EXHIBIT 10.8
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SECOND AMENDED AND RESTATED NOTE PURCHASE AGREEMENT
(VARIABLE FUNDING NOTE, CLASS A),
dated as of February 14, 2007,
among
PAGE FUNDING LLC
as Issuer and Purchaser,
CONSUMER PORTFOLIO SERVICES, INC.,
as Servicer and Seller,
and
UBS REAL ESTATE SECURITIES INC.,
as Class A Note Purchaser and as initial Class A Noteholder
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TABLE OF CONTENTS
PAGE
ARTICLE I DEFINITIONS.................................................................................. 2
SECTION 1.01 Definitions..................................................................2
ARTICLE II PURCHASE AND SALE OF THE NOTE................................................................2
SECTION 2.01 The Initial Note Purchase....................................................2
SECTION 2.02 Advances.....................................................................2
SECTION 2.03 Advance and Prepayment Procedures............................................2
SECTION 2.04 The Class A Notes............................................................3
SECTION 2.05 Commitment Term; Optional Renewal............................................3
SECTION 2.06 Appointment of Trustee under Indenture.......................................3
ARTICLE III INTEREST AND FEES......................................................................... 3
SECTION 3.01 Interest.....................................................................3
SECTION 3.02 Fees.........................................................................4
SECTION 3.03 Increased Costs, etc.........................................................4
SECTION 3.04 Increased Capital Costs......................................................4
SECTION 3.05 Taxes........................................................................5
SECTION 3.06 ▇▇▇▇-to-Market Adjustments...................................................6
SECTION 3.07 Illegality; Substituted Interest Rates.......................................7
ARTICLE IV OTHER PAYMENT TERMS......................................................................... 7
SECTION 4.01 Time and Method of Payment...................................................7
ARTICLE V REPRESENTATIONS AND WARRANTIES................................................................8
SECTION 5.01 Representations and Warranties of the Issuer.................................8
SECTION 5.02 Representations and Warranties of CPS.......................................11
SECTION 5.03 Representations, Warranties and Covenants of the Class A Note Purchaser.....12
ARTICLE VI CONDITIONS .................................................................................14
SECTION 6.01 Conditions to Purchase......................................................14
SECTION 6.02 Conditions to Each Class A Advance..........................................15
ARTICLE VII COVENANTS .................................................................................17
SECTION 7.01 Affirmative Covenants.......................................................17
SECTION 7.02 Negative Covenants. Until the Class A Facility Termination Date:...........21
ARTICLE VIII MISCELLANEOUS PROVISIONS..................................................................23
SECTION 8.01 Amendments..................................................................23
SECTION 8.02 No Waiver; Remedies.........................................................23
SECTION 8.03 Binding on Successors and Assigns...........................................23
SECTION 8.04 Termination; Survival.......................................................24
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SECTION 8.05 Payment of Costs and Expenses; Indemnification..............................24
SECTION 8.06 Characterization as Basic Document; Entire Agreement........................26
SECTION 8.07 Notices.....................................................................26
SECTION 8.08 Severability of Provisions..................................................26
SECTION 8.09 Tax Characterization........................................................26
SECTION 8.10 Full Recourse to Issuer.....................................................26
SECTION 8.11 Governing Law...............................................................26
SECTION 8.12 Submission to Jurisdiction..................................................27
SECTION 8.13 Waiver of Jury Trial........................................................27
SECTION 8.14 Counterparts................................................................27
SECTION 8.15 Set-Off.....................................................................27
SECTION 8.16 Nonpetition Covenants.......................................................28
SECTION 8.17 Servicer References.........................................................28
SECTION 8.18 Confidentiality; Press Releases.............................................28
SECTION 8.19 Intercreditor Agreement to Control..........................................28
SECTION 8.20 No Novation.................................................................29
SECTION 8.21 Survival of Representations, Warranties and Indemnities Under Original Note
Purchase Agreement..........................................................29
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SECOND AMENDED AND RESTATED NOTE PURCHASE AGREEMENT
THIS SECOND AMENDED AND RESTATED NOTE PURCHASE AGREEMENT, dated as of
February 14, 2007 (as amended, supplemented, restated or otherwise modified from
time to time in accordance with the terms hereof, this "AGREEMENT"), is made
among PAGE FUNDING LLC, a Delaware limited liability company (the "ISSUER"),
CONSUMER PORTFOLIO SERVICES, INC., a California corporation ("CPS" or the
"SERVICER"), and UBS REAL ESTATE SECURITIES INC., a Delaware corporation, as
Class A Note Purchaser (in such capacity, together with any successors in such
capacity, the "CLASS A NOTE PURCHASER").
R E C I T A L S
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1. The Issuer and ▇▇▇▇▇ 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"), have
entered into a Second Amended and Restated Indenture of even date herewith (as
the same may be further amended, supplemented, restated or otherwise modified
from time to time in accordance with the terms thereof, the "INDENTURE"),
pursuant to which the Issuer has previously issued a class of notes designated
as the Issuer's Variable Funding Notes, Class A (the "CLASS A NOTES") and
pursuant to which the Issuer will issue on the Class B Closing Date a class of
notes designated as the Issuer's Variable Funding Notes, Class B (the "CLASS B
NOTES"). The Class B Notes will be subordinate in right of payment to the Class
A Notes and to any and all other amounts due and owing to the Class A Note
Purchaser and the Class A Noteholders pursuant to the Basic Documents. The Class
A Notes and the Class B Notes are collectively referred to herein as the
"NOTES".
2. The security for the Notes includes retail installment sale
contracts and/or promissory notes and security agreements secured by the new and
used automobiles, vans, minivans and light trucks financed thereby and certain
other Conveyed Property. The Receivables will initially be serviced by CPS. The
Notes will be secured by the Receivables, which will be pledged by the Issuer to
the Trustee from time to time pursuant to the Indenture.
3. From time to time prior to the Class A Facility Termination
Date, the Issuer will acquire pools of Receivables secured by the new and used
automobiles, vans, minivans and light trucks financed thereby and certain other
Conveyed Property from CPS pursuant to a Third Amended and Restated Sale and
Servicing Agreement of even date herewith (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 SERVICING AGREEMENT"), among the Issuer,
as Issuer and as purchaser (in such capacity, the "PURCHASER"), CPS, as seller
and servicer (in such capacities, the "SELLER" and the "SERVICER,"
respectively), and the Trustee. The Issuer will in turn pledge the Receivables
and the Other Conveyed Property to the Trustee for the benefit of the
Noteholders and the Note Purchasers pursuant to the Indenture. The Receivables
will be described in the schedules to one or more assignments by the Seller to
the Issuer (each, an "ASSIGNMENT") dated as of the cutoff date specified therein
(such date, a "CUTOFF DATE" and each date of transfer, a "FUNDING DATE", in each
case with respect to the related Receivables and other Conveyed Property).
Repayment of each class of Notes and any and all other amounts due and owing to
the Note Purchasers and the Noteholders under the Basic Documents will be
secured by a security interest in the Collateral as provided in the Indenture.
In addition, repayment of the Class B Notes and any and all other amounts due
and owing to the Class B Note Purchasers and the Class B Noteholders under the
Basic Documents will be secured by a security interest in the Additional Class B
Collateral.
4. The Issuer has issued the Class A Notes in favor of the
Class A Note Purchaser and has obtained the agreement of the Class A Note
Purchaser to purchase the Class A Notes and to purchase increases in the Class A
Notes from time to time (each, a "CLASS A ADVANCE"), all of which Class A
Advances (including the initial Class A Advance) will constitute Class A
Advances and will be evidenced by the Class A Notes purchased in connection
herewith. Each Class A Advance and all Class A Advance Amounts with respect
thereto will be secured by all of the Collateral regardless of whether a
particular Receivable was pledged to the Trustee prior to, on the date of, or
subsequent to the date of such Class A Advance or Class A Advance Amount, and
will be senior to all Class B Advances, all Class B Advance Amounts and any and
all other amounts due and owing to the Class B Note Purchaser and the Class B
Noteholders pursuant to the Basic Documents, which are also secured by all of
the Collateral. Subject to the terms and conditions of this Agreement and the
other Basic Documents, the Class A Note Purchaser is willing to purchase the
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Class A Advances from time to time in an aggregate outstanding amount up to the
Class A Maximum Invested Amount until the Class A Facility Termination Date. CPS
has joined in this Agreement to confirm certain representations, warranties and
covenants made by it as Servicer and as Seller for the benefit of the Class A
Note Purchaser.
5. The Notes are subject to the terms and provisions of an
Intercreditor Agreement, dated as of February 14, 2007 (as the same may be
amended, restated, supplemented or otherwise modified from time to time in
accordance with the terms thereof), by and among UBS Real Estate Securities
Inc., as Class A Note Purchaser and the initial Class A Noteholder, The Patriot
Group, LLC and Waterfall Eden Fund, LP, each as a Class B Note Purchaser and as
an initial Class B Note Purchaser, Page Funding LLC, as Issuer and Purchaser,
Consumer Portfolio Services, Inc., as Seller and Servicer, and ▇▇▇▇▇ Fargo Bank,
National Association, as Collateral Agent, Trustee and Note Paying Agent.
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 to the Sale and Servicing Agreement. 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 NOTE
SECTION 2.01 THE INITIAL NOTE PURCHASE. On the terms and conditions set
forth in this Agreement and the other Basic Documents, and in reliance on the
covenants, representations and agreements set forth herein and therein, the
Issuer shall issue and cause the Trustee to authenticate and deliver to the
Class A Note Purchaser an amended and restated Class A Note on the Class B
Closing Date. The amended and restated Class A Note shall be dated the Class B
Closing Date, registered in the name of "UBS Real Estate Securities Inc." and
duly authenticated in accordance with the provisions of the Indenture.
SECTION 2.02 ADVANCES. Upon the Issuer's request, delivered in
accordance with the provisions of SECTION 2.03, subject to the satisfaction of
all conditions precedent thereto and to the terms and conditions of the Basic
Documents, and in reliance upon the representations and warranties set forth
herein and therein, the Class A Note Purchaser shall purchase Class A Advances
from time to time during the Class A Term at the relevant Class A Advance
Amount; provided that no Class A Advance shall be required or permitted to be
purchased on any date if, after giving effect to such Class A Advance, (a) the
Class A Invested Amount would exceed the Class A Maximum Invested Amount or (b)
a Class A Borrowing Base Deficiency exists or would exist. Subject to the terms
and conditions of this Agreement and the other Basic Documents, the aggregate
principal amount of the Class A Notes outstanding may be increased, to a maximum
amount not to exceed the Class A Maximum Advance Amount, or decreased from time
to time.
SECTION 2.03 ADVANCE AND PREPAYMENT PROCEDURES.
(a) Whenever the Issuer wishes the Class A Note Purchaser to
purchase a Class A Advance, the Issuer shall (or shall cause the Servicer to)
notify the Class A Note Purchaser by telephone, promptly followed by written
notice, with an electronic copy of such notice sent to the Class A Note
Purchaser, substantially in the form of EXHIBIT B hereto (each such request, a
"CLASS A ADVANCE REQUEST"), together with the related Addition Notice, a Class A
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Borrowing Base Certificate and a data tape or other electronic file containing
information regarding the Related Receivables to be transferred on such Class A
Funding Date delivered to the Class A Note Purchaser no later than two (2)
Business Days prior to the proposed Class A Funding Date. Each such Class A
Advance Request shall be irrevocable and shall in each case refer to this
Agreement and specify the aggregate amount of the requested Class A Advance to
be purchased on such date, which amount shall be not less than $2,000,000. The
Class A Note Purchaser shall promptly thereafter (but in no event later than
11:00 a.m. New York City time on the proposed Class A Funding Date) notify the
Issuer whether the Class A Note Purchaser has determined to purchase the
requested Class A Advance. On the Class A Funding Date specified in the Class A
Advance Request, subject to the other conditions set forth herein and in the
other Basic Documents, the Class A Note Purchaser shall pay the Class A Advance
Amount for such Class A Advance to or at the direction of the Issuer, by wire
transfer in U.S. dollars of such amount in same day funds to an account
designated by the Issuer or its designee by no later than 4:00 p.m. (New York
City time) on the related Class A Funding Date. The Issuer hereby directs the
Class A Note Purchaser to pay the Class A Advance Amount for each Class A
Advance to CPS for the benefit of the Issuer.
(b) The Class A Notes may be prepaid in whole or in part in
accordance with Article X of the Indenture.
SECTION 2.04 THE CLASS A NOTES. On each date a Class A Advance is
purchased, increasing the outstanding principal amount of the Class A Notes, and
on each date the outstanding principal amount of the Class A Notes is reduced, a
duly authorized officer, employee or agent of the Class A Note Purchaser shall
make appropriate notations in its books and records of the amount of such Class
A Advance made by the Class A Note Purchaser and the amount of such reduction,
as applicable, applied by the Class A Note Purchaser. The Issuer hereby
authorizes each duly authorized officer, employee and agent of the Class A Note
Purchaser to make such notations on the books and records as aforesaid and every
such notation made in accordance with the foregoing authority shall be PRIMA
FACIE evidence of the accuracy of the information so recorded and shall be
binding on the Issuer absent manifest error.
SECTION 2.05 COMMITMENT TERM; OPTIONAL RENEWAL. The term of the
Commitment hereunder (the "CLASS A TERM") shall be for a period commencing on
the Class B Closing Date and ending on the Class A Facility Termination Date.
Thereafter, the Class A Term may be extended for one additional 364-day period
in the respective discretion, and upon the mutual agreement of the parties,
which agreement may take the form of changing the specified "Class A Facility
Termination Date" together with such other terms upon which the parties may
agree. Notwithstanding the foregoing, nothing contained in this SECTION 2.05
shall obligate any of the parties hereto to extend any Class A Term unless it
shall desire to do so in its sole discretion.
SECTION 2.06 APPOINTMENT OF TRUSTEE UNDER INDENTURE. The Class A Note
Purchaser hereby acknowledges and approves the appointment of ▇▇▇▇▇ Fargo Bank,
National Association as the Trustee with respect to the Collateral pursuant to
Section 6.13 of the Indenture.
ARTICLE III
INTEREST AND FEES
SECTION 3.01 INTEREST. Each Class A Advance funded or maintained by the
Class A Note Purchaser during any Interest Period shall bear interest at the
Class A Note Interest Rate.
(a) Interest on Class A Advances shall be due and payable on
each Settlement Date in accordance with the provisions of the Sale and Servicing
Agreement.
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(b) All computations of interest at the Class A Note Interest
Rate shall be made on the basis of a year of 360 days and the actual number of
days elapsed. Whenever any payment of interest or principal in respect of any
Class A Advance 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) On the Class B Closing Date, the Issuer and the Servicer
jointly and severally paid to the Class A Note Purchaser a structuring fee equal
to the product of (x) 1.00% and (y) the Class B Maximum Invested Amount as of
the Class B Closing Date.
(b) The Issuer and the Servicer shall jointly and severally
pay or cause to be paid the Class A Note Purchaser's reasonable out-of-pocket
expenses, including its legal fees, in accordance with and subject to Section
8.05.
(c) On each Settlement Date on or prior to the Class A
Facility Termination Date, the Issuer and the Servicer shall jointly and
severally pay or cause to be paid to the Class A Note Purchaser a facility fee
equal to the product of (i) the product of (x) a fraction, the numerator of
which is the actual number of days elapsed in the related Interest Period and
the denominator of which is 360 and (y) 0.25% and (ii) the excess of (x) the
Class A Maximum Invested Amount over (y) the daily average outstanding Invested
Amount (the "CLASS A UNUSED FACILITY FEE") during the related Interest Period.
SECTION 3.03 INCREASED COSTS, ETC. The Issuer agrees to reimburse the
Class A Note Purchaser for an increase in the cost of, or any reduction in the
amount of any sum receivable by the Class A Note Purchaser, including reductions
in the rate of return on the Class A Note Purchaser's capital, in respect of
making, continuing or maintaining (or of its obligation to make, continue or
maintain) any Class A Advances that arise in connection with any change in, or
the introduction, adoption, effectiveness, interpretation reinterpretation or
phase-in, in each case, after the date hereof, of any law or regulation,
directive, guideline, accounting rule, 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 3.04 and 3.05,
respectively. Each such demand shall be provided to the Issuer in writing and
shall state, in reasonable detail, the reasons therefor and the additional
amount required fully to compensate the Class A Note Purchaser for such
increased cost or reduced amount or return. Such additional amounts shall be
payable by the Issuer to the Class A Note Purchaser within five (5) Business
Days of its receipt of such notice, and such notice shall, in the absence of
manifest error, be conclusive and binding on the Issuer.
SECTION 3.04 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, accounting rule, 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 Class A Note Purchaser or any Person
controlling the Class A Note Purchaser and the Class A Note Purchaser reasonably
determines that the rate of return on its or such controlling Person's capital
as a consequence of its commitment or the purchases of Advances or the
maintenance of the Class A Notes by the Class A Note Purchaser is reduced to a
level below that which the Class A 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 Class A Note Purchaser to
the Issuer, the Issuer shall pay to the Class A Note Purchaser an incremental
commitment fee sufficient to compensate the Class A Note Purchaser or such
controlling Person for such reduction in rate of return. A statement of the
Class A Note Purchaser as to any such additional amount or amounts (including
calculations thereof in reasonable detail), in the absence of manifest error,
shall be conclusive and binding on the Issuer; and PROVIDED, FURTHER, that the
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initial payment of such increased commitment fee shall include a payment for
accrued amounts due under this SECTION 3.03 prior to such initial payment. In
determining such additional amount, the Class A Note Purchaser may use any
method of averaging and attribution that it shall reasonably deem applicable so
long as it applies such method to other similar transactions.
SECTION 3.05 TAXES. All payments by the Issuer of principal of, and
interest on, the Class A Notes and all other amounts (including fees) payable by
the Issuer, the Purchaser, the Seller or the Servicer hereunder or under any
other Basic Document 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 Class A Note Purchaser,
taxes imposed by the United States 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 Class A Note Purchaser is organized or is operating or
any political subdivision thereof (such non-excluded items being called
"TAXES"); PROVIDED THAT, notwithstanding anything herein to the contrary, the
Issuer shall not be required to increase any amounts payable to the Class A Note
Purchaser with respect to any Taxes that are imposed on the Class A Note
Purchaser at the time of acquisition of the Class A Notes by the Class A Note
Purchaser. In the event that any withholding or deduction from any payment to be
made by the Issuer, the Purchaser, the Seller or the Servicer hereunder and/or
under any other Basic Document is required in respect of any Taxes pursuant to
any applicable law, rule or regulation, then the Issuer, the Purchaser, the
Seller or the Servicer, as the case may be, will:
(a) pay directly to the relevant authority the full amount
required to be so withheld or deducted;
(b) promptly forward to the Class A Note Purchaser or its
agent an official receipt or other documentation evidencing such payment to such
authority; and
(c) pay to the Class A Note Purchaser or its agent such
additional amount or amounts as is necessary to ensure that the net amount
actually received by the Class A Note Purchaser will equal the full amount the
Class A Note Purchaser would have received had no such withholding or deduction
been required.
Moreover, if any Taxes are directly asserted against the Class
A Note Purchaser with respect to any payment received by the Class A Note
Purchaser or its agent, the Class A Note Purchaser or such agent may pay such
Taxes and the Issuer, the Purchaser, the Seller or the Servicer 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 Class A Note Purchaser would have received had not such Taxes been
asserted. The Class A 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 3.05.
If the Issuer, the Purchaser, the Seller or the Servicer fails
to pay any Taxes when due to the appropriate taxing authority or fails to remit
to the Class A Note Purchaser or its agent the required receipts or other
required documentary evidence, the Issuer, the Purchaser, the Seller or the
Servicer, as applicable, shall indemnify the Class A Note Purchaser and its
agent, if any, for any Taxes and incremental Taxes, interest or penalties that
may become payable by the Class A Note Purchaser or its agent as a result of any
such failure. For purposes of this SECTION 3.05, a distribution hereunder by the
agent for the Class A Note Purchaser shall be deemed a payment by the Issuer.
Upon the request of the Issuer, the Class A 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
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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 Class A 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 3.05 to the Class A
Note Purchaser if the Class A Note Purchaser fails to comply with the
requirements set forth in this paragraph.
SECTION 3.06 ▇▇▇▇-TO-MARKET ADJUSTMENTS.
(a) The Servicer, the Seller, the Purchaser and the Issuer
shall cooperate with the Class A Note Purchaser and will execute and deliver, or
cause to be executed and delivered, all such documents that may be reasonably
necessary to calculate the Market Value, and will take all such other actions,
as the Class A Note Purchaser may reasonably request from time to time in order
to calculate the Market Value. On each Tuesday (provided such Tuesday is a
Business Day) of each calendar week during the Class A Term, the Class A Note
Purchaser shall advise the Servicer of the Market Value (as calculated by the
Class A Note Purchaser in its sole discretion) and, in reliance upon and subject
to Section 3.06(b), the Class A Note Purchaser consents to the Servicer advising
the Class B Note Purchaser of such Market Value.
(b) In connection with the Class A Note Purchaser's provision
of the Market Value to the Servicer and the Servicer's provision of such Market
Value to the Class B Note Purchaser, in each case pursuant to Section 3.06(a),
each of the Servicer, the Seller, the Purchaser and the Issuer expressly
acknowledges and agrees that the Class A Note Purchaser is agreeing to permit
the Servicer to furnish the Market Value to the Class B Note Purchaser solely as
an accommodation in connection with the transactions contemplated by this
Agreement and the other Basic Documents. The Class A Note Purchaser makes no
representation or warranty (whether express or implied, oral or written) as to
the accuracy or completeness, or fitness for a particular use, of the Market
Value, and assumes no responsibility whatsoever to the Servicer, the Seller, the
Purchaser, the Issuer, the Class B Note Purchasers or the Class B Noteholders in
connection with its calculation of Market Value or any use of such Market Value
by the Servicer, the Seller, the Issuer, the Purchaser, any Class B Note
Purchaser, any Class B Noteholder, any of their respective affiliates or any
other Person and, consequently, the Servicer, the Seller, the Purchaser, the
Issuer, the Class B Note Purchasers and the Class B Noteholders are not relying
upon the Class A Note Purchaser for the Market Value in such regard. In
consideration of the Class A Note Purchaser's providing the Market Value to the
Servicer and permitting the provision of such Market Value to the Class B Note
Purchasers from time to time, for which the Class A Note Purchaser is not
receiving any compensation, each of the Servicer, the Seller, the Purchaser and
the Issuer hereby unconditionally and irrevocably releases and discharges the
Class A Note Purchaser and its respective affiliates, directors, officers,
agents, employees and representatives from, and each of the initial Servicer,
the Seller, the Purchaser and the Issuer hereby agrees, jointly and severally,
to indemnify, hold harmless and reimburse the Class A Note Purchaser and its
respective affiliates, directors, officers, agents, employees and
representatives with respect to, any and all actions, liabilities, losses,
damages or claims of any kind or nature whatsoever (including, without
limitation, reasonable attorney's fees and expenses and expenses of litigation),
as incurred, that may be imposed on or incurred by or asserted against the Class
A Note Purchaser or any such other Person or Persons in any way relating to or
arising out of (i) the Class A Note Purchaser's calculation of Market Value,
(ii) the Class A Note Purchaser's provision of such Market Value to the
Servicer, (iii) the Servicer's provision of such Market Value to the Class B
Note Purchaser, (iv) the use of such Market Value by any of the Servicer, the
Seller, the Purchaser, the Issuer, any Class B Note Purchaser, any Class B
Noteholder, any of their respective affiliates or any other Person in connection
with the transactions contemplated by this Agreement and the other Basic
Documents or otherwise, or (v) with respect to any Pledged Subordinate
Securities issued in connection with a Securitization Transaction, the lead
placement agent's calculation of the market value thereof for purposes of the
definition of Class B Borrowing Base. Indemnification under this Section 3.06(b)
shall survive the termination of this Agreement and the other Basic Documents.
These indemnity obligations shall be in addition to any obligations that the
initial Servicer, the Seller, the Purchaser or the Issuer may otherwise have
under applicable law, hereunder or under any other Basic Document.
(c) In the event that a Class A Borrowing Base Deficiency
exists on any date of determination as determined by the Class A Note Purchaser
in its sole discretion, the Issuer shall on the same Business Day of the receipt
of notice from the Class A Note Purchaser (or if notice is received after 10:01
a.m. New York time, then on the next Business Day) prepay the Class A Invested
Amount by an amount equal to such Class A Borrowing Base Deficiency by paying
such amount to or at the direction of the Class A Note Purchaser. If a Class A
Borrowing Base Deficiency is not fully paid by the Issuer pursuant to the
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immediately preceding sentence, then (i) on any Class A Funding Date, the Class
A Note Purchaser shall net and set-off the amount of any outstanding Class A
Borrowing Base Deficiency against the amount of the Class A Advance to be made
on such Class A Funding Date and (ii) on each Settlement Date as of which any
portion of such Class A Borrowing Base Deficiency shall remain outstanding, any
amount otherwise payable to the Deposit Account on such Settlement Date pursuant
to Section 5.7(a)(xii) of the Sale and Servicing Agreement shall instead be paid
to the Class A Note Purchaser on such Settlement Date as a prepayment of the
Class A Invested Amount (the "CLASS A MARGIN CALL").
(d) The Class A Note Purchaser will not materially change the
methodology by which it calculates the Market Value (such materiality to be
determined by the Class A Note Purchaser in its sole and absolute discretion)
without providing prior written notice of such change to the Servicer and each
Class B Note Purchaser.
SECTION 3.07 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 Class A Note Purchaser to make or
maintain any Class A Notes at the LIBOR rate as contemplated by this Agreement,
or (b) in the event that the Class A 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 Class A 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 Class A Note Purchaser of maintaining or funding
the Class A Notes based on such applicable LIBOR rate (provided that the parties
hereto acknowledge and agree that the Class A Note Purchaser shall only make
such determination if the published LIBOR rate used by the Class A Note
Purchaser does not accurately reflect the actual LIBOR rate), (x) the obligation
of the Class A Note Purchaser to make or maintain the Class A Notes at the LIBOR
rate shall forthwith be suspended and the Class A Note Purchaser shall promptly
notify the Issuer thereof (by telephone confirmed in writing) and (y) each Class
A 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 Class A 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 Class A 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 Class A Note Purchaser to make or maintain the Class A Notes
at the LIBOR rate it becomes lawful for the Class A Note Purchaser to make or
maintain the Class A Notes at the LIBOR rate, or the circumstances described in
clause (b) or (c) above no longer exist, the Class A 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 Class A Note Purchaser to make or maintain
the Class A 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. Unless otherwise specified
herein, all amounts payable to the Class A Note Purchaser hereunder or with
respect to the Class A Notes shall be made by wire transfer of immediately
available funds in Dollars not later than 5:00 p.m., New York City time, on the
due date therefor. Any funds received after that time will be deemed to have
been received on the next Business Day.
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ARTICLE V
REPRESENTATIONS AND WARRANTIES
SECTION 5.01 REPRESENTATIONS AND WARRANTIES OF THE ISSUER. The Issuer
makes the following representations and warranties (references to the Issuer
hereunder include the Purchaser), on which the Class A Note Purchaser relies in
purchasing the Class A Notes and in making each Class A Advance, and on which
the Trustee relies in receiving a security interest in the Receivables and the
other Collateral related thereto under the Indenture. Such representations are
made as of the date of this Agreement and as of each Class A Funding Date, and
shall survive the issuance of the Class A Notes, the making of each Class A
Advance and the grant of a security interest in the Receivables and the other
Collateral related thereto to the Trustee for the benefit of the Note Purchasers
and the Noteholders under the Indenture.
(a) SALE AND SERVICING AGREEMENT AND CLASS B NOTE PURCHASE
AGREEMENT. Each of the representations and warranties of the Purchaser set forth
in Section 7.1 of the Sale and Servicing Agreement is true and correct. The
representations and warranties of the Servicer, the Seller, the Purchaser and
the Issuer in the Basic Documents are 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.
(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
Class A Note Purchaser is not purchasing the Class A Notes with a view toward
further distribution and that the Class A 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 Class A 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 Class A Advance
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 Class A Advance to
be a "purpose credit" within the meaning of Regulation U. Neither the making of
any Class A Advance hereunder, nor the use of the proceeds thereof, will 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.
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(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 Servicer, the Class A
Note Purchaser, the Trustee or the Backup Servicer in connection with any
particular Class A Advance or the negotiation, preparation, delivery or
performance of this Agreement, the Class A Notes, the Indenture, the Sale and
Servicing 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. On such date, the Issuer had no 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 the Issuer, after due
inquiry, that would 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 Class A Note Purchaser for use in connection with the transactions
contemplated hereby or thereby.
(h) COLLATERAL SECURITY.
(i) The Issuer owns and will own each item that it
pledges as Collateral or UBS Cross Collateral, as the case may be, free
and clear of any and all Liens (including, without limitation, any tax
liens), other than Liens created pursuant to the Indenture. No security
agreement, financing statement or other public notice similar in effect
with respect to all or any part of the Collateral or the UBS Cross
Collateral is or will be on file or of record in any public office or
authorized by the Issuer, except (A) such as have been or may
hereinafter be filed with respect to the Collateral or the UBS Cross
Collateral pursuant to the Basic Documents, and (B) such as shall be
terminated as to the Collateral or the UBS Cross Collateral no later
than concurrently with the pledge of such Collateral or UBS Cross
Collateral under the Indenture.
(ii) (A) Granting Clause I of the Indenture is
effective to create, as collateral security for the Notes and the other
obligations to the Class A Note Purchaser, a valid and enforceable Lien
on the Collateral in favor of the Trustee for the benefit of the Note
Purchasers and the Noteholders; and (B) Granting Clause III of the
Indenture is effective to create, as collateral security for the Class
B notes issued under the Bear Indenture and the other obligations to
the Class B note purchasers under the Bear Basic Documents, a valid and
enforceable Lien on the UBS Cross Collateral in favor of the Bear
Indenture Trustee for the benefit of the Class B note purchasers and
the Class B noteholders under the Bear Basic Documents, in each case,
subject to the Intercreditor Agreements.
(iii) The Liens created pursuant to the Indenture (a)
constitute a perfected security interest in the Collateral in favor of
the Trustee for the benefit of the Note Purchasers and the Noteholders,
subject to the Intercreditor Agreement, (b) constitute a perfected
security interest in the UBS Cross Collateral in favor of the Bear
Indenture Trustee for the benefit of the Class B note purchasers and
the Class B noteholders under the Bear Basic Documents, subject to the
Intercreditor Agreement, (c) are 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 (other than, in the case of
the UBS Cross Collateral, the Lien created by Granting Clause I of the
Indenture) and (d) are enforceable as such as against all other
Persons.
(iv) Upon delivery of Contracts evidencing the
Receivables to the Trustee in accordance with Section 2.1(a) of the
Sale and Servicing Agreement, the Lien created pursuant to the
Indenture will constitute a perfected security interest in such
Contracts in favor of the Trustee for the benefit of the Note
Purchasers and the Noteholders, which Lien will be prior to all other
Liens of all other Persons that may be perfected by possession of such
Contracts under Article 9 of the Uniform Commercial Code and which Lien
is enforceable as such as against all other Persons.
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(i) NO CLASS A FUNDING TERMINATION EVENT. No Class A Funding
Termination Event, or event which, with the giving of notice or the passage of
time or both would constitute a Class A Funding Termination Event, 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
the Liens 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
Class A Note Purchaser or its Affiliates, or its counsel, with respect to tax,
accounting, regulatory or any other matters.
(l) BASIC DOCUMENTS. The Issuer has furnished to the Class A
Note Purchaser true, accurate and (except as otherwise consented by the Class A
Note Purchaser) complete copies of all other Basic Documents to which it is a
party as of the date of this Agreement, all of which Basic Documents are in full
force and effect as of the date of this Agreement 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) THE INDENTURE. Each of the representations and warranties
of the Issuer contained in the Indenture is true and correct. No party to any
Basic Document is in default under any of its obligations thereunder.
(n) ELIGIBLE RECEIVABLES. All of the Receivables included in
the Class A Borrowing Base are Eligible Receivables.
(o) NO FRAUDULENT CONVEYANCE. As of the Closing Date and
immediately after giving effect to each Class A Advance, the fair value of the
assets of the Issuer is greater than the fair value of its liabilities
(including, without limitation, contingent liabilities of the Issuer), and the
Issuer 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. 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 is not
transferring any Collateral or any UBS Cross Collateral with any intent to
hinder, delay or defraud any of its creditors. The Issuer 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 Receivables by CPS under the Sale and Servicing Agreement.
(p) NO OTHER BUSINESS. The Issuer engages in no business
activities other than the purchase or acquisition of the Collateral and the
Pledged Subordinate Securities, pledging the Collateral, and the Pledged
Subordinate Securities and the UBS Cross Collateral under the Indenture,
transferring the Collateral in connection with Securitization Transactions and
in connection with whole-loan or other asset 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 hereof, or as
amended with the prior written consent of the Controlling Note Purchaser.
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.
(q) CLASS A NOTES ENTITLED TO BENEFIT OF THE INDENTURE. The
Class A Notes purchased by the Class A Note Purchaser hereunder will be entitled
to the benefit of the security provided in the Indenture.
(r) NO INDEBTEDNESS. The Issuer has no Indebtedness, other
than Indebtedness incurred under (or contemplated by) the terms of the Basic
Documents.
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(s) ERISA. The Issuer does not maintain any Plans, and the
Issuer agrees to notify the Class A Note Purchaser 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
notice to the Class A Note Purchaser 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.
SECTION 5.02 REPRESENTATIONS AND WARRANTIES OF CPS. CPS makes the
following representations and warranties, on which the Issuer relies in
purchasing the Receivables and the Other Conveyed Property related thereto, and
on which the Class A Note Purchaser relies in purchasing its Class A Notes. Such
representations and warranties are made as of the date of this Agreement and as
of each Class A Funding Date, and shall survive the sale by CPS to the Purchaser
of the Receivables and the Other Conveyed Property related thereto under the
Sale and Servicing Agreement, the issuance of the Class A Notes, the purchase of
each Class A Advance and the grant of a security interest in the Receivables and
the other Collateral related thereto by the Issuer to the Trustee for the
benefit of the Note Purchasers and the Noteholders under the Indenture.
(a) SALE AND SERVICING AGREEMENT AND CLASS B NOTE PURCHASE
AGREEMENT. Each of the representations, warranties and covenants of the Seller
and the Servicer in the Sale and Servicing Agreement and the Basic Documents 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) CPS is not 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
would have a Material Adverse Effect and (ii) CPS is not in default under or
with respect to any contract, agreement, lease or other instrument to which CPS
is a party and which is material to CPS's condition (financial or otherwise),
business, operations or properties, and CPS has not 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
Servicer) is true and correct as of the date originally made, as of the date of
this Agreement and as of and after giving effect to the making of each Class A
Advance as if made on and as of the making of each Class A Advance as if set
forth in full herein.
(e) NO PUBLIC OFFERING OF NOTES. Neither the Servicer nor, to
the best of the Servicer's knowledge after due inquiry, anyone acting on the
Servicer'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 Class A Advance
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 Class A Advance to be a "purpose
credit" within the meaning of Regulation U. Neither the making of any Class A
Advance hereunder, nor the use of the proceeds thereof, will 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 2.2 of the Sale and Servicing Agreement, the Sale
and Servicing Agreement is effective to create a valid and enforceable Lien on
the Receivables and the Other Conveyed Property in favor of the Issuer. The Lien
created pursuant to the Sale and Servicing Agreement (a) constitutes a first
priority perfected security interest in the Receivables and the Other Conveyed
Property in favor of the Purchaser, (b) is prior to all other Liens, if any, on
the Receivables and the Other Conveyed Property, and (c) 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 Servicer, the Seller or any of their
respective Affiliates to the Issuer, the Purchaser, the Class A Note Purchaser,
the Trustee or the Backup Servicer in connection with any particular Class A
Advance or the negotiation, preparation, delivery or performance of this
Agreement, the Class A Notes 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 would 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 Class A Note Purchaser 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 Class A Note Purchaser
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 notice to the
Class A Note Purchaser 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.
(j) CLASS A BORROWING BASE CERTIFICATE. The information set
forth in the Class A Borrowing Base Certificate is true and correct in all
material respects.
(k) INSURANCE. During the Class A Term, CPS shall maintain
such insurance as is generally acceptable to prudent institutional investors and
usual and customary for similar companies in its industry.
SECTION 5.03 REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE CLASS A
NOTE PURCHASER. The Class A Note Purchaser hereby covenants to the Issuer and
the Servicer 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
Class A Note Purchaser represents and warrants to the Issuer and the Servicer,
as of the date hereof (or as of a subsequent date on which a successor or
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assignee of the Class A Note Purchaser shall become a party hereto, in which
case such successor or assignee hereby represents and warrants to the Issuer and
the Servicer), that:
(a) it has had an opportunity to discuss the Issuer's and the
Servicer's business, management and financial affairs, and the terms and
conditions of the transactions contemplated by the Basic Documents, with the
Issuer and the Servicer and their respective representatives;
(b) it is a "qualified purchaser" (as defined in Section
2(a)(51) of the Investment Company Act) that is either (i) a "qualified
institutional buyer" as such term is defined under Rule 144A of 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 Class A Notes;
(c) it is purchasing the Class A Notes for its own account, or
for the account of one or more "qualified purchasers" (as defined in Section
2(a)(51) of the Investment Company Act) that are either (i) "qualified
institutional buyers" within the meaning of Rule 144A of 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 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 Class A 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
Class A Notes, and that any transfer must comply with provisions of SECTION 2.5
of the Indenture and SECTION 8.03(b) of this Agreement;
(e) it understands that the Class A Notes will bear the legend
set out in the form of Class A Note attached as EXHIBIT A-1 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 Class A Notes;
(g) it understands that the Class A Notes may be offered,
resold, pledged or otherwise transferred, with prior written notice to the
Issuer, only (A) to the Issuer, (B) in a transaction meeting the requirements of
Rule 144A under the Securities Act, (C) outside the United States to a foreign
person in a transaction meeting the requirements of Regulation S under the
Securities Act, or (D) in a transaction complying with or exempt from the
registration requirements of the Securities Act and in accordance with any
applicable securities laws of any state of the United States or any other
jurisdiction;
(h) if it desires to offer, sell or otherwise transfer, pledge
or hypothecate the Class A Notes as described in clause (B), (C) or (D) of the
preceding paragraph, the transferee of the Class A Notes will be required to
deliver a certificate and may under certain circumstances be required to deliver
an opinion of counsel, in each case, as described in the Indenture, reasonably
satisfactory in form and substance to the Trustee, that an exemption from the
registration requirements of the Securities Act applies to such offer, sale,
transfer or hypothecation. The Class A Note Purchaser understands that the
registrar and transfer agent for the Class A Notes will not be required to
accept for registration of transfer the Class A Notes acquired by it unless the
terms and conditions of Sections 2.4 and 2.5 of the Indenture have been
satisfied;
(i) it will obtain from any purchaser of the Class A Notes
substantially the same representations and warranties contained in the foregoing
paragraphs; and
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(j) this Agreement has been duly and validly authorized,
executed and delivered by it and constitutes a legal, valid, binding obligation
of it, enforceable against it 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 enforcement is considered in a proceeding in equity or at law.
ARTICLE VI
CONDITIONS
SECTION 6.01 CONDITIONS TO PURCHASE. The Class A Note Purchaser will
have no obligation to purchase the amended and restated Class A Notes hereunder
unless:
(a) each of the Basic Documents shall be in full force and
effect and 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;
(b) at the time of such issuance, all conditions to the
issuance of the Class A Notes under the Indenture and under SECTION 2.1(b) of
the Sale and Servicing Agreement shall have been satisfied and all conditions to
the initial Class A Advance set forth under SECTION 6.02 hereof have been
satisfied;
(c) the Class A Note Purchaser shall have received a duly
executed, authorized and authenticated Class A Note registered as provided in
Section 2.01 and stating that the principal amount thereof shall not exceed the
Class A Maximum Invested Amount;
(d) the Issuer shall have paid all fees required to be paid by
it on or prior to the date hereof, including all fees required under SECTIONS
3.01 and 3.02 hereof;
(e) the Class A Notes purchased by the Class A Note Purchaser
hereunder shall be entitled to the benefit of the security provided in the
Indenture and shall constitute the legal, valid and binding obligations of the
Issuer, enforceable against the Issuer in accordance with their 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;
(f) no Material Adverse Change shall have occurred with
respect to CPS or the Issuer since September 30, 2006;
(g) the Class A Note Purchaser shall have received:
(i) a duly executed and delivered original
counterpart of each Basic Document (other than any Basic Document that
contemplates delivery on a date that is after the Class B Closing
Date), each such document being in full force and effect;
(ii) certified copies of charter documents and each
amendment thereto, and resolutions of (A) the Board of Directors or
other governing authority of each of the Issuer and the Servicer
authorizing or ratifying the execution, delivery and performance,
respectively, of all Basic Documents to which it is a party, (B) the
issuance of Class A Notes contemplated hereunder and the issuance of
the Class B Notes contemplated under the Class B Note Purchase
Agreement and (C) the granting of the security interests contemplated
under the Basic Documents, certified by the Secretary or an Assistant
Secretary of each of the Issuer and the Servicer as of the Class A
Closing 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;
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(iii) a certificate of the Secretary or an Assistant
Secretary of the Issuer and the Servicer, 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 the Seller and the
Servicer in this Agreement and the other Basic Documents to which it is
a party are true and correct as of the date hereof, and that the Seller
and the Servicer 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 date hereof;
(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
it is a party are true and correct as of the Class A Closing Date and
that 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 date hereof;
(vi) legal opinions (including opinions relating to
true sale, non-consolidation, UCC, enforceability and corporate
matters, any of which may take the form of a "bring-down" opinion from
the opinions issued on the Class A Closing Date) in form and substance
satisfactory to the Class A Note Purchaser;
(vii) evidence satisfactory to the Class A Note
Purchaser of completion of all necessary UCC filings and search
reports;
(viii) payment of Class A Note Purchaser's reasonable
out-of-pocket fees and expenses in accordance with SECTION 3.02(c)
hereof;
(ix) copies of certificates (long form) 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 Servicer in the States of Delaware and California,
in each case, dated no earlier than 15 days prior to the Class B
Closing Date;
(x) copies (which may be delivered in electronic
format) of any commitment or agreement between the Issuer and the
Servicer and any lender or other financial institution, other than any
such commitment or agreement (or portion thereof) which the Class A
Note Purchaser specifically agrees are not required to be delivered
hereunder; and
(xi) such other documents, opinions and information
as the Class A Note Purchaser may reasonably request; and
(h) the Class A Note Purchaser shall have completed to its
satisfaction its due diligence review of the Issuer and the Servicer and its
respective management, controlling stockholders, systems, underwriting,
servicing and collection operations, static pool performance and its loan files.
SECTION 6.02 CONDITIONS TO EACH CLASS A ADVANCE. The obligation of the
Class A Note Purchaser to fund any Class A Advance on any day (including the
initial Class A Advance) shall be subject to the conditions precedent that on
the date of such Class A Advance, before and after giving effect thereto and to
the application of any proceeds therefrom, the following statements shall be
true:
(a) no Class A Funding Termination Event shall have occurred
and be continuing;
(b) the Class A Facility Termination Date shall not have
occurred and will not occur as a result of making such Class A Advance and no
default under or breach of the Sale and Servicing Agreement or any other Basic
Document exists or will exist;
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(c) no later than two (2) Business Days prior to the requested
Class A Funding Date, the Class A Note Purchaser shall have received a properly
completed Class A Borrowing Base Certificate from the Servicer in the form of
EXHIBIT A hereto;
(d) no later than two (2) Business Days prior to the requested
Class A Funding Date, the Class A Note Purchaser shall have received a properly
completed and executed Class A Advance Request, together with timely receipt of
each other item required pursuant to SECTION 2.03 hereof;
(e) the Servicer shall have delivered to the Class A Note
Purchaser the Servicer's Certificate for the immediately preceding Accrual
Period pursuant to Section 4.9 of the Sale and Servicing Agreement;
(f) such Class A Advance shall be in an amount not less than
$2,000,000;
(g) no more than two Class A Advances shall be made in the
same week;
(h) after giving effect to such Class A Advance, the Class A
Invested Amount will not exceed the Class A Maximum Invested Amount;
(i) the representations and warranties made by the Servicer,
the Seller, the Purchaser, the Issuer and the Class B Note Purchaser in the
Basic Documents are true and correct as of the date of such requested Class A
Advance, with the same effect as though made on the date of such Class A
Advance, and the Class A Note Purchaser shall have received (I) a certificate
from the Servicer and the Seller to such effect with respect to its
representations and warranties and that the Servicer and the Seller 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 related
Class A Funding Date, and (II) a certificate from the Issuer and the Purchaser
to such effect with respect to its representations and warranties and that 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 related Class A Funding Date, which certifications,
in each case, may be included in the related Class A Advance Request;
(j) the Trustee shall (in accordance with the procedures
contemplated in SECTION 3.4 of the Sale and Servicing Agreement) have confirmed
receipt of the related Receivable File for each Eligible Receivable included in
the Class A Borrowing Base calculation and shall have delivered to the
Controlling Note Purchaser (with a copy thereof to each other Note Purchaser) a
Trust Receipt with respect to the Receivable Files related to the Related
Receivables to be purchased on such Class A Funding Date, or if requested by the
Class A Note Purchaser, an aggregate Trust Receipt with respect to the
Receivable Files for all of the Receivables;
(k) after giving effect to such Class A Advance, there shall
be no Class A Borrowing Base Deficiency;
(l) all limitations and conditions specified in SECTION 2.02
of this Agreement and in SECTION 2.1(b) of the Sale and Servicing Agreement
shall have been satisfied with respect to the making of such Class A Advance;
(m) after giving effect to such Class A Advance, no Material
Adverse Change with respect to CPS or the Issuer shall have occurred and there
shall have been no Material Adverse Effect;
(n) none of the Issuer, the Purchaser, the Seller or the
Servicer shall have breached any of its covenants under the Basic Documents in
any material respect;
(o) the Issuer shall have provided the Class A Note Purchaser
with all other information that the Class A Note Purchaser may reasonably
require, if the Class A Note Purchaser shall have given the Issuer reasonable
advance notice of such requirements;
(p) all amounts due and owing to the Class A Noteholders and
the Class A Note Purchaser under this Agreement and/or any of the other Basic
Documents shall have been paid in full;
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(q) after giving effect to such Class A Advance and the
application of proceeds therefrom, no Default or Event of Default shall have
occurred and be continuing on and as of the requested Class A Funding Date;
(r) if any TFC Receivables are being purchased in connection
with such Class A Advance, no TFC Funding Termination Event shall have occurred;
and
(s) on and as of the requested Class A Funding Date, each of
the representations and warranties set forth in Section 3.1 of the Sale and
Servicing Agreement is true and correct for all Related Receivables being
pledged by the Issuer to the Trustee for the benefit of the Noteholders and the
Note Purchasers under the Indenture on such date and each Related Receivable is
an Eligible Receivable. No such Related Receivable was originated in any
jurisdiction in which the Seller is required to be licensed in order to own such
Related Receivable unless the Seller has obtained such license prior to owning
such Related Receivable. With respect to each such Related Receivable, the
applicable Dealer or Consumer Lender (if such Consumer Lender is not the
Seller), as applicable, has either been paid or received credit from Seller for
all proceeds from the sale of such Related Receivable to the Seller.
The giving of any notice pursuant to SECTION 2.03 shall
constitute a representation and warranty by the Issuer and the Servicer that all
conditions precedent to such Class A Advance have been satisfied.
ARTICLE VII
COVENANTS
SECTION 7.01 AFFIRMATIVE COVENANTS
Until the Class A Facility Termination Date:
(a) NOTICE OF DEFAULTS, OTHER FUNDING TERMINATION EVENTS,
LITIGATION, ADVERSE JUDGMENTS, ETC. CPS or the Issuer, as applicable, shall give
notice to each Note Purchaser promptly:
(i) upon CPS or the Issuer, as the case may be,
becoming aware of, and in any event within three (3) Business Days
after, the occurrence of any Event of Default or Default or any Class B
Event of Default or Class B Default or any event of default or default
under any other Basic Document or any other material agreement of CPS;
(ii) upon CPS or the Issuer, as the case may be,
becoming aware of, and in any event within three (3) Business Days
after, the occurrence of any Funding Termination Event,
(iii) upon, and in any event within three (3)
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 or the Issuer (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, if adversely determined, would cause a Material
Adverse Effect;
(iv) upon, and in any event within three (3) Business
Days after, CPS or the Issuer, as the case may be, becoming aware of
any event or change in circumstances that could have a Material Adverse
Effect, constitute a Material Adverse Change or cause an Event of
Default or a Class B Event of Default; and
(v) upon, and in any event within three (3) 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 or the Issuer, its
respective assets or any of the Collateral in an amount in excess of
$1,000,000.
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.
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(b) TAXES. Each of CPS and the Issuer shall pay and discharge
all taxes and governmental charges upon it 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 Class A
Note Purchaser 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 Servicing Agreement, the Notes and the
other Basic Documents.
(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 other than the Lien created pursuant to the Pledge Agreement.
(e) CLASS A BORROWING BASE CERTIFICATES. The Issuer shall
deliver to the Class A Note Purchaser, together with each Class A Advance
Request, a Class A Borrowing Base Certificate in accordance with Section 2.03(a)
hereof.
(f) COLLATERAL STATEMENTS. The Issuer will furnish or cause to
be furnished to the Class A Note Purchaser from time to time statements and
schedules further identifying and describing the Collateral and the UBS Cross
Collateral and such other reports in connection with the Collateral or the UBS
Cross Collateral as the Class A Note Purchaser 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) ACTIONS TO ENFORCE RIGHTS UNDER CONTRACTS. CPS and the
Issuer shall take such reasonable and lawful actions as the Controlling Note
Purchaser shall request to enforce the rights of the Note Purchasers and the
Noteholders under the Basic Documents with respect to the Collateral, and,
following the occurrence of an Event of Default, shall take such reasonable and
lawful actions as are necessary to enable the Controlling Note Purchaser to
exercise such rights in its own name.
(h) HEDGING STRATEGY. The Issuer shall implement and maintain
a hedging strategy that is reasonably acceptable to the Controlling Note
Purchaser; PROVIDED, THAT, for purposes of this subparagraph (h), a hedging
strategy consisting of the Seller sponsoring one or more securitizations of
pools of Receivables at least every 120 days during the term of the Class A
Notes shall be deemed acceptable to the Controlling Note Purchaser.
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(i) MONTHLY SERVICER'S CERTIFICATE. The Issuer shall, or shall
cause the Servicer (so long as CPS is Servicer) to, deliver to the Note
Purchasers, the Trustee and the Backup Servicer, no later than 12:00 noon, New
York City time, on each Determination Date, in a computer-readable format
reasonably acceptable to each such Person, a Servicer's Certificate executed by
a Responsible Officer or agent of Servicer containing all information required
to be included in such Servicer's Certificate under Section 4.9 of the Sale and
Servicing Agreement and related monthly data. The Issuer shall, or shall cause
the Servicer (so long as the CPS is Servicer) to, deliver to each Note
Purchaser, the Trustee and the Backup Servicer a hard copy of any such
Servicer's Certificate upon request of such Person.
(j) SEPARATE EXISTENCE; NO COMMINGLING. During each Class A
Term, 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 Receivables to be
pledged to the Trustee for the benefit of the Note Purchasers and the
Noteholders pursuant to the Indenture and (ii) to sell, securitize or otherwise
liquidate all or any portion of such Receivables in accordance with the
provisions of the Basic Documents. In addition, during each Class A Term, 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 ▇▇▇▇▇▇▇ ▇▇▇▇▇ LLP in the true sale and non consolidation opinions of
▇▇▇▇▇▇▇ ▇▇▇▇▇ LLP; provided that in the event that any request is made for the
Class A Note Purchaser 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
▇▇▇▇▇▇▇ ▇▇▇▇▇ LLP, such request shall be accompanied by an opinion of ▇▇▇▇▇▇▇
▇▇▇▇▇ LLP, or such other counsel as may be reasonably satisfactory to the Class
A Note Purchaser, that the conclusions set forth in the true sale and non-
consolidation opinions of ▇▇▇▇▇▇▇ ▇▇▇▇▇ LLP will be unaffected by such change.
(k) OTHER LIENS OR INTERESTS. Except for the conveyances under
the Sale and Servicing Agreement and the other Basic Documents, 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 Receivables or the
Other Conveyed Property. Except for the pledges pursuant to the Indenture and
the other Basic Documents, 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 Collateral or the UBS Cross Collateral (other than,
in the case of the UBS Cross Collateral, the lien created pursuant to Granting
Clause I of the Indenture), subject to the Intercreditor Agreement. CPS and the
Issuer shall, at their own expense and in each case subject to the Intercreditor
Agreement, defend (i) the Collateral and the UBS Cross 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 or the UBS Cross Collateral, other
than the security interests created under the Basic Documents, (ii) the right,
title and interest of each Note Purchaser and each Noteholder in and to any of
the Collateral, and (iii) subject to the Lien created pursuant to Granting
Clause I of the Indenture, the right, title and interest of the Bear Indenture
Trustee, each Class B note purchaser and each Class B noteholder under the Bear
Basic Documents in and to any of the UBS Cross Collateral, in each case against
the claims and demands of all Persons whomsoever.
(l) BOOKS AND RECORDS; OTHER INFORMATION.
(i) Each of CPS and the Issuer shall maintain
accounts and records as to each Receivable accurately and in sufficient
detail to permit the reader thereof to know at any time the status of
such Receivable, including payments and recoveries made and payments
owing (and the nature of each). CPS shall maintain accurate and
complete books and records with respect to the Receivables and the
Other Conveyed Property 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) CPS and the Issuer shall, and shall cause each
of their respective Affiliates to, permit any representative of the
Class A Note Purchaser to visit and inspect any of the properties of
the Issuer and such Affiliates and to examine the books and records of
CPS or 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
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of CPS or 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 Class A Note Purchaser 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 written notice; provided that, after a
Default or Event of Default shall have occurred and be continuing, the
Class A Note Purchaser may make such inspections, examine such
documents, make such copies, take such extracts and conduct such
discussions at such times as it may determine in its sole discretion
during CPS's and the Issuer's normal business hours.
(iii) Each of CPS and the Issuer shall promptly
provide to the Class A Note Purchaser all information regarding its
respective operations and practices and the Collateral as the Class A
Note Purchaser shall reasonably request.
(iv) CPS shall maintain its computer systems so that,
from and after the time of each sale of Receivables under the Sale and
Servicing Agreement to the Issuer, CPS's master computer records
(including any back-up archives) that refer to a Receivable shall
indicate clearly that such Receivable has been sold by CPS to the
Issuer and that such Receivable has been pledged by the Issuer to the
Trustee for the benefit of the Note Purchasers and the Noteholders.
Indication of the Trustee's interest in such Receivable shall be
deleted from or modified on CPS's computer systems when, and only when,
the Receivable shall have been released from the Lien of the Indenture
in accordance with the terms of the Indenture, and indication of the
Issuer's interest in such Receivable shall be deleted from or modified
on CPS's computer systems when, and only when, the Receivable shall
have been paid in full or repurchased from the Issuer by CPS.
(v) Upon request, CPS shall furnish to the Class A
Note Purchaser, within five (5) Business Days, (x) a list of all
Receivables (by contract number and name of Obligor) then owned by the
Issuer, together with a reconciliation of such list to the Schedule of
Receivables, and (y) such other information as the Class A Note
Purchaser may reasonably request.
(vi) If at any time CPS shall propose to sell, grant
a security interest in, or otherwise transfer any interest in any
automobile, van, sport utility vehicle or light duty truck receivables
(other than the Receivables) to any prospective purchaser, lender, or
other transferee, and if CPS shall give to such prospective purchaser,
lender or other transferee computer tapes, records, or print-outs
(including any restored from back-up archives, collectively "data
records") that refer in any manner whatsoever to any Receivable, such
data records shall indicate clearly that such Receivable has been sold
by CPS to the Issuer and pledged by the Issuer to Trustee for the
benefit of the Note Purchasers and the Noteholders unless such
Receivable shall have been released from the Lien of the Indenture in
accordance with the terms of the Indenture and shall have been paid in
full or repurchased from the Issuer by CPS.
(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 Receivables.
(o) COMPLIANCE WITH BASIC DOCUMENTS. CPS, in its capacity as
Seller and Servicer, or otherwise, shall comply with each of its covenants
contained in the Basic Documents.
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(p) FINANCING STATEMENTS. At the request of the Controlling
Note Purchaser, CPS and the Issuer shall file such financing statements as the
Controlling Note Purchaser determines may be required by law to perfect,
maintain and protect the interest of the Note Purchasers and the Noteholders in
the Collateral and the proceeds thereof.
(q) PAYMENT OF FEES AND EXPENSES. CPS and the Issuer shall pay
to the Class A Note Purchaser, on demand, any and all fees, costs or expenses
that the Class A Note Purchaser 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 Class A Note Purchaser.
(r) FINANCIAL STATEMENTS AND ACCESS TO RECORDS. CPS shall
provide the Class A Note Purchaser with quarterly unaudited financial statements
within sixty (60) days of the end of each of CPS's first three fiscal quarters,
and CPS will provide the Class A Note Purchaser with audited financial
statements within one hundred twenty (120) days of each of CPS's fiscal year-end
audited by a nationally recognized independent certified public accounting firm.
Upon request of the Class A Note Purchaser, CPS shall provide the Class A Note
Purchaser with unaudited monthly financial statements. CPS shall deliver to the
Class A Note Purchaser 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, Event
of Default, Funding Termination Event or Servicer Termination Event.
Notwithstanding the foregoing, CPS shall have no obligation to deliver any of
the foregoing financial statements to the Class A Note Purchaser for so long as
CPS is subject to, and in compliance with, the reporting requirements under
Section 13(a) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"). In connection with each report filed by CPS under Section 13(a) of the
Exchange Act during the Class A Term, CPS shall be deemed to have represented
and warranted to the Class A Note Purchaser 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, Event of Default, Funding Termination Event or
Servicer Termination Event as of such filing date.
(s) LITIGATION MATTERS. CPS shall notify the Class A Note
Purchaser in writing, promptly upon its learning thereof, of any litigation,
arbitration or administrative proceeding which may reasonably be expected to
have a Material Adverse Effect or result in a Material Adverse Change.
(t) NOTICE OF CHANGE OF CHIEF EXECUTIVE OFFICE. CPS and the
Issuer shall provide the Controlling Note Purchaser 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
Controlling Note Purchaser to make any additional filings necessary to continue
the Trustee's perfected security interest in the Collateral for the benefit of
the Note Purchasers and the Noteholders.
(u) CONSOLIDATED TOTAL ADJUSTED EQUITY. CPS shall maintain
minimum Consolidated Total Adjusted Equity of $60,000,000 as of the end of each
fiscal quarter.
(v) MAXIMUM LEVERAGE RATIO. CPS shall maintain a maximum
leverage ratio (total liabilities less all non-recourse debt/Consolidated Total
Adjusted Equity) of less than six times as of the end of each fiscal quarter.
(w) LIQUIDITY. CPS shall maintain cash and cash equivalents of
at least $8.5 million as of the end of each calendar month.
(x) DEPOSIT ACCOUNT. All distributions made by the Issuer to
CPS in respect of CPS's equity interest in the Issuer shall be deposited
directly into the Deposit Account.
SECTION 7.02 NEGATIVE COVENANTS. Until the Class A Facility Termination
Date:
(a) ADVERSE TRANSACTIONS. Neither CPS nor the Issuer shall
enter into any transaction that adversely affects the Collateral, the UBS Cross
Collateral, the Class A Note Purchaser's rights under this Agreement, the Notes
or any other Basic Document, the Issuer's interest in the Receivables and the
Other Conveyed Property pursuant to the Sale and Servicing Agreement, the
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Trustee's security interest in the Collateral pursuant to the Indenture, or that
could reasonably be expected to result in a Material Adverse Change with respect
to the Issuer or CPS or a Material Adverse Event.
(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 (i) to the extent of funds legally available therefor from
payments received by the Issuer pursuant to Section 5.7(a) of the Sale and
Servicing Agreement, or (ii) pursuant to Section 5.10 of the Sale and Servicing
Agreement, in each case in compliance with Section 7.01(x) of this Agreement.
Notwithstanding the foregoing, the Issuer shall not declare or pay any dividends
on any date as of which a Default or an Event of Default or a Class B Default or
a Class B Event of Default shall have occurred and is continuing.
(d) INVESTMENTS. The Issuer shall not make any investment in
any Person through the direct or indirect holding of securities or otherwise,
other than in the ordinary course of business or in connection with the future
securitization of Receivables.
(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 Class A 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
reasonably be expected to result in a Material Adverse Change with respect to
the Issuer or CPS or a Material Adverse Event: (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 would adversely affect the payment or performance
of, or the Issuer's ability to pay and/or perform, its obligations to Class A
Note Purchaser with respect to this Agreement or any other Basic Document to
which it is a party, or the Notes.
(f) ASSET SALES. The Issuer will not sell any Receivables or
other Collateral related thereto if, following such sale, the Class A Invested
Amount would exceed the Class A Borrowing Base after giving effect to the
application of proceeds of such sale; PROVIDED that the foregoing shall not
prohibit a foreclosure sale by or on behalf of the Class A Noteholders or the
Class A Note Purchaser upon the occurrence of an Event of Default; PROVIDED
FURTHER that in the event that the Issuer or CPS shall intend to sell any
Receivables in a whole-loan transfer to any third party, the Issuer or CPS shall
inform Class A Note Purchaser of such prospective sale and Class A Note
Purchaser shall be permitted to bid on such Receivables in the same bidding
process as that in which any third party is permitted to bid on such
Receivables.
(g) NO LIENS ON EQUITY INTERESTS IN THE ISSUER. Other than the
Lien created pursuant to the Pledge Agreement, 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 Controlling
Note Purchaser.
(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 Receivables and the
Other Conveyed Property, pledging the Receivables and the other Collateral to
the Trustee for the benefit of the Note Purchasers and the Noteholders pursuant
to Granting Clause I of the Indenture, pledging the Pledged Subordinate
Securities to the Trustee for the benefit of the Class B Note Purchasers and the
Class B Noteholders pursuant to Granting Clause II of the Indenture, pledging
the UBS Cross Collateral, subject to the Intercreditor Agreement, to the Bear
Indenture Trustee for the benefit of the Class B note purchasers and the Class B
noteholders under the Bear Basic Documents pursuant to Granting Clause III of
the Indenture, transferring the Receivables and the Other Conveyed Property in
connection with Securitization Transactions and in connection with whole-loan
sales, acquiring the Pledged Subordinate Securities in connection with
Securitization Transactions, 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 Controlling Note Purchaser. 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 facilities established pursuant to this Agreement and
the other Basic Documents.
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(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 Controlling Note Purchaser.
(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 the LLC
Agreement.
(l) NONPETITION. Notwithstanding any prior termination of this
Agreement, neither the Servicer nor the Seller will, prior to the date that is
one year and one day after the day upon which the outstanding principal amount
of each class of Notes has been reduced to zero and all Secured Obligations and
any and all other amounts due and owing to the Class A Note Purchaser and the
Class A Noteholders pursuant to the Basic Documents 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
Servicer, 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, the UBS Cross Collateral or the
Deposit Account seriously misleading within the meaning of Section 9-506(a) of
the UCC, unless it shall have given each Note Purchaser at least 30 days' prior
written notice thereof and shall have promptly filed appropriate amendments to
all previously filed financing statements or continuation statements.
ARTICLE VIII
MISCELLANEOUS PROVISIONS
SECTION 8.01 AMENDMENTS. No amendment to or waiver of any provision of
this Agreement, nor consent to any departure by CPS, the Issuer or the Class A
Note Purchaser therefrom, shall in any event be effective unless the same shall
be in writing and signed by CPS, the Issuer and the Class A Note Purchaser.
SECTION 8.02 NO WAIVER; REMEDIES. Any waiver, consent or approval given
by the Controlling Note Purchaser or any party hereto (other than any waiver,
consent or approval which is contemplated by the express terms of this Agreement
or any other Basic Document) 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 the
Controlling Note Purchaser or 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. Any waiver
consent or approval given by the Controlling Note Purchaser under this Agreement
or any other Basic Document shall be binding upon each Class A Noteholder and
each Class B Noteholder and their respective successors and permitted assigns.
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 8.03 BINDING ON SUCCESSORS AND ASSIGNS.
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(a) This Agreement shall be binding upon, and inure to the
benefit of, the Issuer, the Purchaser, the Seller, the Servicer, the Class A
Note Purchaser and their respective successors and assigns; PROVIDED, HOWEVER,
that, except as otherwise provided in Section 4.17 of the Sale and Servicing
Agreement, none of the Issuer, the Purchaser, the Seller or the Servicer 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 Class A Note Purchaser. 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.
(b) The Class A Note Purchaser may at any time grant a
security interest in and Lien on all of its interests under this Agreement, the
Class A Notes and all Basic Documents to any Person who, at any time now or in
the future, provides program liquidity or credit enhancement, including without
limitation, a surety bond or financial guaranty insurance policy for the benefit
of the Class A Note Purchaser. The Class A Note Purchaser may assign the Class A
Commitment or all of its interest under the Class A Notes, this Agreement and
the Basic Documents to (i) any Affiliate of the Class A Note Purchaser at any
time, (ii) to any other Person at any time that a Default has occurred and is
continuing and (iii) at any other time with the prior written consent of the
Issuer; provided that as a condition precedent to any such assignment, the
assignee of the Class A Note Purchaser shall execute an agreement pursuant to
which it agrees to assume and perform all of the obligations of the Class A Note
Purchaser under the Basic Documents. Notwithstanding the foregoing, it is
understood and agreed by the Issuer that the Class A Notes may be sold,
transferred or pledged without the consent of the Issuer and without the
execution of any such assumption agreement in compliance with, and as provided
for under, SECTION 5.03(G). Notwithstanding any other provisions set forth in
this Agreement, the Class A Note Purchaser may at any time create a security
interest in all of its rights under this Agreement, the Class A Notes and the
Basic Documents in favor of any Federal Reserve Bank in accordance with
Regulation A of the Board of Governors of the Federal Reserve System.
(c) If, on or after the date of this Agreement, the Class A
Note Purchaser reasonably determines that the adoption of any applicable law,
rule or regulation, or any change in any applicable law, rule or regulation or
any change in the interpretation or administration thereof by any Governmental
Authority, central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by the Class A Note Purchaser with any
request or directive issued on or after the date of this Agreement (whether or
not having the force of law) of any such authority, central bank or comparable
agency, has made or would be likely to make it unlawful for the Class A Note
Purchaser to purchase the Class A Advances, hold the Class A Notes or otherwise
to perform the transactions contemplated to be performed by it pursuant to this
Agreement and those contemplated to be performed by it pursuant to the Basic
Documents to which the Class A Note Purchaser is a party, then (i) the Class A
Note Purchaser shall so notify the Issuer; (ii) the obligation of the Class A
Note Purchaser to purchase the Class A Advances from time to time as
contemplated hereunder shall be suspended; and (iii) the Class A Note Purchaser
may assign its rights and obligations hereunder and under the Basic Documents,
the Class A Notes and its interests therein pursuant to and in compliance with
Section 8.03(b); provided that a Class A Funding Termination Event shall occur
if the Issuer or the Servicer fails to accept the proposed assignee chosen by
the Class A Note Purchaser.
SECTION 8.04 TERMINATION; SURVIVAL. The obligations and
responsibilities of the Class A Note Purchaser created hereby shall terminate on
the Class A Facility Termination Date. Notwithstanding the foregoing, all
covenants, agreements, representations, warranties and indemnities made by the
Servicer, the Seller, the Purchaser and/or the Issuer herein and/or in the Class
A Notes delivered pursuant hereto shall survive the purchase and the repayment
of the Class A Advances and the execution and delivery of this Agreement and the
Class A Notes and shall continue in full force and effect until all interest and
principal on the Class A Notes and other amounts owed hereunder and under the
other Basic Documents have been paid in full and the commitment of the Class A
Note Purchaser hereunder has been terminated. In addition, the obligations of
the Issuer, the Purchaser, the Seller and the Servicer under SECTIONS 3.02,
3.03, 3.04, 3.05(B), 8.05, 8.11, 8.12 and 8.13 shall survive the termination of
this Agreement.
SECTION 8.05 PAYMENT OF COSTS AND EXPENSES; INDEMNIFICATION.
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(a) PAYMENT OF COSTS AND EXPENSES.
(i) The Issuer agrees to pay on demand the reasonable
expenses of the Class A Note Purchaser (including the reasonable
out-of-pocket and legal expenses of the Class A 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
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, whether or not
the transactions contemplated hereby or thereby are
consummated, and
(B) the consummation of the transactions
contemplated by this Agreement and the other Basic Documents;
provided that such expenses related to the amendment and
restatement of this facility shall be capped at $45,000.
(ii) The Issuer and the Servicer further jointly and
severally agree to (A) pay upon demand all reasonable costs and
out-of-pocket expenses incurred by the Class A Note Purchaser as a
consequence of, or in connection with, the enforcement of this
Agreement or any of the other Basic Documents and any stamp,
documentary or other taxes which may be payable by the Class A Note
Purchaser in connection with the execution or delivery of this
Agreement, any Class A Advance hereunder, or the issuance of the Class
A Notes or any other Basic Documents; and (B) hold and save the Class A
Note Purchaser harmless from all liability for any breach by the Issuer
of its obligations under this Agreement. The Issuer and Servicer also
further jointly and severally agree to reimburse the Class A Note
Purchaser upon demand for all reasonable out-of-pocket and legal
expenses incurred by the Class A Note Purchaser in connection with the
negotiation of any restructuring or "work-out," whether or not
consummated, of the Basic Documents.
(b) INDEMNIFICATION. In consideration of the Class A Note
Purchaser's execution and delivery of this Agreement, the Issuer, the Purchaser,
the Seller and the Servicer, jointly and severally, hereby agree to indemnify
and hold the Class A Note Purchaser and each of its officers, directors,
employees and agents (collectively, the "INDEMNIFIED PARTIES") harmless from and
against any and all actions, causes of action, suits, losses, costs, liabilities
and damages, and reasonable expenses incurred in connection therewith, as
incurred (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)
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 Receivable
constituting part of the Collateral), directly or indirectly, with the
proceeds of any Class A Advance 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 by any
Person; or
(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,
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, bad faith or willful misconduct and, with respect to the Servicer,
excluding any Indemnified Liabilities that would constitute recourse to the
Servicer for loss by reason of the bankruptcy, insolvency (or other credit
condition) of, or credit-related default by the related Obligor on any
Receivable and not arising from defaults by the related Obligor arising from a
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claim by the related Obligor that any part of the debt evidenced by the
Receivables is not due as a result of wrongful action by any Person, such as a
breach of Consumer Laws. If and to the extent that the foregoing undertaking may
be unenforceable for any reason, the Issuer and the Servicer 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 8.05 shall in no event include
indemnification for any Taxes (which indemnification is provided in SECTION
3.05). Upon the written request of the Class A Note Purchaser pursuant to this
Section 8.05, the Issuer and the Servicer shall promptly reimburse the Class A
Note Purchaser for the amount of any such Indemnified Liabilities incurred by
the Class A Note Purchaser.
SECTION 8.06 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 Servicing Agreement, 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 8.07 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 facsimile number set forth below its signature hereto or at such other
address or facsimile number 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; any notice, if transmitted by facsimile, shall be
deemed given when transmitted and accompanied by telephonic confirmation of
receipt.
SECTION 8.08 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 8.09 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 Class A Notes will be treated as evidence of indebtedness
issued by the Issuer, (b) agrees to treat the Class A 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 8.10 FULL RECOURSE TO ISSUER. The obligations of the Issuer
under this Agreement and the other Basic Documents shall be full recourse
obligations of the Issuer. Notwithstanding the foregoing, 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 8.10 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, the Seller or the Servicer
hereunder or under any other Basic Document, which obligations are full recourse
obligations of the Issuer, the Purchaser, the Seller and the Servicer,
respectively.
SECTION 8.11 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
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THE GENERAL OBLIGATIONS LAW), AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
SECTION 8.12 SUBMISSION TO JURISDICTION. ANY LEGAL ACTION OR PROCEEDING
WITH RESPECT TO THIS AGREEMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW
YORK OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK, AND BY
EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH OF THE PARTIES HERETO CONSENTS,
FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE EXCLUSIVE JURISDICTION OF
THOSE COURTS. EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES ANY OBJECTION,
INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM
NON CONVENIENS, OR ANY LEGAL PROCESS WITH RESPECT TO ITSELF OR ANY OF ITS
PROPERTY, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR
PROCEEDING IN SUCH JURISDICTION IN RESPECT OF THIS AGREEMENT OR ANY DOCUMENT
RELATED HERETO. EACH OF THE PARTIES HERETO WAIVES PERSONAL SERVICE OF ANY
SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS
PERMITTED BY NEW YORK LAW.
SECTION 8.13 WAIVER OF JURY TRIAL. THE PARTIES HERETO EACH WAIVE THEIR
RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED UPON
OR ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY, IN ANY ACTION, PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY
PARTY AGAINST THE OTHER PARTY, WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORT
CLAIMS OR OTHERWISE. THE PARTIES HERETO EACH AGREE THAT ANY SUCH CLAIM OR CAUSE
OF ACTION SHALL BE TRIED BY A COURT TRIAL WITHOUT A JURY. WITHOUT LIMITING THE
FOREGOING, THE PARTIES FURTHER AGREE THAT THEIR RESPECTIVE RIGHT TO A TRIAL BY
JURY IS WAIVED BY OPERATION OF THIS SECTION AS TO ANY ACTION, COUNTERCLAIM OR
OTHER PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE THE VALIDITY OR
ENFORCEABILITY OF THIS AGREEMENT OR ANY PROVISION HEREOF. THIS WAIVER SHALL
APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO
THIS AGREEMENT.
SECTION 8.14 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. Any signature page to this Agreement containing a manual signature
may be delivered by facsimile transmission or other electronic communication
device capable of transmitting or creating a printable written record, and when
so delivered shall have the effect of delivery of an original manually signed
signature page.
SECTION 8.15 SET-OFF.
(a) The obligations of the Issuer, the Purchaser, the Seller
and the Servicer hereunder are absolute and unconditional and each of the
Issuer, the Purchaser, the Seller and the Servicer expressly waives any and all
rights of set-off, abatement, diminution or deduction that the Issuer, the
Purchaser, the Seller or the Servicer may otherwise at any time have under
applicable law.
(b) In addition to any rights now or hereafter granted under
applicable law and not by way of limitation of such rights, during the
continuance of any Event of Default hereunder:
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(i) the Class A 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 Class A 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 Class A Note Purchaser or any of its Affiliates, the respective
obligations of the Purchaser and the Issuer to the Class A Note
Purchaser under this Agreement and the other Basic Documents and
irrespective of whether or not the Class A Note Purchaser shall have
made any demand hereunder or thereunder; and
(ii) the Class A Note Purchaser is hereby authorized
at any time and from time to time, without notice to the Seller or the
Servicer, such notice being hereby expressly waived, to set-off any
obligation owing by the Class A Note Purchaser or any of its Affiliates
to the Seller or the Servicer, or against any funds or other property
of the Seller or the Servicer held by or otherwise in the possession of
the Class A Note Purchaser or any of its Affiliates, the respective
obligations of the Seller and the Servicer to the Class A Note
Purchaser under this Agreement and the other Basic Documents and
irrespective of whether or not the Class A Note Purchaser shall have
made any demand hereunder or thereunder.
SECTION 8.16 NONPETITION COVENANTS. Notwithstanding any prior
termination of this Agreement, the Servicer and 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 each class of Notes has been reduced to zero and all Secured
Obligations and any and all other amounts due and owing to the Note Purchasers
and the Noteholders pursuant to the Basic Documents have been paid in full,
acquiesce, petition or otherwise invoke or cause the Purchaser 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 8.17 SERVICER REFERENCES. All references to the Servicer herein
shall apply to CPS, in its capacity as the initial Servicer, and not to a
successor Servicer.
SECTION 8.18 CONFIDENTIALITY; PRESS RELEASES. Unless required by law or
regulation to do so or otherwise expressly permitted by the Basic Documents,
neither the Class A Note Purchaser on the one hand, nor any of the Seller, the
Servicer, the Purchaser or the Issuer on the other hand, shall publish or
otherwise disclose any information relating to the material terms of the Class A
Commitment or the Class B Commitment (including, without limitation, the Market
Value calculations), any of the Basic Documents or the transactions contemplated
hereby or thereby to any Person (other than its own advisors to the extent
reasonably necessary) without the prior written consent of the other; provided
that nothing herein shall be construed to prohibit any party from issuing a
press release announcing the consummation of the transactions contemplated by
the Basic Documents. No party shall publish any press release naming the other
party without the prior written consent of the other (which consent shall not be
unreasonably withheld). For avoidance of doubt, it is agreed that Seller is
required by law (i) to report its entry into this Agreement and the other Basic
Documents in a current report on Form 8-K of the Securities and Exchange
Commission, which report must file as exhibits at least this Agreement, the Sale
and Servicing Agreement, and the Indenture, and (ii) to make reference to such
agreements and the Commitment in its periodic reports to be filed respecting
time periods that include all or part of the Class A Term. This confidentiality
agreement shall apply to any and all information relating to the Commitment, any
of the Basic Documents and the transactions contemplated hereby and thereby at
any time on or after the date hereof.
SECTION 8.19 INTERCREDITOR AGREEMENT TO CONTROL. The rights,
obligations and remedies of the parties to this Agreement and under the other
Basic Documents are subject in all respects to the terms and provisions of the
Intercreditor Agreement; provided, however that to the extent such rights,
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obligations and remedies relate to the Bear Cross Collateral, such rights,
obligations and remedies are subject in all respects to the terms and provisions
of the Bear Intercreditor Agreement. In the event of any conflict between the
terms of this Agreement or any other Basic Document and the Intercreditor
Agreement, the Intercreditor Agreement shall control. In addition, in the event
of any conflict between the terms of this Agreement or any other Basic Document
and the Bear Intercreditor Agreement that relates to the Bear Cross Collateral,
the Bear Intercreditor Agreement shall control.
SECTION 8.20 NO NOVATION. It is expressly understood and agreed by the
parties hereto that the amendment and restatement of this Agreement is in no way
intended to and shall not be deemed to constitute a novation or repayment of the
outstanding Class A Advances and the other obligations and liabilities existing
under the Original Basic Documents and the security interest of the Trustee in
the Collateral for the benefit of the Noteholders and the Note Purchasers shall
remain in full force and effect after giving effect to the amendment and
restatement of this Agreement.
SECTION 8.21 SURVIVAL OF REPRESENTATIONS, WARRANTIES AND INDEMNITIES
UNDER ORIGINAL NOTE PURCHASE AGREEMENT. The representations, warranties and
indemnity obligations of the Issuer, the Purchaser, the Servicer, the Seller and
CPS made in the Original Note Purchase Agreement and each other Original Basic
Document prior to the Class B Closing Date shall survive the Class B Closing
Date and the execution and delivery of this Agreement, and each such
representation and warranty so made is true and correct as of the date
originally made and as of the date hereof.
[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.
PAGE FUNDING LLC, as Issuer and Purchaser
By:________________________________________
Name:______________________________________
Title:_____________________________________
Address: ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Company Secretary
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
CONSUMER PORTFOLIO SERVICES, INC., as CPS,
Seller and Servicer
By:________________________________________
Name:______________________________________
Title:_____________________________________
Address: ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Secretary
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
UBS REAL ESTATE SECURITIES INC., as Class A
Note Purchaser and as initial Class A
Noteholder
By:________________________________________
Name:______________________________________
Title:_____________________________________
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
Annex-1