Exhibit 10.3
Receivables Purchase Agreement
EXECUTION COPY
PURCHASE AGREEMENT dated as of this May 1, 1998, by and between LINC
ACCEPTANCE COMPANY LLC, a Delaware limited liability company (the "Seller"),
having its principal executive office at 0000 Xxxxx Xxxxxxx Xxxxxxxxxx, Xxxxx
000, Lock-Box 39, Dallas, Texas, and CPS RECEIVABLES CORP., a California
corporation (the "Purchaser"), having its principal executive office at 2 Xxx,
Xxxxxx, Xxxxxxxxxx 00000.
WHEREAS, in the regular course of its business, the Seller purchases
and services through its auto loan programs certain motor vehicle retail
installment sale contracts secured by new and used automobiles, light trucks,
vans or minivans acquired from motor vehicle dealers.
WHEREAS, the Seller and the Purchaser wish to set forth the terms
pursuant to which the Linc Receivables (as hereinafter defined), are to be sold
by the Seller to the Purchaser, which Linc Receivables together with the CPS
Receivables will be transferred by the Purchaser, pursuant to the Pooling and
Servicing Agreement (as hereinafter defined), to CPS Auto Grantor Trust 1998-2
to be created thereunder, which Trust will issue certificates representing
beneficial ownership interests in the Receivables and the other property of the
Trust (the "Class A Certificates" and the "Class B Certificates", together, the
"Certificates").
NOW, THEREFORE, in consideration of the foregoing, other good and
valuable consideration, and the mutual terms and covenants contained herein, the
parties hereto agree as follows:
ARTICLE I
CERTAIN DEFINITIONS
Terms not defined in this Purchase Agreement shall have the meaning set
forth in the Pooling and Servicing Agreement. As used in this Purchase
Agreement, the following terms shall, unless the context otherwise requires,
have the following meanings (such meanings to be equally applicable to the
singular and plural forms of the terms defined):
"Agreement" means this Purchase Agreement and the Linc Assignment.
"Assignment" means the Linc Assignment, the Samco Assignment and/or the
CPS Assignment.
"Base Prospectus" means the Prospectus dated April 8, 1998, with
respect to Auto Receivables Trusts, with the Purchaser as Seller, and any
amendment or supplement thereto.
"Certificate Insurer" means Financial Security Assurance, Inc., a
financial guaranty insurance company incorporated under the laws of the State of
New York, or its successors in interest.
"Certificate Purchase Agreement" means the Certificate Purchase
Agreement, dated May 18, 1998, between The Structured Finance High Yield Fund,
LLC ("The Class B Certificate Purchaser") and the Purchaser relating to the
Class B Certificates.
"Closing Date" means May 18, 1998.
"CPS" means Consumer Portfolio Services, Inc., a California
corporation, and its successors and assigns.
"CPS Assignment" means the assignment substantially in the form of
Exhibit A to the CPS Purchase Agreement.
"CPS Purchase Agreement" means the purchase agreement dated as of May
1, 1998, between Consumer Portfolio Services, Inc., as seller, and the
Purchaser, as purchaser, as such agreement may be amended, supplemented or
otherwise modified from time to time in accordance with the terms thereof.
"CPS Receivable" shall have the meaning specified in the CPS Purchase
Agreement.
"Linc" means Linc Acceptance Company LLC, a Delaware limited liability
company, and its successors and assigns.
"Linc Assignment" means the assignment dated May 18, 1998, by the
Seller to the Purchaser, relating to the purchase of the Linc Receivables and
certain other property related thereto by the Purchaser from the Seller pursuant
to this Purchase Agreement which shall be substantially in the form of Exhibit A
to this Purchase Agreement.
"Linc Receivable" means each retail installment sale contract for a
Financed Vehicle that appears on the Schedule of Linc Receivables and all rights
thereunder.
"Linc Receivables Purchase Price" means $4,959,494.
"Obligor(s)" means the purchaser or co-purchasers of a Financed Vehicle
or any other Person who owes or may be liable for payments under a Receivable.
"Offering Documents" means the Prospectus Supplement, the Base
Prospectus and the Private Placement Memorandum.
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"Pooling and Servicing Agreement" means the Pooling and Servicing
Agreement dated as of May 1, 1998, among the Purchaser, as Seller, Consumer
Portfolio Services, Inc., as originator of the CPS Receivables and as servicer,
and Norwest Bank Minnesota, as trustee and standby servicer, as such agreement
may be amended, supplemented or otherwise modified from time to time in
accordance with its terms.
"Purchase Agreement" means this Purchase Agreement, as this agreement
may be amended, supplemented or otherwise modified from time to time in
accordance with the terms hereof.
"Purchaser" means CPS Receivables Corp., a California corporation, and
its successors and assigns.
"Receivables" means, collectively, the Linc Receivables, the CPS
Receivables and the Samco Receivables.
"Repurchase Event" shall have the meaning specified in Section 6.2
hereof.
"Samco" means Samco Acceptance Corp., a Delaware corporation, and its
successors and assigns.
"Samco Assignment" means the assignment substantially in the form of
Exhibit A to the Samco Purchase Agreement.
"Samco Purchase Agreement" means the purchase agreement dated as of May
1, 1998, between Samco Acceptance Corp., as seller, and the Purchaser, as
purchaser, as such agreement may be amended, supplemented or otherwise modified
from time to time in accordance with the terms thereof.
"Samco Receivable" shall have the meaning specified in the Samco
Purchase Agreement
"Schedule of CPS Receivables" means the list of CPS Receivables annexed
as Exhibit B to the CPS Purchase Agreement.
"Schedule of Linc Receivables" means the list of Linc Receivables
annexed hereto as Exhibit B.
"Schedule of Receivables" means the Schedule of Linc Receivables, the
Schedule of Samco Receivables and/or the CPS Schedule of Receivables.
"Schedule of Samco Receivables" means the list of Samco Receivables
annexed as Exhibit B to the Samco Purchase Agreement.
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"Seller" means Linc, a Delaware corporation, in its capacity as seller
of the Linc Receivables and the other Transferred Linc Property relating
thereto, and its successors and assigns.
"Servicer" means Consumer Portfolio Services, Inc., a California
corporation, in its capacity as Servicer of the Receivables, and its successors
and assigns.
"Transferred CPS Property" shall have the meaning specified in the CPS
Purchase Agreement.
"Transferred Linc Property" shall have the meaning specified in Section
2.1(a) hereof.
"Transferred Property" shall have the meaning specified in Section
2.1(a) hereof.
"Transferred Samco Property" shall have the meaning specified in the
Samco Purchase Agreement.
"Trust" means the CPS Auto Grantor Trust 1998-2 created by the Pooling
and Servicing Agreement.
"Trustee" means Norwest Bank Minnesota, National Association, in its
capacity as trustee under the Pooling and Servicing Agreement, and any successor
trustee thereunder.
"UCC" means the Uniform Commercial Code, as in effect from time to time
in the relevant jurisdictions.
"Underwriter" means First Union Capital Markets, a division of Wheat
First Securities, Inc.
"Underwriting Agreement" means the Underwriting Agreement, dated May
__, 1998, among the Underwriter, CPS, Linc, Samco and the Purchaser relating to
the Class A Certificates.
ARTICLE II
PURCHASE AND SALE OF RECEIVABLES
2.1. Purchase and Sale of Receivables. On the Closing Date, subject to
the terms and conditions of this Purchase Agreement, the Seller agrees to sell
to the Purchaser, and the Purchaser agrees to purchase from the Seller, without
recourse (subject to the obligations in this Purchase Agreement and the Pooling
and Servicing Agreement), all of the Seller's right,
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title and interest in, to and under the Linc Receivables and the other
Transferred Linc Property relating thereto. The conveyance to the Purchaser of
the Linc Receivables and other Transferred Linc Property relating thereto is
intended as a sale free and clear of all liens and it is intended that the
Transferred Linc Property and other property of the Purchaser shall not be part
of the Seller's estate in the event of the filing of a bankruptcy petition by or
against the Seller under any bankruptcy law.
(a) Transfer of Receivables. On the Closing Date and
simultaneously with the transactions to be consummated pursuant to the Pooling
and Servicing Agreement, the Seller shall sell, transfer, assign, grant, set
over and otherwise convey to the Purchaser, without recourse (subject to the
obligations herein and in the Pooling and Servicing Agreement), all right, title
and interest of the Seller in and to (i) the Linc Receivables listed in the
Schedule of Linc Receivables and, with respect to Linc Receivables that are Rule
of 78's Receivables, all monies due or to become due thereon after the Cutoff
Date (including Scheduled Payments due after the Cutoff Date (including
principal prepayments relating to such Scheduled Payments) but received by the
Seller on or before the Cutoff Date) and, with respect to Linc Receivables that
are Simple Interest Receivables, all monies received thereunder after the Cutoff
Date, and all Liquidation Proceeds and Recoveries received with respect to such
Linc Receivables; (ii) the security interests in the Financed Vehicles granted
by Obligors pursuant to the Linc Receivables and any other interest of the
Seller in such Financed Vehicles, including, without limitation, the
certificates of title or, with respect to Financed Vehicles in the State of
Michigan, other evidence of ownership with respect to Financed Vehicles; (iii)
any proceeds from claims on any physical damage, credit life and credit accident
and health insurance policies or certificates relating to the Financed Vehicles
securing the Linc Receivables or the Obligors thereunder; (iv) refunds for the
costs of extended service contracts with respect to Financed Vehicles securing
the Linc Receivables, refunds of unearned premiums with respect to credit life
and credit accident and health insurance policies or certificates covering an
Obligor or Financed Vehicle securing the Linc Receivables or his or her
obligations with respect to such a Financed Vehicle and any recourse to Dealers
for any of the foregoing; (v) the Receivable File related to each Linc
Receivable; and (vi) the proceeds of any and all of the foregoing (collectively,
the "Transferred Linc Property" and together with the Transferred CPS Property
and the Transferred Samco Property, the "Transferred Property").
(b) Linc Receivables Purchase Price. In consideration for the
Linc Receivables and other Transferred Linc Property described in Section
2.1(a), the Purchaser shall, on the Closing Date, pay to the Seller the Linc
Receivables Purchase Price by federal wire transfer (same day) funds.
2.2. The Closing. The sale and purchase of the Linc Receivables and
other Transferred Linc Property shall take place at a closing (the "Closing") at
the offices of Xxxxx, Xxxxx & Xxxxx, 0000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx
00000-0000 on the Closing Date, simultaneously with the closings under: (a) the
CPS Purchase Agreement pursuant to which CPS will sell the CPS Receivables and
other Transferred CPS Property to the
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Purchaser, (b) the Samco Purchase Agreement pursuant to which Samco will sell
the Samco Receivables and other Transferred Samco Property to the Purchaser, (c)
the Pooling and Servicing Agreement pursuant to which the Purchaser will assign
all of its right, title and interest in and to the Receivables and the other
Transferred Property to the Trustee for the benefit of the Certificateholders
and the Trust will issue and deliver the Certificates to the Purchaser in
exchange for the Transferred Property, (d) the Underwriting Agreement pursuant
to which the Underwriter shall purchase the Class A Certificates from the
Purchaser, and (e) the Certificate Purchase Agreement pursuant to which the
Class B Certificate Purchaser shall purchase the Class B Certificates from the
Purchaser.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
3.1. Representations and Warranties of the Purchaser. The Purchaser
hereby represents and warrants to the Seller as of the date hereof and as of the
Closing Date (which representations and warranties shall survive the Closing
Date):
(a) Organization and Good Standing. The Purchaser has been
duly organized and is validly existing as a corporation in good standing under
the laws of the State of Delaware, with power and authority to own its
properties and to conduct its business as such properties shall be currently
owned and such business is presently conducted, and had at all relevant times,
and shall have, power, authority and legal right to execute and deliver this
Agreement and perform its obligations hereunder.
(b) Due Qualification. The Purchaser is duly qualified to do
business as a foreign corporation in good standing, and has obtained all
necessary licenses and approvals in all jurisdictions material to the
performance of its obligations under this Agreement.
(c) Power and Authority. The Purchaser has the power and
authority to execute and deliver this Agreement and to carry out its terms and
the execution, delivery and performance of this Agreement have been duly
authorized by the Purchaser by all necessary corporate action.
(d) Binding Obligation. This Agreement shall constitute a
legal, valid and binding obligation of the Purchaser enforceable in accordance
with its terms, subject to the effect of any applicable bankruptcy, insolvency,
moratorium, receivership, reorganization, liquidation and other similar laws
affecting creditors' rights and the effect of general principles of equity
including (without limitation) concepts of materiality, reasonableness, good
faith, fair dealing (regardless of whether considered and applied in a
proceeding in equity or at law), and also to the possible unavailability of
specific performance or injunctive relief.
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(e) No Violation. The execution, delivery and performance by
the Purchaser of this Agreement and the consummation of the transactions
contemplated hereby and the fulfillment of the terms hereof do not conflict
with, result in a breach of any of the terms and provisions of, nor constitute
(with or without notice or lapse of time) a default under, the certificate of
incorporation or by-laws of the Purchaser, or any indenture, agreement,
mortgage, deed of trust, or other instrument to which the Purchaser is a party
or by which it is bound or to which any of its properties are subject; nor
result in the creation or imposition of any lien upon any of its properties
pursuant to the terms of any indenture, agreement, mortgage, deed of trust, or
other instrument (other than the Basic Documents); nor violate any law, order,
rule or regulation applicable to the Purchaser of any court or of any Federal or
State regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over the Purchaser or its properties.
(f) No Proceedings. There are no proceedings or investigations
pending, or to the Purchaser's best knowledge, threatened, before any court,
regulatory body, administrative agency or other governmental instrumentality
having jurisdiction over the Purchaser or its properties: (A) asserting the
invalidity of this Agreement or the Certificates; (B) seeking to prevent the
issuance of the Certificates or the consummation of any of the transactions
contemplated by this Agreement; (C) seeking any determination or ruling that
might materially and adversely affect the performance by the Purchaser of its
obligations under, or the validity or enforceability of, this Agreement or the
Certificates; or (D) relating to the Purchaser and which might adversely affect
the Federal or State income, excise, franchise or similar tax attributes of the
Certificates.
(g) No Consents. No consent, approval, authorization or order
of or declaration or filing with any governmental authority is required to be
obtained by the Purchaser for the issuance or sale of the Certificates or the
consummation of the other transactions contemplated by this Agreement, the
Pooling and Servicing Agreement and the other Basic Documents, except such as
have been duly made or obtained.
3.2. Representations and Warranties of the Seller. (a) The Seller
hereby represents and warrants to the Purchaser as of the date hereof and as of
each Closing Date (which representations and warranties shall survive the
Closing Date):
(i) Organization and Good Standing. The Seller has been duly
organized and is validly existing as a corporation in good standing
under the laws of the State of Delaware, with power and authority to
own its properties and to conduct its business as such properties shall
be currently owned and such business is presently conducted and had at
all relevant times, and shall have, power, authority and legal right to
acquire, and own the Linc Receivables.
(ii) Due Qualification. The Seller is duly qualified to do
business as a foreign corporation in good standing, and has obtained
all necessary licenses and approvals in all jurisdictions in which the
ownership or lease of property or the
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conduct of its business (including the origination of the Linc
Receivables as required by the Pooling and Servicing Agreement) shall
require such qualifications.
(iii) Power and Authority. The Seller has the power and
authority to execute and deliver this Agreement and to carry out its
terms; the Seller has full power and authority to sell and assign the
property sold and assigned to the Purchaser and has duly authorized
such sale and assignment to the Purchaser by all necessary corporate
action; and the execution, delivery and performance of this Agreement
has been duly authorized by the Seller by all necessary corporate
action.
(iv) Valid Sale; Binding Obligation. This Agreement effects a
valid sale, transfer and assignment of the Linc Receivables and the
other Transferred Linc Property conveyed to the Purchaser pursuant to
the Linc Assignment, enforceable against creditors of and purchasers
from the Seller; and this Agreement shall constitute a legal, valid and
binding obligation of the Seller enforceable in accordance with its
terms, subject to the effect of any applicable bankruptcy, insolvency,
moratorium, receivership, reorganization, liquidation and other similar
laws affecting creditors' rights and the effect of general principles
of equity including (without limitation) concepts of materiality,
reasonableness, good faith, fair dealing (regardless of whether
considered and applied in a proceeding in equity or at law), and also
to the possible unavailability of specific performance or injunctive
relief.
(v) No Violation. The execution, delivery and performance by
the Seller of this Agreement and the consummation of the transactions
contemplated hereby and the fulfillment of the terms hereof do not
conflict with, result in any breach of any of the terms and provisions
of, nor constitute (with or without notice or lapse of time) a default
under, the articles of incorporation, as amended, or by-laws of the
Seller, or any indenture, agreement, mortgage, deed of trust, or other
instrument to which the Seller is a party or by which it is bound or to
which any of its properties are subject; nor result in the creation or
imposition of any lien upon any of its properties pursuant to the terms
of any such indenture, agreement, mortgage, deed of trust, or other
instrument (other than the Basic Documents); nor violate any law,
order, rule or regulation applicable to the Seller of any court or of
any Federal or State regulatory body, administrative agency or other
governmental instrumentality having jurisdiction over the Seller or its
properties.
(vi) No Proceedings. There are no proceedings or
investigations pending, or to the Seller's best knowledge, threatened,
before any court, regulatory body, administrative agency, or other
governmental instrumentality having jurisdiction over the Seller or its
properties: (A) asserting the invalidity of this Agreement or the
Certificates; (B) seeking to prevent the issuance of the Certificates
or the consummation of any of the transactions contemplated by this
Agreement; (C) seeking any determination or ruling that might
materially and adversely affect the performance by the Seller of its
obligations under, or the validity or enforceability of, this
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Agreement or the Certificates; or (D) relating to the Seller and which
might adversely affect the Federal or State income, excise, franchise
or similar tax attributes of the Certificates.
(vii) No Consents. No consent, approval, authorization or
order of or declaration or filing with any governmental authority is
required for the issuance or sale of the Certificates or the
consummation of the other transactions contemplated by this Agreement,
the Pooling and Servicing Agreement and the other Basic Documents,
except such as have been duly made or obtained.
(viii) Financial Condition. The Seller has a positive net
worth and is able to and does pay its liabilities as they mature. The
Seller is not in default under any obligation to pay money to any
Person except for matters being disputed in good faith which do not
involve an obligation of the Seller on a promissory note. The Seller
will not use the proceeds from the transactions contemplated by this
Agreement to give any preference to any creditor or class of creditors,
and this transaction will not leave the Seller with remaining assets
which are unreasonably small compared to its ongoing operations.
(ix) Fraudulent Conveyance. The Seller is not selling the Linc
Receivables to the Purchaser with any intent to hinder, delay or
defraud any of its creditors; the Seller will not be rendered insolvent
as a result of the sale of the Linc Receivables to the Purchaser.
(b) The Seller makes the following representations and
warranties as to the Linc Receivables and the other Transferred Linc Property
relating thereto on which the Purchaser relies in accepting the Linc Receivables
and the other Transferred Linc Property relating thereto. Such representations
and warranties speak with respect to each Linc Receivable as of the Closing Date
and shall survive the sale, transfer, and assignment of the Linc Receivables and
the other Transferred Linc Property relating thereto to the Purchaser and the
subsequent assignment and transfer pursuant to the Pooling and Servicing
Agreement:
(i) Location of Receivable Files; One Original. A complete
Receivable File with respect to each Linc Receivable has been or prior
to the Closing Date will be delivered to the Trustee at the location
listed in Schedule B to the Pooling and Servicing Agreement. There is
only one original executed copy of each Linc Receivable.
(ii) Schedule of Receivables; Selection Procedures. The
information with respect to the Linc Receivables set forth in the
Schedule of Linc Receivables is true and correct in all material
respects as of the close of business on the Cutoff Date, and no
selection procedures adverse to the Certificateholders have been
utilized in selecting the Linc Receivables.
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(iii) Security Interest in Financed Vehicle. Immediately prior
to the sale, assignment, and transfer thereof, each Linc Receivable
shall be secured by a validly perfected first security interest in the
related Financed Vehicle in favor of the Seller as secured party, and
such security interest is prior to all other liens upon and security
interests in such Financed Vehicle which now exist or may hereafter
arise or be created (except, as to priority, for any tax liens or
mechanics' liens which may arise after each Closing Date).
(iv) Linc Receivables in Force. No Linc Receivable has been
satisfied, subordinated or rescinded, nor has any Financed Vehicle been
released from the lien granted by the related Linc Receivable in whole
or in part.
(v) No Waiver. No provision of a Linc Receivable has been
waived.
(vi) No Amendments. No Linc Receivable has been amended,
except as such Linc Receivable may have been amended to grant
extensions which shall not have numbered more than (a) one extension of
one calendar month in any calendar year or (b) three such extensions in
the aggregate.
(vii) No Default; Repossession. Except for payment
delinquencies continuing for a period of not more than thirty (30) days
as of the Cutoff Date, no default, breach, violation or event
permitting acceleration under the terms of any Linc Receivable has
occurred; and no continuing condition that with notice or the lapse of
time would constitute a default, breach, violation, or event permitting
acceleration under the terms of any Linc Receivable has arisen; and the
Seller shall not waive and has not waived any of the foregoing; and no
Financed Vehicle securing a Linc Receivable shall be in repossession as
of the Cutoff Date.
(viii) Title. It is the intention of the Seller that the
transfer and assignment herein contemplated constitute a sale of the
Linc Receivables and other Transferred Linc Property from the Seller to
the Purchaser and that the beneficial interest in and title to such
Linc Receivables and other Transferred Linc Property not be part of the
debtor's estate in the event of the filing of a bankruptcy petition by
or against the Seller under any bankruptcy law. No Linc Receivable or
other Transferred Linc Property has been sold, transferred, assigned,
or pledged by the Seller to any Person other than the Purchaser or any
such pledge has been released on or prior to the related Closing Date.
Immediately prior to any transfer and assignment herein contemplated,
the Seller had good and marketable title to each Linc Receivable and
other Transferred Linc Property, and was the sole owner thereof, free
and clear of all liens, claims, encumbrances, security interests, and
rights of others and, immediately upon the transfer thereof, the
Purchaser shall have good and marketable title to each such Linc
Receivable and other Transferred Linc Property,
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and will be the sole owner thereof, free and clear of all liens,
encumbrances, security interests, and rights of others, and the
transfer has been perfected under the UCC.
(ix) Lawful Assignment. No Linc Receivable has been originated
in, or is subject to the laws of, any jurisdiction under which the
sale, transfer, and assignment of such Linc Receivable under this
Agreement shall be unlawful, void, or voidable. The Seller has not
entered into any agreement with any account debtor that prohibits,
restricts or conditions the assignment of any portion of the Linc
Receivables or other Transferred Linc Property.
(x) All Filings Made. All filings (including, without
limitation, UCC filings) necessary in any jurisdiction to give the
Purchaser a first priority perfected ownership interest in the Linc
Receivables and the other Transferred Linc Property have been made,
taken or performed.
(xi) Casualty. No Financed Vehicle related to a Linc
Receivable has suffered a Casualty.
(xii) Obligation to Dealers or Others. The Purchaser and its
assignees will assume no obligation to Dealers or other originators or
holders of the Linc Receivables (including, but not limited to under
dealer reserves) as a result of the purchase of the Linc Receivables.
(xiii) Full Amount Advanced. The full amount of each Linc
Receivable has been advanced to each Obligor, and there are no
requirements for future advances thereunder. No Obligor with respect to
a Linc Receivable has any option under the Linc Receivable to borrow
from any Person additional funds secured by the related Financed
Vehicle.
(c) The representations and warranties contained in this Agreement
shall not be construed as a warranty or guaranty by the Seller as to the future
payments by any Obligor. The sale of the Linc Receivables and the other
Transferred Linc Property pursuant to this Agreement shall be "without recourse"
to the Seller except for the representations, warranties and covenants made by
the Seller in this Purchase Agreement.
ARTICLE IV
CONDITIONS
4.1. Conditions to Obligation of the Purchaser. The obligation of the
Purchaser to purchase the Linc Receivables on the Closing Date is subject to the
satisfaction of the following conditions:
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(a) Representations and Warranties True. The representations
and warranties of the Seller hereunder shall be true and correct on the Closing
Date with the same effect as if then made, and the Seller shall have performed
all obligations to be performed by it hereunder on or prior to the Closing Date.
(b) Computer Files Marked. The Seller shall, at its own
expense, on or prior to the Closing Date, indicate in its computer files that
the Linc Receivables have been sold to the Purchaser pursuant to this Agreement
and shall deliver to the Purchaser the Schedule of Linc Receivables certified by
the Chairman, the President, the Vice President or the Treasurer of the Seller
to be true, correct and complete.
(c) Receivable Files Delivered. The Seller shall, at its own
expense, deliver the related Receivable Files to the Trustee at the offices
specified in Schedule B to the Pooling and Servicing Agreement on or prior to
the Closing Date.
(d) Documents to be delivered by the Seller on the Closing
Date.
(i) The Linc Assignment. On the Closing Date, the Seller will
execute and deliver the Linc Assignment. The Linc Assignment shall be
substantially in the form of Exhibit A hereto.
(ii) Evidence of UCC-1 Filing. On or prior to the Closing
Date, the Seller shall record and file, at its own expense, a UCC-1
financing statement in each jurisdiction in which required by
applicable law, executed by the Seller, as seller or debtor, and naming
the Purchaser, as purchaser or secured party, naming the Linc
Receivables and the other Transferred Linc Property conveyed hereafter
as collateral, meeting the requirements of the laws of each such
jurisdiction and in such manner as is necessary to perfect the sale,
transfer, assignment and conveyance of such Linc Receivables and other
Transferred Linc Property relating thereto to the Purchaser. The Seller
shall deliver a file-stamped copy, or other evidence satisfactory to
the Purchaser of such filing, to the Purchaser on or prior to the
Closing Date.
(iii) Other Documents. On or prior to the Closing Date, the
Seller shall deliver such other documents as the Purchaser may
reasonably request.
(e) Other Transactions. The transactions contemplated by the
Pooling and Servicing Agreement, the CPS Purchase Agreement, the Samco Purchase
Agreement, the Underwriting Agreement and the Certificate Purchase Agreement
shall be consummated on the Closing Date.
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4.2. Conditions to Obligation of the Seller. The obligation of the
Seller to sell the Linc Receivables to the Purchaser is subject to the
satisfaction of the following conditions on each Closing Date:
(a) Representations and Warranties True. The representations
and warranties of the Purchaser hereunder shall be true and correct on the
Closing Date with the same effect as if then made, and the Purchaser shall have
performed all obligations to be performed by it hereunder on or prior to the
Closing Date.
(b) Receivables Purchase Price. The Purchaser will deliver to
the Seller the Linc Receivables Purchase Price on the Closing Date as provided
in Section 2.1(b). The Seller hereby directs the Purchaser to wire such purchase
price pursuant to wire instructions to be delivered to the Purchaser on or prior
to the Closing Date.
ARTICLE V
COVENANTS OF THE SELLER
The Seller agrees with the Purchaser as follows:
5.1. Protection of Right, Title and Interest.
(a) Filings. The Seller shall cause all financing statements
and continuation statements and any other necessary documents covering the
right, title and interest of the Purchaser in and to the Linc Receivables and
the other Transferred Linc Property to be promptly filed, and at all times to be
kept recorded, registered and filed, all in such manner and in such places as
may be required by law fully to preserve and protect the right, title and
interest of the Purchaser hereunder to the Linc Receivables and the other
Transferred Linc Property. The Seller shall cause to be delivered to the
Purchaser file stamped copies of, or filing receipts for, any document recorded,
registered or filed as provided above, as soon as available following such
recordation, registration or filing. The Purchaser shall cooperate fully with
the Seller in connection with the obligations set forth above and will execute
any and all documents reasonably required to fulfill the intent of this Section
5.1(a). In the event the Seller fails to perform its obligations under this
subsection, the Purchaser or the Trustee may do so at the expense of the Seller.
(b) Name and Other Changes. At least 60 days prior to the date
the Seller makes any change in its name, identity or corporate structure which
would make any financing statement or continuation statement filed in accordance
with paragraph (a) above seriously misleading within the applicable provisions
of the UCC or any title statute, the Seller shall give the Trustee, the
Certificate Insurer (so long as a Certificate Insurer Default (as such term is
defined in the Pooling and Servicing Agreement) shall not have occurred and be
continuing) and the Purchaser written notice of any such change and no later
than five
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days after the effective date thereof, shall file appropriate amendments to all
previously filed financing statements or continuation statements. At least 60
days prior to the date of any relocation of its principal executive office, the
Seller shall give the Trustee, the Certificate Insurer (so long as a Certificate
Insurer Default shall not have occurred and be continuing) and the Purchaser
written notice thereof if, as a result of such relocation, the applicable
provisions of the UCC would require the filing of any amendment of any
previously filed financing or continuation statement or of any new financing
statement and the Seller shall within five days after the effective date
thereof, file any such amendment or new financing statement. The Seller shall at
all times maintain each office from which it shall service Receivables, and its
principal executive office, within the United States of America.
(c) Maintenance of Computer Systems. The Seller shall maintain
its computer systems so that, from and after the time of sale to the Purchaser
of the Linc Receivables hereunder, the Seller's master computer records
(including any back-up archives) that refer to a Linc Receivable shall indicate
clearly the interest of the Purchaser in such Linc Receivable and that such Linc
Receivable is owned by the Purchaser. Indication of the Purchaser's ownership of
a Linc Receivable shall be deleted from or modified on the Seller's computer
systems when, and only when, the Linc Receivable shall have been paid in full or
repurchased.
(d) Sale of Other Receivables. If at any time the Seller shall
propose to sell, grant a security interest in, or otherwise transfer any
interest in any automobile, light truck, van or minivan receivables (other than
the Linc Receivables) to any prospective purchaser, lender, or other transferee,
the Seller shall give to such prospective purchaser, lender, or other transferee
computer tapes, records, or print-outs (including any restored from back-up
archives) that, if they shall refer in any manner whatsoever to any Linc
Receivable, shall indicate clearly that such Linc Receivable has been sold and
is owned by the Purchaser unless such Linc Receivable has been paid in full or
repurchased.
(e) Access to Records. The Seller shall permit the Purchaser
and its agents at any time during normal business hours to inspect, audit, and
make copies of and abstracts from the Seller's records regarding any Linc
Receivable; provided, however, that the Seller's obligations under this Section
5.1(e) shall terminate upon the termination of the Trust pursuant to the Pooling
and Servicing Agreement.
(f) List of Receivables. Upon request, the Seller shall
furnish to the Purchaser, within five Business Days, a list of all Linc
Receivables (by contract number and name of Obligor) then owned by the
Purchaser, together with a reconciliation of such list to the Schedule of Linc
Receivables.
5.2. Other Liens or Interests. Except for the conveyances hereunder and
pursuant to the Pooling and Servicing Agreement, the Seller will not sell,
pledge, assign or transfer to any other Person, or grant, create, incur, assume
or suffer to exist any lien on any interest therein, and the Seller shall defend
the right, title, and interest of the Purchaser in, to and
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under the Linc Receivables against all claims of third parties claiming through
or under the Seller; provided, however, that the Seller's obligations under this
Section 5.2 shall terminate upon the termination of the Trust pursuant to the
Pooling and Servicing Agreement.
5.3. Chief Executive Office. During the term of the Linc Receivables,
the Seller will maintain its chief executive office in one of the United States,
except Louisiana or Vermont.
5.4. Costs and Expenses. The Seller agrees to pay all reasonable costs
and disbursements in connection with the perfection, as against all third
parties, of the Purchaser's right, title and interest in and to the Linc
Receivables.
5.5. Delivery of Receivable Files. On or prior to the Closing Date, the
Seller shall cause to be delivered to the Trustee at the location specified in
Schedule B to the Pooling and Servicing Agreement the Receivables Files relating
to the Linc Receivables. The Seller shall have until the last day of the second
Collection Period following receipt of notification that there has been a
failure to deliver a file with respect to a Linc Receivable or that a file is
unrelated to the Receivables identified in Schedule A to the Pooling and
Servicing Agreement or that any of the documents referred to in Section 2.7 of
the Pooling and Servicing Agreement are not contained in a Receivable File, to
deliver such file or any of the aforementioned documents required to be included
in such Receivable File to the Trustee. Unless such defect with respect to such
Receivable File shall have been cured by the last day of the second Collection
Period following discovery thereof by the Trustee and notice thereof to Linc,
the Seller hereby agrees to repurchase any such Receivable from the Trust as of
such last day. In consideration of the purchase of the Receivable, the Seller
shall remit the Purchase Amount in the manner specified in Section 4.5 of the
Pooling and Servicing Agreement. The sole remedy hereunder of the Trustee, the
Trust or the Certificateholders with respect to a breach of this Section 5.5,
shall be to require the Seller to repurchase the Receivable pursuant to this
Section 5.5. Upon receipt of the Purchase Amount, the Trustee shall release to
the Seller or its designee the related Receivable File and shall execute and
deliver all instruments of transfer or assignment, without recourse, as are
prepared by the Seller and delivered to the Trustee and are necessary to vest in
the Seller or such designee title to the Receivable.
5.6. Indemnification. (a) The Seller shall indemnify the Purchaser for
any liability as a result of the failure of a Linc Receivable to be originated
in compliance with all requirements of law and for any breach of any of its
representations and warranties contained herein.
(b) The Seller shall defend, indemnify, and hold harmless the
Purchaser from and against any and all costs, expenses, losses, damages, claims,
and liabilities, arising out of or resulting from the use, ownership, or
operation by the Seller or any Affiliate thereof of a Financed Vehicle related
to a Linc Receivable.
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(c) The Seller shall defend, indemnify, and hold harmless the
Purchaser from and against any and all taxes, except for taxes on the net income
of the Purchaser, that may at any time be asserted against the Purchaser with
respect to the transactions contemplated herein, including, without limitation,
any sales, gross receipts, general corporation, tangible personal property,
privilege, or license taxes and costs and expenses in defending against the
same.
(d) The Seller shall defend, indemnify, and hold harmless the
Purchaser from and against any and all costs, expenses, losses, damages, claims
and liabilities to the extent that such cost, expense, loss, damage, claim or
liability arose out of, or was imposed upon the Purchaser through, the
negligence, willful misfeasance, or bad faith of the Seller in the performance
of its duties under this Agreement, or by reason of reckless disregard of the
Seller's obligations and duties under this Agreement.
Indemnification under this Section 5.6 shall include reasonable fees
and expenses of litigation and shall survive payment of the Certificates. These
indemnity obligations shall be in addition to any obligation that the Seller may
otherwise have.
5.7. Sale. The Seller agrees to treat this conveyance for all purposes
(including without limitation tax and financial accounting purposes) as a sale
on all relevant books, records, tax returns, financial statements and other
applicable documents.
5.8. Non-Petition. In the event of any breach of a representation and
warranty made by the Purchaser hereunder, the Seller covenants and agrees that
it will not take any action to pursue any remedy that it may have hereunder, at
law, in equity or otherwise, until a year and a day have passed since the date
on which all Certificates issued by the Trust or a similar trust formed by the
Purchaser have been paid in full. The Purchaser and the Seller agree that
damages will not be an adequate remedy for such breach and that this covenant
may be specifically enforced by the Purchaser or by the Trust.
ARTICLE VI
MISCELLANEOUS PROVISIONS
6.1. Obligations of Seller. The obligations of the Seller under this
Agreement shall not be affected by reason of any invalidity, illegality or
irregularity of any Linc Receivable.
6.2. Repurchase Events. The Seller hereby covenants and agrees with the
Purchaser for the benefit of the Purchaser, the Trustee, the Certificate Insurer
and the Certificateholders, that (i) the occurrence of a breach of any of the
Seller's representations and warranties contained in Section 3.2(b) hereof
(without regard to any limitations regarding the Seller's knowledge) and (ii)
the failure of the Seller to timely comply with its obligations pursuant to
Section 5.5 hereof, shall constitute events obligating the Seller to repurchase
the
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affected Linc Receivables hereunder ("Repurchase Events"), at the Purchase
Amount from the Trust. Unless the breach of any of the Seller's representations
and warranties shall have been cured by the last day of the second Collection
Period following the discovery thereof by or notice to the Purchaser and the
Seller of such breach, the Seller shall repurchase any Linc Receivable if such
Linc Receivable is materially and adversely affected by the breach as of the
last day of such second Collection Period (or, at the Seller's option, the last
day of the first Collection Period following the discovery) and, in the event
that the breach relates to a characteristic of the Linc Receivables in the
aggregate, and if the Trust is materially and adversely affected by such breach,
unless the breach shall have been cured by such second Collection Period, the
Seller shall purchase such aggregate Principal Balance of Linc Receivables, such
that following such purchase such representation shall be true and correct with
respect to the remainder of the Linc Receivables in the aggregate. The
provisions of this Section 6.2 are intended to grant the Trustee a direct right
against the Seller to demand performance hereunder, and in connection therewith
the Seller waives any requirement of prior demand against the Purchaser and
waives any defaults it would have against the Purchaser with respect to such
repurchase obligation. Any such purchase shall take place in the manner
specified in Section 4.5 of the Pooling and Servicing Agreement. The sole remedy
hereunder of the Certificateholders, the Trust, the Certificate Insurer, the
Trustee or the Purchaser against the Seller with respect to any Repurchase Event
shall be to enforce the Seller's obligation to repurchase such Linc Receivables
pursuant to this Agreement; provided, however, that the Seller shall indemnify
the Trustee, the Certificate Insurer, the Trust and the Certificateholders
against all costs, expenses, losses, damages, claims and liabilities, including
reasonable fees and expenses of counsel, which may be asserted against or
incurred by any of them, as a result of third party claims arising out of the
events or facts giving rise to such breach. Upon receipt of the Purchase Amount,
the Purchaser shall cause the Trustee to release the related Receivables File to
the Seller and to execute and deliver all instruments of transfer or assignment,
without recourse, as are necessary to vest in the Seller title to the Linc
Receivable. Notwithstanding the foregoing, if it is determined that consummation
of the transactions contemplated by the Pooling and Servicing Agreement and the
other transaction documents referenced in such Agreement, servicing and
operation of the Trust pursuant to the Pooling and Servicing Agreement and such
other documents, or the ownership of a Certificate by a Holder constitutes a
violation of the prohibited transaction rules of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), or the Internal Revenue Code of
1986, as amended ("Code"), for which no statutory exception or administrative
exemption applies, such violation shall not be treated as a Repurchase Event.
6.3. Reassignment of Purchased Receivables. With respect to all Linc
Receivables repurchased by the Seller pursuant to this Agreement, the Purchaser
shall assign, without recourse except as provided herein, representation or
warranty, to the Seller all the Purchaser's right, title and interest in and to
such Linc Receivables, and all security and documents relating thereto.
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6.4. Conveyance as Sale of Receivables Not Financing. The parties
hereto intend that the conveyance under this Agreement be a sale of the Linc
Receivables and the other Transferred Linc Property from the Seller to the
Purchaser and not a financing secured by such assets; and the beneficial
interest in and title to the Linc Receivables and the other Transferred Linc
Property shall not be part of the Seller's estate in the event of the filing of
a bankruptcy petition by or against the Seller under any bankruptcy law. In the
event that any conveyance hereunder is for any reason not considered a sale, the
parties intend that this Agreement constitute a security agreement under the UCC
(as defined in the UCC as in effect in the State of Texas) and applicable law,
and the Seller hereby grants to the Purchaser a first priority perfected
security interest in, to and under the Linc Receivables and the other
Transferred Linc Property being delivered to the Purchaser on the Closing Date,
and other property conveyed hereunder and all proceeds of any of the foregoing
for the purpose of securing payment and performance of the Certificates and the
repayment of amounts owed to the Purchaser from the Seller.
6.5. Trust. The Seller acknowledges that the Purchaser will, pursuant
to the Pooling and Servicing Agreement, sell the Receivables to the Trust and
assign its rights under this Purchase Agreement, the CPS Purchase Agreement and
the Samco Purchase Agreement to the Trustee for the benefit of the
Certificateholders, and that the representations and warranties contained in
this Agreement and the rights of the Purchaser under this Purchase Agreement,
including under Sections 6.2 and 6.4 hereof are intended to benefit such Trust
and the Certificateholders. The Seller also acknowledges that the Trustee on
behalf of the Certificateholders as assignee of the Purchaser's rights hereunder
may directly enforce, without making any prior demand on the Purchaser, all the
rights of the Purchaser hereunder including the rights under Sections 6.2 and
6.4 hereof. The Seller hereby consents to such sale and assignment.
6.6. Amendment. This Agreement may be amended from time to time by a
written amendment duly executed and delivered by the Seller and the Purchaser
with the consent of the Certificate Insurer; provided, however, that (i) any
such amendment that materially adversely affects the rights of the Class A
Certificateholders under the Pooling and Servicing Agreement must be consented
to by the holders of Class A Certificates representing more than 50% of the
Class A Certificate Balance and (ii) any amendment that materially adversely
affects the rights of the Class B Certificateholders under the Pooling and
Servicing Agreement must be consented to by the holders of Class B Certificates
representing more than 50% of the Class B Certificate Balance.
6.7. Waivers. No failure or delay on the part of the Purchaser in
exercising any power, right or remedy under this Agreement shall operate as a
waiver thereof, nor shall any single or partial exercise of any such power,
right or remedy preclude any other or further exercise thereof or the exercise
of any other power, right or remedy.
6.8. Notices. All communications and notices pursuant hereto to either
party shall be in writing or by telegraph or telex and addressed or delivered to
it at its address (or in
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case of telex, at its telex number at such address) shown in the opening portion
of this Agreement or at such other address as may be designated by it by notice
to the other party and, if mailed or sent by telegraph or telex, shall be deemed
given when mailed, communicated to the telegraph office or transmitted by telex.
6.9. Costs and Expenses. The Seller will pay all expenses incident to
the performance of its obligations under this Purchase Agreement.
6.10. Representations of the Seller and the Purchaser. The respective
agreements, representations, warranties and other statements by the Seller and
the Purchaser set forth in or made pursuant to this Purchase Agreement shall
remain in full force and effect and will survive the closing under Section 2.2
hereof.
6.11. Confidential Information. The Purchaser agrees that it will
neither use nor disclose to any Person the names and addresses of the Obligors,
except in connection with the enforcement of the Purchaser's rights hereunder,
under the Linc Receivables, under the Pooling and Servicing Agreement or as
required by law.
6.12. Headings and Cross-References. The various headings in this
Purchase Agreement are included for convenience only and shall not affect the
meaning or interpretation of any provision of this Purchase Agreement.
References in this Purchase Agreement to Section names or numbers are to such
Sections of this Purchase Agreement.
6.13. Third Party Beneficiaries. The parties hereto hereby expressly
agree that each of the Trustee for the benefit of the Certificateholders and the
Certificate Insurer shall be third party beneficiaries with respect to this
Agreement, provided, however, that no third party other than the Trustee for the
benefit of the Certificateholders and the Certificate Insurer shall be deemed a
third party beneficiary of this Agreement.
6.14. Governing Law. THIS PURCHASE AGREEMENT AND THE ASSIGNMENTS SHALL
BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE
OF NEW YORK WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.
6.15. Counterparts. This Agreement may be executed in two or more
counterparts and by different parties on separate counterparts, each of which
shall be an original, but all of which together shall constitute one and the
same instrument.
[Rest of page intentionally left blank.]
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IN WITNESS WHEREOF, the parties hereby have caused this Agreement to be
executed by their respective officers thereunto duly authorized as of the date
and year first above written.
CPS RECEIVABLES CORP.
By:/s/ Xxxxxxx X. Xxxxx
Name: Xxxxxxx X. Xxxxx
Title: Chief Financial Officer
LINC ACCEPTANCE COMPANY LLC
By:/s/ W. Xxxxxx Xxxxxxx
Name: W. Xxxxxx Xxxxxxx
Title: Executive Vice President
and Treasurer
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Exhibit A
ASSIGNMENT
For value received, in accordance with the Purchase Agreement (the
"Linc Purchase Agreement") dated as of May 1, 1998, between the undersigned (the
"Seller") and CPS Receivables Corp. (the "Purchaser"), the undersigned does
hereby sell, transfer, assign and otherwise convey unto the Purchaser, without
recourse (subject to the obligations in the Linc Purchase Agreement and the
Pooling and Servicing Agreement), all right, title and interest of the Seller in
and to (i) the Linc Receivables listed in the Schedule of Linc Receivables and,
with respect to Linc Receivables that are Rule of 78's Receivables, all monies
due or to become due thereon after the Cutoff Date (including Scheduled Payments
due after the Cutoff Date (including principal prepayments relating to such
Scheduled Payments) but received by the Seller on or before the Cutoff Date)
and, with respect to Linc Receivables that are Simple Interest Receivables, all
monies received thereunder after the Cutoff Date, and all Liquidation Proceeds
and Recoveries received with respect to such Receivables; (ii) the security
interests in the Financed Vehicles granted by Obligors pursuant to the Linc
Receivables and any other interest of the Seller in such Financed Vehicles,
including, without limitation, the certificates of title or, with respect to
Financed Vehicles in the State of Michigan, other evidence of ownership with
respect to Financed Vehicles; (iii) any proceeds from claims on any physical
damage, credit life and credit accident and health insurance policies or
certificates relating to the Financed Vehicles securing the Linc Receivables;
(iv) refunds for the costs of extended service contracts with respect to
Financed Vehicles securing the Linc Receivables, refunds of unearned premiums
with respect to credit life and credit accident and health insurance policies or
certificates covering an Obligor or Financed Vehicle securing the Linc
Receivables or his or her obligations with respect to such a Financed Vehicle
and any recourse to Dealers for any of the foregoing; (v) the Receivable File
related to each Linc Receivable; and (vi) the proceeds of any and all of the
foregoing. The foregoing sale does not constitute and is not intended to result
in any assumption by the Purchaser of any obligation of the undersigned to the
Obligors, insurers or any other Person in connection with the Linc Receivables,
the Receivable Files, any insurance policies or any agreement or instrument
relating to any of them.
This Assignment is made pursuant to and upon the representations,
warranties and agreements on the part of the undersigned contained in the Linc
Purchase Agreement and is to be governed by the Linc Purchase Agreement.
Capitalized terms used herein and not otherwise defined shall have the
meanings assigned to them in the Linc Purchase Agreement.
THIS ASSIGNMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE INTERNAL LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICTS OF LAW
PRINCIPLES.
IN WITNESS WHEREOF, the undersigned has caused this Assignment to be
duly executed as of May 18, 1998.
LINC ACCEPTANCE COMPANY LLC
By:
Name:
Title:
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Exhibit B
Schedule of Linc Receivables
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