Exhibit 10.11
Execution Copy
ASSIGNMENT
For value received, in accordance with the Purchase Agreement dated as
of December 1, 1997, between the undersigned (the "Seller") 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 Sale
and Servicing Agreement), all right, title and interest of the Seller in and to
(i) the CPS Receivables listed in the Schedule of CPS Receivables and, with
respect to 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 Simple
Interest Receivables, all monies received thereunder after the Cutoff Date and
all Liquidation Proceeds and Recoveries received with respect to such CPS
Receivables; (ii) the security interests in the Financed Vehicles granted by
Obligors pursuant to the CPS Receivables and any other interest of the Seller in
such Financed Vehicles, including, without limitation, the certificates of title
or, with respect to Financed Vehicles in the State of Michigan, other evidence
of ownership with respect to such 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 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 related 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 December 11, 1997.
CONSUMER PORTFOLIO SERVICES, INC.
By:
Name:
Title:
-2-
Execution Copy
PURCHASE AGREEMENT dated as of this December 1, 1997, by and between
CONSUMER PORTFOLIO SERVICES, INC., a California corporation (the "Seller"),
having its principal executive office at 0 Xxx, Xxxxxx, Xxxxxxxxxx 00000, and
CPS RECEIVABLES CORP., a California corporation (the "Purchaser"), having its
principal executive office at 0 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 CPS Receivables (as hereinafter defined), are to be sold
by the Seller to the Purchaser, which CPS Receivables together with the Samco
Receivables will be transferred by the Purchaser, pursuant to the Sale and
Servicing Agreement (as hereinafter defined), to CPS Auto Receivables Trust
1997-5 to be created thereunder, which Trust will issue notes under the
Indenture (as hereinafter defined) representing indebtedness of the Trust (the
"Class A Notes" or "Notes") and certificates under the Trust Agreement (as
hereinafter defined) representing beneficial interests in the Trust (the
"Certificates" and, together with the Notes, the "Securities").
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 Sale and Servicing Agreement and if not defined therein, shall have the
meanings set forth in the Indenture. 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, Linc Assignment and/or the Samco
Assignment.
"Base Prospectus" means the Prospectus dated October 16, 1997, with
respect to CPS Auto Receivables Trusts and any amendment or supplement thereto.
-1-
"Closing Date" means December 11, 1997.
"CPS" means Consumer Portfolio Services, Inc., a California corporation
and its successors and assigns.
"CPS Assignment" means the assignment dated December 11, 1997, 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 Receivables" means each retail installment sale contract for a
Financed Vehicle that appears on the Schedule of CPS Receivables and all rights
thereunder.
"Indenture" means the Indenture dated as of December 1, 1997, between
CPS Auto Receivables Trust 1997-5, as issuer, and Norwest Bank Minnesota,
National Association, as trustee.
"Obligor(s)" means the purchaser or co-purchasers of a Financed Vehicle
or any other Person who owes or may be liable for payments under a Receivable.
"Offering Documents" means the Prospectus Supplement, the Base
Prospectus and the Private Placement Memorandum.
"Private Placement Memorandum" means the Private Placement Memorandum,
dated December [8], 1997, relating to the private placement of the Certificates
and any amendment or supplement thereto.
"Prospectus Supplement" means the Prospectus Supplement dated December
8, 1997, relating to the public offering of the Class A Notes and any amendment
or supplement thereto.
"Purchase Agreement" means this Purchase Agreement, as this agreement
may be amended, supplemented or otherwise modified from time to time in
accordance with the terms hereof.
"Purchaser" means CPS Receivables Corp., a California corporation, and
its successors and assigns.
"Receivables" means, collectively, the CPS Receivables, the Line
Receivables and the Samco Receivables.
"Receivables Purchase Price" means 85,966,448.89.
"Repurchase Event" shall have the meaning specified in Section 6.2
hereof.
-2-
"Sale and Servicing Agreement" means the Sale and Servicing Agreement
dated as of December 1, 1997, among CPS Auto Receivables Trust 1997-5, as
issuer, CPS Receivables Corp., as seller, Consumer Portfolio Services, Inc., as
originator of the Receivables and servicer, and Norwest Bank Minnesota, National
Association, as trustee and standby servicer, as such agreement may be amended,
supplemented or otherwise modified from time to time in accordance with the
terms thereof.
"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
December 1, 1997, between Samco Acceptance Corp., as seller, and CPS Receivables
Corp., 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.
"Seller" means Consumer Portfolio Services, Inc., a California
corporation, in its capacity as seller of the CPS 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, and 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.
-3-
"Transferred Property" means the Transferred CPS Property and the
Transferred Samco Property.
"Transferred Samco Property" shall have the meaning specified in the
Samco Purchase Agreement.
"Trust" means the CPS Auto Receivables Trust 1997-5 created by the
Trust Agreement.
"Trust Agreement" means the Trust Agreement dated as of December 2,
1997, between CPS Receivables Corp. and Bankers Trust (Delaware), as Owner
Trustee as amended and restated pursuant to an amendment dated as of December
11, 1997 between the same parties.
"UCC" means the Uniform Commercial Code, as in effect from time to time
in the relevant jurisdictions.
"Underwriters" means, collectively, Xxxxx Xxxxxx Incorporated and Black
Diamond Securities, LLC.
"Underwriting Agreement" means the Underwriting Agreement, dated
December 8, 1997, among the Underwriters, CPS, Samco, Linc and the Purchaser
relating to the Class A Notes.
ARTICLE II
PURCHASE AND SALE OF RECEIVABLES
2.1. Purchase and Sale of Receivables. On the Closing Date, subject to
the terms and conditions of this Purchase Agreement, the Seller agrees to sell
to the Purchaser, and the Purchaser agrees to purchase from the Seller, without
recourse (subject to the obligations in this Purchase Agreement and the Sale 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 CPS Property relating thereto is intended as a sale free and clear
of all liens and it is intended that the 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 Trust Agreement, the
Indenture and the
-4-
Sale 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 Sale and Servicing Agreement), all right, title
and interest of the Seller in and to (i) the CPS Receivables listed in the
Schedule of CPS Receivables and, with respect to 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 Simple Interest Receivables, all monies received
thereunder after the Cutoff Date and all Liquidation Proceeds and Recoveries
received with respect to such CPS Receivables; (ii) the security interests in
the Financed Vehicles granted by Obligors pursuant to the CPS Receivables and
any other interest of the Seller in such Financed Vehicles, including, without
limitation, the certificates of title or, with respect to Financed Vehicles in
the State of Michigan, other evidence of ownership with respect to such 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 or the Obligors thereunder; (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 CPS Receivable or Financed Vehicle securing a CPS
Receivable 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) Receivables Purchase Price. In consideration for the CPS
Receivables and other Transferred Property described in Section 2.1(a), the
Purchaser shall, on the Closing Date, pay to the Seller the Receivables Purchase
Price. An amount equal to $81,621,042.72 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 be by federal wire transfer (same day) funds.
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, Brown & Xxxxx,
0000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000-0000 on the Closing Date, simultaneously
with the closings under: (a) the Samco Purchase Agreement pursuant to which
Samco will sell the Samco Receivables to CPS Receivables Corp., (b) the Linc
Purchase Agreement pursuant to which Linc will sell the Linc Receivables to CPS
Receivables Corp., (c) the Sale and Servicing Agreement pursuant to which the
Purchaser will assign all of its right, title and interest in and to the
Receivables and the other Transferred Property to the Trust for the benefit of
the Securityholders, (d) the Trust Agreement pursuant to which the Trust shall
be formed and the Certificates issued, (e) the Indenture pursuant to which the
Trust will issue the Notes, (f) the Underwriting Agreement pursuant to which the
Trust shall sell the Class A Notes to the
-5-
Underwriters and (g) the Certificate Purchase Agreement pursuant to which the
Purchaser shall sell the Certificates to one or more investors.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
3.1. Representations and Warranties of the Purchaser. The Purchaser
hereby represents and warrants to the Seller as of the date hereof and as of
each Closing Date (which representations and warranties shall survive such
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 acquire and own the Receivables.
(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 in which the
ownership or lease of property or the conduct of its business shall
require such qualifications.
(c) Power and Authority. The Purchaser has the power and
authority to execute and deliver the Agreements and to carry out its
terms and the execution, delivery and performance of the Agreements
have been duly authorized by the Purchaser by all necessary corporate
action.
(d) Binding Obligation. The Agreements shall constitute a
legal, valid and binding obligation of the Purchaser enforceable in
accordance with its terms.
(e) No Violation. The execution, delivery and performance by
the Purchaser of the Agreements and the consummation of the
transactions contemplated hereby and the fulfillment of the terms
hereof do not conflict with, result in a breach of any of the terms and
provisions of, nor constitute (with or without notice or lapse of time)
a default under, the 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.
-6-
(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 the Agreements or the
Securities; (B) seeking to prevent the issuance of the Securities or
the consummation of any of the transactions contemplated by the
Agreements; (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, the Agreements
or the Securities; or (D) relating to the Purchaser and which might
adversely affect the Federal or State income, excise, franchise or
similar tax attributes of the Securities.
(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
Securities or the consummation of the other transactions contemplated
by the Agreements, the Trust Agreement, the Indenture or the Sale and
Servicing Agreement, except such as have been duly made or obtained.
3.2. Representations and Warranties of the Seller. (a) The Seller
hereby represents and warrants to the Purchaser as of the date hereof and as of
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 Sale and Servicing Agreement) shall require such
qualifications.
(iii) Power and Authority. The Seller has the power and
authority to execute and deliver the Agreements and to carry out their
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 the Agreements
have been duly authorized by the Seller by all necessary corporate
action.
(iv) Valid Sale; Binding Obligation. This Purchase Agreement
effects a valid sale, transfer and assignment of the CPS Receivables
and the other Transferred CPS Property conveyed to the Purchaser
pursuant to Section 2.1, enforceable against creditors of and
purchasers from the Seller; and this Agreement
-7-
shall constitute a legal, valid and binding obligation of the Seller
enforceable in accordance with its terms.
(v) No Violation. The execution, delivery and performance by
the Seller of the Agreements 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 the Agreements or the
Securities; (B) seeking to prevent the issuance of the Securities or
the consummation of any of the transactions contemplated by the
Agreements; (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, the Agreements
or the Securities; or (D) relating to the Seller and which might
adversely affect the Federal or State income, excise, franchise or
similar tax attributes of the Securities.
(vii) No Consents. No consent, approval, authorization or
order of or declaration or filing with any governmental authority is
required for the issuance or sale of the Securities or the consummation
of the other transactions contemplated by the Agreements, the Trust
Agreement, the Indenture or the Sale and Servicing Agreement, 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 the
Agreements 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 CPS
-8-
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 CPS 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 and 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 Sale and Servicing
Agreement:
(i) Origination Date. Each Receivable has an origination date
on or after June 10, 1996.
(ii) Principal Balance/Number of Contracts. As of the Cutoff
Date, the total aggregate principal balance of the Receivables was
$95,706,307. The Receivables are evidenced by 7,556 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 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 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 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 Sale
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,
-9-
(5) has an Annual Percentage Rate of not less than 15.58%, (6) that is
a Rule of 78's Receivable provides for, in the event that such
Receivable 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.
(v) Approximately 88.21% of the aggregate Principal Balance of
the Receivables, constituting 90.74% of the number of Receivables, as
of the Cutoff Date, represents 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 19.24% of the aggregate Principal Balance of the
Receivables as of the Cutoff Date were originated in the State of
California; approximately 47.55% of the aggregate Principal Balance of
the Receivables as of the Cutoff Date were originated under the CPS
alpha program; approximately 7.30% of the aggregate Principal Balance
of the Receivables as of the Cutoff Date were originated under the CPS
delta program; approximately 14.91% of the aggregate Principal Balance
of the Receivables as of the Cutoff Date were originated under the CPS
first time buyer program; and approximately 23.10% of the aggregate
Principal Balance of the Receivables were originated under the CPS
standard program; approximately 4.07% of the aggregate Principal
Balance of the Receivables are Samco Receivables; 6.80% of the
Receivables are Linc Receivables; no Receivable shall have a payment
that is more than 30 days overdue as of the Cutoff Date; 24.86% of the
aggregate Principal Balance of the Receivables are Rule of 78's
Receivables and 75.14% of the aggregate Principal Balance of the
Receivables are Simple Interest Receivables; each Receivable shall have
a final scheduled payment due no later than December 31, 2002; each
Receivable has an original term to maturity of not more than 60 months
and an average original term to maturity of 57 months and a remaining
term to maturity of not more than 60 months and an average remaining
term to maturity of 56 months; and each Receivable was originated on or
before the Cutoff Date.
(vi) Scheduled Payments. Each Receivable had an original
principal balance of not less than $2,806.70 nor more than $28,793.51
has an outstanding principal balance as of the Cutoff Date of not less
than $1,315.65 and not more than $28,793.51 and has a first Scheduled
Payment due on or prior to [ ], 1997.
(vii) 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
-10-
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.
(viii) Origination of Receivables. Based on the billing
address of the Obligors and the Principal Balances as of the Cutoff
Date, approximately 19.24% of the Receivables were originated in
California, approximately 6.84% of the Receivables were originated in
Florida, approximately 6.21% of the Receivables were originated in
Texas, 5.38% of the Receivables were originated in Pennsylvania and the
remaining 62.33% of the Receivables were originated in all other
States.
(ix) 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 Receivables 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
payments directly to the Post-Office Box.
(x) Location of Receivable Files; One Original. 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 Sale and Servicing Agreement. There is only
one original executed copy of each Receivable.
(xi) Schedule of Receivables; Selection Procedures. The
information with respect to the Receivables set forth in the Schedule
of CPS Receivables, the Schedule of Linc Receivables and the Schedule
of Samco 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 Securityholders have been utilized in selecting the
Receivables.
(xii) 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 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.
(xiii) Binding Obligation. Each Receivable represents the
genuine, legal, valid and binding payment obligation in writing of the
Obligor, enforceable by
-11-
the holder thereof in accordance with its terms.
(xiv) 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.
(xv) Security Interest in Financed Vehicle. Immediately prior
to the sale, assignment, and transfer thereof, each Receivable shall be
secured by a validly perfected first priority 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).
(xvi) 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.
(xvii) No Waiver. No provision of a Receivable has been
waived.
(xviii) 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.
(xix) 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.
(xx) 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.
(xxi) 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 neither
the Seller nor Samco shall waive and neither has waived any of the
foregoing; and no Financed Vehicle shall have been
-12-
repossessed as of the Cutoff Date.
(xxii) 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.
(xxiii) Title. It is the intention of the Seller that the
transfer and assignment herein contemplated constitute a sale of the
CPS Receivables from the Seller to the Purchaser and that the
beneficial interest in and title to such CPS Receivables 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
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 to each CPS Receivable, 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 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.
(xxiv) 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 Linc Purchase Agreement or the Samco Purchase Agreement shall be
unlawful, void, or voidable. None of the Seller, Samco nor Linc has
entered into any agreement with any account debtor that prohibits,
restricts or conditions the assignment of any portion of the
Receivables.
(xxv) 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 CPS Property have been made,
taken or performed.
-13-
(xxvi) Chattel Paper. Each Receivable constitutes "chattel
paper" under the applicable 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 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.
(xxviii) Tax Liens. As of the Cutoff Date, there is no lien
against any Financed Vehicle for delinquent taxes.
(xxix) Title Documents. (A) If the Receivable was originated
in a State in which notation of a 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 Financed 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 has received written evidence from
the related Dealer that such title document showing the Seller (or,
with respect to the Samco Receivables, Samco and, with respect to the
Linc Receivables, Linc) as first lienholder has been applied for.
(xxx) Casualty. No Financed Vehicle 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 the purchase of the Receivables.
-14-
(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. No Obligor has any option
under a Receivable to borrow from any Person additional funds secured
by the related Financed Vehicle.
(c) The representations and warranties contained in this Agreement
shall not be construed as a warranty or guaranty by the Seller as to the future
payments by any Obligor. The sale of the CPS Receivables pursuant to this
Agreement shall be "without recourse" except for the representations, warranties
and covenants made by the Seller in this Agreement or the Sale and Servicing
Agreement.
ARTICLE IV
CONDITIONS
4.1. Conditions to Obligation of the Purchaser. On the applicable
Closing Date, the obligation of the Purchaser to purchase the CPS Receivables 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
related 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 such Closing Date.
(b) Computer Files Marked. The Seller shall, at its own
expense, on or prior to the Related Closing Date, indicate in its
computer files that the CPS 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 Sale and Servicing Agreement on
or prior to the related Closing Date.
(d) Documents to be delivered by the Seller at the Closing.
(i) The Assignment. On each Closing Date, the Seller
will execute and deliver the 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
-15-
or debtor, and naming the Purchaser, as purchaser or secured
party, naming the CPS Receivables and the other Transferred
CPS 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 to the
Purchaser. The Seller shall deliver a file-stamped copy, or
other evidence satisfactory to the Purchaser of such filing,
to the Purchaser on or prior to such Closing Date.
(iii) Evidence of UCC-2 Filing. On or prior to the
related 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") in each jurisdiction in which
required by applicable law, meeting the requirements of the
laws of each such jurisdiction and in such manner as is
necessary to release GECC's interest 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 file-stamped copy, or other evidence satisfactory to
the Purchaser of such filing, to the Purchaser on or prior to
such Closing Date.
(iv) Other Documents. On or prior to the related
Closing Date, the Seller shall deliver such other documents as
the Purchaser may reasonably request.
(e) Other Transactions. The transactions contemplated by the
Trust Agreement, the Indenture, the Sale and Servicing Agreement, the
Samco Purchase Agreement, the Linc Purchase Agreement, the Underwriting
Agreement and the Certificate Purchase Agreement shall be consummated
on the Closing Date.
4.2. Conditions to Obligation of the Seller. The obligation of the
Seller to sell the 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 Seller
shall have performed all obligations to be performed by it hereunder on
or prior to the Closing Date.
(b) Receivables Purchase Price. At 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 $81,621,042.72 of the Receivables Purchase Price to Bank of
America, ABA: 000000000, Account #1458425131, Consumer Portfolio
Services, Inc. pursuant to wire instructions to be delivered to the
Purchaser on or prior to the Closing Date.
-16-
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 Sale and Servicing Agreement, the Sale and Servicing Agreement
shall govern:
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 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 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 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
-17-
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 CPS 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 or light- duty truck receivables (other than the CPS 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.
(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.
(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.
5.2. Other Liens or Interests. Except for the conveyances hereunder and
pursuant to the Sale 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 the 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).
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.
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 CPS
Receivables.
-18-
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 Sale 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 3.4 of the Sale and Servicing
Agreement, that there has been a failure to deliver a file with respect to a
Receivable (including a Samco Receivable or a Linc Receivable) or that a file is
unrelated to the Receivables identified in Schedule A to the Sale and Servicing
Agreement or that any of the documents referred to in Section 3.3 of the Sale
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 Sale and Servicing
Agreement. The sole remedy hereunder of the Trustee, the Trust or the
Securityholders with respect to a breach of this Section 5.5, shall be to
require the Seller to repurchase the Receivable pursuant to this Section 5.5.
Upon receipt of the Purchase Amount, the Trustee shall release to the Seller or
its designee the related Receivable File and shall execute and deliver all
instruments of transfer or assignment, without recourse, as are prepared by the
Seller and delivered to the Trustee and are necessary to vest in the Seller or
such designee title to the Receivable.
5.6. Indemnification. (a) The Seller shall indemnify the Purchaser for
any liability as a result of the failure of a 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.
-19-
(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 Sale 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 5.6 shall include reasonable fees
and expenses of litigation and shall survive payment of the Notes and
Certificates. These indemnity obligations shall be in addition to any obligation
that the Seller may otherwise have.
5.7. Sale. The Seller agrees to treat this conveyance for all purposes
(including without limitation tax and financial accounting purposes) as a sale
on all relevant books, records, tax returns, financial statements and other
applicable documents.
5.8. Non-Petition. In the event of any breach of a representation and
warranty made by the Purchaser hereunder, the Seller covenants and agrees that
it will not take any action to pursue any remedy that it may have hereunder, 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
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.
6.2. Repurchase Events. The Seller hereby covenants and agrees with the
Purchaser for the benefit of the Purchaser, the Trustee, the Insurer and the
Securityholders, 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 Receivables or Linc Receivables)
hereunder ("Repurchase Events"), at the Purchase Amount from the Trust. Unless
the breach of any of the Seller's representations and warranties shall have been
cured by the last day of the second Collection Period following the discovery
thereof by or notice to the Purchaser and the Seller of such breach, the Seller
shall repurchase any 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,
-20-
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 5.6 of the Sale and Servicing Agreement. For
purposes of this Section 6.2, the Purchase Amount of a Receivable which is not
consistent with the warranty pursuant to Section 3.2(b)(iv)(a)(5) or (iv)(a)(6)
shall include such additional amount as shall be necessary to provide the full
amount of interest as contemplated therein. The sole remedy hereunder of the
Securityholders, the Trust, the 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 Insurer, the Trust and
the Securityholders against all costs, expenses, losses, damages, claims and
liabilities, including reasonable fees and expenses of counsel, which may be
asserted against or incurred by any of them, as a result of third party claims
arising out of the events or facts giving rise to such breach. Upon receipt of
the Purchase Amount, the Purchaser shall cause the Trustee to release the
related Receivables File to the Seller and to execute and deliver all
instruments of transfer or assignment, without recourse, as are necessary to
vest in the Seller title to the Receivable. Notwithstanding the foregoing, if it
is determined that consummation of the transactions contemplated by the Sale and
Servicing Agreement, the Indentures and the other transaction documents
referenced in such Agreement, servicing and operation of the Trust pursuant to
Trust Agreement and such other documents, or the ownership of a Security by a
Holder constitutes a violation of the prohibited transaction rules of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"), or the
Internal Revenue Code of 1986, as amended ("Code") for which no statutory
exception or administrative exemption applies, such violation shall not be
treated as a Repurchase Event.
6.3. Seller's Assignment of Purchased Receivables. With respect to all
Receivables repurchased by the Seller pursuant to this Agreement, the Purchaser
shall assign, without recourse except as provided herein, representation or
warranty, to the Seller all the Purchaser's right, title and interest in and to
such Receivables, and all security and documents relating thereto.
6.4. Conveyance as Sale of Receivables Not Financing. The parties
hereto intend that the conveyance hereunder be a sale of the CPS Receivables and
the other Transferred CPS Property from the Seller to the Purchaser and not a
financing secured by such assets; and the beneficial interest in and title to
the CPS Receivables and the other Transferred CPS 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
-21-
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 CPS Receivables and the other Transferred CPS 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 Securities and the repayment of amounts owed to
the Purchaser from the Seller.
6.5. Trust. The Seller acknowledges that the Purchaser will, pursuant
to the Sale and Servicing Agreement, sell the Receivables to the Trust and
assign its rights under this Purchase Agreement, the Linc Purchase Agreement and
the Samco Purchase Agreement to the Trust, and that the representations and
warranties contained in this Agreement and the rights of the Purchaser under
this Purchase Agreement, including under Sections 6.2 and 6.4 hereof are
intended to benefit such Trust and the Securityholders. The Seller also
acknowledges that the Trustee on behalf of the Securityholders 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 Section 6.2 and 6.4 hereof. The Seller hereby consents to such sale
and assignment.
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 Insurer; provided, however, that (i) any such
amendment that materially adversely affects the rights of the Class A
Noteholders under the Sale and Servicing Agreement must be consented to by the
holders of Class A Notes representing more than 50% of the outstanding principal
amount of Class A Notes and (ii) any amendment that materially adversely affects
the rights of the Certificateholders under the Sale and Servicing Agreement must
be consented to by the holders of Certificates representing more than 50% of the
Certificate Balance.
6.7. Accountants' Letters. (a) KPMG Peat Marwick LLP 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 LLP 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 LLP 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.
-22-
6.8. Waivers. No failure or delay on the part of the Purchaser in
exercising any power, right or remedy under the Agreements shall operate as a
waiver thereof, nor shall any single or partial exercise of any such power,
right or remedy preclude any other or further exercise thereof or the exercise
of any other power, right or remedy.
6.9. 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.
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
CPS Receivables and security interests in the Financed Vehicles and the
enforcement of any obligation of the Seller hereunder.
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.
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 CPS Receivables, under the Sale and Servicing Agreement or as required
by law.
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.
6.14. Third Party Beneficiaries. The parties hereto hereby expressly
agree that each of the Trustee for the benefit of the Securityholders and the
Insurer shall be third party beneficiaries with respect to this Purchase
Agreement, provided, however, that no third party other than the Trustee for the
benefit of the Securityholders and the Credit Enhancer shall be deemed a third
party beneficiary of this Purchase Agreement.
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.
-23-
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:
Name:
Title:
CONSUMER PORTFOLIO SERVICES, INC.
By:
Name:
Title:
Exhibit A
ASSIGNMENT
For value received, in accordance with the Purchase Agreement dated as
of December 1, 1997, between the undersigned (the "Seller") 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 Sale
and Servicing Agreement), all right, title and interest of the Seller in and to
(i) the CPS Receivables listed in the Schedule of CPS Receivables and, with
respect to 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 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 CPS Receivables and any other interest of the Seller in
such Financed Vehicles, including, without limitation, the certificates of title
or, with respect to Financed Vehicles in the State of Michigan, other evidence
of ownership with respect to such 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 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 related 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 [ ].
CONSUMER PORTFOLIO SERVICES, INC.
By:
Name:
Title:
A-1
Exhibit B
Schedule of CPS Receivables
See Following Page
