MECHANICS BANK, as Administrator, WILMINGTON TRUST, NATIONAL ASSOCIATION, as Owner Trustee, and U.S. BANK NATIONAL ASSOCIATION, as Indenture Trustee

CALIFORNIA REPUBLIC AUTO RECEIVABLES TRUST 2018-1,
as Issuer,

 

MECHANICS BANK,
as Administrator,

 

WILMINGTON TRUST, NATIONAL ASSOCIATION,
as Owner Trustee,

 

and

 

U.S. BANK NATIONAL ASSOCIATION,
as Indenture Trustee

 

 

 

TABLE OF CONTENTS

 

 

 

THIS ADMINISTRATION AGREEMENT, dated as of June 1, 2018 (as amended, restated, supplemented or otherwise modified from time to time, this “Agreement”), is among California Republic Auto Receivables Trust 2018-1, a Delaware statutory trust (the “Issuer”), Mechanics Bank, a California corporation authorized to transact a banking business (“Mechanics Bank”), as administrator (the “Administrator”), Wilmington Trust, National Association, a national banking association, as owner trustee (the “Owner Trustee”), and U.S. Bank National Association, a national banking association, not in its individual capacity but solely as Indenture Trustee (the “Indenture Trustee”).

 

WHEREAS, the Issuer was established as a separate statutory trust in accordance with the Delaware Statutory Trust Act, 12 Del. C. § 3806(1)(b), et seq. and is governed pursuant to a second amended and restated trust agreement, dated as of June 1, 2018 (the “Trust Agreement”), between California Republic Funding, LLC, a Delaware limited liability company (“Depositor”), and the Owner Trustee;

 

WHEREAS, the Issuer is issuing certain notes (the “Notes”) pursuant to an indenture, dated as of June 1, 2018 (the “Indenture”), between the Issuer and the Indenture Trustee;

 

WHEREAS, pursuant to a sale and servicing agreement, dated as of June 1, 2018 (the “Sale and Servicing Agreement”), among the Issuer, the Depositor, Mechanics Bank and the Indenture Trustee, the Issuer is required to perform certain duties in connection with the Notes and the collateral pledged as security therefor pursuant to the Indenture;

 

WHEREAS, the Issuer, the Indenture Trustee and the Owner Trustee desire that the Administrator perform certain duties of the Issuer and the Owner Trustee under the Sale and Servicing Agreement and the Indenture and to provide such additional services consistent with the terms of this Agreement as the Issuer and the Owner Trustee may from time to time request; and

 

WHEREAS, the Administrator has the capacity to provide the services required hereby and is willing to perform such services for the Issuer and the Owner Trustee on the terms set forth herein.

 

NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained, the parties agree as follows:

 

Section 1.  Capitalized Terms; Interpretive Provisions.  Capitalized terms used herein that are not otherwise defined shall have the meanings ascribed thereto in Appendix A to the Sale and Servicing Agreement, which Appendix is hereby incorporated into and made a part of this Agreement.   Appendix A also contains rules as to usage applicable to this Agreement.

 

Section 2.  Duties of the Administrator.

 

when action is necessary to comply with the respective duties of the Issuer and the Owner Trustee under the Issuer Basic Documents.  The Administrator shall prepare for execution by the Issuer, or shall cause the preparation by other appropriate persons of, all such documents, reports, notices, filings, instruments, certificates and opinions that it shall be the duty of the Issuer or the Owner Trustee to prepare, file or deliver pursuant to the Issuer Basic Documents.

 

In addition, the Administrator shall take or cause the Issuer to take all action that is the duty of the Issuer to take pursuant to the Sale and Servicing Agreement and the other Issuer Basic Documents, except (i) any such duties that constitute Non-Ministerial Matters (as such term is defined in Section 2(c)), (ii) duties that are expressly identified to be performed by the Owner Trustee or another Person on behalf of the Issuer, (iii) duties constituting payment obligations of the Issuer, including duties under Article Five of the Sale and Servicing Agreement and (iv) duties under Section 3.01 of the Indenture.

 

In furtherance of the foregoing, the Administrator shall take all appropriate action that the Issuer or the Owner Trustee is required to take pursuant to the Indenture, including such of the foregoing as are required with respect to the following matters under the Indenture (parenthetical section references are to Sections of the Indenture unless otherwise specified):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

AB and the related rules and regulations of the Commission.  The Depositor shall not exercise its right to request delivery of information or other performance under these provisions other than in good faith, or for purposes other than compliance with the Securities Act, the Exchange Act and the rules and regulations of the Commission under the Securities Act and the Exchange Act.  The Administrator acknowledges that interpretations of the requirements of Regulation AB may change over time, whether due to interpretive guidance provided by the Commission or its staff, consensus among participants in the asset-backed securities markets, advice of counsel or otherwise, and the Administrator agrees to comply with all reasonable requests made by the Depositor in good faith for delivery of information and shall deliver to the Depositor all information and certifications reasonably required by the Depositor to comply with its Exchange Act reporting obligations, including with respect to any of its predecessors or successors. The obligations of the Administrator to provide such information shall survive the removal or termination of the Administrator as Administrator hereunder.

 

 

 

 

 

 

 

provided, however, that the Administrator may, with the consent of the Owner Trustee, the Indenture Trustee or the Persons entitled to vote with respect thereto, under the Trust Agreement, take any action with respect to Non-Ministerial matters that the Administrator, in its good faith judgment, deems to be the best interests of the Issuer.  The Administrator shall be entitled to be reimbursed by the Issuer for any expenses or liabilities incurred without willful misconduct, bad faith or negligence in connection with Non-Ministerial Matters.

 

 

Section 3.  Records.  The Administrator shall maintain appropriate books of account and records relating to services performed hereunder, which books of account and records shall be accessible for inspection by the Issuer, the Depositor and the Noteholders at any time during normal business hours upon reasonable prior notice.

 

Section 4.  Compensation.  As compensation for the performance of the Administrator’s obligations under this Agreement and as reimbursement for its expenses related thereto, the Administrator shall be entitled to a fee equal to $5,000 per annum (the “Administration Fee”), which fee shall be paid by the Servicer out of the Servicing Fee.

 

Section 5.  Additional Information to be Furnished to the Issuer.  The Administrator shall furnish to the Issuer from time to time such additional information regarding the Collateral as the Issuer may reasonably request.

 

Section 6.  Independence of the Administrator.  For all purposes of this Agreement, the Administrator shall be an independent contractor and shall not be subject to the supervision of the Issuer or either Trustee with respect to the manner in which it accomplishes the performance of its obligations hereunder.  Unless expressly set forth herein or otherwise authorized by the Issuer or the related Trustee, the Administrator shall have no authority to act for or represent the Issuer or either Trustee in any way and shall not otherwise be deemed an agent of the Issuer or either Trustee.

 

Section 7.  No Joint Venture.  Nothing contained in this Agreement shall (i) constitute the Administrator and any of the Issuer, either Trustee or both Trustees as members of any partnership, joint venture, association, syndicate, unincorporated business or other separate entity, (ii) be construed to impose any liability as such on any of them or (iii) be deemed to confer on any of them any express, implied or apparent authority to incur any obligation or liability on behalf of the others.

 

Section 8.  Other Activities of the Administrator.  Nothing herein shall prevent the Administrator or its Affiliates from engaging in other businesses or, in its sole discretion, from acting in a similar capacity as an Administrator for any other Person even though such Person may engage in business activities similar to those of the Issuer or either Trustee.

 

Section 9.  Term of Agreement; Resignation and Removal of Administrator.

 

 

 

 

 

 

 

 

The Administrator agrees that if any of the events specified in clauses (i), (ii) or (iii) above shall occur, it shall give written notice thereof to the Issuer, and the Trustees within seven days after the occurrence of such event.

 

 

 

 

 

Section 10.  Action Upon Termination, Resignation or Removal.  Promptly upon the effective date of termination of this Agreement pursuant to Section 9(a) or the resignation or removal of the Administrator pursuant to Sections 9(b), (c) or (d), respectively, the Administrator shall be entitled to be paid all fees and reimbursable expenses accruing to it to the date of such termination, resignation or removal.  The Administrator shall forthwith upon such termination pursuant to Section 9(a) deliver to the Issuer all property and documents of or relating to the Notes or the Collateral then in the custody of the Administrator.  In the event of the resignation or removal of the Administrator pursuant to Sections 9(b), (c) or (d), respectively, the Administrator shall cooperate with the Issuer and take all reasonable steps requested to assist the Issuer in making an orderly transfer of the duties of the Administrator.

 

Section 11.  Notices.  Any notice, report or other communication given hereunder shall be in writing and addressed as follows:

 

 

c/o Wilmington Trust, National Association

▇▇▇▇▇▇ Square North

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Attention:  Corporate Trust Administration

 

 

Mechanics Bank

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Attention:  ▇▇▇▇▇▇ ▇▇▇▇

 

 

U.S. Bank National Association

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7th Floor Mail Code MK-IL-SK7R

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Attention: Structured Finance – California Republic Auto Receivables Trust 2018-1

 

or to such other address as any such party shall have provided to the other parties in writing.  Any notice required to be in writing hereunder shall be deemed given if such notice is mailed by certified mail, postage prepaid, or hand delivered to the address of such party as provided above.

 

Section 12.  Amendments.

 

 

 

 

Section 13.  Successors and Assigns.  This Agreement may not be assigned by the Administrator unless such assignment is previously consented to in writing by the Issuer and the Owner Trustee, subject to satisfaction of the Rating Agency Condition in respect thereof.  An assignment with such consent and satisfaction, if accepted by the assignee, shall bind the assignee hereunder in the same manner as the Administrator is bound hereunder.  Notwithstanding the foregoing, this Agreement may be assigned by the Administrator without the consent of the Issuer or either Trustee; provided, that such assignment is being made (i) to a successor administrator located outside the State of

California if the tax advisers to the Issuer have advised the Administrator in writing that assignment of this Agreement to such successor is necessary in order to avoid the imposition by the State of California of any tax on the gross income of the Issuer or on dealer intangibles deemed to be held by the Issuer as a result of the Issuer being considered to be located in California or (ii) to a corporation or other organization that is a successor (by merger, consolidation or purchase of assets) to the Administrator; provided, further, that any such successor organization described in clause (i) or (ii) above executes and delivers to the Issuer and the Trustees an agreement in which such corporation or other organization agrees to be bound hereunder by the terms of said assignment in the same manner as the Administrator is bound hereunder.  Subject to the foregoing, this Agreement shall bind any successors or assigns of the parties hereto.

 

Each of the parties hereto hereby acknowledges, consents and agrees to any transfer (including assignment, mortgage, pledge or grant of a security interest) by the Issuer to the Indenture Trustee and the Noteholders in accordance with the terms of the Indenture of all of the Issuer’s rights hereunder.

 

Section 14.  GOVERNING LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL.  THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO ANY OTHERWISE APPLICABLE PRINCIPLES OF CONFLICTS OF LAWS (OTHER THAN SECTION 5‑1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW), AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.  EACH OF THE PARTIES HERETO HEREBYAGREES TO THE NON-EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK, LOCATED IN THE BOROUGH OF MANHATTAN, AND THE FEDERAL COURTS LOCATED WITHIN THE STATE OF NEW YORK IN THE BOROUGH OF MANHATTAN.  EACH OF THE PARTIES HERETO HEREBY WAIVES ANY OBJECTION BASED ON FORUM NON CONVENIENS, AND ANY OBJECTION TO VENUE OF ANY ACTION INSTITUTED HEREUNDER IN ANY OF THE AFOREMENTIONED COURTS AND CONSENTS TO THE GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY SUCH COURT.  TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH OF THE PARTIES HERETO WAIVES ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE BETWEEN THE PARTIES HERETO ARISING OUT OF, CONNECTED WITH, RELATED TO OR INCIDENTAL TO THE RELATIONSHIP BETWEEN ANY OF THEM IN CONNECTION WITH THIS INDENTURE OR THE TRANSACTIONS CONTEMPLATED HEREBY.  INSTEAD, ANY SUCH DISPUTE RESOLVED IN COURT WILL BE RESOLVED IN A BENCH TRIAL WITHOUT A JURY.

 

Section 15.  Table of Contents and Headings.  The Table of Contents and the various headings in this Agreement are included for convenience only and shall not affect the meaning or interpretation of any provision of this Agreement.

 

Section 16.  Counterparts.  This Agreement may be executed in any number of counterparts, each of which shall be an original, but all of which shall together constitute one and the same instrument.

 

Section 17.  Severability.  If any one or more of the covenants, agreements, provisions or terms of this Agreement shall be for any reason whatsoever held invalid, illegal or unenforceable, then such covenants, agreements, provisions or terms shall be deemed severable from the remaining covenants, agreements, provisions and terms of this Agreement and shall in no way affect the validity or enforceability of the other covenants, agreements, provisions and terms of this Agreement.

 

Section 18.  Limitation of Liability of Owner Trustee.  Notwithstanding anything contained herein to the contrary, this instrument has been executed by Wilmington Trust not in its individual capacity but solely in its capacity as Owner Trustee of the Issuer and in no event shall Wilmington Trust in its individual capacity have any liability for the representations, warranties, covenants, agreements or other obligations of the Issuer hereunder, as to all of which recourse shall be had solely to the assets of the Issuer.  For all purposes of this Agreement, in the performance of any duties or obligations of the Issuer hereunder, the Issuer shall be subject to, and entitled to the benefits of, the laws and provisions of Articles Six, Seven and Eight of the Trust Agreement.  No recourse under any obligation, covenant or agreement of the Issuer contained in this Agreement shall be had against any agent, independent contractor, or other Person acting on behalf of the Issuer (including the Administrator and the Owner Trustee) as such by the enforcement of any assessment or by any legal or equitable proceeding, by virtue of any statute or otherwise: it being expressly agreed and understood that this agreement is solely an obligation of the Issuer as a Delaware statutory trust, and that no personal liability whatever shall attach to or be incurred by any agent, independent contractor, or other Person acting on behalf of the Issuer (including the Administrator and Owner Trustee), as such, under or by reason of any obligations, covenants or agreements of the Issuer contained in this Agreement, or implied therefrom, and that any and all personal liability for breaches by the Issuer of any of its obligations, covenants or agreements, either at common law or at equity, or by statute or construction, of every such agent, independent contractor, or Person is hereby expressly waived as a condition of and in consideration for the execution of this Agreement.

 

Section 19.  Third-Party Beneficiary.  The Indenture Trustee on behalf of the Noteholders is an express third party beneficiary to this Agreement, is entitled to the rights and benefits hereunder and may enforce the provisions hereof as if it were a party hereto.

 

Section 20.  Nonpetition Covenant.  Each of the parties hereto covenants that it will not at any time institute against, or join any Person in instituting against, the Issuer or the Depositor any bankruptcy, reorganization, arrangement, insolvency or liquidation Proceedings or other Proceedings under any Insolvency Law in connection with any obligations relating to the Basic Documents, and agrees that it will not cooperate with or encourage others to file a bankruptcy petition against the Issuer or the Depositor.

 

Section 21.  Liability of Administrator.  Neither the Administrator nor any of its directors, officers, employees or agents shall be under any liability to the Issuer, the Depositor, either Trustee or the Noteholders, except as provided in this Agreement, for any action taken or for refraining from the taking of any action pursuant to this Agreement; provided, however, that this provision shall not protect the Administrator against any liability by reason of willful misfeasance, bad faith or negligence in the

performance of its duties. The Administrator and any director, officer, employee or agent of the Administrator may conclusively reasonably rely in good faith on the advice of counsel or on any document of any kind prima facie properly executed and submitted by any Person respecting any matters arising under this Agreement or any other Basic Document.

 

Section 22.  Relocation.  If the Administrator’s acting as administrator of the Issuer would cause a tax to be imposed by the State of California on the gross income of the Issuer or on dealer intangibles deemed to be owned by the Issuer, and if the Administrator does not assign this Agreement to a successor pursuant to Section 12, the Administrator shall, if in its reasonable discretion it believes it necessary, relocate its trust administrative functions such that the Issuer shall not, as evidenced by an opinion of a nationally recognized California tax counsel, reasonably satisfactory to the Owner Trustee, be subject to said California tax on its gross income or on any dealer intangibles.

 

Section 23.  Patriot Act.  The parties hereto acknowledge that in accordance with Section 326 of the Patriot Act, U.S. Bank and Mechanics Bank, like all financial institutions and in order to help fight the funding of terrorism and money laundering, are required to obtain, verify, and record information that identifies each person or legal entity that establishes a relationship or opens an account.  The parties to this Agreement agree that they will provide U.S. Bank and Mechanics Bank, as the case may be, with such information as either may request in order for U.S. Bank and Mechanics Bank, as the case may be, to satisfy the requirements of the Patriot Act.

 

IN WITNESS WHEREOF, the parties have caused this Administration Agreement to be duly executed by their respective officers thereunto duly authorized as of the day and year first above written.

 

	CALIFORNIA REPUBLIC AUTO RECEIVABLES TRUST 2018-1
	By:	WILMINGTON TRUST, NATIONAL ASSOCIATION, not in its individual capacity but solely as Owner Trustee
	By:
		Name:
		Title:

 

 

 

	MECHANICS BANK, as Administrator
	By:
		Name:
		Title:

 

 

 

 

	U.S BANK NATIONAL ASSOCIATION, not in its individual capacity but solely as Indenture Trustee
	By:
		Name:
		Title:

 

 

 

 

	WILMINGTON TRUST, NATIONAL ASSOCIATION, as Owner Trustee
	By:
		Name:
		Title:

 

 

 

 

EXHIBIT A

 

POWER OF ATTORNEY

 

                                                              }

 

KNOW ALL MEN BY THESE PRESENTS, that Wilmington Trust, National Association, a national banking association, not in its individual capacity but solely as owner trustee (the “Owner Trustee”) for California Republic Auto Receivables Trust 2018-1 (the “Issuer”), does hereby make, constitute and appoint Mechanics Bank, as administrator (the “Administrator”) under the Administration Agreement, dated as of June 1, 2018 (as amended, supplemented or otherwise modified from time to time, the “Administration Agreement”), among the Issuer, the Owner Trustee, the Administrator and U.S. Bank National Association, as Indenture Trustee, and its agents and attorneys, as Attorneys-in-Fact to execute on behalf of the Owner Trustee or the Issuer all such documents, reports, filings, instruments, certificates and opinions as it should be the duty of the Owner Trustee or the Issuer to prepare, file or deliver pursuant to the Basic Documents, including, without limitation, to appear for and represent the Owner Trustee and the Issuer in connection with the preparation, filing and audit of federal, state and local tax returns pertaining to the Issuer, and with full power to perform any and all acts associated with such returns and audits that the Owner Trustee could perform, including without limitation, the right to distribute and receive confidential information, defend and assert positions in response to audits, initiate and defend litigation, and to execute waivers of restrictions on assessments of deficiencies, consents to the extension of any statutory or regulatory time limit, and settlements.

 

It is expressly understood and agreed that this Power of Attorney is executed and delivered by Wilmington Trust, National Association, not individually or personally, but solely as Owner Trustee.  Wilmington Trust, National Association shall have no duty or obligation to manage or oversee the Attorney or make any payment in respect of, register, record, sell, dispose of or otherwise deal with the Trust’s property or activities (including any activities of any seller or depositor, the Attorney or any other agent of the Issuer, or to otherwise take or refrain from taking any action under, or in connection with, any document contemplated hereby and nothing contained herein shall be construed as creating any liability on Wilmington Trust, National Association, individually or personally, to perform any covenant of the Trust either expressed or implied contained in any document delivered hereunder, all such liability, if any, being expressly waived by the Attorney and any Person in receipt of or relying on this Power of Attorney and by any person claiming by, through or under any such party.  Wilmington Trust, National Association will not make and is not bound to make any investigation into any facts or matters stated or any statement, instrument, opinion, report, notice, request, consent or other paper or document delivered under or in connection with this Power of Attorney, and under no circumstances shall Wilmington Trust, National Association be personally liable for the payment of any indebtedness or expenses of the Issuer or the Owner Trustee or be liable for the breach or failure of any obligation, representation, warranty or covenant made or undertaken by the Issuer or the Owner Trustee hereunder, under any document or agreement executed by the Attorney on behalf of the Issuer or Owner Trustee under any other related documents and no implied duties shall exist hereunder with respect to Wilmington Trust, National Association in its role as Owner Trustee.

 

Notwithstanding anything herein to the contrary, this Power of Attorney does not, and is not intended to, and will not be construed to, grant any authority to the Attorney to (i) expand, increase, incur, or otherwise impose any duties, liabilities or obligations of or on Wilmington Trust, National Association, as Owner Trustee or in its individual capacity, (ii) grant, convey, mortgage, transfer, attach, release, sell, manage, or otherwise deal with any property of Wilmington Trust, National Association, or (iii) provide any guaranty or indemnity by or from Wilmington Trust, National Association, as Owner Trustee or in its individual capacity, for any reason whatsoever.

 

This Power of Attorney is not intended to extend or expand the powers granted to Attorney under the Administration Agreement or to allow the Attorney to take any action not authorized by the Administration Agreement. Notwithstanding anything contained herein to the contrary, the Attorney shall not, without Wilmington Trust, National Association's written consent: (i) initiate or permit the initiation of any action, suit or proceeding under Wilmington Trust, National Association's name, (ii) engage or permit the engagement of counsel to represent Wilmington Trust, National Association in any action, suit or proceeding without the written consent and approval of Wilmington Trust, National Association or (iii) prepare, execute or deliver any government filings, forms, permits, registrations or other documents or take any action with the intent to cause, and that actually causes, Wilmington Trust, National Association to be registered to do business in any State or subject it to jurisdiction other than in the State of Delaware.

 

All powers of attorney for this purpose heretofore filed or executed by the Owner Trustee are hereby revoked.

 

Capitalized terms that are used and not otherwise defined herein shall have the meanings ascribed thereto in the Administration Agreement.

 

EXECUTED this ____ day of June, 2018.

 

	WILMINGTON TRUST, NATIONAL ASSOCIATION, as Owner Trustee
	By:
		Name:
		Title: