Exhibit 1.3
CPS AUTO RECEIVABLES TRUST 1997-5
$55,750,000 6.26% Class A-1 Asset Backed Notes
$35,175,000 6.40% Class A-2 Asset Backed Notes
UNDERWRITING AGREEMENT
December 8, 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 sell to you in your capacities as the
Underwriters (the "Underwriters"), $55,750,000 aggregate principal amount of CPS
Auto Receivables Trust 1997-5 6.26% Asset Backed Notes, Class A-1 (the "Class
A-1 Notes") and $35,175,000 aggregate principal amount of 6.40% Asset Backed
Notes, Class A-2 (the "Class A-2 Notes" and; together with the Class A-1 Notes
the "Class A Notes" or "Notes"). The Notes will be issued by CPS Auto
Receivables Trust 1997-5 (the "Trust") pursuant to the Indenture (the
"Indenture") dated as of December 1, 1997 among 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 and all rights and obligations thereunder (the "Receivables"), with
respect to Receivables that are Rule of 78's Receivables, all payments due
thereon after November 24, 1997 (the "Cutoff Date") and, with respect to
Receivables that are Simple Interest Receivables, all payments received
thereunder after the 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 December 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.
The Class A-1 Notes will be issued in an aggregate principal amount of
$55,750,000 and will bear interest at an annual rate equal to 6.26% (the "Class
A-1 Interest Rate"). The Class A-2 Notes will be issued in an aggregate
principal amount of $35,175,000 and will bear interest at an annual rate equal
to 6.40% (the "Class A-2 Interest Rate"). The aggregate principal amount of the
Notes will equal [ ]% of the aggregate principal balance of the 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
$4,781,307 which is equal to 5.0% of the aggregate principal balance of the
Receivables as of the Cutoff Date. The Certificates will bear interest at an
annual rate equal to 95% (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.
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,
Samco, with respect to Xxxxx, and Xxxx, with respect to Linc, 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 Commission
thereunder 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
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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
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.
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"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.
"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.
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"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.
(d) 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.
(e) 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.
(f) Linc Acceptance Company LLC ("Linc") is a limited liability company
duly formed, validly existing and in good standing under the laws of Delaware
and is duly qualified to transact business as a foreign entity 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, Samco or Linc or the Company's or CPS's Samco's or Linc's
ability to perform its obligations under this Agreement, the
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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) 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.
(j) 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.
(k) Each of the Company, CPS, Linc and Xxxxx 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, Xxxx and Xxxxx 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
Linc's or Xxxxx's business with Cuba or with any person or affiliate located in
Cuba changes in any material way, each of the Company, CPS, Linc and Samco, as
the case may
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be, will provide the Department notice of such business or change, as
appropriate, in a form acceptable to the Department.
(l) All representations and warranties of the Company, CPS, Linc 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 Date
and are hereby incorporated by reference as if each such representation and
warranty were specifically made herein.
(m) Each of the Company, CPS, Linc 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 Linc 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.
(n) 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).
(o) This Agreement and each Basic Document to which the Company, CPS, Samco
or Linc is a party has been duly authorized, executed and delivered by each of
the Company, CPS, Linc and Samco, as applicable, and constitutes a valid and
binding agreement of each of the Company, CPS, Linc and Samco, as applicable,
enforceable against the Company, CPS, Linc 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.
(p) None of the Company, CPS, Samco or Linc is in breach or violation of
its Articles of Incorporation, Charter or Certificate of Formation, as
applicable, or By-Laws or Limited Liability Company Agreement, as applicable, 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
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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 Company or CPS or Samco or Linc to perform its
obligations under any of the Basic Documents or the Notes.
(q) 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, Charter or Certificate of Formation, as
applicable, or By-Laws or Limited Liability Company Agreement of the Company,
CPS, Samco or Linc, any statute, order or regulation applicable to the Company,
CPS, Samco or Linc of any court, regulatory body, administrative agency or
governmental body having jurisdiction over the Company, CPS, Samco or Linc 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, CPS, Samco or Linc (other than in favor of the Trustee, the
Owner 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,
CPS, Samco or Linc is a party or by which the Company, CPS, Samco or Linc may be
bound or to which any of the property or assets of the Company, CPS, Samco or
Linc 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, CPS, Samco or Linc or materially adverse to the
transactions contemplated by this Agreement or the Basic Documents.
(r) 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.
(s) The Receivables are chattel paper as defined in the Uniform Commercial
Code as in effect in the State of California.
(t) Under generally accepted accounting principles, CPS will report its
transfer of the CPS Receivables to the Company pursuant to the CPS Purchase
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 Linc will report its transfer of the Linc
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Receivables to the Company pursuant to the Linc Purchase Agreement as a sale of
the Linc Receivables and the Company will report its transfer of the Receivables
to the Trust 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, the Samco Purchase Agreement and the Linc 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).
(u) Pursuant to the CPS Purchase Agreement, the Samco Purchase Agreement
and the Linc Purchase Agreement, CPS, Samco and Linc 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.
(v) 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") (i)
evidencing 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) evidencing 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) evidencing the transfer of the applicable Linc Receivables
to the Seller shall have been filed in the Office of the Secretary of State of
the State of Connecticut, (iv) evidencing 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 (v) evidencing the pledge of the applicable
Receivables by the Trust to the Trustee shall have been filed in the Office of
the Secretaries of State of States of Minnesota and California 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 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
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filing of the Financing Statements in the offices of the Secretaries of State of
the States of California, Connecticut, 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.
(w) None of the Company, CPS, Samco, Linc 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 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.
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, Brown & Xxxxx, 0000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, at
9:30 a.m. (New York time) on December 11, 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 representing all of the Notes. The Notes
will be made available for inspection at the above office of Xxxxx, Brown &
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.
3. OFFERING BY THE UNDERWRITERS.
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.
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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 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
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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 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) 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 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.
-12-
(f) 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.
(g) 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.
(h) The Company, CPS, Linc 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, Linc 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.
(i) 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).
(j) 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 1934, as
amended, and (ii) such additional information concerning the business and
financial condition of the Company and CPS as the Underwriters may from time to
time reasonably request.
(k) On or before the Closing Date, the Company, CPS, Linc and Samco shall
cause the respective computer records of the Company, CPS, Linc and Samco
relating to the Receivables to be marked to show the Trust's ownership of the
Receivables, and from and after the Closing Date none of the Company, CPS, Linc
or 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.
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(l) 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, Linc or Samco,
CPS shall, or shall cause the Company, Samco or Linc to, furnish such documents
and take any such other actions.
(m) 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.
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, Brown & 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
-14-
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, Xxxx and Xxxxx contained herein, to the performance by the Company, CPS,
Xxxx and Xxxxx 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 December 8, 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
-15-
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 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, Linc 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, Brown & Xxxxx, special
counsel for CPS, Xxxxx, Linc (with respect to New York law) 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 Pullman & Xxxxxxxx LLC,
special Connecticut counsel for Linc, opinions dated the Closing Date,
addressed to such Underwriter in a form satisfactory to such Underwriter.
(i) Each Underwriter shall have received from Xxxxx, Brown & 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.
-16-
(j) Each Underwriter shall have received from Xxxxx, Brown & 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
furnished to such counsel such documents as they may reasonably request for the
purpose of enabling them to pass upon such matters.
(k) 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.
(l) 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.
(m) 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.
(n) 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.
(o) 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.
(p) At the Closing Date, the Company, CPS, Linc and Xxxxx 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, Linc or Samco, as the case may be, in which each such officer shall state
that: (i) the representations and warranties of the Company, CPS, Linc or Samco,
as applicable, in this Agreement are true and correct on and as of the Closing
Date; (ii) the Company, CPS, Linc 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,
Linc or Samco, as
-17-
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, Linc 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,
Linc 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, Linc 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, Linc or Samco except as contemplated by the Final Prospectus and
the Private Placement Memorandum or as described in such certificate.
(q) 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.
(r) 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 the State of California reflecting the
sale and assignment of the interest of CPS in the CPS Receivables included in
the Receivables and the related other Trust Property and the proceeds thereof to
the Company, (ii) the office of the Secretary of State of the State of Texas
reflecting the sale and assignment of the interest of Xxxxx in the Samco
Receivables included in the Receivables and the related other Trust Property and
the proceeds thereof to the Company, (iii) the office of the Secretary of State
of the State of Connecticut reflecting the sale and assignment of the interest
of Xxxx in the Linc Receivables included in the Receivables and the related
other Trust Property and the proceeds thereof to the Company, (iv) the office of
the Secretary of State of California reflecting the sale and assignment of the
interest of the Company in the Receivables and the related other Trust Property
and the proceeds thereof to the Trust and (iv) the office of the Secretary of
State of
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Delaware reflecting the transfer of the interest of the Trust in the Receivables
and the related other Trust Property and the proceeds thereof to the Trustee.
(s) 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.
(t) 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, Brown &
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 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
-19-
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.
(b) (i) 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,
-20-
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.
(ii) 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 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 November 25, 1997 containing information with respect to the
Receivables as of the Cutoff Date.
(iii) 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.
-21-
(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 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.
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(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 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 PaineWebber 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 1933 Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. The Underwriters'
obligations in this Section
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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 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, Linc 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
-24-
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 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
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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;
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, Linc 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
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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
(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, Xxxxx, Linc 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
-27-
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, Xxxxx, Linc 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.]
-28-
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:
LINC ACCEPTANCE COMPANY LLC
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 Purchase
Underwriter to be Purchased Price
----------- --------------- -----
PaineWebber Incorporated Class A-1: $27,875,000 $27,867,654.94
Class A-2: $17,587,500 $17,586,553.79
Black Diamond Securities, LLC Class A-1: $27,875,000 $27,867,654.94
Class A-2: $17,587,500 $17,586,553.79
Total $90,925,000 $90,908,417.46
=========== ==============
