Exhibit 1.1
CPS AUTO GRANTOR TRUST 1997-2
$[ ] (approximate) [ %]
Class A Pass-Through Certificates
UNDERWRITING AGREEMENT
May [ ], 1997
PaineWebber
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▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Black Diamond Securities, LLC
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▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
CPS Receivables Corp. (the "Company"), a California corporation and
wholly-owned subsidiary of Consumer Portfolio Services, Inc., a California
corporation ("CPS"), proposes to issue and sell to you in your capacities as the
Underwriters (the "Underwriters"), approximately [$ ] (based on the
expected aggregate principal balance of the Receivables as of the Cutoff Date)
aggregate principal amount of CPS Auto Grantor Trust 1997-2 [ %] Asset-Backed
Certificates, Class A (the "Certificates"). The Certificates will be issued by
CPS Auto Grantor Trust 1997-2 (the "Trust") pursuant to the Pooling and
Servicing Agreement (the "Pooling and Servicing Agreement") dated as of May [
], 1997 among the Company, CPS, as servicer (in such capacity, the "Servicer")
and Norwest Bank Minnesota, National Association, as trustee (the "Trustee").
Pursuant to the Pooling and Servicing Agreement, the Trust will also issue
approximately [$ ] (based on the expected aggregate principal balance of
the Cutoff Date) aggregate principal amount of CPS Auto Grantor Trust 1997-2
[ %] Asset-Backed Certificates, Class B (the "Class B Certificates") which
are not being offered pursuant to the Registration Statement (as defined below)
and are not the subject of this Agreement. The Certificates will evidence, in
the aggregate, beneficial ownership of an undivided 95% interest in the Trust
(other than interest received by the Trust in excess of the Class A Pass-Through
Rate). The Class B Certificates will evidence, in the aggregate, beneficial
ownership of an undivided 5% interest in the Trust (other than interest received
by the Trust in excess of the Class B Pass-Through Rate). The assets of the
Trust will include, among other things, a pool of retail installment sale
contracts
and all rights and obligations thereunder (collectively, the "Receivables"),
with respect to Rule of 78's Receivables, all payments due thereunder after May
[ ], 1997 (the "Cutoff Date"), with respect to Simple Interest Receivables, all
payments received thereunder after the Cutoff Date, security interests in the
new and used automobiles, light trucks, vans and minivans securing the
Receivables, certain bank accounts and the proceeds thereof, the Policy (for the
benefit of the Certificateholders only) and the right of CPS to receive certain
insurance proceeds and certain other property, all as more specifically
described in the Pooling and Servicing Agreement.
The Certificates will be issued in an aggregate principal amount of
approximately [$ ] (based on the expected aggregate principal balance
of the Receivables as of the Cutoff Date) which is equal to 95% of the aggregate
principal balance of the Receivables as of the Cutoff Date. The Certificates
will bear interest at an annual rate equal to 6.55% (the "Class A Pass-Through
Rate") in accordance with the provisions of the Pooling and Servicing Agreement.
The Class B Certificates will be issued in an aggregate principal amount of
approximately [$ ] (based on the expected aggregate principal balance
of the Receivables as of the Cutoff Date) which is equal to 5% of the aggregate
principal balance of the Receivables as of the Cutoff Date. The Class B
Certificates will bear interest at an annual rate equal to [ %] (the "Class B
Pass-Through Rate") in accordance with the provisions of the Pooling and
Servicing Agreement.
To the extent not otherwise defined herein, capitalized terms used herein
shall have the meanings assigned to such terms in the Pooling and Servicing
Agreement.
As the Underwriters, each of you have advised the Company that (a) you are
authorized to enter into this Agreement and (b) each of you is willing, acting
severally and not jointly, to purchase the aggregate principal amount of the
Certificates set forth opposite your respective names in Schedule I hereto.
In consideration of the mutual agreements contained herein and of the
interests of the parties in the transactions contemplated hereby, the parties
hereto agree as follows:
1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company, with respect to the Company, and CPS, with respect to CPS, and
both the Company and CPS in all other instances, each represents and warrants
to, and agrees with each Underwriter, as of the date hereof and as of the
Issuance, that:
(a) CPS has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (File No. 333-26355),
including a Base Prospectus, for registration of the offering and sale of the
Certificates under the Securities Act of 1933, as amended (the "1933 Act"), and
the rules and regulations (the "1933 Act Regulations") of the Commission
thereunder which conforms with the requirements of the 1933 Act and the 1933 Act
Regulations. CPS has complied with the conditions for the use
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of a Registration Statement on Form S-3. CPS may have filed with the Commission
one or more amendments to such Registration Statement, and may have used a
Preliminary Final Prospectus, each of which has been previously furnished to
each of the Underwriters. The offering of the Certificates is a Delayed
Offering and, although the Base Prospectus may not include all the information
with respect to the Certificates and the offering thereof required by the 1933
Act and the 1933 Act Regulations to be included in the Final Prospectus, the
Base Prospectus includes all such information required by the 1933 Act and the
1933 Act Regulations to be included therein as of the Effective Date. The
Company will hereafter file with the Commission pursuant to Rules 415 and
424(b), a final supplement to the Base Prospectus relating to the Certificates
and the offering thereof. As filed, such final supplement shall include all
required information with respect to the Certificates and, except to the extent
the Underwriters shall agree in writing to any modification thereof, shall be in
all substantive respects in the form furnished to each of the Underwriters prior
to the Execution Time or, to the extent not completed at the Execution Time,
shall be in such form with only such specific additional information and other
changes (beyond that contained in the Base Prospectus and any Preliminary Final
Prospectus) as the Company has advised each of the Underwriters, prior to the
Execution Time, will be included or made therein.
(b) On the Effective Date, the Registration Statement did or will, and
when the Final Prospectus is first filed (if required) in accordance with Rule
424(b) and on the Closing Date (as defined below), the Final Prospectus (as
supplemented and amended as of the Closing Date) will, comply in all material
respects with the applicable requirements of the 1933 Act, the 1933 Act
Regulations, the Securities Exchange Act of 1934, as amended (the "1934 Act"),
and the rules and regulations thereunder (the "1934 Act Regulations"); on the
Effective Date, the Registration Statement did not or will not contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary in order to make the statements therein not
misleading; and, on the Effective Date, the Final Prospectus, if not filed
pursuant to Rule 424(b), did not or will not, and on the date of any filing
pursuant to Rule 424(b) and on the Closing Date, the Final Prospectus (as
supplemented and amended in the case of the Closing Date) will not, include any
untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements therein not misleading; provided, however, that
each of CPS and the Company makes no representations or warranties as to the
information contained in or omitted from the Registration Statement or the Final
Prospectus (or any amendment or supplement thereto) in reliance upon and in
conformity with information furnished in writing to the Company by or on behalf
of any Underwriter specifically for inclusion in the Registration Statement or
the Final Prospectus (or any supplement or amendment thereto) or the information
regarding the Certificate Insurer set forth under the heading "THE CERTIFICATE
INSURER" in or incorporated by reference in the Preliminary Final Prospectus and
the Final Prospectus.
(c) The terms which follow, when used in this Agreement, shall have the
meanings indicated.
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"Base Prospectus" shall mean the prospectus referred to in Section 1(a)
hereof contained in the Registration Statement at the Effective Date.
"Delayed Offering" shall mean the offering of the Certificates pursuant to
Rule 415 which does not commence promptly after the effective date of the
Registration Statement, with the result that only information required pursuant
to Rule 415 need be included in such Registration Statement at the effective
date thereof with respect to the Certificates.
"Effective Date" shall mean each date that the Registration Statement and
any post-effective amendment(s) thereto became or become effective and each date
after the date hereof on which a document incorporated by reference in the
Registration Statement is filed by the Company.
"Execution Time" shall mean the date and time that this Agreement is
executed and delivered by the parties hereto.
"Final Prospectus" shall mean the prospectus supplement relating to the
Certificates that is first filed pursuant to Rule 424(b) under the 1933 Act
after the Execution Time, together with the Base Prospectus.
"Preliminary Final Prospectus" shall mean any preliminary prospectus
supplement to the Base Prospectus which describes the Certificates and the
offering thereof and is used prior to filing of the Final Prospectus.
"Prospectus" shall mean, collectively, the Base Prospectus, any Preliminary
Final Prospectus and the Final Prospectus.
"Registration Statement" shall mean (i) the Registration Statement referred
to in Section 1(a) hereof, including all documents incorporated therein by
reference, exhibits, financial statements and notes thereto and related
schedules and other statistical and financial data and information included
therein, as amended at the Execution Time (or, if not effective at the Execution
Time, in the form in which it shall become effective); (ii) in the event any
post-effective amendment thereto becomes effective prior to the Closing Date,
such Registration Statement as so amended; and (iii) in the event any Rule
462(b) Registration Statement becomes effective prior to the Closing Date, such
Registration Statement as so modified by the Rule 462(b) Registration Statement,
from and after the effectiveness thereof. Such term shall include any Rule 430A
Information deemed to be included therein at the Effective Date as provided by
Rule 430A.
"Rule "415", "Rule 424", "Rule "430A" and "Regulation S-K" refer to such
rules or regulation under the 1933 Act.
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"Rule 430A Information" means information with respect to the Certificates
and the offering thereof permitted to be omitted from the Registration Statement
when it becomes effective pursuant to Rule 430A.
"Rule 462(b) Registration Statement" means a Registration Statement
filed pursuant to Rule 462(b) under the 1933 Act relating to the offering
covered by the Registration Statement (File No. 333-26355).
Any reference herein to the Registration Statement, the Base Prospectus,
any Preliminary Final Prospectus or the Final Prospectus shall be deemed to
refer to and include the documents incorporated by reference therein pursuant to
Item 12 of Form S-3 which were filed under the 1934 Act on or before the
Effective Date of the Registration Statement or the issue date of the Base
Prospectus, any Preliminary Final Prospectus or the Final Prospectus, as the
case may be; and any reference herein to the terms "amend", "amendment" or
"supplement" with respect to the Registration Statement, the Base Prospectus,
any Preliminary Final Prospectus or the Final Prospectus shall be deemed to
refer to and include the filing of any document under the 1934 Act after the
Effective Date of the Registration Statement or the issue date of the Base
Prospectus, any Preliminary Final Prospectus or the Final Prospectus, as the
case may be, deemed to be incorporated therein by reference.
(d) Each of the Company and CPS and Samco is a corporation duly organized,
validly existing and in good standing under the laws of the State of California
and is duly qualified to transact business as a foreign corporation in each
jurisdiction in which it is required to be so qualified and in which the failure
to so qualify, taken in the aggregate, would have a material adverse effect on
it.
(e) Since the respective dates as of which information is given in the
Registration Statement and the Final Prospectus, there has not been any material
adverse change, or any development which could reasonably be expected to result
in a material adverse change, in or affecting the financial position,
shareholders' equity or results of operations of the Company or CPS or the
Company's or CPS's or Samco's ability to perform its obligations under this
Agreement or the Pooling and Servicing Agreement or any of the other Basic
Documents (as defined below), other than as set forth or incorporated by
reference in the Registration Statement or as set forth in the Final Prospectus.
(f) Except for the registration of the Certificates under the 1933 Act and
such consents, approvals, authorizations, registrations or qualifications as may
be required under the 1934 Act and applicable State securities or Blue Sky laws
in connection with the purchase and distribution of the Certificates by the
Underwriters or the filing requirements of Rule 430A or Rule 424(b) under the
1933 Act, no consent, approval, authorization or order of or declaration or
filing with any governmental authority is required for the issuance or sale of
the Certificates or the consummation of the other transactions contemplated by
this Agreement or the Pooling and Servicing Agreement or any of the other Basic
Documents,
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except such as have been duly made or obtained or as will be duly made or
obtained on or before the Closing Date.
(g) The Commission has not issued an order preventing or suspending the
use of any Prospectus relating to the proposed offering of the Certificates, nor
instituted proceedings for that purpose. The Registration Statement contains,
and the Final Prospectus together with any amendments or supplements thereto
will contain, all statements which are required to be stated therein by, and
will conform to, the requirements of the 1933 Act and the 1933 Act Regulations.
(h) The documents (other than the financial statements of the Certificate
Insurer, as to which no representation is made by CPS or the Company) which are
incorporated by reference in the Registration Statement and the Final Prospectus
or from which information is so incorporated by reference, as of the dates they
were filed with the Commission, complied in all material respects with the
requirements of the 1933 Act, the 1933 Act Regulations, the 1934 Act and the
1934 Act Regulations, as applicable, and any documents so filed and incorporated
by reference subsequent to the Effective Date shall, when they are filed with
the Commission, conform in all material respects with the requirements of the
1934 Act and the 1934 Act Regulations.
(i) Each of the Company and CPS confirms as of the date hereof that it is
in compliance with all provisions of Section 1 of Laws of Florida, Chapter
92-198, An Act Relating to Disclosure of doing Business with Cuba, and each of
the Company and CPS further agrees that if it commences engaging in business
with the government of Cuba or with any person or affiliate located in Cuba
after the date the Registration Statement becomes or has become effective with
the Commission or with the Florida Department of Banking and Finance (the
"Department"), whichever date is later, or if the information included in the
Final Prospectus, if any, concerning either the Company's or CPS's business with
Cuba or with any person or affiliate located in Cuba changes in any material
way, each of the Company and CPS, as the case may be, will provide the
Department notice of such business or change, as appropriate, in a form
acceptable to the Department.
(j) All representations and warranties of the Company and CPS and Samco
contained in each of the Basic Documents, including this Agreement, will be true
and correct in all material respects as of the Closing Date and are hereby
incorporated by reference as if each such representation and warranty were
specifically made herein.
(k) Each of the Company and CPS and Samco has full power and authority
(corporate and other) to enter into and perform its obligations under this
Agreement, the Pooling and Servicing Agreement, the CPS Purchase Agreement, the
Samco Purchase Agreement, the Insurance Agreement, the Indemnification
Agreement, the Spread Account Agreement, the Lock-Box Agreement and the
Servicing Assumption Agreement (collectively, the "Basic Documents"), and to
consummate the transactions contemplated hereby and thereby.
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(l) On or before the Closing Date, the direction by the Company to the
Trustee to authenticate the Certificates will have been duly authorized by the
Company, the Certificates will have been duly executed and delivered by the
Company and, when authenticated by the Trustee in accordance with the Pooling
and Servicing Agreement and delivered and paid for pursuant to this Agreement,
will be duly issued and entitled to the benefits and security afforded by the
Pooling and Servicing Agreement, subject as to the enforcement of remedies (x)
to applicable bankruptcy, insolvency, reorganization, moratorium, and other
similar laws affecting creditors' rights generally and (y) to general principles
of equity (regardless of whether the enforcement of such remedies is considered
in a proceeding in equity or at law).
(m) This Agreement and each Basic Document to which the Company or CPS or
Samco is a party has been duly authorized, executed and delivered by each of the
Company and CPS and Samco, as applicable, and constitutes a valid and binding
agreement of each of the Company and CPS and Samco, as applicable, enforceable
against the Company and CPS and Samco in accordance with its terms, subject as
to the enforcement of remedies (x) to applicable bankruptcy, insolvency,
reorganization, moratorium, and other similar laws affecting creditors' rights
generally, (y) to general principles of equity (regardless of whether the
enforcement of such remedies is considered in a proceeding in equity or at law)
and (z) with respect to rights of indemnity under this Agreement, to limitations
of public policy under applicable securities laws.
(n) None of the Company, CPS or Samco is in breach or violation of its
Articles of Incorporation or By-Laws or in default in the performance or
observance of any credit or security agreement or other agreement or instrument
to which it is a party or by which it or its properties may be bound, or in
violation of any applicable law, statute, regulation, order or ordinance of any
governmental body having jurisdiction over it, which breach or violation would
have a material adverse effect on the ability of the Company or CPS or Samco to
perform its obligations under any of the Basic Documents or the Certificates.
(0) The issuance and delivery of the Certificates, the consummation of any
other of the transactions contemplated herein or in the Pooling and Servicing
Agreement or in any of the other Basic Documents or the fulfillment of the terms
of this Agreement or the Pooling and Servicing Agreement or any of the other
Basic Documents, subject to the registration of the Certificates under the 1933
Act and such consents, approvals, authorizations, registrations or
qualifications as may be required under the 1934 Act and applicable State
securities or Blue Sky laws in connection with the purchase and distribution of
the Certificates by the Underwriters or the filing requirements of Rule 430A or
Rule 424(b) under the 1933 Act, do not and will not conflict with or violate any
term or provision of the Articles of Incorporation or By-Laws of the Company or
CPS or Samco, any statute, order or regulation applicable to the Company or CPS
or Samco of any court, regulatory body, administrative agency or governmental
body having jurisdiction over the Company or CPS or Samco and do not and will
not conflict with, result in a breach or violation or the acceleration of or
constitute a default under or result in the creation or imposition of any lien,
charge or encumbrance upon any of the property or assets of the Company or CPS
or Samco (other
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than in favor of the Trustee or as otherwise permitted under the Pooling and
Servicing Agreement) pursuant to the terms of any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument to which the Company or
CPS or Samco is a party or by which the Company or CPS or Samco may be bound or
to which any of the property or assets of the Company or CPS or Samco may be
subject except for conflicts, violations, breaches, accelerations and defaults
which would not, individually or in the aggregate, be materially adverse to the
Company or CPS or Samco or materially adverse to the transactions contemplated
by this Agreement or the Basic Documents.
(p) Any taxes, fees and other governmental charges due on or prior to the
Closing Date (including, without limitation, sales taxes) in connection with the
execution, delivery and issuance of this Agreement, the Pooling and Servicing
Agreement, the other Basic Documents and the Certificates have been or will have
been paid at or prior to the Closing Date.
(q) The Receivables are chattel paper as defined in the Uniform Commercial
Code as in effect in the State of California.
(r) Under generally accepted accounting principles, CPS will report its
transfer of the Receivables to the Company pursuant to the CPS Purchase
Agreement as a sale of the CPS Receivables and the Company will report its
transfer of the Receivables to the Trustee pursuant to the Pooling and Servicing
Agreement as a sale of the Receivables. Each of CPS and the Company has been
advised by KPMG Peat Marwick LLP, Certified Public Accountants, that the
transfers pursuant to the CPS Purchase Agreement and the Samco Purchase
Agreement will be so classified under generally accepted accounting principles
in accordance with Statement No. 77 of the Financial Accounting Standards Board
(December 1983) and, on and after January 1, 1997, with Statement No. 125 of the
Financial Accounting Standards Board (June 1996).
(s) Pursuant to the CPS Purchase Agreement and the Samco Purchase
Agreement, CPS and Samco are transferring to the Company ownership of the
Receivables, the security interests in the Financed Vehicles securing the
Receivables, certain other property related to the Receivables and the proceeds
of each of the foregoing (collectively, the "Trust Assets"), and, immediately
prior to the transfer thereof to the Trust, the Company will be the sole owner
of all right, title and interest in, and has good and marketable title to, the
Receivables and the other Trust Assets. The assignment of the Receivables and
the other Trust Assets, including all the proceeds thereof, to the Trust
pursuant to the Pooling and Servicing Agreement, vests in the Trust all
interests which are purported to be conveyed thereby, free and clear of any
liens, security interests or encumbrances.
(t) Immediately prior to the transfer of the Receivables to the Trust, the
Company's interest in the Receivables and the proceeds thereof shall have been
perfected, UCC-1 financing statements (the "Financing Statements") shall have
been filed in the offices of the Secretaries of State of the States of
California and Texas and there shall be no
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unreleased statements affecting the Receivables filed in such office other than
the Financing Statements. If a court concludes that the transfer of the
Receivables from the Company to the Trust is a sale, then the interest of the
Trust in the Receivables, the other Trust Assets and the proceeds thereof, will
be perfected by virtue of the Financing Statements having been filed in the
office of the Secretary of State of the State of California. If a court
concludes that such transfer is not a sale, the Pooling and Servicing Agreement
and the transactions contemplated thereby constitute a grant by the Company to
the Trust of a valid security interest in the Receivables, the other Trust
Assets and the proceeds thereof, which security interest will be perfected by
virtue of the Financing Statements having been filed in the office of the
Secretary of State of the State of California. No filing or other action, other
than the filing of the Financing Statements in the offices of the Secretaries of
State of the States of California and Texas referred to above and the execution
and delivery of the Pooling and Servicing Agreement, is necessary to perfect the
interest or the security interest of the Trust in the Receivables and the
proceeds thereof against third parties.
(u) The Pooling and Servicing Agreement is not required to be qualified
under the Trust Indenture Act.
(v) None of the Company, CPS, Samco or the Trust is required to be
registered as an "investment company" under the Investment Company Act.
2. PURCHASE, SALE AND DELIVERY OF THE CERTIFICATES.
Subject to the terms and conditions and in reliance upon the
representations, warranties and covenants herein set forth, the Company agrees
to sell to each Underwriter, and each Underwriter agrees, severally and not
jointly, to purchase from the Company the initial principal amount of the
Certificates set forth opposite such Underwriter's name in Schedule I hereto, at
the purchase price equal to [ %] of such initial principal amount.
The Company will deliver against payment of the purchase price the
Certificates in the form of one or more permanent global Certificates in
definitive form (the "Global Certificates") deposited with the Trustee as
custodian for The Depository Trust Company ("DTC") and registered in the name of
Cede & Co., as nominee for DTC. Interests in any Global Certificates will be
held only in book-entry form through DTC except in the limited circumstances
described in the Final Prospectus. Payment for the Certificates will be made by
the Underwriters by wire transfer of same day funds to an account previously
designated to the Underwriters by the Company at the offices of ▇▇▇▇▇, Brown &
▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, at 9:30 a.m. (New York time) on
May [ ], 1997, or at such other time as is mutually agreed (such time being
herein referred to as the "Closing Date") against delivery of the Global
Certificates representing all of the Certificates. The Global Certificates will
be made available for checking at the above office of ▇▇▇▇▇, Brown & ▇▇▇▇▇ at
least 24 hours prior to the Closing Date.
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As used herein, "business day" means a day on which the New York Stock
Exchange is open for trading and on which banks in New York, California and
Minnesota are open for business and are not permitted by law or executive order
to be closed.
3. OFFERING BY THE UNDERWRITERS.
The Company is advised by the Underwriters that they propose to make a
public offering of the Certificates, as set forth in the Final Prospectus, from
time to time as and when the Underwriters deem advisable after the Registration
Statement becomes effective.
4. COVENANTS OF THE COMPANY.
The Company covenants and agrees with the several Underwriters that:
(a) CPS will use its best efforts to cause the Registration Statement, if
not effective at the Execution Time, and any amendment thereto, to become
effective as soon as reasonably practicable thereafter or, if the procedure in
Rule 430A is followed, prepare and timely file with the Commission under Rule
424(b) a Final Prospectus containing information previously omitted at the time
of effectiveness of the Registration Statement in reliance upon Rule 430A.
Prior to the termination of the offering of the Certificates, CPS will not file
any amendment of the Registration Statement or amendment or supplement
(including the Final Prospectus or any Preliminary Final Prospectus) to the Base
Prospectus or any Rule 462(b) Registration Statement unless CPS has furnished to
each of the Underwriters a copy for its review prior to filing and will not file
any such proposed amendment or supplement to which any of the Underwriters
reasonably objects and which is not in compliance with the 1933 Act Regulations.
CPS will promptly advise the Underwriters (i) when the Registration Statement,
if not effective at the Execution Time, and any amendment thereto, shall have
become effective; (ii) when the Final Prospectus, and any supplement thereto,
shall have been filed with the Commission pursuant to Rule 424(b); (iii) when,
prior to termination of the offering of the Certificates, any amendment to the
Registration Statement shall have been filed or become effective; (iv) of any
request by the Commission for any amendment of the Registration Statement or
supplement to the Final Prospectus or for any other additional information; (v)
of the issuance by the Commission of any stop order suspending the effectiveness
of the Registration Statement or the institution of any proceeding for that
purpose; and (vi) of the receipt by CPS of any notification with respect to the
suspension of the qualification of the Certificates for sale in any jurisdiction
or the initiation of any proceeding for such purpose. CPS will use its best
efforts to prevent the issuance of any such stop order or the suspension of any
such qualification and, if issued or suspended, to obtain as soon as possible
the withdrawal thereof.
(b) Prior to the filing thereof with the Commission, CPS will submit to
each of the Underwriters, for its approval after reasonable notice thereof, such
approval not to be unreasonably withheld or delayed, a copy of any post--
effective amendment to the Registration Statement, any Rule 462(b) Registration
Statement proposed to be filed or a
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copy of any document proposed to be filed under the 1934 Act before the
termination of the offering of the Certificates by the Underwriters if such
document would be deemed to be incorporated by reference into the Registration
Statement or Final Prospectus.
(c) The Company will deliver to, or upon the order of, the Underwriters,
from time to time, as many copies of any Preliminary Final Prospectus as the
Underwriters may reasonably request. The Company will deliver to, or upon the
order of, the Underwriters during the period when delivery of a Final Prospectus
is required under the 1933 Act, as many copies of the Final Prospectus, or as
thereafter amended or supplemented, as the Underwriters may reasonably request.
The Company will deliver to the Underwriters at or before the Closing Date, two
signed copies of the Registration Statement and all amendments thereto including
all exhibits filed therewith, and will deliver to the Underwriters such number
of copies of the Registration Statement (including such number of copies of the
exhibits filed therewith that may reasonably be requested), including documents
filed under the 1934 Act and deemed to be incorporated by reference therein, and
of all amendments thereto, as the Underwriters may from time to time reasonably
request.
(d) The Company will, and will cause the Trust to, comply with the 1933
Act, the 1933 Act Regulations, the 1934 Act and the 1934 Act Regulations, so as
to permit the completion of the distribution of the Certificates as contemplated
in this Agreement and the Final Prospectus. If during the period in which a
prospectus is required by law to be delivered by an Underwriter or dealer in
connection with the sale of any Certificates, any event shall occur as a result
of which, in the judgment of the Company or in the reasonable opinion of the
Underwriters, it becomes necessary to amend or supplement the Final Prospectus
in order to make the statements therein, in the light of the circumstances
existing at the time the Final Prospectus is delivered to a purchaser, not
misleading, or, if it is necessary at any time to amend or supplement the Final
Prospectus to comply with any law or to file under the 1934 Act any document
which would be deemed to be incorporated by reference in the Registration
Statement to comply with the 1933 Act or the 1934 Act, the Company will promptly
notify each of the Underwriters and will promptly either (i) prepare and file,
or cause to be prepared and filed, with the Commission an appropriate amendment
to the Registration Statement or supplement to the Final Prospectus or (ii)
prepare and file, or cause to be prepared and filed, with the Commission (at the
expense of the Company) an appropriate filing under the 1934 Act which shall be
incorporated by reference in the Final Prospectus so that the Final Prospectus
as so amended or supplemented will not, in the light of the circumstances when
it is so delivered, be misleading, or so that the Final Prospectus will comply
with applicable law.
(e) The Company will cooperate with the Underwriters in endeavoring to
qualify the Certificates for sale under the laws of such jurisdictions as the
Underwriters may designate and will maintain such qualifications in effect so
long as required for the distribution of the Certificates, except that the
Company will not be obligated to qualify the Certificates in any jurisdiction in
which such qualification would require the Company to qualify to do business as
a foreign corporation, file a general or unlimited consent to service
-11-
of process or subject itself to taxation in any such jurisdiction to which it is
not subject and will arrange for the determination of the legality of the
Certificates for purchase by institutional investors. The Company will, from
time to time, prepare and file such statements, reports, and other documents as
are or may be required to continue such qualifications in effect for so long a
period as the Underwriters may reasonably request for distribution of the
Certificates.
(f) The Company shall not invest, or otherwise use the proceeds received
by the Company from its sale of the Certificates in such a manner as would
require the Company, CPS or the Trust to register as an investment company under
the 1940 Act.
(g) Until the retirement of the Certificates, or until such time as the
Underwriters shall cease to maintain a secondary market in the Certificates,
whichever occurs first, the Company will deliver to each Underwriter the annual
statements of compliance and the annual independent certified public
accountant's reports furnished to the Trustee pursuant to the Pooling and
Servicing Agreement, as soon as such statements and reports are furnished to the
Trustee.
(h) The Company or CPS shall, from the date hereof through and including
the Closing Date, furnish, or cause to be furnished, or make available, or cause
to be made available, to each Underwriter or its counsel such additional
documents and information regarding each of them and their respective affairs as
each Underwriter may from time to time reasonably request and which the Company
or CPS possess or can acquire without unreasonable effort or expense, including
any and all documentation requested in connection with such Underwriter's due
diligence efforts regarding information in the Registration Statement and the
Final Prospectus and in order to evidence the accuracy or completeness of any of
the conditions contained in this Agreement; and all actions taken by the Company
or CPS to authorize the sale of the Certificates shall be reasonably
satisfactory in form and substance to each Underwriter.
(i) The Company will cause the Trust to make generally available to
Certificateholders as soon as practicable, but no later than sixteen months
after the Effective Date, an earnings statement of the Trust covering a period
of at least twelve consecutive months beginning after such Effective Date and
satisfying the provisions of Section 11(a) of the Act (including Rule 158
promulgated thereunder).
(j) So long as any of the Certificates are outstanding, the Company will
furnish to the Underwriters copies of all reports or other communications
(financial or otherwise) furnished or made available to Certificateholders, and
deliver to the Underwriters during such period, (i) as soon as they are
available, copies of any reports and financial statements filed by or on behalf
of the Trust or the Company with the Commission pursuant to the Securities
Exchange Act of 1934, as amended, and (ii) such additional information
concerning the business and financial condition of the Company as the
Underwriter may from time to time reasonably request.
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(k) On or before the Closing Date, the Company and CPS and ▇▇▇▇▇ shall
cause the respective computer records of the Company and CPS and Samco relating
to the Receivables to be marked to show the Trustee's absolute ownership of the
Receivables, and from and after the Closing Date neither the Company nor CPS nor
Samco shall take any action inconsistent with the Trustee's ownership of such
Receivables, other than as expressly permitted by the Pooling and Servicing
Agreement.
(l) To the extent, if any, that the ratings provided with respect to the
Certificates by either of the Rating Agencies is conditional upon the furnishing
of documents or the taking of any other actions by the Company or CPS, CPS
shall, or shall cause the Company to, furnish such documents and take any such
other actions.
(m) On the Closing Date, the Company and CPS shall cause the Certificate
Insurer to issue the Policy to the Trustee for the benefit of the holders of the
Certificates in form and substance satisfactory to each Underwriter.
5. [RESERVED]
6. COSTS AND EXPENSES.
The Company and CPS will pay upon receipt of a written request therefor all
costs, expenses and fees incident to the performance of the obligations of the
Company under this Agreement and will, jointly and severally, reimburse the
Underwriters for all reasonable out-of-pocket expenses, including reasonable
fees and disbursements of counsel, reasonably incurred in connection with
investigating, marketing and proposing to market the Certificates or in
contemplation of performing the Underwriters' obligations hereunder and
including, without limiting the generality of the foregoing, the following: (i)
accounting fees of the Company; (ii) the fees and disbursements of counsel for
the Company; (iii) the cost of printing and delivering to, or as requested by,
the Underwriters copies of the Registration Statement, Preliminary Final
Prospectuses, the Final Prospectus, this Agreement, the listing application in
respect of the Certificates, the Blue Sky Survey, if any, and any supplements or
amendments thereto; (iv) the filing fees of the Commission; (v) any fees charged
by the Rating Agencies for rating the Certificates; and (vi) the fees and
expenses of the Trustee, including the fees and disbursements of counsel for the
Trustee, in connection with the Certificates, the Pooling and Servicing
Agreement and the other Basic Documents to which the Trustee is a party and the
expenses, including the fees and disbursements of counsel for the Underwriters,
incurred in connection with the qualification of the Certificates under State
securities or Blue Sky laws. If this Agreement shall not be consummated because
the conditions in Section 7 hereof are not satisfied, or because this Agreement
is terminated by each of the Underwriters pursuant to Section 12 hereof (other
than on the basis of a default by the Underwriters pursuant to Section 10
hereof), or by reason of any failure, refusal or inability on the part of the
Company or CPS to perform any undertaking or satisfy any condition of this
Agreement or to comply with any of the terms hereof on its part to be performed,
unless such failure to satisfy said condition or to comply with said terms be
due
-13-
to the default or omission of any Underwriter, then the Company and CPS, jointly
and severally, shall reimburse the Underwriters for reasonable out-of-pocket
expenses, including reasonable fees and disbursements of counsel, reasonably
incurred in connection with investigating, marketing and proposing to market the
Certificates or in contemplation of performing their obligations hereunder upon
receipt of a written request therefor; but the Company shall not in any event be
liable to any of the Underwriters for damages on account of loss of anticipated
profits from the sale by them of the Certificates. Except to the extent
expressly set forth in this Section 6, the Underwriters shall each be
responsible for their own costs and expenses, including the fees and expenses of
their counsel.
7. CONDITIONS OF OBLIGATIONS OF THE UNDERWRITERS.
The several obligations of the Underwriters to purchase and pay for the
Certificates on the Closing Date are subject to the accuracy in all material
respects as of the Closing Date of the representations and warranties of the
Company and CPS contained herein, to the performance by the Company and CPS of
their respective covenants and obligations hereunder and to the following
additional conditions precedent:
(a) If the Registration Statement has not become effective prior to the
Execution Time, unless the Underwriters agree in writing to a later time, the
Registration Statement will become effective not later than (i) 5:30 p.m. New
York City time on the date of determination of the public offering price of the
Certificates, if such determination occurred at or prior to 3:00 p.m. New York
City time on such date or (ii) 12:00 noon New York City time on the business day
following the day on which the public offering price of the Certificates was
determined, if such determination occurred after 3:00 p.m. New York City time on
such date; if filing of the Final Prospectus, or any supplement thereto, is
required pursuant to Rule 424(b), the Final Prospectus, and any such supplement,
shall have been filed within the applicable time period prescribed for such
filing by Rule 424(b), and any request of the Commission for additional
information (to be included in the Registration Statement or otherwise) shall
have been disclosed to the Underwriters and complied with to their reasonable
satisfaction. No stop order suspending the effectiveness of the Registration
Statement, as amended from time to time, shall have been issued and no
proceedings for that purpose shall have been taken or, to the knowledge of the
Company, shall be contemplated by the Commission and no injunction, restraining
order, or order of any nature by a Federal or state court of competent
jurisdiction shall have been issued as of the Closing Date which would prevent
the issuance of the Certificates.
(b) On or prior to the date of this Agreement and on or prior to the
Closing Date, each Underwriter shall have received a letter or letters, dated as
of May [ ], 1997, and as of the Closing Date, respectively, of KPMG Peat
Marwick LLP, Certified Public Accountants, substantially in the form of the
drafts to which each of the Underwriters has previously agreed and otherwise in
form and substance satisfactory to each Underwriter and its counsel.
-14-
(c) Subsequent to the execution and delivery of this Agreement, there
shall not have occurred (i) any change, or any development involving a
prospective change, in or affecting particularly the business or properties of
the Company, CPS or any Affiliate of the Company or CPS which, in the judgment
of each Underwriter, materially impairs the investment quality of the
Certificates or the ability of CPS to act as Servicer or (ii) any downgrading in
the rating of any debt securities or preferred stock of the Company, CPS or any
Affiliate thereof by any "nationally recognized statistical rating organization"
(as defined for purposes of Rule 436(g) under the Securities Act), or any public
announcement that any such organization has under surveillance or review its
rating of any debt securities or preferred stock of the Company, CPS or any
Affiliate thereof (other than an announcement with positive implications of a
possible upgrading, and no implication of a possible downgrading of such
rating); (iii) any suspension or limitation of trading in securities generally
on the New York Stock Exchange, or any setting of minimum prices for trading on
such exchange, or any suspension of trading of any securities of the Company or
CPS or any Affiliate of the Company or CPS on any exchange or in the
over-the-counter market; (iv) any banking moratorium declared by Federal, New
York or California authorities; or (v) any outbreak or escalation of major
hostilities in which the United States is involved, any declaration of war by
Congress or any other substantial national or international calamity, emergency
or change in financial markets if, in the judgment of each Underwriter, the
effect of any such outbreak, escalation, declaration, calamity, emergency or
change makes it impractical or inadvisable to proceed with completion of the
private placement of the Certificates.
(d) The Company and CPS shall have furnished each Underwriter with such
number of conformed copies of such opinions, certificates, letters and documents
as it may reasonably request.
(e) On the Closing Date, each of the Basic Documents and the Certificates
shall have been duly authorized, executed and delivered by the parties thereto,
shall be in full force and effect and no default shall exist thereunder, and the
Trustee shall have received a fully executed copy thereof or, with respect to
the Certificates, a conformed copy thereof. The Basic Documents and the
Certificates shall be substantially in the forms heretofore provided to each
Underwriter.
(f) Each Underwriter shall have received a certificate of the Trustee, as
to the due authorization, execution and delivery of the Pooling and Servicing
Agreement by the Trustee.
(g) Each Underwriter shall have received evidence satisfactory to such
Underwriter that the Certificates have been rated "Aaa" by ▇▇▇▇▇'▇ and "AAA" by
Standard & Poor's.
(h) Each Underwriter shall have received from ▇▇▇▇▇, Brown & ▇▇▇▇▇,
special counsel for CPS and the Company, opinions dated the Closing Date,
addressed to such Underwriter, in a form satisfactory to such Underwriter.
-15-
(i) Each Underwriter shall have received from ▇▇▇▇▇, Brown & ▇▇▇▇▇,
special Federal tax counsel for the Company, an opinion dated the Closing Date,
addressed to such Underwriter, with respect to the status of the Trust for
federal income tax purposes.
(j) Each Underwriter shall have received from ▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇, an
opinion dated the Closing Date, addressed to such Underwriter, with respect to
the validity of the Certificates and such other related matters as such
Underwriter shall require and the Company or CPS shall have furnished or caused
to be furnished to such counsel such documents as they may reasonably request
for the purpose of enabling them to pass upon such matters.
(k) Each Underwriter shall have received from counsel to the Trustee, the
Standby Servicer and the Collateral Agent (which counsel shall be reasonably
acceptable to such Underwriter), an opinion addressed to such Underwriter dated
the Closing Date, in form and substance satisfactory to such Underwriter and its
counsel, ▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇.
(l) Each Underwriter shall have received from counsel to the Certificate
Insurer, which counsel shall be reasonably acceptable to such Underwriter, an
opinion addressed to such Underwriter, dated the Closing Date, in form and
substance satisfactory to such Underwriter and its counsel, ▇▇▇▇▇, ▇▇▇▇▇ &
▇▇▇▇▇.
(m) At the Closing Date, each Underwriter shall have received any and all
opinions of counsel to the Company and CPS supplied to the Rating Agencies and
the Certificate Insurer relating to, among other things, the interest of the
Trustee in the Receivables and the other Trust Assets and the proceeds thereof
and certain monies due or to become due with respect thereto, certain bankruptcy
issues and certain matters with respect to the Certificates. Any such opinions
shall be addressed to each Underwriter or shall indicate that such Underwriter
may rely on such opinions as though they were addressed to such Underwriter, and
shall be dated the Closing Date.
(n) At the Closing Date, the Company and CPS shall have furnished to each
Underwriter a certificate, dated the Closing Date, of the President or any Vice
President of the Company or CPS, as the case may be, in which each such officer
shall state that: (i) the representations and warranties of the Company or CPS,
as applicable, in this Agreement are true and correct on and as of the Closing
Date; (ii) the Company or CPS, as applicable, has complied with all agreements
and satisfied all conditions on its part required to be performed or satisfied
hereunder and under each of the other Basic Documents at or prior to the Closing
Date; (iii) the representations and warranties of the Company or CPS, as
applicable, in each of the Basic Documents are true and correct as of the dates
specified therein; (iv) the Registration Statement has become effective under
the 1933 Act and no stop order suspending the effectiveness of the Registration
Statement has been issued, and no proceedings for such purpose have been taken
or are, to his or her knowledge, contemplated by the Commission; (v) he or she
has carefully examined the Registration Statement and the Final Prospectus and,
in his or her opinion, as of the Effective Date of the Registration
-16-
Statement, the statements contained in the Registration Statement were true and
correct, and as of the Closing Date the Registration Statement and the Final
Prospectus do not contain any untrue statement of a material fact or omit to
state a material fact with respect to the Company or CPS necessary in order to
make the statements therein, in light of the circumstances under which they were
made, not misleading, and since the Effective Date of the Registration
Statement, no event has occurred with respect to the Company or CPS which should
have been set forth in a supplement to or an amendment of the Final Prospectus
which has not been so set forth in such supplement or amendment; and (vi)
subsequent to the respective dates as of which information is given in the
Registration Statement and the Final Prospectus, there has been no material
adverse change, or any development with respect to the Company or CPS or Samco
which could reasonably be expected to result in a material adverse change, in or
affecting particularly the business or properties of the Trust, the Company or
CPS except as contemplated by the Final Prospectus or as described in such
certificate.
(o) Each Underwriter shall have received evidence satisfactory to such
Underwriter that the Certificate Insurer shall have issued the Policy to the
Trustee for the benefit of the Certificateholders in form and substance
satisfactory to such Underwriter.
(p) Each Underwriter shall have received evidence satisfactory to it that,
on or before the Closing Date, the Financing Statements have been filed in the
office of the Secretary of State of California reflecting the assignment of the
interest of CPS in the Receivables and the other Trust Assets and the proceeds
thereof to the Company, and the transfer of the interest of the Company in the
Receivables and the other Trust Assets and the proceeds thereof to the Trustee.
(q) All proceedings in connection with the transactions contemplated by
this Agreement, the Pooling and Servicing Agreement and each of the other Basic
Documents and all documents incident hereto or thereto shall be satisfactory in
form and substance to each Underwriter.
(r) The Company shall have furnished to the Underwriters such further
certificates and documents confirming the representations and warranties,
covenants and conditions contained herein and related matters as the
Underwriters may reasonably have requested.
The opinions and certificates mentioned in this Agreement shall be deemed
to be in compliance with the provisions hereof only if they are in all material
respects reasonably satisfactory to the Underwriters and to ▇▇▇▇▇, Brown &
▇▇▇▇▇, counsel for the Underwriters.
-17-
If any of the conditions hereinabove provided for in this Section 7 shall
not have been fulfilled when and as required by this Agreement to be fulfilled,
the obligations of the Underwriters hereunder may be terminated by the
Underwriters by notifying the Company of such termination in writing or by
telegram at or prior to the Closing Date. In such event, the Company and the
Underwriters shall not be under any obligation to each other (except to the
extent provided in Sections 6 and 9 hereof).
8. CONDITIONS OF THE OBLIGATIONS OF THE COMPANY.
The obligations of the Company to sell and deliver the portion of the
Certificates required to be delivered as and when specified in this Agreement
are subject to the condition that, at the Closing Date, no stop order suspending
the effectiveness of the Registration Statement shall have been issued and in
effect or proceedings therefor initiated or threatened.
9. INDEMNIFICATION.
(a) The Company and CPS, jointly and severally, agree to indemnify and
hold harmless each Underwriter, its directors, officers, employees and agents
and each person, if any, who controls any Underwriter within the meaning of the
1933 Act or the 1934 Act, against any losses, claims, damages or liabilities to
which such Underwriter or any such other person may become subject under the
1933 Act or otherwise, insofar as such losses, claims, damages or liabilities
(or actions or proceedings in respect thereof) arise out of or are based upon
(i) any untrue statement or alleged untrue statement of any material fact
contained in the Registration Statement, the Base Prospectus, any Preliminary
Final Prospectus, the Final Prospectus or any amendment or supplement thereto
(other than information contained therein under the heading "the Certificate
Insurer" and information incorporated by reference therein), or (ii) the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading in the
light of the circumstances under which they were made; and will reimburse each
Underwriter and each such person within 30 days of presentation for any legal or
other expenses reasonably incurred by such Underwriter in connection with
investigating or defending any such loss, claim, damage or liability, action or
proceeding or in responding to a subpoena or governmental inquiry related to the
offering of the Certificates, whether or not such Underwriter or such person is
a party to any action or proceeding, upon receipt of a written request therefor;
provided, however, that neither the Company nor CPS will be liable in any such
case to the extent that any such loss, claim, damage or liability arises out of
or is based upon an untrue statement or alleged untrue statement, or omission or
alleged omission made in the Registration Statement, the Base Prospectus, any
Preliminary Final Prospectus, the Final Prospectus, or any amendment or
supplement thereto, in reliance upon and in conformity with written information
furnished to the Company or CPS, as the case may be, by, through or on behalf of
the Underwriters specifically for use in the preparation thereof. This
indemnity agreement will be in addition to any liability which the Company or
CPS may otherwise have. The indemnity agreement of the Company and CPS in this
Agreement is subject to the condition that, insofar as it relates to any untrue
statement, alleged untrue statement, omission or alleged omission made in the
Registration Statement, the Base Prospectus, any Preliminary Final Prospectus or
in the Final Prospectus, or any amendment or supplement thereto, such indemnity
agreement shall not inure to the benefit of any Underwriter if such Underwriter
failed to send or give a copy of the Final Prospectus (as
-18-
amended or supplemented, if the Company or CPS, as the case may be, shall have
furnished any amendment or supplement thereto to such Underwriter, which
corrected such untrue statement or omission that is the basis of the loss,
liability, claim, damage or expense for which indemnification is sought) to the
person asserting any such loss, liability, claim, damage or expense at such time
as the Final Prospectus, as so amended or supplemented, was required under the
1933 Act to be delivered to such person.
(b) (i) Each Underwriter, severally and not jointly, will indemnify and
hold harmless each of the Company and CPS, each of their directors, officers,
employees and agents and each person, if any, who controls the Company within
the meaning of the 1933 Act or the 1934 Act, to the same extent as the foregoing
indemnity from each of the Company and CPS to any Underwriter, its directors,
officers, employees and agents and each person who controls any such
Underwriter, but only with respect to untrue statements or omissions or alleged
untrue statements or omissions made in the Registration Statement, the Base
Prospectus, any Preliminary Final Prospectus, the Final Prospectus, or any
amendment or supplement thereto, in reliance upon and in conformity with written
information furnished to the Company or CPS, as the case may be, by, through or
on behalf of such Underwriter specifically for use in the preparation of the
Registration Statement, the Base Prospectus, any Preliminary Final Prospectus,
the Final Prospectus or any amendment or supplement thereto. This indemnity
agreement will be in addition to any liability which such Underwriter may
otherwise have. The Company and the Underwriters acknowledge and agree that the
only information furnished or to be furnished by any Underwriter to the Company
for inclusion in the Registration Statement, the Base Prospectus, any
Preliminary Final Prospectus or the Final Prospectus, or any amendments or
supplements thereto, consists of the information set forth in the last paragraph
on the front cover page concerning the terms of the offering by the Underwriters
(insofar as such information relates to the Underwriters), legends required by
Item 502(d) of Regulation S-K under the 1933 Act and the information under the
caption "Methods of Distribution" in the Final Prospectus and under the caption
"Underwriting" in the Final Prospectus.
(ii) Each Underwriter agrees, severally and not jointly, to indemnify
and hold harmless the Company, CPS, the other Underwriter; the respective
officers, directors, employees and agents of any such party, and each person who
controls the Company, CPS or such other Underwriter within the meaning of the
1933 Act or the 1934 Act against any losses, claims, damages or liabilities to
which such person may become subject under the 1933 Act or otherwise, insofar as
such losses, claims, damages or liabilities (or actions or proceedings in
respect thereof) arise out of or are based upon (a) any untrue statement or
alleged untrue statement of any material fact contained in the Computational
Materials (as defined below) provided by such indemnifying Underwriter or (b)
the omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading in the
light of the circumstances in which they were made, not misleading (except, in
each case, to the extent that such untrue statement or alleged untrue statement
or omission or alleged omission results from the failure of the Company Provided
Information to be accurate in all material respects); and will reimburse each
such
-19-
party within 30 days of written request therefor for any legal or other expenses
reasonably incurred by such person in connection with investigating or defending
any such loss, claim, damage or liability, action or proceeding or in responding
to a subpoena or governmental inquiry related thereto, whether or not such
person is a party to any action or proceeding. The obligations of each
Underwriter under this subsection (ii) shall be in addition to any other
liability which such Underwriter may otherwise have. For purposes hereof, the
term "Computational Materials" means information provided by an Underwriter to a
prospective purchaser of Certificates, which information is not part of the
Prospectus. For purposes hereof, the term "Company Provided Information" means
the information contained in the table on page [S-24] of the Preliminary Final
Prospectus dated May [ ], 1997 as to the weighted average APR of the
Receivables, the weighted average remaining term of the Receivables and the
aggregate principal balance of the Receivables as of the Preliminary Cutoff
Date.
(iii) Each Underwriter shall, no later than the date on which the
Prospectus is required to be filed pursuant to Rule 424, provide to CPS for
filing with the Commission on Form 8-K a copy of any Computational Materials
delivered by such Underwriter to any prospective purchaser of Certificates.
(c) In case any proceeding (including any governmental investigation)
shall be instituted involving any person in respect of which indemnity may be
sought pursuant to this Section 9, such person (the "indemnified party") shall
promptly notify the person against whom such indemnity may be sought (the
"indemnifying party") in writing. The failure to give such notice shall not
relieve the indemnifying party or parties from any liability which it or they
may have to the indemnified party for contribution or otherwise than on account
of the provisions of Section 9(a) or (b), except and only to the extent such
omission so to notify shall have materially prejudiced the indemnifying party
under Section 9(a) or (b). In case any such proceeding shall be brought against
any indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate
therein and, to the extent that it shall wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel reasonably satisfactory to such indemnified party and shall pay as
incurred the fees and disbursements of such counsel related to such proceeding.
In any such proceeding, any indemnified party shall have the right to retain its
own counsel at its own expense. Notwithstanding the foregoing, the indemnifying
party shall pay as incurred (or within 30 days of presentation of an invoice)
the fees and expenses of the counsel retained by the indemnified party in the
event (i) the indemnifying party and the indemnified party shall have mutually
agreed to the retention of such counsel, (ii) the named parties to any such
proceeding (including any impleaded parties) include both the indemnifying party
and the indemnified party and representation of both parties by the same counsel
would be inappropriate due to actual or potential differing interests between
them or (iii) the indemnifying party shall have failed to assume the defense and
employ counsel acceptable to the indemnified party within a reasonable period of
time after notice of commencement of the action. It is understood that the
indemnifying party shall not, in connection with any proceeding or related
proceedings in the same jurisdiction,
-20-
be liable for the reasonable fees and expenses of more than one separate firm
for all such indemnified parties. Such firm shall be designated in writing by
the Underwriters in the case of parties indemnified pursuant to Section 9(a) and
by the Company in the case of parties indemnified pursuant to Section 9(b). The
indemnifying party shall not be liable for any settlement of any proceeding
effected without its written consent but if settled with such consent or if
there be a final judgment for the plaintiff, the indemnifying party agrees to
indemnify the indemnified party from and against any loss or liability by reason
of such settlement or judgment. In addition, the indemnifying party will not,
without the prior written consent of the indemnified party (which consent shall
not be unreasonably withheld or delayed), settle or compromise or consent to the
entry of any judgment in any pending or threatened claim, action or proceeding
of which indemnification may be sought hereunder (whether or not any indemnified
party is an actual or potential party to such claim, action or proceeding)
unless such settlement, compromise or consent includes an unconditional release
of each indemnified party from all liability arising out of such claim, action
or proceeding.
(d) If the indemnification provided for in this Section 9 is unavailable
to or insufficient to hold harmless an indemnified party under Section 9(a) or
(b) above in respect of any losses, claims, damages or liabilities (or actions
or proceedings in respect thereof) referred to therein, then each indemnifying
party shall contribute to the amount paid or payable by such indemnified party
as a result of such losses, claims, damages or liabilities (or actions or
proceedings in respect thereof) in such proportion as is appropriate to reflect
the relative benefits received by the Company and CPS on the one hand and the
Underwriters on the other from the offering of the Certificates. If, however,
the allocation provided by the immediately preceding sentence is not permitted
by applicable law then each indemnifying party shall contribute to such amount
paid or payable by such indemnified party in such proportion as is appropriate
to reflect not only such relative benefits but also the relative fault of the
Company or CPS on the one hand and the Underwriters on the other in connection
with the statements or omissions which resulted in such losses, claims, damages
or liabilities (or actions or proceedings in respect thereof), as well as any
other relevant equitable considerations. The relative benefits received by the
Company on the one hand and the Underwriters on the other shall be deemed to be
in the same proportion as the total net proceeds from the offering (before
deducting expenses) received by the Company bear to the total underwriting
discounts and commissions received by the Underwriters (in each case as set
forth in the table on the cover page of the Final Prospectus). As between the
Underwriters, the relative benefits received by PaineWebber, on the one hand,
and Black Diamond Securities, LLC, on the other, shall be deemed to be in the
same proportion as the respective portions of the total underwriting discounts
and commissions received by each of them. The relative fault shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company on the one hand
or the Underwriters on the other and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission.
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The Company, CPS and the Underwriters agree that it would not be just and
equitable if contributions pursuant to this Section 9(d) were determined by pro
rata allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to above in this Section 9(d). The amount
paid or payable by an indemnified party as a result of the losses, claims,
damages or liabilities (or actions or proceedings in respect thereof) referred
to above in this Section 9(d) shall be deemed to include any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim, subject to the limitations
set forth above. Notwithstanding the provisions of this Section 9(d), (i) no
Underwriter shall be required to contribute any amount in excess of the
underwriting discounts and commissions applicable to the Certificates purchased
by such Underwriter and (ii) no person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the 1933 Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations in this Section 9(d) to
contribute are several in proportion to their respective underwriting
obligations and not joint.
(e) In any proceeding relating to the Registration Statement, the Base
Prospectus, any Preliminary Final Prospectus, the Final Prospectus, or any
supplement or amendment thereto, each party against whom contribution may be
sought under this Section 9 hereby consents to the jurisdiction of any court
having jurisdiction over any other contributing party, agrees that process
issuing from such court may be served upon it by any other contributing party
and consents to the service of such process and agrees that any other
contributing party may join it as an additional defendant in any such proceeding
in which such other contributing party is a party.
(f) Any losses, claims, damages, liabilities or expenses for which an
indemnified party is entitled to indemnification or contribution under this
Section 9 shall be paid by the indemnifying party to the indemnified party as
such losses, claims, damages, liabilities or expenses are incurred. The
indemnity and contribution agreements contained in this Section 9 and the
representations and warranties of each of the Company and CPS set forth in this
Agreement shall remain operative and in full force and effect, regardless of (i)
any investigation made by or on behalf of any Underwriter, the Company or CPS,
their respective directors, officers, employees or agents or any persons
controlling any Underwriter or the Company, (ii) acceptance of any Certificates
and payment thereof or hereunder, and (iii) any termination of this Agreement.
A successor to any Underwriter, the Company or CPS, their respective directors,
officers, employees or agents, or any person controlling any Underwriter, the
Company or CPS, shall be entitled to the benefits of the indemnity, contribution
and reimbursement agreements contained in this Section 9.
-22-
10. DEFAULT BY THE UNDERWRITERS.
If on the Closing Date, Black Diamond Securities, LLC shall fail to
purchase and pay for all or any portion of the Certificates which such
Underwriter has agreed to purchase and pay for on such date (otherwise than by
reason of any default on the part of the Company or CPS), then PaineWebber shall
use reasonable efforts to procure within 36 hours thereafter one or more
additional Underwriters to purchase from the Company such amounts as may be
agreed upon and upon the terms set forth herein, the Certificates which the
defaulting Underwriter failed to purchase. If during such 36 hours the
non-defaulting Underwriter shall not have procured one or more additional
Underwriters to purchase the Certificates agreed to be purchased by the
defaulting Underwriter, then (a) if the aggregate amount of Certificates with
respect to which such default shall occur does not exceed 10% of the
Certificates covered hereby, the non-defaulting Underwriter shall be obligated
to purchase the Certificates which such defaulting Underwriter failed to
purchase, or (b) if the aggregate number of shares of Certificates with respect
to which such default shall occur exceeds 10% of the Certificates covered
hereby, the Company or the non-defaulting Underwriter will have the right, by
written notice given within the next 36-hour period to the parties to this
Agreement, to terminate this Agreement without liability on the part of the non
-defaulting Underwriter or of the Company except to the extent provided in
Section 9 hereof. In the event of a default by Black Diamond Securities, LLC,
as set forth in this Section 10, the Closing Date may be postponed for such
period, not exceeding seven days, as the non-defaulting Underwriter may
determine in order that the required changes in the Registration Statement or in
the Final Prospectus or in any other documents or arrangements may be effected.
For purposes of this Agreement, the term "Underwriter" includes any person
substituted for a defaulting Underwriter. Any action taken under this Section
10 shall not relieve Black Diamond Securities, LLC from liability in respect of
any default of such Underwriter under this Agreement.
11. NOTICES.
All communications hereunder shall be in writing and, except as otherwise
provided herein, will be mailed, delivered, telecopied or telegraphed and
confirmed as follows:
if to the Underwriters, to each of the following addresses:
PaineWebber
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: [ ]
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
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and
Black Diamond Securities, L.L.C.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇;
if to the Company, at the following address:
CPS Receivables Corp.
▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇.
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇;
or, if sent to CPS at the following address:
Consumer Portfolio Services, Inc.
▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇.
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
12. TERMINATION.
This Agreement may be terminated by the Underwriters by notice by each of
the Underwriters to the Company as follows:
(a) at any time prior to the Closing Date, if any of the following has
occurred: (i) since the respective dates as of which information is given in the
Registration Statement and the Final Prospectus, any material adverse change or
any development involving a prospective material adverse change in the business,
properties, results of operations, financial condition or business prospects of
CPS or the Company, whether or not arising in the ordinary course of business,
(ii) any outbreak or escalation of hostilities or declaration of war or national
emergency or other national or international calamity or crisis or change in
economic or political conditions if the effect of such outbreak, escalation,
declaration, emergency, calamity, crisis or change on the financial markets of
the United States would, in each of the Underwriters' reasonable judgment, make
it impracticable to market the Certificates or to enforce contracts for the sale
of the Certificates, (iii) any suspension of trading in securities generally on
the New York Stock Exchange or the American Stock Exchange or limitation on
prices (other than limitations on hours or numbers of days of trading) for
securities on either such Exchange, (iv) the enactment, publication, decree or
other promulgation of any statute, regulation, rule or order of any court or
other
-24-
governmental authority which in each of the Underwriters' reasonable opinion
materially and adversely affects or may materially and adversely affect the
business or operations of the Company, (v) declaration of a banking moratorium
by United States or New York State authorities, (vi) any downgrading or the
giving of notice of any intended or potential downgrading in the rating of the
Company's debt securities by any "nationally recognized statistical rating
organization" (as defined for purposes of Rule 436(g) under the 1934 Act),
(vii) the suspension of trading of the Common Stock by the Commission on the New
York Stock Exchange or (viii) the taking of any action by any governmental body
or agency in respect of its monetary or fiscal affairs which in each of the
Underwriters' reasonable opinion has a material adverse effect on the securities
markets in the United States; or
(b) as provided in Sections 7 and 10 of this Agreement.
13. SUCCESSORS.
This Agreement has been and is made solely for the benefit of the
Underwriters, CPS and the Company and their respective successors, executors,
administrators, heirs and assigns, and the respective affiliates, officers,
directors, employees, agents and controlling persons referred to herein, and no
other person will have any right or obligation hereunder. No purchaser of any
of the Certificates from any Underwriter shall be deemed a successor or assign
merely because of such purchase.
14. MISCELLANEOUS.
The reimbursement, indemnification and contribution agreements contained in
this Agreement and the representations, warranties and covenants in this
Agreement shall remain in full force and effect regardless of (a) any
termination of this Agreement, (b) any investigation made by or on behalf of any
Underwriter or the Company, their respective directors, officers, employees or
agents or any controlling person of any Underwriter or the Company indemnified
herein and (c) delivery of and payment for the Certificates under this
Agreement.
Each Underwriter agrees that, prior to the date which is one year and one
day after the payment in full of all securities issued by the Company or by a
trust for which the Company was the depositor, which securities were rated by
any nationally recognized statistical rating organization, it will not institute
against, or join any other person in instituting against, the Company any
bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings
or other proceedings under any Federal or state bankruptcy or similar law.
This Agreement may be executed in two or more counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and
the same instrument.
-25-
This Agreement shall be governed by, and construed in accordance with, the
laws of the State of New York without regard to the conflict of laws provisions
thereof. With respect to any claim arising out of this Agreement (i) each party
irrevocably submits to the exclusive jurisdiction of the courts of the State of
New York and the United States District Court for the Southern District of New
York, and (ii) each party irrevocably waives (1) any objection which it may have
at any time to the laying of venue of any suit, action or proceeding arising out
of or relating hereto brought in any such court, (2) any claim that any such
suit, action or proceeding brought in any such court has been brought in any
inconvenient forum and (3) the right to object, with respect to such claim,
suit, action or proceeding brought in any such court, that such court does not
have jurisdiction over such party. To the extent permitted by applicable law,
each Underwriter, the Company and CPS irrevocably waive all right of trial by
jury in any action, proceeding or counterclaim arising out of or in connection
with this Agreement or any matter arising hereunder.
This Agreement supersedes all prior agreements and understandings relating
to the subject matter hereof.
Neither this Agreement nor any term hereof may be changed, waived,
discharged or terminated orally, but only by an instrument in writing signed by
the party against whom enforcement of the change, waiver, discharge or
termination is sought.
The headings in this Agreement are for purposes of reference only and shall
not limit or otherwise affect the meaning hereof.
Any provision of this Agreement which is prohibited, unenforceable or not
authorized in any jurisdiction shall, as to such jurisdiction, be ineffective to
the extent of such prohibition, unenforceability or non-authorization without
invalidating the remaining provisions hereof or affecting the validity,
enforceability or legality of such provision in any other jurisdiction.
[Rest of page intentionally left blank.]
-26-
If the foregoing letter is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicates hereof,
whereupon it will become a binding agreement among the Company and the several
Underwriters in accordance with its terms.
Very truly yours,
CPS RECEIVABLES CORP.
By:
------------------------------------------
Name:
Title:
CONSUMER PORTFOLIO SERVICES, INC.
By:
------------------------------------------
Name:
Title:
The foregoing Underwriting Agreement
is hereby confirmed and accepted as
of the date first above written:
PAINEWEBBER
By:
------------------------------
Name:
Title:
BLACK DIAMOND SECURITIES, LLC
By:
-----------------------------------
Name:
Title:
SCHEDULE I
Schedule of Underwriters
Portion of Initial Principal
Amount of the Certificates to be
Underwriter Purchased
PaineWebber [ %]
Black Diamond Securities, LLC [ %]
-------------
Total [ %]
=============
