Exhibit 10.1

EXECUTION COPY

 

 

 

REGIONAL MANAGEMENT RECEIVABLES, LLC,

as Borrower,

REGIONAL MANAGEMENT CORP.,

as Servicer,

the LENDERS

from time to time parties hereto,

WELLS FARGO BANK, NATIONAL ASSOCIATION,

as Account Bank, Collateral

Custodian and Backup Servicer,

and

WELLS FARGO SECURITIES, LLC,

as Administrative Agent

 

 

AMENDED AND RESTATED

CREDIT AGREEMENT

Dated as of November 21, 2017

 

 

 

 

 

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TABLE OF CONTENTS

 

          Page   ARTICLE ONE    DEFINITIONS; CONSTRUCTION   

Section 1.01.

   Definitions      1  

Section 1.02.

   Accounting Terms and Determinations      29  

Section 1.03.

   Computation of Time Periods      30  

Section 1.04.

   Interpretation      30   ARTICLE TWO    THE LOANS   

Section 2.01.

   The Loans      31  

Section 2.02.

   Funding Mechanics      31  

Section 2.03.

   [Reserved]      32  

Section 2.04.

   [Reserved]      32  

Section 2.05.

   Evidence of the Loans      32  

Section 2.06.

   Optional Principal Repayment      32  

Section 2.07.

   Payments      32  

Section 2.08.

   Settlement Procedures      33  

Section 2.09.

   Mandatory Payments      34  

Section 2.10.

   Payments, Computations, Etc.      34  

Section 2.11.

   Collections and Allocations; Investment of Funds      35  

Section 2.12.

   Fees      36  

Section 2.13.

   Increased Costs; Capital Adequacy; Illegality      36  

Section 2.14.

   Taxes      38  

Section 2.15.

   Sharing of Payments, Etc.      40  

Section 2.16.

   Tax Treatment      41  

Section 2.17.

   The Account Bank      41   ARTICLE THREE    SECURITY   

Section 3.01.

   Collateral      48  

Section 3.02.

   Release of Collateral; No Legal Title      50  

Section 3.03.

   Protection of Security Interest; Administrative Agent, as Attorney-in-Fact   
  50  

Section 3.04.

   Assignment of the Second Tier Purchase Agreement      51  

Section 3.05.

   Waiver of Certain Laws      51  

 

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          Page   ARTICLE FOUR    CONDITIONS OF CLOSING AND THE LOANS   

Section 4.01.

   Conditions of Closing and the Loans      52   ARTICLE FIVE    REPRESENTATIONS
AND WARRANTIES   

Section 5.01.

   Representations and Warranties of the Borrower      55  

Section 5.02.

   Representations and Warranties of the Borrower as to the Receivables      60
 

Section 5.03.

   Representations and Warranties of the Servicer      61  

Section 5.04.

   Representations and Warranties of the Backup Servicer and the Collateral
Custodian      63  

Section 5.05.

   Repurchase of Certain Receivables      64   ARTICLE SIX    COVENANTS   

Section 6.01.

   Affirmative Covenants of the Borrower      66  

Section 6.02.

   Negative Covenants of the Borrower      70  

Section 6.03.

   Affirmative Covenants of the Servicer      76  

Section 6.04.

   Negative Covenants of the Servicer      80   ARTICLE SEVEN    ADMINISTRATION
AND SERVICING OF CONTRACTS   

Section 7.01.

   Designation of Servicing      82  

Section 7.02.

   Servicing Compensation      82  

Section 7.03.

   Duties of the Servicer      82  

Section 7.04.

   Collection of Payments      87  

Section 7.05.

   Payment of Certain Expenses by the Initial Servicer      87  

Section 7.06.

   Reports      87  

Section 7.07.

   Annual Statement as to Compliance      88  

Section 7.08.

   Annual Independent Public Accountant’s Reports      88  

Section 7.09.

   Rights Prior to Assumption of Duties by Successor Servicer      89  

Section 7.10.

   Rights After Assumption of Duties by Successor Servicer; Liability      92  

Section 7.11.

   Limitation on Liability of the Servicer and Others      93  

Section 7.12.

   The Servicer Not to Resign      93  

Section 7.13.

   Servicer Termination Events      93  

Section 7.14.

   Appointment of Successor Servicer      95  

Section 7.15.

   Merger or Consolidation, Assumption of Obligations or Resignation, of the
Servicer      97  

 

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          Page  

Section 7.16.

   Wells Fargo Bank as Successor Servicer      97  

Section 7.17.

   Responsibilities of the Borrower      99  

Section 7.18.

   Servicer Centralization Event      99   ARTICLE EIGHT    THE BACKUP SERVICER
  

Section 8.01.

   Designation of the Backup Servicer      100  

Section 8.02.

   Duties of the Backup Servicer      100  

Section 8.03.

   Backup Servicing Compensation      100  

Section 8.04.

   Backup Servicer Removal      100  

Section 8.05.

   The Backup Servicer Not to Resign      101  

Section 8.06.

   Covenants of the Backup Servicer      101  

Section 8.07.

   Merger of the Backup Servicer      101  

Section 8.08.

   Privilege      101   ARTICLE NINE    THE COLLATERAL CUSTODIAN   

Section 9.01.

   Appointment; Duties of the Collateral Custodian      102  

Section 9.02.

   Compensation and Indemnification of Collateral Custodian      102  

Section 9.03.

   Covenants of the Collateral Custodian      102  

Section 9.04.

   Liability of the Collateral Custodian      103  

Section 9.05.

   Limitation on Liability of the Collateral Custodian and Others      105  

Section 9.06.

   Certain Matters Affecting the Collateral Custodian      105  

Section 9.07.

   Documents Held by the Collateral Custodian; Indication of Borrower Ownership;
Inspection and Release of Receivable Files      107  

Section 9.08.

   Further Agreements      109   ARTICLE TEN    TERMINATION EVENTS   

Section 10.01.

   Termination Events      112  

Section 10.02.

   Actions Upon Declaration or the Automatic Occurrence of the Termination Date
     114  

Section 10.03.

   Exercise of Remedies      116  

Section 10.04.

   Waiver of Certain Laws      116  

Section 10.05.

   Power of Attorney      116  

 

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          Page   ARTICLE ELEVEN    INDEMNIFICATION   

Section 11.01.

   Indemnities by the Borrower      117  

Section 11.02.

   Indemnities by the Servicer      119  

Section 11.03.

   General Indemnity Provisions      120   ARTICLE TWELVE    THE ADMINISTRATIVE
AGENT   

Section 12.01.

   Authorization and Action      121  

Section 12.02.

   Delegation of Duties      121  

Section 12.03.

   Exculpatory Provisions      122  

Section 12.04.

   Reliance      122  

Section 12.05.

   Non-Reliance on Administrative Agent and Other Lenders      123  

Section 12.06.

   Indemnification      123  

Section 12.07.

   Administrative Agent in its Individual Capacity      124  

Section 12.08.

   Assignment      124  

Section 12.09.

   Successor Administrative Agent      124   ARTICLE THIRTEEN    ASSIGNMENTS;
PARTICIPATIONS   

Section 13.01.

   Assignments and Participations      125   ARTICLE FOURTEEN    MUTUAL
COVENANTS REGARDING CONFIDENTIALITY   

Section 14.01.

   Covenants of the Borrower, the Servicer, the Collateral Custodian and the
Backup Servicer      128  

Section 14.02.

   Covenants of the Administrative Agent, the Lenders, the Backup Servicer and
the Collateral Custodian      128   ARTICLE FIFTEEN    MISCELLANEOUS   

Section 15.01.

   Amendments and Waivers      132  

Section 15.02.

   Notices, Etc.      133  

Section 15.03.

   No Waiver, Rights and Remedies      133  

Section 15.04.

   Binding Effect      133  

Section 15.05.

   Term of this Agreement      133  

 

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Section 15.06.

   GOVERNING LAW; CONSENT TO JURISDICTION; WAIVER OF OBJECTION TO VENUE      134
 

Section 15.07.

   WAIVER OF JURY TRIAL      134  

Section 15.08.

   Costs, Expenses and Taxes      134  

Section 15.09.

   No Insolvency Proceedings      135  

Section 15.10.

   Recourse Against Certain Parties      135  

Section 15.11.

   Patriot Act Compliance      136  

Section 15.12.

   Execution in Counterparts; Severability; Integration      136  

Section 15.13.

   Intercreditor Agreement      136  

Section 15.14.

   Multiple Roles      136  

Section 15.15.

   Account Control Agreement      136   SCHEDULES   

Schedule A –

   Notice Information      SA-1  

Schedule B –

   Eligible Receivable Criteria      SB-1  

Schedule C –

   Schedule of Receivables      SC-1  

Schedule D –

   Location of Receivable Files      SD-1  

Schedule E –

   List of Approved Subservicers      SE-1  

Schedule F –

   Representations and Warranties Regarding Security Interests      SF-1  

Schedule G –

   Servicing Centralization Event Changes      SG-1  

Schedule H –

   Locations of Books and Records      SH-1  

Schedule I –

   List of Approved Lienholders      SI-1   EXHIBITS   

Exhibit A –

   [Reserved]   

Exhibit B –

   Form of Assignment and Acceptance      B-1  

Exhibit C –

   Collection Policy      C-1  

Exhibit D-1 –

   Form of Power of Attorney (Borrower)      D-1-1  

Exhibit D-2 –

   Form of Power of Attorney (Servicer)      D-2-1  

Exhibit E –

   Form of Monthly Report      E-1  

Exhibit F –

   Form of Receivable Receipt      F-1  

Exhibit G –

   Form of Release of Documents      G-1  

 

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AMENDED AND RESTATED CREDIT AGREEMENT

This Amended and Restated Credit Agreement, dated as of November 21, 2017 (as
amended, restated, supplemented or otherwise modified from time to time, this
“Agreement”), is among Regional Management Receivables, LLC, a Delaware limited
liability company, as borrower (the “Borrower”), Regional Management Corp., a
Delaware corporation (“Regional Management”), as servicer (the “Servicer”), the
lenders from time to time parties hereto (the “Lenders”), Wells Fargo
Securities, LLC, as administrative agent for the Lenders (the “Administrative
Agent”), and Wells Fargo Bank, National Association, as account bank (in such
capacity, the “Account Bank”), collateral custodian (in such capacity, the
“Collateral Custodian”) and backup servicer (in such capacity, the “Backup
Servicer”).

WITNESSETH:

WHEREAS, the Borrower was formed for the purpose of taking assignments of, and
holding, various assets, including motor vehicle finance contracts, amounts
received on or in respect of such finance contracts and proceeds of the
foregoing;

WHEREAS, pursuant to the Credit Agreement, dated as of December 11, 2015 (the
“Original Warehouse Agreement”), among the parties hereto, the Lenders made a
loan to the Borrower, the proceeds of which were used to finance the purchase
price of certain motor vehicle retail installment contracts;

WHEREAS, the Borrower has requested that the Lenders make an additional loan to
the Borrower, the proceeds of which will be used to finance the purchase price
of certain additional motor vehicle retail installment contracts as described
herein; and

WHEREAS, the parties hereto desire to amend and restate the Original Warehouse
Agreement upon the terms and subject to the conditions set forth herein.

NOW THEREFORE, in consideration of the premises and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:

ARTICLE ONE

DEFINITIONS; CONSTRUCTION

Section 1.01. Definitions. Whenever used herein, unless the context otherwise
requires, the following words and phrases shall have the following meanings:

“Account Bank” means a Qualified Institution approved by the Administrative
Agent that is holding the Accounts, which initially shall be Wells Fargo Bank.

“Account Bank Fee” means $2,000 per month.

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“Account Collateral” means the Accounts, together with all cash, securities,
financial assets (as defined in Section 8-102(a)(9) of the UCC) and investments
and other property from time to time deposited or credited to the Collection
Account and the Reserve Account and all proceeds thereof.

“Account Control Agreement” means the Account Control Agreement relating to the
Accounts, dated as of the Closing Date, among the Borrower, the Servicer, the
Administrative Agent and the Account Bank.

“Account Restructuring Date” means the earliest date on which the following
events have occurred, subject to approval by the Administrative Agent: (i) the
lenders in the Senior Revolver have approved Bank of America and Regional
Management entering into the Security Agreement, the Master Deposit Account
Control Agreement and the Wells Fargo Deposit Account Control Agreement and
amending the Intercreditor Agreement and (ii) the Security Agreement, the Master
Deposit Account Control Agreement and the Wells Fargo Account Control Agreement
and the amendment to the Intercreditor Agreement have been duly executed and
delivered by each of the parties thereto.

“Accounts” mean the Collection Account and the Reserve Account.

“Additional Amount” has the meaning given to such term in Section 2.14(a).

“Additional Deposit Accounts” mean the deposit accounts governed by the Wells
Fargo Deposit Account Control Agreement.

“Administrative Agent” has the meaning given to such term in the Preamble.

“Advisors” means accountants, attorneys, consultants, advisors, credit
enhancers, liquidity providers and Persons similar to the foregoing and the
respective directors, officers, employees and managers of each of the foregoing.

“Affected Party” means any Secured Party or any Affiliate thereof.

“Affiliate” means, with respect to a Person, any other Person controlling,
controlled by or under common control with such Person. For purposes of this
definition, “control” when used with respect to any specified Person means the
power to direct the management and policies of such Person, directly or
indirectly, whether through the ownership of voting securities, by contract or
otherwise; and the terms “controlling” or “controlled” have meanings correlative
to the foregoing.

“Aggregate Unpaids” means, as of any date, an amount equal to the sum of
(without duplication) (i) the Loan Balance, (ii) all accrued but unpaid
Interest, (iii) all amounts due and owing or accrued but unpaid to the Secured
Parties, the Account Bank, the Collateral Custodian and the Backup Servicer and
(iv) all other Obligations owed (whether due or accrued) by the Borrower and the
Servicer under this Agreement and the other Basic Documents.

“Agreement” has the meaning given to such term in the Preamble.

 

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“Amount Financed” means, with respect to a Receivable, the aggregate amount
advanced under the related Contract towards the purchase price of the related
Financed Vehicle and any related costs, including amounts advanced in respect of
accessories, insurance premiums, service and warranty contracts, other items
customarily financed as part of a Contract and related costs.

“Annual Percentage Rate” or “APR” means, with respect to a Receivable, the rate
per annum of finance charges stated in such Receivable as the “annual percentage
rate” (within the meaning of the Federal Truth-in-Lending Act). If, after the
Closing Date, the rate per annum with respect to a Receivable as of the related
Cutoff Date is reduced (i) as a result of an Insolvency Proceeding involving the
related Obligor or (ii) pursuant to the Servicemembers Civil Relief Act or
similar State law, “Annual Percentage Rate” or “APR” shall refer to such reduced
rate.

“Anti-Corruption Laws” means (i) the U.S. Foreign Corrupt Practices Act of 1977,
(ii) the U.K. Bribery Act 2010 and (iii) all laws, rules, and regulations of any
jurisdiction applicable to each of the Borrower, the Servicer and their
respective Affiliates from time to time concerning or relating to bribery or
anti-corruption.

“Anti-Money Laundering Laws” means applicable laws or regulations in any
jurisdiction to which any Regional Management Entity, any of its Subsidiaries or
any of their respective related Related Parties are located or doing business
that relates to money laundering or terrorism financing, any predicate crime to
money laundering or any financial record keeping and reporting requirements
related thereto.

“Applicable Law” means, with respect to any Person, all existing and future
applicable laws, rules, regulations (including proposed, temporary and final
income tax regulations), statutes, treaties, codes, ordinances, permits,
certificates, orders and licenses of and interpretations by any Governmental
Authority (including usury laws, the Dodd-Frank Act, the Federal
Truth-in-Lending Act, Regulations B and Z of the CFPB, the Securities Act and
the Exchange Act), and applicable judgments, decrees, injunctions, writs, orders
or line actions of any court, arbitrator or other administrative, judicial or
quasi-judicial tribunal or agency of competent jurisdiction.

“Approved Lienholder” means any lienholder set forth on Schedule I hereto.

“Assignment and Acceptance” means an assignment and acceptance agreement between
a Lender and an Eligible Assignee, in substantially the form of Exhibit B
hereto.

“Assumption Date” means the date, if any, when the Backup Servicer becomes
Successor Servicer hereunder.

“Authorized Officer” means, with respect to any Person other than a natural
person, any officer of such Person, including any president, vice president,
assistant vice president, treasurer, assistant treasurer, secretary or assistant
secretary or any other officer performing functions similar to those performed
by such officers.

 

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“Available Funds” means, for any Payment Date and the related Collection Period,
the sum of (i) Collections on deposit in the Collection Account, to the extent
received during or in respect of such Collection Period and (ii) any Reserve
Account Withdrawal Amounts.

“Available Funds Shortfall” means, for any Payment Date and the related
Collection Period, the positive difference, if any, of (i) the amount necessary
to make all distributions required to be made pursuant to clauses (i) through
(v) of Section 2.08 over (ii) Collections on deposit in the Collection Account,
to the extent received during or in respect of such Collection Period.

“Backup Servicer” has the meaning given to such term in the Preamble.

“Backup Servicer Termination Notice” has the meaning given to such term in
Section 8.04.

“Backup Servicing Fee” means the fee payable to the Backup Servicer on each
Payment Date in accordance with Section 2.12(b), which fee shall be equal to the
greater of (i) $8,000, and (ii) the product of (a) the Backup Servicing Fee
Rate, (b) the Pool Balance as of the first day of the related Collection Period
and (c) 1/12.

“Backup Servicing Fee Rate” has the meaning given to such term in the Wells
Fargo Fee Letter.

“Bank of America” means Bank of America, N.A.

“Bankruptcy Code” means the United States Bankruptcy Code (Title 11 of the
United States Code).

“Basel II” means the second Basel Accord issued by the Basel Committee on
Banking Supervision.

“Basel III” means the third Basel Accord issued by the Basel Committee on
Banking Supervision.

“Basic Documents” means this Agreement, each First Tier Purchase Agreement, the
Second Tier Purchase Agreement, each Subservicing Agreement, the Fee Letter, the
Account Control Agreement, the Intercreditor Agreement, the Master Deposit
Account Control Agreement, the Wells Fargo Deposit Account Control Agreement,
the Security Agreement, the Wells Fargo Fee Letter and any other document,
certificate, opinion, agreement or writing the execution of which is necessary
or incidental to carrying out the transactions contemplated by this Agreement or
any of the other foregoing documents.

“Benefit Plan” means (i) employee benefit plans (as defined in Section 3(3) of
ERISA) that are subject to Title I of ERISA, (ii) plans described in
Section 4975(e)(1) of the Code, including individual retirement accounts or
Keogh Plans that are not exempt under Section 4975(g) of the Code and (iii) any
entities whose underlying assets include plan assets by reason of a plan’s
investment in such entities.

 

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“Borrower” has the meaning given to such term in the Preamble.

“Borrower Basic Documents” means all Basic Documents to which the Borrower is a
party or by which it is bound.

“Borrower Operating Account” means the account of the Borrower, which is
identified by account number XXXXXXXXXX and ABA number XXXXXXXXXX.

“Breakage Costs” means such amount or amounts as shall compensate any Lender for
any administrative loss, cost or expense (but excluding lost profits) incurred
by such Lender (as reasonably determined by such Lender) as a result of any
prepayment of the Loans (and interest thereon) other than on a Payment Date.

“Business Day” means any day other than a Saturday or a Sunday on which
commercial banking institutions are not required or authorized to be closed in
Greenville, South Carolina, New York, New York, Minneapolis, Minnesota and
Charlotte, North Carolina.

“Certificate of Formation” means the certificate of formation of the Borrower
filed in Delaware, dated as of August 26, 2014.

“Certificate of Title” means, with respect to a Financed Vehicle, (i) the
original certificate of title relating thereto or (ii) if the applicable
Registrar of Titles or Title Intermediary issues a letter or other form of
evidence of lien in lieu of a certificate of title (including electronic
titling), the original lien entry letter or form or copies of correspondence to
such applicable Registrar of Titles or Title Intermediary, and all related
documentation, for issuance of the original lien entry letter or form, which, in
either case, shall name the related Obligor as the owner of such Financed
Vehicle and the related Originator, the Borrower, the Administrative Agent or
any Approved Lienholder, as secured party.

“CFPB” means the Consumer Financial Protection Bureau.

“Change in Control” means the occurrence of any of the following: (i) any Person
or group of Persons (within the meaning of Section 13 or 14 of the Exchange
Act), shall have acquired beneficial ownership (within the meaning of Rule 13d-3
under the Exchange Act), directly or indirectly, of 30% or more of the total
outstanding voting equity interests of Regional Management on a fully-diluted
basis (and taking into account all such equity interests that such Person or
group of Persons has the right to acquire pursuant to any option right) or
(ii) the failure of Regional Management to own, directly or indirectly and free
and clear of Liens, all of the outstanding voting equity (including membership)
interests of the Borrower.

“Closing Date” means December 11, 2015.

“Code” means the Internal Revenue Code of 1986.

“Collateral” has the meaning given to such term in Section 3.01(a).

“Collateral Custodian” has the meaning given to such term in the Preamble.

 

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“Collateral Custodian Fee” means the fee described in the Wells Fargo Fee Letter
payable to the Collateral Custodian on each Payment Date in accordance with
Section 2.12(b).

“Collection Account” means a segregated trust account established or caused to
be established by the Servicer with the Account Bank, for the benefit of the
Secured Parties, into which all Collections shall be deposited.

“Collection Period” means, with respect to any Payment Date, the immediately
preceding calendar month (or, in the case of the first Payment Date, the period
from and including the Initial Cutoff Date through and including the last day of
the calendar month immediately preceding the first Payment Date).

“Collection Policy” means with respect to (i) the initial Servicer and any
Subservicer, the customary servicing practices of Regional Management attached
hereto as Exhibit C and (ii) any Successor Servicer, the customary servicing
practices of such Successor Servicer, in each case as such customary servicing
practices may be changed from time to time pursuant to this Agreement.

“Collections” means, with respect to any Collection Period and the related
Payment Date, (i) all cash collections and other cash proceeds of any
Receivable, Financed Vehicle or any other Collateral received by the Servicer
(including from an Originator, the Borrower or a Subservicer) from or on behalf
of any Obligor in payment of any amounts owed in respect of such Receivable,
including Release Amounts deposited in the Collection Account pursuant to
Sections 5.05 and 7.03(c), Insurance Proceeds, investment earnings in the
Collection Account and the Reserve Account and Liquidation Proceeds, (ii) any
other funds received by the Servicer (including from an Originator, the Borrower
or a Subservicer) with respect to any Receivable (exclusive of ancillary fees
(other than extension fees and late fees) which may be retained by the Servicer
or the related Subservicer), Financed Vehicle or any other Collateral and
(iii) all amounts received as proceeds of the Collateral sold pursuant to
Section 10.02(c); in each case received during or in respect of such Payment
Date and Collection Period.

“Commodity Exchange Act” means the Commodity Exchange Act of 1936.

“Confidential Information” means any information with respect to Regional
Management, the Servicer, the Borrower, the Originators and their respective
businesses and financial information, the Obligors, the Receivables and other
Collateral and includes (i) information transmitted in written, oral, magnetic
or any other medium, (ii) all copies and reproductions, in whole or in part, of
such information and (iii) all summaries, analyses, compilations, studies, notes
or other records which contain, reflect or are generated from such information;
provided, that Confidential Information does not include, with respect to a
Person, information that (a) was already known to such Person and such knowledge
was not obtained from any other entity who was known by such Person to be
subject to an obligation of confidentiality or otherwise prohibited from
transmitting such information to such Person, (b) is or has become part of the
public domain through no act or omission of such Person, (c) is or was lawfully
disclosed to such Person without restriction on disclosure by a third party,
(d) is or was developed independently by such Person or (e) is or was lawfully
and independently provided to such Person prior to disclosure hereunder, from a
third party who is not known by such Person to be subject to an obligation of
confidentiality or otherwise prohibited from transmitting such information.

 

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“Continued Errors” has the meaning given to such term in Section 7.09(e).

“Contract” means any direct or indirect automobile loan or retail installment
sale contract executed by an Obligor for a Financed Vehicle under which an
extension of credit by an Originator or a Dealer, as applicable, was made in the
ordinary course of business to such Obligor and which is secured by the related
Financed Vehicle which Regional Management had previously acquired from such
Originator (if other than Regional Management) pursuant to a First Tier Purchase
Agreement and the Borrower has acquired such Contract from Regional Management
pursuant to the Second Tier Purchase Agreement and has included as part of the
Collateral hereunder.

“Contractual Obligation” means, with respect to any Person, any provision of any
securities issued by such Person or any indenture, mortgage, deed of trust,
contract, undertaking, agreement, instrument or other document to which such
Person is a party or by which it or any of its property is bound or is subject.

“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 such Receivable or otherwise modifying or restructuring the
related Scheduled Payments, an amount equal to such reduction in the Principal
Balance of such Receivable or the reduction in the net present value (using as
the discount rate the lower of the APR 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.

“Cumulative Net Loss Ratio” means, with respect to any Collection Period, the
percentage equivalent of a fraction, (i) the numerator of which is the aggregate
Principal Balance of all Receivables (or all Initial Receivables or Effective
Date Receivables, as indicated by the context) that became Defaulted Receivables
(or should have been charged-off in accordance with the Collection Policy) from
the related Cutoff Date through the end of such Collection Period, reduced by
the aggregate amount of Liquidation Proceeds collected since the related Cutoff
Date through the end of such Collection Period and (ii) the denominator of which
is the Cutoff Date Pool Balance (or the aggregate Principal Balance of all
Initial Receivables or Effective Date Receivables as of the related Cutoff Date,
as indicated by the context).

“Cutoff Date” means the Initial Cutoff Date or the Effective Date Cutoff Date,
as indicated by the context.

“Cutoff Date Pool Balance” means, (i) prior to the Effective Date,
$86,054,751.47, and (ii) on and after the Effective Date Cutoff Date,
$63,939,646.40.

“Dealer” means a franchised or independently owned automobile dealer that sold a
Financed Vehicle to an Obligor and through which the Contract and related
Receivable were originated by an Originator, which are assigned by such
Originator (if other than Regional Management) to Regional Management pursuant
to a First Tier Purchase Agreement, are being assigned by Regional Management to
the Borrower pursuant to the Second Tier Purchase Agreement and are collaterally
assigned to the Administrative Agent hereunder.

 

7

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“Dealer Agreement” means an agreement, existing as of the Closing Date (or, in
the case of the Effective Date Receivables, as of the Effective Date), between a
Dealer and an Originator regarding the terms and conditions of the acquisition
by such Originator from such Dealer of Contracts and the related Receivables.

“Debt to Tangible Net Worth” means, with respect to Regional Management, as of
any day, the ratio of its Funded Debt to its Tangible Net Worth.

“Defaulted Receivable” means, any Receivable (i) with respect to which more than
10.0% of a Scheduled Payment thereon remains unpaid for 120 days or more after
the related due date for such payment, (ii) with respect to which the related
Financed Vehicle (a) has been surrendered or repossessed and the redemption
period, if any, granted the related Obligor by Applicable Law has expired,
(b) is to be repossessed but is unable to be located or is otherwise subject to
being repossessed or (c) has been repossessed by the Servicer and held in its
inventory for 90 days or more, (iii) which has been settled for less than the
Principal Balance of such Receivable, (iv) which has been liquidated by the
Servicer through the sale of the related Financed Vehicle, (v) for which
Liquidation Proceeds have been received which, in the Servicer’s judgment,
constitute the final amounts recoverable in respect of such Receivable or
(vi) which has been charged-off (or should have been charged-off) or is deemed
uncollectible in accordance with the Collection Policy. For purposes of
computing the Pool Balance, the Principal Balance of any Receivable that becomes
a “Defaulted Receivable” will be deemed to be zero as of the date it becomes a
“Defaulted Receivable”.

“Delinquency Ratio” means, with respect to any Collection Period, the percentage
equivalent of a fraction, (i) the numerator of which is equal to the aggregate
Principal Balance of all Delinquent Receivables (or all Delinquent Receivables
that were Initial Receivables or Effective Date Receivables, as indicated by the
context) as of the last day of such Collection Period and (ii) the denominator
of which is equal to the Pool Balance (or the aggregate Principal Balance of all
Initial Receivables or Effective Date Receivables, as indicated by the context)
as of the last day of such Collection Period.

“Delinquent Receivable” means a Receivable, other than a Defaulted Receivable,
with respect to which more than 10.0% of a Scheduled Payment thereon remains
unpaid for 60 days or more from the related due date.

“Derivatives” means any (i) exchange-traded or over-the-counter forward, future,
option, swap, cap, collar, floor or foreign exchange contract or any combination
of the foregoing, whether for physical delivery or cash settlement, relating to
any interest rate, interest rate index, currency, currency exchange rate,
currency exchange rate index, debt instrument, debt price, debt index,
depository instrument, depository price, depository index, equity instrument,
equity price, equity index, commodity, commodity price or commodity index,
(ii) similar transaction, contract, instrument, undertaking or security or
(iii) transaction, contract, instrument, undertaking or security containing any
of the foregoing.

 

8

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“Determination Date” means, with respect to any Payment Date and the related
Collection Period, the last day of such Collection Period.

“Dodd-Frank Act” means The Dodd-Frank Wall Street Reform and Consumer Protection
Act (Pub.L. 111-203, H.R. 4173).

“Dollars” or “$” means the lawful currency of the United States.

“Dominion Period” has the meaning given to such term in the Intercreditor
Agreement.

“Early Adoption Increased Costs” means charges or compensation sought from the
Borrower by an Affected Party under Section 2.13(a) in anticipation of a
Regulatory Change (including the imposition of internal charges on such Affected
Party’s interests or obligations under this Agreement) in connection with such
measures, in advance of the effective date of such Regulatory Change.

“Effective Date” means November 21, 2017.

“Effective Date Cutoff Date” means October 31, 2017, except that in the case of
Effective Date Receivables originated from November 1, 2017 through November 14,
2017, the Effective Date Cutoff Date will be November 15, 2017.

“Effective Date Fee Letter” means the fee letter, dated as of the Effective
Date, among the Borrower, the Servicer and the Administrative Agent, setting
forth, among other things, the Structuring Fee.

“Effective Date Loan” means the Loan made on the Effective Date in an amount
equal to the Effective Date Loan Advance.

“Effective Date Loan Advance” means $37,811,769.64.

“Effective Date Receivables” means Receivables included as part of the
Collateral on the Effective Date.

“Eligible Assignee” means a Person who is (i) an Affiliate of a Lender or the
Administrative Agent or (ii) acceptable to the Administrative Agent and, so long
as no Termination Event or Servicer Termination Event has occurred and is
continuing, the Borrower has consented to such assignee in writing, which
consent shall not be unreasonably withheld, delayed or conditioned.

“Eligible Receivable” means, on any date of determination, any Receivable
(i) that has been included as part of the Collateral, (ii) for which the related
Receivable File is in the possession of the Collateral Custodian, (iii) which is
identified on the Schedule of Receivables and (iv) which satisfies each of the
eligibility requirements set forth on Schedule B hereto as of, in the case of
(a) the Initial Receivables, the Closing Date, or (b) the Effective Date
Receivables, the Effective Date.

 

9

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“ERISA” means the Employee Retirement Income Security Act of 1974, and the
regulations promulgated and rulings issued thereunder.

“ERISA Affiliate” means any (i) corporation which is a member of the same
controlled group of corporations (within the meaning of Section 414(b) of the
Code) as the Borrower, (ii) trade or business (whether or not incorporated)
under common control (within the meaning of Section 414(c) of the Code) with the
Borrower or (iii) member of the same affiliated service group (within the
meaning of Section 414(m) of the Code) as the Borrower, any corporation
described in clause (i) above or any trade or business described in clause (ii)
above.

“Errors” has the meaning given to such term in Section 7.09(e).

“Exchange Act” means the Securities Exchange Act of 1934.

“Excluded Taxes” means any of the following Taxes imposed on or with respect to
a Secured Party or required to be withheld or deducted from a payment to a
Secured Party: (i) taxes imposed on or measured by net income (however
denominated), franchise or gross revenue taxes imposed in lieu of net income
taxes or branch profits taxes imposed, by the United States (or any political
subdivision thereof), or any other jurisdiction (or any political subdivision
thereof), as a result of the recipient being organized in, having a present or
former connection with (other than any connections arising from such recipient
having executed, delivered, become a party to, performed its obligations under,
received payments under, received or perfected a security interest under,
engaged in any other transaction pursuant to or enforced on the Loans or any
Basic Document, or sold or assigned an interest in the Loans or any Basic
Document), or having its principal office or applicable lending office located
in the jurisdiction imposing such Tax or any political subdivision thereof) or
where such Taxes are paid by such recipient as of the date such recipient
becomes a party to this Agreement, (ii) any United States withholding Tax
imposed by reason of a Secured Party’s failure to provide to the Borrower the
documents set forth in Section 2.14(e) or to maintain or update such documents
in accordance with the terms thereof, (iii) any United States federal
withholding Taxes that would be imposed on amounts payable to a recipient that
is not a United States person within the meaning of Code Section 7701(a)(30)
based upon the applicable withholding rate in effect at the time such recipient
becomes a party to this Agreement (or designates a new lending office) and
(iv) any Taxes imposed pursuant to or as a result of FATCA.

“Extension Ratio” means, with respect to any Collection Period, the percentage
equivalent of a fraction, (i) the numerator of which is the aggregate Principal
Balance of all Receivables (or all Initial Receivables or Effective Date
Receivables, as indicated by the context) that were extended during such
Collection Period and (ii) the denominator of which is the Pool Balance (or the
aggregate Principal Balance of all Initial Receivables or Effective Date
Receivables, as indicated by the context) as of the first day of such Collection
Period.

“Facility Termination Date” means the date, following the Termination Date or
the Payment Date on which the Loans are prepaid pursuant to Section 2.06, on
which all Aggregate Unpaids have been indefeasibly paid in full.

 

10

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“FATCA” means Sections 1471 through 1474 of the Code, any current or future
regulations or official interpretations thereof, any agreements entered into
pursuant to Section 1471(b) of the Code and any laws, rules or regulations
applicable to any intergovernmental agreement enacted pursuant to the foregoing.

“Federal Reserve Board” means the Board of Governors of the Federal Reserve
System.

“Fee Letter” means, (i) prior to the Effective Date, the Initial Fee Letter, and
(ii) on and after the Effective Date, the Effective Date Fee Letter.

“Final Scheduled Payment Date” means the Payment Date occurring in December,
2024.

“Financed Vehicle” means any new or used automobile, light-duty truck, minivan,
sport utility vehicle or other passenger vehicle (excluding motorcycles),
together with all accessions thereto, securing the related Obligor’s
Indebtedness thereunder.

“FinCEN” means the US Department of the Treasury’s Financial Crimes Enforcement
Network.

“First Priority Principal Payment Amount” means, with respect to any Payment
Date and the related Collection Period, the excess, if any, of the Loan Balance
on that Payment Date (before giving effect to any payments made on that Payment
Date) over the Pool Balance as of the last day of such Collection Period;
provided, however, that on and after the Final Scheduled Payment Date or the
occurrence of the Termination Date, the First Priority Principal Payment Amount
will not be less than the amount that is necessary to reduce the Loan Balance to
zero.

“First Tier Purchase Agreement” means each Amended and Restated First Tier
Purchase Agreement and First Tier Purchase Agreement (in the case of Regional
Finance Company of Virginia, LLC), dated as of the Effective Date, between an
Originator other than Regional Management and Regional Management.

“Formation Documents” means the limited liability company agreement of the
Borrower and the Certificate of Formation.

“Funded Debt” means, with respect to Regional Management, on a consolidated
basis and any day, all items that, in accordance with GAAP, would be included in
determining total liabilities as shown on the liability side of its balance
sheet as of such date and which includes (i) Indebtedness, (ii) obligations
representing the deferred purchase price of property other than accounts payable
arising in the ordinary course of its business on terms customary in the trade,
(iii) obligations, whether or not assumed, secured by Liens or payable out of
the proceeds or products of property now or hereafter owned or acquired by
Regional Management, (iv) obligations which are evidenced by notes, acceptances
(including bankers acceptances) or other instruments, (v) reimbursement
obligations with respect to any letters of credit and (vi) all amounts owing or
to become owing in connection with any of the foregoing.

“GAAP” means generally accepted accounting principles as in effect from time to
time in the United States.

 

11

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“Governmental Authority” means, with respect to any Person, any nation or
government (domestic or foreign), any State or other political subdivision
thereof, any entity exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government, any central bank or
comparable agency and any court or arbitrator having jurisdiction over such
Person.

“Gramm-Leach-Bliley Act” means the Financial Services Modernization Act of 1999
(Pub.L. 106-102, 113 Stat. 1338).

“Indebtedness” means, with respect to any Person and any day, without
duplication, (i) all indebtedness or guarantees of such Person for borrowed
money or for the deferred purchase price of property or services (other than
current liabilities incurred in the ordinary course of business and payable in
accordance with customary trade practices) or which is evidenced by a note,
bond, debenture or similar instrument, (ii) all obligations of such Person under
capital leases, (iii) all obligations of such Person in respect of acceptances
issued or created for the account of such Person, (iv) all liabilities secured
by any Lien on any property owned by such Person even though such Person has not
assumed or otherwise become liable for the payment thereof, (v) all
indebtedness, obligations or liabilities of that Person in respect of
Derivatives, (vi) all obligations, contingent or otherwise, of such Person as an
account party in respect of letters of credit and letters of guaranty and
(vii) all obligations, contingent or otherwise, of such Person in respect of
bankers’ acceptances.

“Indemnified Amounts” has the meaning given to such term in Section 11.01.

“Indemnified Party” has the meaning given to such term in Section 11.01.

“Indemnified Taxes” means Taxes, other than Excluded Taxes, imposed on or with
respect to any payment made by or for the account of the Borrower under this
Agreement.

“Independent Manager” means an individual who (i) is not and has not been
employed by the Borrower or any of its Affiliates as a director, officer or
employee within the five years immediately prior to such individual’s
appointment as an independent manager, (ii) is not (and is not affiliated with a
company or a firm that is) a significant Advisor to the Borrower or any of its
Affiliates, (iii) is not affiliated with a significant customer or supplier of
the Borrower or any of or Affiliates, (iv) is not affiliated with a company of
which the Borrower or any of its Affiliates is a significant customer or
supplier, (v) does not have significant personal services contract(s) with the
Borrower or any of its Affiliates, (vi) is not affiliated with a tax-exempt
entity that receives significant contributions from the Borrower or any of its
Affiliates, (vii) is not the beneficial owner at the time of such individual’s
appointment as an independent manager, or any time thereafter while serving as
an independent manager, of such number of shares of any classes of common stock
of the Borrower or any of its Affiliates the value of which constitutes more
than 5% of such individual’s net worth and (viii) is not a spouse, parent,
sibling or child of any person described by clauses (i) through (vii) above.

“Ineligible Receivable” means a Receivable that was not, if such Receivable is
(i) an Initial Receivable, (a) an Eligible Receivable as of the Closing Date, or
(b) that is a Texas Initial Receivable, in respect of which the Borrower did not
obtain all necessary licenses or approvals in the State of Texas required by the
Borrower for the ownership or lease of property of the conduct of its business
within 30 days of the Closing Date or (ii) an Effective Date Receivable, an
Eligible Receivable as of the Effective Date.

 

12

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“Initial Cutoff Date” means October 31, 2015.

“Initial Fee Letter” means the fee letter, dated as of the Closing Date, among
the Borrower, the Servicer and the Administrative Agent, setting forth, among
other things, the Structuring Fee.

“Initial Loan” means the Loan made on the Closing Date in an amount equal to the
Initial Loan Balance.

“Initial Loan Balance” means $75,728,181.

“Initial Receivables” means Receivables that were included as part of the
Collateral on the Closing Date.

“Insolvency Event” means, with respect to any Person, (i) the filing of a decree
or order for relief by a court having jurisdiction in the premises in respect of
such Person or any substantial part of its property in an involuntary case under
any applicable Insolvency Law now or hereafter in effect, or appointing a
receiver, liquidator, assignee, custodian, trustee, sequestrator or similar
official for such Person or for any substantial part of its property, or
ordering the winding-up or liquidation of such Person’s affairs, and such decree
or order shall remain unstayed and in effect for a period of 60 consecutive days
or (ii) the commencement by such Person of a voluntary case under any Insolvency
Law now or hereafter in effect, or the consent by such Person to the entry of an
order for relief in an involuntary case under any such Insolvency Law, or the
consent by such Person to the appointment of or taking possession by a receiver,
liquidator, assignee, custodian, trustee, sequestrator or similar official for
such Person or for any substantial part of its property, or the making by such
Person of any general assignment for the benefit of creditors, or the failure by
such Person generally to pay its debts as such debts become due, or the taking
of action by such Person in furtherance of any of the foregoing.

“Insolvency Laws” means the Bankruptcy Code and all other applicable
liquidation, conservatorship, bankruptcy, moratorium, arrangement,
rearrangement, receivership, insolvency, reorganization, suspension of payments,
marshaling of assets and liabilities or similar debtor relief laws from time to
time in effect affecting the rights of creditors generally.

“Insolvency Proceeding” means, with respect to any Person, any bankruptcy,
insolvency, arrangement, rearrangement, conservatorship, moratorium, suspension
of payments, readjustment of debt, reorganization, receivership, liquidation,
marshaling of assets and liabilities or similar proceeding of or relating to
such Person under any Insolvency Laws.

“Instrument” means any “instrument” (as defined in Article 9 of the UCC), other
than an instrument that constitutes part of chattel paper.

 

13

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“Insurance Policy” means, with respect to any Receivable, (i) an insurance
policy covering physical damage to or loss of the related Financed Vehicle or
(ii) any lender’s single interest, credit life, vehicle service contract, GAP
coverage, disability, hospitalization or similar insurance policy with respect
to the related Obligor.

“Insurance Proceeds” means any amounts payable or any payments made under any
Insurance Policy.

“Intercreditor Agreement” means the Second Amended and Restated Intercreditor
Agreement, dated as of June 20, 2017, as amended by the First Amendment, dated
November 21, 2017, in each case among the Regional Management Entities, Bank of
America, the Administrative Agent, Wells Fargo Securities, Wells Fargo Bank and
Credit Recovery Associates Upstate Motor Company.

“Interest” means, for any Interest Period, interest on the Loan Balance computed
pursuant to Section 2.07; provided, however, that no portion of any payment of
Interest shall be considered to have been paid by any distribution if at any
time such distribution is rescinded or must otherwise be returned for any
reason.

“Interest Carryover Shortfall” means, with respect to any Payment Date, the
excess, if any, of the Monthly Interest Payment Amount for the preceding Payment
Date, over the amount of interest that is actually paid to the Lenders on such
preceding Payment Date, plus interest on the amount of interest due but not paid
to the Lenders on the preceding Payment Date, to the extent permitted by
Applicable Law, at the Interest Rate for the related Interest Period.

“Interest Period” means, with respect to any Payment Date, the period from and
including the 15th of the prior calendar month (or, in the case of the first
Payment Date, from and including the Closing Date) to but excluding the 15th of
the current calendar month (or, in the case of the first Payment Date, to but
excluding the first Payment Date); provided, however, that any Interest Period
that commences before the Facility Termination Date that would otherwise end
after the Facility Termination Date shall end on the Facility Termination Date.

“Interest Rate” means 3.00% per annum, computed on the basis of a 360-day year
consisting of twelve 30-day months with the exception of the first Interest
Period, which will be computed on the basis of the actual number of days elapsed
and a 360-day year.

“Invested Percentage” means, with respect to any Lender and the Loan Balance on
any day, the percentage equivalent of (i) the sum of (a) the portion of the Loan
Balance funded by such Lender on or prior to such day, plus (b) any portion of
the Loan Balance acquired by such Lender on or prior to such day as an assignee
from another Lender pursuant to an Assignment and Acceptance, minus (c) any
portion of the Loan Balance assigned by such Lender to an assignee on or prior
to such day pursuant to an Assignment and Acceptance, divided by (ii) the Loan
Balance on such day.

“Investment” means, with respect to any Person, any direct or indirect loan,
advance or investment by such Person in any other Person, whether by means of
share purchase, capital contribution, loan or otherwise, and excluding
commission, travel and similar advances to officers, employees and directors
made in the ordinary course of business.

 

14

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“Investment Company Act” means the Investment Company Act of 1940.

“IRS” means the Internal Revenue Service.

“Lender” means each Person identified as a “Lender” on its signature page hereto
or in the Assignment and Acceptance pursuant to which it became a party to this
Agreement, and any assignee of such Lender to the extent of the portion of such
Loan Balance assumed by such assignee pursuant to its respective Assignment and
Acceptance, and “Lenders” means, collectively, all of the foregoing Persons.

“Lender Advance” means, with respect to a Lender and a Loan, the amount
representing the portion of such Loan being funded by such Lender.

“Lender Register” has the meaning given to such term in Section 13.01(d).

“Level I Effective Date Receivables Trigger Event” means, with respect to the
Effective Date Receivables, the occurrence of any of the following events with
respect to any Collection Period beginning with the Collection Period during
which the Effective Date occurs:

(i) the average Delinquency Ratio for such Collection Period and the two
preceding Collection Period for (a) the 3rd through 12th Collection Period after
the Effective Date exceeds 5.00%, (b) the 13th through 35th Collection Period
after the Effective Date exceeds 7.00% and (c) the 36th Collection Period after
the Effective Date and each Collection Period thereafter exceeds 8.50%;

(ii) the three-month average Extension Ratio for such Collection Period and the
two preceding Collection Periods exceeds 5.00%; or

(iii) the Cumulative Net Loss Ratio exceeds the related percentages set forth in
the following table for such Collection Period:

 

Collection
Period

   Cumulative Net
Loss Ratio     Collection
Period      Cumulative Net
Loss Ratio  

1 through 6

     5.40 %      21        15.30 % 

7

     6.25 %      22        15.80 % 

8

     7.00 %      23        16.25 % 

9

     7.75 %      24        16.60 % 

10

     8.65 %      25        16.90 % 

11

     9.45 %      26        17.20 % 

12

     10.25 %      27        17.50 % 

13

     11.00 %      28        17.70 % 

14

     11.65 %      29        17.90 % 

15

     12.30 %      30        18.10 % 

16

     13.00 %      31        18.30 % 

17

     13.40 %      32        18.55 % 

18

     14.00 %      33        18.75 % 

19

     14.45 %      34        19.10 % 

20

     14.90 %      35        19.50 %         36 and after        19.80 % 

 

15

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“Level I Initial Receivables Trigger Event” means, with respect to the Initial
Receivables, the occurrence of any of the following events with respect to any
Collection Period:

(i) the average Delinquency Ratio for such Collection Period and the two
preceding Collection Period for (a) the 3rd through 12th Collection Period after
the Closing Date exceeds 5.00%, (b) the 13th through 35th Collection Period
after the Closing Date exceeds 7.00% and (c) the 36th Collection Period after
the Closing Date and each Collection Period thereafter exceeds 8.50%;

(ii) the three-month average Extension Ratio for such Collection Period and the
two preceding Collection Periods exceeds 5.00%; or

(iii) the Cumulative Net Loss Ratio exceeds the related percentages set forth in
the following table for such Collection Period:

 

Collection
Period

   Cumulative Net
Loss Ratio     Collection
Period      Cumulative Net
Loss Ratio  

1 through 6

     5.40 %      21        15.30 % 

7

     6.25 %      22        15.80 % 

8

     7.00 %      23        16.25 % 

9

     7.75 %      24        16.60 % 

10

     8.65 %      25        16.90 % 

11

     9.45 %      26        17.20 % 

12

     10.25 %      27        17.50 % 

13

     11.00 %      28        17.70 % 

14

     11.65 %      29        17.90 % 

15

     12.30 %      30        18.10 % 

16

     13.00 %      31        18.30 % 

17

     13.40 %      32        18.55 % 

18

     14.00 %      33        18.75 % 

19

     14.45 %      34        19.10 % 

20

     14.90 %      35        19.50 %         36 and after        19.80 % 

“Level I Trigger Event” means the occurrence of either a Level I Initial
Receivables Trigger Event or a Level I Effective Date Receivables Trigger Event.

“Level II Effective Date Receivables Trigger Event” means, with respect to the
Effective Date Receivables, the occurrence of any of the following events with
respect to any Collection Period beginning with the Collection Period during
which the Effective Date occurs:

 

16

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(i) the average Delinquency Ratio for such Collection Period and the two
preceding Collection Period for (a) the 3rd through 12th Collection Period after
the Effective Date exceeds 7.00%, (b) the 13th through 35th Collection Period
after the Effective Date exceeds 9.00% and (c) the 36th Collection Period after
the Effective Date and each Collection Period thereafter exceeds 10.50%;

(ii) the three-month average Extension Ratio for such Collection Period and the
two preceding Collection Periods exceeds 6.00%; or

(iii) the Cumulative Net Loss Ratio exceeds the related percentages set forth in
the following table for such Collection Period:

 

Collection
Period

   Cumulative Net
Loss Ratio     Collection
Period      Cumulative Net
Loss Ratio  

1 through 6

     6.55 %      21        18.60 % 

7

     7.55 %      22        19.15 % 

8

     8.50 %      23        19.70 % 

9

     9.50 %      24        20.15 % 

10

     10.50 %      25        20.50 % 

11

     11.50 %      26        20.85 % 

12

     12.45 %      27        21.25 % 

13

     13.30 %      28        21.50 % 

14

     14.15 %      29        21.75 % 

15

     14.95 %      30        21.95 % 

16

     15.75 %      31        22.20 % 

17

     16.30 %      32        22.50 % 

18

     16.95 %      33        22.70 % 

19

     17.50 %      34        23.10 % 

20

     18.05 %      35        23.50 %         36 and after        24.00 % 

“Level II Initial Receivables Trigger Event” means, with respect to the Initial
Receivables, the occurrence of any of the following events with respect to any
Collection Period:

(i) the average Delinquency Ratio for such Collection Period and the two
preceding Collection Period for (a) the 3rd through 12th Collection Period after
the Closing Date exceeds 7.00%, (b) the 13th through 35th Collection Period
after the Closing Date exceeds 9.00% and (c) the 36th Collection Period after
the Closing Date and each Collection Period thereafter exceeds 10.50%;

(ii) the three-month average Extension Ratio for such Collection Period and the
two preceding Collection Periods exceeds 6.00%; or

(iii) the Cumulative Net Loss Ratio exceeds the related percentages set forth in
the following table for such Collection Period:

 

17

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Collection
Period

   Cumulative Net
Loss Ratio     Collection
Period      Cumulative Net
Loss Ratio  

1 through 6

     6.55 %      21        18.60 % 

7

     7.55 %      22        19.15 % 

8

     8.50 %      23        19.70 % 

9

     9.50 %      24        20.15 % 

10

     10.50 %      25        20.50 % 

11

     11.50 %      26        20.85 % 

12

     12.45 %      27        21.25 % 

13

     13.30 %      28        21.50 % 

14

     14.15 %      29        21.75 % 

15

     14.95 %      30        21.95 % 

16

     15.75 %      31        22.20 % 

17

     16.30 %      32        22.50 % 

18

     16.95 %      33        22.70 % 

19

     17.50 %      34        23.10 % 

20

     18.05 %      35        23.50 %         36 and after        24.00 % 

“Level II Trigger Event” means the occurrence of either a Level II Initial
Receivables Trigger Event or a Level II Effective Date Receivables Trigger
Event.

“Liability” means any duty, responsibility, obligation or liability.

“Lien” means any mortgage, lien, pledge, charge, claim, security interest or
encumbrance of any kind.

“Liquidation Proceeds” means, for any Collection Period and any Defaulted
Receivable, the amount (which shall not be less than zero) received by the
Servicer and deposited into the Collection Account after such Receivable became
a Defaulted Receivable, in connection with the attempted realization of the full
amounts due or to become due under such Receivable, whether from the sale or
other disposition of the related Financed Vehicle, the proceeds of repossession
or any collection effort, the proceeds of recourse or similar payments payable
in respect of such Receivable, receipt of Insurance Proceeds or otherwise, net
of (i) any amounts required by Applicable Law to be remitted to the related
Obligor and (ii) any reasonable out-of-pocket expenses (exclusive of overhead)
incurred by the Servicer with respect to the collection and enforcement of such
Receivable, to the extent not previously reimbursed to the Servicer.

“Loan” has the meaning set forth in Section 2.01 and “Loans” means the Initial
Loan and the Effective Date Loan.

“Loan Balance” means, on any day (i) prior to the Effective Date, the Initial
Loan Balance, reduced by all payments of principal made prior to such day on the
Initial Loan and (ii) on and after the Effective Date, the sum of (a) the amount
determined pursuant to clause (i) above and (b) the Effective Date Loan Advance,
reduced by all payments of principal made prior to such day on the Effective
Date Loan.

 

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“Long-Term Rating Requirement” means, with respect to any Person, that such
Person has a long-term unsecured debt rating of not less than “A” by Standard &
Poor’s and not less than “A2” by Moody’s.

“Master Deposit Account” means the deposit account governed by the Master
Deposit Account Control Agreement.

“Master Deposit Account Control Agreement” means the Third Amended and Restated
Deposit Account Control Agreement, dated as of June 20, 2017, among Regional
Management, Bank of America, as collateral agent, and Bank of America, as
depository bank.

“Material Adverse Effect” means, with respect to any Person and to any event or
circumstance, a material adverse effect on (i) the business, condition
(financial or otherwise), operations, performance, properties or prospects of
such Person, (ii) the validity, enforceability or collectability of this
Agreement or any other Basic Document or the validity, enforceability or
collectability of a material portion of (a) the Contracts, (b) the Receivables
or (c) any other Collateral, (iii) the rights and remedies of the Secured
Parties under the Basic Documents, (iv) the ability of such Person to perform
its obligations under this Agreement or any other Basic Document to which it is
a party or (v) the status, existence, perfection, priority or enforceability of
the interest of the Administrative Agent or the Lenders in the Collateral.

“Maximum Lawful Rate” means the highest rate of interest permissible under
Applicable Law.

“Member” means Regional Management, as the member of the Borrower.

“Monthly Accrued Interest” means, with respect to any Payment Date, the
aggregate interest accrued for the related Interest Period at the Interest Rate
on the Loan Balance on the immediately preceding Payment Date, after giving
effect to all payments of principal in reduction of the Loan Balance on or prior
to such preceding Payment Date (or in the case of the first Payment Date, on the
Initial Loan Balance).

“Monthly Interest Payment Amount” means, with respect to any Payment Date, the
sum of the Monthly Accrued Interest and any Interest Carryover Shortfall.

“Monthly Loan Tape” means a data tape, which shall include with respect to each
Receivable (i) the related Contract identification number, (ii) the identity of
the related Originator, (iii) the current Principal Balance as of the related
Cutoff Date, (iv) the current number of days such Receivable is delinquent,
(v) whether or not the related Obligor is a debtor in bankruptcy, (vi) the next
payment date, (vii) the remaining term to maturity, (viii) the current maturity
date, (ix) the original maturity date, (x) the number of extensions, (xi) the
date of Contract (origination date), (xii) the funding date, (xiii) the original
interest rate, (xiv) the current interest rate, (xv) the original monthly
payment amount, (xvi) the current monthly payment amount, (xvii) the amount of
the down payment, (xviii) the make/model/year of the related Financed Vehicle,
(xix) the vehicle identification number of the related Financed Vehicle,
(xx) the book value of the related Finance Vehicle (at origination), (xxi) the
loan-to-value ratio (at origination), (xxii) the original principal balance
(amount financed), (xxiii) the original term to maturity, (xxiv) new/used
Financed Vehicle status, (xxv) mileage on the related Financed Vehicle (at
origination), (xxvi) the State in which the related Obligor has a mailing
address, (xxvii) the FICO® score at origination, and (xxviii) history of
payments delinquent (number of times delinquent) 1-30 days, 31-60 days, 61-90
days and 91 or more days.

 

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“Monthly Report” means, with respect to any Payment Date and the related
Collection Period, a monthly statement of the Servicer delivered on each
Reporting Date with respect to such Collection Period, in substantially the form
of Exhibit E, which may be modified from time to time as mutually agreed by the
Servicer, the Administrative Agent and the Backup Servicer.

“Moody’s” means Moody’s Investors Service, Inc.

“Multiemployer Plan” means a “multiemployer plan” as defined in
Section 4001(a)(3) of ERISA which is or was at any time during the current year
or the immediately preceding five years contributed to by the Borrower or any
ERISA Affiliate on behalf of its employees.

“Obligations” means all loans, advances, debts, liabilities, indemnities and
obligations for monetary amounts owing by the Borrower to the Secured Parties or
any of their respective assigns, whether due or to become due, matured or
unmatured, liquidated or unliquidated, contingent or non-contingent and all
covenants and duties regarding such amounts, of any kind or nature, present or
future, arising under or in respect of the Loans, whether or not evidenced by
any separate note, agreement or other instrument, including all principal,
interest (including interest that accrues after the commencement against the
Borrower of any action under the Bankruptcy Code), amounts payable pursuant to
Sections 2.13 and 2.14, Breakage Costs, fees, including any and all arrangement
fees, loan fees, the Structuring Fee and any and all other fees, expenses, costs
or other sums (including attorneys’ fees and disbursements) chargeable to the
Borrower under the Basic Documents.

“Obligor” means each Person obligated to make payments on or pursuant to a
Receivable, including any guarantor thereof.

“OFAC” means the U.S. Department of the Treasury’s Office of Foreign Assets
Control.

“Officer’s Certificate” means a certificate signed by any officer of the
Borrower, the Servicer, an Originator, the Backup Servicer or the Collateral
Custodian, as the case may be, and delivered to the Administrative Agent or any
other party hereto as required by this Agreement.

“Opinion of Counsel” means, with respect to any Person, a written opinion of
counsel, who is reasonably acceptable to the Administrative Agent or the party
hereto that is the recipient of such written opinion of counsel.

“Original Warehouse Agreement” has the meaning set forth in the Recitals.

“Originator” means (i) Regional Management, (ii) Regional Finance Corporation of
Alabama, (iii) Regional Finance Company of Georgia, LLC, (iv) Regional Finance
Company of New Mexico, LLC, (v) Regional Finance Corporation of North Carolina,
(vi) Regional Finance Company of Oklahoma, LLC, (vii) Regional Finance
Corporation of South Carolina, (viii) Regional Finance Corporation of Tennessee,
(ix) Regional Finance Corporation of Texas, (x) Regional Finance Company of
Virginia, LLC, (xi) any Approved Lienholder and (xii) any other entity approved
in writing by the Administrative Agent.

 

20

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“Overcollateralization Amount” has the meaning set forth in the Fee Letter.

“Participant Register” has the meaning given to such term in Section 13.01(g).

“Patriot Act” means the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed
into law October 26, 2001)).

“Payment Date” means the 15th day of each calendar month or, if any such day is
not a Business Day, the next succeeding Business Day (provided that the first
Payment Date will be December 29, 2015).

“Pension Plans” means “employee pension benefit plans”, as such term is defined
in Section 3 of ERISA, maintained by the Borrower, or in which employees of the
Borrower are entitled to participate, as from time to time in effect.

“Permitted Investments” means any of the following types of investments:

(i) marketable obligations of the United States, the full and timely payment of
which are backed by the full faith and credit of the United States and which
have a maturity of not more than 270 days from the date of acquisition;

(ii) bankers’ acceptances and certificates of deposit and other interest-bearing
obligations (in each case having a maturity of not more than 270 days from the
date of acquisition) denominated in Dollars and issued by any bank with capital,
surplus and undivided profits aggregating at least $100,000,000, the short-term
obligations of which meet or exceed the Short-Term Rating Requirement;

(iii) repurchase obligations with a term of not more than ten days for
underlying securities of the types described in clauses (i) and (ii) above
entered into with any bank of the type described in clause (ii) above;

(iv) commercial paper rated at least “A-1” by Standard & Poor’s and “Prime-1” by
Moody’s;

(v) money market funds registered under the Investment Company Act having a
rating, at the time of such investment in the highest rating category by Moody’s
and Standard & Poor’s;

(vi) demand deposits, time deposits or certificates of deposit (having original
maturities of no more than 365 days) of depository institutions or trust
companies incorporated under the laws of the United States or any State (or
domestic branches of any foreign bank) and subject to supervision and
examination by federal or State banking or depository institution authorities;
provided, however, that at the time such investment, or the commitment to make
such investment, is entered into, the short-term debt rating of such depository
institution or trust company meets or exceeds the Short-Term Rating Requirement;
and

 

21

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(vii) any other investments approved in writing by the Administrative Agent.

“Permitted Liens” means (i) Liens in favor of the Administrative Agent, as agent
for the Secured Parties, created pursuant to this Agreement or any other Basic
Document and (ii) mechanics’ and other statutory Liens that arise by operation
of law, other than Tax and ERISA liens.

“Person” means an individual, partnership, corporation, limited liability
company, joint stock company, trust (including a business or statutory trust),
unincorporated association, sole proprietorship, joint venture, government (or
any agency or political subdivision thereof) or other entity.

“Pool Balance” means, as of any day, the aggregate Principal Balance of the
Receivables as of such day.

“Precomputed Interest Method” means the method in which the debt is expressed as
the sum of the original principal amount plus the finance charge computed in
advance, assuming all payments will be made when scheduled.

“Principal Balance” means, with respect to any Receivable as of any day, the
outstanding principal balance of such Receivable as of such day, equal to the
Amount Financed of such Receivable minus the sum of the following amounts
(without duplication): (i) that portion of all Scheduled Payments actually
received on or prior to such day allocable to principal using the Simple
Interest Method or Precomputed Interest Method, as applicable, (ii) any Cram
Down Loss, (iii) any prepayment in full or any partial prepayment applied in
reduction of principal (including any Insurance Proceeds) and (iv) if such
Receivable is subject to the Precomputed Interest Method, any unearned interest
as of such date. The Principal Balance of any Receivable that becomes a
Defaulted Receivable will be deemed to be zero as of the date it becomes a
Defaulted Receivable.

“Qualified Institution” means any depository institution or trust company
organized under the laws of the United States or any State (or any domestic
branch of a foreign bank) (i) that either (a) meets, or the parent of which
meets, either (1) the Long-Term Rating Requirement or (2) the Short-Term Rating
Requirement or (b) is otherwise acceptable to the Administrative Agent, in its
sole discretion, and (ii) whose deposits are insured by the Federal Deposit
Insurance Corporation.

“Ratings Request” means a written request by a Lender to the Borrower and the
Servicer, stating that such Lender intends to request that a nationally
recognized statistical ratings organization publicly issue a rating to the
transactions contemplated by this Agreement that reasonably reflects the
economics and credit of the Loans at the time of such request.

 

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“Receivable” means Indebtedness owed to an Originator or the Borrower by an
Obligor (without giving effect to any transfer hereunder) under a Contract
included in the Schedule of Receivables, whether constituting an account,
chattel paper, instrument or general intangible, arising out of or in connection
with the sale, refinancing or loan made by a Dealer or such Originator with
respect to a Financed Vehicle in connection therewith, and includes the right of
payment of any finance charges and other obligations of the Obligor with respect
thereto. For the avoidance of doubt, the definition of “Receivable” includes
reference to both an “Initial Receivable” and “Effective Date Receivable.”
Notwithstanding the foregoing, once the Administrative Agent has released its
security interest in a Receivable and the related Contract in accordance with
the terms of this Agreement, such Receivable shall no longer be a Receivable
hereunder.

“Receivable File” means, with respect to each Receivable, (i) the Certificate of
Title for the related Financed Vehicle, or, if the original Certificate of Title
has not been received, evidence that such Certificate or Title has been applied
for, (ii) the original fully executed Contract and all original endorsements or
assignments showing the chain of ownership of such Contract and (iii) any
additional original executed documents, if any, evidencing a modification to any
of the foregoing documents.

“Receivable Receipt” means the receivable receipt executed by the Collateral
Custodian in connection with (i) the Initial Receivables and (ii) the Effective
Date Receivables, in each case substantially in the form attached hereto as
Exhibit F.

“Records” means, with respect to any Contract, all documents, books, records and
other information (including computer programs, tapes, disks, punch cards, data
processing software and related property and rights) maintained with respect to
any related item of Collateral and the related Obligor.

“Regional Local Bank Account” has the meaning given to such term in the
Intercreditor Agreement.

“Regional Management” has the meaning given to such term in the Preamble.

“Regional Management Entities” means Regional Management, the Borrower and the
Originators.

“Registrar of Titles” means with respect to any State, the Governmental
Authority responsible for the registration of, and the issuance of certificates
of title relating to, motor vehicles and liens thereon.

“Regular Principal Payment Amount” means, with respect to any Payment Date and
the related Collection Period, an amount equal to the lesser of (i) the Loan
Balance on that Payment Date (after giving effect to any other payments of
principal made on that Payment Date) and (ii) (a) an amount by which (1) the sum
of the Loan Balance on that Payment Date (before giving effect to any payments
of principal made on that Payment Date) and the Target Overcollateralization
Amount exceeds (2) the Pool Balance as of the last day of such Collection Period
minus (b) the First Priority Principal Payment Amount.

“Regulation AB” means Regulation AB under the Securities Act.

 

23

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“Regulatory Change” means (i) the adoption or any change therein after the date
hereof of any Applicable Law, rule or regulation (including any applicable law,
rule or regulation regarding capital adequacy or liquidity coverage) or (ii) any
change after the date hereof in the interpretation or administration thereof by
any Governmental Authority charged with the interpretation or administration
thereof, or compliance with any request or directive (whether or not having the
force of law) of any such Governmental Authority; provided, that for purposes of
this definition, (a) the Risk-Based Capital Requirements, (b) the Dodd-Frank
Act, Basel II, Basel III, the Volcker Rule and all requests, rules, guidelines
or directives thereunder, issued in connection therewith or in implementation
thereof, and (c) all requests, rules, guidelines and directives promulgated by
the Bank for International Settlements, the Basel Committee on Banking
Supervision (or any successor or similar authority) or the United States or
foreign regulatory authorities, shall in each case be deemed to be a “Regulatory
Change”, regardless of the date enacted, adopted, issued or implemented.

“Related Parties” means, with respect to any Person, its Affiliates and their
respective partners, directors, officers and employees.

“Release Amount” means, as of the related Release Date, the aggregate Release
Prices deposited for a retransfer of Receivables under Section 5.05 and 7.03(c).

“Release Date” means a Payment Date specified by the Borrower in connection with
the retransfer of the Receivables under Section 5.05 or 7.03(c).

“Release of Documents” means any Release of Documents executed by the Servicer
substantially in the form attached hereto as Exhibit H.

“Release Price” means an amount equal to the Principal Balance of a Receivable
to be retransferred pursuant to Section 5.05 or 7.03(c), plus accrued and unpaid
interest on such Receivable (at the related APR) through the date of repurchase
and all related Breakage Costs.

“Report Failure Period” has the meaning given to such term in the Intercreditor
Agreement.

“Reporting Date” means, with respect to any Payment Date, the fourth Business
Day prior to such Payment Date.

“Required Lenders” means, at a particular time, all Lenders.

“Required Rating” means a rating of the transaction contemplated by this
Agreement of at least “A” from one nationally recognized statistical rating
agency selected by the Lender seeking a Ratings Request and reasonably
acceptable to the Borrower.

“Requirements of Law” means, with respect to any Person, any law, treaty, rule
or regulation, or order or determination of a Governmental Authority, in each
case applicable to or binding upon such Person or to which such Person is
subject, whether federal, State or local (including usury laws, the Federal
Truth-in-Lending Act, Regulations U and T of the Federal Reserve Board and
Regulations B, X and Z of the CFPB).

 

24

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“Reserve Account” means a segregated trust account caused to be established or
established by the Servicer with the Account Bank for the benefit of the Secured
Parties.

“Reserve Account Amount” means, on any day, the amount on deposit in the Reserve
Account.

“Reserve Account Initial Deposit” means, on (i) the Closing Date, $3,721,095.03,
and (ii) the Effective Date, an amount equal to $1,278,792.93 (i.e., the amount
by which (a) the Reserve Account Required Amount, calculated after giving effect
to the Effective Date Loan on the Effective Date, exceeds (b) the Reserve
Account Amount on the day immediately preceding the Effective Date), in each
case which amount was deposited by the Borrower into the Reserve Account on the
Closing Date or on the Effective Date, as the case may be.

“Reserve Account Required Amount” means, on any day (i) on or prior to the
Account Restructuring Date, an amount equal to the lesser of (a) $3,721,095.03
and (b) the Loan Balance and (ii) after the Account Restructuring Date, an
amount equal to the lesser of (a) the product of (1) 2.00% and (2) the Cutoff
Date Pool Balance and (b) the Loan Balance.

“Reserve Account Withdrawal Amount” means, with respect to any Payment Date
(i) on which an Available Funds Shortfall exists, an amount equal to the lesser
of (a) the Reserve Account Amount and (b) the Available Funds Shortfall and
(ii) following the Termination Date, upon the written direction of the
Administrative Agent to the Servicer and the Account Bank, all or a portion of
the Reserve Account Amount.

“Responsible Officer” means, when used with respect to any Person, any officer
of such Person, including any president, vice president, assistant vice
president, treasurer, secretary, assistant secretary, corporate trust officer or
any other officer thereof customarily performing functions similar to those
performed by the individuals who at the time shall be such officers,
respectively, or to whom any matter is referred because of such officer’s
knowledge of or familiarity with the particular subject, and, in each case,
having direct responsibility for the administration of this Agreement.

“Risk-Based Capital Requirements” means the United States bank regulatory rule
titled Risk-Based Capital Guidelines; Capital Adequacy Guidelines; Capital
Maintenance: Regulatory Capital; Impact of Modification to Generally Accepted
Accounting Principles; Consolidation of Asset-Backed Commercial Paper Programs;
and Other Related Issues, adopted on December 15, 2009 by the Financial
Accounting Standard Board.

“Sanctioned Country” means a country or territory that is subject to a
comprehensive embargo or a country in which transactions are prohibited by
(i) the regulations or executive orders administered or enforced by OFAC,
(ii) the United States Trading with the Enemy Act of 1917 or (iii) the United
States International Emergency Economic Powers Act of 1977.

“Sanctioned Person” means any Person that is a target of Sanctions, including a
Person that is (i) listed on OFAC’s Specially Designated Nationals (SDN) and
Blocked Persons List, (ii) listed on OFAC’s Consolidated Sanctions List, (iii) a
legal entity that is deemed by OFAC to be a Sanctions target based on the
ownership of such legal entity by Sanctioned Person(s) or (iv) a Person that is
a Sanctions target pursuant to any territorial or country-based Sanctions
program.

 

25

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“Sanctions” means any and all economic or financial sanctions, sectoral
sanctions, secondary sanctions, trade embargoes and anti-terrorism laws,
including those imposed, administered or enforced from time to time by (i) the
United States, including those administered by OFAC, the U.S. State Department,
the U.S. Department of Commerce, or through any existing or future Executive
Order, (ii) the United Nations Security Council, (iii) the European Union,
(iv) the United Kingdom or (v) any other Governmental Authority with
jurisdiction over any Regional Management Entity, its Subsidiaries or their
respective Related Parties.

“Schedule of Receivables” means the schedule of Receivables attached hereto as
Schedule C.

“Scheduled Payments” means, with respect to a Receivable, regularly scheduled
monthly payments to be made by an Obligor pursuant to the terms of the related
Contract.

“SEC” means the U.S. Securities and Exchange Commission.

“Second Tier Purchase Agreement” means the Amended and Restated Second Tier
Purchase Agreement, dated as of the Effective Date, between Regional Management
and the Borrower.

“Secured Party” means the Administrative Agent and each Lender.

“Securities Act” means the Securities Act of 1933.

“Security Agreement” means the Amended and Restated Security Agreement, dated as
of June 20, 2017, among Regional Management, as agent for the Borrower and the
borrowers under the Senior Revolver, the Borrower, the borrowers under the
Senior Revolver and Bank of America, as collateral agent.

“Senior Revolver” means the Sixth Amended and Restated Loan and Security
Agreement, dated as of June 20, 2017, as amended by the First Amendment, dated
November 21, 2017, in each case, among the lenders therein, Bank of America, as
agent and Regional Management, Regional Finance Corporation of South Carolina,
Regional Finance Corporation of Georgia, Regional Finance Corporation of Texas,
Regional Finance Corporation of North Carolina, Regional Finance Corporation of
Alabama, Regional Finance Corporation of Tennessee, Regional Finance Company of
New Mexico, LLC, Regional Finance Company of Oklahoma, LLC, Regional Finance
Company of Missouri, LLC, Regional Finance Company of Georgia, LLC, RMC
Financial Services of Florida, LLC, Regional Finance Company of Louisiana, LLC,
Regional Finance Company of Mississippi, LLC, Regional Finance Company of
Kentucky, LLC and Regional Finance Company of Virginia, LLC, collectively, as
borrowers.

“Servicer” has the meaning given to such term in the Preamble.

“Servicer Basic Documents” means all Basic Documents to which the Servicer is a
party or by which it is bound.

“Servicer Centralization Event” means the occurrence of a Level I Trigger Event
followed by the delivery of written notice from the Administrative Agent to the
Servicer, the Borrower and the Backup Servicer that the activities described on
Schedule G should go into effect.

 

26

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“Servicer File” means, with respect to a Receivable, each of the following
documents: (i) application of the Obligor for credit; (ii) a copy (but not the
original) of the Contract and any amendments thereto; provided, however, that
the Servicer shall deliver each original amendment to the Contract to the
Collateral Custodian immediately following the execution thereof; (iii) a
certificate of insurance or application therefor with respect to the related
Financed Vehicle; (iv) the invoice (or evidence of book value for used Financed
Vehicles) for the related Financed Vehicle; (v) the Obligor’s order for the
related Financed Vehicle and an indication of down payment, if applicable;
(vi) a copy of the service contract, if any, on the related Financed Vehicle;
(vii) a copy of the credit life insurance policy, if any, and the credit
disability insurance policy, if any, on the Obligor relating to the related
Financed Vehicle; and (viii) such other documents as the Servicer customarily
retains in its files in order to accomplish its duties under this Agreement.

“Servicer Termination Event” has the meaning given to such term, on any day
(i) prior to the Assumption Date, in Section 7.13 and (ii) on and after the
Assumption Date, in Section 7.16(f).

“Servicer Termination Notice” has the meaning given to such term in
Section 7.13.

“Servicing Fee” means the fee payable to the Servicer on each Payment Date,
monthly in arrears in accordance with Section 2.08, in an amount equal to the
product of (i) the Servicing Fee Rate, (ii) the Pool Balance as of the first day
of the related Collection Period and (iii) 1/12.

“Servicing Fee Rate” means 4.00% per annum.

“Short-Term Rating Requirement” means, with respect to any Person, that such
Person has a short-term unsecured debt rating of not less than “A-1” by
Standard & Poor’s and not less than “Prime-1” by Moody’s.

“Simple Interest Method” means the method of allocating a fixed level payment to
principal and interest, pursuant to which the portion of such payment that is
allocated to interest is equal to the product of the fixed rate of interest
multiplied by the unpaid principal balance multiplied by the period of time
elapsed since the preceding payment of interest was made.

“Solvent” means, with respect to any Person at any time, having a state of
affairs such that (i) the fair value of the property owned by such Person is
greater than the amount of such Person’s liabilities (including the amount of
any known disputed, contingent and unliquidated liabilities) as such value is
established and liabilities evaluated for purposes of Section 101(32) of the
Bankruptcy Code; (ii) the present fair salable value of the property owned by
such Person in an orderly liquidation of such Person is not less than the amount
that will be required to pay the probable liability of such Person on its debts
as they become absolute and matured; (iii) such Person is able to realize upon
its property and pay its debts and other liabilities (including disputed,
contingent and unliquidated liabilities) as they mature in the normal course of
business; (iv) such Person does not intend to, and does not believe that it
will, incur debts or liabilities beyond such Person’s ability to generally pay
as such debts and liabilities mature; and (v) such Person is not engaged in
business or a transaction, and is not about to engage in a business or a
transaction, for which such Person’s property would constitute unreasonably
small capital in relation to such business or transaction.

 

27

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“Standard & Poor’s” means Standard & Poor’s Ratings Services, a Standard &
Poor’s Financial Services LLC business.

“State” means any state of the United States or the District of Columbia.

“Structuring Fee” has the meaning set forth in the Fee Letter.

“Subservicer” means each subservicer appointed by the Servicer and acceptable to
the Administrative Agent and the Required Lenders for the servicing and
administration of some or all of the Receivables which, as of the Effective
Date, are identified on Schedule E, which schedule may be amended from time to
time in accordance with this Agreement.

“Subservicing Agreement” means each agreement, dated as of the Effective Date,
between the Servicer and a Subservicer.

“Subsidiary” means, with respect to a Person, any entity with respect to which
more than 50.0% of the outstanding voting securities or other ownership
interests shall at any time be owned or controlled, directly or indirectly, by
such Person and/or one or more of its Subsidiaries, or any similar business
organization which is so owned or controlled.

“Successor Servicer” means the Backup Servicer, as successor to the Servicer, or
another entity appointed pursuant to Section 7.14(b) as successor to the
Servicer.

“Tangible Net Worth” means, with respect to Regional Management as of any date
of determination, its net worth calculated in accordance with GAAP, after
subtracting therefrom the aggregate amount of its deferred tax assets and
intangible assets, including goodwill, franchises, licenses, patents,
trademarks, tradenames, copyrights and service marks.

“Target Overcollateralization Amount” has the meaning set forth in the Fee
Letter.

“Tax” or “Taxes” means any present or future taxes, levies, imposts, duties,
deductions, withholdings (including backup withholding), charges, assessments or
fees of any nature (including interest, penalties and additions thereto) that
are imposed by any Governmental Authority.

“Termination Date” means the date of the automatic occurrence, or the
declaration of the occurrence, of the “Termination Date” pursuant to
Section 10.01(b).

“Termination Event” has the meaning given to such term in Section 10.01(a).

“Test Data File” means a test data file, which shall include the loan master
file, the transaction history file and all other files necessary to carry out
the servicing obligations hereunder.

 

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“Texas Initial Receivable” means an Initial Receivable originated or serviced in
the State of Texas for which the Borrower had not obtained all necessary
licenses or approvals in the State of Texas that are required for the ownership
or lease of property or the conduct of its business within 30 days of the
Closing Date.

“Title Intermediary” means Decision Dynamics, Inc., Dealertrack (or its
Affiliates, including VINtek, Inc.) or another title administration service
provider approved in writing by the Administrative Agent and which the Servicer
has confirmed in writing that such Title Intermediary is authorized by the
applicable Registrar of Titles to conduct electronic lien and titling
transactions with respect to Financed Vehicles.

“Transition Expenses” has the meaning given to such term in Section 7.14(d).

“UCC” means the Uniform Commercial Code as from time to time in effect in the
applicable jurisdiction.

“United States” or “U.S.” means the United States of America.

“Unmatured Termination Event” means any event that, with the giving of notice or
the lapse of time, or both, would become a Termination Event.

“U.S. Person” has the meaning set forth in Code Section 7701(a)(30).

“Volcker Rule” means the regulations adopted to implement Section 619 of the
Dodd-Frank Act.

“Wells Fargo Deposit Account Control Agreement” means the Third Amended and
Restated Deposit Account Control Agreement, dated as of June 17, 2017, among
Regional Management, Bank of America, as collateral agent, and Wells Fargo Bank,
as depository bank.

“Wells Fargo Bank” means Wells Fargo Bank, National Association.

“Wells Fargo Fee Letter” means the Schedule of Fees, dated as of November 6,
2015, between Wells Fargo Bank, the Borrower and/or Regional Management.

“Wells Fargo Securities” means Wells Fargo Securities, LLC.

Section 1.02. Accounting Terms and Determinations. Unless otherwise defined or
specified herein, all accounting terms shall be construed herein, all accounting
determinations hereunder shall be made, all financial statements required to be
delivered hereunder shall be prepared and all financial records shall be
maintained in accordance with GAAP. If at any time any change in GAAP would
affect the computation of any financial ratio or requirement set forth herein,
the Administrative Agent, Regional Management and the Borrower shall negotiate
in good faith to amend such ratio or requirement to preserve the original intent
thereof in light of such change in GAAP; provided, that until so amended,
(i) such ratio or requirement shall continue to be computed in accordance with
GAAP prior to such change therein and (ii) Regional Management and the Borrower
shall provide to the Administrative Agent financial statements and other
documents required under this Agreement or as reasonably requested hereunder
setting forth a reconciliation between calculations of such ratio or requirement
made before and after giving effect to such change in GAAP.

 

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Section 1.03. Computation of Time Periods. Unless otherwise stated in this
Agreement, in the computation of a period of time from a specified date to a
later specified date, the word “from” means “from and including” and the words
“to” and “until” each mean “to but excluding”.

Section 1.04. Interpretation. When used in this Agreement, unless a contrary
intention appears: (i) a term has the meaning assigned to it; (ii) an accounting
term not otherwise defined has the meaning assigned to it in accordance with
GAAP; (iii) “or” is not exclusive; (iv) “including” means including without
limitation; (v) words in the singular include the plural and words in the plural
include the singular; (vi) any agreement, instrument or statute defined or
referred to herein or in any instrument or certificate delivered in connection
herewith means such agreement, instrument or statute as from time to time
amended, modified or supplemented and includes (in the case of agreements or
instruments) references to all attachments thereto and instruments incorporated
therein; (vii) references to a Person are also to its successors and permitted
assigns; (viii) the words “hereof”, “herein” and “hereunder” and words of
similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision hereof; (ix) references contained
herein to Article, Section, subsection, Schedule and Exhibit, as applicable, are
references to Articles, Sections, subsections, Schedules and Exhibits in this
Agreement unless otherwise specified; (x) references to “writing” include
printing, typing and other means of reproducing words in a visible form; and
(xi) the term “proceeds” has the meaning set forth in the applicable UCC.

 

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ARTICLE TWO

THE LOANS

Section 2.01. The Loans. On the terms and subject to the conditions set forth in
this Agreement (including the conditions precedent set forth in Section 4.01)
and the other Basic Documents (other than the Master Depository Account Control
Agreement, the Wells Master Depository Account Control Agreement and the
Security Agreement), and in reliance on the covenants, representations and
agreements set forth herein and therein, each Lender shall make an advance in
the amount of such Lender’s Lender Advance (each, a “Loan”) to the Borrower in
an aggregate amount equal to, in the case of (i) the Initial Loan, the Initial
Loan Balance, which Initial Loan was made on the Closing Date and (ii) the
Effective Date Loan, the Effective Date Loan Advance, which Effective Date Loan
shall be made on the Effective Date.

Section 2.02. Funding Mechanics.

(a) Each Lender’s Lender Advance shall be made available to the Administrative
Agent, subject to the fulfillment of the applicable conditions set forth in
Article Four, at or prior to 12:00 p.m., Charlotte, North Carolina time, on the
Closing Date, in the case of the Initial Loan, or on the Effective Date, in the
case of the Effective Date Loan, by deposit of immediately available funds to
the depository account or account of the Administrative Agent. Subject to
(i) the Administrative Agent’s receipt of such funds and (ii) the fulfillment of
the applicable conditions set forth in Article Four, as certified to the
Administrative Agent, the Administrative Agent will not later than 1:00 p.m.,
Charlotte, North Carolina time, on the Closing Date or the Effective Date, as
the case may be, make such funds available, in the same type of funds received,
by wire transfer of immediately available funds to such depository account as
shall be specified by the Borrower in writing to the Administrative Agent and
the Lenders at least one Business Day prior to the Closing Date or the Effective
Date, as the case may be. If any Lender makes available to the Administrative
Agent funds for the related Loan to be made by such Lender as provided in the
provisions of Sections 2.01 and 2.02, and such funds are not made available to
the Borrower by the Administrative Agent because the conditions to such Loan set
forth in Article Four are not satisfied or waived in accordance with the terms
hereof, the Administrative Agent shall return such funds (in like funds as
received from such Lender) to such Lender, without interest.

(b) If either Loan is not made or effectuated due to the Borrower’s failure to
satisfy, or continue to satisfy, the conditions to fund the related Loan on the
Closing Date or the Effective Date, as the case may be, the Borrower and the
Servicer shall jointly and severally indemnify each Lender against any
reasonable loss, cost or expense incurred by such Lender, including any loss
(including loss of anticipated profits, net of anticipated profits in the
reemployment of such funds in the manner determined by such Lender), cost or
expense incurred by reason of the liquidation or reemployment of deposits or
other funds acquired by such Lender to fund or maintain such Loan.

(c) The failure of any Lender to make any Lender Advance required to be made by
it shall not relieve any other Lender of its obligations hereunder; provided,
that the obligations of the Lenders are several and no Lender shall be
responsible for any other Lender’s failure to make the Loans as required.

 

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Section 2.03. [Reserved].

Section 2.04. [Reserved].

Section 2.05. Evidence of the Loans. The Borrower hereby unconditionally
promises to pay to each Lender, the Principal Amount of each Loan made by each
Lender on the Final Scheduled Payment Date, in aggregate principal amount equal
to the Loan Balance.

(a) Each Lender shall maintain in accordance with its usual practice an account
or accounts evidencing the Indebtedness of the Borrower to such Lender resulting
from each Loan made by such Lender, including the amounts of principal and
interest payable and paid to such Lender from time to time hereunder.

(b) Any Lender may request that Loans made by it be evidenced by a promissory
note. In such event, the Borrower shall prepare, execute and deliver to such
Lender a promissory note payable to the order of such Lender (or, if requested
by such Lender, to such Lender and its registered assigns). Thereafter, the
Loans evidenced by such promissory note and interest thereon shall at all times
(including after assignment pursuant to Section 13.01) be represented by one or
more promissory notes in such form payable to the order of the payee named
therein (or, if such promissory note is a registered note, to such payee and its
registered assigns).

Section 2.06. Optional Principal Repayment. The Borrower may, prior to the
occurrence of a Termination Event, on any Payment Date following the last day of
a Collection Period as of which the Pool Balance is less than or equal to 20.0%
of the Cutoff Date Pool Balance, prepay the Loan Balance and all other Aggregate
Unpaids; provided, that (i) the Borrower shall have given at least
three Business Days’ prior written notice to the Administrative Agent, the
Lenders, the Account Bank and the Collateral Custodian, (ii) on such Payment
Date, the Borrower pays to (a) the appropriate parties all amounts due and owing
pursuant to clauses (i), (ii) and (viii) of Section 2.08 and (b) the
Administrative Agent, for the account of the Secured Parties, (1) all accrued
and unpaid Interest and (2) all other Aggregate Unpaids payable through the date
of such prepayment, including any fees or other amounts payable pursuant to
Section 11.01. Any notice of a prepayment shall be irrevocable.

Section 2.07. Payments.

(a) The Borrower shall pay Interest on the Loan Balance from the Closing Date
until the date that the Loan Balance has been reduced to $0.00. The portion of
the Loans funded or maintained by each Lender shall accrue interest during each
Interest Period at the Interest Rate, and be payable on each Payment Date as
provided in Section 2.08. The principal of the Loans shall be payable in
installments on each Payment Date as provided in Section 2.08, unless earlier
paid pursuant to Section 2.06. Notwithstanding the foregoing, the Loan Balance,
all Interest thereon, together with all other Aggregate Unpaids, shall be due
and payable, if not previously paid, on the earlier of (i) the Termination Date
and (ii) the Final Scheduled Payment Date.

 

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(b) Each Lender’s Invested Percentage of the Loan Balance shall bear interest at
a rate per annum equal to the Interest Rate. Interest shall be calculated on the
basis of a 360-day year consisting of twelve 30-day months.

(c) The principal of and Interest on the Loans shall be paid as provided herein.
The Administrative Agent shall allocate to the Lenders each payment in respect
of the Loans received by the Administrative Agent as provided herein. Payments
in respect of principal and Interest (including pursuant to Section 2.06) shall
be allocated and applied to the Lenders based on their respective Invested
Percentages, or in any such case in such other proportions as each affected
Lender may agree upon in writing from time to time with the Administrative Agent
and the Borrower.

(d) Notwithstanding any other provision of this Agreement or the other Basic
Documents, if at any time the rate of interest payable by any Person under the
Basic Documents exceeds the Maximum Lawful Rate, then, so long as the Maximum
Lawful Rate would be exceeded, such rate of interest shall be equal to the
Maximum Lawful Rate. If at any time thereafter the rate of interest so payable
is less than the Maximum Lawful Rate, such Person shall continue to pay Interest
at the Maximum Lawful Rate until such time as the total interest received from
such Person is equal to the total Interest that would have been received had
Applicable Law not limited the interest rate so payable. In no event shall the
total Interest received by a Lender under this Agreement and the other Basic
Documents exceed the amount which such Lender could lawfully have received, had
the Interest due been calculated from the Closing Date at the Maximum Lawful
Rate.

Section 2.08. Settlement Procedures. On each Payment Date, the Servicer shall
instruct the Account Bank to pay, or if a Termination Event shall have occurred
and is continuing, the Administrative Agent shall instruct the Account Bank to
pay, no later than 12:00 p.m., Charlotte, North Carolina time, in each case,
based solely on the information in the related Monthly Report, to the following
Persons, from the Collection Account and the Reserve Account, to the extent of
Available Funds, in the following order of priority:

(i) First, to the Servicer, the accrued and unpaid Servicing Fee;

(ii) Second, pro rata, to the (a) Collateral Custodian, the accrued and unpaid
Collateral Custodian Fee and any out-of-pocket expenses and indemnification
amounts due and owing to the Collateral Custodian, which expenses and
indemnification amounts, prior to the Termination Date, shall not exceed $50,000
per annum, (b) Backup Servicer, the accrued and unpaid Backup Servicing Fee and
any out-of-pocket expenses and indemnification amounts due and owing to the
Backup Servicer, which expenses and indemnification amounts, prior to the
Termination Date, shall not exceed $50,000 per annum, (c) Account Bank, an
amount equal to any accrued and unpaid Account Bank Fee, together with its
expenses and indemnities, which expenses and indemnities shall not, unless the
Termination Date has occurred, exceed $25,000 per annum and (d) Successor
Servicer, up to a maximum of $150,000 in unpaid Transition Expenses payable
pursuant to Section 7.14(d);

 

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(iii) Third, to the Administrative Agent for the ratable distribution to the
Lenders, the Monthly Interest Payment Amount;

(iv) Fourth, to the Administrative Agent for the ratable distribution to the
Lenders, the First Priority Principal Payment Amount;

(v) Fifth, to the Administrative Agent for the ratable distribution to each
Lender, all other Aggregate Unpaids (other than the Loan Balance) then due under
this Agreement to the Lenders;

(vi) Sixth, to the Reserve Account, the amount necessary to cause the amount on
deposit therein to equal the Reserve Account Required Amount;

(vii) Seventh, to the Administrative Agent for further distribution to the
Lenders, an amount equal to the Regular Principal Payment Amount;

(viii) Eighth, to the Servicer, the Collateral Custodian, the Backup Servicer,
the Account Bank and any Successor Servicer, any fees, expenses or indemnities
not paid pursuant to clauses (i) and (ii) above (whether as a result on the
limitations on amounts set forth therein or otherwise); and

(ix) Ninth, any remaining amount shall be distributed to the Borrower.

Section 2.09. Mandatory Payments. The Borrower promises to pay to the
Administrative Agent for the account of each Lender, (i) upon the written
request of the Administrative Agent, all Breakage Costs, the amount of which
shall be determined by such Lender, set forth in a written notice to the
Borrower, and shall be conclusive absent manifest error and (ii) all other
amounts required to be paid by the Borrower in accordance with the terms of this
Agreement.

Section 2.10. Payments, Computations, Etc. Unless otherwise expressly provided
herein, all amounts to be paid or deposited by the Borrower or the Servicer
hereunder shall be paid or deposited in accordance with the terms hereof no
later than 12:00 p.m., Charlotte, North Carolina time, on the day when due in
Dollars in immediately available funds to the depository account or accounts
specified by the Administrative Agent. Except as otherwise provided in
Section 2.07, the Borrower shall, to the extent permitted by Applicable Law, pay
to the Lenders interest on all amounts not paid or deposited when due hereunder
at a per annum rate equal to the Interest Rate, payable on demand; provided,
however, that such total Interest Rate shall not at any time exceed the Maximum
Lawful Rate. Whenever any payment hereunder (i) shall be stated to be due on a
day other than a Business Day, such payment shall be made, without penalty, on
the next succeeding Business Day, except in the case where the next succeeding
Business Day would occur in the succeeding calendar month, in which case such
payment shall be due on the preceding Business Day or (ii) is received after
12:00 p.m., Charlotte, North Carolina time, such payment shall be deemed to have
been received on the next succeeding Business Day, and any such extension of
time shall in such case be included in the computation of payment of Interest,
other interest or any fee payable hereunder, as the case may be.

 

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(b) Except as otherwise provided herein, all payments hereunder shall be made
without set-off or counterclaim and in such amounts as may be necessary in order
that all such payments shall not be less than the amounts otherwise specified to
be paid under this Agreement.

(c) To the extent that (i) any Person makes a payment to any party hereto or
(ii) any party hereto receives or is deemed to have received any payment or
proceeds for application to an obligation, which payment or proceeds or any part
thereof are subsequently invalidated, declared to be fraudulent or preferential,
set aside or required to be repaid to a trustee, receiver or any other party
under any Insolvency Law, State or federal law, common law or for equitable
cause, then, to the extent such payment or proceeds are set aside, the
obligation or part thereof intended to be satisfied shall be revived and
continue in full force and effect, as if such payment or proceeds had not been
received or deemed received by the related party.

Section 2.11. Collections and Allocations; Investment of Funds.

(a) On or prior to (i) the Closing Date, in the case of the Initial Receivables,
or (ii) the Effective Date, in the case of the Effective Date Receivables, the
Servicer or a Subservicer (A) shall have directed the related Obligors to make
all payments in respect of the Initial Receivables or the Effective Date
Receivables, as the case may be, to a Subservicer, and the Subservicer shall
cause the amounts to be deposited into a Regional Local Bank Account related to
the Subservicer located in the State in which the related Contract was
originated and (B) will deposit (in immediately available funds) into the
Collection Account all Collections received after the related Cutoff Date and
through and including the Business Day prior to the Closing Date or the
Effective Date, as the case may be.

(b) Each of the Servicer, each Subservicer and the Borrower shall transfer, or
cause to be transferred, all Collections received in respect of a Collection
Period in the form of immediately available funds to the Collection Account as
soon as possible, but in no event later than the close of business on the second
Business Day after such Collections are received.

(c) On or prior to each Payment Date, the Servicer shall instruct the Account
Bank, in writing, based on the amounts set forth in the Monthly Report, to
withdraw from the Reserve Account the Reserve Account Withdrawal Amount, if any,
to be deposited into the Collection Account on the opening of business on such
Payment Date and applied in accordance with Section 2.08. On any Payment Date
following the Termination Date, at the sole discretion of the Administrative
Agent, all or a portion of the Reserve Account Amount shall be withdrawn by the
Account Bank and deposited into the Collection Account and applied in accordance
with Section 2.08. So long as no Termination Event or Unmatured Termination
Event has occurred or is continuing, if, after giving effect to the
distributions from, and deposits in, the Reserve Account on any Payment Date
pursuant to Section 2.08, the Reserve Account Amount is greater than the Reserve
Account Required Amount for such Payment Date, the Servicer shall direct the
Account Bank in writing to distribute such excess amount to or at the direction
of the Borrower into the Borrower Operating Account.

 

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(d) To the extent there are uninvested amounts on deposit in either Account,
such amounts may be invested in Permitted Investments that mature no later than
the Business Day before the next Payment Date, which Permitted Investments shall
be selected (i) prior to the occurrence of any Termination Event or Servicer
Termination Event, by the Borrower or (ii) after the occurrence of any
Termination Event or Servicer Termination Event, by the Administrative
Agent.    So long as Wells Fargo Bank is the Account Bank, each Permitted
Investment may be purchased by the Account Bank or through an Affiliate of the
Account Bank. No Permitted Investment may be purchased at a premium and any
earnings (and losses) on the foregoing investments shall be for the account of
the Borrower. Absent direction from the Borrower or the Administrative Agent, as
specified above, any uninvested amounts on deposit in either Account shall
remain uninvested.

(e) Each of the Borrower and the Administrative Agent acknowledges that upon its
written request and at no additional cost, it has the right to receive
notification after the completion of each purchase and sale of Permitted
Investments or the Account Bank’s receipt of a broker’s confirmation. Each of
the Borrower and the Administrative Agent agrees that such notifications shall
not be provided by the Account Bank hereunder, and the Account Bank shall
instead make available, upon request and in lieu of notifications, periodic
account statements that reflect such investment activity. No statement need be
made available for any fund or account if no activity has occurred in such fund
or account during such period.

Section 2.12. Fees.

(a) The Borrower hereby agrees to pay to the Administrative Agent, on or prior
to (i) the Closing Date, the Structuring Fee and all other fees set forth in the
Initial Fee Letter and (ii) the Effective Date, the Structuring Fee and all
other fees set forth in the Effective Date Fee Letter, in each case together
with all reasonable out-of-pocket expenses of the Administrative Agent in
immediately available funds.

(b) In accordance with Section 2.08, (i) the Servicer shall be entitled to
receive the Servicing Fee and (ii) the Backup Servicer, the Collateral Custodian
and the Account Bank shall be entitled to receive the Backup Servicing Fee, the
Collateral Custodian Fee and the Account Bank Fee, respectively, in each case
monthly in arrears.

(c) The Borrower shall pay to Sidley Austin LLP on the Closing Date and the
Effective Date, its fees and disbursements in immediately available funds and
shall pay all additional reasonable fees and disbursements of such counsel
within ten Business Days after receiving an invoice for such amounts.

Section 2.13. Increased Costs; Capital Adequacy; Illegality.

(a) If any Regulatory Change (i) subjects any Affected Party to any charge or
withholding on or with respect to this Agreement or an Affected Party’s
obligations under this Agreement, or on or with respect to the Loans and/or the
Receivables, or changes the basis of taxation of payments to any Affected Party
of any amounts payable under this Agreement (except for changes in the rate of
tax on the overall net income of an Affected Party, duty or other charge with
respect to the Loans, or any payment made hereunder or Excluded Taxes),
(ii) imposes, modifies or deems applicable any reserve, assessment, fee, tax,
insurance charge, special deposit or similar requirement against assets of,
deposits with or for the account of, or liabilities of an Affected Party, or
credit extended by an Affected Party pursuant to this

 

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Agreement or (iii) imposes any other condition affecting the Loans or a Lender’s
right hereunder, the result of which (A) is a fee, expense, internal capital
charge or other imputed cost allocable to any Affected Party, (B) increases the
cost to an Affected Party of performing its obligations under this Agreement or
(C) reduces the rate of return on an Affected Party’s capital or assets as a
consequence of its obligations under this Agreement, or to reduce the amount of
any sum received or receivable by an Affected Party under this Agreement, or to
require any payment calculated by reference to the amount of Loans or interests
in Loans held or interest received by it, then, within 30 days after demand by
the Administrative Agent on behalf of such Affected Party, the Borrower shall
pay to the Administrative Agent, for the benefit of the relevant Affected Party,
such amounts charged to such Affected Party or such amounts to otherwise
compensate such Affected Party for such increased cost or such reduction. The
Borrower acknowledges that any Affected Party may institute measures in
anticipation of a Regulatory Change (including the imposition of internal
charges on such Affected Party’s interests or obligations under this Agreement),
and may commence allocating Early Adoption Increased Costs, in advance of the
effective date of such Regulatory Change, and the Borrower agrees to pay such
Early Adoption Increased Costs to the Affected Party within 30 days after demand
therefor without regard to whether such effective date has occurred; provided,
however, that such amounts shall be payable to an Affected Party only if such
Affected Party represents and warrants in writing to the Borrower that it is
(1) recognizing internal charges in respect of such Affected Party’s interests
or obligations under this Agreement in anticipation of a Regulatory Change and
(2) applying consistent return metrics in making determinations to charge Early
Adoption Increased Costs or similar amounts to its similarly situated auto
finance company customers; further provided, however, that no amount of Early
Adoption Increased Costs shall begin to accrue or be payable by the Borrower in
respect of an anticipated Regulatory Change until 30 days after it receives
written notice that such Affected Party intends to make a claim for Early
Adoption Increased Costs under this Section in respect of such change. For the
avoidance of doubt, the Borrower shall not be required to pay any Early Adoption
Increased Costs incurred by any Affected Party prior to the expiration of the
30-day notice period specified in the preceding sentence. The Borrower further
acknowledges that any charge or compensation demanded hereunder may take the
form of a monthly charge to be assessed by such Affected Party.

(b) If either (i) the introduction of or any change in or in the interpretation
of any law, guideline, rule, regulation, directive or request (including the
Dodd-Frank Act, Basel II, Basel III, the Volcker Rule or the Risk-Based Capital
Requirements) or (ii) compliance by any Affected Party with the interpretation
of or any change in the interpretation of any law, guideline, rule, regulation,
directive or request from any Governmental Authority (whether or not having the
force of law), including compliance by an Affected Party with any request or
directive regarding capital adequacy (including the Dodd-Frank Act, Basel II,
Basel III or the Risk-Based Capital Requirements), but in each case, excluding
Excluded Taxes, that has or would have the effect of reducing the rate of return
on the capital of any Affected Party as a consequence of its obligations
hereunder or arising in connection herewith to a level below that which any such
Affected Party could have achieved but for such introduction, change or
compliance (taking into consideration the policies of such Affected Party with
respect to capital adequacy) by an amount deemed by such Affected Party to be
material, then from time to time, within 30 days after demand by such Affected
Party (which demand shall be accompanied by a statement setting forth the basis
for such demand and reasonably estimated calculation of such demand), the
Borrower shall pay directly to such Affected Party such additional amount or
amounts as will compensate such Affected Party for such reduction.

 

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(c) In determining any amount provided for in this Section, the Affected Party
may use any reasonable averaging and attribution methods. Any Affected Party
making a claim under this Section shall submit to the Borrower a certificate
describing such additional or increased cost or reduction in reasonable detail,
which certificate shall be conclusive absent manifest error.

(d) If any Lender has or anticipates having any claim for compensation from the
Borrower pursuant to Section 2.13(a), and such Lender believes that having the
Loans under this Agreement publicly rated by one credit rating agency would
reduce the amount of such compensation by an amount deemed by such Lender to be
material, such Lender shall provide a Ratings Request to the Borrower and the
Servicer that such Lender intends to request a public rating of the facility
from one credit rating agency selected by such Lender and reasonably acceptable
to the Borrower, the Required Rating. The Borrower and the Servicer agree that
they shall cooperate with such Lender’s efforts to obtain the Required Rating,
and shall provide the applicable credit rating agency (either directly or
through distribution to the Administrative Agent or such Lender) any information
requested by such credit rating agency for purposes of providing and monitoring
the Required Rating. The Lenders shall pay the initial fees payable to the
credit rating agency for providing the rating and all ongoing fees payable to
the credit rating agency for their continued monitoring of the rating. Nothing
in this subsection shall preclude any Lender from demanding compensation from
the Borrower pursuant to Section 2.13(a) at any time and without regard to
whether the Required Rating shall have been obtained, or shall require any
Lender to obtain any rating on the facility prior to demanding any such
compensation from the Borrower.

Section 2.14. Taxes.

(a) All payments made by the Borrower in respect of the Loans and all other
payments made by the Borrower or the Servicer under this Agreement will be made
free and clear of and without deduction or withholding for or on account of any
Taxes, unless such withholding or deduction is required by Applicable Law,
including FATCA. In such event, the applicable withholding agent shall make such
withholding or deduction and shall pay to the appropriate taxing authority any
such Taxes required to be deducted or withheld and if such Taxes are Indemnified
Taxes the amount payable to each Lender or the Administrative Agent, as the case
may be, will be increased (such increase, the “Additional Amount”) such that
after deduction or withholding for or on account of any Indemnified Taxes
(including any deduction or withholding for any Indemnified Taxes on such
Additional Amount), the applicable Lender receives an amount equal to the amount
that would have been paid had no such deduction or withholding been made.

(b) The Borrower will indemnify each Lender and the Administrative Agent for the
full amount of Indemnified Taxes in respect of which the Borrower is required to
pay Additional Amounts (including any Indemnified Taxes imposed by any
jurisdiction on such Additional Amounts) paid by such Lender or the
Administrative Agent and any liability (including penalties, interest and
reasonable expenses) arising therefrom or with respect thereto; provided,

 

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however, that the Lender or the Administrative Agent making a demand for
indemnity payment hereunder shall provide the Borrower with a certificate from
the relevant taxing authority or from a Responsible Officer of such Lender or
the Administrative Agent, as the case may be, stating or otherwise evidencing
that it has made payment of such Taxes and will provide a copy of or extract
from documentation, if available, furnished by such taxing authority evidencing
assertion or payment of such Taxes. This indemnification shall be made within
ten days from the date a Lender makes written demand therefor.

(c) Within 30 days after the date of any payment by the Borrower of any Taxes
pursuant to this Section, the Borrower will furnish to the Administrative Agent
at its address set forth on Schedule A hereto, appropriate evidence of payment
thereof.

(d) If a Lender is a U.S. Person, such Lender shall deliver to the Borrower,
with a copy to the Administrative Agent and the Account Bank, upon the earlier
of 15 days after the Closing Date or on or prior to the date on which such
entity becomes a Lender hereunder (and from time to time thereafter upon the
reasonable request of the Borrower or the Administrative Agent), two executed
copies of IRS Form W-9 certifying that such Lender is exempt from U.S. federal
backup withholding tax.

(e) If a Lender is not created or organized under the laws of the United States
or a State or is otherwise not a U.S. Person, such Lender shall, to the extent
that it may then do so under Applicable Law, deliver to the Borrower, with a
copy to the Administrative Agent and the Account Bank, upon the earlier of 15
days after the Closing Date, or on or prior to the date on which such entity
becomes a Lender hereunder and from time to time thereafter upon the reasonable
request of the Borrower or the Administrative Agent, (i) two executed originals
of IRS Form W-8ECI, Form W-8BEN or W-8BEN-E, or Form W-8IMY accompanied by the
relevant certification documents for each beneficial owner (or any successor
forms or other certificates or statements which may be required from time to
time by the relevant United States taxing authorities or Applicable Law), as
appropriate, and (ii) two executed originals (of any other form prescribed by
Applicable Law as a basis for claiming exemption from or a reduction in U.S.
federal withholding tax, duly completed, together with such supplementary
documentation as may be prescribed by Applicable Law) to permit the Borrower or
the Administrative Agent to determine the withholding or deduction required to
be made; provided, however, that the delivery of any form or documentation
pursuant to this subsection shall not be required if in the related Lender’s
reasonable judgment the completion, execution or delivery of such form or
documentation would subject such Lender to any material unreimbursed cost or
expense or would materially prejudice the legal or commercial position of such
Lender. For any period with respect to which a Lender has failed to provide the
Borrower with the appropriate form, certificate or statement described in this
subsection (other than if such failure is due to a change in law occurring after
the date of this Agreement), with a copy to the Administrative Agent and the
Account Bank, such Lender shall not be entitled to indemnification under
Section 2.13 or Section 2.14(a) or (b) with respect to any Taxes.

(f) If a payment made to any Lender under any Basic Document would be subject to
U.S. federal withholding Tax imposed by FATCA if such Lender were to fail to
comply with the applicable reporting requirements of FATCA (including those
contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Lender
shall deliver to the Borrower, the

 

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Administrative Agent and the Account Bank, at the time or times prescribed by
law and at such time or times reasonably requested by the Borrower, the
Administrative Agent or the Account Bank, such documentation prescribed by
Applicable Law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code)
and such additional documentation reasonably requested by the Borrower, the
Administrative Agent or the Account Bank as may be necessary for the Borrower,
the Administrative Agent and the Account Bank to comply with their obligations
under FATCA and to determine that such Lender has complied with its obligations
under FATCA or to determine the amount to deduct and withhold from such payment.
Upon request from the Account Bank, the Borrower will provide such additional
information that it may have to assist the Account Bank in making any
withholdings or informational reports.

(g) Each Lender agrees that if any form or certification it previously delivered
expires or becomes obsolete or inaccurate in any respect, it shall update such
form or certification or promptly notify the Borrower, the Administrative Agent
and the Account Bank of its legal inability to do so.

(h) Within 30 days of the written request of the Borrower therefor, each Lender
shall execute and deliver to the Borrower such certificates, forms or other
documents which can be furnished consistent with the facts and which are
reasonably necessary to assist the Borrower in applying for refunds of Taxes
remitted hereunder; provided, however, that (i) a Lender shall not be required
to deliver such certificates, forms or other documents if in its sole discretion
it is determined that the deliverance of such certificate, form or other
document would have a material adverse effect on such Lender and (ii) the
Borrower shall reimburse such Lender for any reasonable expenses incurred in the
delivery of such certificate, form or other document. If any party determines,
in its sole discretion exercised in good faith, that it has received a refund of
any Taxes as to which it has been indemnified pursuant to this Section
(including by the payment of Additional Amounts), it shall pay to the
indemnifying party an amount equal to such refund (but only to the extent of
indemnity payments made under this Section with respect to the Taxes giving rise
to such refund), net of all reasonable out-of-pocket expenses (including Taxes)
of such indemnified party and without interest (other than any interest paid by
the relevant Governmental Authority with respect to such refund). Such
indemnifying party, upon the request of such indemnified party, shall repay to
such indemnified party the amount paid over pursuant to this subsection in the
event that such indemnified party is required to repay such refund to such
Governmental Authority.

Section 2.15. Sharing of Payments, Etc.    If, other than as expressly provided
elsewhere herein, any Lender shall obtain on account of the Loans owned by it
any payment in excess of its Invested Percentage in such payment, such Lender
shall immediately (i) notify the Administrative Agent of such fact and
(ii) purchase from the other Lenders such participations made by them as shall
be necessary to cause such purchasing Lender to share the excess payment pro
rata (based on the Invested Percentage of each Lender as in effect prior to
receipt of such payment) with each of them; provided, however, that if all or
any portion of such excess payment is thereafter recovered from the purchasing
Lender, such purchase shall to that extent be rescinded and each other Lender
shall repay to the purchasing Lender the purchase price paid therefor, together
with an amount equal to such paying Lender’s ratable share (according to the
proportion of (a) the amount of such paying Lender’s required repayment to
(b) the total amount so recovered from the purchasing Lender) of any interest or
other amount paid or payable by the

 

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purchasing Lender in respect of the total amount so recovered. The Borrower
agrees that any Lender so purchasing a participation from another Lender may, to
the fullest extent permitted by Applicable Law, exercise all its rights of
payment (including the right of set-off) with respect to such participation as
fully as if such Lender was the direct creditor of the Borrower in the amount of
such participation. The Administrative Agent will keep records (which shall be
conclusive and binding in the absence of manifest error) of participations
purchased under this Section.

Section 2.16. Tax Treatment. The Borrower, the Lenders and the Administrative
Agent agree to treat the Loans and any interests therein as indebtedness of the
Borrower secured by the Collateral for U.S. federal, State and local income,
single business and franchise tax purposes.

Section 2.17. The Account Bank.

(a) The Borrower hereby appoints Wells Fargo Bank as the initial Account Bank.
All payments of amounts due and payable in respect of the Aggregate Unpaids that
are to be made from amounts withdrawn from the Collection Account or the Reserve
Account shall be made on behalf of the Borrower by the Account Bank in
accordance with Section 2.08.

(b) The Account Bank shall be compensated for its activities hereunder by
receiving the Account Bank Fee. The Account Bank Fee shall be payable in
accordance with the priorities specified in Section 2.08 or, at the option of
the Servicer, may be paid directly to the Account Bank by the Servicer. The
Borrower shall indemnify the Account Bank and its officers, directors, employees
and agents for, and hold them harmless against, any loss, liability or expense
incurred, other than in connection with the willful misconduct, gross negligence
or bad faith on the part of the Account Bank or its agents or Affiliates,
arising out of or in connection with (i) the performance of its obligations
under and in accordance with this Agreement, 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 and (ii) the
gross negligence, willful misconduct or bad faith of the Borrower in the
performance of its duties hereunder. All such amounts shall be payable in
accordance with Section 2.08. The provisions of this Section shall survive the
termination of this Agreement.

THE FOREGOING INDEMNIFICATION SHALL APPLY WHETHER OR NOT SUCH LIABILITIES AND
COSTS ARE IN ANY WAY OR TO ANY EXTENT OWED, IN WHOLE OR IN PART, UNDER ANY CLAIM
OR THEORY OF STRICT LIABILITY.

(c) The Account Bank shall be liable in accordance herewith only to the extent
of the obligations specifically undertaken by the Account Bank in such capacity
herein and under the Account Control Agreement. No implied covenants or
obligations shall be read into this Agreement against the Account Bank and, in
the absence of bad faith on the part of the Account Bank or its agents or
Affiliates, the Account Bank may conclusively rely on the truth of the
statements and the correctness of the opinions expressed in any certificates or
opinions furnished to the Account Bank pursuant to and conforming to the
requirements of this Agreement.

(d) The Account Bank shall not be liable for:

(i) an error of judgment made in good faith by one of its officers; or

 

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(ii) any action taken, suffered or omitted to be taken in good faith in
accordance with or believed by it to be authorized or within the discretion or
rights or powers conferred, by this Agreement or at the direction of a Secured
Party relating to the exercise of any power conferred upon the Account Bank
under this Agreement in each case unless it shall be proved that the Account
Bank shall have been negligent in ascertaining the pertinent facts.

(e) The Account Bank shall not be deemed to have knowledge of any default, event
of default, Termination Event, Unmatured Termination Event, event or
information, or be required to act upon any default, event of default,
Termination Event, Unmatured Termination Event, event or information (including
the sending of any notice) unless a Responsible Officer of the Account Bank
shall have received written notice or has actual knowledge of such event or
information, and shall have no duty to take any action to determine whether any
such event, default, event of default, Termination Event, or Unmatured
Termination Event has occurred. Delivery of any reports, information and
documents to the Account Bank provided for herein is for informational purposes
only and the Account Bank’s receipt of such reports (including monthly
distribution reports) and any publicly available information, shall not
constitute actual or constructive knowledge or notice of any information
contained therein or determinable from information contained therein.

(f) Without limiting the generality of this Section, the Account Bank shall have
no duty (i) to see to any recording, filing or depositing of this Agreement or
any agreement referred to herein or any financing statement or continuation
statement evidencing a security interest in the Collateral, or to see to the
maintenance of any such recording or filing or depositing or to any recording,
refiling or redepositing of any thereof, (ii) to see to any insurance of the
Financed Vehicles or Obligors or to effect or maintain any such insurance,
(iii) to see to the payment or discharge of any Tax or any Lien of any kind
owing with respect to, assessed or levied against, any part of the Contracts,
(iv) to confirm or verify the contents of any reports or certificates of the
Servicer (other than in its capacity as Backup Servicer in accordance with its
express duties as such undertaken herein) or the Borrower delivered to the
Account Bank pursuant to this Agreement believed by the Account Bank to be
genuine and to have been signed or presented by the proper party or parties or
(v) to inspect the Financed Vehicles at any time or ascertain or inquire as to
the performance or observance of any of the Borrower’s or the Servicer’s
representations, warranties or covenants or the Servicer’s duties and
obligations as Servicer and as custodian of books, records, files and computer
records relating to the Contracts under this Agreement (in each case other than
in its capacity as Backup Servicer or Collateral Custodian in accordance with
its express duties as such undertaken herein).

(g) The Account Bank 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 ground for believing that the repayment of such funds or indemnity
satisfactory to it 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 Account Bank to perform, or be responsible for the manner
of performance of, any of the obligations of the Servicer under this Agreement
(other than in its capacity as Backup Servicer in accordance with its express
duties as such undertaken herein).

 

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(h) The Account Bank may rely and shall be protected in acting or refraining
from acting upon any resolution, Officer’s Certificate, Monthly Report,
certificate of auditors or any other certificate, statement, instrument,
opinion, report, notice, request, consent, order, appraisal, bond or other paper
or document reasonably believed by it to be genuine and to have been signed or
presented by the proper party or parties.

(i) The Account Bank may consult with counsel of its choice with regard to legal
questions arising out of or in connection with this Agreement and the advice or
opinion of such counsel shall be full and complete authorization and protection
in respect of any action taken, omitted or suffered by the Account Bank in good
faith in accordance therewith.

(j) The Account Bank shall be under no obligation to exercise any of the rights,
powers or remedies vested in it by this Agreement (except to comply with its
obligations under this Agreement and any other Basic Document to which it is a
party) or to institute, conduct or defend any litigation under this Agreement or
in relation to this Agreement, at the request, order or direction of the
Administrative Agent pursuant to the provisions of this Agreement, unless the
Administrative Agent, on behalf of the Secured Parties, or any other party
hereto shall have offered to the Account Bank reasonable security or indemnity
against the costs, expenses and liabilities that may be incurred therein or
thereby.

(k) The Account Bank shall not be bound to make any investigation into the facts
or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, consent, order, approval, bond or other paper
or document, unless requested in writing so to do by a Secured Party; provided,
that if the payment within a reasonable time to the Account Bank 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 Account Bank, not reasonably
assured by the Borrower, the Account Bank 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 Borrower or,
if paid by the Account Bank, shall be reimbursed by the Borrower pursuant to
Section 2.08.

(l) The Account Bank 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 Account Bank shall not be responsible for any
misconduct or negligence of any such agent or custodian appointed with due care
by it hereunder.

(m) The Account Bank shall have no duties or responsibilities except those that
are specifically set forth herein and the other Basic Documents to which it is a
party, and no implied covenants or obligations shall be read into this Agreement
against the Account Bank. If the Account Bank shall request instructions from
the Administrative Agent or the Servicer with respect to any act, action or
failure to act in connection with and as set forth in this Agreement, the
Account Bank shall be entitled to refrain from taking such action and continue
to refrain from acting unless and until the Account Bank shall have received
written instructions from the Administrative Agent or the Servicer, as
applicable, without incurring any liability therefor to the Administrative
Agent, the Borrower, the Servicer or any other person.

 

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(n) The Account Bank may act in reliance upon any written communication of the
Administrative Agent concerning the delivery of Collateral pursuant to this
Agreement. The Account Bank does not assume, shall have no responsibility for
and makes no representation as to, monitoring the value of the Contracts and
other Collateral. The Account Bank shall not be liable for any action or
omission to act hereunder, except for its own gross negligence, bad faith or
willful misconduct.

THE FOREGOING PARAGRAPH SHALL APPLY WHETHER OR NOT SUCH LIABILITIES ARE IN ANY
WAY OR TO ANY EXTENT OWED, IN WHOLE OR IN PART, UNDER ANY CLAIM OR THEORY OF
STRICT LIABILITY.

(o) If the Account Bank shall at any time receive conflicting instructions from
the Administrative Agent and the Servicer or any other party to this Agreement
and the conflict between such instructions cannot be resolved by reference to
the terms of this Agreement, the Account Bank shall be entitled to rely on the
instructions of the Administrative Agent. In the absence of bad faith, gross
negligence or willful misconduct on the part of the Account Bank, the Account
Bank may rely and shall be protected in acting or refraining from acting upon
any resolution, Officer’s Certificate, Monthly Report, 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. The Account Bank may rely upon the validity of documents delivered to
it, without investigation as to their authenticity or legal effectiveness, and
the Account Bank shall not be liable to the Servicer or any other party to this
Agreement in respect of any claims that may arise or be asserted against the
Account Bank because of the invalidity of any such documents or their failure to
fulfill their intended purpose. The Account Bank shall not be bound to ascertain
or inquire as to the performance or observance of any of the terms of this
Agreement or any other agreement on the part of any party, except as may
otherwise be specifically set forth herein.

(p) The Account Bank is authorized, in its sole discretion, to disregard any and
all notices or instructions given by any other party hereto or by any other
Person other than any such notices or instructions as are expressly provided for
in this Agreement or the Account Control Agreement and orders or process of any
court entered or issued with or without jurisdiction. If any property subject
hereto is at any time attached, garnished or levied upon under any court order
or in case the payment, assignment, transfer, conveyance or delivery of any such
property shall be stayed or enjoined by any court order, or in case any order,
judgment or decree shall be made or entered by any court affecting such property
or any part hereof, then and in any of such events the Account Bank is
authorized, in its sole discretion, to rely upon and comply with any such order,
writ, judgment or decree with which it is advised by legal counsel of its own
choosing is binding upon it, and if it complies with any such order, writ,
judgment or decree it shall not be liable to any other party hereto or to any
other Person by reason of such compliance even though such order, writ, judgment
or decree maybe subsequently reversed, modified, annulled, set aside or vacated.

 

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(q) Any Person into which the Account Bank may be merged or converted or with
which it may be consolidated, or any Person resulting from any merger,
conversion or consolidation to which the Account Bank shall be a party, or any
Person succeeding to the business of the Account Bank, provided that such Person
otherwise meets the requirements of the definition of the term “Account Bank”,
shall be the successor of the Account Bank under this Agreement, without the
execution or filing of any paper or any further act on the part of any of the
parties hereto, anything herein to the contrary notwithstanding.

(r) The Account Bank may at any time resign and terminate its obligations under
this Agreement; provided, however, that except as provided below, no such
resignation or termination shall be effective until a successor Account Bank is
appointed (and accepts such appointment) pursuant to the terms of this Section.
Promptly after receipt of notice of the Account Bank’s intended resignation, the
Borrower shall appoint, by written instrument, a successor Account Bank. If the
Borrower fails to appoint a successor Account Bank pursuant to the terms hereof
within 30 days after receipt of the Account Bank’s notice of resignation, the
Administrative Agent shall have the exclusive right to appoint by written
instrument, a successor Account Bank. If neither the Borrower nor the
Administrative Agent has appointed a successor Account Bank within 60 days after
receipt of the Account Bank’s notice of resignation, the Account Bank may
petition a court of competent jurisdiction to appoint a successor Account Bank,
with the cost of such petition to be borne by the Borrower.

(s) The Account Bank may conclusively rely on, and shall be fully protected in
acting or refraining from acting upon, any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
approval, bond or any other paper or document (including any of the foregoing
delivered in electronic format) believed by it to be genuine and to have been
signed or presented by the proper person or persons. Nothing herein shall be
construed to impose an obligation on the part of the Account Bank to investigate
evaluate, certify, verify, independently determine or re-calculate any
information, statement, representation or warranty or any fact or matter stated
in, or the accuracy of, any such document and may conclusively rely as to the
truth of the statements and the correctness of the opinions expressed therein.

(t) Without limiting the generality of any other provision hereof, the Account
Bank shall have no duty to conduct any investigation as to the occurrence of any
condition requiring the repurchase of any Receivable by any Person pursuant to
this Agreement, or the eligibility of any Receivable for purposes of this
Agreement.

(u) Before the Account Bank acts or refrains from taking any action under this
Agreement, it may require an Officer’s Certificate and/or Opinion of Counsel
from the party requesting that the Account Bank act or refrain from acting in
form and substance acceptable to the Account Bank, the costs of which (including
the Account Bank’s reasonable attorney’s fees and expenses) shall be paid by the
party requesting that the Account Bank act or refrain from acting. The Account
Bank shall not be liable for any action it takes or omits to take in good faith
in reliance on any such Officer’s Certificate or Opinion of Counsel.

(v) Notwithstanding anything to the contrary in this Agreement, the Account Bank
shall not be liable for any loss or damage or any failure or delay in the
performance of its obligations hereunder if it is prevented from so performing
its obligations by any reason which is beyond the control of the Account Bank,
including by any existing or future law or regulation, any existing or future
act of governmental authority, act of God, flood, war whether declared or

 

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undeclared, terrorism, riot, rebellion, civil commotion, other industrial
action, general failure of electricity or other supply, technical failure,
accidental or mechanical or electrical breakdown, computer failure or failure of
any money transmission system and any other market conditions affecting the
execution or settlement of transactions or any event where, in the reasonable
opinion of the Account Bank, performance of any duty or obligation under or
pursuant to this Agreement would or may be illegal or would result in the
Account Bank being in breach of any Applicable Law or any practice, request,
direction, notice, announcement or similar action of any Governmental Authority
to which the Account Bank is subject.

(w) Notwithstanding anything to the contrary in this Agreement, the Account Bank
shall not be required to take any action that is not in accordance with
Applicable Law.

(x) The right of the Account Bank to perform any permissive or discretionary act
enumerated in this Agreement or any related document shall not be construed as a
duty.

(y) Neither the Account Bank nor any of its officers, directors, employees,
attorneys or agents will be responsible or liable for (i) the existence,
genuineness, value or protection of any collateral securing the Receivables, for
the legality, enforceability, effectiveness or sufficiency of the Basic
Documents for the creation, perfection, continuation, priority, sufficiency or
protection of any of the Liens, or for any defect or deficiency as to any such
matters, or for monitoring the status of any lien or performance of collateral,
or for any failure to demand, collect, foreclose or realize upon or otherwise
enforce any of the Liens or Basic Documents or any delay in doing so, or
(ii) reviewing or determining the accuracy, completeness or sufficiency of any
chain of ownership (including endorsements or assignments related thereto) with
respect to any Receivable or Receivable File.

(z) The Account Bank shall not be liable for any action or inaction of the
Servicer, or any other party (or agent thereof) to this Agreement or any related
document and may assume compliance by such parties with their obligations under
this Agreement or any related agreements, unless a Responsible Officer of the
Account Bank shall have received written notice to the contrary at the address
of the Account Bank set forth on Schedule A hereto.

(aa) Knowledge of the Account Bank shall not be attributed or imputed to Wells
Fargo Bank’s other roles in the transaction and knowledge of the Collateral
Custodian or Backup Servicer shall not be attributed or imputed to each other or
to the Account Bank (other than those where the roles are performed by the same
group or division within Wells Fargo Bank or otherwise share the same
Responsible Officers), or any Affiliate, line of business or other division of
Wells Fargo Bank (and vice versa).

(bb) [Reserved].

(cc) Neither the Account Bank nor any of its directors, officers, agents or
employees shall be responsible in any manner to any of the Secured Parties for
any recitals, statements, representations or warranties made by the Borrower,
the Servicer, Regional Management, the Administrative Agent, the Backup Servicer
or the Collateral Custodian contained in this Agreement or in any certificate,
report, statement or other document referred to or provided for in, or received
under or in connection with, this Agreement or any other Basic Document to

 

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which it is a party for the value, validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement or any other document furnished
in connection herewith, or for any failure of the Borrower to perform its
obligations hereunder, or for the satisfaction of any condition specified in
Article Four.

(dd) Without limiting the generality of any other provision hereof, neither the
Account Bank’s preparation or receipt of any reports pursuant to this Agreement
nor any other publicly available information available to the Account Bank shall
constitute written notice hereunder.

(ee) The Account Bank shall be entitled to any protection, privilege or
indemnity afforded to the Collateral Custodian under the terms of this
Agreement.

(ff) Notwithstanding anything to the contrary herein or otherwise, under no
circumstance will the Account Bank be liable for special, punitive, indirect, or
consequential loss or damage of any kind whatsoever (including lost profits),
whether or not foreseeable, even if the Account Bank is actually aware of or has
been advised of the likelihood of such loss or damage.

 

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ARTICLE THREE

SECURITY

Section 3.01. Collateral.

(a) The parties hereto intend that this Agreement constitute a security
agreement and the transactions effected hereby constitute a secured loan by the
Lenders to the Borrower under Applicable Law. As collateral security for the
prompt, complete and indefeasible payment and performance in full when due,
whether by lapse of time, acceleration or otherwise, of the Aggregate Unpaids,
the Borrower hereby grants to the Administrative Agent, as agent for the Secured
Parties, a lien on and security interest in all of the Borrower’s right, title
and interest in, to and under the following, whether now existing or owned or
hereafter arising or acquired by the Borrower (collectively, the “Collateral”):

(i) the Receivables and the related Contracts, and any accounts or obligations
evidenced thereby, any guarantee thereof, all Collections and all monies due
(including any payments made under any guarantee or similar credit enhancement
with respect to any such Receivables) to become due or received by any Person in
payment of any of the foregoing on or after the related Cutoff Date;

(ii) the Financed Vehicles (including Financed Vehicles that have been
repossessed) or in any document or writing evidencing any security interest in
any Financed Vehicle and each security interest in each Financed Vehicle
securing each such Receivable, including all proceeds from any sale or other
disposition of such Financed Vehicles;

(iii) each First Tier Purchase Agreement and all remedies thereunder and the
assignment to the Administrative Agent of all UCC financing statements filed by
Regional Management against each Originator (other than Regional Management)
under or in connection with the First Tier Purchase Agreement;

(iv) the Second Tier Purchase Agreement and all remedies thereunder and the
assignment to the Administrative Agent of all UCC financing statements filed by
the Borrower against Regional Management under or in connection with the Second
Tier Purchase Agreement;

(v) the Account Collateral;

(vi) all Liquidation Proceeds;

(vii) all Receivable Files, Servicer Files and the Schedule of Receivables, and
the documents, agreements and instruments included in the Receivable Files and
Servicer Files, including rights of recourse of the Borrower against the related
Originators or, if applicable, under the related Dealer Agreement, any Dealer;

(viii) all Records, documents and writings evidencing or related to the
Receivables or the Contracts;

 

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(ix) all rights to payment under all Insurance Policies with respect to a
Financed Vehicle, including any monies collected from whatever source in
connection with any default of an Obligor with respect to a Financed Vehicle and
any proceeds from claims or refunds of premiums on any Insurance Policy, and all
proceeds thereof;

(x) all guaranties, indemnities, warranties, insurance (and proceeds and premium
refunds thereof), payments and other agreements or arrangements of whatever
character from time to time supporting or securing payment of the Receivables,
whether pursuant to the related Contracts or otherwise;

(xi) all rights to payment under all service contracts and other contracts and
agreements associated with the Receivables and all of the Borrower’s interest in
all recourse rights against all related Dealers with respect to the Receivables
(excluding any rights in any Dealer reserve);

(xii) all security interests, Liens, guaranties and other encumbrances in favor
of or assigned or transferred to the Borrower in and to the Receivables and
Financed Vehicles;

(xiii) all deposit accounts, monies, deposits, funds, accounts and instruments
relating to the foregoing; and

(xiv) all income, products, accessions and proceeds of the foregoing.

(b) The grant under this Section does not constitute and is not intended to
result in a creation or an assumption by any of the Secured Parties of any
obligation of the Borrower or any other Person in connection with any or all of
the Collateral or under any agreement or instrument relating thereto. Anything
herein to the contrary notwithstanding, (i) the Borrower shall remain liable
under the Contracts to the extent set forth therein to perform all of its duties
and obligations thereunder to the same extent as if this Agreement had not been
executed, (ii) the exercise by the Administrative Agent of any of its rights in
the Collateral shall not release the Borrower from any of its duties or
obligations under the Collateral and (iii) no Secured Party shall have any
obligations or liability under the Collateral by reason of this Agreement, nor
shall any Secured Party be obligated to perform any of the obligations or duties
of the Borrower thereunder or to take any action to collect or enforce any claim
for payment assigned hereunder.

(c) Notwithstanding the foregoing grant of security interest, no account,
instrument, chattel paper or other obligation or property of any kind due from,
owned by or belonging to a Sanctioned Person shall be Collateral.

(d) Each of the Borrower and the Servicer represents and warrants as to itself
that each remittance of Collections by the Borrower or the Servicer to the
Administrative Agent or any Lender under this Agreement will have been (i) in
payment of a debt incurred by the Borrower in the ordinary course of business or
financial affairs of the Borrower and the Servicer and (ii) made in the ordinary
course of business or financial affairs of the Borrower and the Servicer.

 

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Section 3.02. Release of Collateral; No Legal Title.

(a) At the same time as any Receivable (i) expires by its terms and all amounts
in respect thereof have been paid by the related Obligor and deposited into the
Collection Account or (ii) has been prepaid in full and all amounts in respect
thereof have been paid by the related Obligor and deposited into the Collection
Account, the Administrative Agent will, to the extent requested by the Servicer,
release its interest in such Receivable, the related Contract and the related
Collateral. In connection with any sale of a Financed Vehicle on or after the
occurrence of an event described in clauses (i) or (ii) above or in connection
with a Defaulted Receivable, after the deposit by the Servicer of the proceeds
of the sale or other disposition of the related Financed Vehicle into the
Collection Account, the Administrative Agent will, at the sole expense of the
Servicer, execute and deliver to the Servicer any assignments, bills of sale,
termination statements, payoff letters and any other releases and instruments as
the Servicer may reasonably request in order to effect the release and transfer
of such Financed Vehicle; provided, that the Administrative Agent will not make
any representation or warranty, express or implied, with respect to any such
Financed Vehicle in connection with such sale or transfer and assignment.
Nothing in this Section shall diminish the Servicer’s obligations pursuant to
Section 7.03(c) or 7.03(d) with respect to the proceeds of any such sale or
other disposition.

(b) Upon (i) the exercise of the optional principal repayment in accordance with
Section 2.06 or (ii) the Facility Termination Date, the Administrative Agent, at
the Borrower’s expense, upon payment in full of the related Aggregate Unpaids,
shall execute and file such partial or full releases or partial or full
assignments of financing statements and other documents and instruments as may
be reasonably requested by the Borrower to effectuate the release of the
relevant portion of the Collateral.

(c) The Administrative Agent will not, except as may result from the exercise of
its remedies hereunder, have legal title to any part of the Collateral on the
Facility Termination Date and will have no further interest in or rights with
respect to the Collateral.

Section 3.03. Protection of Security Interest; Administrative Agent, as
Attorney-in-Fact.

(a) The Borrower agrees that from time to time, at its expense, it will promptly
execute and deliver all instruments and documents, and take all actions, that
may reasonably be necessary, or that the Administrative Agent may reasonably
deem necessary, to perfect, protect or more fully evidence the security interest
granted to the Administrative Agent in the Receivables and the other Collateral,
or to enable the Administrative Agent or the Secured Parties to exercise and
enforce their rights and remedies hereunder and thereunder.

(b) If the Borrower fails to perform any of its obligations hereunder after five
Business Days’ notice from any Secured Party, any Secured Party may (but shall
not be required to) perform, or cause performance of, such obligation; and the
reasonable costs and expenses incurred by such Secured Party in connection
therewith shall be payable by the Borrower as provided in Article Eleven. The
Borrower irrevocably authorizes the Administrative Agent and appoints the
Administrative Agent, as its attorney-in-fact to act on behalf of the Borrower,
(i) to execute or cause to be executed on behalf of the Borrower as debtor and
to file financing statements necessary or desirable in the Administrative
Agent’s sole discretion to perfect and to

 

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maintain the perfection and priority of the interest of the Secured Parties in
the Receivables and the other Collateral, including financing statements that
describe the collateral covered thereby as “all assets of the Borrower whether
now owned or existing or hereafter acquired or arising and wheresoever located”
and (ii) to file a carbon, photographic or other reproduction of this Agreement
or any financing statement with respect to the Receivables and the other
Collateral, as a financing statement in such offices as the Administrative Agent
in its sole discretion deems necessary or desirable to perfect and to maintain
the perfection and priority of the interests of the Secured Parties in the
Receivables and the other Collateral. This appointment is coupled with an
interest and is irrevocable.

Section 3.04. Assignment of the Second Tier Purchase Agreement. The Borrower
hereby represents, warrants and confirms to the Administrative Agent that the
Borrower has collaterally assigned to the Administrative Agent, for the ratable
benefit of the Secured Parties hereunder, all of the Borrower’s right and title
to and interest in the Second Tier Purchase Agreement. The Borrower confirms
that the Administrative Agent shall have the sole right to enforce the
Borrower’s rights and remedies under the Second Tier Purchase Agreement for the
benefit of the Secured Parties, but without any obligation on the part of the
Administrative Agent, the Secured Parties or any of their respective Affiliates,
to perform any of the obligations of the Borrower under the Second Tier Purchase
Agreement. The Borrower further confirms and agrees that such collateral
assignment to the Administrative Agent shall terminate upon the Facility
Termination Date; provided, however, that the rights of the Secured Parties
pursuant to such collateral assignment with respect to rights and remedies in
connection with any indemnities and any breach of any representation, warranty
or covenants made by Regional Management pursuant to the Second Tier Purchase
Agreement, which rights and remedies survive the termination of the Second Tier
Purchase Agreement, shall be continuing and shall survive any termination of
such collateral assignment.

Section 3.05. Waiver of Certain Laws. Each of the Borrower and the Servicer
agrees, to the full extent that it may lawfully so agree, that neither it nor
anyone claiming through or under it will set up, claim or seek to take advantage
of any appraisement, valuation, stay, extension or redemption law now or
hereafter in force in any locality where any part of the Collateral may be
situated in order to prevent, hinder or delay the enforcement or foreclosure of
this Agreement, or the absolute sale of any of the Collateral or any part
thereof, or the final and absolute putting into possession thereof, immediately
after such sale, of the purchasers thereof, and each of the Borrower and the
Servicer, for itself and all who may at any time claim through or under it,
hereby waives, to the full extent that it may be lawful so to do, the benefit of
all such laws, and any and all right to have any of the properties or assets
constituting the Collateral marshaled upon any such sale, and agrees that the
Administrative Agent or any court having jurisdiction to foreclose the security
interests granted in this Agreement may sell the Collateral as an entirety or in
such parcels as the Administrative Agent or such court may determine.

 

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ARTICLE FOUR

CONDITIONS OF CLOSING AND THE LOANS

Section 4.01. Conditions of Closing and the Loans. Neither the Closing Date, nor
the Effective Date shall occur and the Lenders shall not be obligated to make
either the Initial Loan or the Effective Date Loan hereunder, as applicable, nor
shall any Lender, the Administrative Agent or any other party hereto be
obligated to take, fulfill or perform any other action hereunder, until the
following conditions precedent, after giving effect to the proposed Loan, in
each case, have been satisfied in the sole discretion of the Administrative
Agent:

(a) The Administrative Agent shall have received (i) an executed copy of each
Basic Document (other than, as of the Closing Date, the Master Deposit Account
Control Agreement, the Wells Fargo Deposit Account Control Agreement and the
Security Agreement) and (ii) such other documents, instruments, agreements and
Opinions of Counsel as the Administrative Agent shall request in connection with
the transactions contemplated by this Agreement, each in form and substance
satisfactory to the Administrative Agent.

(b) The Administrative Agent shall have received (i) satisfactory evidence,
which may be in the form of an Officer’s Certificate or an Opinion of Counsel,
that the Borrower, the Servicer, Regional Management, the Backup Servicer and
the Collateral Custodian have obtained all required consents and approvals of
all Persons, including all requisite Governmental Authorities, to the execution,
delivery and performance of this Agreement and the other Basic Documents (other
than the Master Depository Account Control Agreement, the Wells Master
Depository Account Control Agreement and the Security Agreement) to which each
is a party and the consummation of the transactions contemplated hereby or
thereby or (ii) an Officer’s Certificate or an Opinion of Counsel from each of
the Borrower, the Servicer, Regional Management, the Backup Servicer and the
Collateral Custodian, in form and substance satisfactory to the Administrative
Agent, affirming that no such consents or approvals are required.

(c) The Borrower and Regional Management shall each be in compliance in all
material respects with all Applicable Laws and shall have delivered an Officer’s
Certificate to the Administrative Agent as to such compliance and other closing
matters.

(d) The Borrower shall have paid all fees, costs and expenses required to be
paid by it on the Closing Date, including all fees required hereunder and under
the Fee Letter, and shall have reimbursed each Lender and the Administrative
Agent for all fees, costs and expenses of closing the transactions contemplated
hereunder and under the other Basic Documents (other than the Master Depository
Account Control Agreement, the Wells Master Depository Account Control Agreement
and the Security Agreement), including attorneys’ fees and any other legal and
document preparation costs incurred by any Lender and/or the Administrative
Agent.

(e) No Termination Event or Unmatured Termination Event shall have occurred.

 

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(f) No Servicer Termination Event or any event that, with the giving of notice
or the lapse of time, or both, would become a Servicer Termination Event shall
have occurred.

(g) The Administrative Agent shall have received the Schedule of Receivables and
the Schedule of Locations of Books and Records.

(h) All existing financing statements naming Regional Management, as debtor,
securing any chattel paper as collateral thereunder shall be terminated, or
amended to release such collateral, to the extent such financing statement
covers any Receivables that will become Collateral upon its pledge on the
Closing Date or the Effective Date, as the case may be.

(i) The Borrower shall have (i) delivered each related Receivable File to the
Collateral Custodian prior to, in the case of (A) the Initial Receivables, the
Closing Date and (B) the Effective Date Receivables, 90 days after the Effective
Date and (ii) caused the Collateral Custodian to deliver to the Administrative
Agent the related Receivable Receipt, in the case of (A) the Initial
Receivables, the Closing Date and (B) the Effective Date Receivables, 30 days
after delivery of the related Receivable Files to the Collateral Custodian
pursuant to clause (i)(B) above.

(j) The Borrower (directly or through the Servicer and the Subservicers) shall
have deposited into (i) the Collection Account, an amount equal to all
Collections received on or in respect of the related Receivables since the
related Cutoff Date and (ii) the Reserve Account, an amount equal to the Reserve
Account Initial Deposit.

(k) After giving effect to the funding of the Initial Loan on the Closing Date,
or the Effective Date Loan on the Effective Date, as the case may be, the Loan
Balance shall not exceed the Cutoff Date Pool Balance minus the Target
Overcollateralization Amount.

(l) On and as of the Closing Date or the Effective Date, as the case may be,
each of the Borrower, the Servicer and Regional Management has performed all of
the agreements contained in this Agreement and the other Basic Documents (other
than, as of the Closing Date, the Master Deposit Account Control Agreement, the
Wells Fargo Deposit Account Control Agreement and the Security Agreement) to be
performed by it.

(m) No adverse procedures were used by the Borrower in providing information
related to the Receivables and, to the Borrower’s knowledge, the selection of
the Receivables by the Administrative Agent did not result in a selection
adverse to the Lenders.

(n) No Applicable Law shall prohibit, and no order, judgment or decree of any
Governmental Authority shall prohibit or enjoin, the making of the Initial Loan
on the Closing Date or the Effective Date Loan on the Effective Date by the
Lenders in accordance with the provisions hereof.

 

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(o) The Administrative Agent shall have received opinions from (i) Alston & Bird
(A) on each of the Closing Date and the Effective Date with respect to
corporate, security interest, true sale and nonconsolidation, Investment Company
Act and Volcker Rule exemption matters customarily rendered in connection with
the transactions contemplated by the Basic Documents (other than the Master
Depository Account Control Agreement, the Wells Master Depository Account
Control Agreement and the Security Agreement) and (B) on the Closing Date
perfection of security interests opinion in the related Financed Vehicles in the
States of North Carolina, South Carolina and Texas (i.e., States in which
Receivables aggregating more than 10.0% of the Initial Cutoff Date Pool Balance
were originated) and (ii) Womble Carlyle with respect to corporate opinions for
the Originators whose jurisdictions are in the States of Alabama, South Carolina
and Tennessee, customarily rendered in connection with the transactions
contemplated in the Basic Documents.

(p) The Administrative Agent shall have received such other approvals, opinions,
information or documents as the Administrative Agent may reasonably require.

 

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ARTICLE FIVE

REPRESENTATIONS AND WARRANTIES

Section 5.01. Representations and Warranties of the Borrower. The Borrower
represents and warrants, as of the Closing Date and the Effective Date:

(a) Organization and Good Standing. The Borrower has been duly organized, and is
validly existing as a limited liability company in good standing under the laws
of the State of Delaware, with all requisite power and authority to own or lease
its properties and conduct its business as such business is presently conducted,
and the Borrower had at all relevant times, and now has all necessary power,
authority and legal right to acquire, own, sell and pledge the Receivables and
the other Collateral.

(b) Due Qualification. The Borrower is duly qualified to do business and is in
good standing as a Delaware limited liability company and has obtained all
necessary licenses and approvals in all jurisdictions (other than in the State
of Texas) in which the ownership or lease of property or the conduct of its
business requires such qualifications, licenses or approvals (including, as
applicable, the origination, purchase, sale, pledge and servicing of the
Receivables) except where the failure to qualify could not reasonably be
expected to result in a Material Adverse Effect.

(c) Power and Authority; Due Authorization. The Borrower (i) has all necessary
power, authority and legal right to (A) execute and deliver the Borrower Basic
Documents, (B) carry out the terms of the Borrower Basic Documents and (C) grant
the security interest in the Collateral on the terms and conditions herein
provided and (ii) has duly authorized by all necessary limited liability company
action the execution, delivery and performance of the Borrower Basic Documents
and the grant of the security interest in the Collateral on the terms and
conditions herein and therein provided.

(d) Binding Obligation. Each Borrower Basic Document constitutes a legal, valid
and binding obligation of the Borrower, enforceable against the Borrower in
accordance with its respective terms, except as such enforceability may be
limited by Insolvency Laws and except as such enforceability may be limited by
general principles of equity (whether considered in a suit at law or in equity).

(e) No Violation. The consummation of the transactions contemplated by the
Borrower Basic Documents and the fulfillment of the terms hereof and thereof
will not (i) conflict with, result in any breach of any of the terms and
provisions of, or constitute (with or without notice or lapse of time or both) a
default under, the Formation Documents or any Contractual Obligation of the
Borrower, (ii) result in the creation or imposition of any Lien upon any of the
Borrower’s properties pursuant to the terms of any such Contractual Obligation,
other than this Agreement, or (iii) violate any Applicable Law.

(f) No Proceedings. There is no litigation, proceeding or investigation pending
or, to the knowledge of the Borrower, threatened against the Borrower, before

 

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any Governmental Authority (i) asserting the invalidity of any Borrower Basic
Document, (ii) seeking to prevent the consummation of any of the transactions
contemplated by the Borrower Basic Documents or (iii) seeking any determination
or ruling that could reasonably be expected to have a Material Adverse Effect.

(g) All Consents Required. All approvals, authorizations, consents, orders,
licenses or other actions of any Person or of any Governmental Authority
required for the due execution, delivery and performance by the Borrower of the
Borrower Basic Documents have been obtained.

(h) Bulk Sales. The execution, delivery and performance of this Agreement do not
require compliance with any “bulk sales” act or similar law by the Borrower.

(i) Solvency. The transactions contemplated by the Basic Documents do not and
will not render the Borrower not Solvent.

(j) Selection Procedures. No adverse procedures were used by the Borrower in
providing information related to the Receivables to be included in the
Collateral on the Closing Date or the Effective Date, as the case may be, and,
to the Borrower’s knowledge, the selection of such Receivables by the
Administrative Agent did not result in a selection adverse to the Lenders. Each
such Receivable shall have been underwritten in accordance with and satisfy the
standards of the underwriting criteria at the time of origination of such
Receivable.

(k) Taxes. The Borrower has filed or caused to be filed all federal, State,
local and foreign tax returns that are required to be filed by it. The Borrower
has paid or made adequate provisions for the payment of all federal, State,
local and foreign Taxes and all assessments made against it or any of its
property (other than any amount of Tax the validity of which is currently being
contested in good faith by appropriate proceedings and with respect to which
reserves in accordance with GAAP have been provided on the books of the
Borrower), and no Tax lien has been filed and, to the Borrower’s knowledge, no
claim is being asserted, with respect to any such Tax, fee or other charge.

(l) Exchange Act Compliance; Regulations T, U and X. None of the transactions
contemplated herein (including the use of the proceeds from the Loans and the
pledge of the Collateral) will violate or result in a violation of Section 7 of
the Exchange Act, or any regulations issued pursuant thereto, including
Regulations T, U and X of the Federal Reserve Board, 12 C.F.R., Chapter II. The
Borrower does not own or intend to carry or purchase, and no proceeds from the
Loans will be used to carry or purchase, any “Margin Stock” within the meaning
of Regulation U or to extend “Purchase Credit” within the meaning of Regulation
U.

(m) Quality of Title. Each related Receivable, together with the Contract
related thereto, shall, at all times, be owned by the Borrower free and clear of
any Lien except for Permitted Liens, and upon the making of (i) the Initial
Loan, the Administrative Agent, on behalf of the Secured Parties, shall acquire
a valid and

 

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perfected first priority security interest in each Initial Receivable and
(ii) the Effective Date Loan, the Administrative Agent, on behalf of the Secured
Parties, shall acquire a valid and perfected first priority security interest in
each Effective Date Receivable and, in each case, to the extent such a security
interest can be created by filing a financing statement under the UCC or by
possession thereof, the related Collateral, free and clear of all Liens other
than Permitted Liens. No effective financing statement or other instrument
similar in effect covering any portion of the Collateral shall at any time be on
file in any recording office except such as may be filed in favor of
(i) Regional Management in accordance with the First Tier Purchase Agreements,
(ii) the Borrower in accordance with the Second Tier Purchase Agreement or
(iii) the Administrative Agent in accordance with this Agreement.

(n) Security Interest. The Borrower has granted a security interest (as defined
in the UCC) to the Administrative Agent, on behalf of the Secured Parties, in
the Collateral, which is enforceable in accordance with Applicable Law upon
execution and delivery of this Agreement. Upon the filing of UCC-1 financing
statements naming the Administrative Agent as secured party and the Borrower as
debtor, or upon the Collateral Custodian obtaining control, in the case of that
portion of the Collateral which constitutes chattel paper, the Administrative
Agent, on behalf of the Secured Parties, shall have a first priority (except for
any Permitted Liens) perfected security interest in the Collateral to the extent
such an interest can be created by filing a financing statement under the UCC or
maintaining such possession. All filings (including such UCC filings) as are
necessary in any jurisdiction to perfect such security interest of the
Administrative Agent, on behalf of the Secured Parties, in the Collateral have
been (or prior to the applicable Loan will be) made.

(o) Reports Accurate. All Monthly Reports, Monthly Loan Tapes and static pool
information (if prepared by the Borrower, or to the extent that information
contained therein is supplied by the Borrower, such portion supplied by the
Borrower), information, exhibits, financial statements, documents, books,
records or reports (including the data file indicating characteristics of the
Receivables immediately prior to the Closing Date or the Effective Date, as the
case may be) furnished or to be furnished by the Borrower to any Secured Party,
the Backup Servicer, the Account Bank or the Collateral Custodian in connection
with this Agreement are true, complete and correct in all material respects as
of the dates specified therein or the date so furnished (as applicable).

(p) Location of Offices. The principal place of business and chief executive
office of the Borrower and the offices where the Borrower keeps all Records are
located at the addresses referred to in Schedule H and have been so for the four
months preceding the Closing Date or the Effective Date, as the case may be (or
at such other locations as to which the notice and other requirements specified
in Section 6.02(i) shall have been satisfied).

(q) The Accounts. The Borrower has neither pledged nor assigned, nor entered
into a control agreement with respect to either Account, other than in
accordance with the terms of this Agreement and the Account Control Agreement.
Each Account is a “deposit account” or “securities account”, in each case under
and as defined in the relevant UCC.

 

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(r) Tax Status. The Borrower has not elected and will not elect to be treated as
a corporation, and has not otherwise become treated as a corporation, for United
States federal income tax purposes.

(s) Tradenames and Place of Business. (i) The Borrower has no trade names,
fictitious names, assumed names or “doing business as” names or other names
under which it has done or is doing business and (ii) the principal place of
business and chief executive office of the Borrower are located at the address
of the Borrower set forth on Schedule A hereto and has been so for the last four
months.

(t) Second Tier Purchase Agreement. The Second Tier Purchase Agreement is the
only agreement pursuant to which the Borrower purchased the Receivables and the
related Contracts.

(u) Value Given. In consideration for the transfer to the Borrower of the
related Receivables and the related Collateral under the Second Tier Purchase
Agreement, the Borrower shall have paid Regional Management an amount equal to
the fair market value of the related Receivables, and no such transfer shall
have been made for or on account of an antecedent debt owed by Regional
Management to the Borrower and no such transfer is or may be voidable or subject
to avoidance under any Insolvency Law.

(v) Accounting. The Borrower accounts for the transfers to it from Regional
Management of the Receivables and related Collateral under the Second Tier
Purchase Agreement as sales of such Receivables and related Collateral in its
books, records and financial statements, in each case consistent with GAAP and
with the requirements set forth herein.

(w) Special Purpose Entity. The Borrower is in compliance with Section 6.02(q).

(x) Confirmation from Regional Management. The Borrower has received in writing
from Regional Management confirmation that, so long as the Borrower is not
“insolvent” within the meaning of the Bankruptcy Code, Regional Management will
not cause the Borrower to file a voluntary petition under the Bankruptcy Code or
any other Insolvency Laws. Each of the Borrower and Regional Management is aware
that in light of the circumstances described in the preceding sentence and other
relevant facts, the filing of a voluntary petition under the Bankruptcy Code for
the purpose of making any Receivable or any other assets of the Borrower
available to satisfy claims of the creditors of Regional Management would not
result in making such assets available to satisfy such creditors under the
Bankruptcy Code.

(y) Investment Company Act; Volcker Rule. The Borrower is not an “investment
company” within the meaning of the Investment Company Act and is not required to
register as an “investment company” under the Investment Company Act. In
reaching this conclusion, the Borrower relied on the exemption from the
definition of “investment company” in Section 3(c)(5) of the Investment Company
Act (although other exemptions may apply) and the Borrower is not a “covered
fund” for purposes of the Volcker Rule.

 

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(z) ERISA. Each Pension Plan is in compliance with applicable funding
requirements. No prohibited transactions, accumulated funding deficiencies,
withdrawals or reportable events have occurred with respect to any Pension Plan
that, in the aggregate, could subject the Borrower to any material tax, penalty
or other liability. No notice of intent to terminate a Pension Plan has been
billed, nor has any Pension Plan been terminated under Section 4041(f) of ERISA,
nor has the Pension Benefit Guaranty Corporation instituted proceedings to
terminate, or appoint a trustee to administer a Pension Plan and no event has
occurred or condition exists that might constitute grounds under Section 4042 of
ERISA for the termination of, or the appointment of a trustee to administer, any
Pension Plan.

(aa) Accuracy of Representations and Warranties. Each representation or warranty
by the Borrower contained herein, in any other Borrower Basic Document or in any
certificate or other document furnished by the Borrower pursuant hereto or
thereto or in connection herewith or therewith is true and correct in all
material respects.

(bb) Representations and Warranties in Second Tier Purchase Agreement. The
representations and warranties made by Regional Management to the Borrower in
the Second Tier Purchase Agreement are hereby remade by the Borrower on each
date to which they speak in the Second Tier Purchase Agreement, as if such
representations and warranties were set forth herein. For purposes of this
Section, such representations and warranties are incorporated herein by
reference as if made by the Borrower to each of the Secured Parties under the
terms hereof mutatis mutandis.

(cc) Sanctions. Each of the Borrower and each Related Party, and, to the
knowledge of the Borrower, their respective agents, trustees, administrators,
managers, advisors and representatives (i) is not a Sanctioned Person, (ii) is
not owned or controlled by or acting on behalf of a Sanctioned Person, (iii) is
not under investigation for an alleged breach of Sanctions by a Governmental
Authority that enforces Sanctions and (iv) will not fund any repayment of the
Loan Balance with proceeds derived from any transaction that would be prohibited
by Sanctions or would otherwise cause any Lender, any other party to the Basic
Documents or any Related Party to be in breach of any Sanctions. The proceeds of
the Loans will not be used and have not been used to fund any operations in,
finance any investments or activities in or make any payments to, a Sanctioned
Person or a Sanctioned Country.

(dd) Money Services Business. The Borrower is not, nor is required to be
registered as, nor will it at any time during the term of this Agreement be, or
be required to be registered as, a “Money Services Business” within the meaning
of the FinCEN rules at 31 C.F.R. 1010.100(ff).

 

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(ee) Disclosure. The Borrower has disclosed to the Administrative Agent and the
Lenders all agreements, instruments and corporate or other restrictions to which
it is subject, and all other matters known to it, that, individually or in the
aggregate, could reasonably be expected to result in a Material Adverse Effect.
None of the written reports, financial statements, certificates or other written
information (other than general market or economic data) furnished by or on
behalf of Borrower to the Administrative Agent or any Lender in connection with
the negotiation of this Agreement or delivered hereunder (as modified or
supplemented by other information so furnished), contains any material
misstatement of fact or omits to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; provided that, with respect to projected financial
information, it represents only that such information was prepared in good faith
based upon assumptions believed to be reasonable at the time (it being
understood that forecasts and projections are subject to contingencies and no
assurances can be given that any forecast or projection will be realized).

Section 5.02. Representations and Warranties of the Borrower as to the
Receivables. The Borrower represents and warrants, as of the Closing Date and
the Effective Date:

(a) Security Interest. This Agreement constitutes a grant of a security interest
in all Collateral to the Administrative Agent which upon the filing of financing
statements in the applicable jurisdictions, shall be a first priority perfected
security interest in all Collateral, subject only to Permitted Liens. Until the
Facility Termination Date, neither the Borrower nor any Person claiming through
or under the Borrower shall have any claim to or interest in any Account
Collateral; provided, if this Agreement constitutes the grant of a security
interest in such property, except for the interest of the Borrower in such
property. The representations and warranties contained in Schedule F are true
and correct in all material respects.

(b) Eligibility of Initial Receivables. As of the Closing Date, (i) Schedule C
is an accurate and complete listing in all material respects of the Initial
Receivables as of the Initial Cutoff Date and the information contained therein
with respect to the identity of such Receivables and the amounts owing
thereunder is true and correct in all material respects as of the Initial Cutoff
Date, (ii) each such Receivable is an Eligible Receivable as of the Initial
Cutoff Date, (iii) each such Receivable and the related Financed Vehicle is free
and clear of any Lien of any Person (other than Permitted Liens) and in
compliance with all Applicable Laws and (iv) with respect to each such
Receivable, all consents, licenses, approvals or authorizations of or
registrations or declarations with any Governmental Authority required to be
obtained, effected or given by the Borrower in connection with the origination,
purchase and pledge of such Receivable and the related Collateral to the
Administrative Agent have been duly obtained, effected or given and are in full
force and effect.

(c) Eligibility of Effective Date Receivables. As of the Effective Date,
(i) Schedule C is an accurate and complete listing in all material respects of
the Effective Date Receivables as of the Effective Date Cutoff Date and the
information contained therein with respect to the identity of such Receivables
and the amounts owing

 

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thereunder is true and correct in all material respects as of the Effective Date
Cutoff Date, (ii) each such Receivable is an Eligible Receivable as of the
Effective Date Cutoff Date, (iii) each such Receivable and the related Financed
Vehicle is free and clear of any Lien of any Person (other than Permitted Liens)
and in compliance with all Applicable Laws and (iv) with respect to each such
Receivable, all consents, licenses, approvals or authorizations of or
registrations or declarations with any Governmental Authority required to be
obtained, effected or given by the Borrower in connection with the origination,
purchase and pledge of such Receivable and the related Collateral to the
Administrative Agent have been duly obtained, effected or given and are in full
force and effect.

Section 5.03. Representations and Warranties of the Servicer. The Servicer
represents and warrants, as of the Closing Date and the Effective Date:

(a) Organization and Good Standing. The Servicer and each Subservicer has been
duly organized and is validly existing as a corporation or limited liability
company, as applicable, in good standing under the laws of the State of its
incorporation or formation, as applicable, with all requisite corporate power
and authority to own or lease its properties and to conduct its business as such
business is presently conducted and to enter into and perform its obligations
pursuant to this Agreement and the Servicer had at all relevant times, and now
has all requisite corporate power and authority to acquire, own, sell and
service the Receivables and the other Collateral.

(b) Due Qualification. Each of the Servicer and each Subservicer is duly
qualified to do business and is in good standing as a corporation or limited
liability company, as applicable, and has obtained all necessary licenses and
approvals in all jurisdictions in which the ownership or lease of its property
and or the conduct of its business, including the origination and servicing of
the Receivables, requires such qualification, licenses or approvals, except
where the failure to so qualify could not reasonably be expected to result in a
Material Adverse Effect.

(c) Power and Authority; Due Authorization. The Servicer (i) has all necessary
power, authority and legal right to (A) execute and deliver the Servicer Basic
Documents and (B) carry out the terms of the Servicer Basic Documents and
(ii) has duly authorized by all necessary corporate action the execution,
delivery and performance of the Servicer Basic Documents.

(d) Binding Obligation. Each Servicer Basic Document constitutes a legal, valid
and binding obligation of the Servicer enforceable against the Servicer in
accordance with its respective terms, except as such enforceability may be
limited by Insolvency Laws and except as such enforceability may be limited by
general principles of equity (whether considered in a suit at law or in equity).

(e) No Violation. The consummation of the transactions contemplated the Servicer
Basic Documents and the fulfillment of the terms hereof and thereof will not
(i) conflict with, result in any breach of any of the terms and provisions of,
or constitute (with or without notice or lapse of time or both) a default under,
the Servicer’s certificate

 

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of incorporation, bylaws or any Contractual Obligation of the Servicer,
(ii) result in the creation or imposition of any Lien upon any of the Servicer’s
properties pursuant to the terms of any such certificate of incorporation,
bylaws or Contractual Obligation, other than this Agreement, or (iii) violate
any Applicable Law.

(f) No Proceedings. There is no litigation, proceeding or investigation pending
or, to the best knowledge of the Servicer, threatened against the Servicer,
before any Governmental Authority (i) asserting the invalidity of any Servicer
Basic Document, (ii) seeking to prevent the consummation of any of the
transactions contemplated by any Servicer Basic Document, (iii) challenging the
enforceability of a material portion of the Receivables or (iv) seeking any
determination or ruling that could reasonably be expected to have Material
Adverse Effect.

(g) All Consents Required. All approvals, authorizations, consents, orders or
other actions of any Person or of any Governmental Authority required for the
due execution, delivery and performance by the Servicer of the Servicer Basic
Documents have been obtained.

(h) Solvency. The transactions contemplated by the Basic Documents do not and
will not render the Servicer not Solvent.

(i) Taxes. The Servicer has filed or caused to be filed all federal tax returns
and all other material tax returns that are required to be filed by it. The
Servicer has paid or made adequate provisions for the payment of all Taxes shown
on such tax returns and all material assessments made against it or any of its
property (other than any amount of Tax the validity of which is currently being
contested in good faith by appropriate proceedings and with respect to which
reserves in accordance with GAAP have been provided on the books of the
Servicer), and no tax lien has been filed and, to the Servicer’s knowledge, no
claim is being asserted, with respect to any such Tax.

(j) Reports Accurate. All Monthly Reports, information, exhibits, financial
statements, documents, books, records or reports furnished or to be furnished by
the Servicer or any Subservicer to any Secured Party, the Backup Servicer, the
Account Bank or the Collateral Custodian in connection with this Agreement are
accurate, true and correct in all material respects as of the date specified
therein or the date so furnished (as applicable).

(k) Servicer’s Performance. The Servicer has the knowledge, the experience and
the systems, financial and operational capacity available to timely perform each
of its obligations hereunder.

(l) Compliance with the Collection Policy. The Servicer and each Subservicer
has, with respect to the Receivables, complied in all material respects with the
Collection Policy.

(m) The Accounts. The Servicer has neither pledged nor assigned, nor entered
into a control agreement with respect to, either Account or amounts on deposit
therein with or to any other Person except the Administrative Agent and/or the
Secured Parties. Each Account is a “deposit account” or “securities account”, in
each case under and as defined in the relevant UCC.

 

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(n) Representations and Warranties in the Second Tier Purchase Agreement. The
representations and warranties made by Regional Management in the Second Tier
Purchase Agreement are hereby remade by Regional Management on each date as of
which they speak in the Second Tier Purchase Agreement, as if such
representations and warranties were set forth herein. For purposes of this
subsection, such representations and warranties are incorporated herein by
reference as if made by Regional Management to the Administrative Agent and to
each of the Secured Parties under the terms hereof mutatis mutandis.

(o) Anti-Corruption Laws and Sanctions. The Servicer, each of its Subsidiaries,
their respective Related Parties, and, to the knowledge of the Servicer, their
respective agents, trustees, administrators, managers, advisors and
representatives (i) is not a Sanctioned Person, (ii) is not owned or controlled
by or acting on behalf of a Sanctioned Person and (iii) is not under
investigation for an alleged breach of Sanctions by a Governmental Authority
that enforces Sanctions. No advance, use of proceeds or other transaction
contemplated by this Agreement will violate Anti-Corruption Laws or applicable
Sanctions.

(p) Money Services Business. The Servicer is not, nor is required to be
registered as, nor will it at any time during the term of this Agreement be, or
be required to be registered as, a “Money Services Business” within the meaning
of the FinCEN rules at 31 C.F.R. 1010.100(ff).

Section 5.04. Representations and Warranties of the Backup Servicer and the
Collateral Custodian. Each of the Backup Servicer and the Collateral Custodian
represents and warrants as of the Closing Date:

(a) Organization and Good Standing. It has been duly organized, and is validly
existing as a national banking association and in good standing under the laws
of the United States, with all requisite power and authority to own or lease its
properties and to conduct its business as such business is presently conducted
and to execute, deliver and perform its obligations under the Basic Documents to
which it is a party.

(b) Power and Authority; Due Authorization. It (i) has all necessary power and
authority to execute, deliver and carry out the terms of the Basic Documents to
which it is a party and (ii) has duly authorized by all necessary action on its
part the execution, delivery and performance of such Basic Documents.

(c) Binding Obligation. Each of the Basic Documents to which it is a party
constitutes a legal, valid and binding obligation of it, enforceable against it
in accordance with its terms.

(d) No Violation. The consummation of the transactions contemplated by this
Agreement and the fulfillment of the terms hereof will not (i) conflict with,
result in any breach of any of the terms and provisions of, or constitute (with
or without notice or lapse

 

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of time or both) a default under, its organizational documents or any of its
Contractual Obligations, (ii) result in the creation or imposition of any Lien
upon any of its properties pursuant to the terms of any such organizational
documents or Contractual Obligation, other than this Agreement, or (iii) violate
any Applicable Law.

(e) No Proceedings. There is no litigation, proceeding or investigation pending
or, to its knowledge, threatened against it, before any Governmental Authority
(i) asserting the invalidity of this Agreement, (ii) seeking to prevent the
consummation of any of the transactions contemplated by this Agreement,
(iii) challenging the enforceability of any portion of the Receivables or
(iv) seeking any determination or ruling that could reasonably be expected to
have a Material Adverse Effect.

(f) All Consents Required. All approvals, authorizations, consents, orders or
other actions of any Person or of any Governmental Authority (if any) required
for the due execution, delivery and performance by it of this Agreement have
been obtained.

Section 5.05. Repurchase of Certain Receivables.

(a) If any Receivable is an Ineligible Receivable as of the Closing Date or the
Effective Date (including if the related Certificate of Title is not delivered
to the Collateral Custodian within 90 days of the Closing Date or the Effective
Date), as the case may be, after the earlier of 30 days after (i) the date the
Borrower has knowledge that such Receivable is an Ineligible Receivable and
(ii) receipt by the Borrower from the Administrative Agent or the Servicer of
written notice thereof (which notice the Servicer shall be required to give
promptly upon knowledge thereof), the Borrower shall accept the release of each
such Receivable, and the Administrative Agent shall be deemed, upon receipt of
the Release Price, to convey to the Borrower, without recourse, representation
or warranty, all of its right, title and interest in each such Receivable. In
any of the foregoing instances, the Borrower shall accept the release of each
such Receivable from the Administrative Agent. On and after the date of release,
the Receivable so released shall not be included in the Collateral. In
consideration of a release, the Borrower shall, on the date of release of such
Receivable, make or cause to be made a deposit of the Release Price to the
Collection Account in immediately available funds and/or via an ACH transaction.
Upon each release to the Borrower of such Receivable, the Administrative Agent
shall automatically and without further action be deemed to transfer, assign and
set-over to the Borrower, without recourse, representation or warranty, all the
right, title and interest of the Administrative Agent in, to and under such
Receivable and all future monies due or to become due with respect thereto, all
proceeds of such Receivable and Liquidation Proceeds and Insurance Proceeds
relating thereto, all rights to security for any such Receivable, and all
proceeds and products of the foregoing. The Administrative Agent shall, at the
sole expense of the Servicer, execute such documents and instruments of release
as may be prepared by the Servicer on behalf of the Borrower and take other such
actions as shall reasonably be requested by the Borrower to effect the release
of such Receivable pursuant to this subsection.

(b) In the case of (i) the Initial Receivables, prior to the Closing Date, or
(ii) the Effective Date Receivables, 30 days after the Effective Date
Receivables are delivered to the Collateral Custodian, which shall in no event
exceed 120 days after the Effective Date, the Collateral Custodian shall have
reviewed the related Receivable Files to verify the presence of

 

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the original Receivable and a Certificate of Title (or, if the original
certificate of title has not yet been issued, copies of correspondence or
application to the applicable Registrar of titles, and all related
documentation, for issuance of the original certificate of title) with respect
to the related Financed Vehicle and, upon completion of such review, shall have
delivered to the Administrative Agent a Receivable Receipt. With respect to any
Contract for which any of the foregoing documents has not been delivered to the
Collateral Custodian or corrected within 30 days of the Closing Date or 120 days
after the Effective Date, as the case may be, in a manner acceptable to the
Administrative Agent, the Borrower shall remove or cause the removal of the
related Receivable from the Collateral, and the Borrower shall acquire and
repurchase, respectively, such Receivable from the Collateral and deposit the
Release Price into the Collection Account. The Collateral Custodian is not
responsible for monitoring or enforcing repurchase requirements. Other than the
foregoing review, the Collateral Custodian shall have no duty or obligation to
review any of the Receivable Files. The Servicer may review the Receivable Files
following the delivery to the Administrative Agent and Collateral Custodian of a
written request. Within 15 days following the end of each month, until
February 29, 2016 in the case of the Initial Receivables and until March 15,
2018 in the case of the Effective Date Receivables, the Collateral Custodian
shall deliver to the Administrative Agent and the Servicer a list of all related
Receivables for which it does not have in its possession the related Certificate
of Title.

 

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ARTICLE SIX

COVENANTS

Section 6.01. Affirmative Covenants of the Borrower. From the Closing Date until
the Facility Termination Date:

(a) Compliance with Laws. The Borrower will comply in all material respects with
all Applicable Laws, including those with respect to the Receivables and related
Financed Vehicles.

(b) Preservation of Existence. The Borrower will preserve and maintain its
existence, rights, franchises and privileges in the State of Delaware, and
qualify and remain qualified in good standing as a foreign limited liability
company in each jurisdiction where the failure to preserve and maintain such
existence, rights, franchises, privileges and qualification has had, or could
reasonably be expected to have, a Material Adverse Effect.

(c) Performance and Compliance with Agreements. The Borrower will, at its
expense, timely and fully perform and comply (or cause (i) Regional Management
to perform and comply pursuant to this Agreement and other Basic Documents to
which Regional Management is a party or (ii) each Originator to perform and
comply pursuant to the related First Tier Purchase Agreement) with all
provisions, covenants and other promises required to be observed by it under the
Basic Documents and the Receivables.

(d) Keeping of Records and Books of Account. The Borrower will (or will direct
the Servicer on behalf of the Borrower to) maintain and implement administrative
and operating procedures (including an ability to recreate records evidencing
Receivables in the event of the destruction of the originals thereof), and keep
and maintain all documents, books, records and other information reasonably
necessary or advisable for the collection of all Receivables.

(e) Borrower Assets. With respect to each Receivable, the Borrower will:
(i) acquire such Receivable pursuant to and in accordance with the terms of the
Second Tier Purchase Agreement, (ii) take all action necessary to perfect,
protect and more fully evidence the Borrower’s ownership of such Receivable,
including (A) filing and maintaining effective financing statements (Form UCC-1)
listing Regional Management as debtor in all necessary or appropriate filing
offices (and will cause Regional Management to obtain similar financing
statements from each Originator from which it acquired the Receivables), and
filing continuation statements, amendments or assignments with respect thereto
in such filing offices and (B) executing or causing to be executed such other
instruments or notices as may be necessary or appropriate and (iii) take all
additional action that the Administrative Agent may reasonably request,
including the filing of financing statements (Form UCC-1) listing the
Administrative Agent as secured party to perfect, protect and more fully
evidence the respective interests of the parties to this Agreement in the
Collateral on the Closing Date.

 

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(f) Delivery of Collections. The Borrower will deliver or cause to be delivered
to the Servicer for further remittance to the Collection Account promptly (but
in no event later than one Business Day after receipt) all Collections received
by it.

(g) Separate Existence. The Borrower shall comply with the special purpose
entity requirements set forth in Section 6.02(q).

(h) Collection Policy. The Borrower will cause the Servicer to (i) with respect
to each Receivable, comply in all material respects with the Collection Policy
throughout the life of such Receivable, (ii) furnish to the Administrative
Agent, prior to its effective date, prompt notice of any material change to the
Collection Policy, and not allow any such material change to be put into effect
without the prior written consent of the Administrative Agent and (iii) furnish
to the Administrative Agent revised versions of the Collection Policy.

(i) Termination Events. The Borrower will provide the Administrative Agent, the
Backup Servicer and the Collateral Custodian with written notice promptly and in
any event within three Business Days after a Responsible Officer of the Borrower
obtains knowledge (or should have obtained knowledge) of the occurrence of each
Termination Event and each Unmatured Termination Event setting forth the details
of such event and the action that the Borrower proposes to take with respect
thereto.

(j) Taxes. The Borrower will file or caused to be filed all tax returns that are
required to be filed by it and pay all Taxes, including those required to meet
the obligations of the Basic Documents. The Borrower will pay when due, cause to
be paid when due or make adequate and timely provisions for the payment when due
of all federal and State, local and foreign Taxes and all assessments made
against it or any of its property (other than any amount of Tax the validity of
which the Borrower may contest in good faith by appropriate proceedings,
including appeals, and with respect to which the Borrower retains reserves in
accordance with GAAP on the books of the Borrower), including those required to
meet the obligations of the Basic Documents.

(k) Tax Status. The Borrower will not elect to be treated as a corporation, or
otherwise become taxable as a corporation, for U.S. federal income tax purposes.

(l) Use of Proceeds. The Borrower will use the proceeds of the Loans only to
acquire the Receivables from Regional Management pursuant to the Second Tier
Purchase Agreement, and Regional Management will use the ultimate proceeds of
the Loans only (i) to finance the acquisition of Receivables and (ii) to fund
the fees and expenses arising under this Agreement and the other Basic
Documents. No part of the proceeds of the Loans will be used, whether directly
or indirectly, for any purpose that entails a violation of any of the
regulations of the Federal Reserve Board, including Regulations T, U and X.

(m) Reporting. The Borrower will maintain for itself, or cause to be maintained,
a system of accounting established and administered in accordance with GAAP and
furnish or cause to be furnished to the Administrative Agent and, in the case of
Monthly Reports, Monthly Loan Tapes and notices of material events, each Lender,
the Collateral Custodian, the Account Bank and the Backup Servicer:

 

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(i) Monthly Reports and Monthly Loan Tapes. Not later than each Reporting Date,
a Monthly Report, a Monthly Loan Tape and such other information as reasonably
requested by the Administrative Agent.

(ii) Income Tax Liability. Within ten Business Days after the receipt of revenue
agent reports or other written proposals, determinations or assessments of the
IRS or any other taxing authority which propose, determine or otherwise set
forth positive adjustments to the Tax liability of any “affiliated group”
(within the meaning of Section 1504(a)(l) of the Code) which equal or exceed
$1,000,000 in the aggregate, telephonic or telecopied notice (confirmed in
writing within five Business Days) specifying the nature of the items giving
rise to such adjustments and the amounts thereof.

(iii) Tax Returns. Upon demand by the Administrative Agent, copies of all
federal, State and local Tax returns and reports filed by the Borrower, or in
which the Borrower was included on a consolidated or combined basis (excluding
sales, use and like taxes).

(iv) Auditors’ Management Letters. Promptly after any auditors’ management
letters are received by the Borrower or by its accountants, which refer in whole
or in part to any inadequacy, defect, problem, qualification or other lack of
fully satisfactory accounting controls utilized by the Borrower.

(v) Representations. Promptly upon receiving knowledge of same, the Borrower
shall notify the Administrative Agent if any representation or warranty set
forth in Section 5.01 or 5.02 was incorrect at the time it was given or deemed
to have been given and at the same time deliver to the Administrative Agent a
written notice setting forth in reasonable detail the nature of such facts and
circumstances. In particular, but without limiting the foregoing, the Borrower
shall notify the Administrative Agent in the manner set forth in the preceding
sentence before the Closing Date of any facts or circumstances within the
knowledge of the Borrower which would render any of such representations and
warranties untrue at the date when they were made or deemed to have been made.

(vi) ERISA. Promptly, and in any event within 30 days, after receiving notice of
any “Reportable Event” (as defined in Title IV of ERISA) with respect to the
Borrower (or any ERISA Affiliate thereof and for which the Borrower would have
liability), a copy of such notice.

(vii) Proceedings. As soon as possible and in any event within three Business
Days after a Responsible Officer of the Borrower receives notice or obtains
knowledge thereof, any settlement of, material judgment (including a material
judgment with respect to the liability phase of a bifurcated trial) in or
commencement of any labor controversy (of a material nature), material
litigation, material action, material suit or material proceeding before any
Governmental Authority, domestic or foreign, affecting the Regional Management
Entities.

 

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(viii) Notice of Material Events. Promptly upon becoming aware thereof, notice
of any other event or circumstance that, in the reasonable judgment of the
Borrower, is likely to have a Material Adverse Effect.

(n) Accounting Policy. The Borrower will promptly notify the Administrative
Agent of any material change in the Borrower’s accounting policies that are not
otherwise required by GAAP.

(o) Notices Regarding Collateral. The Borrower will advise the Administrative
Agent in writing promptly, in reasonable detail, of (i) any Lien (other than
Permitted Liens) asserted or claim made against a material portion of the
Collateral, (ii) the occurrence of a material breach by the Borrower of any of
its representations, warranties or covenants contained herein and (iii) the
occurrence of any other event which would have a material adverse effect on the
security interest of the Administrative Agent on behalf of the Secured Parties
in the Collateral or the collectability of all or a material portion of the
Receivables or which would have a material adverse effect on the security
interests of the Administrative Agent for the benefit of the Secured Parties.

(p) Reports Accurate. All Monthly Reports, Monthly Loan Tapes and static pool
information (if prepared by the Borrower, or to the extent that information
contained therein is supplied by the Borrower, such portion supplied by the
Borrower), information, exhibits, financial statements, documents, books,
records or reports furnished or to be furnished by the Borrower to any Secured
Party, the Backup Servicer and the Collateral Custodian in connection with this
Agreement will be true, complete and correct in all material respects.

(q) Further Assurances. Promptly upon request by the Administrative Agent, or
any Lender, the Borrower will (i) correct any material defect or error that may
be discovered in any Basic Document or in the execution, acknowledgment, filing
or recordation thereof, and (ii) do, execute, acknowledge, deliver, record,
re-record, file, re-file, register and register any and all such further acts,
deeds, certificates, assurances and other instruments as the Administrative
Agent or any Lender may reasonably require from time to time in order to
(A) carry out more effectively the purposes of the Basic Documents, (B) to the
fullest extent permitted by Applicable Law, subject the Borrower’s properties,
assets, rights or interests to the Liens now or hereafter intended to be covered
by any of the Basic Documents, (C) perfect and maintain the validity,
effectiveness and priority of any of the Basic Documents and any of the Liens
intended to be created hereunder and thereunder and (D) assure, convey, grant,
assign, transfer, preserve, protect and confirm more effectively unto the
Secured Parties the rights granted or now or hereafter intended to be granted to
the Secured Parties under any Basic Document or under any other instrument
executed in connection with any Borrower Basic Document.

 

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(r) Compliance with Anti-Money Laundering Laws and Anti-Corruption Laws. The
Borrower and its Related Parties shall (i) comply with all applicable Anti-Money
Laundering Laws and Anti-Corruption Laws, (ii) conduct the requisite due
diligence in connection with the transactions contemplated herein for purposes
of complying with applicable Anti-Money Laundering Laws, (iii) ensure it does
not use any of the proceeds of the Loans in violation of any Anti-Corruption
Laws or Anti-Money Laundering Laws and (iv) ensure it does not fund any
repayment of the Loans in violation of any Anti-Corruption Laws or Anti-Money
Laundering Laws.

(s) Compliance with Sanctions. The Borrower and its Related Parties shall not,
directly or indirectly, use the proceeds of the Loans, or lend, contribute or
otherwise make such proceeds available to any Subsidiary, joint venture partner
or other Person (i) to fund any activities or business of or with a Sanctioned
Person or (ii) in any manner that would be prohibited by Sanctions or would
otherwise cause any Lender to be in breach of any Sanctions. The Borrower shall
comply with Sanctions and shall maintain policies and procedures reasonably
designed to ensure compliance with Sanctions. The Borrower shall notify the
Lenders and the Administrative Agent in writing not more than one Business Day
after becoming aware of any breach of Section 5.01(cc) or this subsection.

(t) Other. The Borrower will furnish to the Administrative Agent promptly, from
time to time, such other information, documents, records or reports respecting
the Collateral or the condition or operations, financial or otherwise, of the
Borrower or Regional Management as the Administrative Agent may from time to
time reasonably request in order to protect the interests of the Secured Parties
under or as contemplated by this Agreement.

(u) Account Restructuring Date. On the Account Restructuring Date, the Borrower
entered into, or caused the Servicer to enter into, the Security Agreement, the
Master Deposit Account Control Agreement and the Wells Fargo Deposit Account
Control Agreement, amended the Intercreditor Agreement and delivered to the
Administrative Agent an Opinion of Counsel to the effect that such agreements
(i) are the valid, binding and enforceable obligations of the parties thereto
and (ii) created a perfected security interest for the benefit of the
Administrative Agent in the Master Deposit Account and the Additional Deposit
Accounts, prior to any other security interest created under Article 9 of the
New York UCC, perfected by a method other than control, in each case in form and
substance satisfactory to the Administrative Agent.

Section 6.02. Negative Covenants of the Borrower. From the Closing Date until
the Facility Termination Date:

(a) Indebtedness. The Borrower will not create, incur, assume or permit to exist
any Indebtedness except Indebtedness pursuant to this Agreement or the other
Basic Documents.

(b) Liens. The Borrower will not create, incur, assume or permit to exist any
Lien on any of its property, except for any Permitted Liens and Liens created
under this Agreement or the other Basic Documents.

 

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(c) Other Business. The Borrower will not (i) engage in any business other than
the transactions contemplated by the Basic Documents, (ii) incur any
Indebtedness, obligation, liability or contingent obligation of any kind other
than pursuant to this Agreement or any other Basic Document (excluding any
incidental expenses incurred by the Borrower in connection with the performance
of its obligations under the Basic Documents) or (iii) have or form any
Subsidiary or make any Investments in any other Person.

(d) Receivables Not to be Evidenced by Instruments. The Borrower will take no
action to cause any Receivable that is not, as of the Closing Date, evidenced by
an Instrument, to be so evidenced except in connection with the enforcement or
collection of such Receivable.

(e) Security Interests. The Borrower will not sell, pledge, assign or transfer
to any other Person, or grant, create, incur, assume or suffer to exist any Lien
on any portion of the Collateral, whether now existing or hereafter transferred
hereunder, or any interest therein, and the Borrower will not sell, pledge,
assign or suffer to exist any Lien on its interest, if any, hereunder. The
Borrower will promptly notify the Administrative Agent of the existence of any
Lien on any portion of the Collateral and the Borrower shall defend the right,
title and interest of the Administrative Agent in, to and under such Collateral,
against all claims of third parties; provided, however, that nothing in this
subsection shall prevent or be deemed to prohibit the Borrower from suffering to
exist Permitted Liens upon any portion of the Collateral.

(f) The Accounts. The Borrower shall not create or participate in the creation
of, or permit to exist, any Liens (other than Permitted Liens) and will not
enter into any “control agreement” (as defined in the relevant UCC) with respect
to either Account other than as set forth in, or permitted pursuant to, this
Agreement and the Account Control Agreement.

(g) Mergers, Acquisitions, Sales, Etc. The Borrower will not be a party to any
merger or consolidation, or purchase or otherwise acquire all or substantially
all of the assets or any stock or membership interests of any class of, or any
partnership or joint venture interest in, any other Person, or, other than in
compliance with the terms hereof, sell, transfer, convey or lease all or any
substantial part of its assets, or sell or assign with or without recourse any
portion of the Collateral or any interest therein (other than pursuant hereto).

(h) Distributions. The Borrower shall not declare or pay, directly or
indirectly, any dividend or make any other distribution (whether in cash or
other property) with respect to the profits, assets or capital of the Borrower
or any Person’s interest therein, or purchase, redeem or otherwise acquire for
value any of its capital stock now or hereafter outstanding, except that the
Borrower may declare and pay cash or limited liability company membership
interest distributions with funds distributed to the Borrower pursuant to
Section 2.08, 2.09 and the last sentence of Section 2.11, subject to Applicable
Law.

 

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(i) Change of Name or Location of Receivable Files. The Borrower shall not
(i) change its name, form or State of organization or change the location of its
principal place of business and chief executive office, and the offices where it
keeps the Records from the locations referred to in Schedule D or (ii) move, or
consent to the Collateral Custodian moving, the Receivable Files relating to
(A) the Initial Receivables from the location thereof on the Closing Date or
(B) the Effective Date Receivables from the location thereof on the Effective
Date, unless in each case the Borrower has given at least 30 days’ prior written
notice to the Administrative Agent and has taken all actions required under the
UCC of each relevant jurisdiction in order to continue the first priority
perfected security interest of the Administrative Agent in the Collateral,
subject only to Permitted Liens.

(j) True Sale. Except for purposes of GAAP, the Borrower will not account for or
treat the transactions contemplated by the First Tier Purchase Agreements and
the Second Tier Purchase Agreement in any manner other than as the sale, or
absolute assignment, of the Receivables and other Collateral by the Originators
(other than Regional Management) to Regional Management and by Regional
Management to the Borrower, respectively.

(k) ERISA Matters. The Borrower will not (i) assuming that no portion of the
Loans is funded or held with “plan assets” within the meaning of Section 3(42)
of ERISA, engage or permit any ERISA Affiliate to engage in any prohibited
transaction for which an exemption is not available or has not previously been
obtained from the United States Department of Labor, (ii) fail, or permit any
ERISA Affiliate to fail, to satisfy the “minimum funding standard” (as defined
in Section 412 of the Code or Section 302 of ERISA), whether or not waived,
(iii) file, or permit any ERISA Affiliate to file, an application for a waiver
of the minimum funding standard pursuant to Section 412(c) of the Code or
Section 303(c) of ERISA with respect to any Pension Plan, (iv) incur, or permit
any ERISA Affiliate to incur, any liability under Title IV of ERISA with respect
to the termination of any Pension Plan, (v) fail, or permit any ERISA Affiliate
to fail, to make any payments to a Multiemployer Plan that the Borrower or any
ERISA Affiliate may be required to make under the agreement relating to such
Multiemployer Plan or any law pertaining thereto, (vi) terminate any Pension
Plan so as to result in any liability or (vii) permit to exist any occurrence of
any “Reportable Event” described in Title IV of ERISA.

(l) Formation Documents; Borrower Basic Documents. Without the prior written
consent of the Administrative Agent, the Borrower will not (i) amend, modify,
waive or terminate any provision of its Formation Documents or any Borrower
Basic Document or (ii) permit the Member to amend, modify or terminate its
Certificate of Formation or its limited liability company agreement.

(m) Changes in Payment Instructions. The Borrower will not add or make any
change, or permit the Servicer or any Subservicer to make any change, in its
instructions (i) to Obligors regarding payments in respect of the Receivables to
be made to the Borrower, the Servicer or any Subservicer in which payments in
respect of the Receivables are made and (ii) regarding payments to be made to
the Administrative

 

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Agent with respect to the Collateral, each unless the Administrative Agent has
consented to such change and has received duly executed copies of all
documentation related thereto, which documentation shall be satisfactory in form
and substance to the Administrative Agent.

(n) Extension or Amendment. The Borrower will not, except as otherwise permitted
in Section 7.03(c)(i), extend, amend or otherwise modify, or permit the Servicer
to extend, amend or otherwise modify, the terms of any Contract.

(o) Collection Policy. Subject to Sections 6.01(h) and 6.04(i), the Borrower
will not materially amend, modify, restate or replace, in whole or in part, the
Collection Policy, which change would materially impair the collectability of
the Receivables or otherwise affect the interests or the remedies of the Secured
Parties under the Basic Documents, without the prior written consent of the
Administrative Agent.

(p) No Assignments. The Borrower will not assign or delegate, grant any interest
in or permit any Lien (other than Permitted Liens) to exist upon any of its
rights, obligations or duties under this Agreement without the prior written
consent of the Administrative Agent.

(q) Special Purpose Entity. The Borrower will not (nor has it taken any such
action in the past):

(i) engage in any business or activity other than the purchase and receipt of
Receivables and related assets under the Second Tier Purchase Agreement, the
pledge of Receivables and related assets under the Basic Documents and such
other activities as are incidental thereto;

(ii) acquire or own any material assets other than (A) the Receivables and
related assets under the Second Tier Purchase Agreement, (B) incidental property
as may be necessary for the operation of the Borrower and (C) cash generated
from the foregoing;

(iii) merge into or consolidate with any Person or dissolve, terminate or
liquidate in whole or in part, transfer or otherwise dispose of all or
substantially all of its assets or change its legal structure, without in each
case first obtaining the Administrative Agent’s consent;

(iv) elect for the Borrower to be treated, or otherwise become taxable, as a
corporation for U.S. federal income tax purposes;

(v) fail to preserve its existence as an entity duly organized, validly existing
and in good standing under the laws of the jurisdiction of its organization or
formation, or without the prior written consent of the Administrative Agent,
amend, modify, terminate, fail to comply with the provisions of its Formation
Documents or fail to observe Delaware limited liability company formalities;

 

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(vi) own any Subsidiary or make any Investment in any Person without the consent
of the Administrative Agent;

(vii) commingle its assets with the assets of any of its Affiliates, or of any
other Person, except to the extent contemplated by this Agreement;

(viii) incur any debt, secured or unsecured, direct or contingent (including
guaranteeing any obligation), other than Indebtedness to the Secured Parties
hereunder or under any other Basic Document or in conjunction with a repayment
of the Aggregate Unpaids, except for trade payables in the ordinary course of
its business, provided that such debt is not evidenced by a note and paid when
due;

(ix) become not Solvent or generally fail to pay its debts and liabilities from
its assets as the same shall become due;

(x) fail to maintain its records, books of account and bank accounts separate
and apart from those of any other Person; provided, however, that the Borrower
may be included in Regional Management’s consolidated financial statements for
Tax and reporting purposes;

(xi) enter into any contract or agreement with any of its principals or
Affiliates or any other Person, except as contemplated by this Agreement upon
terms and conditions that are commercially reasonable and intrinsically fair and
substantially similar to those that would be available on an arm’s-length basis
with third parties other than its Affiliates;

(xii) fail to correct any known misunderstandings regarding the separate
identity of the Borrower from any principal or Affiliate thereof or from any
other Person;

(xiii) guarantee, become obligated for, or hold itself out to be responsible for
the debt of another Person;

(xiv) make any loan or advances to any third party, including any principal or
Affiliate, or hold evidence of Indebtedness issued by any other Person (other
than Permitted Investments and Contracts);

(xv) fail either to hold itself out to the public as a legal entity separate and
distinct from any other Person or to conduct its business solely in its own name
in order not (A) to mislead others as to the identity with which such other
party is transacting business, or (B) to suggest that it is responsible for the
debts of any third party (including any of its principals or Affiliates);

(xvi) fail to maintain adequate capital for the normal obligations reasonably
foreseeable in a business of its size and character and in light of its
contemplated business operations;

 

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(xvii) file or consent to the filing of any petition, either voluntary or
involuntary, to take advantage of any applicable Insolvency Laws or make an
assignment for the benefit of creditors;

(xviii) hold itself out as or be considered as a department or division of
(A) any of its principals or Affiliates, (B) any Affiliate of a principal or
(C) any other Person;

(xix) permit any transfer (whether in any one or more transactions) of a direct
or indirect ownership interest in the Borrower unless the Borrower delivers to
the Administrative Agent an acceptable non-consolidation opinion;

(xx) fail to maintain separate financial statements, showing its assets and
liabilities separate and apart from those of any other Person, or have its
assets listed on the financial statement of any other Person; provided, however,
that the Borrower may be included in Regional Management’s consolidated
financial statements for Tax and reporting purposes;

(xxi) fail to pay its own liabilities and expenses only out of its own funds;

(xxii) fail to pay or cause to be paid the salaries of its own employees, if
applicable, in light of its contemplated business operations;

(xxiii) acquire obligations or securities of its Affiliates or stockholders;

(xxiv) fail to allocate fairly and reasonably any overhead expenses that are
shared with an Affiliate, including paying for office space and services
performed by any employee of an Affiliate;

(xxv) fail to use separate invoices and checks bearing its own name;

(xxvi) pledge its assets for the benefit of any other Person, other than with
respect to payment of the Indebtedness to the Secured Parties hereunder;

(xxvii) fail at any time to have at least one Independent Manager on its board
of managers; provided, however, such Independent Manager may be an independent
director or manager of another special purpose entity affiliated with Regional
Management;

(xxviii) fail to provide that the unanimous consent of all managers of the
Borrower (including the consent of the Independent Manager) is required for the
Borrower to (A) dissolve or liquidate, in whole or part, or institute
proceedings to be adjudicated bankrupt or not Solvent, (B) institute or consent
to the institution of bankruptcy or Insolvency Proceedings against it, (C) file
a petition seeking or consent to reorganization or relief under any Insolvency
Law, (D) seek or consent to the appointment of a receiver, liquidator, assignee,
trustee,

 

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sequestrator, custodian or any similar official for the Borrower, (E) make any
assignment for the benefit of the Borrower’s creditors, (F) admit in writing its
inability to pay its debts generally as they become due or (G) take any action
in furtherance of any of the foregoing;

(xxix) replace or appoint any Person as an Independent Manager of the Borrower
(A) who does not satisfy the definition of an Independent Manager and (B) with
less than ten days’ prior written notice to the Administrative Agent and without
an Officer’s Certificate of Regional Management that the prospective Independent
Manager satisfies the definition of an Independent Manager;

(xxx) (A) amend, restate, supplement or otherwise modify its Formation Documents
in any respect that would impair its ability to comply with the Basic Documents
or (B) fail to require in its limited liability company agreement that no
Independent Manager may be replaced or appointed with less than ten days’ prior
written notice to the Administrative Agent and a certification by Regional
Management that the prospective Independent Manager satisfies the definition of
an Independent Manager; and

(xxxi) not take or refrain from taking, as applicable, each of the activities
specified in the non-consolidation opinion of Alston & Bird, LLP, dated the
Effective Date, upon which the conclusions expressed therein are based.

(r) Residual Interest Conveyance. The Borrower will not transfer any interest or
residual interest in (i) its rights to receive amounts pursuant to
Section 2.08(ix) or (ii) its membership or other equity interests.

Section 6.03. Affirmative Covenants of the Servicer. From the Closing Date until
the Facility Termination Date:

(a) Compliance with Laws. The Servicer will comply in all material respects with
all Applicable Laws, including those with respect to the Contracts, the
Receivables, the related Financed Vehicles and the Receivable Files or any part
thereof.

(b) Preservation of Corporate Existence. The Servicer will preserve and maintain
its corporate existence, rights, franchises and privileges in the jurisdiction
of its formation, and qualify and remain qualified in good standing as a foreign
corporation in each jurisdiction where the failure to preserve and maintain such
existence, rights, franchises, privileges and qualification has had, or could
reasonably be expected to have, a Material Adverse Effect.

(c) Obligations and Compliance with Receivables. The Servicer will fulfill and
comply with all obligations on the part of the Borrower to be fulfilled or
complied with under or in connection with each Receivable and will do nothing to
impair the rights of the Administrative Agent in, to and under the Collateral.

 

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(d) Performance and Compliance with Servicer Basic Documents. The Servicer will
timely and fully perform and comply with all provisions, covenants and other
promises required to be observed by it under the Servicer Basic Documents.

(e) Keeping of Records and Books of Account. The Servicer will maintain and
implement administrative and operating procedures (including an ability to
recreate records evidencing Receivables, including the Servicer Files, in the
event of the destruction of the originals thereof), and keep and maintain all
documents, books, records and other information reasonably necessary or
advisable for the collection of all Receivables, including the Servicer Files.

(f) Taxes. The initial Servicer will file all tax returns required to be filed
by it and pay any and all Taxes, including those required to meet the
obligations of the Basic Documents; provided, however, that the initial Servicer
shall not be required to pay any such Tax if and so long as the amount,
applicability or validity thereof is being contested in good faith by
appropriate proceedings and with respect to which reserves in accordance with
GAAP have been provided on the books of the initial Servicer.

(g) Use of Proceeds. Regional Management will use the monies remitted to it by
the Borrower pursuant to the Second Tier Purchase Agreement (i.e., the net
proceeds of the related Loan) only (i) to finance the acquisition of the related
Receivables, (ii) to fund the fees and expenses arising under this Agreement and
the other Basic Documents and (iii) for general corporate purposes. No part of
the proceeds of the Loans will be used, whether directly or indirectly, for any
purpose that entails a violation of any of the regulations of the Federal
Reserve Board, including Regulations T, U and X.

(h) Preservation of Security Interest. The Servicer will execute and file such
financing and continuation statements and any other documents that may be
required by any Applicable Law or regulation of any Governmental Authority to
preserve and protect fully the security interest of the Administrative Agent in,
to and under the Collateral.

(i) Collection Policy. The Servicer and each Subservicer will comply in all
material respects with the Collection Policy in regard to each Receivable. The
initial Servicer shall furnish to the Administrative Agent, prior to its
effective date, prompt notice of any material change in the Collection Policy,
and not allow any such material change to be put into effect without the prior
written consent of the Administrative Agent. The initial Servicer will not agree
to or otherwise permit to occur any change in the Collection Policy, which
change would reasonably be expected to impair the collectability of the
Receivables or otherwise materially and adversely affect the interests or
remedies of the Secured Parties under this Agreement or any other Basic
Document, without the prior written consent of the Administrative Agent. The
initial Servicer will cause to be delivered to the Administrative Agent and the
Backup Servicer a modified Collection Policy including each change thereto, for
inclusion as Exhibit C.

(j) Termination Events and Servicer Termination Events. The Servicer will
furnish to the Administrative Agent, as soon as possible and in any event within
three Business Days after the occurrence of each Termination Event, Unmatured
Termination Event and Servicer Termination Event, a written statement of its
chief financial officer or chief accounting officer setting forth the details of
such event and the action that the Servicer proposes to take with respect
thereto.

 

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(k) Other. The Servicer will furnish or cause to be furnished to the
Administrative Agent and each Lender, promptly, from time to time, such other
information, documents, records or reports respecting the Collateral or the
condition or operations, financial or otherwise, of the Borrower, the Servicer
or an Originator as the Administrative Agent or a Lender may from time to time
reasonably request in order to protect the interests of the Secured Parties
under or as contemplated by this Agreement.

(l) Losses, Etc. In any suit, proceeding or action brought by the Backup
Servicer, the Collateral Custodian or any Secured Party for any sum owing
thereto, the Servicer shall save, indemnify and keep each such entity harmless
from and against all expense, loss or damage suffered by reason of any defense,
setoff, counterclaim, recoupment or reduction of liability whatsoever of the
Obligor under the Receivables, arising out of a breach by the Servicer of any
obligation under the related Receivable or arising out of any other agreement,
Indebtedness or liability at any time owing to or in favor of such Obligor or
its successor from the Servicer, and all such obligations of the Servicer shall
be and remain enforceable against and only against the Servicer and shall not be
enforceable against each such entity.

(m) Notice Regarding Collateral. The Servicer shall advise the Collateral
Custodian and the Administrative Agent in writing promptly, in reasonable detail
of (i) any Lien (other than Permitted Liens) asserted or claim made against any
portion of the Collateral, (ii) the occurrence of any breach by the Servicer of
any of its representations, warranties and covenants contained herein and
(iii) the occurrence of any other event which could have a material adverse
effect on the security interest of the Administrative Agent on behalf of the
Secured Parties in the Collateral or the collectability of all or a material
portion of the Receivables, or which could have a material adverse effect on the
security interests of the Administrative Agent for the benefit of the Secured
Parties.

(n) Realization on Receivables. In the event that the Servicer realizes upon any
Receivable, the methods utilized by the Servicer to realize upon such Receivable
or otherwise enforce any provisions of such Receivable will not subject the
Servicer, the Borrower, any Secured Party, the Backup Servicer or the Collateral
Custodian to liability under any federal, State or local law, and any such
realization or enforcement by the Servicer will be conducted in accordance with
the provisions of this Agreement, the Collection Policy and Applicable Law.

(o) Accounting Policy. The initial Servicer will promptly notify the
Administrative Agent of any material change in the Servicer’s accounting
policies.

(p) Additional Information. The Servicer shall, within two Business Days of its
receipt thereof, respond to reasonable written directions or written requests
for information that the Backup Servicer, the Account Bank, the Borrower, the
Administrative Agent, each Lender or the Collateral Custodian might have with
respect to the administration of the Receivables.

 

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(q) Compliance with Anti-Money Laundering Laws and Anti-Corruption Laws. The
Servicer, its Subsidiaries and their respective Related Parties shall (i) comply
with all applicable Anti-Money Laundering Laws and Anti-Corruption Laws,
(ii) conduct the requisite due diligence in connection with the transactions
contemplated herein for purposes of complying with applicable Anti-Money
Laundering Laws, (iii) ensure it does not use any of the proceeds of the Loans
in violation of any Anti-Corruption Laws or Anti-Money Laundering Laws and
(iv) ensure it does not fund any repayment of the Loans in violation of any
Anti-Corruption Laws or Anti-Money Laundering Laws.

(r) Additional Covenants. The Servicer will (i) immediately notify the Borrower,
the Backup Servicer, the Administrative Agent, each Lender, the Account Bank and
the Collateral Custodian of the existence of any Lien on any portion of the
Collateral (other than the Lien of the Administrative Agent and Permitted Liens)
if the Servicer has actual knowledge thereof, (ii) defend the right, title and
interest of such entities in, to and under the Collateral against all claims of
third parties claiming through or under the Servicer, (iii) transfer to the
Account Bank for deposit into the Collection Account, all payments received by
the Servicer with respect to the Collateral in accordance with this Agreement
other than during a Dominion Period or a Report Failure Period, (iv) comply with
the terms and conditions of this Agreement relating to the obligation of the
Borrower to remove Receivables from the Collateral pursuant to this Agreement
and the obligation of Regional Management to reacquire Receivables from the
Borrower pursuant to the Second Tier Purchase Agreement, (v) promptly notify the
Borrower, the Administrative Agent, the Backup Servicer, the Account Bank and
the Collateral Custodian of the occurrence of any Servicer Termination Event and
any breach by the Servicer of any of its covenants or representations and
warranties contained herein, (vi) promptly notify the Borrower, the
Administrative Agent, each Lender, the Backup Servicer, the Account Bank and the
Collateral Custodian of the occurrence of any event which, to the knowledge of
the Servicer, would require that the Borrower make or cause to be made any
filings, reports, notices or applications or seek any consents or authorizations
from any and all Government Authorities in accordance with the relevant UCC and
any State vehicle license or registration authority as may be necessary or
advisable to create, maintain and protect a first priority perfected security
interest of the Administrative Agent in, to and on the Financed Vehicles and a
first priority security interest of the Administrative Agent in, to and on the
Collateral, (vii) take all reasonable action necessary to maximize the returns
pursuant to the Insurance Policies, (viii) immediately notify the Backup
Servicer if any changes to the Collection Policy or the servicing platform occur
and (ix) not impair the rights of the Borrower or the Secured Parties in the
Collateral.

(s) Account Restructuring Date. On the Account Restructuring Date, the Servicer
entered into, or caused the Borrower to enter into, the Security Agreement, the
Master Deposit Account Control Agreement and the Wells Fargo Deposit Account
Control Agreement, amended the Intercreditor Agreement and delivered to the
Administrative Agent an Opinion of Counsel to the effect that such agreements
(i) are the

 

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valid, binding and enforceable obligations of the parties thereto and
(ii) created a perfected security interest for the benefit of the Administrative
Agent in the Master Deposit Account and the Additional Deposit Accounts, prior
to any other security interest created under Article 9 of the New York UCC,
perfected by a method other than control, in each case in form and substance
satisfactory to the Administrative Agent.

Section 6.04. Negative Covenants of the Servicer. From the Closing Date until
the Facility Termination Date:

(a) Collection Account; Reserve Account. The Servicer shall not create or
participate in the creation of, or permit to exist, any Liens (other than
Permitted Liens) with respect to the Collection Account or the Reserve Account.
The Servicer shall not grant the right to take dominion or “control” (as defined
in the relevant UCC) at a future time or upon the occurrence of a future event
to any Person with respect to such Collection Account or the Reserve Account.

(b) Mergers, Acquisition, Sales, Etc. The initial Servicer shall not
(i) consolidate with or merge into any other Person or (ii) convey or transfer
all or substantially all of its assets to any other Person; provided, that the
Servicer may (A) merge with another Person if (1)(x) the initial Servicer is the
entity surviving such merger or (y) the Person with whom the Servicer is merged
into or consolidated assumes in writing all duties and liabilities of the
initial Servicer hereunder, (2) the initial Servicer shall have delivered prior
written notice of such consolidation, merger, conveyance or transfer to the
Administrative Agent and (3) immediately after giving effect to such merger, no
Termination Event, Unmatured Termination Event or Servicer Termination Event
shall have occurred and be continuing and (B) convey or transfer all or
substantially all of its assets to a Person if (1) such Person assumes in
writing all duties and liabilities of the Servicer hereunder, (2) the initial
Servicer shall have delivered prior written notice of such consolidation,
merger, conveyance or transfer to the Administrative Agent and (3) immediately
after giving effect to such transfer, no Termination Event, Unmatured
Termination Event or Servicer Termination Event shall have occurred and be
continuing.

(c) Change of Name or Location of Servicer Files or Receivable Files. The
Servicer shall not (i) change its name or its State of organization, move the
location of its principal place of business and chief executive office, and the
offices where it keeps records concerning the Receivables (including the
Servicer Files) from the locations referred to in Schedule D or (ii) move, or
consent to the Collateral Custodian moving, the Receivable Files from the
location thereof on the Effective Date, unless the Servicer has given at least
30 days’ prior written notice to the Administrative Agent and has taken all
actions required under the UCC of each relevant jurisdiction in order to
continue the first priority perfected security interest of the Administrative
Agent for the benefit of the Secured Parties, in the Collateral, subject only to
Permitted Liens.

(d) Change in Payment Instructions to Obligors. The Servicer will not make any
change in its instructions to the Obligors regarding payments to be made to the
Borrower, the Servicer or a Subservicer, unless the Administrative Agent has
consented to such change and has received duly executed documentation related
thereto.

 

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(e) Extension or Amendment of Contracts. The Servicer will not, except as
otherwise permitted in Section 7.03(c)(i), extend, amend or otherwise modify the
terms of any Contract.

(f) No Instruments. The Servicer shall take no action to cause any Receivable to
be evidenced by any Instrument or “electronic chattel paper” (as defined in the
UCC).

(g) No Liens. The Servicer shall not sell, pledge, assign or transfer to any
other Person, or grant, create, incur, assume or suffer to exist any Lien (other
than the Lien created by this Agreement) on the Collateral or any interest
therein, the Servicer will notify the Collateral Custodian and the
Administrative Agent of the existence of any Lien on any portion of the
Collateral immediately upon discovery thereof, and the Servicer shall defend the
right, title and interest of the Administrative Agent on behalf of the Secured
Parties in, to and under the Collateral against all claims of third parties
claiming through or under the Servicer.

(h) Compliance with Sanctions. The Servicer, its Subsidiaries and their
respective Related Parties shall not, directly or indirectly, use the proceeds
of the Loans, or lend, contribute or otherwise make such proceeds available to
any Subsidiary, joint venture partner or other Person (i) to fund any activities
or business of or with a Sanctioned Person or (ii) in any manner that would be
prohibited by Sanctions or would otherwise cause any Lender to be in breach of
any Sanctions. The Servicer shall comply with Sanctions and shall maintain
policies and procedures reasonably designed to ensure compliance with Sanctions.
The Servicer shall notify the Lenders and the Administrative Agent in writing
not more than one Business Day after becoming aware of any breach of
Section 5.03(o) or this subsection.

(i) Release; Additional Covenants. The Servicer shall not (i) release any
Financed Vehicle securing any Receivable from the security interest granted
therein by such Receivable in whole or in part except in the event of payment in
full by the Obligor thereunder or upon transfer of such Financed Vehicle to a
purchaser following repossession by the Servicer, (ii) impair the rights of the
Borrower, the Administrative Agent, the Secured Parties or the Collateral
Custodian in the Collateral, (iii) increase the number of Scheduled Payments due
under a Receivable except as permitted herein, (iv) prior to the payment in full
of any Receivable, sell, pledge, assign, or transfer to any other Person, or
grant, create, incur, assume or suffer to exist any Lien on such Receivable or
any interest therein, (v) impair the rights of the Borrower or the Secured
Parties in the Collateral or (vi) sell, pledge, assign, or transfer to any other
Person, or grant, create, incur, assume or suffer to exist any Lien on the
Collateral or any interest therein.

(j) Force-Placed Insurance Policy. The Servicer shall not force place any
Insurance Policies against the Financed Vehicles or the related Obligors.

 

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ARTICLE SEVEN

ADMINISTRATION AND SERVICING OF CONTRACTS

Section 7.01. Designation of Servicing. The Administrative Agent, each Lender
and the Borrower, at the direction of and on behalf of the Administrative Agent,
hereby appoint Regional Management, as Servicer to service, manage, collect and
administer each of the Receivables and the other Collateral, and to enforce its
respective rights and interests in and under the Collateral and Regional
Management hereby accepts such appointment and agrees to perform the duties and
responsibilities of the Servicer pursuant to the terms hereof.

Section 7.02. Servicing Compensation. As compensation for its servicing
activities hereunder and reimbursement for its expenses, the Servicer shall be
entitled to receive the Servicing Fee to the extent of funds available therefor
pursuant to Section 2.08. The Servicer shall be further entitled to retain as
additional servicing compensation all ancillary fees and payments from Obligors,
including administrative fees and similar charges allowed by Applicable Law, but
excluding extension fees and late fees.

Section 7.03. Duties of the Servicer.

(a) Standard of Care. The Servicer shall take or cause to be taken all such
action as may be necessary or advisable to collect each Receivable from time to
time, all in accordance with Applicable Law, with reasonable care and diligence
and in accordance with the Collection Policy.

(b) Records Held in Trust. The Servicer shall hold in trust for the Borrower and
the Secured Parties all records which evidence or relate to all or any part of
the Collateral. In the event that a Successor Servicer assumes the servicing
responsibilities of the Servicer, the outgoing Servicer shall promptly deliver
to the Successor Servicer, and the Successor Servicer shall hold in trust for
the Borrower and the Secured Parties, all records which evidence or relate to
all or any part of the Collateral.

(c) Collection Practices.

(i) The Servicer shall be responsible for collection of payments called for
under the terms and provisions of the Contracts, as and when the same shall
become due. The Servicer, in making collection of Receivable payments pursuant
to this Agreement, shall be acting as agent for the Secured Parties, and shall
be deemed to be holding such funds in trust on behalf of and as agent for the
Borrower and the Secured Parties. The Servicer, consistent with the Collection
Policy, shall service, manage, administer and make collections on the
Receivables on behalf of the Borrower and shall have full power and authority to
do any and all things which it may deem necessary or desirable in connection
therewith which are not inconsistent with this Agreement. The Servicer may in
its discretion grant extensions, rebates or adjustments on a Contract in
accordance with the Collection Policy and amend or modify any Contract or
Receivable, but shall not modify the APR, the number or amount of the Scheduled
Payments or the Principal Balance unless required by Applicable Law or court
order issued pursuant to Insolvency

 

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Proceedings involving the related Obligor. The Servicer may in its discretion
waive any late payment charge or any other fees (not including interest on the
Principal Balance of a Receivable) that may be collected in the ordinary course
of servicing any Receivable but shall not extend any Contract such that its
maturity date occurs later than the last day of the Collection Period relating
to the Final Scheduled Payment Date. In the event that the Servicer breaches the
provisions of the three preceding sentences, it shall purchase the related
Receivable by depositing an amount equal to the related Release Price into the
Collection Account no later than the 30th day following its knowledge of such
breach or receipt of notice of such breach. The Servicer shall also enforce
(A) all rights of the Borrower under the Second Tier Purchase Agreement,
including the right to require Regional Management to repurchase Receivables for
breaches of its representations and warranties, and (B) its rights under the
First Tier Purchase Agreement, including the right to require each related
Originator to repurchase Receivables for breaches of its representations and
warranties.

(ii) If the full amount of a Scheduled Payment due under a Receivable is not
received within five Business Days after its due date, the Servicer will, in
accordance with the Collection Policy, make reasonable and customary efforts to
contact the related Obligor. The Servicer shall continue its efforts in
accordance with the Collection Policy to obtain such payment from an Obligor
whose payment has not been made until the Financed Vehicle with respect to such
Receivable is repossessed and sold or the Servicer has determined in its
discretion that all amounts due and payable which are collectable on the
Receivable have been collected. The Servicer shall use its best efforts,
consistent with the Collection Policy, to collect funds on a Defaulted
Receivable.

(iii) In the event a Receivable becomes a Defaulted Receivable or is reasonably
anticipated by the Servicer to become a Defaulted Receivable, the Servicer and
the Subservicers, themselves or through the use of independent contractors or
agents shall, consistent with the Collection Policy, repossess or otherwise
convert the ownership of the Financed Vehicle securing any such Receivable as to
which the Servicer or the related Subservicer shall have determined eventual
payment in full is unlikely. All fees, costs and expenses incurred by the
Servicer and the Subservicers in connection with the repossession or other
conversion of ownership of a Financed Vehicle securing such Receivable shall be
reimbursed to the Servicer and the Subservicer (other than overhead), to the
extent not previously recouped by the Servicer from Liquidation Proceeds on the
Payment Date immediately succeeding the Collection Period in which the Servicer
delivered to the Administrative Agent an itemized statement of such costs and
expenses. Notwithstanding the foregoing and consistent with the terms of this
Agreement, neither the Servicer nor any Subservicer shall be obligated to make
any efforts to repossess or take any action with respect to a Defaulted
Receivable if, in its reasonable judgment consistent with the Collection Policy,
the Liquidation Proceeds would not be increased.

(iv) Except as otherwise provided in Section 7.03(c)(ii), the Servicer shall
deposit or cause to be deposited by electronic funds transfer all Collections to
the Collection Account no later than two Business Days after receipt.

 

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(d) Collection; Recourse; Sales of Financed Vehicles. The Servicer and each
Subservicer shall use its best efforts, consistent with the Collection Policy,
to repossess or otherwise convert the ownership of the Financed Vehicle securing
any related Receivable as to which it shall have determined eventual payment in
full is unlikely. From time to time, as appropriate for servicing or foreclosing
upon any Receivable, the Borrower shall, upon written request of the Servicer,
execute such documents as shall be reasonably necessary to prosecute any such
proceedings. The Servicer and each Subservicer shall follow the Collection
Policy as it shall deem necessary or advisable in its servicing of Receivables.
The Servicer and each Subservicer shall use all commercially reasonable efforts
to maximize proceeds from the repossession of a Financed Vehicle securing any
Receivable, which may include reasonable efforts to realize rights of recourse
or other remedies against any Dealer, or selling (or causing to be sold) any
such Financed Vehicle at auction, 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, neither the Servicer nor the related Subservicer shall
expend funds in connection with the repair or the repossession of such Financed
Vehicle unless it shall determine in its reasonable discretion that such repair
and/or repossession will increase the Liquidation Proceeds by an amount greater
than the amount of such expenses.

(e) Subservicers. The Servicer may at any time and from time to time delegate in
the ordinary course of business any or all of its duties and obligations
hereunder to one or more Subservicers; provided, however, that (i) each initial
Subservicer shall only be responsible for servicing Receivables in the State in
which it is located and (ii) notwithstanding any other provision of this
Agreement, the Servicer shall at all times remain responsible for the
performance of such duties and obligations. The identity of each Subservicer
shall be listed on Schedule E.

(f) Insurance. The Servicer shall:

(i) on behalf of the Borrower, administer and enforce all rights and
responsibilities of the Borrower, as owner of the Receivables, provided for in
the Insurance Policies relating to the Receivables;

(ii) in accordance with the underwriting criteria then in effect, require that
each Obligor shall have obtained physical damage insurance covering the Financed
Vehicle as of the date of execution of the related Contract and monitor such
physical damage insurance coverage;

(iii) administer the filings of claims under the Insurance Policies by filing
the appropriate notices related to claims, including initial notices of loss, as
well as claims with the respective carriers or their authorized agents all in
accordance with the terms of the Insurance Policies; and use reasonable efforts
to file such claims on a timely basis after obtaining knowledge of the events
giving rise to such claims;

(iv) utilize such notices, claim forms and claim procedures as are required by
the respective insurance carriers issuing Insurance Policies covering Financed
Vehicles and the related Obligors;

 

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(v) upon receipt of notice from the related insurer that an Obligor’s physical
damage insurance covering a Financed Vehicle related to a Receivable has lapsed
or is otherwise not in force, send written notice to such Obligor stating that
each Obligor is required to maintain physical damage insurance covering a
Financed Vehicle throughout the term of the related Receivable; and

(vi) notwithstanding the foregoing, the Servicer shall not (A) be required to
pay any premiums or, other than administering the filing of claims and
performing reporting requirements specified in the Insurance Policies in
connection with filing such claims in accordance with this Agreement, perform
any obligations of the named insured under such Insurance Policies or (B) be
responsible to the Borrower, the Administrative Agent, the Secured Parties or
the Collateral Custodian for any (1) act or omission to act done in order to
comply with the requirements or to satisfy any provisions of the Insurance
Policies or (2) act, absent willful misconduct or negligence, or omission to act
done in compliance with this Agreement.

In the case of any inconsistency between the requirements of the Servicer under
this Agreement, the underwriting criteria then in effect or the Collection
Policy and the requirements of any Insurance Policy relating to a Financed
Vehicle applicable to the Borrower or the Servicer, the Servicer shall comply
with the applicable Insurance Policy; provided, however, that the Servicer shall
not be required to comply with any requirement of such Insurance Policy which is
commercially impracticable.

(g) Obligation to Restore. In the event of any physical loss or damage to a
Financed Vehicle from any cause, whether through accidental means or otherwise,
the Servicer shall have no obligation to cause such Financed Vehicle to be
restored or repaired. However, the Servicer shall comply in all material
respects with the provisions of any Insurance Policy or Insurance Policies
directly or indirectly related to any physical loss or damage to a Financed
Vehicle.

(h) [Reserved].

(i) Security Interests. The Borrower hereby directs the Servicer to (i) provide
notice to the Borrower promptly upon its discovery of the relocation of a
Financed Vehicle and (ii) take or cause to be taken such steps as are reasonably
necessary, to maintain perfection of the security interest created by the
related Receivable in such Financed Vehicle. The Servicer shall, at the
direction of the Borrower or the Administrative Agent, take any action
reasonably necessary to preserve and protect the security interests of the
Borrower and the Secured Parties in the Receivables, including any action
specified in any Opinion of Counsel delivered to the Servicer.

(j) Realization on Financed Vehicles. The Servicer warrants, represents and
covenants that in the event that the Servicer or any Subservicer realizes upon
any Financed Vehicle, the methods utilized to realize upon such Receivable or
otherwise enforce any provisions of the related Contract, will not subject the
Servicer, the Borrower, any Secured Party or the Collateral Custodian to
liability under any federal, State or local law, and that such enforcement by
the Servicer or a Subservicer will be conducted in accordance with the
provisions of this Agreement, the Collection Policy and Applicable Law.

 

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(k) Recordkeeping. The Servicer shall:

(i) maintain legible copies (in electronic or hard-copy form, in the discretion
of the Servicer) or originals of all documents in the Servicer File with respect
to each Receivable and the related Financed Vehicle; and

(ii) keep books and records, reasonably satisfactory to the Administrative
Agent, pertaining to each Receivable and make periodic reports in accordance
with this Agreement; such records may not be destroyed or otherwise disposed of
except as provided herein and as allowed by Applicable Law, all documents,
whether developed or originated by the Servicer or not, reasonably required to
document or to properly administer any Receivable shall remain at all times the
property of the Borrower and shall be held in trust by the Servicer; the
Servicer shall not acquire any property rights with respect to such records, and
shall not have the right to possession of them except as subject to the
conditions stated in this Agreement; and the Servicer shall bear the entire cost
of restoration in the event any Servicer File shall become damaged, lost or
destroyed while in the Servicer’s possession or control.

(l) Inspection. The Servicer shall permit the Secured Parties and the Backup
Servicer, upon five Business Days’ prior notice and during regular business
hours (provided that from and after the occurrence of any Termination Event,
Unmatured Termination Event or Servicer Termination Event, the foregoing notice
shall not be required to be given), to periodically, at the discretion of the
Administrative Agent and the Backup Servicer, as applicable, review the
collection and administration of the Receivables by the Servicer and the
Subservicers in order to assess compliance by the Servicer and the Subservicers
with the Collection Policy and this Agreement and may conduct an audit of the
Receivables and Receivable Files in conjunction with such a review. Such review
may include tours of the facilities of the Servicer and the Subservicers and
discussions with their respective managements. Reasonable costs and expenses
incurred in connection with any such inspection conducted pursuant to this
subsection shall be at the Servicer’s expense; provided, that if no Termination
Event, Unmatured Termination Event or Servicer Termination Event shall have
occurred and be continuing, the Administrative Agent, the Backup Servicer, the
Lenders or their respective agents or representatives shall only be entitled to
conduct two such inspections during any 12-month period beginning on the Closing
Date and on each anniversary thereof and provided, further, that if a
Termination Event, Unmatured Termination Event or Servicer Termination Event
shall have occurred and be continuing, there shall be no limit on the number of
such inspections the Administrative Agent, the Backup Servicer, the Lenders or
their respective agents or representatives shall be entitled to conduct. It is
anticipated that each inspection by the Administrative Agent will be a full
operational, legal, compliance and collateral audit and will verify among other
items, the existence of Collateral, cash application and aging and eligibility,
will include a litigation and regulatory review, and will confirm that internal
ratings actually applied conform to underwriting standards. Each audit by the
Administrative Agent will also include a sample review of no fewer than 100
Receivable Files and Servicer Files to check the accuracy of information
provided by the Borrower, the Servicer or the Subservicers. The Servicer shall
reimburse the Administrative Agent for all reasonable fees, costs and expenses
incurred by or on behalf of the Administrative Agent and the Secured Parties in
connection with the foregoing actions promptly upon receipt of a written invoice
therefor, which invoices in any one year may not exceed $20,000 (unless a
Termination Event has occurred, following which such expenses will not be so
capped).

 

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Section 7.04. Collection of Payments.

(a) Payment Instructions. On or before the Closing Date in the case of the
Initial Receivables, or the Effective Date in the case of the Effective Date
Receivables, the Servicer and each Subservicer shall have instructed the
Obligors to make all payments in respect of the related Receivables directly
with the Servicer or such Subservicer.

(b) Establishment of the Accounts. The Servicer shall cause to be established or
establish, on or before the Closing Date, and maintained in the name of the
Administrative Agent, for the benefit of the Secured Parties, with the Account
Bank, (i) the Collection Account and (ii) the Reserve Account, in each case over
which the Administrative Agent shall have sole dominion and control and from
which neither the Servicer nor the Borrower shall have any right of withdrawal,
except as otherwise set forth in the Account Control Agreement. The Borrower
will be required to pay all reasonable fees and expenses owing to the Account
Bank in connection with the maintenance of the Accounts for its own account and
shall not be entitled to any payment therefor. Following the Facility
Termination Date, the Account Bank shall terminate the Accounts.

(c) Adjustments. If the Servicer, directly or through a Subservicer, makes (i) a
deposit into the Collection Account in respect of a collection of a Receivable
and such collection was received by the Servicer in the form of a check that is
not honored for any reason or (ii) a mistake with respect to the amount of any
collection and deposits an amount that is less than or more than the actual
amount of such collection, the Servicer shall appropriately adjust the amount
subsequently deposited into the Collection Account to reflect such dishonored
check or mistake. Any Scheduled Payment in respect of which a dishonored check
is received shall be deemed not to have been paid.

Section 7.05. Payment of Certain Expenses by the Initial Servicer. The initial
Servicer will be required to pay all expenses incurred by it in connection with
its activities under this Agreement, including the fees and disbursements of
independent certified public accountants, Taxes imposed on the Servicer,
expenses incurred in connection with payments and reports pursuant to this
Agreement, fees and expenses of Subservicers (including monthly compensation for
acting as Subservicers) and agents of the Servicer and all other fees and
expenses not expressly stated under this Agreement for the account of the
Borrower. The initial Servicer shall be required to pay such expenses for its
own account and shall not be entitled to any payment therefor other than the
Servicing Fee.

Section 7.06. Reports.

(a) Monthly Reports; Monthly Compliance Statements; Monthly Loan Tapes. On each
Reporting Date, the Servicer will provide to the Borrower, the Administrative
Agent, each Lender, the Backup Servicer, the Collateral Custodian and the
Account Bank (i) a Monthly Report, (ii) a Monthly Loan Tape and (iii) an
Officer’s Certificate, dated as of related Determination Date, stating that
(A) a review of the activities of the Servicer and the

 

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Subservicers during such Collection Period (or since the Closing Date in the
case of the first such Officer’s Certificate) and of its performance under this
Agreement has been made under such officer’s supervision and (B) to the best of
such officer’s knowledge, based on such review, the Servicer and the
Subservicers have fulfilled all of their respective obligations under this
Agreement throughout such Collection Period (or such longer period in the case
of the first such Officer’s Certificate), or, if there has been a default in the
fulfillment of any such obligation, specifying each such default known to such
officer and the nature and status thereof.

(b) Financial Statements. In the event the initial Servicer is no longer subject
to the periodic and current reporting requirements of Section 13 or 15(d) of the
Exchange Act, the initial Servicer will submit to the Administrative Agent and
each Lender, (i) within 45 days of the end of each of its fiscal quarters, its
unaudited consolidated financial statements (including an analysis of
delinquencies and losses on the Receivables for each fiscal quarter) as of the
end of each such fiscal quarter and (ii) within 90 days of the end of each of
its fiscal years, its audited consolidated financial statements (including an
analysis of delinquencies and losses on the Receivables for each fiscal year
describing the causes thereof and sufficient to determine whether a Termination
Event or a Servicer Termination Event has occurred or is reasonably likely to
occur and otherwise reasonably satisfactory to the Administrative Agent) as of
the end of each such fiscal year; provided that such financial statements are in
public company reporting format under the Exchange Act.

(c) Static Pool Information. The initial Servicer will provide to the
Administrative Agent in regard to vintage originations, upon request (i) static
pool gross and net loss history, (ii) static pool defaulted receivable recovery
rates, (iii) static pool origination characteristics and (iv) any additional
static pool information reasonably requested by the Administrative Agent.

Section 7.07. Annual Statement as to Compliance. The Servicer shall deliver to
the Administrative Agent on or before March 31st of each year, beginning in
2016, an Officer’s Certificate, dated as of the preceding December 31st, stating
that (i) a review of the activities of the Servicer during the preceding
12-month period (or since the Closing Date in the case of the first such
Officer’s Certificate) 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, each of the Servicer and the Subservicers have
fulfilled all their respective obligations under this Agreement throughout such
year (or such shorter period in the case of the first such Officer’s
Certificate), or, if there has been a default in the fulfillment of any such
obligation, specifying each such default known to such officer and the nature
and status thereof.

Section 7.08. Annual Independent Public Accountant’s Reports. Upon the request
of the Administrative Agent or any Lender, which request may be made up to once
per year; provided that such request is made before November 30th of the year of
the request, the Servicer will deliver to the Administrative Agent, on or before
March 31st of the year following such request, beginning in 2016, a copy of a
report prepared by a firm of independent certified public accountants, who may
also render other services to the Servicer or any of its Affiliates, addressed
to the board of directors of the Servicer or any of its Affiliates, and the
Administrative Agent and dated during the current year, to the effect that such
firm has examined the policies and procedures of the Servicer and the
Subservicers and issued its report thereon and expressing a summary of findings
(based on certain procedures performed on the documents, records and

 

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accounting records that such accountants considered appropriate under the
circumstances) relating to the servicing of the Receivables and the
administration of the Receivables (including the preparation of the Monthly
Reports, the Monthly Loan Tapes and the static pool information) during the
preceding calendar year (or such longer period in the case of the first report)
and that such servicing and administration was conducted in compliance with the
terms of this Agreement, except for (i) such exceptions as such firm shall
believe to be immaterial and (ii) such other exceptions as shall be set forth in
such report and that such examination (a) was performed in accordance with
standards established by the American Institute of Certified Public Accountants
and (b) included tests relating to auto loans serviced for others in accordance
with the requirements of any program under which the Servicer customarily
provides such reporting to other warehouse lenders similarly situated, which may
include Uniform Single Attestation Program for Mortgage Bankers, SSAE 16 reports
or comparable reports to the extent the procedures in such program are
applicable to the servicing obligations set forth in this Agreement.
Notwithstanding the foregoing, to the extent that in connection with public
offerings, Regulation AB under the Securities Act requires the delivery of an
annual attestation of a firm of independent public accountants with respect to
the assessment of servicing compliance with specified servicing criteria of the
Servicer stating, among other things, that the Servicer’s assertion of
compliance with the specified servicing criteria is fairly stated in all
material respects, or the reason why such an opinion cannot be expressed, the
delivery of a copy of such an attestation to the Administrative Agent shall be
deemed to satisfy the provisions of this Section. Such report shall also
indicate that the firm is “Independent” of the Servicer and its Affiliates
within the meaning of the Code of Professional Ethics of the American Institute
of Certified Public Accountants.

In the event such independent certified public accountants require the
Collateral Custodian or the Backup Servicer to agree to the procedures to be
performed by such firm in any of the reports required to be prepared pursuant to
this Section, the Servicer shall direct the related party in writing to so
agree; it being understood and agreed that each of the Collateral Custodian and
the Backup Servicer will deliver any such letter of agreement in conclusive
reliance upon the direction of the Servicer, and neither the Collateral
Custodian nor the Backup Servicer has made any independent inquiry or
investigation as to, and shall have no obligation or liability in respect of,
the sufficiency, validity or correctness of such procedures. The Account Bank
shall not be liable for any claims, liabilities or expenses relating to such
accountants’ engagement or any report issued in connection with such engagement,
and dissemination of any such report is subject to the consent of the
accountants.

The Servicer shall pay all costs and expenses associated with this Section up to
$30,000 per annum and the Administrative Agent shall reimburse the Servicer for
any amounts in excess of $30,000 per annum.

Section 7.09. Rights Prior to Assumption of Duties by Successor Servicer.

(a) On or before each Reporting Date, the Servicer shall deliver to the Backup
Servicer an electronic file containing all information necessary to allow the
Backup Servicer to review the Monthly Report related thereto and determine the
following: (i) that such Monthly Report is complete on its face, (ii) that the
amounts to be withdrawn for payments pursuant to Section 2.08 from the
Collection Account are the same as the amounts to be withdrawn from the

 

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Collection Account as set forth in the Monthly Report and (iii) the Reserve
Account Amount. The Backup Servicer shall, within two Business Days after
receipt of the electronic file referred to in the preceding sentence, (A) load
such electronic file, (B) confirm such computer tape or diskette is in readable
form and (C) verify (1) the aggregate Principal Balance of the Receivables as of
the last day of the related Collection Period and (2) the Cumulative Net Loss
Ratio, the Delinquency Ratio and the Extension Ratio for, prior to the Effective
Date, the Initial Receivables and after the Effective Date, for each of the
Initial Receivables and the Effective Date Receivables, each as set forth in the
Monthly Report. In the event of any discrepancy between the information set
forth in the two foregoing sentences, as determined or calculated by the
Servicer, from that determined or calculated by the Backup Servicer, the Backup
Servicer shall notify the Servicer of such discrepancy by the third Business Day
following receipt by the Backup Servicer of the related electronic file and, if
by the Business Day following receipt by the Servicer of such notice, the Backup
Servicer and the Servicer are unable to resolve such discrepancy, the Backup
Servicer shall promptly notify the Administrative Agent of such discrepancy. The
Backup Servicer shall provide a monthly report, in form and substance
satisfactory to the Backup Servicer, the Administrative Agent and the Servicer,
to the Administrative Agent and the Servicer, on or before the close of business
on the Business Day immediately preceding the related Payment Date. The Backup
Servicer, in its capacity as such, shall not be responsible for delays
attributable to the Servicer’s failure to deliver information, defects in the
information supplied by the Servicer or other circumstances beyond the control
of the Backup Servicer.

(b) At such time as may be requested in writing by the Administrative Agent, the
Servicer shall deliver the Test Data File to the Backup Servicer, in a format
acceptable to the Backup Servicer. The Backup Servicer and the Servicer will
agree upon the file layout and electronic medium to transfer such data to the
Backup Servicer. The Backup Servicer shall confirm to the Servicer and the
Administrative Agent in writing that the Test Data File is in the correct format
or if any changes or modifications are necessary. The Backup Servicer shall
convert the Test Data File to its internal servicing system, and confirm in
writing to the Servicer and the Administrative Agent that it has received and
verified the completeness of the Test Data File within 90 days of receipt of
such Test Data File; provided, however, that such confirmation shall not be
deemed to apply to the accuracy of the Test Data File data as provided by the
Servicer, but shall be deemed only to apply to the accuracy of the conversion of
the Test Data Files to the Backup Servicer’s internal systems. Any reasonable
cost associated with the obligations of the Backup Servicer described in this
subsection shall be at the expense of the Servicer, and, to the extent that the
Servicer does not pay such amounts, the Backup Servicer shall be entitled to
recover such amounts pursuant to Section 2.08.

(c) Other than as specifically set forth elsewhere in this Agreement, the Backup
Servicer shall have no obligation to supervise, verify, monitor or administer
the performance of the Servicer and shall have no Liability for any action taken
or omitted by the Servicer.

(d) The Backup Servicer shall consult with the Servicer as may be necessary from
time to time to perform or carry out the Backup Servicer’s obligations
hereunder, including the obligation, if requested in writing by the
Administrative Agent, to succeed to the duties and obligations of the Servicer
pursuant hereto.

 

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(e) Except as provided in this Agreement, the Backup Servicer may accept and
rely on all accounting, records and work of the Servicer without audit, and the
Backup Servicer shall have no Liability for the acts or omissions of the
Servicer. If any error, inaccuracy or omission (collectively, “Errors”) exists
in any information received from the Servicer, and such Errors should cause or
materially contribute to the Backup Servicer making or continuing any Errors
(collectively, “Continued Errors”), the Backup Servicer shall have no Liability
for such Continued Errors; provided, however, that this provision shall not
protect the Backup Servicer against any Liability which would otherwise be
imposed by reason of willful misconduct, bad faith or gross negligence in
discovering or correcting any Error or in the performance of its duties under
this Agreement. In the event the Backup Servicer becomes aware of Errors or
Continued Errors, the Backup Servicer shall promptly notify the Servicer of such
Errors or Continued Errors and, with the prior consent of the Administrative
Agent, shall use its best efforts to reconstruct and reconcile such data as is
commercially reasonable to correct such Errors and Continued Errors and prevent
future Continued Errors. The Backup Servicer shall be entitled to recover its
reasonable costs thereby expended from the Servicer (or, to the extent not paid
by the Servicer, in accordance with Section 2.08).

(f) The Backup Servicer shall be indemnified by the Servicer and the Borrower
from and against all claims, damages, losses or expenses reasonably incurred by
the Backup Servicer (including reasonable attorneys’ fees) arising out of claims
asserted against the Backup Servicer by third parties on any matter arising out
of this Agreement to the extent the act or omission giving rise to the claim
accrues before the date on which the Backup Servicer assumes the duties of
Servicer hereunder, except for any claims, damages, losses or expenses arising
from the Backup Servicer’s own gross negligence, bad faith or willful
misconduct.

(g) The Backup Servicer shall be liable in accordance herewith only to the
extent of its obligations set forth in this Agreement or any obligations assumed
by the Backup Servicer from the Servicer pursuant to Section 7.14. Such
liability is limited to only those actions taken or omitted to be taken by the
Backup Servicer and caused through its gross negligence, bad faith or willful
misconduct. No implied covenants or obligations shall be read into this
Agreement against the Backup Servicer and, in the absence of bad faith on its
part, the Backup Servicer may conclusively rely on the truth of the statements
and the correctness of the opinions expressed in any certificates or opinions
furnished to the Backup Servicer and conforming to the requirements of this
Agreement.

(h) The Backup Servicer shall not be deemed to have knowledge of any default,
event of default, Termination Event, Unmatured Termination Event, event or
information, or be required to act upon any default, event of default,
Termination Event, Unmatured Termination Event, event or information (including
the sending of any notice) unless a Responsible Officer of the Backup Servicer
shall have received written notice or has actual knowledge of such event or
information, and shall have no duty to take any action to determine whether any
such event, default, event of default, Termination Event, or Unmatured
Termination Event has occurred. Delivery of any reports, information and
documents to the Backup Servicer provided for herein is for informational
purposes only and the Backup Servicer’s receipt of such reports (including
Monthly Reports) and any publicly available information, shall not constitute
actual or constructive knowledge or notice of any information contained therein
or determinable from information contained therein.

 

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(i) The Backup Servicer shall not be required to expend or risk its own funds or
otherwise incur financial liability in the performance of its duties hereunder,
or in the exercise of any of its rights or powers, if there shall be reasonable
ground for believing that the repayment of such funds or indemnity satisfactory
to it against such risk or liability shall not be reasonably assured to it.
Notwithstanding any provision to the contrary, the Backup Servicer, so long as
it is not the Successor Servicer, shall not be liable for any obligation of the
Servicer contained in this Agreement, and the parties shall look only to the
Servicer to perform such obligations.

Section 7.10. Rights After Assumption of Duties by Successor Servicer;
Liability. At any time following the assumption of the duties of the Servicer by
the Backup Servicer or the designation of a Successor Servicer pursuant to
Section 7.14 as a result of the occurrence of a Servicer Termination Event:

(a) The Servicer, on behalf of the Borrower, shall, at the Administrative
Agent’s request, (i) assemble all of the records relating to the Collateral,
including all Receivable Files, and shall make the same available to the
Administrative Agent or the Successor Servicer at a place selected by the
Administrative Agent, and (ii) segregate all cash, checks and other instruments
received by it from time to time constituting collections of Collateral in a
manner acceptable to the Administrative Agent and shall, promptly upon receipt
but no later than two Business Days after receipt, remit all such cash, checks
and instruments, duly endorsed or with duly executed instruments of transfer,
to, or at the direction of, the Administrative Agent.

(b) The Borrower hereby authorizes the Administrative Agent, to take or cause to
be taken any and all steps in the Borrower’s name and on behalf of the Borrower
necessary or desirable, in the determination of the Administrative Agent, to
collect all amounts due under any and all of the Collateral with respect
thereto, including endorsing the Borrower’s name on checks and other instruments
representing Collections and enforcing the Receivables.

(c) The Backup Servicer shall be liable in accordance herewith only to the
extent of its obligations set forth in this Agreement or any obligations assumed
by the Backup Servicer from the Servicer pursuant to Section 7.14. Such
liability is limited to only those actions taken or omitted to be taken by the
Backup Servicer and caused through its gross negligence, bad faith or willful
misconduct. No implied covenants or obligations shall be read into this
Agreement against the Backup Servicer and, in the absence of bad faith on its
part, the Backup Servicer may conclusively rely on the truth of the statements
and the correctness of the opinions expressed in any certificates or opinions
furnished to the Backup Servicer and conforming to the requirements of this
Agreement.

(d) The Backup Servicer shall not be deemed to have knowledge of any default,
event of default, Termination Event, Unmatured Termination Event, event or
information, or be required to act upon any default, event of default,
Termination Event, Unmatured Termination Event, event or information (including
the sending of any notice) unless a Responsible Officer of the Backup Servicer
shall have received written notice or has actual knowledge of such event or
information, and shall have no duty to take any

 

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action to determine whether any such event, default, event of default,
Termination Event, or Unmatured Termination Event has occurred. Delivery of any
reports, information and documents to the Backup Servicer provided for herein is
for informational purposes only and the Backup Servicer’s receipt of such
reports (including Monthly Reports) and any publicly available information,
shall not constitute actual or constructive knowledge or notice of any
information contained therein or determinable from information contained
therein.

(e) The Backup Servicer shall not be required to expend or risk its own funds or
otherwise incur financial liability in the performance of its duties hereunder,
or in the exercise of any of its rights or powers, if it reasonably determines
that the repayment of such funds or adequate written indemnity against such
risks or liability is not available prior to the expenditure of such funds or
the incurrence of financial liability. Notwithstanding any provision to the
contrary, the Backup Servicer, so long as it is not the Successor Servicer,
shall not be liable for any obligation of the Servicer contained in this
Agreement, and the parties shall look only to the Servicer to perform such
obligations.

Section 7.11. Limitation on Liability of the Servicer and Others. Except as
otherwise provided herein, neither the Servicer nor any of its directors or
officers or employees or agents shall be under any liability to the Secured
Parties, the Backup Servicer, the Collateral Custodian or any other Person 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 its willful misfeasance, bad faith or gross negligence in
the performance of duties or by reason of its willful misconduct hereunder.

Section 7.12. The Servicer Not to Resign. The Servicer shall resign only with
the prior written consent of the Administrative Agent and the Required Lenders
or if the Servicer provides an Opinion of Counsel to the Administrative Agent
and the Backup Servicer to the effect that it is no longer permitted by
Applicable Law to act as Servicer hereunder. No termination or resignation of
the Servicer hereunder shall be effective until the Backup Servicer or a
different entity, acceptable to the Administrative Agent, has accepted its
appointment as Successor Servicer hereunder and has agreed to be bound by the
terms of this Agreement and the Collection Policy.

Section 7.13. Servicer Termination Events. The occurrence and continuance of any
one of the following events shall constitute a “Servicer Termination Event”
hereunder:

(a) any failure by the Servicer to (i) deliver any Collections or (ii) make any
payment, transfer or deposit, in each case as required by this Agreement or any
other Servicer Basic Document and which failure shall continue unremedied for
two Business Days after (A) receipt of written notice of such failure by the
Servicer from the Administrative Agent, any Lender, a Responsible Officer of the
Collateral Custodian or a Responsible Officer of the Backup Servicer or
(B) discovery of such failure by a Responsible Officer of the Servicer;

 

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(b) any failure by the Servicer to deliver to the Administrative Agent, each
Lender, the Collateral Custodian or the Backup Servicer a Monthly Report and a
Monthly Loan Tape when required that shall continue unremedied for two Business
Days after (i) receipt of written notice of such failure by the Servicer from
the Administrative Agent, any Lender, a Responsible Officer of the Collateral
Custodian or a Responsible Officer of the Backup Servicer or (ii) discovery of
such failure by a Responsible Officer of the Servicer;

(c) any merger or consolidation of the Servicer in breach of Section 7.15;

(d) any failure by the Servicer duly to observe or perform in any material
respect any other covenant or agreement of the Servicer set forth in any
Servicer Basic Document, which failure shall remain unremedied for 30 days after
the earlier of (i) receipt of written notice of such failure by the Servicer
from the Administrative Agent, any Lender, a Responsible Officer of the
Collateral Custodian or a Responsible Officer of the Backup Servicer or
(ii) discovery of such failure by a Responsible Officer of the Servicer;

(e) any representation, warranty or certification made by the Servicer in any
Servicer Basic Document or in any other certificate, information or report
delivered pursuant to any Servicer Basic Document shall prove to have been false
or incorrect in any material respect when made or deemed made or delivered, and
which remains unremedied for 30 days after the earlier of (i) receipt of written
notice of such failure by the Servicer from the Administrative Agent, any
Lender, a Responsible Officer of the Collateral Custodian or a Responsible
Officer of the Backup Servicer or (ii) discovery of such failure by a
Responsible Officer of the Servicer;

(f) an Insolvency Event shall occur with respect to the Servicer;

(g) so long as Regional Management is the Servicer, as of the last day of any
Collection Period, (i) its Tangible Net Worth is less than $100,000,000 or
(ii) its Debt to Tangible Net Worth exceeds 3.0 to 1.0;

(h) a Termination Event shall have occurred and shall not have been waived; or

(i) any failure by the Servicer to observe any covenant, condition or agreement
under Section 6.04(h).

During the continuance of any of the foregoing, notwithstanding anything herein
to the contrary, so long as any such Servicer Termination Event shall not have
been remedied within any applicable cure period or waived in writing by the
Administrative Agent and each Lender, the Administrative Agent, by written
notice to the Servicer (with a copy to the Collateral Custodian, the Account
Bank and the Backup Servicer) (each, a “Servicer Termination Notice”), may
terminate all of the rights and obligations of the Servicer as Servicer under
this Agreement.

 

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Section 7.14. Appointment of Successor Servicer.

(a) On and after the receipt by the Servicer of a Servicer Termination Notice,
the Servicer shall continue to perform all servicing functions under this
Agreement until the date specified in the Servicer Termination Notice or
otherwise specified by the Administrative Agent in writing or, if no such date
is specified in such Servicer Termination Notice or otherwise specified by the
Administrative Agent, until a date mutually agreed upon by the Servicer, the
Backup Servicer (if the Backup Servicer becomes the Successor Servicer) and the
Administrative Agent. The Administrative Agent shall, at the request, or may
with the consent, of the Required Lenders, at the time described in the
immediately preceding sentence, appoint the Backup Servicer as the Successor
Servicer hereunder, and the Backup Servicer shall on such date assume all
duties, liabilities and obligations of the Servicer hereunder from and after
such date, and all authority and power of the Servicer under this Agreement
shall pass to and be vested in the Backup Servicer except to the extent
otherwise set forth herein.

(b) In the event that the Administrative Agent does not so appoint the Backup
Servicer to succeed the Servicer as Servicer hereunder or the Backup Servicer is
unable to assume such obligations on the date specified, the Administrative
Agent, in consultation with the Required Lenders, shall as promptly as possible
appoint a different entity to be the successor Servicer, and such successor
Servicer shall accept its appointment by a written assumption agreement in a
form acceptable to the Administrative Agent (the Backup Servicer as successor
Servicer or such other entity as successor Servicer, the “Successor Servicer”).
In the event that a Successor Servicer has not accepted its appointment at the
time when the Servicer ceases to act as Servicer, the Administrative Agent or
the resigning Backup Servicer shall petition a court of competent jurisdiction
to appoint any established financial institution having a net worth of not less
than $50,000,000 and whose regular business includes the servicing of subprime
automobile receivables as the Successor Servicer hereunder.

(c) The Administrative Agent shall have the same rights of removal and
termination for cause with respect to any Successor Servicer as with respect to
Regional Management as the Servicer.

(d) All reasonable costs and expenses (including attorneys’ fees and
disbursements) incurred by the Backup Servicer and Successor Servicer in
connection with the transfer and assumption of servicing obligations hereunder
from the Servicer to the Backup Servicer or Successor Servicer, converting the
Servicer’s data to such Person’s computer system and amending this Agreement to
reflect such succession as Servicer pursuant to this Section shall be paid by
the predecessor Servicer upon presentation of a written invoice setting forth
reasonable transition expenses provided that such expenses shall not exceed
$150,000 (the “Transition Expenses”) in the aggregate as to all such Persons. In
no event shall the Backup Servicer or the Successor Servicer be responsible for
any Transition Expenses. If the predecessor Servicer fails to pay the Transition
Expenses, the Transition Expenses shall be payable pursuant to Section 2.08.

(e) Upon the termination and removal of the Servicer and the assumption by the
Successor Servicer hereunder, the predecessor Servicer shall cooperate with the
Successor Servicer in effecting the termination of the rights and
responsibilities of the predecessor Servicer

 

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under this Agreement, including the transfer to the Successor Servicer for
administration by it of all Collections that shall at the time be held by the
predecessor Servicer for deposit, or shall thereafter be received, with respect
to the Receivables, the Collection Account, the Reserve Account and Servicer
Files and other records maintained by the Servicer.

(f) Upon its appointment, the Successor Servicer shall be the successor in all
respects to the Servicer with respect to servicing functions under this
Agreement and shall be subject to all the responsibilities, duties and
liabilities relating thereto placed on the Servicer by the terms and provisions
hereof, and all references in this Agreement to the Servicer shall be deemed to
refer to the Successor Servicer; provided, however, that any Successor Servicer
shall have (i) no liability with respect to any obligation which was required to
be performed by the predecessor Servicer prior to the date that the successor
becomes the Successor Servicer or any claim of a third party based on any
alleged action or inaction of the predecessor Servicer, (ii) no obligation to
perform any repurchase or advancing obligations, if any, of the Servicer,
(iii) no obligation to pay any taxes required to be paid by the Servicer,
(iv) no obligation to pay any of the fees and expenses of any other party to
this Agreement and (v) no liability or obligation with respect to any Servicer
indemnification obligations of any prior Servicer, including Regional
Management. The indemnification obligations of the Backup Servicer, upon
becoming a successor Servicer are expressly limited to those instances of gross
negligence, bad faith or willful misconduct of the Backup Servicer in its role
as Successor Servicer.

(g) All authority and power granted to the Servicer under this Agreement shall
automatically cease and terminate upon termination of the Servicer as servicer
and shall pass to and be vested in the Administrative Agent and the
Administrative Agent is hereby authorized and empowered to execute and deliver,
on behalf of the Servicer, as attorney-in-fact or otherwise, all documents and
other instruments, and to do and accomplish all other acts or things necessary
or appropriate to effect the purposes of such transfer of servicing rights. The
Servicer agrees to cooperate with the Borrower in effecting the termination of
the responsibilities and rights of the Servicer to conduct servicing of the
Receivables.

(h) The Administrative Agent may, solely for purposes of establishing the fee to
be paid to the Backup Servicer or any other Successor Servicer after a notice of
removal of the Servicer pursuant to this Article, solicit written bids (such
bids to include a proposed servicer fee and servicing transfer costs) from not
less than three entities experienced in the servicing of subprime automobile
receivables similar to the Receivables and that are not Affiliates of the
Servicer or the Borrower and are reasonably acceptable to the Administrative
Agent. Any such written solicitation shall prominently indicate that bids should
specify any applicable subservicing fees required to be paid from the Servicing
Fee and that any fees and transfer costs in excess of the Servicing Fee shall be
paid by the Borrower from amounts received pursuant to Section 2.08. The
Borrower may also solicit additional bids from other such entities. The
Successor Servicer shall act as Servicer hereunder and shall, subject to the
availability of sufficient funds in the Collection Account pursuant to
Section 2.08 (up to the Servicing Fee), receive as compensation therefor a fee
equal to the fee proposed in the bid so solicited which provides for the lowest
combinations of servicing fee and transition costs, as reasonably determined by
the Administrative Agent and may revise the percentage used to calculate the
Servicing Fee, which, if the Successor Servicer is the Backup Servicer, shall be
revised as provided in Section 7.16(a) or, if the Backup Servicer is not the
Successor Servicer, may be adjusted in the sole discretion of the Administrative
Agent.

 

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Section 7.15. Merger or Consolidation, Assumption of Obligations or Resignation,
of the Servicer. Any Person (a) into which the Servicer may be merged or
consolidated in accordance with Section 6.04(b), (b) which may result from any
merger or consolidation to which the Servicer may be a party in accordance with
Section 6.04(b), (c) which may succeed to the properties and assets of the
Servicer substantially as a whole or (d) which may succeed to the duties and
obligations of the Servicer under this Agreement following the resignation of
the Servicer, which Person executes an agreement of assumption acceptable to the
Administrative Agent to perform every obligation of the Servicer hereunder,
shall, with the prior written consent of the Administrative Agent, be the
successor to the Servicer under this Agreement without further act on the part
of any of the parties to this Agreement; provided, however, that:

(i) prior written notice of such consolidation, merger, succession or
resignation shall be delivered by the Servicer to the Administrative Agent, the
Collateral Custodian and the Account Bank;

(ii) immediately after giving effect to such consolidation, merger, succession
or resignation, no Servicer Termination Event and no event which after notice or
lapse of time, or both, would become a Servicer Termination Event shall have
occurred and is continuing;

(iii) no Termination Event or Unmatured Termination Event would occur as result
of such consolidation, merger, succession or resignation;

(iv) the Servicer shall have delivered to the Borrower, the Administrative Agent
and the Collateral Custodian an Officer’s Certificate and an Opinion of Counsel,
each stating that such consolidation, merger, succession or resignation and such
agreement of assumption comply with this Section and that all conditions
precedent provided for in this Agreement and the other Basic Documents to which
it is a party relating to such transaction have been complied with; and

(v) the Servicer shall have delivered to the Borrower, the Administrative Agent
and the Collateral Custodian an Opinion of Counsel to the effect that in the
opinion of such counsel either (A) all financing statements, continuation
statements and amendments and notations on Certificates of Title thereto have
been executed and filed that are necessary to preserve and protect the interest
of the Borrower, the Secured Parties and the Collateral Custodian in the
Receivables and reciting the details of such filings or (B) no such action shall
be necessary to preserve and protect such interest.

Section 7.16. Wells Fargo Bank as Successor Servicer. In the event that Wells
Fargo Bank becomes the Successor Servicer hereunder following the termination of
Regional Management as Servicer, the following shall apply with respect to Wells
Fargo Bank, as Successor Servicer:

(a) Servicing Fee. At all times that Wells Fargo Bank or another Person is
acting as Successor Servicer hereunder, “Servicing Fee Rate” shall mean the
greater of (i) 4.00% per annum and (ii) the average of three bids obtained by
the Administrative Agent pursuant to the first two sentences of Section 7.14(h).

 

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(b) Covenants; Representations and Warranties. The covenants and representations
and warranties of Regional Management, as Servicer, shall apply to Wells Fargo
Bank as Successor Servicer but shall be deemed modified to the extent necessary
to apply to Wells Fargo Bank; provided, however, that prior to or promptly
following the Assumption Date, applicable modifications and amendments shall be
agreed upon by Wells Fargo Bank and the Administrative Agent, as contemplated by
Section 7.16(g).

(c) Delegation of Duties. Wells Fargo Bank as Successor Servicer may delegate
any or all of its duties and obligations hereunder to one or more Subservicers;
provided, however, that Wells Fargo Bank as Successor Servicer shall at all
times remain responsible for the performance of such duties and obligations.

(d) Collection Policy. The Collection Policy shall be amended pursuant to
Section 7.16(g) to reflect the policies of Wells Fargo Bank as Successor
Servicer.

(e) Servicer Obligations.

(i) Wells Fargo Bank shall have no obligation to provide investment directions
pursuant to Section 2.11 or any other Section requiring investment directions
from the Servicer.

(ii) Wells Fargo Bank shall not be responsible for any deficiency collections or
enforcement of the Borrower’s rights under the Second Tier Purchase Agreement,
as set forth in Section 7.03(c)(i). The Administrative Agent hereby agrees to
enforce the rights of the Borrower under the Second Tier Purchase Agreement.

(f) Termination. Wells Fargo Bank shall only be terminated in accordance with
this subsection and “Servicer Termination Events” shall mean and refer to the
following on and after the Assumption Date:

(i) Wells Fargo Bank shall fail to make any payment, transfer or deposit as
required under this Agreement;

(ii) Wells Fargo Bank shall fail to observe or perform in any material respect
any other covenant or agreement of the Servicer as set forth in this Agreement;

(iii) a material breach of a representation, warranty or certification by Wells
Fargo Bank made by it in its role as Servicer under this Agreement; or

(iv) an Insolvency Event shall occur with respect to Wells Fargo Bank.

 

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Upon the occurrence and continuation of a Servicer Termination Event, the
Administrative Agent shall notify Wells Fargo Bank of such Servicer Termination
Event and Wells Fargo Bank shall have 60 days thereafter to cure such breach.
Should Wells Fargo Bank fail to cure such breach, then upon the lapse of 60 days
thereafter or at such later time specified by the Administrative Agent, Wells
Fargo Bank shall be removed as Servicer and a new Successor Servicer shall be
appointed in accordance with the terms hereof.

The Administrative Agent, with the consent of the Required Lenders, may
terminate Wells Fargo Bank as Successor Servicer hereunder in its sole
discretion, upon 90 days’ prior written notice to Wells Fargo Bank.

(g) Amendment. Prior to or promptly following the Assumption Date, the parties
to this Agreement will enter into one or more amendments or supplements
acceptable in form and content to the Backup Servicer and the Administrative
Agent, providing for such modifications of this Agreement as are necessary to
permit the Backup Servicer to fulfill its responsibilities hereunder as
Successor Servicer.

Section 7.17. Responsibilities of the Borrower. Anything herein to the contrary
notwithstanding, the Borrower shall (i) perform or shall cause the Servicer to
perform all of its obligations under the Receivables to the same extent as if a
security interest in such Receivables had not been granted hereunder, and the
exercise by the Administrative Agent of its rights hereunder shall not relieve
the Borrower from such obligations and (ii) pay when due, from funds available
to the Borrower under Section 2.08, any Taxes of the Borrower, including any
sales taxes payable in connection with the Receivables and their creation and
satisfaction. No Secured Party shall have any obligation or liability with
respect to any Receivable, nor shall any of them be obligated to perform any of
the obligations of the Borrower thereunder.

Section 7.18. Servicer Centralization Event. Upon the occurrence of a Servicer
Centralization Event, the Backup Servicer and the Servicer will work with the
Administrative Agent to put into effect the items described on Schedule G,
together with such other items as may reasonably be agreed upon between the
Backup Servicer and the Administrative Agent.

 

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ARTICLE EIGHT

THE BACKUP SERVICER

Section 8.01. Designation of the Backup Servicer.

(a) The backup servicing role with respect to the Receivables shall be conducted
by the Person appointed to act as Backup Servicer hereunder from time to time in
accordance with this Section.

(b) The Borrower and the Administrative Agent, on behalf of the Secured Parties,
each hereby appoints and directs Wells Fargo Bank to act as Backup Servicer, for
the benefit of the Administrative Agent and the Secured Parties. Wells Fargo
Bank hereby accepts such appointment and agrees to perform the duties and
obligations with respect thereto set forth herein.

(c) Until the receipt by Wells Fargo Bank of a notice from the Administrative
Agent of the designation of a new Backup Servicer pursuant to Section 8.04,
Wells Fargo Bank agrees that it will not terminate its activities as Backup
Servicer hereunder except in accordance with Section 8.05.

(d) Upon the occurrence of a Servicer Termination Event, the Administrative
Agent may designate the Backup Servicer to act as Successor Servicer for the
benefit of the Secured Parties. The Backup Servicer shall accept such
appointment and agree to perform the duties and obligations with respect thereto
set forth herein.

Section 8.02. Duties of the Backup Servicer. From the Closing Date until the
earlier of (i) its removal pursuant to Section 8.04, (ii) its resignation in
accordance with the provisions of Section 8.05, (iii) its appointment as
Successor Servicer pursuant to Section 7.14(a) or (iv) the Facility Termination
Date, the Backup Servicer shall perform, on behalf of the Secured Parties, the
duties and obligations set forth in Section 7.09.

Section 8.03. Backup Servicing Compensation. As compensation for its backup
servicing activities hereunder, the Backup Servicer shall be entitled to receive
the Backup Servicing Fee from the Borrower. The Backup Servicer shall be
entitled to receive its Backup Servicing Fee to the extent of funds available
therefor pursuant to Section 2.08. The Backup Servicer’s entitlement to receive
the Backup Servicing Fee shall cease on the earliest to occur of (i) it becoming
the Successor Servicer, (ii) its removal as Backup Servicer pursuant to
Section 8.04, (iii) its resignation in accordance with the provisions of
Section 8.05 and (iv) the termination of this Agreement.

Section 8.04. Backup Servicer Removal. The Backup Servicer may be removed in
connection with a breach by the Backup Servicer in any material respect of any
representation, warranty or covenant of the Backup Servicer under this
Agreement, or otherwise in the discretion of the Administrative Agent, by 30
days’ prior notice given in writing and delivered to the Backup Servicer from
the Administrative Agent (the “Backup Servicer Termination Notice”). On and
after the receipt by the Backup Servicer of the Backup Servicer Termination
Notice, the Backup Servicer shall continue to perform all backup servicing
functions under this Agreement

 

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until the date specified in the Backup Servicer Termination Notice or otherwise
specified by the Administrative Agent in writing or, if no such date is
specified in the Backup Servicer Termination Notice or otherwise specified by
the Administrative Agent, until a date mutually agreed upon by the Backup
Servicer and the Administrative Agent.

Section 8.05. The Backup Servicer Not to Resign. The Backup Servicer shall
resign only with the prior written consent of the Administrative Agent and the
Required Lenders or if the Backup Servicer provides an Opinion of Counsel to the
Administrative Agent to the effect that the Backup Servicer is no longer
permitted by Applicable Law to act as Backup Servicer hereunder. No termination
or resignation of the Backup Servicer hereunder shall be effective until a
successor Backup Servicer, acceptable to the Administrative Agent has accepted
its appointment as successor Backup Servicer hereunder and has agreed to be
bound by the terms of this Agreement and the Collection Policy. If, however, a
successor Backup Servicer is not appointed by the Administrative Agent and the
Required Lenders within 30 days after the giving of notice of resignation or
removal, the Backup Servicer may petition a court of competent jurisdiction for
the appointment of a successor Backup Servicer, with the cost of such petition
to be borne by the Borrower.

Section 8.06. Covenants of the Backup Servicer.

(a) Affirmative Covenants. From the date of its appointment until the Facility
Termination Date:

(i) Compliance with Law. The Backup Servicer will comply in all material
respects with all Applicable Laws and all of its obligations under this
Agreement.

(ii) Preservation of Existence. The Backup Servicer will preserve and maintain
its existence, rights, franchises and privileges in the jurisdiction of its
formation, and qualify and remain qualified in good standing in each
jurisdiction where the failure to preserve and maintain such existence, rights,
franchises, privileges and qualification has had, or would reasonably be
expected to have, a Material Adverse Effect.

(b) Negative Covenant. From the date of its appointment until the Facility
Termination Date, the Backup Servicer will not make any changes to the Backup
Servicing Fee without the prior written approval of the Administrative Agent
and, so long as no Termination Event or Servicer Termination Event has occurred,
the Borrower.

Section 8.07. Merger of the Backup Servicer. Any Person into which the Backup
Servicer may be merged or converted or with which it may be consolidated, or any
Person resulting from any merger, conversion or consolidation to which to Backup
Servicer shall be a party, or any Person succeeding to the business of the
Backup Servicer, shall be the successor of the Backup Servicer under this
Agreement, without the execution or filing of any paper or any further act on
the part of any of the parties hereto, anything herein to the contrary
notwithstanding.

Section 8.08. Privilege. The Backup Servicer shall be entitled to any
protection, privilege or indemnity afforded to the Account Bank under the terms
of this Agreement.

 

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ARTICLE NINE

THE COLLATERAL CUSTODIAN

Section 9.01. Appointment; Duties of the Collateral Custodian. The
Administrative Agent, each Lender and the Borrower, at the direction of and on
behalf of the Administrative Agent, hereby appoint Wells Fargo Bank to act on
their behalf as Collateral Custodian hereunder, and Wells Fargo Bank hereby
accepts such appointment. The Collateral Custodian shall perform such duties and
only such duties as are specifically set forth in this Agreement.

Section 9.02. Compensation and Indemnification of Collateral Custodian.

(a) The Collateral Custodian shall be compensated for its activities hereunder
and reimbursed for reasonable out-of-pocket expenses by receiving the Collateral
Custodian Fee.

(b) The Borrower shall indemnify the Collateral Custodian and its officers,
directors, employees and agents for, and hold them harmless against any loss,
liability or expense incurred, other than in connection with the willful
misconduct, gross negligence or bad faith on the part of the Collateral
Custodian, arising out of or in connection with (i) the performance of its
obligations under and in accordance with this Agreement, including the
reasonable 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 and (ii) the negligence, willful misconduct or bad faith of
the Borrower in the performance of its duties hereunder. All such amounts shall
be payable in accordance with Section 2.08. The provisions of this Section shall
survive the termination of this Agreement.

THE FOREGOING INDEMNIFICATION SHALL APPLY WHETHER OR NOT SUCH LIABILITIES AND
COSTS ARE IN ANY WAY OR TO ANY EXTENT OWED, IN WHOLE OR IN PART, UNDER ANY CLAIM
OR THEORY OF STRICT LIABILITY, OR ARE CAUSED, IN WHOLE OR IN PART, BY ANY
NEGLIGENT ACT OR OMISSION OF ANY KIND BY THE COLLATERAL CUSTODIAN.

Section 9.03. Covenants of the Collateral Custodian.

(a) Affirmative Covenants. From the date hereof until the Facility Termination
Date:

(i) Compliance with Law. The Collateral Custodian will comply in all material
respects with all Applicable Laws and will comply with all of its obligations
hereunder.

(ii) Preservation of Existence. The Collateral Custodian will preserve and
maintain its existence, rights, franchises and privileges in the jurisdiction of
its formation and qualify and remain qualified in good standing in each
jurisdiction where failure to preserve and maintain such existence, rights,
franchises, privileges and qualification has had, or would reasonably be
expected to have, a Material Adverse Effect.

(b) Negative Covenant. From the date hereof until the Facility Termination Date
the Collateral Custodian will not assign, transfer, convey, deliver or dispose
of any Receivable Files related to a Receivable or other document evidencing or
relating to any of the Collateral or any of the Collateral except as
contemplated by this Agreement.

 

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(c) Agreement to Provide. The Collateral Custodian agrees to promptly provide
all information reasonably requested by the Servicer to help facilitate the
Servicer’s compliance with its obligations set forth under Section 7.08.

Section 9.04. Liability of the Collateral Custodian.

(a) The Collateral Custodian shall be liable in accordance herewith only to the
extent of the obligations specifically undertaken by the Collateral Custodian in
such capacity herein. No implied covenants or obligations shall be read into
this Agreement against the Collateral Custodian and, in the absence of bad faith
on the part of the Collateral Custodian, the Collateral Custodian may
conclusively rely on the truth of the statements and the correctness of the
opinions expressed in any certificates or opinions furnished to the Collateral
Custodian pursuant to and conforming to the requirements of this Agreement.

(b) The Collateral Custodian shall not be liable for:

(i) an error of judgment made in good faith by one of its officers; or

(ii) any action taken, suffered or omitted to be taken in good faith in
accordance with or believed by it to be authorized or within the discretion or
rights or powers conferred, by this Agreement or at the direction of a Secured
Party relating to the exercise of any power conferred upon the Collateral
Custodian under this Agreement in each case unless it shall be proved that the
Collateral Custodian shall have been negligent in ascertaining the pertinent
facts.

(c) The Collateral Custodian shall not be deemed to have knowledge of any
default, event of default, Termination Event, Unmatured Termination Event, event
or information, or be required to act upon any default, event of default,
Termination Event, Unmatured Termination Event, event or information (including
the sending of any notice) unless a Responsible Officer of the Collateral
Custodian shall have received written notice or has actual knowledge of such
event or information, and shall have no duty to take any action to determine
whether any such event, default, event of default, Termination Event, or
Unmatured Termination Event has occurred. Delivery of any reports, information
and documents to the Collateral Custodian provided for herein is for
informational purposes only and the Collateral Custodian’s receipt of such
reports (including Monthly Reports) and any publicly available information,
shall not constitute actual or constructive knowledge or notice of any
information contained therein or determinable from information contained
therein.

(d) Without limiting the generality of this Section, the Collateral Custodian
shall have no duty (i) to see to any recording, filing or depositing of this
Agreement or any agreement referred to herein or any financing statement or
continuation statement evidencing a security interest in the Receivables or the
related Financed Vehicles, or to see to the maintenance of any such recording or
filing or depositing or to any recording, refiling or redepositing of any
thereof, (ii) to see to any insurance of the Financed Vehicles or Obligors or to
effect or maintain any such insurance, (iii) to see to the payment or discharge
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charge or any Lien or encumbrance of any kind owing with respect to, assessed or
levied against, any part of the Receivables, (iv) to confirm or verify the
contents of any reports or certificates of the Servicer or the Borrower
delivered to the Collateral Custodian pursuant to this Agreement believed by the
Collateral Custodian to be genuine and to have been signed or presented by the
proper party or parties or (v) to inspect the Financed Vehicles at any time or
ascertain or inquire as to the performance or observance of any of the
Borrower’s or the Servicer’s representations, warranties or covenants or the
Servicer’s duties and obligations as Servicer and as custodian of books,
records, files and computer records relating to the Receivables under this
Agreement.

(e) The Collateral Custodian 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 ground for believing that the repayment of such funds or
indemnity satisfactory to it 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 Collateral Custodian to perform, or be
responsible for the manner of performance of, any of the obligations of the
Servicer under this Agreement.

(f) The Collateral Custodian may rely and shall be protected in acting or
refraining from acting upon any resolution, Officer’s Certificate, any Monthly
Report, any Monthly Loan Tape, certificate of auditors or any other certificate,
statement, instrument, opinion, report, notice, request, consent, order,
appraisal, bond or other paper or document reasonably believed by it to be
genuine and to have been signed or presented by the proper party or parties.

(g) The Collateral Custodian may consult with counsel of its choice with regard
to legal questions arising out of or in connection with this Agreement and the
advice or opinion of such counsel shall be full and complete authorization and
protection in respect of any action taken, omitted or suffered by the Collateral
Custodian in good faith in accordance therewith.

(h) The Collateral Custodian shall be under no obligation to exercise any of the
rights, powers or remedies vested in it by this Agreement (except to comply with
its obligations under this Agreement and any other Basic Document to which it is
a party) or to institute, conduct or defend any litigation under this Agreement
or in relation to this Agreement, at the request, order or direction of the
Administrative Agent pursuant to the provisions of this Agreement, unless the
Administrative Agent, on behalf of the Secured Parties, shall have offered to
the Collateral Custodian reasonable security or indemnity against the costs,
expenses and liabilities that may be incurred therein or thereby.

(i) The Collateral Custodian 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, unless requested in writing so to do by a Secured
Party; provided, that if the payment within a reasonable time to the Collateral
Custodian 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 Collateral
Custodian, not reasonably assured by the Borrower, the Collateral Custodian 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 Borrower or, if paid by the Collateral Custodian, shall be
reimbursed by the Borrower upon demand.

 

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(j) The Collateral Custodian 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 Collateral Custodian shall not be
responsible for any misconduct or negligence of any such agent or custodian
appointed with due care by it hereunder.

(k) The Collateral Custodian shall indemnify and hold harmless the Borrower, the
Servicer, the Secured Parties and each of their respective officers, directors,
employees and agents from and against any and all loss, liability or expense
that may be imposed on, incurred by or asserted against them as a result of any
improper act or omission in any way relating to the maintenance and custody of
the Receivable Files by the Collateral Custodian; provided, however, that the
Collateral Custodian shall not be liable for any portion of any such loss,
liability or expenses resulting from the willful misfeasance, bad faith or gross
negligence of the Borrower, the Servicer or any Secured Party.

Section 9.05. Limitation on Liability of the Collateral Custodian and Others.
The directors, officers, employees or agents of the Collateral Custodian shall
not be under any liability to any Secured Party, the Borrower or any other
Person hereunder or pursuant to any document delivered hereunder, it being
expressly understood that all such liability is expressly waived and released as
a condition of, and as consideration for, the execution of this Agreement;
provided, however, that this provision shall not protect the directors,
officers, employees and agents of the Collateral Custodian against any liability
which would be imposed by reason of willful misfeasance, bad faith or gross
negligence in the performance of duties. Except as provided in Section 9.04, the
Collateral Custodian shall not be under any liability to any Secured Party, the
Borrower or any other Person for any action taken or for refraining from the
taking of any action in its capacity as Collateral Custodian pursuant to this
Agreement whether arising from express or implied duties under this Agreement;
provided, however, that this provision shall not protect the Collateral
Custodian against any liability which would be imposed by reason of willful
misfeasance, bad faith or gross negligence in the performance of duties. The
Collateral Custodian may rely in good faith on any document of any kind, prima
facie, properly executed and submitted by any Person respecting any matters
arising hereunder.

Section 9.06. Certain Matters Affecting the Collateral Custodian.

(a) The Collateral Custodian shall have no duties or responsibilities except
those that are specifically set forth herein, and no implied covenants or
obligations shall be read into this Agreement against the Collateral Custodian.
The Collateral Custodian shall be under no responsibility or duty with respect
to the disposition of any Receivable Files delivered to it hereunder while such
Receivable Files are not in its possession. If the Collateral Custodian shall
request instructions from the Administrative Agent or the Servicer with respect
to any act, action or failure to act in connection with and as set forth in this
Agreement, the Collateral Custodian shall be entitled to refrain from taking
such action and continue to refrain from acting unless and until the Collateral
Custodian shall have received written instructions from the Administrative Agent
or the Servicer, as applicable without incurring any liability therefor to the
Administrative Agent, the Borrower, the Servicer or any other Person.

 

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(b) The Collateral Custodian may act in reliance upon any written communication
of the Administrative Agent concerning the delivery of the Receivable Files for
any of the Receivables and other items of Collateral pursuant to this Agreement.
The Collateral Custodian does not assume and shall have no responsibility for,
and makes no representation as to, monitoring the value of the Receivable Files
relating to any of the Receivables and other Collateral. The Collateral
Custodian shall not be liable for any action or omission to act hereunder,
except for its own gross negligence, bad faith or willful misconduct. In no
event shall the Collateral Custodian have any responsibility to ascertain or
take action with respect to the Receivable Files relating to any of the
Receivables or other Collateral, except as expressly provided herein.

THE FOREGOING PARAGRAPH SHALL APPLY WHETHER OR NOT SUCH LIABILITIES ARE IN ANY
WAY OR TO ANY EXTENT OWED, IN WHOLE OR IN PART, UNDER ANY CLAIM OR THEORY OF
STRICT LIABILITY, OR ARE CAUSED, IN WHOLE OR IN PART, BY ANY NEGLIGENT ACT OR
OMISSION OF ANY KIND BY THE COLLATERAL CUSTODIAN.

(c) If the Collateral Custodian shall at any time receive conflicting
instructions from the Administrative Agent and the Servicer or any other party
to this Agreement and the conflict between such instructions cannot be resolved
by reference to the terms of this Agreement, the Collateral Custodian shall be
entitled to rely on the instructions of the Administrative Agent. In the absence
of bad faith, gross negligence or willful misconduct on the part of the
Collateral Custodian, the Collateral Custodian may rely and shall be protected
in acting or refraining from acting upon any resolution, Officer’s Certificate,
Monthly Report, Monthly Loan Tape, 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. The
Collateral Custodian may rely upon the validity of documents delivered to it,
without investigation as to their authenticity or legal effectiveness, and the
Servicer and the other parties to this Agreement will hold the Collateral
Custodian harmless from any claims that may arise or be asserted against the
Collateral Custodian because of the invalidity of any such documents or their
failure to fulfill their intended purpose. The Collateral Custodian shall not be
bound to ascertain or inquire as to the performance or observance of any of the
terms of this Agreement or any other agreement on the part of any party, except
as may otherwise be specifically set forth herein. The Collateral Custodian may
consult with counsel of its choice with regard to legal questions arising out of
or in connection with this Agreement and the advice or opinion of such counsel
shall be full and complete authorization and protection in respect of any action
taken, omitted or suffered by the Collateral Custodian in good faith in
accordance therewith.

(d) In the event the Collateral Custodian loses or misplaces any Receivable File
related to any Receivable or portion thereof, or if any such instruments,
documents, or certificates are destroyed or damaged while in the possession of
the Collateral Custodian, then, in addition to any other liability the
Collateral Custodian may have in respect thereof pursuant to the terms of this
Agreement or otherwise, the Collateral Custodian shall be responsible for the
costs of reproducing such information and agrees to execute and deliver to the
Administrative Agent, upon the Administrative Agent’s written request, an
affidavit stating that such instrument, document, or certificate has been lost
or destroyed, as applicable, and, if necessary, such other affidavits or
certificates as may be reasonably necessary to obtain replacement Certificates
of Title.

 

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(e) The Collateral Custodian is authorized, in its sole discretion, to disregard
all notices or instructions given by any other party hereto or by any other
Person, except only such notices or instructions as are herein provided for and
orders or process of any court entered or issued with or without jurisdiction.
If any property subject hereto is at any time attached, garnished or levied upon
under any court order or in case the payment, assignment, transfer, conveyance
or delivery of any such property shall be stayed or enjoined by any court order,
or in case any order, judgment or decree shall be made or entered by any court
affecting such property or any part hereof, then and in any of such events the
Collateral Custodian is authorized, in its sole discretion, to rely upon and
comply with any such order, writ, judgment or decree with which it is advised by
legal counsel of its own choosing is binding upon it, and if it complies with
any such order, writ, judgment or decree it shall not be liable to any other
party hereto or to any other Person by reason of such compliance even though
such order, writ, judgment or decree may be subsequently reversed, modified,
annulled, set aside or vacated.

(f) The Collateral Custodian may at any time resign and terminate its
obligations under this Agreement; provided, however, that except as provided
below, no such resignation or termination shall be effective until a successor
Collateral Custodian is appointed (and accepts such appointment) pursuant to the
terms of this Section. Promptly after receipt of notice of the Collateral
Custodian’s intended resignation, the Borrower shall appoint, by written
instrument, a successor Collateral Custodian who shall be acceptable to the
Administrative Agent. If the Borrower fails to appoint a successor Collateral
Custodian pursuant to the terms hereof within 30 days after receipt of the
Collateral Custodian’s notice of resignation, the Administrative Agent shall
have the exclusive right to appoint by written instrument, a successor
Collateral Custodian. If neither the Borrower nor the Administrative Agent has
appointed a successor Collateral Custodian within 60 days after receipt of the
Collateral Custodian’s notice of resignation, the Collateral Custodian may
petition a court of competent jurisdiction to appoint a successor Collateral
Custodian, with the cost of such petition to be borne by the Borrower.

(g) Any corporation, banking association or trust company into which the
Collateral Custodian may be merged or converted or consolidated with, or any
corporation, banking association or trust company resulting from any merger,
conversion or consolidation to which the Collateral Custodian shall be a party,
or any corporation, banking association or trust company succeeding to all or
substantially all the corporate trust business of the Collateral Custodian,
shall be the successor of the Collateral Custodian hereunder, without the
execution or filing of any paper or any further act on the part of any of the
parties hereto.

Section 9.07. Documents Held by the Collateral Custodian; Indication of Borrower
Ownership; Inspection and Release of Receivable Files.

(a) The Collateral Custodian shall hold and maintain physical possession of the
Receivable Files delivered to it in accordance with this Agreement. The Borrower
shall deliver, or cause to be delivered, to the Collateral Custodian the
Receivable Files (i) for the Initial Receivables prior to the Closing Date and
(ii) for the Effective Date Receivables prior to the 90th day after the
Effective Date; provided, however, that if application has been made for the
issuance of a Certificate of Title and such Certificate of Title has not yet
been issued at the time the related Receivable Files are delivered to the
Collateral Custodian, there shall be delivered as part of such Receivable Files
copies of all correspondence with the appropriate Registrar of

 

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Titles or Title Intermediary, and all related documentation for the issuance of
the Certificate of Title, and the Certificate of Title shall be delivered (or
made available electronically) to the Collateral Custodian promptly upon receipt
thereof by the Borrower but in no event later than 90 days after the Closing
Date or the Effective Date, as the case may be.

(b) The Collateral Custodian agrees to maintain the Receivable Files which are
delivered to it at the address set forth on Schedule D hereto of the Collateral
Custodian as shall from time to time be identified to the Administrative Agent
by written notice delivered promptly but in no event later than 20 days after
any change in location. The Borrower shall cause the Servicer and each Successor
Servicer to take whatever actions are required subject to the other provisions
of this Agreement, including the filing of financing statements, as a result of
relocating the Receivable Files, if any, to maintain the perfection of the
Administrative Agent’s right, title and interest in and to the Contracts and the
Receivable Files.

(c) The Collateral Custodian shall have and perform the following powers and
duties:

(i) hold the Receivable Files for the benefit of the Borrower and the
Administrative Agent, and maintain a current inventory thereof;

(ii) carry out such duties hereunder with respect to the handling and custody of
the Receivable Files so that the integrity and physical possession of the
Receivable Files will be maintained and without gross negligence, bad faith or
willful misconduct; and

(iii) promptly, and in any event within two Business Days after receipt of the
Release of Documents, release the original Contract or the original Certificate
of Title to a Financed Vehicle then held by it to the Servicer upon receipt of a
Release of Documents, which documents will be sent by overnight messenger to
arrive not later than the third Business Day after such request; each such
Release of Documents must be received by the Collateral Custodian prior to 2:00
p.m. (Central Time) for such receipt day to be considered the first Business
Day, and a Release of Documents received after 2:00 p.m. (Central Time), the
next Business Day will be considered the first Business Day; and the Servicer
will provide the Collateral Custodian with its courier information in order to
effect such releases.

(d) Upon not less than five Business Days’ written notice (or as much notice as
the Servicer can reasonably be giving if such request is by or on behalf of a
regulator of the Servicer or the Borrower), and subject only to the Collateral
Custodian’s security requirements applicable to its own employees having access
to similar records held by the Collateral Custodian, the Collateral Custodian
shall permit the Servicer, the Borrower, the Administrative Agent or any of
their authorized representatives, attorneys, regulators or auditors to inspect
the Receivable Files held by the Collateral Custodian and the records, systems,
process and procedures of the Collateral Custodian for maintaining the
Receivable Files

(e) As soon as practicable, but in any event within 30 days after the Facility
Termination Date, the Collateral Custodian shall deliver to or as directed by,
and at the expense of and in the manner specified by, the Servicer or, if
Regional Management is not the Servicer, the Borrower, all Receivable Files held
by it.

 

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Section 9.08. Further Agreements . The parties hereto further agree that:

(a) The Collateral Custodian may conclusively rely on, and shall be fully
protected in acting or refraining from acting upon, any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction, consent,
order, approval, bond or any other paper or document (including any of the
foregoing delivered in electronic format) believed by it to be genuine and to
have been signed or presented by the proper Person or Persons. Nothing herein
shall be construed to impose an obligation on the part of the Collateral
Custodian to investigate, evaluate, certify, verify, independently determine or
re-calculate any information, statement, representation or warranty or any fact
or matter stated in, or the accuracy of, any such document and may conclusively
rely as to the truth of the statements and the correctness of the opinions
expressed therein.

(b) Without limiting the generality of any other provision hereof, the
Collateral Custodian shall have no duty to conduct any investigation as to the
occurrence of any condition requiring the repurchase of any Receivable by any
Person pursuant to this Agreement, or the eligibility of any Receivable for
purposes of this Agreement.

(c) Before the Collateral Custodian acts or refrains from taking any action
under this Agreement, it may require an Officer’s Certificate and/or Opinion of
Counsel from the party requesting that the Collateral Custodian act or refrain
from acting in form and substance acceptable to the Collateral Custodian, the
costs of which (including the Collateral Custodian’s reasonable attorney’s fees
and expenses) shall be paid by the party requesting that the Collateral
Custodian act or refrain from acting. The Collateral Custodian shall not be
liable for any action it takes or omits to take in good faith in reliance on any
such Officer’s Certificate or Opinion of Counsel.

(d) Notwithstanding anything to the contrary in this Agreement, the Collateral
Custodian shall not be liable for any loss or damage, or any failure or delay in
the performance of its obligations hereunder if it is prevented from so
performing its obligations by any reason which is beyond the control of the
Collateral Custodian, including by any existing or future law or regulation, any
existing or future act of governmental authority, act of God, flood, war whether
declared or undeclared, terrorism, riot, rebellion, civil commotion, other
industrial action, general failure of electricity or other supply, technical
failure, accidental or mechanical or electrical breakdown, computer failure or
any event where, in the reasonable opinion of the Collateral Custodian,
performance of any duty or obligation under or pursuant to this Agreement would
or may be illegal or would result in the Collateral Custodian being in breach of
any Applicable Law or practice, request, direction, notice, announcement or
similar action of any Governmental Authority to which the Collateral Custodian
is subject.

(e) Notwithstanding anything to the contrary in this Agreement, the Collateral
Custodian shall not be required to take any action that is not in accordance
with Applicable Law.

 

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(f) The right of the Collateral Custodian to perform any permissive or
discretionary act enumerated in this Agreement or any related document shall not
be construed as a duty.

(g) Neither the Collateral Custodian nor any of its officers, directors,
employees, attorneys or agents will be responsible or liable for (i) the
existence, genuineness, value or protection of any collateral securing the
Receivables, for the legality, enforceability, effectiveness or sufficiency of
the Basic Documents for the creation, perfection, continuation, priority,
sufficiency or protection of any of the Liens, or for any defect or deficiency
as to any such matters, or for monitoring the status of any lien or performance
of collateral, or for any failure to demand, collect, foreclose or realize upon
or otherwise enforce any of the liens or Basic Documents or any delay in doing
so, or (ii) reviewing or determining the accuracy, completeness or sufficiency
of any chain of ownership (including endorsements or assignments related
thereto) with respect to any Receivable or Receivable File.

(h) The Collateral Custodian shall not be liable for any action or inaction of
the Servicer, or any other party (or agent thereof) to this Agreement or any
related document and may assume compliance by such parties with their respective
obligations under this Agreement or any related agreements, unless a Responsible
Officer of the Collateral Custodian shall have obtained actual knowledge of such
event or received written notice to the contrary at the address of the
Collateral Custodian set forth on Schedule A hereto.

(i) Neither the Collateral Custodian nor any of its directors, officers, agents
or employees shall be responsible in any manner to any of the Secured Parties
for any recitals, statements, representations or warranties made by the
Borrower, the Servicer, Regional Management, the Administrative Agent, the
Backup Servicer or the Account Bank contained in this Agreement or in any
certificate, report, statement or other document referred to or provided for in,
or received under or in connection with, this Agreement or any other Basic
Document to which it is a party for the value, validity, effectiveness,
genuineness, enforceability or sufficiency of this Agreement or any other
document furnished in connection herewith, or for any failure of the Borrower to
perform its obligations hereunder, or for the satisfaction of any condition
specified in Article Four.

(j) Without limiting the generality of any other provision hereof, neither the
Collateral Custodian’s preparation or receipt of any reports pursuant to this
Agreement nor any other publicly available information available to the
Collateral Custodian shall constitute written notice hereunder.

(k) The Collateral Custodian shall be entitled to any protection, privilege or
indemnity afforded to the Account Bank under the terms of this Agreement.

(l) The parties hereto acknowledge and agree that, notwithstanding anything to
the contrary in this Agreement, the review contemplated by Section 9.07 (the
“Review”) is a review to be performed by the Collateral Custodian solely for the
purpose of acknowledging receipt of loan files by the Collateral Custodian. Any
custodial certification (the “Certification”) related to such Review prepared by
the Collateral Custodian and furnished to the Servicer and the Administrative
Agent is produced solely in connection with this purpose. The parties hereto did
not engage the Collateral Custodian to perform the Review, produce the
Certification or perform

 

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any of the services in this Agreement for the purpose of making findings with
respect to the accuracy of the information or data regarding the Collateral
provided to the Collateral Custodian hereunder for the Review as contemplated by
Rule 17g-10 under the Exchange Act. Given the purpose and scope of the
Collateral Custodian’s services (including the Review and any Certification)
under this Agreement and given the use of the Review and Certification, the
parties hereto agree that the Collateral Custodian’s Review is not commonly
understood in the market to be “due diligence services” for purposes of Rule
17g-10. The parties hereto do not consider the Review and the Certification to
be “due diligence services” for purposes of Rule 17g-10, and shall not treat the
Certification as a “third party due diligence report” for purposes of Rule
15Ga-2 under the Exchange Act. The other parties hereto hereby acknowledge that
the Collateral Custodian is relying on this certification for purposes of
determining that its Review does not constitute “due diligence services” under
Rule 17g-10.

 

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ARTICLE TEN

TERMINATION EVENTS

Section 10.01. Termination Events.

(a) Each of the following events shall constitute a “Termination Event”:

(i) a default in the payment of any Monthly Interest Payment Amount on any
Payment Date and such default continues unremedied for a period of two Business
Days or more;

(ii) a default in the payment of the Loan Balance on the Final Scheduled Payment
Date or on a Payment Date fixed for optional prepayment of the Loans pursuant to
Section 2.06;

(iii) the occurrence of a Level II Trigger Event;

(iv) a failure on the part of the Borrower to make any payment, transfer or
deposit required by the terms of any Basic Document (other than as set forth in
clauses (i) and (ii) above) on the day such payment or deposit is required to be
made, which default or failure continues unremedied for three Business Days
after the earlier of (i) receipt of written notice of such failure by the
Borrower from the Administrative Agent or any Lender or (ii) discovery of such
failure by a Responsible Officer of the Borrower;

(v) a failure by the Borrower to duly to perform or observe any term, covenant
or agreement of the Borrower contained in this Agreement or any other Borrower
Basic Document and such failure remains unremedied for 30 calendar days (or such
longer period not in excess of 60 days as may be reasonably necessary to remedy
that failure; provided that such failure is capable of remedy within 60 days)
after the earliest to occur of (i) discovery by a Responsible Officer of the
Borrower, (ii) the date such Responsible Officer should have discovered such
failure and (iii) receipt of a written notice of such failure from the
Administrative Agent, any Lender, a Responsible Officer of the Collateral
Custodian or a Responsible Officer of the Backup Servicer;

(vi) any representation, warranty or certification made or deemed to be made by
the Borrower under this Agreement or any other Borrower Basic Document, or any
Monthly Report, any Monthly Loan Tape or other information required to be given
by the Borrower or the Servicer to the Administrative Agent or any Lender, shall
prove to have been false or incorrect in any material respect when made or
deemed made or delivered, and which remains unremedied for 30 calendar days
after the earlier to occur of (A) discovery by a Responsible Officer of the
Borrower and (B) receipt of a written notice of such failure from the
Administrative Agent or any Lender;

(vii) the occurrence of an Insolvency Event (which, if involuntary, remains
unstayed for more than 45 days) relating to any Regional Management Entity;

(viii) a Servicer Termination Event shall have occurred;

 

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(ix) the Borrower shall become (A) an “investment company” within the meaning of
the Investment Company Act or relies solely on the exemption from the definition
of “investment company” in Section 3(c)(1) or 3(c)(7) of the Investment Company
Act (although other exemptions may be available) or the arrangements
contemplated by the Basic Documents shall require the Borrower to register as an
“investment company” within the meaning of the Investment Company Act or (B) a
“covered fund” for purposes of the Volcker Rule;

(x) a regulatory, tax or accounting body has ordered that the activities of the
Borrower or any Affiliate of the Borrower contemplated hereby be terminated or,
as a result of any other event or circumstance, the activities of the Borrower
or any Affiliate of the Borrower contemplated hereby may reasonably be expected
to cause the Borrower or any of its respective Affiliates to suffer materially
adverse regulatory, accounting or tax consequences;

(xi) any material adverse change in the operations of the Servicer, Regional
Management, the Borrower or any other event which materially affects the ability
of the Servicer, Regional Management or the Borrower to either collect the
Receivables or to perform its obligations under any Basic Document to which it
is a party;

(xii) the IRS shall file notice of a Lien pursuant to Section 6323 of the Code
with regard to any assets of the Borrower or Regional Management and such lien
shall not have been released within five Business Days after the earlier of the
Borrower or Regional Management having actual knowledge thereof or written
notice thereof from the Administrative Agent or any Lender, or the Pension
Benefit Guaranty Corporation shall file notice of a Lien pursuant to
Section 4068 of ERISA with regard to any of the assets of the Borrower or
Regional Management and such Lien shall not have been released or stayed within
30 days after the earlier of the Borrower or Regional Management having actual
knowledge thereof or written notice thereof from the Administrative Agent or any
Lender;

(xiii) the Administrative Agent shall fail for any reason to have a first
priority perfected security interest in any material portion of the Collateral
(subject to Permitted Liens), which failure shall continue for five Business
Days after the earlier of the Borrower or the Servicer having actual knowledge
thereof or the Borrower or the Servicer having received written notice thereof
from the Administrative Agent or any Lender;

(xiv) a Change in Control shall occur;

(xv) the Servicer, Regional Management or the Borrower shall enter into any
transaction or merger whereby it is not the surviving entity or the Borrower
shall enter into any merger;

(xvi) an event of default occurs, or an event occurs which, with the giving of
notice or the passage of time or both, would constitute an event of default,
under any agreement of any Regional Management Entity in connection with any
Indebtedness of $1,000,000 or more (in the case of the Borrower), or $5,000,000
or more (in the case of

 

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Regional Management or any of its Subsidiaries other than the Borrower, which
for the avoidance of doubt shall not include events of termination or similar
events under financing agreements entered into by Subsidiaries that are
structured as special purpose entities, provided that no events of termination
or similar events occur under such financing agreements other than due to
actions or activities of such Subsidiaries;

(xvii) any of Regional Management, any Originator or the Borrower shall (A) have
one or more final nonappealable judgments entered against it by a court of
competent jurisdiction in excess of, in the aggregate, in the case of
(1) Regional Management or Regional Management and all Originators, $5,000,000,
(2) any Originator, $5,000,000, or (3) the Borrower, $1,000,000, in each case
which judgment(s) shall not have been discharged or stayed within 30 days,
(B) enter into one or more settlements in excess of, in the aggregate, in the
case of (1) Regional Management or Regional Management and all Originators,
$20,000,000, (2) any Originator, $5,000,000, or (3) the Borrower, $1,000,000 or
(C) have a penalty or fine assessed against it by any Governmental Authority in
excess of $10,000,000; or

(xviii) any Basic Document shall cease to be in full force and effect (other
than in accordance with its terms) or any Regional Management Entity shall so
assert in writing or otherwise seek to terminate or disaffirm its obligations
under any Basic Document.

(b) Upon the occurrence of any Termination Event, the Administrative Agent
shall, at the request, or may with the consent, of the Required Lenders, by
notice to the Borrower (with a copy to the Collateral Custodian and the Account
Bank), declare the Termination Date to have occurred, without demand, protest or
future notice of any kind, all of which are hereby expressly waived by the
Borrower, and, upon such declaration, the Loans and all other amounts owing by
the Borrower under this Agreement shall be accelerated and become immediately
due and payable; provided, that in the event that a Termination Event described
in Section 10.01(a)(ii) or 10.01(a)(vii) has occurred, the Termination Date
shall automatically occur, without demand, protest or any notice of any kind,
all of which are hereby expressly waived by the Borrower.

Section 10.02. Actions Upon Declaration or the Automatic Occurrence of the
Termination Date. Upon the declaration or the automatic occurrence of the
Termination Date, the Administrative Agent may, or at the direction of the
Required Lenders, shall, exercise in respect of the Collateral, in addition to
any and all other rights and remedies otherwise available to it, including
rights available hereunder and the rights and remedies of a secured party upon
default under the UCC (such rights and remedies to be cumulative and
nonexclusive), and, in addition, the Administrative Agent may, or at the
direction of the Required Lenders, shall take the following remedial actions:

(a) The Administrative Agent may, without notice to the Borrower except as
required by Applicable Law and at any time or from time to time, charge, set-off
and otherwise apply all or any part of the Loan Balance, any Interest accrued
thereon and or any other amount due and owing to any Secured Party against
amounts payable to the Borrower from the Accounts or any part of such Accounts
in accordance with and subject to the priorities required by Section 2.08.

 

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(b) The Administrative Agent may take any action permitted under the Basic
Documents and may exercise at the Borrower’s sole expense any and all rights and
remedies of the Borrower under or in connection with the Collateral, including
directing that Collections be deposited into an account specified by the
Administrative Agent (rather than to the Collection Account).

(c) Consistent with the rights and remedies of a secured party under the UCC
(and except as otherwise required by the UCC), the Administrative Agent may, on
behalf of itself and the Lenders and without notice except as specified below,
solicit and accept bids for and sell the Collateral or any part of the
Collateral in one or more parcels at public or private sale, at any exchange,
broker’s board or at the Administrative Agent’s offices or elsewhere, for cash,
on credit or for future delivery, upon such terms and conditions and at prices
that are consistent with the prevailing market for collateral similar to the
Collateral as it may deem advisable and at such prices as it may deem best. The
Administrative Agent shall give the Lenders and the Borrower at least 15
Business Days’ prior written notice of the time and place of any public sale or
the time after which any private sale is to be made. The Administrative Agent
shall not be obligated to make any sale of Collateral regardless of notice of
sale having been given. The Administrative Agent may adjourn any public or
private sale from time to time by announcement at the time and place fixed for
such sale, and such sale may, without further notice, be made at the time and
place to which it was so adjourned. If the proceeds from the sale of the
Collateral would be insufficient to fully pay accrued and unpaid Interest and
the Loans Outstanding, the Administrative Agent may only proceed with the sale
if the Lenders with 100% of the Loans Outstanding have consented to such sale.
Every such sale shall operate to divest all right, title, interest, claim and
demand whatsoever of the Borrower in and to the Collateral so sold, and shall be
a perpetual bar, both at law and in equity, against the Borrower or any Person
claiming the Collateral sold through the Borrower and its successors or assigns.

(d) Upon the completion of any sale under Section 10.02(c), the Borrower will
deliver or cause to be delivered all of the Collateral sold to the purchaser or
purchasers at such sale on the date of sale, or within a reasonable time
thereafter if it shall be impractical to make immediate delivery, but in any
event full title and right of possession to such property shall pass to such
purchaser or purchasers forthwith upon the completion of such sale.
Nevertheless, if so requested by the Administrative Agent or by any purchaser,
the Borrower shall confirm any such sale or transfer by executing and delivering
to such purchaser all proper instruments of conveyance and transfer and release
as may be designated in any such request.

(e) At any sale under Section 10.02(c), Regional Management or any Secured Party
may bid for and purchase the property offered for sale and, upon compliance with
the terms of sale, may hold, retain and dispose of such property without further
accountability therefor. Any Secured Party purchasing property at a sale under
Section 10.02(c) may set off the purchase price of such property against amounts
owing to such Secured Party in full payment of such purchase price up to the
full amount owing to such Secured Party.

 

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Section 10.03. Exercise of Remedies. No failure or delay on the part of the
Administrative Agent to exercise any right, power or privilege under this
Agreement and no course of dealing between the Borrower or the Servicer, on the
one hand, and the Administrative Agent, on the other hand, shall operate as a
waiver of such right, power or privilege, nor shall any single or partial
exercise of any right, power or privilege under this Agreement preclude any
other or further exercise of such right, power or privilege or the exercise of
any other right, power or privilege. The rights and remedies expressly provided
in this Agreement are cumulative and not exclusive of any rights or remedies
which the Secured Parties would otherwise have pursuant to Applicable Law or
equity. No notice to or demand on any party in any case shall entitle such party
to any other or further notice or demand in similar or other circumstances, or
constitute a waiver of the right of the other party to any other or further
action in any circumstances without notice or demand.

Section 10.04. Waiver of Certain Laws. The Borrower agrees, to the full extent
that it may lawfully so agree, that neither it nor anyone claiming through or
under it will set up, claim or seek to take advantage of any appraisal,
valuation, stay, extension or redemption law now or hereafter in force in any
locality where any Collateral may be situated in order to prevent, hinder or
delay the enforcement or foreclosure of this Agreement, or the absolute sale of
any of the Collateral or any part thereof, or the final and absolute putting
into possession thereof, immediately after such sale, of the purchasers thereof,
and the Borrower, for itself and all who may at any time claim through or under
it, hereby waives, to the full extent that it may be lawful so to do, the
benefit of all such Applicable Laws, and any and all right to have any of the
properties or assets constituting the Collateral marshaled upon any such sale,
and agrees that the Administrative Agent or any court having jurisdiction to
foreclose the security interests granted in this Agreement may sell the
Collateral as an entirety or such parcels as the Administrative Agent or such
court may determine.

Section 10.05. Power of Attorney. The Borrower hereby irrevocably appoints the
Administrative Agent its true and lawful attorney (with full power of
substitution) in its name, place and stead and at its expense, upon the
occurrence and during the continuance of a Termination Event in connection with
the enforcement of the rights and remedies provided for in this Article,
including (i) to give any necessary receipts or acquittance for amounts
collected or received hereunder, (ii) to make all necessary transfers of the
Collateral in connection with any sale or other disposition made pursuant
hereto, (iii) to execute and deliver for value all necessary or appropriate
bills of sale, assignments and other instruments in connection with any such
sale or other disposition, the Borrower thereby ratifying and confirming all
that such attorney (or any substitute) shall lawfully do hereunder and pursuant
hereto and (iv) to sign any agreements, orders or other documents in connection
with or pursuant to any Basic Document. Nevertheless, if so requested by the
Administrative Agent, directly or through a purchaser of any of the Collateral,
the Borrower shall ratify and confirm any such sale or other disposition by
executing and delivering to the Administrative Agent or such purchaser all
proper bills of sale, assignments, releases and other instruments as may be
designated in any such request.

 

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ARTICLE ELEVEN

INDEMNIFICATION

Section 11.01. Indemnities by the Borrower. Without limiting any other rights
which the Administrative Agent, each Lender or its assignee, the Collateral
Custodian, the Backup Servicer, the Account Bank or any of their respective
Affiliates may have hereunder or under Applicable Law, the Borrower hereby
agrees to indemnify each such entity and each of their respective Affiliates and
officers, directors, employees and agents thereof (each, an “Indemnified Party”
and collectively, the “Indemnified Parties”) from and against any and all fees,
damages, losses, claims, liabilities and related costs and expenses, including
reasonable attorneys’ fees and disbursements and court costs (collectively, the
“Indemnified Amounts”) awarded against or incurred by, any such Indemnified
Party or other non-monetary damages of any such Indemnified Party arising out of
or as a result of this Agreement including in connection with any action, claim
or suit brought to enforce the Collateral Custodian’s, the Backup Servicer’s or
the Account Bank’s right to indemnification, excluding, however, Indemnified
Amounts to the extent resulting from the gross negligence, bad faith or willful
misconduct on the part of such Indemnified Party. Without limiting the
foregoing, the Borrower shall indemnify the Indemnified Parties for Indemnified
Amounts relating to or resulting from:

(i) any Receivable represented by the Borrower to be an Eligible Receivable
which is not on the Closing Date, an Eligible Receivable;

(ii) reliance on any representation or warranty made or deemed made by the
Borrower, the Servicer, any of their respective Affiliates or any of their
respective officers under or in connection with this Agreement, which shall have
been false or incorrect in any material respect when made or deemed made or
delivered;

(iii) the failure by the Borrower to comply with any term, provision or covenant
contained in this Agreement or any other Basic Document or a failure by any
Regional Management Entity to comply with any term, provision or covenant
contained in any agreement executed in connection with this Agreement or any
other Basic Document, or with any Applicable Law with respect to any Contract or
Receivable, the related Financed Vehicle or the non-conformity of any Contract
with any such Applicable Law and any failure by the Borrower or the Servicer to
perform its respective duties under the Contracts and Receivables included as
part of the Collateral;

(iv) the failure to vest and maintain vested in the Administrative Agent a valid
and enforceable first priority perfected security interest in any or all of the
Collateral, except for Permitted Liens;

(v) the failure to file, or any delay in filing, financing statements or other
similar instruments or documents under the UCC of any applicable jurisdiction or
other Applicable Law with respect to the Collateral, whether at the time of the
related Loan or at any subsequent time and as required by the Basic Documents;

 

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(vi) any dispute, claim, offset or defense (other than the discharge in
bankruptcy of the Obligor) of the Obligor to the payment of any Receivable
comprising a portion of the Collateral which is, or is purported to be, an
Eligible Receivable (including a defense based on the Receivable not being a
legal, valid and binding obligation of such Obligor enforceable against it in
accordance with its terms);

(vii) any failure by the Borrower or the Servicer to perform its duties or
obligations in accordance with the provisions of this Agreement;

(viii) any products liability claim or personal injury or property damage suit
or other similar or related claim or action of whatever sort arising out of or
in connection with any Receivable or the related Financed Vehicle;

(ix) the failure by the Borrower to pay when due any Taxes for which the
Borrower is liable, including sales, excise or personal property taxes payable
in connection with the Collateral;

(x) any repayment by a Secured Party of any amount previously distributed in
reduction of the Loan Balance or payment of Interest, any obligation or any
other amount due hereunder, in each case which amount such Secured Party
believes in good faith is required to be repaid;

(xi) any litigation, proceeding or investigation (a) before any Governmental
Authority (1) in respect of any Contract, Receivable or Financed Vehicle,
(2) relating to the use of the proceeds of the Loans or (3) related to this
Agreement (A) that is not commenced by the Indemnified Party or (B) if so
commenced, in which such Indemnified Party is not the prevailing party;
provided, that no Indemnified Party shall be entitled to any indemnification for
any item described in this clause resulting from such Indemnified Party’s gross
negligence or willful misconduct or (b) relating to or arising from the Basic
Documents, the transactions contemplated hereby and thereby, the use of proceeds
of the Loans by the Borrower or any other investigation, litigation or
proceeding relating to the Borrower or the Servicer in which any Indemnified
Party becomes involved as a result of any of the transactions contemplated by
the Basic Documents;

(xii) the use of the proceeds of the Loans;

(xiii) any failure by the Borrower to give reasonably equivalent value to
Regional Management in consideration for the transfer by Regional Management to
the Borrower of any of the Receivables and the related Collateral or any attempt
by any Person to void or otherwise avoid any such transfer under any statutory
provision or common law or equitable action, including any provision of any
Insolvency Law;

(xiv) the failure of the Borrower to remit to the Servicer Collections remitted
to the Borrower in accordance with the terms hereof or the commingling by the
Borrower of any Collections with other funds;

 

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(xv) entering into or giving or withholding any amendments or supplements or
waivers or consents (including review and analysis thereof) with respect to the
Basic Documents or any other document or instrument delivered pursuant hereto or
thereto (whether or not the same is finally agreed to) if the same is requested
by the Borrower or the Servicer, or is required or necessary under the Basic
Documents; or

(xvi) any and all civil penalties or fines assessed by OFAC against, and all
reasonable costs and expenses (including attorneys’ fees and disbursements)
incurred in connection with the defense thereof by any Indemnified Party as a
result of funding all or any portion of the Loans or the acceptance of payments
or of Collateral due under the Basic Documents.

Section 11.02. Indemnities by the Servicer. Without limiting any other rights
which the Indemnified Parties may have hereunder or under Applicable Law, the
Servicer hereby agrees to indemnify the Indemnified Parties from and against any
and all Indemnified Amounts awarded against or incurred by, any such Indemnified
Party or other non-monetary damages of any such Indemnified Party relating to or
arising from any of the following (including in connection with any action,
claim or suit brought to enforce the Collateral Custodian’s, the Backup
Servicer’s or the Account Bank’s right to indemnification), excluding, however,
Indemnified Amounts to the extent resulting from the gross negligence, bad faith
or willful misconduct on the part of any Indemnified Party:

(i) reliance on any representation or warranty made or deemed made by the
Borrower, the Servicer, any of their respective Affiliates or any of their
respective officers under or in connection with this Agreement, which shall have
been false or incorrect in any material respect when made or deemed made or
delivered;

(ii) the failure by the Servicer to comply with (a) any term, provision or
covenant contained in this Agreement or any other Basic Document or (b) any
term, provision or covenant contained in any agreement executed in connection
with this Agreement or any other Basic Document, or with any Applicable Law with
respect to any Receivable, the related Financed Vehicle, the non-conformity of
any Receivable with any such Applicable Law and any failure by the Originator to
perform its respective duties under the Receivables or (c) any Applicable Law in
the operation of Regional Management;

(iii) any failure by the Servicer to perform any of its other duties or
obligations in accordance with the provisions of this Agreement;

(iv) the failure to vest and maintain vested in the Administrative Agent a valid
and enforceable first priority perfected security interest in the Collateral;

(v) the failure to file, or any delay in filing, financing statements or other
similar instruments or documents under the UCC of any applicable jurisdiction or
other Applicable Laws with respect to the Collateral, whether at the time of a
Loan or at any subsequent time and as required by the Basic Documents;

 

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(vi) any litigation, proceeding or investigation (a) before any Governmental
Authority (1) in respect of any Contract, Receivable or Financed Vehicle,
(2) relating to the use of the proceeds of the Loans or (3) related to this
Agreement (A) that is not commenced by the Indemnified Party or (B) if so
commenced, in which such Indemnified Party is not the prevailing party;
provided, that no Indemnified Party shall be entitled to any indemnification for
any item described in this clause resulting from such Indemnified Party’s gross
negligence or willful misconduct, (b) relating to or arising from the Basic
Documents, the transactions contemplated hereby and thereby, the use of proceeds
of the Loans by the Servicer or any other investigation, litigation or
proceeding relating to the Borrower or the Servicer in which any Indemnified
Party becomes involved as a result of any of the transactions contemplated by
the Basic Documents or (c) relating to or arising from any force-placed
Insurance Policies;

(vii) entering into or giving or withholding any amendments or supplements or
waivers or consents (including review and analysis thereof) with respect to the
Basic Documents or any other document or instrument delivered pursuant hereto or
thereto (whether or not the same is finally agreed to) if the same is requested
by the Servicer, or is required or necessary under the Basic Documents;

(viii) any and all loss, liability, damage or expense incurred in connection
with the Servicer having force-placed Insurance Policies on the Financed
Vehicles;

(ix) any and all civil penalties or fines assessed by OFAC against, and all
reasonable costs and expenses (including attorneys’ fees and disbursements)
incurred in connection with the defense thereof by any Indemnified Party as a
result of funding all or any portion of the Loans or the acceptance of payments
or of Collateral due under the Basic Documents; or

(x) the commingling by the Servicer of any Collections with other funds.

Section 11.03. General Indemnity Provisions. Notwithstanding the foregoing, in
no event shall any Indemnified Party be indemnified against Excluded Taxes, any
other Taxes for which the Borrower was required to indemnify a Secured Party
pursuant to Section 2.14 or, except as otherwise provided herein, (i) nonpayment
by an Obligor of an amount due and payable with respect to a Contract or
(ii) any loss in value of any Financed Vehicle or Permitted Investment due to
changes in market conditions or for other reasons beyond the control of the
Borrower or the Servicer. Any amounts subject to the indemnification provisions
of this Article shall be paid solely pursuant to the provisions of Section 2.08
in the order and priority set forth therein.

The indemnities expressly provided in this Article are cumulative and not
exclusive of any rights or remedies that the Indemnified Parties would otherwise
have pursuant to law or equity and shall survive the termination or assignment
of this Agreement and the resignation or removal of the parties hereto.

 

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ARTICLE TWELVE

THE ADMINISTRATIVE AGENT

Section 12.01. Authorization and Action.

(a) Effective as of the Effective Date, each Lender and each Secured Party
(other than the Administrative Agent) hereby designates and appoints Wells Fargo
Securities (and Wells Fargo Securities accepts such designation and appointment)
as Administrative Agent hereunder, and authorizes the Administrative Agent to
take such actions as agent on its behalf and to exercise such powers as are
delegated to the Administrative Agent by the terms of this Agreement together
with such powers as are reasonably incidental thereto. In performing its
functions and duties hereunder, the Administrative Agent shall act solely as
agent for the Secured Parties and does not assume nor shall be deemed to have
assumed any obligation or relationship of trust or agency with or for the
Borrower or any of its successors or assigns. The Administrative Agent shall not
be required to take any action which exposes it to personal liability or which
is contrary to this Agreement or Applicable Law. The appointment and authority
of the Administrative Agent hereunder shall terminate on the Facility
Termination Date.

(b) Each Lender hereby irrevocably designates and appoints the Administrative
Agent as its agent under this Agreement, and each such Lender irrevocably
authorizes the Administrative Agent, as the agent for such Lender, to take such
action on its behalf under the provisions of the Basic Documents and to exercise
such powers and perform such duties thereunder as are expressly delegated to the
Administrative Agent by the terms of this Agreement, together with such other
powers as are reasonably incidental thereto.

(c) Notwithstanding any provision to the contrary elsewhere in this Agreement,
the Administrative Agent shall not have any duties or responsibilities, except
those expressly set forth herein, or any fiduciary relationship with any Lender,
and no implied covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into this Agreement or otherwise exist against the
Administrative Agent.

(d) The Administrative Agent shall promptly distribute to each Lender all
notices, requests for consent and other information received by the
Administrative Agent under this Agreement that are not also delivered to the
Lenders.

(e) The Administrative Agent consents to the Regional Management Entities
entering into this Agreement, each First Tier Purchase Agreement, the Second
Tier Purchase Agreement and each Subservicing Agreement, as applicable.

Section 12.02. Delegation of Duties. The Administrative Agent may execute any of
its duties under any of the Basic Documents by or through agents or
attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. The Administrative Agent shall not be
responsible for the negligence or misconduct of any agents or attorneys-in-fact
selected by it with reasonable care.

 

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Section 12.03. Exculpatory Provisions. Neither the Administrative Agent nor any
of its directors, officers, agents or employees shall be (i) liable for any
action lawfully taken or omitted to be taken by it or them under or in
connection with this Agreement (except for its, their or such Person’s own gross
negligence or willful misconduct or, in the case of the Administrative Agent,
the breach of its obligations expressly set forth in this Agreement) or
(ii) responsible in any manner to any of the Secured Parties for any recitals,
statements, representations or warranties made by the Borrower, the Servicer,
Regional Management, the Backup Servicer or the Collateral Custodian contained
in this Agreement or in any certificate, report, statement or other document
referred to or provided for in, or received under or in connection with, this
Agreement or any other Basic Document to which it is a party for the value,
validity, effectiveness, genuineness, enforceability or sufficiency of this
Agreement or any other document furnished in connection herewith, or for any
failure of the Borrower to perform its obligations hereunder, or for the
satisfaction of any condition specified in Article Four. The Administrative
Agent shall be under no obligation to any Secured Party to ascertain or to
inquire as to the observance or performance of any of the agreements or
covenants contained in, or conditions of, this Agreement, or to inspect the
properties, books or records of the Borrower. The Administrative Agent shall not
be deemed to have knowledge or notice of the occurrence of any breach of this
Agreement or the occurrence of any Termination Event, Unmatured Termination
Event or Servicer Termination Event unless it has received notice from the
Borrower, the Servicer or any Lender, referring to this Agreement and describing
such event.

Section 12.04. Reliance.

(a) The Administrative Agent shall be entitled to rely, and shall be fully
protected in relying, upon any writing, resolution, notice, consent,
certificate, affidavit, letter, telecopy or e-mail message, written statement,
order or other document or conversation believed by it to be genuine and correct
and to have been signed, sent or made by the proper Person or Persons and upon
advice and statements of legal counsel (including counsel to the Administrative
Agent), independent accountants and other experts selected by the Administrative
Agent.

(b) The Administrative Agent shall be fully justified in failing or refusing to
take any action under any of the Basic Documents (other than those actions that
are expressly required to be taken by it under the terms of the Basic Documents)
unless it shall first receive such advice or concurrence of the Required Lenders
as it deems appropriate or it shall first be indemnified to its satisfaction by
the Lenders against any and all liability and expense which may be incurred by
it by reason of taking or continuing to take any such action.

(c) The Administrative Agent shall in all cases be fully protected in acting, or
in refraining from acting, under any of the Basic Documents in accordance with a
request of the Required Lenders, and such request and any action taken or
failure to act pursuant thereto shall be binding upon all present and future
Lenders.

(d) The Administrative Agent shall in all cases be fully protected in acting, or
in refraining from acting, under any of the Basic Documents in accordance with a
request of Lenders having Invested Percentages aggregating greater than 50% of
the aggregate Invested Percentages of all Lenders (or such other percentages of
Lenders set forth herein), and such request and any action taken or failure to
act pursuant thereto shall be binding upon all present and future Lenders.

 

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(e) In the event the Administrative Agent receives notice of the occurrence of
any breach of this Agreement or the occurrence of any Termination Event,
Unmatured Termination Event or Servicer Termination Event from the Borrower, the
Servicer or any Lender, referring to this Agreement and describing such event,
it shall promptly give notice thereof to each Lender. The Administrative Agent
shall take such action with respect to any such event as shall be reasonably
directed by the Required Lenders.

Section 12.05. Non-Reliance on Administrative Agent and Other Lenders. Each
Lender expressly acknowledges that neither the Administrative Agent nor any of
its officers, directors, employees, agents, attorneys-in-fact or Affiliates has
made any representations or warranties to it and that no act by the
Administrative Agent hereafter taken, including any review of the affairs of the
Borrower, Regional Management, the Servicer, any Originator, the Backup Servicer
or the Collateral Custodian shall be deemed to constitute any representation or
warranty by the Administrative Agent to any Lender. Each Lender represents to
the Administrative Agent that it has, independently and without reliance upon
the Administrative Agent or any other Lender, and based on such documents and
information as it has deemed appropriate, made its own appraisal of and
investigation into the business, operations, property, financial and other
condition and creditworthiness of the Borrower, the Servicer, Regional
Management, each Originator, the Backup Servicer or the Collateral Custodian and
the Receivables and made its own decision to purchase its interest in the Loans
hereunder and enter into this Agreement. Each Lender also represents that it
will, independently and without reliance upon the Administrative Agent or any
other Lender, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own analysis, appraisals and
decisions in taking or not taking action under any of the Basic Documents, and
to make such investigation as it deems necessary to inform itself as to the
business, operations, property, financial and other condition and
creditworthiness of the Borrower, the Servicer, Regional Management, each
Originator, the Backup Servicer or the Collateral Custodian and the Receivables.
Except for notices, reports and other documents received by the Administrative
Agent hereunder, the Administrative Agent shall have no duty or responsibility
to provide any Lender with any credit or other information concerning the
business, operations, property, condition (financial or otherwise), prospects or
creditworthiness of the Borrower, the Servicer, Regional Management, each
Originator, the Backup Servicer or the Collateral Custodian or the Receivables
which may come into the possession of the Administrative Agent or any of its
officers, directors, employees, agents, attorneys-in-fact or affiliates.

Section 12.06. Indemnification. Each Lender agrees to indemnify the
Administrative Agent in its capacity as such (without limiting the obligation
(if any) of the Borrower or the Servicer to reimburse the Administrative Agent
for any such amounts), ratably according to their respective Invested
Percentages, from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind whatsoever which may at any time (including at any time following
the payment of the obligations under this Agreement, including the Loan Balance)
be imposed on, incurred by or asserted against the Administrative Agent in any
way relating to or arising out of this Agreement, or any documents contemplated
by or referred to herein or the transactions contemplated hereby

 

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or any action taken or omitted by the Administrative Agent under or in
connection with any of the foregoing; provided, that no Lender shall be liable
for the payment of any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of the Administrative Agent resulting from its own gross negligence or willful
misconduct. The provisions of this Section shall survive the payment of the
Aggregate Unpaids under this Agreement, including the Loan Balance, the
termination of this Agreement, and any resignation or removal of the
Administrative Agent.

Section 12.07. Administrative Agent in its Individual Capacity. The
Administrative Agent and its Affiliates may make loans to, accept deposits from
and generally engage in any kind of business with the Borrower and any other
party to a Basic Document as though it were not the Administrative Agent
hereunder. Any such Person, in its capacity as Administrative Agent, shall not,
by virtue of its acting in any such other capacities, be deemed to have duties
or responsibilities hereunder or be held to a standard of care in connection
with the performance of its duties as Administrative Agent other than as
expressly provided in this Agreement. Any Person which is the Administrative
Agent may act as the Administrative Agent without regard to and without
additional duties or liabilities arising from its role as such administrator or
agent or arising from its acting in any such other capacity. None of the
provisions to this Agreement shall require the Administrative Agent to expend or
risk its own funds or otherwise to incur any liability, financial or otherwise,
in the performance of any of its duties hereunder, or in the exercise of any of
its rights or powers if it shall have reasonable grounds for believing that
repayment of such funds or indemnity satisfactory to it against such risk or
liability is not assured to it.

Section 12.08. Assignment. The Administrative Agent may freely assign its rights
and obligations hereunder upon ten days’ written notice to the Lenders and the
Borrower.

Section 12.09. Successor Administrative Agent. The Administrative Agent may
resign as Administrative Agent upon ten days’ written notice to the Lenders and
the Borrower with such resignation becoming effective upon a successor
administrative agent succeeding to the rights, powers and duties of the
Administrative Agent pursuant to this Section. If the Administrative Agent shall
resign as Administrative Agent, then the Required Lenders shall appoint a
successor administrative agent, which may be a Lender. Any successor
Administrative Agent shall succeed to the rights, powers and duties of the
resigning Administrative Agent, and the term “Administrative Agent” shall mean
such successor Administrative Agent effective upon its appointment, and the
former Administrative Agent’s rights, powers and duties as Administrative Agent
shall be terminated, without any other or further act or deed on the part of
such former Administrative Agent or any of the parties to this Agreement. After
the resigning Administrative Agent’s resignation as Administrative Agent, the
provisions of this Article shall inure to its benefit as to any actions taken or
omitted to be taken by it while it was Administrative Agent under this
Agreement.

 

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ARTICLE THIRTEEN

ASSIGNMENTS; PARTICIPATIONS

Section 13.01. Assignments and Participations.

(a) [Reserved].

(b) Each Lender may upon at least ten days’ notice to the Administrative Agent,
assign to one or more banks or other entities all or a portion of its rights and
obligations under this Agreement; provided, however, that (i) each such
assignment shall be of a constant, and not a varying percentage of all of the
assigning Lender’s rights and obligations under this Agreement, (ii) the amount
of the Loan Balance of the assigning Lender being assigned pursuant to each such
assignment (determined as of the date of the Assignment and Acceptance with
respect to such assignment) shall in no event be less than the lesser of (A)
$10,000,000 or an integral multiple of $1,000,000 in excess of that amount and
(B) the full amount of the assigning Lender’s portion of the Loan Balance,
(iii) each such assignment shall be to an Eligible Assignee, (iv) the parties to
each such assignment shall execute and deliver to the Administrative Agent, for
its acceptance and recording in the Lender Register, an Assignment and
Acceptance, together with a processing and recordation fee of $3,500 or such
lesser amount as shall be approved by the Administrative Agent, (v) the parties
to each such assignment shall have agreed to reimburse the Administrative Agent
for all reasonable fees, costs and expenses (including the reasonable fees and
disbursements of counsel for the Administrative Agent) incurred by the
Administrative Agent in connection with such assignment, (vi) each Person that
becomes a Lender under an Assignment and Acceptance shall agree to be bound by
the confidentiality provisions of Article Fourteen and (vii) there shall be no
increased costs, expenses or Taxes incurred by the Administrative Agent or the
Lenders upon assignment or participation. Upon such execution, delivery and
acceptance and the recording by the Administrative Agent, from and after the
effective date specified in each Assignment and Acceptance, which effective date
shall be the date of acceptance thereof by the Administrative Agent, unless a
later date is specified therein, (i) the assignee thereunder shall be a party
hereto and, to the extent that rights and obligations hereunder have been
assigned to it pursuant to such Assignment and Acceptance, have the rights and
obligations of a Lender hereunder and (ii) the Lender assignor thereunder shall,
to the extent that rights and obligations hereunder have been assigned by it
pursuant to such Assignment and Acceptance, relinquish its rights and be
released from its obligations under this Agreement (and, in the case of an
Assignment and Acceptance covering all or the remaining portion of an assigning
Lender’s rights and obligations under this Agreement, such Lender shall cease to
be a party hereto).

(c) By executing and delivering an Assignment and Acceptance, the Lender
assignor thereunder and the assignee thereunder confirm to and agree with each
other and the other parties hereto as follows: (i) other than as provided in
such Assignment and Acceptance, such assigning Lender makes no representation or
warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with this Agreement or
the execution, legality, validity, enforceability, genuineness, sufficiency or
value of this Agreement or any other instrument or document furnished pursuant
hereto; (ii) such assignee confirms that it has received a copy of this
Agreement, together with copies of such financial statements and

 

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other documents and information as it has deemed appropriate to make its own
credit analysis and decision to enter into such Assignment and Acceptance;
(iii) such assignee will, independently and without reliance upon the
Administrative Agent, such assigning Lender or any other Lender and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
this Agreement; (iv) such assigning Lender and such assignee confirm that such
assignee is an Eligible Assignee; (v) such assignee appoints and authorizes the
Administrative Agent to take such action as agent on its behalf and to exercise
such powers under this Agreement as are delegated to such agent by the terms
hereof, together with such powers as are reasonably incidental thereto; and
(vi) such assignee agrees that it will perform in accordance with their terms
all of the obligations which by the terms of this Agreement are required to be
performed by it as a Lender.

(d) The Administrative Agent, for the benefit of the Borrower, shall maintain at
its address referred to herein a copy of each Assignment and Acceptance
delivered to and accepted by it and a register for the recordation of the names,
addresses of each Lender and the Invested Percentages of each Lender from time
to time (the “Lender Register”). The entries in the Lender Register shall be
conclusive and binding for all purposes, absent manifest error, and the Borrower
and the Lenders shall treat each Person whose name is recorded in the Lender
Register as a Lender hereunder for all purposes of this Agreement. The Lender
Register shall be available for inspection by any Lender at any reasonable time
and from time to time upon reasonable prior notice.

(e) Subject to the provisions of Section 13.01(a), upon its receipt of an
Assignment and Acceptance executed by an assigning Lender and an assignee, the
Administrative Agent shall, if such Assignment and Acceptance has been
completed, accept such Assignment and Acceptance, and the Administrative Agent
shall then record the information contained therein in the Lender Register.

(f) Each Lender may sell participations to one or more banks or other entities
in or to all or a portion of its rights and obligations under this Agreement
(including all or a portion of its Invested Percentage and its interests in the
Loan Balance); provided, however, that (i) such Lender’s obligations under this
Agreement shall remain unchanged, (ii) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations
and (iii) the Administrative Agent, the other Lenders and the other parties
hereto shall continue to deal solely and directly with such Lender in connection
with such Lender’s rights and obligations under this Agreement. Notwithstanding
anything herein to the contrary, each participant shall have the rights of a
Lender (including any right to receive payment) under Sections 2.13 and 2.14;
provided, however, that no participant shall be entitled to receive payment
under either such Section in excess of the amount that would have been payable
under such Section by the Borrower to the Lender granting its participation had
such participation not been granted, and no Lender granting a participation
shall be entitled to receive payment under either such Section in an amount
which exceeds the sum of (A) the amount to which such Lender is entitled under
such Section with respect to any portion of the Loans owned by such Lender which
is not subject to any participation plus (B) the aggregate amount to which its
participants are entitled under such Sections with respect to the amounts of
their respective participations. With respect to any participation described in
this Section, the participant’s rights as set forth in the agreement

 

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between such participant and the applicable Lender to agree to or to restrict
such Lender’s ability to agree to any modification, waiver or release of any of
the terms of this Agreement or to exercise or refrain from exercising any powers
or rights which such Lender may have under or in respect of this Agreement shall
be limited to the right to consent to any of the matters set forth in
Section 13.01. Notwithstanding anything in the foregoing to the contrary, no
Lender may sell a participation to any other person without first sending
written notice to the Borrower informing it of such Lender’s intention to make
such sale, including the name of the proposed participant.

(g) Each Lender that sells a participation shall maintain a register on which it
enters the name and address of each participant and the amount (and stated
interest) of each participant’s interest in the Loans or other obligations under
this Agreement (the “Participant Register”); provided that no Lender shall have
any obligation to disclose all or any portion of the Participant Register
(including the identity of any participant or any information relating to a
participant’s interest in any commitments, loan, letter of credit or its other
obligations under this Agreement) to any Person except to the extent that such
disclosure is necessary to establish that such commitment, loan or other
obligation is in registered form under Section 5f.103-1(c) of the United States
Treasury Regulations or as reasonably necessary for the Borrower, the Servicer
or the Administrative Agent to comply with their respective withholding and
reporting obligations under FATCA. The entries in the Participant Register shall
be conclusive absent manifest error, and such Lender shall treat each Person
whose name is recorded in the Participant Register as the owner of such
participation for all purposes of this Agreement notwithstanding any notice to
the contrary. For the avoidance of doubt, the Administrative Agent (in its
capacity as Administrative Agent) shall have no responsibility for maintaining a
Participant Register.

(h) Each Lender may, in connection with any assignment or participation or
proposed assignment or participation pursuant to this Section, after
consultation with the Borrower, disclose to the assignee or participant or
proposed assignee or participant in each case on a confidential basis any
information, including Confidential Information, relating to the Borrower
furnished to such Lender by or on behalf of the Borrower.

(i) Nothing herein shall prohibit any Lender from pledging or assigning as
collateral any of its rights under this Agreement to (i) any Federal Reserve
Bank or any other Governmental Authority in accordance with Applicable Law or
(ii) a collateral trustee or security agent for holders of commercial paper and,
in each case, any such pledge or Collateral assignment may be made without
compliance with Section 13.01(a) or 13.01(b).

 

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ARTICLE FOURTEEN

MUTUAL COVENANTS REGARDING CONFIDENTIALITY

Section 14.01. Covenants of the Borrower, the Servicer, the Collateral Custodian
and the Backup Servicer. Each of the Borrower, the Servicer, the Backup Servicer
and the Collateral Custodian, severally and with respect to itself only,
covenants and agrees to hold in confidence, and not disclose to any Person, the
terms of this Agreement (including any fees payable in connection with this
Agreement or the identity of the Lenders under this Agreement), except as the
Administrative Agent or any such Lender may have consented to in writing prior
to any proposed disclosure and except that it may disclose such information
(i) to its Advisors, officers, directors, employees, lenders, investors,
potential investors, agents, auditors, subservicers or representatives, (ii) to
the extent such information has become available to the public other than as a
result of a disclosure by or through the Borrower, the Servicer, the Backup
Servicer or the Collateral Custodian, (iii) to Wells Fargo Bank, Wells Fargo
Securities or their respective Affiliates or (iv) to the extent it should be
(a) required by Applicable Law (including filing a copy of this Agreement and
the other Basic Documents (other than the Fee Letter)) as exhibits to filings
required to be made with the SEC, or in connection with any legal or regulatory
proceeding, (b) requested by any Governmental Authority to disclose such
information or (c) requested by any nationally recognized statistical rating
organization; provided, that, in the case of clause (iv)(a), the Borrower, the
Servicer, the Backup Servicer and the Collateral Custodian, as applicable, will
(unless otherwise prohibited by Applicable Law) notify the Administrative Agent
and the Lenders of its intention to make any such disclosure prior to making
such disclosure.

Section 14.02. Covenants of the Administrative Agent, the Lenders, the Backup
Servicer and the Collateral Custodian.

(a) Each of the Administrative Agent, each Lender, the Backup Servicer, any
Successor Servicer and the Collateral Custodian covenants and agrees that it
will not disclose any of the Confidential Information now or hereafter received
or obtained by it without the Borrower’s prior written consent; provided,
however, that it may disclose any such Confidential Information to those of its
employees, Affiliates or third-party service providers directly involved in the
transactions contemplated by the Basic Documents or to any nationally recognized
statistical rating organization (within the meaning of the Exchange Act) in
compliance with Rule 17g-5 thereunder solely with respect to Section 2.13(d), if
applicable (or any similar rule or regulation in any relevant jurisdiction);
provided, further, that no Lender may disclose the Collections Policy to any
Affiliate of such Lender that is engaged in the business of consumer motor
vehicles lending without the prior written consent of the Servicer.

(b) Each of the Administrative Agent, each Lender, the Backup Servicer, any
Successor Servicer and the Collateral Custodian acknowledges and understands
that the Confidential Information may contain “nonpublic personal information”
as that term is defined in Section 6809(4) of the Gramm-Leach-Bliley Act, and
each of the Administrative Agent, the Lenders, the Backup Servicer, any
Successor Servicer and the Collateral Custodian, and each of its employees,
Affiliates, directly involved in the transaction contemplated by the Basic
Documents and its respective Advisors, agrees to maintain such nonpublic
personal information

 

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received hereunder in accordance with the Gramm-Leach-Bliley Act and other
applicable federal and state privacy laws. Each of the Administrative Agent, the
Lenders, the Backup Servicer, any Successor Servicer and the Collateral
Custodian shall, and shall direct its employees, Affiliates directly involved in
the transaction contemplated by the Basic Documents and its respective Advisors
to (i) not disclose such nonpublic personal information to any third party,
including, without limitation, third party service providers, but excluding
subservicers, without the prior written consent of the Borrower and the
Servicer, (ii) agree not to use nonpublic personal information for any purpose
not reasonably contemplated by their respective roles in the transaction
contemplated by the Basic Documents, (iii) protect against any unauthorized
access to or use of such nonpublic personal information, (iv) in the event of
any actual or apparent theft, unauthorized use or disclosure of such nonpublic
personal information, immediately commence all reasonable efforts to investigate
and correct the causes and remediate the results thereof, and (v) as soon as
practicable following discovery of any event described in clause (iv) above,
provide notice thereof to the Borrower and the Servicer, and such further
information and assistance as may be reasonably requested by either of them.

(c) Each of the Administrative Agent, each Lender, the Backup Servicer, any
Successor Servicer and the Collateral Custodian may also disclose any such
Confidential Information to its Advisors and any subservicers who need to know
such information for the purpose of assisting it in connection with the
transactions contemplated by the Basic Documents. Each of the Administrative
Agent, each Lender, the Backup Servicer, any Successor Servicer and the
Collateral Custodian agrees to be responsible for any breach of Article Fourteen
of this Agreement by its Affiliates and Advisors, and it agrees that its
Affiliates and Advisors will be advised by it of the confidential nature of such
information and that it shall cause its Affiliates to be bound by this
Agreement.

(d) None of the Administrative Agent, any Lender, the Backup Servicer, any
Successor Servicer and the Collateral Custodian, nor any of their respective
Affiliates, employees, agents or Advisors, without the prior written consent of
the Borrower, will disclose to any Person the fact that Confidential Information
has been provided to it or them, that discussions or negotiations have taken
place with respect to the transactions contemplated by the Basic Documents, or
the existence, terms, conditions or other facts of the transactions contemplated
by the Basic Documents, including the status thereof.

(e) Each of the Administrative Agent, each Lender, the Backup Servicer, any
Successor Servicer and the Collateral Custodian acknowledges and agrees that any
Confidential Information provided to it, in whatever form, is the sole property
of the Borrower and Regional Management. Neither any such Person nor its
Affiliates or Advisors shall use any of the Confidential Information now or
hereafter received or obtained from or through the Borrower, Regional Management
or any of their respective Affiliates for any purpose other than for purposes of
engaging in, or as otherwise contemplated by, the transactions contemplated by
the Basic Documents. The Administrative Agent, each Lender, the Backup Servicer,
any Successor Servicer and the Collateral Custodian agree that if the Borrower
and/or Regional Management should request that it destroy or return the
Confidential Information, it shall return or destroy such Confidential
Information as so directed; provided that it shall be permitted to retain only
that portion of the Confidential Information, in accordance with the
confidentiality obligations specified in this Agreement, that is necessary
(i) for purposes of documenting any due diligence review performed by it in
connection with this Agreement and (ii) to comply with any Applicable Laws or
the internal document retention policies of the Administrative Agent, any
Lender, the Backup Servicer, any Successor Servicer or the Collateral Custodian.

 

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(f) Each of the Administrative Agent, each Lender, the Backup Servicer, any
Successor Servicer and the Collateral Custodian acknowledges that all
Confidential Information is considered proprietary and of competitive value, and
in many instances trade secrets. Each of the Administrative Agent, each Lender,
the Backup Servicer, any Successor Servicer and the Collateral Custodian agrees
that because of the unique nature of the Confidential Information any breach of
this Agreement may cause the Borrower, Regional Management and their respective
Affiliates irreparable harm and money damages and other remedies available at
law in the event of a breach would not be adequate to compensate the Borrower,
Regional Management and their Affiliates for any such breach. Accordingly, each
of the Administrative Agent, each Lender, the Backup Servicer, any Successor
Servicer and the Collateral Custodian acknowledges and agrees that the Borrower,
Regional Management and their respective Affiliates shall be entitled, without
the requirement of posting a bond or other security, to seek equitable relief,
including injunctive relief and specific performance, as a remedy for any such
breach. Such relief shall be in addition to, and not in lieu of, all other
remedies available to the Borrower, Regional Management and their respective
Affiliates whether at law or in equity.

(g) If the Administrative Agent, any Lender, the Backup Servicer, any Successor
Servicer and the Collateral Custodian, or any of their respective Affiliates or
Advisors are legally compelled (whether by deposition, interrogatory, request
for documents, subpoena, civil investigation, demand or similar process) to
disclose any Confidential Information (including the fact that discussions or
negotiations took place with respect to the transactions contemplated by the
Basic Documents), the related entity shall promptly notify the Borrower and
Regional Management in writing (unless it has been advised that such
notification is prohibited by Applicable Law) of such requirement so that the
Borrower and/or Regional Management, at their sole cost and expense, may seek a
protective order or other appropriate remedy and/or waive compliance with the
provisions hereof. The Administrative Agent, each Lender, the Backup Servicer,
any Successor Servicer and the Collateral Custodian agree to use their
reasonable efforts, upon the written request of the Borrower or Regional
Management, to obtain or assist the Borrower or the Servicer in obtaining any
such protective order. Failing the reasonably timely entry of a protective order
or the reasonably timely receipt of a waiver hereunder, the related entity may
disclose, without liability hereunder, that portion (and only that portion) of
the Confidential Information that it have been advised that it is legally
compelled to disclose; provided that it agrees to use reasonable efforts to
obtain assurance that confidential treatment will be accorded such Confidential
Information by the Person or Persons to whom it was disclosed.

Notwithstanding the foregoing, it is understood that the Administrative Agent,
each Lender, the Backup Servicer, any Successor Servicer and the Collateral
Custodian or any of their respective Affiliates or Advisors may be required to
disclose (and may so disclose, without liability hereunder, provided that it
complies with the following sentence) the Confidential Information or portions
thereof at the request of a bank examiner or other regulatory authority or in
connection with an examination of it or its Affiliates by a bank examiner or
other regulatory authority, including in connection with the regulator
compliance policy of Administrative Agent,

 

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each Lender, the Backup Servicer, any Successor Servicer and the Collateral
Custodian. Under such circumstances, the related entity agrees to provide notice
to the Borrower and Regional Management as soon as practicable in connection
with (and, if possible, before) releasing the Confidential Information to the
bank examiner or other regulatory authority pursuant to such request or
examination.

 

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ARTICLE FIFTEEN

MISCELLANEOUS

Section 15.01. Amendments and Waivers.

(a) No failure or delay by the Administrative Agent or any Lender in exercising
any right or power hereunder shall operate as a waiver thereof, nor shall any
single or partial exercise of any such right or power, or any abandonment or
discontinuance of steps to enforce such a right or power, preclude any other or
further exercise thereof or the exercise of any other right or power. The rights
and remedies of the Administrative Agent and the Lenders hereunder are
cumulative and are not exclusive of any rights or remedies that they would
otherwise have. No waiver of any provision of this Agreement or consent to any
departure by the Borrower therefrom shall in any event be effective unless the
same shall be permitted by this Section, and then such waiver or consent shall
be effective only in the specific instance and for the purpose for which given.
Without limiting the generality of the foregoing, the making of a Loan shall not
be construed as a waiver of any Termination Event or Unmatured Termination
Event, regardless of whether the Administrative Agent, any Agent or any Lender
may have had notice or knowledge of such Termination Event or Unmatured
Termination Event at the time.

(b) Neither this Agreement nor any provision hereof may be amended or modified
except pursuant to an agreement or agreements in writing entered into by the
Borrower and the Administrative Agent with the consent of the Required Lenders;
provided, that no such agreement shall, without the written consent of each
Lender:

(i) amend any provision of Section 2.08;

(ii) amend any provision of Schedule B;

(iii) change any provision of this Section or the definition of “Required
Lenders” or any other provision hereof specifying the number or percentage of
Lenders required to amend, waive or otherwise modify any rights hereunder or
make any determination or grant any consent hereunder;

(iv) amend or change the definition of “Cumulative Net Loss Ratio”, “Level I
Initial Receivables Trigger Event”, “Level I Effective Date Receivables Trigger
Event”, “Level I Trigger Event”, “Level II Initial Receivables Trigger Event”,
“Level II Effective Date Receivables Trigger Event”, “Level II Trigger Event”,
“Reserve Account Required Amount”, “Target Overcollateralization Amount” or
“Interest Rate”; or

(v) reduce the principal or the rate of interest on either Loan or any fees or
other amounts payable hereunder or under any other Basic Document;

provided further, that no such agreement shall amend, modify or otherwise affect
the rights or duties of the Account Bank, the Backup Servicer or the Collateral
Custodian hereunder without the prior written consent of the Account Bank, the
Backup Servicer or the Collateral Custodian, as the case may be; provided
further, that the Fee Letter may only be amended, or rights or privileges
thereunder waived, in writing executed by the parties thereto and with the
written consent of the Required Lenders.

 

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(c) Neither this Agreement nor any provision hereof may be waived except
pursuant to an agreement or agreements in writing entered into by the
Administrative Agent with the consent of the Required Lenders; provided, that no
such agreement shall, without the written consent of each Lender waive any
condition set forth in Section 4.01; provided further, that no such agreement
shall waive the rights or duties of the Account Bank, the Backup Servicer or the
Collateral Custodian hereunder without the prior written consent of the Account
Bank, the Backup Servicer or the Collateral Custodian, as the case may be.

(d) The Borrower shall promptly deliver to the Account Bank, the Backup Servicer
and the Collateral Custodian an executed copy of any amendment, waiver or
modification under this Section.

Section 15.02. Notices, Etc. All notices and other communications provided for
hereunder shall, unless otherwise stated herein, be in writing (including
communication by facsimile copy) and e-mailed, mailed, transmitted or delivered,
as to each party hereto, at its address set forth under its name on Schedule A
hereto or specified in such party’s Assignment and Acceptance or at such other
address as shall be designated by such party in a written notice to the other
parties hereto. All such notices and communications shall be effective, upon
receipt, or in the case of notice by (i) mail, five days after being deposited
in the United States mail, first class postage prepaid, (ii) e-mail and
facsimile copy, when electronic communication of receipt is obtained, or
(iii) overnight courier, one Business Day after being deposited with such
overnight courier service, except that notices and communications pursuant to
Article Two shall not be effective until received with respect to any notice
sent by mail, telecopier or e-mail.

Section 15.03. No Waiver, Rights and Remedies. No failure on the part of the
Administrative Agent, any other Secured Party or any assignee of any Secured
Party or any other party hereto to exercise, and no delay in exercising, any
right, remedy, power or privilege hereunder shall operate as a waiver thereof;
nor shall any single or partial exercise thereof preclude any other or further
exercise thereof or the exercise of any other right, remedy, power or privilege
hereunder.

Section 15.04. Binding Effect. This Agreement shall be binding upon and inure to
the benefit of the Borrower, the Servicer, the Backup Servicer, the Collateral
Custodian, the Secured Parties and their respective successors and permitted
assigns.

Section 15.05. Term of this Agreement. This Agreement shall remain in full force
and effect until the Facility Termination Date; provided, however, that the
rights and remedies with respect to any breach of any representation and
warranty made or deemed made by the Borrower pursuant to Article Five and the
indemnification and payment provisions of Article Eleven, the confidentiality
provisions of Article Fourteen, the provisions of Section 15.10 and any other
provision of this Agreement expressly stated to survive, shall be continuing and
shall survive any termination of this Agreement or the assignment, resignation
or removal by or of the applicable parties hereto.

 

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Section 15.06. GOVERNING LAW; CONSENT TO JURISDICTION; WAIVER OF OBJECTION TO
VENUE. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICTS OF LAWS
PROVISIONS (OTHER THAN §5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS
LAW). EACH OF THE PARTIES HERETO HEREBY AGREES TO THE NON-EXCLUSIVE JURISDICTION
OF THE COURTS OF THE STATE OF NEW YORK, LOCATED IN THE BOROUGH OF MANHATTAN AND
THE FEDERAL COURTS LOCATED WITHIN THE STATE OF NEW YORK IN THE BOROUGH OF
MANHATTAN. EACH OF THE PARTIES HERETO HEREBY WAIVES ANY OBJECTION BASED ON FORUM
NON CONVENIENS, AND ANY OBJECTION TO VENUE OF ANY ACTION INSTITUTED HEREUNDER IN
ANY OF THE AFOREMENTIONED COURTS AND CONSENTS TO THE GRANTING OF SUCH LEGAL OR
EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY SUCH COURT.

Section 15.07. WAIVER OF JURY TRIAL. TO THE EXTENT PERMITTED BY APPLICABLE LAW,
EACH OF THE PARTIES HERETO WAIVES ANY RIGHT TO HAVE A JURY PARTICIPATE IN
RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE BETWEEN
THE PARTIES HERETO ARISING OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO
THE RELATIONSHIP BETWEEN ANY OF THEM IN CONNECTION WITH THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY. INSTEAD, ANY SUCH DISPUTE RESOLVED IN COURT
WILL BE RESOLVED IN A BENCH TRIAL WITHOUT A JURY.

Section 15.08. Costs, Expenses and Taxes.

(a) In addition to the rights of indemnification granted to the Indemnified
Parties under Article Eleven, the Borrower agrees to pay on demand all
reasonable costs and expenses of the Secured Parties, the Backup Servicer, the
Account Bank and the Collateral Custodian incurred in connection with the
administration (including periodic auditing), amendment or modification of, or
any waiver or consent issued in connection with, this Agreement, the other Basic
Documents and the other documents to be delivered hereunder or in connection
herewith, including the reasonable fees and disbursements of counsel for the
Secured Parties, the Backup Servicer, the Account Bank and the Collateral
Custodian with respect thereto and with respect to advising such entities as to
their respective rights and remedies under this Agreement and the other
documents to be delivered hereunder or in connection herewith, and all costs and
expenses, if any (including reasonable counsel fees and expenses), incurred by
such entities in connection with the enforcement of this Agreement and the other
documents to be delivered hereunder or in connection herewith.

(b) The Borrower shall pay on demand any and all stamp, sales, excise and other
taxes and fees payable or determined to be payable in connection with the
execution, delivery, filing and recording of this Agreement and the other Basic
Documents, the other documents to be delivered hereunder or any agreement or
other document providing liquidity support, credit enhancement or other similar
support to a Lender in connection with this Agreement or the funding or
maintenance of the Loans hereunder.

 

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Section 15.09. No Insolvency Proceedings.

(a) Notwithstanding any prior termination of this Agreement, no Secured Party,
the Collateral Custodian or the Backup Servicer shall, prior to the date which
is one year and one day after the final payment of the Aggregate Unpaids,
petition, cooperate with or encourage any other Person in petitioning or
otherwise invoke the process of any Governmental Authority for the purpose of
commencing or sustaining an Insolvency Proceeding against the Borrower under any
United States federal or State Insolvency Laws or appointing a receiver,
liquidator, assignee, trustee, custodian, sequestrator or other similar official
of the Borrower or any substantial part of its property or ordering the winding
up or liquidation of the affairs of the Borrower.

(b) The provisions of this Section shall survive the termination of this
Agreement.

Section 15.10. Recourse Against Certain Parties.

(a) No recourse under or with respect to any obligation, covenant or agreement
(including the payment of any fees or any other obligations) of any Secured
Party, the Backup Servicer, the Account Bank, the Collateral Custodian, Regional
Management or the Borrower as contained in this Agreement or any other
agreement, instrument or document entered into by it pursuant hereto or in
connection herewith shall be had against manager or administrator of such Person
or any incorporator, Affiliate, stockholder, officer, employee or director of
such Person or of any such manager or administrator, as such, by the enforcement
of any assessment or by any legal or equitable proceeding, by virtue of any
statute or otherwise; it being expressly agreed and understood that the
agreements of any Secured Party, the Backup Servicer, the Account Bank and the
Collateral Custodian contained in this Agreement and all of the other
agreements, instruments and documents entered into by it pursuant hereto or in
connection herewith are, in each case, solely the corporate obligations of such
Person, and that no personal liability whatsoever shall attach to or be incurred
by any administrator of any such Person or any incorporator, stockholder,
Affiliate, officer, employee or director of such Person or of any such
administrator, as such, or any other of them, under or by reason of any of the
obligations, covenants or agreements of such Person contained in this Agreement
or in any other such instruments, documents or agreements, or that are implied
therefrom, and that any and all personal liability of every such administrator
of such Person and each incorporator, stockholder, Affiliate, officer, employee
or director of such Person or of any such administrator, or any of them, for
breaches by such Person of any such obligations, covenants or agreements, which
liability may arise either at common law or at equity, by statute or
constitution, or otherwise, is hereby expressly waived as a condition of and in
consideration for the execution of this Agreement.

(b) The provisions of this Section shall survive the termination of this
Agreement.

 

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(c) No claim may be made by the Borrower, the Servicer or any of their
respective Affiliates against the Administrative Agent, any Lender, the
Collateral Custodian, the Backup Servicer, the Account Bank or any of their
respective Affiliates, directors, officers, employees, attorneys or agents for
any special, indirect, consequential or punitive damages arising out of or
related to the transactions contemplated by this Agreement, and each of the
Borrower and the Servicer, to the extent permitted by Applicable Law, hereby
waives, releases, and agrees not to sue upon any claim for any such damages,
whether or not accrued and whether or not known or suspected to exist in its
favor.

Section 15.11. Patriot Act Compliance. Each of the Administrative Agent, the
Backup Servicer, the Account Bank and the Collateral Custodian hereby notify the
Borrower that pursuant to the requirements of the Patriot Act, it, and each
Lender, may be required to obtain, verify and record information that identifies
the Borrower, which information includes the name and address of the Borrower,
organizational documentation, director and shareholder information, and other
information that will allow the Administrative Agent, the Backup Servicer, the
Account Bank, the Collateral Custodian and each Lender to identify the Borrower
in accordance with the Patriot Act. This notice is given in accordance with the
requirements of the Patriot Act and is effective for the Administrative Agent,
the Backup Servicer, the Account Bank, the Collateral Custodian and each Lender.

Section 15.12. Execution in Counterparts; Severability; Integration. This
Agreement may be executed in any number of counterparts and by different parties
hereto in separate counterparts, each of which when so executed shall be deemed
to be an original and all of which when taken together shall constitute one and
the same agreement. In case any provision in or obligation under this Agreement
shall be invalid, illegal or unenforceable in any jurisdiction, the validity,
legality and enforceability of the remaining provisions or obligations, or of
such provision or obligation in any other jurisdiction, shall not in any way be
affected or impaired thereby. This Agreement contains the final and complete
integration of all prior expressions by the parties hereto with respect to the
subject matter hereof and shall constitute the entire agreement among the
parties hereto with respect to the subject matter hereof, superseding all prior
oral or written understandings other than any fee letter contemplated hereby.

Section 15.13. Intercreditor Agreement. The parties hereto acknowledge the
existence of the Intercreditor Agreement and that certain rights of the parties
(other than the Account Bank, the Backup Servicer and the Collateral Custodian)
may be subject to the provisions thereof.

Section 15.14. Multiple Roles. The parties expressly acknowledge and consent to
Wells Fargo Bank acting in the capacities of Collateral Custodian, Backup
Servicer and in the capacity as Account Bank. Wells Fargo Bank may, in such
multiple capacities, discharge its separate functions fully, without hindrance
or regard to conflict of interest principles or other breach of duties to the
extent that any such conflict or breach arises from the performance by Wells
Fargo Bank of express duties set forth in this Agreement in any of such
capacities, all of which defenses, claims or assertions are hereby expressly
waived by the other parties hereto except in the case of negligence (other than
errors in judgment), bad faith or willful misconduct by Wells Fargo Bank.

Section 15.15. Account Control Agreement. The parties hereto agree that the
“Credit Agreement” as defined and referenced in the Account Control Agreement
refers to this Agreement as amended and restated on the Effective Date.

 

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IN WITNESS WHEREOF, the parties have caused this Amended and Restated Credit
Agreement to be executed by their respective officers thereunto duly authorized,
as of the date first above written.

 

REGIONAL MANAGEMENT RECEIVABLES, LLC,

as Borrower

By:  

/s/ Donald E. Thomas

  Name: Donald E. Thomas   Title: EVP and Chief Financial Officer REGIONAL
MANAGEMENT CORP., as Servicer By:  

s/ Donald E. Thomas

  Name: Donald E. Thomas   Title: EVP and Chief Financial Officer

WELLS FARGO SECURITIES, LLC,

as Administrative Agent

By:  

/s/ Brian Grushkin

  Name: Brian Grushkin   Title: Director

WELLS FARGO BANK, NATIONAL ASSOCIATION,

as Lender

By:  

/s/ Brian Grushkin

  Name: Brian Grushkin   Title: Director Closing Date Lender Advance:
$75,728,181 Effective Date Lender Advance: $37,811,769.64 Effective Date Loan
Balance: $56,266,888.84

Regional Management A&R Credit Agreement

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WELLS FARGO BANK, NATIONAL ASSOCIATION,

as Account Bank, Collateral Custodian and Backup Servicer

By:  

/s/ Jennifer C. Westberg

  Name: Jennifer C. Westberg   Title: Vice President

Regional Management A&R Credit Agreement

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SCHEDULE A

NOTICE INFORMATION

Regional Management:

Regional Management Corp.

979 Batesville Road, Suite B

Greer, SC 29651

Attention: Legal Department

Telephone No.: (XXX) XXX-XXXX

E-mail: XXXXXXXXXX@regionalmanagement.com; XXXXXXXXXX

@regionalmanagement.com

Borrower:

Regional Management Receivables, LLC

979 Batesville Road, Suite B

Greer, SC 29651

Attention: Legal Department

Telephone No.: (XXX) XXX-XXXX

E-mail: XXXXXXXXXX@regionalmanagement.com; XXXXXXXXXX

@regionalmanagement.com

Administrative Agent:

Wells Fargo Securities, LLC

550 S. Tryon Street

Charlotte, North Carolina 28202

Attention: James B. Brinkley II

Facsimile No.: (XXX) XXX-XXXX

Telephone No.: (XXX) XXX-XXXX

E-mail: XXXXXXXXXX @wellsfargo.com

Lender:

Wells Fargo Bank, National Association

550 S. Tryon Street

Charlotte, North Carolina 28202

Attention: Leah Miller

Facsimile No.: (XXX) XXX-XXXX

Telephone No.: (XXX) XXX-XXXX

E-mail: XXXXXXXXXX @wellsfargo.com

 

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Account Bank, Collateral Custodian and Backup Servicer:

Wells Fargo Bank, National Association

MAC N9300-061

600 S. 4th Street

Minneapolis, Minnesota 55479

Attention: Corporation Trust Services – Asset-Backed Administration

Facsimile No.: (XXX) XXX-XXXX

Telephone No.: (XXX) XXX-XXXX

E-mail: XXXXXXXXXX @wellsfargo.com

 

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SCHEDULE B

ELIGIBLE RECEIVABLE CRITERIA

An “Eligible Receivable” means a Receivable as to which all of the following
conditions are satisfied:

(a) Characteristics of Receivables. As of the related Cutoff Date (or such other
date as may be specifically set forth below), each Receivable:

(i) has been fully and properly executed or electronically authenticated by the
Obligor thereto;

(ii) was originated in the United States and denominated in Dollars;

(iii) at the time of origination, for which the Obligor thereto has provided as
its most recent billing address an address located in the continental United
States;

(iv) was originated in accordance with the underwriting criteria then in effect;

(v) has either (A) been originated by a Dealer in the ordinary course of such
Dealer’s business to finance the retail sale by a Dealer of the related Financed
Vehicle and has been purchased by an Originator in the ordinary course of its
respective business or (B) has been originated or acquired directly by an
Originator in accordance with its customary practices and, in either case, has
been transferred by such Originator to Regional Management pursuant to a First
Tier Purchase Agreement, transferred by Regional Management to the Borrower
pursuant to the Second Tier Purchase Agreement and pledged by the Borrower to
the Administrative Agent pursuant to this Agreement;

(vi) as of the Closing Date or the Effective Date, is secured by a first
priority validly perfected security interest in the Financed Vehicle in favor of
the Originator, as secured party, or all necessary actions have been commenced
that would result in a first priority security interest in the Financed Vehicle
in favor of the Originator, as secured party, which security interest, in either
case, is assignable and has been so assigned by Regional Management to Borrower
and by the Borrower to the Administrative Agent;

(vii) contains customary and enforceable provisions such that the rights and
remedies of the holder thereof are adequate for realization against the
collateral of the benefits of the security;

(viii) provided, at origination, for level monthly payments which fully amortize
the initial Principal Balance over the original term; provided, that the amount
of the first or last payment may be different from the level payment but in no
event more than three times the level monthly payment;

(ix) provides for interest and applicable fees at the APR specified in the
Schedule of Receivables and for which payment is calculated pursuant to the
Simple

 

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Interest Method or Precomputed Interest Method, as applicable, and in the event
that such Receivable is prepaid by the Obligor, requires a prepayment that fully
pays the Principal Balance of such Receivable and any interest and applicable
fees accrued at the related APR through the date of prepayment;

(x) no Scheduled Payment remains unpaid 30 days or more from the original due
date for such payment;

(xi) is not a Defaulted Receivable;

(xii) is not secured by a Financed Vehicle that has been repossessed;

(xiii) such Receivable was not noted in the records of the related Originator or
the Servicer as being the subject of any pending bankruptcy or insolvency
proceeding;

(xiv) which (i) requires that the Obligor thereunder obtain and maintain
comprehensive and collision insurance covering the related Financed Vehicle and
(ii) at the time of origination, the related Financed Vehicle was covered by an
Insurance Policy that covers physical loss or damage in at least the minimum
amount required by the State in which the related Obligor resides;

(xv) has a final scheduled payment date due on or before the Final Scheduled
Payment Date;

(xvi) was selected by the Administrative Agent in a manner that, to the Borrower
or the Originator’s knowledge, did not result in a selection adverse to the
Lenders; additionally, no adverse procedures were used by the Borrower in
providing information related to the related Receivables being added to the
Collateral on the Closing Date or the Effective Date, as the case may be;

(xvii) provides that a prepayment by the related Obligor will fully pay the
Principal Balance and accrued interest through the date of prepayment based on
the Contract’s APR;

(xviii) the related Financed Vehicle, if titled in the State of Texas, is a
“motor vehicle” as defined in Section 501.002 of the Texas Transportation Code;

(xix) for which the Servicer and the Originator have clearly marked their
electronic records to indicate that such Receivable is owned by the Borrower;

(xx) the first scheduled payment on the related Contract is no more than 45 days
from the contract date (so long as no payment has yet been made on such
Contract) or past due; provided that no funds will have been advanced by an
Originator, the Borrower, any third-party lender or anyone acting on behalf of
any of them in order to cause such Contract to comply with such requirement;

(xxi) the Financed Vehicle of which (i) was purchased with the proceeds of such
Contract, (ii) has all accessories and optional equipment described in the
Contract and (iii) was not at the time of origination of the related Contract,
designated for racing or modified for use as a public livery vehicle or any
other commercial use;

 

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(xxii) is fully assignable;

(xxiii) such Receivable had an original term to maturity and a remaining term to
maturity of not more than 72 months and not less than three months;

(xxiv) such Receivable had an APR of at least 9.99%;

(xxv) such Receivable had a Principal Balance not exceeding $35,000; and

(xxvi) if such Receivable does not satisfy any of the conditions above, such
Receivable is otherwise satisfactory in all respects to the Administrative Agent
and listed on Schedule C hereto.

(b) Schedule of Receivables. The information with respect to a Receivable set
forth in the Schedule of Receivables is true and correct in all material
respects as of the Initial Cutoff Date, if such Receivable is an Initial
Receivable, or (ii) the Effective Date Cutoff Date, if such Receivable is an
Effective Date Receivable.

(c) Compliance with Law. The Receivable complied at the time it was originated
or made, and the transfer of that Receivable to the Borrower complied at the
time of transfer, in all material respects with all requirements of applicable
federal, State and local laws, and regulations thereunder, including to the
extent applicable, usury laws, the Federal Truth in Lending Act, the Equal
Credit Opportunity Act, the Fair Credit Reporting Act, the Federal Trade
Commission Act, the Fair Debt Collection Practices Act, the Fair Credit Billing
Act, the Magnuson-Moss Warranty Act, Federal Reserve Board Regulations B and Z,
the Servicemembers Civil Relief Act, State adaptations of the National Consumer
Act and of the Uniform Consumer Credit Code and any other consumer credit, equal
opportunity and disclosure laws applicable to that Receivable.

(d) Binding Obligation. The Receivable and the related Contract is duly
authorized on the part of the related Obligor, is in full force and effect and
constitutes the legal, valid and binding payment obligation in writing of the
Obligor, enforceable by the holder thereof in accordance with its terms, except
(i) as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, liquidation or other similar laws and equitable principles
relating to or affecting the enforcement of creditors’ rights generally and
(ii) as such Receivable may be modified by the application after the related
Cutoff Date of the Servicemembers Civil Relief Act, to the extent applicable to
the related Obligor.

(e) Receivable in Force. The Receivable has not been satisfied, subordinated or
rescinded nor has the related Financed Vehicle been released from the lien of
such Receivable in whole or in part.

(f) No Default; No Waiver. Except for payment delinquencies with respect to any
Receivable, no default, breach, violation or event permitting acceleration under
the terms of the Receivable existed as of the related Cutoff Date nor did any
continuing condition that with notice or lapse of time, or both, would
constitute a default, breach, violation or event permitting acceleration under
the terms of the Receivable exist as of such Cutoff Date and the Borrower has
not waived any of the foregoing.

 

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(g) Insurance. At the time of origination, the related Financed Vehicle was
covered by an Insurance Policy that covers physical loss or damage in an amount
at least equal to the lesser of (i) the cash value of such Financed Vehicle and
(ii) the Principal Balance of the related Receivable.

(h) No Government Obligor. The Obligor on the Receivable is not the United
States or any State or any local government, or any agency, department,
political subdivision or instrumentality of the United States or any State or
any local government.

(i) Assignment. No Receivable has been originated in, or is subject to the laws
of, any jurisdiction under which the sale, transfer, assignment, setting over,
conveyance or pledge of such Receivable would be unlawful, void, or voidable.
Regional Management has not entered into any agreement with any Obligor that
prohibits, restricts or conditions the assignment of the related Receivable.

(j) Good Title. It is the intention of the Borrower that the sale, transfer,
assignment and conveyance herein contemplated constitute an absolute sale,
transfer, assignment and conveyance of the Receivables and that the Receivables
not be part of Regional Management’s estate in the event of the filing of a
bankruptcy petition by or against Regional Management under any bankruptcy law.
As of the Closing Date in the case of the Initial Receivables or the Effective
Date in the case of the Effective Date Receivables, no such Receivable has been
sold, transferred, assigned, conveyed or pledged to any Person other than
pursuant to the Basic Documents. As of the Closing Date in the case of the
Initial Receivables or the Effective Date in the case of the Effective Date
Receivables, and immediately prior to the sale and transfer herein contemplated,
Regional Management had good and marketable title to and was the sole owner of
the related Receivable free and clear of all Liens (except any Lien which will
be released prior to assignment of such Receivable hereunder), and, immediately
upon the sale and transfer thereof, the Borrower will have good and marketable
title to each Receivable, free and clear of all Liens (other than Permitted
Liens).

(k) Filings. (i) The related Originator or Approved Lienholder is named as the
sole lienholder on the Certificate of Title of such Financed Vehicle, or has
submitted documentation to obtain title thereto noting such Originator or
Approved Lienholder as sole lienholder and such Certificate of Title is clear of
all Liens and adverse claims (other than Permitted Liens); provided however, the
Certificate of Title must be received on each Receivable within 90 days of the
Closing Date or the Effective Date, as the case may be, and (ii) all filings
(including UCC filings) necessary in any jurisdiction to give the Borrower a
first priority, validly perfected ownership interest in the Receivables (other
than any related security with respect thereto, to the extent that an ownership
interest therein cannot be perfected by the filing of a financing statement),
and to give the Administrative Agent a first priority perfected security
interest therein, will be made on the Closing Date or the Effective Date, as the
case may be.

 

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(l) Priority. The Receivable is not pledged, assigned, sold, subject to a
security interest, or otherwise conveyed other than pursuant to the Basic
Documents. Regional Management has not authorized the filing of and there are no
financing statements against the Originator or Regional Management that include
a description of collateral covering any Receivable other than any financing
statement relating to security interests granted under the Basic Documents or
that have been or, prior to the assignment of such Receivable hereunder, will be
terminated, amended or released. The Second Tier Purchase Agreement creates a
valid and continuing security interest in the Receivable (other than the related
security with respect thereto) in favor of the Borrower which security interest
is prior to all other Liens (other than Permitted Liens) and is enforceable as
such against all other creditors of and purchasers and assignees from Regional
Management.

(m) Characterization of Receivables. Each Receivable constitutes “tangible
chattel paper” as defined in the UCC.

(n) One Original. There is only one executed original copy of the Contract (in
each case within the meaning of the UCC) related to each Receivable. The
Contract relating to such Receivable has not been stamped or otherwise marked to
show any interest of any other Person, or if it has been stamped or otherwise
marked to show any interest of any other Person, such stamp or other mark has
been cancelled or voided (or if such stamp or mark is in the name of Bank of
America, as agent under the Senior Revolver, the Borrower has the right to
cancel or void such stamp or mark without the consent of Bank of America and
Bank of America has released in writing its lien on such Contract).

(o) No Defenses. Regional Management has no knowledge either of any facts which
would give rise to any right of rescission, offset, claim, counterclaim or
defense, or of the same being asserted or threatened and is not subject to any
dispute, offset, counterclaim or defense whatsoever (except the discharge in
bankruptcy of the related Obligor) with respect to any Receivable.

(p) Receivable File. The Collateral Custodian is holding the related Receivable
File and all requisite documentation for the benefit of the Secured Parties and
the Collateral Custodian has issued a Receivable Receipt to the Administrative
Agent prior to the Closing Date, in the case of the Initial Receivables, or the
Effective Date, in the case of the Effective Date Receivables.

(q) No Fraud or Misrepresentation. To the best of the Borrower’s knowledge, such
Receivable was originated without fraud or misrepresentation.

 

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SCHEDULE C

SCHEDULE OF RECEIVABLES

[Original delivered to and on file with the Administrative Agent]

 

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SCHEDULE D

LOCATION OF RECEIVABLE FILES

Wells Fargo Bank, National Association

ABS Custody Vault

1055 10th Avenue SE

MAC N9401-011

Minneapolis, Minnesota 55414

 

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SCHEDULE E

LIST OF APPROVED SUBSERVICERS

Regional Finance Corporation of Alabama, d/b/a Regional Finance, d/b/a Superior
Financial Services, d/b/a First Community Credit

Regional Finance Company of Georgia, LLC, d/b/a Regional Finance, d/b/a Auto
Credit Source

Regional Finance Company of New Mexico, LLC, d/b/a Regional Finance

Regional Finance Corporation of North Carolina, d/b/a Regional Finance, d/b/a
Auto Credit Source, d/b/a RMC Financial Services

Regional Finance Company of Oklahoma, LLC, d/b/a Regional Finance

Regional Finance Corporation of South Carolina, d/b/a Regional Finance, d/b/a
RMC Financial Services, d/b/a Sun Finance, d/b/a Anchor Finance

Regional Finance Corporation of Tennessee, d/b/a Regional Finance

Regional Finance Corporation of Texas, d/b/a Regional Finance, d/b/a Auto Credit
Source, d/b/a Regional Finance Corporation

Regional Finance Company of Virginia, LLC, d/b/a Regional Finance

 

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SCHEDULE F

REPRESENTATIONS AND WARRANTIES REGARDING SECURITY INTEREST

The Borrower represents and warrants as of the Closing Date, in the case of the
Initial Receivables, or as of the Effective Date, in the case of the Effective
Date Receivables:

(i) This Agreement creates a valid and continuing security interest (as defined
in the applicable UCC) in all Receivables in favor of the Administrative Agent,
which security interest is prior to all other Liens, and is enforceable as such
against creditors of and purchasers from the Borrower.

(ii) The Borrower has taken all steps necessary to perfect its security interest
against the Obligor in the Financed Vehicle securing the related Receivables.

(iii) The related Receivables constitute “tangible chattel paper” within the
meaning of the applicable UCC.

(iv) The Borrower owns and has good and marketable title to the related
Receivables free and clear of any Lien, claim, or encumbrance of any Person.

(v) The Borrower has caused or will have caused, within ten days after the
Closing Date, the filing of all appropriate financing statements in the proper
filing office in the appropriate jurisdictions under Applicable Law in order to
perfect the security interest in the Receivables granted to the Administrative
Agent hereunder.

(vi) Other than the security interest granted to the Administrative Agent
pursuant to this Agreement, the Borrower has not pledged, assigned, sold,
granted a security interest in, or otherwise conveyed any of the related
Receivables. The Borrower has not authorized the filing of and is not aware of
any financing statements against the Borrower that include a description of
collateral covering the related Receivables other than any financing statement
relating to the security interest granted to the Administrative Agent hereunder,
that has been terminated or amended in connection with the security interest of
the Administrative Agent. The Borrower is not aware of any judgment or tax lien
filings against the Borrower.

(vii) The Borrower has in its possession all copies of the Contracts that
constitute or evidence the related Receivables. The Contracts that constitute or
evidence the related Receivables do not have any marks or notations indicating
that they have been pledged, assigned, or otherwise conveyed to any Person other
than the Administrative Agent, except such marks or notations otherwise
canceled, voided or superceded (or if such stamp or mark is in the name of Bank
of America, as agent under the Senior Revolver, the Borrower has the right to
cancel or void such stamp or mark without the consent of Bank of America and
Bank of America has released in writing its lien on such Contract). All
financing statements filed or to be filed against the Borrower in favor of the
Administrative Agent in connection herewith describing the Receivables contain a
statement to the following effect: “A purchase of or security interest in any
collateral described in this financing statement will violate the rights of the
Administrative Agent”.

 

SF-1

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SCHEDULE G

SERVICING CENTRALIZATION EVENT

Following the occurrence of a Servicing Centralization Event, upon the direction
of the Administrative Agent, the following will occur:

(a) The Backup Servicer will confirm access and control of a central lockbox
approved by the Administrative Agent (the “Lockbox”), pursuant to a lockbox
agreement (the “Lockbox Agreement”) among the holder of the Lockbox, Regional
Management and the Administrative Agent. Regional Management will send letters
to Obligors with new/updated payment instructions to make all payments to the
Lockbox and all other offices of Regional Management that collect cash and
checks must send such Collections to the Lockbox within one day of receipt.

(b) The Administrative Agent and the Backup Servicer will participate in status
meetings with Regional Management on a regular basis.

(c) The Backup Servicer will begin data-mapping to ensure a smooth transition
from the Regional Management servicing platform to the servicing platform of the
Backup Servicer, should Regional Management be removed as Servicer.

(d) The collection function will remain with Regional Management as Servicer,
but moved to a central location acceptable to the Administrative Agent and the
Backup Servicer.

(e) Regional Management will utilize a single repossession vendor with a
national footprint acceptable to the Administrative Agent and the Backup
Servicer.

 

SG-1

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SCHEDULE H

LOCATIONS OF BOOKS AND RECORDS

[Provided to and on file with the Administrative Agent]

 

SH-1

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SCHEDULE I

LIST OF APPROVED LIENHOLDERS

[Provided to and on file with the Administrative Agent]

 

SI-1

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EXHIBIT A

[RESERVED]

 

A-1

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EXHIBIT B

FORM OF ASSIGNMENT AND ACCEPTANCE

                 , 20     

Reference is made to the Amended and Restated Credit Agreement, dated as of
November 21, 2017 (as amended, restated, supplemented or otherwise modified from
time to time, the “Credit Agreement”), among Regional Management Receivables,
LLC, as borrower, Regional Management Corp., as servicer, the lenders from time
to time parties thereto, Wells Fargo Securities, LLC, as administrative agent
(the “Administrative Agent”), and Wells Fargo Bank, National Association, as
account bank, collateral custodian and backup servicer. Capitalized terms used
herein that are not otherwise defined herein shall have the meanings ascribed
thereto in the Credit Agreement.

                     (the “Assignor”) and                      (the “Assignee”)
agree as follows:

1. The Assignor hereby sells and assigns to the Assignee, and the Assignee
hereby purchases and assumes from the Assignor, that interest in and to all of
the Assignor’s rights and obligations under the Credit Agreement as of the date
hereof which represents the percentage interest specified in Section 1 of
Schedule 1 of all outstanding rights and obligations of the Assignor in and to
its Invested Percentage of the Loans under the Credit Agreement and all rights
relating thereto. After giving effect to such sale and assignment, the amount of
the Loans held by the Assignee will be as set forth in Section 2 of Schedule 1.

2. The Assignor represents and warrants that it is the legal and beneficial
owner of the interest being assigned by it hereunder and that such interest is
free and clear of any Lien.

3. The Assignor and the Assignee confirm to and agree with each other and the
other parties to Credit Agreement that: (i) other than as provided herein, the
Assignor makes no representation or warranty and assumes no responsibility with
respect to any statements, warranties or representations made in or in
connection with the Credit Agreement or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of the Credit Agreement or any
other instrument or document furnished pursuant thereto; (ii) the Assignee
confirms that it has received a copy of the Credit Agreement, together with
copies of such financial statements and other documents and information as it
has deemed appropriate to make its own credit analysis and decision to enter
into such Assignment and Acceptance; (iii) the Assignee will, independently and
without reliance upon the Administrative Agent, the Assignor or any other Lender
party to the Credit Agreement and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under the Credit Agreement; (iv) the Assignor and
the Assignee confirm that the Assignee is an Eligible Assignee; (v) the Assignee
appoints and authorizes the Administrative Agent to take such action as agent on
its behalf and to exercise such powers under this Agreement as are delegated to
such agent by the terms hereof, together with such powers as are reasonably
incidental thereto; (vi) the Assignee agrees that it will perform in accordance
with

 

B-1

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their terms all of the obligations which by the terms of the Credit Agreement
are required to be performed by it as a Lender, including the confidentiality
provisions of Article Fourteen of the Credit Agreement; and (vii) this
Assignment and Acceptance meets all other requirements for such an Assignment
and Acceptance set forth in Article Thirteen of the Credit Agreement.

4. Following the execution of this Assignment and Acceptance by the Assignor and
the Assignee, it will be delivered to the Administrative Agent for acceptance.
The effective date of this Assignment and Acceptance (the “Assignment Date”)
shall be the date of acceptance thereof by the Administrative Agent, unless a
later date is specified in Section 3 of Schedule 1.

5. The Assignor and the Assignee agree to reimburse the Administrative Agent for
all reasonable fees, costs and expenses (including reasonable fees and
out-of-pocket expenses of counsel for the Administrative Agent) incurred by the
Administrative Agent in connection with this Assignment and Acceptance.

6. Upon such acceptance by the Administrative Agent, the Assignee shall be a
party to the Credit Agreement and, to the extent provided in this Assignment and
Acceptance, have the rights and obligations of a Lender thereunder; provided,
however, that the Assignor shall, to the extent such rights have been assigned
by it under this Assignment and Acceptance, relinquish its assigned rights and
be released from its assigned obligations under the Credit Agreement (and, in
the case of an Assignment and Acceptance coving all or the remaining portion of
an assigning Assignor’s rights and obligations under the Credit Agreement, the
Assignor shall cease to be a party thereto).

7. Upon such acceptance by the Administrative Agent, from and after the
Assignment Date, the Administrative Agent shall make, or cause to be made, all
payments under the Credit Agreement in respect of the interest assigned hereby
(including all payments of principal, interest and fees with respect thereto) to
the Assignee. The Assignor and Assignee shall make all appropriate adjustments
in payments under the Credit Agreement for periods prior to the Assignment Date
directly between themselves.

8. THIS ASSIGNMENT AND ACCEPTANCE SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS
CONFLICTS OF LAW PROVISIONS (OTHER THAN § 5-1401 AND 5-1402 OF THE NEW YORK
GENERAL OBLIGATIONS LAW).

 

B-2

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IN WITNESS WHEREOF, the Assignor and the Assignee have executed this Acceptance
and Assignment as of the      day of                     , 20     .

 

                                         , as Assignor By:  

 

  Name:   Title:                                      , as Assignee By:  

 

  Name:   Title:

 

B-3

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Schedule 1

to

Assignment and Acceptance

Dated                     , 20     

 

Section 1.

  

Percentage Interest:

                          % 

Section 2.

  

Dollar Amount of the Loans Owing to the Assignee:

   $                       

Section 3.

  

Assignment Date:                     , 20     

  

 

B-4

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EXHIBIT C

FORM OF COLLECTION POLICY

[Provided to and on file with the Administrative Agent]

 

C-1

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EXHIBIT D-1

FORM OF POWER OF ATTORNEY

December 11, 2015

This Power of Attorney (this “Power of Attorney”) is executed and delivered by
Regional Management Receivables, LLC (“Grantor”) to Wells Fargo Securities, LLC,
as Administrative Agent (“Attorney”), pursuant to (i) the Credit Agreement,
dated as of December 11, 2015 (as amended, restated, supplemented or otherwise
modified from time to time, the “Credit Agreement”), among the Grantor, as
borrower (the “Borrower”), Regional Management Corp., as servicer, the lenders
from time to time parties thereto, Wells Fargo Securities, LLC, as
administrative agent, and Wells Fargo Bank, National Association, as account
bank, collateral custodian and backup servicer, and (ii) the other Basic
Documents. Capitalized terms used herein that are not otherwise defined shall
have the meanings ascribed thereto in the Credit Agreement.

No person to whom this Power of Attorney is presented, as authority for Attorney
to take any action or actions contemplated hereby, shall inquire into or seek
confirmation from Grantor as to the authority of Attorney to take any action
described below, or as to the existence of or fulfillment of any condition to
this Power of Attorney, which is intended to grant to Attorney unconditionally
the authority to take and perform the actions contemplated herein, and Grantor
irrevocably waives any right to commence any suit or action, in law or equity,
against any person or entity that acts in reliance upon or acknowledges the
authority granted under this Power of Attorney. The Power of Attorney granted
hereby is coupled with an interest and may not be revoked or canceled by Grantor
until all Aggregate Unpaids have been indefeasibly paid in full and Attorney has
provided its written consent thereto.

Grantor hereby irrevocably constitutes and appoints Attorney (and all officers,
employees or agents designated by Attorney), with full power of substitution, as
its true and lawful attorney-in-fact with full irrevocable power and authority
in its place and stead and in its name or in Attorney’s own name, from time to
time in Attorney’s discretion, to take any and all appropriate action and to
execute and deliver any and all documents and instruments that may be necessary
or desirable to accomplish the purposes of the Credit Agreement, and, without
limiting the generality of the foregoing, hereby grants to Attorney the power
and right, on its behalf, without notice to or assent by it, upon the occurrence
and during the continuance of any Termination Event, to do the following: (i) to
give any necessary receipts or acquittance for amounts collected or received
under the Credit Agreement, (ii) to make all necessary transfers of the
Collateral in connection with any sale or other disposition made pursuant to the
Credit Agreement, (iii) to execute and deliver for value all necessary or
appropriate bills of sale, assignments and other instruments in connection with
any such sale or other disposition, Grantor thereby ratifying and confirming all
that such Attorney (or any substitute) shall lawfully do hereunder and pursuant
hereto, (iv) to sign any agreements, orders or other documents in connection
with or pursuant to any Basic Document, (v) to exercise all rights and
privileges of Grantor under the Second Tier Purchase Agreement, (vi) to pay or
discharge any taxes, Liens or other encumbrances levied or placed on or
threatened against Grantor or Grantor’s property, (vii) to defend any suit,
action or

 

D-1-1

--------------------------------------------------------------------------------

proceeding brought against Grantor if Grantor does not defend such suit, action
or proceeding or if Attorney believes that it is not pursuing such defense in a
manner that will maximize the recovery to Attorney, and settle, compromise or
adjust any suit, action or proceeding described above and, in connection
therewith, give such discharges or releases as Attorney may deem appropriate,
(viii) to file or prosecute any claim, litigation, suit or proceeding in any
court of competent jurisdiction or before any arbitrator, or take any other
action otherwise deemed appropriate by Attorney for the purpose of collecting
any and all such moneys due to Grantor whenever payable and to enforce any other
right in respect of Grantor’s property, (ix) to sell, transfer, pledge, make any
agreement with respect to or otherwise deal with, any of Grantor’s property, and
execute, in connection with such sale or action, any endorsements, assignments
or other instruments of conveyance or transfer in connection therewith and
(x) to cause the certified public accountants then engaged by Grantor to prepare
and deliver to Attorney at any time and from time to time, promptly upon
Attorney’s request, any reports required to be prepared by or on behalf of
Grantor under the Credit Agreement or any other Basic Document, all as though
Attorney were the absolute owner of its property for all purposes, and to do, at
Attorney’s option and Grantor’s expense, at any time or from time to time, all
acts and other things that Attorney reasonably deems necessary to perfect,
preserve, or realize upon its property or assets and the Liens of the
Administrative Agent, as agent for the Secured Parties thereon, all as fully and
effectively as it might do.

Grantor hereby ratifies, to the extent permitted by Applicable Law, all that the
Attorney shall lawfully do or cause to be done by virtue hereof.

IN WITNESS WHEREOF, this Power of Attorney is executed by Grantor as of the date
first above written.

 

REGIONAL MANAGEMENT RECEIVABLES, LLC By:  

 

 

Name:

Title:

Sworn to and subscribed before

me as of the date first above written

 

 

Notary Public

[NOTARY SEAL]

 

 

D-1-2

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EXHIBIT D-2

FORM OF POWER OF ATTORNEY

December 11, 2015

This Power of Attorney (this “Power of Attorney”) is executed and delivered by
Regional Management Corp. (“Grantor”) to Wells Fargo Securities, LLC, as
Administrative Agent (“Attorney”), pursuant to (i) the Credit Agreement, dated
as of December 11, 2015 (as amended, restated, supplemented or otherwise
modified from time to time, the “Credit Agreement”), among Regional Management
Receivables, LLC, as borrower (the “Borrower”), Grantor, as servicer, the
lenders from time to time parties thereto, Wells Fargo Securities, LLC, as
administrative agent, and Wells Fargo Bank, National Association, as account
bank, collateral custodian and backup servicer, and (ii) the other Basic
Documents. Capitalized terms used herein that are not otherwise defined shall
have the meanings ascribed thereto in the Credit Agreement.

No person to whom this Power of Attorney is presented, as authority for Attorney
to take any action or actions contemplated hereby, shall inquire into or seek
confirmation from Grantor as to the authority of Attorney to take any action
described below, or as to the existence of or fulfillment of any condition to
this Power of Attorney, which is intended to grant to Attorney unconditionally
the authority to take and perform the actions contemplated herein, and Grantor
irrevocably waives any right to commence any suit or action, in law or equity,
against any person or entity that acts in reliance upon or acknowledges the
authority granted under this Power of Attorney. The Power of Attorney granted
hereby is coupled with an interest and may not be revoked or canceled by Grantor
until all Aggregate Unpaids have been indefeasibly paid in full and Attorney has
provided its written consent thereto.

Grantor hereby irrevocably constitutes and appoints Attorney (and all officers,
employees or agents designated by Attorney), with full power of substitution, as
its true and lawful attorney-in-fact with full irrevocable power and authority
in its place and stead and in its name or in Attorney’s own name, from time to
time in Attorney’s discretion, to take any and all appropriate action and to
execute and deliver any and all documents and instruments that may be necessary
or desirable to accomplish the purposes of the Credit Agreement, and, without
limiting the generality of the foregoing, hereby grants to Attorney the power
and right, on its behalf, without notice to or assent by it, upon the occurrence
and during the continuance of any Servicer Termination Event, to execute any
agreements, orders, instructions or other documents in connection with the
Receivables, the Receivables Files, the Contracts or the Certificates of Title,
including giving instructions to the Collateral Custodian or subservicer with
respect to assembly and delivery of possession of the Receivables Files, the
Contracts or the Certificates of Title to or at the direction of the
Administrative Agent, all as though Attorney were the absolute owner of its
property for all purposes, and to do, at Attorney’s option and Grantor’s
expense, at any time or from time to time, all acts and other things that
Attorney reasonably deems necessary to perfect, preserve, or realize upon its
property or assets and the Liens of the Administrative Agent, as agent for the
Secured Parties thereon, all as fully and effectively as it might do.

 

D-2-1

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Grantor hereby ratifies, to the extent permitted by Applicable Law, all that the
Attorney shall lawfully do or cause to be done by virtue hereof.

IN WITNESS WHEREOF, this Power of Attorney is executed by Grantor as of the date
first above written.

 

REGIONAL MANAGEMENT CORP. By:  

 

 

Name:

Title:

Sworn to and subscribed before

me as of the date first above written

 

 

Notary Public

[NOTARY SEAL]

 

D-2-2

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EXHIBIT E

FORM OF MONTHLY REPORT

[On file with Administrative Agent]

[Note: After the Effective Date, the Monthly Report must include the Cumulative
Net Loss Ratio, the Delinquency Ratio and the Extension Ratio, in each case
calculated for (i) the Initial Receivables and (ii) the Effective Date
Receivables.]

 

E-1

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EXHIBIT F

FORM OF RECEIVABLE RECEIPT

            , 201    

Wells Fargo Securities, LLC

as Administrative Agent

550 South Tryon Street

Charlotte, North Carolina 28202

Attention: James B. Brinkley II

 

  Re: Regional Management Receivables, LLC Credit Agreement

Ladies and Gentlemen:

Reference is made to the Amended and Restated Credit Agreement, dated as of
November 21, 2017 (as amended, restated, supplemented or otherwise modified from
time to time, the “Credit Agreement”), among Regional Management Receivables,
LLC, as borrower (the “Borrower”), Regional Management Corp., as servicer, the
lenders from time to time parties thereto, Wells Fargo Securities, LLC, as
administrative agent, and Wells Fargo Bank, National Association, as account
bank, collateral custodian (in such capacity, the “Collateral Custodian”) and
backup servicer. Capitalized terms used herein that are not otherwise defined
shall have the meanings ascribed thereto in the Credit Agreement.

The undersigned, on behalf of the Collateral Custodian, hereby acknowledges,
subject to Section 9.08(g) of the Credit Agreement, (i) delivery of each item
listed in the definition of “Receivable File” with respect to the Receivables
set forth on Schedule 1 hereto and (ii) that each item listed in the definition
of “Receivable File” with respect to the Receivables set forth on Schedule 2
hereto has not been delivered to the Collateral Custodian.

 

WELLS FARGO BANK, NATIONAL ASSOCIATION, as Collateral Custodian By:  

 

 

Name:

Title:

 

F-1

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Schedule 1

to Receivable Receipt

 

F-2

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Schedule 2

to Receivable Receipt

 

F-3

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EXHIBIT G

FORM OF RELEASE OF DOCUMENTS

            , 201    

Wells Fargo Bank, National Association

ABS Custody Vault

1055 10th Avenue SE

MAC N9401-011

Minneapolis, MN 55414

Attention: Corporate Trust Services — Asset-Backed Securities Vault

Telephone: (612) 667-8058

Facsimile: (612) 667-1080

Email: abs.custody.vault@wellsfargo.com

Re: Regional Management Receivables, LLC Credit Agreement

Ladies and Gentlemen:

Reference is made to the Amended and Restated Credit Agreement, dated as of
November 21, 2017 (as amended, restated, supplemented or otherwise modified from
time to time, the “Credit Agreement”), among Regional Management Receivables,
LLC, as borrower (the “Borrower”), Regional Management Corp., as servicer, the
lenders from time to time parties thereto, Wells Fargo Securities, LLC, as
administrative agent, and Wells Fargo Bank, National Association, as account
bank, collateral custodian (in such capacity, the “Collateral Custodian”) and
backup servicer. Capitalized terms used herein that are not otherwise defined
shall have the meanings ascribed thereto in the Credit Agreement.

In connection with the administration of the Receivables and related Receivable
Files held by you as the Collateral Custodian, the undersigned, as Servicer of
the Receivables, requests the release of the [Receivable File/specify documents]
for the Receivable(s) described below, for the reason(s) indicated. The
undersigned shall return the Receivable Files to the Collateral Custodian when
the undersigned’s need therefore no longer exists, except where the Receivable
is paid in full or otherwise disposed of (as indicated below).

Loan Number:                                             

Borrower’s Name:                                             

 

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Reason for Requesting Documents (check one; all documents to be returned unless
otherwise specified)

 

           1    Receivable paid in full            2    Repurchase of Receivable
(explain)                                                 3    Servicing of Loan
           4    Liquidation            5    Other (explain)
                                                         

Address for delivery of Receivable Files:

                                                                 

                                                                 

                                                                 

                                                                 

Shipping carrier info.:

                                                                 

 

Very truly yours, REGIONAL MANAGEMENT CORP., as Servicer By:  

 

 

Name:

Title:

 

G-2