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EXHIBIT 10.22
PERFORMANCE GUARANTY
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THIS PERFORMANCE GUARANTY, dated as of July 10, 2008 (as
amended,
modified or supplemented from time to time in accordance with its
terms, this
"GUARANTY"), is issued by CONSUMER PORTFOLIO SERVICES INC., a
California
corporation (together with its successors and permitted assigns,
the
"GUARANTOR"), for the benefit the Note Purchaser (as defined
below), the
Administrative Agent (as defined below) and the Noteholder (as
defined below)
(the Noteholder, Note Purchaser, the Administrative Agent and their
successors
and permitted assigns, the "BENEFICIARIES").
PRELIMINARY STATEMENTS:
WHEREAS, the Note Purchaser has previously purchased the Class
A-1 Notes and the Class A-2 Notes from Folio Funding II, LLC, a
Delaware limited
liability company (the "ISSUER");
WHEREAS, as a condition precedent to the effectiveness of the
Amended and Restated Documents, and subject to certain conditions
contained
herein, the Guarantor will guarantee the performance of the Issuer
of its
obligations under the Amended and Restated Documents;
WHEREAS, the Issuer is a direct subsidiary of the Guarantor;
WHEREAS, the Guarantor will obtain substantial direct and
indirect benefit from the transactions to be effected under the
Amended and
Restated Documents, and is willing to provide this Guaranty on the
terms and
conditions set forth herein; and
WHEREAS, each of the Beneficiaries have entered into the
Amended and Restated Documents in reliance upon the benefits of
this Guaranty.
NOW, THEREFORE, in consideration of the premises and other
consideration, the receipt and sufficiency of which is hereby
acknowledged by
the Guarantor, the Guarantor hereby agrees as follows:
SECTION 1. Definitions. Capitalized terms used in this Guaranty and
not
otherwise defined herein have the meanings assigned to them in
ANNEX A to the
Note Purchase Agreement (as defined below). Whenever used in this
Guaranty, the
following words and phrases, unless the context otherwise requires,
shall have
the following meanings:
ADMINISTRATIVE AGENT: Citigroup Financial Products Inc.
AMENDED AND RESTATED DOCUMENTS: The Basic Documents other than
this Guaranty and the Warrants.
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LIEN: Any security interest, lien (statutory or other),
charge, pledge, equity, mortgage, hypothecation, assignment for
security or
encumbrance of any kind or nature whatsoever.
NOTEHOLDER: Citigroup Financial Products Inc., in its capacity
as holder of the Class A-1 Notes and the Class A-2 Notes.
NOTE PURCHASE AGREEMENT: Amended and Restated Note Purchase
Agreement, dated as of July 10, 2008 among the Issuer, the
Guarantor as Seller,
the Note Purchaser and the Administrative Agent.
NOTE PURCHASER:
Citigroup Financial Products Inc.
SECTION 2. GUARANTY. The Guarantor hereby irrevocably, absolutely
and
unconditionally guarantees, as primary obligor, and not merely as
surety or
guarantor of collection, to the Beneficiaries the full and timely
performance
of, and compliance with each and every duty, covenant, undertaking,
indemnity,
agreement and obligation of, the Issuer (the "GUARANTEED PARTY")
under each of
the Amended and Restated Documents (all of such duties, covenants,
undertakings,
indemnities, agreements and obligations being hereinafter
collectively called
the "GUARANTEED LIABILITIES") if, and only if, the Issuer or CPS
fails to
properly perform any duty, covenant, undertaking, agreement or
obligation with
respect to the Collateral contained in the Amended and Restated
Documents,
including, without limitation, duties, covenants, undertakings,
agreements or
obligations relating to the maintenance and preservation of the
Collateral and
the Beneficiaries' rights with respect to such Collateral and such
failure
continues for fifteen (15) Business Days, or such shorter
applicable cure period
as set forth in the Amended and Restated Documents; PROVIDED,
HOWEVER, that
Guarantor shall be entitled to assert any defense to performance as
if it were
the Guaranteed Party under the Amended and Restated Documents. For
clarification
purposes and the avoidance of doubt, the foregoing guaranty shall
not be a
guaranty of the Issuer's payment obligations if (a) the Collateral
securing the
Issuer Secured Obligations does not produce sufficient cash flow or
have
sufficient market value to satisfy the Issuer Secured Obligations
and (b) the
Guarantor and the Issuer have at all times properly performed each
and every
duty, covenant, undertaking, agreement and obligation with respect
to the
Collateral contained in the Amended and Restated Documents,
including, without
limitation, all duties, covenants, undertakings, agreements and
obligations
relating to the maintenance and preservation of the Collateral and
the
Beneficiaries' rights with respect to such Collateral. In addition
to, and
without limitation of the foregoing, each of the Guarantor, the
Guaranteed Party
and the Beneficiaries expressly agree that any breach or threatened
breach of
any Guaranteed Liability will cause irreparable harm to the
Beneficiaries and
the Beneficiaries shall be entitled, in addition to any other
rights or remedies
provided hereunder or otherwise by law or in equity, to injunctive
relief, any
application for which neither the Guarantor nor the Guaranteed
Party shall
oppose. The Guarantor further agrees to pay all reasonable costs
and expenses
(including reasonable attorneys' fees and legal expenses) paid or
incurred by
any Beneficiary in endeavoring to obtain the performance by the
Guaranteed Party
of the Guaranteed Liabilities, or any part thereof, and in
enforcing this
Guaranty.
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SECTION 3. CONTINUING GUARANTY; TERM OF AGREEMENT. This Guaranty
shall
in all respects be a continuing, absolute and unconditional
guaranty, and shall
terminate upon performance in full of (i) all of the Guaranteed
Liabilities and
(ii) any and all reasonable expenses paid or incurred by the
Beneficiaries in
endeavoring to collect the Guaranteed Liabilities and in enforcing
this
Guaranty. All of the agreements and obligations under this Guaranty
shall remain
in full force and effect until all such obligations shall have been
performed in
full and all reasonable expenses shall have been paid in full.
SECTION 4. RESCISSION. The Guarantor further agrees that, if at
any
time all or any part of any payment theretofore applied by any
Beneficiary to
any of the Guaranteed Liabilities is or must be rescinded or
returned by such
Beneficiary for any reason whatsoever, such Guaranteed Liabilities
shall, for
the purposes of this Guaranty, to the extent that such payment is
or must be
rescinded or returned, be deemed to have continued in existence,
notwithstanding
such application by such Beneficiary, and this Guaranty shall
continue to be
effective or be reinstated, as the case may be, as to such
Guaranteed
Liabilities, all as though such application by such Beneficiary had
not been
made.
SECTION 5. SUBROGATION. If the Guarantor shall perform any
obligation
due in respect of any of the Amended and Restated Documents
pursuant to this
Guaranty, the Guarantor shall, to the extent permitted under
applicable law, be
subrogated to the rights of the Beneficiaries in respect of which
such
performance was made. The Guarantor will not exercise any rights
which it may
acquire by way of subrogation under this Guaranty until the Amended
and Restated
Documents shall have been performed. If any amount shall be paid to
the
Guarantor on account of such subrogation rights at any time when
all of the
Guaranteed Liabilities shall not have been performed, such amount
shall be held
in trust for the benefit of each Beneficiary and shall forthwith be
paid to each
Beneficiary to be credited and applied against the satisfaction of
such
obligations in accordance with the terms of the Amended and
Restated Documents.
SECTION 6. WAIVER; WAIVER OF DEFENSES. The Guarantor hereby
expressly
waives: (i) notice of each Beneficiary's acceptance of this
Guaranty; (ii)
notice of the existence or creation or nonperformance of all or any
of the
Guaranteed Liabilities; (iii) presentment, demand, demand for
payment, notice of
dishonor, notice of default or nonperformance, protest, and all
other notices
whatsoever (provided that nothing contained in this clause (iii)
shall affect
any obligations to give notice or make demand as set forth in the
Amended and
Restated Documents); and (iv) all diligence in collection or
protection of or
realization upon the Guaranteed Liabilities or any thereof, any
obligation
hereunder, or any security for or guaranty of any of the foregoing.
To the
fullest extent permitted by applicable law, the Guarantor agrees
not to assert,
and hereby waives for the benefit of each Beneficiary, all rights
(whether by
counterclaim, setoff or otherwise) and defenses (including, without
limitation,
the defense of fraud or fraud in the inducement), whether acquired
by
subrogation, assignment or otherwise, to the extent that such
rights and
defenses may be available to the Guarantor to avoid performance of
its
obligations under this Guaranty in accordance with the express
provisions of
this Guaranty; PROVIDED that the Guarantor shall be entitled to
assert as a
defense to performance hereunder any defense to performance
available as if it
were the Guaranteed Party under the respective Amended and Restated
Document.
SECTION 7. UNCONDITIONAL NATURE OF GUARANTY. This Guaranty
shall
constitute a guaranty of performance and not of collection, and the
Guarantor
specifically agrees that it shall not be necessary, and that the
Guarantor shall
not be entitled to require, before or as a condition of enforcing
the liability
of the Guarantor under this Guaranty or requiring performance of
the Guaranteed
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Liabilities by the Guarantor hereunder, or at any time thereafter,
that any
Person: (i) file suit or proceed to obtain or assert a claim for
personal
judgment against the Guaranteed Party or any other Person that may
be liable for
any Guaranteed Liabilities; (ii) make any other effort to obtain
performance of
any Guaranteed Liabilities from the Guaranteed Party or any other
Person that
may be liable for such Guaranteed Liabilities; (iii) foreclose
against or seek
to realize upon any security now or hereafter existing for such
Guaranteed
Liabilities; (iv) exercise or assert any other right or remedy to
which such
Person is or may be entitled in connection with any Guaranteed
Liabilities or
any security or other guaranty therefor; or (v) assert or file any
claim against
the assets of the Guaranteed Party or any other Person liable for
any Guaranteed
Liabilities. Notwithstanding anything herein to the contrary, no
provision of
this Guaranty shall require the Guarantor to perform, observe or
discharge any
Guaranteed Liabilities prior to the time such Guaranteed
Liabilities are due.
Each Beneficiary may in all events pursue its rights under this
Guaranty prior
to or simultaneously with pursuing its various rights referred to
in the Amended
and Restated Documents, as such Beneficiary may determine. No
action of any
Beneficiary permitted hereunder shall in any way affect or impair
such
Beneficiary's rights or the Guarantor's obligations under this
Guaranty. The
obligations of the Guarantor shall be continuing and irrevocable,
absolute and
unconditional, primary, original and immediate and not contingent,
irrespective
of:
(i) any lack of validity,
