Exhibit 1.1
Underwriting Agreement
CPS AUTO RECEIVABLES TRUST 1997-3
$80,832,000 6.10% Class A-1 Asset Backed Notes
$61,668,000 6.38% Class A-2 Asset Backed Notes
$3,750,000 10.65% Class B Asset Backed Notes
UNDERWRITING AGREEMENT
August 15, 1997
PaineWebber Incorporated
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Black Diamond Securities, LLC
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
CPS Receivables Corp. (the "Company"), a California corporation and
wholly-owned subsidiary of Consumer Portfolio Services, Inc., a California
corporation ("CPS"), proposes to issue and sell to you in your capacities as the
Underwriters (the "Underwriters"), $80,832,000 aggregate principal amount of CPS
Auto Receivables Trust 1997-3 6.10% Asset Backed Notes, Class A-1 (the "Class
A-1 Notes") and $61,668,000 aggregate principal amount of 6.38% Asset Backed
Notes, Class A-2 (the "Class A-2 Notes" and; together with the Class A-1 Notes
the "Class A Notes") and $3,750,000 aggregate principal amount of 10.65% Asset
Backed Notes, Class B (the "Class B Notes" and, together with the Class A Notes,
the "Notes"). The Notes will be issued by CPS Auto Receivables Trust 1997-3 (the
"Trust") pursuant to the Indenture (the "Indenture") dated as of August 1, 1997
among CPS Auto Receivables Trust 1997-3 (the "Trust") and Norwest Bank
Minnesota, National Association, as trustee (the "Trustee"). The assets of the
Trust will include, among other things, a pool of retail installment sale
contracts consisting of the Initial Receivables and the Subsequent Receivables
and all rights and obligations thereunder (collectively, the "Receivables"),
with respect to Initial Receivables that are Rule of 78's Receivables, all
payments due thereon after July 31, 1997 (the "Cutoff Date") and, with respect
to Initial
Receivables that are Simple Interest Receivables, all payments received
thereunder after the Cutoff Date, with respect to Subsequent Receivables that
are Rule of 78's Receivables, all payments due thereon after the related
Subsequent Cutoff Date and, with respect to Subsequent Receivables that are
Simple Interest Receivables, all payments received thereunder after the related
Subsequent Cutoff Date, security interests in the new and used automobiles,
light trucks, vans and minivans securing the Receivables, certain bank accounts
and the proceeds thereof, the Policy (for the benefit of the Class A Noteholders
only) and the right of the Company to receive certain insurance proceeds and
certain other property, all as more specifically described in the Sale and
Servicing Agreement, dated as of August 1, 1997, among the Trust, CPS, as
servicer (in such capacity, the "Servicer") the Company, as Seller and Norwest
Bank Minnesota, National Association, as trustee.
On the Closing Date, the Seller will deposit into the Pre-Funding
Account $27,084,817 from the proceeds of the sale of the Notes and the
Certificates. It is intended that from time to time on or before October 15,
1997, the Trust will purchase Subsequent Receivables from the Seller having an
aggregate principal balance of up to $27,084,817 with funds on deposit in the
Pre-Funding Account.
The Class A-1 Notes will be issued in an aggregate principal amount of
$80,832,000 and will bear interest at an annual rate equal to 6.10% (the "Class
A-1 Interest Rate"). The Class A-2 Notes will be issued in an aggregate
principal amount of $61,668,000 and will bear interest at an annual rate equal
to 6.38% (the "Class A-2 Interest Rate"). The Class B Notes will be issued in an
aggregate principal amount of $3,750,000 and will bear interest at an annual
rate equal to 10.65% (the "Class B Interest Rate"). The aggregate principal
amount of the Notes will equal 118.98% of the aggregate principal balance of the
Initial Receivables as of the Cutoff Date. Calculations of interest for each
class of Notes will be in accordance with the provisions of the Sale and
Servicing Agreement.
The Certificates will be issued in an aggregate principal amount of
$3,750,000 which is equal to 2.5% of the sum of (i) aggregate principal balance
of the Receivables as of the Cutoff Date and (ii) the amount to be deposited in
the Pre-Funding Account on the Closing Date. The Certificates will bear interest
at an annual rate equal to 10.65% (the "Pass-Through Rate") in accordance with
the provisions of the Trust Agreement. The Certificates will not be underwritten
by the Underwriters pursuant to this Agreement.
To the extent not otherwise defined herein, capitalized terms used
herein shall have the meanings assigned to such terms in the Indenture or, if
not defined therein, in the Sale and Servicing Agreement.
As the Underwriters, each of you have advised the Company that (a) you
are authorized to enter into this Agreement and (b) each of you is willing,
acting severally and not jointly, to purchase the aggregate principal amount of
the Notes set forth opposite your respective names in Schedule I hereto.
-2-
In consideration of the mutual agreements contained herein and of the
interests of the parties in the transactions contemplated hereby, the parties
hereto agree as follows:
1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company, with respect to the Company, and CPS, with respect to CPS,
and Samco, with respect to Samco, and both the Company and CPS in all other
instances, each represents and warrants to, and agrees with each Underwriter, as
of the date hereof and as of the Issuance, that:
(a) CPS has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (File No. 333-25301),
---------- including a Base Prospectus, for registration of the offering and
sale of the Class A Notes under the Securities Act of 1933, as amended (the
"1933 Act"), and the rules and regulations (the "1933 Act Regulations") of the
Commissionthereunder which conforms with the requirements of the 1933 Act and
the 1933 Act Regulations. CPS has complied with the conditions for the use of a
Registration Statement on Form S-3. CPS may have filed with the Commission one
or more amendments to such Registration Statement, and may have used a
Preliminary Final Prospectus, each of which has been previously furnished to
each of the Underwriters. The offering of the Class A Notes is a Delayed
Offering and, although the Base Prospectus may not include all the information
with respect to the Class A Notes and the offering thereof required by the 1933
Act and the 1933 Act Regulations to be included in the Final Prospectus, the
Base Prospectus includes all such information required by the 1933 Act and the
1933 Act Regulations to be included therein as of the Effective Date. The
Company will hereafter file with the Commission pursuant to Rules 415 and
424(b), a final supplement to the Base Prospectus relating to the Class A Notes
and the offering thereof. As filed, such final supplement shall include all
required information with respect to the Class A Notes and, except to the extent
the Underwriters shall agree in writing to any modification thereof, shall be in
all substantive respects in the form furnished to each of the Underwriters prior
to the Execution Time or, to the extent not completed at the Execution Time,
shall be in such form with only such specific additional information and other
changes (beyond that contained in the Base Prospectus and any Preliminary Final
Prospectus) as the Company has advised each of the Underwriters, prior to the
Execution Time, will be included or made therein.
(b) On the Effective Date, the Registration Statement did or will, and
when the Final Prospectus is first filed (if required) in accordance with Rule
424(b) and on the Closing Date (as defined below), the Final Prospectus (as
supplemented and amended as of the Closing Date) will, comply in all material
respects with the applicable requirements of the 1933 Act, the 1933 Act
-3-
Regulations, the Securities Exchange Act of 1934, as amended (the "1934 Act"),
and the rules and regulations thereunder (the "1934 Act Regulations"); on the
Effective Date, the Registration Statement did not or will not contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary in order to make the statements therein not
misleading; and, on the Effective Date, the Final Prospectus, if not filed
pursuant to Rule 424(b), did not or will not, and on the date of any filing
pursuant to Rule 424(b) and on the Closing Date, the Final Prospectus (as
supplemented and amended in the case of the Closing Date) will not, include any
untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements therein not misleading; provided, however, that
each of CPS and the Company makes no representations or warranties as to the
information contained in or omitted from the Registration Statement or the Final
Prospectus (or any amendment or supplement thereto) in reliance upon and in
conformity with information specified in Section 9(b) furnished in writing to
the Company by or on behalf of any Underwriter specifically for inclusion in the
Registration Statement or the Final Prospectus (or any supplement or amendment
thereto) or the information regarding the Insurer set forth under the heading
"THE INSURER" in or incorporated by reference in the Preliminary Final
Prospectus and the Final Prospectus.
(c) The terms which follow, when used in this Agreement, shall have the
meanings indicated.
"Base Prospectus" shall mean the prospectus referred to in
Section 1(a) hereof contained in the Registration Statement at the
Effective Date.
"Delayed Offering" shall mean the offering of the Notes
pursuant to Rule 415 which does not commence promptly after the
effective date of the Registration Statement, with the result that only
information required pursuant to Rule 415 need be included in such
Registration Statement at the effective date thereof with respect to
the Notes.
"Effective Date" shall mean each date that the Registration
Statement and any post-effective amendment(s) thereto became or become
effective and each date after the date hereof on which a document
incorporated by reference in the Registration Statement is filed by the
Company.
"Execution Time" shall mean the date and time that this
Agreement is executed and delivered by the parties hereto.
"Final Prospectus" shall mean the prospectus supplement
relating to the Notes that is first filed pursuant to Rule 424(b) under
the 1933 Act after the Execution Time, together with the Base
Prospectus.
-4-
"Preliminary Final Prospectus" shall mean any preliminary
prospectus supplement to the Base Prospectus which describes the Notes
and the offering thereof and is used prior to filing of the Final
Prospectus.
"Prospectus" shall mean, collectively, the Base Prospectus,
any Preliminary Final Prospectus and the Final Prospectus.
"Registration Statement" shall mean (i) the Registration
Statement referred to in Section 1(a) hereof, including all documents
incorporated therein by reference, exhibits, financial statements and
notes thereto and related schedules and other statistical and financial
data and information included therein, as amended at the Execution Time
(or, if not effective at the Execution Time, in the form in which it
shall become effective); (ii) in the event any post-effective amendment
thereto becomes effective prior to the Closing Date, such Registration
Statement as so amended; and (iii) in the event any Rule 462(b)
Registration Statement becomes effective prior to the Closing Date,
such Registration Statement as so modified by the Rule 462(b)
Registration Statement, from and after the effectiveness thereof. Such
term shall include any Rule 430A Information deemed to be included
therein at the Effective Date as provided by Rule 430A.
"Rule 415", "Rule 424", "Rule 430A" and "Regulation S-K" refer
to such rules or regulation under the 1933 Act.
"Rule 430A Information" means information with respect to the
Notes and the offering thereof permitted to be omitted from the
Registration Statement when it becomes effective pursuant to Rule 430A.
"Rule 462(b) Registration Statement" means a Registration
Statement filed pursuant to Rule 462(b) under the 1933 Act relating to
the offering covered by the Registration Statement (File No.
333-25301).
Any reference herein to the Registration Statement, the Base
Prospectus, any Preliminary Final Prospectus or the Final Prospectus shall be
deemed to refer to and include the documents incorporated by reference therein
pursuant to Item 12 of Form S-3 which were filed under the 1934 Act on or before
the Effective Date of the Registration Statement or the issue date of the Base
Prospectus, any Preliminary Final Prospectus or the Final Prospectus, as the
case may be; and any reference herein to the terms "amend", "amendment" or
"supplement" with respect to the Registration Statement, the Base Prospectus,
any Preliminary Final Prospectus or the Final Prospectus shall be deemed to
refer to and include the filing of any document under the 1934 Act after the
Effective Date of the Registration Statement or the issue date of the Base
Prospectus, any Preliminary Final Prospectus or the Final Prospectus, as the
case may be, deemed to be incorporated therein by reference.
-5-
(d) The Seller, at its own expense in consultation with the
Underwriters, has prepared a private placement memorandum (together with any
exhibits attached thereto, the "Private Placement Memorandum") describing, among
other things, the Class B Notes, the Receivables, the Policy, the Trust and the
Trust Documents. Copies of the Private placement Memorandum and any amendments
or supplements thereto to date have been delivered to the Underwriters. From and
after the date of any amendment or supplement to the Private Placement
Memorandum, the term "Private Placement Memorandum" shall mean the Private
Placement Memorandum as so amended or supplemented. The Private Placement
Memorandum, as of its date, and any amendment thereof or supplement thereto, as
of their respective dates, and at all times up to and including the Closing
Date, does not and will not, as of such dates and at such times, contain any
untrue statement of a material fact or omit to state a material fact necessary
to make the statements therein, in light of the circumstances under which they
were made, not misleading; provided, however, that each of CPS and the Company
makes no representations or warranties as to (i) the information contained in or
omitted from the Private Placement Memorandum (or any amendment or supplement
thereto) in reliance upon and in conformity with information specified in
Section 9(b) furnished in writing to the Company by or on behalf of any
Underwriter specifically for inclusion in the Private Placement Memorandum (or
any supplement or amendment thereto) or (ii) the information regarding the
Insurer set forth under the heading "THE INSURER" in or incorporated by
reference in the Preliminary Final Prospectus and the Final Prospectus (which
information referred to in (ii) above the Underwriters acknowledge has not been
included in the Private Placement Memorandum).
(e) Each of the Company and CPS is a corporation duly organized,
validly existing and in good standing under the laws of the State of California
and is duly qualified to transact business as a foreign corporation in each
jurisdiction in which it is required to be so qualified and in which the failure
to so qualify, taken in the aggregate, would have a material adverse effect on
it.
(f) Samco Acceptance Corp. ("Samco") is a corporation duly organized,
validly existing and in good standing under the laws of Delaware and is duly
qualified to transact business as a foreign corporation in each jurisdiction in
which it is required to be so qualified and in which failure to so qualify,
taken in the aggregate, would have a material adverse affect on it.
(g) Since the respective dates as of which information is given in the
Registration Statement and the Final Prospectus or in the Private Placement
Memorandum, there has not been any material adverse change, or any development
which could reasonably be expected to result in a material adverse change, in or
affecting the financial position, shareholders' equity or results of operations
of the Company, CPS or Samco or the Company's or
-6-
CPS's or Samco's ability to perform its obligations under this Agreement, the
Indenture, the Trust Agreement or the Sale and Servicing Agreement or any of the
other Basic Documents (as defined below), other than as set forth or
incorporated by reference in the Registration Statement or as set forth in the
Final Prospectus or in the Private Placement Memorandum.
(h) Except for the registration of the Class A Notes under the 1933 Act
and such consents, approvals, authorizations, registrations or qualifications as
may be required under the 1934 Act and applicable State securities or Blue Sky
laws in connection with the purchase and distribution of the Notes by the
Underwriters or the filing requirements of Rule 430A or Rule 424(b) under the
1933 Act, no consent, approval, authorization or order of or declaration or
filing with any governmental authority is required for the issuance or sale of
the Notes or the consummation of the other transactions contemplated by this
Agreement or the Sale and Servicing Agreement or any of the other Basic
Documents, except such as have been duly made or obtained or as will be duly
made or obtained on or before the Closing Date.
(i) Assuming that (i) the Underwriters' representations and warranties
in Section 3 are true, (ii) the representations and agreements of each
Accredited --------- Investor in the form of the letter set forth in Exhibit B-1
to the Private Placement Memorandum are true and will be complied with, (iii)
the Class B Notes are offered and sold in the manner contemplated in this
Agreement and in the Private Placement Memorandum and (iv) each Purchaser of
Class B Notes is an Eligible Purchaser (as defined in Section 3(b)), the Class B
Notes are not required to be registered under Section 5 of the Securities Act in
connection with the offer, issuance, sale and delivery thereof as contemplated
by the Private Placement Memorandum and this Agreement.
(j) None of the Seller, CPS, or anyone authorized to act on their
behalf has offered, transferred, pledged, sold or otherwise disposed of any
Class B Note, any interest in any Class B Note, or any other security similar to
the Class B Notes of the Seller or CPS or of any entity organized or originated
by the Seller or CPS to, or solicited any offer to buy or accept a transfer,
pledge or other disposition of any Class B Note, any interest in any Class B
Note or any such other similar security from, or otherwise approached or
negotiated with respect to any Class B Note, any interest in any Class B Note or
any such other similar security with, any person in any manner, or made any
general solicitation by means of general advertising or in any other manner or
taken any other action, that would constitute a distribution of the Class B
Notes under the Securities Act of 1933, as amended (the "Securities Act"), or
that would render the offer or sale of any Class B Note by the Underwriters a
violation of the Securities Act or any state securities law, or require
registration or qualification pursuant thereto, or would require qualification
of
-7-
the Indenture under the Trust Indenture Act of 1939, as amended (the "Trust
Indenture Act"), or require registration under the Investment Company Act of
1940, as amended (the "Investment Company Act"), nor will the Seller or CPS act,
nor has the Seller or CPS authorized, nor will the Seller or CPS authorize, any
person to act, in such manner with respect to any Class B Note.
(k) The Commission has not issued an order preventing or suspending the
use of any Prospectus relating to the proposed offering of the Notes, nor
instituted proceedings for that purpose. The Registration Statement contains,
and the Final Prospectus together with any amendments or supplements thereto
will contain, all statements which are required to be stated therein by, and
will conform to, the requirements of the 1933 Act and the 1933 Act Regulations.
(l) The documents (other than the financial statements of the Insurer,
as to which no representation is made by CPS or the Company) which are
incorporated by reference in the Registration Statement, the Final Prospectus
and the Private Placement Memorandum or from which information is so
incorporated by reference, as of the dates they were filed with the Commission,
complied in all material respects with the requirements of the 1933 Act, the
1933 Act Regulations, the 1934 Act and the 1934 Act Regulations, as applicable,
and any documents so filed and incorporated by reference subsequent to the
Effective Date shall, when they are filed with the Commission, conform in all
material respects with the requirements of the 1934 Act and the 1934 Act
Regulations.
(m) Each of the Company, CPS and Samco confirms as of the date hereof
that it is in compliance with all provisions of Section 1 of Laws of Florida,
Chapter 92-198, An Act Relating to Disclosure of doing Business with Cuba, and
each of the Company, CPS and Samco further agrees that if it commences engaging
in business with the government of Cuba or with any person or affiliate located
in Cuba after the date the Registration Statement becomes or has become
effective with the Commission or with the Florida Department of Banking and
Finance (the "Department"), whichever date is later, or if the information
included in the Final Prospectus, if any, concerning either the Company's, CPS's
or Samco's business with Cuba or with any person or affiliate located in Cuba
changes in any material way, each of the Company, CPS and Samco, as the case may
be, will provide the Department notice of such business or change, as
appropriate, in a form acceptable to the Department.
(n) All representations and warranties of the Company and CPS and Samco
contained in each of the Basic Documents, including this Agreement, will be true
and correct in all material respects when delivered and as of the Closing
-8-
Date and are hereby incorporated by reference as if each such representation and
warranty were specifically made herein.
(o) Each of the Company and CPS and Samco has full power and authority
(corporate and other) to enter into and perform its obligations under this
Agreement, the Certificate Purchase Agreement, the Indenture, the Trust
Agreement, the Sale and Servicing Agreement, the CPS Purchase Agreement, the
Samco Purchase Agreement, the Insurance Agreement, the Indemnification
Agreement, the Spread Account Agreement, the Lock-Box Agreement and the
Servicing Assumption Agreement (collectively, the "Basic Documents"), and to
consummate the transactions contemplated hereby and thereby.
(p) On or before the Closing Date, the direction by the Company to the
Trustee to authenticate the Notes will have been duly authorized by the Company,
the Notes will have been duly executed and delivered by the Company and, when
authenticated by the Trustee in accordance with the Indenture and delivered and
paid for pursuant to this Agreement, will be duly issued and will entitle the
holder thereof to the benefits and security afforded by the Indenture, subject
as to the enforcement of remedies (x) to applicable bankruptcy, insolvency,
reorganization, moratorium, and other similar laws affecting creditors' rights
generally and (y) to general principles of equity (regardless of whether the
enforcement of such remedies is considered in a proceeding in equity or at law).
(q) This Agreement and each Basic Document to which the Company or CPS
or Samco is a party has been duly authorized, executed and delivered by each of
the Company and CPS and Samco, as applicable, and constitutes a valid and
binding agreement of each of the Company and CPS and Samco, as applicable,
enforceable against the Company and CPS and Samco in accordance with its terms,
subject as to the enforcement of remedies (x) to applicable bankruptcy,
insolvency, reorganization, moratorium, and other similar laws affecting
creditors' rights generally, (y) to general principles of equity (regardless of
whether the enforcement of such remedies is considered in a proceeding in equity
or at law) and (z) with respect to rights of indemnity under this Agreement, to
limitations of public policy under applicable securities laws.
(r) None of the Company, CPS or Samco is in breach or violation of its
Articles of Incorporation or Charter, as applicable, or By-Laws or in default in
the performance or observance of any credit or security agreement or other
agreement or instrument to which it is a party or by which it or its properties
may be bound, or in violation of any applicable law, statute, regulation, order
or ordinance of any governmental body having jurisdiction over it, which breach
or violation would have a material adverse effect on the ability of the
-9-
Company or CPS or Samco to perform its obligations under any of the Basic
Documents or the Notes.
(s) The issuance and delivery of the Notes, the consummation of any
other of the transactions contemplated herein or in the Indenture, the Trust
Agreement, the Sale and Servicing Agreement or in any of the other Basic
Documents or the fulfillment of the terms of this Agreement, the Indenture, the
Trust Agreement, or the Sale and Servicing Agreement or any of the other Basic
Documents, subject to the registration of the Class A Notes under the 1933 Act
and such consents, approvals, authorizations, registrations or qualifications as
may be required under the 1934 Act and applicable State securities or Blue Sky
laws in connection with the purchase and distribution of the Notes by the
Underwriters or the filing requirements of Rule 430A or Rule 424(b) under the
1933 Act, do not and will not conflict with or violate any term or provision of
the Articles of Incorporation or Charter, as applicable, or By-Laws of the
Company or CPS or Samco, any statute, order or regulation applicable to the
Company or CPS or Samco of any court, regulatory body, administrative agency or
governmental body having jurisdiction over the Company or CPS or Samco and do
not and will not conflict with, result in a breach or violation or the
acceleration of or constitute a default under or result in the creation or
imposition of any lien, charge or encumbrance upon any of the property or assets
of the Company or CPS or Samco (other than in favor of the Trustee, the Trustee
or as otherwise permitted under the Indenture or the Sale and Servicing
Agreement) pursuant to the terms of any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which the Company or CPS or Samco
is a party or by which the Company or CPS or Samco may be bound or to which any
of the property or assets of the Company or CPS or Samco may be subject except
for conflicts, violations, breaches, accelerations and defaults which would not,
individually or in the aggregate, be materially adverse to the Company or CPS or
Samco or materially adverse to the transactions contemplated by this Agreement
or the Basic Documents.
(t) Any taxes, fees and other governmental charges due on or prior to
the Closing Date (including, without limitation, sales taxes) in connection with
the execution, delivery and issuance of this Agreement, the Indenture, the Trust
Agreement, the Sale and Servicing Agreement, the other Basic Documents and the
Notes have been or will have been paid at or prior to the Closing Date.
(u) The Receivables are chattel paper as defined in the Uniform
Commercial Code as in effect in the State of California.
(v) Under generally accepted accounting principles, CPS will report its
transfer of the CPS Receivables to the Company pursuant to the CPS Purchase
-10-
Agreement as a sale of the CPS Receivables, Samco will report its transfer of
the Samco Receivables to the Company pursuant to the Samco Purchase Agreement as
a sale of the Samco Receivables and the Company will report its transfer of the
Receivables to the Trustee pursuant to the Sale and Servicing Agreement as a
sale of the Receivables. Each of CPS and the Company has been advised by KPMG
Peat Marwick, Certified Public Accountants, that the transfers pursuant to the
CPS Purchase Agreement and the Samco Purchase Agreement will be so classified
under generally accepted accounting principles in accordance with Statement No.
77 of the Financial Accounting Standards Board (December 1983) and with
Statement No. 125 of the Financial Accounting Standards Board (June 1996).
(w) Pursuant to the CPS Purchase Agreement and the Samco Purchase
Agreement, CPS and Samco are transferring to the Company ownership of the
Receivables, the security interests in the Financed Vehicles securing the
Receivables, certain other property related to the Receivables and the proceeds
of each of the foregoing (collectively, the "Trust Property"), and, immediately
prior to the transfer of any Receivables to the Trust, the Company will be the
sole owner of all right, title and interest in, and has good and marketable
title to, the Receivables and the other Trust Property. The assignment of the
Receivables and the other Trust Property, including all the proceeds thereof, to
the Trust pursuant to the Sale and Servicing Agreement, vests in the Trust all
interests which are purported to be conveyed thereby, free and clear of any
liens, security interests or encumbrances.
(x) Immediately prior to the transfer of any Receivables to the Trust,
the Company's interest in such Receivables and the proceeds thereof shall have
been perfected, UCC-1 financing statements (the "Financing Statements")
evidencing (i) the transfer of the applicable CPS Receivables to the Seller
shall have been filed in the Office of the Secretary of State of the State of
California, (ii) the transfer of the applicable Samco Receivables to the Seller
shall have been filed in the Office of the Secretary of State of the State of
Texas, (iii) the transfer of the applicable Receivables to the Trust shall have
been filed in the Office of the Secretary of State of the State of Delaware, and
(iv) the pledge of the applicable Receivables by the Trust to the Trustee and
there shall be no unreleased statements affecting the Receivables filed in any
such office other than the Financing Statements. If a court concludes that the
transfer of the Receivables from the Company to the Trust is a sale, then the
interest of the Trust in the Receivables, the other Trust Property and the
proceeds thereof, will be perfected by virtue of the Financing Statements having
been filed in the office of the Secretary of State of the State of California.
If a court concludes that such transfer is not a sale, the Sale and Servicing
Agreement and the transactions contemplated thereby constitute a grant by the
Company to the Trust of a valid security interest in the
-11-
Receivables, the other Trust Property and the proceeds thereof, which security
interest will be perfected by virtue of the Financing Statements having been
filed in the office of the Secretary of State of the State of California. No
filing or other action, other than the filing of the Financing Statements in the
offices of the Secretaries of State of the States of California, Delaware and
Texas referred to above and the execution and delivery of the Sale and Servicing
Agreement, is necessary to perfect the interest or the security interest of the
Trust in the Receivables and the proceeds thereof against third parties.
(y) The Indenture is not required to be qualified under the Trust
Indenture Act.
(z) None of the Company, CPS, Samco or the Trust is required to be
registered as an "investment company" under the Investment Company Act.
2. PURCHASE, SALE AND DELIVERY OF THE NOTES.
Subject to the terms and conditions and in reliance upon the
representations, warranties and covenants herein set forth, the Company agrees
to sell to each Underwriter, and each Underwriter agrees, severally and not
jointly, to purchase from the Company the initial principal amount of the Notes
set forth opposite such Underwriter's name in Schedule I hereto, at the purchase
price specified in Schedule I with respect to each Class of Notes.
The Company will deliver against payment of the purchase price (i) the
Class A Notes in the form of one or more permanent global Notes in definitive
form (the "Global Notes") deposited with the Trustee as custodian for The
Depository Trust Company ("DTC") and registered in the name of Cede & Co., as
nominee for DTC and (ii) the Class B Certificates in definitive form registered
in the name of such party as the Underwriters shall direct. Interests in any
Global Notes will be held only in book-entry form through DTC except in the
limited circumstances described in the Final Prospectus. Payment for the Notes
will be made by the Underwriters by wire transfer of same day funds to an
account previously designated to the Underwriters by the Company at the offices
of Xxxxx, Xxxxx & Xxxxx, 0000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, at 9:30 a.m.
(New York time) on August 19, 1997, or at such other time as is mutually agreed
(such time being herein referred to as the "Closing Date") against delivery of
the Global Notes and Class B Notes representing all of the Notes. The Notes will
be made available for inspection at the above office of Xxxxx, Xxxxx & Xxxxx at
least 24 hours prior to the Closing Date.
As used herein, "business day" means a day on which the New York Stock
Exchange is open for trading and on which banks in New York, California and
Minnesota are open for business and are not permitted by law or executive order
to be closed.
-12-
3. OFFERING BY THE UNDERWRITERS.
(a) The Company and CPS are advised by the Underwriters that they
propose to make a public offering of the Class A Notes, as set forth in the
Final Prospectus, from time to time as and when the Underwriters deem advisable
after the Registration Statement becomes effective. The Company agrees that the
Underwriters may, but are not obligated to, make a market in the Class A Notes
and that any such market making by an Underwriter may be discontinued at any
time in the sole discretion of such Underwriter.
(b) The Company and CPS are advised by the Underwriters that one or
both of the Underwriters will make offers of the Class B Notes on the terms set
forth in the Private Placement Memorandum, as amended or supplemented, solely to
(i) persons whom the Underwriters reasonably believe to be "qualified
institutional buyers" as defined in Rule 144A under the 1933 Act (each, a
"QIB"), and/or (ii) a limited number of other institutional "accredited
investors", as defined in Rule 501(a)(1), (2), (3) or (7) under the 1933 Act,
that make certain representations and agreements to the Underwriters and the
Seller (each, and "Accredited Investor" and, together with the QIBs, the
"Eligible Purchasers");
(c) Each Underwriter purchasing Class B Notes severally represents and
warrants to the Company and CPS that it is an "accredited investor" as defined
in Rule 501(a)(1) under the Securities Act and a Qualified Institutional Buyer
within the meaning of Rule 144A of the Securities Act.
(d) Each Underwriter purchasing Class B Notes severally acknowledges
that (i) the Class B Notes have not been and will not be registered under the
Securities Act or any state securities laws and may not be offered or sold
within the United States or to, or for the account or benefit of, U.S. persons
except pursuant to an exemption from the registration requirements of the
Securities Act and (ii) upon original issuance thereof, and until such time as
the same is no longer required under the applicable requirements of the 1933
Act, the Class B Notes (and all notes issued in exchange therefore or in
substitution thereof) shall bear the following legend:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT"). THE HOLDER HEREOF, BY
PURCHASING THIS SECURITY, AGREES THAT THIS SECURITY MAY BE RESOLD,
PLEDGED OR OTHERWISE TRANSFERRED ONLY (1) SO LONG AS THIS SECURITY IS
ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A PERSON WHOM THE
TRANSFEROR REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER
WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT,
-13-
PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE RESALE, PLEDGE OR
OTHER TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, AND SUBJECT TO
THE RECEIPT BY THE TRUSTEE AND THE SELLER OF A CERTIFICATION OF THE
TRANSFEREE, (2) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OR (3) IN RELIANCE ON ANOTHER EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND SUBJECT TO THE
RECEIPT BY THE TRUSTEE, OF A CERTIFICATION OF THE TRANSFEREE
(SATISFACTORY TO THE TRUSTEE) AND AN OPINION OF COUNSEL (SATISFACTORY
TO THE TRUSTEE AND THE SELLER) TO THE EFFECT THAT SUCH TRANSFER IS IN
COMPLIANCE WITH THE SECURITIES ACT, IN EACH CASE IN ACCORDANCE WITH ANY
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES AND IN
COMPLIANCE WITH THE TRANSFER REQUIREMENTS SET FORTH IN SECTION 2.4 OF
THE INDENTURE.
IN NO EVENT SHALL THIS SECURITY BE TRANSFERRED TO AN EMPLOYEE
BENEFIT PLAN, TRUST ANNUITY OR ACCOUNT SUBJECT TO ERISA OR A PLAN
DESCRIBED IN SECTION 4975(E)(1) OF THE CODE, (ANY SUCH PLAN, TRUST OR
ACCOUNT BEING REFERRED TO AS AN "EMPLOYEE PLAN"), A TRUSTEE OF ANY
EMPLOYEE PLAN, OR AN ENTITY, ACCOUNT OR OTHER POOLED INVESTMENT FUND
THE UNDERLYING ASSETS OF WHICH INCLUDE OR ARE DEEMED TO INCLUDE
EMPLOYEE PLAN ASSETS BY REASON OF AN EMPLOYEE PLAN'S INVESTMENT IN THE
ENTITY, ACCOUNT OR OTHER POOLED INVESTMENT FUND. INCLUDED WITHIN THE
DEFINITION OF "EMPLOYEE PLANS" ARE, WITHOUT LIMITATION, XXXXX (HR-10)
PLANS, IRA's (INDIVIDUAL RETIREMENT ACCOUNTS OR ANNUITIES) AND OTHER
EMPLOYEE BENEFIT PLANS, SUBJECT TO SECTION 406 OF ERISA OR SECTION 4975
OF THE CODE.
(e) Each Underwriter purchasing Class B Notes severally agrees that it
and each of its affiliates will not offer or sell the Class B Notes by means of
any form of general solicitation or general advertising, within the meaning of
Rule 502(c) under the Securities Act, including, but not limited to (i) any
advertisement, article, notice or other communication published in any
newspaper, magazine or similar media or broadcast over television or radio, or
(ii) any seminar or meeting whose attendees have been invited by any general
solicitation or general advertising.
(f) Each Underwriter purchasing Class B Notes acknowledges that none of
the Trust, the Seller or CPS, nor any person representing the Trust, the Seller
or CPS, has made any representation with respect to the Trust, the Seller, CPS
-14-
or the offering or sale of the Class B Notes, other than the information
contained in the Private Placement Memorandum, which has been delivered to it
and upon which it is relying in making its investment decision with respect to
the Class B Notes. Each Under writer purchasing Class B Notes affirms that it
has access to such financial and other information concerning the Trust, the
Seller, CPS and the Class B Notes as it has deemed necessary in connection with
its decision to purchase Class B Notes, including an opportunity to ask
questions of and request information from the Trust, the Seller and CPS.
4. COVENANTS OF THE COMPANY AND CPS.
The Company, and CPS (if so stated), covenants and agrees with the
several Underwriters that:
(a) The Company will use its best efforts to cause the Registration
Statement, if not effective at the Execution Time, and any amendment thereto, to
become effective as soon as reasonably practicable thereafter or, if the
procedure in Rule 430A is followed, prepare and timely file with the Commission
under Rule 424(b) a Final Prospectus containing information previously omitted
at the time of effectiveness of the Registration Statement in reliance upon Rule
430A. Prior to the termination of the offering of the Notes the Company will not
file any amendment of the Registration Statement or amendment or supplement
(including the Final Prospectus or any Preliminary Final Prospectus) to the Base
Prospectus or any Rule 462(b) Registration Statement unless the Company has
furnished to each of the Underwriters a copy for its review prior to filing and
will not file any such proposed amendment or supplement to which any of the
Underwriters reasonably objects and which is not in compliance with the 1933 Act
Regulations. The Company will promptly advise the Underwriters (i) when the
Registration Statement, if not effective at the Execution Time, and any
amendment thereto, shall have become effective; (ii) when the Final Prospectus,
and any supplement thereto, shall have been filed with the Commission pursuant
to Rule 424(b); (iii) when, prior to termination of the offering of the Notes,
any amendment to the Registration Statement shall have been filed or become
effective; (iv) of any request by the Commission for any amendment of the
Registration Statement or supplement to the Final Prospectus or for any other
additional information; (v) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or the institution of
any proceeding for that purpose; and (vi) of the receipt by the Company of any
notification with respect to the suspension of the qualification of the Notes
for sale in any jurisdiction or the initiation of any proceeding for such
purpose. The Company will use its best efforts to prevent the issuance of any
such stop
-15-
order or the suspension of any such qualification and, if issued or suspended,
to obtain as soon as possible the withdrawal thereof.
(b) Prior to the filing thereof with the Commission, the Company will
submit to each of the Underwriters, for its approval after reasonable notice
thereof, such approval not to be unreasonably withheld or delayed, a copy of any
post-effective amendment to the Registration Statement, any Rule 462(b)
Registration Statement proposed to be filed or a copy of any document proposed
to be filed under the 1934 Act before the termination of the offering of the
Notes by the Underwriters if such document would be deemed to be incorporated by
reference into the Registration Statement or Final Prospectus.
(c) The Company will deliver to, or upon the order of, the
Underwriters, from time to time, as many copies of any Preliminary Final
Prospectus as the Underwriters may reasonably request. The Company will deliver
to, or upon the order of, the Underwriters during the period when delivery of a
Final Prospectus is required under the 1933 Act, as many copies of the Final
Prospectus, or as thereafter amended or supplemented, as the Underwriters may
reasonably request. The Company will deliver to, or upon the order of, the
Underwriters as many copies of the Private Placement Memorandum as the
Underwriters shall reasonably request. The Company will deliver to the
Underwriters at or before the Closing Date, two signed copies of the
Registration Statement and all amendments thereto including all exhibits filed
therewith, and will deliver to the Underwriters such number of copies of the
Registration Statement (including such number of copies of the exhibits filed
therewith that may reasonably be requested), including documents filed under the
1934 Act and deemed to be incorporated by reference therein, and of all
amendments thereto, as the Underwriters may from time to time reasonably
request.
(d) The Company will, and will cause the Trust to, comply with the 1933
Act, the 1933 Act Regulations, the 1934 Act and the 1934 Act Regulations, so as
to permit the completion of the distribution of the Class A Notes as
contemplated in this Agreement and the Final Prospectus. If during the period in
which a prospectus is required by law to be delivered by an Underwriter or
dealer in connection with the sale of any Class A Notes, any event shall occur
as a result of which, in the judgment of the Company or in the reasonable
opinion of the Underwriters, it becomes necessary to amend or supplement the
Final Prospectus in order to make the statements therein, in the light of the
circumstances existing at the time the Final Prospectus is delivered to a
purchaser, not misleading, or, if it is necessary at any time to amend or
supplement the Final Prospectus to comply with any law or to file under the 1934
Act any document which would be deemed to be incorporated by reference in the
Registration Statement to comply with the 1933 Act or the
-16-
1934 Act, the Company will promptly notify each of the Underwriters and will
promptly either (i) prepare and file, or cause to be prepared and filed, with
the Commission an appropriate amendment to the Registration Statement or
supplement to the Final Prospectus or (ii) prepare and file, or cause to be
prepared and filed, with the Commission (at the expense of the Company) an
appropriate filing under the 1934 Act which shall be incorporated by reference
in the Final Prospectus so that the Final Prospectus as so amended or
supplemented will not, in the light of the circumstances when it is so
delivered, be misleading, or so that the Final Prospectus will comply with
applicable law.
(e) Until such time as all of the Class B Notes have been sold and
issued, if any event shall occur as a result of which it is necessary, in the
opinion of the Underwriters, to amend or supplement the Private Placement
Memorandum in order to correct any untrue statement of a material fact or to
state a material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading, the
Seller shall forthwith prepare and furnish, without charge, to the Underwriters
a reasonable number of copies of an amendment of, or supplement to, the Private
Placement Memorandum (in form and substance satisfactory to the Underwriters),
so that, as so amended or supplemented, the Private Placement Memorandum will
not contain an untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. Until such time as all
of the Class B Notes have been sold and issued, the Seller will not at any time
amend or supplement the Private Placement Memorandum (i) prior to having
furnished the Underwriters with a copy of the proposed form of the amendment or
supplement and giving the Underwriters and its counsel a reasonable opportunity
to review the same or (ii) in a manner to which the Underwriters or their
counsel shall reasonably object. The Seller or CPS shall give prompt written
notice to the Underwriters of any event occurring on or prior to the Closing
Date, requiring an amendment of, or a supplement to, the Private Placement
Memorandum under this paragraph.
(f) The Company will cooperate with the Underwriters in endeavoring to
qualify the Notes for sale under the laws of such jurisdictions as the
Underwriters may designate and will maintain such qualifications in effect so
long as required for the distribution of the Notes, except that the Company will
not be obligated to qualify the Notes in any jurisdiction in which such
qualification would require the Company to qualify to do business as a foreign
corporation, file a general or unlimited consent to service of process or
subject itself to taxation in any such jurisdiction to which it is not subject
and will arrange for the determination of the legality of the Notes for purchase
by institutional investors. The Company will, from time to time, prepare and
file
-17-
such statements, reports, and other documents as are or may be required to
continue such qualifications in effect for so long a period as the Underwriters
may reasonably request for distribution of the Notes.
(g) The Company shall not invest, or otherwise use the proceeds
received by the Company from its sale of the Notes in such a manner as would
require the Company, CPS or the Trust to register as an investment company under
the 1940 Act.
(h) Until the retirement of the Notes, or until such time as the
Underwriters shall cease to maintain a secondary market in the Notes, whichever
occurs first, the Company will deliver to each Underwriter the annual statements
of compliance and the annual independent certified public accountant's reports
furnished to the Trustee pursuant to the Sale and Servicing Agreement, as soon
as such statements and reports are furnished to the Trustee.
(i) The Company, CPS and Samco shall, from the date hereof through and
including the Closing Date, furnish, or cause to be furnished, or make
available, or cause to be made available, to each Underwriter or its counsel
such additional documents and information regarding each of them and their
respective affairs as each Underwriter may from time to time reasonably request
and which the Company, CPS or Samco possesses or can acquire without
unreasonable effort or expense, including any and all documentation requested in
connection with such Underwriter's due diligence efforts regarding information
in the Registration Statement and the Final Prospectus and in order to evidence
the accuracy or completeness of any of the conditions contained in this
Agreement; and all actions taken by the Company or CPS to authorize the sale of
the Notes shall be reasonably satisfactory in form and substance to each
Underwriter.
(j) The Company will cause the Trust to make generally available to
Class A Noteholders as soon as practicable, but no later than sixteen months
after the Effective Date, an earnings statement of the Trust covering a period
of at least twelve consecutive months beginning after such Effective Date and
satisfying the provisions of Section 11(a) of the Act (including Rule 158
promulgated thereunder).
(k) So long as any of the Notes are outstanding, the Company will
furnish to the Underwriters copies of all reports or other communications
(financial or otherwise) furnished or made available to Noteholders, and deliver
to the Underwriters during such period, (i) as soon as they are available,
copies of any reports and financial statements filed by or on behalf of the
Trust or the Company with the Commission pursuant to the Securities Exchange Act
of
-18-
1934, as amended, and (ii) such additional information concerning the business
and financial condition of the Company and CPS as the Underwriter may from time
to time reasonably request.
(l) The Company shall cause its affiliates and any person acting on its
behalf not to, directly or indirectly, make offers or sales of any security
(including, but not limited to the Notes and the Certificates), solicit offers
to buy or but any security (including, but not limited to the Notes and the
Certificates), under circumstances that would require the registration of the
Class B Notes under the 1933 Act, or to do or cause to be done any other action
that would require such registration.
(m) For so long as any of the Class B Notes are outstanding and are
"restricted securities" within the meaning of Rule 144(a)(3) under the
Securities Act, (1) the Seller and CPS will provide or cause to be provided to
any holder of Class B Notes and any prospective Underwriter of Class B Notes
designated by a holder of such Class B Notes, upon the reasonable request of
such holder or prospective Underwriter, the information required to be provided
to such holder or prospective Underwriter by Rule 144A(d)(4) under the
Securities Act; and (2) the Seller and CPS shall take such actions as are
necessary, in the opinion of counsel, to ensure that the safe harbor exemption
from the registration requirements of the Securities Act under Rule 144A is and
will be available for resales of the Class B Notes conducted in accordance with
Rule 144A.
(n) On or before the Closing Date, the Company and CPS and Samco shall
cause the respective computer records of the Company and CPS and Samco relating
to the Receivables to be marked to show the Trustee's absolute ownership of the
Receivables, and from and after the Closing Date neither the Company nor CPS nor
Samco shall take any action inconsistent with the Trust's ownership of such
Receivables, other than as expressly permitted by the Sale and Servicing
Agreement or any other Basic Document.
(o) To the extent, if any, that the ratings provided with respect to
the Notes by either of the Rating Agencies is conditional upon the furnishing of
documents or the taking of any other actions by the Company, CPS or Samco, CPS
shall, or shall cause the Company or Samco to, furnish such documents and take
any such other actions.
(p) On the Closing Date, the Company and CPS shall cause the Insurer to
issue the Policy to the Trustee for the benefit of the holders of the Class A
Notes in form and substance satisfactory to each Underwriter.
-19-
5. [RESERVED]
6. COSTS AND EXPENSES.
The Company and CPS will pay upon receipt of a written request therefor
all costs, expenses and fees incident to the performance of the obligations of
the Company and CPS under this Agreement and will, jointly and severally,
reimburse the Underwriters for all reasonable out-of-pocket expenses, including
reasonable fees and disbursements of counsel, reasonably incurred in connection
with investigating, marketing and proposing to market the Notes or in
contemplation of performing the Underwriters' obligations hereunder and
including, without limiting the generality of the foregoing, the following: (i)
accounting fees of the Company; (ii) the fees and disbursements of Xxxxx, Xxxxx
& Xxxxx; (iii) the cost of printing and delivering to, or as requested by, the
Underwriters copies of the Registration Statement, Preliminary Final
Prospectuses, the Final Prospectus, the Private Placement Memorandum, this
Agreement, the listing application in respect of the Class A Notes, the Blue Sky
Survey, if any, and any supplements or amendments thereto; (iv) the filing fees
of the Commission; (v) any fees charged by the Rating Agencies for rating the
Notes; and (vi) the fees and expenses of the Trustee and the Owner Trustee,
including the fees and disbursements of counsel for the Trustee and counsel for
the Owner Trustee, in connection with the Notes, the Sale and Servicing
Agreement and the other Basic Documents to which the Trustee or the Owner
Trustee, as applicable, is a party and the expenses, including the fees and
disbursements of counsel for the Underwriters, incurred in connection with the
qualification of the Notes under State securities or Blue Sky laws. If this
Agreement shall not be consummated because the conditions in Section 7 hereof
are not satisfied, or because this Agreement is terminated by each of the
Underwriters pursuant to Section 12 hereof (other than on the basis of a default
by the Underwriters pursuant to Section 10 hereof), or by reason of any failure,
refusal or inability on the part of the Company or CPS to perform any
undertaking or satisfy any condition of this Agreement or to comply with any of
the terms hereof on its part to be performed, unless such failure to satisfy
said condition or to comply with said terms be due to the default or omission of
any Underwriter, then the Company and CPS, jointly and severally, shall
reimburse the Underwriters for reasonable out-of-pocket expenses, including
reasonable fees and disbursements of counsel, reasonably incurred in connection
with investigating, marketing and proposing to market the Notes or in
contemplation of performing their obligations hereunder upon receipt of a
written request therefor; but the Company shall not in any event be liable to
any of the Underwriters for damages on account of loss of anticipated profits
from the sale by them of the Notes. Except to the extent expressly set forth in
this Section 6, the Underwriters shall each be responsible for their own costs
and expenses, including the fees and expenses of their counsel.
7. CONDITIONS OF OBLIGATIONS OF THE UNDERWRITERS.
The several obligations of the Underwriters to purchase and pay for the
Notes on the Closing Date are subject to the accuracy in all material respects
as of the Closing Date of the representations and warranties of the Company, CPS
and Samco contained herein, to the
-20-
performance by the Company, CPS and Samco of their respective covenants and
obligations hereunder and to the following additional conditions precedent:
(a) If the Registration Statement has not become effective prior to the
Execution Time, unless the Underwriters agree in writing to a later time, the
Registration Statement will become effective not later than (i) 5:30 p.m. New
York City time on the date of determination of the public offering price of the
Notes, if such determination occurred at or prior to 3:00 p.m. New York City
time on such date or (ii) 12:00 noon New York City time on the business day
following the day on which the public offering price of the Notes was
determined, if such determination occurred after 3:00 p.m. New York City time on
such date; if filing of the Final Prospectus, or any supplement thereto, is
required pursuant to Rule 424(b), the Final Prospectus, and any such supplement,
shall have been filed within the applicable time period prescribed for such
filing by Rule 424(b), and any request of the Commission for additional
information (to be included in the Registration Statement or otherwise) shall
have been disclosed to the Underwriters and complied with to their reasonable
satisfaction. No stop order suspending the effectiveness of the Registration
Statement, as amended from time to time, shall have been issued and no
proceedings for that purpose shall have been taken or, to the knowledge of the
Company, shall be contemplated by the Commission and no injunction, restraining
order, or order of any nature by a Federal or state court of competent
jurisdiction shall have been issued as of the Closing Date which would prevent
the issuance of the Notes.
(b) On or prior to the date of this Agreement and on or prior to the
Closing Date, each Underwriter shall have received a letter or letters, dated as
of August 15, 1997, and as of the Closing Date, respectively, of KPMG Peat
Marwick LLP, Certified Public Accountants, substantially in the form of the
drafts to which each of the Underwriters has previously agreed and otherwise in
form and substance satisfactory to each Underwriter and its counsel.
(c) Subsequent to the execution and delivery of this Agreement, there
shall not have occurred (i) any change, or any development involving a
prospective change, in or affecting particularly the business or properties of
the Company, CPS or any Affiliate of the Company or CPS which, in the judgment
of each Underwriter, materially impairs the investment quality of the Notes or
the ability of CPS to act as Servicer or (ii) any downgrading in the rating of
any debt securities or preferred stock of the Company, CPS or any Affiliate
thereof by any "nationally recognized statistical rating organization" (as
defined for purposes of Rule 436(g) under the Securities Act), or any public
announcement that any such organization has under surveillance or review its
rating of any debt securities or preferred stock of the Company, CPS or any
Affiliate thereof (other than an announcement with positive implications of a
-21-
possible upgrading, and no implication of a possible downgrading of such
rating); (iii) any suspension or limitation of trading in securities generally
on the New York Stock Exchange, or any setting of minimum prices for trading on
such exchange, or any suspension of trading of any securities of the Company or
CPS or any Affiliate of the Company or CPS on any exchange or in the
over-the-counter market; (iv) any banking moratorium declared by Federal, New
York or California authorities; or (v) any outbreak or escalation of major
hostilities in which the United States is involved, any declaration of war by
Congress or any other substantial national or international calamity, emergency
or change in financial markets if, in the judgment of each Underwriter, the
effect of any such outbreak, escalation, declaration, calamity, emergency or
change makes it impractical or inadvisable to market the Notes on the terms and
in the manner set forth in the Final Prospectus.
(d) The Company, CPS and Samco shall have furnished each Underwriter
with such number of conformed copies of such opinions, certificates, letters and
documents as it may reasonably request.
(e) On the Closing Date, each of the Basic Documents, the Notes and the
Certificates shall have been duly authorized, executed and delivered by the
parties thereto, shall be in full force and effect and no default shall exist
thereunder, and the Trustee shall have received a fully executed copy thereof
or, with respect to the Notes, a conformed copy thereof. The Basic Documents,
the Notes and the Certificates shall be substantially in the forms heretofore
provided to each Underwriter.
(f) Each Underwriter shall have received evidence satisfactory to such
Underwriter that the Notes have been rated "Aaa" by Xxxxx'x and "AAA" by
Standard & Poor's.
(g) Each Underwriter shall have received from Xxxxx, Xxxxx & Xxxxx,
special counsel for CPS, Samco and the Company, opinions dated the Closing Date,
addressed to such Underwriter, in a form satisfactory to such Underwriter.
(h) Each Underwriter shall have received from Xxxxx, Xxxxx & Xxxxx,
special Federal tax counsel for the Company, an opinion dated the Closing Date,
addressed to such Underwriter, with respect to the status of the Trust for
federal income tax purposes.
(i) Each Underwriter shall have received from Xxxxx, Xxxxx & Xxxxx, an
opinion dated the Closing Date, addressed to such Underwriter, with respect to
the validity of the Notes and such other related matters as such Underwriter
shall require and the Company or CPS shall have furnished or caused to be
-22-
furnished to such counsel such documents as they may reasonably request for the
purpose of enabling them to pass upon such matters.
(j) Each Underwriter shall have received from counsel to the Trustee,
the Standby Servicer and the Collateral Agent (which counsel shall be reasonably
acceptable to such Underwriter), an opinion addressed to such Underwriter dated
the Closing Date, in form and substance satisfactory to such Underwriter and its
counsel.
(k) Each Underwriter shall have received from counsel to the Owner
Trustee, which counsel shall be reasonably acceptable to such Underwriter, an
opinion addressed to such Underwriter, dated the Closing Date, in form and
substance satisfactory to such Underwriter and its counsel.
(l) Each Underwriter shall have received from special Delaware counsel
to the Trust, which counsel shall be reasonably acceptable to such Underwriter,
an opinion addressed to such Underwriter, dated the Closing Date, in form and
substance satisfactory to such Underwriter and its counsel.
(m) Each Underwriter shall have received from counsel to the Insurer,
which counsel shall be reasonably acceptable to such Underwriter, an opinion
addressed to such Underwriter, dated the Closing Date, in form and substance
satisfactory to such Underwriter and its counsel.
(n) At the Closing Date, each Underwriter shall have received any and
all opinions of counsel to the Company and CPS supplied to the Rating Agencies
and the Insurer relating to, among other things, the interest of the Trustee in
the Receivables and the other Trust Property and the proceeds thereof and
certain monies due or to become due with respect thereto, certain bankruptcy
issues and certain matters with respect to the Notes. Any such opinions shall be
addressed to each Underwriter or shall indicate that such Underwriter may rely
on such opinions as though they were addressed to such Underwriter, and shall be
dated the Closing Date.
(o) At the Closing Date, the Company, CPS and Samco shall have
furnished to each Underwriter a certificate, dated the Closing Date, of the
President, the Chief Financial Officer or any Vice President of the Company, CPS
or Samco, as the case may be, in which each such officer shall state that: (i)
the representations and warranties of the Company, CPS or Samco, as applicable,
in this Agreement are true and correct on and as of the Closing Date; (ii) the
Company, CPS or Samco, as applicable, has complied with all agreements and
satisfied all conditions on its part required to be performed or satisfied
hereunder and under each of the other Basic Documents at or prior to the Closing
Date; (iii) the representations and warranties of the Company, CPS
-23-
or Samco, as applicable, in each of the Basic Documents are true and correct as
of the dates specified therein; (iv) with respect to the certificate delivered
by CPS, the Registration Statement has become effective under the 1933 Act and
no stop order suspending the effectiveness of the Registration Statement has
been issued, and no proceedings for such purpose have been taken or are, to his
or her knowledge, contemplated by the Commission; (v) with respect to the
certificates delivered by CPS and the Company, he or she has carefully examined
the Registration Statement, the Final Prospectus and the Private Placement
Memorandum and, in his or her opinion, as of the Effective Date of the
Registration Statement, the statements contained in the Registration Statement
and the statements contained in the Private Placement Memorandum were true and
correct, and as of the Closing Date the Registration Statement, the Final
Prospectus and the Private Placement Memorandum do not contain any untrue
statement of a material fact or omit to state a material fact with respect to
the Company, CPS or Samco necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading, and since
the Effective Date of the Registration Statement, no event has occurred with
respect to the Company, CPS or Samco which should have been set forth in a
supplement to or an amendment of the Final Prospectus or the Private Placement
Memorandum which has not been so set forth in such supplement or amendment; and
(vi) with respect to the certificate delivered by the Company and CPS,
subsequent to the respective dates as of which information is given in the
Registration Statement, the Final Prospectus and the Private Placement
Memorandum, there has been no material adverse change, or any development with
respect to the Company, CPS or Samco which could reasonably be expected to
result in a material adverse change, in or affecting particularly the business
or properties of the Trust, the Company, CPS or Samco except as contemplated by
the Final Prospectus and the Private Placement Memorandum or as described in
such certificate.
(p) Each Underwriter shall have received evidence satisfactory to such
Underwriter that the Insurer shall have issued the Policy to the Trustee for the
benefit of the Class A Noteholders in form and substance satisfactory to such
Underwriter.
(q) Each Underwriter shall have received evidence satisfactory to it
that, on or before the Closing Date, the Financing Statements have been filed in
(i) the office of the Secretary of State of California reflecting the assignment
of the interest of CPS in the CPS Receivables included in the Initial
Receivables and the related other Trust Property and the proceeds thereof to the
Company, (ii) the office of the Secretary of State of Texas reflecting the
assignment of the interest of Samco in the Samco Receivables included in the
Initial Receivables and the related other Trust Property and the proceeds
thereof to the Company, (iii) the office of the Secretary of State of California
reflecting
-24-
the transfer of the interest of the Company in the Initial Receivables and the
related other Trust Property and the proceeds thereof to the Trust and (iv) the
office of the Secretary of State of Delaware reflecting the transfer of the
interest of the Trust in the Initial Receivables and the related other Trust
Property and the proceeds thereof to the Trustee.
(r) All proceedings in connection with the transactions contemplated by
this Agreement, the Sale and Servicing Agreement and each of the other Basic
Documents and all documents incident hereto or thereto shall be satisfactory in
form and substance to each Underwriter.
(s) The Company shall have furnished to the Underwriters such further
certificates and documents confirming the representations and warranties,
covenants and conditions contained herein and related matters as the
Underwriters may reasonably have requested.
The opinions and certificates mentioned in this Agreement shall be
deemed to be in compliance with the provisions hereof only if they are in all
material respects reasonably satisfactory to the Underwriters and to Xxxxx,
Xxxxx & Xxxxx, counsel for the Underwriters.
If any of the conditions hereinabove provided for in this Section 7
shall not have been fulfilled when and as required by this Agreement to be
fulfilled, the obligations of the Underwriters hereunder may be terminated by
the Underwriters by notifying the Company of such termination in writing or by
telegram at or prior to the Closing Date. In such event, the Company and the
Underwriters shall not be under any obligation to each other (except to the
extent provided in Sections 6 and 9 hereof).
8. CONDITIONS OF THE OBLIGATIONS OF THE COMPANY.
The obligations of the Company to sell and deliver the portion of the
Notes required to be delivered as and when specified in this Agreement are
subject to the condition that, at the Closing Date, no stop order suspending the
effectiveness of the Registration Statement shall have been issued and in effect
or proceedings therefor initiated or threatened.
9. INDEMNIFICATION.
(a) The Company and CPS, jointly and severally, agree to indemnify and
hold harmless each Underwriter, its directors, officers, employees and agents
and each person, if any, who controls any Underwriter within the meaning of the
1933 Act or the 1934 Act, against any losses, claims, damages or liabilities to
which such Underwriter or any such other person may become subject under the
1933 Act or otherwise, insofar as such losses, claims, damages or liabilities
(or actions or proceedings in respect thereof) arise out of or are based upon
(i) any untrue statement or alleged untrue statement of any material
-25-
fact contained in the Registration Statement, the Base Prospectus, any
Preliminary Final Prospectus, the Final Prospectus, the Private Placement
Memorandum, or any amendment or supplement thereto (other than information
contained therein under the heading "the Insurer" and information incorporated
by reference therein), or (ii) the omission or alleged omission to state therein
a material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances under which
they were made; and will reimburse each Underwriter and each such person within
30 days of presentation of a written request therefor for any legal or other
expenses reasonably incurred by such Underwriter in connection with
investigating or defending any such loss, claim, damage or liability, action or
proceeding or in responding to a subpoena or governmental inquiry related to the
offering of the Notes, whether or not such Underwriter or such person is a party
to any action or proceeding; provided, however, that neither the Company nor CPS
will be liable in any such case to the extent that any such loss, claim, damage
or liability arises out of or is based upon an untrue statement or alleged
untrue statement, or omission or alleged omission made in the Registration
Statement, the Base Prospectus, any Preliminary Final Prospectus, the Final
Prospectus, the Private Placement Memorandum, or any amendment or supplement
thereto, in reliance upon and in conformity with written information furnished
to the Company or CPS, as the case may be, by, through or on behalf of the
Underwriters specifically for use in the preparation thereof; provided, further,
that neither the Company nor CPS will be liable in any such case to the extent
that any such loss, claim, damage or liability arises out of or is based upon an
untrue statement or alleged untrue statement, or omission or alleged omission
made in the Computational Materials (as defined below), except to the extent
expressly provided in (b) below. This indemnity agreement will be in addition to
any liability which the Company or CPS may otherwise have. The indemnity
agreement of the Company and CPS in this Agreement is subject to the condition
that, insofar as it relates to any untrue statement, alleged untrue statement,
omission or alleged omission made in the Registration Statement, the Base
Prospectus, any Preliminary Final Prospectus or in the Final Prospectus, the
Private Placement Memorandum, or any amendment or supplement thereto, such
indemnity agreement shall not inure to the benefit of any Underwriter if such
Underwriter failed to send or give a copy of the Final Prospectus or the Private
Placement Memorandum, as applicable (as amended or supplemented, if the Company
or CPS, as the case may be, shall have furnished any amendment or supplement
thereto to such Underwriter, which corrected such untrue statement or omission
that is the basis of the loss, liability, claim, damage or expense for which
indemnification is sought) to the person asserting any such loss, liability,
claim, damage or expense at such time as the Final Prospectus or Private
Placement Memorandum, as applicable, as so amended or supplemented, was required
under the 1933 Act to be delivered to such person.
-26-
(a) Each Underwriter, severally and not jointly, will indemnify and
hold harmless each of the Company and CPS, each of their directors, officers,
employees and agents and each person, if any, who controls the Company within
the meaning of the 1933 Act or the 1934 Act, to the same extent as the foregoing
indemnity from each of the Company and CPS to any Underwriter, its directors,
officers, employees and agents and each person who controls any such
Underwriter, but only with respect to untrue statements or omissions or alleged
untrue statements or omissions made in the Registration Statement, the Base
Prospectus, any Preliminary Final Prospectus, the Final Prospectus, the Private
Placement Memorandum, or any amendment or supplement thereto, in reliance upon
and in conformity with written information furnished to the Company or CPS, as
the case may be, by, through or on behalf of such Underwriter specifically for
use in the preparation of the Registration Statement, the Base Prospectus, any
Preliminary Final Prospectus, the Final Prospectus, the Private Placement
Memorandum, or any amendment or supplement thereto. This indemnity agreement
will be in addition to any liability which such Underwriter may otherwise have.
The Company and the Underwriters acknowledge and agree that the only information
furnished or to be furnished by any Underwriter to the Company for inclusion in
the Registration Statement, the Base Prospectus, any Preliminary Final
Prospectus or the Final Prospectus, or any amendments or supplements thereto,
consists of the information set forth in the last paragraph on the front cover
page concerning the terms of the offering by the Underwriters (insofar as such
information relates to the Underwriters), legends required by Item 502(d) of
Regulation S-K under the 1933 Act and the information under the caption "Methods
of Distribution" in the Final Prospectus and under the caption "Underwriting" in
the Final Prospectus.
(b) (i) Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Company, CPS, the other Underwriter; the
respective officers, directors, employees and agents of any such party, and each
person who controls the Company, CPS or such other Underwriter within the
meaning of the 1933 Act or the 1934 Act against any losses, claims, damages or
liabilities to which such person may become subject under the 1933 Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions or
proceedings in respect thereof) arise out of or are based upon (a) any untrue
statement or alleged untrue statement of any material fact contained in the
Computational Materials (as defined below) provided by such indemnifying
Underwriter or (b) the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading in the light of the circumstances in which they were made, not
misleading (except, in each case, to the
-27-
extent that such untrue statement or alleged untrue statement or omission or
alleged omission results from the failure of the Company Provided Information to
be accurate in all material respects); and will reimburse each such party within
30 days of written request therefor for any legal or other expenses reasonably
incurred by such person in connection with investigating or defending any such
loss, claim, damage or liability, action or proceeding or in responding to a
subpoena or governmental inquiry related thereto, whether or not such person is
a party to any action or proceeding. The obligations of each Underwriter under
this subsection (ii) shall be in addition to any other liability which such
Underwriter may otherwise have. For purposes hereof, the term "Computational
Materials" means information provided by an Underwriter to a prospective
purchaser of Notes, which information is not part of the Prospectus. For
purposes hereof, the term "Company Provided Information" means the information
contained in the data tape delivered by CPS to the Underwriters on or about
August 1, 1997 containing information with respect to the Receivables as of the
Cutoff Date.
(ii) Each Underwriter shall, no later than the date on which the
Prospectus is required to be filed pursuant to Rule 424, provide to CPS for
filing with the Commission on Form 8-K a copy of any Computational Materials
delivered by such Underwriter to any prospective purchaser of Notes.
(c) In case any proceeding (including any governmental investigation)
shall be instituted involving any person in respect of which indemnity may be
sought pursuant to this Section 9, such person (the "indemnified party") shall
promptly notify the person against whom such indemnity may be sought (the
"indemnifying party") in writing. The failure to give such notice shall not
relieve the indemnifying party or parties from any liability which it or they
may have to the indemnified party for indemnity or contribution or otherwise
than on account of the provisions of Section 9(a) or (b), except and only to the
extent such omission so to notify shall have materially prejudiced the
indemnifying party under Section 9(a) or (b). In case any such proceeding shall
be brought against any indemnified party and it shall notify the indemnifying
party of the commencement thereof, the indemnifying party shall be entitled to
participate therein and, to the extent that it shall wish, jointly with any
other indemnifying party similarly notified, to assume the defense thereof, with
counsel reasonably satisfactory to such indemnified party and shall pay as
incurred the fees and disbursements of such counsel related to such proceeding.
In any such proceeding, any indemnified party shall have the right to retain its
own counsel at its own expense. Notwithstanding the foregoing, the indemnifying
party shall pay as incurred (or within 30 days of
-28-
presentation of an invoice) the fees and expenses of the counsel retained by the
indemnified party in the event (i) the indemnifying party and the indemnified
party shall have mutually agreed to the retention of such counsel, (ii) the
indemnified party has reasonably concluded (based on advice of counsel) that
there may be legal defenses available to it or other indemnified parties that
are different from or in addition to those available to the indemnifying party,
(iii) the named parties to any such proceeding (including any impleaded parties)
include both the indemnifying party and the indemnified party and representation
of both parties by the same counsel would be inappropriate due to actual or
potential differing interests between them or (iv) the indemnifying party shall
have failed to assume the defense and employ counsel acceptable to the
indemnified party within a reasonable period of time after notice of
commencement of the action. It is understood that the indemnifying party shall
not, in connection with any proceeding or related proceedings in the same
jurisdiction, be liable for the reasonable fees and expenses of more than one
separate firm for all such indemnified parties. Such firm shall be designated in
writing by the Underwriters in the case of parties indemnified pursuant to
Section 9(a) and by the Company in the case of parties indemnified pursuant to
Section 9(b). The indemnifying party shall not be liable for any settlement of
any proceeding effected without its written consent but if settled with such
consent or if there be a final judgment for the plaintiff, the indemnifying
party agrees to indemnify the indemnified party from and against any loss or
liability by reason of such settlement or judgment. In addition, the
indemnifying party will not, without the prior written consent of the
indemnified party (which consent shall not be unreasonably withheld or delayed),
settle or compromise or consent to the entry of any judgment in any pending or
threatened claim, action or proceeding of which indemnification may be sought
hereunder (whether or not any indemnified party is an actual or potential party
to such claim, action or proceeding) unless such settlement, compromise or
consent includes an unconditional release of each indemnified party from all
liability arising out of such claim, action or proceeding.
(d) If the indemnification provided for in this Section 9 is
unavailable to or insufficient to hold harmless an indemnified party under
Section 9(a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) referred to therein,
then each indemnifying party shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) in such proportion as
is appropriate to reflect the relative benefits received by the Company and CPS
on the one hand and the Underwriters on the other from the offering of the
Notes. If, however, the allocation provided by the immediately preceding
sentence is not permitted by applicable law then each indemnifying party shall
contribute to such amount paid or payable by such indemnified party in such
proportion as is appropriate
-29-
to reflect not only such relative benefits but also the relative fault of the
Company or CPS on the one hand and the Underwriters on the other in connection
with the statements or omissions which resulted in such losses, claims, damages
or liabilities (or actions or proceedings in respect thereof), as well as any
other relevant equitable considerations. The relative benefits received by the
Company on the one hand and the Underwriters on the other shall be deemed to be
in the same proportion as the total net proceeds from the offering (before
deducting expenses) received by the Company bear to the total underwriting
discounts and commissions received by the Underwriters (in each case as set
forth in the table on the cover page of the Final Prospectus). As between the
Underwriters, the relative benefits received by Black Diamond Securities, LLC,
on the one hand, and Xxxxx Xxxxxx Incorporated, on the other, shall be deemed to
be in the same proportion as the respective portions of the total underwriting
discounts and commissions received by each of them. The relative fault shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company on the one hand
or the Underwriters on the other and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission.
The Company, CPS and the Underwriters agree that it would not be just
and equitable if contributions pursuant to this Section 9(d) were determined by
pro rata allocation (even if the Underwriters were treated as one entity for
such purpose) or by any other method of allocation which does not take account
of the equitable considerations referred to above in this Section 9(d). The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages or liabilities (or actions or proceedings in respect thereof)
referred to above in this Section 9(d) shall be deemed to include any legal or
other expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim, subject to the limitations
set forth above. Notwithstanding the provisions of this Section 9(d), (i) no
Underwriter shall be required to contribute any amount in excess of the
underwriting discounts and commissions applicable to the Notes purchased by such
Underwriter and (ii) no person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the 0000 Xxx) shall be entitled to contribution
from any person who was not guilty of such fraudulent misrepresentation. The
Underwriters' obligations in this Section 9(d) to contribute are several in
proportion to their respective underwriting obligations and not joint.
(e) In any proceeding relating to the Registration Statement, the Base
Prospectus, any Preliminary Final Prospectus, the Final Prospectus, the Private
Placement Memorandum, or any supplement or amendment thereto, each party against
whom contribution may be sought under this Section 9 hereby consents to the
jurisdiction of any court having jurisdiction over any other contributing party,
agrees that process issuing from such court may be
-30-
served upon it by any other contributing party and consents to the service of
such process and agrees that any other contributing party may join it as an
additional defendant in any such proceeding in which such other contributing
party is a party.
(f) Any losses, claims, damages, liabilities or expenses for which an
indemnified party is entitled to indemnification or contribution under this
Section 9 shall be paid by the indemnifying party to the indemnified party as
such losses, claims, damages, liabilities or expenses are incurred. The
obligations of the Company and CPS pursuant to Section 6, the indemnity and
contribution agreements contained in this Section 9 and the representations and
warranties of each of the Company and CPS set forth in this Agreement shall
remain operative and in full force and effect, regardless of (i) any
investigation made by or on behalf of any Underwriter, the Company or CPS, their
respective directors, officers, employees or agents or any persons controlling
any Underwriter or the Company, (ii) acceptance of any Notes and payment thereof
or hereunder, and (iii) any termination of this Agreement. A successor to any
Underwriter, the Company or CPS, their respective directors, officers, employees
or agents, or any person controlling any Underwriter, the Company or CPS, shall
be entitled to the benefits of the indemnity, contribution and reimbursement
agreements contained in this Section 9.
10. DEFAULT BY THE UNDERWRITERS.
If on the Closing Date, Black Diamond Securities, LLC shall fail to
purchase and pay for all or any portion of the Notes which such Underwriter has
agreed to purchase and pay for on such date (otherwise than by reason of any
default on the part of the Company, CPS or Samco), then PaineWebber Incorporated
shall use reasonable efforts to procure within 36 hours thereafter one or more
additional Underwriters to purchase from the Company such amounts as may be
agreed upon and upon the terms set forth herein, the Notes which the defaulting
Underwriter failed to purchase. If during such 36 hours PaineWebber Incorporated
shall not have procured one or more additional Underwriters to purchase the
Notes agreed to be purchased by the defaulting Underwriter, then (a) if the
aggregate amount of Notes with respect to which such default shall occur does
not exceed 10% of the Notes covered hereby, PaineWebber Incorporated shall be
obligated to purchase the Notes which Black Diamond Securities, LLC failed to
purchase, or (b) if the aggregate principal balance of Notes with respect to
which such default shall occur exceeds 10% of the principal balance of Notes
covered hereby, the Company or (provided PaineWebber Incorporated has not
defaulted) PaineWebber Incorporated will have the right, by written notice given
within the next 36-hour period to the parties to this Agreement, to terminate
this Agreement without liability on the part of the non-defaulting Underwriter
or of the Company except to the extent provided in Section 9 hereof. In the
event of a default by PaineWebber Incorporated as set forth in this Section 10,
the Closing Date may be postponed for such period, not exceeding seven days, as
the non-defaulting Underwriter may determine in order that the required
-31-
changes in the Registration Statement or in the Final Prospectus or Private
Placement Memorandum or in any other documents or arrangements may be effected.
For purposes of this Agreement, the term "Underwriter" includes any person
substituted for a defaulting Underwriter. Any action taken under this Section 10
shall not relieve Black Diamond Securities, LLC from liability in respect of any
default of such Underwriter under this Agreement.
11. NOTICES.
All communications hereunder shall be in writing and, except as
otherwise provided herein, will be mailed, delivered, telecopied or telegraphed
and confirmed as follows:
if to the Underwriters, to each of the following addresses:
PaineWebber Incorporated
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx Xxxxxx
Fax: (000) 000-0000
with a copy to:
PaineWebber Incorporated
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxxx
Fax: (000) 000-0000
and
Black Diamond Securities, LLC
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxxx
Fax: (000) 000-0000
if to the Company, at the following address:
CPS Receivables Corp.
0 Xxx
Xxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx Xxxxxxx, Xx.
Facsimile No.: (000) 000-0000;
-32-
or, if sent to CPS at the following address:
Consumer Portfolio Services, Inc.
0 Xxx
Xxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx Xxxxxxx, Xx.
Facsimile No.: (000) 000-0000
12. TERMINATION.
This Agreement may be terminated by the Underwriters by notice by each
of the Underwriters to the Company as follows:
(a) at any time prior to the Closing Date, if any of the following has
occurred: (i) since the respective dates as of which information is given in the
Registration Statement and the Final Prospectus, any material adverse change or
any development involving a prospective material adverse change in the business,
properties, results of operations, financial condition or business prospects of
CPS, Samco or the Company, whether or not arising in the ordinary course of
business, (ii) any outbreak or escalation of hostilities or declaration of war
or national emergency or other national or international calamity or crisis or
change in economic or political conditions if the effect of such outbreak,
escalation, declaration, emergency, calamity, crisis or change on the financial
markets of the United States would, in each of the Underwriters' reasonable
judgment, make it impracticable to market the Notes or to enforce contracts for
the sale of the Notes, (iii) any suspension of trading in securities generally
on the New York Stock Exchange or the American Stock Exchange or limitation on
prices (other than limitations on hours or numbers of days of trading) for
securities on either such Exchange, (iv) the enactment, publication, decree or
other promulgation of any statute, regulation, rule or order of any court or
other governmental authority which in each of the Underwriters' reasonable
opinion materially and adversely affects or may materially and adversely affect
the business or operations of the Company, (v) declaration of a banking
moratorium by United States or New York State authorities, (vi) any downgrading
or the giving of notice of any intended or potential downgrading in the rating
of the Company's debt securities by any "nationally recognized statistical
rating organization" (as defined for purposes of Rule 436(g) under the 1934
Act), (vii) the suspension of trading of the Common Stock by the Commission on
the New York Stock Exchange or (viii) the taking of any action by any
governmental body or agency in respect of its monetary or fiscal affairs which
in each of the Underwriters' reasonable opinion has a material adverse effect on
the securities markets in the United States; or
-33-
(b) as provided in Sections 7 and 10 of this Agreement.
13. SUCCESSORS.
This Agreement has been and is made solely for the benefit of the
Underwriters, CPS, Samco and the Company and their respective successors,
executors, administrators, heirs and assigns, and the respective affiliates,
officers, directors, employees, agents and controlling persons referred to
herein, and no other person will have any right or obligation hereunder. No
purchaser of any of the Notes from any Underwriter shall be deemed a successor
or assign merely because of such purchase.
14. MISCELLANEOUS.
The reimbursement, indemnification and contribution agreements
contained in this Agreement, the obligations of the Company and CPS under
Section 6 and the representations, warranties and covenants in this Agreement
shall remain in full force and effect regardless of (a) any termination of this
Agreement, (b) any investigation made by or on behalf of any Underwriter or the
Company, their respective directors, officers, employees or agents or any
controlling person of any Underwriter or the Company indemnified herein and (c)
delivery of and payment for the Notes under this Agreement.
Each Underwriter agrees that, prior to the date which is one year and
one day after the payment in full of all securities issued by the Company or by
a trust for which the Company was the depositor, which securities were rated by
any nationally recognized statistical rating organization, it will not institute
against, or join any other person in instituting against, the Company any
bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings
or other proceedings under any Federal or state bankruptcy or similar law.
This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
This Agreement shall be governed by, and construed in accordance with,
the laws of the State of New York without regard to the conflict of laws
provisions thereof. With respect to any claim arising out of this Agreement (i)
each party irrevocably submits to the exclusive jurisdiction of the courts of
the State of New York and the United States District Court for the Southern
District of New York, and (ii) each party irrevocably waives (1) any objection
which it may have at any time to the laying of venue of any suit, action or
proceeding arising out of or relating hereto brought in any such court, (2) any
claim that any such suit, action or proceeding brought in any such court has
been brought in any inconvenient forum and (3) the right to object, with respect
to such claim, suit, action or proceeding brought in any such court, that such
court does not have jurisdiction over such party. To the extent permitted by
applicable law, each Underwriter, the Company, Samco
-34-
and CPS irrevocably waive all right of trial by jury in any action, proceeding
or counterclaim arising out of or in connection with this Agreement or any
matter arising hereunder.
This Agreement supersedes all prior agreements and understandings
relating to the subject matter hereof.
Neither this Agreement nor any term hereof may be changed, waived,
discharged or terminated orally, but only by an instrument in writing signed by
the party against whom enforcement of the change, waiver, discharge or
termination is sought.
The headings in this Agreement are for purposes of reference only and
shall not limit or otherwise affect the meaning hereof.
Any provision of this Agreement which is prohibited, unenforceable or
not authorized in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition, unenforceability or
non-authorization without invalidating the remaining provisions hereof or
affecting the validity, enforceability or legality of such provision in any
other jurisdiction.
[Rest of page intentionally left blank.]
-35-
If the foregoing letter is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicates hereof,
whereupon it will become a binding agreement among the Company and the several
Underwriters in accordance with its terms.
Very truly yours,
CPS RECEIVABLES CORP.
By:
Name:
Title:
CONSUMER PORTFOLIO SERVICES, INC.
By:
Name:
Title:
SAMCO ACCEPTANCE CORP.
By:
Name:
Title:
The foregoing Underwriting Agreement
is hereby confirmed and accepted as
of the date first above written:
PAINEWEBBER INCORPORATED
By:
Name:
Title:
BLACK DIAMOND SECURITIES, LLC
By:
Name:
Title:
SCHEDULE I
Schedule of Underwriters
Portion of Initial Principal
Amount of the Notes to be Purchase
Underwriter Purchased Price
PaineWebber Incorporated Class A-1: $80,775,275 $80,531,762
Class A-2: $61,624,725 $61,437,355
Class B: $3,750,000 $ 3,674,964
Black Diamond Securities, LLC Class A-1: $56,725 $ 56,554
Class A-2: $43,275 $ 43,143
Class B: $0 $ 0
Total $150,000,000
