
however, that, for purposes of this definition, a Person shall not be deemed to
Beneficially Own securities tendered pursuant to a tender or exchange offer made
by or on behalf of such Person or any of such Person's Affiliates until such
tendered securities are accepted for purchase or exchange; (b) "Group" shall
mean a "group" for purposes of Section 13(d) of the Exchange Act; (c) "Unrelated
Person" shall mean at any time any Person other than the Seller or any of its
Subsidiaries and other than any trust for any employee benefit plan of the
Seller or any of its Subsidiaries; (d) "Related Person" shall mean any other
Person owning (1) 5% or more of the outstanding common stock of such Person, or
(2) 5% or more of the Voting Stock of such Person; and (e) "Voting Stock" of any
Person shall mean the capital stock or other indicia of equity rights of such
Person which at the time has the power to vote for the election of one or more
members of the Board of Directors (or other governing body) of such Person.
"CLASS A PRINCIPAL COVERAGE RATIO" means as of any
Determination Date, the ratio obtained by dividing (a) Available Funds with
respect to the related Settlement Date less all amounts payable pursuant to
clauses (i) through (iv) pursuant to Section 8.5 of the Indenture on the related
Settlement Date by (b) the Required Noteholders' Principal Distributable Amount
with respect to the related Settlement Date.
"CLASS A-1 APPLICABLE MARGIN" means 10.875%.
"CLASS A-1 AGGREGATE INVESTED AMOUNT" means the sum of the
Class A-1 Individual Invested Amounts.
"CLASS A-1 DEFAULT APPLICABLE MARGIN" means the sum of (i) the
Class A-1 Applicable Margin and (ii) 2.00%.
"CLASS A-1 FACILITY AMOUNT" means $10,000,000.
"CLASS A-1 FACILITY TERMINATION DATE" means the first to occur
of (A) the Class A-1 Scheduled Maturity Date or (B) an Event of Default.
"CLASS A-1 FUNDING DATE" means prior to the Effective Date,
each Business Day on which an advance under the Initial Class A-1 Notes
occurred.
"CLASS A-1 HOLDERS" or "CLASS A-1 NOTEHOLDERS" means the
Persons in whose name the Class A-1 Notes are registered on the Note Register,
which on the Effective Date shall initially be Citigroup Financial Products Inc.
or an Affiliate thereof.
"CLASS A-1 INDIVIDUAL INVESTED AMOUNT" means, with respect to
a Class A-1 Noteholder, such Class A-1 Noteholder's portion of the Class A-1
Invested Amount, as determined by the Administrative Agent.
"CLASS A-1 INVESTED AMOUNT" means, with respect to any date of
determination, the aggregate outstanding principal amount of the Class A-1 Notes
at such date of determination.
"CLASS A-1 MAJORITY NOTEHOLDERS" means Holders of Class A-1
Notes that in the aggregate evidence more than 50% of the Class A-1 Aggregate
Invested Amount.
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"CLASS A-1 NOTES" has the meaning set forth in the preamble to
the Indenture.
"CLASS A-1 NOTE INTEREST RATE" means for any day during any
Interest Period the sum of (i) LIBOR for such day and (ii) the Class A-1
Applicable Margin (or if an Event of Default shall have occurred and be
continuing, the Class A-1 Default Applicable Margin) for such day; PROVIDED,
HOWEVER, that the Class A-1 Note Interest Rate will in no event be higher than
the maximum rate permitted by law.
"CLASS A-1 NOTEHOLDERS' INTEREST CARRYOVER SHORTFALL" means,
with respect to any Settlement Date, the excess of the Class A-1 Noteholders'
Interest Distributable Amount for the preceding Settlement Date over the amount
that was actually deposited in the Note Distribution Account on such preceding
Settlement Date on account of the Class A-1 Noteholders' Interest Distributable
Amount.
"CLASS A-1 NOTEHOLDERS' INTEREST DISTRIBUTABLE AMOUNT" means,
with respect to any Settlement Date, the sum of the Class A-1 Noteholders'
Monthly Interest Distributable Amount for such Settlement Date and the Class A-1
Noteholders' Interest Carryover Shortfall for such Settlement Date, if any, plus
interest on the Class A-1 Noteholders' Interest Carryover Shortfall, to the
extent permitted by law, at the Class A-1 Note Interest Rate for the related
Interest Period(s), from and including the preceding Settlement Date to, but
excluding, the current Settlement Date.
"CLASS A-1 NOTEHOLDERS' MONTHLY INTEREST DISTRIBUTABLE AMOUNT"
means, with respect to any Settlement Date, the sum of the interest amounts
accrued on the Class A-1 Notes on each day during the related Interest Period.
The interest amount accrued on the Class A-1 Notes on any day during any
Interest Period shall equal the product of (i) the Class A-1 Note Interest Rate
for such day and (ii) the Class A-1 Invested Amount on such day and (iii) 1/360.
"CLASS A-1 NOTEHOLDERS' PRINCIPAL DISTRIBUTABLE AMOUNT" means
(A) with respect to any Settlement Date (other than any Settlement Date
described in clauses (B) and (C) below) prior to the Class A-1 Facility
Termination Date, the Required Noteholders' Principal Distributable Amount with
respect to such Settlement Date or if such Required Noteholders' Principal
Distributable Amount exceeds the Class A-1 Invested Amount on such Settlement
Date, the portion of such Required Noteholders' Principal Distributable Amount
required to reduce the Class A-1 Invested Amount to zero, (B) upon the
occurrence of a Principal Coverage Ratio Violation with respect to the
Determination Date related to any Settlement Date, for such Settlement Date
only, all remaining Available Funds after making the distributions required by
Section 8.5(i) through (iv) of the Indenture up to the Class A-1 Invested Amount
as of such Settlement Date, (C) upon and subsequent to the occurrence of an
Event of Default, with respect to each Settlement Date, the Class A-1 Invested
Amount as of such Settlement Date and (D) on the Class A-1 Facility Termination
Date, the Class A-1 Invested Amount on such Class A-1 Facility Termination Date.
"CLASS A-1 SCHEDULED MATURITY DATE" means June 15, 2009 or if
the Class A-1 Term is extended pursuant to SECTION 2.02 of the Note Purchase
Agreement, June 15, 2010.
"CLASS A-1 TERM" has the meaning given to such term in SECTION
2.02 of the Note Purchase Agreement.
"CLASS A-2 APPLICABLE MARGIN" means 10.875%.
"CLASS A-2 AGGREGATE INVESTED AMOUNT" means the sum of the
Class A-2 Individual Invested Amounts.
"CLASS A-2 DEFAULT APPLICABLE MARGIN" means the sum of (i) the
Class A-2 Applicable Margin and (ii) 2.00%.
"CLASS A-2 INDIVIDUAL INVESTED AMOUNT" means, with respect to
a Class A-2 Noteholder, such Class A-2 Noteholder's portion of the Class A-2
Invested Amount, as determined by the Administrative Agent.
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"CLASS A-2 FACILITY AMOUNT" means $60,000,000.
"CLASS A-2 FACILITY TERMINATION DATE" means the earlier of (a)
the Class A-2 Scheduled Maturity Date, or (b) the date of the occurrence of an
Event of Default.
"CLASS A-2 HOLDERS" or "CLASS A-2 NOTEHOLDERS" means the
Person in whose name the Class A-2 Notes are registered on the Note Register,
which on the Effective Date shall initially be Citigroup Financial Products Inc.
or an Affiliate thereof.
"CLASS A-2 INVESTED AMOUNT" means, with respect to any date of
determination, the aggregate outstanding principal amount of the Class A-2 Notes
at such date of determination.
"CLASS A-2 MAJORITY NOTEHOLDERS" means Holders of Class A-2
Notes that in the aggregate evidence more than 50% of the Class A-2 Aggregate
Invested Amount.
"CLASS A-2 NOTES" has the meaning set forth in the preamble to
the Indenture.
"CLASS A-2 NOTE INTEREST RATE" means for any day during any
Interest Period the sum of (i) LIBOR for such day and (ii) the Class A-2
Applicable Margin (or if an Event of Default shall have occurred and be
continuing, the Class A-2 Default Applicable Margin) for such day; PROVIDED,
HOWEVER, that the Class A-2 Note Interest Rate will in no event be higher than
the maximum rate permitted by law.
"CLASS A-2 NOTEHOLDERS' INTEREST CARRYOVER SHORTFALL" means,
with respect to any Settlement Date, the excess of the Class A-2 Noteholders'
Interest Distributable Amount for the preceding Settlement Date over the amount
that was actually deposited in the Note Distribution Account on such preceding
Settlement Date on account of the Class A-2 Noteholders' Interest Distributable
Amount.
"CLASS A-2 NOTEHOLDERS' INTEREST DISTRIBUTABLE AMOUNT" means,
with respect to any Settlement Date, the sum of the Class A-2 Noteholders'
Monthly Interest Distributable Amount for such Settlement Date and the Class A-2
Noteholders' Interest Carryover Shortfall for such Settlement Date, if any, plus
interest on the Class A-2 Noteholders' Interest Carryover Shortfall, to the
extent permitted by law, at the Class A-2 Note Interest Rate for the related
Interest Period(s), from and including the preceding Settlement Date to, but
excluding, the current Settlement Date.
"CLASS A-2 NOTEHOLDERS' MONTHLY INTEREST DISTRIBUTABLE AMOUNT"
means, with respect to any Settlement Date, the sum of the interest amounts
accrued on the Class A-2 Notes on each day during the related Interest Period.
The interest amount accrued on the Class A-2 Notes on any day during any
Interest Period shall equal the product of (i) the Class A-2 Note Interest Rate
for such day and (ii) the Class A-2 Invested Amount on such day and (iii) 1/360.
"CLASS A-2 NOTEHOLDERS' PRINCIPAL DISTRIBUTABLE AMOUNT" means
(A) with respect to any Settlement Date (other than any Settlement Date
described in clauses (D), (E) and (F) below) prior to which the Class A-1 Notes
have been paid in full, zero, (B) with respect to any Settlement Date (other
than any Settlement Date described in clauses (D), (E) and (F) below) on which a
portion of the Required Noteholders' Principal Distributable Amount with respect
to such Settlement Date has been applied in an amount sufficient to reduce the
Class A-1 Notes to zero, any remaining Required Noteholders' Principal
Distributable Amount, (C) with respect to any Settlement Date after the Class
A-1 Notes have been paid in full (other than any Settlement Date described in
clauses (D), (E) and (F) below) and prior to the Class A-2 Facility Termination
Date, the Required Noteholders' Principal Distributable Amount with respect to
such Settlement Date, (D) upon the occurrence of a Principal Coverage Ratio
Violation with respect to the Determination Date related to any Settlement Date,
for such Settlement Date only, all remaining Available Funds after making the
distributions required by Section 8.5(i) through (v) of the Indenture up to the
Class A-2 Invested Amount as of such Settlement Date, (E) upon and subsequent to
the occurrence of an Event of Default, with respect to each Settlement Date, the
Class A-2 Invested Amount as of such Settlement Date and (F) on the Class A-2
Facility Termination Date, the Class A-2 Invested Amount on such Class A-2
Facility Termination Date.
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"CLASS A-2 SCHEDULED MATURITY DATE" means June 15, 2009 or if
the Class A-2 Term is extended pursuant to SECTION 2.02 of the Note Purchase
Agreement, June 15, 2010.
"CLASS A-2 TERM" has the meaning given to such term in SECTION
2.02 of the Note Purchase Agreement.
"CODE" means the Internal Revenue Code of 1986, as amended
from time to time, and Treasury Regulations promulgated thereunder.
"COLLATERAL" has the meaning specified in the Granting Clause
of the Indenture.
"COLLATERAL DEFICIENCY" means as of any Valuation Date, the
positive excess, if any, of the Aggregate Invested Amount of the Notes as of
such date of determination over the aggregate market value, as determined by the
Administrative Agent in its sole reasonable discretion, of the Pledged Residual
Interest Certificates issued pursuant to the Eligible Committed Securitizations
as of such date of determination.
"COLLECTION ACCOUNT" means the account designated as such,
established and maintained pursuant to SECTION 8.2 of the Indenture.
"COLLECTION ACCOUNT PROPERTY" means all amounts and
investments held from time to time in the Collection Account (whether in the
form of deposit accounts, Physical Property, book-entry securities,
uncertificated securities or otherwise), and all proceeds of the foregoing.
"COMMISSION" means the United States Securities and Exchange
Commission.
"COMPLIANCE CERTIFICATE" means an Officer's Certificate of
each of CPS and the Issuer certifying that there has not been a breach of any
representation, warranty or covenant of CPS or the Issuer set forth in any of
the Basic Documents.
"CONFIRMATION STATEMENT" means, with respect to any transfer
of Residual Interest Certificates to the Purchaser pursuant to SECTION 2.1 of
the Sale and Contribution Agreement, notice of the Seller's election to transfer
Residual Interest Certificates to the Purchaser, such notice to designate the
related Transfer Date and the Transfer Value of the Residual Interest
Certificates to be transferred by the Seller to the Purchaser on such Transfer
Date.
"CONSOLIDATED TOTAL ADJUSTED EQUITY" of any Person means, with
respect to any fiscal quarter, the total shareholders' equity of such Person and
its consolidated Subsidiaries that, in accordance with GAAP, is reflected on the
consolidated balance sheet of such Person and its consolidated Subsidiaries for
such fiscal quarter, MINUS the aggregate amount of such Person's and its
consolidated Subsidiaries intangible assets, including without limitation,
goodwill, franchises, licenses, patents, trademarks, tradenames, copyrights and
service marks.
"CONSUMER LAWS" means federal and State interest and usury
laws, the federal Truth-in-Lending Act and its implementing Federal Reserve
Board Regulation Z, the federal Equal Credit Opportunity Act and its
implementing Federal Reserve Board Regulation B, the federal Fair Credit
Reporting Act, the federal Fair Debt Collection Practices Act, the Federal Trade
Commission Act and all applicable Federal Trade Commission Trade Regulation
Rules, the Xxxxxxxx-Xxxx Warranty Act, the Servicemembers Civil Relief Act, the
California Military Reservist Relief Act and any other federal, state or local
law relating to credit extensions to servicemembers, the Texas Consumer Credit
Code, the California Automobile Sales Finance Act and the laws of any other
state relating to retail installment sales of motor vehicles and ancillary
products and/or services, State adaptations of the National Consumer Act and of
the Uniform Consumer Credit Code, all other federal, State and local consumer
credit laws and other consumer protection laws relating to the conduct of the
business of CPS, laws requiring the licensing of sale finance companies and/or
lenders, the Uniform Commercial Code as it relates to secured retail installment
sales and secured loans, state and local laws proscribing unlawful, unfair
and/or deceptive acts and practices, federal, state and local laws relating to
privacy and/or data security, and any rules, regulations and/or interpretations
of the foregoing laws.
A-5
"CORPORATE TRUST OFFICE" means with respect to the Trustee,
the principal office of the Trustee at which at any particular time its
corporate trust business shall be administered which office is located at Sixth
Street and Marquette Avenue, MAC N9311-161, Xxxxxxxxxxx, Xxxxxxxxx 00000, email:
XXXXXXXXXXXXXX@XXXXXXXXXX.XXX or at such other address as the Trustee may
designate from time to time by notice to the Note Purchaser, the Seller, the
Issuer, or the principal corporate trust office of any successor Trustee (the
address of which the successor Trustee will notify the Note Purchaser).
"CPS" means Consumer Portfolio Services, Inc., a California
corporation.
"DEFAULT" means any occurrence that is, or with notice or the
lapse of time or both would become, an Event of Default.
"DEFAULT APPLICABLE MARGIN" means the Class A-1 Default
Applicable Margin or the Class A-2 Default Applicable Margin, as applicable.
"DELIVERY" means, when used with respect to Collection Account
Property:
(i) the perfection and priority of a security interest in such
Collection Account Property which is governed by the law of a jurisdiction which
has adopted the 1978 Revision to Article 8 of the UCC (and not the 1994 Revision
to Article 8 of the UCC as referred to in (II) below):
(a) with respect to bankers' acceptances, commercial
paper, negotiable certificates of deposit and other obligations that
constitute "INSTRUMENTS" within the meaning of Section 9-102(a)(47) of
the UCC and are susceptible of physical delivery, transfer thereof to
the Trustee or its nominee or custodian by physical delivery to the
Trustee or its nominee or custodian endorsed to, or registered in the
name of, the Trustee or its nominee or custodian or endorsed in blank,
and, with respect to a certificated security (as defined in Section
8-102 of the UCC), transfer thereof (1) by delivery of such
certificated security endorsed to, or registered in the name of, the
Trustee or its nominee or custodian or endorsed in blank to a financial
intermediary (as defined in Section 8-313 of the UCC) and the making by
such financial intermediary of entries on its books and records
identifying such certificated securities as belonging to the Trustee or
its nominee or custodian and the sending by such financial intermediary
of a confirmation of the purchase of such certificated security by the
Trustee or its nominee or custodian, or (2) by delivery thereof to a
"CLEARING CORPORATION" (as defined in Section 8-102(3) of the UCC) and
the making by such clearing corporation of appropriate entries on its
books reducing the appropriate securities account of the transferor and
increasing the appropriate securities account of a financial
intermediary by the amount of such certificated security, the
identification by the clearing corporation of the certificated
securities for the sole and exclusive account of the financial
intermediary, the maintenance of such certificated securities by such
clearing corporation or a "CUSTODIAN BANK" (as defined in Section
8-102(4) of the UCC) or the nominee of either subject to the clearing
corporation's exclusive control, the sending of a confirmation by the
financial intermediary of the purchase by the Trustee or its nominee or
custodian of such securities and the making by such financial
intermediary of entries on its books and records identifying such
certificated securities as belonging to the Trustee or its nominee or
custodian (all of the foregoing, "PHYSICAL Property"), and, in any
event, any such Physical Property in registered form shall be in the
name of the Trustee or its nominee or custodian; and such additional or
alternative procedures as may hereafter become appropriate to effect
the complete transfer of ownership of any such Collection Account
Property to the Trustee or its nominee or custodian, consistent with
changes in applicable law or regulations or the interpretation thereof;
(b) with respect to any security issued by the U.S.
Treasury, the Federal Home Loan Mortgage Corporation or by the Federal
National Mortgage Association that is a book-entry security held
through the Federal Reserve System pursuant to Federal book-entry
regulations, the following procedures, all in accordance with
applicable law, including applicable Federal regulations and Articles 8
and 9 of the UCC: book-entry registration of such Collection Account
Property to an appropriate book-entry account maintained with a Federal
Reserve Bank by a financial intermediary which is also a "DEPOSITORY"
pursuant to applicable Federal regulations and issuance by such
financial intermediary of a deposit advice or other written
A-6
confirmation of such book-entry registration to the Trustee or its
nominee or custodian of the purchase by the Trustee or its nominee or
custodian of such book-entry securities; the making by such financial
intermediary of entries in its books and records identifying such
book-entry security held through the Federal Reserve System pursuant to
Federal book-entry regulations as belonging to the Trustee or its
nominee or custodian and indicating that such custodian holds such
Collection Account Property solely as agent for the Trustee or its
nominee or custodian; and such additional or alternative procedures as
may hereafter become appropriate to effect complete transfer of
ownership of any such Collection Account Property to the Trustee or its
nominee or custodian, consistent with changes in applicable law or
regulations or the interpretation thereof; and
(c) with respect to any item of Collection Account
Property that is an uncertificated security under Article 8 of the UCC
and that is not governed by CLAUSE (B) above, registration on the books
and records of the issuer thereof in the name of the financial
intermediary, the sending of a confirmation by the financial
intermediary of the purchase by the Trustee or its nominee or custodian
of such uncertificated security, the making by such financial
intermediary of entries on its books and records identifying such
uncertificated securities as belonging to the Trustee or its nominee or
custodian; or
(ii) the perfection and priority of a security interest in
such Collection Account Property which is governed by the law of a jurisdiction
which has adopted the 1994 Revision to Article 8 of the UCC:
(a) with respect to bankers' acceptances, commercial
paper, negotiable certificates of deposit and other obligations that
constitute "INSTRUMENTS" within the meaning of Section 9-102(a)(47) of
the UCC (other than certificated securities) and are susceptible of
physical delivery, transfer thereof to the Trustee by physical delivery
to the Trustee, indorsed to, or registered in the name of, the Trustee
or its nominee or indorsed in blank and such additional or alternative
procedures as may hereafter become appropriate to effect the complete
transfer of ownership of any such Collection Account Property to the
Trustee free and clear of any adverse claims, consistent with changes
in applicable law or regulations or the interpretation thereof;
(b) with respect to a "CERTIFICATED SECURITY" (as
defined in Section 8-102(a)(4) of the UCC), transfer thereof:
(1) by physical delivery of such
certificated security to the Trustee, PROVIDED that if the
certificated security is in registered form, it shall be
indorsed to, or registered in the name of, the Trustee or
indorsed in blank;
(2) by physical delivery of such
certificated security in registered form to a "SECURITIES
intermediary" (as defined in Section 8-102(a)(l4) of the UCC)
acting on behalf of the Trustee if the certificated security
has been specially indorsed to the Trustee by an effective
indorsement.
(c) with respect to any security issued by the U.S.
Treasury, the Federal Home Loan Mortgage Corporation or by the Federal
National Mortgage Association that is a book-entry security held
through the Federal Reserve System pursuant to Federal book entry
regulations, the following procedures, all in accordance with
applicable law, including applicable federal regulations and Articles 8
and 9 of the UCC: book-entry registration of such property to an
appropriate book-entry account maintained with a Federal Reserve Bank
by a securities intermediary which is also a "DEPOSITARY" pursuant to
applicable federal regulations and issuance by such securities
intermediary of a deposit advice or other written confirmation of such
book-entry registration to the Trustee of the purchase by the
securities intermediary on behalf of the Trustee of such book-entry
security; the making by such securities intermediary of entries in its
books and records identifying such book-entry security held through the
Federal Reserve System pursuant to Federal book-entry regulations as
belonging to the Trustee and indicating that such securities
intermediary holds such book-entry security solely as agent for the
Trustee; and such additional or alternative procedures as may hereafter
become appropriate to effect complete transfer of ownership of any such
Collection Account Property to the Trustee free of any adverse claims,
consistent with changes in applicable law or regulations or the
interpretation thereof;
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(d) with respect to any item of Collection Account
Property that is an "UNCERTIFICATED SECURITY" (as defined in Section
8-102(a)(18) of the UCC) and that is not governed by CLAUSE (C) above,
transfer thereof:
(1) (A) by registration to the Trustee as
the registered owner thereof, on the books and records of the
issuer thereof;
(B) by another Person (not a securities
intermediary) who either becomes the registered owner of the
uncertificated security on behalf of the Trustee, or having
become the registered owner acknowledges that it holds for the
Trustee;
(2) the issuer thereof has agreed that it
will comply with instructions originated by the Trustee
without further consent of the registered owner thereof;
(e) with respect to a "SECURITY ENTITLEMENT" (as
defined in Section 8-102(a)(17) of the UCC):
(1) if a securities intermediary (A)
indicates by book entry that a "FINANCIAL ASSET" (as defined
in Section 8-102(a)(9) of the UCC) has been credited to the
Trustee's "SECURITIES ACCOUNT" (as defined in Section 8-501(a)
of the UCC), (B) receives a financial asset (as so defined)
from the Trustee or acquires a financial asset for the
Trustee, and in either case, accepts it for credit to the
Trustee's securities account (as so defined), (C) becomes
obligated under other law, regulation or rule to credit a
financial asset to the Trustee's securities account, or (D)
has agreed that it will comply with "ENTITLEMENT ORDERS" (as
defined in Section 8-102(a)(8) of the UCC) originated by the
Trustee, without further consent by the "ENTITLEMENT HOLDER"
(as defined in Section 8-l02(a)(7) of the UCC), of a
confirmation of the purchase and the making by such securities
intermediary of entries on its books and records identifying
as belonging to the Trustee of (I) a specific certificated
security in the securities intermediary's possession, (II) a
quantity of securities that constitute or are part of a
fungible bulk of certificated securities in the securities
intermediary's possession, or (III) a quantity of securities
that constitute or are part of a fungible bulk of securities
shown on the account of the securities intermediary on the
books of another securities intermediary;
(f) in each case of delivery contemplated pursuant to
CLAUSES (A) through (E) of SUBSECTION (ii) hereof, the Trustee shall
make appropriate notations on its records, and shall cause the same to
be made on the records of its nominees, indicating that such Trust
Property which constitutes a security is held in trust pursuant to and
as provided in the Sale and Contribution Agreement.
"DETERMINATION DATE" means, with respect to any Settlement
Date, the third Business Day preceding such Settlement Date.
"DOLLAR" means lawful money of the United States.
"EFFECTIVE DATE" means July 10, 2008.
"ELIGIBLE ACCOUNT" means either (i) a segregated trust account
that is maintained with a depository institution acceptable to the Note
Purchaser, or (ii) a segregated direct deposit account maintained with a
depository institution or trust company organized under the laws of the United
States of America, or any of the States thereof, or the District of Columbia,
having a certificate of deposit, short-term deposit or commercial paper rating
of at least "A-1+" by Standard & Poor's and "P-1" by Moody's and acceptable to
the Administrative Agent.
"ELIGIBLE COMMITTED SECURITIZATION" means an outstanding
Securitization Transaction that is not subject to a "Default" with respect to a
material breach or an "Event of Default" as such terms are defined under the
related Securitization Transaction Documents.
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"ELIGIBLE INVESTMENTS" mean book-entry securities, negotiable
instruments or securities represented by instruments in bearer or registered
form which evidence:
(a) direct obligations of, and obligations fully
guaranteed as to the full and timely payment by, the United States of
America;
(b) demand deposits, time deposits or certificates of
deposit of any depository institution or trust company incorporated
under the laws of the United States of America or any State thereof (or
any domestic branch of a foreign bank) and subject to supervision and
examination by Federal or State banking or depository institution
authorities; PROVIDED, HOWEVER, that at the time of the investment or
contractual commitment to invest therein, the commercial paper or other
short-term unsecured debt obligations (other than such obligations the
rating of which is based on the credit of a Person other than such
depository institution or trust company) thereof shall be rated "A-1+"
or better by Standard & Poor's and "P-1" by Moody's;
(c) commercial paper that, at the time of the
investment or contractual commitment to invest therein, is rated "A-1+"
or better by Standard & Poor's and "P-1" by Moody's;
(d) bankers' acceptances issued by any depository
institution or trust company referred to in CLAUSE (b) above;
(e) repurchase obligations with respect to any
security that is a direct obligation of, or fully guaranteed as to the
full and timely payment by, the United States of America or any agency
or instrumentality thereof the obligations of which are backed by the
full faith and credit of the United States of America, in either case
entered into with (i) a depository institution or trust company (acting
as principal) described in CLAUSE (b) or (ii) a depository institution
or trust company whose commercial paper or other short term unsecured
debt obligations are rated "A-1+" or better by Standard & Poor's and
"P-1" by Moody's and long term unsecured debt obligations are rated
"AAA" by Standard & Poor's and "AAA" by Moody's;
(f) with the prior written consent of the Note
Purchaser, money market mutual funds registered under the Investment
Company Act of 1940, as amended, having a rating, at the time of such
investment, from each of Standard & Poor's and Moody's in the highest
investment category granted thereby; and
(g) any other investment as may be acceptable to the
Note Purchaser, as evidenced by a writing to that effect, as may from
time to time be confirmed in writing to the Trustee by the
Administrative Agent.
Any of the foregoing Eligible Investments may be purchased by
or through the Trustee or any of its Affiliates.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended.
"EVENT OF DEFAULT" has the meaning specified in SECTION 5.1 of
the Indenture.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.
"EXCLUDED SUBSIDIARY" shall mean each of (i) CPS Leasing,
Inc., (ii) CPS Marketing, Inc., (iii) TFC Enterprises, LLC, (iv) Mercury Finance
Company, LLC, (v) each Subsidiary of Mercury Finance Company, LLC, (vi) Page
Funding, LLC and (vii) Page Three Funding, LLC.
"EXTENSION NOTICE" has the meaning specified in SECTION 2.02
of the Note Purchase Agreement.
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"EXECUTIVE OFFICER" means, with respect to any corporation,
the Chief Executive Officer, Chief Operating Officer, Chief Financial Officer,
President, Senior Vice President, any Vice President, the Secretary or the
Treasurer of such corporation; with respect to any limited liability company,
the manager and any individuals appointed to any of the preceding offices by the
manager; and with respect to any partnership, any general partner thereof.
"EXTENSION BREACH" means, as of any date of determination, one
or more of the following: (i) there has been more than one prior occurrence
(whether or not then continuing) of an Event of Default; (ii) there has been
more than two prior occurrences (whether or not then continuing) of a Principal
Coverage Ratio Violation; (iii) an Event of Default or a Principal Coverage
Ratio Violation (whether or not then continuing) has occurred during the 60 days
prior to the date of delivery of the Extension Notice; or (iv) as of the
Originally Scheduled Facility Termination Date, a Default or an Event of Default
shall have occurred and is continuing.
"FACILITY" means the transactions contemplated by the Basic
Documents.
"FACILITY TERMINATION DATE" means, with respect to the Class
A-1 Notes, the Class A-1 Facility Termination Date and with respect to the Class
A-2 Notes, the Class A-2 Facility Termination Date.
"FDIC" means the Federal Deposit Insurance Corporation.
"FEE SCHEDULE" means that certain notice captioned "Schedule
of Fees for CPS - Citigroup Residual Warehouse" from Xxxxx Fargo Bank, National
Association, as acknowledged by CPS as of July 11, 2007.
"FUNDING DATE" means, with respect to the Class A-1 Notes, a
Class A-1 Funding Date and with respect to the Class A-2 Notes, the Initial
Funding Date.
"FUNDING TRUST" means CPS Receivables Funding Trust, a
Delaware statutory trust.
"FUNDING TRUST CERTIFICATE" means a certificate issued by
Funding Trust that evidences a 100% fractional undivided ownership interest in
one or more instruments or certificates, each of which evidences not less than
99.00% of the residual interest in a Trust and represents the right to receive
amounts to be distributed or paid to the holders of the residual interests
pursuant to the related Securitization Transaction Documents.
"GAAP" means U.S. generally accepted accounting principles
occasioned by the promulgation of rules, regulations, pronouncements or opinions
by the Financial Accounting Standards Board, the American Institute of Certified
Public Accountants or the Securities and Exchange Commission (or successors
thereto or agencies with similar functions) from time to time.
"GOVERNMENTAL AUTHORITY" means the United States of America,
any nation, government, state, local or other political subdivision thereof or
any court, entity or agency exercising executive, legislative, judicial,
regulatory, or administrative functions thereof pertaining thereto.
"GRANT" means to mortgage, pledge, bargain, sell, warrant,
alienate, remise, release, convey, assign, transfer, create, xxxxx x xxxx upon
and a security interest in and right of set-off against, deposit, set over and
confirm pursuant to the Indenture. A Grant of the Collateral or of any other
agreement or instrument shall include all rights, powers and options (but none
of the obligations) of the granting party thereunder, including, as and to the
extent provided in the Basic Documents, the immediate and continuing right
(after an Event of Default) to claim for, collect, receive and give receipt for
principal and interest payments in respect of the Collateral and all other
moneys payable thereunder, to give and receive notices and other communications,
to make waivers or other agreements, to exercise all rights and options, to
bring proceedings in the name of the granting party or otherwise and generally
to do and receive anything that the granting party is or may be entitled to do
or receive thereunder or with respect thereto.
"GUARANTOR" means Consumer Portfolio Services, Inc., a
California corporation.
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"GUARANTY" means the Performance Guaranty dated as of July 10,
2008, by CPS, as the guarantor, in favor of the Noteholder, Note Purchaser, the
Administrative Agent and their successors and permitted assigns, substantially
in the form attached as EXHIBIT B to the Note Purchase Agreement, as the same
may be amended, supplemented or otherwise modified from time to time in
accordance with the terms thereof.
"HOLDER" or "NOTEHOLDER" means a Class A-1 Noteholder or a
Class A-2 Noteholder, as the context may require.
"INDEBTEDNESS" means, with respect to any Person at any time,
any (a) indebtedness or liability of such Person for borrowed money whether or
not evidenced by bonds, debentures, notes, repurchase agreements and similar
arrangements, or other instruments, or for the deferred purchase price of
property or services (including trade obligations); (b) obligations of such
Person as lessee under leases which should be, in accordance with GAAP, recorded
as capital leases; (c) current liabilities of such Person in respect of unfunded
vested benefits under plans covered by Title IV of ERISA; (d) obligations issued
for or liabilities incurred on the account of such Person; (e) obligations or
liabilities of such Person arising under acceptance facilities; (f) obligations
of such Person under any guarantees, endorsements (other than for collection or
deposit in the ordinary course of business) and other contingent obligations to
purchase, to provide funds for payment, to supply funds to invest in any Person
or otherwise to assure a creditor against loss; (g) obligations of others
secured by any lien on property or assets of such Person, whether or not the
obligations have been assumed by such Person; or (h) obligations of such Person
under any interest rate or currency exchange agreement.
"INDENTURE" means the Amended and Restated Indenture dated as
of July 10, 2008, by and among the Issuer, the Administrative Agent and Xxxxx
Fargo Bank, National Association, as Trustee, as the same may be further
amended, supplemented or otherwise modified from time to time in accordance with
the terms thereof.
"INDEPENDENT" means, when used with respect to any specified
Person, that the person (a) is in fact independent of the Issuer, any other
obligor upon the Notes, the Seller, the Purchaser and any Affiliate of any of
the foregoing persons, (b) does not have any direct financial interest or any
material indirect financial interest in the Issuer, any other obligor on the
Notes, the Seller, the Purchaser or any Affiliate of any of the foregoing
Persons and (c) is not connected with the Issuer, any other obligor on the
Notes, the Seller, the Purchaser or any Affiliate of any of the foregoing
Persons as an officer, employee, promoter, underwriter, trustee, partner,
director or Person performing similar functions.
"INITIAL CLASS A-1 NOTES" means up to $60,000,000 Class A-1
Variable Funding Notes issued by the Issuer on the Initial Funding Date.
"INITIAL CLASS A-2 NOTES" means the $60,000,000 Class A-2 Term
Notes issued by the Issuer on the Initial Funding Date.
"INITIAL CLOSING DATE" means July 11, 2007.
"INITIAL FUNDING DATE" means July 13, 2007.
"INSOLVENCY EVENT" means, with respect to a specified Person,
(a) the institution of a proceeding or the filing of a petition against such
Person seeking the entry of a decree or order for relief by a court having
jurisdiction in the premises in respect of such Person or any substantial part
of its property in an involuntary case under any applicable federal or state
bankruptcy, insolvency or other similar law now or hereafter in effect, seeking
the appointment of a receiver, liquidator, assignee, custodian, trustee,
sequestrator or similar official for such Person or for any substantial part of
its property, or ordering the winding-up or liquidation of such Person's
affairs, and such proceeding or petition, decree or order shall remain unstayed
or undismissed for a period of 60 consecutive days or an order or decree for the
requested relief is earlier entered or issued; or (b) the commencement by such
Person of a voluntary case under any applicable federal or state bankruptcy,
insolvency or other similar law now or hereafter in effect, or the consent by
such Person to the entry of an order for relief in an involuntary case under any
such law, or the consent by such Person to the appointment of or taking
possession by, a receiver, liquidator, assignee, custodian, trustee,
sequestrator, or similar official for such Person or for any substantial part of
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its property, or the making by such Person of any general assignment for the
benefit of creditors, or the failure by such Person generally to pay its debts
as such debts become due, or the taking of action by such Person in furtherance
of any of the foregoing.
"INTEREST PERIOD" means, for any Settlement Date on which
interest is to be paid with respect to the Notes, the period from and including
the most recent prior Settlement Date (or, in the case of the first Settlement
Date, the Effective Date) to but excluding such current Settlement Date on which
interest is to be paid.
"INVESTED AMOUNT" means, with respect to the Class A-1 Notes,
the Class A-1 Invested Amount and with respect to the Class A-2 Notes, the Class
A-2 Invested Amount.
"INVESTMENT COMPANY ACT" has the meaning set forth in SECTION
5.01(i)(f) of the Note Purchase Agreement.
"INVESTMENT EARNINGS" means, with respect to any Settlement
Date and the Collection Account, the investment earnings on the Collection
Account Property and deposited into the Collection Account during the related
Interest Period pursuant to SECTION 8.3 of the Indenture.
"ISSUER" means Folio Funding II LLC until a successor replaces
it in accordance with the terms of the Indenture and, thereafter, means the
successor and, for purposes of any provision contained herein, each other
obligor on the Notes.
"ISSUER SECURED OBLIGATIONS" has the meaning set forth in the
Granting Clause of the Indenture.
"ISSUER SECURED PARTIES" has the meaning set forth in the
Granting Clause of the Indenture.
"ISSUER ORDER" and "ISSUER REQUEST" means a written order or
request signed in the name of the Issuer by any one of its Authorized Officers
and delivered to the Trustee.
"LIBOR" means the rate for one-month deposits in U.S. dollars,
which rate is determined on a daily basis by the Note Purchaser by reference to
the British Bankers' Association LIBOR Rates on Bloomberg (or such other service
or services as may be nominated by the British Bankers' Association for the
purpose of displaying London interbank offered rates for U.S. dollar deposits)
on such date (or, if such date is not a Business Day, on the immediately
preceding Business Day) at or about 11 a.m. New York City time; PROVIDED,
HOWEVER, that if no rate appears on Bloomberg on any date of determination,
LIBOR shall mean the rate for one-month deposits in U.S. Dollars which appears
on the Reuters Screen LIBOR Page (as defined in the International Swap Dealers
Association Inc. Code of Standard Wording, Assumptions and Provisions for Swaps,
1986 Edition) on any such date of determination; PROVIDED FURTHER, that if no
rate appears on either Bloomberg or such Reuters Screen LIBOR Page on any such
date of determination, LIBOR shall be determined as follows:
LIBOR will be determined at approximately 11:00 a.m., New York
City time, on such day on the basis of (a) the arithmetic mean of the rates at
which one-month deposits in U.S. dollars are offered to prime banks in the
London interbank market by four (4) major banks in the London interbank market
selected by the Note Purchaser and in a principal amount of not less than
$200,000,000 that is representative for a single transaction in such market at
such time, if at least two (2) such quotations are provided, or (b) if fewer
than two (2) quotations are provided as described in the preceding clause (a),
the arithmetic mean of the rates, as requested by the Note Purchaser, quoted by
three (3) major banks in New York City, selected by the Note Purchaser, at
approximately 11:00 A.M., New York City time, on such day, for one-month
deposits in United States dollars to leading European banks and in a principal
amount of not less than $200,000,000 that is representative for a single
transaction in such market at such time.
"LIEN" means a security interest, lien, charge, pledge,
equity, or other encumbrance of any kind.
"LITIGATION THRESHOLD" has the meaning set forth in SCHEDULE
II to the Note Purchase Agreement.
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"LLC AGREEMENT" means the Limited Liability Company Agreement
of Folio Funding II LLC dated as of July 3, 2007, as such agreement may be
further amended, supplemented or otherwise modified from time to time in
accordance with the terms thereof.
"MAJORITY NOTEHOLDERS" means the Class A-1 Majority
Noteholders and the Class A-2 Majority Noteholders, collectively acting as a
single class.
"MATERIAL ADVERSE CHANGE" means any event, matter, condition
or circumstance which (a) materially and adversely affects the business, assets,
condition (financial or otherwise), results of operations, properties (whether
real, personal or otherwise) or prospects of (i) the Guarantor, the Seller, the
Purchaser or the Issuer, in each case, individually or taken as a whole, or (ii)
CPS and its Subsidiaries, taken as a whole; (b) materially impairs the ability
of CPS or any of its Subsidiaries to perform or observe its obligations under
any Basic Document to which it is a party; (c) materially impairs the rights,
powers or remedies of the Note Purchaser or the Administrative Agent under any
of the Basic Documents; (d) materially adversely affects the legality, binding
affect, validity or enforceability of any of the Basic Documents; or (e)
materially adversely affects the validity, attachment, perfection, priority or
enforcement of any Liens granted in favor of the Trustee.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on
(a) the Collateral; (b) the Guarantor, the Seller, the Purchaser or the Issuer,
in each case, individually or taken as a whole; (c) any of the Basic Documents
(including, without limitation, a material adverse effect on (i) the timely
payment of the principal of or the interest on the Notes or any other amounts
payable under the Basic Documents or (ii) the ability of the Guarantor, the
Seller, the Purchaser or the Issuer to perform any of its obligations under any
Basic Document to which it is a party) or (d) the interests of the
Administrative Agent, the Note Purchaser or the Noteholders under the Basic
Documents.
"MAXIMUM FACILITY INVESTED AMOUNT" means $70,000,000.
"MONTHLY SERVICER'S CERTIFICATE" has the meaning set forth in
SECTION 7.01(i) of the Note Purchase Agreement.
"MOODY'S" means Xxxxx'x Investors Service, Inc., or its
successor.
"MULTIEMPLOYER PLAN" means a Plan which is a multiemployer
plan as defined in Section 4001(a)(3) of ERISA.
"NOTES" means the Class A-1 Notes and/or the Class A-2 Notes,
as the context may require.
"NOTE INTEREST RATE" means, with respect to the Class A-1
Notes, the Class A-1 Note Interest Rate, and with respect to the Class A-2
Notes, the Class A-2 Note Interest Rate.
"NOTE PAYING AGENT" means the Trustee or any other Person that
meets the eligibility standards for the Trustee specified in SECTION 6.11 of the
Indenture and is authorized by the Issuer to make the payments to and
distributions from the Collection Account, including payment of principal of or
interest on each class of Notes on behalf of the Issuer.
"NOTE PURCHASE AGREEMENT" means the Amended and Restated Note
Purchase Agreement dated as of July 10, 2008 among the Note Purchaser, the
Administrative Agent, the Issuer, the Purchaser and the Seller, as the same may
be further amended, supplemented or otherwise modified from time to time in
accordance with the terms thereof.
"NOTE PURCHASER" means Citigroup Financial Products Inc. and
its successors and permitted assigns.
"NOTE REGISTER" and "NOTE REGISTRAR" have the respective
meanings specified in SECTION 2.4 of the Indenture.
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"OFFICER'S CERTIFICATE" means a certificate signed by the
Chief Executive Officer, the Chief Financial Officer or the Chief Investment
Officer of the Seller, the Purchaser or the Issuer, as applicable.
"OPINION OF COUNSEL" means a written opinion of counsel who
may be but need not be counsel to the Purchaser, the Seller or the Issuer, which
counsel shall be reasonably acceptable to the Trustee and the Note Purchaser and
which opinion shall be acceptable in form and substance to the Trustee and to
the Note Purchaser.
"ORIGINALLY SCHEDULED FACILITY TERMINATION DATE" means June
15, 2009.
"OTHER TAXES" has the meaning set forth in SECTION 3.06 of the
Note Purchase Agreement.
"OUTSTANDING" means, as of the date of determination, the
Notes theretofore authenticated and delivered under the Indenture except:
(i) Notes theretofore canceled by the Note Registrar or
delivered to the Note Registrar for cancellation;
(ii) Notes the payment for which money in the necessary amount
has been theretofore deposited with the Trustee or any Note Paying
Agent in trust for the Holders of such Notes (provided, however, that
if such Notes are to be prepaid, notice of such prepayment has been
duly given pursuant to the Indenture, satisfactory to the Trustee); and
(iii) Notes in exchange for or in lieu of one or more other
Notes which have been authenticated and delivered pursuant to the
Indenture unless proof satisfactory to the Trustee is presented that
any such Note is held by a bona fide purchaser.
"PERCENTAGE INTEREST" means (i) with respect to any Class A-1
Note, the percentage obtained by dividing (x) the Class A-1 Individual Invested
Amount by (y) the Class A-1 Aggregate Invested Amount, and (ii) with respect to
any Class A-2 Note, the percentage obtained by dividing (x) the Class A-2
Individual Invested Amount by (y) the Class A-2 Aggregate Invested Amount.
"PERSON" means any individual, corporation, estate,
partnership, limited liability company, joint venture, association, joint stock
company, trust (including any beneficiary thereof), unincorporated organization
or government or any agency or political subdivision thereof.
"PHYSICAL PROPERTY" has the meaning given to such term in the
definition of "Delivery" above.
"PLAN" means any Person that is (i) an "employee benefit plan"
(as defined in Section 3(3) of ERISA) that is subject to the provisions of Title
I of ERISA, (ii) a "plan" (as defined in Section 4975(e)(1) of the Code) that is
subject to Section 4975 of the Code or (ii) any entity whose underlying assets
include assets of a plan described in (i) or (ii) above by reason of such plan's
investment in the entity.
"PLEDGED RESIDUAL INTEREST ASSETS" has the meaning set forth
in the Granting Clause of the Indenture.
"PLEDGED RESIDUAL INTEREST CERTIFICATES" has the meaning set
forth in the Granting Clause of the Indenture.
"PREPAYMENT DATE" has the meaning specified in SECTION 10.1 of
the Indenture.
"PREPAYMENT FEE" has the meaning set forth in SECTION 3.02(B)
of the Note Purchase Agreement.
"PRINCIPAL COVERAGE RATIO VIOLATION" means on any
Determination Date, if the Class A Principal Coverage Ratio is less than the
Principal Coverage Ratio set forth in SCHEDULE III to the Note Purchase
Agreement with respect to the related Settlement Date.
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"PROCEEDING" means any suit in equity, action at law or other
judicial or administrative proceeding.
"PURCHASER" means Folio Funding II LLC.
"RECORD DATE" means, with respect to a Settlement Date, the
close of business on the day immediately preceding such Settlement Date.
"RELEVANT REPORT" means any report, correspondence or other
statement of information related to (a) any Collateral, (b) any secured
financing facility under which CPS or any Affiliate thereof is a borrower, (c)
any securitization of motor vehicle loans or retail installment sale contracts
sponsored or contemplated by CPS, (d) any other actual or contemplated
securities issuance by CPS or any Affiliate of CPS, (e) the origination
policies, procedures or operations of CPS, (f) the servicing policies,
procedures or operations of CPS, or (g) any circumstance, event, or development
relating to the business, operations, properties, condition (financial or
otherwise) or prospects of CPS or the Issuer that constitutes, or is reasonably
likely to constitute, a Material Adverse Change or that has resulted in, or is
reasonably likely to result in, a Material Adverse Effect.
"REQUIRED NOTEHOLDERS' PRINCIPAL DISTRIBUTABLE AMOUNT" means
with respect to any Settlement Date subsequent to the Effective Date, the dollar
amount set forth in SCHEDULE III to the Note Purchase Agreement with respect to
such Settlement Date.
"REQUIREMENT OF LAW" means as to any Person, the certificate
of incorporation and bylaws or other organizational or governing documents of
such Person, and any law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its property or to which such Person or
property is subject.
"RESIDUAL INTEREST ASSETS" means Residual Interest
Certificates, all rights with respect thereto and all proceeds of the foregoing.
"RESIDUAL INTEREST CERTIFICATE" means (i) an instrument or
certificate that evidences not less than 99.00% of the residual interest in a
Trust and represents the right to receive amounts to be distributed or paid to
the holders of the residual interests pursuant to the related Securitization
Transaction Documents or (ii) a Funding Trust Certificate.
"RESPONSIBLE OFFICER" means, in the case of the Trustee, the
chairman or vice-chairman of the board of directors, the chairman or
vice-chairman of the executive committee of the board of directors, the
president, vice-president, assistant vice-president or managing director, the
secretary, and assistant secretary or any other officer of the Trustee
customarily performing functions similar to those performed by any of the above
designated officers and also means, with respect to a particular corporate trust
matter, any other officer to whom such matter is referred because of such
officer's knowledge of and familiarity with the particular subject.
"RULE 144A INFORMATION" has the meaning set forth in SECTION
3.25 of the Indenture.
"SALE AND CONTRIBUTION AGREEMENT" means the Amended and
Restated Sale and Contribution Agreement dated as of July 10, 2008, by and
between Folio Funding II LLC, as Purchaser and Issuer, and CPS, as Seller, as
the same may be further amended, supplemented or otherwise modified from time to
time in accordance with the terms thereof.
"SCHEDULED MATURITY DATE" means, with respect to the Class A-1
Notes, the Class A-1 Scheduled Maturity Date and with respect to the Class A-2
Notes, the Class A-2 Scheduled Maturity Date.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SECURITIZATION ENTITY" has the meaning set forth in SECTION
5.02(i)(m) of the Note Purchase Agreement.
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"SECURITIZATION ISSUER" has the meaning set forth in SECTION
5.02(i)(m) of the Note Purchase Agreement.
"SECURITIZATION TRANSACTION" means any securitization
transaction that is sponsored by CPS or any Affiliate thereof.
"SECURITIZATION TRANSACTION DOCUMENTS" shall mean,
collectively, all agreements, documents, instruments and certificates executed
and delivered in connection with any Securitization Transaction.
"SELLER" means Consumer Portfolio Services, Inc., and its
successors in interest to the extent permitted hereunder.
"SETTLEMENT DATE" means, the 18th day of each calendar month
or, if such 18th day is not a Business Day, the next Business Day.
"SETTLEMENT DATE STATEMENT" has the meaning specified in
SECTION 3.9 of the Indenture.
"SHADOW RATING FAILURE" means the failure of the
Administrative Agent to receive by the 90th day subsequent to the Effective Date
evidence satisfactory to it confirming that each class of securities that is
subject to an insurance policy or a surety bond issued by a monoline insurer
issued by each Securitization Issuer pursuant to the related Securitization
Transaction Documents are rated by Moody's and S&P (without giving effect to any
insurance policy or a surety bond issued by a monoline insurer).
"SPECIFIED AFFILIATES" means any Subsidiary of CPS, other than
an Excluded Subsidiary.
"STANDARD & POOR'S" means Standard & Poor's Ratings Services,
a division of The XxXxxx-Xxxx Companies, Inc., or its successor.
"STANWICH LITIGATION" means In re Structured Settlement
Litigation, Nos. BC 244111, 244271 and 243787 (Cal. Super. Ct. filed May 9,
2001).
"SUBSIDIARY" means, with respect to any Person, any
corporation, partnership, association or other business entity of which a
majority of the outstanding shares of capital stock or other equity interests
having ordinary voting power for the election of directors or their equivalent
is at the time owned by such Person directly or through one or more
Subsidiaries.
"TAXES" has the meaning set forth in SECTION 3.06 of the Note
Purchase Agreement.
"TERM" means, with respect to the Class A-1 Notes, the Class
A-1 Term and with respect to the Class A-2 Notes, the Class A-2 Term.
"TERMINATION DATE" means the date on which the Trustee shall
have received payment and performance of all Secured Obligations and disbursed
such payments in accordance with the Basic Documents and any and all other
amounts due and payable to the Issuer Secured Parties pursuant to the Basic
Documents have been paid in full.
"TRANSFER DATE" has the meaning set forth in ARTICLE I of the
Sale and Contribution Agreement.
"TRANSFER VALUE" has the meaning set forth in ARTICLE I of the
Sale and Contribution Agreement.
"TRANSFERRED RESIDUAL INTEREST CERTIFICATE" has the meaning
set forth in Article I of the Sale and Contribution Agreement.
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"TRUST" means the statutory trust established pursuant to a
Trust Agreement to accept and hold a discrete pool of motor vehicle installment
contracts conveyed by CPS pursuant to the related Securitization Transaction
Documents, the beneficial ownership of which is evidenced by the Residual
Interest Certificate issued by such statutory trust.
"TRUST AGREEMENT" means an agreement between an Affiliate of
CPS, as depositor, and another Person, as owner trustee, pursuant to which a
Trust is established and governed.
"TRUST ESTATE" means all money, instruments, rights and other
property that are subject or intended to be subject to the lien and security
interest of the Indenture for the benefit of the Issuer Secured Parties,
including all Collateral Granted to the Trustee for the benefit of the Issuer
Secured Parties pursuant to the Granting Clause of the Indenture.
"TRUST RECEIPT" shall have the meaning set forth in SECTION
2.12 of the Indenture.
"TRUSTEE" means Xxxxx Fargo Bank, National Association, a
national banking association, not in its individual capacity but as trustee
under the Indenture, or any successor trustee under the Indenture.
"TRUSTEE FEE" means (A) the fee payable to the Trustee on each
Settlement Date in accordance with the Fee Schedule, and (B) any other amounts
payable to the Trustee pursuant to the Fee Schedule.
"UCC" means the Uniform Commercial Code as in effect in the
relevant jurisdiction, as amended from time to time.
"VALUATION DATE" shall have the meaning set forth in SECTION
3.07 of the Note Purchase Agreement.
"WARRANTS" means the warrants to purchase common stock issued
by CPS to Citigroup Global Markets Inc., dated as of July 10, 2008,
substantially in the form attached as EXHIBIT A to the Note Purchase Agreement,
as the same may be amended, supplemented or otherwise modified from time to time
in accordance with the terms thereof.
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