cpss_ex10-24.htm


     EXECUTION
COPY


    MOTOR
VEHICLE CONTRACTS PURCHASE AND SALE AGREEMENT

     

    by and
between

     

    CONSUMER
PORTFOLIO SERVICES, INC.,

     

    as
Seller/Servicer

     

    and

     

    CALT SPE,
LLC,

     

    as
Purchaser

     

    Dated as
of September 26, 2008

     


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    TABLE OF
CONTENTS

     

    Page

     

    ARTICLE I CERTAIN
DEFINITIONS                                                                                                                                 

    
      	
              Section
      1.01

            	
              Definitions 

            	
            


    

    
      	
              Section
      1.02

            	
              General. 

            	
               

            


    

     

    ARTICLE II PURCHASE
AND SALE OF
CONTRACTS                                                                                                                                       

     

    
      	
              Section
      2.01

            	
              Purchase and Sale of
      Contracts, Certificates and Other Assets. 

            	
               

            


    

    
      	
              Section
      2.02

            	
              Closing the Purchase
      and Sale. 

            	
               

            


    

    
      	
              Section
      2.03

            	
              Deliverables at the
      Closing. 

            	
               

            


    

    
      	
              Section
      2.04

            	
              Servicing
      Transfer. 

            	
               

            


    

    
      	
              Section
      2.05

            	
              Payment of Aggregate
      Purchase Price; Purchase Price Adjustment. 

            	
               

            


    

     

    ARTICLE III
REPRESENTATIONS AND
WARRANTIES                                                                                                                                       

    
      	
              Section
      3.01

            	
              Purchaser
      Representations and Warranties. 

            	
            


    

    
      	
              Section
      3.02

            	
              [Reserved]. 

            	
            


    

    
      	
              Section
      3.03

            	
              Seller/Servicer’s
      Representations and
Warranties

            


    

    
      	
              Section
      3.04

            	
              Representations and
      Warranties Concerning Contracts. 

            	
            


    

     

    ARTICLE IV
ADDITIONAL
AGREEMENTS                                                                                                                                    

    
      	
              Section
      4.01

            	
              Protection of Right,
      Title and Interest. 

            	
            


    

    
      	
              Section
      4.02

            	
              Security
      Interests. 

            	
            


    

    
      	
              Section
      4.03

            	
              Non-Solicitation. 

            	
            


    

    
      	
              Section
      4.04

            	
              Chief Executive
      Office; Jurisdiction. 

            	
               

            


    

    
      	
              Section
      4.05

            	
              Merger or
      Consolidation of the Seller/Servicer. 

            	
               

            


    

    
      	
              Section
      4.06

            	
              [Reserved]. 

            	
               

            


    

    
      	
              Section
      4.07

            	
              Cooperation.
      . 

            	
               

            


    

    
      	
              Section
      4.08

            	
              Further
      Assurances. 

            	
               

            


    

    
      	
              Section
      4.09

            	
              Transfer
      Taxes. 

            	
               

            


    

    
      	
              Section
      4.10

            	
              Unremitted Sales and
      Use Tax Collections. . 

            	
               

            


    

    
      	
              Section
      4.11

            	
              Description of
      Seller/Servicer’s Auto Finance Business; Credit Life Policy
      Status. 

            	
               

            


    

    
      	
              Section
      4.12

            	
              [Reserved]. 

            	
               

            


    

    
      	
              Section
      4.13

            	
              Servicing Transfer
      Reconciliation. 

            	
               

            


    

    
      	
              Section
      4.14

            	
              Transfer of Date
      File. 

            	
               

            


    

    
      	
              Section
      4.15

            	
              Delivery of Schedule
      A-2. 

            	
               

            


    

     

    ARTICLE V
SECURITIZATION TRANSACTIONS AND WHOLE LOAN TRANSFERS

     

    
      	
              Section
      5.01

            	
              Notice of
      Securitization Transactions and Whole Loan
      Transfers. 

            	
               

            


    

    
      	
              Section
      5.02

            	
              Agreement to Cooperate
      and Assist Purchaser with Securitization Transactions and Whole Loan
      Transfers. 

            	
               

            


    

    
      	
              Section
      5.03

            	
              Obligations of
      Purchaser in Connection with Securitization Transactions and Whole Loan
      Transfers. 

            	
               

            


    

    
      	
              Section
      5.04

            	
              Assignment of
      Purchaser’s Rights. 

            	
               

            


    

     

    ARTICLE VI
CONFIDENTIALITY                                                                                                                         

     


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    Section
6.01                                Confidentiality.                                         

    ARTICLE VII
INDEMNIFICATION                                                                                                                                  

     

    
      	
              Section
      7.01

            	
              Survival of
      Representations and Warranties. 

            	
               

            


    

    
      	
              Section
      7.02

            	
              Obligations of
      Seller/Servicer. 

            	
               

            


    

    
      	
              Section
      7.03

            	
              Obligations of
      Purchaser. 

            	
               

            


    

    
      	
              Section
      7.04

            	
              Notice and Opportunity
      to Defend. 

            	
               

            


    

    
      	
              Section
      7.05

            	
              Exclusive
      Remedy. 

            	
               

            


    

     

    ARTICLE VIII
PRE-CLOSING
COVENANTS                                                                                                                               

     

    
      	
              Section
      8.01

            	
              Pre-Closing
      Covenants. 

            	
               

            


    

     

    ARTICLE IX
CONDITIONS TO
CLOSING                                                                                                                                   

     

    
      	
              Section
      9.01

            	
              Conditions to
      Obligation of the Purchaser. 

            	
               

            


    

    
      	
              Section
      9.02

            	
              Conditions to
      Obligation of the Seller/Servicer. 

            	
               

            


    

    
      	
              Section
      9.03

            	
              Termination of
      Agreement. 

            	
               

            


    

     

    ARTICLE X
MISCELLANEOUS
PROVISIONS                                                                                                                               

     

    
      	
              Section
      10.01

            	
              Amendment. 

            	
               

            


    

    
      	
              Section
      10.02

            	
              Successors and
      Assigns.  . 

            	
               

            


    

    
      	
              Section
      10.03

            	
              No Waivers; Cumulative
      Remedies. 

            	
               

            


    

    
      	
              Section
      10.04

            	
              Notices. 

            	
               

            


    

    
      	
              Section
      10.05

            	
              Headings and
      Cross-references 

            	
               

            


    

    
      	
              Section
      10.06

            	
              Governing
      Law. 

            	
               

            


    

    
      	
              Section
      10.07

            	
              Counterparts. 

            	
               

            


    

    
      	
              Section
      10.08

            	
              Merger and
      Integration. 

            	
               

            


    

    
      	
              Section
      10.09

            	
              Schedules, Exhibits
      and Annexes. 

            	
               

            


    

    
      	
              Section
      10.10

            	
              General Interpretive
      Principles. 

            	
               

            


    

    
      	
              Section
      10.11

            	
              UCC
      References. 

            	
               

            


    

    
      	
              Section
      10.12

            	
              Costs and
      Expenses. 

            	
               

            


    

    
      	
              Section
      10.13

            	
              Publicity and
      Reports.. 

            	
               

            


    

    
      	
              Section
      10.14

            	
              No Third Party
      Beneficiaries.  . 

            	
               

            


    

    
      	
              Section
      10.15

            	
              Effect of
      Termination. 

            	
               

            


    


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    EXHIBITS:

    


    Exhibit
A-1                                –
Bill of Sale

    Exhibit
A-2                                –
Assumption Agreement

    Exhibit
B                      –
Forms of Contract

    Exhibit
C                      –
Collection Policy

    Exhibit
D                      –
UCC Information for Seller/Servicer

    Exhibit
E                      –
Form of Power of Attorney

    


    SCHEDULES:

    


    Schedule
A-1                                –
Listing of Contracts (list of fields) prepared as of the Cut-Off
Date

    Schedule
A-2                                –
Listing of Contracts (list of fields) prepared as of the Closing
Date

    Schedule
B                                –
Form of Estimated Closing Statement

    Schedule
C                                –
Lockboxes and Payment Instructions

    Schedule
D                                –
Data File

    Schedule
E                                –
Authority to do Business

    Schedule
F                                –
Purchaser Statement (Section 4.06)

    Schedule
G                                –
Closing Checklist

    Schedule
H                                –
Image File

    Schedule
I                                –
Definitions of Fields Used on Schedules A-1 and A-2

    Schedule
J                                –
Customer Service Lines

    Schedule
K                                –
Location of Custodial Files


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    MOTOR
VEHICLE CONTRACTS PURCHASE AND SALE AGREEMENT

     

    This
MOTOR VEHICLE CONTRACTS PURCHASE AND SALE AGREEMENT is made as of the 26th day
of September 2008, by and between CONSUMER PORTFOLIO SERVICES,
INC., a California corporation (together with its successors and
permitted assigns, the “Seller/Servicer” or
“CPS”) and
CALT SPE, LLC, a
Delaware limited liability company (together with its successors and permitted
assigns, the “Purchaser”).

     

    WHEREAS,
the Purchaser desires to purchase certain motor vehicle loan contracts from the
Seller/Servicer, and the Seller/Servicer desires to sell such motor vehicle loan
contracts to the Purchaser with the understanding that such sale effected hereby
shall be “servicing released”;

     

    WHEREAS,
the Purchaser and the Seller/Servicer will execute this Agreement on the date
hereof and consummate such sale on the Closing Date; and

     

    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

     

    Section
1.01                                Definitions

     

    As used
in this Agreement, the following terms shall, unless the context otherwise
requires, have the following meanings:

     

    “Affiliate” of any
specified Person means any other Person controlling or controlled by or under
common control with such specified Person.  For the purposes of this
definition, “control” when used with respect to any specified Person means the
power to direct the management and policies of such Person, directly or
indirectly, whether through the ownership of voting securities, by contract or
otherwise; and the terms “controlling” or “controlled” have meanings correlative
to the foregoing.

     

    “Aggregate Principal
Balance” means, as of any date of determination, an amount equal to the
sum of the then Principal Balances of all Contracts.

     

    “Aggregate Purchase
Price” has the meaning given to such term in Section 2.05(a) of this
Agreement.

     

     “Agreement” means this
Motor Vehicle Contracts Purchase and Sale Agreement, dated as of September 26,
2008, by and between the Seller/Servicer and the Purchaser, as this agreement
may be amended, modified or supplemented from time to time in accordance with
its terms.

     

    “Amount Financed”
means with respect to a Contract, the amount advanced under such Contract toward
the purchase price or refinancing of the Financed Vehicle and any
related

     


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    costs,
including amounts advanced in respect of accessories, insurance premiums,
service and warranty contracts, and the other items financed as part of the
motor vehicle retail installment sale contracts.

     

    “Ancillary
Fees”  means, with respect to a Contract, any late fees, NSF
fees, prepayment charges, extension fees or administrative fees paid by the
Obligor under such Contract.

     

    “Annual Percentage
Rate” or “APR” means, with
respect to a Contract, the annual percentage rate of finance charges or service
charges stated in such Contract.

     

    “Assumption Agreement”
means the Assignment and Assumption Agreement attached to this Agreement as
Exhibit A-2.

     

    “Backup Servicer”
means Systems & Services Technologies, Inc.

     

    “Bankruptcy Code”
shall mean Title 11 of the United States Code, 11. U.S.C. §§ 101 et seq., as
amended.

     

    “Bill of Sale” means
the bill of sale attached to this Agreement as Exhibit A-1.

     

    “Business Day” means
any day other than a Saturday, a Sunday or a day on which banking institutions
in the State of New York, the State of California, Minneapolis, Minnesota, or
any other city in which the principal executive offices of the Seller/Servicer,
the Transferor or the Indenture Trustee, as the case may be, are located are
authorized or obligated by law, executive order or governmental decree to be
closed, or a day on which the bond markets in New York are closed for
trading.

     

    “Casualty” means, with
respect to a Financed Vehicle, the total loss or destruction of such Financed
Vehicle.

     

    “Certificate of Title”
means, with respect to a Financed Vehicle, an original Certificate of Title
issued by the Registrar of Titles of the applicable state (other than any
Non-Certificate of Title State), on which the lien of the Seller as secured
party on the Financed Vehicle is recorded.

     

    “Chargeoff” means (i)
any Contract that has been deemed by the Servicer to be uncollectible and
charged off, (ii) if the related Financed Vehicle has not been repossessed, any
Contract for which 10% or more of a Scheduled Payment becomes more than 120 days
delinquent, (iii) if the related Financed Vehicle has been repossessed, any
Contract for which either (A) 10% or more of Scheduled Payment becomes more than
180 days delinquent or (B) 90 days have passed from the date of repossession, or
(iv) any Contract the Obligor under which has filed for bankruptcy under Federal
or state law and the Servicer has determined that its loss is
known.

     

    “Chattel Paper” has
the meaning given to such term in Section 9-102(a)(11) of the UCC.

     


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    “Closing” has the
meaning given to such term in Section 2.02 of this Agreement.

     

    “Closing Date” means
September 26, 2008 or such other date as may be mutually agreed upon by
Purchaser and Seller/Servicer.

     

    “Collection Period”
means a calendar month in which Scheduled Payments, or portions thereof, are
payable and/or received.

     

    “Collection Policy”
means the collection policy of the Seller/Servicer, which are the practices and
procedures employed in the servicing of Contracts as of the Closing Date, as
described in Exhibit C hereto.

     

    “Collections Payment
Amount” means an amount equal to all collections of Scheduled Payments
and other amounts (including, without limitation, all Ancillary Fees and any
amount payable to the Seller/Servicer under the Contracts as well as all sales
and other proceeds of the Financed Vehicles under the Contracts) on the
Contracts purchased by the Purchaser hereunder, to the extent such collections
were received by the Seller/Servicer during the period from the opening of
business on the date after the Cut-Off Date to the close of business on the
Closing Date.

     

    “Consumer Lender”
means a Person that is licensed under applicable law to originate loans to
natural persons resident in one or more of the United States of America and
authorized by Seller/Servicer to participate in its direct lending program, but
shall not include Seller/Servicer or any of its Affiliates.

     

    “Contract” means each
motor vehicle retail installment sale contract or an installment promissory note
and security agreement with respect to a Financed Vehicle that appears on the
List of Contracts on Schedule A hereto, including all Supporting Obligations
with respect to such Contract.

     

    “Custodial File”
means, with respect to a Contract, a file containing the following documents or
instruments with respect to such Contract:  (i) the fully executed
original of each Contract; (ii) if such Contract was not originated in a state
in which the Obligor may maintain possession of the Certificate of Title, the
original Certificate of Title with respect to the related Financed Vehicle; and
(iii) if such Contract was originated in a state that provides the Obligor may
maintain possession of the Certificate of Title and the Seller/Servicer does not
maintain possession of the Certificate of Title, the lien certificate showing
the Seller/Servicer as sole lienholder; provided, that if the
original Certificate of Title or lien certificate has not yet been received, a
copy of the application therefor showing the Seller as secured party or a dealer
guaranty of title shall suffice for purposes of clauses (i) and
(ii).

     

    “Custodian” means
Wells Fargo Bank, National Association, in its capacity as custodian under the
Transfer and Servicing Agreement.

     

    “Cram Down Loss”
means, with respect to a Contract, if a court of appropriate jurisdiction in an
insolvency proceeding shall have issued an order reducing the amount owed on
such Contract or otherwise modifying or restructuring the Scheduled Payments to
be made on such Contract, an amount equal to the excess of the Principal Balance
of such Contract

     


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    immediately
prior to such order over the Principal Balance of such Contract as so reduced by
such court order.  For purposes of this Agreement, “Cram Down Loss”
shall be deemed to have occurred with respect to a Contract when all of the
following shall have occurred:  (i) a court shall have issued an
order of the type set forth above, (ii) the related Chapter 13
reorganization plan has been confirmed by such court, and (iii) the related
Obligor is current with the terms of the related Chapter 13 reorganization
plan.

     

    “Cut-Off Date” means
the close of business on August 31, 2008.

     

    “Data File” means,
with respect to each Contract, an electronic systems data file that provides
information for each item listed on Schedule D hereto, to the extent that the
Seller/Servicer maintains such items in its electronic systems data file for a
given Contract.

     

    “Dealer” means the
dealer which sold a Financed Vehicle related to a Contract and which originated
or assisted in the origination of such Contract under a Dealer
Agreement.

     

    “Dealer Agreement”
means any agreement and, if applicable, assignment under which Contracts were
originated by or through a Dealer and sold to the Seller/Servicer or an
Affiliate of the Seller/Servicer.

     

    “Dealer Contract”
means a Contract that was purchased by the Seller/Servicer from the Dealer that
sold the related Financial Vehicle to the related Obligor.

     

    “Dollars”  means
the lawful currency of the United States of America.

     

    “Due Date” means, with
respect to each payment under a Contract, the day set forth in the Contract, or
as otherwise modified by the Servicer in accordance with the Collection Policy
and provided in the Servicing File relating to such Contract as the date on
which such payment under that Contract is scheduled to be made.

     

    “Eligible Contract”
shall mean a Contract for which each representation and warranty set forth in
Section 3.04 is true and correct.

     

    “Estimated Closing
Statement” means  a schedule to be delivered to the Purchaser
by the Seller/Servicer pursuant to Section 2.04(b) in substantially the form
attached hereto as Schedule B.

     

    “Excluded Assets” has
the meaning given to such term in Section 2.01(b) of this
Agreement.

     

    “Final Closing
Statement” has the meaning given to such term in Section 2.04(b) of this
Agreement.

     

    “Financed Vehicle”
means a new or used automobile, together with any and all non-severable
appliances, parts, instruments, accessories, furnishings, other equipment,
accessions, additions, improvements, substitutions and replacements from time to
time in or to such vehicle, that has or had been pledged by the related Obligor
as collateral security for such Contract.

     


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    “GAAP” means United
States generally accepted accounting principles.

     

    “Governmental Entity”
means any federal, state, municipal, national, local or other governmental
department, court, commission, board, bureau, agency, intermediary, carrier or
instrumentality or political subdivision thereof, or any entity or officer
exercising executive, legislative, judicial, quasi-judicial, regulatory or
administrative functions of or pertaining to any government or any court, in
each case, whether of the United States or a state, territory or possession
thereof, a foreign sovereign entity or country or jurisdiction or the District
of Columbia.

     

    “Hart-Scott-Rodino
Act” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended.

     

    “Image File” means,
with respect to each Contract, an electronic system data file that provides
information for each item listed on Schedule H hereto.

     

    “Indemnified Party”
has the meaning given to such term in Section 7.04 hereof.

     

    “Indemnifying Party”
has the meaning given to such term in Section 7.04 hereof.

     

    “Indenture” means,
collectively, the Master Indenture and the Indenture Supplements.

     

    “Indenture Supplement”
shall mean, with respect to any Series, the related Indenture Supplement, as the
same may be amended, supplemented or otherwise modified from time to
time.

     

    “Indenture Trustee”
shall mean Wells Fargo Bank, National Association, in its capacity as indenture
trustee under the Indenture, its successors in interest and any successor
indenture trustee under the Indenture.

     

    “Independent
Accountants” means McGladrey and Pullen LLP, or other accounting firm
acceptable to the Purchaser, so long as, in such case, such firm (i) is in
fact independent with respect to the Seller/Servicer and (ii) qualifies as
“independent” under all rules, guidelines and pronouncements of each of the
American Institute of Certified Public Accountants, the Securities and Exchange
Commission and the Sarbanes-Oxley Act of 2002.

     

    “Instrument” has the
meaning given to such term in Section 9-102(a)(47) of the UCC.

     

    “Insurance Policy”
means, with respect to a Contract, the policy of physical damage and all other
insurance covering the Financed Vehicles or the Obligors (other than VSI
Insurance or Residual Value Insurance).

     

    “Investor
Representative” shall mean, initially, CIGPF I Corp. and, thereafter, any
successor Investor Representative in accordance with the Transfer and Servicing
Agreement.

     


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    “Issuer” shall mean
Auto Loan Trust, a Delaware statutory trust, and its successors and permitted
assigns.

     

    “Law” means any
constitutional provision, statute, ordinance or other law, or regulation of any
Governmental Entity and any Order.

     

    “Lien” means, with
respect to a Contract, a security interest, lien, charge, pledge, equity or
encumbrance of any kind other than tax liens, mechanics’ liens, and any liens
which attach by operation of law.

     

    “List of Contracts”
means the listing of all the Contracts and certain specified information (i) as
of the Cut-Off Date in the form of Schedule A-1 hereto and (ii) as of the
Closing Date in the form of Schedule A-2 hereto.  The various fields
included on Schedule A-1 and Schedule A-2 are defined on Schedule I
hereto.

     

    “Lockbox” means a post
office box or other similar arrangement to which the Obligors have been
instructed to remit Scheduled Payments, which shall initially be located at P.O.
Box 98742, Phoenix, Arizona 85038-0742.

     

    “Losses” means, with
respect to a Purchaser Indemnified Party or a Seller/Servicer Indemnified Party,
as the case may be, the excess of (x) all losses, damages, costs and
expenses (including, without limitation, reasonable attorneys’ fees and
expenses) actually suffered or incurred by such Person, over (y) the
aggregate amount of excess monies actually received by such Person due to the
errors or mistakes by the applicable Indemnifying Person; provided that it shall
not include (i) any indirect, consequential or punitive damages (the Purchaser
agrees that it will not initiate any punitive claims except for cross-claims) of
any Indemnified Party, including damages for lost profits and lost business
opportunities, or (ii) any Losses to the extent covered by insurance insuring
any Indemnified Party with respect thereto or otherwise recoverable from Third
Parties Claims, but not excluding any portion of such Loss that would pursuant
to the terms of such insurance or other arrangement ultimately be borne by any
Indemnified Party relating to, resulting from or arising out of any deductible
or other like arrangement).

     

    “Master Indenture”
shall mean the Master Indenture, dated as of September 26, 2008, among the
Issuer, the Indenture Trustee and CPS, as Servicer, as the same may be amended,
supplemented or otherwise modified from time to time.

     

    “Non-Certificated Title
States” means the States of Arizona, Kansas, Kentucky, Maine, Maryland,
Michigan, Minnesota, Montana, New York, Oklahoma, Wisconsin, Wyoming and such
other States in which the applicable Department of Motor Vehicles or similar
authority issues evidence of title to a Financed Vehicle in a non-certificated
form.

     

    “Obligor” means the
purchaser or the co-purchasers of the Financed Vehicle or any other Person who
owes payments under a Contract.  The phrase “payment made on behalf of
an Obligor” shall mean all payments made with respect to a Contract except
payments made by the Seller/Servicer or a servicer acting on behalf of the
Seller/Servicer.

     


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    “Order” means any
decree, injunction, judgment, order, ruling, assessment or writ.

     

    “Originator” means the
Person that originated a Contract or, in the case of a Contract originated by a
Dealer and purchased by the initial lender under that Contract, the Person that
purchased such Contract from such Dealer.

     

    “Paid Ahead Amounts”
means any payments received by, or on behalf of, the Seller/Servicer, to the
extent that such payments constitute installments of Scheduled Payments that are
due in a subsequent Collection Period.

     

    “Person” means any
individual, corporation, limited liability company, estate, partnership, joint
venture, association, joint stock company, trust, unincorporated organization,
or government or any agency or political subdivision thereof.

     

    “Post Closing Payment
Event” shall have the meaning set forth in the Section 2.04(d) of this
Agreement.

     

    “Post Closing
Payments” shall have the meaning set forth in the Section 2.04(d) of this
Agreement.

     

    “Pricing Letter” means
that certain letter agreement, dated as of September 26, 2008, between CIGPF I
Corp. and Consumer Portfolio Services, Inc. in respect of the calculation of the
Aggregate Purchase Price.

     

    “Principal Balance”
means, as of the close of business on any date of determination, the Amount
Financed minus the sum of (A) that portion of all Scheduled Payments and any
full or partial prepayments in respect of such Contract received on or prior to
such date and allocable to principal as determined by the Seller/Servicer and
(B) any Cram Down Loss in respect of such Contract.  For purposes of
this definition, allocations between interest and principal of the Scheduled
Payment on each Contract shall be made in accordance with the terms of such
Contract.

     

    “Proceeds” has the
meaning given to such term in Section 9-102(a)(64) of the UCC.

     

    “Purchaser” shall have
the meaning set forth in the first paragraph of this Agreement.

     

    “Purchaser Indemnified
Party” has the meaning given to such term in Section 7.02 of this
Agreement.

     

    “Purchaser
Obligations” shall have the meaning set forth in Section 2.01(c) of this
Agreement.

     

    “Registrar of Titles”
means the agency, department or office having the responsibility for maintaining
records of titles to motor vehicles in the jurisdiction in which a particular
Financed Vehicle is registered.

     


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    “Related Contract
Assets” means the items listed in (a) clauses (ii) through (ix) of
Section 2.01(a).

     

    “Related Documents”
means this Agreement, the Assignment and Assumption Agreement, the Bill of Sale
and all of the documents listed on the closing list attached as Schedule F
hereto.

     

    “Repurchase Price”
shall have the meaning given to such term in Section 2.05(e).

     

    “Requirements of Law”
shall mean, for any Person, (a) any certificate of incorporation, certificate of
formation, articles of association, bylaws, limited liability company agreement,
or other organizational or governing documents of that Person and (b) any law,
treaty, statute, regulation, or rule, or any determination by a Governmental
Authority or arbitrator, that is applicable to or binding on that Person or to
which that Person is subject.  This term includes, without limitation,
usury laws, the Exchange Act, the Truth in Lending Act, and Regulation Z and
Regulation B of the Board of Governors of the Federal Reserve
System.

     

    “Rule of 78's
Contract” means a Contract whereby the portion of a Scheduled Payment
that is allocated to the payment of interest on a Contract is equal to the
product of (i) a fraction (measured as of such date of determination), the
numerator of which is Rterm of such Loan Contract and the denominator of which
is the Fractional Interest Portions of such Contract (measured as of such date
of determination), and (ii) the Original Unearned Interest of such
Contract.  The remaining amount of the Scheduled Payment, after
deducting the portion thereof allocable to the payment of interest, is used to
reduce the Principal Balance of such Contract.

     

    For
purposes of applying the above formula, the following terms shall have the
meanings set forth below:

     

    “Original Gross
Balance”  means, with respect to a Contract, the sum, measured
as of the date of origination of such Contract, of all Scheduled Payments with
respect to such Contract.

     

    “Original Unearned
Interest”  means, with respect to a Contract, the Original
Gross Balance of such Contract minus the Principal Balance of such Contract on
such date of origination.

     

    “Oterm”  means, with
respect to a Contract, the number of Scheduled Payments before application of
any periods payment (measured from the origination date of such
Contract).

     

    “Rterm” means, with respect to
a Contract, the number of remaining Scheduled Payments before application of the
current periods payment.

     

    “Fractional Interest
Portions”  means, with respect to a Contract, the sum of the
number 1 through the Oterm (e.g. for a 12 month loan 1+2+3....12 =
78).

     

    “Scheduled Payment”
means, with respect to a Collection Period, that portion of the payment that the
Obligor is contractually obligated to make during such Collection
Period.

     


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    “Section 341 Contract”
means a Contract, the Obligor of which has completed a Section 341 Meeting as of
the Cut-Off Date.

     

    “Section 341 Meeting”
means a meeting held pursuant to Section 341(a) of the United States Bankruptcy
Code (as the same may be amended from time to time).

     

     “Securitization
Transaction” means a transaction having the following attributes: (i) the
sale, pledge or transfer of some or all of the Contracts and/or other Sold
Assets by the Purchaser or an Affiliate of the Purchaser to a trust or other
special purpose entity, and (ii) either of the following: (x) the issuance of
asset-backed securities by such trust or other special purpose entity as part of
an asset-backed securities transaction that is marketed in the name of the
Purchaser or an Affiliate of the Purchaser in the term market, or (y) the
funding of the Contracts by a “multi-seller” special purpose entity established
for the purpose of funding financial assets such as the Contracts primarily
through the issuance of commercial paper in the asset-backed commercial paper
market.

     

    “Seller/Servicer”
means Consumer Portfolio Services, Inc., in its capacity as seller hereunder
and, prior to the Closing Date, servicer of the Contracts.

     

    “Seller/Servicer Indemnified
Party” has the meaning given to such term in Section 7.03 of this
Agreement.

     

    “Service Contract”
means, with respect to a Financed Vehicle, any third-party service contracts
entered in by, or on behalf of, the Seller/Servicer.

     

    “Servicing File”
means, with respect to a Contract, a file containing the following documents or
instruments with respect to such Contract:  (i) a true and correct
copy of the fully executed original of each Contract; (ii) the original credit
application, or a physical or electronic copy thereof; (iii) if such Contract
was not originated in a state in which the Obligor may maintain possession of
the Certificate of Title, a true and correct copy of the original Certificate of
Title with respect to the related Financed Vehicle; (iv) if such Contract was
originated in a state that provides the Obligor may maintain possession of the
Certificate of Title and the Seller/Servicer does not maintain possession of the
Certificate of Title, a true and correct copy of the lien certificate showing
the Seller/Servicer as sole lienholder, provided, that if the
original Certificate of Title or lien certificate has not yet been received, a
copy of the application therefor showing the Seller as secured party or a dealer
guaranty of title shall suffice for purposes of clauses (iii) and (iv); (v) any
agreement(s) modifying the Contract (including, without limitation, any
extension agreement(s)); (vi) a copy of the contract for any supplemental
warranty purchased with respect to the Financed Vehicle; (vii) acceptable
vehicle valuation documentation consisting of the dealer invoice or sticker for
new cars and reference to the most recently published National Automobile
Dealers Association Used Car Price Guide or Kelly Blue Book or similar vehicle
valuation document, based on year, make and model of the related Financed
Vehicle for used cars and (viii) any documents specifically relating to the
Obligor or the Financed Vehicle maintained by the Seller/Servicer or its
designee in its Servicing Files as of the date hereof.  The documents
referred to above may be maintained in microfiche or electronic
form.

     


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    “Servicing Standard”
has the meaning given to such term in the Transfer and Servicing
Agreement.

     

    “Simple Interest
Contract” means a Contract under which the portion of the payment
allocable to interest and the portion allocable to principal is determined in
accordance with the Simple Interest Method.

     

    “Simple Interest
Method” means the method of allocating a fixed level payment between
principal and interest, pursuant to which the portion of such payment that is
allocated to interest is equal to the product of the APR multiplied by the
unpaid balance multiplied by the period of time (expressed as a fraction of a
year, based on the actual number of days in the calendar month and a year of 365
days) elapsed since the preceding payment of interest was made and the remainder
of such payment is allocable to principal.

     

    “Skip Automobile
Contract” means a Contract (i) which is delinquent as of the Closing
Date; and (ii) where Seller/Servicer (a) has concluded that the address or
telephone number of the related Obligor maintained by Seller/Servicer as of the
Closing Date is incorrect and Seller/Servicer has not been able to obtain
revised contact information for such Obligor and (b) has designated the status
of the Contract as “A07” or “F07” in accordance with its servicing
procedures.

     

    “Sold Assets” means,
collectively, (i) the Contracts, (ii) the Related Contract Assets and (iii) all
other items identified in Section 2.01(a) hereof.

     

    “Supporting
Obligation” has the meaning given to such term in Section 9-102(a)(77) of
the UCC.

     

    “Tax Return” means any
report, return, document, statement, declaration or other information filed with
respect to any Taxes (including any schedules attached thereto), and any claims
for refund of Taxes, including any amendments or supplements to any of the
foregoing, with any Taxing Authority.

     

    “Taxes” means any and
all taxes, fees, levies or other assessments, including, without limitation,
federal, state, local, or foreign income, gross receipts, transfer, gains,
inventory, custom, duty, excise, real or personal property, sales, withholding,
social security, occupation, use, service, value added, license, net worth,
payroll, franchise or similar taxes, imposed by any Taxing Authority together
with any interest, penalties or additions to tax and additional amounts imposed
with respect thereto.

     

    “Taxing Authority”
means any Governmental Entity responsible for the imposition or collection of
any Taxes.

     

    “Term” means the time
period beginning on the Closing Date and ending on the maturity date of the last
maturing Contract.

     

    “Third Party Claims”
has the meaning given to such term in Section 7.04 of this
Agreement.

     


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    “Title Documents”
means, with respect to any Financed Vehicle, the Certificate of Title for, or
other evidence of ownership including, without limitation, a lien certificate of
such Financed Vehicle, issued by the Registrar of Titles (or in the case of a
lien certificate the office of Secretary of State) in the jurisdiction in which
such Financed Vehicle is registered.

     

    “Transfer and Servicing
Agreement” shall mean the Transfer and Servicing Agreement, dated as of
September 26, 2008, among the Transferor, the Seller/Servicer, the Issuer, the
Indenture Trustee, the Custodian and the Investor Representative, as the same
may be amended, supplemented or otherwise modified from time to time, and shall
include for all purposes the “Servicing Annex” attached thereto and made a part
thereof.

     

    “Transfer Taxes” has
the meaning given to such term in Section 4.08 of this Agreement.

     

    “UCC” means the
Uniform Commercial Code as in effect in the respective
jurisdiction.

     

    “VSI Insurance” means
any vendor single interest insurance policies issued to the benefit of the
Seller/Servicer at the time a Contract was originated.

     

     “Whole Loan Transfer”
means any sale or transfer of (including the sale of a participation or other
interest in) some or all of the Contracts and/or other Sold Assets by the
Purchaser to a third party, which sale or transfer is not a Securitization
Transaction.

     

    Section
1.02                                General.

     

    For the
purpose of this Agreement, except as otherwise expressly provided or unless the
context otherwise requires, the words “herein,” “hereof” and “hereunder” and
other words of similar import refer to this Agreement as a whole and not to any
particular Article, Section or other subdivision, and Section references refer
to Sections of this Agreement.  Unless otherwise specified herein, all
calculations of interest payable by a party to this Agreement shall be
calculated on the basis of actual number of days elapsed in a year comprised of
three hundred sixty (360) days, consisting of twelve months each having thirty
(30) days.

     

    ARTICLE
II

     

    PURCHASE
AND SALE OF CONTRACTS

     

    Section
2.01                                Purchase and Sale of
Contracts, Certificates and Other Assets.

     

    (a)  Transfer of Contracts and
other Assets.  Subject to the terms and conditions hereof, in
consideration of the delivery by the Purchaser to, or upon the order of, the
Seller/Servicer of the Aggregate Purchase Price on the Closing Date and the
assumption on the Closing Date by the Purchaser of the Purchaser Obligations
pursuant to Section 2.01(c), the Seller/Servicer shall sell, transfer, assign
and otherwise convey to the Purchaser on the Closing Date, all the right, title
and interest of the Seller/Servicer in, to and under:

     

    
      	
               
      

            	
              (i)

            	
              the
      Contracts and all the rights and benefits arising from and in connection
      with each Contract (including, without limitation, (A) all
      Scheduled

            


    

     


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    Payments
and other amounts received with respect to the Contracts from the opening of
business on the day after the Cut-Off Date, (B) the Collections Payment Amount
and (C) the right to service such Contracts);

     

    
      	
               
      

            	
              (ii)

            	
              the
      security interests in the Financed Vehicles granted by the related
      Obligors and any accessions thereto made pursuant to and in accordance
      with the Contracts;

            


    

     

    
      	
               
      

            	
              (iii)

            	
              all
      security deposits and other collateral provided by an Obligor as
      collateral security for its obligation under the related
      Contract;

            


    

     

    
      	
               
      

            	
              (iv)

            	
              all
      rights of the Seller/Servicer to proceeds from Insurance Policies covering
      individual Financed Vehicles, the Obligors or the
    Contracts;

            


    

     

    
      	
               
      

            	
              (v)

            	
              all
      Lockboxes maintained by, or on behalf of, the Seller/Servicer with respect
      to the Contracts;

            


    

     

    
      	
               
      

            	
              (vi)

            	
              all
      Instruments, Chattel Paper, Certificates of Title, lien certificates and
      other documents contained in the Custodial Files and Servicing Files
      relating to the Contracts;

            


    

     

    
      	
               
      

            	
              (vii)

            	
              the
      Data File and the Image File;

            


    

     

    
      	
               
      

            	
              (viii)

            	
              the
      right to recover any Cram Down
Losses;

            


    

     

    
      	
               
      

            	
              (ix)

            	
              all
      Service Contracts; and

            


    

     

    
      	
               
      

            	
              (x)

            	
              all
      Proceeds of the foregoing.

            


    

     

    (b)  Notwithstanding
the terms of Section 2.01(a), the Seller/Servicer shall not sell, transfer,
assign or otherwise convey to the Purchaser, and the Purchaser shall not
purchase, and the Sold Assets shall not include, (i) any right, title or
interest in and to any assets other than those specifically included in the
definition of Sold Assets or (ii) without diminishing the “servicing released”
nature of the Purchaser’s acquisition of the Sold Assets, servicing compensation
earned by Seller/Servicer, and other rights of the Seller/Servicer, as servicer
under the Transfer and Servicing Agreement, the applicable Indenture Supplements
and any other agreement providing compensation rights to the Seller/Servicer as
Servicer (the assets described in clauses (i) and (ii), collectively, the “Excluded
Assets”).  For the avoidance of doubt, the Excluded Assets
shall include, without limitation: (i) any Contract that is not an Eligible
Contract, (ii) any Dealer Agreements (and any rights and benefits arising
therefrom) and (iii) any Tax Returns (except to the extent relating to the
Contracts) and any books or records relating to Taxes of the Seller/Servicer and
any of its Affiliates, representatives and agents.  The Purchaser
agrees that it shall promptly return any Excluded Assets to the Seller/Servicer
if any such Excluded Assets are delivered to the Purchaser in connection with
the consummation of the transactions contemplated by this
Agreement.

     


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    On the
Closing Date, the Purchaser shall assume and shall pay, perform or otherwise
discharge, the following obligations with respect to the Sold Assets
(collectively, the “Purchaser
Obligations”):

     

    
      	
               
      

            	
              (i)

            	
              all
      obligations of the Seller/Servicer arising on or after the Closing Date to
      Obligors or to perform under Contracts;
and

            


    

     

    
      	
               
      

            	
              (ii)

            	
              all
      liabilities arising on or after the Closing Date associated with the
      ownership of the Financed Vehicles.

            


    

     

    Notwithstanding
the terms of this Section 2.01(c), other than the Purchaser Obligations, the
Purchaser shall not assume any liability or obligation of the Seller/Servicer
arising on or after the Closing Date, including, without limitation, any
liability or obligation under any Dealer Agreement.

     

    (c)  Except
as specifically provided in Article VII of this Agreement or under any of the
Related Documents, all transfers of Sold Assets on the Closing Date pursuant to
this Agreement shall be without recourse to the Seller/Servicer or any of its
respective Affiliates; it
being understood that the Seller/Servicer or any of its respective
Affiliates shall, subject to the limitations set forth in Article VII hereof, be
liable to the Purchaser for indemnities relating to all representations,
warranties and covenants made by the Seller/Servicer pursuant to the terms of
this Agreement, all of which obligations are further limited so as not to
constitute credit recourse to the Seller/Servicer or any of its Affiliates for
the Obligors under the Contracts.

     

    (d)  The
Seller/Servicer and the Purchaser intend the transfer of Sold Assets on the
Closing Date to be a “true sale” by the Seller/Servicer to the Purchaser that is
absolute and irrevocable and that provides the Purchaser with the full benefits
of ownership of the Sold Assets, and neither the Seller/Servicer nor the
Purchaser intend the transactions contemplated hereunder to be, or for any
purpose to be characterized as, loans from the Purchaser to the
Seller/Servicer.  Furthermore, it is neither the intention of the
Purchaser nor the Seller/Servicer that the conveyance of the Sold Assets by the
Seller/Servicer be deemed a grant of a security interest in the Sold Assets by
the Seller/Servicer to the Purchaser to secure a debt or other obligation of the
Seller/Servicer.  However, in the event and to the extent that,
notwithstanding the intent of the parties hereto, any Sold Asset is considered
by a court of competent jurisdiction to be property of the Seller/Servicer’s
estate, then (i) this Agreement also shall be deemed to be and shall be a
security agreement within the meaning of applicable Law, and (ii) the conveyance
by the Seller/Servicer provided for in this Agreement shall be deemed to be a
grant by the Seller/Servicer to the Purchaser of, and the Seller/Servicer will
grant to the Purchaser on the Closing Date, a security interest in and to all of
the Seller/Servicer’s right, title and interest in, to and under the Sold
Assets, whether now or hereafter existing or created, to secure (1) the rights
of the Purchaser hereunder, (2) a loan by the Purchaser to the Seller/Servicer
in an amount equal to the Aggregate Purchase Price and (3) without limiting the
foregoing, the payment and performance of the Seller/Servicer’s obligations
(whether monetary or otherwise) hereunder.  The Seller/Servicer and
the Purchaser shall, to the extent consistent with this Agreement, take such
actions as may be necessary to ensure that, if this Agreement were deemed to
create a security interest in the Sold Assets, such security
interest

     


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    would be
deemed to be a perfected security interest of first priority in favor of the
Purchaser under applicable Law and will be maintained as such throughout the
Term of this Agreement.

     

    (e)  The
Purchaser will acquire the Sold Assets on the Closing Date on a
servicing-released basis.  Consistent with the foregoing, as between
the parties to this Agreement, following the Closing, the Purchaser shall have
the sole right to service, administer and collect the Sold Assets and to assign
and/or delegate such right to any Person and, except as specifically set forth
herein, the Seller/Servicer or any of its respective Affiliates shall have no
obligation to service, administer or collect the Sold Assets after the Closing
Date.

     

    (f)  Except
as set forth in Section 4.06, the Purchaser shall have no obligation to account
to the Seller/Servicer or any of its Affiliates for the Sold
Assets.  The Purchaser shall have no obligation to account for, or to
return Scheduled Payments on, or with respect to, a Sold Asset, or any interest
or other finance charge collected pursuant thereto, to the Seller/Servicer or
any of its Affiliates, irrespective of whether such collections and charges are
in excess of the amount paid for such Sold Asset.  The Purchaser shall
have the sole right to retain any gains or profits created by buying, selling or
holding the Sold Assets and shall have the sole risk of and responsibility for
losses or damages created by such buying, selling or holding.

     

    (g)  The
Purchaser shall have the unrestricted right to further assign, transfer,
deliver, hypothecate, subdivide or otherwise deal with all of the Purchaser’s
right, title and interest in and to the Sold Assets in whole or in part on
whatever terms the Purchaser shall determine.

     

    (h)  Except
for the Purchaser Obligations, the Purchaser shall have no obligation or
liability under any agreement included in the Sold Assets.  No
obligation or liability other than the Purchaser Obligations is intended to be
assumed by the Purchaser hereunder, and any such assumption is expressly
disclaimed.

     

    Section
2.02                                Closing the Purchase and
Sale.

     

    The
closing of the transactions contemplated by this Agreement (the “Closing”) shall take
place at 10:00 a.m. (Eastern Time) on the Closing Date at the offices of Orrick,
Herrington & Sutcliffe LLP located at 666 Fifth Avenue, New York, New York
10103, or at such other place and/or time as the Purchaser and the
Seller/Servicer may reasonably agree.

     

    Section
2.03                                Deliverables at the
Closing.

     

    The
following documents will be delivered prior to or at the Closing:

     

    (a)  Andrews
Kurth LLP, as counsel to the Seller/Servicer, shall furnish to the Purchaser
their written opinion, addressed to the Purchaser and dated the Closing,
regarding the enforceability of each of the Seller/Servicer’s obligations under
certain of the Related Documents;

     

    (b)  The
Seller/Servicer shall deliver the List of Contracts, as set forth on Schedule
A-1 hereto, setting forth the applicable information as of the Cut-Off
Date;

     


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    The
Seller/Servicer shall deliver such other documents, instruments and certificates
required to be delivered by it pursuant to Section 9.01 of this Agreement;
and

     

    (c)  The
Purchaser shall deliver such other documents, instruments and certificates
required to be delivered by it pursuant to Section 9.02 of this
Agreement.

     

    The
foregoing opinion letter shall be in form and substance reasonably satisfactory
to the addressees thereof.

     

    Section
2.04                                Servicing
Transfer.  The Seller/Servicer and the Purchaser agree that the
Contracts shall be sold on the Closing Date on a “servicing-released”
basis.  On the Closing Date, CPS shall enter into the Transfer and
Servicing Agreement, pursuant to which CPS shall assume servicing
responsibilities related to the Contracts.  At any time after the
Closing Date, Investor Representative, on behalf of the Issuer, may remove CPS
as servicer of the Contracts and assign Backup Servicer as primary active
servicer thereof, subject to and in accordance with the terms and conditions of
the Transfer and Servicing Agreement.

     

    Section
2.05                                Payment of Aggregate
Purchase Price; Purchase Price Adjustment.

     

    (a)           Purchaser
must pay to Seller/Servicer the purchase price described in the Pricing Letter
(the “Aggregate
Purchase Price”) in return for the related Purchased Assets.

     

    The Aggregate Purchase Price shall be
calculated based on the Aggregate Principal Balance of the Contracts set forth
on Schedule
A.  This Aggregate Purchase Price is payable by Purchaser to
Seller/Servicer first, to the extent
that Purchaser has cash available therefor in immediately available funds on the
Closing Date and second by
Seller/Servicer making and Purchaser accepting a contribution to Purchaser’s
capital in an amount equal to the portion of the Aggregate Purchase Price not
paid in cash pursuant to clause “first”
above.

     

    (b)           On
or before September 26, 2008, the Seller/Servicer shall deliver to the Purchaser
the Estimated Closing Statement, together with all other documentation necessary
to support the components set forth therein. Thereafter, from the date of
initial delivery thereof to and including the Closing Date, the Seller/Servicer
and the Purchaser shall amend such Estimated Closing Statement on a mutually
agreeable basis in order to reflect the reconciliations or discussions with
respect thereto. On the Closing Date, the Purchaser shall pay Seller/Servicer
the Aggregate Purchase Price (excluding any adjustment payments, if any, payable
pursuant to Section 2.04(d)) based on the Estimated Closing
Statement.  Payment to Seller/Servicer to be made in cash on the
Closing Date shall be made by a wire transfer in immediately available funds to
an account designated in writing by Seller/Servicer.  As promptly as
practicable, but in any event within sixty (60) days following the Closing Date,
the Seller/Servicer shall deliver to the Purchaser a statement (the “Final Closing
Statement”) indicating the actual amounts for the items included in the
Estimated Closing Statement, with such amounts being calculated in a manner
consistent with the calculation of such amounts on the Estimated Closing
Statement.  The Final Closing Statement delivered by the
Seller/Servicer to the Purchaser shall be deemed to be, and shall be, final,
binding and conclusive, absent manifest error, on the parties
hereto.

     

    (c)           Within
ten (10) Business Days following the delivery of the Final Closing Statement
pursuant to this Section 2.04, the adjustment payments, if any, payable pursuant
to

     

    (d)

     

    Section
2.05(d) shall be paid by wire transfer of immediately available funds to a bank
account designated by the Seller/Servicer or the Purchaser, as the case may
be.

     

    (e)           The
Purchaser shall make an adjustment payment to the Seller/Servicer in an amount
equal to the amount if any, that the Aggregate Purchase Price on the Final
Closing Statement is greater than the Aggregate Purchase Price on the Estimated
Closing Statement, or the Seller/Servicer shall make an adjustment payment to
the Purchaser in an amount equal to the amount if any, that the Aggregate
Purchase Price on the Final Closing Statement is less than the Aggregate
Purchase Price on the Estimated Closing Statement.

     

    (f)           In
the event that either party determines after the date on which the Final Closing
Statement is delivered that a Contract should not have been categorized as an
Eligible Contract for purposes of calculating the Aggregate Purchase Price, then
the parties agree that a further adjustment to the Aggregate Purchase Price
shall be made and, in such event, Seller/Servicer shall pay to Purchaser an
amount (the “Repurchase Price”)
equal to the sum of (i) the product of the Purchase Price Percentage (as defined
in the Pricing Letter) and the Principal Balance of such Contract and (ii) all
related due and owing Finance Charges for such Contract as of the date of such
repurchase, and the Purchaser shall return or cause to be returned to the
Seller/Servicer or its designee the related Custodial File and Servicing File,
free and clear of any and liens.  Under no circumstances shall
Purchaser be obligated to pay Seller/Servicer any amounts pursuant to the
foregoing..

     

    Each of the above events shall be a
“Post Closing Payment
Event” and the amounts determined above may be netted together to result
in either a net amount due to the Seller/Servicer or a net amount due to the
Purchaser.

     

    Any party with knowledge of any facts
relating to any Post Closing Payment Event shall provide, or cause to be
provided, to the other parties written notice and supporting documentation (to
the extent available to such party) in a monthly request.  The
Purchaser or the Seller/Servicer, as the case may be, shall, within five (5)
Business Days after receipt of such monthly request, reimburse the other party,
in immediately available funds, for the amount of said
adjustment.  Notwithstanding the foregoing, the parties agree that
this Section 2.04(d) shall be implemented fairly and equitably so as to avoid
the double payment or failure to pay any amount which would result in the unjust
enrichment of any party pursuant to the terms hereof.  The payments to
be made by the Seller/Servicer or the Purchaser under this Section 2.04(d) shall
be referred to as the “Post Closing
Payments.”

     

    ARTICLE
III

     

    REPRESENTATIONS
AND WARRANTIES

     

    Section
3.01                                Purchaser Representations
and Warranties.

     

    In order
to induce the Seller/Servicer to enter into this Agreement and to sell the Sold
Assets, the Purchaser makes the following representations and warranties to the
Seller/Servicer, which representations and warranties shall be declared
automatically made and stated on the Closing Date and will also be correct and
complete as of the Closing Date, and the Seller/Servicer shall be declared to
have relied upon such representations and warranties

     


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    regardless
of any independent investigation and/or review now, heretofore or hereafter made
by the Seller/Servicer, its attorneys or agents and regardless of any
opportunity for any such investigation or review:

     

    (a)  Organization and Good
Standing.  The Purchaser is a limited liability company duly
formed, validly existing and in good standing under the laws of the State of
Delaware and has the organizational power to own its assets and to transact the
business in which it is currently engaged.

     

    (b)  Due
Authorization.  The Purchaser has the power and authority to
make, execute, deliver and perform this Agreement and all of the transactions
contemplated under this Agreement, and has taken all necessary action to
authorize the execution, delivery and performance of this
Agreement.  When executed and delivered, this Agreement will
constitute the legal, valid and binding obligation of the Purchaser enforceable
in accordance with its terms, except as enforcement may be limited by
bankruptcy, insolvency or similar laws affecting the enforcement of creditors’
rights generally and by the availability of equitable remedies.

     

    (c)  No
Agent.  No Person acting as agent on behalf of the Purchaser or
any of its Affiliates in connection with the negotiation, execution and
performance of this Agreement or the transactions contemplated hereby is or will
be entitled to any finder’s or similar fee or other commissions as a result of
this Agreement or the transactions contemplated by this Agreement.

     

    Section
3.02                                [Reserved].

     

    Section
3.03                                Seller/Servicer’s
Representations and Warranties.

     

    In order
to induce the Purchaser to enter into this Agreement and to purchase the Sold
Assets from the Seller/Servicer, the Seller/Servicer makes the following
representations and warranties to the Purchaser, which representations and
warranties shall be declared automatically made and stated on the Closing Date
and will also be correct and complete as of the Closing Date, and the Purchaser
shall be declared to have relied upon such representations and warranties on the
Closing Date regardless of any independent investigation and/or review now,
heretofore or hereafter made by the Purchaser, its attorneys or agents and
regardless of any opportunity for any such investigation or review:

     

    (a)  Organization and Good
Standing.  The Seller/Servicer is a corporation duly organized,
validly existing and in good standing under the laws of the State of California.
The Seller/Servicer has the power to own its assets and to transact the business
in which it is currently engaged and has, and has had at all relevant times,
power, authority and legal right to originate or acquire and service the
Contracts and to own or sell the Sold Assets.  Except as set forth on
Schedule E hereto, the Seller/Servicer is duly qualified to transact business,
and has obtained all applicable licenses and approvals and is in good standing
in each jurisdiction in which the character of the business transacted by it or
properties owned or leased by it requires such qualification or license, except
where the failure to obtain such license or approval would

     


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    not have
a material adverse effect on the business, properties, assets or condition
(financial or otherwise) of the Seller/Servicer.

     

    (b)  Due
Authorization.  The Seller/Servicer has the power and authority
to make, execute, deliver and perform this Agreement and all of the transactions
contemplated under this Agreement, and has taken all necessary action to
authorize the execution, delivery and performance of this
Agreement.  When executed and delivered, this Agreement will
constitute the legal, valid and binding obligation of the Seller/Servicer
enforceable in accordance with its terms, except as enforcement may be limited
by bankruptcy, insolvency or similar laws affecting the enforcement of
creditors’ rights generally and by the availability of equitable
remedies.

     

    (c)  No Consent
Required.  The Seller/Servicer is not required to obtain the
consent of any other party or any consent, license, approval or authorization
from, or registration or declaration with, any Governmental Entity or any other
Person (which for the purpose of this Section 3.02(c) shall include any filings
or expiration of waiting periods under the Hart-Scott-Rodino Act) in connection
with the execution, delivery, performance, validity or enforceability of this
Agreement the failure of which so to obtain would have a material adverse effect
on the business, properties, assets or condition (financial or otherwise) of the
Seller/Servicer or on its ability to consummate the transactions contemplated by
this Agreement.

     

    (d)  No
Violations.  The execution, delivery and performance of this
Agreement by the Seller/Servicer will not violate any provision of any existing
Law or regulation or any Order of any court or the charter or bylaws of the
Seller/Servicer, or constitute a material breach of any mortgage, indenture,
contract or other agreement (other than any Contract) to which the
Seller/Servicer or any of its Affiliates is a party or by which the
Seller/Servicer or any of its Affiliates may be bound.

     

    (e)  No
Proceedings.  There are no proceedings or investigations
pending, or to the knowledge of the Seller/Servicer after due inquiry,
threatened, against the Seller/Servicer, or over any of the Sold Assets before
any Governmental Entity or arbitrator: (A) asserting the invalidity of this
Agreement, (B) seeking to prevent the consummation of any of the transactions
contemplated by this Agreement, or (C) seeking any determination or ruling that
might materially and adversely affect the performance by the Seller/Servicer, of
its obligations under, or the validity or enforceability of, this
Agreement.

     

    (f)  Solvency.  The
transactions contemplated by this Agreement are being consummated by the
Seller/Servicer with no contemplation of insolvency and no intent to hinder,
delay or defraud any of its present or future creditors, and the Seller/Servicer
has received fair consideration having value reasonably equivalent or in excess
of the value of the Contracts and the other Sold Assets and the performance of
the Seller/Servicer’s obligations hereunder.  Both immediately before
and immediately after the transactions contemplated by this Agreement, (a) the
Seller/Servicer was or will be solvent and will not become insolvent and will
have adequate capital to conduct its business after giving effect to the
transactions contemplated in this Agreement and was or will be paying its debts
as they become due and (b) the sum of the Seller/Servicer’s assets was or will
be greater than the sum of its debts and in

     


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    excess of
the amount that will be required to pay its probable liabilities as they then
exist and as they become absolute and matured.

     

    (g)  No
Agent.  No Person acting on behalf of the Seller/Servicer or
any of its Affiliates in connection with the negotiation, execution and
performance of this Agreement or the transactions contemplated hereby is or will
be entitled to any finder’s or similar fee or other commissions as a result of
this Agreement or the transactions contemplated by this
Agreement.  Any such fees will be for the account of the
Seller/Servicer (and not the Purchaser) who shall pay such fees on the Closing
Date.

     

    (h)  Bulk Sales
Act.  No transaction contemplated by this Agreement or any
other Related Document to which the Seller/Servicer is a party requires
compliance with, or will be subject to avoidance under, any bulk sales act or
similar law.

     

    (i)  Approvals.  All
authorizations, orders and approvals of, or other action by, any Governmental
Entity or other Person that are required to be obtained by the Seller/Servicer,
and all notices to and filings with any Governmental Entity or other Person that
are required to be made by it (which for purposes of this Section 3.02(i) shall
include any filings or expiration of waiting periods under the Hart Scott Rodino
Act), in the case of each of the foregoing in connection with the conveyance of
Sold Assets or the due execution, delivery and performance by the
Seller/Servicer of this Agreement or any other Related Document to which it is a
party and the consummation of the transactions contemplated by this Agreement,
have been obtained or made (or will be obtained or made) prior to the Closing
Date and are in full force and effect, except where the failure to obtain or
make any such authorization, consent, order, approval, action, notice or filing,
individually or in the aggregate, would not have a material adverse effect on
the ability of the Seller/Servicer to consummate the transactions contemplated
by this Agreement.

     

    (j)  Investment Company
Act.  Neither the Seller/Servicer, nor any of the
Seller/Servicer’s subsidiaries, is registered or required to be registered as an
“investment company” under the Investment Company Act of 1940, as
amended.

     

    (k)  Taxes.  The
Seller/Servicer has filed or caused to be filed all material tax returns and
reports required by law to have been filed by it with respect to any Sold Assets
and has paid all material taxes, assessments and governmental charges thereby
shown to be owing with respect to any Sold Assets, except any such taxes,
assessments or charges (i) that are being diligently contested in good faith by
appropriate proceedings, and (ii) for which adequate reserves in accordance with
GAAP shall have been set aside on its books.

     

    (l)  UCC
Information.  The information with respect to the
Seller/Servicer set forth on Exhibit D hereto is true, complete and correct in
all material respects.

     

    (m)  Service
Contracts.  All Service Contracts with respect to the Contracts
are in full force and effect as of the Closing Date, and the Seller/Servicer is
not aware of any breach of contract thereunder by the Seller/Servicer with
respect to such Service Contracts.

     


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    Power of
Attorney.  Except as delivered by the Seller/Servicer pursuant
to this Agreement, there are no outstanding powers of attorney executed on
behalf of the Seller/Servicer with respect to the Sold Assets.

     

    Section
3.04                                Representations and
Warranties Concerning Contracts.  In order to induce the
Purchaser to enter into this Agreement and to purchase the Contracts from the
Seller/Servicer, the Seller/Servicer makes the following representations and
warranties with respect to the Contracts as of each of the Cut-Off Date and the
Closing Date (unless an earlier date or only the Closing Date is specifically
set forth therein), and the Purchaser shall be declared to have relied upon such
representations and warranties (for the avoidance of doubt, no Purchaser would
have entered into this Agreement if any of the following representations and
warranties were not true and complete) regardless of any independent
investigation and/or review now, heretofore or hereafter made by the Purchaser,
their respective attorneys or agents and regardless of any opportunity for any
such investigation or review:

     

    (a)  List of
Contracts.

     

    (i)           The
information set forth in the List of Contracts, delivered as of the Cut-Off Date
and on the Closing Date, is true and correct in all material
respects.

     

    (ii)           The
calculations of the Principal Balances set forth in the List of Contracts,
delivered as of the Cut-Off Date and on the Closing Date, for each Contract are
true and correct (it being agreed and understood by the parties that all Paid
Ahead Amounts received have been applied in calculating such Principal
Balances).

     

    (b)  Characteristics of
Contracts.  (A) Each Contract (1) has been originated in the
United States of America by a Dealer or Consumer Lender for the retail sale of a
Financed Vehicle in the ordinary course of such Dealer’s or Consumer Lender’s
business, has been fully and properly executed by the parties thereto, has been
purchased by Seller/Servicer in connection with the sale of Financed Vehicles
and has been validly assigned by such Dealer or Consumer Lender to
Seller/Servicer, (2) has created a valid, subsisting, and enforceable first
priority perfected security interest in favor of Seller/Servicer in the Financed
Vehicle, which security interest has been assigned by Seller/Servicer to
Purchaser, (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 including,
without limitation, a right of repossession following a default, (4) provides
for level monthly scheduled payments that fully amortize the Amount Financed
over the original term (except for the last scheduled payment, which may be
different from the level monthly payment but in no event shall exceed two
(2)  times such payment) and yield interest at the Annual Percentage
Rate, (5) has an Annual Percentage Rate of not less than 8.00% and not greater
than 30.00%, (6) is either a Rule of 78’s Contract or a Simple Interest
Contract, (7) was originated by a Dealer or Consumer Lender and was sold by such
Dealer or Consumer Lender, as applicable, to Seller/Servicer without any fraud
or misrepresentation on the part of such Dealer or Consumer Lender, (8) is
denominated in U.S. dollars, and (9) provides, in the case of a prepayment, for
the full payment of the Principal Balance thereof plus accrued interest through
the date of prepayment based on the Annual Percentage Rate of the
Receivable.

     


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    (B)           Certain Pool
Information.  Approximately 86.4% of the Aggregate Principal
Balance of the Contracts as of the Cut-Off Date represents financing of used
automobiles, light trucks, vans or minivans; the remainder of the Contracts
represent financing of new vehicles; approximately 12.9% of the Aggregate
Principal Balance of the Contracts as of the Cut-Off Date had Obligors that were
at the time of origination U.S. military personnel; 4.4% of the Aggregate
Principal Balance of the Contracts as of the Cut-Off Date were originated under
the CPS Preferred Program; approximately 37.5% of the Aggregate Principal
Balance of the Contracts as of the Cut-Off Date were originated under the CPS
Alpha Program; approximately 8.0% of the Aggregate Principal Balance of the
Contracts as of the Cut-Off Date were originated under the CPS Delta Program;
approximately 6.2% of the Aggregate Principal Balance of the Contracts as of the
Cut-Off Date were originated under the CPS First-Time Buyer Program;
approximately 4.5% of the Aggregate Principal Balance of the Contracts as of the
Cut-Off Date were originated under the CPS Standard Program; approximately 10.5%
of the Aggregate Principal Balance of the Contracts as of the Cut-Off Date were
originated under the CPS Super Alpha Program; approximately 16.1% of the
Aggregate Principal Balance of the Contracts as of the Cut-Off Date were
originated under the CPS Alpha Plus Program; none of the Contracts, as of the
Cut-Off Date, were Section 341 Contracts; all of the Contracts were acquired by
CPS; no Receivable has a payment that is more than 30 days contractually
delinquent as of the Cut-Off Date; each Contract has a final scheduled payment
due no later than August 31, 2014; and each Contract was originated on or before
the Cut-Off Date.

     

    (c)  Compliance With
Law.  Each Contract, the sale of the Financed Vehicle and the
sale of any physical damage, credit life and credit accident and health
insurance and any extended warranties or service contracts (A) complied at the
time the related Contract was originated or made, and at the execution of this
Agreement complies in all material respects with all Requirements of Law, 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 Magnuson-Moss Warranty Act,  the Federal Reserve
Board’s Regulations B and Z, the Servicemembers Civil Relief Act, the Military
Reservist Relief Act, the Texas Consumer Credit Code, the California Automobile
Sales Finance Act, state adaptations of the National Consumer Act, the Uniform
Consumer Credit Code and all other applicable consumer credit laws and equal
credit opportunity and disclosure laws, and (B) without limiting the generality
of the foregoing, is not subject to liabilities or is not rendered unenforceable
based on general theories of contract limitation or relief including, without
limitation, theories based on unconscionable, deceptive, unfair, or predatory
sales or financing practices.

     

    (d)  Payment
Application.  Payments under each Contract have been applied in
accordance with such Contract, and are due monthly in substantially equal
amounts through its maturity date sufficient to fully amortize the Principal
Balance of such Contract by its maturity date.

     

    (e)  No Government
Obligor.  None of the Contracts are due from the United States
of America or any state thereof or from any agency, department, or
instrumentality of the United States of America or any state
thereof.

     


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    Security Interest in
Financed Vehicle.  Seller/Servicer has taken all steps
necessary to perfect its security interest against the Obligors in the Financed
Vehicles securing the Contracts.  Immediately subsequent to the sale,
assignment and transfer thereof to the Issuer, each Contract shall be secured by
a validly perfected first priority security interest in the Financed Vehicle in
favor of Seller/Servicer as secured party which security interest has been
validly assigned by Seller/Servicer to Purchaser, and such assigned 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.

     

    (f)  Contracts in
Force.  No Contract has been satisfied, subordinated or
rescinded, nor has any Financed Vehicle been released from the lien granted by
the related Contract in whole or in part.

     

    (g)  No Waiver or
Amendment.  The terms of the Contract have not been waived,
altered, amended or modified (including, without limitation, extensions) in any
respect, except by instruments or documents identified in the Servicing File
with respect thereto, and no such waiver, amendment or modification has caused
such Contract to fail to meet all of the representations, warranties, and
conditions set forth herein with respect thereto.  Such Contract
constitutes the entire agreement between the Seller/Servicer and the related
Obligor.

     

    (h)  No
Defenses.  Except as set forth in Schedule A (field
“Litigation”), no right of rescission, setoff, counterclaim or defense exists or
has been asserted or threatened with respect to any Contract. The operation of
the terms of any Contract or the exercise of any right thereunder will not
render such Contract unenforceable in whole or in part and such Contract is not
subject to any such right of rescission, setoff, counterclaim, or
defense.

     

    (i)  No
Liens.  As of the Cut-Off Date, (a) 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
Contract and (b) there is no lien against the related Financed Vehicle for
delinquent taxes.

     

    (j)  No
Default.  Except as otherwise set forth on Schedule A (fields
“CureDate” and “AccelerationNotice”) hereto, as of the Closing Date, no default,
breach, violation or event permitting acceleration under the terms of any
Contract has occurred (other than any expiration of any collision insurance);
and no continuing condition that with notice or the lapse of time, or both,
would constitute a default, breach, violation or event permitting acceleration
under the terms of any Contract has arisen (other than any expiration of any
collision insurance); and Seller/Servicer shall not waive and has not waived any
of the foregoing (except in a manner consistent with Section 4.02 of the
Servicing Annex).

     

    (k)  No
Bankruptcies.  Except as set forth on Schedule A (fields
“BKChapter”, “BKDate”, “LoanStatus” and “CramDown”) hereto, (i) none of the
Seller/Servicer or its agents have received written notice (which, for purposes
of this clause (l), shall include notice of an Obligor bankruptcy set forth in a
Banko or other similar report) that any Obligor under any

     


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    Contract
had filed for bankruptcy under Federal or state law, and (ii) to the best of the
Seller/Servicer’s knowledge without any independent investigation, no Obligor
under any Contract was in bankruptcy or similar proceedings.

     

    (l)  No
Repossessions.  Except as set forth on Schedule A (field
“REPO”) hereto, no Financed Vehicle securing any Contract is in repossession
status or has been repossessed without reinstatement.

     

    (m)  Insurance; Other. (A)
Each Obligor has obtained insurance covering the Financed Vehicle as of the
execution of the Contract insuring against loss and damage due to fire, theft,
transportation, collision and other risks generally covered by comprehensive and
collision coverage, and each Contract requires the Obligor to obtain and
maintain such insurance naming Seller/Servicer and its successors and assigns as
loss payee or an additional insured, (B) each Contract that finances the cost of
premiums for credit life and credit accident and health insurance is covered by
an insurance policy or certificate of insurance naming Seller/Servicer as
policyholder (creditor) under each such insurance policy and certificate of
insurance and (C) as to each Contract that finances the cost of an extended
service contract, the respective Financed Vehicle which secures the Receivable
is covered by an extended service contract.

     

    (n)  Title. It is the
intention of Seller/Servicer that the transfer and assignment herein
contemplated constitute a sale of the Contracts and the other Sold Assets from
Seller/Servicer to Purchaser and that the beneficial interest in and title to
such Contracts and the other Sold Assets not be part of Seller/Servicer’s estate
in the event of the filing of a bankruptcy petition by or against
Seller/Servicer under any bankruptcy law.  Other than in connection
with prior warehouse financings by the Seller/Servicer, no Contract or other
Sold Assets has been sold, transferred, assigned, or pledged by Seller/Servicer
to any Person other than Purchaser.  Immediately prior to the transfer
and assignment herein contemplated, Seller/Servicer had good and marketable
title to each Contract and the other Sold Assets 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, Purchaser shall
have good and marketable title to each such Contract 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.

     

    (o)  Tangible Chattel
Paper.  Each Contract constitutes “tangible chattel paper” (as
such term is defined in the UCC).

     

    (p)  Custodial File and Servicing
File; One Original.  The Seller/Servicer has delivered to the
Custodian, for the benefit of the Indenture Trustee at the location listed in
Schedule K hereto a complete Custodial File with respect to each
Contract.  The Seller/Servicer will retain possession of the Servicing
File for the benefit of the Indenture Trustee in accordance with the Transfer
and Servicing Agreement.  There is only one original executed copy of
each Contract.

     

    (q)  Third Party Fees and
Expenses.  The Seller/Servicer has paid and promptly will pay
all third party fees and expenses, including, inter alia, any servicing
fees and

     


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    expenses,
which were and are owing with respect to the Contracts on or before the Cut-Off
Date or which are owing with respect to Contracts after the Cut-Off Date for
services rendered prior to the Cut-Off Date.  Any such fees and
expenses will be for the account of the Seller/Servicer (and not the
Purchaser).

     

    (r)  No Untrue
Statements.  Neither this Agreement nor any statement, report
or other document or information (including but not limited to information
regarding loan loss, foreclosure and delinquency experience) furnished or to be
furnished in connection with the sale of the Contracts to the Purchaser or
pursuant to this Agreement or in connection with the transactions contemplated
hereby contains any untrue statement of fact or omits to state a fact necessary
to make the statements contained therein not misleading.

     

    (s)  Amount
Financed.  At the time each Contract was originated, the Amount
Financed was fully disbursed to each applicable Obligor, and there is no
requirement for future advances of principal thereunder and all fees and
expenses in connection with the origination of such Contract have been
paid.  The Obligor with respect to the Contract does not have any
option under the terms of such Contract to borrow from any Person additional
funds secured by the Financed Vehicle.

     

    (t)  Collection
Policy.  The collection practices used by the Servicer and each
agent of the Servicer with respect to each Contract have been in all material
respects in accordance with the Collection Policy.

     

    (u)  Form of
Contract.  No less than 90% of the Contracts are substantially
similar, in both form and substance to one of the forms of Contract identified
on Exhibit B to this Agreement.  Any modifications to or deviations
from any of such form of Contract will not have a material adverse effect on any
of the Seller/Servicer or the Purchaser and will not reduce the Scheduled
Payments or other payments due thereunder.  No amendments, supplements
or modifications to, deviations from or waivers under any Contract have been
made or granted by Seller/Servicer since the Cut-Off Date.

     

    (v)  Lawful
Assignment.  No Contract has been originated in, or is subject
to the laws of, any jurisdiction under which the sale, transfer, and assignment
of such Contract under this Agreement or pursuant to transfers of the Securities
shall be unlawful, void, or voidable.  Seller/Servicer has not entered
into any agreement with any Obligor that prohibits, restricts or conditions the
assignment of any portion of the Contracts.

     

    (w)  All Filings
Made.  All filings (including, without limitation, UCC filings)
necessary in any jurisdiction to give Purchaser a first priority perfected
security interest in the Contracts and the other Sold Assets, have been made,
taken or performed.

     

    (x)  Title
Documents.  (A) If the Contract was originated in a State in
which notation of a security interest on the Certificate of Title of the related
Financed Vehicle is required or permitted to perfect such security interest, the
Certificate of Title of the related Financed Vehicle for such Contract shows, or
if a new or replacement Certificate of Title is being applied for with respect
to such Financed Vehicle the Certificate of Title (or, with respect to Contracts
originated in the Non-Certificated Title States, other Title
Documents

     


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    issued by
the applicable Department of Motor Vehicles or similar authority) will be
received within 180 days and will show, Seller/Servicer named as the original
secured party under the related Contract as the holder of a first priority
security interest in such Financed Vehicle, and (B) if the Contract 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 Seller/Servicer, named as the original
secured party under the related Contract, and in either case, Purchaser has the
same rights as such secured party has or would have (if such secured party were
still the owner of the Contract) against all parties claiming an interest in
such Financed Vehicle, and such rights have been validly pledged to the
Indenture Trustee pursuant to the Indenture.  With respect to each
Contract for which the Title Document has not yet been returned from the
Registrar of Titles, Seller/Servicer has received written evidence from the
related Dealer or Consumer Lender that such Title Document showing
Seller/Servicer, as first lienholder has been applied for.

     

    (y)  Valid and Binding Obligation
of Obligor.  Each Contract is the legal, valid and binding
obligation in writing 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.

     

    (z)  Characteristics of
Obligors.  As of the date of each Obligor’s application for
financing of the related Financed Vehicle, such Obligor (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 has not
been discharged, (c) had not been the subject of more than one Federal, State or
other bankruptcy, insolvency or similar proceeding, and (d) was domiciled in the
United States.  During the period from the date of each Obligor’s
application for financing of the vehicle purchase from which the related
Contract arises to the Closing Date, no Obligor is or has been the subject of
any Federal, State or other bankruptcy, insolvency or similar
proceeding.

     

    (aa)  Dealer
Contract.  Each Contract is a Dealer Contract.

     

    (bb)  Other Contract
Characteristics.  As of the Closing Date (A) no Contract is
more than 60 days past due with respect to more than 10% of any Scheduled
Contract Payment; and (B) no Contract is a Skip Contract.

     

    (cc)  Illinois
Contracts.  (a) Seller/Servicer does not own a substantial
interest in the business of a Dealer within the meaning of Illinois Sales
Finance Agency Act Rules and Regulations, Section 160.230(1) and (b) with
respect to each Contract originated in the State of Illinois, (i) the printed or
typed portion of the related Form of Contract complies with the requirements of
815 ILCS 375/3(b) and (ii) Seller/Servicer has not, and for so long as such
Contract is outstanding shall not, place or cause to be placed on the related
Financed Vehicle any collateral protection insurance in violation of 815 ILCS
180/10.

     


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    California
Contracts.  Each Contract originated in the State of California
has been, and at all times during the term of the Sale and Servicing Agreement
will be, serviced by the Servicer in compliance with Cal. Civil Code §2981, et
seq.

     

    (dd)  Origination
Date.  Each Contract has an origination date on or after June
1, 2007, and before the Cut-Off Date.

     

    (ee)  Maturity of
Contracts.  Each Contract has an original term to maturity of
not more than 72 months; the weighted average original term to maturity of the
Contracts was 63 months as of the Cut-Off Date; the remaining term to maturity
of each Contract was 72 months or less as of the Cut-Off Date; the weighted
average remaining term to maturity of the Contracts was 57 months as of the
Cut-Off Date.

     

    (ff)  Scheduled Contract
Payments.  Each Contract has an original Principal Balance of
not less than $3,000 nor more than $35,000.

     

    (gg)  Origination of
Contracts.  Based on the billing address of the Obligors and
the Principal Balances as of the Cut-Off Date, approximately 11.0%, 8.6%, 8.6%,
6.0% and 6.1% of the Contracts (by Principal Balance) had Obligors residing in
the States of California, Texas, Florida, Ohio and Pennsylvania,
respectively.

     

    (hh)  Lockbox.  On
or prior to the next billing period after the Cut-Off Date, Seller/Servicer will
notify each Obligor to make payments with respect to its respective Contracts
after the Cut-Off Date directly to the Lockbox, and will provide each Obligor
with a monthly statement in order to enable such Obligors to make payments
directly to the Lockbox.

     

    (ii)  No Security
Deposit.  Except for the Contracts listed on Schedule A (field
“SecurityDeposit”) hereto, no Obligor has posted any security deposit with
respect to its Contract.

     

    (jj)  Casualty and
Impounding.  No Financed Vehicle has suffered a Casualty and
Seller/Servicer has not received notice that any Financed Vehicle has been
impounded.

     

    (kk)  Principal Balance/Number of
Contracts.  As of the Cut-Off Date, the Aggregate Principal
Balance of the Contracts was $198,661,842.27 and there were 14,004
Contracts.

     

    (ll)  No
Impairment.  Seller/Servicer has not done anything to convey
any right to any Person that would result in such Person having a right to
payments due under any Contracts or otherwise to impair the rights of Purchaser,
the Issuer or the Indenture Trustee in any Contract or the proceeds
hereof.

     

    (mm)  Contracts Not
Assumable.  No Contract is assumable by another Person in a
manner in which would release the Obligor thereof from such Obligor’s
obligations to Seller/Servicer with respect to such Contract.

     

    (nn)  Creation of Security
Interest.  This Agreement creates a valid and continuing
security interest (as defined in the UCC) in the Sold Assets in favor of
Purchaser,

     


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    which
security interest is prior to all other Liens and is enforceable as such as
against creditors of and purchasers from Seller/Servicer.

     

    (oo)  No Other Security
Interests.  Seller/Servicer has not authorized the filing of
and is not aware of any financing statements filed against Seller/Servicer that
include a description of collateral covering the Sold Assets other than any
financing statement relating to the security interest granted to Purchaser
hereunder or that has been terminated or amended to reflect that the Contracts
and the other Sold Assets have been deleted as collateral
thereunder.  Seller/Servicer is not aware of any judgment or tax lien
filings against Seller/Servicer.

     

    (pp)  Notations on Contracts;
Financing Statement Disclosure.  Seller/Servicer has in its
possession copies of all Contracts.  The Contracts do not have any
marks or notations indicating that they have been pledged, assigned or otherwise
conveyed to any Person other than Purchaser.  All financing statements
filed or to be filed against Seller/Servicer in favor of Purchaser in connection
herewith describing the Sold Assets contain a statement to the following
effect:  “A purchase of or security interest in any collateral
described in this financing statement will violate the rights of the secured
party.”

     

    ARTICLE
IV

     

    ADDITIONAL
AGREEMENTS

     

    The
Seller/Servicer agrees with the Purchaser as follows:

     

    Section
4.01                                Protection of Right, Title
and Interest.

     

    The
Seller/Servicer hereby authorizes the Purchaser on behalf of the Seller/Servicer
to execute and deliver Certificates of Title for any Financed Vehicle under any
Contract set forth on Schedule A hereto that the Purchaser shall purchase
hereunder, or naming the Seller/Servicer as secured party or as owner, as the
case may be, and such other documents or certificates as may be necessary in
connection therewith, in order to identify the Purchaser or its assignee, as
appropriate, as the secured party with respect to such Financed
Vehicle.

     

    Section
4.02                                Security
Interests.

     

    (a)  The
Seller/Servicer hereby authorizes the Purchaser to file or cause to be filed any
financing or continuation statements under the UCC in effect in any
jurisdiction, naming the Seller/Servicer (or any successor to the
Seller/Servicer pursuant to Section 4.05) as debtor and the Purchaser as secured
party, reasonably necessary to preserve and protect the status of the ownership
interest in the Contracts and the Related Contract Assets created hereby as a
first priority perfected security interest in favor of such Purchaser, without
the signature of the Seller/Servicer to the extent permitted by applicable
Law.

     

    (b)  In
the event that the assignment of a Contract to the Purchaser is insufficient,
without a notation on the related Financed Vehicle’s Certificate of Title, or
without fulfilling any additional administrative requirements under the laws of
the state in which the existing owner of such Financed Vehicle is located or
incorporated, as the case may be, to perfect a security interest in the related
Financed Vehicle in favor of such owner, the

     


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    Seller/Servicer
hereby agrees that the designation of the Seller/Servicer as the secured party
on the Certificate of Title is in its capacity as agent of the
Purchaser.

     

    (c)  In
order to facilitate the actions of the Backup Servicer or any other successor
servicer of the Contracts to maintain perfection of the security or ownership
interest created by each Contract in the related Financed Vehicle, the
Seller/Servicer shall provide the Purchaser, the Backup Servicer or any other
such successor servicer with any power of attorney reasonably necessary to
permit it to retitle any Financed Vehicle or to amend the relevant lien
certificate showing the Seller as the sole lienholder.  The
Seller/Servicer hereby appoints the Purchaser (acting through the Backup
Servicer or through any other such successor servicer) its attorney-in-fact to
endorse, as appropriate, the Certificate of Title relating to any Financed
Vehicle, in order to cause a change in the registration of legal owner of the
Financed Vehicle to such Purchaser at such time as such Certificate of Title is
endorsed and delivered to the relevant state department of motor vehicles with
appropriate fees.

     

    (d)  On
or about April 30 in each calendar year, beginning April 30, 2009,
Seller/Servicer will deliver to Purchaser an opinion of counsel (i) stating
that no further filing of any financing statement, amendment of financing
statement, or continuation statement is then necessary to perfect Purchaser’s
ownership interest in the Contracts, and (ii) stating that no further filing of
any financing statement, amendment of financing statement, or continuation
statement will be necessary prior to April 30 of the next calendar year to
maintain the perfection of Purchaser’s ownership interest in the Contracts or,
if that is not the case, identifying each filing that will be necessary prior to
April 30 of that calendar year.

     

    Section
4.03                                Non-Solicitation.  The
Seller/Servicer agrees that, from and after the Cut-Off Date until the
expiration of the Term, it has not engaged in and will not engage in, and has
not permitted and will not permit any of its Affiliates or any agent of itself
or any of its Affiliates to engage in, any targeted solicitation of the Obligors
under any of the Contracts for the purpose of refinancing any such Contract in
whole or in part or otherwise causing prepayment under any
Contract.  The Seller/Servicer agrees that, from and after the Cut-Off
Date until the expiration of the Term, it has, and will continue to, use
reasonable efforts to prevent its Affiliates (and any agents of its Affiliates)
from accessing a list of Obligors of the Seller/Servicer.  It is
understood and agreed that all rights and benefits relating to the solicitation
of any Obligors and the attendant rights, title and interest in and to the list
of such Obligors and data relating to their Contracts shall be transferred to
the Purchaser pursuant hereto on the Closing Date and the Seller/Servicer shall
not take any action to undermine these rights and benefits.  Without
limitation of the foregoing, it is understood and agreed that, from and after
the Cut-Off Date, the Seller/Servicer or any agent of the Seller/Servicer (1)
has not transferred or will not transfer to any third party (other than the
Purchaser) any customer list comprised primarily of the Obligors under the
Contracts or (2) has not added or will not add the name of any Obligor under any
Contract to any customer list of the Seller/Servicer if such name was not on
such list prior to the Cut-Off Date.

     

    Section
4.04                                Chief Executive Office;
Jurisdiction.

     

    Seller/Servicer
will not change its name, its type or jurisdiction of organization, or its
organizational identification number without first delivering to the Purchaser
an opinion of

     


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    counsel
stating that all actions and filings that are necessary or appropriate to
maintain the perfection and the priority of Purchaser’s ownership interest in
the Contracts have been taken or made.

     

    Section
4.05                                Merger or Consolidation of
the Seller/Servicer.

     

    During
the Term, any Person (i) into or with which the Seller/Servicer may be merged or
consolidated, (ii) resulting from any merger or consolidation to which the
Seller/Servicer shall be a party, (iii) except for the acquisitions contemplated
by this Agreement and the other Related Documents, that acquires by conveyance,
transfer or lease substantially all of the assets of the Seller/Servicer or (iv)
succeeding to the business of the Seller/Servicer, shall execute an agreement of
assumption to perform the obligations of the Seller/Servicer under this
Agreement and shall be the successor to the Seller/Servicer under this Agreement
without the execution or filing of any paper or any further act on the part of
any of the parties to this Agreement; provided, however, that all
financing statements and continuation statements and amendments thereto have
been executed and filed that are necessary to preserve and protect the interest
of the Purchaser in the Contracts and related property.  If any
merger, consolidation or succession pursuant to this Section 4.05 shall occur
during the Term, the Seller/Servicer shall provide notice of such merger,
consolidation or succession to the Purchaser no later than sixty (60) days after
such merger, consolidation or succession.

     

    Section
4.06                                [Reserved].

     

    Section
4.07                                Cooperation.  a)
Notwithstanding any other provision in this Agreement, the Purchaser agrees to
furnish or cause to be furnished to the Seller/Servicer, upon request, as
promptly as practicable and to the extent available, such information and
assistance relating to the Sold Assets (including access to books and records)
as is reasonably necessary in connection with the preparation of any Tax
Returns, the making of any election relating to Taxes, the preparation for any
audit or other examination by any Taxing Authority, and the prosecution or
defense of any claim, suit or proceeding, relating to any Tax.  Any
expenses incurred in furnishing such information or assistance shall be born by
the Seller/Servicer requesting it.

     

    (b)  Notwithstanding
any other provision in this Agreement, the Seller/Servicer agrees to furnish or
cause to be furnished to the Purchaser, as promptly as practicable and to the
extent available, such information and assistance relating to the Sold Assets
(including access to books and records) as is reasonably necessary in connection
with the preparation of any Tax Returns, the making of any election relating to
Taxes, the preparation of any audit or other examination by any Taxing Authority
and the prosecution or defense of any claim, suit or proceeding, relating to any
Tax.  Any expenses incurred in furnishing such information or
assistance shall be borne by the Purchaser (it being agreed and understood that
(i) nothing provided in this Section 4.07 shall require the
Seller/Servicer  to continue to employ any of current, or to agree to
employ any new, employees following the Closing and (ii) the Seller/Servicer
shall not be in breach of this Section 4.07 if it is unable to comply with its
terms following the Closing as a result of employees no longer being employed
with the Seller/Servicer or if sufficient employees are not employed by the
Seller/Servicer).

     


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    Further
Assurances.  The Seller/Servicer will, at Purchaser’s sole cost
and expense (such costs and expenses shall only be the reasonable out-of-pocket
costs and expenses of the Seller/Servicer in connection with, and with respect
to, the preparation of any of the documents set forth in this Section 4.08),
make, from time to time such schedules, confirmatory assignments, conveyances,
transfer endorsements, powers of attorney, certificates, reports and other
assurances or instruments and take such further steps relating to the Sold
Assets and other rights covered by this Agreement, as the Purchaser or its
designee may request and reasonably require.  The Seller/Servicer
shall, at the request of the Purchaser or its designee, execute such documents
and instruments as may be reasonably requested and as are prepared by the
Purchaser or its designee.

     

    Section
4.08                                Transfer
Taxes.  Any tax, fee or governmental charge payable by the
Seller/Servicer or the Purchaser to any federal, state or local government
resulting solely from the sale, transfer, assignment, or conveyance of the Sold
Assets (“Transfer
Taxes”) by the Seller/Servicer pursuant to this Agreement will be paid by
the Seller/Servicer.  Any Tax Return that must be filed in connection
with the Transfer Taxes shall be prepared and filed when due by the party
primarily responsible under applicable local law for filing such Tax Returns,
and such party shall provide such Tax Returns to the other party at least ten
(10) days prior to the due date for such Tax Returns.

     

    Section
4.09                                Unremitted Sales and Use Tax
Collections.  The Seller/Servicer will remit to the applicable
Taxing Authorities any sales and/or use taxes collected from the Obligors prior
to the Closing Date that have not been remitted to the applicable Taxing
Authority as of the Closing Date.

     

    Section
4.10                                Description of
Seller/Servicer’s Auto Finance Business; Credit Life Policy
Status.

     

    (a)  Upon
the request of the Purchaser, the Seller/Servicer shall deliver to the Purchaser
a description of the Seller/Servicer’s auto finance business, including
descriptions of the origination, underwriting and servicing practices of the
Seller/Servicer with respect to the Contracts and historical portfolio loss and
delinquency information (in tabular format with applicable footnotes and
explanatory information) as of September 30, 2008, December 31, 2007, December
31, 2006, December 31, 2005 and December 31, 2004.  Such descriptive
information shall be in the form customarily provided by Seller/Servicer in
connection with Securitization Transactions and having substance reasonably
satisfactory to the Purchaser.  The Seller/Servicer agrees that,
subject to the terms of Section 5.03, the Purchaser may provide, disclose or
otherwise use such information in connection with Whole Loan Transfers and
Securitization Transactions.

     

    (b)  In
connection with any delivery pursuant to clause (a) above, the Seller/Servicer
shall contemporaneously deliver to the Purchaser, at the Seller/Servicer’s
expense, an agreed-upon procedures letter of the Independent Accountant
pertaining to the financial information provided pursuant to Section 4.11(a) in
substantially the form provided by Seller/Servicer in Securitization
Transactions.

     

    (c)  By
not later than December 31, 2008, the Seller/Servicer shall deliver to the
Purchaser a statement, in form and substance satisfactory to the Purchaser,
regarding the

     


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    Seller/Servicer’s
policy with respect to origination of those Contracts that include a credit life
insurance option.  The Seller/Servicer agrees that the Purchaser and
its Affiliates may disclose the text of such statement to third
parties.

     

    Section
4.11                                [Reserved].

     

    Section
4.12                                Servicing Transfer
Reconciliation.  On or before 1:00 P.M. (New York City
Time) on the day after the Closing Date, the Seller/Servicer shall deliver to
the Purchaser a computer file containing a true and complete in all material
respects list of the (i) outstanding Principal Balances of the Contracts, (ii)
the number of Contracts, (iii) the payoff balances of the Contracts, (iv) the
weighted average coupon of the Contracts, (v) the weighted average remaining
term to maturity of the Contracts, (vi) the number and balances by dollar amount
of Contracts that are 1-29 days delinquent, 30-59 days delinquent, 60-89 days
delinquent or more than 90 days delinquent, (vii) the number of Contracts that
have been classified as a Chargeoff after the Cut-Off Date, which shall be set
forth on Schedule A ([field “ChargeOff”]) and (viii) the number of Financed
Vehicles that have been repossessed after the Cut-Off Date, which shall be set
forth on Schedule A ([field “REPO”]).  The information to be delivered
pursuant to clauses (i) through (viii) above shall be as of the close of
business on the Closing Date.

     

    Section
4.13                                Transfer of Date
File.  On or before 5:00 P.M. (New York City Time) on the
day after the Closing Date, the Seller/Servicer shall deliver to the Purchaser
or its designee the Data File, which shall be true and correct as of the close
of business on the Closing Date.

     

    Section
4.14                                Delivery of Schedule
A-2.  On or before 1:00 P.M. (New York City Time) on the
second day after the Closing Date, the Seller/Servicer shall deliver to the
Purchaser or its designee the List of Contracts prepared as of the Closing Date
in the form of Schedule A-2 attached hereto.

     

    


     

    ARTICLE
V

     

    SECURITIZATION
TRANSACTIONS AND WHOLE LOAN TRANSFERS

     

    Section
5.01                                Notice of Securitization
Transactions and Whole Loan Transfers.

     

    Subject
to the provisions of Section 10.02 hereof, the Seller/Servicer and the Purchaser
agree that, with respect to some or all of the Contracts and the other Sold
Assets, the Purchaser may effect either:

     

    (a)  one
or more Whole Loan Transfers; and/or

     

    (b)  one
or more Securitization Transactions.

     

    Section
5.02                                Agreement to Cooperate and
Assist Purchaser with Securitization Transactions and Whole Loan
Transfers.  With respect to each Whole Loan Transfer
or

     


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    Securitization
Transaction, as the case may be, entered into by the Purchaser after the Closing
Date, the Seller/Servicer agrees:

     

    (a)  to
allow rating agencies, credit enhancers or investors reasonable access to
management and relevant personnel for the purpose of reviewing the
Seller/Servicer’s, operations and answering questions about the Contracts and
the Seller/Servicer’s servicing business, and to allow reasonable opportunity to
tour relevant facilities at reasonable times upon reasonable notice;
and

     

    (b)  to
the extent available, to make available to Purchaser and any prospective
purchaser all records maintained by the Seller/Servicer with respect to the
Contracts, the servicing thereof and the preparation (including, but not limited
to, the endorsement, delivery, assignment, and/or execution, as applicable) of
the Custodial Files, Servicing Files and other related documents.

     

    Notwithstanding
the foregoing, (i) nothing provided in this Section 5.02 shall require the
Seller/Servicer or any of its Affiliates to continue to employ any of its
current, or to agree to employ any new, employees following the Closing, (ii)
the Seller/Servicer shall not be in breach of this Section 5.02 if it is unable
to comply with its terms following the Closing as a result of employees no
longer being employed by the Seller/Servicer or any of its Affiliates, as the
case may be, or if sufficient employees are not employed by the Seller/Servicer
or any of its Affiliates, as the case may be, and (iii) the Purchaser agrees to
reimburse the Seller/Servicer for all of its reasonable out-of-pocket cost and
expenses incurred in performing its obligations set forth in this Section
5.02.

     

    Section
5.03                                Obligations of Purchaser in
Connection with Securitization Transactions and Whole Loan
Transfers.  With respect to each Whole Loan Transfer or
Securitization Transaction, as the case may be, entered into by the Purchaser,
the Purchaser agrees that any Securitization Transaction or Whole Loan Transfer
effected by the Purchaser or any of its Affiliates shall be conducted in the
name of the Purchaser or one of its Affiliates and that in no event shall the
Purchaser or any of its Affiliates act in any manner that would indicate to
third parties that the Seller/Servicer or any of its Affiliates is a sponsor of,
is conducting or has any responsibility to any third party for any
Securitization Transaction or Whole Loan Transfer effected by the Purchaser or
any of its Affiliates (it being agreed and understood by the parties that no
purchaser of securities in connection with a Whole Loan Transfer or
Securitization Transaction will have any direct claims against the
Seller/Servicer or any of its Affiliates and that the Purchaser shall indemnify
the Seller/Servicer and its Affiliates for the losses arising out of any such
claim).

     

    Section
5.04                                Assignment of Purchaser’s
Rights.  The Seller/Servicer acknowledges and agrees that the
Issuer, as assignee of the Purchaser’s rights under this Agreement, may exercise
the Purchaser’s rights and obligations under this Article V; provided, however, as a
condition to any assignment hereunder, the assignee agrees to be bound by the
obligations of the Purchaser under the final paragraph of Section 5.02, clause
(iii).

     


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    


     

    CONFIDENTIALITY

     

    Section
5.05                                Confidentiality.  Except
(i) as otherwise provided in this Agreement, (ii) with the prior written consent
of the other parties hereto, (iii) as otherwise required by Requirements of Law
or (iv) is otherwise public information that was not made public by the
Seller/Servicer or any of its Affiliates, all information disclosed by the
Purchaser or its representatives, whether before or after the date hereof, in
connection with the transactions contemplated by, or the discussions and
negotiations preceding, this Agreement shall be kept confidential by the
Seller/Servicer and its representatives.  Notwithstanding any other
provision of this Agreement, in connection with Treasury Regulation Section
1.6011-4 of the Internal Revenue Code of 1986, as amended, the parties hereby
agree that each party (and each employee, representative, or other agent of such
party) may disclose to any and all persons, without limitation of any kind, the
U.S. tax treatment and U.S. tax structure of the transaction and all materials
of any kind (including opinions or other tax analyses) that are provided to such
party relating to such U.S. tax treatment and U.S. tax structure, other than any
information for which nondisclosure is reasonably necessary in order to comply
with applicable securities laws.

     

    ARTICLE
VI

     

    INDEMNIFICATION

     

    Section
6.01                                Survival of Representations
and Warranties.  The representations and warranties of the
parties contained in Sections 3.01 and 3.02 of this Agreement or in any
instrument delivered pursuant hereto and the obligations of the parties pursuant
to Sections 7.02(a) and 7.03(a) will survive until forty-five (45) days after
the conclusion of the Term.  The representations and warranties of
each of the Seller/Servicer contained in Section 3.03 of this Agreement and the
obligations of the Seller/Servicer pursuant to Sections 7.02(b), 7.02(c) and
7.02(d) will survive on a Contract-by-Contract basis, with the representations,
warranties and obligations with respect to an individual Contract expiring
forty-five (45) days following the maturity date for such
Contract.  Notwithstanding anything to the contrary in this Section,
any matter which is the subject of a claim which is asserted in writing within
the period provided herein shall survive with respect to such claim until the
final resolution thereof.

     

    Section
6.02                                Obligations of
Seller/Servicer.  Subject to the limitations set forth in
Section 7.05 of this Agreement, the Seller/Servicer shall protect, defend,
indemnify and hold harmless the Purchaser and its officers, directors, employees
and Affiliates (each, a “Purchaser Indemnified
Party”) from and against any and all Losses arising out of:

     

    (a)  the
breach of any representation or warranty contained in Section 3.03 of this
Agreement;

     

    (b)  the
inability of the Purchaser or its designee to enforce the collection of all or
any portion of a Scheduled Payment from an Obligor who has failed to make such
payments if such inability arises directly out of matters covered by the
representations or warranties contained in Section 3.04 of this Agreement and
the Seller/Servicer has breached the representation or warranty in Section 3.04
relating to such matter (it being agreed and understood by the parties that the
Purchaser and its designees shall be obligated to use efforts

     


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    consistent
with those customarily used by persons involved in the servicing of motor
vehicle contracts to collect such Scheduled Payments before seeking
indemnification pursuant to this Section 7.02(b));

     

    (c)  any
claim or cause of action brought by claimants who have been certified as a
“class” by a court of competent jurisdiction, to the extent arising out of any
actions or inactions by Seller/Servicer in its capacity as the initial purchaser
of the Contract or in its capacity as the servicer of the Contracts on and
before the Closing Date; or

     

    (d)  the
breach of any covenant or agreement by the Seller/Servicer contained in this
Agreement (it being agreed and understood by the parties that this Section
7.02(d) is not intended to apply to breaches of representations or warranties
under this Agreement).

     

    Section
6.03                                Obligations of
Purchaser.  Subject to the limitations set forth in Section
7.05 and under this Section, the Purchaser shall protect, defend, indemnify and
hold harmless the Seller/Servicer and its officers, directors, employees and
Affiliates (each, a “Seller/Servicer Indemnified
Party”) from and against any and all Losses arising out of:

     

    (a)  the
breach of any representation or warranty made by the Purchaser contained in
Section 3.01 of this Agreement;

     

    (b)  any
claim or cause of action brought by a Person to the extent arising out of the
servicing of any Contract following the Closing Date;

     

    (c)  any
Assumed Liabilities; or

     

    (d)  the
breach of any covenant or agreement (other than the covenant of the Purchaser
set forth in Section 4.06 hereof) by the Purchaser contained in this
Agreement.

     

    Section
6.04                                Notice and Opportunity to
Defend.  If there occurs an event which the Purchaser
Indemnified Party or the Seller/Servicer Indemnified Party, as the case may be
(for purposes of this Article VII, an “Indemnified Party”),
asserts is an indemnifiable event pursuant to Sections 7.02 or 7.03, the
Indemnified Party shall promptly notify the party obligated to provide
indemnification (an “Indemnifying Party”)
in writing, with such written notice to (i) state the amount of the Loss, or a
good faith estimate thereof, and the method of computation thereof, and (ii)
contain a reference to the specific section or sections of this Agreement in
respect of which such right to indemnification is asserted.  The
obligations of the Indemnifying Party under this Article VII with respect to
Losses arising from claims of any third party (which shall not include any claim
made by the Seller/Servicer or the Purchaser, as the case may be) which are
subject to the indemnification provided for in this Article VII (“Third Party Claims”)
shall be governed by and contingent upon the following additional terms and
conditions: if an Indemnified Party shall receive notice of any Third Party
Claim, the Indemnified Party will give the Indemnifying Party prompt written
notice of such Third Party Claim, and in any case no later than 15 days of
receiving notice of such Third Party Claim.  Such notice shall not be
a condition precedent to any liability of the Indemnifying Party hereunder;
provided, however, that the
failure to provide prompt notice as provided herein will relieve the
Indemnifying Party of its obligations hereunder to the extent of any incremental
Losses directly related to the failure to timely provide such
notice.  If the Indemnified Party notifies the Indemnifying Party of a
Third

     


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    Party
Claim, the Indemnifying Party shall have the right (at the expense of such
Indemnifying Party) to assume the defense thereof if it acknowledges in writing
to the Indemnified Party that such action or proceeding is covered by the
indemnification obligations set forth in this Article VII and, upon any such
assumption, shall not be liable to the Indemnified Party for any expenses
subsequently incurred by the Indemnified Party in connection therewith; provided, however, that, if
after reasonable investigation the Indemnifying Party has a good faith belief
that it is not required to indemnify the Indemnified Party for such Third Party
Claim, then the Indemnifying Party may withdraw such acknowledgment of liability
if such withdrawal is done with sufficient notice such as not to unduly
prejudice the Indemnified Party; provided further, however, that if
there exists or is reasonably likely to exist a conflict of interest that would
make it inappropriate in the judgment of the Indemnified Party, in its
reasonable discretion, for the same counsel to represent both the Indemnified
Party and the Indemnifying Party, then the Indemnified Party shall be entitled
to retain its own counsel, in each jurisdiction for which the Indemnified Party
reasonably determines counsel is required, at the expense of the Indemnifying
Party.  The Indemnified Party agrees to cooperate fully with the
Indemnifying Party and its counsel in the defense against any Third Party Claim
and shall make available to the Indemnifying Party and its counsel all records
and other materials reasonably required for use in contesting such Third Party
Claim.  The Indemnified Party shall have the right to participate at
its own expense in the defense of such Third Party Claim.  No
Indemnifying Party shall consent to the entry of any judgment or enter into any
settlement of any Third Party Claim without the consent of the Indemnified Party
(A) if such judgment or settlement does not include as an unconditional term
thereof the giving by each claimant or plaintiff to each Indemnified Party of a
release from all liability in respect to such claim or (B) if such judgment or
settlement would result in the finding or admission of any violation of
Law.

     

    Section
6.05                                Exclusive
Remedy.  The parties acknowledge and agree that (i) the
indemnification provisions of this Article VII shall be the sole and exclusive
remedies of the  Purchaser and the Seller/Servicer for any breach of
or inaccuracy in any representation or warranty contained in this Agreement and
(ii) no breach of any representation or warranty arising out of this Agreement
shall give rise to any further indemnification rights or claims of any nature
whatsoever in respect thereof (whether by contract, common law, statute, law,
regulation or otherwise), all of which the parties hereby waive; provided, however, that nothing
herein is intended to waive any claims for fraud.

     

    ARTICLE
VII

     

    PRE-CLOSING
COVENANTS

     

    Section
7.01                                Pre-Closing
Covenants.  The Purchaser and the Seller/Servicer agree as
follows with respect to the period between the date hereof and the Closing
Date:

     

    (a)  General.  The
Purchaser and the Seller/Servicer will use its best efforts to take all action
and to do all things necessary, proper, or advisable in order to consummate and
make effective the transactions contemplated by this Agreement (including
without limitation satisfaction, but not waiver, of the closing conditions set
forth in Article IX below).

     

    (b)  Notices and
Consents.  The Seller/Servicer will give (and will cause its
Affiliates to give) any notices to third parties, and the Seller/Servicer will
use its reasonable

     


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    best
efforts (and will cause its Affiliates to use its reasonable best efforts) to
obtain any third party consents that the Purchaser reasonably may request. The
Purchaser and the Seller/Servicer will (and will cause each of their respective
Affiliates to) give any notices to, make any filings with, and use its
reasonable best efforts to obtain any authorizations, consents, and approvals of
any Governmental Entity in connection with the matters referred to in this
Agreement.

     

    (c)  Servicing of
Contracts.  The Seller/Servicer will service the Contracts in
accordance with the Servicing Standard, and the Seller/Servicer has not and will
not modify the Servicing Standard so as to decrease the degree of skill and care
exercised by the Seller/Servicer below that in effect on the Cut-Off
Date.

     

    (d)  Full
Access.  The Seller/Servicer will permit (and will cause its
Affiliates to permit) representatives of the Purchaser to have full access at
all reasonable times, and in a manner so as not to interfere with the normal
business operations of the Seller/Servicer and its Affiliates, to all premises,
properties, personnel, books, records (including tax records), contracts, and
documents of or pertaining to the Sold Assets.

     

    (e)  Notice of
Developments.  The Seller/Servicer and the Purchaser will give
prompt written notice to each other party of any material adverse development
causing a breach of any of its own representations and warranties contained in
this Agreement. No disclosure by any party pursuant to this Section 8.01(e),
however, shall be deemed to prevent or cure any misrepresentation, breach of
warranty, or breach of covenant.

     

    (f)  Exclusivity.  The
Seller/Servicer will not (and the Seller/Servicer will not cause or permit any
of its Affiliates to) (i) solicit, initiate, or encourage the submission of any
proposal or offer from any Person relating to the acquisition of Contracts or
any substantial portion thereof, or (ii) participate in any discussions or
negotiations regarding, furnish any information with respect to, assist or
participate in, or facilitate in any other manner any effort or attempt by any
Person to do or seek any of the foregoing. The Seller/Servicer will notify the
Purchaser immediately if any Person makes any proposal, offer, inquiry, or
contact with respect to any of the foregoing.

     

    (g)  Servicing
Functionality.  The Seller/Servicer shall take all other
commercially reasonable actions as the Purchaser may reasonably request to
assist the Backup Servicer or any other successor servicer to establish
servicing functionality.

     

    ARTICLE
VIII

     

    CONDITIONS
TO CLOSING

     

    Section
8.01                                Conditions to Obligation of
the Purchaser.  The obligation of the Purchaser to consummate
the transactions to be performed by it on the Closing Date is subject to
satisfaction of the following conditions:

     

    (a)  the
representations and warranties made by Seller/Servicer in this Agreement on the
Closing Date must be true and correct;

     

    (b)  all
information provided by Seller/Servicer to the Purchaser relating to the
Contracts must be true and correct;

     


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    Seller/Servicer
must have (i) delivered the List of Contracts to the Purchaser and
(ii) performed all other covenants and obligations required of
Seller/Servicer prior to the Closing Date under this Agreement;

     

    (c)  Seller/Servicer
shall have procured all of the third party consents necessary to consummate the
transactions contemplated by this Agreement;

     

    (d)  no
action, suit, or proceeding shall be pending or threatened before any court or
quasi-judicial or administrative agency of any federal, state, local, or foreign
jurisdiction or before any arbitrator wherein an unfavorable injunction,
judgment, order, decree, ruling, or charge would (A) prevent consummation of any
of the transactions contemplated by this Agreement, (B) cause any of the
transactions contemplated by this Agreement to be rescinded following
consummation, or (C) affect adversely the right of the Purchaser to own the Sold
Assets;

     

    (e)  Seller/Servicer
shall have delivered to the Purchaser a certificate to the effect that each of
the conditions specified in clauses (a) through (e) above is satisfied in all
respects;

     

    (f)  all
applicable waiting periods (and any extensions thereof) under the
Hart-Scott-Rodino Act shall have expired or otherwise been terminated and the
Seller/Servicer, its Affiliates, and the Purchaser shall have received all other
authorizations, consents, and approvals of Governmental
Entities  necessary to consummate the transactions contemplated by
this Agreement;

     

    (g)  the
Bill of Sale, Assumption Agreement and the other Related Documents shall have
been duly executed and delivered by the Seller/Servicer;

     

    (h)  the
Purchaser shall have received evidence satisfactory to it and its counsel that
on or before the Closing Date, UCC-1 financing statements required to be filed
on or prior to the Closing Date pursuant to the Related Documents have been
filed;

     

    (i)  Mark
Creatura and/or Andrews Kurth LLP, counsel to the Seller/Servicer, shall have
furnished to the Purchaser their written opinion, as counsel to the
Seller/Servicer, addressed to the Purchaser and dated the Closing Date,
regarding the due organization of the Seller/Servicer, the due authorization,
execution and delivery by, and enforceability against, the Seller/Servicer of
this Agreement and the other Related Documents to which it is a party, no
breaches, defaults or violations of organizational documents, contracts or law,
no consents, and such other matters requested by the Purchaser to be addressed
by such counsel, in form and substance reasonably satisfactory to the Purchaser
and its counsel;

     

    (j)  Mark
Creatura, Esq., counsel to the Seller/Servicer, shall have furnished to the
Purchaser his written opinion, as counsel to each of the Seller/Servicer,
addressed to the Purchaser and dated the Closing Date, regarding no litigation,
in form and substance reasonably satisfactory to the Purchaser and its
counsel;

     

    (k)  subsequent
to the execution and delivery of this Agreement there shall not have occurred
any of the following: trading in securities generally on the New York
Stock

     


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    Exchange,
the American Stock Exchange or the over-the-counter market shall have been
suspended or limited, or minimum prices shall have been established on either of
such exchanges or such market by the Securities and Exchange Commission, by such
exchange or by any other regulatory body or governmental authority having
jurisdiction, or trading in securities of Seller/Servicer on any exchange or in
the over-the-counter market shall have been suspended or a general moratorium on
commercial banking activities shall have been declared by federal or New York
state authorities or an outbreak or escalation of hostilities or a declaration
by the United States of a national emergency or war or such a material adverse
change in general economic, political or financial conditions (or the effect of
international conditions on the financial markets in the United States shall be
such) as to make it, in the judgment of the Purchaser, impracticable or
inadvisable to proceed with the transaction set forth herein;

     

    (l)  the
Seller/Servicer and any other Affiliate that appears as a secured party on any
Contract shall execute and deliver a Power of Attorney, substantially in the
form of Exhibit E hereto;

     

    (m)  the
Seller/Servicer or its Affiliate shall deliver all of the closing items set
forth on the Closing Checklist as annexed hereto as Schedule G;

     

    (n)  the
Seller/Servicer shall deliver to the Purchaser or its designee the Image
File;

     

    (o)  the
Seller/Servicer shall deliver to the Custodian the Custodial File for each of
the Contract set forth on the List of Contracts;

     

    (p)  the
Seller/Servicer shall retain possession of the Servicing File for each of the
Contract set forth on the List of Contracts for the benefit of the Indenture
Trustee; and

     

    (q)  all
corporate and legal matters relating to this Agreement must have been addressed
in a manner reasonably satisfactory to the Purchaser, and all related documents
reasonably requested of Seller/Servicer by the Purchaser must have been
received.

     

    Section
8.02                                Conditions to Obligation of
the Seller/Servicer.  The obligation of the Seller/Servicer to
consummate the transactions to be performed by it in connection with the Closing
is subject to satisfaction of the following conditions:

     

    (a)  the
representations and warranties made by the Purchaser in this Agreement on the
Closing Date must be true and correct;

     

    (b)  the
Purchaser must have paid the Aggregate Purchase Price due on the Closing Date;
and

     

    (c)  all
corporate and legal matters relating to this Agreement must have been addressed
in a manner reasonably satisfactory to Seller/Servicer, and all related
documents reasonably requested of the Purchaser by Seller/Servicer must have
been received.

     


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    Termination of
Agreement.  Either party may terminate this Agreement by giving
reasonable notice to the other party and receiving the prior written consent of
the Investor Representative.

     

    ARTICLE
IX

     

    MISCELLANEOUS
PROVISIONS

     

    Section
9.01                                Amendment.  This
Agreement may be amended from time to time by a written amendment duly executed
and delivered by the parties hereto.

     

    Section
9.02                                Successors and
Assigns.  No party can assign any interest in this Agreement,
except that (a) Purchaser may assign its interest in this Agreement to the
Issuer under the Transfer and Servicing Agreement and (b) any party may assign
its interest in this Agreement to any other Person if (i) at least 10 days prior
to the assignment, notice is given to the other party and the Investor
Representative, and (ii) each of the other party and the Investor Representative
gives its prior written approval to the assignment.

     

    Section
9.03                                No Waivers; Cumulative
Remedies.  No failure to exercise and no delay in exercising,
on the part of the Purchaser or the Seller/Servicer, any right, remedy, power or
privilege hereunder, shall operate as a waiver thereof; nor shall any single or
partial exercise of any right, remedy, power or privilege hereunder preclude any
other or further exercise thereof or the exercise of any other right, remedy,
power or privilege.  The rights, remedies, powers and privileges
herein provided are cumulative and not exhaustive of any rights, remedies,
powers and privileges provided by law.

     

    Section
9.04                                Notices.  All
notices and other communications under this Agreement must be in writing and
shall be deemed to have been duly given if personally delivered via overnight or
courier service, (a) in the case of Seller/Servicer, to Consumer Portfolio
Services, Inc., 16355 Laguna Canyon Road, Irvine, CA 92618,
Attention:  Mark Creatura, (b) in the case of Purchaser, to CALT SPE,
LLC, c/o Consumer Portfolio Services, Inc., 16355 Laguna Canyon Road, Irvine, CA
92618, Attention:  Mark Creatura, with a copy to the Investor
Representative at CIGPF I Corp., Attn:  Ari Rosenberg, 390 Greenwich
Street, New York, NY 10103, Tel: (212) 723-1041.  Any of these
entities may designate a different address in a notice to the others under this
Section 10.04.

     

    Section
9.05                                
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 Agreement.  References in this Agreement to
Section names or numbers are to such sections of this Agreement unless otherwise
specified.

     

    Section
9.06                                Governing
Law.  THIS
AGREEMENT AND THE BILL OF SALE SHALL BE CONSTRUED BY AND INTERPRETED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, INCLUDING SECTIONS 5-1401 AND
5-1402 OF THE GENERAL OBLIGATIONS LAW BUT OTHERWISE WITHOUT GIVING EFFECT TO THE
PRINCIPLES OF CONFLICTS OF LAW, THAT WOULD RESULT IN APPLICATION OF LAWS OTHER
THAN NEW YORK, AND THE RIGHTS, OBLIGATIONS AND REMEDIES OF THE PARTIES HERETO
SHALL BE

     


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    DETERMINED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

     

    Section
9.07                                Counterparts.  This
Agreement may be executed in two or more counterparts (and by different parties
on separate counterparts), each of which shall be an original, but all of which
shall constitute one and the same instrument.  Delivery of an executed
counterpart of this Agreement by facsimile or by electronic means shall be
equally effective as the delivery of an originally executed
counterpart.

     

    Section
9.08                                Merger and
Integration.  Except as specifically stated otherwise herein,
this Agreement and the other Related Documents set forth the entire
understanding of the parties hereto relating to the subject matter hereof, and
all prior understandings, written or oral, are superseded by this
Agreement.  This Agreement may not be modified, amended, waived or
supplemented except as provided herein.

     

    Section
9.09                                Schedules, Exhibits and
Annexes.  The schedules, exhibits and annexes attached hereto
and referred to herein shall constitute a part of this Agreement and are
incorporated into this Agreement for all purposes.

     

    Section
9.10                                General Interpretive
Principles.  For purposes of this Agreement except as otherwise
expressly provided or unless the context otherwise requires:

     

    (a)  the
terms defined in this Agreement have the meanings assigned to them in this
Agreement and include the plural as well as the singular, and the use of any
gender herein shall be deemed to include the other gender;

     

    (b)  accounting
terms not otherwise defined herein have the meanings assigned to them in
accordance with generally accepted accounting principles as in effect on the
Closing Date;

     

    (c)  references
herein to “Articles”, “Sections”, “Subsections”, “paragraphs”, and other
subdivisions without reference to a document are to designated Articles,
Sections, Subsections, paragraphs and other subdivisions of this
Agreement;

     

    (d)  a
reference to a Subsection without further reference to a Section is a reference
to such Subsection as contained in the same Section in which the reference
appears, and this rule shall also apply to paragraphs and other
subdivisions;

     

    (e)  the
words “herein”, “hereof”, “hereunder” and other words of similar import refer to
this Agreement as a whole and not to any particular provision; and

     

    (f)  the
term “include” or “including” shall mean without limitation by reason of
enumeration.

     

    Section
9.11                                UCC
References.  References in this Agreement to any section of the
UCC shall mean, on or after the effective date of adoption of any revision to
the UCC in the applicable jurisdiction, such revised or successor section
thereto.

     


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    Costs and
Expenses.  Each of the Purchaser and the Seller/Servicer will
pay all reasonable expenses incident to the performance of their respective
obligations under this Agreement and any of the Related Documents, including
fees and expenses of counsel in connection with the enforcement of any of their
respective obligations hereunder.

     

    Section
9.12                                Publicity and
Reports.  None of the parties to this Agreement shall issue any
press release, publicity statement or other public notice (including, without
limitation, any “tombstone”) of any kind relating to the transactions
contemplated by this Agreement unless such publicity has been approved by the
other parties, except that no party to this Agreement be precluded from (i)
making or giving such notices in good faith as may be required by Law (provided
that such party shall consult with the other parties as to the content of such
notice) and (ii) disclosing the existence of the transaction set forth in this
Agreement, but not the financial terms thereof.

     

    Section
9.13                                No Third Party
Beneficiaries.  This Agreement benefits and is binding on the
parties and their respective successors and permitted assigns.  Each
of Seller/Servicer and Purchaser agree and acknowledge that each of the Issuer
and the Indenture Trustee is a third-party beneficiary of this
Agreement.

     

    Section
9.14                                Effect of
Termination.  No termination or rejection or failure to assume
the executory obligations of this Agreement in the bankruptcy of the
Seller/Servicer shall be deemed to impair or affect the obligations pertaining
to any executed conveyance or executed obligations, including without limitation
breaches of representations and warranties by the Seller/Servicer occurring
prior to the date of such termination.

     

    [Signature
Page Follows]

    



    
      
         


      

      
         


        
          

        

      

      
         


      

    


    IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the date first written above.

     

    CONSUMER PORTFOLIO SERVICES,
INC.,

     

    as the
Seller/Servicer

     

    


    By:           /s/ Robert E. Riedl    

    Name:  Robert E.
Riedl

    Title:    Sr.
V.P.

     

    CALT
SPE, LLC,

     

    as the
Purchaser

     

    By:           /s/ Jeff
Fritz        

    Name:  Jeff Fritz

    Title:   
V.P. & CFO