EXHIBIT INDEX
1.1 --Form of Underwriting Agreement.*
4.1 --Form of Pooling and Servicing Agreement, and certain other related
agreements as Exhibits thereto.
5.1 --Opinion of Mayer, Brown & Platt with respect to legality.*
8.1 --Opinion of Mayer, Brown & Platt with respect to tax matters.*
10.1 --Form of Receivables Purchase Agreement.
23.1 --Consent of Mayer, Brown & Platt (included in its opinions filed
as Exhibit 5.1 and Exhibit 8.1).*
24.1 --Powers of Attorney.
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* To be filed pursuant to an amendment to this Registration Statement.
II-7
EXHIBIT 4.1
[ ]
Seller
and
Consumer Portfolio Services, Inc.
Servicer
and
[ ]
Trustee [and Standby Servicer]
POOLING AND SERVICING AGREEMENT
Dated as of [ ]
$[ ]
CPS Auto Grantor Trust 199[ ]-[ ]
$[ ], [ ]% Class A Certificates
$[ ], [ ]% Class B Certificates
POOLING AND SERVICING AGREEMENT dated as of [ _______ ] (the "Agreement")
among [ ________ ], a [ ______ ], as seller (the "Seller"), Consumer Portfolio
Services, Inc., a California corporation ("CPS"), as servicer (the "Servicer"),
and [ ], a [ __________ ], as trustee [and standby servicer] (the "Trustee" [and
"Standby Servicer", respectively]).
In consideration of the premises and of the mutual agreements herein
contained, and other good and valuable consideration, the receipt of which is
acknowledged, the parties hereto, intending to be legally bound, agree as
follows:
ARTICLE I
Definitions
SECTION 1.1. Definitions. Whenever used in this Agreement, the following
words and phrases, unless the context otherwise requires, whenever capitalized
shall have the following meanings:
"Affiliate" of any Person means any Person who directly or indirectly
controls, is controlled by, or is under direct or indirect common control with
such Person. For purposes of this definition of "Affiliate", the term "control"
(including the terms "controlling", "controlled by" and "under common control
with") means the possession, directly or indirectly, of the power to direct or
cause a direction of the management and policies of a Person, whether through
the ownership of voting securities, by contract or otherwise.
"Aggregate Pass-Through Rate" means the sum of the Class A Pass-Through
Rate and the Class B Pass-Through Rate.
"Aggregate Prepayment Reduction Amount" means for any Distribution Date,
the sum of the Prepayment Reduction Amounts for all Simple Interest Receivables
which were paid in full during the related Collection Period.
"Agreement" means this Pooling and Servicing Agreement, as the same may be
amended and supplemented from time to time.
"Amount Financed" with respect to a Receivable means the aggregate
amount originally advanced under the Receivable toward the purchase price of the
Financed Vehicle and any related costs.
"Annual Percentage Rate" or "APR" of a Receivable means the annual rate of
finance charges stated in the Receivable.
"Authenticating Agent" has the meaning assigned to such term in Section
6.2B.
"Business Day" means any day other than a Saturday, a Sunday or a day on
which banking institutions in the City of New York, the State in which the
Corporate Trust Office is located, the State in which the executive offices of
the Servicer are located or the State in which the principal place of business
of the [Credit Enhancer] is located shall be authorized or obligated by law,
executive order, or governmental decree to be closed.
"Casualty" means, with respect to a Financed Vehicle, the total loss or
destruction of such Financed Vehicle.
"Certificate" means any one of the certificates executed by the Trustee on
behalf of the Trust and authenticated by the Trustee in substantially the form
set forth in Exhibit A or Exhibit B hereto.
"Certificate Account" means the account designated as such, established and
maintained pursuant to Section 4.1.
"Certificate Balance" as of any day, means the sum of the Class A
Certificate Balance on such day and the Class B Certificate Balance on such day.
"Certificate Register" and "Certificate Registrar" mean, respectively, the
register maintained and the Certificate Registrar appointed pursuant to Section
6.3.
"Certificateholder" or "Holder" means the Person in whose name a
Certificate shall be registered in the Certificate Register, except that so long
as any Certificates are outstanding, solely for the purposes of giving any
consent, waiver, request or demand pursuant to this Agreement, the interest
evidenced by any Certificate registered in the name of the Seller or the
Servicer, or any Affiliate of either of them, shall not be taken into account in
determining whether the requisite percentage necessary to effect any such
consent, waiver, request or demand shall have been obtained.
"Certificates" means the Class A Certificates and the Class B Certificates.
"Class A Certificate" means any one of the [ ]% Class A Certificates,
executed by the Trustee on behalf of the Trust and authenticated by the Trustee
in substantially the form set forth in Exhibit A hereto.
"Class A Certificate Balance" shall equal, initially, the Class A
Percentage of the Original Pool Balance and, thereafter,
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shall equal the initial Class A Certificate Balance, reduced by all amounts
previously distributed to Class A Certificateholders and allocable to principal.
"Class A Certificateholder" means the Person in whose name a Class A
Certificate shall be registered in the Certificate Register.
"Class A Distributable Amount" means, for any Distribution Date, an amount
equal to the sum of the Class A Principal Distributable Amount for such
Distribution Date and the Class A Interest Distributable Amount for such
Distribution Date.
"Class A Guaranteed Distribution Amount" means, with respect to each
Distribution Date, the sum of the Class A Interest Distributable Amount for such
Distribution Date and the Class A Principal Distributable Amount for such
Distribution Date, in each case in accordance with the original terms of the
Class A Certificates when issued and without regard to any amendment or
modification of the Certificates or the Agreement which has not been consented
to by the [Credit Enhancer]; provided, however, the Class A Guaranteed
Distribution Amount shall not include, nor shall coverage be provided under [the
Credit Enhancement] in respect of, any taxes, withholding or other charge
imposed with respect to any Class A Certificateholder by any governmental
authority.
"Class A Interest Carryover Shortfall" means, as of the close of any
Distribution Date on which an [Enhancement Default] is continuing, the excess of
the Class A Interest Distributable Amount for such Distribution Date and any
outstanding Class A Interest Carryover Shortfall from the preceding Distribution
Date plus interest on such outstanding Class A Interest Carryover Shortfall, to
the extent permitted by law, at the Class A Pass- Through Rate from such
preceding Distribution Date through the current Distribution Date (calculated on
the basis of a 360-day year consisting of twelve 30-day months), over the amount
of interest that the Holders of the Class A Certificates actually received on
such current Distribution Date.
"Class A Interest Distributable Amount" means, for any Distribution Date,
an amount equal to thirty (30) days of interest at the Class A Pass-Through Rate
on the Class A Certificate Balance as of the close of business on the last day
of the related Collection Period (calculated on the basis of a 360-day year
consisting of twelve 30-day months); provided, however, that on the first
Distribution Date, the Class A Interest Distributable Amount will equal interest
at the Class A Pass-Through Rate on the Class A Certificate Balance from and
including the Closing Date through and including [ ______ ].
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"Class A Pass-Through Rate" means [ ]% per annum.
"Class A Percentage" shall be [ ] percent ([ ]%).
"Class A Pool Factor" means, as of a Distribution Date, a seven-digit
decimal figure equal to the Class A Certificate Balance as of the close of
business on such Distribution Date divided by the initial Class A Certificate
Balance. The Class A Pool Factor will be 1.0000000 as of the Closing Date;
thereafter, the Class A Pool Factor will decline to reflect reductions in the
Class A Certificate Balance.
"Class A Principal Carryover Shortfall" means, as of the close of any
Distribution Date on which an [Enhancement Default] is continuing, the excess of
the Class A Principal Distributable Amount and any outstanding Class A Principal
Carryover Shortfall from the preceding Distribution Date, over the amount of
principal that the Holders of the Class A Certificates actually received on such
current Distribution Date.
"Class A Principal Distributable Amount" means, with respect to any
Distribution Date other than the Final Scheduled Distribution Date, the sum of
the Class A Percentage of the sum of the following amounts: (i) the principal
portion of all Scheduled Payments (including amounts transferred from the
Payahead Account to the Certificate Account to be applied to the principal
portion of Scheduled Payments) received during the preceding Collection Period
on Rule of 78's Receivables and all payments of principal received on Simple
Interest Receivables during such Collection Period; (ii) the principal portion
of all prepayments in full received during the preceding Collection Period
(including prepayments in full resulting from collections with respect to a
Receivable received during the preceding Collection Period plus the transfer of
the Payahead Balance with respect to such Receivable to the Certificate Account
pursuant to Section 4.6(a)(ii)) (without duplication of amounts included in
clause (i) above and clause (iv) below); (iii) the portion of the Purchase
Amount allocable to principal of each Receivable that became a Purchased
Receivable as of the last day of the preceding Collection Period and, at the
option of the [Credit Enhancer], the Principal Balance of each Receivable that
was required to be but was not so purchased or repurchased (without duplication
of amounts referred to in clauses (i) and (ii) above); (iv) the Principal
Balance of each Receivable that first became a Liquidated Receivable during the
preceding Collection Period (without duplication of the amounts included in
clauses (i) and (ii) above); and (v) the aggregate amount of Cram Down Losses
with respect to the Receivables that have occurred during the preceding
Collection Period. In addition, on the Final Scheduled Distribution Date, the
Class A Principal Distributable Amount
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will equal the Class A Certificate Balance as of the Final Scheduled
Distribution Date.
"Class B Certificate" means any one of the [ ]% Class B Certificates,
executed by the Trustee on behalf of the Trust and authenticated by the Trustee
in substantially the form set forth in Exhibit B hereto.
"Class B Certificate Balance" shall equal, initially, the Class B
Percentage of the Original Pool Balance and, thereafter, shall equal the initial
Class B Certificate Balance, reduced by all amounts previously distributed to
Class B Certificateholders and allocable to principal.
"Class B Certificateholder" means the Person in whose name a Class B
Certificate shall be registered in the Certificate Register.
"Class B Deficiency" shall have the meaning specified in Section 4.7(c).
"Class B Distributable Amount" means, for any Distribution Date, the sum of
the Class B Principal Distributable Amount and the Class B Interest
Distributable Amount.
"Class B Interest Distributable Amount" means, for any Distribution Date,
an amount equal to thirty (30) days of interest at the Class B Pass-Through Rate
on the Class B Certificate Balance as of the close of business on the last day
of the related Collection Period (calculated on the basis of a 360-day year
consisting of twelve 30-day months); provided, however, that on the first
Distribution Date, the Class B Interest Distributable Amount will equal interest
at the Class B Pass-Through Rate on the Class B Certificate Balance from and
including the Closing Date through and including [ ].
"Class B Interest Carryover Shortfall" means, as of the close of any
Distribution Date, the excess of the Class B Interest Distributable Amount for
such Distribution Date and any outstanding Class B Interest Carryover Shortfall
from the preceding Distribution Date, plus interest on such outstanding Class B
Interest Carryover Shortfall, to the extent permitted by law, at the Class B
Pass-Through Rate from such preceding Distribution Date through the current
Distribution Date (calculated on the basis of a 360-day year consisting of
twelve 30-day months), over the amount of interest that the Holders of the Class
B Certificates actually received pursuant to Section 4.6(c)(vi) on such current
Distribution Date.
"Class B Pass-Through Rate" means [ ]% per annum.
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"Class B Percentage" shall be [ ] percent ([ ]%).
"Class B Pool Factor" means, as of a Distribution Date, a seven-digit
decimal figure equal to the Class B Certificate Balance as of the close of
business on such Distribution Date divided by the initial Class B Certificate
Balance. The Class B Pool Factor will be 1.0000000 as of the Closing Date;
thereafter, the Class B Pool Factor will decline to reflect reductions in the
Class B Certificate Balance.
"Class B Principal Carryover Shortfall" means, as of the close of any
Distribution Date, the excess of the Class B Principal Distributable Amount and
any outstanding Class B Principal Carryover Shortfall from the preceding
Distribution Date, over the amount of principal that the Holders of the Class B
Certificates actually received.
"Class B Principal Distributable Amount" means, with respect to any
Distribution Date, the Class B Percentage of the sum of the following amounts:
(i) the principal portion of all Scheduled Payments received during the
preceding Collection Period on Rule of 78's Receivables and all payments of
principal received on Simple Interest Receivables during such Collection Period
(including amounts transferred from the Payahead Account to the Certificate
Account to be applied to the principal portion of Scheduled Payments); (ii) the
principal portion of all prepayments in full received during the preceding
Collection Period (including prepayments in full resulting from collections with
respect to a Receivable received during the preceding Collection Period plus the
transfer of the Payahead Balance with respect to such Receivable to the
Certificate Account pursuant to Section 4.6(a)(ii)) (without duplication of
amounts included in clause (i) above and clause (iv) below); (iii) the portion
of the Purchase Amount allocable to principal of each Receivable that became a
Purchased Receivable as of the last day of the preceding Collection Period and,
at the option of the [Credit Enhancer], the Principal Balance of each Receivable
that was required to be but was not so purchased or repurchased (without
duplication of amounts referred to in clauses (i) and (ii) above); (iv) the
Principal Balance of each Receivable that first became a Liquidated Receivable
during the preceding Collection Period (without duplication of the amounts
included in clause (i) and (ii) above); and (v) the aggregate amount of Cram
Down Losses with respect to the Receivables that have occurred during the
preceding Collection Period. In addition, on the Final Scheduled Distribution
Date, the Class B Principal Distributable Amount will equal the Class B
Certificate Balance as of the Final Scheduled Distribution Date.
"Closing Date" means [ ].
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"Code" shall have the meaning specified in Section 2.6.
["Collateral Agent" means, the [Collateral Agent] named in the [Spread
Account Agreement], and any successor thereto pursuant to the terms of [the
Spread Account Agreement].]
"Collection Account" means the account designated as such, established and
maintained pursuant to Section 4.1.
"Collection Period" means each calendar month during the term of this
Agreement or, in the case of the initial Collection Period, the period from and
excluding the Cutoff Date to and including the last day of the month in which
the Cutoff Date occurred. Any amount stated "as of the close of business on the
last day of a Collection Period" shall give effect to the following calculations
as determined as of the end of the day on such last day: (1) all applications of
collections, (2) all current and previous Payaheads, (3) all applications of
Payahead Balances and (4) all distributions.
"Confidential Information" means, in relation to any Person, any written
information delivered or made available by or on behalf of CPS or the Seller to
such Person in connection with or pursuant to this Agreement or the transactions
contemplated hereby which is proprietary in nature and clearly marked or
identified as being confidential information, other than information (i) which
was publicly known, or otherwise known to such Person, at the time of disclosure
(except pursuant to disclosure in connection with this Agreement), (ii) which
subsequently becomes publicly known through no act or omission by such Person,
or (iii) which otherwise becomes known to such Person other than through
disclosure by CPS or the Seller.
"Corporate Trust Office" means the office of the Trustee at which its
corporate trust business shall be administered, which office at the date of this
Agreement is located at [ ________ ].
"CPS" means Consumer Portfolio Services, Inc., a California corporation and
its successors.
"Cram Down Loss" means, with respect to a Receivable, if a court of
appropriate jurisdiction in an insolvency proceeding shall have issued an order
reducing the amount owed on a Receivable or otherwise modifying or restructuring
Scheduled Payments to be made on a Receivable, an amount equal to such reduction
in Principal Balance of such Receivable or the reduction in the net present
value (using as the discount rate the lower of the contract rate or the rate of
interest specified by the court in such order) of the Scheduled Payments as so
modified or restructured. A "Cram Down Loss" shall be deemed to have occurred on
the date such order is entered.
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["Credit Enhancer" means [ ], a [ ] organized and created
under the laws of [ ], or its successors in interest.
["Credit Enhancement" means [describe Credit Enhancement] issued by the
[Credit Enhancer] for the benefit of the Holders of the Class A Certificates
issued hereunder.]
["Credit Enhancement Account" means the segregated trust account created by
the Servicer under Section 4.1.]
"Cutoff Date" means [ ].
"Dealer" means, with respect to a Receivable, the seller of the related
Financed Vehicle, who originated and assigned such Receivable to CPS, who in
turn sold such Receivable to the Seller.
"Deficiency Claim Amount" shall have the meaning specified in Section
4.7(a).
"Deficiency Claim Date" means, with respect to any Distribution Date, the
fourth Business Day preceding such Distribution Date.
"Deficiency Notice" shall have the meaning specified in Section 4.7(a).
"Determination Date" means the earlier of (i) the seventh Business Day of
each calendar month and (ii) the fifth Business Day preceding the related
Distribution Date.
"Distribution Date" means, for each Collection Period, the 15th day of the
following month, or if the 15th day is not a Business Day, the next following
Business Day, commencing [ ].
"Eligible Account" means (i) a segregated trust account that is maintained
with a depository institution acceptable to the [Credit Enhancer] (so long as an
[Enhancement Default] shall not have occurred and be continuing), or (ii) a
segregated direct deposit account maintained with a depository institution or
trust company organized under the laws of the United States of America, or any
of the States thereof, or the District of Columbia, having a certificate of
deposit, short-term deposit or commercial paper rating of at least "A-1" by
Standard & Poor's Ratings Group and "P-1" by Moody's Investors Service, Inc. and
(so long as an [Enhancement Default] shall not have occurred and be continuing)
acceptable to the [Credit Enhancer].
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"Eligible Investments" mean book-entry securities, negotiable instruments
or securities represented by instruments in bearer or registered form which
evidence:
(a) direct obligations of, and obligations fully guaranteed as to the
full and timely payment by, the United States of America;
(b) demand deposits, time deposits or certificates of deposit of any
depository institution or trust company incorporated under the laws of the
United States of America or any State thereof (or any domestic branch of a
foreign bank) and subject to supervision and examination by Federal or State
banking or depository institution authorities; provided, however, that at the
time of the investment or contractual commitment to invest therein, the
commercial paper or other short-term unsecured debt obligations (other than such
obligations the rating of which is based on the credit of a Person other than
such depository institution or trust company) thereof shall be rated "A-1+" by
Standard & Poor's and "P-1" by Moody's;
(c) commercial paper that, at the time of the investment or
contractual commitment to invest therein, is rated "A-1+" by Standard & Poor's
and "P-1" by Moody's;
(d) bankers' acceptances issued by any depository institution or trust
company referred to in clause (b) above;
(e) repurchase obligations with respect to any security that is a
direct obligation of, or fully guaranteed as to the full and timely payment by,
the United States of America or any agency or instrumentality thereof the
obligations of which are backed by the full faith and credit of the United
States of America, in either case entered into with (i) a depository institution
or trust company (acting as principal) described in clause (b) or (ii) a
depository institution or trust company whose commercial paper or other short
term unsecured debt obligations are rated "A-1+" by Standard & Poor's and "P-1"
by Moody's and long term unsecured debt obligations are rated "AAA" by Standard
& Poor's and "Aaa" by Moody's;
(f) with the prior written consent of the [Credit Enhancer], money
market mutual funds registered under the Investment Company Act of 1940, as
amended, having a rating, at the time of such investment, from each of the
Rating Agencies in the highest investment category granted thereby; and
(g) any other investment as may be acceptable to the [Credit
Enhancer], as evidenced by a writing to that effect, as may from time to time be
confirmed in writing to the Trustee by the [Credit Enhancer].
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Any Eligible Investments may be purchased by or through the Trustee or any
of its Affiliates.
"Enhancement Default" shall mean any one of the following events shall have
occurred and be continuing:
(i) the [Credit Enhancer] fails to make a payment required under the
[Credit Enhancement] in accordance with its terms;
(ii) the [Credit Enhancer] (A) files any petition or commences any
case or proceeding under any provision or chapter of the United States
Bankruptcy Code, the New York Department of Insurance Code or similar
Federal or State law relating to insolvency, bankruptcy, rehabilitation,
liquidation or reorganization, (B) makes a general assignment for the
benefit of its creditors or (C) has an order for relief entered against it
under the United States Bankruptcy Code or any other similar Federal or
State law relating to insolvency, bankruptcy, rehabilitation, liquidation
or reorganization which is final and nonappealable; or
(iii) a court of competent jurisdiction or other competent court or
regulatory authority enters a final and nonappealable order, judgment or
decree (A) appointing a custodian, trustee, agent or receiver for the
[Credit Enhancer] or for all or any material portion of its property or (B)
authorizing the taking of possession by a custodian, trustee, agent or
receiver of the [Credit Enhancer] (or the taking of possession of all or
any material portion of the property of the [Credit Enhancer]).
"ERISA" shall have the meaning specified in Section 2.6.
"Event of Default" means an event specified in Section 9.1.
"Final Scheduled Distribution Date" shall be the [ ], 200[ ]
Distribution Date.
"Financed Vehicle" means a new or used automobile, light truck, van or
minivan, together with all accessions thereto, securing an Obligor's
indebtedness under a Receivable.
"Insolvency Proceeding" shall have the meaning specified in Section 9.5(b).
["Enhancement Agreement" means the [Credit Enhancement Agreement] among [ ]
and the [Credit Enhancer], dated as of [ ].]
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"[Enhancement Agreement] Event of Default" means an Event of Default as
defined in the [Enhancement Agreement].
"Lien" means a security interest, lien, charge, pledge, equity or
encumbrance of any kind, other than tax liens, mechanics' liens, and any liens
that may attach to a Financed Vehicle by operation of law.
"Liquidated Receivable" means any Receivable (i) which has been liquidated
by the Servicer through the sale of the Financed Vehicle or (ii) for which the
related Financed Vehicle has been repossessed and [90] days have elapsed since
the date of such repossession or (iii) as to which an Obligor has failed to make
more than [90]% of a Scheduled Payment of more than [ten] dollars for [120] or
more days as of the end of a Collection Period or (iv) with respect to which
proceeds have been received which, in the Servicer's judgment, constitute the
final amounts recoverable in respect of such Receivable.
"Liquidation Proceeds" means, with respect to a Liquidated Receivable, the
monies collected from whatever source during the Collection Period in which such
Receivable became a Liquidated Receivable, net of the reasonable costs of
liquidation, including reasonable expenses of the Servicer in connection with
such liquidation, plus any amounts required by law to be remitted to the
Obligor.
"Lock-Box Account" means the segregated account designated as such,
established and maintained pursuant to Section 4.1.
"Lock-Box Agreement" means the [lock-box agreement], dated the Closing
Date, among the Servicer, the Lock-Box Processor and the Trustee, as amended,
modified or supplemented from time to time, unless such Agreement shall be
terminated in accordance with its terms or the terms hereof, in which event
"Lock-Box Agreement" shall mean such other agreement, in form and substance
acceptable to the [Credit Enhancer], among the Servicer, the Lock-Box Processor
and the Trustee.
"Lock-Box Bank" means, as of any date, a depository institution named by
the Servicer and acceptable to the [Credit Enhancer] at which the Lock-Box
Account is established and maintained as of such date.
"Lock-Box Processor" means initially Cash Flex, L.P. and its successors or
any replacement Lock-Box Processor acceptable to the [Credit Enhancer] under the
Lock-Box Agreement.
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"Moody's" means Moody's Investors Service, Inc., and any successors
thereof.
"Obligor" on a Receivable means the purchaser or co-purchasers of the
related Financed Vehicle or any other Person who owes or may be liable for
payments under such Receivable.
"Officer's Certificate" means a certificate signed by the chairman of the
board, the president, any vice chairman of the board, any vice president, the
treasurer, the controller or any assistant treasurer or any assistant controller
of CPS, the Seller, or the Servicer, as appropriate.
"Opinion of Counsel" means a written opinion of counsel who may but need
not be counsel to the Seller or Servicer, which counsel shall be acceptable to
the Trustee and the [Credit Enhancer] and which opinion shall be acceptable to
the Trustee and the [Credit Enhancer] in form and substance.
"Optional Purchase Percentage" means 10%.
"Original Class A Principal Balance" means the product of the Class A
Percentage and the Original Pool Balance.
"Original Class B Principal Balance" means the product of the Class B
Percentage and the Original Pool Balance.
"Original Pool Balance" means $[ ].
"Payahead" on a Rule of 78's Receivable means the amount, as of the close
of business on the last day of a Collection Period, determined in accordance
with Section 4.3 with respect to such Rule of 78's Receivable.
"Payahead Account" means the account designated as such, established and
maintained pursuant to Section 4.1. The Payahead Account shall be held by the
Trustee but shall be primarily for the benefit of the Obligors of Rule of 78's
Receivables and shall not be part of the Trust.
"Payahead Balance" on a Rule of 78's Receivable means the sum, as of the
close of business on the last day of a Collection Period, of all Payaheads made
by or on behalf of the Obligor with respect to such Rule of 78's Receivable, as
reduced by applications of previous Payaheads with respect to such Rule of 78's
Receivable, pursuant to Sections 4.3 and 4.4.
"Paying Agent" has the meaning assigned to such term in Section 6.2A.
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"Person" means any individual, corporation, limited liability company,
estate, partnership, joint venture, association, joint stock company, trust,
unincorporated organization, or government or any agency or political
subdivision thereof.
"Pool Balance" as of the close of business on the last day of a Collection
Period means the aggregate Principal Balance of the Receivables (excluding
Liquidated and Purchased Receivables).
"Post-Office Box" means the separate post-office box in the name of the
Trustee for the benefit of the Certificateholders and the [Credit Enhancer],
established and maintained pursuant to Section 4.1.
"Preference Claim" shall have the meaning specified in Section 9.5(b).
"Prepayment Reduction Amount" means with respect to any Simple Interest
Receivable which has been paid in full during any Collection Period, an amount
equal to one twelfth of the excess of (a) the product of (i) the Aggregate
Pass-Through Rate and (ii) the Principal Balance of such Simple Interest
Receivable as of the first day of such Collection Period over (b) the product of
(i) a fraction (A) the numerator of which is the number of days from and
including the first day of such Collection Period to but excluding the date on
which such Simple Interest Receivable is paid in full and (B) the denominator of
which is 30 and (ii) the Aggregate Pass-Through Rate and (iii) the Principal
Balance of such Simple Interest Receivable as of the first day of such
Collection Period.
"Principal Balance" of a Receivable, as of the close of business on the
last day of a Collection Period means the Amount Financed minus the sum of the
following amounts without duplication: (i) in the case of a Rule of 78's
Receivable, that portion of all Scheduled Payments actually received on or prior
to such day allocable to principal using the actuarial or constant yield method;
(ii) in the case of a Simple Interest Receivable, that portion of all Scheduled
Payments actually received on or prior to such day allocable to principal using
the Simple Interest Method; (iii) any payment of the Purchase Amount with
respect to the Receivable allocable to principal; (iv) any Cram Down Loss in
respect of such Receivable; and (v) any prepayment in full or any partial
prepayment applied to reduce the Principal Balance of the Receivable.
"Purchase Agreement" means the Purchase Agreement dated as of
[ ], by and between the Seller and CPS, as amended,
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modified or supplemented from time to time, relating to the purchase of the
Receivables by the Seller from CPS.
"Purchase Amount" means, with respect to a Receivable, the amount, as of
the close of business on the last day of a Collection Period, required to prepay
in full such Receivable under the terms thereof including interest thereon to
the end of the month of purchase.
"Purchased Receivable" means a Receivable purchased as of the close of
business on the last day of a Collection Period by the Servicer pursuant to
Section 3.7 or by CPS pursuant to Section 2.6 or Section 2.8.
"Rating Agency" means [ ___________ ] and any successors thereof. If such
organization or successor is no longer in existence, "Rating Agency" shall be
such nationally recognized statistical rating organization or other comparable
Person designated by the [Credit Enhancer], notice of which designation shall be
given to the Trustee and the Servicer.
"Receivable" means each retail installment sale contract for a Financed
Vehicle which shall appear on Schedule A to this Agreement (which Schedule A may
be in the form of microfiche) and all rights and obligations thereunder except
for Receivables that shall have become Purchased Receivables.
"Receivable Files" means the documents specified in Section 2.7.
"Record Date" means the tenth day of the calendar month in which a
Distribution Date occurs.
"Recoveries" means, with respect to a Liquidated Receivable, the monies
collected from whatever source, during any Collection Period following the
Collection Period in which such Receivable became a Liquidated Receivable, net
of the reasonable costs of liquidation plus any amounts required by law to be
remitted to the Obligor.
["Reimbursement Obligations" means, with respect to each Distribution Date,
any amounts due to the [Credit Enhancer] under the terms hereof or under the
Enhancement Agreement and with respect to which the [Credit Enhancer] has not
been previously paid.]
["Reserve Fund" means, the Reserve Fund established by the Seller pursuant
to the [Reserve Fund Agreement]. The Reserve Fund shall be held by the [Reserve
Fund Collateral Agent] and shall in no event be deemed part of the Trust.]
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["Reserve Fund Agreement" means the Reserve Fund Agreement dated as of
[ ], among [ ] and [the Reserve Fund Collateral Agent].
["Reserve Fund Collateral Agent" means [ ] acting as Reserve Fund
Collateral Agent under the [Reserve Fund Agreement].]
"Residual Certificate" shall have the meaning set forth in Section 6.1
hereof.
"Rule of 78's Receivable" means any Receivable under which the portion of a
payment allocable to earned interest (which may be referred to in the related
retail installment sale contract as an add-on finance charge) and the portion
allocable to the Amount Financed is determined according to the method commonly
referred to as the "Rule of 78's" method or the "sum of the months' digits"
method or any equivalent method.
"Scheduled Payment" means, for any Collection Period for any Receivable,
the amount indicated in such Receivable as required to be paid by the Obligor in
such Collection Period (without giving effect to deferments of payments pursuant
to Section 3.2 or any rescheduling of payments in any insolvency or similar
proceedings).
"Seller" means CPS Receivables Corp., as the seller of the Receivables
under this Agreement, and each of its successors pursuant to Section 7.3.
"Servicer" means CPS as the servicer of the Receivables which were
purchased by the Seller, and each successor to CPS (in the same capacity)
pursuant to Section 8.3(a) or 9.2.
"Servicer's Certificate" means a certificate completed and executed by a
Servicing Officer pursuant to Section 3.9, substantially in the form of Exhibit
E-2.
["Servicing Assumption Agreement" means the Servicing Assumption Agreement,
dated as of [ ], among CPS, [the Standby Servicer] and the Trustee, as the
same may be amended or supplemented in accordance with its terms.]
"Servicing Fee" means the fee payable to the Servicer for services rendered
during the respective Collection Period, determined pursuant to Section 3.8.
"Servicing Officer" means any person whose name appears on a list of
Servicing Officers delivered to the Trustee and the [Credit Enhancer], as the
same may be amended from time to time.
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"Servicing Rate" shall be [ ]% per annum, payable monthly[, provided,
however, that if [the Standby Servicer] becomes the successor Servicer, the
"Servicing Rate" shall be equal to a percentage per annum determined pursuant to
[the Servicing Assumption Agreement] not to exceed [ ]% per annum].
"Simple Interest Method" means the method of allocating a fixed level
payment between principal and interest, pursuant to which the portion of such
payment that is allocated to interest is equal to the product of the APR
multiplied by the unpaid balance multiplied by the period of time (expressed as
a fraction of a year, based on the actual number of days in the calendar month
and the actual number of days in the calendar year) elapsed since the preceding
payment of interest was made and the remainder of such payment is allocable to
principal.
"Simple Interest Receivable" means any Receivable under which the portion
of a payment allocable to interest and the portion allocable to principal is
determined in accordance with the Simple Interest Method.
["Spread Account" means, with respect to the Trust and similar trusts to be
established by the Seller, the Spread Account established and maintained
pursuant to the Spread Account Agreement. The Spread Account shall be held by
the [Collateral Agent] and shall in no event be deemed part of the Trust.]
["Spread Account Agreement" means the Master Spread Account Agreement among
[ ] and [the Collateral Agent], as amended and restated as of [ ],
as the same may be amended, supplemented or otherwise modified in accordance
with the terms thereof.
"Standard & Poor's" means Standard & Poor's Ratings Group, Inc. and any
successors thereof.
["Standby Fee" means the fee payable to [the Standby Servicer] so long as
CPS is the Servicer calculated in the same manner, on the same basis and for the
same period as the Servicing Fee is calculated pursuant to Section 3.8 based on
a rate of [ ]% per annum rather than the Servicing Rate.]
["Standby Servicer" means [ ], in its capacity as Standby
Servicer pursuant to the terms of [the Servicing Assumption Agreement] or such
Person as shall have been appointed Standby Servicer pursuant to Section
9.2(c).]
"State" means any State of the United States of America, or the District of
Columbia.
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"Total Distribution Amount" shall mean, for each Distribution Date, the sum
of the following amounts with respect to the preceding Collection Period: (i)
all collections on Receivables (including amounts transferred from the Payahead
Account to the Certificate Account pursuant to Section 4.6(a)(ii) but excluding
amounts deposited into the Payahead Account); (ii) Liquidation Proceeds received
during the Collection Period with respect to Receivables that became Liquidated
Receivables during the Collection Period in accordance with the Servicer's
customary servicing procedures; (iii) proceeds from Recoveries with respect to
Liquidated Receivables; and (iv) the Purchase Amount of each Receivable that
became a Purchased Receivable as of the last day of the Collection Period, and
any earnings on investments of funds in the Collection Account and the Payahead
Account pursuant to Section 4.1(a).
"Trust" means the trust created by this Agreement, the estate of which
shall consist of the Trust Assets.
"Trust Assets" means that property set forth in items (i) through (viii) in
Section 2.2 and [the Credit Enhancement] for the benefit of the Class A
Certificateholders.
"Trustee" means the Person acting as Trustee under this Agreement, its
successor in interest, and any successor trustee pursuant to Section 10.11.
"Trustee Fee" means the monthly fee payable on each Distribution Date to
the Trustee for services rendered during the preceding Collection Period in an
amount equal to the product of (i) one-twelfth of [ ]% and (ii) the Pool Balance
of the last day of the second preceding Collection Period, distributed in
accordance with Section 4.6(c); provided, however, that with respect to the
initial Distribution Date, such monthly fee shall be an amount equal to the
product of (i) one-twelfth of [ ]% and (ii) the Pool Balance as of the close of
the Cutoff Date.
"Trustee Officer" means any vice president, any assistant vice president,
any assistant secretary, any assistant treasurer, any trust officer, or any
other officer of the Trustee customarily performing functions similar to those
performed by any of the above designated officers and also means, with respect
to a particular corporate trust matter, any other officer to whom such matter is
referred because of his knowledge of and familiarity with the particular
subject.
"Trustee's Certificate" means a certificate completed and executed for the
Trustee by a Trustee Officer pursuant to Section 10.2, substantially in the form
of, in the case of an assignment to CPS, Exhibit C-1 and in the case of an
assignment to the Servicer, Exhibit C-2.
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"UCC" means the Uniform Commercial Code as in effect in the respective
jurisdiction.
SECTION 1.2. Usage of Terms. With respect to all terms in this Agreement,
the singular includes the plural and the plural the singular; words importing
any gender include the other genders; references to "writing" include printing,
typing, lithography, and other means of reproducing words in a visible form;
references to agreements and other contractual instruments include all
subsequent amendments thereto or changes therein entered into in accordance with
their respective terms and not prohibited by this Agreement; references to
Persons include their permitted successors and assigns; and the term "including"
means "including without limitation."
SECTION 1.3. Section References. All section references shall be to
Sections in this Agreement.
SECTION 1.4. Limitation on Trust Fund Activities. Notwithstanding any other
provision in this Agreement to the contrary, the Trustee shall have no power to
vary the investment of the Certificateholders within the meaning of Treasury
Department Regulation ss. 301.7701-4(c) or to engage in business unless the
Trustee and the [Credit Enhancer] shall have received an Opinion of Counsel that
such activity shall not cause the Trust to be an association taxable as a
corporation for federal income tax purposes.
SECTION 1.5. Calculations. All calculations of the amount of interest
accrued on the Certificates and all calculations of the amount of the Servicing
Fee and the Trustee Fee shall be made on the basis of a 360-day year consisting
of twelve 30-day months. All references to the Principal Balance of a Receivable
as of the last day of a Collection Period shall refer to the close of business
on such day.
SECTION 1.6. Action by or Consent of Certificateholders. Whenever any
provision of this Agreement refers to action to be taken, or consented to, by
Certificateholders, such provision shall be deemed to refer to
Certificateholders of record as of the Record Date immediately preceding the
date on which such action is to be taken, or consent given, by
Certificateholders. Solely for the purposes of any action to be taken, or
consented to, by Certificateholders, any Certificate registered in the name of
the Seller, CPS or any Affiliate thereof shall be deemed not to be outstanding
and shall not be taken into account in determining whether the requisite
interest necessary to effect any such action or consent has been obtained;
provided, however, that, solely for the purpose of determining whether the
Trustee is entitled to rely upon any such action or consent, only
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Certificates which the Trustee knows to be so owned shall be so disregarded.
SECTION 1.7. Material Adverse Effect. Whenever a determination is to be
made under this Agreement as to whether a given event, action, course of conduct
or set of facts or circumstances could or would have a material adverse effect
on the Trust or the Certificateholders (or any similar or analogous
determination), such determination shall be made without taking into account the
[Credit Enhancement].
ARTICLE II
The Trust and Trust Property
SECTION 2.1. Creation of Trust. Upon the execution of this Agreement by the
parties hereto, there is hereby created the CPS Auto Grantor Trust 199[ ]-[ ].
SECTION 2.2. Conveyance of Receivables. In consideration of the Trustee's
delivery of Certificates in an aggregate principal amount equal to the Original
Pool Balance to or upon the written order of the Seller, the Seller does hereby
sell, transfer, assign, set over and otherwise convey to the Trustee, in trust
for the benefit of the Certificateholders, without recourse, except as provided
in Sections 2.5, 2.6 and 2.8 (subject to the obligations herein):
(i) all right, title and interest of the Seller in and to the
Receivables listed in Schedule A hereto and, with respect to Rule of 78's
Receivables, all monies due or to become due thereon after the Cutoff Date
(including Scheduled Payments due after the Cutoff Date (including
principal prepayments relating to such Scheduled Payments) but received by
the Seller or CPS before the Cutoff Date) and, with respect to Simple
Interest Receivables, all monies received thereunder after the Cutoff Date
and all Liquidation Proceeds and Recoveries received with respect to such
Receivables;
(ii) all right, title and interest of the Seller in and to the
security interests in the Financed Vehicles granted by Obligors pursuant to
the Receivables and any other interest of the Seller in such Financed
Vehicles, including, without limitation, the certificates of title or, with
respect to such Financed Vehicles in the State of Michigan, all other
evidence of ownership with respect to such Financed Vehicles;
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(iii) all right, title and interest of the Seller in and to any
proceeds from claims on any physical damage, credit life and credit
accident and health insurance policies or certificates relating to the
Financed Vehicles or the Obligors;
(iv) all right, title and interest of the Seller in and to the
Purchase Agreement, including a direct right to cause CPS to purchase
Receivables from the Trust under certain circumstances;
(v) all right, title and interest of the Seller in and to refunds for
the costs of extended service contracts with respect to Financed Vehicles,
refunds of unearned premiums with respect to credit life and credit
accident and health insurance policies or certificates covering an Obligor
or Financed Vehicle or his or her obligations with respect to a Financed
Vehicle and any recourse to Dealers for any of the foregoing;
(vi) the Receivable File related to each Receivable;
(vii) all amounts and property from time to time held in or credited
to the Collection Account, the Lock-Box Account, [the Credit Enhancement
Account] or the Certificate Account; and
(viii) the proceeds of any and all of the foregoing.
In addition, the Seller shall cause [the Credit Enhancement] to be issued
to and delivered to the Trust for the benefit of the Certificateholders.
SECTION 2.3. Transfer Intended as Sale; Precautionary Security Interest.
The conveyance to the Trust of the property set forth in Section 2.2 above is
intended as a sale free and clear of all Liens, and it is intended that the
property of the Trust shall not be part of the Seller's estate in the event of
the filing of a bankruptcy petition by or against the Seller under any
bankruptcy law. In the event, however, that notwithstanding the intent of CPS,
the Seller and the Trustee, the transfer under this Agreement is held not to be
a sale, this Agreement shall constitute a grant of a security interest in the
property described in Section 2.2 above, for the benefit of the
Certificateholders and the [Credit Enhancer] as their interests may appear
herein.
SECTION 2.4. Acceptance by Trustee. The Trustee does hereby accept all
consideration conveyed by the Seller pursuant to Section 2.2, and declares that
the Trustee shall hold such
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consideration upon the trusts herein set forth for the benefit of all present
and future Certificateholders, subject to the terms and provisions of this
Agreement.
SECTION 2.5. Representations and Warranties of Seller. The Seller makes the
following representations and warranties as to the Receivables to the [Credit
Enhancer] and to the Trustee, on which the [Credit Enhancer] relies in executing
and delivering [the Credit Enhancement], and on which the Trustee on behalf of
itself and the Certificateholders relies in accepting the items specified in
Section 2.2 in trust and executing and authenticating the Certificates. Such
representations and warranties speak as of the Closing Date, but shall survive
the sale, transfer, and assignment of the Receivables to the Trustee.
(i) Characteristics of Receivables. (A) Each Receivable (1) has been
originated in the United States of America by a Dealer for the retail sale
of a Financed Vehicle in the ordinary course of such Dealer's business, has
been fully and properly executed by the parties thereto and has been
purchased by CPS in connection with the sale of Financed Vehicles by the
Dealers, (2) has created a valid, subsisting, and enforceable first
priority perfected security interest in favor of CPS in the Financed
Vehicle, which security interest has been assigned by CPS to the Seller,
which in turn has assigned such security interest to the Trustee, (3)
contains customary and enforceable provisions such that the rights and
remedies of the holder or assignee thereof shall be adequate for
realization against the collateral of the benefits of the security, (4)
provides for level monthly payments that fully amortize the Amount Financed
over the original term (except for the last payment, which may be different
from the level payment) and yield interest at the Annual Percentage Rate,
(5) has an Annual Percentage Rate of not less than [ ]%, (6) that is a Rule
of 78's Receivable provides for, in the event that such contract is
prepaid, a prepayment that fully pays the Principal Balance and includes a
full month's interest, in the month of prepayment, at the Annual Percentage
Rate, (7) is a Rule of 78's Receivable or a Simple Interest Receivable, and
(8) was originated by a Dealer and was sold by the Dealer without any fraud
or misrepresentation on the part of such Dealer.
(B) Approximately [ ]% of the aggregate Principal Balance of
the Receivables, constituting [ ]% of the number of contracts, as of the
Cutoff Date, represents financing of used automobiles, light trucks, vans
or minivans; the remainder of the Receivables represent financing of new
automobiles, light trucks, vans or minivans; approximately [ ]% of the
aggregate Principal
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Balance of the Receivables as of the Cutoff Date were originated in the
State of California; approximately [ ]% of the aggregate Principal Balance
of the Receivables as of the Cutoff Date were originated under the CPS
alpha program; approximately [ ]% of the aggregate Principal Balance of the
Receivables as of the Cutoff Date were originated under the CPS delta
program; the remainder of the Receivables were originated under the CPS
standard program; no Receivable shall have a payment that is more than [30]
days overdue as of the Cutoff Date; [ ]% of the Receivables are Rule of
78's Receivables and [ ]% of the Receivables are Simple Interest
Receivables; each Receivable shall have a final scheduled payment due no
later than [ ], 200[ ]; each Receivable has an original term to maturity
of at least 24 months and not more than 60 months and a remaining term to
maturity of not less than 18 months nor greater than 60 months; and each
Receivable was originated on or before the Cutoff Date.
(ii) Schedule of Receivables. The information with respect to the
Receivables set forth in Schedule A to this Agreement is true and correct
in all material respects as of the close of business on the Cutoff Date,
and no selection procedures adverse to the Certificateholders have been
utilized in selecting the Receivables.
(iii) Compliance with Law. Each Receivable, the sale of the Financed
Vehicle and the sale of any physical damage, credit life and credit
accident and health insurance and any extended service contracts complied
at the time the related Receivable was originated or made and at the
execution of this Agreement complies in all material respects with all
requirements of applicable Federal, State, and local laws, and regulations
thereunder including, without limitation, usury laws, the Federal
Truth-in-Lending Act, the Equal Credit Opportunity Act, the Fair Credit
Reporting Act, the Fair Debt Collection Practices Act, the Federal Trade
Commission Act, the Magnuson-Moss Warranty Act, the Federal Reserve Board's
Regulations B and Z, the Soldiers' and Sailors' Civil Relief Act of 1940,
the Texas Consumer Credit Code, the California Automobile Sales Finance Act
and State adaptations of the National Consumer Act and of the Uniform
Consumer Credit Code, and other consumer credit laws and equal credit
opportunity and disclosure laws.
(iv) Binding Obligation. Each Receivable represents the genuine,
legal, valid and binding payment obligation in writing of the Obligor,
enforceable by the holder thereof in accordance with its terms.
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(v) No Government Obligor. None of the Receivables are due from the
United States of America or any State or from any agency, department, or
instrumentality of the United States of America or any State.
(vi) Security Interest in Financed Vehicle. Immediately subsequent to
the sale, assignment and transfer thereof to the Trust, each Receivable
shall be secured by a validly perfected first priority security interest in
the Financed Vehicle in favor of the Trust as secured party, and such
security interest is prior to all other liens upon and security interests
in such Financed Vehicle which now exist or may hereafter arise or be
created (except, as to priority, for any tax liens or mechanics' liens
which may arise after the Closing Date).
(vii) Receivables in Force. No Receivable has been satisfied,
subordinated or rescinded, nor has any Financed Vehicle been released from
the lien granted by the related Receivable in whole or in part.
(viii) No Waiver. No provision of a Receivable has been waived.
(ix) No Amendments. No Receivable has been amended, except as such
Receivable may have been amended to grant extensions which shall not have
numbered more than (a) one extension of one calendar month in any calendar
year or (b) three such extensions in the aggregate.
(x) No Defenses. As of the Closing Date, no right of rescission,
setoff, counterclaim or defense exists or has been asserted or threatened
with respect to any Receivable. The operation of the terms of any
Receivable or the exercise of any right thereunder will not render such
Receivable unenforceable in whole or in part or subject to any such right
of rescission, setoff, counterclaim, or defense.
(xi) No Liens. As of the Cutoff Date, there are no liens or claims
existing or which have been filed for work, labor, storage or materials
relating to a Financed Vehicle that shall be liens prior to, or equal or
coordinate with, the security interest in the Financed Vehicle granted by
the Receivable.
(xii) No Default; Repossession. Except for payment delinquencies
continuing for a period of not more than [thirty] days as of the Cutoff
Date, no default, breach, violation or event permitting acceleration under
the terms of any Receivable has occurred; and no continuing condition
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that with notice or the lapse of time would constitute a default,
breach, violation or event permitting acceleration under the terms of
any Receivable has arisen; and the Seller shall not waive and has not
waived any of the foregoing; and no Financed Vehicle shall have been
repossessed as of the Cutoff Date.
(xiii) Insurance; Other. (A) Each Obligor has obtained insurance
covering the Financed Vehicle as of the execution of the Receivable
insuring against loss and damage due to fire, theft, transportation,
collision and other risks generally covered by comprehensive and
collision coverage, and that each Receivable requires the Obligor to
obtain and maintain such insurance naming CPS and its successors and
assigns as an additional insured, (B) each Receivable that finances
the cost of premiums for credit life and credit accident and health
insurance is covered by an insurance policy or certificate of
insurance naming CPS as policyholder (creditor) under each such
insurance policy and certificate of insurance and (C) as to each
Receivable that finances the cost of an extended service contract, the
respective Financed Vehicle which secures the Receivable is covered by
an extended service contract.
(xiv) Title. It is the intention of the Seller that the transfer
and assignment herein contemplated constitute a sale of the
Receivables from the Seller to the Trust and that the beneficial
interest in and title to such Receivables not be part of the Seller's
estate in the event of the filing of a bankruptcy petition by or
against the Seller under any bankruptcy law. No Receivable has been
sold, transferred, assigned, or pledged by the Seller to any Person
other than the Trustee. Immediately prior to the transfer and
assignment herein contemplated, the Seller had good and marketable
title to each Receivable and was the sole owner thereof, free and
clear of all liens, claims, encumbrances, security interests, and
rights of others, and, immediately upon the transfer thereof, the
Trustee for the benefit of the Certificateholders and the [Credit
Enhancer] shall have good and marketable title to each such Receivable
and will be the sole owner thereof, free and clear of all liens,
encumbrances, security interests, and rights of others, and the
transfer has been perfected under the UCC.
(xv) Lawful Assignment. No Receivable has been originated in, or
is subject to the laws of, any jurisdiction under which the sale,
transfer, and assignment of such Receivable under this Agreement or
pursuant to transfers of the Certificates shall be unlawful, void, or
voidable. The Seller has not entered into any agreement
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with any account debtor that prohibits, restricts or conditions the
assignment of any portion of the Receivables.
(xvi) All Filings Made. All filings (including, without
limitation, UCC filings) necessary in any jurisdiction to give the
Trustee a first priority perfected ownership interest in the
Receivables have been made.
(xvii) Receivable File; One Original. CPS has delivered to the
Trustee a complete Receivable File with respect to each Receivable.
There is only one original executed copy of each Receivable.
(xviii) Chattel Paper. Each Receivable constitutes "chattel
paper" under the UCC.
(xix) Title Documents. (A) If the Receivable was originated in a
State in which notation of security interest on the title document of
the related Financed Vehicle is required or permitted to perfect such
security interest, the title document of the related Financed Vehicle
for such Receivable shows, or if a new or replacement title document
is being applied for with respect to such Financed Vehicle the title
document (or, with respect to Receivables originated in the State of
Michigan, a copy thereof) will be received within [180] days and will
show, CPS named as the original secured party under the related
Receivable as the holder of a first priority security interest in such
Financed Vehicle, and (B) if the Receivable was originated in a State
in which the filing of a financing statement under the UCC is required
to perfect a security interest in motor vehicles, such filings or
recordings have been duly made and show CPS named as the original
secured party under the related Receivable, and in either case, the
Trustee has the same rights as such secured party has or would have
(if such secured party were still the owner of the Receivable) against
all parties claiming an interest in such Financed Vehicle. With
respect to each Receivable for which the title document has not yet
been returned from the Registrar of Titles, CPS has received written
evidence from the related Dealer that such title document showing CPS
as first lienholder has been applied for.
(xx) Valid and Binding Obligation of Obligor. Each Receivable is
the legal, valid and binding obligation of the Obligor thereunder and
is enforceable in accordance with its terms, except only as such
enforcement may be limited by bankruptcy, insolvency or similar laws
affecting the enforcement of creditors' rights generally, and all
parties to such contract had full legal capacity to execute and
deliver such contract and all other documents related
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thereto and to grant the security interest purported to be granted
thereby.
(xxi) Tax Liens. As of the Cutoff Date, there is no lien against
the related Financed Vehicle for delinquent taxes.
(xxii) Characteristics of Obligors. As of the date of each
Obligor's application for the loan from which the related Receivable
arises, such Obligor (a) did not have any material past due credit
obligations or any personal or real property repossessed or wages
garnished within one year prior to the date of such application,
unless such amounts have been repaid or discharged through bankruptcy,
(b) was not the subject of any Federal, State or other bankruptcy,
insolvency or similar proceeding pending on the date of application
that is not discharged, (c) had not been the subject of more than one
Federal, State or other bankruptcy, insolvency or similar proceeding,
and (d) was domiciled in the United States.
(xxiii) Origination. Each Receivable has an origination date on
or after [ ].
(xxiv) Maturity of Receivables. Each Receivable has an original
term to maturity of not less than [ ] months and not more than 60
months; the weighted average original term to maturity of the
Receivables is [ ] months as of the Cutoff Date; the remaining
term to maturity of each Receivable was [ ] months or less as of the
Cutoff Date; the weighted average remaining term to maturity of the
Receivables was [ ] months as of the Cutoff Date.
(xxv) Scheduled Payments. Each Receivable had an original
principal balance of not less than $[ ] nor more than $[ ],
has an outstanding principal balance as of the Cutoff Date of not less
than $[ ] nor more than $[ ] and has a first Scheduled Payment
due on or prior to [ ].
(xxvi) Origination of Receivables. Based on the billing address
of the Obligors and the Principal Balances as of the Cutoff Date,
approximately [ ]% of the Receivables were originated in [ ].
(xxvii) Post-Office Box. On or prior to the next billing period
after the Cutoff Date, CPS will notify each Obligor to make payments
with respect to its respective Receivables after the Cutoff Date
directly to the Post- Office Box, and will provide each Obligor with a
monthly statement in order to enable such Obligors to make payments
directly to the Post-Office Box.
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(xxviii) Location of Receivable Files. A complete
Receivable File with respect to each Receivable has been or prior to
the Closing Date will be delivered to the Trustee at the location
listed in Schedule B.
(xxix) Casualty. No Financed Vehicle has suffered a Casualty.
(xxx) Principal Balance/Number of Contracts. As of the Cutoff
Date, the total aggregate principal balance of the Receivables was
$[ ]. The Receivables are evidenced by [ ] Contracts.
SECTION 2.6. Repurchase Upon Breach. The Seller, the Servicer, the [Credit
Enhancer] or the Trustee, as the case may be, shall inform the other parties to
this Agreement and the [Credit Enhancer] promptly, in writing, upon the
discovery of any breach of the Seller's representations and warranties made
pursuant to Section 2.5 (without regard to any limitation therein as to the
Seller's knowledge). Unless the breach shall have been cured by the last day of
the second Collection Period following the discovery thereof by the Trustee or
the [Credit Enhancer] or receipt by the Trustee and the [Credit Enhancer] of
notice from the Seller or the Servicer of such breach, CPS shall repurchase any
Receivable if such Receivable is materially and adversely affected by the breach
as of the last day of such second Collection Period (or, at CPS's option, the
last day of the first Collection Period following the discovery) and, in the
event that the breach relates to a characteristic of the Receivables in the
aggregate, and if the Trust is materially and adversely affected by such breach,
unless the breach shall have been cured by such second Collection Period, CPS
shall purchase such aggregate Principal Balance of Receivables, such that
following such purchase such representation shall be true and correct with
respect to the remainder of the Receivables in the aggregate. In consideration
of the purchase of the Receivable, CPS shall remit the Purchase Amount, in the
manner specified in Section 4.5. For purposes of this Section, the Purchase
Amount of a Receivable which is not consistent with the warranty pursuant to
Section 2.5(i)(A)(4) or (A)(5) shall include such additional amount as shall be
necessary to provide the full amount of interest as contemplated therein. The
sole remedy of the Trustee, the Trust, the Certificateholders or the [Credit
Enhancer] with respect to a breach of representations and warranties pursuant to
Section 2.5 shall be to enforce CPS's obligation to purchase such Receivables
pursuant to the Purchase Agreement; provided, however, that CPS shall indemnify
the Trustee, [the Standby Servicer], the [Collateral Agent], the [Credit
Enhancer], the Trust and the Certificateholders against all costs, expenses,
losses, damages, claims and liabilities, including reasonable fees and expenses
of
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counsel, which may be asserted against or incurred by any of them as a result of
third party claims arising out of the events or facts giving rise to such
breach. Upon receipt of the Purchase Amount and written instructions from the
Servicer, the Trustee shall release to CPS or its designee the related
Receivables File and shall execute and deliver all reasonable instruments of
transfer or assignment, without recourse, as are prepared by the Seller and
delivered to the Trustee and necessary to vest in CPS or such designee title to
the Receivable. If it is determined that consummation of the transactions
contemplated by this Agreement and the other transaction documents referenced in
this Agreement, the servicing and operation of the Trust pursuant to this
Agreement and such other documents, or the ownership of a Certificate by a
Holder constitutes a violation of the prohibited transaction rules of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"), or the
Internal Revenue Code of 1986, as amended ("Code") or any successor statutes of
similar impact, together with the regulations thereunder, to which no statutory
exception or administrative exemption applies, such violation shall not be
treated as a breach of the Seller's representations and warranties made pursuant
to Section 2.5 if not otherwise such a breach.
SECTION 2.7. Delivery of Receivable Files. On or prior to the Closing Date,
the Seller shall transfer and deliver to the Trustee at the offices specified in
Schedule B to this Agreement with respect to each Receivable the following:
(i) The fully executed original of the Receivable (together with
any agreements modifying the Receivable, including without limitation,
any extension agreements).
(ii) The original certificate of title in the name of CPS or such
documents that CPS shall keep on file, in accordance with its
customary procedures, evidencing the security interest of CPS in the
Financed Vehicle or, if not yet received, a copy of the application
therefor showing CPS as secured party.
The Servicer shall hold all other documents with respect to the Receivables as
custodian for the Trust.
SECTION 2.8. Acceptance of Receivable Files by Trustee. The Trustee
acknowledges receipt of files which the Seller has represented are the
Receivable Files. The Trustee has reviewed the Receivable Files and has
determined that it has received a file for each Receivable identified in
Schedule A to this Agreement. The Trustee declares that it holds and will
continue to hold such files and any amendments, replacements or supplements
thereto and all other Trust Assets as Trustee in trust for the use and benefit
of all present and future
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Certificateholders. The Trustee agrees to review each file delivered to it no
later than [45] days after the Closing Date to determine whether such Receivable
Files contain the documents referred to in Section 2.7(i) and (ii). If the
Trustee has found or finds that a file for a Receivable has not been received,
or that a file is unrelated to the Receivables identified in Schedule A to this
Agreement or that any of the documents referred to in Section 2.7(i) or (ii) are
not contained in a Receivable File, the Trustee shall inform CPS, the Seller,
[the Standby Servicer] and the [Credit Enhancer] promptly, in writing, of the
failure to receive a file with respect to such Receivable (or of the failure of
any of the aforementioned documents to be included in the Receivable File) or
shall return to CPS as the Seller's designee any file unrelated to a Receivable
identified in Schedule A to this Agreement (it being understood that the
Trustee's obligation to review the contents of any Receivable File shall be
limited as set forth in the preceding sentence). Unless such defect with respect
to such Receivable File shall have been cured by the last day of the second
Collection Period following discovery thereof by the Trustee, CPS shall
repurchase any such Receivable as of such last day. In consideration of the
purchase of the Receivable, CPS shall remit the Purchase Amount, in the manner
specified in Section 4.5. The sole remedy of the Trustee, the Trust, or the
Certificateholders with respect to a breach pursuant to this Section 2.8 shall
be to require CPS to purchase the Receivables pursuant to this Section 2.8. Upon
receipt of the Purchase Amount and written instructions from the Servicer, the
Trustee shall release to CPS or its designee the related Receivables File and
shall execute and deliver all reasonable instruments of transfer or assignment,
without recourse, as are prepared by CPS and delivered to the Trustee and are
necessary to vest in CPS or such designee title to the Receivable. The Trustee
shall make a list of Receivables for which an application for a certificate of
title but not an original certificate of title or, with respect to Receivables
originated in the State of Michigan, a copy of an original certificate of title,
is included in the Receivable File as of the date of its review of the
Receivable Files and deliver a copy of such list to the Servicer and the [Credit
Enhancer]. On the date which is [180] days following the Closing Date or the
next succeeding Business Day, the Trustee shall inform CPS and the other parties
to this Agreement and the [Credit Enhancer] of any Receivable for which the
related Receivable File on such date does not include an original certificate of
title or, with respect to Financed Vehicles in the State of Michigan, for which
the related Receivable File on such date does not include a copy of an original
certificate of title, and CPS shall repurchase any such Receivable as of the
last day of the current Collection Period.
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SECTION 2.9. Access to Receivable Files. The Trustee shall permit the
Servicer, any Certificateholder and the [Credit Enhancer] access to the
Receivable Files at all reasonable times during the Trustee's normal business
hours; provided, however, that the Trustee shall provide such access to any
Certificateholder only (i) in such cases where the Trustee is required by
applicable statutes or regulations (whether applicable to the Trustee, the
Servicer or to such Certificateholder) to permit such Certificateholder to
review the Receivable Files or (ii) if an [Enhancement Default] shall have
occurred and be continuing. In addition, the Trustee shall provide such access
to any Certificateholder at all reasonable times during the Trustee's normal
business hours if an Event of Default shall have occurred and be continuing. In
each case, such access shall be afforded without charge but only upon reasonable
request. Each Certificateholder shall be deemed to have agreed by its acceptance
of a Certificate to use its best efforts to hold in confidence all Confidential
Information in accordance with its then customary procedures; provided that
nothing herein shall prevent any Certificateholder from delivering copies of any
financial statements and other documents whether or not constituting
Confidential Information, and disclosing other information, whether or not
Confidential Information, to (i) its directors, officers, employees, agents and
professional consultants, (ii) any other institutional investor that holds
Certificates, (iii) any prospective institutional investor transferee in
connection with the contemplated transfer of a Certificate or any part thereof
or participation therein who is subject to confidentiality arrangements at least
substantially similar hereto, (iv) any governmental authority, (v) the National
Association of Insurance Commissioners or any similar organization, (vi) any
nationally recognized rating agency in connection with the rating of the Class A
Certificates by such agency or (vii) any other Person to which such delivery or
disclosure may be necessary or appropriate (a) in compliance with any applicable
law, rule, regulation or order, (b) in response to any subpoena or other legal
process, (c) in connection with any litigation to which such Certificateholder
is a party, or (d) in order to protect or enforce such Person's investment in
any Certificate. The Trustee shall, within [two] Business Days of the request of
the Servicer or the [Credit Enhancer], execute such documents and instruments as
are prepared by the Servicer or the [Credit Enhancer] and delivered to the
Trustee, as the Servicer or the [Credit Enhancer] deems necessary to permit the
Servicer, in accordance with its customary servicing procedures, to enforce the
Receivable on behalf of the Trust and any related insurance policies covering
the Obligor, the Receivable or Financed Vehicle so long as such execution in the
Trustee's sole discretion does not conflict with this Agreement and will not
cause it undue risk or liability. The Trustee shall not be obligated to release
any
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document from any Receivable File unless it receives a trust receipt signed by a
Servicing Officer in the form of Exhibit E-1 hereto (the "Trust Receipt"). Such
Trust Receipt shall obligate the Servicer to return such document(s) to the
Trustee when the need therefor no longer exists unless the Receivable shall be
liquidated, in which case, upon receipt of a certificate of a Servicing Officer
substantially in the form of Exhibit E-2 hereto to the effect that all amounts
required to be deposited in the Collection Account with respect to such
Receivable have been so deposited, the Trust Receipt shall be released by the
Trustee to the Servicer.
ARTICLE III
Administration and Servicing of Receivables
SECTION 3.1. Duties of Servicer. The Servicer, as agent for the Trust, the
Certificateholders and the [Credit Enhancer] (to the extent provided herein)
shall manage, service, administer and make collections on the Receivables with
reasonable care, using that degree of skill and attention customary and usual
for institutions which service motor vehicle retail installment contracts
similar to the Receivables and, to the extent more exacting, that the Servicer
exercises with respect to all comparable automotive receivables that it services
for itself or others. The Servicer's duties shall include collection and posting
of all payments, responding to inquiries of Obligors on such Receivables,
investigating delinquencies, sending payment statements to Obligors, reporting
tax information to Obligors, accounting for collections, furnishing monthly and
annual statements to the Trustee and the [Credit Enhancer] with respect to
distributions. Without limiting the generality of the foregoing, and subject to
the servicing standards set forth in this Agreement, the Servicer is authorized
and empowered by the Trustee to execute and deliver, on behalf of itself, the
Trust, the Certificateholders or any of them, any and all instruments of
satisfaction or cancellation, or partial or full release or discharge, and all
other comparable instruments, with respect to such Receivables or to the
Financed Vehicles securing such Receivables and/or the certificates of title or,
with respect to Financed Vehicles in the State of Michigan, other evidence of
ownership with respect to such Financed Vehicles. If the Servicer shall commence
a legal proceeding to enforce a Receivable, the Trustee shall thereupon be
deemed to have automatically assigned, solely for the purpose of collection,
such Receivable to the Servicer. If in any enforcement suit or legal proceeding
it shall be held that the Servicer may not enforce a Receivable on the ground
that it shall not be a real party in interest or a holder entitled to enforce
such Receivable, the Trustee shall, at the Servicer's expense and
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direction, take steps to enforce such Receivable, including bringing suit in its
name or the name of the Certificateholders. The Servicer shall prepare and
furnish and the Trustee shall execute, any powers of attorney and other
documents reasonably necessary or appropriate to enable the Servicer to carry
out its servicing and administrative duties hereunder.
SECTION 3.2. Collection and Allocation of Receivable Payments. Consistent
with the standards, policies and procedures required by this Agreement, the
Servicer shall make reasonable efforts to collect all payments called for under
the terms and provisions of the Receivables as and when the same shall become
due and shall follow such collection procedures as it follows with respect to
all comparable automotive receivables that it services for itself or others;
provided, however, that the Servicer shall notify each Obligor to make all
payments with respect to the Receivables to the Post-Office Box. The Servicer
will provide each Obligor with a monthly statement in order to notify such
Obligors to make payments directly to the Post-Office Box. The Servicer shall
allocate collections between principal and interest in accordance with the
customary servicing procedures it follows with respect to all comparable
automotive receivables that it services for itself or others and in accordance
with the terms of this Agreement. Except as provided below, the Servicer, for so
long as CPS is the Servicer, may grant extensions on a Receivable; provided,
however, that the Servicer may not grant more than one extension per calendar
year with respect to a Receivable or grant an extension with respect to a
Receivable for more than one calendar month or grant more than three extensions
in the aggregate with respect to a Receivable without the prior written consent
of the [Credit Enhancer] and provided, further, that if the Servicer extends the
date for final payment by the Obligor of any Receivable beyond the last day of
the penultimate Collection Period preceding the Final Scheduled Distribution
Date, it shall promptly purchase the Receivable from the Trust in accordance
with the terms of Section 3.7 hereof (and for purposes thereof, the Receivable
shall be deemed to be materially and adversely affected by such breach). If the
Servicer is not CPS, the Servicer may not make any extension on a Receivable
without the prior written consent of the [Credit Enhancer]. The Servicer may in
its discretion waive any late payment charge or any other fees that may be
collected in the ordinary course of servicing a Receivable. Notwithstanding
anything to the contrary contained herein, the Servicer shall not agree (i) to
any alteration of the interest rate on any Receivable or of the amount of any
Scheduled Payment on Receivables, and (ii) shall not agree to any modification
that would result in a "deemed exchange" of a receivable under Section 1001 of
the Internal Revenue Code of 1986, as amended, or would constitute reinvestment
adversely affecting the status of the
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Trust as not an association taxable as a corporation for Federal income tax
purposes.
SECTION 3.3. Realization Upon Receivables. On behalf of the Trust, the
Certificateholders and the [Credit Enhancer], the Servicer shall use its best
efforts, consistent with the servicing procedures set forth herein, to repossess
or otherwise convert the ownership of the Financed Vehicle securing any
Receivable as to which the Servicer shall have determined eventual payment in
full is unlikely. The Servicer shall commence efforts to repossess or otherwise
convert the ownership of a Financed Vehicle on or prior to the date that an
Obligor has failed to make more than 90% of a Scheduled Payment thereon in
excess of $10 for 120 days or more; provided, however, that the Servicer may
elect not to commence such efforts within such time period if in its good faith
judgment it determines either that it would be impracticable to do so or that
the proceeds ultimately recoverable with respect to such Receivable would be
increased by forbearance. The Servicer shall follow such customary and usual
practices and procedures as it shall deem necessary or advisable in its
servicing of automotive receivables, consistent with the standards of care set
forth in Section 3.2, which may include reasonable efforts to realize upon any
recourse to Dealers and selling the Financed Vehicle at public or private sale.
The foregoing shall be subject to the provision that, in any case in which the
Financed Vehicle shall have suffered damage, the Servicer shall not expend funds
in connection with the repair or the repossession of such Financed Vehicle
unless it shall determine in its discretion that such repair and/or repossession
will increase the proceeds ultimately recoverable with respect to such
Receivable by an amount greater than the amount of such expenses.
SECTION 3.4. Physical Damage Insurance; Other Insurance. (a) The Servicer,
in accordance with the servicing procedures and standards set forth herein,
shall require that (i) each Obligor shall have obtained insurance covering the
Financed Vehicle, as of the date of the execution of the Receivable, insuring
against loss and damage due to fire, theft, transportation, collision and other
risks generally covered by comprehensive and collision coverage and each
Receivable requires the Obligor to maintain such physical loss and damage
insurance naming CPS and its successors and assigns as an additional insured,
(ii) each Receivable that finances the cost of premiums for credit life and
credit accident and health insurance is covered by an insurance policy or
certificate naming CPS as policyholder (creditor) and (iii) as to each
Receivable that finances the cost of an extended service contract, the
respective Financed Vehicle which secures the Receivable is covered by an
extended service contract.
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(b) To the extent applicable, the Servicer shall not take any action
which would result in noncoverage under any of the insurance policies referred
to in Section 3.4(a) which, but for the actions of the Servicer, would have been
covered thereunder. The Servicer, on behalf of the Trustee, shall take such
reasonable action as shall be necessary to permit recovery under any of the
foregoing insurance policies. Any amounts collected by the Servicer under any of
the foregoing insurance policies shall be deposited in the Collection Account
pursuant to Section 4.2. The Servicer shall cause to be maintained in respect of
each Financed Vehicle the insurance or insurance reserves referred to in Section
3.4(a) (i) above.
SECTION 3.5. Maintenance of Security Interests in Financed Vehicles. (a)
Consistent with the policies and procedures required by this Agreement, the
Servicer shall take such steps as are necessary to maintain perfection of the
security interest created by each Receivable in the related Financed Vehicle
including but not limited to obtaining the execution by the Obligors and the
recording, registering, filing, re-recording, re-registering and refiling of all
security agreements, financing statements and continuation statements or
instruments as are necessary to maintain the security interest granted by
Obligors under the respective Receivables. The Trustee hereby authorizes the
Servicer to take such steps as are necessary to re-perfect or continue the
perfection of such security interest on behalf of the Trust in the event of the
relocation of a Financed Vehicle or for any other reason.
(b) Upon the occurrence of an [Enhancement Agreement] Event of
Default, the [Credit Enhancer] may (so long as an [Enhancement Default] shall
not have occurred and be continuing) instruct the Trustee and the Servicer to
take or cause to be taken, or, if an [Enhancement Default] shall have occurred,
upon the occurrence of an Event of Default, the Trustee and the Servicer shall
take or cause to be taken such action as may, in the opinion of counsel to the
Trustee, which opinion shall not be an expense of the Trustee, be necessary to
perfect or reperfect the security interests in the Financed Vehicles securing
the Receivables in the name of the Trustee on behalf of the Trust by amending
the title documents of such Financed Vehicles or by such other reasonable means
as may, in the opinion of counsel to the [Credit Enhancer] or the Trustee (as
applicable), which opinion shall not be an expense of the Trustee, be necessary
or prudent. The Servicer hereby agrees to pay all expenses related to such
perfection or reperfection and to take all action necessary therefor. In
addition, prior to the occurrence of an [Enhancement Agreement Event of
Default], the [Credit Enhancer] may (unless an [Enhancement Default] shall have
occurred and be continuing) instruct the Trustee and the Servicer to take or
cause to be taken such action as may, in the opinion of counsel
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to the [Credit Enhancer], be necessary to perfect or reperfect the security
interest in the Financed Vehicles securing the Receivables in the name of the
Trustee on behalf of the Trust, including by amending the title documents of
such Financed Vehicles or by such other reasonable means as may, in the opinion
of counsel to the [Credit Enhancer], be necessary or prudent; provided, however,
that if the [Credit Enhancer] requests (unless an [Enhancement Default] shall
have occurred and be continuing) that the title documents be amended prior to
the occurrence of an [Enhancement Agreement Event of Default], the out-of-pocket
expenses of the Servicer or the Trustee in connection with such action shall be
reimbursed to the Servicer or the Trustee, as applicable, by the [Credit
Enhancer].
SECTION 3.6. Additional Covenants of Servicer. The Servicer shall not
release the Financed Vehicle securing each Receivable from the security interest
granted by such Receivable in whole or in part except in the event of payment in
full by the Obligor thereunder or repossession, nor shall the Servicer impair
the rights of the Certificateholders in such Receivables, nor shall the Servicer
amend a Receivable, except that extensions may be granted in accordance with
Section 3.2.
SECTION 3.7. Purchase of Receivables Upon Breach. The Servicer or the
Trustee shall inform the other party and the [Credit Enhancer] promptly, in
writing, upon the discovery of any breach of Section 3.2, 3.4, 3.5 or 3.6;
provided, however, that the failure to give such notice shall not affect any
obligation of the Servicer hereunder. Unless the breach shall have been cured by
the last day of the second Collection Period following such discovery (or, at
the Servicer's election, the last day of the first following Collection Period),
the Servicer shall purchase any Receivable materially and adversely affected by
such breach. In consideration of the purchase of such Receivable, the Servicer
shall remit the Purchase Amount in the manner specified in Section 4.5. The sole
remedy of the Trustee, the Trust, the [Credit Enhancer] or the
Certificateholders with respect to a breach of Section 3.2, 3.4, 3.5 or 3.6
shall be to require the Servicer to repurchase Receivables pursuant to this
Section 3.7; provided, however, that the Servicer shall indemnify the Trustee,
[the Standby Servicer], the [Collateral Agent], the [Credit Enhancer], the Trust
and the Certificateholders against all costs, expenses, losses, damages, claims
and liabilities, including reasonable fees and expenses of counsel, which may be
asserted against or incurred by any of them as a result of third party claims
arising out of the events or facts giving rise to such breach. If it is
determined that the management, administration and servicing of the Receivables
and operation of the Trust pursuant to this Agreement constitutes a violation of
the prohibited transaction rules of ERISA or the Code to which no statutory
exception or administrative exemption applies, such
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violation shall not be treated as a breach of Sections 3.2, 3.4, 3.5 or 3.6 if
not otherwise such a breach.
SECTION 3.8. Servicing Fee. The Servicing Fee for the initial Distribution
Date shall equal the product of (a) one twelfth of the Servicing Rate and (b)
the Pool Balance as of the close of business on the Cutoff Date. Thereafter, the
Servicing Fee for a Distribution Date shall equal the product of (i) one twelfth
of the Servicing Rate and (ii) the Pool Balance as of the last day of the second
preceding Collection Period. The Servicing Fee shall also include all late fees,
prepayment charges including, in the case of a Rule of 78's Receivable that is
prepaid in full, to the extent not required by law to be remitted to the related
Obligor, the difference between the Principal Balance of such Rule of 78's
Receivable (plus accrued interest to the date of prepayment) and the principal
balance of such Receivable computed according to the "Rule of 78's", and other
administrative fees or similar charges allowed by applicable law with respect to
Receivables, collected (from whatever source) on the Receivables. The Servicing
Fee for a Distribution Date shall be reduced by an amount equal to the Aggregate
Prepayment Reduction Amount for such Distribution Date.
SECTION 3.9. Servicer's Certificate. By 10:00 a.m., [ ] time, on each
Determination Date, the Servicer shall deliver to the Trustee, the [Credit
Enhancer], the Rating Agencies and the Seller a Servicer's Certificate
containing all information necessary to make the distributions pursuant to
Section 4.6 (including, if required, withdrawals from or deposits to the
Payahead Account and withdrawals from the Spread Account) for the Collection
Period preceding the date of such Servicer's Certificate and all information
necessary for the Trustee to send statements to Certificateholders and the
[Credit Enhancer] pursuant to Section 4.8. Receivables to be purchased by the
Servicer or to be purchased by CPS shall be identified by the Servicer by
account number with respect to such Receivable (as specified in Schedule A).
SECTION 3.10. Annual Statement as to Compliance: Notice of Default. (a) The
Servicer shall deliver to the Trustee and the [Credit Enhancer], on or before
July 31 of each year beginning [ ], an Officer's Certificate, dated as of
March 31 of such year, stating that (i) a review of the activities of the
Servicer during the preceding 12-month period (or, in the case of the first such
certificate, the period from the Cutoff Date to [ ]) and of its performance
under this Agreement has been made under such officer's supervision and (ii) to
the best of such officer's knowledge, based on such review, the Servicer has
fulfilled all its obligations under this Agreement throughout such year (or, in
the case of the first such certificate, such shorter period), or, if there has
been a default in the
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fulfillment of any such obligation, specifying each such default known to such
officer and the nature and status thereof. The Trustee shall send a copy of such
certificate and the report referred to in Section 3.11 to the Rating Agencies.
The Trustee shall forward a copy of such certificate as well as the report
referred to in Section 3.11 to each Certificateholder.
(b) The Servicer shall deliver to the Trustee, the [Credit Enhancer]
and the Rating Agencies, promptly after having obtained knowledge thereof, but
in no event later than [2] Business Days thereafter, written notice in an
Officer's Certificate of any event which with the giving of notice or lapse of
time, or both, would become an Event of Default under Section 9.1.
The Seller shall deliver to the Trustee, the [Credit Enhancer] and the
Rating Agencies, promptly after having obtained knowledge thereof, but in no
event later than [5] Business Days thereafter, written notice in an Officer's
Certificate of any event which with the giving of notice or lapse of time, or
both, would become an Event of Default under clause (ii) of Section 9.1.
The Trustee shall deliver to each Certificateholder a copy of each notice
delivered to it by the Servicer or the Seller pursuant to this Section 3.10(b).
SECTION 3.11. Annual Independent Certified Public Accountant's Report. The
Servicer shall cause a firm of nationally recognized independent certified
public accountants, who may also render other services to the Servicer or to the
Seller, to deliver to the Trustee, the Certificateholders and the [Credit
Enhancer] on or before July 31 of each year beginning [ ], a report dated as
of March 31 of such year and reviewing the Servicer's activities during the
preceding 12-month period (or, in the case of the first such report, the period
from the Cutoff Date to [ ]), addressed to the Board of Directors of the
Servicer and to the Trustee and the [Credit Enhancer], to the effect that such
firm has examined the financial statements of the Servicer and issued its report
therefor and that such examination (1) was made in accordance with generally
accepted auditing standards, and accordingly included such tests of the
accounting records and such other auditing procedures as such firm considered
necessary in the circumstances; (2) included tests relating to auto loans
serviced for others in accordance with the requirements of the Uniform Single
Audit Program for Mortgage Bankers (the "Program"), to the extent the procedures
in the Program are applicable to the servicing obligations set forth in this
Agreement; (3) included an examination of the delinquency and loss statistics
relating to the Servicer's portfolio of automobile and light truck installment
sales contracts; and (4) except as described in the report, disclosed no
exceptions or
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errors in the records relating to automobile and light truck loans serviced for
others that, in the firm's opinion, paragraph four of the Program requires such
firm to report. The accountant's report shall further state that (1) a review in
accordance with agreed upon procedures was made of three randomly selected
Servicer Certificates; (2) except as disclosed in the report, no exceptions or
errors in the Servicer Certificates were found; and (3) the delinquency and loss
information, relating to the Receivables contained in the Servicer Certificates
were found to be accurate.
The Report will also indicate that the firm is independent of the Servicer
within the meaning of the Code of Professional Ethics of the American Institute
of Certified Public Accountants.
SECTION 3.12. Reserved.
SECTION 3.13. Servicer Expenses. The Servicer shall be required to pay all
expenses incurred by it in connection with its activities hereunder, including
fees and disbursements of independent accountants, taxes imposed on the
Servicer, and expenses incurred in connection with distributions and reports to
Certificateholders.
[SECTION 3.14. Retention and Termination of Servicer. The Servicer hereby
covenants and agrees to act as such under this Agreement for an initial term of
ninety (90) days, commencing on the Closing Date, which term shall be
automatically extended by the [Credit Enhancer] for successive terms of ninety
(90) days each as specified in a writing delivered by the [Credit Enhancer]
prior to the expiration of each current term to the Servicer and the Trustee
which provides that the Servicer will be automatically extended for a succeeding
ninety (90) day term unless an Event of Default shall have occurred and be
continuing, in which case [the Credit Enhancer] may extend the Servicer in its
sole discretion (or, at the discretion of [the Credit Enhancer] exercised
pursuant to revocable written standing instructions from time to time to the
Servicer and the Trustee, for any specified number of terms greater than one),
until the termination of the Trust. Each such notice (including each notice
pursuant to standing instructions, which shall be deemed delivered at successive
ninety (90) day intervals for so long as such instructions are in effect) (a
"Servicer Extension Notice") shall be delivered by [the Credit Enhancer] to the
Trustee and the Servicer. The Servicer hereby agrees that, upon its receipt of
any such Servicer Extension Notice, the Servicer shall become bound, for the
duration of the term covered by such Servicer Extension Notice, to continue as
the Servicer subject to and in accordance with the other provisions of this
Agreement. At such time as the Class A Certificates have been paid in full and
all outstanding Reimbursement Obligations and other amounts owed to
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[the Credit Enhancer] have been paid in full, the term of the Servicer's
appointment hereunder shall be deemed to have been extended until the
termination of the Trust (unless such appointment is terminated sooner in
accordance with the terms of this Agreement).]
SECTION 3.15. Access to Certain Documentation and Information Regarding
Receivables. The Servicer shall provide to representatives of the Trustee, the
Certificateholders and the [Credit Enhancer] reasonable access to documentation
and computer systems and information regarding the Receivables. The Servicer
shall provide such access to any Certificateholder only (i) in such cases where
the Servicer is required by applicable statutes or regulations (whether
applicable to the Servicer or to such Certificateholder) to permit such
Certificateholder to review such materials and (ii) if an [Enhancement Default]
shall have occurred and be continuing. In each case, such access shall be
afforded without charge but only upon reasonable request and during normal
business hours. Nothing in this Section 3.15 shall derogate from the obligation
of the Servicer to observe any applicable law prohibiting disclosure of
information regarding the Obligors, and the failure of the Servicer to provide
access as provided in this Section 3.15 as a result of such obligation shall not
constitute a breach of this Section 3.15.
SECTION 3.16. Verification of Servicer's Certificate. (a) On or before the
fifth calendar day of each month, the Servicer will deliver to the Trustee and
[the Standby Servicer] a computer diskette (or other electronic transmission) in
a format acceptable to the Trustee and [the Standby Servicer] containing
information with respect to the Receivables as of the close of business on the
last day of the preceding Collection Period which information is necessary for
preparation of the Servicer's Certificate. [The Standby Servicer] shall use such
computer diskette (or other electronic transmission) to verify certain
information specified in Section 3.16(b) contained in the Servicer's Certificate
delivered by the Servicer, and [the Standby Servicer] shall notify the Servicer
and the [Credit Enhancer] of any discrepancies on or before the second Business
Day following the Determination Date. In the event that [the Standby Servicer]
reports any discrepancies, the Servicer and [the Standby Servicer] shall attempt
to reconcile such discrepancies prior to the second Business Day prior to the
related Distribution Date, but in the absence of a reconciliation, the
Servicer's Certificate shall control for the purpose of calculations and
distributions with respect to the related Distribution Date. In the event that
[the Standby Servicer] and the Servicer are unable to reconcile discrepancies
with respect to a Servicer's Certificate by the related Distribution Date, the
Servicer shall cause a firm of independent certified public accountants, at the
Servicer's expense, to audit
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the Servicer's Certificate and, prior to the fifth calendar day of the following
month, reconcile the discrepancies. The effect, if any, of such reconciliation
shall be reflected in the Servicer's Certificate for such next succeeding
Determination Date. Other than the duties specifically set forth in this
Agreement, [the Standby Servicer] shall have no obligations hereunder,
including, without limitation, to supervise, verify, monitor or administer the
performance of the Servicer. [The Standby Servicer] shall have no liability for
any actions taken or omitted by the Servicer. The duties and obligations of [the
Standby Servicer] shall be determined solely by the express provisions of this
Agreement and no implied covenants or obligations shall be read into this
Agreement against [the Standby Servicer].
(b) [the Standby Servicer] shall review each Servicer's Certificate
delivered pursuant to Section 3.16(a) and shall:
(i) confirm that such Servicer's Certificate is complete on its
face;
(ii) load the computer diskette (which shall be in a format
acceptable to [the Standby Servicer]) received from the Servicer
pursuant to Section 3.16(a) hereof, confirm that such computer
diskette is in a readable form and calculate and confirm the Principal
Balance of each Receivable for the most recent Distribution Date;
(iii) confirm that the Total Distribution Amount, the Class A
Distributable Amount, the Class A Principal Distributable Amount, the
Class A Interest Distributable Amount, the Class B Distributable
Amount, the Class B Interest Distributable Amount, the Class B
Principal Distributable Amount, the [Standby Fee], the Servicing Fee,
the Trustee Fee and the amount on deposit in the Spread Account in the
Servicer's Certificate are accurate based solely on the recalculation
of the Servicer's Certificate; and
(iv) confirm the calculation of the performance tests set forth
in the Spread Account Agreement.
SECTION 3.17. Fidelity Bond. The Servicer shall maintain a fidelity bond in
such form and amount as is customary for entities acting as custodian of funds
and documents in respect of consumer contracts on behalf of institutional
investors.
SECTION 3.18. Delegation of Duties. The Servicer may at any time delegate
duties under this Agreement to sub-contractors who are in the business of
servicing automotive receivables with the prior written consent of the
controlling party as determined
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pursuant to Section 12.11 and (unless an [Enhancement Agreement Event of
Default] shall have occurred and be continuing or [ ] shall then be the
Servicer) the Holders of Class B Certificates evidencing at least [ ]% of the
Class B Certificate Balance; provided, however, that no such delegation or
sub-contracting of duties by the Servicer shall relieve the Servicer of its
responsibility with respect to such duties; and provided further, that the
consent of the Holders of the requisite percentage of the Class B Certificate
Balance shall not be unreasonably withheld or delayed and shall be deemed to
have been given unless, on or before the Objection Date, the Trustee shall have
received Objection Notices from Holders of Class B Certificates representing
more than [ ]% of the Class B Certificate Balance. Upon written request of the
Servicer, the Trustee shall deliver to each Class B Certificateholder of record
as of the most recent Record Date a notice (a "Delegation Notice") prepared by
the Servicer (i) specifying the duties the Servicer proposes to delegate, (ii)
identifying the sub-contractor to whom it proposes to delegate such duties and
(iii) informing such Class B Certificateholder that if it wishes to object to
the proposed delegation of duties, it must deliver a written notice of objection
(specifying in reasonable detail the reasons for its objection; such notice of
objection an "Objection Notice") on or before the date specified in such
Delegation Notice (the "Objection Date"), which Objection Date shall be a date
which is not more than [10] Business Days after the date the Servicer delivers
such Delegation Notice to the Trustee.
ARTICLE IV
Distributions, Spread Account;
Statements to Certificateholders
SECTION 4.1. Accounts; Post-Office Box. (a) The Trustee shall establish the
Lock-Box Account in the name of the Trustee for the benefit of the
Certificateholders, provided that pursuant to the Lock-Box Agreement, the
Lock-Box Processor and no other person, save the Trustee, has authority to
direct disposition of funds on deposit in the Lock-Box Account consistent with
the provisions of this Agreement and the Lock-Box Agreement. The Trustee shall
have no liability or responsibility with respect to the Lock-Box Processor's
directions or activities as set forth in the preceding sentence. The Lock-Box
Account shall be established pursuant to and maintained in accordance with the
Lock-Box Agreement and shall be a demand deposit account initially established
and maintained with Bank of America, or at the request of the [Credit Enhancer]
(unless an [Enhancement Default] shall have occurred and be continuing) an
Eligible Account satisfying clause (i) of the definition thereof; provided,
however, that the Trustee shall give the Servicer prior
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written notice of any change made at the request of the [Credit Enhancer] in the
location of the Lock-Box Account. The Trustee shall establish and maintain the
Post-Office Box at a United States Post Office Branch in the name of the Trustee
for the benefit of the Certificateholders and the [Credit Enhancer].
In the event the Servicer shall for any reason no longer be acting as such,
[the Standby Servicer] or a successor Servicer shall thereupon assume all of the
rights and obligations of the outgoing Servicer under the Lock-Box Agreement. In
such event, the successor Servicer shall be deemed to have assumed all of the
outgoing Servicer's interest therein and to have replaced the outgoing Servicer
as a party to the Lock-Box Agreement to the same extent as if such Lock-Box
Agreement had been assigned to the successor Servicer, except that the outgoing
Servicer shall not thereby be relieved of any liability or obligations on the
part of the outgoing Servicer to the Lock-Box Bank under such Lock-Box
Agreement. The outgoing Servicer shall, upon request of the Trustee, but at the
expense of the outgoing Servicer, deliver to the successor Servicer all
documents and records relating to the Lock-Box Agreement and an accounting of
amounts collected and held by the Lock-Box Bank and otherwise use its best
efforts to effect the orderly and efficient transfer of any Lock-Box Agreement
to the successor Servicer. In the event that the [Credit Enhancer] (so long as
an [Enhancement Default] shall not have occurred and be continuing) or Holders
of Certificates evidencing more than [ ]% of the Class A Certificate Balance (if
an [Enhancement Default] shall have occurred and be continuing) shall elect to
change the identity of the Lock-Box Bank, the Servicer, at its expense, shall
cause the Lock-Box Bank to deliver, at the direction of the [Credit Enhancer]
(so long as an [Enhancement Default] shall not have occurred and be continuing)
or Holders of Certificates evidencing more than [ ]% of the Class A Certificate
Balance (if an [Enhancement Default] shall have occurred and be continuing) to
the Trustee or a successor Lock-Box Bank, all documents and records relating to
the Receivables and all amounts held (or thereafter received) by the Lock-Box
Bank (together with an accounting of such amounts) and shall otherwise use its
best efforts to effect the orderly and efficient transfer of the lock-box
arrangements.
In addition, the Trustee shall establish, with itself, the Collection
Account, [the Credit Enhancement Account], and the Certificate Account in the
name of the Trustee for the benefit of the Certificateholders. In addition, the
Trustee shall establish with itself the Payahead Account in the name of the
Trustee for the benefit of Obligors of Rule of 78's Receivables who make
payments thereon in excess of Scheduled Payments and applicable late fees and
for the benefit, to the extent of earnings on investments of funds in the
Payahead Account, of the Certificateholders. The Payahead Account shall not be
included
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in the Trust. The Collection Account, [the Credit Enhancement Account], the
Certificate Account and the Payahead Account shall be Eligible Accounts
initially established with the Trustee; provided, however, if any of such
accounts shall cease to be an Eligible Account, the Servicer, with the consent
of the [Credit Enhancer], within 5 Business Days shall, cause such accounts to
be moved to an institution so that such account meets the definition of Eligible
Account. The Servicer shall promptly notify the Rating Agencies of any change in
the location of any of the aforementioned accounts.
All amounts held in the Collection Account and the Payahead Account shall
be invested by the Trustee at the written direction of the Servicer in Eligible
Investments in the name of the Trustee as trustee of the Trust and shall mature
no later than one Business Day immediately preceding the Distribution Date next
succeeding the date of such investment. Such written direction shall certify
that any such investment is authorized by this Section. No investment may be
sold prior to its maturity. Amounts in [the Credit Enhancement Account] and the
Certificate Account shall not be invested. The amount of earnings on investments
of funds in the Collection and Payahead Accounts during the Collection Period
related to each Distribution Date shall be deposited into the Certificate
Account, on each Distribution Date, and shall be available for distribution
pursuant to Section 4.6(c).
(b) The Trustee shall on or prior to each Distribution Date (and
prior to the transfer from the Collection Account to the Certificate Account
described in Section 4.6(a)) transfer from the Collection Account to the
Payahead Account all Payaheads as described in Section 4.3 received by the
Servicer during the Collection Period.
SECTION 4.2. Collections. On each Business Day, pursuant to the Lock-Box
Agreement, the Lock-Box Processor will transfer any payments from Obligors
received in the Post-Office Box to the Lock-Box Account. Within [two] Business
Days of receipt of funds into the Lock-Box Account, the Servicer shall cause the
Lock-Box Bank to transfer funds from the Lock-Box Account to the Collection
Account. In addition, the Servicer shall remit all payments by or on behalf of
the Obligors received by the Servicer with respect to the Receivables (other
than Purchased Receivables), and all Liquidation Proceeds no later than the
Business Day following receipt directly (without deposit into any intervening
account) into the Lock-Box Account or the Collection Account.
SECTION 4.3. Application of Collections. All collections for each
Collection Period shall be applied by the Servicer as follows:
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With respect to each Receivable (other than a Purchased Receivable),
payments by or on behalf of the Obligor shall be applied, in the case of a Rule
of 78's Receivable, first, to the Scheduled Payment of such Rule of 78's
Receivable and, second, to any late fees accrued with respect to such Rule of
78's Receivable and, in the case of a Simple Interest Receivable, to interest
and principal in accordance with the Simple Interest Method. With respect to any
Rule of 78's Receivable, any remaining excess shall be added to the Payahead
Balance, and shall be applied to prepay the Rule of 78's Receivable, but only if
the sum of such excess and the previous Payahead Balance shall be sufficient to
prepay the Rule of 78's Receivable in full. Otherwise, any such remaining excess
payments with respect to a Rule of 78's Receivable shall constitute a Payahead,
and shall increase the Payahead Balance.
SECTION 4.4. Payaheads. As of the close of business on the last day of each
Collection Period, if the payments by or on behalf of the Obligor on a Rule of
78's Receivable (other than a Purchased Receivable) shall be less than the
Scheduled Payment and accrued late fees with respect to such Receivable, the
Payahead Balance of an Obligor shall be applied by the Servicer to the extent of
the shortfall and such Payahead Balance shall be reduced accordingly.
SECTION 4.5. Additional Deposits. The Servicer or CPS, as the case may be,
shall deposit or cause to be deposited in the Collection Account the aggregate
Purchase Amount with respect to Purchased Receivables and the Servicer shall
deposit therein all amounts to be paid under Section 11.2. All such deposits
shall be made, in immediately available funds, on the Business Day preceding the
Determination Date. On or before the third Business Day preceding each
Distribution Date, the Trustee shall remit to the Collection Account any amounts
delivered to the Trustee by the [Collateral Agent] pursuant to Section 4.7.
SECTION 4.6. Distributions; [Credit Enhancement Claims]. (a) On each
Distribution Date, the Trustee shall cause to be made the following transfers
and distributions based solely on the amounts set forth in the Servicer's
Certificate for the related Distribution Date:
(i) From the Collection Account to the Certificate Account, in
immediately available funds, those funds that were deposited in the
Collection Account, plus earnings on investments of funds in the
Collection Account pursuant to Section 4.1(a), for the Collection
Period related to such Distribution Date.
(ii) From the Payahead Account, to the Certificate Account, in
immediately available funds, the aggregate
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previous Payaheads to be applied to Scheduled Payments on Rule of 78's
Receivables or prepayments for the related Collection Period pursuant
to Sections 4.3 and 4.4, plus earnings on investments of funds in the
Payahead Account, for the related Collection Period, pursuant to
Section 4.1 (a).
(b) Prior to each Distribution Date, the Servicer shall on the
related Determination Date calculate the Total Distribution Amount, the Class A
Distributable Amount, the Class A Interest Distributable Amount, the Class A
Principal Distributable Amount, the Class B Interest Distributable Amount and
the Class B Principal Distributable Amount, and, based on the Total Distribution
Amount, and the other distributions to be made on such Distribution Date,
determine the amount distributable to the Certificateholders of each class.
(c) On each Distribution Date, the Trustee (based on the information
contained in the Servicer's Certificate delivered on the related Determination
Date pursuant to Section 3.9) shall, subject to subsection (d) hereof, make the
following distributions in the following order of priority:
[(i) to the Servicer, from the Total Distribution Amount, any
amount deposited into the Collection Account pursuant to Section
4.7(a), and any amount deposited into the Collection Account pursuant
to Section 4.11(i) in respect of Servicing Fees, the Servicing Fee and
all unpaid Servicing Fees from prior Collection Periods; provided,
however, that as long as CPS is the Servicer and [ ], is [the
Standby Servicer], the Trustee shall first pay to [the Standby
Servicer] out of the Servicing Fee otherwise payable to CPS an amount
equal to the [Standby Fee];
(ii) in the event [the Standby Servicer] becomes the successor
Servicer, to [the Standby Servicer], from the Total Distribution
Amount (as such Total Distribution Amount has been reduced by payments
pursuant to clause (i) above) and any amount deposited into the
Collection Account pursuant to Section 4.7(a), to the extent not
previously paid by the predecessor Servicer pursuant to Section 9.2,
reasonable transition expenses (up to a maximum of $[ ]) incurred in
acting as successor Servicer;
(iii) to the Trustee, from the Total Distribution Amount (as such
Total Distribution Amount has been reduced by payments pursuant to
clauses (i) and (ii) above), any amount deposited into the Collection
Account pursuant to Section 4.7(a), and any amount deposited into the
Collection Account pursuant to Section 4.11(i) in respect of Trustee
Fees and reasonable out-of-pocket expenses of the Trustee,
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the Trustee Fee and all reasonable out-of-pocket expenses (including
counsel fees and expenses) and all unpaid Trustee Fees and all unpaid
reasonable out-of-pocket expenses (including counsel fees and
expenses) from prior Collection Periods; provided, however, that
unless an Event of Default shall have occurred and be continuing,
expenses payable to the Trustee pursuant to this clause (iii) and
expenses payable to the [Collateral Agent] pursuant to clause (iv)
below, shall be limited to $[ ] per annum;
(iv) to the [Collateral Agent], from the Total Distribution
Amount (as such Total Distribution Amount has been reduced by payments
pursuant to clauses (i) through (iii) above), any amount deposited
into the Collection Account pursuant to Section 4.7(a), and any amount
deposited into the Collection Account pursuant to Section 4.11(i) in
respect of fees and expenses of the [Collateral Agent], all fees and
expenses payable to the [Collateral Agent] with respect to such
Distribution Date pursuant to the Spread Account Agreement;
(v) to the Class A Certificateholders, from the Total
Distribution Amount (as such Total Distribution Amount has been
reduced by payments pursuant to clauses (i) through (iv) above) and
any amount deposited into the Collection Account pursuant to Section
4.7(a) and 4.11(iii), an amount equal to the sum of the Class A
Interest Distributable Amount and any Class A Interest Carryover
Shortfall as of the close of the preceding Distribution Date;
(vi) to the Class B Certificateholders, from the Total
Distribution Amount (as such Total Distribution Amount has been
reduced by payments pursuant to clauses (i) through (v) above) and any
amount deposited into the Collection Account pursuant to Sections
4.7(c) and (d), an amount equal to the sum of the Class B Interest
Distributable Amount and any Class B Interest Carryover Shortfall as
of the close of the preceding Distribution Date;
(vii) to the Class A Certificateholders, from the Total
Distribution Amount (as such Total Distribution Amount has been
reduced by payments pursuant to clauses (i) through (vi) above), any
amount deposited into the Collection Account pursuant to Section
4.7(a), and any amount deposited into the Collection Account pursuant
to Section 4.11(ii) or (iii), an amount equal to the sum of the Class
A Principal Distributable Amount and any Class A Principal Carryover
Shortfall as of the close of the preceding Distribution Date with
respect to each Distribution Date;
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(viii) to the [Credit Enhancer], from the Total Distribution
Amount (as such Total Distribution Amount has been reduced by payments
made pursuant to clauses (i) through (vii) above), and any amount
deposited into the Collection Account pursuant to Section 4.7(a), an
amount equal to the Reimbursement Obligations;
(ix) to any successor Servicer, from the Total Distribution
Amount (as such Total Distribution Amount has been reduced by payments
pursuant to clauses (i) through (viii) above) and any amount deposited
into the Collection Account pursuant to Section 4.7(a), to the extent
not previously paid by the predecessor Servicer pursuant to Section
9.2, or in the case of [the Standby Servicer], pursuant to clause (ii)
above, reasonable transition expenses (up to a maximum of $[ ])
incurred in acting as successor Servicer;
(x) to the Class B Certificateholders, from the Total
Distribution Amount (as such Total Distribution Amount has been
reduced by payments pursuant to clauses (i) through (ix) above) and
any amount deposited into the Collection Account pursuant to Sections
4.7(c) and (d), an amount equal to the sum of the Class B Principal
Distributable Amount and any Class B Principal Carryover Shortfall as
of the close of the preceding Distribution Date; and
(xi) to the [Collateral Agent], for deposit into the Spread
Account, the remaining Total Distribution Amount, if any.]
(d) The rights of the Class B Certificateholders to receive
distributions in respect of the Class B Certificates pursuant to Section
4.6(c)(vi) on a Distribution Date shall be and hereby are subordinated to the
payment of the amounts distributable pursuant to Sections 4.6(c)(i) through (v)
except to the extent of monies deposited in the Collection Account from [the
Reserve Fund] pursuant to Section 4.7(d) hereof and [the Reserve Fund
Agreement]. The rights of the Class B Certificateholders to receive
distributions in respect of the Class B Certificates pursuant to Section
4.6(c)(x) on a Distribution Date shall be and hereby are subordinated to the
payment of the amounts distributable pursuant to Sections 4.6(c)(i) through (ix)
except to the extent of monies deposited in the Collection Account from [the
Reserve Fund] pursuant to Section 4.7(d) hereof and [the Reserve Fund
Agreement]. At such time as the Class A Certificates are paid in full and the
[Credit Enhancer] has received payment in full for all outstanding Reimbursement
Obligations and any other amounts owed to the [Credit Enhancer], the Class B
Certificateholders shall be entitled to exercise all rights granted to the Class
A Certificateholders under this
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Agreement to the extent that the exercise of such rights does not conflict with
the provisions of the Spread Account Agreement. In no event shall the Class A
Certificateholders be entitled to any amounts deposited in the Collection
Account pursuant to Section 4.7(d) hereof and [the Reserve Fund Agreement].
(e) [mechanics for drawing on [the Credit Enhancement]]
(f) Subject to Section 11.1 respecting the final payment upon retirement of
each Certificate, the Servicer shall on each Distribution Date instruct the
Trustee to distribute to each Certificateholder of record on the preceding
Record Date either by wire transfer, in immediately available funds to the
account of such Holder at a bank or other entity having appropriate facilities
therefor, if such Certificateholder shall have provided to the Trustee
appropriate instructions prior to the Record Date for such Distribution Date and
such Holder's Certificates in the aggregate evidence an original principal
balance of at least $[1,000,000], or, if not, by check mailed to such
Certificateholder at the address of such Holder appearing in the Certificate
Register, the amounts to be distributed to such Certificateholder pursuant to
such Holder's Certificates.
[SECTION 4.7. Withdrawals from [Spread Account] and [Reserve Fund]. (a) In
the event that the Servicer's Certificate with respect to any Determination Date
shall state that the Total Distribution Amount with respect to such
Determination Date is insufficient (taking into account the application of the
Total Distribution Amount to the payment required to be made on the related
Distribution Date pursuant to Section 4.6(c)(vi)) to make the payments required
to be made on the related Distribution Date pursuant to Section 4.6(c)(i), (ii),
(iii), (iv), (v), (vii), (viii) or (ix) (such deficiency being a "Deficiency
Claim Amount"), then on the [ ] Business Day immediately preceding the
related Distribution Date, the Trustee shall deliver to the [Collateral Agent],
[the Credit Enhancer], and the Servicer, by hand delivery, telex or facsimile
transmission, a written notice (a "Deficiency Notice") specifying the Deficiency
Claim Amount for such Distribution Date. Such Deficiency Notice shall direct the
[Collateral Agent] to remit such Deficiency Claim Amount (to the extent of the
funds available to be distributed pursuant to [the Spread Account Agreement]) to
the Trustee for deposit in the Collection Account and distribution pursuant to
Sections 4.6(c)(i), (ii), (iii), (iv), (v), (vii), (viii) and/or (ix), as
applicable.
(b) Any Deficiency Notice shall be delivered by [ ], on the [ ]
Business Day preceding such Distribution Date. The amounts distributed by the
[Collateral Agent] to the Trustee pursuant to a Deficiency Notice shall be
deposited by the Trustee into the Collection Account pursuant to Section 4.5.
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(c) In the event that the Servicer's Certificate with respect to any
Determination Date shall state that the Total Distribution Amount with respect
to such Determination Date is insufficient to make the payments required to be
made on the related Distribution Date pursuant to Section 4.6(c)(vi) or (x)
(such deficiency being a "Class B Deficiency"), then on the [ ] Business Day
immediately preceding the related Distribution Date, the Trustee shall deliver
to the [Collateral Agent] and the Servicer, by hand delivery, telex or facsimile
transmission, a written notice specifying the amount of the Class B Deficiency
for such Distribution Date. Such notice shall direct the [Collateral Agent] to
remit to the Trustee an amount equal to such Class B Deficiency (but only to the
extent that, pursuant to the Spread Account Agreement, funds are required to be
released from [the Spread Account] to the Seller on the related Distribution
Date) for deposit into the Collection Account and distribution pursuant to
Section 4.6(c)(vi) and/or Section 4.6(c)(x), as applicable, and any funds so
remitted to the Trustee shall be deemed to have been released to the Seller and
paid to the Trustee at the direction of the Seller.
(d) In the event that there are insufficient funds to cure any Class B
Deficiency pursuant to subsection (c) above, the [Collateral Agent] shall
instruct the [Reserve Fund Collateral Agent] to withdraw an amount up to the
remaining Class B Deficiency from [the Reserve Fund] in accordance with the
terms of the [Reserve Fund Agreement] for deposit in the Collection Account and
distribution pursuant to Sections 4.6(c)(vi) and (x), as applicable.]
SECTION 4.8. Statements to Certificateholders; Tax Returns. (a) With
each distribution from the Certificate Account to the Certificateholders made on
a Distribution Date, the Servicer shall provide to the [Credit Enhancer] and to
the Trustee for the Trustee to forward to each Certificateholder of record a
statement (prepared by the Servicer) substantially in the form of Exhibit D
hereto setting forth at least the following information as to the Certificates
to the extent applicable:
(i) the amount of such distribution allocable to principal of the
Class A Certificates and the Class B Certificates, respectively;
(ii) the amount of such distribution allocable to interest on the
Class A Certificates and the Class B Certificates, respectively;
(iii) the Pool Balance, the Class A Pool Factor and the Class B Pool
Factor as of the close of business on the last day of the preceding
Collection Period;
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(iv) the Class A Certificate Balance and the Class B Certificate
Balance as of the close of business on the last day of the preceding
Collection Period, after giving effect to payments allocated to principal
reported under (i) above;
(v) the amount of the Servicing Fee (inclusive of the
[Standby Fee] paid to [the Standby Servicer]) paid to the Servicer with
respect to the related Collection Period, the Class A Percentage of the
Servicing Fee (inclusive of the [Standby Fee]), the Class B Percentage of
the Servicing Fee (inclusive of the [Standby Fee]) and the amount of any
unpaid Servicing Fees (inclusive of the [Standby Fee]) and the change in
such amount from that of the prior Distribution Date;
(vi) the amount of the Class A Interest Carryover Shortfall, if
applicable, on such Distribution Date and the Class A Principal Carryover
Shortfall, if applicable, on such Distribution Date, and the change in such
amounts from the prior Distribution Date;
(vii) the amount of the Class B Interest Carryover Shortfall, if
applicable, on such Distribution Date and the amount of the Class B
Principal Carryover Shortfall, if applicable, on such Distribution Date,
and the change in such amounts from the prior Distribution Date;
(viii) the amount paid, if any, to Class A Certificateholders from
funds received under [the Credit Enhancement] for such Distribution Date;
(ix) the amount distributable to the [Credit Enhancer] on such
Distribution Date;
(x) the aggregate amount in the Payahead Account, the [Spread Account]
and [the Reserve Fund] and the change in such amount from the preceding
Distribution Date;
(xi) the number of Receivables and the aggregate gross amount
scheduled to be paid thereon, including unearned finance and other charges,
for which the related Obligors are delinquent in making scheduled payments
between [31 and 59 days and 60] days or more;
(xii) the number and the aggregate Purchase Amount of Receivables that
became Purchased Receivables during the related Collection Period and
summary information as to losses and delinquencies with respect to the
Receivables; and
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(xiii) the cumulative amount of Liquidated Receivables net, of
Recoveries, since the Cutoff Date to the last day of the related Collection
Period.
Each amount set forth pursuant to subclauses (i), (ii), (v) and (vi) above shall
be expressed as a dollar amount per $1,000 of original principal balance of a
Certificate.
(b) Within thirty days after the end of each calendar year, the
Trustee shall, provided it has received the necessary information from the
Servicer, furnish to each Person who at any time during such calendar year was a
Certificateholder of record and received any payment thereon (a) a report
(prepared by the Servicer) as to the aggregate of amounts reported pursuant to
(i), (ii) and (v) of this Section 4.8 for such calendar year or applicable
portion thereof during which such person was a Certificateholder, and (b) such
information as may be reasonably requested by the Certificateholders or required
by the Internal Revenue Code and regulations thereunder, to enable such Holders
to prepare their Federal and State income tax returns. The obligation of the
Trustee set forth in this paragraph shall be deemed to have been satisfied to
the extent that substantially comparable information shall be provided by the
Servicer pursuant to any requirements of the Code.
(c) The Servicer, at its own expense, shall cause a firm of nationally
recognized accountants to prepare any tax returns required to be filed by the
Trust, and the Trustee shall execute and file such returns if requested to do so
by the Servicer. The Trustee upon request, will furnish the Servicer with all
such information known to the Trustee as may be reasonably required in
connection with the preparation of all tax returns of the Trust.
[SECTION 4.9. Credit Enhancement; Subrogation. (a) The Trustee shall
keep a complete and accurate record of the amount of payments made under [the
Credit Enhancement] in reduction of the Class A Certificate Balance and in
payment of the Class A Interest Distributable Amount and Class A Principal
Distributable Amount pursuant to [the Credit Enhancement]. The [Credit Enhancer]
shall have the right to inspect such records at reasonable times upon one
Business Day's prior notice to the Trustee.
(b) Subject to and conditioned upon payment of any interest or
principal with respect to the Class A Certificates by or on behalf of the
[Credit Enhancer], the Trustee on behalf of the Class A Certificateholders shall
assign, and the Class A Certificateholders, by reason of their acquisition and
holding of the Class A Certificates, are hereby deemed to have assigned to the
[Credit Enhancer] all rights to the payment of the Class A Interest
Distributable Amount and Class A Principal Distributable
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Amount which are then due for payment to the extent of all payments made by the
[Credit Enhancer]. The [Credit Enhancer] (for so long as no [Enhancement
Default] shall have occurred and be continuing) may exercise any option, vote,
right, power or the like with respect to the Class A Certificates to the extent
it has made a principal payment pursuant under [the Credit Enhancement]. The
Trustee and the Class A Certificateholders, by reason of their acquisition and
holding of the Class A Certificates, agree that the [Credit Enhancer] shall be
subrogated to all of the rights to payment of the Class A Certificateholders or
in relation thereto to the extent that any payment of principal or interest was
made to such Class A Certificateholders with payments made under [the Credit
Enhancement] by the [Credit Enhancer] in accordance with the provisions hereof.]
SECTION 4.10. Reliance on Information from the Servicer.
Notwithstanding anything to the contrary contained in this Agreement, all
distributions from any of the accounts described in this Article IV and any
transfer of amounts between such accounts shall be made by the Trustee in
reliance on information provided to the Trustee by the Servicer in writing,
whether by way of a Servicer's Certificate or otherwise.
SECTION 4.11. Reserved.
ARTICLE V
Reserved.
ARTICLE VI
The Certificates
SECTION 6.1. The Certificates. The Trustee shall, upon written order
or request signed in the name of the Seller by one of its officers authorized to
do so and delivered to an Authorized Officer of the Trustee, execute on behalf
of the Trust, authenticate and deliver the Certificates to or upon the order of
the Seller in the aggregate principal amount and denominations as set forth in
such written order or request. Each of the Class A Certificates and Class B
Certificates shall be issuable in minimum denominations of $1,000 and integral
multiples thereof; provided , however, that one Class A Certificate and one
Class B Certificate respectively, may be issued in a denomination that
represents the residual amount of the Original Class A Principal Balance and the
original Class B Principal Balance, respectively (each, a "Residual
Certificate"). Upon initial issuance, the Class A Certificates and the Class B
Certificates shall be substantially in the form of Exhibit A and
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Exhibit B, respectively, in an aggregate amount equal to the Original Class A
Principal Balance and the Original Class B Principal Balance, respectively. The
Certificates shall be executed by the Trustee on behalf of the Trust by manual
or facsimile signature of an Authorized Officer of the Trustee under the
Trustee's seal imprinted thereon. Certificates bearing the manual or facsimile
signatures of individuals who were, at the time when such signatures shall have
been affixed, authorized to sign on behalf of the Trust, notwithstanding that
such individuals shall have ceased to be so authorized prior to the
authentication and delivery of such Certificates or did not hold such offices at
the date of such Certificates.
[SECTION 6.2A. Appointment of Paying Agent. The Trustee may act as or
appoint one or more paying agents (each, a "Paying Agent"). The Paying Agent
shall make distributions to Certificateholders from amounts delivered by the
Trustee to the Paying Agent from amounts on deposit in the Certificate Account
pursuant to Article IV. Either the Trustee or the [Credit Enhancer] may remove
the Paying Agent if such Person determines in its sole discretion that the
Paying Agent shall have failed to perform its obligations under this Agreement
in any material respect. The Paying Agent shall initially be the Trustee. A
co-paying agent may be chosen by the Trustee. Any co-paying agent or any
successor Paying Agent shall be permitted to resign as Paying Agent, co-paying
agent or successor Paying Agent, as the case may be, upon 30 days' written
notice to the Trustee, the Seller and the [Credit Enhancer]. In the event that
the Trustee, any co-paying agent or any successor Paying Agent shall no longer
be the Paying Agent, co-paying agent or successor Paying Agent, as the case may
be, the Trustee, with the [Credit Enhancer]'s reasonable consent, shall appoint
a successor to act as Paying Agent or co-paying agent. The Trustee shall cause
each Paying Agent and each successor Paying Agent or any additional Paying Agent
appointed by the Trustee (other than the Trustee, which hereby agrees) to
execute and deliver to the Trustee an instrument in which such Paying Agent,
successor Paying Agent or additional Paying Agent shall agree with the Trustee
that, as Paying Agent, such Paying Agent, successor Paying Agent or additional
Paying Agent will hold all sums, if any, held by it for payment to the
Certificateholders in trust for the benefit of the Certificateholders entitled
thereto in an Eligible Account (which may be maintained with such Paying Agent)
until such sums shall be paid to such Certificateholders and shall promptly
notify the Trustee of any default in making such payment. The Paying Agent shall
return all unclaimed funds to the Trustee and upon removal of a Paying Agent
shall also return all funds in its possession to the Trustee. The provisions of
Sections 10.4 and 10.5 shall apply to each Paying Agent in its role as Paying
Agent. The fees of any Paying Agent or co-paying agent shall be
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paid by the Trustee. Each Paying Agent and co-paying agent must be acceptable
to the Seller.]
[SECTION 6.2B. Authenticating Agent. (a) The Trustee may appoint one
or more authenticating agents with respect to the Certificates which shall be
authorized to act on behalf of the Trustee in authenticating the Certificates in
connection with the issuance, delivery, registration of transfer, exchange or
repayment of the Certificates (the "Authenticating Agent"). Whenever reference
is made in this Agreement to the authentication of Certificates by the Trustee
or the Trustee's certificate of authentication, such reference shall be deemed
to include authentication by an Authenticating Agent and a certificate of
authentication executed on behalf of the Trustee by an Authenticating Agent.
Each Authenticating Agent must be acceptable to the Seller and the [Credit
Enhancer]. The Trustee is hereby appointed as the initial Authenticating Agent.
(b) Any institution succeeding to the corporate agency business of an
Authenticating Agent shall continue to be an Authenticating Agent without the
execution or filing of any paper or any further act on the part of the Trustee
or such Authenticating Agent.
(c) Any Authenticating Agent may at any time resign by giving written
notice of resignation to the Trustee and to the Seller. The Trustee may at any
time terminate the agency of an Authenticating Agent by giving notice of
termination to such Authenticating Agent and to the Seller. Upon receiving such
a notice of resignation or upon such a termination, or in case at any time an
Authenticating Agent shall cease to be acceptable to the Trustee or the Seller
or the [Credit Enhancer], the Trustee may appoint a successor Authenticating
Agent. Any successor Authenticating Agent upon acceptance of its appointment
hereunder shall become vested with all the rights, powers and duties of its
predecessor hereunder with like effect as if originally named as an
Authenticating Agent. No successor Authenticating Agent shall be appointed
unless acceptable to the Trustee, the Seller and the [Credit Enhancer].
[(d) The Trustee agrees to pay to each Authenticating Agent from its
own funds from time to time reasonable compensation for its services under this
Section 6.2B.
(e) The provisions of Sections 10.4 and 10.5 shall be applicable to
any Authenticating Agent.
(f) Pursuant to an appointment made under this Section 6.2B, the
Certificates may have endorsed thereon, in lieu of the Trustee's certificate of
authentication, an alternate certificate of authentication in substantially the
following form:
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This is one of the Certificates described in the Pooling and Servicing
Agreement.
[ ]
as Authenticating Agent for the Trustee,
By
Authorized Signatory]]
SECTION 6.2. Authentication of Certificates. The Trustee shall cause
the Certificates to be executed on behalf of the Trust, authenticated, and
delivered to or upon the written order of the Seller, signed by its chairman of
the board, its president, or any vice president, without further corporate
action by the Seller, in authorized denominations, pursuant to this Agreement.
No Certificate shall entitle its Holder to any benefit under this Agreement, or
shall be valid for any purpose, unless there shall appear on such Certificate a
certificate of authentication substantially in the form set forth in Exhibit A
or Exhibit B hereto or in Section 6.2B, as the case may be, executed by the
Trustee by manual signature; such authentication shall constitute conclusive
evidence that such Certificate shall have been duly authenticated and delivered
hereunder. All Certificates issued on the Closing Date shall be dated the
Closing Date. All Certificates issued upon transfer or exchange thereafter shall
be dated the date of their authentication.
SECTION 6.3. Registration of Transfer and Exchange of Certificates.
(a) The Certificate Registrar shall keep or cause to be kept, at the office or
agency maintained pursuant to Section 6.7, a Certificate Register in which,
subject to such reasonable regulations as it may prescribe, the Trustee shall
provide for the registration of Certificates and of transfers and exchanges of
Certificates as herein provided. The Trustee shall be the initial Certificate
Registrar.
(b) Upon surrender for registration of transfer of any Certificate at
the Corporate Trust Office, the Trustee shall execute, authenticate and the
Trustee shall deliver, in the name of the designated transferee or transferees,
one or more new Certificates in authorized denominations of a like aggregate
amount dated the date of authentication. At the option of a Holder, Certificates
may be exchanged for other Certificates in authorized denominations of a like
aggregate amount upon surrender of the Certificates to be exchanged at the
Corporate Trust Office.
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Every Certificate presented or surrendered for registration of
transfer or exchange shall be accompanied by a written instrument of transfer in
form satisfactory to the Trustee and the Certificate Registrar duly executed by
the Holder or his attorney duly authorized in writing. Each Certificate
surrendered for registration of transfer and exchange shall be canceled and
subsequently disposed of by the Trustee in accordance with its customary
procedures.
No service charge shall be made for any registration of transfer or
exchange of Certificates, but the Trustee may require payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer or exchange of Certificates.
SECTION 6.4. Mutilated, Destroyed, Lost or Stolen Certificates. If (a)
any mutilated Certificate shall be surrendered to the Certificate Registrar, or
if the Certificate Registrar shall receive evidence to its satisfaction of the
destruction, loss, or theft of any Certificate and (b) there shall be delivered
to the Certificate Registrar, the Trustee and the [Credit Enhancer] such
security or indemnity as may be required by them to save each of them harmless,
then in the absence of notice that such Certificate shall have been acquired by
a bona fide purchaser, the Trustee on behalf of the Trust shall execute,
authenticate and deliver, in exchange for or in lieu of any such mutilated,
destroyed, lost or stolen Certificate, a new Certificate of like tenor and
denomination. In connection with the issuance of any new Certificate under this
Section 6.4, the Trustee and the Certificate Registrar may require the payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection therewith. Any duplicate Certificate issued pursuant to
this Section 6.4 shall constitute conclusive evidence of ownership in the Trust,
as if originally issued, whether or not the lost, stolen, or destroyed
Certificate shall be found at any time.
SECTION 6.5. Persons Deemed Owners. Prior to due presentation of a
Certificate for registration of transfer, the Trustee or the Certificate
Registrar may treat the Person in whose name any Certificate shall be registered
as the owner of such Certificate for the purpose of receiving distributions
pursuant to Section 4.6 and for all other purposes whatsoever, and neither the
Trustee nor the Certificate Registrar shall be bound by any notice to the
contrary.
SECTION 6.6. Access to List of Certificateholders' Names and
Addresses. The Trustee shall furnish or cause to be furnished to the Servicer or
the [Credit Enhancer], at the expense of the Trust, within 15 days after receipt
by the Trustee of a request therefor from the Servicer or the [Credit Enhancer],
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as the case may be, in writing, a list of the names and addresses of the
Certificateholders as of the most recent Record Date. If three or more Class A
Certificateholders, or one or more Holders of Class A Certificates evidencing
not less than [ ]% of the Class A Certificate Balance apply in writing to the
Trustee, and such application states that the applicants desire to communicate
with other Certificateholders with respect to their rights under this Agreement
or under the Certificates and such application shall be accompanied by a copy of
the communication that such applicants propose to transmit, then the Trustee
shall, within [five] Business Days after the receipt for such application,
afford such applicants access during normal business hours to the current list
of Certificateholders. Each Holder, by receiving and holding a Certificate,
shall be deemed to have agreed to hold none of the Servicer, the [Credit
Enhancer] or the Trustee accountable by reason of the disclosure of its name and
address, regardless of the source from which such information was derived.
SECTION 6.7. Maintenance of Office or Agency. The Trustee shall
maintain in [ ], an office or offices or agency or agencies where
Certificates may be surrendered for registration of transfer or exchange and
where notices and demands to or upon the Trustee in respect of the Certificates
and this Agreement may be served. The Trustee initially designates its office
located at [ ], as its office for such purposes. The Trustee shall
give prompt written notice to the Servicer and to Certificateholders of any
change in the location of the Certificate Register or any such office or agency.
SECTION 6.8. Book-Entry Certificates. The Certificates, upon original
issuance (except for the Residual Certificate), will be issued in the form of
typewritten Certificates representing the Book-Entry Certificates, to be
delivered to The Depository Trust Company, the initial Clearing Agency, by, or
on behalf of, the Seller. The Certificates delivered to the Depository Trust
Company shall initially be registered on the Certificate Register in the name of
CEDE & Co., the nominee of the initial Clearing Agency, and no Certificate Owner
will receive a definitive certificate representing such Certificate Owner's
interest in the Certificates, except as provided in Section 6.10. Unless and
until definitive, fully registered Certificates (the "Definitive Certificates")
have been issued to Certificate Owners pursuant to Section 6.10;
(i) the provisions of this Section 6.8 shall be in full force and
effect;
(ii) the Seller, the Servicer, the Certificate Registrar, and the
Trustee may deal with the Clearing Agency for all purposes (including
the making of distributions on
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the Certificates) as the authorized representative of the
Certificate Owners;
(iii) to the extent that the provisions of this Section 6.8
conflict with any other provisions of this Agreement, the provisions
of this Section 6.8 shall control;
(iv) the rights of Certificate Owners shall be exercised only
through the Clearing Agency and shall be limited to those established
by law and agreements between such Certificate Owners and the Clearing
Agency and/or the Clearing Agency Participants. Pursuant to the
Depository Agreement, unless and until Definitive Certificates are
issued pursuant to Section 6.10, the initial Clearing Agency will make
book-entry transfers among the Clearing Agency Participants and
receive and transmit distributions of principal and interest on the
Certificates to such Clearing Agency Participants; and
(v) whenever this Agreement requires or permits actions to be
taken based upon instructions or directions of Holders of Certificates
evidencing a specified percentage of the Class A Principal Balance or
Class B Principal Balance, as the case may be, the Clearing Agency
shall be deemed to represent such percentage only to the extent that
it has received instructions to such effect from Certificate Owners
and/or Clearing Agency Participants owning or representing,
respectively, such required percentage of the beneficial interest in
Certificates and has delivered such instructions to the Trustee.
SECTION 6.9. Notices to Clearing Agency. Whenever notice or other
communication to the Certificateholders is required under this Agreement, other
than to the Holder of the Residual Certificate, unless and until Definitive
Certificates shall have been issued to Certificate Owners pursuant to Section
6.10, the Trustee and the Servicer shall give all such notices and
communications specified herein to be given to Holders of the Certificates to
the Clearing Agency.
SECTION 6.10. Definitive Certificates. If (i) (A) the Seller advises
the Trustee in writing that the Clearing Agency is no longer willing or able to
properly discharge its responsibilities under the Depository Agreement and (B)
the Trustee or the Seller is unable to locate a qualified successor, (ii) the
Seller at its option, advises the Trustee in writing that it elects to terminate
the book-entry system through the Clearing Agency, or (iii) after the occurrence
of an Event of Servicing Termination, Certificate Owners representing beneficial
interests aggregating not less than [ ]% of the Clearing Agency through the
Clearing Agency Participants in writing that the
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continuation of a book-entry system through the Clearing Agency is no longer in
the best interests of the Certificate Owners, than the Trustee shall notify the
Clearing Agency and request that the Clearing Agency notify all Certificate
Owners of the occurrence of any such event and of the availability of Definitive
Certificates to Certificate Owners requesting the same. Upon surrender to the
Trustee of the Certificates by the Clearing Agency, accompanied by registration
instructions from the Clearing Agency for registration, the Trustee shall issue
the Definitive Certificates and deliver such Definitive Certificates in
accordance with the instructions of the Clearing Agency. Neither the Seller, the
Certificate Registrar nor the Trustee shall be liable for any delay in delivery
of such instructions andy may conclusively rely on, and shall be protected in
relying on, such instructions. Upon the issuance of Definitive Certificates, the
Trustee shall be protected in relying on, such instructions. Upon the issuance
of Definitive Certificates, the Trustee shall recognize the Holders of the
Definitive Certificates as Certificateholders hereunder. The Trustee shall not
be liable if the Trustee or the Seller is unable to locate a qualified successor
Clearing Agency.
ARTICLE VII
The Seller
SECTION 7.1. Representations of Seller. The Seller makes the following
representations to the [Credit Enhancer] and the Trustee, on which the [Credit
Enhancer] relied in executing and delivering [the Credit Enhancement] and on
which the Trustee on behalf of itself and the Certificateholders relied in
accepting the Receivables in trust and executing and authenticating the
Certificates. The representations speak as of the execution and delivery of this
Agreement and shall survive the sale of the Receivables to the Trustee.
(i) Organization and Good Standing. The Seller has been duly
organized and is validly existing as a [ ] in good standing under
the laws of [ ], with power and authority to execute,
deliver and perform its obligations under this Agreement and to own
its properties and to conduct its business as such properties shall be
currently owned and such business is presently conducted, and had at
all relevant times, and shall have, power, authority, and legal right
to acquire and own the Receivables.
(ii) Due Qualification. The Seller is duly qualified to do
business as a foreign corporation in good standing, and has obtained
all necessary licenses and
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approvals in all jurisdictions in which the ownership or lease of
property or the conduct of its business shall require such
qualifications.
(iii) Power and Authority. The Seller has the power and authority
to execute and deliver this Agreement and to carry out its terms; the
Seller has full power and authority to sell and assign the property
sold and assigned to and deposited with the Trustee as part of the
Trust and has duly authorized such sale and assignment to the Trustee
by all necessary corporate action; and the execution, delivery, and
performance of this Agreement has been duly authorized by the Seller
by all necessary corporate action.
(iv) Valid Sale; Binding Obligation. This Agreement effects a
valid sale, transfer and assignment of the Receivables and the other
property conveyed to the Trust pursuant to Section 2.2, enforceable
against creditors of and purchasers from the Seller; and this
Agreement shall constitute a legal, valid and binding obligation of
the Seller enforceable in accordance with its terms.
(v) No Violation. The execution, delivery and performance by the
Seller of this Agreement and the consummation of the transactions
contemplated hereby and the fulfillment of the terms hereof do not
conflict with, result in any breach of any of the terms and provisions
of, nor constitute (with or without notice or lapse of time) a default
under, the articles of incorporation or by-laws of the Seller, or any
indenture, agreement, mortgage, deed of trust, or other instrument to
which the Seller is a party or by which it is bound or any of its
properties are subject; nor result in the creation or imposition of
any lien upon any of its properties pursuant to the terms of any such
indenture, agreement, mortgage, deed of trust, or other instrument
(other than this Agreement); nor violate any law, order, rule, or
regulation applicable to the Seller of any court or of any Federal or
State regulatory body, administrative agency, or other governmental
instrumentality having jurisdiction over the Seller or its properties.
(vi) No Proceedings. There are no proceedings or investigations
pending, or to the Seller's best knowledge, threatened, before any
court, regulatory body, administrative agency, or other governmental
instrumentality having jurisdiction over the Seller or its properties:
(A) asserting the invalidity of this Agreement or the Certificates,
(B) seeking to prevent the issuance of the Certificates or the
consummation of any of the transactions contemplated by this
Agreement, (C) seeking any determination or ruling that might
materially and adversely
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affect the performance by the Seller of its obligations under, or the
validity or enforceability of, this Agreement or the Certificates, or
(D) relating to the Seller and which might adversely affect the Federal
or State income, excise, franchise or similar tax attributes of the
Certificates.
(vii) No Consents. No consent, approval, authorization or order
of or declaration or filing with any governmental authority is
required for the issuance or sale of the Certificates or the
consummation of the other transactions contemplated by this Agreement,
except such as have been duly made or obtained.
(viii) The Seller has filed on a timely basis all tax returns
required to be filed by it and paid all taxes, to the extent that such
taxes have become due.
(ix) The Seller hereby represents and warrants to the Trustee
that the Seller's principal place of business and chief executive
office is, and for the four months preceding the date of this
Agreement has been, located at: [ ].
SECTION 7.2. Liability of Seller; Indemnities. The Seller shall be liable
in accordance herewith only to the extent of the obligations specifically
undertaken by the Seller under this Agreement and the representations made by
the Seller in this Agreement. The Seller shall indemnify, defend, and hold
harmless the Trustee and [the Standby Servicer] from and against any loss,
liability or expense incurred by reason of (a) the Seller's willful misfeasance,
bad faith, or negligence in the performance of its duties under this Agreement,
or by reason of reckless disregard of its obligations and duties under this
Agreement or (b) the Seller's violation of Federal or State securities laws in
connection with the sale of the Certificates.
Indemnification under this Section 7.2 shall include, without limitation,
reasonable fees and expenses of counsel and expenses of litigation. If the
Seller shall have made any indemnity payments to the Trustee or [the Standby
Servicer] pursuant to this Section and the Trustee or [the Standby Servicer]
thereafter shall collect any of such amounts from others, the Trustee or [the
Standby Servicer] shall repay such amounts to the Seller, without interest.
SECTION 7.3. Merger or Consolidation of, or Assumption of the Obligations
of, Seller. Any Person (a) into which the Seller may be merged or consolidated,
(b) which may result from any merger or consolidation to which the Seller shall
be a party, or (c) which may succeed to the properties and assets of the Seller
substantially as a whole, which person in any of the foregoing
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cases executes an agreement of assumption to perform every obligation of the
Seller under this Agreement, shall be the successor to the Seller hereunder
without the execution or filing of any document or any further act by any of the
parties to this Agreement; provided, however, that (i) immediately after giving
effect to such transaction, no representation or warranty made pursuant to
Section 2.5 shall have been breached and no Event of Default, and no event that,
after notice or lapse of time, or both, would become an Event of Default shall
have happened and be continuing, (ii) the Seller shall have delivered to the
[Credit Enhancer] and the Trustee an Officer's Certificate and an Opinion of
Counsel each stating that such consolidation, merger, or succession and such
agreement or assumption comply with this Section 7.3 and that all conditions
precedent, if any, provided for in this Agreement relating to such transaction
have been complied with, (iii) the Seller shall have delivered to the [Credit
Enhancer] and the Trustee an Opinion of Counsel either (A) stating that, in the
opinion of such counsel, all financing statements and continuation statements
and amendments thereto have been executed and filed that are necessary fully to
preserve and protect the interest of the Trustee in the Receivables, and
reciting the details of such filings, or (B) stating that, in the opinion of
such counsel, no such action shall be necessary to preserve and protect such
interest and (iv) immediately after giving effect to such transaction, no
[Enhancement Agreement Event of Default] and no event that, after notice or
lapse of time, or both, would become an [Enhancement Agreement Event of Default]
shall have happened and be continuing. The Seller shall provide notice of any
merger, consolidation or succession pursuant to this Section 7.3 to each Rating
Agency and shall have received confirmation from each Rating Agency that the
then current rating of the Class A Certificates or the Class B Certificates will
not be downgraded as a result of such merger, consolidation or succession.
Notwithstanding anything herein to the contrary, the execution of the foregoing
agreement of assumption and compliance with clause (i), (ii), (iii) or (iv)
above shall be conditions to the consummation of the transactions referred to in
clause (a), (b) or (c) above.
SECTION 7.4. Limitation on Liability of Seller and Others. The Seller and
any director or officer or employee or agent of the Seller may rely in good
faith on the advice of counsel or on any document of any kind, prima facie
properly executed and submitted by any Person respecting any matters arising
hereunder. The Seller shall not be under any obligation to appear in, prosecute,
or defend any legal action that shall not be incidental to its obligations under
this Agreement, and that in its opinion may involve it in any expense or
liability.
SECTION 7.5. Seller May Own Certificates. The Seller and any Person
controlling, controlled by, or under common control
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with the Seller may in its individual or any other capacity become the owner or
pledgee of Certificates with the same rights as it would have if it were not the
Seller or an affiliate thereof, except as otherwise provided in the definition
of "Certificateholder" specified in Section 1.1 and in Section 1.6. Certificates
so owned by or pledged to the Seller or such controlling or commonly controlled
Person shall have an equal and proportionate benefit under the provisions of
this Agreement, without preference, priority, or distinction as among all of the
Certificates except as otherwise provided herein or by the definition of
Certificateholder.
ARTICLE VIII
The Servicer
SECTION 8.1. Representations of Servicer. The Servicer makes the following
representations to the [Credit Enhancer] and the Trustee, on which the [Credit
Enhancer] relies in executing and delivering [the Credit Enhancement], and on
which the Trustee on behalf of itself and the Certificateholders relies in
accepting the Receivables in trust and executing and authenticating the
Certificates. The representations speak as of the execution and delivery of this
Agreement and shall survive the sale of the Receivables to the Trustee.
(i) Organization and Good Standing. The Servicer has been duly
organized and is validly existing as a corporation in good standing
under the laws of the State of California, with power and authority to
own its properties and to conduct its business as such properties
shall be currently owned and such business is presently conducted, and
had at all relevant times, and shall have, power, authority, and legal
right to acquire, own, and service the Receivables.
(ii) Due Qualification. The Servicer is duly qualified to do
business as a foreign corporation in good standing, and has obtained
all necessary licenses and approvals in all jurisdictions in which the
ownership or lease of property or the conduct of its business
(including the servicing of the Receivables as required by this
Agreement) shall require such qualifications.
(iii) Power and Authority. The Servicer has the power and
authority to execute and deliver this Agreement and to carry out its
terms; and the execution, delivery, and performance of this Agreement
has been duly authorized by the Servicer by all necessary corporate
action.
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(iv) Binding Obligation. This Agreement constitutes a legal,
valid and binding obligation of the Servicer enforceable in accordance
with its terms.
(v) No Violation. The execution, delivery and performance by the
Servicer of this Agreement and the consummation of the transactions
contemplated hereby and the fulfillment of the terms hereof do not
conflict with, result in any breach of any of the terms and provisions
of, nor constitute (with or without notice or lapse of time) a default
under, the articles of incorporation or by-laws of the Servicer, or
any indenture, agreement, mortgage, deed of trust, or other instrument
to which the Servicer is a party or by which it is bound or any of its
properties are subject; nor result in the creation or imposition of
any lien upon any of its properties pursuant to the terms of any
indenture, agreement, mortgage, deed of trust, or other instrument
(other than this Agreement); nor violate any law, order, rule, or
regulation applicable to the Servicer of any court or of any Federal
or State regulatory body, administrative agency, or other governmental
instrumentality having jurisdiction over the Servicer or its
properties.
(vi) No Proceedings. There are no proceedings or investigations
pending, or to the Servicer's best knowledge, threatened, before any
court, regulatory body, administrative agency, or other governmental
instrumentality having jurisdiction over the Servicer or its
properties: (A) asserting the invalidity of this Agreement or the
Certificates, (B) seeking to prevent the issuance of the Certificates
or the consummation of any of the transactions contemplated by this
Agreement, (C) seeking any determination or ruling that might
materially and adversely affect the performance by the Servicer of its
obligations under, or the validity or enforceability of, this
Agreement or the Certificates, or (D) relating to the Servicer and
which might adversely affect the Federal or State income, excise,
franchise or similar tax attributes of the Certificates.
(vii) No Consents. No consent, approval, authorization or order
of or declaration or filing with any governmental authority is
required for the issuance or sale of the Certificates or the
consummation of the other transactions contemplated by this Agreement,
except such as have been duly made or obtained.
(viii) Taxes. The Servicer has filed on a timely basis all tax
returns required to be filed by it and paid all taxes, to the extent
that such taxes have become due.
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(ix) Chief Executive Office. The Servicer hereby represents and
warrants to the Trustee that the Servicer's principal place of
business and chief executive office is, and for the four months
preceding the date of this Agreement has been, located at: 2 Ada,
Irvine, California.
SECTION 8.2. Indemnities of Servicer. (a) The Servicer shall be liable
in accordance herewith only to the extent of the obligations specifically
undertaken by the Servicer under this Agreement and the representations made by
the Servicer herein.
(i) The Servicer shall defend, indemnify, and hold harmless the
Trustee, [the Standby Servicer], the [Collateral Agent], the Trust,
the [Credit Enhancer], the Certificateholders and the Seller, from and
against any and all costs, expenses, losses, damages, claims, and
liabilities, arising out of or resulting from the use, ownership, or
operation by the Servicer or any affiliate thereof of a Financed
Vehicle.
(ii) The Servicer shall indemnify, defend and hold harmless the
Trustee, [the Standby Servicer], the [Collateral Agent], the Trust,
the [Credit Enhancer] and the Seller from and against any taxes that
may at any time be asserted against the Trustee, [the Standby
Servicer], the [Collateral Agent], the Trust, the [Credit Enhancer] or
the Seller, with respect to the transactions contemplated herein
including, without limitation, any sales, gross receipts, general
corporation, tangible personal property, privilege, or license taxes
and costs and expenses in defending against the same.
(iii) The Servicer shall indemnify, defend, and hold harmless the
Trustee, [the Standby Servicer], the [Collateral Agent], the Seller,
the [Credit Enhancer], the Trust and the Certificateholders from and
against any and all costs, expenses, losses, claims, damages, and
liabilities to the extent that such cost, expense, loss, claim,
damage, or liability arose out of, or was imposed upon the Trustee,
[the Standby Servicer], the [Collateral Agent], the Seller, the Trust
or the Certificateholders through, the negligence, willful
misfeasance, or bad faith of the Servicer in the performance of its
duties under this Agreement or by reason of reckless disregard of its
obligations and duties under this Agreement.
(iv) The Servicer shall indemnify, defend, and hold harmless the
Trustee, [the Standby Servicer] and the [Collateral Agent] from and
against all costs, expenses, losses, claims, damages, and liabilities
arising out of or incurred in connection with the acceptance or
performance of
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the trusts and duties herein contained, if any, except to the extent
that such cost, expense, loss, claim, damage or liability: (a) shall be
due to the willful misfeasance, bad faith, or negligence (except for
errors in judgment) of the Trustee, [the Standby Servicer] or
[Collateral Agent], as applicable; (b) relates to any tax other than
the taxes with respect to which the Servicer shall be required to
indemnify the Trustee, [the Standby Servicer] or the [Collateral
Agent]; or (c) shall arise from the Trustee's breach of any of its
representations or warranties set forth in Section 10.13.
(v) Notwithstanding the foregoing, the Servicer shall not be
obligated to defend, indemnify, and hold harmless any
Certificateholder for any losses, claims, damages or liabilities
incurred by any Certificateholders arising out of claims, complaints,
actions and allegations relating to Section 406 of ERISA or Section
4975 of the Code as a result of the purchase or holding of a
Certificate by such Certificateholder with the assets of a plan
subject to such provisions of ERISA or the Code or the servicing,
management and operation of the Trust.
(b) For purposes of this Section, in the event of the termination of
the rights and obligations of a Servicer (or any successor thereto pursuant to
Section 8.3) as Servicer pursuant to Section 9.1, or a resignation by such
Servicer pursuant to this Agreement, such Servicer shall be deemed to be the
Servicer pending appointment of a successor Servicer pursuant to Section 9.2.
The provisions of this Section 8.2(b) shall in no way affect the survival
pursuant to Section 8.2(c) of the indemnification by the Servicer provided by
Section 8.2(a).
(c) Indemnification under this Section 8.2 shall survive the
termination of this Agreement and any resignation or removal of CPS as Servicer
and shall include reasonable fees and expenses of counsel and expenses of
litigation. If the Servicer shall have made any indemnity payments pursuant to
this Section and the recipient thereafter collects any of such amounts from
others, the recipient shall promptly repay such amounts to the Servicer, without
interest.
SECTION 8.3. Merger or Consolidation of, or Assumption of the
Obligations of, Servicer or Standby Servicer. (a) Any Person (a) into which the
Servicer may be merged or consolidated, (b) which may result from any merger or
consolidation to which the Servicer shall be a party, or (c) which may succeed
to the properties and assets of the Servicer substantially as a whole, shall
execute an agreement of assumption to perform every obligation of the Servicer
hereunder, and whether or not such assumption agreement is executed, shall be
the successor to the
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Servicer under this Agreement without further act on the part of any of the
parties to this Agreement; provided, however, that (i) immediately after giving
effect to such transaction, no Event of Default, and no event which, after
notice or lapse of time, or both, would become an Event of Default shall have
happened and be continuing, (ii) the Servicer shall have delivered to the
Trustee and the [Credit Enhancer] an Officer's Certificate and an Opinion of
Counsel each stating that such consolidation, merger or succession and such
agreement of assumption comply with this Section 8.3 and that all conditions
precedent provided for in this Agreement relating to such transaction have been
complied with, (iii) the Servicer shall have delivered to the Trustee and the
[Credit Enhancer] an Opinion of Counsel either (A) stating that, in the opinion
of such counsel, all financing statements and continuation statements and
amendments thereto have been executed and filed that are necessary fully to
preserve and protect the interest of the Trustee in the Receivables and reciting
the details of such filings, or (B) stating that, in the opinion of such
counsel, no such action shall be necessary to preserve and protect such interest
and (iv) nothing herein shall be deemed to release the Servicer from any
obligation. Notwithstanding anything herein to the contrary, the execution of
the foregoing agreement of assumption and compliance with clauses (i), (ii) or
(iii) above shall be conditions to the consummation of the transactions referred
to in clause (a), (b) or (c) above.
(b) Any Person (a) into which [the Standby Servicer] may be merged or
consolidated, (b) which may result from any merger or consolidation to which
[the Standby Servicer] shall be a party, or (c) which may succeed to the
properties and assets of [the Standby Servicer] substantially as a whole, shall
execute an agreement of assumption to perform every obligation of the Servicer
hereunder, and whether or not such assumption agreement is executed, shall be
the successor to [the Standby Servicer] under this Agreement without further act
on the part of any of the parties to this Agreement; provided, however, that
nothing herein shall be deemed to release [the Standby Servicer] from any
obligation.
SECTION 8.4. Limitation on Liability of Servicer and Others. Neither the
Servicer nor any of the directors or officers or employees or agents of the
Servicer shall be under any liability to the Trust or the Certificateholders,
except as provided under this Agreement, for any action taken or for refraining
from the taking of any action pursuant to this Agreement; provided, however,
that this provision shall not protect the Servicer or any such person against
any liability that would otherwise be imposed by reason of a breach of this
Agreement or willful misfeasance, bad faith, or negligence in the performance of
duties or by reason of reckless disregard of obligations and duties under this
Agreement. The Servicer and
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any director or officer or employee or agent of the Servicer may rely in good
faith on any document of any kind prima facie properly executed and submitted by
any Person respecting any matters arising under this Agreement.
Except as provided in this Agreement, the Servicer shall not be under any
obligation to appear in, prosecute, or defend any legal action that shall not be
incidental to its duties to service the Receivables in accordance with this
Agreement, and that in its opinion may involve it in any expense or liability.
SECTION 8.5. Servicer and Standby Servicer Not to Resign. Subject to the
provisions of Section 8.3, neither the Servicer nor [the Standby Servicer] may
resign from the obligations and duties hereby imposed on it as Servicer or
Standby Servicer, as the case may be, under this Agreement except upon
determination that by reason of a change in legal requirements the performance
of its duties under this Agreement would cause it to be in violation of such
legal requirements in a manner which would result in a material adverse effect
on the Servicer or [the Standby Servicer], as the case may be, and the [Credit
Enhancer] does not elect to waive the obligations of the Servicer or [the
Standby Servicer], as the case may be, to perform the duties which render it
legally unable to act or does not elect to delegate those duties to another
Person. Notice of any such determination permitting the resignation of the
Servicer or [the Standby Servicer], as the case may be, shall be communicated to
the Trustee and the [Credit Enhancer] at the earliest practicable time (and, if
such communication is not in writing, shall be confirmed in writing at the
earliest practicable time) and any such determination shall be evidenced by an
Opinion of Counsel to such effect delivered to and satisfactory to the Trustee
and the [Credit Enhancer] concurrently with or promptly after such notice. No
such resignation of the Servicer shall become effective until a successor
servicer shall have assumed the responsibilities and obligations of CPS in
accordance with Section 9.2 and [the Servicing Assumption Agreement], if
applicable. No such resignation of [the Standby Servicer] shall become effective
until an entity acceptable to the [Credit Enhancer] shall have assumed the
responsibilities and obligations of [the Standby Servicer]; provided, however,
that if no such entity shall have assumed such responsibilities and obligations
of [the Standby Servicer] within [60] days of the resignation of [the Standby
Servicer], [the Standby Servicer] may petition a court of competent jurisdiction
for the appointment of a successor to [the Standby Servicer].
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ARTICLE IX
Default
SECTION 9.1. Events of Default. If any one of the
following events ("Events of Default") shall occur and be
continuing:
(i) Any failure by the Servicer to deliver to the Trustee for
distribution to Certificateholders any proceeds or payment required to be
so delivered under the terms of the Certificates and this Agreement that
shall continue unremedied for a period of [two] Business Days (or, in the
case of a payment or deposit to be made no later than a Distribution Date,
the failure to make such payment or deposit by such Distribution Date); or
the certificate required by Section 3.9, the statement required by Section
3.10, or the report required by Section 3.11 shall not have been delivered
within [five (5)] days after the date such certificates or statements or
reports, as the case may be, are required to be delivered; or
(ii) Failure on the part of the Servicer, or the Seller, as the
case may be, duly to observe or to perform in any material respect any
other covenants or agreements of the Servicer or the Seller (as the case
may be) set forth in the Certificates or in this Agreement, which failure
shall continue unremedied for a period of [30] days after the date on which
written notice of such failure requiring the same to be remedied, shall
have been given (1) to the Servicer or the Seller (as the case may be), by
the [Credit Enhancer] or the Trustee, or (2) to the Servicer or the Seller,
(as the case may be), and to the Trustee and the [Credit Enhancer] by the
Holders of Class A Certificates evidencing not less than [ ]% of the Class
A Certificate Balance or, after the Class A Certificates have been paid in
full and all outstanding Reimbursement Obligations and other amounts due to
the [Credit Enhancer] have been paid in full, by the Holders of Class B
Certificates evidencing not less than [ ]% of the Class B Certificate
Balance; or
(iii) The entry of a decree or order by a court or agency or
supervisory authority having jurisdiction in the premises for the
appointment of a conservator, receiver, or liquidator for the Servicer or
the Seller (or, so long as CPS is Servicer, any of the Servicer's
Affiliates) in any bankruptcy, insolvency, readjustment of debt,
marshalling of assets and liabilities, or similar proceedings, or for the
winding up or liquidation of its affairs, and the continuance of any such
decree or order unstayed and in effect for a period of [60] consecutive
days; or
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(iv) The consent by the Servicer or the Seller (or, so long as
CPS is Servicer, any of the Servicer's Affiliates) to the appointment of a
conservator, trustee, receiver or liquidator in any bankruptcy, insolvency,
readjustment of debt, marshalling of assets and liabilities, or similar
proceedings of or relating to the Servicer or the Seller (or, so long as
CPS is Servicer, any of the Servicer's Affiliates) of or relating to
substantially all of its property; or the Servicer or the Seller (or, so
long as CPS is Servicer, any of the Servicer's Affiliates) shall admit in
writing its inability to pay its debts generally as they become due, file a
petition to take advantage of any applicable insolvency or reorganization
statute, make an assignment for the benefit of its creditors, or
voluntarily suspend payment of its obligations; or
(v) The occurrence of an [Enhancement Agreement Event of
Default];
then, and in each and every case, so long as an Event of Default shall not have
been remedied, provided (i) no [Enhancement Default] shall have occurred and be
continuing, the [Credit Enhancer] in its sole and absolute discretion, or (ii)
if an [Enhancement Default] shall have occurred and be continuing, then either
the Trustee or the Holders of Class A Certificates evidencing not less than [ ]%
of the Class A Certificate Balance or (iii) if the Class A Certificates have
been paid in full and either (A) all outstanding Reimbursement Obligations and
other amounts due to the [Credit Enhancer] have been paid in full or (B) an
[Enhancement Default] shall have occurred and be continuing, then either the
Trustee or the Holders of Class B Certificates evidencing not less than [ ]% of
the Class B Certificate Balance, by notice then given in writing to the Servicer
(and to the Trustee if given by the [Credit Enhancer] or by the
Certificateholders) may terminate all of the rights and obligations of the
Servicer under this Agreement. The Servicer shall be entitled to its pro rata
share of the Servicing Fee for the number of days in the Collection Period prior
to the effective date of its termination. On or after the receipt by the
Servicer of such written notice, all authority and power of the Servicer under
this Agreement, whether with respect to the Certificates or the Receivables or
otherwise, shall, without further action, pass to and be vested in (i) [the
Standby Servicer] or (ii) such successor Servicer as may be appointed under
Section 9.2; provided, however, that the successor Servicer shall have no
liability with respect to any obligation which was required to be performed by
the predecessor Servicer prior to the date the successor Servicer becomes the
Servicer or any claim of a third party (including a Certificateholder) based on
any alleged action or inaction of the predecessor Servicer as Servicer; and,
without limitation, the Trustee is hereby
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authorized and empowered to execute and deliver, on behalf of the predecessor
Servicer, as attorney-in-fact or otherwise, any and all documents and other
instruments, and to do or accomplish all other acts or things necessary or
appropriate to effect the purposes of such notice of termination, whether to
complete the transfer and endorsement of the Receivables and related documents,
or otherwise. The predecessor Servicer shall cooperate with the successor
Servicer and the Trustee in effecting the termination of the responsibilities
and rights of the predecessor Servicer under this Agreement, including the
transfer to the successor Servicer for administration by it of all cash amounts
that shall at the time be held or should have been held by the predecessor
Servicer for deposit, or shall thereafter be received with respect to a
Receivable and the delivery to the successor Servicer of all files and records
concerning the Receivables and a computer tape in readable form containing all
information necessary to enable the successor Servicer to service the
Receivables and the other property of the Trust. All reasonable costs and
expenses (including attorneys' fees) incurred in connection with transferring
the Receivable Files to the successor Servicer and amending this Agreement to
reflect such succession as Servicer pursuant to this Section 9.1 shall be paid
by the predecessor Servicer upon presentation of reasonable documentation of
such costs and expenses. In addition, any successor Servicer shall be entitled
to payment from the immediate predecessor Servicer for reasonable transition
expenses incurred in connection with acting as successor Servicer, and to the
extent not so paid, such payment shall be made pursuant to Section 4.6(c)
hereof. Upon receipt of notice of the occurrence of an Event of Default, the
Trustee shall give notice thereof to the Rating Agencies. The predecessor
Servicer shall grant the Trustee, [the Standby Servicer] and the [Credit
Enhancer] reasonable access to the predecessor Servicer's premises at the
predecessor Servicer's expense. If requested by the [Credit Enhancer], [the
Standby Servicer] or successor Servicer shall terminate any arrangements
relating to (i) the Lock-Box Account with the Lock-Box Bank, (ii) the
Post-Office Box or (iii) the Lock-Box Agreement, and direct the Obligors to make
all payments under the Receivables directly to the Servicer at the predecessor
Servicer's expense (in which event the successor Servicer shall process such
payments directly, or, through a Lock-Box Account with a Lock-Box Bank at the
direction of the [Credit Enhancer]).
SECTION 9.2. Appointment of Successor. (a) Upon the Servicer's receipt of
notice of termination pursuant to Section 9.1, the Servicer's resignation in
accordance with the terms of this Agreement or expiration or non-renewal of the
term of the Servicer hereunder in accordance with Section 3.14, the predecessor
Servicer shall continue to perform its functions as Servicer under this
Agreement, in the case of termination, only
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until the date specified in such termination notice or, if no such date is
specified in a notice of termination, until receipt of such notice and, in the
case of expiration and non-renewal of the term of the Servicer upon the
expiration of such term, and, in the case of resignation, until the later of (x)
the date [45] days from the delivery to the Trustee of written notice of such
resignation (or written confirmation of such notice) in accordance with the
terms of this Agreement and (y) the date upon which the predecessor Servicer
shall become unable to act as Servicer, as specified in the notice of
resignation and accompanying Opinion of Counsel. In the event of termination of
the Servicer, [ ], as Standby Servicer, shall assume the
obligations of Servicer hereunder on the date specified in such written notice
(the Assumption Date") pursuant to [the Servicing Assumption Agreement] or, in
the event that the [Credit Enhancer] shall have determined that a Person other
than [the Standby Servicer] shall be the successor Servicer in accordance with
Section 9.2(c), on the date of the execution of a written assumption agreement
by such Person to serve as successor Servicer. Notwithstanding [the Standby
Servicer]'s assumption of, and its agreement to perform and observe, all duties,
responsibilities and obligations of CPS as Servicer under this Agreement arising
on and after the Assumption Date, [the Standby Servicer] shall not be deemed to
have assumed or to become liable for, or otherwise have any liability for, any
duties, responsibilities, obligations or liabilities of CPS or any predecessor
Servicer arising on or before the Assumption Date, whether provided for by the
terms of this Agreement, arising by operation of law or otherwise, including,
without limitation, any liability for, any duties, responsibilities, obligations
or liabilities of CPS or any predecessor Servicer arising on or before the
Assumption Date under Sections 3.7, 4.4 or 8.2 of this Agreement, regardless of
when the liability, duty, responsibility or obligation of CPS or any predecessor
Servicer therefore arose, whether provided by the terms of this Agreement,
arising by operation of law or otherwise. In addition, if [the Standby Servicer]
shall be legally unable to act as Servicer and an [Enhancement Default] shall
have occurred and be continuing, [the Standby Servicer], the Trustee or Class A
Certificateholders holding Class A Certificates evidencing not less than [ ]% of
the Class A Certificate Balance (or, if the Class A Certificates have been paid
in full, Class B Certificateholders holding Class B Certificates evidencing not
less than [ ]% of the Class B Certificate Balance) may petition a court of
competent jurisdiction to appoint any successor to the Servicer. Pending
appointment pursuant to the preceding sentence, [the Standby Servicer] shall act
as successor Servicer unless it is legally unable to do so, in which event the
predecessor Servicer shall continue to act as Servicer until a successor has
been appointed and accepted such appointment. In the event that a successor
Servicer has not been appointed at the time when the predecessor
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Servicer has ceased to act as Servicer in accordance with this Section 9.2, then
the [Credit Enhancer], in accordance with Section 9.2(c) shall appoint, or
petition a court of competent jurisdiction to appoint a successor to the
Servicer under this Agreement.
(b)Upon appointment, the successor Servicer shall be the successor in all
respects to the predecessor Servicer and shall be subject to all the
responsibilities, duties, and liabilities arising thereafter relating thereto
placed on the predecessor Servicer, and shall be entitled to the Servicing Fee
and all of the rights granted to the predecessor Servicer, by the terms and
provisions of this Agreement.
(c) Subject to Section 12.11, the [Credit Enhancer] may exercise at any
time its right to appoint as Standby Servicer or as successor Servicer a Person
other than the Person serving as Standby Servicer at the time, and shall have no
liability to the Trustee, CPS, the Seller, the Person then serving as Standby
Servicer, any Certificateholder or any other person if it does so. Subject to
Section 8.5, no provision of this Agreement shall be construed as relieving [the
Standby Servicer] of its obligation to succeed as successor Servicer upon the
termination of the Servicer pursuant to Section 9.1 or resignation of the
Servicer pursuant to Section 8.5. If upon any such resignation or termination,
the [Credit Enhancer] appoints a successor Servicer other than [the Standby
Servicer], [the Standby Servicer] shall not be relieved of its duties as Standby
Servicer hereunder.
SECTION 9.3. Reserved.
SECTION 9.4. Notification to Certificateholders. Upon any termination of,
or appointment of a successor to, the Servicer pursuant to this Article IX, the
Trustee shall give prompt written notice thereof to Certificateholders at their
respective addresses appearing in the Certificate Register and to each of the
Rating Agencies.
[SECTION 9.5. Direction of Insolvency Proceedings by [Credit Enhancer]. (a)
In the event that the Trustee has received a certified copy of an order of the
appropriate court that any Class A Guaranteed Distribution Amount paid on a
Class A Certificate has been avoided in whole or in part as a preference payment
under applicable bankruptcy law, the Trustee shall so notify the [Credit
Enhancer], shall comply with the provisions of [the Credit Enhancement] to
obtain payment by the [Credit Enhancer] of such avoided Class A Guaranteed
Distribution Amount payment, and shall, at the time it provides notice to the
[Credit Enhancer], notify Holders of the Class A Certificates by mail that, in
the event that any Class A Certificateholder's payment
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is so recoverable, such Class A Certificateholder will be entitled to payment
pursuant to the terms of [the Credit Enhancement]. Pursuant to the terms of [the
Credit Enhancement], the [Credit Enhancer] will make such payment on behalf of
the Class A Certificateholder to the receiver, conservator, debtor-
in-possession or trustee in bankruptcy named in the order and not to the Trustee
or any Class A Certificateholder directly (unless a Class A Certificateholder
has previously paid such payment to the receiver, conservator,
debtor-in-possession or trustee in bankruptcy, in which case the [Credit
Enhancer] will make such payment to the Trustee for distribution to such Class A
Certificateholder upon proof of such payment reasonably satisfactory to the
[Credit Enhancer]).
(b) Upon knowledge of any of the following events, the Trustee shall
promptly notify the [Credit Enhancer] of (i) the commencement of any of the
events or proceedings described in Section 9.1 (iii) or (iv) in respect of the
Seller or the Servicer or any such event or proceedings applicable to an Obligor
under a Receivable (any such event or proceedings, an "Insolvency Proceeding")
and (ii) the making of any claim in connection with any Insolvency Proceeding
seeking the avoidance as a preferential transfer (a "Preference Claim") with
regard to any payment of principal of, or interest on a Class A Certificate.
Each Class A Certificateholder, by its purchase of Class A Certificates, and the
Trustee hereby agree that, the [Credit Enhancer] may, provided an [Enhancement
Default] has not occurred, at any time during the continuation of an Insolvency
Proceeding direct all matters relating to such Insolvency Proceeding, including,
without limitation, (i) all matters relating to any Preference Claim, (ii) the
direction of any appeal of any order relating to any Preference Claim and (iii)
the posting of any surety, supersedeas or performance bond pending any such
appeal at the expense of the [Credit Enhancer], but subject to reimbursement as
provided in the [Enhancement Agreement]. In addition, and without limitation of
the foregoing, as set forth in Section 4.9, the [Credit Enhancer] shall be
subrogated to, and each Class A Certificateholder and the Trustee hereby
delegate and assign, to the fullest extent permitted by law, the rights of the
Trustee and each Class A Certificateholder in the conduct of any proceeding with
respect to a Preference Claim, including, without limitation, all rights of any
party to an adversary proceeding action with respect to any court order issued
in connection with any such Preference Claim.]
SECTION 9.6. Action Upon Certain Failures of the Servicer. In the event
that the Trustee shall have knowledge of any failure of the Servicer specified
in Section 9.1 which would give rise to a right of termination under such
Section upon the Servicer's failure to remedy the same after notice, the Trustee
shall give
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notice thereof to the Servicer and the [Credit Enhancer]. For all purposes of
this Agreement, the Trustee shall not be deemed to have knowledge of any failure
of the Servicer as specified in Section 9.1 unless notified thereof in writing
by the Servicer, the [Credit Enhancer] or by a Certificateholder. The Trustee
shall be under no duty or obligation to investigate or inquire as to any
potential failure of the Servicer specified in Section 9.1.
ARTICLE X
The Trustee
SECTION 10.1. Duties of Trustee. The Trustee, both prior to the occurrence
of an Event of Default and after an Event of Default shall have been cured or
waived, shall undertake to perform such duties and only such duties as are
specifically set forth in this Agreement. If an Event of Default shall have
occurred and shall not have been cured or waived, the Trustee shall exercise
such of the rights and powers vested in it by this Agreement and shall use the
same degree of care and skill in their exercise, as a prudent man would exercise
or use under the circumstances in the conduct of his own affairs.
The Trustee, upon receipt of all resolutions, certificates, statements,
opinions, reports, documents, orders or other instruments furnished to the
Trustee that shall be specifically required to be furnished pursuant to any
provision of this Agreement, shall examine them to determine whether they
conform to the requirements of this Agreement.
The Trustee shall take and maintain custody of the Receivable Files (except
as otherwise provided herein) and the Schedule of Receivables included as an
exhibit to this Agreement and shall retain copies of all Servicer's Certificates
prepared hereunder.
No provision of this Agreement shall be construed to relieve the Trustee
from liability for its own negligent action, its own negligent failure to act,
or its own bad faith; provided, however, that:
(i) Prior to the occurrence of an Event of Default and after the
curing or waiving of all such Events of Default that may have
occurred, the duties and obligations of the Trustee shall be
determined solely by the express provisions of this Agreement, the
Trustee shall not be liable except for the performance of such duties
and obligations as shall be specifically set forth in this Agreement,
no implied covenants or obligations shall be read
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into this Agreement against the Trustee and, in the absence of bad
faith on the part of the Trustee, the Trustee may conclusively rely on
the truth of the statements and the correctness of the opinions
expressed in any certificates or opinions furnished to the Trustee and
conforming to the requirements of this Agreement;
(ii) The Trustee shall not be liable for an error of judgment
made in good faith by a Trustee Officer, unless it shall be proved
that the Trustee shall have been negligent in ascertaining the
pertinent facts;
(iii) The Trustee shall not be liable with respect to any action
taken, suffered, or omitted to be taken in good faith in accordance
with this Agreement or at the direction of the [Credit Enhancer] or,
after an [Enhancement Default], the Holders of Class A Certificates
evidencing not less than [ ]% of the Class A Certificate Balance or,
after the Class A Certificates have been paid in full and either (A)
all outstanding Reimbursement Obligations and other amounts due to the
[Credit Enhancer] have been paid in full or (B) an [Enhancement
Default] shall have occurred and be continuing, the Holders of Class B
Certificates evidencing not less than [ ]% of the Class B Certificate
Balance, relating to the time, method, and place of conducting any
proceeding for any remedy available to the Trustee, or exercising any
trust or power conferred upon the Trustee, under this Agreement;
(iv) The Trustee shall not be charged with knowledge of any Event
of Default, unless a Trustee Officer assigned to the Trustee's
Corporate Trust Office receives written notice of such Event of
Default from the Servicer or the Seller, as the case may be, the
[Credit Enhancer] or, after an [Enhancement Default], the Holders of
Class A Certificates evidencing not less than [ ]% of the Class A
Certificate Balance or, after the Class A Certificates have been paid
in full and either (A) all outstanding Reimbursement Obligations and
other amounts due to the [Credit Enhancer] have been paid in full or
(B) an [Enhancement Default] shall have occurred and be continuing,
the Holders of Class B Certificates evidencing not less than [ ]% of
the Class B Certificate Balance (such notice shall constitute actual
knowledge of an Event of Default by the Trustee); and
(v) The Trustee shall not be liable for any action taken,
suffered or omitted by it in good faith and reasonably believed by it
to be authorized or within the discretion or rights or powers
conferred upon it by this Agreement.
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The Trustee shall not be required to expend or risk its own funds or
otherwise incur financial liability in the performance of any of its duties
hereunder, or in the exercise of any of its rights or powers, if there shall be
reasonable grounds for believing that the repayment of such funds or adequate
indemnity against such risk or liability shall not be reasonably assured to it,
and none of the provisions contained in this Agreement shall in any event
require the Trustee to perform, or be responsible for the manner of performance
of, any of the obligations of the Servicer under this Agreement except during
such time, if any, as the Trustee, in its capacity as Standby Servicer, shall be
the successor to, and be vested with the rights, duties, powers, and privileges
of, the Servicer in accordance with the terms of this Agreement.
Except for actions expressly authorized by this Agreement, the Trustee
shall take no action reasonably likely to impair the security interests created
or existing under any Receivable or Financed Vehicle or to impair the value of
any Receivable or Financed Vehicle.
All information obtained by the Trustee regarding the Obligors and the
Receivables, whether upon the exercise of its rights under this Agreement or
otherwise, shall be maintained by the Trustee in confidence and shall not be
disclosed to any other Person, unless such disclosure is required by this
Agreement or any applicable law or regulation.
SECTION 10.2. Trustee's Certificate. On or as soon as practicable after
each Distribution Date on which Receivables shall be assigned to CPS or the
Servicer, as applicable, pursuant to this Agreement, based on amounts deposited
to the Collection Account, notices received pursuant to this Agreement and the
information contained in the Servicer's Certificate for the related Collection
Period, identifying the Receivables purchased by CPS pursuant to Section 2.6 or
2.8 or purchased by the Servicer pursuant to Section 3.7 or 11.2, the Trustee
shall execute a Trustee's Certificate (in the form of Exhibit C-1 or C-2, as
applicable), and shall deliver such Trustee's Certificate, accompanied by a copy
of the Servicer's Certificate for such Collection Period to CPS or the Servicer,
as the case may be. The Trustee's Certificate submitted with respect to such
Distribution Date shall operate, as of such Distribution Date, as an assignment,
without recourse, representation, or warranty, to CPS or the Servicer, as the
case may be, of all the Trustee's right, title, and interest in and to such
repurchased Receivable, and all security and documents relating thereto, such
assignment being an assignment outright and not for security.
SECTION 10.3. Reserved.
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SECTION 10.4. Certain Matters Affecting Trustee. Except as otherwise
provided in Section 10.1:
(i) The Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, Officer's Certificate,
Servicer's Certificate, certificate of auditors, or any other
certificate, statement, instrument, opinion, report, notice, request,
consent, order, appraisal, bond, or other paper or document believed
by it to be genuine and to have been signed or presented by the proper
party or parties.
(ii) The Trustee may consult with counsel, and any Opinion of
Counsel shall be full and complete authorization and protection in
respect of any action taken or suffered or omitted by it under this
Agreement in good faith and in accordance with such Opinion of
Counsel.
(iii) The Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Agreement, or to institute,
conduct, or defend any litigation under this Agreement or in relation
to this Agreement, at the request, order or direction of any of the
Certificateholders or the [Credit Enhancer] pursuant to the provisions
of this Agreement, unless such Certificateholders or the [Credit
Enhancer] shall have offered to the Trustee reasonable security or
indemnity against the costs, expenses, and liabilities that may be
incurred therein or thereby; nothing contained in this Agreement,
however, shall relieve the Trustee of the obligations, upon the
occurrence of an Event of Default (that shall not have been cured or
waived), to exercise such of the rights and powers vested in it by
this Agreement, and to use the same degree of care and skill in their
exercise as a prudent man would exercise or use under the
circumstances in the conduct of his own affairs.
(iv) Prior to the occurrence of an Event of Default and after the
curing or waiving of all Events of Default that may have occurred, the
Trustee shall not be bound to make any investigation into the facts of
matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, consent, order, approval, bond, or
other paper or document (other than for its duties pursuant to Section
2.8), unless requested in writing to do so by the [Credit Enhancer] or
Holders of Class A Certificates evidencing not less than [ ]% of the
Class A Certificate Balance or, after the Class A Certificates have
been paid in full and either (A) all outstanding Reimbursement
Obligations and other amounts due to the [Credit Enhancer] have been
paid in full or (B) an
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[Enhancement Default] shall have occurred and be continuing, the
Holders of Class B Certificates evidencing not less that [ ]% of the
Class B Certificate Balance; provided, however, that if the payment
within a reasonable time to the Trustee of the costs, expenses, or
liabilities likely to be incurred by it in the making of such
investigation shall be, in the opinion of the Trustee, not reasonably
assured to the Trustee by the security afforded to it by the terms of
this Agreement, the Trustee may require reasonable indemnity against
such cost, expense, or liability as a condition to so proceeding. The
reasonable expense of every such examination shall be paid by the
Person making such request or, if paid by the Trustee, shall be
reimbursed by the Person making such request upon demand. Nothing in
this clause (iv) shall affect the obligation of the Servicer to
observe any applicable law prohibiting disclosure of information
regarding the Obligors.
(v) The Trustee may execute any of the trusts or powers hereunder
or perform any duties under this Agreement either directly or by or
through agents or attorneys or a custodian. The Trustee shall not be
responsible for any misconduct or negligence of any such agent or
custodian appointed with due care by it hereunder or of the Servicer
in its capacity as Servicer or custodian.
(vi) Except as may be required by Sections 2.8 and 10.1,
subsequent to the sale of the Receivables by the Seller to the Trust,
the Trustee shall have no duty of independent inquiry, and the Trustee
may rely upon the representations and warranties and covenants of the
Seller and the Servicer contained in this Agreement with respect to
the Receivables and the Receivable Files.
(vii) The Trustee may rely, as to factual matters relating to the
Seller or the Servicer, on an Officer's Certificate of the Seller or
Servicer, respectively.
(viii) The Trustee shall not be required to take any action or
refrain from taking any action under this Agreement, or any related
documents referred to herein, nor shall any provision of this
Agreement, or any such related document be deemed to impose a duty on
the Trustee to take action, if the Trustee shall have been advised by
counsel that such action is contrary to (i) the terms of this
Agreement, (ii) any such related document or (iii) law.
SECTION 10.5. Trustee Not Liable for Certificates or Receivables. The
recitals contained herein and in the Certificates (other than the certificate of
authentication on the Certificates) shall be taken as the statements of the
Seller or
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the Servicer, as the case may be, and the Trustee assumes no responsibility for
the correctness thereof. The Trustee shall make no representations as to the
validity or sufficiency of this Agreement or of the Certificates (other than the
certificate of authentication on the Certificates), or of any Receivable or
related document. The Trustee shall at no time have any responsibility or
liability for or with respect to the legality, validity, and enforceability of
any security interest in any Financed Vehicle or any Receivable, or the
perfection and priority of such a security interest or the maintenance of any
such perfection and priority, or for or with respect to the efficacy of the
Trust or its ability to generate the payments to be distributed to
Certificateholders under this Agreement, including, without limitation: the
existence, condition, location, and ownership of any Financed Vehicle; the
existence and enforceability of any physical damage insurance thereon; except as
required by Section 2.8, the existence, contents and completeness of any
Receivable or any Receivable File or any computer or other record thereof; the
validity of the assignment of any Receivable to the Trust or of any intervening
assignment; except as required by Section 2.8, the performance or enforcement of
any Receivable; the compliance by the Seller or the Servicer with any warranty
or representation made under this Agreement or in any related document and the
accuracy of any such warranty or representation prior to the Trustee's receipt
of notice or other discovery of any noncompliance therewith or any breach
thereof; any investment of monies by or at the direction of the Servicer or the
[Credit Enhancer] or any loss resulting therefrom (it being understood that the
Trustee shall remain responsible for any Trust Property that it may hold); the
acts or omissions of the Seller, the Servicer, or any Obligor; any action of the
Servicer taken in the name of the Trustee; or any action by the Trustee taken at
the instruction of the Servicer; provided, however, that the foregoing shall not
relieve the Trustee of its obligation to perform its duties under this
Agreement. Except with respect to a claim based on the failure of the Trustee to
perform its duties under this Agreement or based on the Trustee's negligence or
willful misconduct, no recourse shall be had for any claim based on any
provision of this Agreement, the Certificates, or any Receivable or assignment
thereof against the Trustee in its individual capacity, the Trustee shall not
have any personal obligation, liability, or duty whatsoever to any
Certificateholder or any other Person with respect to any such claim, and any
such claim shall be asserted solely against the Trust or any indemnitor who
shall furnish indemnity as provided in this Agreement. The Trustee shall not be
accountable for the use or application by the Seller of any of the Certificates
or of the proceeds of such Certificates, or for the use or application of any
funds paid to the Servicer in respect of the Receivables. The Seller hereby
certifies to the Trustee that the Rating Agencies rating the Class A
Certificates are [ ] and that
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their addresses are as set forth in Section 12.5. The Trustee may rely on the
accuracy of such certification until it receives from the Seller an Officer's
Certificate superseding such certification.
SECTION 10.6. Trustee May Own Certificates. The Trustee in its individual
or any other capacity may become the owner or pledgee of Certificates and may
deal with the Seller and the Servicer in banking transactions with the same
rights as it would have if it were not Trustee.
SECTION 10.7. Indemnity of Trustee. The Servicer shall indemnify the
Trustee for, and hold it harmless against any loss, liability, or expense
incurred without willful misfeasance, negligence, or bad faith on its part,
arising out of or in connection with the acceptance or administration of the
Trust, including the costs and expenses of defending itself against any claim or
liability in connection with the exercise or performance of any of its powers or
duties under this Agreement. Additionally the Seller, pursuant to Section 7.2,
shall indemnify the Trustee with respect to certain matters, the Servicer,
pursuant to Section 8.2, shall indemnify the Trustee with respect to certain
matters, and Certificateholders, pursuant to Section 10.4 shall, upon the
circumstances therein set forth, indemnify the Trustee under certain
circumstances. The provisions of this Section 10.7 shall survive the termination
of this Agreement or any resignation or removal of CPS as Servicer.
SECTION 10.8. Eligibility Requirements for Trustee. The Trustee under this
Agreement shall at all times be organized and doing business under the laws of
the United States of America; authorized under such laws to exercise corporate
trust powers; having a combined capital and surplus of at least $[ ]
and subject to supervision or examination by Federal or State authorities; and
having a rating, both with respect to long-term and short-term unsecured
obligations, of not less than investment grade by the Rating Agencies. If such
corporation shall publish reports of condition at least annually, pursuant to
law or to the requirements of the aforesaid supervising or examining authority,
then for the purpose of this Section 10.8, the combined capital and surplus of
such corporation shall be deemed to be its combined capital and surplus as set
forth in its most recent report of condition so published. In case at any time
the Trustee shall cease to be eligible in accordance with the provisions of this
Section 10.8, the Trustee shall resign immediately in the manner and with the
effect specified in Section 10.9.
SECTION 10.9. Resignation or Removal of Trustee. The Trustee may at any
time resign and be discharged from the trusts hereby created by giving [30]
days' prior written notice thereof
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to the Servicer. Upon receiving such notice of resignation, with the prior
written consent of (a) the [Credit Enhancer] and the Holders of Class A
Certificates evidencing not less than [ ]% of the Class A Certificate Balance or
(b) if the Class A Certificates have been paid in full and all outstanding
Reimbursement Obligations and other amounts owing to the [Credit Enhancer] have
been paid in full, with the prior written consent of the Holders of Class B
Certificates evidencing not less than [ ]% of the Class B Certificate Balance,
the Servicer shall promptly appoint a successor Trustee by written instrument,
in duplicate, one copy of which instrument shall be delivered to the resigning
Trustee and one copy to the successor Trustee. If no successor Trustee shall
have been so appointed and have accepted appointment within [30] days after the
giving of such notice of resignation, the resigning Trustee may petition any
court of competent jurisdiction for the appointment of a successor Trustee. The
Trustee may be removed at any time by written demand of the [Credit Enhancer]
delivered to the Trustee and the Servicer.
If at any time the Trustee shall cease to be eligible in accordance with
the provisions of Section 10.8 and shall fail to resign after written request
therefor by the Servicer, or if at any time the Trustee shall be legally unable
to act, or shall be adjudged bankrupt or insolvent, or a receiver, conservator
or liquidator of the Trustee or of its property shall be appointed, or any
public officer shall take charge or control of the Trustee or of its property or
affairs for the purpose of rehabilitation, conservation or liquidation, then the
Servicer may remove the Trustee. If the Servicer shall remove the Trustee under
the authority of the immediately preceding sentence, the Servicer shall promptly
appoint a successor Trustee by written instrument, in duplicate, one copy of
which instrument shall be delivered to the Trustee so removed and one copy to
the successor Trustee, and pay all fees and expenses owed to the outgoing
Trustee.
Any resignation or removal of the Trustee and appointment of a successor
Trustee pursuant to any of the provisions of this Section 10.9 shall not become
effective until acceptance of appointment by the successor Trustee pursuant to
Section 10.10 and payment of all fees and expenses owed to the outgoing Trustee.
The Servicer shall provide notice of such resignation or removal of the Trustee
to each of the Rating Agencies.
SECTION 10.10. Successor Trustee. Any successor Trustee appointed pursuant
to Section 10.9 shall execute, acknowledge, and deliver to the Servicer, the
[Credit Enhancer] and to its predecessor Trustee an instrument accepting such
appointment under this Agreement, and thereupon the resignation or removal of
the predecessor Trustee shall become effective and such successor Trustee,
without any further act, deed or conveyance, shall
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become fully vested with all the rights, powers, duties, and obligations of its
predecessor under this Agreement, with like effect as if originally named as
Trustee. The predecessor Trustee shall upon payment of its fees and expenses
deliver to the successor Trustee all documents and statements and monies held by
it under this Agreement; and the Servicer and the predecessor Trustee shall
execute and deliver such instruments and do such other things as may reasonably
be required for fully and certainly vesting and confirming in the successor
Trustee all such rights, powers, duties, and obligations.
No successor Trustee shall accept appointment as provided in this Section
10.10 unless at the time of such acceptance such successor Trustee shall be
eligible pursuant to Section 10.8.
Upon acceptance of appointment by a successor Trustee pursuant to this
Section 10.10, the Servicer shall mail notice of the successor of such Trustee
under this Agreement to all Holders of Certificates at their addresses as shown
in the Certificate Register and to the Rating Agencies. If the Servicer shall
fail to mail such notice within [10] days after acceptance of appointment by the
successor Trustee, the successor Trustee shall cause such notice to be mailed at
the expense of the Servicer.
SECTION 10.11. Merger or Consolidation of Trustee. Any corporation into
which the Trustee may be merged or converted or with which it may be
consolidated, or any corporation resulting from any merger, conversion or
consolidation to which the Trustee shall be a party, or any corporation
succeeding to all or substantially all of the corporate trust business of the
Trustee, shall be the successor of the Trustee hereunder, provided such
corporation shall be eligible pursuant to Section 10.8, without the execution or
filing of any instrument or any further act on the part of any of the parties
hereto, anything herein to the contrary notwithstanding; provided further that
the Trustee shall mail notice of such merger or consolidation to the Rating
Agencies.
SECTION 10.12. Co-Trustee; Separate Trustee. Notwithstanding any other
provisions of this Agreement, at any time, for the purpose of meeting any legal
requirements of any jurisdiction in which any part of the Trust or any Financed
Vehicle may at the time be located, the Servicer, the [Credit Enhancer]
(provided an [Enhancement Default] shall not have occurred and be continuing)
and the Trustee acting jointly shall have the power and shall execute and
deliver all instruments to appoint one or more persons approved by the Trustee
to act as co-trustee, jointly with the Trustee, or separate trustee or separate
trustees, of all or any part of the Trust, and to vest in such Person, in such
capacity and for the benefit of the Certificateholders, such title to the Trust,
or any part thereof,
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and, subject to the other provisions of this Section 10.12, such powers, duties,
obligations, rights, and trusts as the Servicer, the [Credit Enhancer] and the
Trustee may consider necessary or desirable. If the Servicer and the [Credit
Enhancer] shall not have joined in such appointment within [15] days after the
receipt by it of a request so to do, or in the case an Event of Default shall
have occurred and be continuing, the Trustee alone shall have the power to make
such appointment. No co-trustee or separate trustee under this Agreement shall
be required to meet the terms of eligibility as a successor trustee pursuant to
Section 10.8, except that the co-trustee or its parent shall comply with the
rating requirements set forth therein, and no notice of a successor trustee
pursuant to Section 10.10 and no notice to Certificateholders of the appointment
of any co-trustee or separate trustee shall be required pursuant to Section
10.10.
Each separate trustee and co-trustee shall, to the extent permitted by law,
be appointed and act subject to the following provisions and conditions:
(i) All rights, powers, duties, and obligations conferred or
imposed upon the Trustee shall be conferred upon and exercised or
performed by the Trustee and such separate trustee or co-trustee
jointly (it being understood that such separate trustee or co-trustee
is not authorized to act separately without the Trustee joining in
such act), except to the extent that under any law of any jurisdiction
in which any particular act or acts are to be performed (whether as
Trustee under this Agreement or, in its capacity as Standby Servicer,
as successor to the Servicer under this Agreement), the Trustee shall
be incompetent or unqualified to perform such act or acts, in which
event such rights, powers, duties, and obligations (including the
holding of title to the Trust or any portion thereof in any such
jurisdiction) shall be exercised and performed singly by such separate
trustee or co-trustee, but solely at the direction of the Trustee;
(ii) No trustee under this Agreement shall be personally liable
by reason of any act or omission of any other trustee under this
Agreement; and
(iii) Provided no [Enhancement Default] shall have occurred and
be continuing, the [Credit Enhancer] may, and, in the event an
[Enhancement Default] shall have occurred and be continuing, then, the
Servicer and the Trustee acting jointly may, at any time accept the
resignation of or remove any separate trustee or co-trustee.
Any notice, request or other writing given to the Trustee shall be
deemed to have been given to each of the other then
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separate trustees and co-trustees, as effectively as if given to each of them.
Every instrument appointing any separate trustee or co-trustee shall refer to
this Agreement and the conditions of this Article X. Each separate trustee and
co-trustee, upon its acceptance of the trusts conferred, shall be vested with
the estates or property specified in its instrument of appointment, either
jointly with the Trustee or separately, as may be provided therein, subject to
all the provisions of this Agreement, specifically including every provision of
this Agreement relating to the conduct of, affecting the liability of, or
affording protection to, the Trustee. Each such instrument shall be filed with
the Trustee and a copy thereof given to the Servicer.
Any separate trustee or co-trustee may at any time appoint the Trustee, its
agent or attorney-in-fact with full power and authority, to the extent not
prohibited by law, to do any lawful act under or in respect of this Agreement on
its behalf and in its name. If any separate trustee or co-trustee shall die,
become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Trustee, to the extent permitted by law, without the appointment of a new or
successor trustee.
SECTION 10.13. Representations and Warranties of Trustee. The Trustee shall
make the following representations and warranties on which the Seller, the
[Credit Enhancer] and Certificateholders shall rely:
(i) The Trustee is a banking corporation duly organized, validly
existing, and in good standing under the laws of its place of
incorporation.
(ii) The Trustee has full corporate power authority and legal
right to execute, deliver, and perform this Agreement and shall have
taken all necessary action to authorize the execution, delivery and
performance by it of this Agreement.
(iii) This Agreement shall have been duly executed and delivered
by the Trustee and this Agreement constitutes a legal, valid and
binding obligation of the Trustee enforceable in accordance with its
terms, subject to (x) applicable bankruptcy, insolvency,
reorganization, moratorium, and other similar laws affecting
creditor's rights generally and (y) general principles of equity.
SECTION 10.14. No Bankruptcy Petition. The Trustee covenants and agrees
that prior to the date which is one year and one day after the payment in full
of all securities issued by the Seller or by a trust for which the Seller was
the depositor it will not institute against, or join any other Person in
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instituting against, the Seller or the Trust any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings, or other proceedings under
any Federal or State bankruptcy or similar law.
SECTION 10.15. Trustee May Enforce Claims Without Possession of
Certificates. All rights of action and claims under this Agreement or the
Certificates may be prosecuted and enforced by the Trustee without the
possession of any of the Certificates or the production thereof in any
proceeding relating thereto, and any such proceeding instituted by the Trustee
shall be brought in its own name as Trustee. Any recovery of judgment shall,
after provision for the payment of the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, be for the
ratable benefit of the Certificateholders in respect of which such judgment has
been obtained.
SECTION 10.16. Rights of [Credit Enhancer] to Direct Trustee; Class B
Certificateholder's Right of First Refusal. (a) The [Credit Enhancer], after
giving written notice to the Trustee, shall have the right to direct the time,
method and place at or by which the Trustee conducts any proceeding for any
remedy available to the Trustee, or exercises any such trust or power conferred
upon the Trustee.
(b) If in the exercise of its rights, powers and remedies under Subsection
(a) above, the [Credit Enhancer] directs the Trustee to liquidate Receivables
with an aggregate Principal Balance exceeding [ ]% of the aggregate Principal
Balance of all Receivables by selling such Receivables to one or more third
parties in one or more substantially contemporaneous sales, the [Credit
Enhancer] shall notify the Rating Agencies thereof and shall direct the Trustee,
prior to contracting to sell any such Receivables to a third party, to notify
any Holder of Class B Certificates evidencing in the aggregate more than [ ]% of
the Class B Certificate Balance of its intent to sell such Receivables and of
the amount of the highest bid the Trustee has received to purchase such
Receivables (the "Strike Bid"). The Class B Certificateholders or their designee
shall have [ten (10)] Business Days from the date of notification to submit a
bid equal to or greater than the Strike Bid. If the Trustee has not received a
bid from such Class B Certificateholders or their designee within such ten (10)
Business Day period, the [Credit Enhancer] shall be entitled to direct the
Trustee to consummate the purchase at the Strike Bid. If the Trustee receives a
bid equal to or greater than the Strike Bid from the Class B Certificateholders
or their designee within such ten (10) Business Day period the [Credit Enhancer]
shall direct the Trustee to accept such bid of the Class B Certificateholders or
their designee.
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(c) Notwithstanding anything to the contrary contained in subsections (a)
or (b) above, the Trustee shall have the right to decline to follow any such
direction of the [Credit Enhancer] if the Trustee, being advised by counsel,
determines that the action so directed may not lawfully be taken, or if the
Trustee in good faith shall, by a responsible officer of the Trustee, determine
that the proceedings so directed would be illegal or involve it in personal
liability or be unduly prejudicial to the rights of Certificateholders;
provided, that nothing in this Agreement shall impair the right of the Trustee
to take any action deemed proper by the Trustee and which is not inconsistent
with such direction of the [Credit Enhancer].
ARTICLE XI
Termination
SECTION 11.1. Termination of the Trust. The respective obligations and
responsibilities of the Seller, the Servicer, and the Trustee created hereby and
the Trust created by this Agreement shall terminate upon the payment to
Certificateholders of all amounts required to be paid to them pursuant to this
Agreement or [the Credit Enhancement] (including all amounts required to reduce
the Class A Certificate Balance to zero and to pay in full any unpaid Class A
Interest Distributable Amount), satisfaction of all Reimbursement Obligations,
and the expiration of any preference period related thereto and the disposition
of all property held as part of the Trust; provided, however, that in no event
shall the trust created by this Agreement continue beyond the expiration of 21
years from the death of the last survivor of the descendants of Joseph P.
Kennedy, the late ambassador of the United States of America to the Court of St.
James, living on the date of this Agreement. The Servicer shall promptly notify
the Trustee and the [Credit Enhancer] of any prospective termination pursuant to
this Section 11.1.
Notice of any termination, specifying the Distribution Date upon which the
Certificateholders may surrender their Certificates to the Trustee for payment
of the final distribution and cancellation, shall be given promptly by the
Trustee by letter to Certificateholders mailed not earlier than the 15th day and
not later than the 25th day of the month next preceding the specified
Distribution Date stating (A) the Distribution Date upon which final payment of
the Certificates shall be made upon presentation and surrender of the
Certificates at the office of the Trustee therein designated, (B) the amount of
any such final payment, and (C) if applicable, that the Record Date otherwise
applicable to such Distribution Date is not applicable, payments being made only
upon presentation and surrender of the Certificates at the office of the Trustee
therein specified. The
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Trustee shall give such notice to the Certificate Registrar (if other than the
Trustee) at the time such notice is given to Certificateholders. Upon
presentation and surrender of the Certificates, the Trustee shall cause to be
distributed to Certificateholders amounts distributable on such Distribution
Date pursuant to Section 4.6. Notwithstanding the foregoing, if on the
Distribution Date upon which final payment of the Certificates is to be made,
there are only six or less initial Certificateholders of record, the amounts
distributable to such initial Certificateholders pursuant to Section 4.6 will be
paid on the final Distribution Date by wire transfer or check as set forth in
Section 4.6(f), and each such initial Certificateholder shall present and
surrender its Certificates at the office of the Trustee designated in the notice
referred to above within [30 days] after such Distribution Date.
In the event that all of the Certificateholders shall not surrender their
Certificates for cancellation within six months after the date specified in the
above-mentioned written notice, the Trustee shall give a second written notice
to the remaining Certificateholders to surrender their Certificates for
cancellation and receive the final distribution with respect thereto. If within
one year after the second notice all the Certificates shall not have been
surrendered for cancellation, the Trustee shall take appropriate steps, or may
appoint an agent to take appropriate steps, to contact the remaining
Certificateholders concerning surrender of their Certificates, and the cost
thereof shall be paid out of the funds and other assets that shall remain
subject to this Agreement or, if none, from CPS. Any funds remaining in the
Trust after exhaustion of such remedies shall be distributed by the Trustee to
the American Red Cross.
SECTION 11.2. Optional Purchase of All Receivables. On the last day of any
Collection Period as of which the Pool Balance shall be less than or equal to
the Optional Purchase Percentage multiplied by the Original Pool Balance, the
Servicer shall have the option to purchase the corpus of the Trust (with the
consent of the [Credit Enhancer], if such purchase would result in a claim under
[the Credit Enhancement] or would result in any amount owing to the [Credit
Enhancer] or to the Holders of the Class A Certificates remaining unpaid);
provided, however, that the Servicer may not effect any such purchase unless the
Trustee shall have received an Opinion of Counsel to the effect that such
purchase would not constitute a fraudulent conveyance. To exercise such option
the Servicer (or the [Credit Enhancer], if applicable) shall deposit pursuant to
Section 4.5 in the Collection Account an amount equal to the aggregate Purchase
Amount for the Receivables (including defaulted Receivables), plus the appraised
value of any other property held by the Trust, such value to be determined by an
appraiser mutually agreed upon
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by the Servicer, the [Credit Enhancer] and the Trustee, and shall succeed to all
interests in and to the Trust. For purposes of this Section, the Purchase Amount
shall not be less than the sum of the Class A Certificate Balance and the Class
B Certificate Balance.
ARTICLE XII
Miscellaneous Provisions
SECTION 12.1. Amendment. This Agreement may be amended from time to time by
the Seller, the Servicer, and the Trustee with the consent of the [Credit
Enhancer] and with the consent (which consent of any Holder of a Certificate
given pursuant to this Section or pursuant to any other provision of this
Agreement shall be conclusive and binding on such Holder and on all future
Holders of such Certificate and of any Certificate issued upon the transfer
thereof or in exchange thereof or in lieu thereof whether or not notation of
such consent is made upon the Certificate) of the Holders of Class A
Certificates evidencing not less than [ ]% of the Class A Certificate Balance
and the Holders of Class B Certificates evidencing not less than [ ]% of the
Class B Certificate Balance for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of this Agreement,
or of modifying in any manner the rights of the Holders of Certificates;
provided, however, that no such amendment shall (a) increase or reduce in any
manner the amount of, or accelerate or delay the timing of, or change the
allocation or priority of, collections of payments on Receivables or
distributions that shall be required to be made on any Certificate or change the
Class A Pass-Through Rate or the Class B Pass-Through Rate without the consent
of each Certificateholder affected thereby, (b) reduce the aforesaid percentage
of the Class A Certificate Balance or Class B Certificate Balance required to
consent to any such amendment, without the consent of the Holders of all
Certificates of the applicable class then outstanding, (c) result in a downgrade
or withdrawal of the then current rating of the Class A Certificates by either
of the Rating Agencies without the consent of all the Class A Certificateholders
or (d) result in a downgrade or withdrawal of the then current rating of the
Class B Certificates by either of the Rating Agencies without the consent of all
the Class B Certificateholders.
Promptly after the execution of any such amendment or consent, the Trustee
shall furnish a copy of such amendment or consent to each Certificateholder and
each of the Rating Agencies.
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Prior to the execution of any amendment to this Agreement, the Trustee
shall be entitled to receive and rely upon an Opinion of Counsel stating that
the execution of such amendment is authorized or permitted by this Agreement and
the Opinion of Counsel referred to in Section 12.2(i)(1). The Trustee may, but
shall not be obligated to, enter into any such amendment which affects the
Trustee's own rights, duties or immunities under this Agreement or otherwise.
SECTION 12.2. Protection of Title to Trust. (a) The Seller or Servicer or
both shall execute and file such financing statements and cause to be executed
and filed such continuation statements, all in such manner and in such places as
may be required by law fully to preserve, maintain, and protect the interest of
the Certificateholders and the Trustee in the Receivables and the other Trust
Assets and in the proceeds thereof. The Seller or Servicer or both shall deliver
(or cause to be delivered) to the Trustee file-stamped copies of, or filing
receipts for, any document filed as provided above, as soon as available
following such filing.
(b) Neither the Seller nor the Servicer shall change its name, identity, or
corporate structure in any manner that would, could, or might make any financing
statement or continuation statement filed in accordance with paragraph (a) above
seriously misleading within the meaning of ss. 9-402(7) of the UCC, unless it
shall have given the Trustee and the [Credit Enhancer] at least [five] days'
prior written notice thereof, shall have promptly filed appropriate amendments
to all previously filed financing statements or continuation statements and
shall have delivered an Opinion of Counsel (A) stating that, in the opinion of
such counsel, all amendments to all previously filed financing statements and
continuation statements have been executed and filed that are necessary fully to
preserve and protect the interest of the Trustee in the Receivables and the
other Trust Assets, and reciting the details of such filings, or (B) stating
that, in the opinion of such counsel, no such action shall be necessary to
preserve and protect such interest.
(c) Each of the Seller and the Servicer shall have an obligation to give
the Trustee and the [Credit Enhancer] at least [60] days' prior written notice
of any relocation of its principal executive office if, as a result of such
relocation, the applicable provisions of the UCC would require the filing of any
amendment of any previously filed financing or continuation statement or of any
new financing statement, shall promptly file any such amendment and shall
deliver an Opinion of Counsel (A) stating that, in the opinion of such counsel,
all amendments to all previously filed financing statements and continuation
statements have been executed and filed that are necessary fully to preserve and
protect the interest of the Trustee in the
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Receivables, and reciting the details of such filings, or (B) stating that, in
the opinion of such counsel, no such action shall be necessary to preserve and
protect such interest. The Servicer shall at all times maintain each office from
which it shall service Receivables, and its principal executive office, within
the United States of America.
(d) The Servicer shall maintain accounts and records as to each Receivable
accurately and in sufficient detail to permit (i) 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) and (ii) reconciliation between
payments or recoveries on (or with respect to) each Receivable and the amounts
from time to time deposited in the Certificate Account and Payahead Account in
respect of such Receivable.
(e) The Servicer shall maintain its computer systems so that, from and
after the time of sale under this Agreement of the Receivables to the Trustee,
the Servicer's master computer records (including any back-up archives) that
refer to a Receivable shall indicate clearly the interest of CPS Auto Grantor
Trust 199[ ]-[ ] in such Receivable and that such Receivable is owned by the
Trust. Indication of the Trust's ownership of a Receivable shall be deleted from
or modified on the Servicer's computer systems when, and only when, such
Receivable shall have been paid in full or repurchased.
(f) If at any time the Seller or the Servicer shall propose to sell, grant
a security interest in, or otherwise transfer any interest in automotive
receivables to any prospective purchaser, lender, or other transferee, the
Servicer shall give to such prospective purchaser, lender, or other transferee
computer tapes, records, or printouts (including any restored from back-up
archives) that, if they shall refer in any manner whatsoever to any Receivable,
shall indicate clearly that such Receivable has been sold to and is owned by the
Trust.
(g) The Servicer shall permit the Trustee, [the Standby Servicer] and the
[Credit Enhancer] and its agents at any time during normal business hours to
inspect, audit, and make copies of and abstracts from the Servicer's records
regarding any Receivable.
(h) Upon request, the Servicer shall furnish to the Trustee, [the Standby
Servicer] or to the [Credit Enhancer], within [five] Business Days, a list of
all Receivables (by contract number and name of Obligor) then held as part of
the Trust, together with a reconciliation of such list to the Schedule of
Receivables and to each of the Servicer's Certificates furnished before such
request indicating removal of Receivables from the Trust.
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(i) The Servicer shall deliver to the Trustee and the [Credit Enhancer]:
(1) promptly after the execution and delivery of this Agreement
and of each amendment hereto and after the execution and delivery of
each amendment to any financing statement, an Opinion of Counsel
either (A) stating that, in the opinion of such counsel, all financing
statements and continuation statements have been executed and filed
that are necessary fully to preserve and protect the interest of the
Trustee in the Receivables, and reciting the details of such filings
or referring to prior Opinions of Counsel in which such details are
given, or (B) stating that, in the opinion of such counsel, no such
action shall be necessary to preserve and protect such interest; and
(2) within 90 days after the beginning of each calendar year
beginning with the first calendar year beginning more than three
months after the Cutoff Date, an Opinion of Counsel, dated as of a
date during such 90-day period either (A) stating that, in the opinion
of such counsel, all financing statements and continuation statements
have been executed and filed that are necessary fully to preserve and
protect the interest of the Trustee in the Receivables, and reciting
the details of such filings or referring to prior Opinions of Counsel
in which such details are given or (B) stating that, in the opinion of
such counsel, no such action shall be necessary to preserve and
protect such interest.
Each Opinion of Counsel referred to in clause (i) (1) or (i) (2) above
shall specify any action necessary (as of the date of such opinion) to be taken
in the following year to preserve and protect such interest.
(j) For the purpose of facilitating the execution of this
Agreement and for other purposes, this Agreement may be executed simultaneously
in any number of counterparts, each of which counterparts shall be deemed to be
an original, and all of which counterparts shall constitute but one and the same
instrument.
(k) In the event any of the events described in Section 9.1 (iii) or
(iv) shall have occurred, or in the event CPS shall have been removed
or replaced as Servicer for any reason, then CPS and/or the Servicer shall
immediately cause each Certificate of Title for a Financed Vehicle to be marked
to reflect the security interest of the Trustee in the Financed Vehicle, and CPS
hereby appoints the Trustee its attorney-in-fact to effect such marking, and the
Trustee hereby accepts such appointment. The appointment of the Trustee
hereunder shall not operate to relieve CPS and/or the Servicer of its
obligations to mark each Certificate of Title
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under this provision. CPS shall be liable for all costs, fees and expenses
incurred under this Section 12.2(k).
SECTION 12.3. Limitation on Rights of Certificateholders. The death or
incapacity of any Certificateholder shall not operate to terminate this
Agreement or the Trust, nor entitle such Certificateholder's legal
representatives or heirs to claim an accounting or to take any action or
commence any proceeding in any court for a partition or winding up of the Trust,
nor otherwise affect the rights, obligations and liabilities of the parties to
this Agreement or any of them.
No Certificateholder shall have any right to vote (except as specifically
provided herein including in Section 12.1) or in any manner otherwise control
the operation and management of the Trust, or the obligations of the parties to
this Agreement, nor shall anything in this Agreement set forth, or contained in
the terms of the Certificates, be construed so as to constitute the
Certificateholders from time to time as partners or members of an association;
nor shall any Certificateholder be under any liability to any third person by
reason of any action taken pursuant to any provision of this Agreement.
No Class A Certificateholder shall have any right by virtue or by availing
itself of any provisions of this Agreement to institute any suit, action, or
proceeding in equity or at law upon or under or with respect to this Agreement,
unless such Holder previously shall have given to the Trustee a written notice
of default and of the continuance thereof, and unless also the Holders of Class
A Certificates evidencing not less than [ ]% of the Class A Certificate Balance
shall have made written request upon the Trustee to institute such action, suit
or proceeding in its own name as Trustee under this Agreement and shall have
offered to the Trustee such reasonable indemnity as it may require against the
costs, expenses, and liabilities to be incurred therein or thereby and the
Trustee, for [30] days after its receipt of such notice, request, and offer of
indemnity, shall have neglected or refused to institute any such action, suit or
proceeding and during such [30]-day period no request or waiver inconsistent
with such written request has been given to the Trustee pursuant to this Section
or Section 9.5; no one or more Holders of Class A Certificates shall have any
right in any manner whatever by virtue or by availing itself or themselves of
any provisions of this Agreement to affect, disturb, or prejudice the rights of
the Holders of any other of the Class A Certificates, or to obtain or seek to
obtain priority over or preference to any other such Holder, or to enforce any
right, under this Agreement except in the manner provided in this Agreement and
for the equal, ratable, and common benefit of all Class A Certificateholders.
For the protection and enforcement of the provisions of this Section 12.3, each
Class A
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Certificateholder and the Trustee shall be entitled to such relief as can be
given either at law or in equity. Nothing in this Agreement shall be construed
as giving the Class A Certificateholders any direct right to make a claim under
[the Credit Enhancement].
No Class B Certificateholder shall have any right by virtue or by availing
itself of any provisions of the Agreement to institute any suit, action,
proceeding in equity or at law upon or under or with respect to the Agreement,
unless it has the prior written consent of the [Credit Enhancer] and, if any
Class A Certificate shall remain outstanding, the prior written consent of the
Holders of Class A Certificates evidencing not less than[ ]% of the Class A
Certificate Balance; provided that, this sentence shall be inoperative from and
after such time as the Class A Certificates have been paid in full and all
outstanding Reimbursement Obligations and other amounts due to the [Credit
Enhancer] have been paid in full.
SECTION 12.4. Governing Law. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AND THE OBLIGATIONS, RIGHTS,
AND REMEDIES OF THE PARTIES UNDER THIS AGREEMENT SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES.
SECTION 12.5. Notices. All demands, notices, and communications upon or to
the Seller, the Servicer, the Trustee, the [Credit Enhancer], [the rating
agency] under this Agreement shall be in writing, and delivered (a) personally,
(b) by certified mail, return receipt requested, (c) by Federal Express or
similar overnight courier service or (d) by telecopy, and shall be deemed to
have been duly given upon receipt (a) in the case of the Seller, to the agent
for service as specified in this Agreement, at the following address:
[ ], or at such other address as shall be designated by the Seller in
a written notice to the Trustee, (b) in the case of the Servicer, to Secretary,
2 Ada, Irvine, California 92618 (Telecopy: 714-753-6805), (c) in the
case of the Trustee, at [ ], (d) in the case of [rating agency], at
the following address: [ ], (e) in the case of [rating agency] at
[ ]; and (f) in the case of [Credit Enhancer], at the following
address: [ ]. Any notice required or permitted to be mailed to a
Certificateholder shall be given by Federal Express or similar overnight courier
service, postage prepaid, at the address of such Holder as shown in the
Certificate Register. Any notice so mailed within the time prescribed in this
Agreement shall be conclusively presumed to have been duly given, whether or not
the Certificateholder shall receive such notice.
The Trustee shall give prompt written notice to each of the Rating Agencies
and each Class A Certificateholder of (i) any
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amendments to the [Enhancement Agreement] or [the Credit Enhancement] (upon
receipt of written notice of any such amendments from the Seller or the
Servicer), (ii) any change in the identity of the Paying Agent and (iii) any
failure to make payment under [the Credit Enhancement].
SECTION 12.6. Severability of Provisions. If any one or more of the
covenants, agreements, provisions, or terms of this Agreement shall be for any
reason whatsoever held invalid, then such covenants, agreements, provisions, or
terms shall be deemed severable from the remaining covenants, agreements,
provisions, or terms of this Agreement and shall in no way affect the validity
or enforceability of the other provisions of this Agreement or of the
Certificates or the rights of the Holders thereof.
SECTION 12.7. Assignment. Notwithstanding anything to the contrary
contained herein, except as provided in Sections 7.3 and 8.3 and as provided in
the provisions of this Agreement concerning the resignation of the Servicer,
this Agreement may not be assigned by the Seller or the Servicer without the
prior written consent of the [Credit Enhancer], the Trustee and the Holders of
Certificates evidencing not less than [ ]% of the Pool Balance, the Holders of
Class A Certificates evidencing not less than [ ]% of the Class A Certificate
Balance and the Holders of Class B Certificates evidencing not less than [ ]% of
the Class B Certificate Balance.
SECTION 12.8. Certificates Nonassessable and Fully Paid. Certificateholders
shall not be personally liable for obligations of the Trust. The interests
represented by the Certificates shall be nonassessable for any losses or
expenses of the Trust or for any reason whatsoever, and upon authentication
thereof by the Trustee pursuant to Section 6.2 or 6.3, Certificates shall be
deemed fully paid.
SECTION 12.9. Nonpetition Covenant. (a) None of the Seller, the Servicer,
the Trustee, [the Standby Servicer] or CPS shall petition or otherwise invoke
the process of any court or government authority for the purpose of commencing
or sustaining a case against the Trust or the Seller 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
Trust or the Seller or any substantial part of its property, or ordering the
winding up or liquidation of the affairs of the Trust or the Seller.
(b) The Servicer shall not, nor cause the Seller to, petition or otherwise
invoke the process of commencing or sustaining a case against the Seller under
any Federal or State bankruptcy, insolvency or similar law or appointing a
receiver,
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liquidator, assignee, trustee, custodian, sequestrator or other similar official
of the Seller or any substantial part of its property, or ordering the winding
up or liquidation of the affairs of the Seller.
SECTION 12.10. Third Party Beneficiaries. Except as otherwise specifically
provided herein with respect to Certificateholders, the parties to this
Agreement hereby manifest their intent that no third party other than the
[Credit Enhancer] and the [Collateral Agent] with respect to the indemnification
provisions set forth herein, shall be deemed a third party beneficiary of this
Agreement, and specifically that the Obligors are not third party beneficiaries
of this Agreement.
[SECTION 12.11. [The Credit Enhancer] as Controlling Party. Each
Certificateholder by purchase of the Certificates held by it acknowledges that
the Trustee, as partial consideration of the issuance of [the Credit
Enhancement], has agreed that the [Credit Enhancer] shall have certain rights
hereunder for so long as no [Enhancement Default] shall have occurred and be
continuing. So long as an [Enhancement Default] has occurred and is continuing,
any provision giving the [Credit Enhancer] the right to direct, appoint or
consent to, approve of, or take any action under this Agreement shall be
inoperative during the period of such [Enhancement Default] and such right shall
instead vest in the Trustee acting at the direction of the Holders of Class A
Certificates evidencing, unless otherwise specified, not less than [ ]% of the
Class A Certificate Balance. From and after such time as the Class A
Certificates have been paid in full and all outstanding Reimbursement
Obligations and other amounts due to the [Credit Enhancer] have been paid in
full, any provision giving the [Credit Enhancer] or the Class A
Certificateholders the right to direct, appoint or consent to, approve of, or
take any action under this Agreement shall be inoperative and such right shall
instead vest in the Trustee acting at the direction of the Holders of Class B
Certificates evidencing, unless otherwise specified, not less than [ ]% of the
Class B Certificate Balance. [The Credit Enhancer may disclaim any of its rights
and powers under this Agreement (but not its duties and obligations under [the
Credit Enhancement]) upon delivery of a written notice to the Trustee. [The
Credit Enhancer] may give or withhold any consent hereunder in its sole and
absolute discretion.]
SECTION 12.12. Agent for Service. The agent for service for the Seller
shall be [ ]. The Seller hereby designates CT Corporation System, 1633
Broadway, New York, New York 10019 (212) 644-1666 as agent for service of
process in all matters pertaining to the Seller in New York.
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IN WITNESS WHEREOF, the Seller, the Servicer, the Trustee and [the Standby
Servicer] have caused this Pooling and Servicing Agreement to be duly executed
by their respective officers as of the day and year first above written.
[ ],
as Seller
By:__________________________________________
Name:
Title:
CONSUMER PORTFOLIO SERVICES, INC.,
as Servicer
By:__________________________________________
Name:
Title:
[ ]
as Trustee [and Standby Servicer]
By:__________________________________________
Name:
Title:
TABLE OF CONTENTS
Section Page
ARTICLE I
Definitions
1.1. Definitions........................................... 2
1.2. Usage of Terms........................................ 19
1.3. Section References.................................... 19
1.4. Limitation on Trust Fund Activities................... 19
1.5. Calculations.......................................... 19
1.6. Action by or Consent of Certificateholders............ 19
1.7. Material Adverse Effect............................... 20
ARTICLE II
The Trust and Trust Property
2.1. Creation of Trust..................................... 20
2.2. Conveyance of Receivables............................. 20
2.3. Transfer Intended as Sale; Precautionary
Security Interest................................ 21
2.4. Acceptance by Trustee................................. 21
2.5. Representations and Warranties of Seller.............. 22
2.6. Repurchase Upon Breach................................ 28
2.7. Delivery of Receivable Files.......................... 29
2.8. Acceptance of Receivable Files by Trustee............. 29
2.9. Access to Receivable Files............................ 31
ARTICLE III
Administration and Servicing of Receivables
3.1. Duties of Servicer.................................... 32
3.2. Collection and Allocation of Receivable
Payments......................................... 33
3.3. Realization Upon Receivables.......................... 34
3.4. Physical Damage Insurance; Other Insurance............ 34
3.5. Maintenance of Security Interests in
Financed Vehicles................................ 35
3.6. Additional Covenants of Servicer...................... 36
3.7. Purchase of Receivables Upon Breach................... 36
3.8. Servicing Fee......................................... 37
3.9. Servicer's Certificate................................ 37
3.10. Annual Statement as to Compliance: Notice
of Default....................................... 37
3.11. Annual Independent Certified Public
Section Page
Accountant's Report............................. 38
3.12. Reserved............................................. 39
3.13. Servicer Expenses.................................... 39
3.14. Retention and Termination of Servicer................ 39
3.15. Access to Certain Documentation and
Information Regarding Receivables............... 40
3.16. Verification of Servicer's Certificate............... 40
3.17. Fidelity Bond........................................ 41
3.18. Delegation of Duties................................. 41
ARTICLE IV
Distributions, Spread Account;
Statements to Certificateholders
4.1. Accounts; Post-Office Box............................ 42
4.2. Collections.......................................... 44
4.3. Application of Collections........................... 44
4.4. Payaheads............................................ 45
4.5. Additional Deposits.................................. 45
4.6. Distributions; [Credit Enhancement Claims]........... 45
4.7. Withdrawals from [Spread Account] and
[Reserve Fund].................................. 49
4.8. Statements to Certificateholders; Tax
Returns......................................... 50
4.9. Credit Enhancement; Subrogation...................... 52
4.10. Reliance on Information from the Servicer............ 53
4.11. Reserved............................................. 53
ARTICLE V
Reserved.
ARTICLE VI
The Certificates
6.1. The Certificates..................................... 53
6.2A. Appointment of Paying Agent.......................... 54
6.2B. Authenticating Agent................................. 55
6.2. Authentication of Certificates....................... 56
6.3. Registration of Transfer and Exchange of
Certificates.................................... 56
6.4. Mutilated, Destroyed, Lost or Stolen
Certificates.................................... 57
6.5. Persons Deemed Owners................................ 57
6.6. Access to List of Certificateholders' Names
and Addresses................................... 57
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Section Page
6.7. Maintenance of Office or Agency.................... 58
6.8. Book-Entry Certificates............................ 58
6.9. Notices to Clearing Agency......................... 59
6.10. Definitive Certificates............................ 59
ARTICLE VII
The Seller
7.1. Representations of Seller.......................... 60
7.2. Liability of Seller; Indemnities................... 62
7.3. Merger or Consolidation of, or Assumption
of the Obligations of, Seller................. 62
7.4. Limitation on Liability of Seller and
Others........................................ 63
7.5. Seller May Own Certificates........................ 63
ARTICLE VIII
The Servicer
8.1. Representations of Servicer........................ 64
8.2. Indemnities of Servicer............................ 66
8.3. Merger or Consolidation of, or Assumption
of the Obligations of, Servicer or Standby
Servicer...................................... 67
8.4. Limitation on Liability of Servicer and
Others........................................ 68
8.5. Servicer and Standby Servicer Not to
Resign........................................ 69
ARTICLE IX
Default
9.1. Events of Default.................................. 70
9.2. Appointment of Successor........................... 72
9.3. Reserved........................................... 74
9.4. Notification to Certificateholders................. 74
9.5. Direction of Insolvency Proceedings by
[Credit Enhancer]............................. 74
9.6. Action Upon Certain Failures of the
Servicer...................................... 75
ARTICLE X
The Trustee
10.1. Duties of Trustee.................................. 76
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Section Page
10.2. Trustee's Certificate............................... 78
10.3. Reserved............................................ 78
10.4. Certain Matters Affecting Trustee................... 79
10.5. Trustee Not Liable for Certificates or
Receivables.................................... 80
10.6. Trustee May Own Certificates........................ 82
10.7. Indemnity of Trustee................................ 82
10.8. Eligibility Requirements for Trustee................ 82
10.9. Resignation or Removal of Trustee................... 82
10.10. Successor Trustee................................... 83
10.11. Merger or Consolidation of Trustee.................. 84
10.12. Co-Trustee; Separate Trustee........................ 84
10.13. Representations and Warranties of Trustee........... 86
10.14. No Bankruptcy Petition.............................. 86
10.15. Trustee May Enforce Claims Without
Possession of Certificates..................... 87
10.16. Rights of [Credit Enhancer] to Direct
Trustee; Class B Certificateholder's
Right of First Refusal......................... 87
ARTICLE XI
Termination
11.1. Termination of the Trust............................ 88
11.2. Optional Purchase of All Receivables................ 89
ARTICLE XII
Miscellaneous Provisions
12.1. Amendment........................................... 90
12.2. Protection of Title to Trust........................ 91
12.3. Limitation on Rights of
Certificateholders............................. 94
12.4. Governing Law....................................... 95
12.5. Notices............................................. 95
12.6. Severability of Provisions.......................... 96
12.7. Assignment.......................................... 96
12.8. Certificates Nonassessable and Fully Paid........... 96
12.9. Nonpetition Covenant................................ 96
12.10. Third Party Beneficiaries........................... 97
12.11. [The Credit Enhancer] as Controlling Party.......... 97
12.12. Agent for Service................................... 97
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EXHIBITS
Exhibit A Form of Class A Certificate
Exhibit B Form of Class B Certificate
Exhibit C-1 Form of Trustee's Certificate
Exhibit C-2 Form of Trustee's Certificate
Exhibit D Form of Monthly Certificateholder Statement
Exhibit E-1 Form of Trust Receipt
Exhibit E-2 Form of Servicing Officer's Certificate
SCHEDULES
Schedule A Schedule of Receivables
Schedule B Location of Receivables
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Exhibit A to the
Pooling and Servicing
Agreement
FORM OF CLASS A CERTIFICATE SEE REVERSE FOR
CERTAIN
DEFINITIONS
UNLESS THIS CERTIFICATE IS PRESENTED By AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION, TO THE ISSUER OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND ANY PAYMENT IS
MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, ANY TRANSFER, PLEDGE, OR OTHER
USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS
THE REGISTERED OWNER HEREOF, CEDE &, CO., HAS AN INTEREST HEREIN.
CPS AUTO GRANTOR TRUST 199[ ]
[ ] ASSET BACKED CERTIFICATE
CLASS A
evidencing a beneficial ownership interest in the Trust, as defined below, the
property of which includes a pool of retail installment sale contracts secured
by new and used automobiles, light trucks, vans and minivans and sold to the
Trust by [Seller].
(This Certificate does not represent an interest in or obligation of [Seller],
Consumer Portfolio Services, Inc., the Trustee or any of their respective
affiliates, except to the extent described below.)
NUMBER R-[ ] CUSIP No. [ ]
$[ ] Final Scheduled Distribution Date: [ ]
THIS CERTIFIES THAT CEDE & CO. is the registered owner of a [ ] dollar
nonassessable, fully-paid, fractional undivided ownership interest in the CPS
Auto Grantor Trust 199[ ]-[ ] (the "Trust") formed by Consumer Portfolio
Services, Inc. (the "Servicer"). The Trust was created pursuant to a Pooling and
Servicing Agreement dated as of [ ] (the "Agreement") among the Seller,
Consumer Portfolio Services, Inc., as servicer (the "Servicer"), and
[ ] as trustee (the "Trustee") [and Standby Servicer], a summary of
certain of the pertinent provisions of which is set forth below. To the
extent not otherwise defined herein, the capitalized terms used herein have the
meanings assigned to them in the Agreement. This Certificate is one of the duly
authorized Certificates designated as "[ ]% Asset Backed Certificates,
Class A" (herein called the "Class A Certificates"). Also issued under the
Agreement are Certificates designated as "[ ]% Asset Backed Certificates,
Class B" (the "Class B Certificates"). The Class B Certificates and the Class A
Certificates are hereinafter collectively called the "Certificates". The
aggregate beneficial ownership interests in the Trust evidenced by all Class A
Certificates is [ ]%. This Class A Certificate is issued under and is subject to
the terms, provisions, and conditions of the Agreement, to which Agreement the
Holder of this Class A Certificate by virtue of the acceptance hereof assents
and by which such Holder is bound. The property of the Trust includes (i) a pool
of retail installment sale contracts for new and used automobiles, light trucks,
vans and minivans (the "Receivables"), with respect to Rule of 78's Receivables,
all monies due or to become due thereon after [ ] (the "Cutoff Date") and,
with respect to Simple Interest Receivables, all amounts received with respect
thereto after the Cutoff Date, security interests in the vehicles financed
thereby, proceeds from claims on certain insurance policies and certain other
rights under the Agreement, certain bank accounts and the proceeds thereof, all
right, title and interest of the Seller in and to the Purchase Agreement, all
right, title and interest of the Seller in and to certain refunds, the
Receivable File related to each Receivable and the proceeds of any or all of the
foregoing; and (ii) [Credit Enhancement] issued for the benefit of the Class A
Certificateholders by [Credit Enhancer] [(the "Credit Enhancement"].
Under the Agreement, there will be distributed on the 15th day of each
month or, if such [ ] day is not a Business Day, the next Business Day (the
"Distribution Date"), commencing on [ ], to the person in whose name
this Class A Certificate is registered at the close of business on the [ ]
day of the calendar month in which such Distribution Date occurs
(the "Record Date"), such Class A Certificateholder's percentage interest
(determined by dividing the denominations of this Class A Certificate by the
aggregate original denomination of all Class A Certificates)
in the amounts distributed to Class A Certificateholders pursuant to the
Agreement.
[Credit Enhancement is provided pursuant to the Enhancement
Agreement.]
Distributions on this Class A Certificate will be made by the Trustee
by check or money order mailed to the Class A Certificateholder of record in the
Certificate Register without the presentation or surrender of this Class A
Certificate or the making of any notation hereon except that with respect to
Class A Certificates registered in the name of Cede & Co., the nominee for the
Clearing Agency, distributions will be made in the form of immediately available
funds. Except as otherwise provided in the Agreement and notwithstanding the
above, the final distribution on this Class A Certificate will be made after due
notice by the Trustee of the pendency of such distribution and only upon
presentation and surrender of this Class A Certificate at the office or agency
maintained for that purpose by the Trustee in the Borough of Manhattan, The City
of New York. The Record Date otherwise applicable to such distribution shall not
be applicable.
Reference is hereby made to the further provisions of this Class A
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon shall have been
executed by an authorized officer of the Trustee, by manual signature, this
Class A Certificate shall not entitle the Holder hereof to any benefit under the
Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Trustee on behalf of the Trust and not in its
individual capacity has caused this Class A Certificate to be duly executed.
CPS AUTO GRANTOR TRUST 199[ ]-[ ]
By: [ ]
not in its individual
capacity but solely in its
capacity as Trustee
By:/s/__________________________
Authorized Signatory
Dated: [ ]
This is one of the Class A Certificates
referred to in the within-mentioned Agreement.
[ ]
not in its individual capacity but
solely in its capacity as Trustee
By:/s/ ___________________________
Authorized Signatory
[REVERSE OF CERTIFICATE]
The Certificates do not represent an obligation of, or an interest in, the
Seller, the Servicer, the Trustee or any affiliate of any of them. The
Certificates are limited in right of payment to certain collections and
recoveries respecting the Receivables [and claims made under the [Credit
Enhancement], all as more specifically set forth in the Agreement. A copy of the
Agreement may be examined during normal business hours at the principal office
of the Seller, and at such other places, if any, designated by the Seller, by
any Certificateholder upon request.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Seller and the rights of the Certificateholders under the Agreement at any time
by the Seller, the Servicer and the Trustee with the consent of the [Credit
Enhancer] and with the consent of the Holders of Certificates evidencing not
less than [ ]% of the Class A Certificate Balance and [ ]% of the Class B
Certificate Balance. Any such consent by the Holder of this Certificate shall be
conclusive and binding on such Holder and on all future Holders of this
Certificate and of any Certificate issued upon the transfer hereof or in
exchange hereof or in lieu hereof whether or not notation of such consent is
made upon this Certificate.
As provided in the Agreement and subject to certain limitations set forth
therein, the transfer of this Certificate is registrable in the Certificate
Register upon surrender of this Certificate for registration of transfer at the
offices or agencies maintained by the Trustee in its capacity as Certificate
Registrar, or by any successor Certificate Registrar, accompanied by a written
instrument of transfer in form satisfactory to the Trustee and the Certificate
Registrar duly executed by the Holder hereof or such Holder's attorney duly
authorized in writing, and thereupon one or more new Certificates of authorized
denominations evidencing the same aggregate interest in the Trust will be issued
to the designated transferee.
The Class A Certificates are issuable only as registered Certificates
without coupons in minimum denominations of $1,000 and integral multiples
thereof; however, one certificate may be issued in the residual amount. As
provided in the Agreement and subject to certain limitations set forth therein,
Certificates are exchangeable for new Certificates of authorized denominations
evidencing the same aggregate denomination, as requested by the Holder
surrendering the same. No service charge will be made for any such registration
of transfer or exchange, but the Trustee may require payment of a sum sufficient
to cover any tax or governmental charges payable in connection therewith.
The Trustee, the Certificate Registrar, and any agent of the Trustee or the
Authenticating Agent may treat the person in whose name this Certificate is
registered as the owner hereof for all purposes, and neither the Trustee, the
Certificate Registrar, nor any such agent shall be affected by any notice to the
contrary.
The obligations and responsibilities created by the Agreement and the Trust
created thereby shall terminate upon the payment to Certificateholders of all
amounts required to be paid to them pursuant to the Agreement, the payment of
all Reimbursement Obligations, and the expiration of any preference period with
respect thereto and the disposition of all property held as part of the Trust.
The Servicer of the Receivables may at its option purchase the corpus of the
Trust at a price specified in the Agreement, and such purchase of the
Receivables and other property of the Trust will effect early retirement of the
Certificates; however, such right of purchase is exercisable only as of the last
day of any Collection Period as of which the Pool Balance is less than or equal
to 10% of the original aggregate principal balance of the Receivables.
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns and
transfers unto
PLEASE INSERT SOCIAL SECURITY
OR OTHER IDENTIFYING NUMBER
OF ASSIGNEE
- -----------------------------------------------------------------
(Please print or typewrite name and address, including postal zip
code, of assignee)
- -----------------------------------------------------------------
the within Certificate, and all rights thereunder, hereby
irrevocably constituting and appointing
__________________________________________ Attorney to transfer said Certificate
on the books of the Certificate Registrar, with full power of substitution in
the premises.
Dated:
__________________________________*
__________________________________*
* NOTICE: The signature to this assignment must correspond with the
name as it appears upon the face of the within Certificate in every particular,
without alteration, enlargement or any change whatever.
Exhibit B to the
Pooling and Servicing
Agreement
FORM OF CLASS B CERTIFICATE
SEE REVERSE FOR
CERTAIN
DEFINITIONS
UNLESS THIS CERTIFICATE IS PRESENTED By AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION, TO THE ISSUER OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND ANY PAYMENT IS
MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, ANY TRANSFER, PLEDGE, OR OTHER
USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS
THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
CPS AUTO GRANTOR TRUST 199[ ]
[ ] ASSET BACKED CERTIFICATE
CLASS B
evidencing a beneficial ownership interest in the Trust, as defined below, the
property of which includes a pool of retail installment sale contracts secured
by new and used automobiles, light trucks, vans and minivans and sold to the
Trust by [Seller].
(This Certificate does not represent an interest in or obligation of [Seller],
Consumer Portfolio Services, Inc., the Trustee or any of their respective
affiliates, except to the extent described below.)
NUMBER R-[ ] CUSIP No. [ ]
$[ ] Final Scheduled Distribution Date: [ ]
THIS CERTIFIES THAT CEDE & CO. is the registered owner of a [ ] dollar
nonassessable, fully-paid, fractional undivided ownership interest in the CPS
Auto Grantor Trust 199[ ]-[ ] (the "Trust") formed by Consumer Portfolio
Services, Inc. (the "Servicer"). The Trust was created pursuant to a Pooling and
Servicing Agreement dated as of [ ] (the "Agreement") among the Seller,
Consumer Portfolio Services, Inc., as servicer (the "Servicer"), and
[ ] as trustee (the "Trustee") [and Standby Servicer], a summary
of certain of the pertinent provisions of which is set forth below. To the
extent not otherwise defined herein, the capitalized terms used herein have the
meanings assigned to them in the Agreement. This Certificate is one of the duly
authorized Certificates designated as "[ ]% Asset Backed Certificates,
Class B" (herein called the "Class B Certificates"). Also issued under the
Agreement are Certificates designated as "[ ]% Asset Backed Certificates,
Class A" (the "Class B Certificates"). The Class B Certificates and the Class A
Certificates are hereinafter collectively called the "Certificates". The
aggregate beneficial ownership interests in the Trust evidenced by all Class B
Certificates is [ ]%. This Class B Certificate is issued under and is subject to
the terms, provisions, and conditions of the Agreement, to which Agreement the
Holder of this Class B Certificate by virtue of the acceptance hereof assents
and by which such Holder is bound. The property of the Trust includes (i) a pool
of retail installment sale contracts for new and used automobiles, light trucks,
vans and minivans (the "Receivables"), with respect to Rule of 78's Receivables,
all monies due or to become due thereon after [ ] (the "Cutoff Date") and, with
respect to Simple Interest Receivables, all amounts received with respect
thereto after the Cutoff Date, security interests in the vehicles financed
thereby, proceeds from claims on certain insurance policies and certain other
rights under the Agreement, certain bank accounts and the proceeds thereof, all
right, title and interest of the Seller in and to the Purchase Agreement, all
right, title and interest of the Seller in and to certain refunds, the
Receivable File related to each Receivable and the proceeds of any or all of the
foregoing; and (ii) [Credit Enhancement] issued for the benefit of the Class A
Certificateholders by [Credit Enhancer] [(the "Credit Enhancement"].
Under the Agreement, there will be distributed on the 15th day of each
month or, if such [ ] day is not a Business Day, the next Business Day (the
"Distribution Date"), commencing on [
], to the person in whose name this Class B Certificate is registered
at the close of business on the [ ] day of the calendar month in which such
Distribution Date occurs (the "Record Date"), such Class B Certificateholder's
percentage interest (determined by dividing the denominations of this Class B
Certificate by the aggregate original denomination of all Class B Certificates)
in the amounts distributed to Class B Certificateholders pursuant to the
Agreement.
Distributions on this Class B Certificate will be made by the Trustee
by check or money order mailed to the Class B Certificateholder of record in the
Certificate Register without the presentation or surrender of this Class B
Certificate or the making of any notation hereon except that with respect to
Class B Certificates registered in the name of Cede & Co., the nominee for the
Clearing Agency, distributions will be made in the form
of immediately available funds. Except as otherwise provided in the Agreement
and notwithstanding the above, the final distribution on this Class B
Certificate will be made after due notice by the Trustee of the pendency of such
distribution and only upon presentation and surrender of this Class B
Certificate at the office or agency maintained for that purpose by the Trustee
in the Borough of Manhattan, The City of New York. The Record Date otherwise
applicable to such distribution shall not be applicable.
Reference is hereby made to the further provisions of this Class B
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon shall have been
executed by an authorized officer of the Trustee, by manual signature, this
Class B Certificate shall not entitle the Holder hereof to any benefit under the
Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Trustee on behalf of the Trust and not in its
individual capacity has caused this Class B Certificate to be duly executed.
CPS AUTO GRANTOR TRUST 199[ ]-[ ]
By: [ ]
not in its individual capacity
but solely in its capacity as
Trustee
By: ______________________________
Authorized Signatory
Dated: [ ]
This is one of the Class B Certificates
referred to in the within-mentioned
Agreement.
[ ]
not in its individual capacity but
solely in its capacity as Trustee
By: ___________________________
Authorized Signatory
[REVERSE OF CERTIFICATE]
The Certificates do not represent an obligation of, or an interest in, the
Seller, the Servicer, the Trustee or any affiliate of any of them. The
Certificates are limited in right of payment to certain collections and
recoveries respecting the Receivables [and claims made under the [Credit
Enhancement], all as more specifically set forth in the Agreement. A copy of the
Agreement may be examined during normal business hours at the principal office
of the Seller, and at such other places, if any, designated by the Seller, by
any Certificateholder upon request.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Seller and the rights of the Certificateholders under the Agreement at any time
by the Seller, the Servicer and the Trustee with the consent of the [Credit
Enhancer] and with the consent of the Holders of Certificates evidencing not
less than [ ]% of the Class A Certificate Balance and [ ]% of the Class B
Certificate Balance. Any such consent by the Holder of this Certificate shall be
conclusive and binding on such Holder and on all future Holders of this
Certificate and of any Certificate issued upon the transfer hereof or in
exchange hereof or in lieu hereof whether or not notation of such consent is
made upon this Certificate.
As provided in the Agreement and subject to certain limitations set forth
therein, the transfer of this Certificate is registrable in the Certificate
Register upon surrender of this Certificate for registration of transfer at the
offices or agencies maintained by the Trustee in its capacity as Certificate
Registrar, or by any successor Certificate Registrar, accompanied by a written
instrument of transfer in form satisfactory to the Trustee and the Certificate
Registrar duly executed by the Holder hereof or such Holder's attorney duly
authorized in writing, and thereupon one or more new Certificates of authorized
denominations evidencing the same aggregate interest in the Trust will be issued
to the designated transferee.
The Class B Certificates are issuable only as registered Certificates
without coupons in minimum denominations of $1,000 and integral multiples
thereof; however, one certificate may be issued in the residual amount. As
provided in the Agreement and subject to certain limitations set forth therein,
Certificates are exchangeable for new Certificates of authorized denominations
evidencing the same aggregate denomination, as requested by the Holder
surrendering the same. No service charge will be made for any such registration
of transfer or exchange, but the Trustee may require payment of a sum sufficient
to cover any tax or governmental charges payable in connection therewith.
The Trustee, the Certificate Registrar, and any agent of the Trustee or the
Authenticating Agent may treat the person in whose name this Certificate is
registered as the owner hereof for all purposes, and neither the Trustee, the
Certificate Registrar, nor any such agent shall be affected by any notice to the
contrary.
The obligations and responsibilities created by the Agreement and the Trust
created thereby shall terminate upon the payment to Certificateholders of all
amounts required to be paid to them pursuant to the Agreement, the payment of
all Reimbursement Obligations, and the expiration of any preference period with
respect thereto and the disposition of all property held as part of the Trust.
The Servicer of the Receivables may at its option purchase the corpus of the
Trust at a price specified in the Agreement, and such purchase of the
Receivables and other property of the Trust will effect early retirement of the
Certificates; however, such right of purchase is exercisable only as of the last
day of any Collection Period as of which the Pool Balance is less than or equal
to 10% of the original aggregate principal balance of the Receivables.
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns and
transfers unto
PLEASE INSERT SOCIAL SECURITY
OR OTHER IDENTIFYING NUMBER
OF ASSIGNEE
- -----------------------------------------------------------------
(Please print or typewrite name and address, including postal zip
code, of assignee)
- -----------------------------------------------------------------
the within Certificate, and all rights thereunder, hereby
irrevocably constituting and appointing
__________________________________________ Attorney to transfer said Certificate
on the books of the Certificate Registrar, with full power of substitution in
the premises.
Dated:
__________________________________*
__________________________________*
* NOTICE: The signature to this assignment must correspond with the
name as it appears upon the face of the within Certificate in every particular,
without alteration, enlargement or any change whatever.
Exhibit C-1 to
Pooling and Servicing
Agreement
Trustee's Certificate
Pursuant to Section 10.2 of
the Pooling and Servicing Agreement
[ ], as trustee (the "Trustee") of the CPS Auto Grantor Trust 199[ ]-[ ]
created pursuant to the Pooling and Servicing Agreement (the "Pooling and
Servicing Agreement"), dated as of [ ], among [ ], as Seller, Consumer Portfolio
Services, Inc., as Servicer, and [ ], as Trustee [and Standby Servicer], does
hereby sell, transfer, assign, and otherwise convey to Consumer Portfolio
Services, Inc., without recourse, representation, or warranty, all of the
Trustee's right, title, and interest in and to all of the Receivables (as
defined in the Pooling and Servicing Agreement) identified in the attached
Servicer's Certificate as "Purchased Receivables," which are to be repurchased
by Consumer Portfolio Services, Inc. pursuant to Section 2.6 and all security
and documents relating thereto.
IN WITNESS WHEREOF I have hereunto set my hand this __ day of ____, 19__.
By:
--------------------------------
Name:
Title:
Exhibit C-2 to
Pooling and Servicing
Agreement
Trustee's Certificate
Pursuant to Section 10.2 of
the Pooling and Servicing Agreement
[ ], as trustee (the "Trustee") of the CPS Auto Grantor Trust 199[ ]-[ ]
created pursuant to the Pooling and Servicing Agreement (the "Pooling and
Servicing Agreement"), dated as of [ ], among [ ], as Seller, [ ], as Servicer
(the "Servicer"), and [ ], as Trustee [and Standby Servicer], does hereby sell,
transfer, assign, and otherwise convey to the Servicer, without recourse,
representation, or warranty, all of the Trustee's right, title, and interest in
and to all of the Receivables (as defined in the Pooling and Servicing
Agreement) identified in the attached Servicer's Certificate as "Purchased
Receivables," which are to be repurchased by the Servicer pursuant to Section
3.7 and all security and documents relating thereto.
IN WITNESS WHEREOF I have hereunto set my hand this __ day of ____, 19__.
By:
--------------------------------
Name:
Title:
Exhibit D to
Pooling and Servicing
Agreement
Form of Monthly
Certificateholder Statement
[To be delivered by Servicer at Closing]
Exhibit E-1 to
Pooling and Servicing
Agreement
Trust Receipt
Pursuant to Section 2.9 of
the Pooling and Servicing Agreement
[ ], as Servicer (the "Servicer") of the CPS Auto Grantor Trust 199[ ]-[ ]
created pursuant to the Pooling and Servicing Agreement (the "Pooling and
Servicing Agreement"), dated as of [ ], among [ ], as Seller, [ ], the Servicer,
and [ ], as Trustee [and Standby Servicer], does hereby acknowledge receipt of
the documents relating to Receivables, each of which documents and the
Receivables they related to are listed on the attached Schedule 1 hereto.
Servicer furthermore agrees to return such documents to the Trustee in
accordance with the terms of the Pooling and Servicing Agreement.
IN WITNESS WHEREOF I have hereunto set my hand this __ day of ____, 19__.
[ ],
as Servicer
By:
--------------------------------
Name:
Title:
Acknowledged By:
[ ],
as Trustee
By:
--------------------------------
Name:
Title:
Exhibit E-2 to
Pooling and Servicing
Agreement
Form of Servicing
Officer's Certificate
[To be delivered by Servicer at Closing]
EXHIBIT 10.1
[FORM OF PURCHASE AGREEMENT]
PURCHASE AGREEMENT dated as of this [ ] by and between CONSUMER PORTFOLIO
SERVICES, INC., a California corporation (the "Seller"), having its principal
executive office at 2 Ada, Irvine, California 92618, and CPS RECEIVABLES CORP. a
California corporation (the "Purchaser"), having its principal executive office
at 2 Ada, Irvine, California 92618.
WHEREAS, in the regular course of its business, the Seller purchases and
services through its auto loan programs certain motor vehicle retail installment
sale contracts secured by new and used automobiles, light trucks, vans or
minivans acquired from motor vehicle dealers.
WHEREAS, the Seller and the Purchaser wish to set forth the terms pursuant
to which the Receivables (as hereinafter defined), are to be sold by the Seller
to the Purchaser, which Receivables will be transferred by the Purchaser,
pursuant to the Pooling and Servicing Agreement (as hereinafter defined) to CPS
Auto Trust 199[ ]-[ ] to be created thereunder, which Trust will issue
certificates representing beneficial ownership interests in the Receivables and
the other property of the Trust (the "Class A Certificates" and the "Class B
Certificates", together, the "Certificates").
NOW, THEREFORE, in consideration of the foregoing, other good and valuable
consideration, and the mutual terms and covenants contained herein, the parties
hereto agree as follows:
ARTICLE I
CERTAIN DEFINITIONS
Terms not defined in this Agreement shall have the meaning set forth in the
Pooling and Servicing Agreement. As used in this Agreement, the following terms
shall, unless the context otherwise requires, have the following meanings (such
meanings to be equally applicable to the singular and plural forms of the terms
defined):
"Agreement" means this Purchase Agreement and all amendments hereof and
supplements hereto.
"Assignment" means the document of assignment attached to this Agreement as
Exhibit A.
"Base Prospectus" means the Prospectus dated [ ], 1997 with respect to
CPS Auto Trusts.
"Closing Date" means [ ], [ ].
"Cutoff Date" means [ ], [ ].
"Distribution Date" means, for each Collection Period, the 15th day of the
following month or, if such 15th day is not a Business Day, the next succeeding
Business Day.
"Obligor(s)" means the purchaser or co-purchasers of a Financed Vehicle or
any other person who owes or may be liable for payments under a Receivable.
"Offering Documents" means the Prospectus Supplement and related Base
Prospectus and the Private Placement Memorandum.
"Pooling and Servicing Agreement" means the Pooling and Servicing Agreement
dated as of [ ] among CPS Receivables Corp., as seller, Consumer Portfolio
Services, Inc., as originator of the Receivables and servicer, and [ ] as
trustee and standby servicer.
"Private Placement Memorandum" means the Private Placement Memorandum,
dated [ ], relating to the private placement of the Class B Certificates and any
amendment or supplement thereto.
"Prospectus Supplement" means the Prospectus Supplement dated [ ],
[ ], relating to the public offering of the Class A Certificates and any
amendment or supplement thereto.
"Purchaser" means CPS Receivables Corp., a California corporation, its
successors and assigns.
"Receivable" means each retail installment sale contract for a Financed
Vehicle that appears on the Schedule of Receivables.
"Receivables Purchase Price" means $ an amount net of any
underwriting fees as described in the Underwriting Agreements).
"Repurchase Event" shall have the meaning specified in Section 6.2 hereof.
"Schedule of Receivables" means the list of Receivables annexed hereto as
Exhibit B.
"Seller" means Consumer Portfolio Services, Inc., a California corporation,
in its capacity as seller of the Receivables and the other Transferred Property
relating thereto, and its successors and assigns.
"Servicer" means Consumer Portfolio Services, Inc., a California
corporation, in its capacity as Servicer of the Receivables, its successors and
assigns.
2
"Transferred Property" shall have the meaning specified in Section 2.1(a)
hereof.
"Trust" means the CPS Auto Grantor Trust 199[ ]-[ ] created by the Pooling
and Servicing Agreement.
"UCC" means the Uniform Commercial Code, as in effect from time to time in
the relevant jurisdictions.
"Underwriter" means [ ].
"Underwriting Agreements" means the (a) Underwriting Agreement, dated
[ ] among the Underwriter, the Seller and the Purchaser relating to the Class
A Certificates and (b) the Certificate Purchase Agreement, dated [ ] among
the Underwriter, the Seller and the Purchaser relating to the Class B
Certificates.
ARTICLE II
PURCHASE AND SALE OF RECEIVABLES
2.1. Purchase and Sale of Receivables. On the Closing Date, subject to the
terms and conditions of this Agreement, the Seller agrees to sell to the
Purchaser, and the Purchaser agrees to purchase from the Seller, without
recourse (subject to the obligations in this Agreement and the Pooling and
Servicing Agreement), all of the Seller's right, title and interest in, to and
under the Receivables and the other Transferred Property relating thereto. The
conveyance to the Purchaser of the Receivables and other Transferred Property
relating thereto is intended as a sale free and clear of all liens and it is
intended that the Transferred Property and other property of the Purchaser shall
not be part of the Seller's estate in the event of the filing of a bankruptcy
petition by or against the Seller under any bankruptcy law.
(a) Transfer of Receivables. On the Closing Date and simultaneously with
the transactions to be consummated pursuant to the Pooling and Servicing
Agreement, the Seller shall sell, transfer, assign, grant, set over and
otherwise convey to the Purchaser, without recourse (subject to the obligations
herein and in the Pooling and Servicing Agreement), (i) all right, title and
interest of the Seller in and to the Receivables listed in the Schedule of
Receivables and, with respect to Rule of 78's Receivables, all monies due or to
become due thereon after the Cutoff Date (including Scheduled Payments due after
the Cutoff Date (including principal prepayments relating to such Scheduled
Payments) but received by the Seller before the Cutoff Date) and, with respect
to Simple Interest Receivables, all monies received thereunder after the Cutoff
Date and all Liquidation Proceeds and Recoveries received with respect to such
Receivables; (ii) all right, title and interest of the Seller in and to the
security
-3-
interests in the Financed Vehicles granted by Obligors pursuant to the
Receivables and any other interest of the Seller in the Financed Vehicles,
including, without limitation, the certificates of title or, with respect to
Financed Vehicles in the State of Michigan, such other evidence of ownership
with respect to Financed Vehicles; (iii) all right, title and interest of the
Seller in and to any proceeds from claims on any physical damage, credit life
and credit accident and health insurance policies or certificates relating to
the Financed Vehicles or the Obligors thereunder; (iv) all right, title and
interest of the Seller in and to refunds for the costs of extended service
contracts with respect to Financed Vehicles, refunds of unearned premiums with
respect to credit life and credit accident and health insurance policies or
certificates covering an Obligor or Financed Vehicle or his or her obligations
with respect to a Financed Vehicle and any recourse to Dealers for any of the
foregoing; (v) the Receivable File related to each Receivable; and (vi) the
proceeds of any and all of the foregoing (collectively, the "Transferred
Property").
(b) Receivables Purchase Price. In consideration for the Receivables
and other Transferred Property described in Section 2.1(a), the Purchaser shall,
on the Closing Date, pay to the Seller the Receivables Purchase Price. The
Receivables Purchase Price shall be paid by federal wire transfer (same day)
funds.
2.2. The Closing. The sale and purchase of the Receivables shall take place
at a closing (the "Closing") at the offices of Mayer, Brown & Platt, 1675
Broadway, New York, New York 10019 on the Closing Date, simultaneously with the
closings under: (a) the Pooling and Servicing Agreement pursuant to which (i)
the Purchaser will assign all of its right, title and interest in and to the
Receivables and the other Transferred Property to the Trustee for the benefit of
the Certificateholders and (ii) the Trust will issue and deliver to the
Purchaser in exchange for the Transferred Property and related transferred
property the Certificates and (b) the Underwriting Agreements pursuant to which
the Underwriters shall purchase the Class A Certificates and the Class B
Certificates from the Purchaser.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
3.1. Representations and Warranties of the Purchaser. The Purchaser hereby
represents and warrants to the Seller as of the date hereof and as of the
Closing Date:
(a) Organization and Good Standing. The Purchaser has been duly
organized and is validly existing as a corporation in good standing under the
laws of the State of California with power and authority to own its properties
and to conduct its
-4-
business as such properties shall be currently owned and such business is
presently conducted, and had at all relevant times, and shall have,
power, authority and legal right to acquire and own the Receivables.
(b) Due Qualification. The Purchaser is duly qualified to do business
as a foreign corporation in good standing, and has obtained all necessary
licenses and approvals in all jurisdictions in which the ownership or lease of
property or the conduct of its business shall require such qualifications.
(c) Power and Authority. The Purchaser has the power and authority to
execute and deliver this Agreement and to carry out its terms and the execution,
delivery and performance of this Agreement has been duly authorized by the
Purchaser by all necessary corporate action.
(d) Binding Obligation. This Agreement shall constitute a legal, valid
and binding obligation of the Purchaser enforceable in accordance with its
terms.
(e) No Violation. The execution, delivery and performance by the
Purchaser of this Agreement and the consummation of the transactions
contemplated hereby and the fulfillment of the terms hereof do not conflict
with, result in a breach of any of the terms and provisions of, nor constitute
(with or without notice or lapse of time) a default under, the articles of
incorporation or by-laws of the Purchaser, or any indenture, agreement,
mortgage, deed of trust, or other instrument to which the Purchaser is a party
or by which it is bound or to which any of its properties are subject; nor
result in the creation or imposition of any lien upon any of its properties
pursuant to the terms of any indenture, agreement, mortgage, deed of trust, or
other instrument (other than the Pooling and Servicing Agreement); nor violate
any law, order, rule or regulation applicable to the Purchaser of any court or
of any Federal or State regulatory body, administrative agency or other
governmental instrumentality having jurisdiction over the Purchaser or its
properties.
(f) No Proceedings. There are no proceedings or investigations
pending, or to the Purchaser's best knowledge, threatened, before any court,
regulatory body, administrative agency or other governmental instrumentality
having jurisdiction over the Purchaser or its properties: (A) asserting the
invalidity of this Agreement or the Certificates; (B) seeking to prevent the
issuance of the Certificates or the consummation of any of the transactions
contemplated by this Agreement; (C) seeking any determination or ruling that
might materially and adversely affect the performance by the Purchaser of its
obligations under, or the validity or enforceability of, this Agreement or the
Certificates; or (D) relating to Purchaser and which might adversely affect the
Federal or State income, excise, franchise or similar tax attributes of the
Certificates.
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(g) No Consents. No consent, approval, authorization or order of or
declaration or filing with any governmental authority is required to be obtained
by the Purchaser for the issuance or sale of the Certificates or the
consummation of the other transactions contemplated by this Agreement or the
Pooling and Servicing Agreement, except such as have been duly made or obtained.
3.2. Representations and Warranties of the Seller. (a) The Seller hereby
represents and warrants to the Purchaser as of the date hereof and as of the
Closing Date:
(i) Organization and Good Standing. The Seller has been duly organized
and is validly existing as a corporation in good standing under the laws of
the State of California, with power and authority to own its properties and
to conduct its business as such properties shall be currently owned and
such business is presently conducted and had at all relevant times, and
shall have, power, authority and legal right to acquire, own and service
the Receivables.
(ii) Due Qualification. The Seller is duly qualified to do business as
a foreign corporation in good standing, and has obtained all necessary
licenses and approvals in all jurisdictions in which the ownership or lease
of property or the conduct of its business (including the origination and
the servicing of the Receivables as required by the Pooling and Servicing
Agreement) shall require such qualifications.
(iii) Power and Authority. The Seller has the power and authority to
execute and deliver this Agreement and to carry out its terms; the Seller
has full power and authority to sell and assign the property sold and
assigned to the Purchaser and has duly authorized such sale and assignment
to the Purchaser by all necessary corporate action; and the execution,
delivery and performance of this Agreement has been duly authorized by the
Seller by all necessary corporate action.
(iv) Valid Sale; Binding Obligation. This Agreement effects a valid
sale, transfer and assignment of the Receivables and the other Transferred
Property conveyed to the Purchaser pursuant to Section 2.1, enforceable
against creditors of and purchasers from the Seller; and this Agreement
shall constitute a legal, valid and binding obligation of the Seller
enforceable in accordance with its terms.
(v) No Violation. The execution, delivery and performance by the
Seller of this Agreement and the consummation of the transactions
contemplated hereby and the fulfillment of the terms hereof do not conflict
with, result in any breach of any of the terms and provisions of, nor
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constitute (with or without notice or lapse of time) a default under, the
articles of incorporation, as amended, or by-laws of the Seller, or any
indenture, agreement, mortgage, deed of trust, or other instrument to which
the Seller is a party or by which it is bound or to which any of its
properties are subject; nor result in the creation or imposition of any
lien upon any of its properties pursuant to the terms of any such
indenture, agreement, mortgage, deed of trust, or other instrument (other
than this Agreement and the Pooling and Servicing Agreement); nor violate
any law, order, rule or regulation applicable to the Seller of any court or
of any Federal or State regulatory body, administrative agency or other
governmental instrumentality having jurisdiction over the Seller or its
properties.
(vi) No Proceedings. There are no proceedings or investigations
pending, or to the Seller's best knowledge, threatened, before any court,
regulatory body, administrative agency, or other governmental
instrumentality having jurisdiction over the Seller or its properties: (A)
asserting the invalidity of this Agreement or the Certificates; (B) seeking
to prevent the issuance of the Certificates or the consummation of any of
the transactions contemplated by this Agreement; (C) seeking any
determination or ruling that might materially and adversely affect the
performance by the Seller of its obligations under, or the validity or
enforceability of, this Agreement or the Certificates; or (D) relating to
the Seller and which might adversely affect the Federal or State income,
excise, franchise or similar tax attributes of the Certificates.
(vii) No Consents. No consent, approval, authorization or order of or
declaration or filing with any governmental authority is required for the
issuance or sale of the Certificates or the consummation of the other
transactions contemplated by this Agreement or the Pooling and Servicing
Agreement, except such as have been duly made or obtained.
(viii) Financial Condition. The Seller has a positive net worth and is
able to and does pay its liabilities as they mature. The Seller is not in
default under any obligation to pay money to any person except for matters
being disputed in good faith which do not involve an obligation of the
Seller on a promissory note. The Seller will not use the proceeds from the
transactions contemplated by this Agreement to give any preference to any
creditor or class of creditors, and this transaction will not leave the
Seller with remaining assets which are unreasonably small compared to its
ongoing operations.
(ix) Fraudulent Conveyance. The Seller is not selling the Receivables
to the Purchaser with any intent to hinder,
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delay or defraud any of its creditors; the Seller will not be rendered
insolvent as a result of the sale of the Receivables to the Purchaser.
(b) The Seller makes the following representations and warranties as
to the Receivables and the other Transferred Property relating thereto on which
the Purchaser relies in accepting the Receivables and the other Transferred
Property relating thereto. Such representations and warranties speak as of the
execution and delivery of this Agreement, but shall survive the sale, transfer,
and assignment of the Receivables and the other Transferred Property relating
thereto to the Purchaser and the subsequent assignment and transfer pursuant to
the Pooling and Servicing Agreement:
(i) Origination Date. Each Receivable has an origination date on
or after [ ].
(ii) Principal Balance/Number of Contracts. As of the Cutoff
Date, the total aggregate principal balance of the Receivables was $[
]. The Receivables are evidenced by [ ] Contracts.
(iii) Maturity of Receivables. Each Receivable has an original
term to maturity of not less than 24 months and not more than 60
months; the weighted average original term to maturity of the
Receivables is [ ] months as of the Cutoff Date; the remaining term to
maturity of each Receivable was 60 months or less as of the Cutoff
Date; the weighted average remaining term to maturity of the
Receivables was [ ] months as of the Cutoff Date.
(iv) Characteristics of Receivables. (a) Each Receivable (1) has
been originated in the United States of America by a Dealer for the
retail sale of a Financed Vehicle in the ordinary course of such
Dealer's business, has been fully and properly executed by the parties
thereto and has been purchased by the Seller in connection with the
sale of Financed Vehicles by the Dealers, (2) has created a valid,
subsisting, and enforceable first priority security interest in favor
of the Seller in the Financed Vehicle, which security interest has
been assigned by the Seller to the Purchaser, which in turn has
assigned such security interest to the Trustee pursuant to the Pooling
and Servicing Agreement, (3) contains customary and enforceable
provisions such that the rights and remedies of the holder or assignee
thereof shall be adequate for realization against the collateral of
the benefits of the security, (4) provides for level monthly payments
that fully amortize the Amount Financed over the original term (except
for the last payment, which may be different from the level payment)
and yield interest at the Annual Percentage Rate, (5) has an Annual
Percentage Rate of not less than [ %], (6) that is a Rule of 78's
Receivable provides for, in the event that
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such contract is prepaid, a prepayment that fully pays the Principal
Balance and includes a full month's interest, in the month of prepayment,
at the Annual Percentage Rate, (7) is a Rule of 78's Receivable or a Simple
Interest Receivable, and (8) was originated by a Dealer and was sold by the
Dealer without any fraud or misrepresentation on the part of such Dealer.
(b) Approximately [ %] of the aggregate Principal Balance of the
Receivables, constituting [ %] of the number of contracts, as of the Cutoff
Date, represents financing of used automobiles, light trucks, vans or
minivans; the remainder of the Receivables represent financing of new
automobiles, light trucks, vans or minivans; approximately [ %] of the
aggregate Principal Balance of the Receivables as of the Cutoff Date were
originated in the State of California; approximately [ %] of the aggregate
Principal Balance of the Receivables as of the Cutoff Date were originated
under the CPS alpha program; approximately [ %] of the aggregate Principal
Balance of the Receivables as of the Cutoff Date were originated under the
CPS delta program; the remainder of the Receivables were originated under
the CPS standard program; no Receivable shall have a payment that is more
than 30 days overdue as of the Cutoff Date; [ %] of the Receivables are
Rule of 78's Receivables and [ %] of the Receivables are Simple Interest
Receivables; each Receivable shall have a final scheduled payment due no
later than [ ]; each Receivable has an original term to maturity of at
least 24 months and not more than 60 months and a remaining term to
maturity of not less than [ ] months nor greater than 60 months; and each
Receivable was originated on or before the Cutoff Date.
(v) Scheduled Payments. Each Receivable had an original principal
balance of not less than [$ ] nor more than [$ ] and, has an
outstanding principal balance as of the Cutoff Date of not less than [$ ]
and not more than [$ ] and has a first Scheduled Payment due on or
prior to [ ].
(vi) Characteristics of Obligors. As of the date of each Obligor's
application for the loan from which the related Receivable arises, each
Obligor on any Receivable (a) did not have any material past due credit
obligations or any personal or real property repossessed or wages garnished
within one year prior to the date of such application, unless such amounts
have been repaid or discharged through bankruptcy, (b) was not the subject
of any Federal, State or other bankruptcy, insolvency or similar proceeding
pending on the date of application that is not discharged, (c) had not been
the subject of more than one Federal, State or other bankruptcy, insolvency
or similar proceeding, and (d) was domiciled in the United States.
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(vii) Origination of Receivables. Based on the billing address of the
Obligors and the Principal Balances as of the Cutoff Date, approximately
[ %] of the Receivables were originated in California, approximately [ %]
of the Receivables were originated in Florida, approximately [ %] of the
Receivables were originated in Pennsylvania, approximately [ %] of the
Receivables were originated in Texas and the remaining [ %] of the
Receivables were originated in all other states.
(viii) Post-Office Box. On or prior to the next billing period after
the Cutoff Date, the Seller will notify each Obligor to make payments with
respect to its respective Receivables after the Cutoff Date directly to the
Post- Office Box, and will provide each Obligor with a monthly statement in
order to enable such Obligors to make payments directly to the Post-Office
Box.
(ix) Location of Receivable Files. A complete Receivable File with
respect to each Receivable has been or prior to the Closing Date will be
delivered to the Trustee at the location listed in Schedule B to the
Pooling and Servicing Agreement.
(x) Schedule of Receivables; Selection Procedures. The information
with respect to the Receivables set forth in the Schedule of Receivables is
true and correct in all material respects as of the close of business on
the Cutoff Date, and no selection procedures adverse to the
Certificateholders have been utilized in selecting the Receivables.
(xi) Compliance with Law. Each Receivable, the sale of the Financed
Vehicle and the sale of any physical damage, credit life and credit
accident and health insurance and any extended service contracts complied
at the time the related Receivable was originated or made and at the
execution of this Agreement complies in all material respects with all
requirements of applicable Federal, State and local laws, and regulations
thereunder including, without limitation, usury laws, the Federal
Truth-in-Lending Act, the Equal Credit Opportunity Act, the Fair Credit
Reporting Act, the Fair Debt Collection Practices Act, the Federal Trade
Commission Act, the Magnuson-Moss Warranty Act, the Federal Reserve Board's
Regulations B and Z, the Soldiers' and Sailors' Civil Relief Act of 1940,
the Texas Consumer Credit Code, the California Automobile Sales Finance
Act, and state adaptations of the National Consumer Act and of the Uniform
Consumer Credit Code, and other consumer credit laws and equal credit
opportunity and disclosure laws.
(xii) Binding Obligation. Each Receivable represents the genuine,
legal, valid and binding payment
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obligation in writing of the Obligor, enforceable by the holder thereof in
accordance with its terms.
(xiii) No Government Obligor. None of the Receivables are due from the
United States of America or any State or from any agency, department, or
instrumentality of the United States of America or any State.
(xiv) Security Interest in Financed Vehicle. Immediately prior to the
sale, assignment, and transfer thereof, each Receivable shall be secured by
a validly perfected first security interest in the Financed Vehicle in
favor of the Seller as secured party, and such security interest is prior
to all other liens upon and security interests in such Financed Vehicle
which now exist or may hereafter arise or be created (except, as to
priority, for any tax liens or mechanics' liens which may arise after the
Closing Date).
(xv) Receivables in Force. No Receivable has been satisfied,
subordinated or rescinded, nor has any Financed Vehicle been released from
the lien granted by the related Receivable in whole or in part.
(xvi) No Waiver. No provision of a Receivable has been waived.
(xvii) No Amendments. No Receivable has been amended, except as such
Receivable may have been amended to grant extensions which shall not have
numbered more than (a) one extension of one calendar month in any calendar
year or (b) three such extensions in the aggregate.
(xviii) No Defenses. As of the Closing Date, no right of rescission,
setoff, counterclaim or defense exists or has been asserted or threatened
with respect to any Receivable. The operation of the terms of any
Receivable or the exercise of any right thereunder will not render such
Receivable unenforceable in whole or in part or subject to any such right
of rescission, setoff, counterclaim, or defense.
(xix) No Liens. As of the Cutoff Date, there are no liens or claims
existing or which have been filed for work, labor, storage or materials
relating to a Financed Vehicle that shall be liens prior to, or equal or
coordinate with, the security interest in the Financed Vehicle granted by
the Receivable.
(xx) No Default; Repossession. Except for payment delinquencies
continuing for a period of not more than thirty days as of the Cutoff Date,
no default, breach, violation or event permitting acceleration under the
terms of any Receivable has occurred; and no continuing condition that with
notice or the lapse of time would constitute a default, breach, violation,
or event permitting acceleration under the terms of any Receivable has
arisen; and the Seller shall not waive and has not waived any of the
foregoing; and no Financed Vehicle shall have been repossessed as of the
Cutoff Date.
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(xxi) Insurance; Other. (A) Each Obligor has obtained insurance
covering the Financed Vehicle as of the execution of the Receivable
insuring against loss and damage due to fire, theft, transportation,
collision and other risks generally covered by comprehensive and collision
coverage and that each Receivable requires the Obligor to obtain and
maintain such insurance naming the Seller and its successors and assigns as
an additional insured, (B) each Receivable that finances the cost of
premiums for credit life and credit accident or health insurance is covered
by an insurance policy and certificate of insurance naming the Seller as
policyholder (creditor) under each such insurance policy and certificate of
insurance and (C) as to each Receivable that finances the cost of an
extended service contract, the respective Financed Vehicle which secures
the Receivable is covered by an extended service contract.
(xxii) Title. It is the intention of the Seller that the transfer and
assignment herein contemplated constitute a sale of the Receivables from
the Seller to the Purchaser and that the beneficial interest in and title
to such Receivables not be part of the debtor's estate in the event of the
filing of a bankruptcy petition by or against the Seller under any
bankruptcy law. No Receivable has been sold, transferred, assigned, or
pledged by the Seller to any Person other than the Purchaser or any such
pledge has been released on or prior to the Closing Date. Immediately prior
to the transfer and assignment herein contemplated, the Seller had good and
marketable title to each Receivable, and was the sole owner thereof, free
and clear of all liens, claims, encumbrances, security interests, and
rights of others and, immediately upon the transfer thereof, the Purchaser
shall have good and marketable title to each such Receivable, and will be
the sole owner thereof, free and clear of all liens, encumbrances, security
interests, and rights of others, and the transfer has been perfected under
the UCC.
(xxiii) Lawful Assignment. No Receivable has been originated in, or is
subject to the laws of, any jurisdiction under which the sale, transfer,
and assignment of such Receivable under this Agreement shall be unlawful,
void, or voidable. The Seller has not entered into any agreement with any
account debtor that prohibits, restricts or conditions the assignment of
any portion of the Receivables.
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(xxiv) All Filings Made. All filings (including, without limitation,
UCC filings) necessary in any jurisdiction to give the Purchaser a first
priority perfected ownership interest in the Receivables have been made.
(xxv) Receivable File; One Original. The Seller has delivered to the
Trustee a complete Receivable File with respect to each Receivable. There
is only one original executed copy of each Receivable.
(xxvi) Chattel Paper. Each Receivable constitutes "chattel paper"
under the UCC.
(xxvii) Valid and Binding Obligation of Obligor. Each Receivable is
the legal, valid and binding obligation of the Obligor thereunder and is
enforceable in accordance with its terms, except only as such enforcement
may be limited by bankruptcy, insolvency or similar laws affecting the
enforcement of creditors' rights generally, and all parties to such
contract had full legal capacity to execute and deliver such contract and
all other documents related thereto and to grant the security interest
purported to be granted thereby; the terms of such Receivable have not been
waived or modified in any respect.
(xxviii) Tax Liens. As of the Cutoff Date, there is no lien against
the related Financed Vehicle for delinquent taxes.
(xxix) Title Documents. (A) If the Receivable was originated in a
State in which notation of security interest on the title document of the
related Financed Vehicle is required or permitted to perfect such security
interest, the title document for such Receivable shows, or if a new or
replacement title document is being applied for with respect to such
Financed Vehicle, the title document will be received within 180 days and
will show, the Seller named as the original secured party under the related
Receivable as the holder of a first priority security interest in such
Financed Vehicle and (B) if the Receivable was originated in a State in
which the filing of a financing statement under the UCC is required to
perfect a security interest in motor vehicles, such filings or recordings
have been duly made and show the Seller named as the original secured party
under the related Receivable, and in either case, the Trustee has the same
rights as such secured party has or would have (if such secured party were
still the owner of the Receivable) against all parties claiming an interest
in such Financed Vehicle. With respect to each Receivable for which the
title document of the related Financed Vehicle has not yet been returned
from the Registrar of Titles, the Seller has received written evidence from
the related Dealer that such
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title document showing the Seller as first lienholder has been applied for.
(xxx) Casualty. No Financed Vehicle related to a Receivable has
suffered a Casualty.
(xxxi) Obligation to Dealers or Others. The Purchaser and its
assignees will assume no obligation to Dealers or other originators or
holders of the Receivables (including, but not limited to under dealer
reserves) as a result of its purchase of the Receivables.
(xxxii) Full Amount Advanced. The full amount of each Receivable has
been advanced to each Obligor, and there are no requirements for future
advances thereunder. The Obligor with respect to the Receivable does not
have any option under the Receivable to borrow from any person additional
funds secured by the Financed Vehicle.
(c) The representations and warranties contained in this Agreement
shall not be construed as a warranty or guaranty by the Seller as to the future
payments by any Obligor. The sale of the Receivables pursuant to this Agreement
shall be "without recourse" except for the representations, warranties and
covenants made by the Seller in this Agreement or the Pooling and Servicing
Agreement.
ARTICLE IV
CONDITIONS
4.1. Conditions to Obligation of the Purchaser. The obligation of the
Purchaser to purchase the Receivables is subject to the satisfaction of the
following conditions:
(a) Representations and Warranties True. The representations and
warranties of the Seller hereunder shall be true and correct on the Closing Date
with the same effect as if then made, and the Seller shall have performed all
obligations to be performed by it hereunder on or prior to the Closing Date.
(b) Computer Files Marked. The Seller shall, at its own expense, on or
prior to the Closing Date, indicate in its computer files that the Receivables
have been sold to the Purchaser pursuant to this Agreement and shall deliver to
the Purchaser the Schedule of Receivables certified by the Chairman, the
President, the Vice President or the Treasurer of the Seller to be true, correct
and complete.
(c) Receivable Files Delivered. The Seller shall, at its own expense,
deliver the Receivable Files to the Trustee at the offices specified in Schedule
B to the Pooling and Servicing Agreement on or prior to the Closing Date.
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(d) Documents to be delivered by the Seller at the Closing.
(i) The Assignment. At the Closing, the Seller will execute and
deliver the Assignment. The Assignment shall be substantially in the form
of Exhibit A hereto.
(ii) Evidence of UCC-1 Filing. On or prior to the Closing Date,
the Seller shall record and file, at its own expense, a UCC-1 financing
statement in each jurisdiction in which required by applicable law,
executed by the Seller, as seller or debtor, and naming the Purchaser, as
purchaser or secured party, naming the Receivables and the other
Transferred Property conveyed hereafter as collateral, meeting the
requirements of the laws of each such jurisdiction and in such manner as is
necessary to perfect the sale, transfer, assignment and conveyance of such
Receivables to the Purchaser. The Seller shall deliver a file-stamped copy,
or other evidence satisfactory to the Purchaser of such filing, to the
Purchaser on or prior to the Closing Date.
(iii) Evidence of UCC-2 Filing. On or prior to the Closing Date,
the Seller shall cause to be recorded and filed, at its own expense, a
UCC-2 termination statement executed by General Electric Capital
Corporation ("GECC") in each jurisdiction in which required by applicable
law, meeting the requirements of the laws of each such jurisdiction and in
such manner as is necessary to release GECC's interest in the Receivables,
including without limitation, the security interests in the Financed
Vehicles securing the Receivables and any proceeds of such security
interests or the Receivables. The Seller shall deliver a file-stamped copy,
or other evidence satisfactory to the Purchaser of such filing, to the
Purchaser on or prior to the Closing Date.
(iv) Other Documents. On or prior to the Closing Date, the Seller
shall deliver such other documents as the Purchaser may reasonably request.
(e) Other Transactions. The transactions contemplated by the Pooling
and Servicing Agreement and the Underwriting Agreements shall be
consummated on the Closing Date.
4.2. Conditions to Obligation of the Seller. The obligation of the
Seller to sell the Receivables to the Purchaser is subject to the
satisfaction of the following conditions:
(a) Representations and Warranties True. The representations and
warranties of the Purchaser hereunder shall be true and correct on the Closing
Date with the same effect as if then made, and the Seller shall have performed
all obligations to be performed by it hereunder on or prior to the Closing Date.
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(b) Receivables Purchase Price. At the Closing Date, the Purchaser
will deliver to the Seller the Receivables Purchase Price as provided in Section
2.1(b). The Seller hereby directs the Purchaser to wire [$ ] the Receivables
Purchase Price to [Bank of America, ABA: 121000358, Account #1458425131,]
Consumer Portfolio Services, Inc. pursuant to wire instructions to be delivered
to the Purchaser on or prior to the Closing Date.
ARTICLE V
COVENANTS OF THE SELLER
The Seller agrees with the Purchaser as follows; provided, however,
that to the extent that any provision of this ARTICLE V conflicts with any
provision of the Pooling and Servicing Agreement, the Pooling and Servicing
Agreement shall govern:
5.1. Protection of Right, Title and Interest.
(a) Filings. The Seller shall cause all financing statements and
continuation statements and any other necessary documents covering the right,
title and interest of the Purchaser in and to the Receivables and the other
Transferred Property to be promptly filed, and at all times to be kept recorded,
registered and filed, all in such manner and in such places as may be required
by law fully to preserve and protect the right, title and interest of the
Purchaser hereunder to the Receivables and the other Transferred Property. The
Seller shall deliver to the Purchaser file stamped copies of, or filing receipts
for, any document recorded, registered or filed as provided above, as soon as
available following such recordation, registration or filing. The Purchaser
shall cooperate fully with the Seller in connection with the obligations set
forth above and will execute any and all documents reasonably required to
fulfill the intent of this Section 5.1(a). In the event the Seller fails to
perform its obligations under this subsection, the Purchaser or the Trustee may
do so at the expense of the Seller.
(b) Name and Other Changes. At least 60 days prior to the date the
Seller makes any change in its name, identity or corporate structure which would
make any financing statement or continuation statement filed in accordance with
paragraph (a) above seriously misleading within the applicable provisions of the
UCC or any title statute, the Seller shall give the Trustee, the [Credit
Enhancer] (so long as a [Credit Enhancer] Default shall not have occurred and be
continuing) and the Purchaser written notice of any such change and no later
than five days after the effective date thereof, shall file appropriate
amendments to all previously filed financing statements or continuation
statements. At least 60 days prior to the date of any relocation of its
principal executive office, the Seller shall give the Trustee, the [Credit
Enhancer] (so long as a [Credit Enhancer] Default shall not have occurred and be
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continuing) and the Purchaser written notice thereof if, as a result of such
relocation, the applicable provisions of the UCC would require the filing of any
amendment of any previously filed financing or continuation statement or of any
new financing statement and the Seller shall within five days after the
effective date thereof, file any such amendment or new financing statement. The
Seller shall at all times maintain each office from which it shall service
Receivables, and its principal executive office, within the United States of
America.
(c) Accounts and Records. The Seller 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).
(d) Maintenance of Computer Systems. The Seller shall maintain its
computer systems so that, from and after the time of sale hereunder of the
Receivables to the Purchaser, the Seller's master computer records (including
any back-up archives) that refer to a Receivable shall indicate clearly the
interest of the Purchaser in such Receivable and that such Receivable is owned
by the Purchaser. Indication of the Purchaser's ownership of a Receivable shall
be deleted from or modified on the Seller's computer systems when, and only
when, the Receivable shall have been paid in full or repurchased.
(e) Sale of Other Receivables. If at any time the Seller shall propose
to sell, grant a security interest in, or otherwise transfer any interest in any
automobile or light-duty truck receivables (other than the Receivables) to any
prospective purchaser, lender, or other transferee, the Seller shall give to
such prospective purchaser, lender, or other transferee computer tapes, records,
or print-outs (including any restored from back-up archives) that, if they shall
refer in any manner whatsoever to any Receivable, shall indicate clearly that
such Receivable has been sold and is owned by the Purchaser unless such
Receivable has been paid in full or repurchased.
(f) Access to Records. The Seller shall permit the Purchaser and its
agents at any time during normal business hours to inspect, audit, and make
copies of and abstracts from the Seller's records regarding any Receivable.
(g) List of Receivables. Upon request, the Seller shall furnish to the
Purchaser, within five Business Days, a list of all Receivables (by contract
number and name of Obligor) then owned by the Purchaser, together with a
reconciliation of such list to the Schedule of Receivables.
5.2. Other Liens or Interests. Except for the conveyances hereunder
and pursuant to the Pooling and Servicing Agreement, the Seller will not sell,
pledge, assign or transfer to any other Person, or grant, create, incur, assume
or suffer to exist any
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lien on any interest therein, and the Seller shall defend the right, title,
and interest of the Purchaser in, to and under such Receivables against all
claims of third parties claiming through or under the Seller; provided, however,
sthat the Seller's obligations under this Section 5.2
shall terminate upon the termination of the Trust pursuant to the Pooling and
Servicing Agreement.
5.3. Chief Executive Office. During the term of the Receivables, the
Seller will maintain its chief executive office in one of the United States,
except Louisiana or Vermont.
5.4. Costs and Expenses. The Seller agrees to pay all reasonable costs
and disbursements in connection with the perfection, as against all third
parties, of the Purchaser's right, title and interest in and to the Receivables.
5.5. Delivery of Receivable Files. On or prior to the Closing Date,
the Seller shall deliver the Receivable Files to the Trustee at the location
specified in Schedule B to the Pooling and Servicing Agreement. The Seller shall
have until the last day of the second Collection Period following receipt from
the Trustee of notification, pursuant to Section 2.8 of the Pooling and
Servicing Agreement, that there has been a failure to deliver a file with
respect to a Receivable or that a file is unrelated to the Receivables
identified in Schedule A to the Pooling and Servicing Agreement or that any of
the documents referred to in Section 2.7 of the Pooling and Servicing Agreement
are not contained in a Receivable File, to deliver such file or any of the
aforementioned documents required to be included in such Receivable File to the
Trustee. Unless such defect with respect to such Receivable File shall have been
cured by the last day of the second Collection Period following discovery
thereof by the Trustee, the Seller hereby agrees to repurchase any such
Receivable from the Trust as of such last day. In consideration of the purchase
of the Receivable, the Seller shall remit the Purchase Amount in the manner
specified in Section 4.5 of the Pooling and Servicing Agreement. The sole remedy
hereunder of the Trustee, the Trust or the Certificateholders with respect to a
breach of this Section 5.5, shall be to require the Seller to repurchase the
Receivable pursuant to this Section 5.5. Upon receipt of the Purchase Amount,
the Trustee shall release to the Seller or its designee the related Receivable
File and shall execute and deliver all instruments of transfer or assignment,
without recourse, as are prepared by the Seller and delivered to the Trustee and
are necessary to vest in the Seller or such designee title to the Receivable.
5.6. Indemnification. (a) The Seller shall indemnify the Purchaser for
any liability as a result of the failure of a Receivable to be originated in
compliance with all requirements of law and for any breach of any of its
representations and warranties contained herein.
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(b) The Seller shall defend, indemnify, and hold harmless the
Purchaser from and against any and all costs, expenses, losses, damages, claims,
and liabilities, arising out of or resulting from the use, ownership, or
operation by the Seller or any Affiliate thereof of a Financed Vehicle.
(c) The Seller shall defend, indemnify, and hold harmless the
Purchaser from and against any and all taxes, except for taxes on the net income
of the Purchaser, that may at any time be asserted against the Purchaser with
respect to the transactions contemplated herein, including, without limitation,
any sales, gross receipts, general corporation, tangible personal property,
privilege, or license taxes and costs and expenses in defending against the
same.
(d) The Seller shall defend, indemnify, and hold harmless the
Purchaser from and against any and all costs, expenses, losses, damages, claims
and liabilities to the extent that such cost, expense, loss, damage, claim or
liability arose out of, or was imposed upon the Purchaser through, the
negligence, willful misfeasance, or bad faith of the Seller in the performance
of its duties under the Agreement, or by reason of reckless disregard of the
Seller's obligations and duties under the Agreement.
(e) The Seller shall defend, indemnify, and hold harmless the
Purchaser from and against all costs, expenses, losses, damages, claims and
liabilities arising out of or incurred in connection with the acceptance or
performance of the Seller's trusts and duties as Servicer under the Pooling and
Servicing Agreement, except to the extent that such cost, expense, loss, damage,
claim or liability shall be due to the willful misfeasance, bad faith, or
negligence (except for errors in judgment) of the Purchaser.
Indemnification under this Section shall include reasonable fees and
expenses of litigation and shall survive termination of the Trust. These
indemnity obligations shall be in addition to any obligation that the Seller may
otherwise have.
5.7. Sale. The Seller agrees to treat this conveyance for all purposes
(including without limitation tax and financial accounting purposes) as a sale
on all relevant books, records, tax returns, financial statements and other
applicable documents.
5.8. Non-Petition. In the event of any breach of a representation and
warranty made by the Purchaser hereunder, the Seller covenants and agrees that
it will not take any action to pursue any remedy that it may have hereunder, in
law, in equity or otherwise, until a year and a day have passed since the date
on which all certificates issued by the Trust or a similar trust formed by the
Purchaser have been paid in full. The Purchaser and the Seller agree that
damages will not be an adequate remedy for such breach and that this covenant
may be specifically
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enforced by the Purchaser or by the Trustee on behalf of the
Trust.
ARTICLE VI
MISCELLANEOUS PROVISIONS
6.1. Obligations of Seller. The obligations of the Seller under this
Agreement shall not be affected by reason of any invalidity, illegality or
irregularity of any Receivable.
6.2. Repurchase Events. The Seller hereby covenants and agrees with the
Purchaser for the benefit of the Purchaser, the Trustee, the [Credit Enhancer]
and the Certificateholders, that (i) the occurrence of a breach of any of the
Seller's representations and warranties contained in Section 3.2(b) hereof
(without regard to any limitations regarding the Seller's knowledge) and (ii)
the failure of the Seller to timely comply with its obligations pursuant to
Section 5.5 hereof, shall constitute events obligating the Seller to repurchase
the affected Receivables hereunder ("Repurchase Events"), at the Purchase Amount
from the Trust. Unless the breach of any of the Seller's representations and
warranties shall have been cured by the last day of the second Collection Period
following the discovery thereof by or notice to the Purchaser and the Seller of
such breach, the Seller shall repurchase any Receivable if such Receivable is
materially and adversely affected by the breach as of the last day of such
second Collection Period (or, at the Seller's option, the last day of the first
Collection Period following the discovery) and, in the event that the breach
relates to a characteristic of the Receivables in the aggregate, and if the
Trust is materially and adversely affected by such breach, unless the breach
shall have been cured by such second Collection Period, the Seller shall
purchase such aggregate Principal Balance of Receivables, such that following
such purchase such representation shall be true and correct with respect to the
remainder of the Receivables in the aggregate. The provisions of this Section
6.2 are intended to grant the Trustee a direct right against the Seller to
demand performance hereunder, and in connection therewith the Seller waives any
requirement of prior demand against the Purchaser and waives any defaults it
would have against the Purchaser with respect to such repurchase obligation. Any
such purchase shall take place in the manner specified in Section 4.5 of the
Pooling and Servicing Agreement. The sole remedy hereunder of the
Certificateholders, the Trust, the [Credit Enhancer], the Trustee or the
Purchaser against the Seller with respect to any Repurchase Event shall be to
enforce the Seller's obligation to repurchase such Receivables pursuant to this
Agreement; provided, however, that the Seller shall indemnify the Trustee, the
[Credit Enhancer], the Trust and the Certificateholders against all costs,
expenses, losses, damages, claims and liabilities, including reasonable fees and
expenses of counsel, which may be asserted against or incurred by
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any of them, as a result of third party claims arising out of the events or
facts giving rise to such breach. Upon receipt of the Purchase Amount, the
Purchaser shall cause the Trustee to release the related Receivables File to the
Seller and to execute and deliver all instruments of transfer or assignment,
without recourse, as are necessary to vest in the Seller title to the
Receivable. Notwithstanding the foregoing, if it is determined that consummation
of the transactions contemplated by the Pooling and Servicing Agreement and the
other transaction documents referenced in such Agreement, servicing and
operation of the Trust pursuant to such Agreement and such other documents, or
the ownership of a Certificate by a Holder constitutes a violation of the
prohibited transaction rules of the Employee Retirement Income Security Act of
1974, as amended ("ERISA"), or the Internal Revenue Code of 1986, as amended
("Code") for which no statutory exception or administrative exemption applies,
such violation shall not be treated as a Repurchase Event.
6.3. Seller's Assignment of Purchased Receivables. With respect to all
Receivables repurchased by the Seller pursuant to this Agreement, the Purchaser
shall assign, without recourse except as provided herein, representation or
warranty, to the Seller all the Purchaser's right, title and interest in and to
such Receivables, and all security and documents relating thereto.
6.4. Conveyance as Sale of Receivables Not Financing. The parties hereto
intend that the conveyance hereunder be a sale of the Receivables and the other
Transferred Property from the Seller to the Purchaser and not a financing
secured by such assets; and the beneficial interest in and title to the
Receivables and the other Transferred Property shall not be part of the Seller's
estate in the event of the filing of a bankruptcy petition by or against the
Seller under any bankruptcy law. In the event that any conveyance hereunder is
for any reason not considered a sale, the parties intend that this Agreement
constitute a security agreement under the UCC (as defined in the UCC as in
effect in the State of California) and applicable law, and the Seller hereby
grants to the Purchaser a first priority perfected security interest in, to and
under the Receivables and the other Transferred Property being delivered to the
Purchaser on the Closing Date, and other property conveyed hereunder and all
proceeds of any of the foregoing for the purpose of securing payment and
performance of the Certificates and the repayment of amounts owed to the
Purchaser from the Seller.
6.5. Trust. The Seller acknowledges that the Purchaser will, pursuant to
the Pooling and Servicing Agreement, sell the Receivables to the Trust and
assign its rights under this Agreement to the Trustee for the benefit of the
Certificateholders, and that the representations and warranties contained in
this Agreement and the rights of the Purchaser under this Agreement, including
under Sections 6.2 and 6.3 hereof are intended to benefit such Trust and the
Certificateholders. The
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Seller also acknowledges that the Trustee on behalf of the Certificateholders as
assignee of the Purchaser's rights hereunder maydirectly enforce, without making
any prior demand on the Purchaser, all the rights of the Purchaser hereunder
including the rights under Section 6.2 and 6.3 hereof. The Seller hereby
consents to such sale and assignment.
6.6. Amendment. This Agreement may be amended from time to time by a
written amendment duly executed and delivered by the Seller and the Purchaser
with the consent of the [Credit Enhancer]; provided, however, that (i) any such
amendment that materially adversely affects the rights of the Class A
Certificateholders under the Pooling and Servicing Agreement must be consented
to by the holders of Class A Certificates representing [66-2/3%] or more of the
Class A Certificate Balance and (ii) any such amendment that materially
adversely affects the rights of the Class B Certificateholders under the Pooling
and Servicing Agreement must be consented to by the holders of Class B
Certificates representing [66-2/3%] or more of the Class B Certificate Balance.
6.7. Accountants' Letters. (a) [Accountants] will review the
characteristics of the Receivables and will compare those characteristics to the
information with respect to the Receivables contained in the Preliminary
Memorandum and the Final Memorandum; (b) The Seller will cooperate with the
Purchaser and [accountants] in making available all information and taking all
steps reasonably necessary to permit such accountants to complete the review set
forth in Section 6.7(a) above and to deliver the letters required of them under
the Underwriting Agreements; and (c) [accountants] will deliver to the Purchaser
a letter, dated the Closing Date, in the form previously agreed to by the Seller
and the Purchaser, with respect to the financial and statistical information
contained in the Offering Documents under the captions "CPS's Automobile
Contract Portfolio" and "The Receivables Pool", certain information relating to
the Receivables on magnetic tape obtained from the Seller and the Purchaser and
with respect to such other information as may be agreed in the form of letter.
6.8. Waivers. No failure or delay on the part of the Purchaser in
exercising any power, right or remedy under this Agreement or the Assignment
shall operate as a waiver thereof, nor shall any single or partial exercise of
any such power, right or remedy preclude any other or further exercise thereof
or the exercise of any other power, right or remedy.
6.9. Notices. All communications and notices pursuant hereto to either
party shall be in writing or by telegraph or telex and addressed or delivered to
it at its address (or in case of telex, at its telex number at such address)
shown in the opening portion of this Agreement or at such other address as may
be designated by it by notice to the other party and, if mailed
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or sent by telegraph or telex, shall be deemed given when mailed, communicated
to the telegraph office or transmitted by telex.
6.10. Costs and Expenses. The Seller will pay all expenses incident to the
performance of its obligations under this Agreement and the Seller agrees to pay
all reasonable out-of-pocket costs and expenses of the Purchaser, excluding fees
and expenses of counsel, in connection with the perfection as against third
parties of the Purchaser's right, title and interest in and to the Receivables
and security interests in the Financed Vehicles and the enforcement of any
obligation of the Seller hereunder.
6.11. Representations of the Seller and the Purchaser. The respective
agreements, representations, warranties and other statements by the Seller and
the Purchaser set forth in or made pursuant to this Agreement shall remain in
full force and effect and will survive the closing under Section 2.2 hereof.
6.12. Confidential Information. The Purchaser agrees that it will neither
use nor disclose to any person the names and addresses of the Obligors, except
in connection with the enforcement of the Purchaser's rights hereunder, under
the Receivables, under the Pooling and Servicing Agreement or as required by
law.
6.13. Headings and Cross-References. The various headings in this Agreement
are included for convenience only and shall not affect the meaning or
interpretation of any provision of this Agreement. References in this Agreement
to Section names or numbers are to such Sections of this Agreement.
6.14. Third Party Beneficiaries. The parties hereto hereby expressly agree
that each of the Trustee for the benefit of the Certificateholders and the
[Credit Enhancer] shall be third party beneficiaries with respect to this
Agreement, provided, however, that no third party other than the Trustee for the
benefit of the Certificateholders and the [Credit Enhancer] shall be deemed a
third-party beneficiary of this Agreement.
6.15. Governing Law. THIS AGREEMENT AND THE ASSIGNMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK
WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.
6.16. Counterparts. This Agreement may be executed in two or more
counterparts and by different parties on separate counterparts, each of which
shall be an original, but all of which together shall constitute one and the
same instrument.
[Rest of page left intentionally blank.]
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IN WITNESS WHEREOF, the parties hereby have caused this Agreement to be
executed by their respective officers thereunto duly authorized as of the date
and year first above written.
CPS RECEIVABLES CORP.
By:
----------------------------------
Name:
Title:
CONSUMER PORTFOLIO SERVICES, INC.
By:
----------------------------------
Name:
Title:
-24-
Exhibit A
ASSIGNMENT
For value received, in accordance with the Purchase Agreement dated
as of [ ] between the undersigned and CPS Receivables Corp. (the "Purchaser")
(the "Purchase Agreement"), the undersigned does hereby sell, transfer, assign
and otherwise convey unto the Purchaser, without recourse (subject to the
obligations in the Purchase Agreement and the Pooling and Servicing Agreement),
(i) all right, title and interest of the Seller in and to the Receivables listed
in the Schedule of Receivables and, with respect to Receivables which are Rule
of 78's Receivables, all monies due or to become due thereon after the Cutoff
Date (including Scheduled Payments due after the Cutoff Date (including
principal prepayments relating to such Scheduled Payments) but received by the
Seller before the Cutoff Date) and, with respect to Receivables which are Simple
Interest Receivables, all monies received thereunder after the Cutoff Date and
all Liquidation Proceeds and Recoveries received with respect to such
Receivables; (ii) all right, title and interest of the Seller in and to the
security interests in the Financed Vehicles granted by Obligors pursuant to the
Receivables and any other interest of the Seller in the Financed Vehicles,
including, without limitation, the certificates of title or, with respect to
Financed Vehicles in the State of Michigan, such other evidence of ownership
with respect to Financed Vehicles; (iii) all right, title and interest of the
Seller in and to any proceeds from claims on any physical damage, credit life
and credit accident and health insurance policies or certificates relating to
the Financed Vehicles related to the Receivables or the Obligors thereunder;
(iv) all right, title and interest of the Seller in and to refunds for the costs
of extended service contracts with respect to Financed Vehicles related to
Seller Financed Vehicles, refunds of unearned premiums with respect to credit
life and credit accident and health insurance policies or certificates covering
an Obligor under a Receivable or Financed Vehicle or his or her obligations with
respect to a Financed Vehicle related to a Receivable and any recourse to
Dealers for any of the foregoing; (v) the Receivable File related to each
Receivable; and (vi) the proceeds of any and all of the foregoing. The foregoing
sale does not constitute and is not intended to result in any assumption by the
Purchaser of any obligation of the undersigned to the Obligors, insurers or any
other person in connection with the Receivables, the Receivable Files, any
insurance policies or any agreement or instrument relating to any of them.
This Assignment is made pursuant to and upon the representations,
warranties and agreements on the part of the undersigned contained in the
Purchase Agreement and is to be governed by the Purchase Agreement.
-1-
Capitalized terms used herein and not otherwise defined shall have the
meanings assigned to them in the Purchase Agreement.
THIS ASSIGNMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
INTERNAL LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICTS OF LAWS
PRINCIPLES.
IN WITNESS WHEREOF, the undersigned has caused this Assignment to be duly
executed as of [ ].
CONSUMER PORTFOLIO SERVICES, INC.
By:
----------------------------------
Name:
Title:
-2-
Exhibit B
Schedule of Receivables
[Delivered to the Trustee at Closing]
-1-
EXHIBIT 24.1
CONSUMER PORTFOLIO SERVICES, INC.
Power of Attorney
Each of the undersigned persons, in his or her capacity as an
officer or director, or both, of Consumer Portfolio Services, Inc. (the
"Company") hereby appoints Charles E. Bradley, Jr. and Jeffrey P. Fritz, and
each of them, with full power of substitution and resubstitution and with full
power in each to act without the other, his or her attorney-in-fact and agent
for the following purposes:
1. To sign for him or her, in his or her name and in his or her
capacity as an officer or director, or both, of the Company, a Registration
Statement on Form S-3 and any amendments and post-effective amendments
thereto (collectively, the "Registration Statement"), for the registration
under the Securities Act of 1933, as amended (the "Act"), of asset backed
certificates (the "Certificates") representing undivided interests in a
trust, the property of which will include a pool of motor vehicle retail
installment sale contracts and other assets to be transferred by the
Company to such trust;
2. To file or cause to be filed such Registration Statement with the
Securities and Exchange Commission;
3. To take all such other action as any such attorney-in-fact, or his
or her substitute, may deem necessary or desirable in order to effect and
maintain the registration of the Certificates; and
4. To sign for him or her, in his or her name and in his or her
capacity as an officer or director, or both, of the Company, all such
documents and instruments as any such attorney-in-fact, or his or her
substitute, may deem necessary or advisable in connection with the
registration, qualification or exemption of the Certificates under the
securities laws of any state or other jurisdiction.
-2-
This power of attorney shall be effective as of April 30, 1997
and shall continue in full force and effect until revoked by the undersigned in
a writing filed with the Secretary of the Company.
--------------------------------
Charles E. Bradley, Sr.
/s/ Charles E. Bradley, Jr.
--------------------------------
Charles E. Bradley, Jr.
/s/ William B. Roberts
--------------------------------
William B. Roberts
/s/ John G. Poole
--------------------------------
John G. Poole
/s/ Thomas L. Chrystie
--------------------------------
Thomas L. Chrystie
/s/ Robert A. Simms
--------------------------------
Robert A. Simms
-3-
