Exhibit 1.1
Underwriting Agreement
EXECUTION COPY
CPS AUTO GRANTOR TRUST 1998-2
$200,490,176 6.09%
Class A Pass-Through Certificates
UNDERWRITING AGREEMENT
May 13, 1998
First Union Capital Markets
One First Union Center
000 Xxxxx Xxxxxxx Xxxxxx, XX-0
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Ladies and Gentlemen:
CPS Receivables Corp. (the "Company"), a California corporation and
wholly-owned subsidiary of Consumer Portfolio Services, Inc., a California
corporation ("CPS"), proposes to issue and sell to you in your capacity as the
Underwriter (the "Underwriter"), $200,490,176 aggregate principal amount of CPS
Auto Grantor Trust 1998-2 6.09% Asset-Backed Certificates, Class A (the
"Certificates"). The Certificates will be issued by CPS Auto Grantor Trust
1998-2 (the "Trust") pursuant to the Pooling and Servicing Agreement (the
"Pooling and Servicing Agreement") dated as of May 1, 1998 among the Company,
CPS, as servicer (in such capacity, the "Servicer") and Norwest Bank Minnesota,
National Association, as trustee (the "Trustee") and standby servicer. Pursuant
to the Pooling and Servicing Agreement, the Trust will also issue $10,552,115
aggregate principal amount of CPS Auto Grantor Trust 1998-2 10.34% Asset-Backed
Certificates, Class B (the "Class B Certificates") which are not being offered
pursuant to the Registration Statement (as defined below) and are not the
subject of this Agreement. The Certificates will evidence, in the aggregate,
beneficial ownership of an undivided 95% interest in the Trust (other than
interest received by the Trust in excess of the Class A Pass-Through Rate). The
Class B Certificates will evidence, in the aggregate, beneficial ownership of an
undivided 5% interest in the Trust (other than interest received by the Trust in
excess of the Class B Pass-Through Rate). The assets of the Trust will include,
among other things, a pool of retail installment sale contracts and all rights
and obligations thereunder (collectively, the "Receivables"), with respect to
Rule of 78's Receivables, all payments due thereunder after May 1, 1998 (the
"Cutoff Date"), with respect to 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 Certificateholders only) and the right of the Company to
receive certain insurance proceeds and certain other property, all as more
specifically described in the Pooling and Servicing Agreement.
The Certificates will be issued in an aggregate principal amount of
$200,490,176 which is equal to 95% of the aggregate principal balance of the
Receivables as of the Cutoff Date. The Certificates will bear interest at an
annual rate equal to 6.09% (the "Class A Pass-Through Rate") in accordance with
the provisions of the Pooling and Servicing Agreement. The Class B Certificates
will be issued in an aggregate principal amount of $10,552,115 which is equal to
5% of the aggregate principal balance of the Receivables as of the Cutoff Date.
The Class B Certificates will bear interest at an annual rate equal to 10.34%
(the "Class B Pass-Through Rate") in accordance with the provisions of the
Pooling and Servicing Agreement.
To the extent not otherwise defined herein, capitalized terms used
herein shall have the meanings assigned to such terms in the Pooling and
Servicing Agreement.
As the Underwriter, you have advised the Company that (a) you are
authorized to enter into this Agreement and (b) you are willing to purchase the
aggregate principal amount of the Certificates 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, CPS, with respect to CPS,
Samco, with respect to Samco, Linc, with respect to Linc and both the Company
and CPS in all other instances, each represents and warrants to, and agrees with
the 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. 333-49945),
including a Base Prospectus, for registration of the offering and sale of the
Certificates 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 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 the Underwriter. The
offering of the Certificates is a Delayed Offering and, although the Base
Prospectus may not include all the information with respect to the Certificates
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 Certificates and the offering thereof. As
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filed, such final supplement shall include all required information with respect
to the Certificates and, except to the extent the Underwriter shall agree in
writing to any modification thereof, shall be in all substantive respects in the
form furnished to the Underwriter 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
the Underwriter, 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 the Underwriter specifically for inclusion in the
Registration Statement or the Final Prospectus (or any supplement or amendment
thereto) or the information regarding the Certificate Insurer set forth under
the heading "THE CERTIFICATE INSURER" in or incorporated by reference in the
Preliminary Final Prospectus and the Final Prospectus.
(c) The terms which follow, when used in this Agreement, shall have the
meanings indicated.
"Base Prospectus" shall mean the prospectus referred to in
Section 1(a) hereof contained in the Registration Statement at the
Effective Date.
"Delayed Offering" shall mean the offering of the Certificates
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 Certificates.
"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
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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 Certificates 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
Certificates and the offering thereof and is used prior to filing of
the Final Prospectus.
"Prospectus" shall mean, collectively, the Base Prospectus,
any Preliminary Final Prospectus and the Final Prospectus.
"Registration Statement" shall mean (i) the Registration
Statement referred to in Section 1(a) hereof, including all documents
incorporated therein by reference, exhibits, financial statements and
notes thereto and related schedules and other statistical and financial
data and information included therein, as amended at the Execution Time
(or, if not effective at the Execution Time, in the form in which it
shall become effective); (ii) in the event any post-effective amendment
thereto becomes effective prior to the Closing Date, such Registration
Statement as so amended; and (iii) in the event any Rule 462(b)
Registration Statement becomes effective prior to the Closing Date,
such Registration Statement as so modified by the Rule 462(b)
Registration Statement, from and after the effectiveness thereof. Such
term shall include any Rule 430A Information deemed to be included
therein at the Effective Date as provided by Rule 430A.
"Rule "415", "Rule 424", "Rule "430A" and "Regulation S-K"
refer to such rules or regulation under the 1933 Act.
"Rule 430A Information" means information with respect to the
Certificates 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.
333-49945).
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
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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, 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 or Samco's or Linc's ability to perform its
obligations under this Agreement or the Pooling 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.
(h) Except for the registration of the Certificates 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 Certificates by the
Underwriter 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 Certificates or the consummation of the other transactions contemplated by
this Agreement or the Pooling 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.
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(i) The Commission has not issued an order preventing or suspending the
use of any Prospectus relating to the proposed offering of the Certificates, 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
Certificate Insurer, as to which no representation is made by CPS or the
Company) which are incorporated by reference in the Registration Statement and
the Final Prospectus 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, Samco and Linc 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, Samco and Linc 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, Samco's or Linc's business with Cuba or with any person or
affiliate located in Cuba changes in any material way, each of the Company, CPS,
Samco and Linc, as the case may 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, Samco and
Linc contained in each of the Basic Documents, including this Agreement, will be
true and correct in all material respects 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, Samco and Linc has full power and
authority (corporate and other) to enter into and perform its obligations under
this Agreement, the Pooling 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 Certificates will have been duly authorized by the
Company, the Certificates will have been duly executed and delivered by the
Company and, when authenticated by the
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Trustee in accordance with the Pooling and Servicing Agreement 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 Pooling and
Servicing Agreement, 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, Samco and Linc, as applicable, and constitutes a valid
and binding agreement of each of the Company, CPS, Samco and Linc, as
applicable, enforceable against the Company, CPS, Samco and Linc 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 its 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 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, CPS, Samco or Linc to perform its
obligations under any of the Basic Documents or the Certificates.
(q) The issuance and delivery of the Certificates, the consummation of
any other of the transactions contemplated herein or in the Pooling and
Servicing Agreement or in any of the other Basic Documents or the fulfillment of
the terms of this Agreement or the Pooling and Servicing Agreement or any of the
other Basic Documents, subject to the registration of the Certificates 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 Certificates by the Underwriter or the filing requirements of Rule 430A or
Rule 424(b) under the 1933 Act, do not and will not conflict with or violate any
term or provision of the Articles of Incorporation or By-Laws of the Company or
CPS or Samco, the Certificate of Formation or Limited Liability Company
Agreement of Linc, any statute, order or regulation applicable to the Company or
CPS or Samco or Linc of any court, regulatory body, administrative agency or
governmental body having jurisdiction over the Company or CPS or 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 or CPS or Samco or Linc (other than in favor of the Trustee or as
otherwise permitted under the Pooling and Servicing Agreement) pursuant to the
terms of any indenture,
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mortgage, deed of trust, loan agreement or other agreement or instrument to
which the Company or CPS or Samco or Linc is a party or by which the Company or
CPS or Samco or Linc may be bound or to which any of the property or assets of
the Company or CPS or 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 or CPS or 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 Pooling and
Servicing Agreement, the other Basic Documents and the Certificates 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
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 Pooling and Servicing Agreement as a sale of the
Receivables. Each of CPS and the Company has been advised by KPMG Peat Marwick
LLP, 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 Assets"), 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
Assets. The assignment of the Receivables and the other Trust Assets, including
all the proceeds thereof, to the Trust pursuant to the Pooling 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 Company shall
have been filed in the Office of the Secretary of State of
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the State of California, (ii) evidencing the transfer of the applicable Samco
Receivables to the Company 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 Company shall have been filed in the Office of the
Secretary of State of the State of Connecticut, and (iv) evidencing the transfer
of the applicable Receivables from the Company to the Trust shall have been
filed in the Office of the Secretary of State of the State of California and
there shall be no unreleased statements affecting the Receivables filed in such
offices 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 Assets 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 Pooling 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 Assets and the proceeds thereof, which security interest will be perfected
by virtue of the Financing Statements having been filed in the office of the
Secretary of State of the State of California. No filing or other action, other
than the filing of the Financing Statements in the offices of the Secretaries of
State of the States of California, Texas and Connecticut referred to above and
the execution and delivery of the Pooling 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) The Pooling and Servicing Agreement is not required to be qualified
under the Trust Indenture Act.
(x) 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 CERTIFICATES.
Subject to the terms and conditions and in reliance upon the
representations, warranties and covenants herein set forth, the Company agrees
to sell to the Underwriter, and the Underwriter agrees to purchase from the
Company, the initial principal amount of the Certificates set forth in Schedule
I hereto, at the purchase price specified in Schedule I.
The Company will deliver against payment of the purchase price the
Certificates in the form of one or more permanent global Certificates in
definitive form (the "Global Certificates") 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 Certificates will be
held only in book-entry form through DTC except in the limited circumstances
described in the Final Prospectus. Payment for the Certificates will be made by
the Underwriter by wire transfer of same day funds to an account previously
designated to the Underwriter by the Company at the offices of Xxxxx, Xxxxx &
Xxxxx, 0000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, at 9:30 a.m. (New York time) on
May 18, 1998, or at such other time as is mutually agreed (such time being
herein referred to as the "Closing Date") against delivery of the Global
Certificates
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representing all of the Certificates. The Global Certificates will be made
available for inspection at the above office of Xxxxx, Xxxxx & Xxxxx at least 24
hours prior to the Closing Date.
As used herein, "business day" means a day on which the New York Stock
Exchange is open for trading and on which banks in New York, California and
Minnesota are open for business and are not permitted by law or executive order
to be closed.
3. OFFERING BY THE UNDERWRITER.
The Company and CPS are advised by the Underwriter that it proposes to
make a public offering of the Certificates, as set forth in the Final
Prospectus, from time to time as and when the Underwriter deems advisable after
the Registration Statement becomes effective. The Company agrees that the
Underwriter may, but is not obligated to, make a market in the Certificates and
that any such market making by the Underwriter may be discontinued at any time
in the sole discretion of the Underwriter.
4. COVENANTS OF THE COMPANY AND CPS.
The Company, and CPS (if so stated), covenants and agrees with the
Underwriter 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 Certificates, 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 the Underwriter a copy for its review prior to filing
and will not file any such proposed amendment or supplement to which the
Underwriter reasonably objects and which is not in compliance with the 1933 Act
Regulations. The Company will promptly advise the Underwriter (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
Certificates, 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 Certificates 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
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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 the Underwriter, 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
Certificates by the Underwriter 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 Underwriter,
from time to time, as many copies of any Preliminary Final Prospectus as the
Underwriter may reasonably request. The Company will deliver to, or upon the
order of, the Underwriter 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 Underwriter may reasonably request.
The Company will deliver to the Underwriter 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 Underwriter 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 Underwriter 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 Certificates 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 the Underwriter or dealer in
connection with the sale of any Certificates, any event shall occur as a result
of which, in the judgment of the Company or in the reasonable opinion of the
Underwriter, 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 the
Underwriter 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.
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(e) The Company will cooperate with the Underwriter in endeavoring to
qualify the Certificates for sale under the laws of such jurisdictions as the
Underwriter may designate and will maintain such qualifications in effect so
long as required for the distribution of the Certificates, except that the
Company will not be obligated to qualify the Certificates 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
Certificates 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 Underwriter may reasonably request for distribution of the
Certificates.
(f) The Company shall not invest, or otherwise use the proceeds
received by the Company from its sale of the Certificates 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 Certificates, or until such time as the
Underwriter shall cease to maintain a secondary market in the Certificates,
whichever occurs first, the Company will deliver to the Underwriter the annual
statements of compliance and the annual independent certified public
accountant's reports furnished to the Trustee pursuant to the Pooling and
Servicing Agreement, as soon as such statements and reports are furnished to the
Trustee.
(h) The Company, CPS, Samco and Linc 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 the Underwriter or its counsel
such additional documents and information regarding each of them and their
respective affairs as the Underwriter may from time to time reasonably request
and which the Company, CPS, Samco or Linc possess or can acquire without
unreasonable effort or expense, including any and all documentation requested in
connection with the 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
Certificates shall be reasonably satisfactory in form and substance to the
Underwriter.
(i) The Company will cause the Trust to make generally available to
Certificateholders 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 Certificates are outstanding, the Company
will furnish to the Underwriter copies of all reports or other communications
(financial or otherwise) furnished or made available to Certificateholders, and
deliver to the Underwriter during such period, (i) as soon as they are
available, copies of any reports and financial statements filed by or on behalf
of
-12-
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 Underwriter may
from time to time reasonably request.
(k) On or before the Closing Date, the Company, CPS, Samco and Linc
shall cause the respective computer records of the Company, CPS, Samco and Linc
relating to the Receivables to be marked to show the Trustee's absolute
ownership of the Receivables, and from and after the Closing Date none of the
Company, CPS, Samco or Linc shall take any action inconsistent with the
Trustee's ownership of such Receivables, other than as expressly permitted by
the Pooling and Servicing Agreement.
(l) To the extent, if any, that the ratings provided with respect to
the Certificates by either of the Rating Agencies is conditional upon the
furnishing of documents or the taking of any other actions by the Company, CPS,
Samco or Linc, 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
Certificate Insurer to issue the Policy to the Trustee for the benefit of the
holders of the Certificates in form and substance satisfactory to the
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 Underwriter 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 Certificates or in
contemplation of performing the Underwriter's obligations hereunder and
including, without limiting the generality of the foregoing, the following: (i)
accounting fees of the Company; (ii) the fees and disbursements of Xxxxx, Xxxxx
& Xxxxx; (iii) the cost of printing and delivering to, or as requested by, the
Underwriter copies of the Registration Statement, Preliminary Final
Prospectuses, the Final Prospectus, this Agreement, the listing application in
respect of the Certificates, 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 Certificates; and (vi) the fees and
expenses of the Trustee, including the fees and disbursements of counsel for the
Trustee, in connection with the Certificates, the Pooling and Servicing
Agreement and the other Basic Documents to which the Trustee is a party and the
expenses, including the fees and disbursements of counsel for the Underwriter,
incurred in connection with the qualification of the Certificates 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 Underwriter pursuant to Section 12 hereof (other
than on the basis of a default by the Underwriter pursuant to Section 10
hereof), or by reason of
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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
the Underwriter, then the Company and CPS, jointly and severally, shall
reimburse the Underwriter 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 Certificates 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
the Underwriter for damages on account of loss of anticipated profits from the
sale by them of the Certificates. Except to the extent expressly set forth in
this Section 6, the Underwriter shall each be responsible for their own costs
and expenses, including the fees and expenses of their counsel.
7. CONDITIONS OF OBLIGATIONS OF THE UNDERWRITER.
The obligation of the Underwriter to purchase and pay for the
Certificates on the Closing Date is subject to the accuracy in all material
respects as of the Closing Date of the representations and warranties of the
Company, CPS, Samco and Linc contained herein, to the performance by the
Company, CPS, Samco and Linc 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 Underwriter agrees 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
Certificates, 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 Certificates 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 Underwriter 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 Certificates.
(b) On or prior to the date of this Agreement and on or prior to the
Closing Date, the Underwriter shall have received a letter or letters, dated as
of May 18, 1998, and as of the Closing Date, respectively, of KPMG Peat Marwick
LLP, Certified Public Accountants, substantially in the form of the drafts to
which the Underwriter has previously agreed and otherwise in form and substance
satisfactory to the Underwriter and its counsel.
-14-
(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 the Underwriter, materially impairs the investment quality of the
Certificates or the ability of CPS to act as Servicer or (ii) any downgrading in
the rating of any debt securities or preferred stock of the Company, CPS or any
Affiliate thereof by any "nationally recognized statistical rating organization"
(as defined for purposes of Rule 436(g) under the Securities Act), or any public
announcement that any such organization has under surveillance or review its
rating of any debt securities or preferred stock of the Company, CPS or any
Affiliate thereof (other than an announcement with positive implications of a
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 the Underwriter, the
effect of any such outbreak, escalation, declaration, calamity, emergency or
change makes it impractical or inadvisable to proceed with completion of the
private placement of the Certificates.
(d) The Company, CPS, Samco and Linc shall have furnished the
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 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 Certificates, a conformed copy thereof. The Basic
Documents and the Certificates shall be substantially in the forms heretofore
provided to the Underwriter.
(f) The Underwriter shall have received a certificate of the Trustee,
as to the due authorization, execution and delivery of the Pooling and Servicing
Agreement by the Trustee.
(g) The Underwriter shall have received evidence satisfactory to such
Underwriter that the Certificates have been rated "AAA" by Xxxxx'x and "AAA" by
Standard & Poor's.
(h) The Underwriter shall have received from Xxxxx, Xxxxx & Xxxxx,
special counsel for CPS, the Company, Samco (with respect to New York law) and
Linc (with respect to New York law), opinions dated the Closing Date, addressed
to the Underwriter, in a form satisfactory to the Underwriter.
-15-
(i) The Underwriter shall have received from Pullman & Xxxxxx LLC,
special Connecticut counsel for Linc, opinions dated the Closing Date, addressed
to the Underwriter in a form satisfactory to the Underwriter.
(j) The Underwriter shall have received from Xxxxx, Xxxxx & Xxxxx,
special Federal tax counsel for the Company, an opinion dated the Closing Date,
addressed to the Underwriter, with respect to the status of the Trust for
federal income tax purposes.
(k) The Underwriter shall have received from Xxxxx, Xxxxx & Xxxxx, an
opinion dated the Closing Date, addressed to the Underwriter, with respect to
the validity of the Certificates and such other related matters as the
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.
(l) The 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 the Underwriter dated
the Closing Date, in form and substance satisfactory to the Underwriter and its
counsel.
(m) The Underwriter shall have received from counsel to the Certificate
Insurer, which counsel shall be reasonably acceptable to the Underwriter, an
opinion addressed to the Underwriter, dated the Closing Date, in form and
substance satisfactory to the Underwriter and its counsel.
(n) At the Closing Date, the Underwriter shall have received any and
all opinions of counsel to the Company and CPS supplied to the Rating Agencies
and the Certificate Insurer relating to, among other things, the interest of the
Trustee in the Receivables and the other Trust Assets 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 Certificates. Any such opinions
shall be addressed to the Underwriter or shall indicate that the Underwriter may
rely on such opinions as though they were addressed to the Underwriter, and
shall be dated the Closing Date.
(o) At the Closing Date, the Company, CPS, Samco and Linc shall have
furnished to the Underwriter a certificate, dated the Closing Date, of the
President or any Vice President of the Company, CPS, Samco or Linc, as the case
may be, in which each such officer shall state that: (i) the representations and
warranties of the Company, CPS, Samco or Linc, as applicable, in this Agreement
are true and correct on and as of the Closing Date; (ii) the Company, CPS, Samco
or Linc, 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, Samco or Linc, as
applicable, in each of the Basic Documents are true and correct as of the dates
specified therein; (iv) with respect to the certificate delivered by CPS, the
Registration Statement has become effective under the 1933 Act and no stop order
suspending the effectiveness of the Registration Statement has been issued, and
no proceedings for such
-16-
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 and the
Final Prospectus and, in his or her opinion, as of the Effective Date of the
Registration Statement, the statements contained in the Registration Statement
were true and correct, and as of the Closing Date the Registration Statement and
the Final Prospectus do not contain any untrue statement of a material fact or
omit to state a material fact with respect to the Company, CPS, Samco or Linc
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,
Samco or Linc which should have been set forth in a supplement to or an
amendment of the Final Prospectus which has not been so set forth in such
supplement or amendment; and (vi) subsequent to the respective dates as of which
information is given in the Registration Statement and the Final Prospectus,
there has been no material adverse change, or any development with respect to
the Company, CPS, Samco or Linc 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, Samco or Linc except as contemplated
by the Final Prospectus or as described in such certificate.
(p) The Underwriter shall have received evidence satisfactory to the
Underwriter that the Certificate Insurer shall have issued the Policy to the
Trustee for the benefit of the Certificateholders in form and substance
satisfactory to the Underwriter.
(q) The 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 Assets 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 Samco in the Samco
Receivables included in the Receivables and the related other Trust Assets 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 Linc in the Linc Receivables included in the Receivables and the related
other Trust Assets and the proceeds thereof to the Company, and (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
Assets and the proceeds thereof to the Trustee.
(r) All proceedings in connection with the transactions contemplated by
this Agreement, the Pooling 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 the Underwriter.
(s) The Company shall have furnished to the Underwriter such further
certificates and documents confirming the representations and warranties,
covenants and conditions contained herein and related matters as the Underwriter
may reasonably have requested.
-17-
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 Underwriter.
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 Underwriter hereunder may be terminated by the
Underwriter 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
Underwriter 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
Certificates 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 the Underwriter, its directors, officers, employees and agents and
each person, if any, who controls the Underwriter within the meaning of the 1933
Act or the 1934 Act, against any losses, claims, damages or liabilities to which
the 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 or any amendment or supplement thereto (other than
information contained therein under the heading "the Certificate Insurer" and
information incorporated by reference therein), or (ii) the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading in the light of the
circumstances under which they were made; and will reimburse the Underwriter and
each such person within 30 days of presentation of a written request therefor
for any legal or other expenses reasonably incurred by the 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 Certificates, whether or not the
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, 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 Underwriter specifically for use in the preparation thereof; provided,
further, that
-18-
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, or any
amendment or supplement thereto, such indemnity agreement shall not inure to the
benefit of the Underwriter if the Underwriter failed to send or give a copy of
the Final Prospectus (as amended or supplemented, if the Company or CPS, as the
case may be, shall have furnished any amendment or supplement thereto to the
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, as so amended or supplemented, was
required under the 1933 Act to be delivered to such person.
(b) (i) The Underwriter, 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 the Underwriter, its directors, officers, employees and
agents and each person who controls the 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, 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 Underwriter
specifically for use in the preparation of the Registration Statement, the Base
Prospectus, any Preliminary Final Prospectus, the Final Prospectus or any
amendment or supplement thereto. This indemnity agreement will be in addition to
any liability which the Underwriter may otherwise have. The Company and the
Underwriter acknowledge and agree that the only information furnished or to be
furnished by the 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 Underwriter (insofar as such information
relates to the Underwriter), 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) The Underwriter agrees to indemnify and hold harmless the
Company, CPS, the respective officers, directors, employees and agents of any
such party, and each person who controls the Company or CPS 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
-19-
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 the 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 the Underwriter under
this subsection (ii) shall be in addition to any other liability which the
Underwriter may otherwise have. For purposes hereof, the term "Computational
Materials" means information provided by the Underwriter to a prospective
purchaser of Certificates, 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 Underwriter on or about May
4, 1998 containing information with respect to the Receivables as of the Cutoff
Date.
(iii) The Underwriter shall, no later than the date on which
any Computational Materials are provided to prospective investors by the
Underwriter, provide to CPS for filing with the Commission on Form 8-K a copy of
such Computational Materials delivered by the Underwriter to any prospective
purchaser of Certificates. The Company will cause any Computational Materials
that are delivered by the Underwriter to the Company pursuant to the preceding
sentence to be filed with the Commission on a Current Report on form 8-K (a
"Current Report") pursuant to Rule 13a-11 under the Securities Exchange Act of
1934, as amended (the "Exchange Act") within the time period required by the
Exchange Act and will promptly advise you when such Current Report has been so
filed. The Company shall have no obligation to file any materials provided by
any of the Underwriters pursuant to Section 9 which (A) in the reasonable
determination of the Company are not required to be filed or (B) contain
erroneous information or contain any untrue statement of a material fact or,
when read in conjunction with the Prospectus and Prospectus Supplement, omit to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading; it being understood, however, that the
Company shall have no obligation to review or pass upon the accuracy or adequacy
of, or to correct, any Computational Materials provided by such Underwriter to
the Company pursuant to this paragraph (iii). The Company shall give notice to
the Underwriter of its determination not to file any materials pursuant to
clause (A) of the preceding sentence and agrees to file such materials if the
Underwriter reasonably objects to such determination within one business day
after receipt of such notice.
(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
-20-
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 Underwriter in the case of parties indemnified pursuant to
Section 9(a) and by the Company in the case of parties indemnified pursuant to
Section 9(b). The indemnifying party shall not be liable for any settlement of
any proceeding effected without its written consent but if settled with such
consent or if there be a final judgment for the plaintiff, the indemnifying
party agrees to indemnify the indemnified party from and against any loss or
liability by reason of such settlement or judgment. In addition, the
indemnifying party will not, without the prior written consent of the
indemnified party (which consent shall not be unreasonably withheld or delayed),
settle or compromise or consent to the entry of any judgment in any pending or
threatened claim, action or proceeding of which indemnification may be sought
hereunder (whether or not any indemnified party is an actual or potential party
to such claim, action or proceeding) unless such settlement, compromise or
consent includes an unconditional release of each indemnified party from all
liability arising out of such claim, action or proceeding.
(d) If the indemnification provided for in this Section 9 is
unavailable to or insufficient to hold harmless an indemnified party under
Section 9(a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) referred to therein,
then each indemnifying party shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) in such proportion as
is appropriate to reflect the relative benefits
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received by the Company and CPS on the one hand and the Underwriter on the other
from the offering of the Certificates. 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 Underwriter 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 Underwriter 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 Underwriter (in each case as set forth in the table
on the cover page of the Final Prospectus). 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 Underwriter 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 Underwriter agree that it would not be just
and equitable if contributions pursuant to this Section 9(d) were determined by
pro rata allocation 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) the
Underwriter shall not be responsible for contributing any amount in excess of
the underwriting discounts and commissions applicable to the Certificates
purchased by the Underwriter and (ii) no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the 0000 Xxx) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation.
(e) In any proceeding relating to the Registration Statement, the Base
Prospectus, any Preliminary Final Prospectus, the Final Prospectus, 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
-22-
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 the Underwriter or the Company, (ii) acceptance of any Certificates
and payment thereof or hereunder, and (iii) any termination of this Agreement. A
successor to the Underwriter, the Company or CPS, their respective directors,
officers, employees or agents, or any person controlling the Underwriter, the
Company or CPS, shall be entitled to the benefits of the indemnity, contribution
and reimbursement agreements contained in this Section 9.
10. [RESERVED]
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 Underwriter, to the following address:
First Union Capital Markets
NC0610
One First Union Center
000 Xxxxx Xxxxxxx Xxxxxx/XX0
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Xxxxxxx Xxxxxx
Facsimile No.: (000) 000-0000
if to the Company, at the following address:
CPS Receivables Corp.
0 Xxx
Xxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx Xxxxxxx, Xx.
Facsimile No.: (000) 000-0000;
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
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12. TERMINATION.
This Agreement may be terminated by the Underwriter by notice by the
Underwriter 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, the Company, Samco or Linc, 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 the Underwriter's reasonable judgment,
make it impracticable to market the Certificates or to enforce contracts for the
sale of the Certificates, (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 the Underwriter's
reasonable opinion materially and adversely affects or may materially and
adversely affect the business or operations of the Company, (v) declaration of a
banking moratorium by United States or New York State authorities, (vi) any
downgrading or the giving of notice of any intended or potential downgrading in
the rating of the Company's debt securities by any "nationally recognized
statistical rating organization" (as defined for purposes of Rule 436(g) under
the 1934 Act), (vii) the suspension of trading of the Common Stock by the
Commission on the New York Stock Exchange or (viii) the taking of any action by
any governmental body or agency in respect of its monetary or fiscal affairs
which in the Underwriter's 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
Underwriter, CPS, the Company, Samco and Linc 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 Certificates from the Underwriter shall be deemed a
successor or assign merely because of such purchase.
-24-
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 the Underwriter or the
Company, their respective directors, officers, employees or agents or any
controlling person of the Underwriter or the Company indemnified herein and (c)
delivery of and payment for the Certificates under this Agreement.
The Underwriter agrees that, prior to the date which is one year and
one day after the payment in full of all securities issued by the Company or by
a trust for which the Company was the depositor, which securities were rated by
any nationally recognized statistical rating organization, it will not institute
against, or join any other person in instituting against, the Company any
bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings
or other proceedings under any Federal or state bankruptcy or similar law.
This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
This Agreement shall be governed by, and construed in accordance with,
the laws of the State of New York without regard to the conflict of laws
provisions thereof. With respect to any claim arising out of this Agreement (i)
each party irrevocably submits to the exclusive jurisdiction of the courts of
the State of New York and the United States District Court for the Southern
District of New York, and (ii) each party irrevocably waives (1) any objection
which it may have at any time to the laying of venue of any suit, action or
proceeding arising out of or relating hereto brought in any such court, (2) any
claim that any such suit, action or proceeding brought in any such court has
been brought in any inconvenient forum and (3) the right to object, with respect
to such claim, suit, action or proceeding brought in any such court, that such
court does not have jurisdiction over such party. To the extent permitted by
applicable law, the Underwriter, the Company, CPS, Samco and Linc 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.
-25-
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.]
-26-
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
Underwriter in accordance with its terms.
Very truly yours,
CPS RECEIVABLES CORP.
By: /s/ Xxxxxxx X. Xxxxx
Name: Xxxxxxx X. Xxxxx
Title: Chief Financial Officer
CONSUMER PORTFOLIO SERVICES, INC.
By: /s/ Xxxxxxx X. Xxxxx
Name: Xxxxxxx X. Xxxxx
Title: Chief Financial Officer
SAMCO ACCEPTANCE CORP.
By: /s/ Xxxx X. Louis
Name: Xxxx X. Xxxxx
Title: President
LINC ACCEPTANCE COMPANY LLC
By: /s/ W. Xxxxxx Xxxxxxx
Name: W. Xxxxxx Xxxxxxx
Title: Executive Vice President
and Treasurer
The foregoing Underwriting Agreement is hereby confirmed and accepted as of the
date first above written:
FIRST UNION CAPITAL MARKETS,
a division of Wheat First
Securities, Inc.
By: /s/ Xxxxxxx Xxxxxx
Name: Xxxxxxx Xxxxxx
Title: Managing Director
SCHEDULE I
Initial Principal
Amount of the
Certificates to be
Underwriter Purchased Purchase Price
----------- --------- --------------
First Union Capital Markets $200,490,176 $200,489,233.69
