Exhibit 10.1
Receivables Purchase Agreement
EXECUTION COPY
PURCHASE AGREEMENT dated as of this May 1, 1998 by and between CONSUMER
PORTFOLIO SERVICES, INC., a California corporation (the "Seller"), having its
principal executive office at 2 Xxx, Xxxxxx, Xxxxxxxxxx 00000, 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 Receivables (as hereinafter defined), are to be sold by
the Seller to the Purchaser, which CPS Receivables together with the Samco
Receivables and Linc Receivables (as hereinafter defined) will be transferred by
the Purchaser, pursuant to the Pooling and Servicing Agreement (as hereinafter
defined) to CPS Auto 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 Agreement shall have the meaning set forth in
the Pooling and Servicing Agreement. As used in this 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 CPS Assignment.
"Assignment" means the CPS Assignment, Samco Assignment and/or Linc
Assignment.
"Base Prospectus" means the Prospectus dated April 8, 1998 with respect
to CPS Auto Receivable 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 Purchasers") 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 dated May 18, 1998 by the Seller
to the Purchaser, relating to the purchase of the CPS Receivables and certain
other property related thereto by the Purchaser from the Seller pursuant to this
Agreement, which shall be in substantially the form attached hereto as Exhibit
A.
"CPS Receivable" means each retail installment sale contract for a
Financed Vehicle that appears on the Schedule of CPS Receivables and all rights
thereunder.
"CPS Receivables Purchase Price" means $194,412,158.
"Cutoff Date" means May 1, 1998.
"Distribution Date" means, for each Collection Period, the 15th day of
the following month or, if such 15th day is not a Business Day, the next
succeeding Business Day.
"Linc" means Linc Acceptance Company LLC, a Delaware limited liability
company and its successors and assigns.
"Linc Assignment" means the assignment substantially in the form of
Exhibit A to the Linc Purchase Agreement.
"Linc Purchase Agreement" means the purchase agreement dated as of May
1, 1998, between Linc, 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.
"Linc Receivable" shall have the meaning specified in the Linc Purchase
Agreement.
"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.
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"Pooling and Servicing Agreement" means the Pooling and Servicing
Agreement dated as of May 1, 1998 among CPS Receivables Corp., as seller,
Consumer Portfolio Services, Inc., as originator of the CPS Receivables and
servicer, and Norwest Bank Minnesota, National Association, as trustee and
standby servicer, as such agreement may be amended, supplemented or otherwise
modified in accordance with the terms thereof.
"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, its
successors and assigns.
"Receivable" means, collectively, the CPS Receivables, the Samco
Receivables and the Linc 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
hereto as Exhibit B.
"Schedule of Linc Receivables" means the list of Linc Receivables
annexed as Exhibit B to the Linc Purchase Agreement.
"Schedule of Receivables" means, collectively, the Schedule of CPS
Receivables, the Schedule of Linc Receivables and the Schedule of Samco
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 Consumer Portfolio Services, Inc., a California
corporation, in its capacity as seller of the Receivables and the other CPS
Transferred 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, its successors and
assigns.
"Transferred CPS Property" shall have the meaning specified in Section
2.1(a) hereof.
"Transferred Linc Property" shall have the meaning specified in the
Linc Purchase Agreement.
"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
13, 1998, among the Underwriter, CPS, Samco and the Purchaser relating to the
Class A Certificates.
ARTICLE II
PURCHASE AND SALE OF RECEIVABLES
SECTION 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, title and
interest in, to and under the CPS Receivables and the other Transferred CPS
Property relating thereto. The conveyance to the Purchaser of the CPS
Receivables and other Transferred Property relating thereto is intended as a
sale free and clear of all liens and it is intended that the
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Transferred CPS 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), (i) all right, title and
interest of the Seller in and to the CPS Receivables listed in the Schedule of
CPS Receivables and, with respect to CPS 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 CPS 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) all right, title and interest of the Seller in and to the
security interests in the Financed Vehicles granted by Obligors pursuant to the
CPS Receivables and any other interest of the Seller in the Financed Vehicles,
including, without limitation, the certificates of title or, with respect to
Financed Vehicles in the State of Michigan, such other evidence of ownership
with respect to Financed Vehicles; (iii) all right, title and interest of the
Seller in and to 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 CPS Receivables or the Obligors thereunder;
(iv) all right, title and interest of the Seller in and to refunds for the costs
of extended service contracts with respect to Financed Vehicles securing the CPS
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 CPS Receivables or his or her obligations with
respect to a Financed Vehicle and any recourse to Dealers for any of the
foregoing; (v) the Receivable File related to each CPS Receivable; and (vi) the
proceeds of any and all of the foregoing (collectively, the "Transferred CPS
Property" and, together with the Transferred Samco Property and the Transferred
Linc Property, the "Transferred Property").
(b) CPS Receivables Purchase Price. In consideration for the CPS
Receivables and other CPS Transferred Property described in Section 2.1(a), the
Purchaser shall, on the Closing Date, pay to the Seller the CPS Receivables
Purchase Price. An amount equal to $183,648,059.30 of the Receivables Purchase
Price shall be paid to the Seller in cash. The remaining $3,681,988.70 of the
Receivables Purchase Price shall be deemed paid and returned to the Purchaser
and be considered a contribution to capital. The portion of the Receivables
Purchase Price to paid in cash shall be by federal wire transfer (same day)
funds.
SECTION 2.2 The Closing. The sale and purchase of the CPS Receivables
shall take place at a closing (the "Closing") at the offices of Xxxxx, Xxxxx &
Xxxxx, 0000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000 on the Closing Date,
simultaneously with the closings under: (a) the Samco Purchase Agreement
pursuant to which Samco will sell the Samco Receivables and other Transferred
Samco Property to the Purchaser, (b) the Linc Purchase Agreement pursuant to
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which Linc will sell the Linc Receivables and other Transferred Linc Property to
the Purchaser, (c) the Pooling and Servicing Agreement pursuant to which (i) 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 (ii) the Trust will issue and deliver to the
Purchaser in exchange for the Transferred Property the Certificates, (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
SECTION 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 California 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.
(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
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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 articles 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 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 or the
Pooling and Servicing Agreement and the other Basic Documents, except such as
have been duly made or obtained.
SECTION 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 the 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 California, 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, own and service the 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 conduct of its business
(including the origination and the servicing of the Receivables as
required by the Pooling and Servicing Agreement) shall require such
qualifications.
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(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
have 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 CPS Receivables and the
other Transferred CPS Property conveyed to the Purchaser pursuant to
the CPS 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 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.
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(vii) No Consents. No consent, approval, authorization or
order of or declaration or filing with any governmental authority is
required to be obtained by the Seller for the issuance or sale of the
Certificates or the consummation of the other transactions contemplated
by this 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
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 Receivables to the Purchaser.
(b) The Seller makes the following representations and warranties as to
the Receivables including the Samco Receivables and the Linc Receivables and the
other Transferred Property relating thereto on which the Purchaser relies in
accepting the Receivables and the other Transferred Property relating thereto.
Such representations and warranties speak with respect to each Receivable as of
the Closing Date, but shall survive the sale, transfer, and assignment of the
Receivables and the other Transferred Property relating thereto to the Purchaser
and the subsequent assignment and transfer pursuant to the Pooling and Servicing
Agreement:
(i) Origination Date. Each Receivable has an origination date
on or after May 12, 1997.
(ii) Principal Balance/Number of Contracts. As of the Cutoff
Date, the total aggregate principal balance of the Receivables was
$211,042,291. The Receivables are evidenced by 16,831 Contracts.
(iii) Maturity of Receivables. Each Receivable has an original
term to maturity of not more than 60 months; the weighted average
original term to maturity of the Receivables is 57.46 months as of the
Cutoff Date; the remaining term to maturity of each Receivable was 60
months or less as of the Cutoff Date; the weighted average remaining
term to maturity of the Receivables was 56.35 months as of the Cutoff
Date.
(iv) Characteristics of Receivables. (A) Each Receivable (1)
has been originated in the United States of America by a Dealer for the
retail sale of a Financed Vehicle in the ordinary course of such
Dealer's business, has been fully and properly executed by the parties
thereto and has been purchased by the Seller (or, with respect to the
Samco Receivables, Samco and, with respect to the Linc Receivables,
Linc) in connection with
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the sale of Financed Vehicles by the Dealers, (2) has created a valid,
subsisting, and enforceable first priority security interest in favor
of the Seller (or, with respect to the Samco Receivables, Samco and,
with respect to the Linc Receivables, Linc) in the Financed Vehicle,
which security interest has been assigned by the Seller (or, with
respect to the Samco Receivables, Samco and, with respect to the Linc
Receivables, Linc) to the Purchaser, which in turn has assigned such
security interest to the Trust pursuant to the Pooling and Servicing
Agreement which will in turn assign such security interest to the
Trustee, (3) contains customary and enforceable provisions such that
the rights and remedies of the holder or assignee thereof shall be
adequate for realization against the collateral of the benefits of the
security, (4) provides for level monthly payments that fully amortize
the Amount Financed over the original term (except for the last
payment, which may be different from the level payment) and yield
interest at the Annual Percentage Rate, (5) has an Annual Percentage
Rate of not less than 15.90%, (6) that is a Rule of 78's Receivable
provides for, in the event that such contract is prepaid, a prepayment
that fully pays the Principal Balance and includes a full month's
interest, in the month of prepayment, at the Annual Percentage Rate,
(7) is a Rule of 78's Receivable or a Simple Interest Receivable, and
(8) was originated by a Dealer and was sold by the Dealer without any
fraud or misrepresentation on the part of such Dealer.
(B). As of the Cutoff Date, approximately 91.08% of
the aggregate Principal Balance of the Receivables,
constituting 92.97% of the number of Receivables, represent
financing of used automobiles, light trucks, vans or minivans;
the remainder of the Receivables represent financing of new
automobiles, light trucks, vans or minivans; approximately
45.50% of the aggregate Principal Balance of the Receivables
as of the Cutoff Date were originated under the CPS Alpha
Program; approximately 10.59% of the aggregate Principal
Balance of the Receivables as of the Cutoff Date were
originated under the CPS Delta Program; approximately 8.53% of
the aggregate Principal Balance of the Receivables as of the
Cutoff Date were originated under the CPS First Time Buyer
program; approximately 32.33% of the Principal Balance of the
Receivables as of the Cutoff Date were originated under the
CPS Standard Program; approximately 0.71% of the aggregate
Principal Balance of the Receivables as of the Cutoff Date
were originated under the CPS Super Alpha Program;
approximately 2.35% of the aggregate Principal Balance of the
Receivables as of the Cutoff Date were originated under the
Linc Program; approximately 5.53% of the aggregate Principal
Balance of the Receivables as of the Cutoff Date are Samco
Receivables; approximately 2.35% of the aggregate Principal
Balance of the Receivables as of the Cutoff Date are Linc
Receivables; no Receivable shall have a payment that is more
than 30 days overdue as of the Cutoff Date; 20.35% of the
aggregate Principal Balance of the Receivables as of the
Cutoff Date are Rule of 78's Receivables and 79.65% of the
aggregate Principal Balance of the Receivables as of the
Cutoff Date are Simple Interest Receivables; each Receivable
shall have a final scheduled payment due no later than May,
2003; each Receivable has an original term to maturity of not
more
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than 60 months and a weighted average original term to
maturity of 57.46 months and a remaining term to maturity of
not more than 60 months and a weighted average remaining term
to maturity of 56.35 months; and each Receivable was
originated on or before the Cutoff Date.
(v) Scheduled Payments. Each Receivable had an original
principal balance of not less than $3,024.35 nor more than $28,497.34
and has an outstanding principal balance as of the Cutoff Date of not
less than $2,972.50 and not more than $28,844.02.
(vi) Characteristics of Obligors. As of the date of each
Obligor's application for the loan from which the related Receivable
arises, each Obligor on any Receivable (a) did not have any material
past due credit obligations or any personal or real property
repossessed or wages garnished within one year prior to the date of
such application, unless such amounts have been repaid or discharged
through bankruptcy, (b) was not the subject of any Federal, State or
other bankruptcy, insolvency or similar proceeding pending on the date
of application that is not discharged, (c) had not been the subject of
more than one Federal, State or other bankruptcy, insolvency or similar
proceeding, and (d) was domiciled in the United States.
(vii) Origination of Receivables. Based on the billing address
of the Obligors and the Principal Balances as of the Cutoff Date,
approximately 18.43% of the Receivables were originated in California,
approximately 6.92% of the Receivables were originated in Florida,
approximately 5.08% of the Receivables were originated in Pennsylvania,
approximately 6.52% of the Receivables were originated in Texas and the
remaining 63.05% of the Receivables were originated in all other
states.
(viii) Post-Office Box. On or prior to the next billing period
after the Cutoff Date, the Seller will notify each Obligor to make
payments with respect to its respective Receivable after the Cutoff
Date directly to the Post-Office Box, and will provide each Obligor
with a monthly statement in order to enable such Obligors to make their
payments directly to the Post-Office Box.
(ix) Location of Receivable Files. A complete Receivable File
with respect to each 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.
(x) Schedule of Receivables; Selection Procedures. The
information with respect to the Receivables set forth in the Schedule
of CPS Receivables, Schedule of Samco Receivables and 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
Receivables.
(xi) Compliance with Law. Each Receivable, the sale of the
Financed Vehicle and the sale of any physical damage, credit life and
credit accident and health insurance
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and any extended service contracts complied at the time the related
Receivable was originated or made and at the execution of this
Agreement complies in all material respects with all requirements of
applicable Federal, State and local laws, and regulations thereunder
including, without limitation, usury laws, the Federal Truth-in-Lending
Act, the Equal Credit Opportunity Act, the Fair Credit Reporting Act,
the Fair Debt Collection Practices Act, the Federal Trade Commission
Act, the Xxxxxxxx-Xxxx Warranty Act, the Federal Reserve Board's
Regulations B and Z, the Soldiers' and Sailors' Civil Relief Act of
1940, the Texas Consumer Credit Code, the California Automobile Sales
Finance Act, and state adaptations of the National Consumer Act and of
the Uniform Consumer Credit Code, and other consumer credit laws and
equal credit opportunity and disclosure laws.
(xii) Binding Obligation. Each Receivable represents the
genuine, legal, valid and binding payment obligation in writing of the
Obligor, enforceable by the holder thereof in accordance with its
terms, except only as such enforcement may be limited by bankruptcy,
insolvency or similar laws affecting the enforcement of creditors'
rights generally, and all parties to such contract had full legal
capacity to execute and deliver such contract and all other documents
related thereto and to grant the security interest purported to be
granted thereby.
(xiii) No Government Obligor. None of the Receivables are due
from the United States of America or any State or from any agency,
department, or instrumentality of the United States of America or any
State.
(xiv) Security Interest in Financed Vehicle. Immediately prior
to the sale, assignment, and transfer thereof, each Receivable shall be
secured by a validly perfected first security interest in the Financed
Vehicle in favor of the Seller (or, with respect to the Samco
Receivables, Samco and, with respect to the Linc Receivables, Linc) 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 the Closing Date).
(xv) Receivables in Force. No Receivable has been satisfied,
subordinated or rescinded, nor has any Financed Vehicle been released
from the lien granted by the related Receivable in whole or in part.
(xvi) No Waiver. No provision of a Receivable has been waived.
(xvii) No Amendments. No Receivable has been amended, except
as such 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.
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(xviii) No Defenses. As of the Closing Date, no right of
rescission, setoff, counterclaim or defense exists or has been asserted
or threatened with respect to any Receivable. The operation of the
terms of any Receivable or the exercise of any right thereunder will
not render such Receivable unenforceable in whole or in part or subject
to any such right of rescission, setoff, counterclaim, or defense.
(xix) No Liens. As of the Cutoff Date, there are no liens or
claims existing or which have been filed for work, labor, storage or
materials relating to a Financed Vehicle that shall be liens prior to,
or equal or coordinate with, the security interest in the Financed
Vehicle granted by the Receivable.
(xx) No Default; Repossession. Except for payment
delinquencies continuing for a period of not more than thirty days as
of the Cutoff Date, no default, breach, violation or event permitting
acceleration under the terms of any 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 Receivable has arisen; and none of
the Seller, Samco nor Linc shall waive and none of them has waived any
of the foregoing; and no Financed Vehicle shall be in repossession as
of the Cutoff Date.
(xxi) Insurance; Other. (A) Each Obligor has obtained
insurance covering the Financed Vehicle as of the execution of the
Receivable insuring against loss and damage due to fire, theft,
transportation, collision and other risks generally covered by
comprehensive and collision coverage, and each Receivable requires the
Obligor to obtain and maintain such insurance naming the Seller (or,
with respect to the Samco Receivables, Samco and, with respect to the
Linc Receivables, Linc) and its successors and assigns as an additional
insured, (B) each Receivable that finances the cost of premiums for
credit life and credit accident or health insurance is covered by an
insurance policy and certificate of insurance naming the Seller (or,
with respect to the Samco Receivables, Samco and, with respect to the
Linc Receivables, Linc) as policyholder (creditor) under each such
insurance policy and certificate of insurance and (C) as to each
Receivable that finances the cost of an extended service contract, the
respective Financed Vehicle which secures the Receivable is covered by
an extended service contract.
(xxii) Title. It is the intention of the Seller that the
transfer and assignment herein contemplated constitute a sale of the
CPS Receivables and other Transferred CPS Property from the Seller to
the Purchaser and that the beneficial interest in and title to such CPS
Receivables and other Transferred CPS 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 CPS Receivable or
other Transferred CPS 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 Closing Date.
Immediately prior to the transfer and assignment herein contemplated,
the Seller had good and marketable title
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to each CPS Receivable and other Transferred CPS 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 CPS Receivable and other Transferred CPS Property, 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.
(xxiii) Lawful Assignment. No Receivable has been originated
in, or is subject to the laws of, any jurisdiction under which the
sale, transfer, and assignment of such Receivable under this Agreement
the Samco Purchase Agreement or the Linc Purchase Agreement shall be
unlawful, void, or voidable. None of the Seller, Samco or Linc has
entered into any agreement with any account debtor that prohibits,
restricts or conditions the assignment of any portion of the
Receivables or other Transferred Property.
(xxiv) 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
Receivables and the other Transferred Property have been made, taken or
performed.
(xxv) Receivable File; One Original. The Seller has delivered
to the Trustee a complete Receivable File with respect to each
Receivable. There is only one original executed copy of each
Receivable.
(xxvi) Chattel Paper. Each Receivable constitutes "chattel
paper" under the UCC.
(xxvii) Valid and Binding Obligation of Obligor. Each
Receivable is the legal, valid and binding obligation of the Obligor
thereunder and is enforceable in accordance with its terms, except only
as such enforcement may be limited by bankruptcy, insolvency or similar
laws affecting the enforcement of creditors' rights generally, and all
parties to such Receivable had full legal capacity to execute and
deliver such contract and all other documents related thereto and to
grant the security interest purported to be granted thereby; the terms
of such Receivable have not been waived or modified in any respect.
(xxviii) Tax Liens. As of the Cutoff Date, there is no lien
against the related Financed Vehicle for delinquent taxes.
(xxix) Title Documents. (A) If the Receivable was originated
in a State in which notation of security interest on the title document
of the related Financed Vehicle is required or permitted to perfect
such security interest, the title document for such Receivable shows,
or, if a new or replacement title document is being applied for with
respect to such Financed Vehicle, the title document (or, with respect
to Receivables originated in the State of Michigan, all other evidence
of ownership with respect to such
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Financial Vehicle) will be received within 180 days and will show, the
Seller (or, with respect to the Samco Receivables, Samco and, with
respect to the Linc Receivables, Linc) named as the original secured
party under the related Receivable as the holder of a first priority
security interest in such Financed Vehicle and (B) if the Receivable
was originated in a State in which the filing of a financing statement
under the UCC is required to perfect a security interest in motor
vehicles, such filings or recordings have been duly made and show the
Seller (or, with respect to the Samco Receivables, Samco and, with
respect to the Linc Receivables, Linc) named as the original secured
party under the related Receivable, and in either case, the Trustee has
the same rights as such secured party has or would have (if such
secured party were still the owner of the Receivable) against all
parties claiming an interest in such Financed Vehicle. With respect to
each Receivable for which the title document of the related Financed
Vehicle has not yet been returned from the Registrar of Titles, the
Seller (or, with respect to the Samco Receivables, Samco and, with
respect to the Linc Receivables, Linc) and received written evidence
from the related Dealer that such title document showing the Seller as
first lienholder has been applied for.
(xxx) Casualty. No Financed Vehicle related to a Receivable
has suffered a Casualty.
(xxxi) Obligation to Dealers or Others. The Purchaser and its
assignees will assume no obligation to Dealers or other originators or
holders of the Receivables (including, but not limited to under dealer
reserves) as a result of its purchase of the Receivables.
(xxxii) Full Amount Advanced. The full amount of each
Receivable has been advanced to each Obligor, and there are no
requirements for future advances thereunder. The Obligor with respect
to the Receivable does not have any option under the Receivable to
borrow from any person additional funds secured by the 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 CPS Receivables and other Transferred
CPS Property pursuant to this Agreement shall be "without recourse" except for
the representations, warranties and covenants made by the Seller in this
Agreement or the Pooling and Servicing Agreement.
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ARTICLE IV
CONDITIONS
SECTION 4.1 Conditions to Obligation of the Purchaser. The obligation
of the Purchaser to purchase the Receivables on the Closing Date is subject to
the satisfaction of the following conditions:
(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 Receivables
have been sold to the Purchaser pursuant to this Purchase Agreement and shall
deliver to the Purchaser the Schedule of CPS 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 at the Closing.
(i) The CPS Assignment. On the Closing Date, the Seller will
execute and deliver the CPS Assignment which 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 CPS
Receivables and other Transferred CPS Property and the other
Transferred 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 CPS Receivables and other Transferred CPS Property
relating thereto 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) Evidence of UCC-2 Filing. On the Closing Date, the
Seller shall cause to be recorded and filed, at its own expense,
appropriate UCC-2 termination statements (or UCC-3 termination
statements, as applicable in the relevant UCC jurisdiction) executed by
General Electric Capital Corporation ("GECC") or First Union National
Bank ("First Union"), as applicable, in each jurisdiction in which
required by applicable law, meeting
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the requirements of the laws of each such jurisdiction and in such
manner as is necessary to release the interest of GECC or First Union,
as applicable, in the Receivables, including without limitation, the
security interests in the Financed Vehicles securing the Receivables
and any proceeds of such security interests or the Receivables. The
Seller shall deliver a copy of each such filing, to the Purchaser on or
prior to the Closing Date.
(iv) 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 Samco Purchase Agreement and the Linc Purchase
Agreement, the Underwriting Agreement and the Certificate Purchase Agreement
shall be consummated on the Closing Date.
SECTION 4.2 Conditions to Obligation of the Seller. The obligation of
the Seller to sell the CPS Receivables to the Purchaser is subject to the
satisfaction of the following conditions:
(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. On the Closing Date, the Purchaser will
deliver to the Seller the CPS Receivables Purchase Price 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; provided, however,
that to the extent that any provision of this ARTICLE V conflicts with any
provision of the Pooling and Servicing Agreement, the Pooling and Servicing
Agreement shall govern:
SECTION 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 Receivables and the other
Transferred 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 Receivables and the other Transferred Property. The
Seller shall deliver to the Purchaser file stamped copies of, or filing receipts
for, any document recorded, registered or filed as provided
17
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 an Insurer Default shall not have occurred and be
continuing) and the Purchaser written notice of any such change and no later
than five 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 an 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) Accounts and Records. The Seller shall maintain accounts and
records as to each CPS Receivable accurately and in sufficient detail to permit
the reader thereof to know at any time the status of such CPS Receivable,
including payments and recoveries made and payments owing (and the nature of
each).
(d) Maintenance of Computer Systems. The Seller shall maintain its
computer systems so that, from and after the time of sale hereunder of the CPS
Receivables to the Purchaser, the Seller's master computer records (including
any back-up archives) that refer to a CPS Receivable shall indicate clearly the
interest of the Purchaser in such CPS Receivable and that such Receivable is
owned by the Purchaser. Indication of the Purchaser's ownership of a CPS
Receivable shall be deleted from or modified on the Seller's computer systems
when, and only when, the CPS Receivable shall have been paid in full or
repurchased.
(e) 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-duty truck, van or mini-van receivables (other than the
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 CPS
Receivable, shall indicate clearly that such CPS Receivable has been sold and is
owned by the Purchaser unless such CPS Receivable has been paid in full or
repurchased.
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(f) 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 Receivable;
provided, however, that the Seller's obligations under this Section 5.1(f) shall
terminate upon termination of the Trust pursuant to the Pooling and Servicing
Agreement.
(g) List of Receivables. Upon request, the Seller shall furnish to the
Purchaser, within five Business Days, a list of all CPS Receivables (by contract
number and name of Obligor) then owned by the Purchaser, together with a
reconciliation of such list to the Schedule of CPS Receivables.
SECTION 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
under such Receivables against all claims of third parties claiming through or
under the Seller (or, with respect to the Samco Receivables, Samco and, with
respect to the Linc Receivables, Linc); 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.
SECTION 5.3 Chief Executive Office. During the term of the Receivables,
the Seller will maintain its chief executive office in one of the United States,
except Louisiana or Vermont.
SECTION 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 Receivables.
SECTION 5.5 Delivery of Receivable Files. On or prior to the Closing
Date, the Seller shall deliver the Receivable Files to the Trustee at the
location specified in Schedule B to the Pooling and Servicing Agreement. The
Seller shall have until the last day of the second Collection Period following
receipt from the Trustee of notification, pursuant to Section 2.8 of the Pooling
and Servicing Agreement, that there has been a failure to deliver a file with
respect to a Receivable (including a Samco Receivable or 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, 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 Xxxxxx,
00
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.
SECTION 5.6 Indemnification. (a) The Seller shall indemnify the
Purchaser for any liability as a result of the failure of a 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.
(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 the Agreement, or by reason of reckless disregard of the
Seller's obligations and duties under the Agreement.
(e) The Seller shall defend, indemnify, and hold harmless the Purchaser
from and against all costs, expenses, losses, damages, claims and liabilities
arising out of or incurred in connection with the acceptance or performance of
the Seller's trusts and duties as Servicer under the Pooling and Servicing
Agreement, except to the extent that such cost, expense, loss, damage, claim or
liability shall be due to the willful misfeasance, bad faith, or negligence
(except for errors in judgment) of the Purchaser.
Indemnification under this Section shall include reasonable fees and
expenses of litigation and shall survive payment of the Certificates of the
payment of the Certificates. These indemnity obligations shall be in addition to
any obligation that the Seller may otherwise have.
SECTION 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.
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SECTION 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, in 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
SECTION 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 Receivable.
SECTION 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 affected Receivables (including any affected Samco
Receivable or Linc Receivable) 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 Receivable if such
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 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 Receivables, such that following
such purchase such representation shall be true and correct with respect to the
remainder of the 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 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
21
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 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.
SECTION 6.3 Reassignment of Purchased Receivables. With respect to all
Receivables repurchased by the Seller pursuant to this Agreement, the Purchaser
shall assign, without recourse, representation or warranty, to the Seller all
the Purchaser's right, title and interest in and to such Receivables, and all
security and documents relating thereto.
SECTION 6.4 Conveyance as Sale of Receivables Not Financing. The
parties hereto intend that the conveyance hereunder be a sale of the Receivables
and the other Transferred Property from the Seller to the Purchaser and not a
financing secured by such assets; and the beneficial interest in and title to
the Receivables and the other Transferred 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 California) and applicable law, and the Seller
hereby grants to the Purchaser a first priority perfected security interest in,
to and under the Receivables and the other Transferred 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.
SECTION 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 Samco Purchase
Agreement and the Linc 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 Agreement, including
under Sections 6.2 and 6.3 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
6.3 hereof. The Seller hereby consents to such sale and assignment.
22
SECTION 6.6 Amendment. This Purchase 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 such 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 Certificates
representing more than 50% of the Class B Certificate Balance.
SECTION 6.7 Accountants' Letters. (a) KPMG Peat Marwick will review the
characteristics of the Receivables and will compare those characteristics to the
information with respect to the Receivables contained in the Offering Documents;
(b) The Seller will cooperate with the Purchaser and KPMG Peat Marwick
in making available all information and taking all steps reasonably necessary to
permit such accountants to complete the review set forth in Section 6.7(a) above
and to deliver the letters required of them under the Underwriting Agreement;
and (c) KPMG Peat Marwick will deliver to the Purchaser a letter, dated the
Closing Date, in the form previously agreed to by the Seller and the Purchaser,
with respect to the financial and statistical information contained in the
Offering Documents under the captions "CPS's Automobile Contract
Portfolio--Delinquency and Loss Experience" and "The Receivables Pool", certain
information relating to the Receivables on magnetic tape obtained from the
Seller and the Purchaser and with respect to such other information as may be
agreed in the form of letter.
SECTION 6.8 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.
SECTION 6.9 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 case of telex, at its telex number at such
address) shown in the opening portion of this Purchase 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.
SECTION 6.10 Costs and Expenses. The Seller will pay all expenses
incident to the performance of its obligations under this Purchase Agreement and
the Seller agrees to pay all reasonable out-of-pocket costs and expenses of the
Purchaser, excluding fees and expenses of counsel, in connection with the
perfection as against third parties of the Purchaser's right, title and interest
in and to the Receivables and security interests in the Financed Vehicles and
the enforcement of any obligation of the Seller hereunder.
23
SECTION 6.11 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.
SECTION 6.12 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 Receivables, under the Pooling and Servicing Agreement or
as required by law.
SECTION 6.13 Headings and Cross-References. The various headings in
this 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.
SECTION 6.14 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.
SECTION 6.15 Governing Law. THIS PURCHASE AGREEMENT AND THE ASSIGNMENT
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.
SECTION 6.16 Counterparts. This Purchase 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.]
24
IN WITNESS WHEREOF, the parties hereby have caused this Purchase
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
CONSUMER PORTFOLIO SERVICES,
INC.
By:/s/ Xxxxxxx X. Xxxxx
Name: Xxxxxxx X. Xxxxx
Title: Chief Financial Officer
25
Exhibit A
ASSIGNMENT
For value received, in accordance with the Purchase Agreement dated as
of May 1, 1998, between the undersigned and CPS Receivables Corp. (the
"Purchaser") (the "CPS Purchase Agreement"), the undersigned does hereby sell,
transfer, assign and otherwise convey unto the Purchaser, without recourse
(subject to the obligations in the CPS Purchase Agreement and the Pooling and
Servicing Agreement), all right, title and interest of the Seller in and to (i)
the Receivables listed in the Schedule of CPS Receivables and, with respect to
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
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 Receivables and any other interest
of the Seller in the Financed Vehicles, including, without limitation, the
certificates of title or, with respect to Financed Vehicles in the State of
Michigan, such 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 CPS Receivables; (iv) refunds for the costs of extended
service contracts with respect to Financed Vehicles securing the CPS
Receivables, refunds of unearned premiums with respect to credit life and credit
accident and health insurance policies or certificates covering an Obligor under
a Receivable or Financed Vehicle or his or her obligations with respect to a
Financed Vehicle related to a CPS Receivable and any recourse to Dealers for any
of the foregoing; (v) the Receivable File related to each CPS 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 CPS 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 CPS
Purchase Agreement and is to be governed by the CPS Purchase Agreement.
Capitalized terms used herein and not otherwise defined shall have the
meanings assigned to them in the CPS 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.
CONSUMER PORTFOLIO SERVICES,
INC.
By:
Name:
Title:
2
Exhibit B
Schedule of Receivables
See Following Page
