SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549



                                    FORM 8-K


                             Current Report Pursuant
                          to Section 13 or 15(d) of the
                         Securities Exchange Act of 1934


         Date of Report (Date of Earliest Event Reported)   October 17, 1997


                        CONSUMER PORTFOLIO SERVICES, INC.
             (Exact Name of Registrant as Specified in its Charter)



                                   California
                 (State or Other Jurisdiction of Incorporation)


        333-25301                                        33-0459135
(Commission File Number)                    (I.R.S. Employer Identification No.)


    2 Ada, Irvine, California                                92618
(Address of Principal Executive Offices)                   (Zip Code)


                                 (714) 753-6800
              (Registrant's Telephone Number, Including Area Code)


                                 Not Applicable
          (Former Name or Former Address, if Changed Since Last Report)















Item 5.  Other Events.

         The  Registrant  is filing final forms of the  exhibits  listed in Item
7(c) below.

Item 7.  Financial Statements and Exhibits.

         (c)  Exhibits.


Exhibit
  No.             Document Description
- -------           --------------------

1.2               Underwriting Agreement

4.3               Trust Agreement

4.4               Indenture

10.7              Sale and Servicing Agreement

10.8              Receivables Purchase Agreement

10.9              Receivables Purchase Agreement


                                       -2-




                                   SIGNATURES

     Pursuant to the  requirements  of the Securities  Exchange Act of 1934, the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned hereunto duly authorized.



                                         CONSUMER PORTFOLIO SERVICES, INC.,
                                         as Originator of the Trust (Registrant)



Dated: January 8, 1997                   By: /s/ Jeffrey P. Fritz
                                             Jeffrey P. Fritz
                                             Senior Vice President

                                       -3-




                                INDEX TO EXHIBITS


                                                                     Sequential
       Exhibit No.         Document Description                        Page No.
       -----------         --------------------                      ----------

           1.2             Underwriting Agreement

           4.3             Trust Agreement

           4.4             Indenture

          10.7             Sale and Servicing Agreement

          10.8             Receivables Purchase Agreement

          10.9             Receivables Purchase Agreement
















                                       -4-

                                                                    Exhibit 1.2

                                                                 EXECUTION COPY



                        CPS AUTO RECEIVABLES TRUST 1997-4
                $54,260,000.00 6.07% Class A-1 Asset Backed Notes
               $46,307,598.60 6.30% Class A-2 Asset Backed Notes
                 $5,293,031.51 10.59% Asset Backed Certificates


                             UNDERWRITING AGREEMENT


                                October 16, 1997



Greenwich Capital Markets, Inc.
600 Steamboat Road
Greenwich, Connecticut 06830

Ladies and Gentlemen:

         CPS Receivables  Corp. (the  "Company"),  a California  corporation and
wholly-owned  subsidiary  of Consumer  Portfolio  Services,  Inc.,  a California
corporation  ("CPS"),  proposes  to issue  and sell to you in your  capacity  as
underwriter (the  "Underwriter"),  $54,260,000.00  aggregate principal amount of
CPS Auto  Receivables  Trust  1997-4 6.07% Asset  Backed  Notes,  Class A-1 (the
"Class A-1 Notes") and $46,307,598.60  aggregate principal amount of 6.30% Asset
Backed Notes,  Class A-2 (the "Class A-2 Notes" and, together with the Class A-1
Notes the "Class A Notes" or the "Notes") and $5,293,031.51  aggregate principal
amount of 10.59% Asset Backed  Certificates  (the  "Certificates"  and, together
with  the  Notes,  the  "Securities").  The  Notes  will be  issued  by CPS Auto
Receivables   Trust  1997-4  (the  "Trust")   pursuant  to  the  Indenture  (the
"Indenture") dated as of October 1, 1997 among CPS Auto Receivables Trust 1997-4
(the "Trust") and Norwest Bank Minnesota,  National Association, as trustee (the
"Trustee").  The Certificates  will be issued by the Trust pursuant to the Trust
Agreement.  The assets of the Trust will include,  among other things, a pool of
retail  installment  sale  contracts and all rights and  obligations  thereunder
(collectively, the "Receivables"), with respect to Rule of 78's Receivables, all
payments due thereon after October 9, 1997 (the "Cutoff Date") and, with respect
to Simple  Interest  Receivables,  all payments  received  thereunder  after the
Cutoff Date,  security interests in the used and new automobiles,  light trucks,
vans and  minivans  securing  the  Receivables,  certain  bank  accounts and the
proceeds thereof, the Policy (for the benefit of the










Class A  Noteholders  only)  and the right of the  Company  to  receive  certain
insurance  proceeds  and  certain  other  property,  all  as  more  specifically
described  in the Sale and  Servicing  Agreement,  dated as of  October 1, 1997,
among the Trust,  CPS, as  servicer  (in such  capacity,  the  "Servicer"),  the
Company, as Seller, and Norwest Bank Minnesota National Association, as Trustee.

         The Class A-1 Notes will be issued in an aggregate  principal amount of
$54,260,000.00  and will bear  interest  at an annual  rate  equal to 6.07% (the
"Class A-1 Interest  Rate").  The Class A-2 Notes will be issued in an aggregate
principal  amount of  $46,307,598.60  and will bear  interest  at an annual rate
equal to 6.30% (the "Class A-2 Interest Rate").  The aggregate  principal amount
of  the  Notes  will  equal  95%  of  the  aggregate  principal  balance  of the
Receivables  as of the Cutoff Date.  Calculations  of interest for each class of
Notes  will be in  accordance  with the  provisions  of the  Sale and  Servicing
Agreement.

         The  Certificates  will be issued in an aggregate  principal  amount of
$5,293,031.51  which is equal to 5% of the  aggregate  principal  balance of the
Receivables  as of the Cutoff Date.  The  Certificates  will bear interest at an
annual rate equal to 10.59% (the  "Pass-Through  Rate") in  accordance  with the
provisions of the Trust Agreement.

         To the extent not  otherwise  defined  herein,  capitalized  terms used
herein shall have the meanings  assigned to such terms in the  Indenture  or, if
not defined therein, in the Sale and Servicing Agreement.

         As the  Underwriter,  you have  advised  the  Company  that (a) you are
authorized to enter into this  Agreement and (b) you are willing to purchase the
aggregate  principal  amount of the Class A Notes and the Certificates set forth
in Schedule I hereto.

         In consideration of the mutual  agreements  contained herein and of the
interests of the parties in the transactions  contemplated  hereby,  the parties
hereto agree as follows:

1.       REPRESENTATIONS AND WARRANTIES OF THE COMPANY, CPS and
         SAMCO.

         The Company, with respect to the Company, CPS, with respect to CPS, and
Samco,  with  respect  to  Samco,  and both  the  Company  and CPS in all  other
instances, each represents and warrants to, and agrees with the Underwriter,  as
of the date hereof and as of the Issuance, that:

         (a) CPS has filed with the  Securities  and  Exchange  Commission  (the
"Commission")  a  registration  statement  on Form  S-3  (File  No.  333-25301),
including a Base  Prospectus,  for  registration of the offering and sale of the
Class A Notes under the Securities Act of 1933, as amended (the "1933 Act"), and
the  rules  and  regulations  (the  "1933 Act  Regulations")  of the  Commission
thereunder which conforms with the requirements of the 1933 Act and the 1933 Act




                                        2





Regulations.  CPS has complied with the conditions for the use of a Registration
Statement  on Form  S-3.  CPS may have  filed  with the  Commission  one or more
amendments to such Registration Statement, and may have used a Preliminary Final
Prospectus, each of which has been previously furnished to the Underwriter.  The
offering  of the  Class A Notes is a Delayed  Offering  and,  although  the Base
Prospectus may not include all the information with respect to the Class A Notes
and the offering  thereof  required by the 1933 Act and the 1933 Act Regulations
to be included in the Final  Prospectus,  the Base Prospectus  includes all such
information required by the 1933 Act and the 1933 Act Regulations to be included
therein as of the  Effective  Date.  The Company  will  hereafter  file with the
Commission  pursuant to Rules 415 and  424(b),  a final  supplement  to the Base
Prospectus  relating to the Class A Notes and the  offering  thereof.  As filed,
such final supplement shall include all required information with respect to the
Class A Notes and, except to the extent the  Underwriter  shall agree in writing
to any modification  thereof,  shall be in all substantive  respects in the form
furnished to the  Underwriter  prior to the Execution Time or, to the extent not
completed at the Execution  Time,  shall be in such form with only such specific
additional  information  and other  changes  (beyond that  contained in the Base
Prospectus and any Preliminary  Final Prospectus) as the Company has advised the
Underwriter, prior to the Execution Time, will be included or made therein.

         (b) On the Effective  Date, on the date hereof and on the Closing Date,
the  Registration  Statement did or will, and when the Final Prospectus is first
filed (if required) in  accordance  with Rule 424(b) and on the Closing Date (as
defined  below),  the Final  Prospectus (as  supplemented  and amended as of the
Closing  Date)  will,  comply  in all  material  respects  with  the  applicable
requirements of the 1933 Act, the 1933 Act Regulations,  the Securities Exchange
Act of 1934,  as  amended  (the  "1934  Act"),  and the  rules  and  regulations
thereunder  (the "1934 Act  Regulations");  on the  Effective  Date, on the date
hereof and on the Closing Date, the Registration Statement,  and any information
incorporated  therein,  did not or will not  contain any untrue  statement  of a
material fact or omit to state any material  fact required to be stated  therein
or necessary in order to make the statements therein not misleading; and, on the
Effective Date, the Final Prospectus,  if not filed pursuant to Rule 424(b), did
not or will not,  and on the date of any filing  pursuant  to Rule 424(b) and on
the Closing Date, the Final  Prospectus (as supplemented and amended in the case
of the Closing Date) will not,  include any untrue  statement of a material fact
or omit to state a  material  fact  necessary  in  order to make the  statements
therein  not  misleading;  provided,  however,  that each of CPS and the Company
makes no  representations  or warranties as to the  information  contained in or
omitted  from  the  Registration  Statement  or the  Final  Prospectus  (or  any
amendment  or  supplement  thereto)  in  reliance  upon and in  conformity  with
information  specified in Section 9(b) furnished in writing to the Company by or
on behalf of the  Underwriter  specifically  for  inclusion in the  Registration
Statement or the Final  Prospectus (or any  supplement or amendment  thereto) or
the information  regarding the Insurer set forth under the heading "THE INSURER"
in or  incorporated  by reference in the  Preliminary  Final  Prospectus and the
Final Prospectus.





                                        3





         (c) The terms which follow, when used in this Agreement, shall have the
meanings indicated.

                  "Base  Prospectus"  shall mean the  prospectus  referred to in
         Section  1(a) hereof  contained  in the  Registration  Statement at the
         Effective Date.

                  "Delayed  Offering"  shall  mean  the  offering  of the  Notes
         pursuant  to Rule  415  which  does not  commence  promptly  after  the
         effective date of the Registration Statement, with the result that only
         information  required  pursuant  to Rule 415 need be  included  in such
         Registration  Statement at the  effective  date thereof with respect to
         the Notes.

                  "Effective  Date"  shall mean each date that the  Registration
         Statement and any post-effective  amendment(s) thereto became or become
         effective  and each  date  after the date  hereof  on which a  document
         incorporated by reference in the Registration Statement is filed by the
         Company.

                  "Execution  Time"  shall  mean the date  and  time  that  this
         Agreement is executed and delivered by the parties hereto.

                  "Final  Prospectus"  shall  mean  the  prospectus   supplement
         relating to the Notes that is first filed pursuant to Rule 424(b) under
         the  1933  Act  after  the  Execution  Time,  together  with  the  Base
         Prospectus.

                  "Preliminary  Final  Prospectus"  shall  mean any  preliminary
         prospectus  supplement to the Base Prospectus which describes the Notes
         and the  offering  thereof  and is used  prior to  filing  of the Final
         Prospectus.

                  "Prospectus"  shall mean,  collectively,  the Base Prospectus,
         any Preliminary Final Prospectus and the Final Prospectus.

                  "Registration  Statement"  shall  mean  (i)  the  Registration
         Statement  referred to in Section 1(a) hereof,  including all documents
         incorporated therein by reference,  exhibits,  financial statements and
         notes thereto and related schedules and other statistical and financial
         data and information included therein, as amended at the Execution Time
         (or, if not  effective at the  Execution  Time, in the form in which it
         shall become effective); (ii) in the event any post-effective amendment
         thereto becomes  effective prior to the Closing Date, such Registration
         Statement  as so  amended;  and  (iii) in the  event  any  Rule  462(b)
         Registration  Statement  becomes  effective  prior to the Closing Date,
         such  Registration   Statement  as  so  modified  by  the  Rule  462(b)
         Registration Statement,  from and after the effectiveness thereof. Such
         term shall  include  any Rule 430A  Information  deemed to be  included
         therein at the Effective Date as provided by Rule 430A.





                                        4





                  "Rule 415", "Rule 424", "Rule 430A" and "Regulation S-K" refer
         to such rules or regulation under the 1933 Act.

                  "Rule 430A Information"  means information with respect to the
         Notes  and the  offering  thereof  permitted  to be  omitted  from  the
         Registration Statement when it becomes effective pursuant to Rule 430A.

                  "Rule  462(b)  Registration  Statement"  means a  Registration
         Statement  filed pursuant to Rule 462(b) under the 1933 Act relating to
         the  offering   covered  by  the   Registration   Statement  (File  No.
         333-25301).

         Any  reference   herein  to  the  Registration   Statement,   the  Base
Prospectus,  any Preliminary  Final  Prospectus or the Final Prospectus shall be
deemed to refer to and include the documents  incorporated by reference  therein
pursuant to Item 12 of Form S-3 which were filed under the 1934 Act on or before
the Effective Date of the  Registration  Statement or the issue date of the Base
Prospectus,  any Preliminary  Final Prospectus or the Final  Prospectus,  as the
case may be;  and any  reference  herein to the terms  "amend",  "amendment"  or
"supplement"  with respect to the Registration  Statement,  the Base Prospectus,
any  Preliminary  Final  Prospectus or the Final  Prospectus  shall be deemed to
refer to and  include  the filing of any  document  under the 1934 Act after the
Effective  Date of the  Registration  Statement  or the  issue  date of the Base
Prospectus,  any Preliminary  Final Prospectus or the Final  Prospectus,  as the
case may be, deemed to be incorporated therein by reference.

         (d)  The  Seller,   at  its  own  expense  in  consultation   with  the
Underwriter,  has prepared a private  placement  memorandum  (together  with any
exhibits attached thereto, the "Private Placement Memorandum") describing, among
other things, the Certificates,  the Receivables,  the Policy, the Trust and the
Trust Documents.  Copies of the Private Placement  Memorandum and any amendments
or supplements thereto to date have been delivered to the Underwriter.  From and
after  the  date  of  any  amendment  or  supplement  to the  Private  Placement
Memorandum,  the term  "Private  Placement  Memorandum"  shall mean the  Private
Placement  Memorandum  as so  amended or  supplemented.  The  Private  Placement
Memorandum,  as of its date, and any amendment thereof or supplement thereto, as
of their  respective  dates,  and at all times up to and  including  the Closing
Date,  does not and will not,  as of such dates and at such  times,  contain any
untrue  statement of a material fact or omit to state a material fact  necessary
to make the statements  therein,  in light of the circumstances under which they
were made, not misleading;  provided,  however, that each of CPS and the Company
makes no representations or warranties as to (i) the information contained in or
omitted from the Private  Placement  Memorandum  (or any amendment or supplement
thereto)  in reliance  upon and in  conformity  with  information  specified  in
Section  9(b)  furnished  in  writing  to the  Company  by or on  behalf  of the
Underwriter  specifically for inclusion in the Private Placement  Memorandum (or
any  supplement  or amendment  thereto) or (ii) the  information  regarding  the
Insurer  set  forth  under the  heading  "THE  INSURER"  in or  incorporated  by
reference in the Preliminary Final Prospectus and the




                                        5





Final Prospectus  (which  information  referred to in (ii) above the Underwriter
acknowledge has not been included in the Private Placement Memorandum).

         (e)  Each of the  Company  and  CPS is a  corporation  duly  organized,
validly  existing and in good standing under the laws of the State of California
and is duly  qualified  to transact  business as a foreign  corporation  in each
jurisdiction in which it is required to be so qualified and in which the failure
to so qualify,  taken in the aggregate,  would have a material adverse effect on
it.

         (f) Samco Acceptance  Corp.  ("Samco") is a corporation duly organized,
validly  existing  and in good  standing  under the laws of Delaware and is duly
qualified to transact business as a foreign  corporation in each jurisdiction in
which it is  required  to be so  qualified  and in which  failure to so qualify,
taken in the aggregate, would have a material adverse affect on it.

         (g) Since the respective dates as of which  information is given in the
Registration  Statement and the Final  Prospectus  and in the Private  Placement
Memorandum,  there has not been any material adverse change,  or any development
which could reasonably be expected to result in a material adverse change, in or
affecting the financial position,  shareholders' equity or results of operations
of the Company,  CPS or Samco or the  Company's  or CPS's or Samco's  ability to
perform its obligations under this Agreement, the Indenture, the Trust Agreement
or the Sale and  Servicing  Agreement  or any of the other Basic  Documents  (as
defined  below),  other than as set forth or  incorporated  by  reference in the
Registration  Statement  or as set  forth  in the  Final  Prospectus  and in the
Private Placement Memorandum.

         (h) Except for the registration of the Class A Notes under the 1933 Act
and such consents, approvals, authorizations, registrations or qualifications as
may be  required  under  the  1934  Act in  connection  with  the  purchase  and
distribution of the Notes by the Underwriter or the filing  requirements of Rule
430A or Rule 424(b) under the 1933 Act, no consent,  approval,  authorization or
order of or  declaration or filing with any  governmental  authority is required
for the issuance or sale of the Notes and the  Certificates or the  consummation
of the  other  transactions  contemplated  by this  Agreement  or the  Sale  and
Servicing  Agreement  or any of the other Basic  Documents,  except such as have
been duly made or  obtained or as will be duly made or obtained on or before the
Closing Date.

         (i) Assuming that (i) the Underwriter's  representations and warranties
in  Section  3 are  true,  (ii)  the  representations  and  agreements  of  each
Accredited  Investor  in the form of the letter set forth in Exhibit  B-1 to the
Private  Placement  Memorandum  are true and will be  complied  with,  (iii) the
Certificates  are offered and sold in the manner  contemplated in this Agreement
and in the Private Placement  Memorandum and (iv) each Purchaser of Certificates
is an Eligible  Purchaser (as defined in Section 3(b)), the Certificates are not
required to be




                                        6





registered  under  Section  5 of the 1933  Act in  connection  with  the  offer,
issuance,  sale and delivery  thereof as contemplated  by the Private  Placement
Memorandum and this Agreement.

         (j) None of the Seller, CPS, Samco or anyone authorized to act on their
behalf has offered,  transferred,  pledged,  sold or  otherwise  disposed of any
Certificate,  any interest in any Certificate,  or any other security similar to
the  Certificates  of the  Seller,  CPS,  Samco or of any  entity  organized  or
originated  by the  Seller,  CPS or Samco to, or  solicited  any offer to buy or
accept a transfer, pledge or other disposition of any Certificate,  any interest
in any  Certificate  or any such  other  similar  security  from,  or  otherwise
approached or negotiated  with respect to any  Certificate,  any interest in any
Certificate  or any such other similar  security with, any person in any manner,
or made any general solicitation by means of general advertising or in any other
manner or taken any other action,  that would  constitute a distribution  of the
Certificates  under the 1933 Act, or that would  render the offer or sale of any
Certificate  by the  Underwriter  a  violation  of  the  1933  Act or any  state
securities law, or require  registration or qualification  pursuant thereto,  or
would require  qualification  of the Indenture  under the Trust Indenture Act of
1939, as amended (the "Trust Indenture Act"), or require  registration under the
Investment  Company Act of 1940, as amended (the "Investment  Company Act"), nor
will the Seller,  CPS or Samco act, nor has the Seller, CPS or Samco authorized,
nor will the Seller,  CPS or Samco authorize,  any person to act, in such manner
with respect to any Certificate.

         (k) The Commission has not issued an order preventing or suspending the
use of any Prospectus  relating to the proposed offering of the Securities,  nor
instituted  proceedings for that purpose.  The Registration  Statement contains,
and the Final  Prospectus  together with any amendments or  supplements  thereto
will contain,  all  statements  which are required to be stated  therein by, and
will conform to, the requirements of the 1933 Act and the 1933 Act Regulations.

         (l) The documents (other than the financial  statements of the Insurer,
as to  which  no  representation  is  made  by  CPS or the  Company)  which  are
incorporated by reference in the  Registration  Statement,  the Final Prospectus
and  the  Private   Placement   Memorandum  or  from  which  information  is  so
incorporated by reference,  as of the dates they were filed with the Commission,
complied in all material  respects  with the  requirements  of the 1933 Act, the
1933 Act Regulations,  the 1934 Act and the 1934 Act Regulations, as applicable,
and any  documents  so filed and  incorporated  by reference  subsequent  to the
Effective Date shall,  when they are filed with the  Commission,  conform in all
material  respects  with  the  requirements  of the  1934  Act and the  1934 Act
Regulations.

         (m) Each of the Company,  CPS and Samco  confirms as of the date hereof
that it is in  compliance  with all  provisions of Section 1 of Laws of Florida,
Chapter  92-198,  An Act Relating to Disclosure of doing Business with Cuba, and
each of the Company,  CPS and Samco further agrees that if it commences engaging
in business with the government of Cuba or with any person or affiliate  located
in Cuba  after  the  date  the  Registration  Statement  becomes  or has  become
effective  with the  Commission  or with the Florida  Department  of Banking and
Finance




                                        7





(the "Department"),  whichever date is later, or if the information  included in
the Final Prospectus, if any, concerning either the Company's,  CPS's or Samco's
business  with Cuba or with any person or  affiliate  located in Cuba changes in
any material way, each of the Company,  CPS and Samco,  as the case may be, will
provide the Department notice of such business or change,  as appropriate,  in a
form acceptable to the Department.

         (n) All representations and warranties of the Company and CPS and Samco
contained in each of the Basic Documents, including this Agreement, will be true
and correct in all material  respects when  delivered and as of the Closing Date
and are hereby  incorporated  by  reference as if each such  representation  and
warranty were specifically made herein.

         (o) Each of the Company and CPS and Samco has full power and  authority
(corporate  and  other) to enter into and  perform  its  obligations  under this
Agreement,   the  Certificate  Purchase  Agreement,  the  Indenture,  the  Trust
Agreement,  the Sale and Servicing  Agreement,  the CPS Purchase Agreement,  the
Samco  Purchase  Agreement,   the  Insurance   Agreement,   the  Indemnification
Agreement,  the  Spread  Account  Agreement,  the  Lock-Box  Agreement  and  the
Servicing Assumption  Agreement  (collectively,  the "Basic Documents"),  and to
consummate the transactions contemplated hereby and thereby.

         (p) On or before the Closing Date,  the direction by the Company to the
Trustee  to  authenticate  the  Notes and the  Certificates  will have been duly
authorized by the Company,  the Notes and the  Certificates  will have been duly
executed and delivered by the Company and, when  authenticated by the Trustee in
accordance with the Indenture and the Trust Agreement and delivered and paid for
pursuant  to this  Agreement,  will be duly  issued and will  entitle the holder
thereof to the  benefits and security  afforded by the  Indenture  and the Trust
Agreement,  subject  as  to  the  enforcement  of  remedies  (x)  to  applicable
bankruptcy,  insolvency,  reorganization,  moratorium,  and other  similar  laws
affecting  creditors'  rights generally and (y) to general  principles of equity
(regardless  of whether the  enforcement  of such  remedies is  considered  in a
proceeding in equity or at law).

         (q) This  Agreement and each Basic Document to which the Company or CPS
or Samco is a party has been duly authorized,  executed and delivered by each of
the  Company  and CPS and Samco,  as  applicable,  and  constitutes  a valid and
binding  agreement  of each of the  Company  and CPS and Samco,  as  applicable,
enforceable  against the Company and CPS and Samco in accordance with its terms,
subject  as to  the  enforcement  of  remedies  (x)  to  applicable  bankruptcy,
insolvency,  reorganization,   moratorium,  and  other  similar  laws  affecting
creditors' rights generally,  (y) to general principles of equity (regardless of
whether the enforcement of such remedies is considered in a proceeding in equity
or at law) and (z) with respect to rights of indemnity under this Agreement,  to
limitations of public policy under applicable securities laws.

         (r) None of the Company,  CPS or Samco is in breach or violation of its
Articles of Incorporation or Charter, as applicable, or By-Laws or in default in
the performance or




                                        8





observance of any credit or security  agreement or other agreement or instrument
to which it is a party or by which  it or its  properties  may be  bound,  or in
violation of any applicable law, statute,  regulation, order or ordinance of any
governmental  body having  jurisdiction over it, which breach or violation would
have a material  adverse effect on the ability of the Company or CPS or Samco to
perform  its  obligations  under  any of the  Basic  Documents  or the  Notes or
Certificates.

         (s) The issuance and  delivery of the Notes and the  Certificates,  the
consummation  of any  other of the  transactions  contemplated  herein or in the
Indenture,  the Trust Agreement,  the Sale and Servicing  Agreement or in any of
the other Basic Documents or the fulfillment of the terms of this Agreement, the
Indenture,  the Trust Agreement,  or the Sale and Servicing  Agreement or any of
the other  Basic  Documents,  subject to the  registration  of the Class A Notes
under the 1933 Act and such consents, approvals,  authorizations,  registrations
or  qualifications  as may be required under the 1934 Act in connection with the
purchase  and  distribution  of the  Notes  by  the  Underwriter  or the  filing
requirements of Rule 430A or Rule 424(b) under the 1933 Act, do not and will not
conflict with or violate any term or provision of the Articles of  Incorporation
or  Charter,  as  applicable,  or  By-Laws of the  Company or CPS or Samco,  any
statute,  order or  regulation  applicable to the Company or CPS or Samco of any
court,  regulatory  body,  administrative  agency or  governmental  body  having
jurisdiction  over the Company or CPS or Samco and do not and will not  conflict
with,  result in a breach or violation or the  acceleration  of or  constitute a
default  under or result in the creation or  imposition  of any lien,  charge or
encumbrance  upon any of the  property  or assets of the Company or CPS or Samco
(other than in favor of the Trustee, the Trustee or as otherwise permitted under
the Indenture or the Sale and Servicing  Agreement) pursuant to the terms of any
indenture,  mortgage,  deed of  trust,  loan  agreement  or other  agreement  or
instrument  to which  the  Company  or CPS or  Samco is a party or by which  the
Company or CPS or Samco may be bound or to which any of the  property  or assets
of the Company or CPS or Samco may be subject except for conflicts,  violations,
breaches,  accelerations  and defaults which would not,  individually  or in the
aggregate,  be  materially  adverse to the Company or CPS or Samco or materially
adverse  to the  transactions  contemplated  by  this  Agreement  or  the  Basic
Documents.

         (t) There are no actions or proceedings  against, or investigations of,
the  Company  or CPS  pending,  or,  to the  knowledge  of the  Company  or CPS,
threatened,  before  any  court,  arbitrator,  administrative  agency  or  other
tribunal  (i)  asserting  the  invalidity  of this  Agreement,  the other  Basic
Documents  or the Class A Notes or  Certificates,  (ii)  seeking to prevent  the
issuance of the Class A Notes or Certificates or the  consummation of any of the
transactions  contemplated by this Agreement and the other Basic Documents (iii)
that are reasonably likely to be adversely  determined and that would materially
and adversely  affect the  performance  by the Company or CPS of its  respective
obligations  under, or the validity or  enforceability  of, this Agreement,  the
other Basic  Documents or the Class A Notes or  Certificates  or (iv) seeking to
affect  adversely  the federal  income tax  attributes  of the Class A Notes and
Certificates  as described  in the Final  Prospectus  and the Private  Placement
Memorandum.





                                        9





         (u) Any taxes, fees and other  governmental  charges due on or prior to
the Closing Date (including, without limitation, sales taxes) in connection with
the execution, delivery and issuance of this Agreement, the Indenture, the Trust
Agreement,  the Sale and Servicing Agreement,  the other Basic Documents and the
Securities have been or will have been paid at or prior to the Closing Date.

         (v) The  Receivables  are  chattel  paper  as  defined  in the  Uniform
Commercial Code as in effect in the States of California and Texas.

         (w) Under generally accepted accounting principles, CPS will report its
transfer  of the CPS  Receivables  to the Company  pursuant to the CPS  Purchase
Agreement  as a sale of the CPS  Receivables,  Samco will report its transfer of
the Samco Receivables to the Company pursuant to the Samco Purchase Agreement as
a sale of the Samco  Receivables and the Company will report its transfer of the
Receivables  to the Trustee  pursuant to the Sale and  Servicing  Agreement as a
sale of the Receivables.  Each of CPS, Samco and the Company has been advised by
KPMG Peat Marwick, Certified Public Accountants,  that the transfers pursuant to
the  CPS  Purchase  Agreement  and  the  Samco  Purchase  Agreement  will  be so
classified  under generally  accepted  accounting  principles in accordance with
Statement No. 77 of the Financial Accounting Standards Board (December 1983) and
with Statement No. 125 of the Financial Accounting Standards Board (June 1996).

         (x)  Pursuant  to the CPS  Purchase  Agreement  and the Samco  Purchase
Agreement,  CPS and Samco  are  transferring  to the  Company  ownership  of the
Receivables,  the  security  interests  in the  Financed  Vehicles  securing the
Receivables,  certain other property related to the Receivables and the proceeds
of each of the foregoing (collectively,  the "Trust Property"), and, immediately
prior to the transfer of any  Receivables to the Trust,  the Company will be the
sole  owner of all right,  title and  interest  in, and has good and  marketable
title to, the Receivables  and the other Trust  Property.  The assignment of the
Receivables and the other Trust Property, including all the proceeds thereof, to
the Trust pursuant to the Sale and Servicing  Agreement,  vests in the Trust all
interests  which are  purported  to be conveyed  thereby,  free and clear of any
liens, security interests or encumbrances.

         (y) Immediately  prior to the transfer of any Receivables to the Trust,
the Company's  interest in such  Receivables and the proceeds thereof shall have
been  perfected,   UCC-1  financing  statements  (the  "Financing   Statements")
evidencing  (i) the transfer of the  applicable  CPS  Receivables  to the Seller
shall have been filed in the  Office of the  Secretary  of State of the State of
California,  (ii) the transfer of the applicable Samco Receivables to the Seller
shall have been filed in the  Office of the  Secretary  of State of the State of
Texas, (iii) the transfer of the applicable  Receivables to the Trust shall have
been filed in the Office of the Secretary of State of the State of Delaware, and
(iv) the pledge of the  applicable  Receivables  by the Trust to the Trustee and
there shall be no unreleased  statements  affecting the Receivables filed in any
such office other than the Financing  Statements.  If a court concludes that the
transfer of the




                                       10





Receivables  from the Company to the Trust is a sale,  then the  interest of the
Trust in the  Receivables,  the other Trust  Property and the proceeds  thereof,
will be perfected by virtue of the Financing Statements having been filed in the
office  of the  Secretary  of  State  of the  State  of  California.  If a court
concludes that such transfer is not a sale, the Sale and Servicing Agreement and
the transactions  contemplated  thereby constitute a grant by the Company to the
Trust of a valid security interest in the Receivables,  the other Trust Property
and the proceeds thereof, which security interest will be perfected by virtue of
the  Financing  Statements  having been filed in the office of the  Secretary of
State of the State of  California.  No filing or other  action,  other  than the
filing of the Financing Statements in the offices of the Secretaries of State of
the States of California, Delaware and Texas referred to above and the execution
and delivery of the Sale and  Servicing  Agreement,  is necessary to perfect the
interest  or the  security  interest  of the  Trust in the  Receivables  and the
proceeds thereof against third parties.

         (z) The Indenture  has been duly  qualified  under the Trust  Indenture
Act.

         (aa) None of the  Company,  CPS,  Samco or the Trust is  required to be
registered as an "investment company" under the Investment Company Act.

         (bb) The information  provided by the Company  pursuant to Section 4(m)
hereof will not, at the date thereof, contain any untrue statement of a material
fact or omit to  state  any  material  fact  necessary  to make  the  statements
therein,  in  light  of the  circumstances  under  which  they  were  made,  not
misleading.


2.       PURCHASE, SALE AND DELIVERY OF THE NOTES AND CERTIFICATES.

         Subject  to  the  terms  and   conditions  and  in  reliance  upon  the
representations,  warranties and covenants  herein set forth, the Company agrees
to sell to the  Underwriter,  and the  Underwriter  agrees to purchase  from the
Company the initial  principal amount of the Notes and Certificates set forth in
Schedule I hereto, at the purchase price specified in Schedule I with respect to
each Class of Notes and Certificates.

         The Company will  deliver  against  payment of the  purchase  price the
Class A Notes in the form of one or more  permanent  global Notes in  definitive
form (the  "Global  Notes")  deposited  with the  Trustee as  custodian  for The
Depository  Trust Company  ("DTC") and  registered in the name of Cede & Co., as
nominee for DTC and (ii) the  Certificates  in definitive form registered in the
name of such party as the  Underwriter  shall  direct.  Interests  in any Global
Notes will be held only in  book-entry  form  through  DTC except in the limited
circumstances  described in the Final Prospectus.  Payment for the Notes will be
made by the  Underwriter  by wire  transfer  of same  day  funds  to an  account
previously designated to the Underwriter by the Company at the offices of Mayer,
Brown & Platt,  1675 Broadway,  New York, New York 10019, at 9:30 a.m. (New York
time) on October 17,  1997,  or at such other time as is mutually  agreed  (such
time being




                                       11





herein referred to as the "Closing  Date") against  delivery of the Global Notes
and  the  Certificates  representing  all  of  the  Securities.  The  Notes  and
Certificates will be made available for inspection at the above office of Mayer,
Brown & Platt at least 24 hours prior to the Closing Date.

         As used herein,  "business day" means a day on which the New York Stock
Exchange  is open for trading  and on which  banks in New York,  California  and
Minnesota are open for business and are not permitted by law or executive  order
to be closed.

3.       OFFERING BY THE UNDERWRITER.

         (a) The  Company,  and  CPS  are  advised  by the  Underwriter  that it
proposes  to make a public  offering  of the Class A Notes,  as set forth in the
Final Prospectus,  from time to time as and when the Underwriter deems advisable
after the Registration Statement becomes effective.  The Company agrees that the
Underwriter may, but is not obligated to, make a market in the Class A Notes and
that any such market making by the  Underwriter  may be discontinued at any time
in the sole discretion of the Underwriter.

         (b) The  Company  and CPS  are  advised  by the  Underwriter  that  the
Underwriter  will make offers of the  Certificates on the terms set forth in the
Private Placement Memorandum, as amended or supplemented,  solely to (i) persons
whom the Underwriter reasonably believes to be "qualified  institutional buyers"
as  defined  in Rule 144A  under the 1933 Act  (each,  a "QIB"),  and/or  (ii) a
limited number of other institutional "accredited investors", as defined in Rule
501(a)(1), (2), (3) or (7) under the 1933 Act, that make certain representations
and  agreements  to the  Underwriter  and  the  Seller  (each,  and  "Accredited
Investor" and, together with the QIBs, the "Eligible Purchasers");

         (c) The Underwriter represents and warrants to the Company and CPS that
it is an "accredited  investor" as defined in Rule 501(a)(1)  under the 1933 Act
and a Qualified  Institutional Buyer within the meaning of Rule 144A of the 1933
Act.

         (d) The Underwriter  acknowledges  that (i) the  Certificates  have not
been and will not be registered  under the 1933 Act or any state securities laws
and may not be  offered  or sold  within  the  United  States  or to, or for the
account or benefit of, U.S.  persons  except  pursuant to an exemption  from the
registration  requirements  of the  1933  Act and (ii)  upon  original  issuance
thereof,  and  until  such  time as the same is no  longer  required  under  the
applicable  requirements of the 1933 Act, the Certificates (and all notes issued
in exchange  therefore  or in  substitution  thereof)  shall bear the  following
legend:

THIS  SECURITY HAS NOT BEEN  REGISTERED  UNDER THE  SECURITIES  ACT OF 1933,  AS
AMENDED (THE "SECURITIES  ACT"). THE HOLDER HEREOF, BY PURCHASING THIS SECURITY,
AGREES THAT THIS SECURITY MAY BE RESOLD,




                                       12





PLEDGED OR OTHERWISE  TRANSFERRED  ONLY (1) SO LONG AS THIS SECURITY IS ELIGIBLE
FOR RESALE  PURSUANT TO RULE 144A,  TO A PERSON WHOM THE  TRANSFEROR  REASONABLY
BELIEVES  IS A  QUALIFIED  INSTITUTIONAL  BUYER  WITHIN THE MEANING OF RULE 144A
UNDER THE SECURITIES ACT, PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A
QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE RESALE, PLEDGE OR
OTHER  TRANSFER  IS BEING  MADE IN  RELIANCE  ON RULE 144A,  AND  SUBJECT TO THE
RECEIPT BY THE TRUSTEE AND THE SELLER OF A CERTIFICATION OF THE TRANSFEREE,  (2)
PURSUANT TO AN EFFECTIVE  REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR (3)
IN RELIANCE  ON ANOTHER  EXEMPTION  FROM THE  REGISTRATION  REQUIREMENTS  OF THE
SECURITIES ACT AND SUBJECT TO THE RECEIPT BY THE TRUSTEE,  OF A CERTIFICATION OF
THE  TRANSFEREE  (SATISFACTORY  TO  THE  TRUSTEE)  AND  AN  OPINION  OF  COUNSEL
(SATISFACTORY TO THE TRUSTEE AND THE SELLER) TO THE EFFECT THAT SUCH TRANSFER IS
IN  COMPLIANCE  WITH THE  SECURITIES  ACT, IN EACH CASE IN  ACCORDANCE  WITH ANY
APPLICABLE  SECURITIES  LAWS OF ANY STATE OF THE UNITED STATES AND IN COMPLIANCE
WITH THE TRANSFER REQUIREMENTS SET FORTH IN SECTION 3.4 OF THE TRUST AGREEMENT.

IN NO EVENT SHALL THIS  SECURITY BE  TRANSFERRED  TO AN EMPLOYEE  BENEFIT  PLAN,
TRUST  ANNUITY  OR  ACCOUNT  SUBJECT  TO ERISA OR A PLAN  DESCRIBED  IN  SECTION
4975(E)(1) OF THE CODE, (ANY SUCH PLAN, TRUST OR ACCOUNT BEING REFERRED TO AS AN
"EMPLOYEE PLAN"), A TRUSTEE OF ANY EMPLOYEE PLAN, OR AN ENTITY, ACCOUNT OR OTHER
POOLED  INVESTMENT FUND THE UNDERLYING  ASSETS OF WHICH INCLUDE OR ARE DEEMED TO
INCLUDE  EMPLOYEE PLAN ASSETS BY REASON OF AN EMPLOYEE PLAN'S  INVESTMENT IN THE
ENTITY,  ACCOUNT OR OTHER POOLED INVESTMENT FUND. INCLUDED WITHIN THE DEFINITION
OF  "EMPLOYEE  PLANS"  ARE,  WITHOUT  LIMITATION,  KEOGH  (HR-10)  PLANS,  IRA's
(INDIVIDUAL  RETIREMENT ACCOUNTS OR ANNUITIES) AND OTHER EMPLOYEE BENEFIT PLANS,
SUBJECT TO SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE.

         (e) The Underwriter  agrees that it and each of its affiliates will not
offer or sell the  Certificates by means of any form of general  solicitation or
general  advertising,  within  the  meaning of Rule  502(c)  under the 1933 Act,
including,  but not limited to (i) any advertisement,  article,  notice or other
communication published in any newspaper, magazine or similar media or broadcast
over  television or radio,  or (ii) any seminar or meeting whose  attendees have
been invited by any general solicitation or general advertising.

         (f) The Underwriter  acknowledges that none of the Trust, the Seller or
CPS,  nor any person  representing  the Trust,  the Seller or CPS,  has made any
representation  with  respect to the Trust,  the Seller,  CPS or the offering or
sale of the Certificates, other than the information




                                       13





contained in the Private  Placement  Memorandum,  which has been delivered to it
and upon which it is relying in making its  investment  decision with respect to
the Certificates.  The Underwriter  affirms that it has access to such financial
and other information concerning the Trust, the Seller, CPS and the Certificates
as it  has  deemed  necessary  in  connection  with  its  decision  to  purchase
Certificates,   including  an  opportunity  to  ask  questions  of  and  request
information from the Trust, the Seller and CPS.

4.       COVENANTS OF THE COMPANY, SAMCO AND CPS.

The Company, Samco (if so stated), and CPS (if so stated),  covenants and agrees
with the Underwriter that:

         (a) The  Company  will use its best  efforts to cause the  Registration
Statement, if not effective at the Execution Time, and any amendment thereto, to
become  effective  as soon  as  reasonably  practicable  thereafter  or,  if the
procedure in Rule 430A is followed,  prepare and timely file with the Commission
under Rule 424(b) a Final Prospectus containing  information  previously omitted
at the time of effectiveness of the Registration Statement in reliance upon Rule
430A. Prior to the termination of the offering of the Notes the Company will not
file any  amendment of the  Registration  Statement  or amendment or  supplement
(including the Final Prospectus or any Preliminary Final Prospectus) to the Base
Prospectus  or any Rule  462(b)  Registration  Statement  unless the Company has
furnished to the  Underwriter a copy for its review prior to filing and will not
file any  such  proposed  amendment  or  supplement  to  which  the  Underwriter
reasonably objects and which is not in compliance with the 1933 Act Regulations.
The Company  will  promptly  advise the  Underwriter  (i) when the  Registration
Statement,  if not effective at the Execution  Time, and any amendment  thereto,
shall have become effective; (ii) when the Final Prospectus,  and any supplement
thereto,  shall have been filed with the  Commission  pursuant  to Rule  424(b);
(iii) when,  prior to termination of the offering of the Notes, any amendment to
the Registration  Statement shall have been filed or become  effective;  (iv) of
any request by the Commission for any amendment of the Registration Statement or
supplement to the Final Prospectus or for any other additional information;  (v)
of the issuance by the Commission of any stop order suspending the effectiveness
of the  Registration  Statement or the  institution  of any  proceeding for that
purpose; and (vi) of the receipt by the Company of any notification with respect
to the suspension of the qualification of the Notes for sale in any jurisdiction
or the initiation of any  proceeding for such purpose.  The Company will use its
best efforts to prevent the issuance of any such stop order or the suspension of
any such  qualification  and,  if  issued  or  suspended,  to  obtain as soon as
possible the withdrawal thereof.

         (b) Prior to the filing thereof with the  Commission,  the Company will
submit to the  Underwriter,  for its approval after  reasonable  notice thereof,
such  approval  not to be  unreasonably  withheld  or  delayed,  a  copy  of any
post-effective   amendment  to  the  Registration  Statement,  any  Rule  462(b)
Registration  Statement  proposed to be filed or a copy of any document proposed
to be filed under the 1934 Act before the termination of the offering of the




                                       14





Notes by the  Underwriter if such document would be deemed to be incorporated by
reference into the Registration Statement or Final Prospectus.

         (c) The Company will deliver to, or upon the order of, the Underwriter,
from time to time,  as many copies of any  Preliminary  Final  Prospectus as the
Underwriter  may  reasonably  request.  The Company will deliver to, or upon the
order of, the Underwriter  during the period when delivery of a Final Prospectus
is required  under the 1933 Act, as many copies of the Final  Prospectus,  or as
thereafter amended or supplemented,  as the Underwriter may reasonably  request.
The  Company  will  deliver  to, or upon the order of, the  Underwriter  as many
copies of the Private  Placement  Memorandum as the Underwriter shall reasonably
request.  The Company will deliver to the  Underwriter  at or before the Closing
Date, two signed copies of the Registration Statement and all amendments thereto
including all exhibits filed therewith, and will deliver to the Underwriter such
number of copies of the Registration  Statement (including such number of copies
of the exhibits filed  therewith  that may  reasonably be requested),  including
documents  filed under the 1934 Act and deemed to be  incorporated  by reference
therein, and of all amendments thereto, as the Underwriter may from time to time
reasonably request.

         (d) The Company will, and will cause the Trust to, comply with the 1933
Act, the 1933 Act Regulations,  the 1934 Act and the 1934 Act Regulations, so as
to  permit  the  completion  of  the  distribution  of  the  Class  A  Notes  as
contemplated in this Agreement and the Final Prospectus. If during the period in
which a prospectus is required by law to be delivered by the  Underwriter or any
dealer in connection  with the sale of any Class A Notes,  any event shall occur
as a result  of which,  in the  judgment  of the  Company  or in the  reasonable
opinion of the  Underwriter,  it becomes  necessary to amend or  supplement  the
Final  Prospectus in order to make the statements  therein,  in the light of the
circumstances  existing  at the time the  Final  Prospectus  is  delivered  to a
purchaser,  not  misleading,  or,  if it is  necessary  at any  time to amend or
supplement the Final Prospectus to comply with any law or to file under the 1934
Act any document  which would be deemed to be  incorporated  by reference in the
Registration  Statement to comply with the 1933 Act or the 1934 Act, the Company
will promptly  notify the  Underwriter  and will promptly either (i) prepare and
file,  or cause to be prepared and filed,  with the  Commission  an  appropriate
amendment to the Registration Statement or supplement to the Final Prospectus or
(ii) prepare and file,  or cause to be prepared and filed,  with the  Commission
(at the expense of the Company) an  appropriate  filing under the 1934 Act which
shall be  incorporated  by reference in the Final  Prospectus  so that the Final
Prospectus  as so  amended  or  supplemented  will  not,  in  the  light  of the
circumstances  when it is so  delivered,  be  misleading,  or so that the  Final
Prospectus will comply with applicable law.

         (e)  Until  such  time as all of the  Certificates  have  been sold and
issued,  if any event shall occur as a result of which it is  necessary,  in the
opinion  of the  Underwriter,  to  amend or  supplement  the  Private  Placement
Memorandum  in order to correct any untrue  statement  of a material  fact or to
state a material fact necessary in order to make the statements therein, in the




                                       15





light of the  circumstances  under  which they were made,  not  misleading,  the
Seller shall forthwith prepare and furnish, without charge, to the Underwriter a
reasonable  number of copies of an amendment of, or  supplement  to, the Private
Placement Memorandum (in form and substance satisfactory to the Underwriter), so
that, as so amended or supplemented,  the Private Placement  Memorandum will not
contain an untrue  statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in light of the circumstances
under  which  they were  made,  not  misleading.  Until  such time as all of the
Certificates have been sold and issued, the Seller will not at any time amend or
supplement the Private  Placement  Memorandum (i) prior to having  furnished the
Underwriter  with a copy of the proposed form of the amendment or supplement and
giving the  Underwriter  and its counsel a reasonable  opportunity to review the
same or (ii) in a manner  to  which  the  Underwriter  or  their  counsel  shall
reasonably object. The Seller,  Samco or CPS shall give prompt written notice to
the  Underwriter  of any  event  occurring  on or  prior  to the  Closing  Date,
requiring an amendment of, or a supplement to, the Private Placement  Memorandum
under this paragraph.

         (f) The Company will cooperate  with the  Underwriter in endeavoring to
qualify  the  Securities  for sale under the laws of such  jurisdictions  as the
Underwriter  may designate and will  maintain such  qualifications  in effect so
long as required for the distribution of the Securities, except that the Company
will not be obligated to qualify the  Securities  in any  jurisdiction  in which
such  qualification  would  require  the  Company to qualify to do business as a
foreign  corporation,  file a general or unlimited consent to service of process
or  subject  itself  to  taxation  in any such  jurisdiction  to which it is not
subject and will arrange for the determination of the legality of the Securities
for purchase by  institutional  investors.  The Company will, from time to time,
prepare and file such statements,  reports, and other documents as are or may be
required to continue such  qualifications  in effect for so long a period as the
Underwriter may reasonably request for distribution of the Securities.

         (g) The  Company  shall  not  invest,  or  otherwise  use the  proceeds
received  by the  Company  from its sale of the  Securities  in such a manner as
would require the Company,  CPS, Samco or the Trust to register as an investment
company under the 1940 Act.

         (h) Until the retirement of the  Securities,  or until such time as the
Underwriter  shall  cease to  maintain  a  secondary  market in the  Securities,
whichever  occurs first,  the Company will deliver to the Underwriter the annual
statements  of  compliance   and  the  annual   independent   certified   public
accountant's reports furnished to the Trustee pursuant to the Sale and Servicing
Agreement, as soon as such statements and reports are furnished to the Trustee.

         (i) The Company,  CPS and Samco shall, from the date hereof through and
including  the  Closing  Date,  furnish,  or  cause  to be  furnished,  or  make
available, or cause to be made available, to the Underwriter or its counsel such
additional documents and information regarding each of them and their respective
affairs as the Underwriter  may from time to time  reasonably  request and which
the Company, CPS or Samco possesses or can acquire without unreasonable




                                       16





effort or expense,  including any and all documentation  requested in connection
with the  Underwriter's  due  diligence  efforts  regarding  information  in the
Registration   Statement,   the  Final  Prospectus  and  the  Private  Placement
Memorandum and in order to evidence the accuracy or  completeness  of any of the
conditions  contained in this  Agreement;  and all actions taken by the Company,
Samco  or CPS to  authorize  the sale of the  Notes  and  Certificates  shall be
reasonably satisfactory in form and substance to the Underwriter.

         (j) The Company  will cause the Trust to make  generally  available  to
Class A Noteholders  as soon as  practicable,  but no later than sixteen  months
after the Effective  Date, an earnings  statement of the Trust covering a period
of at least twelve  consecutive  months  beginning after such Effective Date and
satisfying  the  provisions  of  Section  11(a) of the Act  (including  Rule 158
promulgated thereunder).

         (k) So long as any of the Notes and Certificates  are outstanding,  the
Company  will  furnish  to the  Underwriter  copies  of  all  reports  or  other
communications   (financial  or  otherwise)   furnished  or  made  available  to
Noteholders,  and deliver to the Underwriter  during such period, (i) as soon as
they are available,  copies of any reports and financial  statements filed by or
on  behalf of the  Trust or the  Company  with the  Commission  pursuant  to the
Securities  Exchange  Act  of  1934,  as  amended,   and  (ii)  such  additional
information  concerning  the  business and  financial  condition of the Company,
Samco and CPS as the Underwriter may from time to time reasonably request.

         (l) The Company shall cause its affiliates and any person acting on its
behalf not to,  directly or  indirectly,  make  offers or sales of any  security
(including,  but not limited to the Notes and the Certificates),  solicit offers
to buy or but any  security  (including,  but not  limited  to the Notes and the
Certificates),  under  circumstances  that would require the registration of the
Certificates  under the 1933 Act, or to do or cause to be done any other  action
that would require such registration.

         (m) For so  long as any of the  Certificates  are  outstanding  and are
"restricted securities" within the meaning of Rule 144(a)(3) under the 1933 Act,
(1) the Seller and CPS will  provide  or cause to be  provided  to any holder of
Certificates  and any prospective  Underwriter of  Certificates  designated by a
holder of such  Certificates,  upon the  reasonable  request  of such  holder or
prospective Underwriter,  the information required to be provided to such holder
or prospective  Underwriter by Rule  144A(d)(4)  under the 1933 Act; and (2) the
Seller  and CPS shall  take such  actions as are  necessary,  in the  opinion of
counsel,  to  ensure  that  the safe  harbor  exemption  from  the  registration
requirements  of the 1933 Act  under  Rule  144A is and  will be  available  for
resales of the Certificates conducted in accordance with Rule 144A.

         (n) On or before the Closing Date,  the Company and CPS and Samco shall
cause the respective  computer records of the Company and CPS and Samco relating
to the Receivables to be marked to show the Trustee's  absolute ownership of the
Receivables, and from and after the




                                       17





Closing  Date  neither  the  Company  nor CPS nor Samco  shall  take any  action
inconsistent  with the  Trust's  ownership  of such  Receivables,  other than as
expressly  permitted  by the Sale and  Servicing  Agreement  or any other  Basic
Document.

         (o) To the extent,  if any,  that the ratings  provided with respect to
the Notes and  Certificates by either of the Rating Agencies is conditional upon
the  furnishing  of documents or the taking of any other actions by the Company,
CPS or Samco,  CPS shall,  or shall cause the Company or Samco to,  furnish such
documents and take any such other actions.

         (p) On the Closing Date, the Company and CPS shall cause the Insurer to
issue the Policy to the  Trustee  for the  benefit of the holders of the Class A
Notes in form and substance satisfactory to the Underwriter.

         (q) The  Company  or CPS shall  file  with the  Commission  (a)  within
fifteen days of the  issuance of the Notes a current  report on Form 8-K setting
forth  specific  information  concerning  the Notes and the  Receivables  to the
extent  that  such  information  is not set  forth in the  Prospectus  and (b) a
current report on Form 8-K setting forth all Computational Materials (as defined
below) provided to the Company or CPS by the  Underwriter  within the applicable
time periods allotted for such filing.

5.       [RESERVED]

6.       COSTS AND EXPENSES.

         The Company and CPS will pay upon receipt of a written request therefor
all costs,  expenses and fees incident to the  performance of the obligations of
the Company, Samco and CPS under this Agreement and will, jointly and severally,
reimburse the Underwriter for all reasonable  out-of-pocket expenses,  including
reasonable fees and disbursements of counsel,  reasonably incurred in connection
with  investigating,  marketing  and  proposing to market the  Securities  or in
contemplation  of  performing  the  Underwriter's   obligations   hereunder  and
including,  without limiting the generality of the foregoing, the following: (i)
accounting fees of the Company;  (ii) the fees and disbursements of Mayer, Brown
& Platt;  (iii) the cost of printing and  delivering to, or as requested by, the
Underwriter   copies   of  the   Registration   Statement,   Preliminary   Final
Prospectuses,  the Final  Prospectus,  the Private  Placement  Memorandum,  this
Agreement,  the Blue Sky  Survey,  if any,  and any  supplements  or  amendments
thereto;  (iv) the filing fees of the  Commission;  (v) any fees  charged by the
Rating Agencies for rating the Securities; and (vi) the fees and expenses of the
Trustee and the Owner Trustee,  including the fees and  disbursements of counsel
for the  Trustee  and  counsel for the Owner  Trustee,  in  connection  with the
Securities,  the Sale and Servicing  Agreement and the other Basic  Documents to
which  the  Trustee  or the Owner  Trustee,  as  applicable,  is a party and the
expenses,  including the fees and  disbursements of counsel for the Underwriter.
If this Agreement  shall not be consummated  because the conditions in Section 7
hereof are not satisfied, or because this




                                       18





Agreement is terminated by the Underwriter  pursuant to Section 12 hereof, or by
reason of any failure, refusal or inability on the part of the Company, Samco or
CPS to perform any  undertaking or satisfy any condition of this Agreement or to
comply  with any of the terms  hereof on its part to be  performed,  unless such
failure to satisfy  said  condition  or to comply  with said terms be due to the
default or omission of the Underwriter, then the Company, Samco and CPS, jointly
and severally,  shall  reimburse the  Underwriter  for reasonable  out-of-pocket
expenses,  including  reasonable fees and  disbursements of counsel,  reasonably
incurred in connection with investigating, marketing and proposing to market the
Securities or in contemplation of performing  their  obligations  hereunder upon
receipt of a written request therefor; but the Company shall not in any event be
liable to the Underwriter for damages on account of loss of anticipated  profits
from the sale by them of the  Securities.  Except to the  extent  expressly  set
forth in this Section 6, the Underwriter  shall be responsible for its own costs
and expenses, including the fees and expenses of its counsel.

7.       CONDITIONS OF OBLIGATIONS OF THE UNDERWRITER.

         The  obligation  of  the  Underwriter  to  purchase  and  pay  for  the
Securities  on the  Closing  Date is subject  to the  accuracy  in all  material
respects as of the Closing Date of the  representations  and  warranties  of the
Company,  CPS and Samco contained herein, to the performance by the Company, CPS
and Samco of their  respective  covenants and  obligations  hereunder and to the
following additional conditions precedent:

         (a) If the Registration Statement has not become effective prior to the
Execution Time,  unless the  Underwriter  agrees in writing to a later time, the
Registration  Statement  will become  effective not later than (i) 5:30 p.m. New
York City time on the date of  determination of the public offering price of the
Notes,  if such  determination  occurred at or prior to 3:00 p.m.  New York City
time on such date or (ii)  12:00  noon New York City  time on the  business  day
following  the  day  on  which  the  public  offering  price  of the  Notes  was
determined, if such determination occurred after 3:00 p.m. New York City time on
such date; if filing of the Final  Prospectus,  or any  supplement  thereto,  is
required pursuant to Rule 424(b), the Final Prospectus, and any such supplement,
shall have been filed  within the  applicable  time period  prescribed  for such
filing  by Rule  424(b),  and  any  request  of the  Commission  for  additional
information (to be included in the  Registration  Statement or otherwise)  shall
have been  disclosed  to the  Underwriter  and complied  with to its  reasonable
satisfaction.  No stop order  suspending the  effectiveness  of the Registration
Statement,  as  amended  from  time to  time,  shall  have  been  issued  and no
proceedings  for that purpose  shall have been taken or, to the knowledge of the
Company, shall be contemplated by the Commission and no injunction,  restraining
order,  or  order of any  nature  by a  Federal  or  state  court  of  competent
jurisdiction  shall have been issued as of the Closing Date which would  prevent
the issuance of the Securities.

         (b) On or prior to the  date of this  Agreement  and on or prior to the
Closing Date, the Underwriter shall have received a letter or letters,  dated as
of October 16, 1997, and as of the




                                       19





Closing  Date,  respectively,   of  KPMG  Peat  Marwick  LLP,  Certified  Public
Accountants,  substantially  in the form of the drafts to which the  Underwriter
has previously  agreed and otherwise in form and substance  satisfactory  to the
Underwriter and its counsel.

         (c) Subsequent to the execution and delivery of this  Agreement,  there
shall  not  have  occurred  (i)  any  change,  or any  development  involving  a
prospective  change, in or affecting  particularly the business or properties of
the Insurer,  the Company,  CPS or any Affiliate of the Company or CPS which, in
the judgment of the Underwriter,  materially  impairs the investment  quality of
the Notes and  Certificates or the ability of CPS to act as Servicer or (ii) any
downgrading in the rating of the claims-paying  ability of the Insurer or of any
debt securities or preferred stock of the Company,  CPS or any Affiliate thereof
by any "nationally  recognized  statistical rating organization" (as defined for
purposes of Rule 436(g) under the 1933 Act), or any public announcement that any
such   organization  has  under   surveillance  or  review  its  rating  of  the
claims-paying  ability of the  Insurer or of any debt  securities  or  preferred
stock of the Company,  CPS or any Affiliate  thereof (other than an announcement
with positive  implications  of a possible  upgrading,  and no  implication of a
possible  downgrading  of such  rating);  (iii) any  suspension or limitation of
trading in securities  generally on the New York Stock Exchange,  or any setting
of minimum prices for trading on such exchange,  or any suspension of trading of
any  securities  of the Company or CPS or any Affiliate of the Company or CPS on
any  exchange or in the  over-the-counter  market;  (iv) any banking  moratorium
declared by  Federal,  New York,  Texas or  California  authorities;  or (v) any
outbreak  or  escalation  of major  hostilities  in which the  United  States is
involved,  any declaration of war by Congress or any other substantial  national
or international  calamity,  emergency or change in financial markets if, in the
judgment  of the  Underwriter,  the  effect  of any such  outbreak,  escalation,
declaration,  calamity,  emergency or change makes it impractical or inadvisable
to market the  Securities  on the terms and in the manner set forth in the Final
Prospectus.

         (d) The Company,  CPS and Samco shall have  furnished  the  Underwriter
with such number of conformed copies of such opinions, certificates, letters and
documents as it may reasonably request.

         (e) On the Closing Date,  each of the Basic  Documents,  the Securities
and the Certificates shall have been duly authorized,  executed and delivered by
the  parties  thereto,  shall be in full force and  effect and no default  shall
exist  thereunder,  and the Trustee  shall have  received a fully  executed copy
thereof  or, with  respect to the Notes,  a conformed  copy  thereof.  The Basic
Documents,  the Notes and the  Certificates  shall be substantially in the forms
heretofore provided to the Underwriter.

         (f) The Underwriter  shall have received  evidence  satisfactory to the
Underwriter  that the  Notes  have  been  rated  "Aaa" by  Moody's  and "AAA" by
Standard & Poor's and that the Certificates have been rated "BB" by Standard and
Poor's.





                                       20





         (g) The  Underwriter  shall have  received  from Mayer,  Brown & Platt,
special counsel for CPS, Samco and the Company, opinions dated the Closing Date,
addressed to the Underwriter, in a form satisfactory to the Underwriter.

         (h) The  Underwriter  shall have  received  from Mayer,  Brown & Platt,
special Federal tax counsel for the Company,  an opinion dated the Closing Date,
addressed to the Underwriter and in a form satisfactory to the Underwriter, with
respect to the status of the Trust for federal income tax purposes.

         (i) The  Underwriter  shall have  received  from  Brown & Wood llp,  an
opinion dated the Closing Date,  addressed to the  Underwriter,  with respect to
the validity of the Notes and Certificates and such other related matters as the
Underwriter shall require and the Company,  Samco or CPS shall have furnished or
caused to be furnished to such  counsel  such  documents as they may  reasonably
request for the purpose of enabling them to pass upon such matters.

         (j) The  Underwriter  shall have  received from counsel to the Trustee,
the Standby Servicer and the Collateral Agent (which counsel shall be reasonably
acceptable to the  Underwriter),  an opinion  addressed to the Underwriter dated
the Closing Date, in form and substance  satisfactory to the Underwriter and its
counsel.

         (k) The  Underwriter  shall  have  received  from  counsel to the Owner
Trustee,  which counsel shall be reasonably  acceptable to the  Underwriter,  an
opinion  addressed  to the  Underwriter,  dated the  Closing  Date,  in form and
substance satisfactory to the Underwriter and its counsel.

         (l) The Underwriter  shall have received from special  Delaware counsel
to the Trust,  which counsel shall be reasonably  acceptable to the Underwriter,
an opinion  addressed to the  Underwriter,  dated the Closing  Date, in form and
substance satisfactory to the Underwriter and its counsel.

         (m) The  Underwriter  shall have  received from counsel to the Insurer,
which  counsel shall be reasonably  acceptable  to the  Underwriter,  an opinion
addressed to the  Underwriter,  dated the Closing  Date,  in form and  substance
satisfactory to the Underwriter and its counsel.

         (n) At the Closing Date,  the  Underwriter  shall have received any and
all opinions of counsel to the Company and CPS  supplied to the Rating  Agencies
and the Insurer relating to, among other things,  the interest of the Trustee in
the  Receivables  and the other  Trust  Property  and the  proceeds  thereof and
certain  monies due or to become due with respect  thereto,  certain  bankruptcy
issues and certain matters with respect to the Notes and Certificates.  Any such
opinions  shall be  addressed  to the  Underwriter  or shall  indicate  that the
Underwriter  may rely on such  opinions  as though  they were  addressed  to the
Underwriter, and shall be dated the Closing Date.




                                       21





         (o) At the  Closing  Date,  the  Company,  CPS  and  Samco  shall  have
furnished to the  Underwriter  a  certificate,  dated the Closing  Date,  of the
President, the Chief Financial Officer or any Vice President of the Company, CPS
or Samco,  as the case may be, in which each such officer shall state that:  (i)
the representations and warranties of the Company,  CPS or Samco, as applicable,
in this  Agreement are true and correct on and as of the Closing Date;  (ii) the
Company,  CPS or Samco,  as  applicable,  has complied with all  agreements  and
satisfied  all  conditions  on its part  required to be  performed  or satisfied
hereunder and under each of the other Basic Documents at or prior to the Closing
Date; (iii) the representations and warranties of the Company,  CPS or Samco, as
applicable,  in each of the Basic Documents are true and correct as of the dates
specified  therein;  (iv) with respect to the certificate  delivered by CPS, the
Registration Statement has become effective under the 1933 Act and no stop order
suspending the effectiveness of the Registration  Statement has been issued, and
no proceedings for such purpose have been taken or are, to his or her knowledge,
contemplated by the Commission;  (v) with respect to the certificates  delivered
by CPS, Samco and the Company, he or she has carefully examined the Registration
Statement, the Final Prospectus and the Private Placement Memorandum and, in his
or her opinion,  as of the Effective  Date of the  Registration  Statement,  the
statements contained in the Registration  Statement, as of the date of the Final
Prospectus,  the statements  contained in the Final  Prospectus,  and, as of the
date of Private Placement  Memorandum,  the statements  contained in the Private
Placement  Memorandum  were true and  correct,  and as of the  Closing  Date the
Registration   Statement,   the  Final  Prospectus  and  the  Private  Placement
Memorandum  do not contain any untrue  statement  of a material  fact or omit to
state a material  fact  necessary in order to make the  statements  therein,  in
light of the circumstances under which they were made, not misleading, and since
the Effective  Date of the  Registration  Statement,  no event has occurred with
respect  to the  Company,  CPS or Samco  which  should  have been set forth in a
supplement to or an amendment of the Final  Prospectus or the Private  Placement
Memorandum which has not been so set forth in such supplement or amendment;  and
(vi) with respect to the  certificate  delivered by the Company,  Samco and CPS,
subsequent  to the  respective  dates  as of which  information  is given in the
Registration  Statement,  and the Final  Prospectus  and the  Private  Placement
Memorandum,  there has been no material adverse change,  or any development with
respect to the  Company,  CPS or Samco  which  could  reasonably  be expected to
result in a material adverse change,  in or affecting  particularly the business
or properties of the Trust, the Company,  CPS or Samco except as contemplated by
the Final  Prospectus  and the Private  Placement  Memorandum or as described in
such certificate.

         (p) The Underwriter  shall have received  evidence  satisfactory to the
Underwriter  that the Insurer  shall have  executed and issued the Policy to the
Trustee  for the  benefit  of the  Class A  Noteholders  in form  and  substance
satisfactory to the Underwriter.

         (q) The  Underwriter  shall have received  evidence  satisfactory to it
that, on or before the Closing Date, the Financing Statements have been filed in
(i) the office of the Secretary of State of California reflecting the assignment
of the interest of CPS in the CPS  Receivables  included in the  Receivables and
the related other Trust Property and the proceeds thereof to the




                                       22





Company,  (ii) the  office of the  Secretary  of State of Texas  reflecting  the
assignment  of the  interest of Samco in the Samco  Receivables  included in the
Receivables and the related other Trust Property and the proceeds thereof to the
Company, (iii) the office of the Secretary of State of California reflecting the
transfer of the interest of the Company in the Receivables and the related other
Trust Property and the proceeds  thereof to the Trust and (iv) the office of the
Secretary  of State of Delaware  reflecting  the transfer of the interest of the
Trust in the  Receivables  and the related other Trust Property and the proceeds
thereof to the Trustee.

         (r) All proceedings in connection with the transactions contemplated by
this  Agreement,  the Sale and  Servicing  Agreement and each of the other Basic
Documents and all documents  incident hereto or thereto shall be satisfactory in
form and substance to the Underwriter.

         (s) The Company shall have  furnished to the  Underwriter  such further
certificates  and  documents  confirming  the  representations  and  warranties,
covenants and conditions contained herein and related matters as the Underwriter
may reasonably have requested.

         (t) You shall have received a fully executed Insurance Agreement by and
among the Seller, CPS and Financial Security Assurance Inc., dated as of October
17, 1997 (the "Insurance  Agreement"),  and all  representations  and warranties
thereunder  or made pursuant  thereto shall be true and correct,  and the Seller
shall have performed its obligations thereunder.

         (u) Financial  Security  Assurance  Inc.  shall have  delivered a fully
executed  Indemnification  Agreement  by and among the  Seller,  CPS,  Greenwich
Capital Markets, Inc. and Financial Security Assurance Inc., dated as of October
16,  1997  (the  "Indemnification  Agreement"),  agreeing  to hold you  harmless
against any losses, claims, damages, or liabilities,  joint or several, to which
you may become  subject,  under the Act or  otherwise,  insofar as such  losses,
claims,  damages or liabilities (or actions in respect  thereof) arise out of or
are based upon any untrue  statement or alleged untrue statement of any material
fact contained in the Registration Statement,  the Prospectus,  or any amendment
or supplement thereto, or any related preliminary prospectus, or arise out of or
are based upon the omission or alleged omission to state therein a material fact
required to be stated  therein or necessary to make the  statements  therein not
misleading,  and  shall  have  agreed  to  reimburse  you for any legal or other
expenses  reasonably  incurred  by  you  in  connection  with  investigating  or
defending any such loss, claim, damage, liability or action as such expenses are
incurred to the extent that any such loss, claim, damage or liability arises out
of or is based upon an untrue  statement  or alleged  omission  from any of such
documents in reliance upon and in conformity with written information  furnished
to the Company or you by Financial  Security Assurance Inc. for use specifically
therein. All representations and warranties under the Indemnification  Agreement
or made pursuant  thereto  shall be true and correct,  and the Seller shall have
performed its obligations thereunder.





                                       23





         The opinions and  certificates  mentioned  in this  Agreement  shall be
deemed to be in compliance  with the  provisions  hereof only if they are in all
material respects reasonably satisfactory to the Underwriter and to Brown & Wood
llp, counsel for the Underwriter.

         If any of the  conditions  hereinabove  provided  for in this Section 7
shall not have been  fulfilled  when and as  required  by this  Agreement  to be
fulfilled, the obligations of the Underwriter hereunder may be terminated by the
Underwriter  by  notifying  the  Company  of such  termination  in writing or by
telegram at or prior to the  Closing  Date.  In such event,  the Company and the
Underwriter  shall not be under any  obligation  to each  other  (except  to the
extent provided in Sections 6 and 9 hereof).

8.       CONDITIONS OF THE OBLIGATIONS OF THE COMPANY.

         The  obligations  of the Company to sell and deliver the portion of the
Notes and  Certificates  required to be delivered as and when  specified in this
Agreement are subject to the condition  that, at the Closing Date, no stop order
suspending  the  effectiveness  of the  Registration  Statement  shall have been
issued and in effect or proceedings therefor initiated or threatened.

9.       INDEMNIFICATION.

         (a) The Company and CPS, jointly and severally,  agree to indemnify and
hold harmless the Underwriter, its directors, officers, employees and agents and
each person, if any, who controls the Underwriter within the meaning of the 1933
Act or the 1934 Act, against any losses, claims, damages or liabilities to which
the  Underwriter  or any such other person may become subject under the 1933 Act
or otherwise, insofar as such losses, claims, damages or liabilities (or actions
or proceedings in respect thereof) arise out of or are based upon (i) any untrue
statement or alleged  untrue  statement of any  material  fact  contained in the
Registration Statement, the Computational  Materials,  the Base Prospectus,  any
Preliminary  Final  Prospectus,  the Final  Prospectus,  the  Private  Placement
Memorandum  or any  information  provided  by the  Company,  Samco or CPS to any
holder or prospective  purchaser of Certificates pursuant to Section 4(m) or any
amendment or supplement thereto (other than information  contained therein under
the heading "the Insurer" and information incorporated by reference therein), or
(ii) the omission or alleged  omission to state therein a material fact required
to be stated therein or necessary to make the statements  therein not misleading
in the light of the circumstances under which they were made; and will reimburse
the Underwriter and each such person within 30 days of presentation of a written
request  therefor  for any legal or other  expenses  reasonably  incurred by the
Underwriter in connection with  investigating or defending any such loss, claim,
damage or  liability,  action or  proceeding  or in  responding to a subpoena or
governmental  inquiry  related to the offering of the Notes,  whether or not the
Underwriter  or such  person is a party to any action or  proceeding;  provided,
however, that neither the Company nor CPS will be liable in any such case to the
extent that any such loss, claim,  damage or liability arises out of or is based
upon an untrue  statement or alleged  untrue  statement,  or omission or alleged
omission made in




                                       24





the Registration Statement,  the Computational  Materials,  the Base Prospectus,
any Preliminary  Final Prospectus,  the Final Prospectus,  the Private Placement
Memorandum,  or any  amendment or  supplement  thereto,  in reliance upon and in
conformity with written information furnished to the Company or CPS, as the case
may be, by, through or on behalf of the Underwriter  specifically for use in the
preparation thereof; provided, further, that neither the Company nor CPS will be
liable in any such  case to the  extent  that any such  loss,  claim,  damage or
liability  arises out of or is based upon an untrue  statement or alleged untrue
statement,  or omission or alleged omission made in the Computational  Materials
(as defined below),  except to the extent expressly  provided in (b) below. This
indemnity  agreement  will be in addition to any liability  which the Company or
CPS may otherwise  have. The indemnity  agreement of the Company and CPS in this
Agreement is subject to the condition that,  insofar as it relates to any untrue
statement,  alleged untrue  statement,  omission or alleged omission made in the
Registration Statement,  the Base Prospectus,  any Preliminary Final Prospectus,
the Final  Prospectus,  the Private  Placement  Memorandum  or any  amendment or
supplement  thereto,  such indemnity agreement shall not inure to the benefit of
the  Underwriter if the  Underwriter  failed to send or give a copy of the Final
Prospectus or the Private  Placement  Memorandum,  as applicable  (as amended or
supplemented,  if the Company or CPS, as the case may be,  shall have  furnished
any amendment or supplement  thereto to the  Underwriter,  which  corrected such
untrue  statement or omission that is the basis of the loss,  liability,  claim,
damage or expense for which  indemnification  is sought) to the person asserting
any such  loss,  liability,  claim,  damage or expense at such time as the Final
Prospectus, the Private Placement Memorandum as so amended or supplemented,  was
required under the 1933 Act to be delivered to such person.

         (b) (i) The  Underwriter  will  indemnify and hold harmless each of the
Company and CPS,  each of their  directors,  officers,  employees and agents and
each person, if any, who controls the Company within the meaning of the 1933 Act
or the 1934 Act, to the same extent as the foregoing  indemnity from each of the
Company and CPS to the  Underwriter,  its  directors,  officers,  employees  and
agents and each person who controls any the  Underwriter,  but only with respect
to untrue statements or omissions or alleged untrue statements or omissions made
in the  Registration  Statement,  the Base  Prospectus,  any  Preliminary  Final
Prospectus,  the Final  Prospectus,  the Private  Placement  Memorandum,  or any
amendment or supplement thereto, in reliance upon and in conformity with written
information  furnished to the Company or CPS, as the case may be, by, through or
on behalf of the  Underwriter  specifically  for use in the  preparation  of the
Registration Statement,  the Base Prospectus,  any Preliminary Final Prospectus,
the Private  Placement  Memorandum,  the Final  Prospectus,  or any amendment or
supplement  thereto.  This  indemnity  agreement  will  be in  addition  to  any
liability  which  the  Underwriter  may  otherwise  have.  The  Company  and the
Underwriter  acknowledge and agree that the only information  furnished or to be
furnished by the  Underwriter  to the Company for inclusion in the  Registration
Statement,  the Base Prospectus,  any Preliminary  Final Prospectus or the Final
Prospectus,   or  any  amendments  or  supplements  thereto,   consists  of  the
information  set forth in the last paragraph on the front cover page  concerning
the terms of the offering by the




                                       25





Underwriter  (insofar as such information  relates to the Underwriter),  and the
information under the caption "Underwriting" in the Final Prospectus.

         (ii) The Underwriter agrees to indemnify and hold harmless the Company,
CPS, the respective officers, directors, employees and agents of any such party,
and each person who  controls  the Company or CPS within the meaning of the 1933
Act or the 1934 Act against any losses,  claims, damages or liabilities to which
such person may become subject under the 1933 Act or otherwise,  insofar as such
losses,  claims,  damages or  liabilities  (or actions or proceedings in respect
thereof)  arise out of or are based  upon (a) any  untrue  statement  or alleged
untrue statement of any material fact contained in the  Computational  Materials
(as defined below) provided by such indemnifying Underwriter or (b) the omission
or alleged  omission  to state  therein a material  fact  required  to be stated
therein or necessary to make the statements  therein not misleading in the light
of the  circumstances in which they were made, not misleading  (except,  in each
case, to the extent that such untrue  statement or alleged  untrue  statement or
omission  or alleged  omission  arises  from a  misstatement  or omission in the
Company Provided Information); and will reimburse each such party within 30 days
of written request therefor for any legal or other expenses  reasonably incurred
by such person in  connection  with  investigating  or defending  any such loss,
claim, damage or liability,  action or proceeding or in responding to a subpoena
or governmental  inquiry related thereto,  whether or not such person is a party
to any action or  proceeding.  The  obligations  of the  Underwriter  under this
subsection  (ii)  shall  be  in  addition  to  any  other  liability  which  the
Underwriter may otherwise  have. For purposes  hereof,  the term  "Computational
Materials"  means  information  provided  by the  Underwriter  to a  prospective
purchaser  of  Notes,  which  information  is not  part of the  Prospectus.  For
purposes hereof,  the term "Company Provided  Information" means the information
contained  in the data  tape  delivered  by CPS to the  Underwriter  on or about
October 1, 1997  containing  information  with respect to the  Receivables,  any
information contained in or derived from the Prospectus Supplement, or any other
information  furnished to the  Underwriter by or on behalf of the Company or CPS
concerning the Receivables or the Trust.

         (iii)  The  Underwriter  shall,  no later  than  the date on which  the
Prospectus  is  required to be filed  pursuant  to Rule 424,  provide to CPS for
filing with the  Commission  on Form 8-K a copy of any  Computational  Materials
delivered by the Underwriter to any prospective purchaser of Notes.

         (c) In case any proceeding  (including any governmental  investigation)
shall be instituted  involving  any person in respect of which  indemnity may be
sought pursuant to this Section 9, such person (the  "indemnified  party") shall
promptly  notify the  person  against  whom such  indemnity  may be sought  (the
"indemnifying  party") in writing.  The  failure to give such  notice  shall not
relieve the  indemnifying  party or parties from any liability  which it or they
may have to the  indemnified  party for indemnity or  contribution  or otherwise
than on account of the provisions of Section 9(a) or (b), except and only to the
extent  such  omission  so  to  notify  shall  have  materially  prejudiced  the
indemnifying party under Section 9(a) or (b). In case any such




                                       26





proceeding  shall be brought against any  indemnified  party and it shall notify
the indemnifying party of the commencement thereof, the indemnifying party shall
be  entitled  to  participate  therein  and,  to the extent  that it shall wish,
jointly with any other  indemnifying  party  similarly  notified,  to assume the
defense thereof, with counsel reasonably  satisfactory to such indemnified party
and shall pay as incurred the fees and  disbursements of such counsel related to
such proceeding.  In any such proceeding,  any indemnified  party shall have the
right  to  retain  its own  counsel  at its  own  expense.  Notwithstanding  the
foregoing,  the  indemnifying  party shall pay as incurred (or within 30 days of
presentation of an invoice) the fees and expenses of the counsel retained by the
indemnified  party in the event (i) the  indemnifying  party and the indemnified
party shall have  mutually  agreed to the  retention of such  counsel,  (ii) the
indemnified  party has  reasonably  concluded  (based on advice of counsel) that
there may be legal defenses  available to it or other  indemnified  parties that
are different from or in addition to those available to the indemnifying  party,
(iii) the named parties to any such proceeding (including any impleaded parties)
include both the indemnifying party and the indemnified party and representation
of both  parties by the same  counsel  would be  inappropriate  due to actual or
potential  differing interests between them or (iv) the indemnifying party shall
have  failed  to  assume  the  defense  and  employ  counsel  acceptable  to the
indemnified   party  within  a  reasonable   period  of  time  after  notice  of
commencement of the action.  It is understood that the indemnifying  party shall
not,  in  connection  with any  proceeding  or related  proceedings  in the same
jurisdiction,  be liable for the  reasonable  fees and expenses of more than one
separate firm for all such indemnified parties. Such firm shall be designated in
writing  by the  Underwriter  in the case of  parties  indemnified  pursuant  to
Section 9(a) and by the Company in the case of parties  indemnified  pursuant to
Section 9(b). The  indemnifying  party shall not be liable for any settlement of
any  proceeding  effected  without its written  consent but if settled with such
consent or if there be a final  judgment  for the  plaintiff,  the  indemnifying
party agrees to  indemnify  the  indemnified  party from and against any loss or
liability  by  reason  of  such  settlement  or  judgment.   In  addition,   the
indemnifying   party  will  not,  without  the  prior  written  consent  of  the
indemnified party (which consent shall not be unreasonably withheld or delayed),
settle or  compromise  or consent to the entry of any judgment in any pending or
threatened claim,  action or proceeding of which  indemnification  may be sought
hereunder  (whether or not any indemnified party is an actual or potential party
to such claim,  action or  proceeding)  unless such  settlement,  compromise  or
consent  includes an unconditional  release of each  indemnified  party from all
liability arising out of such claim, action or proceeding.

         (d)  If  the  indemnification   provided  for  in  this  Section  9  is
unavailable  to or  insufficient  to hold  harmless an  indemnified  party under
Section  9(a)  or (b)  above  in  respect  of any  losses,  claims,  damages  or
liabilities (or actions or proceedings in respect thereof)  referred to therein,
then each  indemnifying  party shall contribute to the amount paid or payable by
such  indemnified  party  as  a  result  of  such  losses,  claims,  damages  or
liabilities (or actions or proceedings in respect thereof) in such proportion as
is appropriate to reflect the relative  benefits received by the Company and CPS
on the one hand and the  Underwriter  on the  other  from  the  offering  of the
Securities. If, however, the allocation provided by the immediately preceding




                                       27





sentence is not permitted by applicable law then each  indemnifying  party shall
contribute  to such  amount  paid or payable by such  indemnified  party in such
proportion as is appropriate to reflect not only such relative benefits but also
the relative fault of the Company and CPS on the one hand and the Underwriter on
the other in connection  with the statements or omissions which resulted in such
losses,  claims,  damages or  liabilities  (or actions or proceedings in respect
thereof), as well as any other relevant equitable  considerations.  The relative
benefits  received by the Company and CPS on the one hand and the Underwriter on
the other shall be deemed to be in the same proportion as the total net proceeds
from the offering (before  deducting  expenses)  received by the Company bear to
the total  underwriting  discounts and commissions  received by the Underwriter.
The relative  fault shall be  determined  by reference  to, among other  things,
whether  the  untrue or  alleged  untrue  statement  of a  material  fact or the
omission or alleged  omission to state a material  fact  relates to  information
supplied by the Company and CPS on the one hand or the  Underwriter on the other
and  the  parties'  relative  intent,  knowledge,   access  to  information  and
opportunity to correct or prevent such statement or omission.

         The Company,  CPS and the  Underwriter  agree that it would not be just
and equitable if contributions  pursuant to this Section 9(d) were determined by
pro rata  allocation  or by any other method of  allocation  which does not take
account of the equitable  considerations referred to above in this Section 9(d).
The amount  paid or payable by an  indemnified  party as a result of the losses,
claims,  damages or liabilities  (or actions or proceedings in respect  thereof)
referred to above in this  Section  9(d) shall be deemed to include any legal or
other expenses  reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim,  subject to the limitations
set forth above.  Notwithstanding  the  provisions of this Section 9(d), (i) the
Underwriter  shall be  required  to  contribute  any  amount  in  excess  of the
underwriting discounts and commissions applicable to the Securities purchased by
the  Underwriter  and (ii) no  person  guilty  of  fraudulent  misrepresentation
(within  the  meaning of Section  11(f) of the 1933 Act)  shall be  entitled  to
contribution   from  any  person   who  was  not   guilty  of  such   fraudulent
misrepresentation.

         (e) In any proceeding relating to the Registration Statement,  the Base
Prospectus,  any Preliminary Final Prospectus, the Final Prospectus, the Private
Placement Memorandum, or any supplement or amendment thereto, each party against
whom  contribution  may be sought  under this  Section 9 hereby  consents to the
jurisdiction of any court having jurisdiction over any other contributing party,
agrees that  process  issuing from such court may be served upon it by any other
contributing  party and  consents to the service of such process and agrees that
any other contributing party may join it as an additional  defendant in any such
proceeding in which such other contributing party is a party.

         (f) Any losses, claims,  damages,  liabilities or expenses for which an
indemnified  party is entitled to  indemnification  or  contribution  under this
Section 9 shall be paid by the  indemnifying  party to the indemnified  party as
such  losses,  claims,  damages,  liabilities  or  expenses  are  incurred.  The
obligations of the Company and CPS pursuant to Section 6, the




                                       28





indemnity  and  contribution  agreements  contained  in this  Section  9 and the
representations  and warranties of each of the Company and CPS set forth in this
Agreement shall remain operative and in full force and effect, regardless of (i)
any investigation  made by or on behalf of the Underwriter,  the Company or CPS,
their  respective  directors,  officers,  employees  or  agents  or any  persons
controlling  the  Underwriter or the Company,  (ii) acceptance of any Securities
and payment thereof or hereunder, and (iii) any termination of this Agreement. A
successor to the Underwriter,  the Company or CPS, their  respective  directors,
officers,  employees or agents, or any person  controlling the Underwriter,  the
Company or CPS, shall be entitled to the benefits of the indemnity, contribution
and reimbursement agreements contained in this Section 9.

10.      [RESERVED]

11.      NOTICES.

         All  communications  hereunder  shall  be in  writing  and,  except  as
otherwise provided herein, will be mailed, delivered,  telecopied or telegraphed
and confirmed as follows:

if to the Underwriter, to the following address:

Greenwich Capital Markets, Inc.
600 Steamboat Road
Greenwich, Connecticut 06830

if to the Company, at the following address:

                  CPS Receivables Corp.
                  2 Ada
                  Irvine, California 92618
                  Attention:  Charles Bradley, Jr.
                  Facsimile No.:  (714) 753-6805;

or, if sent to CPS at the following address:

                  Consumer Portfolio Services, Inc.
                  2 Ada
                  Irvine, California 92618
                  Attention:  Charles Bradley, Jr.
                  Facsimile No.:  (714) 753-6805





                                       29





12.      TERMINATION.

         This  Agreement may be terminated by the  Underwriter  by notice to the
Company as follows:

         (a) at any time prior to the Closing  Date, if any of the following has
occurred: (i) since the respective dates as of which information is given in the
Registration   Statement,   the  Final  Prospectus  and  the  Private  Placement
Memorandum,   any  material  adverse  change  or  any  development  involving  a
prospective  material  adverse  change in the business,  properties,  results of
operations, financial condition or business prospects of the Insurer, CPS, Samco
or the Company,  whether or not arising in the ordinary course of business, (ii)
any outbreak or  escalation of  hostilities  or  declaration  of war or national
emergency  or other  national or  international  calamity or crisis or change in
economic or political  conditions  if the effect of such  outbreak,  escalation,
declaration,  emergency,  calamity, crisis or change on the financial markets of
the United States  would,  in the  Underwriter's  reasonable  judgment,  make it
impracticable  to market the Notes or the  Certificates or to enforce  contracts
for the sale of the Notes or  Certificates,  (iii) any  suspension of trading in
securities  generally  on the New York  Stock  Exchange  or the  American  Stock
Exchange or limitation on prices (other than  limitations on hours or numbers of
days of trading) for  securities on either such  Exchange,  (iv) the  enactment,
publication,  decree or other promulgation of any statute,  regulation,  rule or
order of any court or other  governmental  authority which in the  Underwriter's
reasonable  opinion  materially  and  adversely  affects or may  materially  and
adversely affect the business or operations of the Insurer,  CPS or the Company,
(v) declaration of a banking moratorium by United States,  Texas,  California or
New York State authorities,  (vi) any downgrading or the giving of notice of any
intended or potential  downgrading in the rating of the Insurer's  claims-paying
ability  or of  CPS's  or the  Company's  debt  securities  by  any  "nationally
recognized  statistical  rating  organization"  (as defined for purposes of Rule
436(g) under the 1934 Act),  (vii) the suspension of trading of the Common Stock
by the  Commission  on the New York Stock  Exchange  or (viii) the taking of any
action by any  governmental  body or agency in respect of its monetary or fiscal
affairs which in the  Underwriter's  reasonable  opinion has a material  adverse
effect on the securities markets in the United States; or

         (b) as provided in Section 7 of this Agreement.

13.      SUCCESSORS.

         This  Agreement  has been and is made  solely  for the  benefit  of the
Underwriter,  CPS,  Samco  and the  Company  and  their  respective  successors,
executors,  administrators,  heirs and assigns,  and the respective  affiliates,
officers,  directors,  employees,  agents and  controlling  persons  referred to
herein,  and no other  person  will  have any  right  or  obligation  hereunder;
provided,  however, that the initial purchaser of any Notes or Certificates from
the Underwriter




                                       30





shall be deemed a third party  beneficiary to this Agreement and shall enjoy all
of the rights and benefits of the Underwriter hereunder.

14.      MISCELLANEOUS.

         The   reimbursement,   indemnification   and  contribution   agreements
contained  in this  Agreement,  the  obligations  of the  Company  and CPS under
Section 6 and the  representations,  warranties  and covenants in this Agreement
shall remain in full force and effect  regardless of (a) any termination of this
Agreement,  (b) any investigation made by or on behalf of the Underwriter or the
Company,  their  respective  directors,  officers,  employees  or  agents or any
controlling person of the Underwriter or the Company  indemnified herein and (c)
delivery of and payment for the Securities under this Agreement.

         The  Underwriter  agrees that,  prior to the date which is one year and
one day after the payment in full of all securities  issued by the Company or by
a trust for which the Company was the depositor,  which securities were rated by
any nationally recognized statistical rating organization, it will not institute
against,  or join any other  person in  instituting  against,  the  Company  any
bankruptcy,  reorganization,  arrangement, insolvency or liquidation proceedings
or other proceedings under any Federal or state bankruptcy or similar law.

         This  Agreement  may be executed in two or more  counterparts,  each of
which shall be deemed an original,  but all of which together  shall  constitute
one and the same instrument.

         This Agreement shall be governed by, and construed in accordance  with,
the  laws of the  State of New  York  without  regard  to the  conflict  of laws
provisions thereof.  With respect to any claim arising out of this Agreement (i)
each party  irrevocably  submits to the exclusive  jurisdiction of the courts of
the State of New York and the  United  States  District  Court for the  Southern
District of New York, and (ii) each party  irrevocably  waives (1) any objection
which it may have at any time to the  laying  of venue of any  suit,  action  or
proceeding  arising out of or relating hereto brought in any such court, (2) any
claim that any such  suit,  action or  proceeding  brought in any such court has
been brought in any inconvenient forum and (3) the right to object, with respect
to such claim,  suit, action or proceeding  brought in any such court, that such
court does not have  jurisdiction  over such party.  To the extent  permitted by
applicable law, the Underwriter,  the Company,  Samco and CPS irrevocably  waive
all right of trial by jury in any action, proceeding or counterclaim arising out
of or in connection with this Agreement or any matter arising hereunder.

         This  Agreement  supersedes  all prior  agreements  and  understandings
relating to the subject matter hereof.





                                       31





         Neither  this  Agreement  nor any term hereof may be  changed,  waived,
discharged or terminated  orally, but only by an instrument in writing signed by
the  party  against  whom  enforcement  of  the  change,  waiver,  discharge  or
termination is sought.

         The headings in this  Agreement are for purposes of reference  only and
shall not limit or otherwise affect the meaning hereof.

         Any provision of this Agreement which is prohibited,  unenforceable  or
not  authorized  in  any  jurisdiction  shall,  as  to  such  jurisdiction,   be
ineffective   to  the   extent   of  such   prohibition,   unenforceability   or
non-authorization  without  invalidating  the  remaining  provisions  hereof  or
affecting  the  validity,  enforceability  or legality of such  provision in any
other jurisdiction.



                    [Rest of page intentionally left blank.]




                                       32





         If the foregoing letter is in accordance with your understanding of our
agreement,  please  sign  and  return  to us  the  enclosed  duplicates  hereof,
whereupon  it  will  become  a  binding  agreement  among  the  Company  and the
Underwriter in accordance with its terms.

                                    Very truly yours,

                                    CPS RECEIVABLES CORP.


                                    By:
                                       Name:
                                       Title:



                                    CONSUMER PORTFOLIO SERVICES, INC.


                                    By:
                                       Name:
                                       Title:



                                    SAMCO ACCEPTANCE CORP.


                                    By:
                                       Name:
                                       Title:





                                       33





The foregoing  Underwriting Agreement is hereby confirmed and accepted as of the
date first above written:

GREENWICH CAPITAL MARKETS, INC.


  By:
      Name:
      Title:





                                       34



                                   SCHEDULE I




                              Initial Principal Amount of the
                                Notes and Certificates to be         Purchase
        Underwriter                       Purchased                   Price
        -----------                       ----------                  ------

Greenwich Capital Markets,    Class A-1 Notes:   $54,260,000.00   $54,097,220.00
Inc.                          Class A-2 Notes:   $46,307,598.60   $46,161,440.24


                              Total Notes:      $100,567,598.60  $100,258,660.24

                              Certificates:       $5,293,031.51    $5,187,170.38

                              Total Certificates: $5,293,031.51    $5,187,170.38




                                       35



                                                                    Exhibit 4.3

                                                                 EXECUTION COPY










                      AMENDED AND RESTATED TRUST AGREEMENT


                          Dated as of October 17, 1997

                                     between


                       CPS RECEIVABLES CORP., as Depositor


                                       and


                          BANKERS TRUST (DELAWARE), as
                                  Owner Trustee














                                TABLE OF CONTENTS

                                                                            Page
                                                                            ----

                                   ARTICLE I.

                                   Definitions

SECTION 1.1.     Capitalized Terms.............................................1
SECTION 1.2.     Other Definitional Provisions.................................4

                            ARTICLE II.

                           Organization

SECTION 2.1.    Name...........................................................4
SECTION 2.2.    Office.........................................................5
SECTION 2.3.    Purposes and Powers............................................5
SECTION 2.4.    Appointment of Owner Trustee...................................5
SECTION 2.5.    Initial Capital Contribution of Trust Estate...................5
SECTION 2.6.    Declaration of Trust...........................................6
SECTION 2.7.    Title to Trust Property........................................6
SECTION 2.8.    Situs of Trust.................................................6
SECTION 2.9.    Representations and Warranties of the Depositor................7
SECTION 2.10.   Federal Income Tax Allocations.................................8
SECTION 2.11.   Covenants of the Depositor.....................................9
SECTION 2.12.   Covenants of the Certificateholders...........................10

                                 ARTICLE III.

                    Certificates and Transfer of Interests

SECTION 3.1.    Initial Ownership.............................................11
SECTION 3.2.    The Certificates..............................................11
SECTION 3.3.    Authentication of Certificates................................11
SECTION 3.4.    Registration of Transfer and Exchange of Certificates.........11
SECTION 3.5.    Mutilated, Destroyed, Lost or Stolen Certificates.............15
SECTION 3.6.    Persons Deemed Certificateholders.............................15
SECTION 3.7.    Access to List of Certificateholders' Names and
                   Addresses..................................................15
SECTION 3.8.    Maintenance of Office or Agency...............................16
SECTION 3.9.    ERISA Restrictions............................................16





                                                                           Page
                                                                           ----
                                   ARTICLE IV.

                         Voting Rights and Other Actions

SECTION 4.1.    Prior Notice to Holders with Respect to Certain
                  Matters.....................................................16
SECTION 4.2.    Action by Certificateholders with Respect to Certain
                  Matters.....................................................17
SECTION 4.3.    Action by Certificateholders with Respect to
                  Bankruptcy..................................................17
SECTION 4.4.    Restrictions on Certificateholders' Power.....................17
SECTION 4.5.    Majority Control..............................................18
SECTION 4.6.    Rights of Insurer.............................................18

                                   ARTICLE V.

                                 Certain Duties

SECTION 5.1.    Accounting and Records to the Noteholders,
                  Certificateholders, the Internal Revenue Service and
                  Others......................................................19
SECTION 5.2.    Signature on Returns; Tax Matters Partner.....................19
SECTION 5.3.    Underwriting Agreement........................................19
SECTION 5.4.    Trust Accounts................................................20
SECTION 5.5.    Application of Funds in Certificate Distribution
                  Account.....................................................20

                                   ARTICLE VI.

                      Authority and Duties of Owner Trustee

SECTION 6.1.    General Authority.............................................22
SECTION 6.2.    General Duties................................................22
SECTION 6.3.    Action upon Instruction.......................................22
SECTION 6.4.    No Duties Except as Specified in this Agreement or in
                  Instructions................................................23
SECTION 6.5.    No Action Except under Basic Documents or
                  Instructions................................................24
SECTION 6.6.    Restrictions..................................................24






                                                                            Page
                                                                            ----

                                  ARTICLE VII.

                          Concerning the Owner Trustee

SECTION 7.1.    Acceptance of Trusts and Duties...............................24
SECTION 7.2.    Furnishing of Documents.......................................26
SECTION 7.3.    Representations and Warranties................................26
SECTION 7.4.    Reliance; Advice of Counsel...................................26
SECTION 7.5.    Not Acting in Individual Capacity.............................27
SECTION 7.6.    Owner Trustee Not Liable for Certificates or
                  Receivables.................................................27
SECTION 7.7.    Owner Trustee May Own Certificates and Notes..................27
SECTION 7.8.    Payments from Owner Trust Estate..............................27
SECTION 7.9.    Doing Business in other Jurisdictions.........................28

                                  ARTICLE VIII.

                          Compensation of Owner Trustee

SECTION 8.1.    Owner Trustee's Fees and Expenses.............................28
SECTION 8.2.    Indemnification...............................................28
SECTION 8.3.    Payments to the Owner Trustee.................................29
SECTION 8.4.    Non-recourse Obligations......................................29

                                   ARTICLE IX.

                         Termination of Trust Agreement

SECTION 9.1.    Termination of Trust Agreement................................29

                                   ARTICLE X.

             Successor Owner Trustees and Additional Owner Trustees

SECTION 10.1.   Eligibility Requirements for Owner Trustee....................30
SECTION 10.2.   Resignation or Removal of Owner Trustee.......................31
SECTION 10.3.   Successor Owner Trustee.......................................31
SECTION 10.4.   Merger or Consolidation of Owner Trustee......................32
SECTION 10.5.   Appointment of Co-Trustee or Separate Trustee.................32






                                                                            Page
                                                                            ----
                                   ARTICLE XI.

                                  Miscellaneous

SECTION 11.1.   Supplements and Amendments....................................34
SECTION 11.2.   No Legal Title to Owner Trust Estate in
                  Certificateholders..........................................35
SECTION 11.3.   Limitations on Rights of Others...............................35
SECTION 11.4.   Notices.......................................................35
SECTION 11.5.   Severability..................................................36
SECTION 11.6.   Separate Counterparts.........................................36
SECTION 11.7.   Assignments; Insurer..........................................36
SECTION 11.8.   No Petition...................................................36
SECTION 11.9.   No Recourse...................................................36
SECTION 11.10.  Headings......................................................37
SECTION 11.11.  GOVERNING LAW.................................................37
SECTION 11.12.  Servicer......................................................37

                                  ARTICLE XII.

                            Amendment and Restatement

SECTION 12.1.   Amendment and Restatement.....................................37


EXHIBITS

Exhibit A   Form of Certificate
Exhibit B   Form of Certificate of Trust
Exhibit C   Form of Transferee Certificate








         AMENDED  AND  RESTATED  TRUST  AGREEMENT  dated as of October  17, 1997
between CPS  RECEIVABLES  CORP.,  a  California  corporation  (the  "Depositor")
BANKERS TRUST (DELAWARE), a Delaware banking corporation as Owner Trustee.

                               W I T N E S S E T H

         WHEREAS,  Depositor and Owner Trustee are parties to that certain trust
agreement  dated as of October 9, 1997 (the "Original  Agreement") and Depositor
and Owner  Trustee  desire to amend and restate the  Original  Agreement  in its
entirety.

         NOW  THEREFORE,  in  consideration  of the  foregoing,  other  good and
valuable  considerations,  and the mutual terms and covenants  contained herein,
the parties hereto agree as follows:

                                   ARTICLE I.

                                   Definitions

         SECTION 1.1. Capitalized Terms. For all purposes of this Agreement, the
following terms shall have the meanings set forth below:

         "Agreement"  shall mean the Original  Agreement as amended and restated
by this Amended and Restated Trust Agreement, as the same may be further amended
or supplemented from time to time.

         "Basic Documents" shall mean this Agreement,  the Certificate of Trust,
the Sale and  Servicing  Agreement,  the Spread  Account  Agreement,  the Spread
Account Agreement  Supplement,  the Insurance  Agreement,  the Indenture and the
other documents and certificates delivered in connection therewith.

         "Benefit Plan" shall have the meaning  assigned to such term in Section
3.10.

         "Business  Trust  Statute"  shall  mean  Chapter  38 of Title 12 of the
Delaware  Code,  12 Del.  Code ss. 3801 et. seq. as the same may be amended from
time to time.

         "Certificate"  means  a trust  certificate  evidencing  the  beneficial
interest  of a  Certificateholder  in the  Trust,  substantially  in the form of
Exhibit A attached hereto.

         "Certificate  Balance"  means,  as of any  date of  determination,  the
Initial Certificate Balance reduced by all payments  theretofore made on account
of principal of the Certificates.

         "Certificate Distribution Account" shall mean the account designated as
such, established and maintained pursuant to Section 5.4.

         "Certificate  of Trust" shall mean the Certificate of Trust in the form
of  Exhibit B to be filed for the  Trust  pursuant  to  Section  3810(a)  of the
Business Trust Statute.









         "Certificate  Register"  and  "Certificate  Registrar"  shall  mean the
register mentioned and the registrar appointed pursuant to Section 3.4.

         "Certificateholders'  Interest  Distributable  Amount"  shall  have the
meaning assigned to such term in the Sale and Servicing Agreement.

         "Certificateholders'  Principal  Distributable  Amount"  shall have the
meaning assigned to such term in the Sale and Servicing Agreement.

         "Code"  shall mean the Internal  Revenue Code of 1986,  as amended from
time to time, and Treasury Regulations promulgated thereunder.

         "Corporate Trust Office" shall mean, with respect to the Owner Trustee,
the principal corporate trust office of the Owner Trustee located at 1011 Centre
Road, Suite 200, Wilmington,  Delaware 19805-1266 with a copy of all notices and
other documents to Bankers Trust Company, 4 Albany Street, 10th Floor, New York,
New York 10006,  Attention:  Corporate  Trust and Agency Group, or at such other
address as the Owner Trustee may  designate by notice to the  Certificateholders
and the  Depositor,  or the  principal  corporate  trust office of any successor
Owner Trustee (the address of which the successor  owner trustee will notify the
Certificateholders and the Depositor).

         "Depositor"  shall  mean  CPS  Receivables  Corp.  in its  capacity  as
Depositor hereunder.

         "ERISA" shall have the meaning assigned to such term in Section 3.10.

         "Expenses" shall have the meaning assigned to such term in Section 8.2.

         "Holder" or  "Certificateholder"  shall mean the Person in whose name a
Certificate is registered on the Certificate Register.

         "Indemnified  Parties" shall have the meaning  assigned to such term in
Section 8.2.

         "Indenture" shall mean the Indenture dated as of October 1, 1997, among
the Trust and Norwest Bank Minnesota,  National Association,  as Trustee, as the
same may be amended and supplemented from time to time.

         "Initial Certificate Balance" means $5,293,031.51.

         "Instructing  Party"  shall have the  meaning  assigned to such term in
Section 6.3(a).

         "Insurer"  shall  mean  Financial   Security  Assurance  Inc.,  or  its
successor in interest.

         "Original Agreement" shall mean the trust agreement dated as of October
9, 1997 between the Depositor and the Owner Trustee.


                                        2





         "Owner Trust  Estate"  shall mean all right,  title and interest of the
Trust in and to the  property  and  rights  assigned  to the Trust  pursuant  to
Article II of the Sale and Servicing  Agreement,  all funds on deposit from time
to time in the Trust  Accounts and all other  property of the Trust from time to
time,  including any rights of the Owner  Trustee and the Trust  pursuant to the
Sale and Servicing Agreement and the Spread Account Agreement.

         "Owner Trustee" shall mean Bankers Trust (Delaware), a Delaware banking
corporation,  not in its  individual  capacity but solely as owner trustee under
this Agreement, and any successor Owner Trustee hereunder.

         "Pass-Through Rate" shall mean 10.59% per annum.

         "Paying Agent" shall mean Bankers Trust Company.

         "Principal Certificates" means Certificates denominated in dollars.

         "Record Date" shall mean with respect to any Payment Date, the close of
business on the 10th day of the calendar month of such Payment Date.

         "Responsible  Officer" when used with respect to the Owner Trustee, any
officer  or  agent  acting  under a power of  attorney  who is  responsible  for
administering the transactions contemplated by this Trust Agreement

         "Sale  and  Servicing  Agreement"  shall  mean the  Sale and  Servicing
Agreement among the Trust, the Depositor,  Consumer Portfolio Services, Inc. and
the  Trustee,  dated  as of  October  1,  1997 as the same  may be  amended  and
supplemented from time to time.

         "Secretary  of State" shall mean the Secretary of State of the State of
Delaware.

         "Spread  Account"  shall  mean  the  Spread  Account   established  and
maintained pursuant to the Spread Account Agreement.

         "Spread  Account  Agreement"  shall mean the Spread Account  Agreement,
dated as of October 1, 1997, among the Depositor,  the Insurer, and the Trustee,
as the same may be amended,  supplemented  or otherwise  modified in  accordance
with the terms thereof.

         "Treasury  Regulations"  shall mean regulations,  including proposed or
temporary regulations, promulgated under the Code. References herein to specific
provisions  of  proposed  or  temporary   regulations  shall  include  analogous
provisions  of  final   Treasury   Regulations  or  other   successor   Treasury
Regulations.

         "Trust" shall mean the trust established by this Agreement.



                                        3





         "Trustee"  means the Person acting as Trustee under the Indenture,  its
successors in interest and any successor trustee under the Indenture.

         SECTION 1.2. Other Definitional Provisions.  (a) Capitalized terms used
herein and not otherwise  defined have the meanings assigned to them in the Sale
and  Servicing  Agreement  or, if not  defined  therein,  in the Spread  Account
Agreement or in the Indenture.

         (b) All terms defined in this Agreement shall have the defined meanings
when used in any certificate or other document made or delivered pursuant hereto
unless otherwise defined therein.

         (c) As used in this Agreement and in any  certificate or other document
made or delivered  pursuant hereto or thereto,  accounting  terms not defined in
this  Agreement or in any such  certificate  or other  document,  and accounting
terms  partly  defined in this  Agreement  or in any such  certificate  or other
document to the extent not defined,  shall have the respective meanings given to
them under generally accepted accounting  principles as in effect on the date of
this Agreement or any such certificate or other document, as applicable.  To the
extent that the definitions of accounting terms in this Agreement or in any such
certificate or other document are  inconsistent  with the meanings of such terms
under generally accepted  accounting  principles,  the definitions  contained in
this Agreement or in any such certificate or other document shall control.

         (d) The words  "hereof,"  "herein,"  "hereunder"  and words of  similar
import when used in this Agreement  shall refer to this Agreement as a whole and
not  to  any  particular  provision  of  this  Agreement;  Section  and  Exhibit
references  contained in this  Agreement are references to Sections and Exhibits
in or to this Agreement  unless  otherwise  specified;  and the term "including"
shall mean "including without limitation."

         (e) The  definitions  contained in this Agreement are applicable to the
singular as well as the plural forms of such terms and to the  masculine as well
as to the feminine and neuter genders of such terms.


                                   ARTICLE II.

                                  Organization

         SECTION 2.1.  Name.  There is hereby formed a trust to be known as "CPS
Auto Receivables Trust 1997-4",  in which name the Owner Trustee may conduct the
business  of the Trust,  make and execute  contracts  and other  instruments  on
behalf of the Trust and sue and be sued.



                                        4





         SECTION  2.2.  Office.  The office of the Trust shall be in care of the
Owner  Trustee at the  Corporate  Trust  Office or at such other  address as the
Owner Trustee may designate by written notice to the  Certificateholders and the
Depositor.

         SECTION 2.3. Purposes and Powers.  (a) The purpose of the Trust is, and
the  Trust  shall  have the  power and  authority,  to  engage in the  following
activities:

                  (i) to issue  the  Notes  pursuant  to the  Indenture  and the
         Certificates pursuant to this Agreement,  and to sell the Notes and the
         Certificates;

                  (ii) with the  proceeds of the sale of the Notes,  to fund the
         Spread   Account   and  to  pay  the   organizational,   start-up   and
         transactional  expenses  of the  Trust  and to pay the  balance  to the
         Depositor pursuant to the Sale and Servicing Agreement;

                  (iii) to assign, grant, transfer,  pledge, mortgage and convey
         the Owner Trust Estate to the Trustee pursuant to the Indenture for the
         benefit of the  Insurer  and the  Noteholders  and to hold,  manage and
         distribute to the  Certificateholders and the Depositor pursuant to the
         terms of the Sale and  Servicing  Agreement  any  portion  of the Owner
         Trust  Estate  released  from the Lien of,  and  remitted  to the Trust
         pursuant to, the Indenture;

                  (iv) to enter into and perform its obligations under the Basic
         Documents to which it is a party;

                  (v) to engage in those  activities,  including  entering  into
         agreements,  that are  necessary,  suitable or convenient to accomplish
         the foregoing or are incidental thereto or connected therewith; and

                  (vi) subject to compliance with the Basic Documents, to engage
         in such other  activities  as may be  required in  connection  with the
         conservation of the Owner Trust Estate and the making of  distributions
         to the Certificateholders and the Noteholders.

The Trust is hereby authorized to engage in the foregoing activities.  The Trust
shall not engage in any activity other than in connection  with the foregoing or
other than as required or authorized by the terms of this Agreement or the Basic
Documents.

         SECTION  2.4.  Appointment  of  Owner  Trustee.  The  Depositor  hereby
appoints  the Owner  Trustee as trustee  of the Trust  effective  as of the date
hereof, to have all the rights, powers and duties set forth herein.

         SECTION  2.5.  Initial  Capital   Contribution  of  Trust  Estate.  The
Depositor hereby sells, assigns,  transfers,  conveys and sets over to the Owner
Trustee,  as of the date hereof,  the sum of $10.00.  The Owner  Trustee  hereby
acknowledges receipt of the foregoing  contribution in trust from the Depositor,
as of the date hereof, which contribution shall


                                        5





constitute  the  initial  Owner  Trust  Estate  and  shall be  deposited  in the
Certificate   Distribution  Account.  The  Depositor  shall  pay  organizational
expenses of the Trust as they may arise.

         SECTION 2.6.  Declaration of Trust.  The Owner Trustee hereby  declares
that it will  hold the  Owner  Trust  Estate in trust  upon and  subject  to the
conditions  set forth herein for the use and benefit of the  Certificateholders,
subject to the  conditions  of the Trust  under the Basic  Documents.  It is the
intention of the parties hereto that the Trust constitute a business trust under
the Business  Trust  Statute and that this  Agreement  constitute  the governing
instrument of such  business  trust.  It is the intention of the parties  hereto
that  (i) so  long  as  the  Depositor  is the  Holder  of  100  percent  of the
Certificates (either directly or indirectly through  wholly-owned  non-corporate
subsidiaries), for federal income tax purposes and to the extent consistent with
the laws of any other jurisdiction for which the  characterization  of the Trust
as an entity is relevant, the Trust shall be treated solely as a security device
and not as a separate  entity,  and (ii) if the  Depositor  is not the direct or
indirect Holder of 100 percent of the Certificates,  then for federal income tax
purposes  and for purposes of the laws of any other  jurisdiction  for which the
characterization  of the Trust as an entity is  relevant,  and in all events for
California  franchise tax purposes,  the Trust shall be treated as a partnership
among the  Certificateholders  and the Depositor and not as an  association  (or
publicly traded partnership)  taxable as a corporation.  The parties agree that,
unless otherwise required by appropriate tax authorities, the Trust will file or
cause to be filed annual or other necessary returns, reports and other forms, if
any,  consistent with such  characterization  of the Trust.  Effective as of the
date  hereof,  the Owner  Trustee  shall have all rights,  powers and duties set
forth herein and to the extent not inconsistent  herewith, in the Business Trust
Statute  with  respect to  accomplishing  the  purposes of the Trust.  The Owner
Trustee shall file the Certificate of Trust with the Secretary of State.

         SECTION 2.7. Title to Trust Property.  (a) Legal title to all the Owner
Trust  Estate  shall be vested at all  times in the  Trust as a  separate  legal
entity except where  applicable  law in any  jurisdiction  requires title to any
part of the Owner Trust Estate to be vested in a trustee or  trustees,  in which
case  title  shall be deemed to be vested  in the Owner  Trustee,  a  co-trustee
and/or a separate trustee, as the case may be.

         (b) The  Holders  shall not have  legal  title to any part of the Owner
Trust Estate. The Holders shall be entitled to receive  distributions in respect
of their undivided  ownership  interest  therein only in accordance with Article
IX. No  transfer,  by  operation  of law or  otherwise,  of any right,  title or
interest by any  Certificateholder  of its ownership interest in the Owner Trust
Estate shall  operate to  terminate  this  Agreement or the trusts  hereunder or
entitle any  transferee to an accounting or the transfer to it of legal title to
any part of the Owner Trust Estate.

         SECTION 2.8. Situs of Trust. The Trust will be located and administered
in the State of Delaware or the State of New York. All bank accounts  maintained
by the Owner  Trustee  on behalf of the Trust  shall be  located in the State of
Delaware,  the State of New York or the  State of  Minnesota.  Payments  will be
received by the Trust only in Delaware, New York or


                                        6





Minnesota and Payments will be made by the Trust only from Delaware, New York or
Minnesota.  The Trust  shall not have any  employees  in any  state  other  than
Delaware or New York; provided,  however,  that nothing herein shall restrict or
prohibit the Owner Trustee or the Servicer or any agent of the Trust from having
employees  within or without the State of Delaware and New York. The only office
of the Trust will be at the Corporate Trust Office in Delaware.

         SECTION 2.9.  Representations  and  Warranties  of the  Depositor.  The
Depositor makes the following  representations and warranties on which the Owner
Trustee  relies in  accepting  the Owner  Trust  Estate in trust and issuing the
Certificates and upon which the Insurer relies in issuing the Note Policy.

                  (a)  Organization  and Good  Standing.  The  Depositor is duly
         organized and validly  existing as a California  corporation with power
         and authority to own its properties and to conduct its business as such
         properties are currently owned and such business is presently conducted
         and is proposed to be  conducted  pursuant  to this  Agreement  and the
         Basic Documents.

                  (b) Due  Qualification.  The Depositor is duly qualified to do
         business as a foreign  corporation in good  standing,  and has obtained
         all necessary licenses and approvals, in all jurisdictions in which the
         ownership or lease of its property, the conduct of its business and the
         performance  of its  obligations  under  this  Agreement  and the Basic
         Documents requires such qualification.

                  (c) Power and Authority. The Depositor has the corporate power
         and  authority to execute and deliver this  Agreement  and to carry out
         its  terms;  the  Depositor  has full power and  authority  to sell and
         assign the property to be sold and assigned to, and deposited with, the
         Trust and the Depositor has duly  authorized  such sale and  assignment
         and deposit to the Trust by all  necessary  corporate  action;  and the
         execution,  delivery and  performance  of this  Agreement has been duly
         authorized by the Depositor by all necessary corporate action.

                  (d) No Consent  Required.  No  consent,  license,  approval or
         authorization  or registration or declaration  with, any Person or with
         any governmental authority,  bureau or agency is required in connection
         with the  execution,  delivery or performance of this Agreement and the
         Basic  Documents,  except for such as have been  obtained,  effected or
         made.

                  (e)  No  Violation.   The  consummation  of  the  transactions
         contemplated  by this Agreement and the fulfillment of the terms hereof
         do not  conflict  with,  result  in any  breach of any of the terms and
         provisions of, or constitute  (with or without notice or lapse of time)
         a default under,  the  certificate of  incorporation  or by-laws of the
         Depositor, or any material indenture,  agreement or other instrument to
         which the  Depositor is a party or by which it is bound;  nor result in
         the creation or imposition of


                                        7





         any Lien upon any of its  properties  pursuant to the terms of any such
         indenture,  agreement or other  instrument  (other than pursuant to the
         Basic  Documents);  nor  violate  any  law  or,  to  the  best  of  the
         Depositor's knowledge,  any order, rule or regulation applicable to the
         Depositor  of any court or of any  Federal  or state  regulatory  body,
         administrative  agency  or other  governmental  instrumentality  having
         jurisdiction over the Depositor or its properties.

                  (f) No Proceedings. There are no proceedings or investigations
         pending or, to its knowledge,  threatened  against it before any court,
         regulatory   body,   administrative   agency  or  other   tribunal   or
         governmental   instrumentality  having  jurisdiction  over  it  or  its
         properties (A) asserting the invalidity of this Agreement or any of the
         Basic   Documents,   (B)  seeking  to  prevent  the   issuance  of  the
         Certificates   or  the  Notes  or  the   consummation  of  any  of  the
         transactions  contemplated  by  this  Agreement  or any  of  the  Basic
         Documents,   (C)  seeking  any   determination  or  ruling  that  might
         materially  and adversely  affect its  performance  of its  obligations
         under, or the validity or  enforceability  of, this Agreement or any of
         the Basic  Documents,  or (D) seeking to  adversely  affect the federal
         income  tax or other  federal,  state or local  tax  attributes  of the
         Certificates.

         SECTION 2.10.  Federal Income Tax Allocations.  (a) For purposes of the
laws of any  jurisdiction  for which the Trust is characterized as a partnership
(consistent  with the  characterization  of the Trust  described  in Section 2.6
above),  the following  allocations shall apply for Federal income tax purposes.
Interest  payments  on the  Certificates  at the  Pass-Through  Rate  (including
interest on amounts  previously due on the Certificates but not yet distributed)
shall be treated as "guaranteed  payments"  under Section 707(c) of the Code. To
the extent such  characterization is not respected,  net income of the Trust for
any month as  determined  for  Federal  income  tax  purposes  (and each item of
income, gain, loss and deduction entering into the computation thereof) shall be
allocated:

                  (i)  among  the  Holders  of  Certificates  as of the close of
         business  on the  last  day of  such  month,  in  proportion  to  their
         ownership of the  principal  amount of  Certificates  on such date,  an
         amount of net  income up to the sum of:  (x) the  portion of the market
         discount on the Receivables accrued during such month that is allocable
         to the excess,  if any, of the Initial  Certificate  Balance over their
         initial  aggregate  issue  price,  (y)  Certificateholders'  Prepayment
         Premium,  if any,  payable for such month and (z) any other  amounts of
         income payable to the  Certificateholders  for such month; and such sum
         of amounts  specified in clauses (x) through (z) of this sentence shall
         be reduced by any  amortization  by the Trust of premium on Receivables
         that corresponds to any excess of the issue price of Trust Certificates
         over their principal amount; and

                  (ii) to the  Depositor,  to the  extent of any  remaining  net
         income, in accordance with their respective interests therein.



                                        8





         If the net  income of the Trust for any month is  insufficient  for the
         allocations  described in clause (i), subsequent net income shall first
         be  allocated  to make up such  shortfall  before  being  allocated  as
         provided in the preceding  sentence.  Net losses of the Trust,  if any,
         for any month as determined  for Federal  income tax purposes (and each
         item of income,  gain, loss and deduction entering into the computation
         thereof)  shall be  allocated  to the  Depositor,  to the  extent it is
         reasonably expected to bear the economic burden of such net losses, and
         any remaining net losses shall be allocated  among the other Holders of
         Certificates  as of the close of business on the last day of such month
         in proportion to their ownership of principal amount of Certificates on
         such day. The Depositor is authorized to modify the allocations in this
         paragraph if necessary or appropriate,  in its sole discretion, for the
         allocations to fairly reflect the economic income,  gain or loss to the
         Holders  of  Certificates,  or  as  otherwise  required  by  the  Code.
         Notwithstanding   anything   provided  in  this  Section  2.11(a),   if
         Certificates are held solely by the Depositor,  the application of this
         Section 2.11(a) shall be disregarded.

         (b) One hundred percent of the "excess nonrecourse  liabilities" of the
Trust  represented by all outstanding  Classes of Notes shall be allocated,  for
purposes of Treasury Regulations section 1.752-3(3), to the Depositor.

         SECTION 2.11.  Covenants of the  Depositor.  The  Depositor  agrees and
covenants for the benefit of each  Certificateholder,  the Insurer and the Owner
Trustee, during the term of this Agreement,  and to the fullest extent permitted
by applicable law, that:

                  (a) it  shall  not  create,  incur  or  suffer  to  exist  any
         indebtedness  or engage  in any  business,  except,  in each  case,  as
         permitted by its certificate of incorporation and the Basic Documents;

                  (b) it shall not, for any reason,  institute  proceedings  for
         the Trust to be adjudicated a bankrupt or insolvent,  or consent to the
         institution of bankruptcy or insolvency  proceedings against the Trust,
         or file a petition  seeking or consenting to  reorganization  or relief
         under any applicable federal or state law relating to the bankruptcy of
         the Trust,  or consent to the  appointment  of a receiver,  liquidator,
         assignee,  trustee,  sequestrator  (or other  similar  official) of the
         Trust or a  substantial  part of the  property of the Trust or cause or
         permit the Trust to make any  assignment  for the benefit of creditors,
         or  admit in  writing  the  inability  of the  Trust  to pay its  debts
         generally as they become due, or declare or effect a moratorium  on the
         debt of the Trust or take any action in furtherance of any such action;

                  (c) it shall  obtain  from  each  counterparty  to each  Basic
         Document  to which it or the Trust is a party and each other  agreement
         entered  into on or after the date hereof to which it or the Trust is a
         party,  an  agreement  by each  such  counterparty  that  prior  to the
         occurrence of the event  specified in Section 9.1(e) such  counterparty
         shall not institute  against,  or join any other Person in  instituting
         against, it or the Trust, any


                                        9





         bankruptcy,  reorganization,  arrangement,  insolvency  or  liquidation
         proceedings or other similar  proceedings  under the laws of the United
         States or any state of the United States; and

                  (d) it shall  not,  for any  reason,  withdraw  or  attempt to
         withdraw from this Agreement, dissolve, institute proceedings for it to
         be adjudicated a bankrupt or insolvent,  or consent to the  institution
         of bankruptcy or insolvency  proceedings against it, or file a petition
         seeking or consenting to  reorganization or relief under any applicable
         federal  or  state  law  relating  to  bankruptcy,  or  consent  to the
         appointment of a receiver, liquidator,  assignee, trustee, sequestrator
         (or  other  similar  official)  of  it or a  substantial  part  of  its
         property, or make any assignment for the benefit of creditors, or admit
         in writing its inability to pay its debts generally as they become due,
         or  declare  or effect a  moratorium  on its debt or take any action in
         furtherance of any such action.

         SECTION    2.12.    Covenants   of   the    Certificateholders.    Each
Certificateholder by its acceptance of a Certificate agrees:

                  (a)  to  be  bound  by  the  terms  and   conditions   of  the
         Certificates of which such party is the record or beneficial  owner and
         of this Agreement,  including any supplements or amendments  hereto and
         to perform the  obligations of a Holder as set forth therein or herein,
         in all respects as if it were a signatory  hereto.  This undertaking is
         made for the benefit of the Trust,  the Owner Trustee,  the Insurer and
         all other Holders present and future;

                  (b)  to  hereby   appoint  the  Depositor  as  its  agent  and
         attorney-in-fact  to sign any  federal  income tax  information  return
         filed on behalf of the Trust and agree that, if requested by the Trust,
         it will sign such federal income tax information return in its capacity
         as a Holder of an interest in the Trust. Each Holder also hereby agrees
         that in its tax returns it will not take any position inconsistent with
         those taken in any tax returns filed by the Trust;

                  (c) if such Holder is other than an individual or other entity
         holding its Certificate  through a broker who reports  securities sales
         on Form 1099-B,  to notify the Owner Trustee of any transfer by it of a
         Certificate or a beneficial interest in a Certificate in a taxable sale
         or exchange, within 30 days of the date of the transfer; and

                  (d) until the  completion  of the events  specified in Section
         9.1(e), not to, for any reason,  institute proceedings for the Trust or
         the Depositor to be adjudicated a bankrupt or insolvent,  or consent to
         the  institution  of bankruptcy or insolvency  proceedings  against the
         Trust, or file a petition  seeking or consenting to  reorganization  or
         relief  under  any   applicable   federal  or  state  law  relating  to
         bankruptcy,  or consent to the  appointment of a receiver,  liquidator,
         assignee,  trustee,  sequestrator  (or other  similar  official) of the
         Trust or a substantial part of its property, or cause or permit the


                                       10





         Trust to make any assignment for the benefit of its creditors, or admit
         in writing its inability to pay its debts generally as they become due,
         or  declare  or effect a  moratorium  on its debt or take any action in
         furtherance of any such action.


                                  ARTICLE III.

                     Certificates and Transfer of Interests

         SECTION 3.1. Initial Ownership.  Upon the formation of the Trust by the
contribution by the Depositor  pursuant to Section 2.5 and until the issuance of
the Certificates, the Depositor shall be the sole beneficiary of the Trust.

         SECTION  3.2.  The  Certificates.  The  Certificates  shall  be  issued
initially  to  the  Depositor  with  a  Certificate  Balance  of  $5,293,031.51.
Certificates  shall be issued in minimum  denominations  of $1,000 and  integral
multiples  thereof (with the exception of one Certificate  which shall be issued
in a  minimum  denomination  of  $1,000  but  need not be an  integral  multiple
thereof). The Certificates shall be executed on behalf of the Trust by manual or
facsimile signature of an authorized officer of the Owner Trustee.  Certificates
bearing the manual or facsimile  signatures of individuals who were, at the time
when such  signatures  shall have been affixed,  authorized to sign on behalf of
the  Trust,  shall  be  validly  issued  and  entitled  to the  benefit  of this
Agreement,  notwithstanding  that such  individuals  or any of them  shall  have
ceased to be so  authorized  prior to the  authentication  and  delivery of such
Certificates  or did not hold such  offices  at the date of  authentication  and
delivery of such  Certificates.  A transferee  of a  Certificate  shall become a
Certificateholder,  and shall be  entitled  to the  rights  and  subject  to the
obligations of a  Certificateholder  hereunder,  upon due  registration  of such
Certificate in such transferee's name pursuant to Section 3.4.

         SECTION 3.3.  Authentication  of  Certificates.  Concurrently  with the
initial sale of the  Receivables to the Trust pursuant to the Sale and Servicing
Agreement,  the Owner  Trustee  shall cause the  Certificates  with an aggregate
Certificate  Balance  equal to  $5,293,031.51  to be  executed  on behalf of the
Trust,  authenticated  and delivered  upon the written  order of the  Depositor,
signed by its chairman of the board,  its president or any vice  president,  its
treasurer or any assistant  treasurer  without further  corporate  action by the
Depositor, in authorized denominations.  No Certificate shall entitle its holder
to any benefit under this Agreement,  or shall be valid for any purpose,  unless
there  shall  appear  on  such  Certificate  a  certificate  of   authentication
substantially  in the form set forth in Exhibit A, executed by the Owner Trustee
or  the  Owner  Trustee's  authentication  agent,  by  manual  signature;   such
authentication shall constitute  conclusive evidence that such Certificate shall
have been duly authenticated and delivered hereunder.  All Certificates shall be
dated  the date of their  authentication.  Bankers  Trust  Company  shall be the
initial  authentication  agent of the Owner Trustee and all references herein to
the authentication of Certificates shall be deemed to include the authentication
agent.



                                       11





         SECTION 3.4. Registration of Transfer and Exchange of Certificates. (a)
The  Certificate  Registrar  shall  keep or cause to be kept,  at the  office or
agency  maintained  pursuant to Section  3.8, a  Certificate  Register in which,
subject to such  reasonable  regulations as it may prescribe,  the Owner Trustee
shall  provide  for  the  registration  of  Certificates  and of  transfers  and
exchanges of Certificates as herein provided. Bankers Trust Company shall be the
initial Certificate Registrar.

         (b) The  Certificate  Registrar  shall  provide the Paying Agent with a
list of the names and addresses of the Certificateholders on the Closing Date in
the form in which such  information  is provided to the  Certificate  Registrar.
Upon any transfers of  Certificates,  the  Certificate  Registrar shall promptly
notify the Paying Agent (if other than the  Certificate  Registrar)  of the name
and address of the transferee in writing, by facsimile.

         (c)  No  transfer  of a  Certificate  shall  be  made  unless  (i)  the
registration  requirements  of the  Securities  Act of  1933,  as  amended  (the
"Securities  Act"),  and any applicable State securities laws are complied with,
(ii) such  transfer  is exempt  from the  registration  requirements  under said
Securities  Act and  laws or (iii)  such  transfer  is made to a Person  who the
transferor reasonably believes is a "qualified  institutional buyer" (as defined
in Rule 144A of the Securities Act) that is purchasing such  Certificate for its
own account or the account of a qualified  institutional buyer to whom notice is
given that the  transfer  is being made in  reliance  on said Rule 144A.  In the
event that a transfer  is to be made in reliance  upon  clause  (ii) above,  the
Certificateholder  desiring to effect such transfer and such Certificateholder's
prospective  transferee  must each (x)  certify in  writing  to the  Certificate
Registrar the facts  surrounding  such transfer and (y) provide the  Certificate
Registrar with a written  opinion of counsel in form and substance  satisfactory
to the Depositor and the  Certificate  Registrar  that such transfer may be made
pursuant to an  exemption  from the  Securities  Act or laws,  which  Opinion of
Counsel shall not be an expense of the Depositor or the  Certificate  Registrar.
In the event that a transfer is to be made in reliance  upon clause (iii) above,
the prospective transferee shall have furnished to the Certificate Registrar and
the Depositor a Transferee Certificate,  signed by such transferee,  in the form
of Exhibit C. Neither the Depositor nor the  Certificate  Registrar is under any
obligation to register the  Certificates  under said Securities Act or any other
securities  law.  The  Certificate  Registrar  may request and shall  receive in
connection with any transfer signature guarantees satisfactory to it in its sole
discretion.

         (d) In no event  shall a  Certificate  be  transferred  to an  employee
benefit plan,  trust annuity or account  subject to ERISA or a plan described in
Section  4975(e)(1) of the Code (any such plan,  trust or account  including any
Keogh  (HR-10)  plans,  individual  retirement  accounts or annuities  and other
employee  benefit  plans  subject to Section 406 of ERISA or Section 4975 of the
Code being referred to in this Section 6.3 as an "Employee  Plan"), a trustee of
any Employee  Plan, or an entity,  account or other pooled  investment  fund the
underlying assets of which include or are deemed to include Employee Plan assets
by reason of an  Employee  Plan's  investment  in the  entity,  account or other
pooled  investment  fund.  The Seller,  the  Servicer,  the  Trustee,  the Owner
Trustee,  the Insurer  and the Standby  Servicer  shall not be  responsible  for
confirming or otherwise investigating whether a proposed


                                       12





purchaser is an employee  benefit plan,  trust or account  subject to ERISA,  or
described in Section 4975(e)(1) of the Code.

         (e) Each  Holder of a  Certificate,  by virtue of the  acquisition  and
holding thereof, will be deemed to have represented and agreed as follows:

                  (i) It is a qualified  institutional  buyer as defined in Rule
         144A or an institutional accredited investor as defined in Regulation D
         promulgated  under the Securities Act and is acquiring the Certificates
         for its own  institutional  account or for the  account of a  qualified
         institutional buyer or an institutional accredited investor.

                  (ii) It understands that the Certificates have been offered in
         a transaction  not involving any public  offering within the meaning of
         the  Securities  Act, and that,  if in the future it decides to resell,
         pledge or otherwise transfer any Certificates, such Certificates may be
         resold,  pledged or  transferred  only (a) to a person  whom the seller
         reasonably  believes is a qualified  institutional buyer (as defined in
         Rule 144A under the Securities  Act) that purchases for its own account
         or for the account of a qualified institutional buyer to whom notice is
         given that the resale,  pledge or transfer is being made in reliance on
         Rule 144A, (b) pursuant to an effective  registration  statement  under
         the  Securities Act or (c) in reliance on another  exemption  under the
         Securities Act.

                  (iii) It understands that the Certificates  will bear a legend
         substantially to the following effect:

                           THIS  SECURITY  HAS NOT  BEEN  REGISTERED  UNDER  THE
                  SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"). THE
                  HOLDER HEREOF,  BY PURCHASING THIS SECURITY,  AGREES THAT THIS
                  SECURITY MAY BE RESOLD,  PLEDGED OR OTHERWISE TRANSFERRED ONLY
                  (1) SO LONG AS THIS  SECURITY IS ELIGIBLE FOR RESALE  PURSUANT
                  TO RULE  144A,  TO A  PERSON  WHOM THE  TRANSFEROR  REASONABLY
                  BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING
                  OF RULE 144A UNDER THE SECURITIES ACT,  PURCHASING FOR ITS OWN
                  ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED  INSTITUTIONAL BUYER
                  TO WHOM  NOTICE  IS GIVEN  THAT THE  RESALE,  PLEDGE  OR OTHER
                  TRANSFER IS BEING MADE IN  RELIANCE ON RULE 144A,  AND SUBJECT
                  TO THE RECEIPT BY THE CERTIFICATE  REGISTRAR AND THE DEPOSITOR
                  OF A  TRANSFEREE  CERTIFICATE,  (2)  PURSUANT TO AN  EFFECTIVE
                  REGISTRATION  STATEMENT  UNDER  THE  SECURITIES  ACT OR (3) IN
                  RELIANCE   ON   ANOTHER   EXEMPTION   FROM  THE   REGISTRATION
                  REQUIREMENTS  OF THE SECURITIES ACT AND SUBJECT TO THE RECEIPT
                  BY THE CERTIFICATE REGISTRAR AND THE DEPOSITOR, OF A


                                       13





                  CERTIFICATION   OF  THE   TRANSFEREE   (SATISFACTORY   TO  THE
                  CERTIFICATE  REGISTRAR  AND THE  DEPOSITOR)  AND AN OPINION OF
                  COUNSEL  (SATISFACTORY  TO THE  CERTIFICATE  REGISTRAR AND THE
                  DEPOSITOR)  TO THE EFFECT THAT SUCH  TRANSFER IS IN COMPLIANCE
                  WITH THE SECURITIES  ACT, IN EACH CASE IN ACCORDANCE  WITH ANY
                  APPLICABLE  SECURITIES  LAWS OF ANY STATE OF THE UNITED STATES
                  AND IN COMPLIANCE WITH THE TRANSFER  REQUIREMENTS SET FORTH IN
                  SECTION 3.4 OF THE TRUST AGREEMENT.

                           IN NO EVENT SHALL THIS SECURITY BE  TRANSFERRED TO AN
                  EMPLOYEE  BENEFIT PLAN,  TRUST  ANNUITY OR ACCOUNT  SUBJECT TO
                  ERISA OR A PLAN  DESCRIBED IN SECTION  4975(E)(1) OF THE CODE,
                  (ANY SUCH  PLAN,  TRUST OR  ACCOUNT  BEING  REFERRED  TO AS AN
                  "EMPLOYEE  PLAN"),  A  TRUSTEE  OF ANY  EMPLOYEE  PLAN,  OR AN
                  ENTITY, ACCOUNT OR OTHER POOLED INVESTMENT FUND THE UNDERLYING
                  ASSETS OF WHICH INCLUDE OR ARE DEEMED TO INCLUDE EMPLOYEE PLAN
                  ASSETS BY  REASON  OF AN  EMPLOYEE  PLAN'S  INVESTMENT  IN THE
                  ENTITY,  ACCOUNT OR OTHER  POOLED  INVESTMENT  FUND.  INCLUDED
                  WITHIN  THE  DEFINITION  OF  "EMPLOYEE   PLANS"  ARE,  WITHOUT
                  LIMITATION,  KEOGH (HR-10) PLANS, IRA's (INDIVIDUAL RETIREMENT
                  ACCOUNTS  OR  ANNUITIES)  AND OTHER  EMPLOYEE  BENEFIT  PLANS,
                  SUBJECT TO SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE.

                  (iv) It has not acquired the  Certificates  with the assets of
         an Employee Plan.

         (f) Upon surrender for  registration  of transfer of any Certificate at
the office or agency maintained pursuant to Section 3.8, the Owner Trustee shall
execute,  authenticate and deliver (or shall cause its  authenticating  agent to
authenticate  and  deliver),  in  the  name  of  the  designated  transferee  or
transferees,  one or more new Certificates in authorized denominations of a like
class and aggregate  Certificate Balance dated the date of authentication by the
Owner  Trustee  or  any  authenticating  agent.  At  the  option  of  a  Holder,
Certificates  may be  exchanged  for  other  Certificates  of the same  class in
authorized  denominations of a like aggregate Certificate Balance upon surrender
of the Certificates to be exchanged at the office or agency maintained  pursuant
to Section 3.8.

         (g) Every  Certificate  presented or surrendered  for  registration  of
transfer or exchange shall be accompanied by a written instrument of transfer in
form  satisfactory  to the Owner  Trustee  and the  Certificate  Registrar  duly
executed by the  Certificateholder  or his attorney duly  authorized in writing,
with such signature  guaranteed by an "eligible guarantor  institution"  meeting
the  requirements  of the  Certificate  Registrar,  which  requirements  include
membership or participation in the Securities Transfer Agent's Medallion Program


                                       14





("STAMP") or such other  "signature  guarantee  program" as may be determined by
the Certificate  Registrar in addition to, or in substitution for, STAMP, all in
accordance with the Exchange Act. Each Certificate  surrendered for registration
of transfer or exchange  shall be canceled and  subsequently  disposed of by the
Owner Trustee in accordance with its customary practice.

         (h) No service charge shall be made for any registration of transfer or
exchange of Certificates, but the Owner Trustee or the Certificate Registrar may
require payment of a sum sufficient to cover any tax or governmental charge that
may be imposed in connection with any transfer or exchange of Certificates.

         SECTION 3.5. Mutilated,  Destroyed, Lost or Stolen Certificates. If (a)
any mutilated Certificate shall be surrendered to the Certificate Registrar,  or
if the Certificate  Registrar shall receive  evidence to its satisfaction of the
destruction,  loss or theft of any  Certificate and (b) there shall be delivered
to the Certificate  Registrar,  the Owner Trustee and (unless an Insurer Default
shall have occurred and be continuing)  the Insurer,  such security or indemnity
as may be required by them to save each of them harmless, then in the absence of
notice that such Certificate  shall have been acquired by a bona fide purchaser,
the Owner Trustee on behalf of the Trust shall execute and the Owner Trustee, or
the Owner Trustee's  authenticating  agent, shall  authenticate and deliver,  in
exchange  for or in lieu  of any  such  mutilated,  destroyed,  lost  or  stolen
Certificate,  a new  Certificate  of like  class,  tenor  and  denomination.  In
connection  with the issuance of any new  Certificate  under this  Section,  the
Owner  Trustee or the  Certificate  Registrar  may  require the payment of a sum
sufficient to cover any tax or other governmental  charge that may be imposed in
connection therewith.  Any duplicate Certificate issued pursuant to this Section
shall constitute  conclusive  evidence of an ownership interest in the Trust, as
if originally issued,  whether or not the lost, stolen or destroyed  Certificate
shall be found at any time.

         SECTION 3.6. Persons Deemed Certificateholders.  Every Person by virtue
of becoming a Certificateholder  in accordance with this Agreement and the rules
and  regulations of the Clearing Agency shall be deemed to be bound by the terms
of this Agreement.  Prior to due  presentation of a Certificate for registration
of transfer,  the Owner Trustee,  the Certificate  Registrar and the Insurer and
any agent of the Owner Trustee,  the Certificate  Registrar and the Insurer, may
treat the  Person  in whose  name any  Certificate  shall be  registered  in the
Certificate  Register  as the  owner  of such  Certificate  for the  purpose  of
receiving distributions pursuant to the Sale and Servicing Agreement and for all
other  purposes  whatsoever,  and none of the  Owner  Trustee,  the  Certificate
Registrar  or the Insurer nor any agent of the Owner  Trustee,  the  Certificate
Registrar or the Insurer shall be bound by any notice to the contrary.

         SECTION 3.7. Access to List of Certificateholders' Names and Addresses.
The  Certificate  Registrar  shall  furnish  or  cause  to be  furnished  to the
Servicer, the Depositor or (unless an Insurer Default shall have occurred and be
continuing)  the  Insurer,  within  15 days  after  receipt  by the  Certificate
Registrar  of a request  therefor  from such Person in writing,  a list,  of the
names and addresses of the Certificateholders as of the most recent Record Date.


                                       15





If three or more Holders of  Certificates or one or more Holders of Certificates
evidencing not less than 25% of the Certificate  Balance then outstanding  apply
in writing to the Certificate  Registrar,  and such application  states that the
applicants desire to communicate with other  Certificateholders  with respect to
their rights under this Agreement or under the Certificates and such application
is accompanied by a copy of the  communication  that such applicants  propose to
transmit,  then the Certificate Registrar shall, within five Business Days after
the receipt of such  application,  afford such  applicants  access during normal
business  hours to the  current  list of  Certificateholders.  Each  Holder,  by
receiving and holding a Certificate or a beneficial  interest therein,  shall be
deemed to have agreed not to hold any of the Depositor,  the Servicer, the Owner
Trustee,  the  Certificate  Registrar  or  the  Insurer  or  any  agent  thereof
accountable by reason of the  disclosure of its name and address,  regardless of
the source from which such information was derived.

         SECTION 3.8.  Maintenance of Office or Agency. The Trust shall maintain
in New York, an office or offices or agency or agencies where  Certificates  may
be surrendered  for  registration  of transfer or exchange and where notices and
demands  to or upon the  Trust in  respect  of the  Certificates  and the  Basic
Documents may be served. The Trust initially designates Bankers Trust Company at
4 Albany Street, 10th Floor, New York, New York 10006 as its principal corporate
trust office for such  purposes.  The Owner  Trustee  shall give prompt  written
notice to the Depositor,  the  Certificateholders and (unless an Insurer Default
shall have occurred and be continuing) the Insurer of any change in the location
of the Certificate Register or any such office or agency.

         SECTION 3.9. ERISA  Restrictions.  The Certificates may not be acquired
by or for the  account of (i) an  employee  benefit  plan (as defined in Section
3(3)  of the  Employee  Retirement  Income  Security  Act of  1974,  as  amended
("ERISA"))  that is subject to the  provisions of Title I of ERISA,  (ii) a plan
described  in  Section  4975(e)(1)  of the  Internal  Revenue  Code of 1986,  as
amended,  or (iii) any entity  whose  underlying  assets  include plan assets by
reason of a plan's  investment  in the  entity  (each,  a  "Benefit  Plan").  By
accepting  and holding its  ownership  interest in its  Certificate,  the Holder
thereof  shall be  deemed to have  represented  and  warranted  that it is not a
Benefit Plan.


                                   ARTICLE IV.

                         Voting Rights and Other Actions

         SECTION 4.1.  Prior Notice to Holders with Respect to Certain  Matters.
With respect to the following  matters,  the Owner Trustee shall not take action
unless at least 30 days  before the  taking of such  action,  the Owner  Trustee
shall have notified the Certificateholders in writing of the proposed action and
the  Certificateholders  shall not have  notified  the Owner  Trustee in writing
prior to the 30th day after such  notice is given  that such  Certificateholders
have withheld consent or provided alternative direction:



                                       16





                  (a) the  election  by the  Trust to file an  amendment  to the
         Certificate  of Trust  (unless  such  amendment is required to be filed
         under the Business  Trust  Statute or unless such  amendment  would not
         materially and adversely affect the interests of the Holders);

                  (b) the amendment of the Indenture by a supplemental indenture
         in circumstances where the consent of any Noteholder is required;

                  (c) the amendment of the Indenture by a supplemental indenture
         in  circumstances  where the consent of any  Noteholder is not required
         and such  amendment  materially  adversely  affects the interest of the
         Certificateholders; or

                  (d)  except  pursuant  to  Section  13.1(b)  of the  Sale  and
         Servicing Agreement, the amendment,  change or modification of the Sale
         and Servicing  Agreement,  except to cure any ambiguity or defect or to
         amend or supplement any provision in a manner that would not materially
         adversely affect the interests of the Certificateholders.

The Servicer shall notify the  Certificateholders  in writing of any appointment
of a successor  Note  Registrar,  Trustee or Certificate  Registrar  within five
Business Days thereof.

         SECTION  4.2.  Action by  Certificateholders  with  Respect  to Certain
Matters.  The Owner Trustee shall not have the power,  except upon the direction
of the Certificateholders or the Insurer in accordance with the Basic Documents,
to (a) remove the Servicer  under the Sale and Servicing  Agreement  pursuant to
Section 8.1 thereof or (b) except as expressly  provided in the Basic Documents,
sell the Receivables  after the termination of the Indenture.  The Owner Trustee
shall take the actions  referred to in the preceding  sentence only upon written
instructions   signed  by  the   Certificateholders   and  the   furnishing   of
indemnification satisfactory to the Owner Trustee by the Certificateholders.

         SECTION 4.3. Action by  Certificateholders  with Respect to Bankruptcy.
The Owner  Trustee  shall not have the power to,  and shall  not,  commence  any
proceeding  or other actions  contemplated  by Section  2.12(d)  relating to the
Trust  without  the prior  written  consent  of the  Insurer  (unless an Insurer
Default shall have occurred and be continuing)  and the unanimous prior approval
of all  Certificateholders  and the  delivery to the Owner  Trustee by each such
Certificateholder  of  a  certificate  certifying  that  such  Certificateholder
reasonably believes that the Trust is insolvent.

         SECTION  4.4.  Restrictions  on  Certificateholders'   Power.  (a)  The
Certificateholders  shall not direct the Owner  Trustee to take or refrain  from
taking any action if such action or inaction would be contrary to any obligation
of the Trust or the  Owner  Trustee  under  this  Agreement  or any of the Basic
Documents  or would be contrary  to Section  2.3 nor shall the Owner  Trustee be
obligated to follow any such direction, if given.



                                       17





         (b) No Certificateholder  shall have any right by virtue or by availing
itself of any  provisions of this  Agreement to institute any suit,  action,  or
proceeding  in equity or at law upon or under or with respect to this  Agreement
or any Basic Document,  unless the  Certificateholders are the Instructing Party
pursuant to Section  6.3 and unless a  Certificateholder  previously  shall have
given to the Owner  Trustee a written  notice of default and of the  continuance
thereof,  as provided  in this  Agreement,  and also  unless  Certificateholders
evidencing not less than 25% of the Certificate  Balance then outstanding  shall
have made written request upon the Owner Trustee to institute such action,  suit
or proceeding  in its own name as Owner  Trustee under this  Agreement and shall
have offered to the Owner  Trustee such  reasonable  indemnity as it may require
against the costs,  expenses and liabilities to be incurred  therein or thereby,
and the Owner  Trustee,  for 30 days after its receipt of such notice,  request,
and offer of  indemnity,  shall have  neglected or refused to institute any such
action, suit, or proceeding,  and during such 30-day period no request or waiver
inconsistent  with such  written  request  has been  given to the Owner  Trustee
pursuant  to and in  compliance  with this  Section  or  Section  6.3;  it being
understood   and   intended,    and   being   expressly   covenanted   by   each
Certificateholder with every other Certificateholder and the Owner Trustee, that
no one or more  Holders  of  Certificates  shall  have any  right in any  manner
whatever by virtue or by availing itself or themselves of any provisions of this
Agreement  to affect,  disturb,  or  prejudice  the rights of the Holders of any
other of the  Certificates,  or to  obtain or seek to  obtain  priority  over or
preference  to any  other  such  Holder,  or to  enforce  any right  under  this
Agreement,  except in the manner  provided in this  Agreement and for the equal,
ratable,  and common benefit of all  Certificateholders.  For the protection and
enforcement   of  the   provisions   of  this  Section   4.4,   each  and  every
Certificateholder  and the Owner Trustee shall be entitled to such relief as can
be given either at law or in equity.

         SECTION 4.5.  Majority  Control.  No  Certificateholder  shall have any
right to vote or in any manner otherwise control the operation and management of
the Trust except as expressly  provided in this  Agreement.  Except as expressly
provided herein,  any action that may be taken by the  Certificateholders  under
this Agreement may be taken by the Holders of  Certificates  evidencing not less
than a  majority  of the  aggregate  Certificate  Balance.  Except as  expressly
provided herein, any written notice of the Certificateholders delivered pursuant
to this Agreement shall be effective if signed by Certificateholders  evidencing
not less than a majority of the Certificate  Balance at the time of the delivery
of such notice.

         SECTION  4.6.  Rights  of  Insurer.  Notwithstanding  anything  to  the
contrary  in the Basic  Documents,  without  the prior  written  consent  of the
Insurer (so long as no Insurer  Default shall have occurred and be  continuing),
the Owner Trustee  shall not (i) remove the  Servicer,  (ii) initiate any claim,
suit or  proceeding  by the Trust or  compromise  any claim,  suit or proceeding
brought by or against the Trust,  other than with respect to the  enforcement of
any Receivable or any rights of the Trust thereunder, (iii) authorize the merger
or  consolidation  of the Trust with or into any other  business  trust or other
entity  (other than in  accordance  with Section 3.10 of the  Indenture) or (iv)
amend the Certificate of Trust.



                                       18





                                   ARTICLE V.

                                 Certain Duties

         SECTION   5.1.    Accounting   and   Records   to   the    Noteholders,
Certificateholders, the Internal Revenue Service and Others. Subject to Sections
12.1(b)(iii)  and 12.1(c) of the Sale and  Servicing  Agreement,  the  Depositor
shall  (a)  maintain  (or  cause to be  maintained)  the books of the Trust on a
calendar year basis on the accrual method of  accounting,  (b) deliver (or cause
to be delivered) to each  Certificateholder,  as may be required by the Code and
applicable Treasury  Regulations,  such information,  if any, as may be required
(including,  if appropriate  consistent with the  characterization  of the Trust
pursuant  to Section  2.6,  Schedule  K-1) to enable each  Certificateholder  to
prepare its Federal and state income tax returns,  (c) file or cause to be filed
such tax  returns,  if any,  relating to the Trust  (including,  if  appropriate
consistent  with the  characterization  of the Trust  pursuant to Section 2.6, a
partnership  information  return on Internal  Revenue  Service  Form 1065),  and
direct the Servicer to make such  elections as may from time to time be required
or  appropriate  under  any  applicable  state  or  Federal  statute  or rule or
regulation thereunder so as to maintain the Trust's characterization pursuant to
Section 2.6 for Federal  income and  California  franchise  tax purposes and for
purposes of any other jurisdiction for which the  characterization  of the Trust
is relevant.  In any period in which the Paying Agent  receives  written  notice
that the Trust is not treated solely as a security device in accordance with the
provisions  of Section 2.6, the Paying Agent will,  in  accordance  with Section
1446 of the Code and Rev. Proc. 89-31,  1989- 1 C.B. 895 thereunder,  collect or
cause to be collected any withholding tax as described in and in accordance with
Section 5.5 with respect to income or  distributions to  Certificateholders  and
the appropriate forms relating  thereto.  The Depositor shall make all elections
pursuant to this  Section.  The  Depositor  shall have the power to sign all tax
information  returns filed pursuant to this Section 5.1 and any other returns as
may be required  by law,  to the extent it is legally  entitled to do so. In the
event the Trust is treated as a partnership for federal income tax purposes, the
Depositor  shall  elect  under  Section  1278 of the Code to  include  in income
currently any market discount that accrues with respect to the Receivables. None
of the  Trust,  the  Depositor  nor any  Person  on  behalf  of the Trust or the
Depositor shall make the election provided under Section 754 of the Code.

         SECTION  5.2.  Signature  on  Returns;  Tax  Matters  Partner.  (a) The
Depositor shall sign on behalf of the Trust the tax returns of the Trust, unless
applicable law requires a Certificateholder to sign such documents.

         (b) In the event the Trust is  treated  as a  partnership  for  federal
income tax  purposes,  the Depositor  shall be the "tax matters  partner" of the
Trust pursuant to the Code.

         SECTION 5.3. Underwriting Agreement.  The Servicer is hereby authorized
to execute and deliver the Underwriting  Agreement with respect to the Notes and
the Certificates.



                                       19





         SECTION  5.4.  Trust  Accounts.  The  Owner  Trustee,  on behalf of the
Certificateholders,  shall  establish  and  maintain in the name of the Trust an
Eligible Account (the "Certificate Distribution Account"), bearing a designation
clearly  indicating that the funds deposited therein are held for the benefit of
the Trust on  behalf of the  Certificateholders.  The  Certificate  Distribution
Account shall initially be established with the Bankers Trust Company.

         Funds on  deposit  in the  Certificate  Distribution  Account  shall be
invested at the  direction of the Servicer in Eligible  Investments  selected in
writing by the Servicer  (pursuant to standing  instructions or otherwise).  All
such  Eligible  Investments  shall be held by or on  behalf of the Trust for the
benefit  of the  Certificateholders.  Other  than  as  permitted  by the  Rating
Agencies  and the  Insurer,  funds on  deposit in the  Certificate  Distribution
Account shall be invested in Eligible  Investments that will mature so that such
funds will be available at the close of business on the Business Day immediately
preceding  the  following  Payment  Date.  Funds  deposited  in the  Certificate
Distribution  Account on the day  immediately  preceding a Payment Date upon the
maturity of any Eligible  Investments are not required to be invested overnight.
All Eligible  investments  will be held to maturity.  All  interest,  dividends,
gains upon sale and other income from, or earnings on investment of funds in the
Certificate  Distribution  Account shall be distributed on the next Payment Date
pursuant  to Section  5.7 of the Sale and  Servicing  Agreement  and Section 5.5
hereof.

         The Trust shall  possess all right,  title and interest in all funds on
deposit  from time to time in the  Certificate  Distribution  Account and in all
proceeds  thereof.   Except  as  otherwise   provided  herein,  the  Certificate
Distribution  Account  shall be under the sole dominion and control of the Trust
for the  benefit  of the  Certificateholders.  If at any  time  the  Certificate
Distribution  Account ceases to be an Eligible  Account,  the Trust shall within
five  Business  Days  establish  a new  Certificate  Distribution  Account as an
Eligible  Account and shall transfer any cash and/or any investments to such new
Certificate  Distribution Account. The Servicer shall promptly notify the Rating
Agencies of any change in the location of the Certificate Distribution Account.

         SECTION 5.5. Application of Funds in Certificate  Distribution Account.
On each  Payment  Date,  the  Paying  Agent  shall  distribute  or  cause  to be
distributed  all amounts on deposit in the Certificate  Distribution  Account to
Certificateholders  in respect of the  Certificates to the extent of amounts due
and unpaid on the  Certificates  for  principal  and  interest in the  following
amounts and in the following order of priority:

                  (a)   to   the    Holders    of    the    Certificates,    the
         Certificateholders'  Interest  Distributable  Amount;  provided that if
         there are not sufficient funds in the Certificate  Distribution Account
         to  pay  the  entire   amount  of  the   Certificateholders'   Interest
         Distributable  Amount,  the  amount  in  the  Certificate  Distribution
         Account  shall  be  applied  to the  payment  of such  interest  on the
         Certificates  pro rata on the basis of the amount of accrued and unpaid
         interest due on the Certificates;



                                       20





                  (b)   to   the    Holders    of    the    Certificates,    the
         Certificateholders'    Principal   Distributable   Amount   until   the
         outstanding principal balance of the Certificates is reduced to zero.

                  (c) On each  Payment  Date,  the Owner  Trustee  shall send or
         cause to be sent to each  Certificateholder  the statement  provided to
         the Owner Trustee by the Servicer  pursuant to Section 5.11 of the Sale
         and Servicing Agreement on such Payment Date.

                  (d) In the event  that any  withholding  tax is imposed on the
         Trust's payment (or allocations of income) to a Certificateholder, such
         tax  shall   reduce  the   amount   otherwise   distributable   to  the
         Certificateholder  in accordance with this Section. The Paying Agent is
         hereby  authorized  and directed to retain or cause to be retained from
         amounts otherwise  distributable to the  Certificateholders  sufficient
         funds for the payment of any tax that is legally owed by the Trust (but
         such  authorization  shall not prevent the Paying Agent from contesting
         any such tax in appropriate  proceedings,  and  withholding  payment of
         such  tax,  if   permitted   by  law,   pending  the  outcome  of  such
         proceedings). The amount of any withholding tax imposed with respect to
         a  Certificateholder  shall  be  treated  as cash  distributed  to such
         Certificateholder  at the time it is withheld by the Trust and remitted
         to the appropriate  taxing  authority.  If there is a possibility  that
         withholding  tax is payable with respect to a  distribution  (such as a
         distribution  to a non-US  Certificateholder),  the Paying Agent may in
         its sole  discretion  withhold  such  amounts in  accordance  with this
         clause (c). In the event that a Certificateholder wishes to apply for a
         refund of any such  withholding  tax, the Paying Agent shall reasonably
         cooperate with such  Certificateholder  in making such claim so long as
         such  Certificateholder  agrees to  reimburse  the Paying Agent for any
         out-of-pocket expenses incurred.

                  (e)  Any  funds  remaining  in  the  Certificate  Distribution
         Account after distribution of all amounts specified in this Section and
         after payment of all amounts owed to the Owner Trustee hereunder, shall
         be distributed to the Seller.

                  (f) Distributions required to be made to Certificateholders on
         any Payment Date shall be made to each  Certificateholder  of record on
         the  preceding  Record Date  either by wire  transfer,  in  immediately
         available  funds,  to the  account  of such  Holder  at a bank or other
         entity   having   appropriate   facilities   therefor,   if  (i)   such
         Certificateholder  shall have  provided  to the  Certificate  Registrar
         appropriate  written  instructions at least five Business Days prior to
         such  Payment  Date and such  Holder's  certificates  in the  aggregate
         evidence  a  denomination  of not less  than  $1,000,000  or (ii)  such
         Certificateholder  is the Seller, or an Affiliate thereof,  or, if not,
         by check mailed to such Certificateholder at the address of such holder
         appearing in the Certificate  Register.  Notwithstanding the foregoing,
         the final  distribution in respect of any  Certificate  (whether on the
         Final  Scheduled  Payment Date or otherwise)  will be payable only upon
         presentation  and surrender of such Certificate at the office or agency
         maintained for that purpose by the  Certificate  Registrar  pursuant to
         Section 3.8.


                                       21





                  (g) Subject to Section 5.1 and this Section,  monies  received
         by the Owner  Trustee  hereunder  need not be  segregated in any manner
         except to the extent  required by law and may be  deposited  under such
         general  conditions  as may be prescribed by law, and the Owner Trustee
         shall not be liable for any interest thereon.


                                   ARTICLE VI.

                      Authority and Duties of Owner Trustee

         SECTION 6.1.  General  Authority.  The Owner Trustee is authorized  and
directed to execute and deliver the Basic  Documents to which the Trust is named
as a party and each  certificate or other document  attached as an exhibit to or
contemplated  by the Basic  Documents to which the Trust is named as a party and
any amendment thereto, in each case, in such form as the Depositor shall approve
as evidenced  conclusively  by the Owner  Trustee's  execution  thereof,  and on
behalf of the Trust, to direct the Trustee to authenticate and deliver Class A-1
Notes in the aggregate  principal  amount of $54,260,000  and Class A-2 Notes in
the aggregate principal amount of $46,307,598. In addition to the foregoing, the
Owner  Trustee is  authorized  but shall not be  obligated,  to take all actions
required of the Trust  pursuant  to the Basic  Documents.  The Owner  Trustee is
further  authorized  from  time to time to take such  action as the  Instructing
Party  recommends with respect to the Basic Documents so long as such activities
are consistent with the terms of the Basic Documents.

         SECTION 6.2. General Duties.  It shall be the duty of the Owner Trustee
to discharge (or cause to be discharged) all of its responsibilities pursuant to
the  terms  of this  Agreement  and the  Sale  and  Servicing  Agreement  and to
administer  the  Trust in the  interest  of the  Holders,  subject  to the Basic
Documents  and  in   accordance   with  the   provisions   of  this   Agreement.
Notwithstanding  the  foregoing,  the  Owner  Trustee  shall be  deemed  to have
discharged  its  duties  and  responsibilities  hereunder  and  under  the Basic
Documents  to the  extent  the  Servicer  has  agreed in the Sale and  Servicing
Agreement to perform any act or to discharge  any duty of the Trust or the Owner
Trustee  hereunder or under any Basic Document,  and the Owner Trustee shall not
be  liable  for  the  default  or  failure  of the  Servicer  to  carry  out its
obligations under the Sale and Servicing Agreement.

         SECTION 6.3. Action upon Instruction. (a) Subject to Article IV and the
terms of the  Spread  Account  Agreement,  the  Insurer  (so long as an  Insurer
Default shall not have occurred and be continuing) or the Certificateholders (if
an Insurer  Default shall have  occurred and be  continuing)  (the  "Instructing
Party")  shall  have the  exclusive  right to direct  the  actions  of the Owner
Trustee in the  management of the Trust,  so long as such  instructions  are not
inconsistent  with the express terms set forth herein or in any Basic  Document.
The  Instructing  Party  shall  not  instruct  the  Owner  Trustee  in a  manner
inconsistent with this Agreement or the Basic Documents.



                                       22





         (b)  The  Owner  Trustee  shall  not be  required  to take  any  action
hereunder or under any Basic Document if the Owner Trustee shall have reasonably
determined, or shall have been advised by counsel, that such action is likely to
result in liability on the part of the Owner Trustee or is contrary to the terms
hereof or of any Basic Document or is otherwise contrary to law.

         (c) Whenever the Owner Trustee is unable to decide between  alternative
courses of action  permitted  or required by the terms of this  Agreement or any
Basic  Document,  the Owner Trustee shall  promptly give notice (in such form as
shall  be  appropriate  under  the   circumstances)  to  the  Instructing  Party
requesting  instruction  as to the  course of action to be  adopted,  and to the
extent the Owner  Trustee  acts in good  faith in  accordance  with any  written
instruction  received from the Instructing Party, the Owner Trustee shall not be
liable on account of such action to any Person.  If the Owner  Trustee shall not
have received appropriate  instruction within ten days of such notice (or within
such shorter period of time as reasonably may be specified in such notice or may
be  necessary  under the  circumstances)  it may, but shall be under no duty to,
take or refrain from taking such action, not inconsistent with this Agreement or
the  Basic  Documents,  as it  shall  deem to be in the  best  interests  of the
Certificateholders, and shall have no liability to any Person for such action or
inaction.

         (d) In the event that the Owner Trustee is unsure as to the application
of any provision of this  Agreement or any Basic  Document or any such provision
is ambiguous as to its  application,  or is, or appears to be, in conflict  with
any other applicable provision,  or in the event that this Agreement permits any
determination  by the Owner  Trustee  or is silent  or is  incomplete  as to the
course of action that the Owner  Trustee is  required to take with  respect to a
particular  set of facts,  the Owner  Trustee  may give  notice (in such form as
shall  be  appropriate  under  the   circumstances)  to  the  Instructing  Party
requesting  instruction  and,  to the  extent  that the  Owner  Trustee  acts or
refrains  from  acting in good  faith in  accordance  with any such  instruction
received,  the Owner Trustee  shall not be liable,  on account of such action or
inaction,  to  any  Person.  If  the  Owner  Trustee  shall  not  have  received
appropriate  instruction  within 10 days of such notice (or within such  shorter
period of time as reasonably may be specified in such notice or may be necessary
under the  circumstances)  it may but shall be under no duty to, take or refrain
from  taking  such  action not  inconsistent  with this  Agreement  or the Basic
Documents   as  it   shall   deem   to  be  in  the   best   interests   of  the
Certificateholders, and shall have no liability to any Person for such action or
inaction.

         SECTION  6.4. No Duties  Except as  Specified  in this  Agreement or in
Instructions. The Owner Trustee shall not have any duty or obligation to manage,
make any  payment  with  respect  to,  register,  record,  sell,  dispose of, or
otherwise deal with the Owner Trust Estate, or to otherwise take or refrain from
taking any action under, or in connection with, any document contemplated hereby
to which the Owner Trustee is a party, except as expressly provided by the terms
of this  Agreement  or in any  document or written  instruction  received by the
Owner  Trustee  pursuant to Section  6.3; and no implied  duties or  obligations
shall be read  into  this  Agreement  or any Basic  Document  against  the Owner
Trustee. The Owner Trustee shall have no responsibility for filing any financing
or continuation statement in any


                                       23





public office at any time or to otherwise  perfect or maintain the perfection of
any security  interest or lien granted to it hereunder or to prepare or file any
United  States  Securities  and Exchange  Commission  filing for the Trust or to
record this Agreement or any Basic Document.

         SECTION 6.5. No Action  Except under Basic  Documents or  Instructions.
The Owner Trustee shall not manage,  control, use, sell, dispose of or otherwise
deal with any part of the Owner Trust Estate except (i) in  accordance  with the
powers granted to and the authority conferred upon the Owner Trustee pursuant to
this  Agreement,  (ii) in  accordance  with the  Basic  Documents  and  (iii) in
accordance  with any  document or  instruction  delivered  to the Owner  Trustee
pursuant to Section 6.3.

         SECTION 6.6. Restrictions.  The Owner Trustee shall not take any action
(a) that is inconsistent with the purposes of the Trust set forth in Section 2.3
or (b) that, to the actual  knowledge of the Owner Trustee,  would result in the
Trust's becoming taxable as a corporation for Federal income tax purposes or for
the purposes of any applicable state tax on corporations. The Certificateholders
shall not  direct the Owner  Trustee  to take  action  that  would  violate  the
provisions of this Section.


                                  ARTICLE VII.

                          Concerning the Owner Trustee

         SECTION 7.1. Acceptance of Trusts and Duties. The Owner Trustee accepts
the  trusts  hereby  created  and agrees to perform  its duties  hereunder  with
respect  to such  trusts  but only upon the terms of this  Agreement.  The Owner
Trustee also agrees to disburse all moneys actually  received by it constituting
part of the Owner Trust  Estate upon the terms of the Basic  Documents  and this
Agreement. The Owner Trustee shall not be answerable or accountable hereunder or
under any Basic Document under any circumstances, except (i) for its own willful
misconduct,  bad faith or negligence,  (ii) in the case of the inaccuracy of any
representation or warranty  contained in Section 7.3 expressly made by the Owner
Trustee,  (iii) for liabilities arising from the failure of the Owner Trustee to
perform obligations  expressly  undertaken by it in the last sentence of Section
6.4 hereof,  (iv) for any investments  issued by the Owner Trustee or any branch
or affiliate thereof in its commercial  capacity or (v) for taxes, fees or other
charges  on,  based on or measured  by, any fees,  commissions  or  compensation
received by the Owner Trustee. In particular,  but not by way of limitation (and
subject to the exceptions set forth in the preceding sentence):

                  (a) the Owner  Trustee  shall  not be liable  for any error of
         judgment made by a Responsible Officer of the Owner Trustee;



                                       24





                  (b) the Owner  Trustee shall not be liable with respect to any
         action  taken  or  omitted  to be taken  by it in  accordance  with the
         instructions   of  the   Instructing   Party,   the   Servicer  or  any
         Certificateholder;

                  (c) no provision of this Agreement or any Basic Document shall
         require the Owner  Trustee to expend or risk funds or  otherwise  incur
         any  financial  liability  in the  performance  of any of its rights or
         powers hereunder or under any Basic Document if the Owner Trustee shall
         have  reasonable  grounds for believing that repayment of such funds or
         adequate  indemnity  against such risk or  liability is not  reasonably
         assured or provided to it;

                  (d) under no  circumstances  shall the Owner Trustee be liable
         for  indebtedness  evidenced  by or  arising  under  any of  the  Basic
         Documents, including the principal of and interest on the Notes;

                  (e) the  Owner  Trustee  shall  not be  responsible  for or in
         respect of the validity or sufficiency of this Agreement or for the due
         execution  hereof  by  the  Depositor  or  for  the  form,   character,
         genuineness,  sufficiency,  value or validity of any of the Owner Trust
         Estate or for or in respect of the validity or sufficiency of the Basic
         Documents,   other  than  the  certificate  of  authentication  on  the
         Certificates,  and the Owner  Trustee shall in no event assume or incur
         any  liability,  duty  or  obligation  to  the  Insurer,  Trustee,  the
         Collateral  Agent,  any Noteholder or to any  Certificateholder,  other
         than as expressly provided for herein and in the Basic Documents;

                  (f) the Owner  Trustee  shall not be liable for the default or
         misconduct of the Depositor,  the Insurer,  the Trustee or the Servicer
         under any of the Basic  Documents  or otherwise  and the Owner  Trustee
         shall have no obligation or liability to perform the obligations  under
         this Agreement or the Basic Documents that are required to be performed
         by the Depositor under this Agreement, the Insurer or the Trustee under
         the Note Policy,  by the Trustee  under the Indenture or the Trustee or
         the Servicer under the Sale and Servicing Agreement; and

                  (g) the Owner Trustee shall be under no obligation to exercise
         any of the  rights or  powers  vested  in it by this  Agreement,  or to
         institute,  conduct or defend any  litigation  under this  Agreement or
         otherwise or in relation to this  Agreement or any Basic  Document,  at
         the request,  order or direction of the Instructing Party or any of the
         Certificateholders, unless such Instructing Party or Certificateholders
         have offered to the Owner Trustee security or indemnity satisfactory to
         it against the costs,  expenses and liabilities that may be incurred by
         the Owner Trustee therein or thereby. The right of the Owner Trustee to
         perform any  discretionary  act  enumerated in this Agreement or in any
         Basic  Document shall not be construed as a duty, and the Owner Trustee
         shall not be  answerable  for other than its  negligence,  bad faith or
         willful misconduct in the performance of any such act.



                                       25





         SECTION 7.2.  Furnishing of Documents.  The Owner Trustee shall furnish
to the  Certificateholders  promptly upon receipt of a written request therefor,
duplicates or copies of all reports, notices, requests,  demands,  certificates,
financial  statements and any other  instruments  furnished to the Owner Trustee
under the Basic Documents.

         SECTION 7.3.  Representations and Warranties.  The Owner Trustee hereby
represents  and warrants to the  Depositor,  the Holders and the Insurer  (which
shall have relied on such  representations  and  warranties  in issuing the Note
Policy), that:

                  (a) It is a banking  corporation,  duly  organized and validly
         existing in good standing  under the laws of the State of Delaware.  It
         has all requisite corporate power and authority to execute, deliver and
         perform its obligations under this Agreement.

                  (b) It has taken all corporate  action  necessary to authorize
         the execution and delivery by it of this Agreement,  and this Agreement
         will be  executed  and  delivered  by one of its  officers  who is duly
         authorized to execute and deliver this Agreement on its behalf.

                  (c)  Neither  the  execution  nor the  delivery  by it of this
         Agreement, nor the consummation by it of the transactions  contemplated
         hereby nor compliance by it with any of the terms or provisions  hereof
         will  contravene or constitute any default under its charter  documents
         or by-laws.

         SECTION 7.4. Reliance;  Advice of Counsel.  (a) The Owner Trustee shall
incur no liability to anyone in acting upon any signature,  instrument,  notice,
resolution, request, consent, order, certificate, report, opinion, bond or other
document or paper  believed by it to be genuine and  believed by it to be signed
by the proper party or parties. The Owner Trustee may accept a certified copy of
a resolution of the board of directors or other  governing body of any corporate
party as conclusive  evidence that such resolution has been duly adopted by such
body and that the same is in full force and effect. As to any fact or matter the
method of the determination of which is not specifically  prescribed herein, the
Owner Trustee may for all purposes  hereof rely on a certificate,  signed by the
president  or  any  vice  president  or by the  treasurer,  secretary  or  other
authorized  officers of the relevant party, as to such fact or matter,  and such
certificate shall constitute full protection to the Owner Trustee for any action
taken or omitted to be taken by it in good faith in reliance thereon.

         (b) In the exercise or  administration  of the trusts  hereunder and in
the performance of its duties and obligations  under this Agreement or the Basic
Documents,  the Owner  Trustee  (i) may act  directly  or through  its agents or
attorneys  pursuant to agreements  entered into with any of them,  and the Owner
Trustee  shall not be liable for the  conduct or  misconduct  of such  agents or
attorneys  if such  agents or  attorneys  shall have been  selected by the Owner
Trustee with reasonable care, and (ii) may consult with counsel, accountants and
other skilled  persons to be selected with  reasonable  care and employed by it.
The Owner Trustee shall not be liable for anything done,  suffered or omitted in
good faith by it in accordance with the written


                                       26





opinion or advice of any such  counsel,  accountants  or other such  persons and
according to such opinion not contrary to this Agreement or any Basic Document.

         SECTION 7.5. Not Acting in Individual  Capacity.  Except as provided in
this  Article  VII,  in  accepting  the  trusts  hereby  created  Bankers  Trust
(Delaware)  acts solely as Owner  Trustee  hereunder  and not in its  individual
capacity and all Persons having any claim against the Owner Trustee by reason of
the transactions contemplated by this Agreement or any Basic Document shall look
only to the Owner Trust Estate for payment or satisfaction thereof.

         SECTION 7.6. Owner Trustee Not Liable for  Certificates or Receivables.
The recitals contained herein and in the Certificates  (other than the signature
and countersignature of the Owner Trustee on the Certificates) shall be taken as
the statements of the Depositor and the Owner Trustee assumes no  responsibility
for the correctness  thereof.  The Owner Trustee makes no  representations as to
the validity or sufficiency of this  Agreement,  of any Basic Document or of the
Certificates (other than the signature and countersignature of the Owner Trustee
on the  Certificates)  or the Notes, or of any Receivable or related  documents.
The Owner Trustee shall at no time have any  responsibility  or liability for or
with respect to the legality,  validity and enforceability of any Receivable, or
the perfection and priority of any security  interest  created by any Receivable
in any Financed  Vehicle or the maintenance of any such perfection and priority,
or for or with  respect  to the  sufficiency  of the Owner  Trust  Estate or its
ability to generate the payments to be distributed to  Certificateholders  under
this  Agreement  or the  Noteholders  under the  Indenture,  including,  without
limitation: the existence,  condition and ownership of any Financed Vehicle; the
existence  and  enforceability  of any  insurance  thereon;  the  existence  and
contents of any Receivable on any computer or other record thereof; the validity
of  the  assignment  of  any  Receivable  to the  Trust  or of  any  intervening
assignment;  the completeness of any Receivable;  the performance or enforcement
of any  Receivable;  the compliance by the Depositor,  the Servicer or any other
Person with any warranty or  representation  made under any Basic Document or in
any related document or the accuracy of any such warranty or  representation  or
any action of the Trustee or the Servicer or any  subservicer  taken in the name
of the Owner Trustee.

         SECTION 7.7. Owner Trustee May Own  Certificates  and Notes.  The Owner
Trustee in its  individual or any other capacity may become the owner or pledgee
of  Certificates  or Notes and may deal with the Depositor,  the Trustee and the
Servicer  in banking  transactions  with the same  rights as it would have if it
were not Owner Trustee.

         SECTION 7.8. Payments from Owner Trust Estate.  All payments to be made
by the Owner Trustee under this Agreement or any of the Basic Documents to which
the Trust or the Owner Trustee is a party shall be made only from the income and
proceeds of the Owner  Trust  Estate and only to the extent that the Owner Trust
shall have received  income or proceeds from the Owner Trust Estate to make such
payments in accordance with the terms hereof.  Bankers Trust (Delaware),  or any
successor  thereto,  in its  individual  capacity,  will not be  liable  for any
amounts  payable under this Agreement or any of the Basic Documents to which the
Trust or the Owner Trustee is a party.


                                       27





         SECTION 7.9.  Doing  Business in other  Jurisdictions.  Notwithstanding
anything herein contained to the contrary,  neither Bankers Trust (Delaware) nor
any  successor  thereto,  nor the Owner  Trustee  shall be  required to take any
action in any jurisdiction  other than in the State of Delaware if the taking of
such action will, even after the appointment of a co-trustee or separate trustee
in accordance  with Section 10.5 hereof,  (i) require the consent or approval or
authorization or order of or the giving of notice to, or the  registration  with
or the taking of any other action in respect of, any state or other governmental
authority or agency of any jurisdiction  other than the State of Delaware;  (ii)
result in any fee, tax or other governmental  charge under the laws of the State
of Delaware  becoming  payable by Bankers  Trust  (Delaware)  (or any  successor
thereto);  or (iii) subject Bankers Trust (Delaware) (or any successor  thereto)
to personal  jurisdiction in any  jurisdiction  other than the State of Delaware
for causes of action  arising  from acts  unrelated to the  consummation  of the
transactions by Bankers Trust (Delaware) (or any successor thereto) or the Owner
Trustee, as the case may be, contemplated hereby.


                                  ARTICLE VIII.

                          Compensation of Owner Trustee

         SECTION 8.1. Owner Trustee's Fees and Expenses. The Owner Trustee shall
receive at the  direction  of the  Depositor  as  compensation  for its services
hereunder such fees as have been  separately  agreed upon before the date hereof
between CPS and the Owner Trustee, and the Owner Trustee shall be entitled to be
reimbursed  by the  Depositor  for  its  other  reasonable  expenses  hereunder,
including the reasonable compensation expenses and disbursements of such agents,
representatives,  experts  and  counsel  as the  Owner  Trustee  may  employ  in
connection  with the  exercise  and  performance  of its  rights  and its duties
hereunder and under the Basic Documents.

         SECTION 8.2. Indemnification.  The Depositor shall be liable as primary
obliger for, and shall indemnify the Owner Trustee and its officers,  directors,
successors,  assigns,  agents  and  servants  (collectively,   the  "Indemnified
Parties")  from  and  against,  any and all  liabilities,  obligations,  losses,
damages,  taxes,  claims,  actions and suits, and any and all reasonable  costs,
expenses and disbursements (including reasonable legal fees and expenses) of any
kind and nature whatsoever  (collectively,  "Expenses") which may at any time be
imposed  on,  incurred  by,  or  asserted  against  the  Owner  Trustee  or  any
Indemnified  Party in any way relating to or arising out of this Agreement,  the
Basic Documents,  the Owner Trust Estate,  the administration of the Owner Trust
Estate or the action or inaction  of the Owner  Trustee  hereunder,  except only
that the  Depositor  shall not be liable for or required to indemnify  the Owner
Trustee from and against  Expenses  arising or resulting from any of the matters
described in the third  sentence of Section 7.1.  The  indemnities  contained in
this Section 8.2 and the rights under Section 8.1 shall survive the  resignation
or termination of the Owner Trustee or the termination of this Agreement.



                                       28





         SECTION  8.3.  Payments to the Owner  Trustee.  Any amounts paid to the
Owner Trustee  pursuant to this Article VIII shall be deemed not to be a part of
the Owner Trust Estate immediately after such payment.

         SECTION 8.4. Non-recourse Obligations. Notwithstanding anything in this
Agreement or any Basic  Document,  the Owner  Trustee  agrees in its  individual
capacity and in its capacity as Owner Trustee for the Trust that all obligations
of the Trust to the Owner Trustee individually or as Owner Trustee for the Trust
shall be recourse to the Owner Trust Estate only and  specifically  shall not be
recourse to the assets of any Certificateholder.


                                   ARTICLE IX.

                         Termination of Trust Agreement

         SECTION 9.1. Termination of Trust Agreement. (a) This Agreement and the
Trust shall  terminate  and be of no further  force or effect upon the latest of
(i) the maturity or other  liquidation  of the last  Receivable  (including  the
purchase by the  Servicer at its option of the corpus of the Trust as  described
in  Section  11.1 of the  Sale  and  Servicing  Agreement)  and  the  subsequent
distribution of amounts in respect of such  Receivables as provided in the Basic
Documents,  or (ii) the payment to Certificateholders of all amounts required to
be paid to them pursuant to this Agreement and the Sale and Servicing  Agreement
and the  payment to the  Insurer of all amounts  payable or  reimbursable  to it
pursuant to the Sale and Servicing Agreement; provided, however, that the rights
to  indemnification  under  Section 8.2 and the rights  under  Section 8.1 shall
survive the  termination of the Trust.  The Servicer  shall promptly  notify the
Owner Trustee and the Insurer of any  prospective  termination  pursuant to this
Section 9.1. The bankruptcy,  liquidation,  dissolution,  death or incapacity of
any  Certificateholder  shall not (x) operate to terminate this Agreement or the
Trust, nor (y) entitle such  Certificateholder's  legal representatives or heirs
to claim an  accounting  or to take any action or  proceeding in any court for a
partition  or winding up of all or any part of the Trust or Owner  Trust  Estate
nor (z) otherwise affect the rights,  obligations and liabilities of the parties
hereto.

         (b) Except as  provided in clause (a),  neither the  Depositor  nor any
Certificateholder shall be entitled to revoke or terminate the Trust.

         (c) Notice of any termination of the Trust, specifying the Payment Date
upon which the  Certificateholders  shall  surrender  their  Certificates to the
Paying Agent for payment of the final  distribution and  cancellation,  shall be
given by the Paying  Agent by letter to  Certificateholders  mailed  within five
Business Days of receipt of notice of such  termination  from the Servicer given
pursuant to Section 11.1(c) of the Sale and Servicing Agreement, stating (i) the
Payment  Date upon or with  respect to which final  payment of the  Certificates
shall be made upon  presentation and surrender of the Certificates at the office
of the Paying Agent therein designated (ii) the amount of any such final payment
and (iii) that the Record


                                       29





Date otherwise applicable to such Payment Date is not applicable, payments being
made only upon  presentation  and surrender of the Certificates at the office of
the Paying Agent therein  specified.  The Paying Agent shall give such notice to
the  Certificate  Registrar  (if other than the  Paying  Agent) at the time such
notice is given to  Certificateholders.  Upon  presentation and surrender of the
Certificates,  if any,  the  Paying  Agent  shall  cause  to be  distributed  to
Certificateholders  amounts  distributable  on such  Payment  Date  pursuant  to
Section 5.7 of the Sale and Servicing Agreement and Section 5.5 hereof.

         In the event  that all of the  Certificateholders  shall not  surrender
their  Certificates for cancellation  within six months after the date specified
in the above  mentioned  written  notice,  the Paying  Agent shall give a second
written  notice  to  the  remaining   Certificateholders   to  surrender   their
Certificates for cancellation  and receive the final  distribution  with respect
thereto.  If within one year after the second notice all the Certificates  shall
not  have  been  surrendered  for  cancellation,   the  Paying  Agent  may  take
appropriate steps, or may appoint an agent to take appropriate steps, to contact
the remaining Certificateholders concerning surrender of their Certificates, and
the cost  thereof  shall be paid out of the funds and other  assets  that  shall
remain  subject  to this  Agreement.  Any funds  remaining  in the  Trust  after
exhaustion of such remedies shall be distributed,  subject to applicable escheat
laws,  by the Paying Agent to the Depositor and Holders shall look solely to the
Depositor for payment.

         (d) Any funds remaining in the Trust after funds for final distribution
have been  distributed or set aside for distribution and all amounts owed to the
Owner Trustee  pursuant to this Agreement have been paid shall be distributed by
the Paying Agent to the Depositor.

         (e) Upon the  winding  up of the Trust and its  termination,  the Owner
Trustee  shall  cause  the  Certificate  of Trust  to be  canceled  by  filing a
certificate of cancellation  presented to the Owner Trustee in execution form by
the Servicer with the Secretary of State in  accordance  with the  provisions of
Section 3810 of the Business Trust Statute.


                                   ARTICLE X.

             Successor Owner Trustees and Additional Owner Trustees

         SECTION 10.1.  Eligibility  Requirements  for Owner Trustee.  The Owner
Trustee shall at all times be a corporation  (i)  satisfying  the  provisions of
Section  3807(a) of the Business  Trust  Statute;  (ii)  authorized  to exercise
corporate trust powers;  (iii) having a combined capital and surplus of at least
$50,000,000  and  subject  to  supervision  or  examination  by Federal or State
authorities;  and (iv) acceptable to the Insurer in its sole discretion, so long
as an  Insurer  Default  shall  not have  occurred  and be  continuing.  If such
corporation  shall publish reports of condition at least  annually,  pursuant to
law or to the requirements of the aforesaid  supervising or examining authority,
then for the purpose of this Section 10.1,  the combined  capital and surplus of
such  corporation  shall be deemed to be its combined capital and surplus as set
forth in its most recent report of condition so published.


                                       30





In case at any time the Owner  Trustee  shall cease to be eligible in accordance
with the  provisions  of this  Section  10.1,  the Owner  Trustee  shall  resign
immediately in the manner and with the effect specified in Section 10.2.

         SECTION  10.2.  Resignation  or  Removal  of Owner  Trustee.  The Owner
Trustee may at any time resign and be discharged  from the trusts hereby created
by giving written notice thereof to the Depositor, the Insurer and the Servicer.
Upon receiving such notice of resignation,  the Depositor shall promptly appoint
a successor Owner Trustee by written instrument, in duplicate, one copy of which
instrument shall be delivered to the resigning Owner Trustee and one copy to the
successor Owner Trustee, provided that the Depositor shall have received written
confirmation from each of the Rating Agencies that the proposed appointment will
not result in an increased capital charge to the Insurer by either of the Rating
Agencies.  If no successor  Owner  Trustee shall have been so appointed and have
accepted  appointment  within  30  days  after  the  giving  of such  notice  of
resignation,  the resigning  Owner Trustee or the Insurer may petition any court
of competent jurisdiction for the appointment of a successor Owner Trustee.

         If at any  time  the  Owner  Trustee  shall  cease  to be  eligible  in
accordance  with the  provisions  of Section 10.1 and shall fail to resign after
written request  therefor by the Depositor,  or if at any time the Owner Trustee
shall be legally unable to act or shall be adjudged bankrupt or insolvent,  or a
receiver of the Owner  Trustee or of its  property  shall be  appointed,  or any
public  officer  shall take  charge or  control  of the Owner  Trustee or of its
property  or  affairs  for  the  purpose  of  rehabilitation,   conservation  or
liquidation,  then the Depositor  with the consent of the Insurer (so long as an
Insurer  Default shall not have occurred and be continuing) may remove the Owner
Trustee.  If the Depositor shall remove the Owner Trustee under the authority of
the  immediately  preceding  sentence,  the Depositor  shall promptly  appoint a
successor Owner Trustee by written instrument,  in duplicate,  one copy of which
instrument shall be delivered to the outgoing Owner Trustee so removed, one copy
to the Insurer and one copy to the  successor  Owner  Trustee and payment of all
fees owed to the outgoing Owner Trustee.

         Any  resignation  or removal of the Owner Trustee and  appointment of a
successor  Owner Trustee  pursuant to any of the provisions of this Section 10.2
shall not become  effective  until  acceptance of  appointment  by the successor
Owner Trustee pursuant to Section 10.3 and payment of all fees and expenses owed
to the outgoing  Owner  Trustee.  The  Depositor  shall  provide  notice of such
resignation or removal of the Owner Trustee to each of the Rating Agencies.

         SECTION 10.3.  Successor  Owner  Trustee.  Any successor  Owner Trustee
appointed pursuant to Section 10.2 shall execute, acknowledge and deliver to the
Depositor,  the Servicer,  the Insurer and to its  predecessor  Owner Trustee an
instrument  accepting such appointment  under this Agreement,  and thereupon the
resignation or removal of the predecessor  Owner Trustee shall become  effective
and such successor  Owner Trustee,  without any further act, deed or conveyance,
shall become fully vested with all the rights, powers,


                                       31





duties and obligations of its predecessor under this Agreement, with like effect
as if originally  named as Owner Trustee.  The  predecessor  Owner Trustee shall
upon payment of its fees and expenses deliver to the successor Owner Trustee all
documents and  statements  and monies held by it under this  Agreement;  and the
Depositor  and the  predecessor  Owner  Trustee  shall  execute and deliver such
instruments and do such other things as may reasonably be required for fully and
certainly vesting and confirming in the successor Owner Trustee all such rights,
powers, duties and obligations.

         No successor Owner Trustee shall accept appointment as provided in this
Section unless at the time of such acceptance such successor Owner Trustee shall
be eligible pursuant to Section 10.1.

         Upon acceptance of appointment by a successor Owner Trustee pursuant to
this  section,  the  Servicer  shall mail notice of the  successor of such Owner
Trustee to all  Certificateholders,  the Trustee, the Noteholders and the Rating
Agencies.  If the Servicer  shall fail to mail such notice  within 10 days after
acceptance of appointment by the successor  Owner Trustee,  the successor  Owner
Trustee shall cause such notice to be mailed at the expense of the Servicer.

         SECTION 10.4. Merger or Consolidation of Owner Trustee. Any corporation
into which the Owner  Trustee may be merged or converted or with which it may be
consolidated,  or any  corporation  resulting  from any  merger,  conversion  or
consolidation  to which the Owner Trustee shall be a party,  or any  corporation
succeeding to all or  substantially  all of the corporate  trust business of the
Owner Trustee,  shall be the successor of the Owner Trustee hereunder,  provided
such  corporation  shall be  eligible  pursuant  to Section  10.1,  without  the
execution or filing of any  instrument  or any further act on the part of any of
the parties hereto,  anything herein to the contrary  notwithstanding;  provided
further that the Owner Trustee shall mail notice of such merger or consolidation
to the Rating Agencies.

         SECTION  10.5.   Appointment   of   Co-Trustee  or  Separate   Trustee.
Notwithstanding  any other  provisions of this  Agreement,  at any time, for the
purpose of meeting any legal  requirements of any jurisdiction in which any part
of the Owner Trust  Estate or any  Financed  Vehicle may at the time be located,
the Servicer and the Owner Trustee acting jointly shall have the power and shall
execute and deliver all  instruments to appoint one or more Persons  approved by
the Owner Trustee and the Insurer to act as  co-trustee,  jointly with the Owner
Trustee,  or separate  trustee or separate  trustees,  of all or any part of the
owner Trust Estate, and to vest in such Person, in such capacity,  such title to
the Trust,  or any part thereof,  and,  subject to the other  provisions of this
Section, such powers, duties, obligations, rights and trusts as the Servicer and
the Owner Trustee may consider necessary or desirable. If the Servicer shall not
have  joined in such  appointment  within 15 days  after the  receipt by it of a
request so to do, the Owner  Trustee  subject,  unless an Insurer  Default shall
have occurred and be continuing,  to the approval of the Insurer (which approval
shall  not  be  unreasonably  withheld)  shall  have  the  power  to  make  such
appointment.  No co-trustee or separate  trustee under this  Agreement  shall be
required to meet the terms of eligibility as a successor trustee


                                       32





pursuant to Section 10.1 and no notice of the  appointment  of any co-trustee or
separate trustee shall be required pursuant to Section 10.3.

         Each separate trustee and co-trustee  shall, to the extent permitted by
law, be appointed and act subject to the following provisions and conditions:

                  (i) all rights,  powers,  duties and obligations  conferred or
         imposed upon the Owner Trustee shall be conferred upon and exercised or
         performed by the Owner Trustee and such separate  trustee or co-trustee
         jointly (it being  understood that such separate  trustee or co-trustee
         is not authorized to act separately  without the Owner Trustee  joining
         in  such  act),  except  to  the  extent  that  under  any  law  of any
         jurisdiction  in which any  particular act or acts are to be performed,
         the Owner Trustee shall be  incompetent  or unqualified to perform such
         act or acts, in which event such rights, powers, duties and obligations
         (including the holding of title to the Trust or any portion  thereof in
         any such jurisdiction)  shall be exercised and performed singly by such
         separate  trustee or  co-trustee,  but solely at the  direction  of the
         Owner Trustee;

                  (ii) no  trustee  under  this  Agreement  shall be  personally
         liable by reason of any act or omission of any other trustee under this
         Agreement; and

                  (iii) the Servicer and the Owner Trustee acting jointly may at
         any time accept the  resignation  of or remove any separate  trustee or
         co-trustee.

         Any notice,  request or other  writing given to the Owner Trustee shall
be  deemed  to have  been  given  to  each of the  then  separate  trustees  and
co-trustees,  as  effectively  as if  given to each of  them.  Every  instrument
appointing any separate  trustee or co-trustee shall refer to this Agreement and
the conditions of this Article X. Each separate trustee and co-trustee, upon its
acceptance of the trusts conferred, shall be vested with the estates or property
specified  in its  instrument  of  appointment,  either  jointly  with the Owner
Trustee or separately, as may be provided therein, subject to all the provisions
of this  Agreement,  specifically  including  every  provision of this Agreement
relating to the conduct of, affecting the liability of, or affording  protection
to,  the Owner  Trustee.  Each  such  instrument  shall be filed  with the Owner
Trustee and a copy thereof given to the Servicer and the Insurer.

         Any separate  trustee or  co-trustee  may at any time appoint the Owner
Trustee,  its agent or  attorney-in-fact  with full power and authority,  to the
extent not  prohibited  by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name.  If any separate  trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all of its estates,
properties,  rights,  remedies  and trusts shall vest in and be exercised by the
Owner Trustee,  to the extent permitted by law, without the appointment of a new
or successor trustee.




                                       33





                                   ARTICLE XI.

                                  Miscellaneous

         SECTION 11.1.  Supplements  and  Amendments.  (a) This Agreement may be
amended by the Depositor and the Owner Trustee,  with the prior written  consent
of the Insurer (so long as an Insurer  Default  shall not have  occurred  and be
continuing)  and with prior written notice to the Rating  Agencies,  without the
consent of any of the  Noteholders  or the  Certificateholders,  (i) to cure any
ambiguity or defect or (ii) to correct,  supplement or modify any  provisions in
this Agreement;  provided,  however, that such action shall not, as evidenced by
an Opinion of Counsel  which may be based upon a  certificate  of the  Servicer,
adversely  affect in any material  respect the  interests of any  Noteholder  or
Certificateholder.

         (b) This  Agreement  may also be  amended  from time to time,  with the
prior  written  consent of the Insurer (so long as an Insurer  Default shall not
have occurred and be continuing)  by the Depositor and the Owner  Trustee,  with
prior  written  notice to the  Rating  Agencies,  to the extent  such  amendment
materially  and  adversely  affects the interests of the  Noteholders,  with the
consent of the Noteholders  evidencing not less than a majority of the aggregate
outstanding   principal   amount  of  the  Notes   and,   the   consent  of  the
Certificateholders  evidencing not less than a majority by aggregate Certificate
Balance  (which consent of any Holder of a Certificate or Note given pursuant to
this  Section or  pursuant to any other  provision  of this  Agreement  shall be
conclusive  and  binding  on  such  Holder  and on all  future  Holders  of such
Certificate  or Note and of any  Certificate  or Note issued  upon the  transfer
thereof or in exchange  thereof or in lieu  thereof  whether or not  notation of
such consent is made upon the Certificate or Note) for the purpose of adding any
provisions to or changing in any manner or eliminating  any of the provisions of
this  Agreement or of modifying in any manner the rights of the  Noteholders  or
the Certificateholders;  provided,  however, that, subject to the express rights
of the Insurer under the Basic  Documents,  no such amendment shall (a) increase
or reduce in any manner the  amount  of, or  accelerate  or delay the timing of,
collections of payments on Receivables or  distributions  that shall be required
to be made for the benefit of the Noteholders or the  Certificateholders  or (b)
reduce the aforesaid percentage of the aggregate outstanding principal amount of
the Notes and the Certificate Balance required to consent to any such amendment,
without the consent of the Holders of all the  outstanding  Notes and Holders of
all outstanding Certificates.

         Promptly  after the  execution of any such  amendment  or consent,  the
Servicer shall furnish  written  notification of the substance of such amendment
or  consent  to each  Certificateholder,  the  Trustee  and  each of the  Rating
Agencies.

         It shall not be necessary  for the consent of  Certificateholders,  the
Noteholders  or the Trustee  pursuant to this Section to approve the  particular
form of any proposed  amendment or consent,  but it shall be  sufficient if such
consent  shall  approve the  substance  thereof.  The manner of  obtaining  such
consents  (and any other  consents of  Certificateholders  provided  for in this
Agreement or in any other Basic Document) and of evidencing the authorization of
the


                                       34





execution  thereof by  Certificateholders  shall be  subject to such  reasonable
requirements as the Owner Trustee may prescribe. Promptly after the execution of
any  amendment to the  Certificate  of Trust,  the Owner Trustee shall cause the
filing of such amendment with the Secretary of State.

         Prior  to the  execution  of any  amendment  to this  Agreement  or the
Certificate  of Trust,  the Owner  Trustee shall be entitled to receive and rely
upon an Opinion of Counsel  stating  that the  execution  of such  amendment  is
authorized or permitted by this Agreement and that all  conditions  precedent to
the  execution and delivery of such  amendment  have been  satisfied.  The Owner
Trustee may, but shall not be obligated to, enter into any such amendment  which
affects  the Owner  Trustee's  own  rights,  duties  or  immunities  under  this
Agreement or otherwise.

         SECTION   11.2.   No   Legal   Title   to   Owner   Trust   Estate   in
Certificateholders.  The  Certificateholders  shall not have legal  title to any
part of the Owner  Trust  Estate.  The  Certificateholders  shall be entitled to
receive distributions with respect to their undivided ownership interest therein
only in  accordance  with  Article  IX.  No  transfer,  by  operation  of law or
otherwise,  of any right, title or interest of the  Certificateholders to and in
their  ownership  interest in the Owner Trust Estate shall  operate to terminate
this  Agreement  or  the  trusts  hereunder  or  entitle  any  transferee  to an
accounting  or to the  transfer  to it of legal  title to any part of the  Owner
Trust Estate.

         SECTION 11.3.  Limitations on Rights of Others. Except for Section 2.7,
the  provisions  of this  Agreement  are  solely  for the  benefit  of the Owner
Trustee, the Depositor, the Certificateholders,  the Servicer and, to the extent
expressly  provided herein,  the Insurer,  the Trustee and the Noteholders,  and
nothing in this  Agreement,  whether  express or implied,  shall be construed to
give to any other  Person any legal or equitable  right,  remedy or claim in the
Owner Trust Estate or under or in respect of this  Agreement  or any  covenants,
conditions or provisions contained herein.

         SECTION 11.4.  Notices.  (a) Unless  otherwise  expressly  specified or
permitted  by the terms  hereof,  all  notices  shall be in writing and shall be
deemed given upon receipt personally  delivered,  delivered by overnight courier
or mailed  first  class mail or  certified  mail,  in each case  return  receipt
requested,  and shall be deemed to have been duly given upon receipt,  if to the
Owner  Trustee,  addressed to the Corporate  Trust Office;  if to the Depositor,
addressed to CPS Receivables  Corp., 2 Ada, Irvine,  California 92618; if to the
Insurer,  addressed to Financial  Security  Assurance Inc., 350 Park Avenue, New
York, New York 10022,  Attention:  Senior Vice President Surveillance (Telecopy:
(212)  339-3547);  (in each case in which notice or other  communication  to the
Insurer  refers  to an Event of  Default,  a claim  on the Note  Policy  or with
respect to which  failure on the part of the Insurer to respond  shall be deemed
to  constitute  consent  or  acceptance,  then a copy of such  notice  or  other
communication  should also be sent to the  attention of the General  Counsel and
the Head-Financial  Guaranty Group "URGENT MATERIAL  ENCLOSED");  or, as to each
party,  at such other  address as shall be designated by such party in a written
notice to each other party.


                                       35





         (b) Any notice required or permitted to be given to a Certificateholder
shall be given by  first-class  mail,  postage  prepaid,  at the address of such
Holder as shown in the  Certificate  Register.  Any notice so mailed  within the
time prescribed in this Agreement  shall be  conclusively  presumed to have been
duly given, whether or not the Certificateholder receives such notice.

         SECTION 11.5.  Severability.  Any provision of this  Agreement  that is
prohibited or unenforceable in any jurisdiction  shall, as to such jurisdiction,
be ineffective to the extent of such  prohibition  or  unenforceability  without
invalidating  the  remaining  provisions  hereof,  and any such  prohibition  or
unenforceability   in  any   jurisdiction   shall  not   invalidate   or  render
unenforceable such provision in any other jurisdiction.

         SECTION 11.6. Separate Counterparts.  This Agreement may be executed by
the parties hereto in separate counterparts,  each of which when so executed and
delivered  shall  be an  original,  but all  such  counterparts  shall  together
constitute but one and the same instrument.

         SECTION 11.7.  Assignments;  Insurer. This Agreement shall inure to the
benefit  of  and be  binding  upon  the  parties  hereto  and  their  respective
successors  and  permitted  assigns.  Upon  issuance  of the Note  Policy,  this
Agreement  shall also  inure to the  benefit  of the  Insurer  for so long as an
Insurer Default shall not have occurred and be continuing.  Without limiting the
generality of the  foregoing,  all covenants  and  agreements in this  Agreement
which  confer  rights  upon  the  Insurer  shall be for the  benefit  of and run
directly  to the  Insurer,  and the  Insurer  shall be  entitled  to rely on and
enforce such  covenants,  subject,  however,  to the  limitations on such rights
provided in this Agreement and the Basic Documents. The Insurer may disclaim any
of its  rights  and  powers  under  this  Agreement  (but  not  its  duties  and
obligations  under the Policies)  upon delivery of a written notice to the Owner
Trustee.

         SECTION  11.8. No Petition.  The Owner  Trustee (not in its  individual
capacity but solely as Owner  Trustee),  by entering into this  Agreement,  each
Certificateholder,  by  accepting  a  Certificate,  and  the  Trustee  and  each
Noteholder by accepting  the benefits of this  Agreement,  hereby  covenants and
agrees that it will not at any time institute against the Depositor,  or join in
any  institution  against  the  Depositor  of, any  bankruptcy,  reorganization,
arrangement,  insolvency or liquidation proceedings,  or other proceedings under
any United States Federal or state  bankruptcy or similar law in connection with
any obligations  relating to the Certificates,  the Notes, this Agreement or any
of the Basic Documents.

         SECTION  11.9.  No  Recourse.  Each  Certificateholder,  by accepting a
Certificate,  acknowledges that such Certificateholder's  Certificates represent
beneficial  interests  in the Trust only and do not  represent  interests  in or
obligations of the Depositor,  the Servicer,  the Depositor,  the Owner Trustee,
the  Trustee,  the Insurer or any  Affiliate  thereof and no recourse may be had
against such parties or their  assets,  except as may be expressly  set forth or
contemplated in this Agreement, the Certificates or the Basic Documents.



                                       36





         SECTION  11.10.  Headings.  The  headings of the various  Articles  and
Sections  herein are for  convenience  of reference only and shall not define or
limit any of the terms or provisions hereof.

         SECTION  11.11.  GOVERNING  LAW. THIS  AGREEMENT  SHALL BE CONSTRUED IN
ACCORDANCE  WITH THE LAWS OF THE STATE OF  DELAWARE,  WITHOUT  REFERENCE  TO ITS
CONFLICT OF LAW  PROVISIONS,  AND THE  OBLIGATIONS,  RIGHTS AND  REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.

         SECTION  11.12.  Servicer.  The Servicer is authorized  to prepare,  or
cause to be  prepared,  execute  and  deliver  on  behalf  of the Trust all such
documents, reports, filings, instruments,  certificates and opinions as it shall
be the duty of the Trust or Owner Trustee to prepare,  file or deliver  pursuant
to the Basic Documents.  Upon written  request,  the Owner Trustee shall execute
and deliver to the Servicer a limited power of attorney  appointing the Servicer
the Trust's  agent and  attorney-in-fact  to prepare,  or cause to be  prepared,
execute  and  deliver  all  such  documents,   reports,  filings,   instruments,
certificates and opinions.


                                  ARTICLE XII.

                            Amendment and Restatement

         SECTION 12.1. Amendment and Restatement.  The parties hereby agree that
this Amended and Restated Trust  Agreement  replaces and supersedes the Original
Agreement.




                                       37





         IN WITNESS WHEREOF, the parties hereto have caused this Trust Agreement
to be duly executed by their respective  officers hereunto duly authorized as of
the day and year first above written.

                                          BANKERS TRUST (DELAWARE), as
                                            Owner Trustee


                                          By:
                                              Name:
                                              Title:


                                          CPS RECEIVABLES CORP., as
                                            Depositor


                                          By:
                                              Name:
                                              Title:







                                       38



                                                                       EXHIBIT A

NUMBER                                                           $______________
R-

                  SEE REVERSE FOR CERTAIN DEFINITIONS

         THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED  (THE  "SECURITIES  ACT").  THE HOLDER  HEREOF,  BY  PURCHASING  THIS
SECURITY,  AGREES  THAT  THIS  SECURITY  MAY BE  RESOLD,  PLEDGED  OR  OTHERWISE
TRANSFERRED ONLY (1) SO LONG AS THIS SECURITY IS ELIGIBLE FOR RESALE PURSUANT TO
RULE 144A, TO A PERSON WHOM THE  TRANSFEROR  REASONABLY  BELIEVES IS A QUALIFIED
INSTITUTIONAL  BUYER WITHIN THE MEANING OF RULE 144A UNDER THE  SECURITIES  ACT,
PURCHASING  FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED  INSTITUTIONAL
BUYER TO WHOM NOTICE IS GIVEN THAT THE RESALE, PLEDGE OR OTHER TRANSFER IS BEING
MADE IN  RELIANCE ON RULE 144A,  AND  SUBJECT TO THE RECEIPT BY THE  CERTIFICATE
REGISTRAR  AND THE  DEPOSITOR  OF A TRANSFEREE  CERTIFICATE,  (2) PURSUANT TO AN
EFFECTIVE  REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR (3) IN RELIANCE ON
ANOTHER  EXEMPTION FROM THE REGISTRATION  REQUIREMENTS OF THE SECURITIES ACT AND
SUBJECT TO THE RECEIPT BY THE  CERTIFICATE  REGISTRAR  AND THE  DEPOSITOR,  OF A
CERTIFICATION OF THE TRANSFEREE  (SATISFACTORY TO THE CERTIFICATE  REGISTRAR AND
THE  DEPOSITOR)  AND AN  OPINION  OF COUNSEL  (SATISFACTORY  TO THE  CERTIFICATE
REGISTRAR  AND THE  DEPOSITOR) TO THE EFFECT THAT SUCH TRANSFER IS IN COMPLIANCE
WITH  THE  SECURITIES  ACT,  IN EACH  CASE IN  ACCORDANCE  WITH  ANY  APPLICABLE
SECURITIES  LAWS OF ANY STATE OF THE UNITED  STATES AND IN  COMPLIANCE  WITH THE
TRANSFER REQUIREMENTS SET FORTH IN SECTION 3.4 OF THE TRUST AGREEMENT.

         IN NO EVENT SHALL THIS SECURITY BE TRANSFERRED  TO AN EMPLOYEE  BENEFIT
PLAN,  TRUST ANNUITY OR ACCOUNT  SUBJECT TO ERISA OR A PLAN DESCRIBED IN SECTION
4975(E)(1) OF THE CODE, (ANY SUCH PLAN, TRUST OR ACCOUNT BEING REFERRED TO AS AN
"EMPLOYEE PLAN"), A TRUSTEE OF ANY EMPLOYEE PLAN, OR AN ENTITY, ACCOUNT OR OTHER
POOLED  INVESTMENT FUND THE UNDERLYING  ASSETS OF WHICH INCLUDE OR ARE DEEMED TO
INCLUDE  EMPLOYEE PLAN ASSETS BY REASON OF AN EMPLOYEE PLAN'S  INVESTMENT IN THE
ENTITY,  ACCOUNT OR OTHER POOLED INVESTMENT FUND. INCLUDED WITHIN THE DEFINITION
OF  "EMPLOYEE  PLANS"  ARE,  WITHOUT  LIMITATION,  KEOGH  (HR-10)  PLANS,  IRA's
(INDIVIDUAL  RETIREMENT ACCOUNTS OR ANNUITIES) AND OTHER EMPLOYEE BENEFIT PLANS,
SUBJECT TO SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE.







                                        1




         THE PRINCIPAL OF THIS  CERTIFICATE IS  DISTRIBUTABLE IN INSTALLMENTS AS
SET FORTH IN THE TRUST AGREEMENT. ACCORDINGLY, THE OUTSTANDING PRINCIPAL OF THIS
CERTIFICATE AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.


                         ------------------------------

                          [ ]% ASSET BACKED CERTIFICATE

evidencing  a  beneficial  ownership  interest in certain  distributions  of the
Trust,  as  defined  below,  the  property  of which  includes  a pool of retail
installment  sale contracts  secured by new or used  automobiles,  vans or light
duty trucks and sold to the Trust by CPS Receivables Corp.

(This  Certificate  does not  represent  an  interest  in or  obligation  of CPS
Receivables  Corp.  or any of its  Affiliates,  except to the  extent  described
below.)




                                        2




         THIS CERTIFIES THAT  ___________________ is the registered owner of [ ]
Dollars nonassessable,  fully-paid, beneficial interest in certain distributions
of CPS Auto  Receivables  Trust 1997-4 (the "Trust")  formed by CPS  Receivables
Corp., a California corporation.

                  OWNER TRUSTEE'S CERTIFICATE OF AUTHENTICATION

         This is one of the  Certificates  referred  to in the  within-mentioned
Trust Agreement.

         BANKERS TRUST (DELAWARE)            BANKERS TRUST (DELAWARE)
         not in its individual               not in its individual
         capacity but solely or              capacity but solely as
         as Owner Trustee                    Owner Trustee


         By: __________________________      By: Bankers Trust Company
                                                   Authenticating Agent


                                             By: ______________________________


         The Trust was created pursuant to a Trust Agreement dated as of October
9, 1997,  between the Depositor and Bankers Trust  (Delaware),  as Owner Trustee
(the "Owner Trustee") as amended by an amendment,  dated as of October 17, 1997,
between the Depositor and the Owner Trustee (the "Trust  Agreement"),  a summary
of certain  of the  pertinent  provisions  of which is set forth  below.  To the
extent not otherwise defined herein,  the capitalized terms used herein have the
meanings assigned to them in the Trust Agreement.

         This Certificate is one of the duly authorized  Certificates designated
as "Asset Backed Certificates" (herein called the "Certificates").  Issued under
the  Indenture,  dated as of  August 1,  between  the  Trust  and  Norwest  Bank
Minnesota,  National  Association,  as Trustee and collateral  agent,  are three
classes of Notes  designated as "Class A-1 6.07% Asset Backed Notes" (the "Class
A-1  Notes") and "Class A-2 6.30%  Asset  Backed  Notes" (the "Class A-2 Notes",
together  with the Class A-1 Notes,  the "Class A Notes" or the  "Notes").  This
Certificate  is  issued  under  and is  subject  to the  terms,  provisions  and
conditions of the Trust  Agreement,  to which Trust Agreement the holder of this
Certificate by virtue of the acceptance  hereof assents and by which such holder
is bound.  The property of the Trust includes a pool of retail  installment sale
contracts  secured by new and used  automobiles,  vans or light duty trucks (the
"Receivables"),  all monies due  thereunder on or after the Initial Cutoff Date,
security  interests in the vehicles financed thereby,  certain bank accounts and
the proceeds  thereof,  proceeds from claims on certain  insurance  policies and
certain  other  rights  under the  Trust  Agreement  and the Sale and  Servicing
Agreement,  all right,  to and interest of the  Depositor in and to the Purchase
Agreement dated as of October 1, 1997 between Consumer Portfolio Services, Inc.


                                        3





and the  Depositor,  all right to and  interest of the  Depositor  in and to the
Purchase  Agreement dated as of October 1, 1997 between Samco  Acceptance  Corp.
and the Depositor, and all proceeds of the foregoing.

         Under the Trust Agreement, there will be distributed on the 15th day of
each month or, if such 15th day is not a Business  Day,  the next  Business  Day
(the  "Payment  Date"),  commencing on November 17, 1997, to the Person in whose
name this  Certificate is registered at the close of business on the 10th day of
the   calendar   month  of  such   Payment   Date  (the   "Record   Date")  such
Certificateholder's   fractional   undivided   interest  in  the  amount  to  be
distributed to Certificateholders on such Payment Date.

         The holder of this Certificate  acknowledges and agrees that its rights
to receive  distributions in respect of this Certificate are subordinated to the
rights of the Noteholders as described in the Sale and Servicing Agreement,  the
Indenture and the Trust Agreement, as applicable.

         It is the intent of the  Depositor,  Servicer,  and  Certificateholders
that,  for  purposes  of Federal  income  taxes,  the Trust will be treated as a
partnership and the Certificateholders (including the Depositor) will be treated
as partners in that partnership.  The Depositor and the other Certificateholders
by  acceptance  of a  Certificate,  agree  to  treat,  and  to  take  no  action
inconsistent  with the treatment of, the  Certificates  for such tax purposes as
partnership interests in the Trust. Each Certificateholder, by its acceptance of
a Certificate,  covenants and agrees that such Certificateholder will not at any
time institute  against the Trust or the Depositor,  or join in any  institution
against  the  Trust  or  the  Depositor  of,  any  bankruptcy,   reorganization,
arrangement,  insolvency or liquidation proceedings,  or other proceedings under
any United States Federal or state  bankruptcy or similar law in connection with
any obligations relating to the Certificates,  the Notes, the Trust Agreement or
any of the Basic Documents.

         Distributions on this Certificate will be made as provided in the Trust
Agreement by the Owner  Trustee or its agent by wire transfer or check mailed to
the  Certificateholder  of  record  in  the  Certificate  Register  without  the
presentation  or  surrender  of this  Certificate  or the making of any notation
hereon.  Except as otherwise provided in the Trust Agreement and notwithstanding
the above,  the final  distribution on this  Certificate  will be made after due
notice by the Owner Trustee of the pendency of such  distribution  and only upon
presentation  and  surrender  of  this  Certificate  at  the  office  or  agency
maintained for the purpose by the Owner Trustee in the Borough of Manhattan, The
City of New York.

         Reference is hereby made to the further  provisions of this Certificate
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.

         Unless  the  certificate  of  authentication  hereon  shall  have  been
executed by an authorized  officer of the Owner Trustee or its agent,  by manual
signature, this Certificate shall


                                        4





not entitle the holder  hereof to any benefit  under the Trust  Agreement or the
Sale and Servicing Agreement or be valid for any purpose.

         THIS CERTIFICATE  SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF DELAWARE,  WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE IN ACCORDANCE
WITH SUCH LAWS.

         IN WITNESS WHEREOF,  the Owner Trustee,  on behalf of the Trust and not
in its individual capacity, has caused this Certificate to be duly executed.


                                   CPS AUTO RECEIVABLES TRUST 1997-4



                                    By:  BANKERS TRUST (DELAWARE), not in
                                         its individual capacity, but solely as 
                                         Owner Trustee




                                    By: _______________________________
                                        Name:
                                        Title:




Date: ______________________



                                        5





(Reverse of Certificate)

         The  Certificates  do not represent an obligation of, or an interest in
the Servicer, the Depositor,  the Owner Trustee or any Affiliates of any of them
and no recourse may be had against such parties or their  assets,  except as may
be expressly set forth or  contemplated  herein or in the Trust  Agreement,  the
Indenture  or  the  Basic  Documents.  In  addition,  this  Certificate  is  not
guaranteed by any governmental agency or instrumentality and is limited in right
of payment to certain  collections with respect to the Receivables,  all as more
specifically set forth herein and in the Sale and Servicing Agreement. A copy of
each of the Sale and Servicing Agreement and the Trust Agreement may be examined
during normal  business hours at the principal  office of the Depositor,  and at
such other places, if any, designated by the Depositor, by any Certificateholder
upon written request.

         The Trust Agreement permits,  with certain exceptions therein provided,
the amendment  thereof and the modification of the rights and obligations of the
Depositor and the rights of the Certificateholders  under the Trust Agreement at
any time by the  Depositor and the Owner Trustee with the consent of the holders
of the Notes and the  Certificates  evidencing  not less than a majority  of the
outstanding principal balance of the Notes and the Certificate Balance. Any such
consent by the holder of this  Certificate  shall be  conclusive  and binding on
such holder and on all future holders of this Certificate and of any Certificate
issued upon the transfer  hereof or in exchange hereof or in lieu hereof whether
or not  notation  of such  consent  is made  upon  this  Certificate.  The Trust
Agreement also permits the amendment thereof, in certain limited  circumstances,
without the consent of the holders of any of the Certificates.

         As provided in the Trust  Agreement and subject to certain  limitations
therein set forth,  the  transfer of this  Certificate  is  registerable  in the
Certificate  Register upon surrender of this  Certificate  for  registration  of
transfer at the offices or agencies of the Certificate  Registrar  maintained by
the Owner Trustee in the Borough of Manhattan, The City of New York, accompanied
by a written  instrument of transfer in form  satisfactory  to the Owner Trustee
and the  Certificate  Registrar  duly  executed  by the  holder  hereof  or such
holder's  attorney  duly  authorized  in writing,  and thereupon one or more new
Certificates in authorized  denominations evidencing the same aggregate interest
in  the  Trust  will  be  issued  to  the  designated  transferee.  The  initial
Certificate  Registrar  appointed  under the Trust  Agreement  is Bankers  Trust
Company.

         Except for Certificates  issued to the Depositor,  the Certificates are
issuable only as registered  Certificates  without coupons in  denominations  of
$1,000 or integral  multiples  thereof.  As provided in the Trust  Agreement and
subject to certain limitations therein set forth,  Certificates are exchangeable
for new Certificates in authorized  denominations  evidencing the same aggregate
denomination as requested by the holder surrendering the same. No service charge
will be made for any such  registration  of transfer or exchange,  but the Owner
Trustee or the Certificate  Registrar may require payment of a sum sufficient to
cover any tax or governmental charge payable in connection therewith.



                                        6





         The Owner Trustee, the Certificate Registrar, the Insurer and any agent
of the Owner  Trustee,  the  Certificate  Registrar or the Insurer may treat the
person in whose name this  Certificate is registered as the owner hereof for all
purposes, and none of the Owner Trustee, the Certificate Registrar,  the Insurer
nor any such agent shall be affected by any notice to the contrary.

         The obligations and responsibilities created by the Trust Agreement and
the Trust created thereby shall terminate upon the payment to Certificateholders
of all amounts  required to be paid to them pursuant to the Trust  Agreement and
the Sale and  Servicing  Agreement and the  disposition  of all property held as
part of the Trust.  The Servicer of the  Receivables  may at its option purchase
all remaining  Receivables  from the Trust on or after the last day of any month
as of which the then  outstanding  Pool  Balance  is equal to 10% or less of the
Original Pool Balance.

         The  Certificates  may not be acquired by (a) an employee  benefit plan
(as defined in Section 3(3) of ERISA) that is subject to the provisions of Title
I of ERISA,  (b) a plan described in Section  4975(e) (1) of the Code or (c) any
entity  whose  underlying  assets  include  plan  assets  by  reason of a plan's
investment in the entity (each, a "Benefit Plan"). By accepting and holding this
Certificate, the Holder hereof shall be deemed to have represented and warranted
that it is not a Benefit Plan.

         The recitals  contained  herein shall be taken as the statements of the
Depositor or the Servicer,  as the case may be, and the Owner Trustee assumes no
responsibility  for  the  correctness   thereof.  The  Owner  Trustee  makes  no
representations  as to the validity or sufficiency of this Certificate or of any
Receivable or related document.

         Unless  the  certificate  of  authentication  hereon  shall  have  been
executed by an authorized  officer of the Owner Trustee or its agent,  by manual
or facsimile signature,  this Certificate shall not entitle the holder hereof to
any benefit under the Trust Agreement or the Sale and Servicing  Agreement or be
valid for any purpose.



                                        7





                                   ASSIGNMENT

         FOR VALUE RECEIVED the undersigned hereby sells,  assigns and transfers
unto

PLEASE INSERT SOCIAL SECURITY
OR OTHER IDENTIFYING NUMBER
OF ASSIGNEE


- --------------------------------------------------------------------------------
(Please print or type name and address, including postal zip code, of assignee)


- --------------------------------------------------------------------------------
the  within   Certificate,   and  all  rights  thereunder,   hereby  irrevocably
constituting and appointing

_______________________________  Attorney to transfer  said  Certificate  on the
books of the  Certificate  Registrar,  with full  power of  substitution  in the
premises.


Dated:

                                                        ----------------------* 
                                                                Signature

Guaranteed:

                                                        ----------------------*


- ---------- 

* NOTICE:  The signature to this assignment must correspond with the name of the
registered  owner as it appears on the face of the within  Certificate  in every
particular,  without  alteration,  enlargement  or  any  change  whatever.  Such
signature must be guaranteed by an "eligible guarantor  institution" meeting the
requirements of the Certificate Registrar, which requirements include membership
or participation in STAMP or such other "signature  guarantee program" as may be
determined by the Certificate  Registrar in addition to, or in substitution for,
STAMP, all in accordance with the Securities Exchange Act of 1934, as amended.







                                                                       EXHIBIT B


                                    [FORM OF]
                             CERTIFICATE OF TRUST OF
                        CPS AUTO RECEIVABLES TRUST 1997-4

         This  Certificate  of Trust of CPS Auto  Receivables  Trust 1997-4 (the
"Trust"),  dated as of  ___________,  199_,  is being duly executed and filed by
_______________________________,   a  ____________,   and   ______________,   an
individual,  as trustee,  to form a business  trust under the Delaware  Business
Trust Act (12 Del. Code, ss.
3801 et seq.).

         1.  Name.  The name of the  business  trust  formed  hereby is CPS Auto
Receivables Trust 1997-4.

         2. This Certificate of Trust will be effective ______ __, 199_.

         IN WITNESS  WHEREOF,  the  undersigned,  being the sole  trustee of the
Trust,  has  executed  this  Certificate  of Trust as of the  date  first  above
written.

                                          BANKERS TRUST(DELAWARE),
                                            not in its individual
                                            capacity, but solely as
                                            Owner Trustee of the Trust.


                                          By:
                                             Name:
                                             Title:



                                        1




                                                                    Exhibit C to
                                                                 Trust Agreement


                             Transferee Certificate
                           Pursuant to Section 3.4 of
                               the Trust Agreement


         In  connection  with  the  transfer  of   $________________   aggregate
principal  amount of CPS Auto  Receivables  Trust  1997-4  10.59%  Asset  Backed
Certificates (the "Transferred Certificates"),  __________________________,  the
undersigned transferee (the "Transferee"),  pursuant to Section 3.4 of the Trust
Agreement  (as defined  below),  hereby  notifies the Trustee and the Seller and
certifies,  represents  and  warrants  to each of them  that it is a  "qualified
institutional  buyer" (as defined in Rule 144A promulgated  under the Securities
Act of 1933, as amended),  that it is purchasing such  Transferred  Certificates
for its own account or the account of a  qualified  institutional  buyer to whom
notice has been given that the  transfer is to be made in reliance of Rule 144A,
and acknowledges  that it has received such information  regarding the Trust and
the  Transferred  Certificates as it has requested and that it is aware that the
transferor  is relying upon the foregoing  certification  to claim the exemption
from  registration  provided  by Rule  144A and the  Transferee  represents  and
warrants  that it has  delivered  an executed  copy of this  certificate  to the
Trustee and the Seller  prior to the  transfer of any  Transferred  Certificates
discussed  herein. In no event shall a Certificate be transferred to an employee
benefit plan,  trust annuity or account  subject to ERISA or a plan described in
Section  4975(e)(1) of the Code (any such plan,  trust or account  including any
Keogh  (HR-10)  plans,  individual  retirement  accounts or annuities  and other
employee  benefit  plans  subject to Section 406 of ERISA or Section 4975 of the
Code being referred to herein as an "Employee  Plan"), a trustee of any Employee
Plan, or an entity,  account or other pooled  investment  fund,  the  underlying
assets of which include or are deemed to include  Employee Plan assets by reason
of an  Employee  Plan's  investment  in the  entity,  account  or  other  pooled
investment fund. The Seller, Servicer, Trustee and Standby Servicer shall not be
responsible  for  confirming  or  otherwise  investigating  whether  a  proposed
transferee is an employee  benefit plan,  trust or account  subject to ERISA, or
described in Section 4975(e)(1) of the Code. Terms used herein and not otherwise
defined have the meanings  assigned to them in the Trust  Agreement  amended and
restated as of October 17, 1997, between CPS Receivables Corp. and Bankers Trust
(Delaware), as owner trustee (the "Owner Trustee"). 

                                        [TRANSFEREE]


                                        By:
                                           Name:
                                           Title:



                                        2


                                                                    Exhibit 4.4


                                                                 EXECUTION COPY







- --------------------------------------------------------------------------------



                        CPS AUTO RECEIVABLES TRUST 1997-4

                       Class A-1 6.07% Asset-Backed Notes
                       Class A-2 6.30% Asset-Backed Notes

                        ---------------------------------
                                    INDENTURE

                           Dated as of October 1, 1997

                       -----------------------------------
                  NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION

                                     Trustee


- --------------------------------------------------------------------------------













                                TABLE OF CONTENTS

                                                                           Page
                                                                           ----


                                    ARTICLE I

                   Definitions and Incorporation by Reference

SECTION 1.1.  Definitions......................................................3
SECTION 1.2.  Incorporation by Reference of Trust Indenture Act...............12
SECTION 1.3.  Other Definitional Provisions...................................12

                                   ARTICLE II

                                    The Notes

SECTION 2.1.  Form............................................................13
SECTION 2.2.  Execution, Authentication and Delivery..........................13
SECTION 2.3.  Temporary Notes.................................................14
SECTION 2.4.  Registration; Registration of Transfer and Exchange.............14
SECTION 2.5.  Mutilated, Destroyed, Lost or Stolen Notes......................16
SECTION 2.6.  Persons Deemed Owner............................................17
SECTION 2.7.  Payment of Principal and Interest; Defaulted Interest...........18
SECTION 2.8.  Cancellation....................................................19
SECTION 2.9.  Release of Collateral...........................................19
SECTION 2.10. Book-Entry Notes................................................19
SECTION 2.11. Notices to Clearing Agency......................................21
SECTION 2.12. Definitive Notes................................................21

                                   ARTICLE III

                                    Covenants

SECTION 3.1.  Payment of Principal and Interest...............................21
SECTION 3.2.  Maintenance of Office or Agency.................................22
SECTION 3.3.  Money for Payments to be Held in Trust..........................22
SECTION 3.4.  Existence.......................................................24
SECTION 3.5.  Protection of Trust Estate......................................24
SECTION 3.6.  Opinions as to Trust Estate.....................................25
SECTION 3.7.  Performance of Obligations; Servicing of Receivables............26
SECTION 3.8.  Negative Covenants..............................................27
SECTION 3.9.  Annual Statement as to Compliance...............................27
SECTION 3.10. Issuer May Consolidate, Etc. Only on Certain Terms..............28
SECTION 3.11. Successor or Transferee.........................................30
SECTION 3.12. No Other Business...............................................31










SECTION 3.13.  No Borrowing...................................................31
SECTION 3.14.  Servicer's Obligations.........................................31
SECTION 3.15.  Guarantees, Loans, Advances and Other
                 Liabilities..................................................31
SECTION 3.16.  Capital Expenditures...........................................31
SECTION 3.17.  Compliance with Laws...........................................31
SECTION 3.18.  Restricted Payments............................................32
SECTION 3.19.  Notice of Events of Default....................................32
SECTION 3.20.  Further Instruments and Acts...................................32
SECTION 3.21.  Amendments of Sale and Servicing Agreement
                 and Trust Agreement..........................................32
SECTION 3.22.  Income Tax Characterization....................................32

                                   ARTICLE IV

                           Satisfaction and Discharge

SECTION 4.1.  Satisfaction and Discharge of Indenture.........................33
SECTION 4.2.  Application of Trust Money......................................33
SECTION 4.3.  Repayment of Moneys Held by Note Paying Agent...................34

                                    ARTICLE V

                                    Remedies

SECTION 5.1.  Events of Default...............................................34
SECTION 5.2.  Rights Upon Event of Default....................................36
SECTION 5.3.  Collection of Indebtedness and Suits for
                Enforcement by Trustee........................................37
SECTION 5.4.  Remedies........................................................40
SECTION 5.5.  Optional Preservation of the Receivables........................42
SECTION 5.6.  Priorities......................................................42
SECTION 5.7.  Limitation of Suits.............................................43
SECTION 5.8.  Unconditional Rights of Noteholders To
                            Receive Principal and Interest....................44
SECTION 5.9.  Restoration of Rights and Remedies..............................45
SECTION 5.10.  Rights and Remedies Cumulative.................................45
SECTION 5.11.  Delay or Omission Not a Waiver.................................45
SECTION 5.12.  Control by Noteholders.........................................45
SECTION 5.13.  Waiver of Past Defaults........................................46
SECTION 5.14.  Undertaking for Costs..........................................46
SECTION 5.15.  Waiver of Stay or Extension Laws...............................47

                                   ARTICLE VI

                                   The Trustee

SECTION 6.1.  Duties of Trustee...............................................47
SECTION 6.2.  Rights of Trustee...............................................49
SECTION 6.3.  Individual Rights of Trustee....................................50




                                      -ii-





SECTION 6.4.  Trustee's Disclaimer............................................51
SECTION 6.5.  Notice of Defaults..............................................51
SECTION 6.6.  Reports by Trustee to Holders...................................51
SECTION 6.7.  Compensation and Indemnity......................................51
SECTION 6.8.  Replacement of Trustee..........................................52
SECTION 6.9.  Successor Trustee by Merger.....................................53
SECTION 6.10. Appointment of Co-Trustee or Separate Trustee...................54
SECTION 6.11. Eligibility: Disqualification...................................55
SECTION 6.12. Preferential Collection of Claims Against Issuer................56
SECTION 6.13. Appointment and Powers..........................................56
SECTION 6.14. Performance of Duties...........................................56
SECTION 6.15. Limitation on Liability.........................................57
SECTION 6.16. Reliance Upon Documents.........................................57
SECTION 6.17. Successor Trustee...............................................58
SECTION 6.18. [Reserved]......................................................59
SECTION 6.19. Representations and Warranties of the Trustee...................59
SECTION 6.20. Waiver of Setoffs...............................................60
SECTION 6.21. Control by the Controlling Party................................60

                                   ARTICLE VII

                         Noteholders' Lists and Reports

SECTION 7.1.  Issuer To Furnish To Trustee Names and
                Addresses of Noteholders......................................60
SECTION 7.2.  Preservation of Information; Communications
                to Noteholders................................................60
SECTION 7.3.  Reports by Issuer...............................................61
SECTION 7.4.  Reports by Trustee..............................................61

                                  ARTICLE VIII

                Collection of Money and Releases of Trust Estate

SECTION 8.1.  Collection of Money.............................................62
SECTION 8.2.  Release of Trust Estate.........................................62
SECTION 8.3.  Opinion of Counsel..............................................63

                                   ARTICLE IX

                             Supplemental Indentures

SECTION 9.1.  Supplemental Indentures Without Consent of Noteholders..........63
SECTION 9.2.  Supplemental Indentures with Consent of Noteholders.............64
SECTION 9.3.  Execution of Supplemental Indentures............................66
SECTION 9.4.  Effect of Supplemental Indenture................................66




                                      -iii-





SECTION 9.5.  Conformity With Trust Indenture Act.............................67
SECTION 9.6.  Reference in Notes to Supplemental
                Indentures....................................................67

                                    ARTICLE X

                               Redemption of Notes

SECTION 10.1.  Redemption.....................................................67
SECTION 10.2.  Form of Redemption Notice......................................68
SECTION 10.3.  Notes Payable on Redemption Date...............................68

                                   ARTICLE XI

                                  Miscellaneous

SECTION 11.1.  Compliance Certificates and Opinions, etc......................69
SECTION 11.2.  Form of Documents Delivered to Trustee.........................71
SECTION 11.3.  Acts of Noteholders............................................72
SECTION 11.4.  Notices, etc., to Trustee, Issuer and
                 Rating Agencies..............................................72
SECTION 11.5.  Notices to Noteholders; Waiver.................................74
SECTION 11.6.  Alternate Payment and Notice Provisions........................74
SECTION 11.7.  Conflict with Trust Indenture Act..............................75
SECTION 11.8.  Effect of Headings and Table of Contents.......................75
SECTION 11.9.  Successors and Assigns.........................................75
SECTION 11.10. Severability...................................................75
SECTION 11.11. Benefits of Indenture..........................................75
SECTION 11.12. Legal Holidays.................................................76
SECTION 11.13. Governing Law..................................................76
SECTION 11.14. Counterparts...................................................76
SECTION 11.15. Recording of Indenture.........................................76
SECTION 11.16. Trust Obligation...............................................76
SECTION 11.17. No Petition....................................................77
SECTION 11.18. Inspection.....................................................77
 .

Exhibit A-1    Form of Class A-1 Note
Exhibit A-2    Form of Class A-2 Note
Exhibit B      Form of Depository Agreement




                                      -iv-








         INDENTURE  dated as of October 1, 1997,  between  CPS AUTO  RECEIVABLES
TRUST  1997-4,  a Delaware  business  trust (the  "Issuer"),  and  NORWEST  BANK
MINNESOTA, NATIONAL ASSOCIATION, a national banking association, as trustee (the
"Trustee").

         Each party agrees as follows for the benefit of the other party and for
the equal and  ratable  benefit of the Holders of the  Issuer's  Class A-1 6.07%
Asset-Backed Notes (the "Class A-1 Notes")and Class A-2 6.30% Asset-Backed Notes
(the  "Class A-2 Notes"  and,  together  with the Class A-1 Notes,  the "Class A
Notes" or "Notes"):

         As  security  for the  payment  and  performance  by the  Issuer of its
obligations  under this Indenture and the Notes, the Issuer has agreed to assign
the  Collateral  (as defined below) as collateral to the Trustee for the benefit
of the Noteholders.

         Financial  Security  Assurance Inc. (the "Note Insurer") has issued and
delivered a financial  guaranty  insurance policy,  dated the Closing Date (with
endorsements,  the "Note Policy"), pursuant to which the Note Insurer guarantees
Scheduled Payments, as defined in the Note Policy.

         As an  inducement  to the Note  Insurer to issue and  deliver  the Note
Policy,  the  Issuer  and the Note  Insurer  have  executed  and  delivered  the
Insurance and Indemnity Agreement,  dated as of October 1, 1997 (as amended from
time to time, the  "Insurance  Agreement")  among the Note Insurer,  the Issuer,
Consumer Portfolio Services, Inc., and CPS Receivables Corp.

         As an  additional  inducement  to the Note  Insurer  to issue  the Note
Policy, and as security for the performance by the Issuer of the Insurer Secured
Obligations  and as security  for the  performance  by the Issuer of the Trustee
Secured Obligations,  the Issuer has agreed to assign the Collateral (as defined
below) as  collateral  to the  Trustee  for the  benefit of the  Issuer  Secured
Parties, as their respective interests may appear.

                                 GRANTING CLAUSE

         The Issuer hereby  Grants to the Trustee at the Closing  Date,  for the
benefit of the Issuer Secured Parties,

                  (i) all right,  title and interest of the Issuer in and to the
         Receivables  listed in Schedule A to the Sale and  Servicing  Agreement
         and, with respect to  Receivables  which are Rule of 78's  Receivables,
         all  monies  due  or to  become  due  thereon  after  the  Cutoff  Date
         (including Scheduled










         Payments  due after the Cutoff Date  (including  principal  prepayments
         relating to such Scheduled  Payments) but received by the Issuer or CPS
         on or before the Cutoff Date) and,  with respect to  Receivables  which
         are Simple Interest  Receivables,  all monies received thereunder after
         the Cutoff Date and all  Liquidation  Proceeds and Recoveries  received
         with respect to such Receivables after the Cutoff Date;

                  (ii) all right, title and interest of the Issuer in and to the
         security  interests  in  the  Financed  Vehicles  granted  by  Obligors
         pursuant  to the  Receivables  and any other  interest of the Issuer in
         such Financed Vehicles, including, without limitation, the certificates
         of title or,  with  respect to such  Financed  Vehicles in the State of
         Michigan, all other evidence of ownership with respect to such Financed
         Vehicles;

                  (iii) all right,  title and  interest  of the Issuer in and to
         any proceeds from claims on any physical damage, credit life and credit
         accident and health insurance policies or certificates  relating to the
         Financed Vehicles or the Obligors;

                  (iv) all right, title and interest of the Issuer in and to the
         Purchase Agreements,  including a direct right to cause CPS to purchase
         Receivables under certain circumstances;

                  (v)  the  Issuer's  rights  and  benefits,  but  none  of  its
         obligations  or  burdens,   under  the  Sale  and  Servicing  Agreement
         (including all rights of the Seller under the Purchase Agreements);

                  (vi) all  right,  title and  interest  of the Issuer in and to
         refunds for the costs of extended  service  contracts  with  respect to
         Financed Vehicles,  refunds of unearned premiums with respect to credit
         life and credit accident and health insurance  policies or certificates
         covering an Obligor or Financed  Vehicle or his or her obligations with
         respect to a Financed  Vehicle  and any  recourse to Dealers for any of
         the foregoing;

                  (vii) the Receivable File related to each Receivable;

                  (viii) all amounts and  property  from time to time held in or
         credited to the Collection  Account and the Note Distribution  Account;
         and

                  (ix) all present and future claims, demands, causes and choses
         in action in respect of any or all of the foregoing and all payments on
         or under and all proceeds of every kind




                                       -2-





         and  nature  whatsoever  in  respect  of any  or all of the  foregoing,
         including  all proceeds of the  conversion,  voluntary or  involuntary,
         into  cash or  other  liquid  property,  all cash  proceeds,  accounts,
         accounts receivable, notes, drafts, acceptances, chattel paper, checks,
         deposit accounts,  insurance proceeds,  condemnation awards,  rights to
         payment  of any and  every  kind and  other  forms of  obligations  and
         receivables,   instruments   and  other  property  which  at  any  time
         constitute all or part of or are included in the proceeds of any of the
         foregoing (collectively, the "Collateral").

In addition, the Issuer shall cause the Note Policy to be issued for the benefit
of the Class A Noteholders.

         The foregoing Grant is made in trust to the Trustee, for the benefit of
the  Holders of the Notes and for the benefit of the Note  Insurer.  The Trustee
hereby  acknowledges  such Grant,  accepts the trusts  under this  Indenture  in
accordance  with the  provisions  of this  Indenture  and agrees to perform  its
duties required in this Indenture to the best of its ability to the end that the
interests  of such  parties,  recognizing  the  priorities  of their  respective
interests may be adequately and effectively protected.


                                    ARTICLE I

                   Definitions and Incorporation by Reference

         SECTION 1.1.  Definitions.  Except as otherwise  specified herein,  the
following terms have the respective meanings set forth below for all purposes of
this Indenture and the definitions of such terms are equally  applicable to both
the singular and plural forms of such terms and to each gender.

         Capitalized  terms used herein and not otherwise  defined  herein shall
have the meanings  assigned to them in the Sale and  Servicing  Agreement or, if
not defined therein, in the Trust Agreement.

         "Act" has the meaning specified in Section 11.3(a).

         "Affiliate"  of any Person means any Person who directly or  indirectly
controls,  is controlled by, or is under direct or indirect  common control with
such Person. For purposes of this definition of "Affiliate",  the term "control"
(including the terms  "controlling",  "controlled  by" and "under common control
with") means the possession,  directly or indirectly,  of the power to direct or
cause a direction of the management and policies of




                                       -3-





a Person,  whether  through the ownership of voting  securities,  by contract or
otherwise.

         "Amount  Financed"  with  respect to a Receivable  means the  aggregate
amount originally advanced under the Receivable toward the purchase price of the
Financed Vehicle and any related costs.

         "Annual Percentage Rate" or "APR" of a Receivable means the annual rate
of finance charges stated in the Receivable.

         "Authorized  Officer"  means,  with  respect  to  the  Issuer  and  the
Servicer,  any  officer or agent  acting  pursuant to a power of attorney of the
Owner Trustee or the Servicer,  as applicable,  who is authorized to act for the
Owner Trustee or the Servicer, as applicable,  in matters relating to the Issuer
and who is identified on the list of  Authorized  Officers  delivered by each of
the Owner  Trustee and the  Servicer to the Trustee on the Closing Date (as such
list may be modified or supplemented from time to time thereafter).

         "Basic  Documents" means this Indenture,  the Certificate of Trust, the
Trust  Agreement,  the Sale and Servicing  Agreement,  the Master Spread Account
Agreement,  the  Master  Spread  Account  Agreement  Supplement,  the  Insurance
Agreement  and  other  documents  and   certificates   delivered  in  connection
therewith.

         "Book Entry Notes"  means a  beneficial  interest in the Class A Notes,
ownership  and  transfers  of which  shall be made  through  book  entries  by a
Clearing Agency as described in Section 2.10.

         "Business Day" means (i) with respect to the Note Policy, any day other
than a Saturday,  Sunday, legal holiday or other day on which commercial banking
institutions  in  Wilmington,  Delaware,  the  City  of New  York,  Minneapolis,
Minnesota,  or the state in which the  principal  Corporate  Trust Office of the
Trustee is located or any other  location of any successor  Servicer,  successor
Owner Trustee or successor Trustee are authorized or obligated by law, executive
order or governmental decree to be closed and (ii) otherwise, a day other than a
Saturday,  a Sunday or other day on which commercial banks located in the states
of Delaware, Minnesota, California or New York are authorized or obligated to be
closed.

         "Certificate  of Trust"  means the  certificate  of trust of the Issuer
substantially in the form of Exhibit B to the Trust Agreement.

         "Class A-1 Interest Rate" means 6.07% per annum.





                                       -4-





         "Class  A-1  Notes"  means  the Class  A-1  6.07%  Asset-Backed  Notes,
substantially in the form of Exhibit A-1.

         "Class A-2 Interest Rate" means 6.30% per annum.

         "Class  A-2  Notes"  means  the Class  A-2  6.30%  Asset-Backed  Notes,
substantially in the form of Exhibit A-2.

         "Clearing  Agency"  means an  organization  registered  as a  "clearing
agency" pursuant to Section 17A of the Exchange Act, or any successor  provision
thereto. The initial Clearing Agency shall be The Depository Trust Company.

         "Clearing  Agency  Participant"  means a broker,  dealer,  bank,  other
financial  institution  or other  Person  for whom from time to time a  Clearing
Agency effects book-entry transfers and pledges of securities deposited with the
Clearing Agency.

         "Closing Date" means October 17, 1997.

         "Code" means the Internal Revenue Code of 1986, as amended from time to
time, and Treasury Regulations promulgated thereunder.

         "Collateral"  has the meaning  specified in the Granting Clause of this
Indenture.

         "Commission" means the United State Securities and Exchange Commission.

         "Controlling Party" has the meaning specified in the Sale and Servicing
Agreement.

         "Corporate  Trust Office" means the principal  office of the Trustee at
which at any particular  time its corporate trust business shall be administered
which  office at date of the  execution  of this  Agreement  is located at Sixth
Street and  Marquette  Avenue,  Minneapolis,  Minnesota  55479-0070,  Attention:
Corporate Trust Services--Asset-Backed  Administration, or at such other address
as the Trustee may designate from time to time by notice to the Noteholders, the
Note  Insurer,  the Servicer and the Issuer,  or the principal  corporate  trust
office of any successor Trustee (the address of which the successor Trustee will
notify the Noteholders and the Issuer).

         "Default"  means any occurrence that is, or with notice or the lapse of
time or both would become, an Event of Default.

         "Definitive Notes" has the meaning specified in Section 2.10.





                                       -5-





         "Depositor"  means the Seller,  in its capacity as such under the Trust
Agreement.

         "Event of Default" has the meaning specified in Section 5.1.

         "Exchange Act" means the Securities Exchange Act of 1934, as amended.

         "Executive  Officer" means, with respect to any corporation,  the Chief
Executive Officer, Chief Operating Officer, Chief Financial Officer,  President,
Executive Vice President,  any Vice President, the Secretary or the Treasurer of
such corporation;  with respect to any limited liability  company,  the manager;
and with respect to any partnership, any general partner thereof.

         "Grant" means to mortgage,  pledge,  bargain, sell, warrant,  alienate,
remise,  release,  convey,  assign,  transfer,  create,  grant a lien upon and a
security interest in and right of set-off against, deposit, set over and confirm
pursuant to this Indenture.  A Grant of the Collateral or of any other agreement
or  instrument  shall  include all rights,  powers and options  (but none of the
obligations)  of the Granting  party  thereunder,  including  the  immediate and
continuing right to claim for,  collect,  receive and give receipt for principal
and interest  payments in respect of the Collateral and all other moneys payable
thereunder,  to give and  receive  notices  and  other  communications,  to make
waivers or other  agreements,  to  exercise  all rights  and  options,  to bring
proceedings  in the name of the Granting  party or otherwise and generally to do
and  receive  anything  that the  Granting  party is or may be entitled to do or
receive thereunder or with respect thereto.

         "Holder"  or  "Noteholder"  means the  Person  in whose  name a Note is
registered on the Note Register.

         "Indebtedness"  means,  with  respect  to any  Person at any time,  (a)
indebtedness  or  liability  of such Person for  borrowed  money  whether or not
evidenced by bonds, debentures,  notes or other instruments, or for the deferred
purchase  price of property  or  services  (including  trade  obligations);  (b)
obligations of such Person as lessee under leases which should be, in accordance
with generally accepted accounting  principles,  recorded as capital leases; (c)
current  liabilities of such Person in respect of unfunded vested benefits under
plans covered by Title IV of ERISA;  (d)  obligations  issued for or liabilities
incurred on the account of such Person;  (e)  obligations or liabilities of such
Person arising under acceptance facilities; (f) obligations of such Person under
any  guarantees,  endorsements  (other  than for  collection  or  deposit in the
ordinary course of business) and other  contingent  obligations to purchase,  to
provide funds for payment,  to supply funds to invest in any Person or otherwise
to




                                       -6-





assure a creditor  against loss;  (g)  obligations of such Person secured by any
lien on property or assets of such Person,  whether or not the obligations  have
been  assumed  by such  Person;  or (h)  obligations  of such  Person  under any
interest rate or currency exchange agreement.

         "Indenture" means this Indenture as amended,  supplemented or otherwise
modified from time to time in accordance with its terms.

         "Independent"  means,  when used with respect to any specified  Person,
that the person (a) is in fact independent of the Issuer, any other obliger upon
the Notes,  the Seller and any  Affiliate of any of the foregoing  persons,  (b)
does not have any direct financial  interest or any material indirect  financial
interest in the Issuer,  any such other obliger,  the Seller or any Affiliate of
any of the foregoing Persons and (c) is not connected with the Issuer,  any such
other obliger, the Seller or any Affiliate of any of the foregoing Persons as an
officer, employee, promoter,  underwriter,  trustee, partner, director or Person
performing similar functions.

         "Independent   Certificate"  means  a  certificate  or  opinion  to  be
delivered to the Trustee  under the  circumstances  described  in, and otherwise
complying  with, the  applicable  requirements  of Section 11.1,  prepared by an
Independent  appraiser or other expert appointed by an Issuer Order and approved
by the  Trustee  in the  exercise  of  reasonable  care,  and  such  opinion  or
certificate shall state that the signer has read the definition of "Independent"
in this Indenture and that the signer is Independent within the meaning thereof.

         "Insurance Agreement Indenture Cross Default" has the meaning specified
therefor in the Insurance Agreement.

         "Insurer Secured  Obligations"  means all amounts and obligations which
the  Issuer may at any time owe to or on behalf of the Note  Insurer  under this
Indenture, the Insurance Agreement or any other Basic Document.

         "Interest  Rate" means,  with  respect to the (i) Class A-1 Notes,  the
Class A-1 Interest Rate and (ii) Class A-2 Notes, the Class A-2 Interest Rate.

         "Issuer"  means  the  party  named  as such in this  Indenture  until a
successor replaces it and, thereafter,  means the successor and, for purposes of
any  provision  contained  herein and required by the TIA, each other obligor on
the Notes.





                                       -7-





         "Issuer  Order" and "Issuer  Request"  means a written order or request
signed  in the name of the  Issuer  by any one of its  Authorized  Officers  and
delivered to the Trustee.

         "Issuer Secured  Obligations" means the Insurer Secured Obligations and
the Trustee Secured obligations.

         "Issuer Secured  Parties" means each of the Trustee,  in respect of the
Trustee  Secured  Obligations,  and the Note Insurer,  in respect of the Insurer
Secured Obligations.

         "Note" means a Class A-1 Note or a Class A-2 Note.

         "Note Owner" means,  with respect to a Book-Entry  Note, the person who
is the owner of such Book-Entry  Note, as reflected on the books of the Clearing
Agency,  or on the books of a Person  maintaining  an account with such Clearing
Agency (directly as a Clearing Agency Participant or as an indirect participant,
in each case in accordance with the rules of such Clearing Agency).

         "Note  Paying  Agent"  means the Trustee or any other Person that meets
the  eligibility  standards  for the Trustee  specified  in Section  6.11 and is
authorized  by the Issuer to make the  payments  to and  distributions  from the
Collection  Account  and the Note  Distribution  Account,  including  payment of
principal of or interest on the Notes on behalf of the Issuer.

         "Note  Policy"  means the  insurance  policy issued by the Note Insurer
with respect to the Notes, including any endorsements thereto.

         "Note  Policy Claim  Amount" has the meaning  specified in the Sale and
Servicing Agreement.

         "Note  Register"  and "Note  Registrar"  have the  respective  meanings
specified in Section 2.4.

         "Notice of Claim" has the meaning specified in the Sale and
Servicing Agreement.

         "Officer's  Certificate"  means a certificate  signed by any Authorized
Officer  of the  Owner  Trustee,  under  the  circumstances  described  in,  and
otherwise  complying  with, the applicable  requirements of Section 11.1 and TIA
ss. 314, and delivered to the Trustee. Unless otherwise specified, any reference
in  this  Indenture  to an  Officer's  Certificate  shall  be  to  an  Officer's
Certificate of any Authorized Officer of the Issuer.

         "Opinion of Counsel" means one or more written  opinions of counsel who
may, except as otherwise  expressly provided in this Indenture,  be employees of
or counsel to the Issuer and who shall




                                       -8-





be  satisfactory  to  the  Trustee  and,  if  addressed  to  the  Note  Insurer,
satisfactory  to the Note  Insurer,  and which shall comply with any  applicable
requirements of Section 11.1, and shall be in form and substance satisfactory to
the  Trustee,  and if addressed to the Note  Insurer,  satisfactory  to the Note
Insurer.

         "Outstanding"  means,  as of  the  date  of  determination,  all  Notes
theretofore authenticated and delivered under this Indenture except:

                  (i)  Notes  theretofore  canceled  by the  Note  Registrar  or
         delivered to the Note Registrar for cancellation;

                  (ii) Notes or portions  thereof the payment for which money in
         the necessary amount has been theretofore deposited with the Trustee or
         any Note Paying Agent in trust for the Holders of such Notes (provided,
         however,  that  if  such  Notes  are to be  redeemed,  notice  of  such
         redemption has been duly given pursuant to this Indenture, satisfactory
         to the Trustee); and

                  (iii)  Notes in  exchange  for or in lieu of other Notes which
         have been authenticated and delivered pursuant to this Indenture unless
         proof  satisfactory to the Trustee is presented that any such Notes are
         held by a bona fide purchaser;

         provided, however, that Notes which have been paid with proceeds of the
         Note Policy shall continue to remain  Outstanding  for purposes of this
         Indenture until the Note Insurer has been paid as subrogee hereunder or
         reimbursed  pursuant  to the  Insurance  Agreement  as  evidenced  by a
         written notice from the Note Insurer delivered to the Trustee,  and the
         Note Insurer shall be deemed to be the Holder  thereof to the extent of
         any payments thereon made by the Note Insurer; provided,  further, that
         in determining whether the Holders of the requisite  outstanding Amount
         of the Notes have given any request, demand, authorization,  direction,
         notice, consent or waiver hereunder or under any Basic Document,  Notes
         owned by the Issuer,  any other  obliger upon the Notes,  the Seller or
         any Affiliate of any of the foregoing  Persons shall be disregarded and
         deemed not to be Outstanding,  except that, in determining  whether the
         Trustee  shall be protected in relying upon any such  request,  demand,
         authorization,  direction, notice, consent or waiver, only Notes that a
         Responsible Officer of the Trustee either actually knows to be so owned
         or has received  written notice thereof shall be so disregarded.  Notes
         so owned  that have been  pledged  in good  faith  may be  regarded  as
         Outstanding  if the  pledgee  establishes  to the  satisfaction  of the
         Trustee  the  pledgees  right so to act with  respect to such Notes and
         that the pledgee is not the Issuer,  any other  obliger upon the Notes,
         the Seller or any Affiliate of any of the foregoing Persons.



                                       -9-






         "Outstanding Amount" means the aggregate principal amount of all Notes,
or class of Notes, as applicable, Outstanding at the date of determination.

         "Owner Trustee" means Bankers Trust (Delaware), and its successors.

         "Payment Date" has the meaning specified in the Notes.

         "Predecessor  Note" means,  with respect to any particular  Note, every
previous Note  evidencing all or a portion of the same debt as that evidenced by
such  particular  Note;  and,  for the  purpose  of this  definition,  any  Note
authenticated  and  delivered  under  Section 2.5 in lieu of a mutilated,  lost,
destroyed  or  stolen  Note  shall be deemed  to  evidence  the same debt as the
mutilated, lost, destroyed or stolen Note.

         "Preference  Claim" has the meaning specified in the Sale and Servicing
Agreement.

         "Proceeding" means any suit in equity,  action at law or other judicial
or administrative proceeding.

         "Rating Agency" means each of Moody's and Standard & Poor's, so long as
such Persons maintain a rating on the Notes; and if either Moody's or Standard &
Poor's  no  longer  maintains  a rating  on the  Notes,  such  other  nationally
recognized  statistical rating organization  selected by the Seller and (so long
as an Insurer  Default shall not have occurred and be continuing)  acceptable to
the Note Insurer.

         "Rating Agency Condition" means, with respect to any action,  that each
Rating Agency shall have been given 10 days' (or such shorter period as shall be
acceptable  to each Rating  Agency)  prior  notice  thereof and that each of the
Rating Agencies shall have notified the Seller, the Servicer,  the Note Insurer,
the Trustee,  the Owner  Trustee and the Issuer in writing that such action will
not result in a reduction or withdrawal of the then current rating of the Notes.

         "Record Date" means, with respect to a Payment Date or Redemption Date,
the close of business on the Business  Day  immediately  preceding  such Payment
Date or Redemption Date.

         "Redemption  Date" means (a) in the case of a  redemption  of the Notes
pursuant  to Section  10.1(a) or a payment to  Noteholders  pursuant  to Section
10.1(b),  the Payment Date  specified by the Servicer or the Issuer  pursuant to
Section 10.1(a) or (b) as applicable.



                                      -10-






         "Redemption  Price" means (a) in the case of a redemption  of the Notes
pursuant to Section  10.1(a),  an amount equal to the unpaid principal amount of
each class of Notes being redeemed plus accrued and unpaid  interest  thereon to
but  excluding  the  Redemption  Date,  or (b) in the case of a payment  made to
Noteholders  pursuant  to  Section  10.1(b),  the  amount on deposit in the Note
Distribution  Account,  but not in excess of the amount  specified in clause (a)
above.

         "Responsible  Officer" means, with respect to the Trustee,  any officer
within the Corporate Trust Office of the Trustee,  including any Vice President,
Assistant Vice President, Assistant Treasurer, Assistant Secretary, or any other
officer  of the  Trustee  customarily  performing  functions  similar  to  those
performed by any of the above  designated  officers and also,  with respect to a
particular  matter, any other officer to whom such matter is referred because of
such officer's knowledge of and familiarity with the particular subject.

         "Sale and Servicing  Agreement" means the Sale and Servicing  Agreement
dated as of October 1, 1997, among the Issuer,  the Seller, the Servicer and the
Trustee  as  Backup  Servicer  and  Trustee,  as  the  same  may be  amended  or
supplemented from time to time.

         "Scheduled Payments" has the meaning specified in the Note Policy.

         "State"  means any one of the 50 states of the United States of America
or the District of Columbia.

         "Termination  Date" means the latest of (i) the  expiration of the Note
Policy and the return of the Note Policy to the Note  Insurer for  cancellation,
(ii)  the date on which  the  Note  Insurer  shall  have  received  payment  and
performance of all Insurer  Secured  Obligations and (iii) the date on which the
Trustee  shall have  received  payment and  performance  of all Trustee  Secured
Obligations.

         "Trust Estate" means all money, instruments,  rights and other property
that are subject or intended to be subject to the lien and security  interest of
this  Indenture for the benefit of the  Noteholders  (including all property and
interests Granted to the Trustee), including all proceeds thereof.

         "Trust  Indenture Act" or "TIA" means the Trust  Indenture Act of 1939,
as amended and as in force on the date  hereof,  unless  otherwise  specifically
provided.




                                      -11-





         "Trustee"  means  Norwest  Bank  Minnesota,   National  Association,  a
national  banking  association,  not in its  individual  capacity but as trustee
under this Indenture, or any successor trustee under this Indenture.

         "Trustee Secured  Obligations"  means all amounts and obligations which
the Issuer may at any time owe to or on behalf of the Trustee for the benefit of
the Noteholders under this Indenture or the Notes.

         "UCC"  means,  unless  the  context  otherwise  requires,  the  Uniform
Commercial Code, as in effect in the relevant jurisdiction, as amended from time
to time.

         SECTION  1.2.  Incorporation  by  Reference  of  Trust  Indenture  Act.
Whenever  this  Indenture  refers to a provision  of the TIA,  the  provision is
incorporated  by reference in and made a part of this  Indenture.  The following
TIA terms used in this Indenture have the following meanings:

         "Commission" means the Securities and Exchange Commission.

         "indenture securities" means the Notes.

         "indenture security holder" means a Noteholder.

         "indenture to be qualified" means this Indenture.

         "indenture trustee" or "institutional trustee" means the Trustee.

         "obligor" on the indenture securities means the Issuer.

All other TIA terms used in this Indenture that are defined by the TIA,  defined
by TIA  reference  to another  statute or  defined by  Commission  rule have the
meaning assigned to them by such definitions.

         SECTION  1.3.  Other  Definitional   Provisions.   Unless  the  context
otherwise requires:

                  (i)  All   references   in  this   instrument   to  designated
         "Articles," "Sections," "Subsections" and other subdivisions are to the
         designated  Articles,  Sections,  Subsections and other subdivisions of
         this instrument as originally
         executed.

                  (ii) The words "herein," "hereof," "hereunder" and other words
         of similar  import  refer to this  Indenture  as a whole and not to any
         particular Article, Section, Subsection or other subdivision.




                                      -12-






                  (iii) an accounting term not otherwise  defined herein has the
         meaning assigned to it in accordance with generally accepted accounting
         principles as in effect from time to time;

                  (iv)  "or" is not exclusive; and

                  (v)  "including" means including without limitation;


                                   ARTICLE II

                                    The Notes

         SECTION 2.1. Form. (a) The Class A-1 Notes and the Class A-2 Notes,  in
each case together with the Trustee's certificate of authentication, shall be in
substantially  the form set forth in Exhibits  A-1 and A-2,  respectively,  with
such appropriate  insertions,  omissions,  substitutions and other variations as
are required or permitted by this  Indenture and may have such letters,  numbers
or other marks of identification and such legends or endorsements placed thereon
as may,  consistently  herewith,  be determined by the officers  executing  such
Notes, as evidenced by their execution of the Notes.  Any portion of the text of
any Note may be set forth on the reverse thereof,  with an appropriate reference
thereto on the face of the Note.

         (b) The Definitive Notes shall be typewritten, printed, lithographed or
engraved or produced by any  combination of these methods (with or without steel
engraved  borders),  all as determined by the officers  executing such Notes, as
evidenced by their execution of such Notes.

         (c) Each Note shall be dated the date of its authentication.  The terms
of the  Notes set  forth in  Exhibits  A-1 and A-2 are part of the terms of this
Indenture.

         SECTION 2.2.  Execution,  Authentication  and  Delivery.  (a) The Notes
shall be executed on behalf of the Issuer by any of its Authorized Officers. The
signature  of any  such  Authorized  Officer  on the  Notes  may  be  manual  or
facsimile.

         (b) Notes bearing the manual or facsimile  signature of individuals who
were at any time  Authorized  Officers  of the  Issuer  shall  bind the  Issuer,
notwithstanding  that such  individuals  or any of them have ceased to hold such
offices prior to the  authentication  and delivery of such Notes or did not hold
such offices at the date of such Notes.




                                      -13-





         (c) The Trustee  shall upon receipt of the Note Policy and Issuer Order
authenticate  and deliver  Class A-1 Notes for  original  issue in an  aggregate
principal  amount of  $54,260,000  and Class A-2 Notes for original issue in the
aggregate  principal amount of $46,307,598.  Class A-1 Notes and Class A-2 Notes
outstanding  at any time may not  exceed  such  amounts  except as  provided  in
Section 2.5.

         (d) Each Note shall be dated the date of its authentication.  The Notes
shall be issuable as registered Notes in the minimum  denomination of $1,000 and
in integral  multiples  thereof  (except for one Note of each class which may be
issued in a denomination other than an integral multiple of $1,000).

         (e) No Note shall be entitled to any benefit under this Indenture or be
valid or  obligatory  for any  purpose,  unless  there  appears  on such  Note a
certificate  of  authentication  substantially  in the form provided for herein,
executed  by  the  Trustee  by the  manual  signature  of one of its  authorized
signatories,  and such certificate  upon any Note shall be conclusive  evidence,
and the only evidence,  that such Note has been duly authenticated and delivered
hereunder.

         SECTION 2.3. Temporary Notes. (a) Pending the preparation of Definitive
Notes,  the Issuer may execute,  and upon receipt of an Issuer Order the Trustee
shall authenticate and deliver, temporary Notes which are printed, lithographed,
typewritten,  mimeographed or otherwise produced, of the tenor of the Definitive
Notes in lieu of which they are issued and with such variations not inconsistent
with the  terms of this  Indenture  as the  officers  executing  such  Notes may
determine, as evidenced by their execution of such Notes.

         (b) If  temporary  Notes are issued,  the Issuer will cause  Definitive
Notes to be  prepared  without  unreasonable  delay.  After the  preparation  of
Definitive Notes, the temporary Notes shall be exchangeable for Definitive Notes
upon  surrender of the temporary  Notes at the office or agency of the Issuer to
be maintained  as provided in Section 3.2,  without  charge to the Holder.  Upon
surrender for  cancellation of any one or more temporary Notes, the Issuer shall
execute and the Trustee shall  authenticate  and deliver in exchange  therefor a
like principal amount of Definitive Notes of authorized denominations.  Until so
exchanged,  the  temporary  Notes shall in all  respects be entitled to the same
benefits under this Indenture as Definitive Notes.

         SECTION 2.4.  Registration;  Registration of Transfer and Exchange. (a)
The Issuer  shall cause to be kept a register  (the "Note  Register")  in which,
subject to such  reasonable  regulations as it may  prescribe,  the Issuer shall
provide for the  registration  of Notes and the  registration  of  transfers  of
Notes.




                                      -14-





The Trustee is hereby  initially  appointed "Note  Registrar" for the purpose of
registering  Notes  and  transfers  of  Notes  as  herein  provided.   Upon  any
resignation or removal of any Note Registrar,  the Issuer shall promptly appoint
a successor or, in the absence of such an appointment, assume the duties of Note
Registrar.

         (b) If a Person  other than the Trustee is  appointed  by the Issuer as
Note  Registrar,  the Issuer will give the Trustee  prompt written notice of the
appointment  of such Note  Registrar and of the location,  and any change in the
location, of the Note Register,  and the Trustee shall have the right to inspect
the Note Register at all reasonable times and to obtain copies thereof,  and the
Trustee  shall have the right to rely upon a  certificate  executed on behalf of
the Note Registrar by an Executive Officer thereof as to the names and addresses
of the Holders of the Notes and the principal amounts and number of such Notes.

         (c)  Subject to  Sections  2.10 and 2.12  hereof,  upon  surrender  for
registration of transfer of any Note at the office or agency of the Issuer to be
maintained as provided in Section 3.2, if the  requirements of Section  8-401(l)
of the UCC are met the Issuer shall execute,  and upon request by the Issuer the
Trustee shall authenticate, and the Noteholder shall obtain from the Trustee, in
the name of the designated  transferee or transferees,  one or more new Notes in
any authorized  denominations  of the same class and a like aggregate  principal
amount.

         (d) At the option of the Holder, Notes may be exchanged for other Notes
in  any  authorized  denominations,  of the  same  class  and a  like  aggregate
principal amount,  upon surrender of the Notes to be exchanged at such office or
agency. Whenever any Notes are so surrendered for exchange,  subject to Sections
2.10 and 2.12 hereof, if the requirements of Section 8-401(1) of the UCC are met
the Issuer  shall  execute,  and upon  request by the Issuer the  Trustee  shall
authenticate,  and the Noteholder shall obtain from the Trustee, the Notes which
the Noteholder making the exchange is entitled to receive.

         (e) All Notes issued upon any  registration  of transfer or exchange of
Notes shall be the valid  obligations  of the Issuer,  evidencing the same debt,
and entitled to the same benefits under this Indenture, as the Notes surrendered
upon such registration of transfer or exchange.

         (f) Every Note presented or surrendered for registration of transfer or
exchange shall be (i) duly endorsed by, or  accompanied by a written  instrument
of transfer in the form  attached to Exhibits A-1 and A-2 duly  executed by, the
Holder thereof or such Holder's attorney duly authorized in writing with




                                      -15-





such signature  guaranteed by an "eligible  guarantor  institution"  meeting the
requirements  of the Note Registrar  which  requirements  include  membership or
participation in Securities  Transfer Agents Medallion Program ("STAMP") or such
other "signature  guarantee  program" as may be determined by the Note Registrar
in addition  to, or in  substitution  for,  STAMP,  all in  accordance  with the
Exchange  Act and (ii)  accompanied  by such other  documents as the Trustee may
require.

         (g) Each  Noteholder by its  acquisition  of any Notes (or a beneficial
interest  therein)  shall be deemed to have  represented  and  warranted for the
benefit of the Issuer,  the Trustee,  the Indenture Trustee and the Noteholders,
that either (a) it is not  acquiring  any Notes with the assets of any "employee
benefit plan" as defined in Section 3(3) of ERISA which is subject to Title I of
ERISA or any "plan" as defined in Section 4875 of the Internal Revenue Code, (b)
the  acquisition  of the  Notes  will not give  rise to a  nonexempt  prohibited
transaction under Section 406(a) of ERISA or Section 4975 of the Code.

         (h) No service charge shall be made to a Holder for any registration of
transfer or exchange of Notes,  but the Note Registrar may require  payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in connection with any registration of transfer or exchange of Notes, other than
exchanges pursuant to Section 2.3 or 9.6 not involving any transfer.

         (i) The preceding provisions of this Section 2.4  notwithstanding,  the
Issuer shall not be required to make and the Note  Registrar  shall not register
transfers  or exchanges of Notes  selected for  redemption  or of any Note for a
period of 15 days  preceding  the due date for any payment  with  respect to the
Note.

         SECTION 2.5. Mutilated, Destroyed, Lost or Stolen Notes. (a) If (i) any
mutilated Note is surrendered to the Trustee,  or the Trustee receives  evidence
to its  satisfaction  of the  destruction,  loss or theft of any Note,  and (ii)
there is  delivered  to the  Trustee  and the Note  Insurer  (unless  an Insurer
Default shall have occurred and be continuing) such security or indemnity as may
be required by it to hold the Issuer, the Trustee and the Note Insurer harmless,
then, in the absence of notice to the Issuer,  the Note Registrar or the Trustee
that such Note has been acquired by a bona fide  purchaser,  and,  provided that
the  requirements of Section 8-405 of the UCC are met, the Issuer shall execute,
and upon request by the Issuer the Trustee shall  authenticate  and deliver,  in
exchange for or in lieu of any such mutilated, destroyed, lost or stolen Note, a
replacement Note; provided,  however, that if any such destroyed, lost or stolen
Note, but not a mutilated  Note,  shall have become,  or within seven days shall
be, due and payable or shall have been




                                      -16-





called for  redemption,  instead of issuing a replacement  Note,  the Issuer may
direct the Trustee, in writing, to pay such destroyed,  lost or stolen Note when
so due or payable or upon the Redemption  Date without  surrender  thereof.  If,
after the delivery of such replacement  Note or payment of a destroyed,  lost or
stolen  Note  pursuant  to the proviso to the  preceding  sentence,  a bona fide
purchaser  of the  original  Note in lieu of  which  such  replacement  Note was
issued, presents for payment such original Note, the Issuer, the Trustee and the
Note  Insurer  shall be  entitled  to  recover  such  replacement  Note (or such
payment)  from the Person to whom it was  delivered  or any Person  taking  such
replacement Note from such Person to whom such replacement Note was delivered or
any assignee of such Person, except a bona fide purchaser, and shall be entitled
to recover upon the security or indemnity provided therefor to the extent of any
loss,  damage,  cost  or  expense  incurred  by the  Issuer  or the  Trustee  in
connection therewith.

         (b) Upon the issuance of any replacement  Note under this Section,  the
Issuer may require the payment by the Holder of such Note of a sum sufficient to
cover any tax or other  governmental  charge  that may be  imposed  in  relation
thereto and any other  reasonable  expenses  (including the fees and expenses of
the Trustee) connected therewith.

         (c)  Every   replacement  Note  issued  pursuant  to  this  Section  in
replacement of any mutilated, destroyed, lost or stolen Note shall constitute an
original  additional  contractual  obligation of the Issuer,  whether or not the
mutilated,  destroyed,  lost or stolen Note shall be at any time  enforceable by
anyone,  and shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Notes duly issued hereunder.

         (d) The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Notes.

         SECTION  2.6.  Persons  Deemed  Owner.  Prior  to due  presentment  for
registration  of transfer of any Note, the Issuer,  the Trustee and any agent of
Issuer,  the  Trustee,  the Note  Insurer may treat the Person in whose name any
Note is registered (as of the applicable  Record Date) as the owner of such Note
for the purpose of receiving  payments of principal of and interest,  if any, on
such Note and for all other  purposes  whatsoever,  whether  or not such Note be
overdue,  and none of the Issuer, the Note Insurer, the Trustee nor any agent of
the Issuer or the Trustee shall be affected by notice to the contrary.





                                      -17-





         SECTION 2.7. Payment of Principal and Interest; Defaulted Interest. (a)
The Notes shall  accrue  interest as provided in the forms of the Class A-1 Note
and the Class A-2 Note set forth in Exhibits A-1 and A-2, respectively, and such
interest  shall be  payable  on each  Payment  Date as  specified  therein.  Any
installment  of  interest  or  principal,  if any,  payable on any Note which is
punctually  paid or duly  provided for by the Issuer on the  applicable  Payment
Date  shall  be paid to the  Person  in  whose  name  such  Note (or one or more
Predecessor   Notes)  is   registered  on  the  Record  Date,  by  check  mailed
first-class, postage prepaid, to such Person's address as it appears on the Note
Register on such Record Date,  except that,  unless  Definitive  Notes have been
issued pursuant to Section 2.12, with respect to Notes  registered on the Record
Date in the name of the nominee of the Clearing Agency (initially,  such nominee
to be  Cede & Co.),  payment  will be  made  by  wire  transfer  in  immediately
available funds to the account designated by such nominee,  except for the final
installment of principal  payable with respect to such Note on a Payment Date or
on the Final Scheduled Payment Date (and except for the Redemption Price for any
Note called for redemption pursuant to Section 10.1(a)),  which shall be payable
as provided below. The funds represented by any such checks returned undelivered
shall be held in accordance with Section 3.3.

         (b) The principal of each Note shall be payable in installments on each
Payment  Date as  provided in the forms of the Class A-1 Notes and the Class A-2
Notes  set  forth in  Exhibits  A-1 and A-2  respectively.  Notwithstanding  the
foregoing,  the entire  unpaid  principal  amount of the Notes  shall be due and
payable,  if not previously paid, on the date on which an Event of Default shall
have  occurred  and be  continuing,  if the  Trustee or the Holders of the Notes
representing 25% of the Outstanding  Amount of the Notes have declared the Notes
to be  immediately  due and payable in the manner  provided in Section  5.2. All
principal  payments  on each  class  of  Notes  shall  be made  pro  rata to the
Noteholders of such class entitled thereto. Upon written notice from the Issuer,
the Trustee  shall notify the Person in whose name a Note is  registered  at the
close of  business on the Record Date  preceding  the Payment  Date on which the
Issuer  expects that the final  installment of principal of and interest on such
Note will be paid. Such notice shall be mailed or transmitted by facsimile prior
to such final Payment Date and shall specify that such final installment will be
payable only upon  presentation and surrender of such Note and shall specify the
place  where such Note may be  presented  and  surrendered  for  payment of such
installment.  Notices in connection with redemptions of Notes shall be mailed to
Noteholders as provided in Section 10.2.

         (c) If the Issuer  defaults in a payment of interest on the Notes,  the
Issuer shall pay defaulted interest (plus interest on such defaulted interest to
the extent lawful) at the applicable




                                      -18-





Interest Rate in any lawful manner.  The Issuer may pay such defaulted  interest
to the Persons who are  Noteholders on a subsequent  special record date,  which
date shall be at least five Business Days prior to the payment date.  The Issuer
shall fix or cause to be fixed any such  special  record date and payment  date,
and, at least 15 days before any such special record date, the Issuer shall mail
to each Noteholder and the Trustee a notice that states the special record date,
the payment date and the amount of defaulted interest to be paid.

         (d) Promptly  following the date on which all principal of and interest
on the Notes has been paid in full and the Notes  have been  surrendered  to the
Trustee,  the Trustee shall,  if the Note Insurer has paid any amount in respect
of the Notes under the Note Policy or otherwise which has not been reimbursed to
it, deliver such surrendered Notes to the Note Insurer.

         SECTION  2.8.  Cancellation.  Subject  to  Section  2.7(d),  all  Notes
surrendered for payment, registration of transfer, exchange or redemption shall,
if surrendered to any Person other than the Trustee, be delivered to the Trustee
and shall be promptly  canceled by the Trustee.  Subject to Section 2.7(d),  the
Issuer  may at any time  deliver  to the  Trustee  for  cancellation  any  Notes
previously  authenticated  and  delivered  hereunder  which the  Issuer may have
acquired in any manner whatsoever,  and all Notes so delivered shall be promptly
canceled  by the  Trustee.  No  Notes  shall be  authenticated  in lieu of or in
exchange for any Notes canceled as provided in this Section, except as expressly
permitted by this Indenture.  Subject to Section 2.7(d),  all canceled Notes may
be held or disposed of by the Trustee in accordance with its standard  retention
or disposal policy as in effect at the time unless the Issuer shall direct by an
Issuer Order that they be destroyed or returned to it; provided that such Issuer
Order is  timely  and the  Notes  have not been  previously  disposed  of by the
Trustee.

         SECTION 2.9. Release of Collateral.  The Trustee shall, on or after the
Termination  Date,  release any  remaining  portion of the Trust Estate from the
lien created by this Indenture and deposit in the  Collection  Account any funds
then on deposit in any other Trust Account.  The Trustee shall release  property
from the lien created by this  Indenture  pursuant to this Section 2.9 only upon
receipt of an Issuer Request accompanied by an Officer's Certificate, an Opinion
of Counsel and (if required by the TIA)  Independent  Certificates in accordance
with TIA ss. 314(c) and 314(d)(1) meeting the applicable requirements of Section
11.1.

         SECTION  2.10.  Book-Entry  Notes.  The  Class A Notes,  upon  original
issuance,  will be  issued in the form of  typewritten  Notes  representing  the
Book-Entry Notes, to be delivered to DTC




                                      -19-





or to the Trustee as custodian,  the initial Clearing  Agency,  by, or on behalf
of, the Issuer.  Such Class A Notes shall  initially be  registered  on the Note
Register in the name of Cede & Co., the nominee of the initial  Clearing Agency,
and no Note Owner will receive a Definitive Note  representing such Note Owner's
interest in such Class A Note,  except as provided in Section  2.12.  Unless and
until definitive,  fully registered Class A Notes (the "Definitive  Notes") have
been issued to Note Owners pursuant to Section 2.12:

                  (i) the  provisions of this Section shall be in full force and
         effect;

                  (ii) the Note  Registrar  and the Trustee shall be entitled to
         deal  with the  Clearing  Agency  for all  purposes  of this  Indenture
         (including  the  payment of  principal  of and  interest on the Class A
         Notes and the giving of  instructions  or directions  hereunder) as the
         sole Holder of the Class A Notes,  and shall have no  obligation to the
         Note Owners;

                  (iii)  to the  extent  that  the  provisions  of this  Section
         conflict with any other provisions of this Indenture, the provisions of
         this Section shall control;

                  (iv) the rights of Note Owners shall be exercised only through
         the Clearing  Agency and shall be limited to those  established  by law
         and agreements  between such Note Owners and the Clearing Agency and/or
         the Clearing Agency Participants. Unless and until Definitive Notes are
         issued  pursuant  to  Section  2.12,  the  Clearing  Agency  will  make
         book-entry transfers among the Clearing Agency Participants and receive
         and transmit payments of principal of and interest on the Class A Notes
         to such Clearing Agency Participants;

                  (v) whenever this Indenture  requires or permits actions to be
         taken based upon instructions or directions of Holders of Class A Notes
         evidencing  a specified  percentage  of the  Outstanding  Amount of the
         Class A Notes,  the Clearing  Agency shall be deemed to represent  such
         percentage only to the extent that it has received instructions to such
         effect from Note Owners and/or Clearing Agency  Participants  owning or
         representing,  respectively, such required percentage of the beneficial
         interest in the Class A Notes and has delivered  such  instructions  to
         the Trustee; and

                  (vi) Note  Owners may receive  copies of any  reports  sent to
         Noteholders pursuant to this Indenture,  upon written request, together
         with  a  certification  that  they  are  Note  Owners  and  payment  of
         reproduction and postage expenses




                                      -20-





         associated with the  distribution of such reports,  from the Trustee at
         the Corporate Trust Office.

         SECTION 2.11.  Notices to Clearing  Agency.  Whenever a notice or other
communication  to the Class A  Noteholders  is  required  under this  Indenture,
unless and until Definitive Notes shall have been issued to Note Owners pursuant
to Section  2.12,  the Trustee  shall give all such  notices and  communications
specified  herein to be given to  Holders  of the Class A Notes to the  Clearing
Agency and shall have no obligation to deliver such notices or communications to
the Note Owners.

         SECTION 2.12. Definitive Notes. If (i) the Servicer advises the Trustee
in writing  that the  Clearing  Agency is no longer  willing or able to properly
discharge  its  responsibilities  with  respect  to the  Class A Notes,  and the
Servicer is unable to locate a  qualified  successor,  (ii) the  Servicer at its
option advises the Trustee in writing that it elects to terminate the book-entry
system through the Clearing  Agency or (iii) after the occurrence of an Event of
Default,  Note Owners representing  beneficial interests  aggregating at least a
majority  of the  Outstanding  Amount of the Class A Notes  advise  the  Trustee
through the  Clearing  Agency in writing that the  continuation  of a book entry
system  through the  Clearing  Agency is no longer in the best  interests of the
Note  Owners,  then the  Clearing  Agency  shall  notify all Note Owners and the
Trustee  of the  occurrence  of any  such  event  and  of  the  availability  of
Definitive  Notes to Note Owners  requesting  the same.  Upon  surrender  to the
Trustee of the typewritten  Note or Notes  representing  the Book-Entry Notes by
the Clearing Agency, accompanied by registration instructions,  the Issuer shall
execute and the Trustee shall  authenticate  the Definitive  Notes in accordance
with the  instructions  of the  Clearing  Agency.  None of the Issuer,  the Note
Registrar  or the  Trustee  shall be liable  for any delay in  delivery  of such
instructions and may conclusively rely on, and shall be protected in relying on,
such  instructions.  Upon the issuance of  Definitive  Notes,  the Trustee shall
recognize the Holders of the Definitive Notes as Class A Noteholders.


                                   ARTICLE III

                                    Covenants

         SECTION 3.1.  Payment of Principal and  Interest.  The Issuer will duly
and punctually pay the principal of and interest on the Notes in accordance with
the terms of the Notes and this Indenture.  Without limiting the foregoing,  the
Issuer  will  cause  to be  distributed  all  amounts  on  deposit  in the  Note
Distribution  Account on a Payment Date deposited  therein  pursuant to the Sale
and Servicing Agreement (i) for the benefit of the Class A-1




                                      -21-





Notes, to Class A-1 Noteholders and (ii) for the benefit of the Class A-2 Notes,
to Class A-2 Noteholders. Amounts properly withheld under the Code by any Person
from a  payment  to  any  Noteholder  of  interest  and/or  principal  shall  be
considered as having been paid by the Issuer to such Noteholder for all purposes
of this Indenture.

         SECTION 3.2.  Maintenance of Office or Agency. The Issuer will maintain
in  Minneapolis,  Minnesota,  an office or agency where Notes may be surrendered
for  registration  of transfer or exchange,  and where notices and demands to or
upon the Issuer in respect of the Notes and this  Indenture  may be served.  The
Issuer  hereby  initially  appoints  the  Trustee  to serve as its agent for the
foregoing purposes. The Issuer will give prompt written notice to the Trustee of
the location,  and of any change in the location,  of any such office or agency.
If at any time the Issuer  shall fail to  maintain  any such office or agency or
shall fail to furnish the Trustee  with the address  thereof,  such  surrenders,
notices and demands may be made or served at the Corporate Trust Office, and the
Issuer hereby appoints the Trustee as its agent to receive all such  surrenders,
notices and demands.

         SECTION 3.3.  Money for Payments to be Held in Trust.  (a) On or before
each Payment Date and  Redemption  Date, the Issuer shall deposit or cause to be
deposited  in the Note  Distribution  Account  from the  Collection  Account  an
aggregate  sum  sufficient to pay the amounts then becoming due under the Notes,
such sum to be held in trust for the benefit of the Persons entitled thereto and
(unless the Note Paying Agent is the Trustee) shall promptly  notify the Trustee
of its action or failure so to act.

         (b) The Issuer will cause each Note Paying Agent other than the Trustee
to execute  and deliver to the Trustee  and the Note  Insurer an  instrument  in
which such Note Paying  Agent  shall agree with the Trustee  (and if the Trustee
acts as Note Paying Agent,  it hereby so agrees),  subject to the  provisions of
this Section, that such Note Paying Agent will:

                  (i) hold all sums held by it for the  payment of  amounts  due
         with  respect  to the Notes in trust  for the  benefit  of the  Persons
         entitled  thereto  until  such sums  shall be paid to such  Persons  or
         otherwise  disposed  of as  herein  provided  and pay such sums to such
         Persons as herein provided;

                  (ii) give the Trustee  notice of any default by the Issuer (or
         any other  obligor upon the Notes) of which it has actual  knowledge in
         the  making of any  payment  required  to be made with  respect  to the
         Notes;





                                      -22-





                  (iii) at any time during the  continuance of any such default,
         upon the written  request of the Trustee,  forthwith pay to the Trustee
         all sums so held in trust by such Note Paying Agent;

                  (iv)  immediately  resign as a Note Paying Agent and forthwith
         pay to the  Trustee  all sums  held by it in trust for the  payment  of
         Notes if at any time it ceases to meet the standards required to be met
         by a Note Paying Agent at the time of its appointment; and

                  (v) comply with all  requirements  of the Code with respect to
         the  withholding  from  any  payments  made by it on any  Notes  of any
         applicable  withholding  taxes imposed  thereon and with respect to any
         applicable reporting requirements in connection therewith.

         (c) The  Issuer  may at any time,  for the  purpose  of  obtaining  the
satisfaction and discharge of this Indenture or for any other purpose, by Issuer
Order  direct any Note Paying Agent to pay to the Trustee all sums held in trust
by such Note Paying  Agent,  such sums to be held by the  Trustee  upon the same
trusts as those upon  which the sums were held by such Note  Paying  Agent;  and
upon such a payment by any Note Paying  Agent to the  Trustee,  such Note Paying
Agent shall be released from all further liability with respect to such money.

         (d) Subject to  applicable  laws with  respect to the escheat of funds,
any money held by the Trustee or any Note Paying  Agent in trust for the payment
of any amount due with respect to any Note and remaining unclaimed for two years
after such amount has become due and payable shall be discharged from such trust
and be paid to the Issuer on Issuer Request with the consent of the Note Insurer
(unless an Insurer  Default shall have occurred and be continuing)  and shall be
deposited by the Trustee in the Collection Account;  and the Holder of such Note
shall thereafter,  as an unsecured general creditor, look only to the Issuer for
payment  thereof  (but only to the extent of the amounts so paid to the Issuer),
and all  liability of the Trustee or such Note Paying Agent with respect to such
trust money shall thereupon cease; provided,  however, that if such money or any
portion  thereof had been  previously  deposited  by the Note  Insurer  with the
Trustee for the payment of principal or interest on the Notes, to the extent any
amounts are owing to the Note  Insurer,  such amounts  shall be paid promptly to
the Note Insurer  upon receipt of a written  request by the Note Insurer to such
effect,  and  provided,  further,  that the Trustee or such Note  Paying  Agent,
before being  required to make any such  repayment,  shall at the expense of the
Issuer  cause to be  published  once,  in a newspaper  published  in the English
language,  customarily published on each Business Day and of general circulation
in The City of New York, notice that




                                      -23-





such money remains  unclaimed and that,  after a date specified  therein,  which
shall not be less than 30 days from the date of such publication,  any unclaimed
balance of such money then remaining  will be repaid to the Issuer.  The Trustee
shall also adopt and employ, at the expense of the Issuer,  any other reasonable
means of notification of such repayment (including,  but not limited to, mailing
notice of such  repayment  to Holders  whose Notes have been called but have not
been  surrendered for redemption or whose right to or interest in moneys due and
payable  but not claimed is  determinable  from the records of the Trustee or of
any Note Paying Agent, at the last address of record for each such Holder).

         SECTION 3.4. Existence. Except as otherwise permitted by the provisions
of Section 3.10, the Issuer will keep in full effect its  existence,  rights and
franchises as a business  trust under the laws of the State of Delaware  (unless
it becomes, or any successor Issuer hereunder is or becomes, organized under the
laws of any other state or of the United  States of  America,  in which case the
Issuer will keep in full effect its existence,  rights and franchises  under the
laws of such other  jurisdiction) and will obtain and preserve its qualification
to do business in each  jurisdiction in which such  qualification is or shall be
necessary to protect the  validity and  enforceability  of this  Indenture,  the
Notes,  the  Collateral and each other  instrument or agreement  included in the
Trust Estate.

         SECTION  3.5.  Protection  of Trust  Estate.  The  Issuer  intends  the
security  interest  Granted  pursuant to this  Indenture  in favor of the Issuer
Secured  Parties to be prior to all other liens in respect of the Trust  Estate,
and the Issuer shall take all actions necessary to obtain and maintain, in favor
of the Trustee,  for the benefit of the Issuer Secured Parties,  a first lien on
and a first  priority,  perfected  security  interest in the Trust  Estate.  The
Issuer will from time to time prepare (or shall cause to be  prepared),  execute
and deliver all such  supplements  and amendments  hereto and all such financing
statements,  continuation statements, instruments of further assurance and other
instruments, and will take such other action necessary or advisable to:

                  (i) Grant  more  effectively  all or any  portion of the Trust
         Estate;

                  (ii) maintain or preserve the lien and security  interest (and
         the  priority  thereof)  in favor of the Trustee for the benefit of the
         Issuer  Secured  Parties  created by this  Indenture  or carry out more
         effectively the purposes hereof;





                                      -24-





                  (iii)  perfect,  publish  notice of or protect the validity of
         any Grant made or to be made by this Indenture;

                  (iv)  enforce any of the collateral;

                  (v)  preserve  and  defend  title to the Trust  Estate and the
         rights of the  Trustee in such Trust  Estate  against the claims of all
         persons and parties; and

                  (vi) pay all taxes or assessments  levied or assessed upon the
         Trust Estate when due.

The Issuer  hereby  designates  the  Trustee its agent and  attorney-in-fact  to
execute any  financing  statement,  continuation  statement or other  instrument
required by the Trustee pursuant to this Section.

         SECTION 3.6. Opinions as to Trust Estate.  (a) On the Closing Date, the
Issuer  shall  furnish to the Trustee and the Note Insurer an Opinion of Counsel
either stating that, in the opinion of such counsel,  such action has been taken
with  respect to the  recording  and filing of this  Indenture,  any  indentures
supplemental hereto, and any other requisite documents,  and with respect to the
execution and filing of any financing statements and continuation statements, as
are necessary to perfect and make effective the first priority lien and security
interest in favor of the Trustee, for the benefit of the Issuer Secured Parties,
created by this  Indenture  and reciting the details of such action,  or stating
that, in the opinion of such  counsel,  no such action is necessary to make such
lien and security interest effective.

         (b) Within 90 days after the beginning of each calendar year, beginning
with the first  calendar year  beginning more than three months after the Cutoff
Date, the Issuer shall furnish to the Trustee and the Note Insurer an Opinion of
Counsel  either  stating that,  in the opinion of such counsel,  such action has
been taken with respect to the recording,  filing,  re-recording and refiling of
this  Indenture,  any  indentures  supplemental  hereto and any other  requisite
documents  and  with  respect  to the  execution  and  filing  of any  financing
statements and continuation statements as are necessary to maintain the lien and
security  interest  created by this  Indenture  and reciting the details of such
action  or  stating  that in the  opinion  of such  counsel  no such  action  is
necessary to maintain such lien and security  interest.  Such Opinion of Counsel
shall also describe any action  necessary (as of the date of such opinion) to be
taken in the following  year to maintain the lien and security  interest of this
Indenture.





                                      -25-





         SECTION 3.7. Performance of Obligations;  Servicing of Receivables. (a)
The Issuer will not take any action and will use its best  efforts not to permit
any action to be taken by others that would  release any Person from any of such
Person's  material  covenants or  obligations  under any instrument or agreement
included  in  the  Trust  Estate  or  that  would   result  in  the   amendment,
hypothecation, subordination, termination or discharge of or impair the validity
or effectiveness of, any such instrument or agreement,  except as ordered by any
bankruptcy or other court or as expressly provided in this Indenture,  the Basic
Documents or such other instrument or agreement.

         (b) The Issuer may contract with other  Persons  acceptable to the Note
Insurer (so long as no Insurer Default shall have occurred and be continuing) to
assist it in performing its duties under this Indenture,  and any performance of
such duties by a Person  identified  to the  Trustee and the Note  Insurer in an
Officer's  Certificate  of the Issuer  shall be deemed to be action taken by the
Issuer.  Initially,  the Issuer has  contracted  with the Servicer to assist the
Issuer in performing its duties under this Indenture.

         (c)  The  Issuer  will  punctually  perform  and  observe  all  of  its
obligations and agreements contained in this Indenture,  the Basic Documents and
in the  instruments and agreements  included in the Trust Estate,  including but
not limited to preparing  (or causing to prepared)  and filing (or causing to be
filed) all UCC financing  statements and continuation  statements required to be
filed by the terms of this  Indenture  and the Sale and  Servicing  Agreement in
accordance  with and within the time  periods  provided  for herein and therein.
Except as  otherwise  expressly  provided  therein,  the Issuer shall not waive,
amend,  modify,  supplement  or terminate  any Basic  Document or any  provision
thereof  without the consent of the Trustee,  the Note Insurer or the Holders of
at least a majority of the Outstanding Amount of the Notes.

         (d) If a  responsible  officer of the Owner  Trustee shall have written
notice or actual  knowledge of the  occurrence of a Servicer  Termination  Event
under the Sale and Servicing  Agreement,  the Issuer shall  promptly  notify the
Trustee,  the Note Insurer and the Rating  Agencies  thereof in accordance  with
Section 11.4, and shall specify in such notice the action, if any, the Issuer is
taking in respect of such default.  If a Servicer  Termination Event shall arise
from the failure of the  Servicer  to perform  any of its duties or  obligations
under the Sale and  Servicing  Agreement  with respect to the  Receivables,  the
Issuer shall take all reasonable steps available to it to remedy such failure.

         (e) The Issuer  agrees  that it will not waive  timely  performance  or
observance by the Servicer or the Seller of their




                                      -26-





respective duties under the Basic Documents (x) without the prior consent of the
Note Insurer  (unless an Insurer  Default shall have occurred and be continuing)
or (y) if the effect thereof would adversely affect the Holders of the Notes.

         SECTION 3.8.  Negative Covenants.  So long as any Notes are
Outstanding, the Issuer shall not:

                  (i) except as  expressly  permitted  by this  Indenture or the
         Basic Documents,  sell, transfer,  exchange or otherwise dispose of any
         of the properties or assets of the Issuer,  including those included in
         the Trust Estate, unless directed to do so by the Controlling Party;

                  (ii)  claim  any  credit  on, or make any  deduction  from the
         principal  or  interest  payable in respect  of, the Notes  (other than
         amounts properly  withheld from such payments under the Code) or assert
         any claim  against  any present or former  Noteholder  by reason of the
         payment  of the  taxes  levied or  assessed  upon any part of the Trust
         Estate; or

                  (iii)  (A)  permit  the  validity  or  effectiveness  of  this
         Indenture  to be  impaired,  or permit the lien in favor of the Trustee
         created by this  Indenture to be amended,  hypothecated,  subordinated,
         terminated or discharged,  or permit any Person to be released from any
         covenants or obligations with respect to the Notes under this Indenture
         except as may be  expressly  permitted  hereby,  (B)  permit  any lien,
         charge, excise, claim, security interest, mortgage or other encumbrance
         (other than the lien of this  Indenture)  to be created on or extend to
         or otherwise  arise upon or burden the Trust Estate or any part thereof
         or any interest  therein or the proceeds thereof (other than tax liens,
         mechanics'  liens and other  liens that arise by  operation  of law, in
         each case on a Financed  Vehicle and  arising  solely as a result of an
         action or omission of the related Obligor), (C) permit the lien of this
         Indenture  not to  constitute a valid first  priority  (other than with
         respect to any such tax, mechanics' or other lien) security interest in
         the Trust  Estate  or (D)  amend,  modify  or fail to  comply  with the
         provisions of the Basic Documents  without the prior written consent of
         the Controlling Party.

         SECTION 3.9. Annual Statement as to Compliance. The Issuer will deliver
to the  Trustee  and the  Note  Insurer,  on or  before  July  31 of each  year,
beginning July 31, 1998 and otherwise in compliance with the requirements of TIA
Section 314(a)(4) an Officer's  Certificate,  dated as of March 31 of such year,
stating, as to the Authorized Officer signing such Officer's Certificate, that





                                      -27-





                  (i) a review of the  activities of the Issuer during such year
         and of  performance  under  this  Indenture  has been made  under  such
         Authorized Officer's supervision; and

                  (ii) to the best of such Authorized Officer's knowledge, based
         on such  review,  the  Issuer  has  complied  with all  conditions  and
         covenants  under this Indenture  throughout such year, or, if there has
         been a default in the  compliance  of any such  condition  or covenant,
         specifying each such default known to such  Authorized  Officer and the
         nature and status thereof.

         SECTION 3.10.  Issuer May Consolidate,  Etc. Only on Certain Terms. (a)
The Issuer shall not consolidate or merge with or into any other Person, unless

                  (i) the  Person  (if  other  than  the  Issuer)  formed  by or
         surviving such  consolidation or merger shall be a Person organized and
         existing  under the laws of the  United  States of America or any state
         and  shall  expressly  assume,  by an  indenture  supplemental  hereto,
         executed  and  delivered to the Trustee,  in form  satisfactory  to the
         Trustee and the Note Insurer (so long as no Insurer  Default shall have
         occurred  and be  continuing),  the due  and  punctual  payment  of the
         principal  of  and  interest  on  all  Notes  and  the  performance  or
         observance  of every  agreement  and covenant of this  Indenture on the
         part of the Issuer to be performed or observed, all as provided herein;

                  (ii) immediately after giving effect to such  transaction,  no
         Default or Event of Default shall have occurred and be continuing;

                  (iii) the Rating Agency  Condition  shall have been  satisfied
         with respect to such transaction;

                  (iv) the Issuer shall have received an Opinion of Counsel (and
         shall have delivered copies thereof to the Trustee and the Note Insurer
         (so long as no Insurer  Default shall have occurred and be continuing))
         to the effect that such  transaction will not have any material adverse
         tax consequence to the Trust,  the Note Insurer,  any Noteholder or any
         Certificateholder;

                  (v) any  action  as is  necessary  to  maintain  the  lien and
         security interest created by this Indenture shall have been taken;

                  (vi)  the  Issuer  shall  have  delivered  to the  Trustee  an
         Officer's  Certificate and an Opinion of Counsel each stating that such
         consolidation or merger and such supplemental




                                      -28-





         indenture  comply  with  this  Article  III  and  that  all  conditions
         precedent  herein provided for relating to such  transaction  have been
         complied with (including any filing required by the Exchange Act); and

                  (vii) so long as no Insurer Default shall have occurred and be
         continuing, the Issuer shall have given the Note Insurer written notice
         of such  conveyance  or transfer at least 20 Business Days prior to the
         consummation  of such action and shall have  received the prior written
         approval of the Note  Insurer of such  conveyance  or transfer  and the
         Issuer or the Person (if other than the Issuer)  formed by or surviving
         such  conveyance  or transfer has a net worth,  immediately  after such
         conveyance or transfer,  that is (a) greater than zero and (b) not less
         than the net worth of the Issuer  immediately prior to giving effect to
         such conveyance or transfer.

         (b) The Issuer shall not convey or transfer all or substantially all of
its properties or assets,  including those included in the Trust Estate,  to any
Person, unless

                  (i) the Person that  acquires by  conveyance  or transfer  the
         properties and assets of the Issuer the conveyance or transfer of which
         is hereby  restricted  shall (A) be a United States citizen or a Person
         organized  and existing  under the laws of the United States of America
         or any  state,  (B)  expressly  assume,  by an  indenture  supplemental
         hereto,  executed and delivered to the Trustee, in form satisfactory to
         the Trustee,  and the Note Insurer (so long as no Insurer Default shall
         have occurred and be continuing),  the due and punctual  payment of the
         principal  of  and  interest  on  all  Notes  and  the  performance  or
         observance of every  agreement and covenant of this  Indenture and each
         of the Basic  Documents  on the part of the Issuer to be  performed  or
         observed,  all as provided herein, (C) expressly agree by means of such
         supplemental  indenture that all right,  title and interest so conveyed
         or  transferred  shall be  subject  and  subordinate  to the  rights of
         Holders  of  the  Notes,   (D)  unless   otherwise   provided  in  such
         supplemental indenture,  expressly agree to indemnify,  defend and hold
         harmless  the Issuer  against and from any loss,  liability  or expense
         arising  under or  related  to this  Indenture  and the  Notes  and (E)
         expressly  agree by  means of such  supplemental  indenture  that  such
         Person (or if a group of  persons,  then one  specified  Person)  shall
         prepare  (or  cause  to be  prepared)  and make  all  filings  with the
         Commission (and any other appropriate  Person) required by the Exchange
         Act in connection with the Notes;





                                      -29-





                  (ii) immediately after giving effect to such  transaction,  no
         Default or Event of Default shall have occurred and be continuing;

                  (iii) the Rating Agency  Condition  shall have been  satisfied
         with respect to such transaction;

                  (iv) the Issuer shall have received an Opinion of Counsel (and
         shall have delivered copies thereof to the Trustee and the Note Insurer
         (so long as no Insurer  Default shall have occurred and be continuing))
         to the effect that such  transaction will not have any material adverse
         tax consequence to the Trust,  the Note Insurer,  any Noteholder or any
         Certificateholder;

                  (v) any  action  as is  necessary  to  maintain  the  lien and
         security interest created by this Indenture shall have been taken; and

                  (vi)  the  Issuer  shall  have  delivered  to the  Trustee  an
         Officers'  Certificate and an Opinion of Counsel each stating that such
         conveyance or transfer and such supplemental indenture comply with this
         Article  III and that all  conditions  precedent  herein  provided  for
         relating to such  transaction  have been complied with  (including  any
         filing required by the Exchange Act); and

                  (vii) so long as no Insurer Default shall have occurred and be
         continuing, the Issuer shall have given the Note Insurer written notice
         of such  conveyance  or transfer at least 20 Business Days prior to the
         consummation  of such action and shall have  received the prior written
         approval of the Note  Insurer of such  consolidation  or merger and the
         Issuer or the Person (if other than the Issuer)  formed by or surviving
         such  consolidation or merger has a net worth,  immediately  after such
         consolidation or merger, that is (a) greater than zero and (b) not less
         than the net worth of the Issuer  immediately prior to giving effect to
         such consolidation or merger.

         SECTION 3.11.  Successor or Transferee.  (a) Upon any  consolidation or
merger of the Issuer in accordance with Section 3.10(a), the Person formed by or
surviving such  consolidation or merger (if other than the Issuer) shall succeed
to, and be  substituted  for,  and may  exercise  every  right and power of, the
Issuer  under this  Indenture  with the same  effect as if such  Person had been
named as the Issuer herein.

         (b) Upon a conveyance  or transfer of all the assets and  properties of
the Issuer pursuant to Section 3.10(b),  CPS Auto Receivables  Trust 1997-4 will
be released from every covenant and




                                      -30-





agreement  of this  Indenture  to be  observed or  performed  on the part of the
Issuer with respect to the Notes immediately upon the delivery of written notice
to the  Trustee  stating  that CPS Auto  Receivables  Trust  1997-4  is to be so
released.

         SECTION  3.12.  No Other  Business.  The Issuer shall not engage in any
business  other than  financing,  purchasing,  owning,  selling and managing the
Receivables in the manner contemplated by this Indenture and the Basic Documents
and activities incidental thereto.  After the Closing Date, the Issuer shall not
fund the purchase of any additional Receivables.

         SECTION 3.13. No Borrowing.  The Issuer shall not issue, incur, assume,
guarantee  or  otherwise  become  liable,   directly  or  indirectly,   for  any
Indebtedness  except for (i) the Notes (ii) obligations  owing from time to time
to  the  Note  Insurer  under  the  Insurance  Agreement  and  (iii)  any  other
Indebtedness permitted by or arising under the Basic Documents.  The proceeds of
the Notes and the  Certificates  shall be used  exclusively to fund the Issuer's
purchase  of the  Receivables  and the other  assets  specified  in the Sale and
Servicing  Agreement,  to  fund  the  Spread  Account  and to pay  the  Issuer's
organizational, transactional and start-up expenses.

         SECTION  3.14.  Servicer's  Obligations.  The  Issuer  shall  cause the
Servicer  to  comply  with  Sections  4.9,  4.10,  4.11 and 5.11 of the Sale and
Servicing Agreement.

         SECTION 3.15. Guarantees, Loans, Advances and Other Liabilities. Except
as  contemplated  by the Sale and  Servicing  Agreement or this  Indenture,  the
Issuer shall not make any loan or advance or credit to, or  guarantee  (directly
or  indirectly  or by an  instrument  having  the effect of  assuring  another's
payment  or  performance  on  any  obligation  or  capability  of  so  doing  or
otherwise),  endorse  or  otherwise  become  contingently  liable,  directly  or
indirectly, in connection with the obligations,  stocks or dividends of, or own,
purchase,  repurchase  or acquire  (or agree  contingently  to do so) any stock,
obligations,  assets or  securities  of, or any other  interest  in, or make any
capital contribution to, any other Person.

         SECTION  3.16.  Capital  Expenditures.  The  Issuer  shall not make any
expenditure  (by long-term or operating  lease or otherwise)  for capital assets
(either realty or personalty).

         SECTION 3.17.  Compliance  with Laws.  The Issuer shall comply with the
requirements  of all  applicable  laws,  the  non-compliance  with which  would,
individually or in the aggregate, materially and adversely affect the ability of
the Issuer to perform its  obligations  under the Notes,  this  Indenture or any
Basic Document.




                                      -31-





         SECTION 3.18.  Restricted  Payments.  The Issuer shall not, directly or
indirectly,  (i) pay any  dividend or make any  distribution  (by  reduction  of
capital or otherwise),  whether in cash,  property,  securities or a combination
thereof,  to the Owner  Trustee  or any owner of a  beneficial  interest  in the
Issuer or otherwise with respect to any ownership or equity interest or security
in or of the  Issuer  or to the  Servicer,  (ii)  redeem,  purchase,  retire  or
otherwise acquire for value any such ownership or equity interest or security or
(iii)  set  aside or  otherwise  segregate  any  amounts  for any such  purpose;
provided,  however, that the Issuer may make, or cause to be made, distributions
to the Servicer,  the Owner Trustee, the Trustee and the  Certificateholders  as
permitted by, and to the extent funds are available for such purpose under,  the
Sale and  Servicing  Agreement  or the Trust  Agreement.  The  Issuer  will not,
directly or indirectly,  make payments to or  distributions  from the Collection
Account except in accordance with this Indenture and the Basic Documents.

         SECTION 3.19. Notice of Events of Default.  Upon a responsible  officer
of the Owner  Trustee  having  notice or actual  knowledge  thereof,  the Issuer
agrees to give the  Trustee,  the Note  Insurer and the Rating  Agencies  prompt
written  notice of each Event of Default  hereunder and each default on the part
of the Servicer or the Seller of its  obligations  under the Sale and  Servicing
Agreement.

         SECTION 3.20. Further Instruments and Acts. Upon request of the Trustee
or  the  Note  Insurer,  the  Issuer  will  execute  and  deliver  such  further
instruments and do such further acts as may be reasonably necessary or proper to
carry out more effectively the purpose of this Indenture.

         SECTION  3.21.  Amendments  of Sale and  Servicing  Agreement and Trust
Agreement.  The Issuer  shall not agree to any  amendment to Section 13.1 of the
Sale and Servicing Agreement or Section 11.1 of the Trust Agreement to eliminate
the requirements thereunder that the Trustee or the Holders of the Notes consent
to amendments thereto as provided therein.

         SECTION  3.22.  Income Tax  Characterization.  For  purposes of federal
income,  state and local income and franchise  and any other income  taxes,  the
Issuer will treat the Notes as indebtedness  of the Issuer and hereby  instructs
the  Trustee to treat the Notes as  indebtedness  of the Issuer for  federal and
state tax reporting purposes.






                                      -32-





                                   ARTICLE IV

                           Satisfaction and Discharge

         SECTION 4.1.  Satisfaction  and Discharge of Indenture.  This Indenture
shall cease to be of further  effect with  respect to the Notes except as to (i)
rights of registration of transfer and exchange, (ii) substitution of mutilated,
destroyed, lost or stolen Notes, (iii) rights of Noteholders to receive payments
of principal  thereof and interest  thereon,  (iv)  Sections 3.3, 3.4, 3.5, 3.8,
3.10,  3.12,  3.13,  3.20,  3.21  and  3.22,  (v) the  rights,  obligations  and
immunities of the Trustee  hereunder  (including the rights of the Trustee under
Section 6.7 and the  obligations  of the Trustee under Section 4.2) and (vi) the
rights of  Noteholders as  beneficiaries  hereof with respect to the property so
deposited with the Trustee  payable to all or any of them,  and the Trustee,  on
demand of and at the expense of the Issuer,  shall  execute  proper  instruments
acknowledging  satisfaction  and discharge of this Indenture with respect to the
Notes, when

                  (A) all Notes  theretofore  authenticated and delivered (other
         than (i) Notes that have been  destroyed,  lost or stolen and that have
         been  replaced  or paid as  provided  in Section 2.5 and (ii) Notes for
         whose  payment  money  has  theretofore  been  deposited  in  trust  or
         segregated and held in trust by the Issuer and thereafter repaid to the
         Issuer or discharged  from such trust, as provided in Section 3.3) have
         been delivered to the Trustee for  cancellation and the Note Policy has
         expired and been returned to the Note Insurer for cancellation;

                  (B) the  Issuer  has paid or  caused  to be paid  all  Insurer
         Secured Obligations and all Trustee Secured Obligations; and

                  (C) the  Issuer  has  delivered  to the  Trustee  and the Note
         Insurer an Officer's Certificate, an Opinion of Counsel and if required
         by the TIA,  the  Trustee  or the Note  Insurer  (so long as an Insurer
         Default  shall not have  occurred  and be  continuing)  an  Independent
         Certificate from a firm of certified public  accountants,  each meeting
         the applicable  requirements  of Section  11.1(a) and each stating that
         all  conditions   precedent   herein   provided  for  relating  to  the
         satisfaction and discharge of this Indenture have been complied with.

         SECTION 4.2.  Application of Trust Money. All moneys deposited with the
Trustee pursuant to Section 4.1 hereof shall be held in trust and applied by it,
in  accordance  with the  provisions  of the  Notes and this  Indenture,  to the
payment,




                                      -33-





either  directly or through any Note Paying Agent, as the Trustee may determine,
to the Holders of the  particular  Notes for the payment or  redemption of which
such moneys have been deposited with the Trustee,  of all sums due and to become
due thereon for principal  and interest;  but such moneys need not be segregated
from  other  funds  except  to the  extent  required  herein  or in the Sale and
Servicing Agreement or required by law.

         SECTION  4.3.  Repayment  of  Moneys  Held by  Note  Paying  Agent.  In
connection with the satisfaction and discharge of this Indenture with respect to
the Notes,  all moneys then held by any Note Paying Agent other than the Trustee
under the provisions of this  Indenture  with respect to such Notes shall,  upon
demand of the Issuer, be paid to the Trustee to be held and applied according to
Section  3.3 and  thereupon  such Note Paying  Agent shall be released  from all
further liability with respect to such moneys.


                                    ARTICLE V

                                    Remedies

         SECTION  5.1.  Events of Default.  "Event of  Default",  wherever  used
herein,  means any one of the  following  events  (whatever  the reason for such
Event of Default and whether it shall be voluntary or involuntary or be effected
by operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body):

                  (i)  default in the  payment of any  interest on any Note when
         the same becomes due and payable, and such default shall continue for a
         period of five days (solely for  purposes of this clause,  a payment on
         the Notes funded by the Note Insurer or the  Collateral  Agent pursuant
         to the Master Spread Account  Agreement shall be deemed to be a payment
         made by the Issuer); or

                  (ii)  default  in  the  payment  of  the  principal  of or any
         installment  of the principal of any Note when the same becomes due and
         payable  (solely for  purposes of this  clause,  a payment on the Notes
         funded by the Note  Insurer or the  Collateral  Agent  pursuant  to the
         Master Spread Account  Agreement,  shall be deemed to be a payment made
         by the Issuer); or

                  (iii) so long as an Insurer  Default  shall not have  occurred
         and be continuing, an Insurance Agreement Indenture Cross Default shall
         have occurred;  provided,  however, that the occurrence of an Insurance
         Agreement Indenture Cross




                                      -34-





         Default  may not form the basis of an Event of Default  unless the Note
         Insurer shall,  upon prior written notice to the Rating Agencies,  have
         delivered  to the Issuer and the  Trustee  and not  rescinded a written
         notice specifying that such Insurance Agreement Indenture Cross Default
         constitutes an Event of Default under the Indenture; or

                  (iv) so long as an Insurer  Default shall have occurred and be
         continuing, default in the observance or performance of any covenant or
         agreement of the Issuer made in this  Indenture  (other than a covenant
         or agreement,  a default in the  observance or  performance of which is
         elsewhere  in  this   Section   specifically   dealt   with),   or  any
         representation  or warranty of the Issuer made in this  Indenture or in
         any  certificate  or other  writing  delivered  pursuant  hereto  or in
         connection  herewith  proving to have been  incorrect  in any  material
         respect as of the time when the same  shall  have been  made,  and such
         default  shall  continue  or  not be  cured,  or  the  circumstance  or
         condition  in respect of which such  misrepresentation  or warranty was
         incorrect  shall not have been  eliminated  or otherwise  cured,  for a
         period of 30 days (or for such longer period, not in excess of 90 days,
         as may be reasonably  necessary to remedy such  default;  provided that
         such  default  is  capable  of  remedy  within  90 days or less and the
         Servicer  on  behalf  of  the  Owner  Trustee   delivers  an  Officer's
         Certificate to the Trustee to the effect that the Issuer has commenced,
         or will promptly commence and diligently pursue, all reasonable efforts
         to  remedy  such  default)  after  there  shall  have  been  given,  by
         registered  or certified  mail,  to the Issuer by the Trustee or to the
         Issuer  and  the  Trustee  by  the  Holders  of at  least  25%  of  the
         Outstanding  Amount of the  Notes,  a written  notice  specifying  such
         default or incorrect  representation or warranty and requiring it to be
         remedied  and  stating  that  such  notice  is a  "Notice  of  Default"
         hereunder; or

                  (v) so long as an Insurer  Default  shall have occurred and be
         continuing,  the  filing  of a decree  or order  for  relief by a court
         having  jurisdiction  in the  premises  in respect of the Issuer or any
         substantial  part of the Trust Estate in an involuntary  case under any
         applicable Federal or state bankruptcy, insolvency or other similar law
         now or  hereafter  in effect,  or  appointing  a receiver,  liquidator,
         assignee,  custodian,  trustee, sequestrator or similar official of the
         Issuer or for any substantial part of the Trust Estate, or ordering the
         winding-up or liquidation of the Issuer's  affairs,  and such decree or
         order  shall  remain  unstayed  and  in  effect  for  a  period  of  60
         consecutive days; or





                                      -35-





                  (vi) so long as an Insurer  Default shall have occurred and be
         continuing,  the  commencement  by the Issuer of a voluntary case under
         any applicable Federal or state bankruptcy, insolvency or other similar
         law now or  hereafter  in effect,  or the  consent by the Issuer to the
         entry of an order for relief in an involuntary case under any such law,
         or the consent by the Issuer to the appointment or taking possession by
         a receiver,  liquidator,  assignee, custodian, trustee, sequestrator or
         similar official of the Issuer or for any substantial part of the Trust
         Estate,  or the making by the Issuer of any general  assignment for the
         benefit of creditors, or the failure by the Issuer generally to pay its
         debts as such debts  become  due, or the taking of action by the Issuer
         in furtherance of any of the foregoing.

         The Issuer shall  deliver to the Trustee and the Note  Insurer,  within
five  days  after  the  occurrence  thereof,  written  notice  in the form of an
Officer's Certificate of any event which with the giving of notice and the lapse
of time would become an Event of Default under clause (iii), its status and what
action the Issuer is taking or proposes to take with respect thereto.

         SECTION 5.2.  Rights Upon Event of Default.  (a) If an Insurer  Default
shall not have  occurred and be  continuing  and an Event of Default  shall have
occurred and be continuing,  the Notes shall become  immediately due and payable
at par,  together with accrued  interest  thereon.  If an Event of Default shall
have occurred and be continuing,  the Controlling  Party may exercise any of the
remedies  specified in Section 5.4(a).  In the event of any  acceleration of any
Notes by  operation  of this  Section  5.2,  the  Trustee  shall  continue to be
entitled to make claims under the Note Policy pursuant to the Sale and Servicing
Agreement for Scheduled  Payments on the Notes.  Payments  under the Note Policy
following acceleration of any Notes shall be applied by the Trustee:

                  FIRST:  to Noteholders for amounts due and unpaid on the Notes
         for  interest,  ratably,  without  preference  or priority of any kind,
         according to the amounts due and payable on the Notes for interest; and

                  SECOND: to Noteholders for amounts due and unpaid on the Notes
         for  principal,  ratably,  without  preference or priority of any kind,
         according to the amounts due and payable on the Notes for principal.

         (b) In the event any Notes are  accelerated due to an Event of Default,
the Note  Insurer  shall have the right (in  addition to its  obligation  to pay
Scheduled Payments on the Notes in accordance with the Note Policy), but not the
obligation, to make payments under the Note Policy or otherwise of interest and




                                      -36-





principal due on such Notes, in whole or in part, on any date or dates following
such acceleration as the Note Insurer, in its sole discretion, shall elect.

         (c) If an Insurer  Default shall have occurred and be continuing and an
Event of Default  shall have  occurred  and be  continuing,  the  Trustee in its
discretion  may,  or if  so  requested  in  writing  by  Holders  holding  Notes
representing  not less than a majority of the  Outstanding  Amount of the Notes,
declare by written  notice to the Issuer that the Notes become,  whereupon  they
shall become, immediately due and payable at par, together with accrued interest
thereon.

         (d) If an Insurer  Default shall have occurred and be continuing,  then
at any time after such declaration of acceleration of maturity has been made and
before a judgment  or decree for  payment of the money due has been  obtained by
the Trustee as  hereinafter  in this  Article V  provided,  the Holders of Notes
representing  a majority  of the  Outstanding  Amount of the  Notes,  by written
notice to the Issuer and the Trustee, may rescind and annul such declaration and
its consequences if:

                  (i)  the Issuer has paid or deposited with the Trustee
         a sum sufficient to pay

                           (A) all  payments of principal of and interest on all
                  Notes and all other  amounts that would then be due  hereunder
                  or upon such Notes if the Event of Default giving rise to such
                  acceleration had not occurred; and

                           (B)  all  sums  paid  or   advanced  by  the  Trustee
                  hereunder   and   the   reasonable   compensation,   expenses,
                  disbursements  and  advances of the Trustee and its agents and
                  counsel; and

                  (ii) all Events of Default,  other than the  nonpayment of the
         principal of the Notes that has become due solely by such acceleration,
         have been cured or waived as provided in Section 5.12.

         No such  rescission  shall affect any subsequent  default or impair any
right consequent thereto.

         SECTION 5.3.  Collection of  Indebtedness  and Suits for Enforcement by
Trustee.  (a) The Issuer covenants that if (i) default is made in the payment of
any interest on any Note when the same becomes due and payable, and such default
continues  for a period of five days,  or (ii) default is made in the payment of
the principal of or any  installment  of the principal of any Note when the same
becomes due and payable, the Issuer will, upon demand of the Trustee, pay to it,
for the benefit of the Holders




                                      -37-





of the Notes,  the whole amount then due and payable on such Notes for principal
and  interest,  with  interest  upon the overdue  principal,  and, to the extent
payment at such rate of  interest  shall be legally  enforceable,  upon  overdue
installments  of  interest,  at the  applicable  Interest  Rate and in  addition
thereto  such  further  amount  as shall be  sufficient  to cover  the costs and
expenses  of  collection,  including  the  reasonable  compensation,   expenses,
disbursements and advances of the Trustee and its agents and counsel.

         (b) Each Issuer Secured Party hereby  irrevocably  and  unconditionally
appoints the Controlling Party as the true and lawful  attorney-in-fact  of such
Issuer  Secured  Party  for so long  as such  Issuer  Secured  Party  is not the
Controlling Party, with full power of substitution,  to execute, acknowledge and
deliver any notice, document,  certificate, paper, pleading or instrument and to
do in the name of the Controlling  Party as well as in the name, place and stead
of such Issuer Secured Party such acts, things and deeds for or on behalf of and
in the  name of such  Issuer  Secured  Party  under  this  Indenture  (including
specifically  under Section 5.4) and under the Basic Documents which such Issuer
Secured  Party  could  or  might  do or which  may be  necessary,  desirable  or
convenient in such  Controlling  Party's sole  discretion to effect the purposes
contemplated  hereunder and under the Basic Documents and,  without  limitation,
following the occurrence of an Event of Default,  exercise full right, power and
authority to take,  or defer from  taking,  any and all acts with respect to the
administration, maintenance or disposition of the Trust Estate.

         (c) If an Event of Default occurs and is continuing, the Trustee may in
its discretion but with the consent of the  Controlling  Party and shall, at the
direction of the Controlling Party (except as provided in Section 5.3(d) below),
proceed to protect and enforce its rights and the rights of the  Noteholders  by
such appropriate  Proceedings as the Trustee or the Controlling Party shall deem
most effective to protect and enforce any such rights,  whether for the specific
enforcement  of any  covenant or  agreement  in this  Indenture or in aid of the
exercise of any power granted  herein,  or to enforce any other proper remedy or
legal or equitable right vested in the Trustee by this Indenture or by law.

         (d)  Notwithstanding   anything  to  the  contrary  contained  in  this
Indenture  (including  without  limitation  Sections 5.4(a),  5.12 and 5.13) and
regardless of whether an Insurer  Default shall have occurred and be continuing,
if the Issuer fails to perform its obligations under Section 10.1(b) hereof when
and as due,  the Trustee may in its  discretion  (and without the consent of the
Controlling  Party)  proceed to protect and enforce its rights and the rights of
the Noteholders by such appropriate proceedings as




                                      -38-





the Trustee  shall deem most  effective  to protect and enforce any such rights,
whether for specific  performance of any covenant or agreement in this Indenture
or in aid of the exercise of any power granted  herein,  or to enforce any other
proper  remedy  or  legal or  equitable  right  vested  in the  Trustee  by this
Indenture or by law;  provided  that the Trustee  shall only be entitled to take
any such actions without the consent of the Controlling Party to the extent such
actions  are taken  only to  enforce  the  Issuer's  obligations  to redeem  the
principal amount of Notes.

         (e) In case there shall be pending, relative to the Issuer or any other
obligor upon the Notes or any Person having or claiming an ownership interest in
the Trust  Estate,  proceedings  under Title 11 of the United States Code or any
other applicable  Federal or state bankruptcy,  insolvency or other similar law,
or in case a receiver,  assignee  or trustee in  bankruptcy  or  reorganization,
liquidator,  sequestrator  or similar  official shall have been appointed for or
taken  possession of the Issuer or its property or such other obligor or Person,
or in case of any other comparable judicial  proceedings  relative to the Issuer
or other  obligor upon the Notes,  or to the creditors or property of the Issuer
or such other obligor, the Trustee, irrespective of whether the principal of any
Notes shall then be due and payable as therein  expressed or by  declaration  or
otherwise  and  irrespective  of whether the Trustee  shall have made any demand
pursuant to the provisions of this Section, shall be entitled and empowered,  by
intervention in such proceedings or otherwise:

                  (i) to file and prove a claim or claims  for the whole  amount
         of principal and interest  owing and unpaid in respect of the Notes and
         to file such other papers or documents as may be necessary or advisable
         in order to have the  claims of the  Trustee  (including  any claim for
         reasonable  compensation to the Trustee and each  predecessor  Trustee,
         and  their   respective   agents,   attorneys  and  counsel,   and  for
         reimbursement  of  all  expenses  and  liabilities  incurred,  and  all
         advances made, by the Trustee and each predecessor Trustee, except as a
         result of  negligence,  bad  faith or  willful  misconduct)  and of the
         Noteholders allowed in such proceedings;

                  (ii) unless  prohibited by applicable law and regulations,  to
         vote on behalf of the Holders of Notes in any election of a trustee,  a
         standby  trustee or person  performing  similar  functions  in any such
         proceedings;

                  (iii) to collect  and  receive  any  moneys or other  property
         payable or deliverable on any such claims and to distribute all amounts
         received  with  respect  to the  claims of the  Noteholders  and of the
         Trustee on their behalf; and





                                      -39-





                  (iv)  to file  such  proofs  of  claim  and  other  papers  or
         documents  as may be necessary or advisable in order to have the claims
         of  the  Trustee  or the  Holders  of  Notes  allowed  in any  judicial
         proceedings relative to the Issuer, its creditors and its property;

and any trustee,  receiver,  liquidator,  custodian or other similar official in
any such  proceeding is hereby  authorized by each of such  Noteholders  to make
payments to the Trustee, and, in the event that the Trustee shall consent to the
making of payments  directly  to such  Noteholders,  to pay to the Trustee  such
amounts as shall be sufficient to cover reasonable  compensation to the Trustee,
each predecessor Trustee and their respective agents, attorneys and counsel, and
all other  expenses and  liabilities  incurred,  and all advances  made,  by the
Trustee and each  predecessor  Trustee  except as a result of  negligence or bad
faith.

         (f) Nothing herein  contained  shall be deemed to authorize the Trustee
to  authorize  or  consent  to or vote for or  accept  or adopt on behalf of any
Noteholder any plan of  reorganization,  arrangement,  adjustment or composition
affecting  the Notes or the rights of any Holder  thereof  or to  authorize  the
Trustee to vote in respect of the claim of any Noteholder in any such proceeding
except,  as  aforesaid,  to vote for the election of a trustee in  bankruptcy or
similar person.

         (g) All rights of action and of asserting  claims under this Indenture,
the Master Spread Account  Agreement or under any of the Notes,  may be enforced
by the Trustee  without  the  possession  of any of the Notes or the  production
thereof in any trial or other proceedings  relative thereto, and any such action
or  proceedings  instituted  by the Trustee  shall be brought in its own name as
trustee  of an express  trust,  and any  recovery  of  judgment,  subject to the
payment of the expenses,  disbursements  and  compensation of the Trustee,  each
predecessor Trustee and their respective agents and attorneys,  shall be for the
ratable benefit of the Holders of the Notes.

         (h) In any proceedings brought by the Trustee (and also any proceedings
involving the  interpretation  of any provision of this  Indenture or the Master
Spread  Account  Agreement),  the  Trustee  shall be held to  represent  all the
Holders of the Notes,  and it shall not be  necessary  to make any  Noteholder a
party to any such proceedings.

         SECTION 5.4.  Remedies.  (a) If an Event of Default shall have occurred
and be  continuing,  the  Controlling  Party may do one or more of the following
(subject to Section 5.5):





                                      -40-





                  (i) institute Proceedings in its own name and as trustee of an
         express  trust for the  collection  of all amounts  then payable on the
         Notes  or  under  this  Indenture  with  respect  thereto,  whether  by
         declaration or otherwise,  enforce any judgment  obtained,  and collect
         from the Issuer and any other  obligor upon such Notes moneys  adjudged
         due;

                  (ii) institute  Proceedings from time to time for the complete
         or partial  foreclosure  of this  Indenture  with  respect to the Trust
         Estate;

                  (iii)  exercise any remedies of a secured  party under the UCC
         and take any other appropriate action to protect and enforce the rights
         and remedies of the Trustee and the Holders of the Notes; and

                  (iv)  direct  the  Trustee  to sell the  Trust  Estate  or any
         portion thereof or rights or interest therein, at one or more public or
         private  sales  called and  conducted  in any manner  permitted by law;
         provided, however, that

                           (A) if the Note Insurer is the Controlling Party, the
                  Note  Insurer may not sell or  otherwise  liquidate  the Trust
                  Estate  following  an  Insurance   Agreement  Indenture  Cross
                  Default unless

                                    (I) the proceeds of such sale or liquidation
                           distributable  to the  Noteholders  are sufficient to
                           discharge  in full all  amounts  then due and  unpaid
                           upon such Notes for  principal  and  interest  and it
                           shall have received  instruction  to do so by holders
                           of at  least  662/3%  of  the  outstanding  principal
                           balance  of  each  of  the  Class  A  Notes  and  the
                           Certificates, respectively; or

                           (B) if the  Trustee  is the  Controlling  Party,  the
                  Trustee may not sell or otherwise  liquidate  the Trust Estate
                  following an Event of Default unless

                                    (I)  such  Event of  Default  is of the type
                           described in Section 5.1(i) or (ii), or

                                    (II)  either

                                             (x)  the  Holders  of  100%  of the
                                    Outstanding  Amount  of  the  Notes  consent
                                    thereto,

                                             (y) the  proceeds  of such  sale or
                                    liquidation distributable to the Noteholders




                                      -41-





                                    are  sufficient  to  discharge  in full  all
                                    amounts  then due and unpaid upon such Notes
                                    for principal and interest, or

                                             (z) the Trustee determines that the
                                    Trust  Estate  will not  continue to provide
                                    sufficient   funds   for  the   payment   of
                                    principal  of and  interest  on the Notes as
                                    they would have  become due if the Notes had
                                    not been  declared due and payable,  and the
                                    Trustee provides prior written notice to the
                                    Rating  Agencies  and obtains the consent of
                                    Holders of 66-2/3% of the Outstanding Amount
                                    of the Notes.

         In  determining  such  sufficiency  or  insufficiency  with  respect to
clauses (y) and (z),  the  Trustee  may,  but need not,  obtain and rely upon an
opinion of an  Independent  investment  banking or  accounting  firm of national
reputation  as to  the  feasibility  of  such  proposed  action  and  as to  the
sufficiency of the Trust Estate for such purpose.

         SECTION 5.5. Optional  Preservation of the Receivables.  If the Trustee
is the  Controlling  Party and if the Notes  have  been  declared  to be due and
payable under Section 5.2 following an Event of Default and such declaration and
its consequences have not been rescinded and annulled, the Trustee may, but need
not, elect to maintain  possession of the Trust Estate.  It is the desire of the
parties hereto and the Noteholders  that there be at all times  sufficient funds
for the payment of principal of and interest on the Notes, and the Trustee shall
take such  desire  into  account  when  determining  whether or not to  maintain
possession of the Trust Estate. In determining whether to maintain possession of
the Trust Estate, the Trustee may, but need not, obtain and rely upon an opinion
of an Independent  investment banking or accounting firm of national  reputation
as to the  feasibility of such proposed  action and as to the sufficiency of the
Trust Estate for such purpose.

         SECTION 5.6.  Priorities.

         (a) Following (1) the acceleration of the Notes pursuant to Section 5.2
or (2) if an  Insurer  Default  shall  have  occurred  and  be  continuing,  the
occurrence of an Event of Default pursuant to Section 5.1(i), 5.1(ii),  5.1(iv),
5.1(v) or 5.1(vi) of this  Indenture or (3) the receipt of  Insolvency  Proceeds
pursuant  to Section  11.1(b)  of the Sale and  Servicing  Agreement,  the Total
Distribution  Amount,  including  any money or  property  collected  pursuant to
Section 5.4 of this Indenture and any such Insolvency Proceeds, shall be applied
by the Trustee on the related Payment Date in the following order of priority:




                                      -42-





                  FIRST: amounts due and owing and required to be distributed to
         the Servicer,  the Standby Servicer, the Owner Trustee, the Trustee and
         the Collateral Agent, respectively,  pursuant to priorities (i) through
         (iv) of  Section  5.7(b) of the Sale and  Servicing  Agreement  and not
         previously  distributed,  in the order of such  priorities  and without
         preference or priority of any kind within such priorities;

                  SECOND:  to Class A Noteholders  for amounts due and unpaid on
         the Class A Notes for interest, ratably, without preference or priority
         of any kind,  according  to the  amounts due and payable on the Class A
         Notes for interest;

                  THIRD:  to Class A  Noteholders  for amounts due and unpaid on
         the  Class  A Notes  for  principal,  ratably,  without  preference  or
         priority of any kind,  according  to the amounts due and payable on the
         Class A Notes for principal;

                  FOURTH:  amounts due and owing and required to be  distributed
         to the Note Insurer  pursuant to priority  (viii) of Section  5.7(b) of
         the Sale and Servicing Agreement and not previously distributed); and

                  FIFTH: in the event any Person other than the Standby Servicer
         becomes the successor Servicer, to such successor Servicer,  reasonable
         transition  expenses (up to a maximum of $50,000 for all such expenses)
         incurred in acting as successor Servicer;

                  SIXTH: to the Certificateholders for amounts due and unpaid on
         the Certificates for interest,  ratably, without preference or priority
         of  any  kind,  according  to  the  amounts  due  and  payable  on  the
         Certificates for interest;

                  SEVENTH: to the  Certificateholders for amounts due and unpaid
         on the  Certificates  for  principal,  ratably,  without  preference or
         priority of any kind,  according  to the amounts due and payable on the
         Certificates for principal;

                  EIGHTH:  to the Collateral  Agent to be applied as provided in
         the Master Spread Account Agreement.

         (b) The Trustee may fix a record date and payment  date for any payment
to  Noteholders  pursuant to this  Section.  At least 15 days before such record
date the Issuer  shall mail to each  Noteholder  and the  Trustee a notice  that
states the record date, the payment date and the amount to be paid.

         SECTION 5.7.  Limitation of Suits. No Holder of any Note shall have any
right to institute any proceeding,  judicial or otherwise,  with respect to this
Indenture,  or for the  appointment  of a receiver or trustee,  or for any other
remedy hereunder, unless:




                                      -43-




                  (i) such Holder has  previously  given  written  notice to the
         Trustee of a continuing Event of Default;

                  (ii)  the  Holders  of not less  than  25% of the  Outstanding
         Amount of the  Notes  have  made  written  request  to the  Trustee  to
         institute  such  proceeding  in respect of such Event of Default in its
         own name as Trustee hereunder;

                  (iii) such  Holder or  Holders  have  offered  to the  Trustee
         indemnity reasonably satisfactory to it against the costs, expenses and
         liabilities to be incurred in complying with such request;

                  (iv) the Trustee for 60 days after its receipt of such notice,
         request  and  offer  of  indemnity   has  failed  to   institute   such
         proceedings;

                  (v) no direction  inconsistent  with such written  request has
         been given to the Trustee during such 60-day period by the Holders of a
         majority of the Outstanding Amount of the Notes; and

                  (vi) an Insurer Default shall have occurred and be continuing;

it being understood and intended that no one or more Holders of Notes shall have
any right in any manner  whatever by virtue of, or by availing of, any provision
of this  Indenture  to  affect,  disturb  or  prejudice  the rights of any other
Holders of Notes or to obtain or to seek to obtain  priority or preference  over
any other  Holders or to enforce any right under this  Indenture,  except in the
manner herein provided.

         In the event the Trustee  shall  receive  conflicting  or  inconsistent
requests  and  indemnity  from two or more  groups of  Holders  of  Notes,  each
representing  less than a majority of the Outstanding  Amount of the Notes,  the
Trustee in its sole  discretion  may  determine  what action,  if any,  shall be
taken, notwithstanding any other provisions of this Indenture.

         SECTION 5.8.  Unconditional  Rights of Noteholders To Receive Principal
and Interest. Notwithstanding any other provisions of this Indenture, the Holder
of any Note  shall have the  right,  which is  absolute  and  unconditional,  to
receive  payment of the  principal of and  interest,  if any, on such Note on or
after  the  respective  due  dates  thereof  expressed  in such  Note or in this
Indenture (or, in the case of redemption,  on or after the Redemption  Date) and
to institute suit for the enforcement of any




                                      -44-





such payment,  and such right shall not be impaired  without the consent of such
Holder.

         SECTION 5.9.  Restoration  of Rights and Remedies.  If the  Controlling
Party or any  Noteholder  has  instituted any proceeding to enforce any right or
remedy  under  this  Indenture  and such  proceeding  has been  discontinued  or
abandoned for any reason or has been  determined  adversely to the Trustee or to
such  Noteholder,  then and in every such case the  Issuer,  the Trustee and the
Noteholders shall, subject to any determination in such Proceeding,  be restored
severally and respectively to their former positions  hereunder,  and thereafter
all rights and  remedies of the Trustee and the  Noteholders  shall  continue as
though no such proceeding had been instituted.

         SECTION 5.10. Rights and Remedies Cumulative. No right or remedy herein
conferred  upon or reserved to the  Controlling  Party or to the  Noteholders is
intended  to be  exclusive  of any other  right or remedy,  and every  right and
remedy shall,  to the extent  permitted by law, be cumulative and in addition to
every other right and remedy given hereunder or now or hereafter existing at law
or in equity or  otherwise.  The  assertion or employment of any right or remedy
hereunder,  or  otherwise,   shall  not  prevent  the  concurrent  assertion  or
employment of any other appropriate right or remedy.

         SECTION 5.11.  Delay or Omission Not a Waiver.  No delay or omission of
the Controlling  Party or any Holder of any Note to exercise any right or remedy
accruing  upon any  Default or Event of Default  shall  impair any such right or
remedy or  constitute  a waiver of any such  Default  or Event of  Default or an
acquiescence  therein.  Every right and remedy given by this Article V or by law
to the Trustee or to the  Noteholders may be exercised from time to time, and as
often as may be deemed expedient,  by the Trustee or by the Noteholders,  as the
case may be.

         SECTION 5.12. Control by Noteholders. If the Trustee is the Controlling
Party,  the Holders of a majority of the  Outstanding  Amount of the Notes shall
have the right to direct the time, method and place of conducting any proceeding
for any remedy  available to the Trustee with respect to the Notes or exercising
any trust or power conferred on the Trustee; provided that

                  (i) such  direction  shall not be in conflict with any rule of
         law or with this Indenture;

                  (ii)  subject  to  the  express  terms  of  Section  5.4,  any
         direction to the Trustee to sell or liquidate the Trust Estate shall be
         by the  Holders  of  Notes  representing  not  less  than  100%  of the
         Outstanding Amount of the Notes;




                                      -45-





                  (iii) if the  conditions  set forth in  Section  5.5 have been
         satisfied and the Trustee elects to retain the Trust Estate pursuant to
         such  Section,  then any  direction  to the Trustee by Holders of Notes
         representing  less than 100% of the Outstanding  Amount of the Notes to
         sell or liquidate the Trust Estate shall be of no force and effect; and

                  (iv) the Trustee may take any other  action  deemed  proper by
         the Trustee that is not inconsistent with such direction;

provided,  however,  that, subject to Section 6.1, the Trustee need not take any
action that it  determines  might  involve it in liability  or might  materially
adversely affect the rights of any Noteholders not consenting to such action.

         SECTION 5.13. Waiver of Past Defaults.  (a) If an Insurer Default shall
have occurred and be continuing, prior to the declaration of the acceleration of
the  maturity of the Notes as provided in Section  5.4,  the Holders of Notes of
not less than a majority  of the  Outstanding  Amount of the Notes may waive any
past  Default or Event of Default and its  consequences  except a Default (i) in
payment of  principal of or interest on any of the Notes or (ii) in respect of a
covenant or provision  hereof  which  cannot be modified or amended  without the
consent of the Holder of each Note. In the case of any such waiver,  the Issuer,
the Trustee  and the  Holders of the Notes  shall be  restored  to their  former
positions and rights hereunder, respectively; but no such waiver shall extend to
any subsequent or other Default or impair any right consequent thereto.

         Upon any such waiver,  such Default  shall cease to exist and be deemed
to have been cured and not to have  occurred,  and any Event of Default  arising
therefrom shall be deemed to have been cured and not to have occurred, for every
purpose of this Indenture;  but no such waiver shall extend to any subsequent or
other Default or Event of Default or impair any right consequent thereto.

         SECTION  5.14.  Undertaking  for Costs.  All parties to this  Indenture
agree, and each Holder of any Note by such Holder's  acceptance thereof shall be
deemed to have agreed, that any court may in its discretion require, in any suit
for the enforcement of any right or remedy under this Indenture,  or in any suit
against the Trustee for any action taken,  suffered or omitted by it as Trustee,
the filing by any party litigant in such suit of an undertaking to pay the costs
of such suit, and that such court may in its discretion assess reasonable costs,
including  reasonable  attorneys' fees, against any party litigant in such suit,
having due regard to the merits and good faith of the claims or defenses made by
such party litigant; but the




                                      -46-





provisions  of this Section  shall not apply to (a) any suit  instituted  by the
Trustee, (b) any suit instituted by any Noteholder, or group of Noteholders,  in
each case holding in the aggregate  more than 10% of the  Outstanding  Amount of
the Notes or (c) any suit  instituted by any Noteholder  for the  enforcement of
the payment of principal  of or interest on any Note on or after the  respective
due dates  expressed  in such  Note and in this  Indenture  (or,  in the case of
redemption, on or after the Redemption Date).

         SECTION 5.15.  Waiver of Stay or Extension  Laws. The Issuer  covenants
(to the extent  that it may  lawfully do so) that it will not at any time insist
upon,  or plead or in any  manner  whatsoever,  claim  or take  the  benefit  or
advantage  of, any stay or extension  law wherever  enacted,  now or at any time
hereafter in force,  that may affect the  covenants or the  performance  of this
Indenture;  and the  Issuer (to the extent  that it may  lawfully  do so) hereby
expressly waives all benefit or advantage of any such law, and covenants that it
will not hinder, delay or impede the execution of any power and any right of the
Issuer to take such action shall be suspended.


                                   ARTICLE VI

                                   The Trustee

         SECTION 6.1. Duties of Trustee. (a) If an Event of Default has occurred
and is continuing, the Trustee shall exercise the rights and powers vested in it
by this  Indenture  and the Basic  Documents and use the same degree of care and
skill in their  exercise  as a prudent  person  would  exercise or use under the
circumstances in the conduct of such person's own affairs.

         (b)  Except during the continuance of an Event of Default:

                  (i) the  Trustee  undertakes  to perform  such duties and only
         such  duties as are  specifically  set forth in this  Indenture  and no
         implied  covenants  or  obligations  shall be read into this  Indenture
         against the Trustee; and

                  (ii) in the absence of bad faith on its part,  the Trustee may
         conclusively   rely,  as  to  the  truth  of  the  statements  and  the
         correctness of the opinions  expressed  therein,  upon  certificates or
         opinions furnished to the Trustee and conforming to the requirements of
         this Indenture; however, the Trustee shall examine the certificates and
         opinions to determine  whether or not they conform on their face to the
         requirements of this Indenture.





                                      -47-





         (c)  The  Trustee  may  not be  relieved  from  liability  for  its own
negligent action, its own negligent failure to act or its own wilful misconduct,
except that:

                  (i) this  paragraph does not limit the effect of paragraph (b)
         of this Section;

                  (ii) the Trustee shall not be liable for any error of judgment
         made in good faith by a  Responsible  Officer  unless it is proved that
         the Trustee was negligent in ascertaining the pertinent facts; and

                  (iii) the  Trustee  shall not be liable  with  respect  to any
         action  it takes or omits to take in good  faith in  accordance  with a
         direction received by it pursuant to Section 5.12.

         (d) The Trustee shall not be liable for interest on any money  received
by it except as the Trustee may agree in writing with the Issuer.

         (e) Money  held in trust by the  Trustee  need not be  segregated  from
other funds except to the extent  required by law or the terms of this Indenture
or the Sale and Servicing Agreement.

         (f) No provision of this Indenture  shall require the Trustee to expend
or risk its own funds or otherwise incur financial  liability in the performance
of any of its  duties  hereunder  or in the  exercise  of any of its  rights  or
powers,  if it shall have  reasonable  grounds to believe that repayment of such
funds or adequate  indemnity  against such risk or  liability is not  reasonably
assured to it.

         (g) Every  provision  of this  Indenture  relating  to the  conduct  or
affecting  the  liability of or  affording  protection  to the Trustee  shall be
subject to the provisions of this Section and to the provisions of the TIA.

         (h) The Trustee  shall permit any  representative  of the Note Insurer,
during the Trustee's  normal  business  hours,  to examine all books of account,
records,  reports and other papers of the Trustee relating to the Notes, to make
copies and extracts  therefrom and to discuss the Trustee's affairs and actions,
as such affairs and actions  relate to the Trustee's  duties with respect to the
Notes,  with the Trustee's  officers and employees  responsible for carrying out
the Trustee's duties with respect to the Notes.





                                      -48-





         (i) The Trustee shall,  and hereby agrees that it will,  perform all of
the  obligations  and  duties  required  of it  under  the  Sale  and  Servicing
Agreement.

         (j) The Trustee  shall,  and hereby agrees that it will,  hold the Note
Policy in trust,  and will hold any  proceeds of any claim on the Note Policy in
trust solely for the use and benefit of the Noteholders.

         (k) In no event shall Norwest Bank Minnesota,  National Association, in
any of its  capacities  hereunder,  be deemed to have  assumed any duties of the
Owner  Trustee under the Delaware  Business  Trust  Statute,  common law, or the
Trust Agreement.

         (l) Except for actions  expressly  authorized  by this  Indenture,  the
Trustee shall take no action reasonably likely to impair the security  interests
created or existing  under any  Receivable or Financed  Vehicle or to impair the
value of any Receivable or Financed Vehicle.

         (m) All information  obtained by the Trustee regarding the Obligors and
the Receivables, whether upon the exercise of its rights under this Indenture or
otherwise,  shall be maintained  by the Trustee in  confidence  and shall not be
disclosed to any other Person, other than the Trustee's  attorneys,  accountants
and  agents  unless  such  disclosure  is  required  by  this  Indenture  or any
applicable law or regulation.

         SECTION  6.2.  Rights  of  Trustee.  (a) The  Trustee  may  rely on any
document  believed by it to be genuine and to have been signed or  presented  by
the proper person. The Trustee need not investigate any fact or matter stated in
the document.

         (b) Before the Trustee acts or refrains from acting,  it may require an
Officer's  Certificate or an Opinion of Counsel. The Trustee shall not be liable
for any  action  it  takes or omits  to take in good  faith in  reliance  on the
Officer's Certificate or Opinion of Counsel.

         (c) The Trustee may  execute any of the trusts or powers  hereunder  or
perform  any  duties  hereunder  either  directly  or by or  through  agents  or
attorneys or a custodian or nominee,  and the Trustee  shall not be  responsible
for any  misconduct  or  negligence  on the part of, or for the  supervision  of
Consumer Portfolio Services, Inc., or any other such agent, attorney,  custodian
or nominee appointed with due care by it hereunder.

         (d) The Trustee shall not be liable for any action it takes or omits to
take in good faith which it believes  to be  authorized  or within its rights or
powers; provided, however, that the




                                      -49-





Trustee's  conduct does not  constitute  wilful  misconduct,  negligence  or bad
faith.

         (e) The Trustee may consult with counsel,  and the advice or opinion of
counsel with respect to legal matters  relating to this  Indenture and the Notes
shall be full and  complete  authorization  and  protection  from  liability  in
respect to any action  taken,  omitted or suffered by it hereunder in good faith
and in accordance with the advice or opinion of such counsel.

         (f) The Trustee shall be under no  obligation to institute,  conduct or
defend any litigation under this Indenture or in relation to this Indenture,  at
the  request,  order  or  direction  of any  of  the  Holders  of  Notes  or the
Controlling  Party,  pursuant to the provisions of this  Indenture,  unless such
Holders of Notes or the  Controlling  Party  shall have  offered to the  Trustee
reasonable  security or indemnity  against the costs,  expenses and  liabilities
that may be incurred  therein or thereby;  provided,  however,  that the Trustee
shall,  upon the  occurrence  of an Event of Default  (that has not been cured),
exercise the rights and powers vested in it by this  Indenture  with  reasonable
care and skill.

         (g) The Trustee shall not be bound to make any  investigation  into the
facts or matters stated in any resolution,  certificate,  statement, instrument,
opinion, report, notice, request,  consent, order, approval, bond or other paper
or document,  unless  requested in writing to do so by the Note Insurer (so long
as no Insurer  Default shall have occurred and be  continuing) or (if an insurer
Default  shall  have  occurred  and be  continuing)  by  the  Holders  of  Notes
evidencing  not  less  than 25% of the  Outstanding  Amount  thereof;  provided,
however,  that if the  payment  within a  reasonable  time to the Trustee of the
costs, expenses or liabilities likely to be incurred by it in the making of such
investigation is, in the opinion of the Trustee,  not reasonably  assured to the
Trustee by the  security  afforded to it by the terms of this  Indenture  or the
Sale and  Servicing  Agreement,  the Trustee may  require  reasonable  indemnity
against such cost,  expense or liability  as a condition to so  proceeding;  the
reasonable  expense of every such examination shall be paid by the Person making
such  request,  or, if paid by the Trustee,  shall be  reimbursed  by the Person
making such request upon demand.

         SECTION  6.3.  Individual  Rights  of  Trustee.   The  Trustee  in  its
individual  or any other  capacity  may become the owner or pledgee of Notes and
may  otherwise  deal with the Issuer or its  Affiliates  with the same rights it
would  have if it were not  Trustee.  Any Note  Paying  Agent,  Note  Registrar,
co-registrar or co-paying agent may do the same with like rights.  However,  the
Trustee must comply with Sections 6.11 and 6.12.





                                      -50-





         SECTION 6.4. Trustee's Disclaimer. The Trustee shall not be responsible
for  and  makes  no  representation  as to the  validity  or  adequacy  of  this
Indenture,  the Trust Estate or the Notes,  it shall not be accountable  for the
Issuer's use of the proceeds from the Notes, and it shall not be responsible for
any  statement  of the  Issuer in the  Indenture  or in any  document  issued in
connection  with the sale of the Notes or in the Notes other than the  Trustee's
certificate of authentication.

         SECTION 6.5.  Notice of Defaults.  If an Event of Default occurs and is
continuing  and if it is either  known by, or  written  notice of the  existence
thereof has been delivered to, a Responsible Officer of the Trustee, the Trustee
shall mail to each  Noteholder  notice of the Default  within 90 days after such
knowledge  or  notice  occurs.  Except in the case of a Default  in  payment  of
principal  of or  interest  on any  Note  (including  payments  pursuant  to the
mandatory  redemption  provisions  of such Note),  the Trustee may  withhold the
notice if and so long as a committee of its  Responsible  Officers in good faith
determines that withholding the notice is in the interests of Noteholders.

         SECTION 6.6. Reports by Trustee to Holders. The Trustee shall on behalf
of the Issuer deliver to each Noteholder  such  information as may be reasonably
required to enable  such  Holder to prepare  its  Federal  and state  income tax
returns.

         SECTION 6.7. Compensation and Indemnity. (a) Pursuant to Section 5.7(b)
of the Sale and  Servicing  Agreement,  the  Issuer  shall,  or shall  cause the
Servicer to, pay to the Trustee from time to time compensation for its services.
The Trustee's  compensation shall not be limited by any law on compensation of a
trustee of an express  trust.  The Issuer  shall or shall cause the  Servicer to
reimburse the Trustee,  for all reasonable  out-of-pocket  expenses  incurred or
made by it,  including costs of collection,  in addition to the compensation for
its  services.  Such  expenses  shall include the  reasonable  compensation  and
expenses,   disbursements  and  advances  of  the  Trustee's  agents,   counsel,
accountants  and  experts.  The  Issuer  shall or shall  cause the  Servicer  to
indemnify the Trustee against any and all loss, liability or expense incurred by
the Trustee  without  willful  misfeasance,  negligence or bad faith on its part
arising out of or in connection  with the  acceptance or the  administration  of
this trust and the performance of its duties hereunder,  including the costs and
expenses of  defending  itself  against  any claim or  liability  in  connection
therewith.  The Trustee shall notify the Issuer and the Servicer promptly of any
claim for which it may seek  indemnity.  Failure by the Trustee to so notify the
Issuer  and the  Servicer  shall  not  relieve  the  Issuer  of its  obligations
hereunder or the Servicer of its  obligations  under Article XII of the Sale and
Servicing Agreement.  The Trustee may have separate counsel and the Issuer shall
or shall cause the




                                      -51-





Servicer to pay the fees and  expenses of such  counsel.  Neither the Issuer nor
the Servicer need reimburse any expense or indemnify against any loss, liability
or expense incurred by the Trustee through the Trustee's own wilful  misconduct,
negligence or bad faith.

         (b) The Issuer's  payment  obligations to the Trustee  pursuant to this
Section shall survive the discharge of this  Indenture.  When the Trustee incurs
expenses after the  occurrence of a Default  specified in Section 5.1(v) or (vi)
with respect to the Issuer, the expenses are intended to constitute  expenses of
administration  under Title 11 of the United States Code or any other applicable
Federal or state bankruptcy, insolvency or similar law. Notwithstanding anything
else set forth in this Indenture or the Basic Documents,  the Trustee  hereunder
and under the Basic  Documents  shall be recourse  to the Trust  Estate only and
specifically  shall not be recourse to the assets of the General  Partner of the
Issuer or any Securityholder.  In addition, the Trustee agrees that its recourse
to the Issuer,  the Trust  Estate,  the Seller and amounts held  pursuant to the
Spread  Account  Agreement  shall  be  limited  to  the  right  to  receive  the
distributions referred to in Section 5.7(b) of the Sale and Servicing Agreement.

         SECTION 6.8.  Replacement of Trustee.  The Issuer may, with the consent
of the Note Insurer, and, at the request of the Note Insurer,  shall, remove the
Trustee (unless an Insurer Default shall have occurred and be continuing) if:

                  (i) the Trustee fails to comply with Section 6.11;

                  (ii) a court having jurisdiction in the premises in respect of
         the Trustee in an involuntary case or proceeding under federal or state
         banking or  bankruptcy  laws, as now or hereafter  constituted,  or any
         other  applicable  federal  or state  bankruptcy,  insolvency  or other
         similar law,  shall have entered a decree or order  granting  relief or
         appointing  a  receiver,  liquidator,   assignee,  custodian,  trustee,
         conservator,  sequestrator (or similar official) for the Trustee or for
         any  substantial  part  of the  Trustee's  property,  or  ordering  the
         winding-up or liquidation of the Trustee's affairs;

                  (iii) an involuntary  case under the federal  bankruptcy laws,
         as now or hereafter in effect,  or another present or future federal or
         state  bankruptcy,  insolvency or similar law is commenced with respect
         to the Trustee and such case is not dismissed within 60 days;

                  (iv) the Trustee  commences a voluntary case under any federal
         or state banking or bankruptcy  laws, as now or hereafter  constituted,
         or any other applicable federal or state bankruptcy,




                                      -52-





         insolvency or other similar law, or consents to the  appointment  of or
         taking  possession  by a  received,  liquidator,  assignee,  custodian,
         trustee,  conservator or sequestrator  (or other similar  official) for
         the Trustee or for any substantial part of the Trustee's  property,  or
         makes any assignment for the benefit of creditors or fails generally to
         pay its debts as such debts become due or takes any corporate action in
         furtherances of any of the foregoing; or

                  (v) the Trustee otherwise becomes incapable of acting.

         If the  Trustee  resigns or is  removed  or if a vacancy  exists in the
office of Trustee  for any reason (the  Trustee in such event being  referred to
herein as the retiring  Trustee),  the Issuer shall promptly appoint a successor
Trustee  acceptable to the Note Insurer (so long as an Insurer Default shall not
have  occurred  and be  continuing).  If the  Issuer  fails  to  appoint  such a
successor Trustee, the Note Insurer may appoint a successor Trustee.

         A  successor  Trustee  shall  deliver  a  written   acceptance  of  its
appointment to the retiring Trustee,  the Note Insurer (provided that no Insurer
Default shall have occurred and be continuing)  and the Issuer,  whereupon,  the
resignation or removal of the retiring Trustee shall become  effective,  and the
successor  Trustee shall have all the rights,  powers and duties of the retiring
Trustee  under this  Indenture,  subject to  satisfaction  of the Rating  Agency
Condition.  The successor  Trustee shall mail a notice of its succession to each
Noteholder. The retiring Trustee shall promptly transfer all property held by it
as Trustee to the successor Trustee.

         If a successor  Trustee  does not take office  within 60 days after the
retiring Trustee resigns or is removed,  the retiring Trustee, the Issuer or the
Holders of a majority in outstanding  Amount of the Notes may petition any court
of competent jurisdiction for the appointment of a successor Trustee.

         Any  resignation  or  removal  of  the  Trustee  and  appointment  of a
successor  Trustee  pursuant to any of the  provisions of this Section shall not
become  effective  until  acceptance of  appointment  by the  successor  Trustee
pursuant to Section 6.8.

         Notwithstanding  the  replacement  of  the  Trustee  pursuant  to  this
Section,  the Issuer's and the  Servicer's  obligations  under Section 6.7 shall
continue for the benefit of the retiring Trustee.

         SECTION  6.9.   Successor  Trustee  by  Merger.   (a)  If  the  Trustee
consolidates  with,  merges or converts into, or transfers all or  substantially
all its corporate trust business or assets




                                      -53-





to, another  corporation  or banking  association,  the resulting,  surviving or
transferee  corporation  without any further act shall be the successor Trustee.
The Trustee shall provide the Rating  Agencies  prior written notice of any such
transaction.

         (b) In case at the time such  successor or successors to the Trustee by
merger,  conversion or consolidation shall succeed to the trusts created by this
Indenture any of the Notes shall have been authenticated but not delivered,  any
such successor to the Trustee may adopt the certificate of authentication of any
predecessor  trustee,  and deliver such Notes so  authenticated;  and in case at
that time any of the Notes shall not have been  authenticated,  any successor to
the Trustee may  authenticate  such Notes either in the name of any  predecessor
hereunder or in the name of the successor to the Trustee;  and in all such cases
such certificates shall have the full force which it is anywhere in the Notes or
in this Indenture provided that the certificate of the Trustee shall have.

         SECTION  6.10.  Appointment  of  Co-Trustee  or Separate  Trustee.  (a)
Notwithstanding  any other  provisions of this  Indenture,  at any time, for the
purpose of meeting any legal  requirement of any  jurisdiction in which any part
of the Trust may at the time be  located,  the  Trustee  with the consent of the
Note  Insurer  (so long as an Insurer  Default  shall not have  occurred  and be
continuing)  shall have the power and may execute and deliver all instruments to
appoint one or more Persons to act as a co-trustee or  co-trustees,  or separate
trustee or separate  trustees,  of all or any part of the Trust,  and to vest in
such Person or Persons, in such capacity and for the benefit of the Noteholders,
such  title  to the  Trust,  or any  part  hereof,  and,  subject  to the  other
provisions of this Section, such powers, duties, obligations,  rights and trusts
as the Trustee may consider  necessary or  desirable.  No co-trustee or separate
trustee  hereunder  shall be  required  to meet the  terms of  eligibility  as a
successor  trustee  under  Section  6.11 and no  notice  to  Noteholders  of the
appointment  of any  co-trustee  or separate  trustee  shall be  required  under
Section 6.8 hereof.

         (b)  Every  separate  trustee  and  co-trustee  shall,  to  the  extent
permitted by law, be appointed and act subject to the following  provisions  and
conditions:

                  (i) all rights,  powers,  duties and obligations  conferred or
         imposed  upon  the  Trustee  shall be  conferred  or  imposed  upon and
         exercised  or  performed  by the Trustee and such  separate  trustee or
         co-trustee  jointly (it being  understood that such separate trustee or
         co-trustee  is not  authorized  to act  separately  without the Trustee
         joining  in such act),  except to the extent  that under any law of any
         jurisdiction in which any particular act or acts are to be




                                      -54-





         performed the Trustee shall be  incompetent  or  unqualified to perform
         such act or acts,  in which  event  such  rights,  powers,  duties  and
         obligations (including the holding of title to the Trust or any portion
         thereof in any such  jurisdiction)  shall be  exercised  and  performed
         singly  by such  separate  trustee  or  co-trustee,  but  solely at the
         direction of the Trustee;

                  (ii) no trustee hereunder shall be personally liable by reason
         of any act or omission of any other trustee  hereunder,  including acts
         or omissions of predecessor or successor trustees; and

                  (iii) the Trustee may at any time accept the resignation of or
         remove any separate trustee or co-trustee.

         (c) Any notice,  request or other writing given to the Trustee shall be
deemed to have been given to each of the then separate trustees and co-trustees,
as  effectively  as if given to each of them.  Every  instrument  appointing any
separate  trustee or co-trustee shall refer to this Agreement and the conditions
of this Article VI. Each separate trustee and co-trustee, upon its acceptance of
the trusts conferred,  shall be vested with the estates or property specified in
its instrument of appointment, either jointly with the Trustee or separately, as
may be  provided  therein,  subject  to all the  provisions  of this  Indenture,
specifically including every provision of this Indenture relating to the conduct
of, affecting the liability of, or affording  protection to, the Trustee.  Every
such instrument shall be filed with the Trustee.

         (d) Any separate  trustee or co-trustee may at any time  constitute the
Trustee,  its agent or  attorney-in-fact  with full power and authority,  to the
extent not  prohibited  by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name.  If any separate  trustee or co-trustee
shall die, dissolve, become insolvent,  become incapable of acting, resign or be
removed,  all of its  estates,  properties,  rights,  remedies  and trusts shall
invest in and be  exercised  by the  Trustee,  to the extent  permitted  by law,
without the appointment of a new or successor trustee.

         SECTION 6.11. Eligibility:  Disqualification.  The Trustee shall at all
times  satisfy the  requirements  of TIA ss.  310(a).  The Trustee  shall have a
combined  capital and surplus of at least  $50,000,000  as set forth in its most
recent  published  annual  report of  condition  and subject to  supervision  or
examination  by federal  or state  authorities;  and having a rating,  both with
respect to long-term  and  short-term  unsecured  obligations,  of not less than
investment  grade by the Rating  Agencies.  The Trustee shall provide  copies of
such reports to the Note Insurer upon




                                      -55-





request.  The Trustee shall comply with TIA ss.  310(b),  including the optional
provision  permitted  by the second  sentence  of TIA ss.  310(b)(9);  provided,
however,  that there shall be excluded from the  operation of TIA ss.  310(b)(1)
any  indenture  or  indentures  under which other  securities  of the Issuer are
outstanding  if the  requirements  for  such  exclusion  set  forth  in TIA  ss.
310(b)(1) are met.

         SECTION 6.12.  Preferential  Collection of Claims Against  Issuer.  The
Trustee shall comply with TIA ss.  311(a),  excluding any creditor  relationship
listed in TIA ss.  311(b).  A Trustee who has resigned or been removed  shall be
subject to TIA ss. 311(a) to the extent indicated.

         SECTION  6.13.  Appointment  and  Powers.  Subject  to  the  terms  and
conditions  hereof,  each of the Issuer Secured Parties hereby appoints  Norwest
Bank  Minnesota,  National  Association  as  the  Trustee  with  respect  to the
Collateral, and Norwest Bank Minnesota, National Association hereby accepts such
appointment  and agrees to act as Trustee with respect to the Collateral for the
Issuer Secured  Parties,  to maintain  custody and possession of such Collateral
(except as otherwise provided  hereunder) and to perform the other duties of the
Trustee in accordance  with the provisions of this Indenture and the other Basic
Documents.  Each Issuer Secured Party hereby authorizes the Trustee to take such
action  on its  behalf,  and to  exercise  such  rights,  remedies,  powers  and
privileges   hereunder,   as  the  Controlling  Party  may  direct  and  as  are
specifically  authorized  to be  exercised  by the Trustee by the terms  hereof,
together  with such  actions,  rights,  remedies,  powers and  privileges as are
reasonably incidental thereto. The Trustee shall act upon and in compliance with
the written  instructions  of the Controlling  Party delivered  pursuant to this
Indenture promptly following receipt of such written instructions; provided that
the Trustee shall not act in accordance with any  instructions (i) which are not
authorized by, or in violation of the provisions of, this Indenture,  (ii) which
are in violation of any  applicable  law,  rule or regulation or (iii) for which
the Trustee has not received reasonable indemnity.  Receipt of such instructions
shall not be a condition  to the  exercise by the Trustee of its express  duties
hereunder, except where this Indenture provides that the Trustee is permitted to
act only following and in accordance with such instructions.

         SECTION 6.14.  Performance of Duties.  The Trustee shall have no duties
or  responsibilities  except those expressly set forth in this Indenture and the
other  Basic  Documents  to which the  Trustee is a party or as  directed by the
Controlling  Party in accordance with this  Indenture.  The Trustee shall not be
required  to take any  discretionary  actions  hereunder  except at the  written
direction and with the indemnification of the




                                      -56-





Controlling  Party. The Trustee shall,  and hereby agrees that it will,  perform
all of the duties and  obligations  required of it under the Sale and  Servicing
Agreement.

         SECTION 6.15.  Limitation on Liability.  Neither the Trustee nor any of
its  directors,  officers or  employees  shall be liable for any action taken or
omitted  to be taken by it or them in good  faith  hereunder,  or in  connection
herewith, except that the Trustee shall be liable for its negligence,  bad faith
or willful  misconduct;  nor shall the Trustee be responsible  for the validity,
effectiveness,  value,  sufficiency or enforceability against the Issuer of this
Indenture or any of the Collateral (or any part  thereof).  Notwithstanding  any
term or provision of this Indenture, the Trustee shall incur no liability to the
Issuer or the Issuer  Secured  Parties  for any  action  taken or omitted by the
Trustee in connection with the Collateral,  except for the negligence, bad faith
or willful misconduct on the part of the Trustee,  and, further,  shall incur no
liability to the Issuer  Secured  Parties  except for  negligence,  bad faith or
willful  misconduct  in carrying out its duties to the Issuer  Secured  Parties.
Subject to Section  6.16,  the  Trustee  shall be  protected  and shall incur no
liability  to any such party in relying  upon the  accuracy,  acting in reliance
upon  the  contents,  and  assuming  the  genuineness  of  any  notice,  demand,
certificate,  signature, instrument or other document reasonably believed by the
Trustee  to be  genuine  and to  have  been  duly  executed  by the  appropriate
signatory,  and (absent actual  knowledge to the contrary) the Trustee shall not
be required to make any  independent  investigation  with respect  thereto.  The
Trustee shall at all times be free  independently to establish to its reasonable
satisfaction,  but shall have no duty to independently  verify, the existence or
nonexistence of facts that are a condition to the exercise or enforcement of any
right or remedy hereunder or under any of the Basic  Documents.  The Trustee may
consult with counsel, and shall not be liable for any action taken or omitted to
be taken by it hereunder in good faith and in accordance with the written advice
of such counsel.  The Trustee shall not be under any  obligation to exercise any
of the remedial rights or powers vested in it by this Indenture or to follow any
direction from the  Controlling  Party unless it shall have received  reasonable
security or indemnity  satisfactory to the Trustee  against the costs,  expenses
and liabilities which might be incurred by it.

         SECTION 6.16.  Reliance Upon  Documents.  In the absence of negligence,
bad faith or willful  misconduct  on its part,  the Trustee shall be entitled to
rely on any  communication,  instrument,  paper  or  other  document  reasonably
believed  by it to be genuine and correct and to have been signed or sent by the
proper  Person or Persons and shall have no liability in acting,  or omitting to
act, where such action or omission to act is in




                                      -57-





reasonable reliance upon any statement or opinion contained in any such document
or instrument.

         SECTION 6.17.  Successor Trustee.

         (a)  Merger.  Any Person into which the  Trustee  may be  converted  or
merged,  or with  which  it may be  consolidated,  or to  which  it may  sell or
transfer its trust business and assets as a whole or  substantially  as a whole,
or any Person resulting from any such conversion, merger, consolidation, sale or
transfer  to which the  Trustee  is a party,  shall  (provided  it is  otherwise
qualified to serve as the Trustee  hereunder) be and become a successor  Trustee
hereunder and be vested with all of the title to and interest in the  Collateral
and all of the trusts, powers,  descriptions,  immunities,  privileges and other
matters as was its predecessor without the execution or filing of any instrument
or any further act, deed or conveyance on the part of any of the parties hereto,
anything herein to the contrary  notwithstanding,  except to the extent, if any,
that any such action is necessary to perfect, or continue the perfection of, the
security interest of the Issuer Secured Parties in the Collateral; provided that
any such successor shall also be the successor Trustee under Section 6.9.

         (b) Removal. The Trustee may be removed by the Controlling Party at any
time,  with or without  cause,  by an instrument or  concurrent  instruments  in
writing delivered to the Trustee, the other Issuer Secured Party and the Issuer.
A temporary successor may be removed at any time to allow a successor Trustee to
be  appointed  pursuant to  subsection  (c) below.  Any removal  pursuant to the
provisions of this  subsection (b) shall take effect only upon the date which is
the latest of (i) the effective date of the  appointment of a successor  Trustee
and the acceptance in writing by such successor  Trustee of such appointment and
of its  obligation  to  perform  its duties  hereunder  in  accordance  with the
provisions  hereof,  and (ii) receipt by the Controlling  Party of an Opinion of
Counsel to the effect described in Section 3.6.

         (c) Acceptance by Successor.  The Controlling Party shall have the sole
right to appoint each successor Trustee.  Every temporary or permanent successor
Trustee  appointed  hereunder  shall  execute,  acknowledge  and  deliver to its
predecessor  and to the  Trustee,  each Issuer  Secured  Party and the Issuer an
instrument  in writing  accepting  such  appointment  hereunder and the relevant
predecessor  shall  execute,  acknowledge  and deliver such other  documents and
instruments  as will  effectuate the delivery of all Collateral to the successor
Trustee, whereupon such successor,  without any further act, deed or conveyance,
shall  become fully vested with all the  estates,  properties,  rights,  powers,
duties and obligations of its predecessor. Such predecessor shall, nevertheless,
on the written request of either




                                      -58-





Issuer  Secured  Party  or  the  Issuer,   execute  and  deliver  an  instrument
transferring to such successor all the estates, properties, rights and powers of
such predecessor hereunder. In the event that any instrument in writing from the
Issuer or an Issuer Secured Party is reasonably  required by a successor Trustee
to more fully and  certainly  vest in such  successor  the estates,  properties,
rights, powers, duties and obligations vested or intended to be vested hereunder
in the Trustee, any and all such written instruments shall at the request of the
temporary or permanent successor Trustee,  be forthwith  executed,  acknowledged
and delivered by the Trustee or the Issuer,  as the case may be. The designation
of any successor Trustee and the instrument or instruments  removing any Trustee
and  appointing  a  successor  hereunder,  together  with all other  instruments
provided  for  herein,  shall be  maintained  with the  records  relating to the
Collateral  and, to the extent  required by applicable law, filed or recorded by
the successor  Trustee in each place where such filing or recording is necessary
to effect the transfer of the Collateral to the successor  Trustee or to protect
or continue the perfection of the security interests granted hereunder.

         SECTION 6.18.  [Reserved]

         SECTION  6.19.  Representations  and  Warranties  of the  Trustee.  The
Trustee  represents  and warrants to the Issuer and to each Issuer Secured Party
as follows:

                  (a)  Due  Organization.  The  Trustee  is a  national  banking
         association,  duly  organized,  validly  existing and in good  standing
         under the laws of the United States and is duly authorized and licensed
         under applicable law to conduct its business as presently conducted.

                  (b)  Corporate  Power.  The Trustee has all  requisite  right,
         power and  authority  to execute  and  deliver  this  Indenture  and to
         perform all of its duties as Trustee hereunder.

                  (c) Due  Authorization.  The  execution  and  delivery  by the
         Trustee of this Indenture and the other Basic  Documents to which it is
         a party, and the performance by the Trustee of its duties hereunder and
         thereunder,  have  been  duly  authorized  by all  necessary  corporate
         proceedings  and  no  further  approvals  or  filings,   including  any
         governmental  approvals,  are  required  for the  valid  execution  and
         delivery by the Trustee,  or the  performance  by the Trustee,  of this
         Indenture and such other Basic Documents.

                  (d) Valid and Binding Indenture. The Trustee has duly executed
         and delivered  this Indenture and each other Basic Document to which it
         is a party, and each of this Indenture




                                      -59-





         and each such other Basic  Document  constitutes  the legal,  valid and
         binding obligation of the Trustee,  enforceable  against the Trustee in
         accordance  with its terms,  except as (i) such  enforceability  may be
         limited by  bankruptcy,  insolvency,  reorganization  and similar  laws
         relating to or affecting the enforcement of creditors' rights generally
         and (ii) the  availability  of  equitable  remedies  may be  limited by
         equitable principles of general applicability.

         SECTION 6.20.  Waiver of Setoffs.  The Trustee hereby  expressly waives
any and all rights of setoff  that the Trustee  may  otherwise  at any time have
under  applicable  law with respect to any Trust Account and agrees that amounts
in the  Trust  Accounts  shall  at all  times  be held  and  applied  solely  in
accordance with the provisions hereof.

         SECTION  6.21.  Control by the  Controlling  Party.  The Trustee  shall
comply with notices and instructions  given by the Issuer only if accompanied by
the  written  consent  of the  Controlling  Party,  except  that if any Event of
Default  shall have occurred and be  continuing,  the Trustee shall act upon and
comply with notices and instructions given by the Controlling Party alone in the
place and stead of the Issuer.


                                   ARTICLE VII

                         Noteholders' Lists and Reports

         SECTION  7.1.  Issuer To  Furnish  To Trustee  Names and  Addresses  of
Noteholders. The Issuer will furnish or cause to be furnished to the Trustee (a)
not more than five days after the earlier of (i) each Record Date and (ii) three
months  after the last  Record  Date,  a list,  in such form as the  Trustee may
reasonably  require, of the names and addresses of the Holders as of such Record
Date,  (b) at such other times as the Trustee may request in writing,  within 30
days after receipt by the Issuer of any such request, a list of similar form and
content  as of a date not more  than 10 days  prior  to the  time  such  list is
furnished; provided, however, that so long as the Trustee is the Note Registrar,
no such list shall be required to be  furnished.  The Trustee or, if the Trustee
is not the Note  Registrar,  the Issuer  shall  furnish  to the Note  Insurer in
writing on an annual  basis on each March 31 and at such other times as the Note
Insurer may request a copy of the list.

         SECTION   7.2.   Preservation   of   Information;   Communications   to
Noteholders.  (a)  The  Trustee  shall  preserve,  in as  current  a form  as is
reasonably practicable,  the names and addresses of the Holders contained in the
most  recent  list  furnished  to the Trustee as provided in Section 7.1 and the
names and addresses of




                                      -60-





Holders  received by the Trustee in its capacity as Note Registrar.  The Trustee
may  destroy  any list  furnished  to it as  provided  in such  Section 7.1 upon
receipt of a new list so furnished.

         (b) Noteholders  may communicate  pursuant to TIA ss. 312(b) with other
Noteholders  with  respect to their  rights  under this  Indenture  or under the
Notes.

         (c) The  Issuer,  the  Trustee  and the Note  Registrar  shall have the
protection of TIA ss. 312(c).

         SECTION 7.3.  Reports by Issuer.  (a)  The Issuer shall:

                  (i) file with the Trustee,  within 15 days after the Issuer is
         required  to file the same with the  Commission,  copies of the  annual
         reports and of the information,  documents and other reports (or copies
         of such  portions of any of the  foregoing as the  Commission  may from
         time to time by rules and regulations  prescribe)  which the Issuer may
         be required to file with the Commission pursuant to Section 13 or 15(d)
         of the Exchange Act;

                  (ii) file with the Trustee and the  Commission  in  accordance
         with  rules  and  regulations  prescribed  from  time  to  time  by the
         Commission  such  additional  information,  documents  and reports with
         respect to compliance by the Issuer with the  conditions  and covenants
         of this  Indenture  as may be required  from time to time by such rules
         and regulations; and

                  (iii) supply to the Trustee (and the Trustee shall transmit by
         mail to all Noteholders  described in TIA ss. 313(c)) such summaries of
         any  information,  documents  and  reports  required to be filed by the
         Issuer  pursuant to clauses (i) and (ii) of this Section  7.3(a) as may
         be required by rules and  regulations  prescribed  from time to time by
         the Commission.

         (b) Unless  the Issuer  otherwise  determines,  the fiscal  year of the
Issuer shall end on December 31 of each year.

         SECTION  7.4.  Reports by Trustee.  (a) If required by TIA ss.  313(a),
within 60 days after each November 30,  beginning  with  November 30, 1997,  the
Trustee  shall mail to each  Noteholder  as required  by TIA ss.  313(c) a brief
report dated as of such date that complies with TIA ss. 313(a). The Trustee also
shall comply with TIA ss. 313(b).

         (b) A copy of each  report at the time of its  mailing  to  Noteholders
shall be filed by the Trustee with the Commission and




                                      -61-





each stock  exchange,  if any, on which the Notes are listed.  The Issuer  shall
notify the Trustee if and when the Notes are listed on any stock exchange.


                                  ARTICLE VIII

                Collection of Money and Releases of Trust Estate

         SECTION  8.1.  Collection  of  Money.  Except  as  otherwise  expressly
provided  herein,  the  Trustee  may demand  payment or  delivery  of, and shall
receive and collect,  directly and without  intervention  or  assistance  of any
fiscal agent or other  intermediary,  all money and other property payable to or
receivable by the Trustee  pursuant to this Indenture and the Sale and Servicing
Agreement.  The Trustee shall apply all such money received by it as provided in
this  Indenture  and the Sale  and  Servicing  Agreement.  Except  as  otherwise
expressly provided in this Indenture or in the Sale and Servicing Agreement,  if
any  default  occurs  in the  making of any  payment  or  performance  under any
agreement or instrument  that is part of the Trust Estate,  the Trustee may take
such  action as may be  appropriate  to enforce  such  payment  or  performance,
including the institution and prosecution of appropriate  proceedings.  Any such
action  shall be without  prejudice  to any right to claim a Default or Event of
Default under this Indenture and any right to proceed  thereafter as provided in
Article V.

         SECTION 8.2. Release of Trust Estate. (a) Subject to the payment of its
fees and expenses pursuant to Section 6.7, the Trustee may, and when required by
the provisions of this Indenture shall,  execute instruments to release property
from the lien of this Indenture,  in a manner and under  circumstances  that are
not inconsistent with the provisions of this Indenture. No party relying upon an
instrument  executed by the Trustee as  provided in this  Article  VIII shall be
bound to ascertain the Trustee's authority, inquire into the satisfaction of any
conditions precedent or see to the application of any moneys.

         (b) The Trustee shall,  at such time as there are no Notes  outstanding
and all sums due the Trustee pursuant to Section 6.7 have been paid, release any
remaining  portion of the Trust  Estate that  secured the Notes from the lien of
this  Indenture and release to the Issuer or any other Person  entitled  thereto
any funds then on deposit  in the Trust  Accounts.  The  Trustee  shall  release
property from the lien of this  Indenture  pursuant to this Section  8.2(b) only
upon receipt of an Issuer Request  accompanied by an Officer's  Certificate,  an
Opinion of Counsel and (if  required  by the TIA)  Independent  Certificates  in
accordance  with  TIA  ss.  314(c)  and ss.  314(d)(1)  meeting  the  applicable
requirements of Section 11.1.




                                      -62-





         SECTION 8.3.  Opinion of Counsel.  The Trustee  shall  receive at least
seven days' notice when  requested by the Issuer to take any action  pursuant to
Section  8.2(a),  accompanied  by copies of any  instruments  involved,  and the
Trustee shall also require as a condition to such action,  an Opinion of Counsel
in form and substance  satisfactory to the Trustee,  stating the legal effect of
any such  action,  outlining  the steps  required  to  complete  the  same,  and
concluding that all conditions  precedent to the taking of such action have been
complied  with and such  action will not  materially  and  adversely  affect the
security for the Notes or the rights of the Noteholders in  contravention of the
provisions of this Indenture;  provided,  however,  that such Opinion of Counsel
shall not be  required  to  express an opinion as to the fair value of the Trust
Estate.  Counsel  rendering  any such  opinion  may  rely,  without  independent
investigation,  on the  accuracy  and  validity  of  any  certificate  or  other
instrument delivered to the Trustee in connection with any such action.


                                   ARTICLE IX

                             Supplemental Indentures

         SECTION 9.1.  Supplemental  Indentures  Without Consent of Noteholders.
(a)  Without the consent of the Holders of any Notes but with the consent of the
Note Insurer  (unless an Insurer  Default shall have occurred and be continuing)
and with prior notice to the Rating  Agencies by the Issuer,  the Issuer and the
Trustee,  when authorized by an Issuer Order, at any time and from time to time,
may enter into one or more indentures  supplemental  hereto (which shall conform
to the  provisions  of the  Trust  Indenture  Act as in force at the date of the
execution  thereof),  in  form  satisfactory  to  the  Trustee,  for  any of the
following purposes:

                  (i) to correct or amplify the  description  of any property at
         any time  subject to the lien of this  Indenture,  or better to assure,
         convey and confirm unto the Trustee any property subject or required to
         be subjected to the lien of this  Indenture,  or to subject to the lien
         of this Indenture additional property;

                  (ii) to  evidence  the  succession,  in  compliance  with  the
         applicable  provisions hereof, of another person to the Issuer, and the
         assumption by any such  successor of the covenants of the Issuer herein
         and in the Notes contained;

                  (iii) to add to the  covenants of the Issuer,  for the benefit
         of the Holders of the Notes,  or to surrender any right or power herein
         conferred upon the Issuer;





                                      -63-





                  (iv) to  convey,  transfer,  assign,  mortgage  or pledge  any
         property to or with the Trustee;

                  (v) to cure  any  ambiguity,  to  correct  or  supplement  any
         provision  herein  or  in  any  supplemental  indenture  which  may  be
         inconsistent  with any other  provision  herein or in any  supplemental
         indenture  or to make any other  provisions  with respect to matters or
         questions   arising  under  this  Indenture  or  in  any   supplemental
         indenture;  provided  that such action shall not  adversely  affect the
         interests of the Holders of the Notes;

                  (vi)  to  evidence  and  provide  for  the  acceptance  of the
         appointment  hereunder by a successor trustee with respect to the Notes
         and to add to or change  any of the  provisions  of this  Indenture  as
         shall be  necessary  to  facilitate  the  administration  of the trusts
         hereunder by more than one  trustee,  pursuant to the  requirements  of
         Article VI; or

                  (vii) to modify,  eliminate or add to the  provisions  of this
         Indenture   to  such  extent  as  shall  be  necessary  to  effect  the
         qualification  of this  Indenture  under the TIA or under  any  similar
         federal  statute  hereafter  enacted and to add to this  Indenture such
         other provisions as may be expressly required by the TIA.

         The Trustee is hereby  authorized  to join in the execution of any such
supplemental  indenture  and to make  any  further  appropriate  agreements  and
stipulations that may be therein contained.

         (b) The Issuer and the Trustee,  when  authorized  by an Issuer  Order,
may,  also without the consent of any of the Holders of the Notes but with prior
notice  to the  Rating  Agencies  by the  Issuer,  enter  into an  indenture  or
indentures  supplemental  hereto for the purpose of adding any provisions to, or
changing in any manner or  eliminating  any of the provisions of, this Indenture
or of  modifying in any manner the rights of the Holders of the Notes under this
Indenture;  provided,  however,  that such action  shall not, as evidenced by an
Opinion of Counsel,  adversely  affect in any material  respect the interests of
any Noteholder.

         SECTION 9.2. Supplemental  Indentures with Consent of Noteholders.  The
Issuer and the Trustee, when authorized by an Issuer Order, also may, with prior
notice to the Rating  Agencies,  with the consent of the Note Insurer (unless an
Insurer  Default shall have occurred and be continuing)  and with the consent of
the Holders of not less than a majority of the outstanding  Amount of the Notes,
by Act of such Holders  delivered  to the Issuer and the Trustee,  enter into an
indenture  or  indentures  supplemental  hereto  for the  purpose  of adding any
provisions to, or changing




                                      -64-





in any manner or  eliminating  any of the  provisions  of, this  Indenture or of
modifying  in any  manner  the  rights of the  Holders  of the Notes  under this
Indenture;  provided,  however,  that, subject to the express rights of the Note
Insurer under the Basic Documents, no such supplemental indenture shall, without
the consent of the Holder of each Outstanding Note affected thereby:

                  (i) change the date of payment of any installment of principal
         of or interest on any Note, or reduce the principal amount thereof, the
         interest  rate thereon or the  Redemption  Price with respect  thereto,
         change the provision of this Indenture  relating to the  application of
         collections  on, or the  proceeds  of the sale of, the Trust  Estate to
         payment of principal  of or interest on the Notes,  or change any place
         of payment  where,  or the coin or currency  in which,  any Note or the
         interest thereon is payable;

                  (ii) impair the right to institute suit for the enforcement of
         the  provisions of this  Indenture  requiring the  application of funds
         available  therefor,  as  provided  in Article V, to the payment of any
         such  amount  due on the  Notes on or after  the  respective  due dates
         thereof  (or,  in the case of  redemption,  on or after the  Redemption
         Date);

                  (iii) reduce the percentage of the  Outstanding  Amount of the
         Notes,  the consent of the  Holders of which is  required  for any such
         supplemental  indenture,  or the  consent  of the  Holders  of which is
         required for any waiver of compliance  with certain  provisions of this
         Indenture or certain defaults hereunder and their consequences provided
         for in this Indenture;

                  (iv)  modify or alter the  provisions  of the  proviso  to the
         definition of the term "Outstanding";

                  (v) reduce the  percentage  of the  Outstanding  Amount of the
         Notes  required  to direct the  Trustee to direct the Issuer to sell or
         liquidate the Trust Estate pursuant to Section 5.4;

                  (vi) modify any  provision of this Section  except to increase
         any percentage  specified herein or to provide that certain  additional
         provisions of this Indenture or the Basic Documents  cannot be modified
         or waived  without the consent of the Holder of each  Outstanding  Note
         affected thereby;

                  (vii) modify any of the  provisions of this  Indenture in such
         manner as to affect the  calculation  of the  amount of any  payment of
         interest or principal  due on any Note on any Payment  Date  (including
         the   calculation  of  any  of  the   individual   components  of  such
         calculation)  or as to affect the rights of the Holders of Notes to the
         benefit of any  provisions  for the  mandatory  redemption of the Notes
         contained herein; or


                                      -65-





         
                  (viii)  permit the creation of any lien ranking prior to or on
         a parity with the lien of this  Indenture  with  respect to any part of
         the Trust  Estate or,  except as otherwise  permitted  or  contemplated
         herein or in any of the  Basic  Documents,  terminate  the lien of this
         Indenture  on any  property at any time  subject  hereto or deprive the
         Holder  of any  Note  of the  security  provided  by the  lien  of this
         Indenture.

         The Trustee may determine whether or not any Notes would be affected by
any supplemental  indenture and any such determination  shall be conclusive upon
the Holders of all Notes,  whether  theretofore or thereafter  authenticated and
delivered hereunder.  The Trustee shall not be liable for any such determination
made in good faith.

         It shall not be necessary for any Act of Noteholders under this Section
to approve the particular form of any proposed  supplemental  indenture,  but it
shall be sufficient if such Act shall approve the substance thereof.

         Promptly  after the  execution  by the  Issuer  and the  Trustee of any
supplemental  indenture pursuant to this Section,  the Trustee shall mail to the
Holders of the Notes to which such amendment or supplemental indenture relates a
notice  setting  forth in  general  terms  the  substance  of such  supplemental
indenture.  Any  failure  of the  Trustee  to mail such  notice,  or any  defect
therein,  shall not,  however,  in any way impair or affect the  validity of any
such supplemental indenture.

         SECTION 9.3.  Execution of Supplemental  Indentures.  In executing,  or
permitting  the  additional  trusts  created  by,  any  supplemental   indenture
permitted by this Article IX or the modifications  thereby of the trusts created
by this  Indenture,  the Trustee  shall be  entitled to receive,  and subject to
Sections 6.1 and 6.2,  shall be fully  protected in relying  upon, an Opinion of
Counsel stating that the execution of such supplemental  indenture is authorized
or permitted by this Indenture.  The Trustee may, but shall not be obligated to,
enter into any such  supplemental  indenture  that  affects  the  Trustee's  own
rights, duties, liabilities or immunities under this Indenture or otherwise.

         SECTION 9.4.  Effect of Supplemental  Indenture.  Upon the execution of
any supplemental  indenture  pursuant to the provisions  hereof,  this Indenture
shall be and be deemed to be modified and amended in accordance  therewith  with
respect to the




                                      -66-





Notes  affected  thereby,  and the  respective  rights,  limitations  of rights,
obligations,  duties,  liabilities  and  immunities  under this Indenture of the
Trustee, the Issuer and the Holders of the Notes shall thereafter be determined,
exercised and enforced  hereunder subject in all respects to such  modifications
and  amendments,  and all the  terms  and  conditions  of any such  supplemental
indenture  shall be and be deemed to be part of the terms and conditions of this
Indenture for any and all purposes.

         SECTION 9.5.  Conformity  With Trust  Indenture Act. Every amendment of
this  Indenture  and every  supplemental  indenture  executed  pursuant  to this
Article IX shall conform to the  requirements of the Trust Indenture Act as then
in effect so long as this  Indenture  shall  then be  qualified  under the Trust
Indenture Act.

         SECTION  9.6.  Reference  in Notes to  Supplemental  Indentures.  Notes
authenticated  and delivered after the execution of any  supplemental  indenture
pursuant to this  Article IX may,  and if required by the Issuer  shall,  bear a
notation in form  approved by the Issuer as to any matter  provided  for in such
supplemental indenture. If the Issuer shall so determine,  new Notes so modified
as to conform, in the opinion of the Issuer, to any such supplemental  indenture
may be prepared and executed by the Issuer and  authenticated  and  delivered by
the Trustee in exchange for Outstanding Notes.


                                    ARTICLE X

                               Redemption of Notes

         SECTION  10.1.  Redemption.  (a) The Notes are subject to redemption in
whole, but not in part, at the direction of the Seller or the Servicer  pursuant
to Section 11.1(a) of the Sale and Servicing  Agreement,  on any Payment Date on
which the Servicer exercises its option to purchase the Trust Estate pursuant to
said  Section  11.1(a),  for a purchase  price  equal to the  Redemption  Price;
provided,  however,  that the Issuer has available  funds  sufficient to pay the
Redemption  Price. The Servicer or the Issuer shall furnish the Note Insurer and
the Rating Agencies notice of such  redemption.  If the Notes are to be redeemed
pursuant to this  Section  10.1(a),  the  Servicer or the Issuer  shall  furnish
notice of such  election  to the  Trustee  not later  than 35 days  prior to the
Redemption  Date and the  Issuer  shall  deposit  with the  Trustee  in the Note
Distribution  Account the Redemption Price of the Notes to be redeemed whereupon
all  such  Notes  shall  be due and  payable  on the  Redemption  Date  upon the
furnishing of a notice complying with Section 10.2 to each Holder of Notes.





                                      -67-





         (b) In the event  that the  assets of the  Trust are sold  pursuant  to
Section  9.2  of the  Trust  Agreement,  all  amounts  on  deposit  in the  Note
Distribution  Account  shall be paid to the  Noteholders  up to the  Outstanding
Amount of the Notes and all accrued and unpaid interest thereon.  If amounts are
to be paid to Noteholders  pursuant to this Section 10.1(c), the Servicer or the
Issuer shall,  to the extent  practicable,  furnish  notice of such event to the
Trustee not later than 25 days prior to the  Redemption  Date whereupon all such
amounts shall be payable on the Redemption Date.

         SECTION 10.2. Form of Redemption Notice. (a) Notice of redemption under
Section  10.1(a)  shall be given by the Trustee by facsimile  or by  first-class
mail, postage prepaid,  transmitted or mailed prior to the applicable Redemption
Date to each  Holder of Notes,  as of the close of  business  on the Record Date
preceding the applicable  Redemption Date, at such Holder's address appearing in
the Note Register.

         All notices of redemption shall state:

                  (i)  the Redemption Date;

                  (ii)  the Redemption Price;

                  (iii)  that  the  Record  Date  otherwise  applicable  to such
         Redemption  Date is not applicable and that payments shall be made only
         upon  presentation and surrender of such Notes and the place where such
         Notes are to be surrendered for payment of the Redemption  Price (which
         shall be the  office  or  agency  of the  Issuer  to be  maintained  as
         provided in Section 3.2); and

                  (iv) that  interest  on the Notes shall cease to accrue on the
         Redemption Date.

         Notice of  redemption of the Notes shall be given by the Trustee in the
name and at the expense of the Issuer. Failure to give notice of redemption,  or
any  defect  therein,  to any  Holder of any Note shall not impair or affect the
validity of the redemption of any other Note.

         (b) Prior notice of redemption under Section 10.1(b) is not required to
be given to Noteholders.

         SECTION  10.3.  Notes  Payable  on  Redemption  Date.  The  Notes to be
redeemed shall,  following  notice of redemption as required by Section 10.2 (in
the case of redemption  pursuant to Section  10.1(a)),  on the  Redemption  Date
become due and payable at the  Redemption  Price and  (unless  the Issuer  shall
default in the payment of the Redemption Price) no interest shall accrue on the




                                      -68-





Redemption  Price for any period  after the date to which  accrued  interest  is
calculated for purposes of calculating the Redemption Price.


                                   ARTICLE XI

                                  Miscellaneous

         SECTION 11.1. Compliance  Certificates and Opinions,  etc. (a) Upon any
application or request by the Issuer to the Trustee to take any action under any
provision of this Indenture,  the Issuer shall furnish to the Trustee and to the
Note Insurer (i) an Officer's Certificate stating that all conditions precedent,
if any, provided for in this Indenture relating to the proposed action have been
complied  with,  (ii) an Opinion of Counsel  stating that in the opinion of such
counsel all such conditions precedent, if any, have been complied with and (iii)
(if  required by the TIA) an  Independent  Certificate  from a firm of certified
public accountants meeting the applicable  requirements of this Section,  except
that, in the case of any such  application or request as to which the furnishing
of such documents is  specifically  required by any provision of this Indenture,
no additional certificate or opinion need be furnished.

         Every  certificate  or  opinion  with  respect  to  compliance  with  a
condition or covenant provided for in this Indenture shall include:

                  (i) a statement  that each  signatory of such  certificate  or
         opinion has read or has caused to be read such  covenant  or  condition
         and the definitions herein relating thereto;

                  (ii) a brief  statement  as to the  nature  and  scope  of the
         examination  or  investigation  upon which the  statements  or opinions
         contained in such certificate or opinion are based;

                  (iii) a statement that, in the opinion of each such signatory,
         such  signatory  has  made  such  examination  or  investigation  as is
         necessary to enable such signatory to express an informed opinion as to
         whether or not such covenant or condition has been complied with; and

                  (iv) a statement  as to  whether,  in the opinion of each such
         signatory such condition or covenant has been complied with.

         (b) (i) Prior to the  deposit of any  Collateral  or other  property or
securities with the Trustee that is to be made the




                                      -69-





basis for the release of any property or securities  subject to the lien of this
Indenture,  the Issuer shall,  in addition to any obligation  imposed in Section
11.1(a) or  elsewhere  in this  Indenture,  furnish to the  Trustee and the Note
Insurer an  Officer's  Certificate  certifying  or stating  the  opinion of each
person  signing  such  certificate  as to the  fair  value  (on the date of such
deposit) to the Issuer of the  Collateral or other  property or securities to be
so deposited.

                  (ii) Whenever the Issuer is required to furnish to the Trustee
         and the Note Insurer an Officer's Certificate certifying or stating the
         opinion of any signer thereof as to the matters described in clause (i)
         above,  the Issuer  shall  also  deliver  to the  Trustee  and the Note
         Insurer an Independent  Certificate as to the same matters, if the fair
         value to the Issuer of the  securities  to be so  deposited  and of all
         other such  securities made the basis of any such withdrawal or release
         since the commencement of the  then-current  fiscal year of the Issuer,
         as set forth in the certificates delivered pursuant to clause (i) above
         and this  clause (ii) is 10% or more of the  Outstanding  Amount of the
         Notes, but such a certificate need not be furnished with respect to any
         securities so deposited, if the fair value thereof to the Issuer as set
         forth in the related Officer's Certificate is less than $25,000 or less
         than 1% percent of the Outstanding Amount of the Notes.

                  (iii) other than with respect to the release of any  Purchased
         Receivables  or  Liquidated  Receivables,   whenever  any  property  or
         securities  are to be  released  from the lien of this  Indenture,  the
         Issuer  shall  also  furnish  to the  Trustee  and the Note  Insurer an
         Officer's Certificate  certifying or stating the opinion of each person
         signing such  certificate  as to the fair value (within 90 days of such
         release) of the  property  or  securities  proposed to be released  and
         stating  that in the opinion of such person the  proposed  release will
         not impair the security  under this Indenture in  contravention  of the
         provisions hereof.

                  (iv) Whenever the Issuer is required to furnish to the Trustee
         and the Note Insurer an Officer's Certificate certifying or stating the
         opinion of any signer  thereof as to the  matters  described  in clause
         (iii) above,  the Issuer shall also furnish to the Trustee and the Note
         Insurer an  Independent  Certificate as to the same matters if the fair
         value of the property or  securities  and of all other  property  other
         than Purchased  Receivables  and Defaulted  Receivables,  or securities
         released from the lien of this Indenture since the  commencement of the
         then current calendar year, as set forth in the  certificates  required
         by clause (iii) above and this clause (iv), equals 10% or more




                                      -70-





         of the Outstanding  Amount of the Notes,  but such certificate need not
         be  furnished in the case of any release of property or  securities  if
         the  fair  value  thereof  as  set  forth  in  the  related   Officer's
         Certificate  is less than  $25,000  or less than 1 percent  of the then
         Outstanding Amount of the Notes.

                  (v)  Notwithstanding  Section  2.9 or any  provision  of  this
         Section,  the  Issuer may (A)  collect,  liquidate,  sell or  otherwise
         dispose of  Receivables  as and to the extent  permitted or required by
         the  Basic  Documents  and (B)  make  cash  payments  out of the  Trust
         Accounts  as and to the  extent  permitted  or  required  by the  Basic
         Documents.

         SECTION 11.2. Form of Documents  Delivered to Trustee.  (a) In any case
where several  matters are required to be certified by, or covered by an opinion
of, any specified Person, it is not necessary that all such matters be certified
by, or covered  by the  opinion  of,  only one such  Person,  or that they be so
certified  or covered by only one  document,  but one such Person may certify or
give an opinion  with respect to some matters and one or more other such Persons
as to other  matters,  and any such  Person may certify or give an opinion as to
such matters in one or several documents.

         (b) Any  certificate or opinion of an Authorized  Officer of the Issuer
may be based,  insofar as it relates to legal  matters,  upon a  certificate  or
opinion of, or representations by, counsel, unless such officer knows, or in the
exercise of  reasonable  care should know,  that the  certificate  or opinion or
representations with respect to the matters upon which his or her certificate or
opinion is based are erroneous. Any such certificate of an Authorized Officer or
Opinion of Counsel may be based, insofar as it relates to factual matters,  upon
a certificate  or opinion of, or  representations  by, an officer or officers of
the  Servicer,  the Seller or the  Issuer,  stating  that the  information  with
respect to such factual matters is in the possession of the Servicer, the Seller
or the Issuer,  unless such counsel knows, or in the exercise of reasonable care
should know, that the certificate or opinion or representations  with respect to
such matters are erroneous.

         (c) Where any Person is required  to make,  give or execute two or more
applications,  requests, consents,  certificates,  statements, opinions or other
instruments  under this Indenture,  they may, but need not, be consolidated  and
form one instrument.

         (d) Whenever in this  Indenture,  in connection with any application or
certificate  or report to the  Trustee,  it is  provided  that the Issuer  shall
deliver any document as a condition of the granting of such  application,  or as
evidence of the Issuer's compliance with any term hereof, it is intended that




                                      -71-





the truth and accuracy,  at the time of the granting of such  application  or at
the effective  date of such  certificate  or report (as the case may be), of the
facts and  opinions  stated in such  document  shall in such case be  conditions
precedent to the right of the Issuer to have such application  granted or to the
sufficiency of such certificate or report. The foregoing shall not, however,  be
construed to affect the  Trustee's  right to rely upon the truth and accuracy of
any  statement or opinion  contained in any such document as provided in Article
VI.

         SECTION  11.3.   Acts  of   Noteholders.   (a)  Any  request,   demand,
authorization,  direction,  notice,  consent, waiver or other action provided by
this  Indenture  to be  given or taken by  Noteholders  may be  embodied  in and
evidenced by one or more  instruments of  substantially  similar tenor signed by
such Noteholders in person or by agents duly appointed in writing; and except as
herein otherwise expressly provided such action shall become effective when such
instrument or instruments are delivered to the Trustee,  and, where it is hereby
expressly  required,  to the Issuer.  Such  instrument or  instruments  (and the
action embodied therein and evidenced  thereby) are herein sometimes referred to
as the "Act" of the Noteholders signing such instrument or instruments. Proof of
execution of any such instrument or of a writing appointing any such agent shall
be  sufficient  for any purpose of this  Indenture  and (subject to Section 6.1)
conclusive  in  favor  of the  Trustee  and the  Issuer,  if made in the  manner
provided in this Section.

         (b) The  fact  and  date of the  execution  by any  person  of any such
instrument or writing may be proved in any customary manner of the Trustee.

         (c) The ownership of Notes shall be proved by the Note Register.

         (d) Any request,  demand,  authorization,  direction,  notice, consent,
waiver or other action by the Holder of any Notes shall bind the Holder of every
Note issued  upon the  registration  thereof or in exchange  therefor or in lieu
thereof,  in respect of  anything  done,  omitted or  suffered to be done by the
Trustee or the Issuer in  reliance  thereon,  whether  or not  notation  of such
action is made upon such Note.

         SECTION 11.4.  Notices,  etc., to Trustee,  Issuer and Rating Agencies.
(a) Any request, demand,  authorization,  direction,  notice, consent, waiver or
Act of Noteholders or other documents provided or permitted by this Indenture to
be made upon, given or furnished to or filed with:

                  (i) the Trustee by any  Noteholder  or by the Issuer  shall be
         sufficient for every purpose hereunder if




                                      -72-





         personally   delivered,   delivered  by  overnight  courier  or  mailed
         certified  mail,  return receipt  requested and shall be deemed to have
         been duly given  upon  receipt to the  Trustee at its  Corporate  Trust
         Office, or

                  (ii) the Issuer by the Trustee or by any  Noteholder  shall be
         sufficient  for  every  purpose  hereunder  if  personally   delivered,
         delivered by overnight courier or mailed certified mail, return receipt
         requested  and shall deemed to have been duly given upon receipt to the
         Issuer  addressed to: CPS Auto  Receivables  Trust  1997-4,  in care of
         Bankers Trust (Delaware),  1011 Centre Street,  Suite 200,  Wilmington,
         Delaware  19805-1266  with a copy of all notices and other documents to
         Bankers Trust Company,  4 Albany Street,  10th Floor,  Attn:  Corporate
         Trust and Agency  Group,  New York,  New York  10006,  or at such other
         address  previously  furnished in writing to the Trustee by the Issuer.
         The Issuer shall promptly  transmit any notice  received by it from the
         Noteholders to the Trustee.

                  (iii) the Note  Insurer by the Issuer or the Trustee  shall be
         sufficient  for any  purpose  hereunder  if in  writing  and  mailed by
         registered mail or personally delivered or telexed or telecopied to the
         recipient as follows:

                  To the Note Insurer:

                               Financial Security Assurance Inc.
                               350 Park Avenue
                               New York, NY 10022
                               Attention: Surveillance Department

                               Telex No.:     (212) 688-3101
                               Confirmation:  (212) 826-0100
                               Telecopy Nos.: (212) 339-3518 or
                                              (212) 339-3529

         (In  each  case in which  notice  or  other  communication  to the Note
         Insurer  refers to an Event of  Default,  a claim on the Note Policy or
         with  respect  to which  failure  on the part of the  Note  Insurer  to
         respond shall be deemed to  constitute  consent or  acceptance,  then a
         copy of such notice or other  communication  should also be sent to the
         attention of the General Counsel and the Head--Financial Guaranty Group
         "URGENT MATERIAL ENCLOSED.")

         (b) Notices  required to be given to the Rating Agencies by the Issuer,
the  Trustee or the Owner  Trustee  shall be in writing,  personally  delivered,
delivered  by  overnight  courier  or  mailed  certified  mail,  return  receipt
requested  to (i) in the case of  Moody's,  at the  following  address:  Moody's
Investors Service,




                                      -73-





Inc., 99 Church Street,  New York New York 10004 and (ii) in the case of S&P, at
the following  address:  Standard & Poor's Ratings  Services,  26 Broadway (15th
Floor),  New  York,  New York  10004,  Attention  of  Asset-Backed  Surveillance
Department;  or as to each of the  foregoing,  at such other address as shall be
designated by written notice to the other parties.

         SECTION 11.5. Notices to Noteholders;  Waiver. (a) Where this Indenture
provides  for  notice  to  Noteholders  of  any  event,  such  notice  shall  be
sufficiently  given (unless otherwise  expressly  provided herein) if in writing
and mailed,  first-class,  postage prepaid to each  Noteholder  affected by such
event,  at his  address as it appears on the Note  Register,  not later than the
latest date, and not earlier than the earliest  date,  prescribed for the giving
of such  notice.  In any case  where  notice  to  Noteholders  is given by mail,
neither  the  failure to mail such notice nor any defect in any notice so mailed
to any particular  Noteholder  shall affect the  sufficiency of such notice with
respect to other  Noteholders,  and any notice that is mailed in the manner here
in provided shall conclusively be presumed to have been duly given.

         (b) Where this Indenture provides for notice in any manner, such notice
may be waived in writing by any Person  entitled to receive such notice,  either
before or after the  event,  and such  waiver  shall be the  equivalent  of such
notice.  Waivers of notice by  Noteholders  shall be filed with the  Trustee but
such filing  shall not be a condition  precedent  to the  validity of any action
taken in reliance upon such a waiver.

         (c) In case,  by reason of the  suspension of regular mail service as a
result of a strike,  work stoppage or similar activity,  it shall be impractical
to mail  notice of any event to  Noteholders  when such notice is required to be
given  pursuant to any  provision of this  Indenture,  then any manner of giving
such  notice as shall be  satisfactory  to the  Trustee  shall be deemed to be a
sufficient giving of such notice.

         (d) Where this  Indenture  provides for notice to the Rating  Agencies,
failure to give such  notice  shall not affect any other  rights or  obligations
created hereunder,  and shall not under any circumstance constitute a Default or
Event of Default.

         SECTION 11.6. Alternate Payment and Notice Provisions.  Notwithstanding
any provision of this Indenture or any of the Notes to the contrary,  the Issuer
may enter into any agreement with any Holder of a Note providing for a method of
payment,  or notice by the Trustee or any Note Paying Agent to such Holder, that
is different  from the methods  provided for in this Indenture for such payments
or notices,  provided that such methods are  reasonable  and consented to by the
Trustee (which consent shall




                                      -74-





not be unreasonably withheld).  The Issuer will furnish to the Trustee a copy of
each such  agreement and the Trustee will cause  payments to be made and notices
to be given in accordance with such agreements.

         SECTION 11.7.  Conflict with Trust  Indenture Act. (a) If any provision
hereof  limits,  qualifies or conflicts  with another  provision  hereof that is
required to be included in this  Indenture by any of the provisions of the Trust
Indenture Act, such required provision shall control.

         (b) The provisions of TIA ss. 310 through 317 that impose duties on any
person  (including the provisions  automatically  deemed  included herein unless
expressly  excluded by this  Indenture) are a part of and govern this Indenture,
whether or not physically contained herein.

         SECTION 11.8. Effect of Headings and Table of Contents. The Article and
Section  headings herein and the Table of Contents are for convenience  only and
shall not affect the construction hereof.

         SECTION 11.9.  Successors and Assigns.  All covenants and agreements in
this  Indenture  and the  Notes by the  Issuer  shall  bind its  successors  and
assigns,  whether so  expressed or not.  All  agreements  of the Trustee in this
Indenture  shall bind its  successors.  All  agreements  of the  Trustee in this
Indenture shall bind its successors.

         SECTION 11.10. Severability. In case any provision in this Indenture or
in the Notes shall be invalid, illegal or unenforceable, the validity, legality,
and enforceability of the remaining  provisions shall not in any way be affected
or impaired thereby.

         SECTION  11.11.  Benefits  of  Indenture.  The  Note  Insurer  and  its
successors  and assigns shall be a third-party  beneficiary to the provisions of
this Indenture,  and shall be entitled to rely upon and directly to enforce such
provisions of this  Indenture so long as no Insurer  Default shall have occurred
and be  continuing.  Nothing  in this  Indenture  or in the  Notes,  express  or
implied,  shall  give to any  Person,  other than the  parties  hereto and their
successors  hereunder,  and  the  Noteholders,   and  any  other  party  secured
hereunder,  and any other person with an  ownership  interest in any part of the
Trust Estate, any benefit or any legal or equitable right, remedy or claim under
this Indenture. The Note Insurer may disclaim any of its rights and powers under
this  Indenture  (in which case the  Trustee  may  exercise  such right or power
hereunder),  but not its  duties and  obligations  under the Note  Policy,  upon
delivery of a written notice to the Trustee.





                                      -75-





         SECTION 11.12. Legal Holidays.  In any case where the date on which any
payment  is due shall not be a Business  Day,  then  (notwithstanding  any other
provision of the Notes or this Indenture) payment need not be made on such date,
but may be made on the next  succeeding  Business  Day with the same  force  and
effect as if made on the date on which  nominally  due,  and no  interest  shall
accrue for the period from and after any such nominal date.

         SECTION  11.13.  Governing  Law. THIS  INDENTURE  SHALL BE CONSTRUED IN
ACCORDANCE  WITH THE LAWS OF THE STATE OF NEW  YORK,  WITHOUT  REFERENCE  TO ITS
CONFLICT OF LAW  PROVISIONS,  AND THE  OBLIGATIONS,  RIGHTS AND  REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.

         SECTION  11.14.  Counterparts.  This  Indenture  may be executed in any
number  of  counterparts,  each of which so  executed  shall be  deemed to be an
original,  but all such counterparts  shall together  constitute but one and the
same instrument.

         SECTION 11.15. Recording of Indenture.  If this Indenture is subject to
recording in any appropriate public recording  offices,  such recording is to be
effected by the Issuer and at its expense  accompanied  by an Opinion of Counsel
(which may be counsel to the Trustee or any other counsel reasonably  acceptable
to the  Trustee  and the Note  Insurer)  to the effect  that such  recording  is
necessary  either for the  protection  of the  Noteholders  or any other  person
secured  hereunder or for the  enforcement of any right or remedy granted to the
Trustee under this Indenture or to the Collateral  Agent under the Master Spread
Account Agreement.

         SECTION 11.16. Trust Obligation.  No recourse may be taken, directly or
indirectly,  with  respect to the  obligations  of the Issuer,  the Seller,  the
Servicer, the Depositor,  the Owner Trustee or the Trustee on the Notes or under
this  Indenture or any  certificate  or other  writing  delivered in  connection
herewith or therewith,  against (i) the Seller, the Servicer, the Depositor, the
Trustee or the Owner  Trustee in its  individual  capacity,  (ii) any owner of a
beneficial  interest  in the Issuer or (iii) any  partner,  owner,  beneficiary,
agent,  officer,  director,  employee or agent of the Seller, the Servicer,  the
Depositor,  the Trustee or the Owner  Trustee in its  individual  capacity,  any
holder of a beneficial  interest in the Issuer,  the Seller,  the Servicer,  the
Depositor, the Owner Trustee or the Trustee or of any successor or assign of the
Seller,  the Servicer,  the  Depositor,  the Trustee or the Owner Trustee in its
individual  capacity,  except as any such Person may have  expressly  agreed (it
being understood that the Trustee and the Owner Trustee have no such obligations
in their  individual  capacity)  and  except  that any  such  partner,  owner or
beneficiary shall be




                                      -76-





fully  liable,  to the  extent  provided  by  applicable  law,  for  any  unpaid
consideration  for  stock,  unpaid  capital  contribution  or failure to pay any
installment or call owing to such entity. For all purposes of this Indenture, in
the performance of any duties or obligations of the Issuer hereunder,  the Owner
Trustee  shall be subject  to, and  entitled to the  benefits  of, the terms and
provisions of Article VI, VII and VIII of the Trust Agreement.

         SECTION  11.17.  No  Petition.  The  Trustee,  by  entering  into  this
Indenture,  and  each  Noteholder  and  Note  Owner,  by  accepting  a Note or a
beneficial interest therein, hereby covenant and agree that they will not at any
time institute against the Seller, the Depositor,  or the Issuer, or join in any
institutional  against  the  Seller,  the  Depositor,  or  the  Issuer  of,  any
bankruptcy, reorganization,  arrangement, insolvency or liquidation proceedings,
or other  proceedings  under any United  States  Federal or state  bankruptcy or
similar law in  connection  with any  obligations  relating  to the Notes,  this
Indenture or any of the Basic Documents.

         SECTION 11.18. Inspection.  The Issuer agrees that, on reasonable prior
notice, it will permit any representative of the Trustee or of the Note Insurer,
during the Issuer's  normal business hours, to examine all the books of account,
records,  reports,  and other papers of the Issuer,  to make copies and extracts
therefrom,  to cause such books to be audited by  independent  certified  public
accountants, and to discuss the Issuer's affairs, finances and accounts with the
Issuer's officers,  employees, and independent certified public accountants, all
at such  reasonable  times  and as often  as may be  reasonably  requested.  The
Trustee shall and shall cause its representatives to hold in confidence all such
information  except to the extent  disclosure  may be  required  by law (and all
reasonable applications for confidential treatment are unavailing) and except to
the extent that the Trustee may  reasonably  determine  that such  disclosure is
consistent with its Obligations hereunder.




                                      -77-






         IN WITNESS  WHEREOF,  the  Issuer  and the  Trustee  have  caused  this
Indenture  to be duly  executed  by their  respective  officers,  hereunto  duly
authorized, all as of the day and year first above written.

                                          CPS AUTO RECEIVABLES TRUST 1997-4,

                                          By: BANKERS TRUST (DELAWARE),
                                              not in its individual capacity,
                                              but solely as Owner Trustee


                                          By:__________________________________
                                             Title:
                                              Name:



                                           NORWEST BANK MINNESOTA, NATIONAL
                                           ASSOCIATION



                                           By:_________________________________
                                              Title:
                                               Name:






                                      -78-





[Form of Class A-1 Note]                                             EXHIBIT A-1

REGISTERED                                                           $_________

No. R

                       SEE REVERSE FOR CERTAIN DEFINITIONS

                                                         CUSIP NO._____________

         Unless this Note is presented by an  authorized  representative  of The
Depository Trust Company, a New York corporation  ("DTC"),  to the Issuer or its
agent for registration of transfer,  exchange or payment, and any Note issued is
registered in the name of Cede & Co. or in such other name as is requested by an
authorized  representative  of DTC (and any  payment is made to Cede & Co. or to
such other entity as is requested by an authorized  representative  of DTC), ANY
TRANSFER,  PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.

         THE  PRINCIPAL  OF THIS NOTE IS  PAYABLE IN  INSTALLMENTS  AS SET FORTH
HEREIN.  ACCORDINGLY,  THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME
MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.

                        CPS AUTO RECEIVABLES TRUST 1997-4

                        CLASS A-1 [ ]% ASSET-BACKED NOTES

         CPS Auto  Receivables  Trust  1997-4,  a business  trust  organized and
existing  under the laws of the State of  Delaware  (herein  referred  to as the
"Issuer"),  for  value  received,  hereby  promises  to  pay to  CEDE & CO.,  or
registered  assigns,  the principal  sum of [ ] DOLLARS  payable on each Payment
Date in an amount equal to the result obtained by multiplying (i) a fraction the
numerator  of which is $  [INSERT  INITIAL  PRINCIPAL  AMOUNT  OF NOTE]  and the
denominator of which is $ by (ii) the aggregate amount, if any, payable from the
Note  Distribution  Account  in  respect  of  principal  on the  Class A-1 Notes
pursuant  to  Section  3.1 of the  Indenture  and  Section  5.8 of the  Sale and
Servicing Agreement;  provided, however, that the entire unpaid principal amount
of this Note shall be due and payable on the March 2003 Payment Date (the "Final
Scheduled Payment Date").  The Issuer will pay interest on this Note at the rate
per annum shown above on each Payment  Date until the  principal of this Note is
paid or made  available  for  payment,  on the  principal  amount  of this  Note
outstanding  on the preceding  Payment Date (after giving effect to all payments
of principal


                                      A-1-1






made on the preceding Payment Date).  Interest on this Note will accrue for each
Payment Date from the most recent  Payment Date on which  interest has been paid
to but  excluding  such Payment Date or, if no interest has yet been paid,  from
and  including  October 17,  1997.  Interest  will be computed on the basis of a
360-day year of twelve  30-day  months.  Such  principal of and interest on this
Note shall be paid in the manner specified on the reverse hereof.

         The  principal of and interest on this Note are payable in such coin or
currency  of the  United  States of  America  as at the time of payment is legal
tender for payment of public and private debts.  All payments made by the Issuer
with respect to this Note shall be applied  first to interest due and payable on
this Note as provided above and then to the unpaid principal of this Note.

         The  Notes  are  entitled  to  the  benefits  of a  financial  guaranty
insurance policy (the "Note Policy") issued by Financial Security Assurance Inc.
(the "Note  Insurer"),  pursuant to which the Note  Insurer has  unconditionally
guaranteed payments of the Noteholders'  Interest  Distributable  Amount and the
Noteholders'  Principal  Distributable  Amount on each Payment Date, all as more
fully set forth in the Indenture.

         Reference is made to the further  provisions  of this Note set forth on
the reverse  hereof,  which shall have the same effect as though fully set forth
on the face of this Note.

         Unless the  certificate of  authentication  hereon has been executed by
the Trustee whose name appears below by manual signature, this Note shall not be
entitled to any benefit under the Indenture  referred to on the reverse  hereof,
or be valid or obligatory for any purpose.



                                      A-1-2







         IN WITNESS WHEREOF, the Issuer has caused this instrument to be signed,
manually or in  facsimile,  by its  Authorized  Officer as of the date set forth
below.

                                    CPS AUTO RECEIVABLES TRUST 1997-4

                                    By: BANKERS TRUST (DELAWARE), not
                                        in its individual capacity,
                                        but solely as Owner Trustee


                                    By:_________________________________
                                       Name:
                                       Title:











                                      A-1-3







                     TRUSTEE'S CERTIFICATE OF AUTHENTICATION

         This  is one of the  Notes  designated  above  and  referred  to in the
within-mentioned Indenture.


Date:  [        ]                   NORWEST BANK MINNESOTA, NATIONAL
                                    ASSOCIATION, not in its
                                    individual capacity, but solely as
                                    Trustee


                                     By____________________________________
                                       Authorized Signatory







                                      A-1-4







                                [REVERSE OF NOTE]

         This  Note is one of a duly  authorized  issue of Notes of the  Issuer,
designated as its Class A-1 [ ]%  Asset-Backed  Notes (herein  called the "Class
A-1 Notes"),  all issued  under an  Indenture  dated as of October 1, 1997 (such
indenture,  as  supplemented  or  amended,  is herein  called the  "Indenture"),
between the Issuer and Norwest Bank Minnesota,  National Association, as trustee
(the "Trustee",  which term includes any successor Trustee under the Indenture),
to which Indenture and all indentures  supplemental  thereto reference is hereby
made for a statement of the respective rights and obligations  thereunder of the
Issuer,  the Trustee and the Holders of the Notes.  The Notes are subject to all
terms of the  Indenture.  All terms  used in this Note that are  defined  in the
Indenture,  supplemented or amended, shall have the meanings assigned to them in
or pursuant to the Indenture, as so supplemented or amended.

         The Class A-1 Notes and the Class A-2 Notes (together, the "Notes") are
and will be equally and ratably  secured by the  collateral  pledged as security
therefor as provided in the Indenture.

         Principal  of the Class A-1 Notes will be payable on each  Payment Date
in an amount  described on the face hereof.  "Payment  Date" means the fifteenth
day of each  month,  or,  if any  such  date is not a  Business  Day,  the  next
succeeding Business Day, commencing November 17, 1997.

         As described  above,  the entire unpaid  principal  amount of this Note
shall be due and payable on the earlier of the Final Scheduled  Payment Date and
the  Redemption  Date,  if any,  pursuant  to Section  10.1(a) or 10.1(c) of the
Indenture. As described above, a portion of the unpaid principal balance of this
Note shall be due and  payable  on the  Redemption  Date,  if any,  pursuant  to
Section  10.1(b) of the Indenture.  Notwithstanding  the  foregoing,  the entire
unpaid principal amount of the Notes shall be due and payable (i) on the date on
which an Event of Default  shall have  occurred and be  continuing so long as an
Insurer  Default shall not have occurred and be continuing or (ii) if an Insurer
Default shall have occurred and be continuing,  on the date on which an Event of
Default shall have occurred and be continuing  and the Trustee or the Holders of
the Notes  representing at least 66-2/3% of the Outstanding  Amount of the Notes
have declared the Notes to be immediately due and payable in the manner provided
in Section 5.2 of the Indenture.  All principal  payments on the Class A-1 Notes
shall be made pro rata to the Class A-1 Noteholders entitled thereto.

         Payments of interest on this Note due and payable on each Payment Date,
together with the installment of principal, if any,

                                      A-1-5







to the extent not in full payment of this Note, shall be made by check mailed to
the  Person  whose  name  appears  as the  Holder  of this  Note (or one or more
Predecessor  Notes) in the Note  Register  as of the close of  business  on each
Record Date,  except that with respect to Notes registered on the Record Date in
the name of the nominee of the Clearing  Agency  (initially,  such nominee to be
Cede & Co.),  payments  will be made by wire transfer in  immediately  available
funds to the account designated by such nominee.  Such checks shall be mailed to
the Person  entitled  thereto at the address of such Person as it appears on the
Note Register as of the applicable  Record Date without requiring that this Note
be submitted for notation of payment.  Any reduction in the principal  amount of
this Note (or any one or more  Predecessor  Notes) effected by any payments made
on any Payment Date shall be binding upon all future Holders of this Note and of
any Note issued upon the  registration  of transfer hereof or in exchange hereof
or in lieu  hereof,  whether or not rated  hereon.  If funds are  expected to be
available,  as  provided  in the  Indenture,  for  payment  in full of the  then
remaining  unpaid  principal  amount of this Note on a  Payment  Date,  then the
Trustee,  in the name of and on behalf of the Issuer, will notify the Person who
was the Holder  hereof as of the Record  Date  preceding  such  Payment  Date by
notice  mailed  prior to such  Payment  Date and the amount then due and payable
shall be  payable  only  upon  presentation  and  surrender  of this Note at the
Trustee's  principal  Corporate  Trust Office or at the office of the  Trustee's
agent appointed for such purposes located in Minneapolis, Minnesota.

         The Issuer  shall pay interest on overdue  installments  of interest at
the Class A-1 Interest Rate to the extent lawful.

         As provided  in the  Indenture,  the Notes may be redeemed  pursuant to
Section  10.1(a) of the Indenture,  in whole,  but not in part, at the option of
the Servicer (with the consent of the Note Insurer under certain circumstances),
on any Payment  Date on or after the date on which the Pool Balance is less than
or equal to 10% of the Original Pool Balance.

         As provided in the  Indenture  and subject to certain  limitations  set
forth therein,  the transfer of this Note may be registered on the Note Register
upon surrender of this Note for registration of transfer at the office or agency
designated  by the Issuer  pursuant to the  Indenture,  (i) duly endorsed by, or
accompanied  by a written  instrument  of transfer in form  satisfactory  to the
Trustee duly executed by, the Holder  hereof or his attorney duly  authorized in
writing,  with such signature guaranteed by an "eligible guarantor  institution"
meeting  the  requirements  of the Note  Registrar  which  requirements  include
membership or  participation  in Securities  Transfer Agents  Medallion  Program
("Stamp") or such other  "signature  guarantee  program" as may be determined by
the Note Registrar in addition

                                      A-1-6







to, or in substitution  for, Stamp, all in accordance with the Exchange Act, and
(ii)  accompanied  by such other  documents  as the  Trustee  may  require,  and
thereupon  one or more new  Notes of  authorized  denominations  and in the same
aggregate  principal  amount  will be issued  to the  designated  transferee  or
transferees.  No service charge will be charged for any registration of transfer
or  exchange  of this Note,  but the  transferor  may be  required  to pay a sum
sufficient to cover any tax or other governmental  charge that may be imposed in
connection with any such registration of transfer or exchange.

         Each  Noteholder or Note Owner, by acceptance of a Note or, in the case
of a Note Owner,  a beneficial  interest in a Note  covenants and agrees that no
recourse may be taken,  directly or indirectly,  with respect to the obligations
of the  Issuer,  the  Owner  Trustee  or the  Trustee  on the Notes or under the
Indenture or any certificate or other writing delivered in connection therewith,
against (i) the Seller,  the Servicer,  the Depositor,  the Trustee or the Owner
Trustee in its individual  capacity,  (ii) any owner of a beneficial interest in
the Issuer or (iii) any partner, owner, beneficiary, agent, officer, director or
employee of the Seller,  the Servicer,  the Depositor,  the Trustee or the Owner
Trustee in its individual  capacity,  any holder of a beneficial interest in the
Issuer,  the Seller,  the  Servicer,  the  Depositor,  the Owner  Trustee or the
Trustee  or of  any  successor  or  assign  of the  Seller,  the  Servicer,  the
Depositor,  the Trustee or the Owner Trustee in its individual capacity,  except
as any such  Person  may have  expressly  agreed (it being  understood  that the
Trustee  and the Owner  Trustee  have no such  obligations  in their  individual
capacity) and except that any such partner,  owner or beneficiary shall be fully
liable,  to the extent provided by applicable law, for any unpaid  consideration
for stock, unpaid capital contribution or failure to pay any installment or call
owing to such entity.

         Each  Noteholder or Note Owner, by acceptance of a Note or, in the case
of a Note Owner,  a beneficial  interest in a Note  covenants and agrees that by
accepting the benefits of the  Indenture  that such  Noteholder  will not at any
time  institute  against the Depositor or the Issuer or join in any  institution
against  the  Depositor  or  the  Issuer  of,  any  bankruptcy,  reorganization,
arrangement,  insolvency or liquidation proceedings, or other proceedings, under
any United States Federal or state  bankruptcy or similar law in connection with
any obligations relating to the Notes, the Indenture or the Basic Documents.

         Prior to the due presentment for registration of transfer of this Note,
the Issuer,  the Trustee and the Note  Insurer and any agent of the Issuer,  the
Trustee or the Note  Insurer may treat the Person in whose name this Note (as of
the day of

                                      A-1-7







determination  or as of such other date as may be specified in the Indenture) is
registered  as the owner  hereof for all  purposes,  whether or not this Note be
overdue,  and  neither  the  Issuer,  the  Trustee  nor any such agent  shall be
affected by notice to the contrary.

         The Indenture permits, with certain exceptions as therein provided, the
amendment  thereof and the  modification  of the rights and  obligations  of the
Issuer and the rights of the  Holders of the Notes  under the  Indenture  at any
time by the Issuer  with the  consent of the Note  Insurer and of the Holders of
Notes representing a majority of the Outstanding Amount of all Notes at the time
Outstanding.  The Indenture also contains  provisions  permitting the Holders of
Notes representing specified percentages of the Outstanding Amount of the Notes,
on behalf of the  Holders of all the Notes,  to waive  compliance  by the Issuer
with certain  provisions of the  Indenture  and certain past defaults  under the
Indenture  and their  consequences.  Any such consent or waiver by the Holder of
this Note (or any one of more Predecessor Notes) shall be conclusive and binding
upon such Holder and upon all future Holders of this Note and of any Note issued
upon the registration of transfer hereof or in exchange hereof or in lieu hereof
whether or not  notation of such  consent or waiver is made upon this Note.  The
Indenture  also  permits  the  Trustee  to  amend  or waive  certain  terms  and
conditions  set forth in the  Indenture  without  the  consent of Holders of the
Notes issued thereunder.

         The term  "Issuer" as used in this Note  includes any  successor to the
Issuer under the Indenture.

         The Issuer is permitted by the Indenture,  under certain circumstances,
to merge or consolidate, subject to the rights of the Trustee and the Holders of
Notes under the Indenture.

         The Notes are issuable  only in  registered  form in  denominations  as
provided in the Indenture, subject to certain limitations therein set forth.

         This Note and the Indenture  shall be construed in accordance  with the
laws  of the  State  of New  York,  without  reference  to its  conflict  of law
provisions,  and the obligations,  rights and remedies of the parties  hereunder
and thereunder shall be determined in accordance with such laws.

         No reference  herein to the  indenture and no provision of this Note or
of the Indenture  shall alter or impair the  obligation of the Issuer,  which is
absolute and unconditional, to pay the principal of and interest on this Note at
the times, place and rate, and in the coin or currency herein prescribed.


                                      A-1-8







         Anything  herein to the contrary  notwithstanding,  except as expressly
provided in the Indenture or the Basic  Documents,  neither Owner Trustee in its
individual  capacity,  any owner of a beneficial interest in the Issuer, nor any
of  their  respective  partners,  beneficiaries,  agents,  officers,  directors,
employees or successors  or assigns  shall be  personally  liable for, nor shall
recourse be had to any of them for,  the payment of principal of or interest on,
or performance of, or omission to perform, any of the covenants,  obligations or
indemnifications  contained in this Note or the  Indenture,  it being  expressly
understood that said covenants,  obligations and indemnifications have been made
by the Owner Trustee for the sole purposes of binding the interests of the Owner
Trustee in the assets of the Issuer.  The Holder of this Note by the  acceptance
hereof  agrees that except as expressly  provided in the  Indenture or the Basic
Documents,  in the case of an Event of Default under the  Indenture,  the Holder
shall have no claim  against any of the foregoing  for any  deficiency,  loss or
claim therefrom; provided, however, that nothing contained herein shall be taken
to prevent  recourse to, and enforcement  against,  the assets of the Issuer for
any and all liabilities, obligations and undertakings contained in the Indenture
or in this Note.


                                      A-1-9







                                   ASSIGNMENT

Social Security or taxpayer I.D. or other identifying number of assignee

         FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto__________________________________________________
    (name  and  address  of assignee)

the within Note and all rights thereunder,  and hereby  irrevocably  constitutes
and appoints, attorney, to transfer said Note on the books kept for registration
thereof, with full power of substitution in the premises.


Dated:                                    -----------------------------1/
                                          Signature Guaranteed:



- ----------------                          -----------------------------














- --------
1/       NOTE: The signature to this assignment must correspond with the name of
         the  registered  owner as it appears on the face of the within  Note in
         every  particular,  without  alteration,   enlargement  or  any  change
         whatsoever.



                                     A-1-10







                            [Form of Class A-2 Note]                 EXHIBIT A-2

REGISTERED                                                           $

No. R

SEE REVERSE FOR CERTAIN DEFINITIONS
CUSIP NO.________________


         Unless this Note is presented by an  authorized  representative  of The
Depository Trust Company, a New York corporation  ("DTC"),  to the Issuer or its
agent for registration of transfer,  exchange or payment, and any Note issued is
registered in the name of Cede & Co. or in such other name as is requested by an
authorized  representative  of DTC (and any  payment is made to Cede & Co. or to
such other entity as is requested by an authorized  representative  of DTC), ANY
TRANSFER,  PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.

         THE  PRINCIPAL  OF THIS NOTE IS  PAYABLE IN  INSTALLMENTS  AS SET FORTH
HEREIN.  ACCORDINGLY,  THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME
MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.

                        CPS AUTO RECEIVABLES TRUST 1997-4

                        CLASS A-2 [ ]% ASSET-BACKED NOTES

         CPS Auto  Receivables  Trust  1997-4,  a business  trust  organized and
existing  under the laws of the State of  Delaware  (herein  referred  to as the
"Issuer"),  for  value  received,  hereby  promises  to  pay to  CEDE & CO.,  or
registered  assigns,  the principal  sum of [ ] DOLLARS  payable on each Payment
Date in an amount equal to the result obtained by multiplying (i) a fraction the
numerator  of which is $  [INSERT  INITIAL  PRINCIPAL  AMOUNT  OF NOTE]  and the
denominator of which is $ by (ii) the aggregate amount, if any, payable from the
Note  Distribution  Account  in  respect  of  principal  on the  Class A-2 Notes
pursuant  to  Section  3.1 of the  Indenture  and  Section  5.8 of the  Sale and
Servicing Agreement provided,  however,  that the entire unpaid principal amount
of this Note shall be due and payable on the March 2003 Payment Date (the "Final
Scheduled Payment Date").  The Issuer will pay interest on this Note at the rate
per annum shown above on each Payment  Date until the  principal of this Note is
paid or made  available  for  payment,  on the  principal  amount  of this  Note
outstanding  on the preceding  Payment Date (after giving effect to all payments
of principal made on the preceding Payment Date). Interest on this Note will









accrue for each Payment Date from the most recent Payment Date on which interest
has been paid to but excluding such Payment Date or, if no interest has yet been
paid,  from and  including  October 17, 1997.  Interest  will be computed on the
basis of a 360-day year of twelve 30-day months.  Such principal of and interest
on this Note shall be paid in the manner specified on the reverse hereof.

         The  principal of and interest on this Note are payable in such coin or
currency  of the  United  States of  America  as at the time of payment is legal
tender for payment of public and private debts.  All payments made by the Issuer
with respect to this Note shall be applied  first to interest due and payable on
this Note as provided above and then to the unpaid principal of this Note.

         The  Notes  are  entitled  to  the  benefits  of a  financial  guaranty
insurance policy (the "Note Policy") issued by Financial Security Assurance Inc.
(the "Note  Insurer"),  pursuant to which the Note  Insurer has  unconditionally
guaranteed payments of the Noteholders'  Interest  Distributable  Amount and the
Noteholders'  Principal  Distributable  Amount on each Payment Date, all as more
fully set forth in the Indenture.

         Reference is made to the further  provisions  of this Note set forth on
the reverse  hereof,  which shall have the same effect as though fully set forth
on the face of this Note.

         Unless the  certificate of  authentication  hereon has been executed by
the Trustee whose name appears below by manual signature, this Note shall not be
entitled to any benefit under the Indenture  referred to on the reverse  hereof,
or be valid or obligatory for any purpose.











         IN WITNESS WHEREOF, the Issuer has caused this instrument to be signed,
manually or in  facsimile,  by its  Authorized  Officer as of the date set forth
below.

                                     CPS AUTO RECEIVABLES TRUST 1997-4

                                     By:  BANKERS TRUST (DELAWARE), not
                                          in its individual capacity,
                                          but solely as Owner Trustee




                                     By:____________________________________
                                        Name:
                                        Title:











                     TRUSTEE'S CERTIFICATE OF AUTHENTICATION

         This  is one of the  Notes  designated  above  and  referred  to in the
within-mentioned Indenture.

Date:                                       NORWEST BANK MINNESOTA, NATIONAL
                                            ASSOCIATION, not in its
                                            individual capacity, but solely
                                            as Trustee


                                            By:_______________________________
                                               Authorized Signatory










                                [REVERSE OF NOTE]

         This  Note is one of a duly  authorized  issue of Notes of the  Issuer,
designated as its Class A-2 [ ]%  Asset-Backed  Notes (herein  called the "Class
A-2 Notes"),  all issued  under an  Indenture  dated as of October 1, 1997 (such
indenture,  as  supplemented  or  amended,  is herein  called the  "Indenture"),
between the Issuer and Norwest Bank Minnesota,  National Association, as trustee
(the "Trustee",  which term includes any successor Trustee under the Indenture),
to which Indenture and all indentures  supplemental  thereto reference is hereby
made for a statement of the respective rights and obligations  thereunder of the
Issuer,  the Trustee and the Holders of the Notes.  The Notes are subject to all
terms of the  Indenture.  All terms  used in this Note that are  defined  in the
Indenture,  as supplemented or amended, shall have the meanings assigned to them
in or pursuant to the Indenture, as so supplemented or amended.

         The Class A-1 Notes and the Class A-2 Notes (together, the "Notes") are
and will be equally and ratably  secured by the  collateral  pledged as security
therefor as provided in the Indenture.

         Principal  of the Class A-2 Notes will be payable on each  Payment Date
in an amount  described on the face hereof.  "Payment  Date" means the fifteenth
day of each  month,  or,  if any  such  date is not a  Business  Day,  the  next
succeeding Business Day, commencing November 17, 1997.

         As described  above,  the entire unpaid  principal  amount of this Note
shall be due and payable on the earlier of the Final Scheduled  Payment Date and
the  Redemption  Date,  if any,  pursuant  to Section  10.1(a) or 10.1(c) of the
Indenture. As described above, a portion of the unpaid principal balance of this
Note shall be due and  payable  on the  Redemption  Date,  if any,  pursuant  to
Section  10.1(b) of the Indenture.  Notwithstanding  the  foregoing,  the entire
unpaid principal amount of the Notes shall be due and payable (i) on the date on
which an Event of Default  shall have  occurred and be  continuing so long as an
Insurer  Default shall not have occurred and be continuing or (ii) if an Insurer
Default shall have occurred and be continuing,  on the date on which an Event of
Default shall have occurred and be continuing  and the Trustee or the Holders of
the Notes  representing at least 66-2/3% of the Outstanding  Amount of the Notes
have declared the Notes to be immediately due and payable in the manner provided
in Section 5.2 of the Indenture.  All principal  payments on the Class A-2 Notes
shall be made pro rata to the Class A-2 Noteholders entitled thereto.

         Payments of interest on this Note due and payable on each Payment Date,
together with the installment of principal, if any,









to the extent not in full payment of this Note, shall be made by check mailed to
the  Person  whose  name  appears  as the  Holder  of this  Note (or one or more
Predecessor  Notes) in the Note  Register  as of the close of  business  on each
Record Date,  except that with respect to Notes registered on the Record Date in
the name of the nominee of the Clearing  Agency  (initially,  such nominee to be
Cede & Co.),  payments  will be made by wire transfer in  immediately  available
funds to the account designated by such nominee.  Such checks shall be mailed to
the Person  entitled  thereto at the address of such Person as it appears on the
Note Register as of the applicable  Record Date without requiring that this Note
be submitted for notation of payment.  Any reduction in the principal  amount of
this Note (or any one or more  Predecessor  Notes) effected by any payments made
on any Payment Date shall be binding upon all future Holders of this Note and of
any Note issued upon the  registration  of transfer hereof or in exchange hereof
or in lieu  hereof,  whether or not noted  hereon.  If funds are  expected to be
available,  as  provided  in the  Indenture,  for  payment  in full of the  then
remaining  unpaid  principal  amount of this Note on a  Payment  Date,  then the
Trustee,  in the name of and on behalf of the Issuer, will notify the Person who
was the Holder  hereof as of the Record  Date  preceding  such  Payment  Date by
notice  mailed  prior to such  Payment  Date and the amount then due and payable
shall be  payable  only  upon  presentation  and  surrender  of this Note at the
Trustee's  principal  Corporate  Trust Office or at the office of the  Trustee's
agent appointed for such purposes located in Minneapolis, Minnesota.

         The Issuer  shall pay interest on overdue  installments  of interest at
the Class A-2 Interest Rate to the extent lawful.

         As provided  in the  Indenture,  the Notes may be redeemed  pursuant to
Section  10.1(a) of the Indenture,  in whole,  but not in part, at the option of
the Servicer (with the consent of the Note Insurer under certain circumstances),
on any Payment  Date on or after the date on which the Pool Balance is less than
or equal to 10% of the Original Pool Balance.

         As provided in the  Indenture  and subject to certain  limitations  set
forth therein,  the transfer of this Note may be registered on the Note Register
upon surrender of this Note for registration of transfer at the office or agency
designated  by the Issuer  pursuant to the  Indenture,  (i) duly endorsed by, or
accompanied  by a written  instrument  of transfer in form  satisfactory  to the
Trustee duly executed by, the Holder  hereof or his attorney duly  authorized in
writing,  with such signature guaranteed by an "eligible guarantor  institution"
meeting  the  requirements  of the Note  Registrar  which  requirements  include
membership or  participation  in Securities  Transfer Agents  Medallion  Program
("Stamp") or such other  "signature  guarantee  program" as may be determined by
the Note Registrar in addition









to, or in substitution  for, Stamp, all in accordance with the Exchange Act, and
(ii)  accompanied  by such other  documents  as the  Trustee  may  require,  and
thereupon  one or more new  Notes of  authorized  denominations  and in the same
aggregate  principal  amount  will be issued  to the  designated  transferee  or
transferees.  No service charge will be charged for any registration of transfer
or  exchange  of this Note,  but the  transferor  may be  required  to pay a sum
sufficient to cover any tax or other governmental  charge that may be imposed in
connection with any such registration of transfer or exchange.

         Each  Noteholder or Note Owner, by acceptance of a Note or, in the case
of a Note Owner,  a beneficial  interest in a Note  covenants and agrees that no
recourse may be taken,  directly or indirectly,  with respect to the obligations
of the  Issuer,  the  Owner  Trustee  or the  Trustee  on the Notes or under the
Indenture or any certificate or other writing delivered in connection therewith,
against (i) the Seller,  the Servicer,  the Depositor,  the Trustee or the Owner
Trustee in its individual  capacity,  (ii) any owner of a beneficial interest in
the Issuer or (iii) any partner, owner, beneficiary, agent, officer, director or
employee of the Seller,  the Servicer,  the Depositor,  the Trustee or the Owner
Trustee in its individual  capacity,  any holder of a beneficial interest in the
Issuer,  the Seller,  the  Servicer,  the  Depositor,  the Owner  Trustee or the
Trustee  or of  any  successor  or  assign  of the  Seller,  the  Servicer,  the
Depositor,  the Trustee or the Owner Trustee in its individual capacity,  except
as any such  Person  may have  expressly  agreed (it being  understood  that the
Trustee  and the Owner  Trustee  have no such  obligations  in their  individual
capacity) and except that any such partner,  owner or beneficiary shall be fully
liable,  to the extent provided by applicable law, for any unpaid  consideration
for stock, unpaid capital contribution or failure to pay any installment or call
owing to such entity.

         Each  Noteholder or Note Owner, by acceptance of a Note or, in the case
of a Note Owner,  a beneficial  interest in a Note  covenants and agrees that by
accepting the benefits of the  Indenture  that such  Noteholder  will not at any
time  institute  against the Depositor or the Issuer or join in any  institution
against  the  Depositor  or  the  Issuer  of,  any  bankruptcy,  reorganization,
arrangement,  insolvency or liquidation proceedings, or other proceedings, under
any United States Federal or state  bankruptcy or similar law in connection with
any obligations relating to the Notes, the Indenture or the Basic Documents.

         Prior to the due presentment for registration of transfer of this Note,
the Issuer,  the Trustee and the Note  Insurer and any agent of the Issuer,  the
Trustee or the Note  Insurer may treat the Person in whose name this Note (as of
the day of









determination  or as of such other date as may be specified in the Indenture) is
registered  as the owner  hereof for all  purposes,  whether or not this Note be
overdue,  and  neither  the  Issuer,  the  Trustee  nor any such agent  shall be
affected by notice to the contrary.

         The Indenture permits, with certain exceptions as therein provided, the
amendment  thereof and the  modification  of the rights and  obligations  of the
Issuer and the rights of the  Holders of the Notes  under the  Indenture  at any
time by the Issuer  with the  consent of the Note  Insurer and of the Holders of
Notes representing a majority of the Outstanding Amount of all Notes at the time
Outstanding.  The Indenture also contains  provisions  permitting the Holders of
Notes representing specified percentages of the Outstanding Amount of the Notes,
on behalf of the  Holders of all the Notes,  to waive  compliance  by the Issuer
with certain  provisions of the  Indenture  and certain past defaults  under the
Indenture  and their  consequences.  Any such consent or waiver by the Holder of
this Note (or any one or more Predecessor Notes) shall be conclusive and binding
upon such Holder and upon all future Holders of this Note and of any Note issued
upon the registration of transfer hereof or in exchange hereof or in lieu hereof
whether or not  notation of such  consent or waiver is made upon this Note.  The
Indenture  also  permits  the  Trustee  to  amend  or waive  certain  terms  and
conditions  set forth in the  Indenture  without  the  consent of Holders of the
Notes issued thereunder.

         The term  "Issuer" as used in this Note  includes any  successor to the
Issuer under the Indenture.

         The Issuer is permitted by the Indenture,  under certain circumstances,
to merge or consolidate, subject to the rights of the Trustee and the Holders of
Notes under the Indenture.

         The Notes are issuable  only in  registered  form in  denominations  as
provided in the Indenture, subject to certain limitations therein set forth.

         This Note and the Indenture  shall be construed in accordance  with the
laws  of the  State  of New  York,  without  reference  to its  conflict  of law
provisions,  and the obligations,  rights and remedies of the parties  hereunder
and thereunder shall be determined in accordance with such laws.

         No reference  herein to the  Indenture and no provision of this Note or
of the Indenture  shall alter or impair the  obligation of the Issuer,  which is
absolute and unconditional, to pay the principal of and interest on this Note at
the times, place, and rate, and in the coin or currency herein prescribed.










         Anything  herein to the contrary  notwithstanding,  except as expressly
provided in the Indenture or the Basic  Documents,  neither Owner Trustee in its
individual  capacity,  any owner of a beneficial interest in the Issuer, nor any
of  their  respective  partners,  beneficiaries,  agents,  officers,  directors,
employees or successors  or assigns  shall be  personally  liable for, nor shall
recourse be had to any of them for,  the payment of principal of or interest on,
or performance of, or omission to perform, any of the covenants,  obligations or
indemnifications  contained in this Note or the  Indenture,  it being  expressly
understood that said covenants,  obligations and indemnifications have been made
by the Owner Trustee for the sole purposes of binding the interests of the Owner
Trustee in the assets of the Issuer.  The Holder of this Note by the  acceptance
hereof  agrees that except as expressly  provided in the  Indenture or the Basic
Documents,  in the case of an Event of Default under the  Indenture,  the Holder
shall have no claim  against any of the foregoing  for any  deficiency,  loss or
claim therefrom; provided, however, that nothing contained herein shall be taken
to prevent  recourse to, and enforcement  against,  the assets of the Issuer for
any and all liabilities, obligations and undertakings contained in the Indenture
or in this Note.












                                   ASSIGNMENT

Social Security or taxpayer I.D. or other identifying number of assignee

         FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto________________________________________________
    (name and address of assignee)

the within Note and all rights thereunder,  and hereby  irrevocably  constitutes
and appoints, attorney, to transfer said Note on the books kept for registration
thereof, with full power of substitution in the premises.


Dated:                         __________________________________(2)
                               Signature Guaranteed:



_____________________          __________________________________










- -------
(2) NOTE: The signature to this assignment must correspond with the name of
    the  registered  owner as it appears on the face of the within  Note in
    every  particular,  without  alteration,   enlargement  or  any  change
    whatsoever.










                                                                      EXHIBIT B


                          Form of Depository Agreement



                               See Following Page








                                                                   Exhibit 10.7


                                                                 EXECUTION COPY



- --------------------------------------------------------------------------------



                               SALE AND SERVICING

                                    AGREEMENT

                                      among

                      CPS AUTO RECEIVABLES TRUST 1997-4, as
                                     Issuer,

                            CPS RECEIVABLES CORP., as
                                     Seller,

                      CONSUMER PORTFOLIO SERVICES, INC., as
                                    Servicer

                                       and

                NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION, as
                          Standby Servicer and Trustee

                           Dated as of October 1, 1997


- --------------------------------------------------------------------------------








         SALE AND  SERVICING  AGREEMENT  dated as of October 1, 1997,  among CPS
AUTO  RECEIVABLES  TRUST 1997-4, a Delaware  business trust (the "Issuer"),  CPS
RECEIVABLES CORP., a California  corporation (the "Seller"),  CONSUMER PORTFOLIO
SERVICES,  INC., a California  corporation  (the  "Servicer"),  and NORWEST BANK
MINNESOTA, NATIONAL ASSOCIATION, a national banking association, in its capacity
as Standby Servicer and Trustee.

         WHEREAS  the Issuer  desires to  purchase a  portfolio  of  receivables
arising in  connection  with motor vehicle  retail  installment  sale  contracts
acquired by Consumer Portfolio Services,  Inc. or Samco Acceptance Corp. through
motor vehicle dealers and independent finance companies;  WHEREAS the Seller has
purchased such  receivables  from Consumer  Portfolio  Services,  Inc. and Samco
Acceptance Corp. and is willing to sell such receivables to the Issuer;  WHEREAS
the  Servicer is willing to service all such  receivables;  NOW,  THEREFORE,  in
consideration  of the premises and the mutual covenants  herein  contained,  the
parties hereto agree as follows:

                                    ARTICLE I

                                   DEFINITIONS

         SECTION  1.1.  Definitions.   Whenever  used  in  this  Agreement,  the
following  words and phrases  shall have the following  meanings:  "Accountants'
Report"  means  the  report  of a  firm  of  nationally  recognized  independent
accountants described in Section 4.11.  "Administrative  Receivable" means, with
respect to any Collection Period, a Receivable which the Servicer is required to
purchase  pursuant  to  Section  4.7 with  respect  to such  Collection  Period.
"Affiliate" of any Person means any Person who directly or indirectly  controls,
is  controlled  by, or is under  direct or  indirect  common  control  with such
Person.  For  purposes of this  definition,  the term  "control"  when used with
respect to any 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",  "controlled
by" and "under common control with" have meanings correlative to the foregoing.







         "Aggregate  Principal  Balance"  means,  with  respect  to any  date of
determination, the sum of the Principal Balances for all Receivables (other than
(i) any Receivable that became a Liquidated  Receivable  prior to the end of the
related  Collection  Period  and (ii) any  Receivable  that  became a  Purchased
Receivable prior to the end of the related  Collection Period) as of the date of
determination.

         "Agreement" means this Sale and Servicing Agreement, as the same may be
amended and supplemented from time to time.

         "Amount  Financed" means,  with respect to a Receivable,  the aggregate
amount advanced under such Receivable  toward the purchase price of the Financed
Vehicle  and any  related  costs,  including  amounts  advanced  in  respect  of
accessories,  insurance premiums,  service and warranty  contracts,  other items
customarily financed as part of retail automobile  installment sale contracts or
promissory notes, and related costs.

         "Annual  Percentage  Rate" or "APR" of a  Receivable  means the  annual
percentage rate of finance charges or service charges,  as stated in the related
Contract.

         "Assumption Date" shall have the meaning specified in Section 10.3(a).

         "Bank of America" means Bank oIf America Trust and Savings  Association
and its successors.

         "Basic  Documents" means this Agreement,  the Certificate of Trust, the
Trust  Agreement,  the  Indenture,  each Purchase  Agreement,  the Master Spread
Account Agreement,  the Spread Account Supplement the Insurance  Agreement,  the
Indemnification  Agreement,  and other documents and  certificates  delivered in
connection therewith.

         "Business  Day" means any day other than a Saturday,  a Sunday or a day
on which banking  institutions  in the City of New York,  the State in which the
Corporate Trust Office is located,  the State in which the executive  offices of
the Servicer are located and the State in which the principal  place of business
of the  Note  Insurer  is  located  shall be  authorized  or  obligated  by law,
executive order, or governmental decree to be closed.

         "Certificate"  has  the  meaning  assigned  to such  term in the  Trust
Agreement.

         "Certificate  Balance"  has the  meaning  assigned  to such term in the
Trust Agreement.


                                       -2-





         "Certificate  Deficiency"  shall have the meaning assigned to such term
in Section 5.5(c).

         "Certificate  Pool  Factor" as of the close of  business on any Payment
Date means a  seven-digit  decimal  figure  equal to the  outstanding  principal
amount of the Certificates divided by the original outstanding  principal amount
of the Certificates.

         "Certificateholder"  has the meaning assigned to such term in the Trust
Agreement.

         "Certificateholders'  Interest Carryover Shortfall" means, with respect
to  any  Payment   Date,   the  excess  of  the   Certificateholders'   Interest
Distributable  Amount for the  preceding  Payment  Date over the amount that was
actually  deposited in the  Certificate  Distribution  Account on such preceding
Payment  Date  on  account  of the  Certificateholders'  Interest  Distributable
Amount,   plus  interest  on  the  amount  of  interest  due  but  not  paid  to
Certificateholders  on the preceding  Payment  Date, to the extent  permitted by
law, at the Pass-Through  Rate from such preceding Payment Date to but excluding
the current Payment Date.

         "Certificateholders' Interest Distributable Amount" means, with respect
to any  Payment  Date,  the sum of  theI  Certificateholders'  Monthly  Interest
Distributable Amount for such Payment Date and the Certificateholders'  Interest
Carryover Shortfall for such Payment Date.

         "Certificateholders'  Monthly Interest Distributable Amount" means, (a)
for  the  first  Payment  Date,  an  amount  equal  to the  product  of (i)  the
Pass-Through  Rate, (ii) the initial  principal  balance of the Certificates and
(iii) a fraction,  the  numerator of which is the actual  number of days elapsed
from and including  the Closing Date to but  excluding  such first Payment Date,
and the denominator of which is 360 and (b) for any Payment Date after the first
Payment  Date,  an  amount  equal  to  the  product  of (i)  one-twelfth  of the
Pass-Through  Rate and (ii) the principal  balance of the Certificates as of the
close of the preceding Payment Date (after giving effect to all distributions on
account of principal on such preceding Payment Date).

         "Certificateholders'  Monthly  Principal  Distributable  Amount" means,
with respect to any Payment  Date,  the  Certificateholders'  Percentage  of the
Principal Distributable Amount.

         "Certificateholders'  Percentage" will (a) on any Payment Date prior to
the Payment Date on which the principal amount of the Class A-2 Notes is reduced
to zero, be 5.0%,  (b) on the Payment Date on which the principal  amount of the
Class A-2 Notes

                                       -3-





is reduced to zero and each Payment Date thereafter  until the principal  amount
of the Certificates is reduced to zero, be 100%.

         "Certificateholders' Principal Carryover Shortfall" means, with respect
to  any  Payment  Date,   the  excess  of  the   Certificateholders'   Principal
Distributable  Amount for the  preceding  Payment  Date over the amount that was
actually  deposited in the  Certificate  Distribution  Account on such preceding
Payment  Date on  account  of the  Certificateholders'  Principal  Distributable
Amount.

         "Certificateholders'   Principal   Distributable  Amount"  means,  with
respect to any Payment Date,  (other than the Final Scheduled Payment Date), the
sum of the  Certificateholders'  Monthly Principal Distributable Amount for such
Payment Date and the Certificateholders'  Principal Carryover Shortfall for such
Payment Date.  The  Certificateholders'  Principal  Distributable  Amount of the
Final Scheduled Payment Date will equal the outstanding  principal amount of the
Certificates.

         "Class" means the Class A-1 Notes or the Class A-2 Notes as the context
requires.

         "Class  A  Noteholders'  Interest  Distributable  Amount"  means,  with
respect to any Payment Date, the sum of (i) the Class A-1 Noteholders'  Interest
Distributable Amount and (ii) the Class A- 2 Noteholders' Interest Distributable
Amount.

         "Class A Noteholders'  Monthly Principal  Distributable  Amount" means,
with respect to any Payment  Date,  the Class A  Noteholders'  Percentage of the
Principal Distributable Amount.

         "Class A  Noteholders'  Percentage"  will (a) on any Payment Date on or
prior to the Target  Payment  Date,  be 95%,  (b) on any Payment  Date after the
Target Payment Date but prior to the Payment Date on which the principal  amount
of the Class A-2 Notes is reduced to zero,  be 91%,  (c) on the Payment  Date on
which the principal amount of the Class A-2 Notes is reduced to zero by applying
clause (b) above, be the percentage  equivalent of a fraction,  the numerator of
which is the principal amount of the Class A-2 Notes  immediately  prior to such
Payment Date, and the  denominator  of which is the sum of the then  outstanding
principal  amount of the Notes and the Certificates and (d) on any other Payment
Date, be 0%.

         "Class  A  Noteholders'  Principal  Carryover  Shortfall"  means,  with
respect to any Payment Date,  the excess of the Class A  Noteholders'  Principal
Distributable  Amount for the  preceding  Payment  Date over the amount that was
actually  deposited  in the Note  Distribution  Account on such  Payment Date on
account of the Class A Noteholders' Principal Distributable Amount.

                                       -4-





         "Class A  Noteholders'  Principal  Distributable  Amount"  means,  with
respect to any Payment Date,  (other than the Final  Scheduled  Payment Date for
any  Class  of  Class A  Notes),  the sum of the  Class A  Noteholders'  Monthly
Principal  Distributable  Amount  for such  Payment  Date  and the  Noteholders'
Principal  Carryover  Shortfall for such Payment Date.  The Class A Noteholders'
Principal Distributable Amount on the Final Scheduled Payment Date for any Class
of Class A Notes will equal the  outstanding  principal  amount of such Class of
Class A Notes.

         "Class A Notes" means the Class A-1 Notes and the Class A-2 Notes.

         "Class A Target  Amount"  means,  with respect to any Payment  Date, an
amount equal to 90% of the Aggregate  Principal Balance of the Receivables as of
such  Payment  Date after  giving  effect to all  payments of  principal  on the
Receivables received during the related Collection Period.

         "Class A-1 Interest Rate" means 6.07% per annum.

         "Class A-1  Noteholders'  Interest  Carryover  Shortfall"  means,  with
respect to any Payment Date, the excess of the Class A-1  Noteholders'  Interest
Distributable  Amount for the  preceding  Payment  Date over the amount that was
actually  deposited in the Note  Distribution  Account on such preceding Payment
Date on account of the Class A-1  Noteholders'  Interest  Distributable  Amount,
plus  interest  on the  amount  of  interest  due but  not  paid  to  Class  A-1
Noteholders  on the preceding  Payment Date, to the extent  permitted by law, at
the Class A-1 Interest  Rate from such  preceding  Payment Date to but excluding
the current Payment Date.

         "Class A-1  Noteholders'  Interest  Distributable  Amount" means,  with
respect  to any  Payment  Date,  the sum of the Class A-1  Noteholders'  Monthly
Interest   Distributable  Amount  for  such  Payment  Date  and  the  Class  A-1
Noteholders' Interest Carryover
Shortfall for such Payment Date.

         "Class A-1 Noteholders' Monthly Interest  Distributable  Amount" means,
(a) for the first  Payment Date, an amount equal to the product of (i) the Class
A-1 Interest Rate, (ii) the initial principal balance of the Class A-1 Notes and
(iii) a fraction,  the  numerator of which is the actual  number of days elapsed
from and including  the Closing Date to but  excluding  such first Payment Date,
and the denominator of which is 360 and (b) for any Payment Date after the first
Payment Date, an amount equal to the product of (i) one-twelfth of the Class A-1
Interest  Rate and (ii) the  principal  balance of the Class A-1 Notes as of the
close of the preceding Payment Date (after giving effect to all distributions on
account of principal on such preceding Payment Date).

                                       -5-





         "Class  A-1  Notes"  has  the  meaning  assigned  to  such  term in the
Indenture.

         "Class A-2 Interest Rate" means 6.30% per annum.

         "Class A-2  Noteholders'  Interest  Carryover  Shortfall"  means,  with
respect to any Payment Date, the excess of the Class A-2  Noteholders'  Interest
Distributable  Amount for the  preceding  Payment  Date over the amount that was
actually  deposited in the Note  Distribution  Account on such preceding Payment
Date on account of the Class A-2  Noteholders'  Interest  Distributable  Amount,
plus  interest  on the  amount  of  interest  due but  not  paid  to  Class  A-2
Noteholders  on the preceding  Payment Date, to the extent  permitted by law, at
the Class A-2 Interest  Rate from such  preceding  Payment Date to but excluding
the current Payment Date.

         "Class A-2  Noteholders'  Interest  Distributable  Amount" means,  with
respect  to any  Payment  Date,  the sum of the Class A-2  Noteholders'  Monthly
Interest   Distributable  Amount  for  such  Payment  Date  and  the  Class  A-2
Noteholders' Interest Carryover
Shortfall for such Payment Date.

         "Class A-2 Noteholders' Monthly Interest  Distributable  Amount" means,
(a) for the first  Payment Date, an amount equal to the product of (i) the Class
A-2 Interest Rate, (ii) the initial principal balance of the Class A-2 Notes and
(iii) a fraction,  the  numerator of which is the actual  number of days elapsed
from and including  the Closing Date to but  excluding  such first Payment Date,
and the denominator of which is 360 and (b) for any Payment Date after the first
Payment Date, an amount equal to the product of (i) one-twelfth of the Class A-2
Interest  Rate and (ii) the  principal  balance of the Class A-2 Notes as of the
close of the preceding Payment Date (after giving effect to all distributions on
account of principal on such preceding Payment Date).

         "Class  A-2  Notes"  has  the  meaning  assigned  to  such  term in the
Indenture.

         "Closing Date" means October 17, 1997.

         "Code" shall have the meaning specified in Section 3.2.

         "Collateral Agent" means Norwest Bank Minnesota,  National Association,
in its capacity as Collateral Agent under the Master Spread Account Agreement.

         "Collateral Agent Fee" means the fee payable to the Collateral Agent on
each Payment Date in an amount equal to  one-twelfth  of 0.01% of the  aggregate
outstanding  principal  amount of the  Securities  on the last day of the second
preceding Collection

                                       -6-





Period;  provided,  however, that on the first Payment Date the Collateral Agent
will be entitled to receive an amount equal to the product of (i) the percentage
equivalent  of a fraction  the  numerator  of which is the number  days from the
Closing Date to but  excluding  the first  Payment Date and the  denominator  of
which is 360, (ii) 0.01% and (iii) the aggregate outstanding principal amount of
the Securities as of the Closing Date.

         "Collection Account" means the account designated as such,  established
and maintained pursuant to Section 5.1.

         "Collection  Period" means, with respect to the first Payment Date, the
period  beginning on the close of business on the Initial Cutoff Date and ending
on the close of business on October 31, 1997.  With  respect to each  subsequent
Payment Date, the preceding  calendar month.  Any amount stated "as of the close
of business  of the last day of a  Collection  Period"  shall give effect to the
following  calculations as determined as of the end of the day on such last day:
(i) all applications of collections, and (ii) all distributions.

         "Confidential  Information"  means,  in  relation  to any  Person,  any
written  information  delivered or made  available by or on behalf of CPS or the
Seller to such Person in  connection  with or pursuant to this  Agreement or the
transactions  contemplated  hereby  which is  proprietary  in nature and clearly
marked or identified as being confidential  information,  other than information
(i) which was publicly known, or otherwise known to such Person,  at the time of
disclosure  (except  pursuant to disclosure in connection with this  Agreement),
(ii) which  subsequently  becomes  publicly  known through no act or omission by
such Person,  or (iii) which  otherwise  becomes known to such Person other than
through disclosure by CPS or the Seller.

         "Contract" means a motor vehicle retail installment sale contract.

         "Controlling   Party"  shall  be  determined  in  accordance  with  the
provisions of Section 13.15.

         "Corporate  Trust Office" means (i) with respect to the Owner  Trustee,
the principal corporate trust office of the Owner Trustee,  which at the time of
execution of this agreement is 1011 Centre Road, Suite 200, Wilmington, Delaware
19805-1266  with a copy to Bankers Trust Company,  4 Albany Street,  10th Floor,
New York, New York 10006, Attention:  Corporate Trust and Agency Group, and (ii)
with respect to the Trustee and the Collateral  Agent,  the principal  corporate
trust office of the Trustee, which at the time of execution of this agreement is
Sixth Street and Marquette Avenue, Minneapolis, Minnesota 55479-0070.


                                       -7-





         "CPS" means Consumer Portfolio Services,  Inc. a California corporation
and its successors.

         "CPS  Purchase  Agreement"  means the  Purchase  Agreement  dated as of
October 1, 1997 by and  between  the Seller and CPS,  as such  agreement  may be
amended, supplemented or otherwise modified from time to time in accordance with
the terms thereof, relating to the purchase of the CPS Receivables by the Seller
from CPS.

         "CPS Receivables" means a Receivable purchased by the Seller
from CPS.

         "Cram Down Loss"  means,  with respect to a  Receivable,  if a court of
appropriate  jurisdiction in an insolvency proceeding shall have issued an order
reducing the amount owed on a Receivable or otherwise modifying or restructuring
Scheduled Payments to be made on a Receivable, an amount equal to such reduction
in  Principal  Balance of such  Receivable  or the  reduction in the net present
value (using as the discount  rate the lower of the contract rate or the rate of
interest  specified by the court in such order) of the Scheduled  Payments as so
modified or restructured. A "Cram Down Loss" shall be deemed to have occurred on
the date such order is entered.

         "Cutoff Date" means October 9, 1997.

         "Dealer" means, with respect to a Receivable, the seller of the related
Financed  Vehicle,  who originated  and assigned such  Receivable to CPS, who in
turn sold such Receivable to the Seller.

         "Deficiency  Claim  Amount" shall have the meaning set forth in Section
5.5(a).

         "Deficiency  Claim Date" means,  with respect to any Payment Date,  the
fourth Business Day immediately preceding such Payment Date.

         "Deficiency Notice" shall have the meaning set forth in Section 5.5(a).

         "Delegation Notice" shall have the meaning specified in Section 9.5.

         "Delivery" means, when used with respect to Trust Account Property:

         (i) the  perfection  and priority of a security  interest in such Trust
Account  Property  which is  governed  by the law of a  jurisdiction  which  has
adopted the 1978 Revision to Article 8 of the UCC:

                                       -8-





                  a) with  respect to bankers'  acceptances,  commercial  paper,
         negotiable   certificates  of  deposit  and  other   obligations   that
         constitute "instruments" within the meaning of Section 9-105 (1) (i) of
         the UCC and are susceptible of physical  delivery,  transfer thereof to
         the Trustee or its  nominee or  custodian  by physical  delivery to the
         Trustee or its nominee or custodian  endorsed to, or  registered in the
         name of, the Trustee or its nominee or  custodian or endorsed in blank,
         and,  with  respect to a  certificated  security (as defined in Section
         8-102  of  the  UCC),   transfer   thereof  (1)  by  delivery  of  such
         certificated  security  endorsed to, or  registered in the name of, the
         Trustee or its nominee or custodian or endorsed in blank to a financial
         intermediary (as defined in Section 8-313 of the UCC) and the making by
         such  financial  intermediary  of  entries  on its  books  and  records
         identifying such certificated securities as belonging to the Trustee or
         its nominee or custodian and the sending by such financial intermediary
         of a confirmation of the purchase of such certificated  security by the
         Trustee or its nominee or  custodian,  or (2) by delivery  thereof to a
         "clearing corporation" (as defined in Section 8-102 (3) of the UCC) and
         the making by such clearing  corporation of appropriate  entries on its
         books reducing the appropriate securities account of the transferor and
         increasing   the   appropriate   securities   account  of  a  financial
         intermediary  by  the  amount  of  such  certificated   security,   the
         identification   by  the  clearing   corporation  of  the  certificated
         securities  for  the  sole  and  exclusive  account  of  the  financial
         intermediary,  the maintenance of such certificated  securities by such
         clearing  corporation  or a  "custodian  bank" (as  defined  in Section
         8-102(4) of the UCC) or the nominee of either  subject to the  clearing
         corporation's  exclusive control,  the sending of a confirmation by the
         financial intermediary of the purchase by the Trustee or its nominee or
         custodian  of  such   securities  and  the  making  by  such  financial
         intermediary  of  entries  on its books and  records  identifying  such
         certificated  securities  as belonging to the Trustee or its nominee or
         custodian  (all of the  foregoing,  "Physical  Property"),  and, in any
         event,  any such Physical  Property in registered  form shall be in the
         name of the Trustee or its nominee or custodian; and such additional or
         alternative  procedures as may hereafter  become  appropriate to effect
         the complete  transfer of ownership of any such Trust Account  Property
         to the Trustee or its nominee or custodian,  consistent with changes in
         applicable law or regulations or the interpretation thereof;

                  b) with respect to any security  issued by the U.S.  Treasury,
         the Federal Home Loan Mortgage  Corporation or by the Federal  National
         Mortgage  Association  that is a book-entry  security  held through the
         Federal Reserve System pursuant to Federal book-entry regulations,  the
         following procedures,  all in accordance with applicable law, including
         applicable  Federal  regulations  and  Articles  8  and 9 of  the  UCC:
         book-entry   registration   of  such  Trust  Account   Property  to  an
         appropriate  book-entry  account maintained with a Federal Reserve Bank
         by a financial  intermediary  which is also a "depository"  pursuant to
         applicable   Federal   regulations   and  issuance  by  such  financial
         intermediary of a deposit advice or other written  confirmation of such
         book-entry  registration  to the Trustee or its nominee or custodian of
         the  purchase  by the  Trustee  or its  nominee  or  custodian  of such
         book-entry  securities;  the making by such financial  intermediary  of
         entries in its books and records  identifying such book-entry  security
         held through the Federal Reserve System pursuant to Federal  book-entry
         regulations as belonging to the Trustee or its nominee or custodian and
         indicating that such custodian holds such Trust Account Property solely
         as  agent  for the  Trustee  or its  nominee  or  custodian;  and  such
         additional  or   alternative   procedures   as  may  hereafter   become
         appropriate to effect complete  transfer of ownership of any such Trust
         Account Property to the Trustee or its nominee or custodian, consistent
         with changes in applicable  law or  regulations  or the  interpretation
         thereof; and

                  c) with respect to any item of Trust Account  Property that is
         an  uncertificated  security under Article 8 of the UCC and that is not
         governed by clause (b) above,  registration on the books and records of
         the  issuer  thereof  in the name of the  financial  intermediary,  the
         sending of a confirmation by the financial intermediary of the purchase
         by the  Trustee or its  nominee  or  custodian  of such  uncertificated
         security,  the making by such financial  intermediary of entries on its
         books and  records  identifying  such  uncertificated  certificates  as
         belonging to the Trustee or its nominee or custodian; or

         (ii) the perfection  and priority of a security  interest in such Trust
Account  Property  which is  governed  by the law of a  jurisdiction  which  has
adopted the 1994 Revision to Article 8 of the UCC:

                  a) with  respect to bankers'  acceptances,  commercial  paper,
         negotiable   certificates  of  deposit  and  other   obligations   that
         constitute  "instruments"  within the meaning of Section 9-105(1)(i) of
         the UCC (other than  certificated  securities)  and are  susceptible of
         physical delivery, transfer thereof to the Trustee by physical delivery
         to the Trustee,  indorsed to, or registered in the name of, the Trustee
         or its nominee or indorsed in blank and such

                                       -9-





         additional  or   alternative   procedures   as  may  hereafter   become
         appropriate  to effect the  complete  transfer of ownership of any such
         Trust  Property  to the Trustee  free and clear of any adverse  claims,
         consistent  with  changes  in  applicable  law  or  regulations  or the
         interpretation thereof;

                  b) with respect to a  "certificated  security"  (as defined in
         Section 8-102(a)(4) of the UCC), transfer thereof:

                           (1)  by  physical   delivery  of  such   certificated
                  security to the  Trustee,  provided  that if the  certificated
                  security is in  registered  form,  it shall be indorsed to, or
                  registered in the name of, the Trustee or indorsed in blank;

                           (2)  by  physical   delivery  of  such   certificated
                  security in registered form to a "securities intermediary" (as
                  defined in Section  8-102(a)(14)  of the UCC) acting on behalf
                  of the Trustee if the certificated security has been specially
                  endorsed to the Trustee by an effective endorsement.

                  c) with respect to any security  issued by the U.S.  Treasury,
         the Federal Home Loan Mortgage  Corporation or by the Federal  National
         Mortgage  Association  that is a book-entry  security  held through the
         Federal Reserve System pursuant to Federal book entry regulations,  the
         following procedures,  all in accordance with applicable law, including
         applicable  federal  regulations  and  Articles  8  and 9 of  the  UCC:
         book-entry  registration of such property to an appropriate  book-entry
         account  maintained  with  a  Federal  Reserve  Bank  by  a  securities
         intermediary  which  is  also a  "depositary"  pursuant  to  applicable
         federal  regulations and issuance by such securities  intermediary of a
         deposit  advice  or  other  written  confirmation  of  such  book-entry
         registration   to  the  Trustee  of  the  purchase  by  the  securities
         intermediary on behalf of the Trustee of such book-entry security;  the
         making by such  securities  intermediary  of  entries  in its books and
         records  identifying such book-entry  security held through the Federal
         Reserve System pursuant to Federal book-entry  regulations as belonging
         to the Trustee and indicating that such securities  intermediary  holds
         such  book-entry  security  solely as agent for the  Trustee;  and such
         additional  or   alternative   procedures   as  may  hereafter   become
         appropriate to effect complete  transfer of ownership of any such Trust
         Property to the Trustee  free of any adverse  claims,  consistent  with
         changes in applicable law or regulations or the interpretation thereof;


                                      -10-





                  d) with  respect  to any  item of  Trust  Property  that is an
         "uncertificated  security"  (as defined in Section 8- 102(a)(18) of the
         UCC) and that is not governed by clause (c) above, transfer thereof:

                           (1)(A)  by   registration   to  the  Trustee  as  the
                  registered  owner  thereof,  on the books and  records  of the
                  issuer thereof.

                              (B)  by   another   Person   (not   a   securities
                  intermediary)  either  becomes  the  registered  owner  of the
                  uncertificated  security on behalf of the  Trustee,  or having
                  become the registered owner acknowledges that it holds for the
                  Trustee.

                           (2) the issuer thereof has agreed that it will comply
                  with  instructions  originated by the Trustee  without further
                  consent of the registered owner thereof.

                  e) with  respect to a  "security  entitlement"  (as defined in
         Section 8-102(a)(17) of the UCC)

                           (1) if a  securities  intermediary  (A)  indicates by
                  book entry  that a  "financial  asset" (as  defined in Section
                  8-102(a)(9)  of the UCC) has been  credited  to the  Trustee's
                  "securities  account"  (as defined in Section  8-501(a) of the
                  UCC), (B) receives a financial  asset (as so defined) from the
                  Trustee or acquires a financial asset for the Trustee,  and in
                  either case, accepts it for credit to the Trustee's securities
                  account (as so  defined),  (C) becomes  obligated  under other
                  law,  regulation  or rule to credit a  financial  asset to the
                  Trustee's  securities  account, or (D) has agreed that it will
                  comply  with  "entitlement  orders"  (as  defined  in  Section
                  8-102(a)(8)  of the UCC)  originated  by the  Trustee  without
                  further  consent by the  "entitlement  holder"  (as defined in
                  Section 8- 102(a)(7)  of the UCC),  of a  confirmation  of the
                  purchase  and the making by such  securities  intermediary  of
                  entries on its books and records  identifying  as belonging to
                  the  Trustee of (I) a specific  certificated  security  in the
                  securities  intermediary's  possession,  (II)  a  quantity  of
                  securities  that  constitute or are part of a fungible bulk of
                  certificated  securities  in  the  securities   intermediary's
                  possession,  or (III) a quantity of securities that constitute
                  or are  part of a  fungible  bulk of  securities  shown on the
                  account of the securities intermediary on the books of another
                  securities intermediary.


                                      -11-





                  f) in each case of delivery contemplated pursuant to clause(a)
         through  (e)  of  subsection  (ii)  hereof,   the  Trustee  shall  make
         appropriate  notations on its  records,  and shall cause the same to be
         made  on the  records  of its  nominees,  indicating  that  such  Trust
         Property which  constitutes a security is held in trust pursuant to and
         as provided in this Agreement.

         "Depositor"  shall mean the Seller in its capacity as  Depositor  under
the Trust Agreement.

         "Determination  Date" means the earlier of (i) the seventh Business Day
of each  calendar  month and (ii) the fifth  Business Day  preceding the related
Payment Date.

         "Draw Date" means with respect to any Payment Date,  the third Business
Day immediately preceding such Payment Date.

         "Eligible  Account"  means  (i) a  segregated  trust  account  that  is
maintained with a depository institution acceptable to the Note Insurer (so long
as an Insurer  Default  shall not have  occurred and be  continuing),  or (ii) a
segregated  direct deposit account  maintained with a depository  institution or
trust company  organized under the laws of the United States of America,  or any
of the States  thereof,  or the District of Columbia,  having a  certificate  of
deposit,  short-term  deposit or  commercial  paper  rating of at least "A-1" by
Standard & Poor's and "P-1" by Moody's and (so long as an Insurer  Default shall
not have occurred and be continuing) acceptable to the Note Insurer.

         "Eligible   Investments"   mean   book-entry   securities,   negotiable
instruments  or securities  represented  by  instruments in bearer or registered
form which evidence:

         (a) direct  obligations of, and obligations  fully guaranteed as to the
full and timely payment by, the United States of America;

         (b) demand  deposits,  time deposits or  certificates of deposit of any
depository  institution  or trust  company  incorporated  under  the laws of the
United  States of  America or any State  thereof  (or any  domestic  branch of a
foreign bank) and subject to  supervision  and  examination  by Federal or State
banking or depository institution  authorities;  provided,  however, that at the
time  of the  investment  or  contractual  commitment  to  invest  therein,  the
commercial paper or other short-term unsecured debt obligations (other than such
obligations  the rating of which is based on the  credit of a Person  other than
such depository  institution or trust company)  thereof shall be rated "A-1+" by
Standard & Poor's and "P-1" by Moody's;


                                      -12-





         (c) commercial paper that, at the time of the investment or contractual
commitment to invest therein,  is rated "A-1+" by Standard & Poor's and "P-1" by
Moody's;

         (d) bankers' acceptances issued by any depository  institution or trust
company referred to in clause (b) above;

         (e)  repurchase  obligations  with  respect to any  security  that is a
direct  obligation of, or fully guaranteed as to the full and timely payment by,
the  United  States of  America or any  agency or  instrumentality  thereof  the
obligations  of which are  backed by the full  faith  and  credit of the  United
States of America, in either case entered into with (i) a depository institution
or trust  company  (acting  as  principal)  described  in  clause  (b) or (ii) a
depository  institution or trust company whose  commercial  paper or other short
term unsecured debt  obligations are rated "A-1+" by Standard & Poor's and "P-1"
by Moody's and long term unsecured debt  obligations are rated "AAA" by Standard
& Poor's and "Aaa" by Moody's;

         (f) with the prior written  consent of the Note  Insurer,  money market
mutual funds  registered  under the Investment  Company Act of 1940, as amended,
having  a  rating,  at the  time of such  investment,  from  each of the  Rating
Agencies in the highest investment category granted thereby; and

         (g) any other  investment as may be acceptable to the Note Insurer,  as
evidenced by a writing to that effect,  as may from time to time be confirmed in
writing to the Trustee by the Note Insurer.

         Any of the  foregoing  Eligible  Investments  may  be  purchased  by or
through the Owner Trustee or the Trustee or any of their respective Affiliates.

         "ERISA" shall have the meaning specified in Section 3.2.

         "FDIC" means the Federal Deposit Insurance Corporation.

         "Final  Scheduled  Payment  Date" means,  with respect to each Class of
Notes and the Certificates, the March 2003 Payment Date.

         "Financed Vehicle" means a new or used automobile,  light truck, van or
minivan,   together  with  all   accessions   thereto,   securing  an  Obligor's
indebtedness under a Receivable.

         "Indenture"  means the Indenture  dated as of October 1, 1997,  between
the Issuer and Norwest Bank Minnesota,  National Association, as Trustee, as the
same may be amended and supplemented from time to time.


                                      -13-





         "Insolvency  Event" means, with respect to a specified Person,  (a) the
filing of a petition  against  such Person or the entry of a decree or order for
relief by a court having  jurisdiction in the premises in respect of such Person
or any  substantial  part of its  property  in an  involuntary  case  under  any
applicable  federal or state bankruptcy,  insolvency or other similar law now or
hereafter in effect, or appointing a receiver, liquidator,  assignee, custodian,
trustee, sequestrator or similar official for such Person or for any substantial
part of its property, or ordering the winding-up or liquidation or such Person's
affairs, and such petition,  decree or order shall remain unstayed and in effect
for a period of 60 consecutive days; or (b) the commencement by such Person of a
voluntary case under any applicable  federal or state bankruptcy,  insolvency or
other  similar law now or hereafter in effect,  or the consent by such Person to
the entry of an order for relief in an  involuntary  case under any such law, or
the  consent by such Person to the  appointment  of or taking  possession  by, a
receiver,  liquidator,  assignee, custodian,  trustee,  sequestrator, or similar
official for such Person or for any  substantial  part of its  property,  or the
making by such Person of any general assignment for the benefit of creditors, or
the failure by such Person  generally to pay its debts as such debts become due,
or the taking of action by such Person in furtherance of any of the foregoing.

         "Insurance Agreement" means the Insurance and Indemnity Agreement among
the Trust, CPS, the Seller,  and the Note Insurer,  dated as of October 1, 1997,
as such agreement may be amended,  supplemented or otherwise  modified from time
to time in accordance with the terms thereof.

         "Insurance  Agreement  Event of Default" means an "Event of Default" as
defined in the Insurance Agreement.

         "Insurance  Policy" means, with respect to a Receivable,  any insurance
policy  (including  the  insurance  policies  described  in Section  4.4 hereof)
benefiting  the holder of the  Receivable  providing  loss or  physical  damage,
credit life, credit disability,  theft, mechanical breakdown or similar coverage
with respect to the Financed Vehicle or the Obligor.

         "Insurer Default" shall mean any one of the following events shall have
occurred and be continuing:

                  (i) the Note Insurer  fails to make a payment  required  under
         the Policy in accordance with its terms;

                  (ii) the Note Insurer (A) files any petition or commences  any
         case or proceeding  under any provision or chapter of the United States
         Bankruptcy  Code, the New York  Department of Insurance Code or similar
         Federal or State law

                                      -14-





         relating to  insolvency,  bankruptcy,  rehabilitation,  liquidation  or
         reorganization,  (B) makes a general  assignment for the benefit of its
         creditors or (C) has an order for relief  entered  against it under the
         United States Bankruptcy Code or any other similar Federal or State law
         relating to  insolvency,  bankruptcy,  rehabilitation,  liquidation  or
         reorganization which is final and nonappealable; or

                  (iii)  a  court  of  competent  jurisdiction,   the  New  York
         Department of Insurance or other competent  regulatory authority enters
         a final and  nonappealable  order,  judgment or decree (A) appointing a
         custodian,  trustee,  agent or receiver for the Note Insurer or for all
         or any material  portion of its property or (B)  authorizing the taking
         of  possession by a custodian,  trustee,  agent or receiver of the Note
         Insurer (or the taking of possession of all or any material  portion of
         the property of the Note Insurer).

         "Interest  Period" means,  with respect to any Payment Date, the period
from and  including  the Closing Date (in the case of the first Payment Date) or
from and including the most recent  Payment Date on which interest has been paid
to but excluding such Payment Date.

         "Interest  Rate"  means the Class  A-1  Interest  Rate or the Class A-2
Interest Rate, as applicable.

         "Investment Earnings" means, with respect to any Payment Date and Trust
Account,  the investment earnings on amounts on deposit in such Trust Account on
such Payment Date.

         "Issuer" means CPS Auto Receivables Trust 1997-4.

         "Lien" means a security  interest,  lien,  charge,  pledge,  equity, or
encumbrance of any kind,  other than tax liens,  mechanics'  liens and any liens
that attach to the respective Receivable by operation of law.

         "Lien  Certificate"  means,  with  respect  to a Financed  Vehicle,  an
original certificate of title,  certificate of lien or other notification issued
by the  Registrar  of Titles of the  applicable  state to a secured  party which
indicates that the lien of the secured party on the Financed Vehicle is recorded
on the original  certificate of title. In any jurisdiction in which the original
certificate  of title is  required  to be given to the  obligor,  the term "Lien
certificate"  shall mean only a certificate or notification  issued to a secured
party.




                                      -15-




         "Liquidated  Receivable"  means  any  Receivable  (i)  which  has  been
liquidated by the Servicer  through the sale of the Financed Vehicle or (ii) for
which the related Financed Vehicle has been repossessed and 90 days have elapsed
since the date of such  repossession  or (iii) as to which an Obligor has failed
to make more than 90% of a Scheduled Payment of more than ten dollars for 120 or
more days as of the end of a  Collection  Period or (iv) with  respect  to which
proceeds have been received  which, in the Servicer's  judgment,  constitute the
final amounts recoverable in respect of such Receivable.

         "Lockbox Account" means an account  maintained on behalf of the Trustee
by the Lockbox Bank pursuant to Section 4.2(c).

         "Lockbox   Agreement"   means  the  Tri-Party   Remittance   Processing
Agreement,  dated as of October 1, 1997, by and among the Lockbox Processor, the
Servicer and the Trustee,  as such agreement may be amended or supplemented from
time to time, unless the Trustee shall cease to be a party  thereunder,  or such
agreement  shall be  terminated  in  accordance  with its terms,  in which event
"Lockbox  Agreement"  shall mean such  other  agreement,  in form and  substance
acceptable to the  Controlling  Party,  among the Servicer,  the Trustee and the
Lockbox Processor.

         "Lockbox Bank" means as of any date a depository  institution  named by
the  Servicer  and  acceptable  to the  Controlling  Party at which the  Lockbox
Account is established and maintained as of such date.

         "Lockbox Processor" means Bank of America and its successors
and assigns.

         "Master  Spread  Account  Agreement"  means the Master  Spread  Account
Agreement dated as of October 1, 1997 among the Note Insurer, the Seller and the
Collateral Agent, as the same may be modified, supplemented or otherwise amended
in accordance with the terms thereof.

         "Moody's" means Moody's Investors Service, Inc., or its
successor.

         "Net  Liquidation   Proceeds"  means,  with  respect  to  a  Liquidated
Receivable,  all amounts  realized with respect to such  Receivable  (other than
amounts  withdrawn  from the Spread  Account and drawings under the Note Policy)
net of (i) reasonable  expenses  incurred by the Servicer in connection with the
collection  of such  Receivable  and the  repossession  and  disposition  of the
Financed  Vehicle  and (ii)  amounts  that are  required  to be  refunded to the
obligor on such Receivable;  provided,  however,  that the Liquidation  Proceeds
with respect to any Receivable shall in no event be less than zero.


                                      -16-





         "Note" shall have the meaning provided in Section 1.1 of the Indenture.

         "Note  Distribution  Account"  means the  account  designated  as such,
established and maintained pursuant to Section 5.1.

         "Note  Insurer"  means  Financial  Security  Assurance  Inc.,  a  stock
insurance company organized and created under the laws of the State of New York,
or its successors in interest.

         "Note Policy" means the Financial  Guaranty  Insurance Policy issued by
the Note  Insurer  for the  benefit of the  Holders of the Class A Notes  issued
under the Indenture, including any endorsements thereto.

         "Note Policy Claim Amount" with respect to any  Distribution  Date, has
the meaning specified in Section 6.1.

         "Note Pool  Factor" for each Class of Notes as of the close of business
on any Payment Date means a seven-digit  decimal figure equal to the outstanding
principal  amount of such  Class of Notes  divided by the  original  outstanding
principal amount of such Class of Notes.

         "Notes" means the Class A-1 Notes and the Class A-2 Notes.

         "Objection Date" shall have the meaning specified in Section 9.5.

         "Objection Notice" shall have the meaning specified in Section 9.5.

         "Obligor" on a Receivable  means the purchaser or  co-purchasers of the
Financed Vehicle and any other Person who owes payments under the Receivable.

         "Officers'  Certificate"  means a certificate signed by the chairman of
the board,  the president,  any vice chairman of the board,  any vice president,
the  treasurer,   the  controller  or  assistant   treasurer  or  any  assistant
controller, secretary or assistant secretary of CPS, the Seller or the Servicer,
as appropriate.

         "Opinion  of  Counsel"  means a written  opinion of counsel who may but
need not be  counsel  to the  Seller or the  Servicer,  which  counsel  shall be
reasonably  acceptable  to the  Trustee and the Note  Insurer and which  opinion
shall be acceptable in form and substance to the Trustee and, if such opinion or
a copy thereof is required by the  provisions of this  Agreement to be delivered
to the Note Insurer, to the Note Insurer.


                                      -17-





         "Original Pool Balance" means the Pool Balance as of the Cutoff Date.

         "Other Conveyed  Property" means all property conveyed by the Seller to
the Trust pursuant to Section 2.1(b) through (h) of this Agreement.

         "Owner Trust Estate" has the meaning assigned to such term in the Trust
Agreement.

         "Owner Trustee" means Bankers Trust  (Delaware),  not in its individual
capacity but solely as Owner Trustee under the Trust  Agreement,  its successors
in interest or any successor Owner Trustee under the Trust Agreement.

         "Pass-Through Rate" means 10.59% per annum.

         "Payment Date" means, with respect to each Collection  Period, the 15th
day of the following  calendar  month, or if such day is not a Business Day, the
immediately following Business Day, commencing on November 17, 1997.

         "Person"  means  any  individual,   corporation,  estate,  partnership,
limited  liability  company,  joint venture,  association,  joint stock company,
trust  (including  any  beneficiary  thereof),  unincorporated  organization  or
government or any agency or political subdivision thereof.

         "Physical  Property"  has the  meaning  assigned  to  such  term in the
definition of "Delivery" above.

         "Pool Balance"  means, as of any date of  determination,  the aggregate
Principal  Balance  of the  Receivables  (excluding  Purchased  Receivables  and
Liquidated Receivables).

         "Post-Office Box" means the separate post-office box in the name of the
Trustee for the benefit of the Securityholders and the Note Insurer, established
and maintained pursuant to Section 4.1.

         "Preference Claim" shall have the meaning specified in Section 6.2(b).

         "Principal Balance" of a Receivable, as of the close of business on the
last day of a Collection  Period means the Amount  Financed minus the sum of the
following  amounts  without  duplication:  (i) in the  case  of a Rule  of  78's
Receivable, that portion of all Scheduled Payments actually received on or prior
to such day allocable to principal using the actuarial or constant yield method;
(ii) in the case of a Simple Interest Receivable,  that portion of all Scheduled
Payments actually received on or prior to such day allocable to principal using

                                      -18-





the Simple  Interest  Method;  (iii) any  payment of the  Purchase  Amount  with
respect to the  Receivable  allocable to  principal;  (iv) any Cram Down Loss in
respect  of  such  Receivable;  and (v) any  prepayment  in full or any  partial
prepayment applied to reduce the Principal Balance of the Receivable.

         "Principal  Distributable  Amount"  means,  with respect to any Payment
Date,  the  sum  of  (i)  collections  on  Receivables  (other  than  Liquidated
Receivables) allocable to principal including full and partial prepayments; (ii)
the portion of the Purchase  Amount  allocable  to principal of each  Receivable
that  became  a  Purchased  Receivable  as of the  last  day  of  the  preceding
Collection  Period and, at the option of the Note Insurer the Principal  Balance
of  each  Receivable  that  was  required  to be but  was  not so  purchased  or
repurchased  (without  duplication of amounts  referred to in clause (i) above);
(iii) the Principal  Balance of each  Receivable  that first became a Liquidated
Receivable during the preceding  Collection  Period (without  duplication of the
amounts  included in clause (i) above);  (iv) the aggregate  amount of Cram Down
Losses with respect to the  Receivables  that have occurred during the preceding
Collection  Period  (without  duplication of amounts  referred to in clauses (i)
through (iii) above);  and (v) following the  acceleration of the Notes pursuant
to  Section  5.2 of the  Indenture,  the amount of money or  property  collected
pursuant to Section 5.4 of the Indenture since the preceding  Determination Date
by the Trustee or  Controlling  Party for  distribution  pursuant to Section 5.7
hereof.

         "Program" shall have the meaning specified in Section 4.11.

         "Purchase  Agreement" means the CPS Purchase Agreement and/or the Samco
Purchase Agreement.

         "Purchase  Amount" means,  with respect to a Receivable,  the Principal
Balance and all accrued and unpaid  interest  on the  Receivable,  after  giving
effect to the receipt of any moneys  collected  (from  whatever  source) on such
Receivable, if any.

         "Purchased  Receivable" means a Receivable purchased as of the close of
business  on the last day of a  Collection  Period by the  Servicer  pursuant to
Section  4.7 or  repurchased  by the Seller or CPS  pursuant  to Section  3.2 or
Section 11.1(a).

         "Rating  Agency"  means each of Moody's and Standard & Poor's,  and any
successors  thereof.  If no such organization or successor maintains a rating on
the  Securities,  "Rating Agency" shall be a nationally  recognized  statistical
rating  organization or other comparable  Person  designated by the Note Insurer
(so long as an Insurer Default shall not have occurred and be continuing),

                                      -19-





notice of which designation shall be given to the Trustee, the Owner Trustee and
the Servicer.

         "Rating Agency Condition" means, with respect to any action,  that each
Rating Agency shall have been given 3 days' (or such shorter  period as shall be
acceptable  to each Rating  Agency)  prior  notice  thereof and that each of the
Rating Agencies shall have notified the Seller, the Servicer,  the Note Insurer,
the Owner Trustee and the Trustee in writing that such action will not result in
a reduction or  withdrawal  of the then current  rating of any Class of Notes or
the Certificates.

         "Realized  Losses" means, with respect to any Receivable that becomes a
Liquidated  Receivable,  the excess of the Principal  Balance of such Liquidated
Receivable over Net Liquidation Proceeds to the extent allocable to principal.

         "Receivable" means each retail installment sale contract for a Financed
Vehicle listed on Schedule A (which Schedule A may be in the form of microfiche)
and all rights and obligations thereunder except for Receivables that shall have
become Purchased Receivables.

         "Receivable Files" means the documents specified in Section 3.3.

         "Record Date" means, with respect to any Payment Date, the tenth day of
the calendar month in which such Payment Date occurs.

         "Registrar  of  Titles"   means,   with  respect  to  any  state,   the
governmental  agency  or body  responsible  for  the  registration  of,  and the
issuance of certificates of title relating to, motor vehicles and liens thereon.

         "Rule of 78's Receivable"  means any Receivable under which the portion
of a payment  allocable  to earned  interest  (which may be  referred  to in the
related retail  installment  sale contract as an add-on finance  charge) and the
portion  allocable to the Amount Financed is determined  according to the method
commonly  referred  to as the "Rule of 78's"  method or the "sum of the  months'
digits" method or any equivalent method.

         "Samco" means Samco Acceptance Corp., a subsidiary of CPS.

         "Samco Purchase  Agreement" means the Purchase  Agreement,  dated as of
October 1, 1997 by and between  Samco and the Seller,  as such  agreement may be
amended, supplemented or otherwise modified from time to time in accordance with
the terms  thereof,  relating to the  purchase of the Samco  Receivables  by the
Seller from Samco.

                                      -20-





         "Samco  Receivables"  means a  Receivable  purchased by the Seller from
Samco.

         "Schedule of Receivables"  means the schedule of all retail installment
sales contracts and promissory  notes originally held as part of the Trust which
is attached hereto as Schedule A, as amended from time to time.

         "Scheduled  Payment" means,  with respect to any Collection  Period for
any  Receivable,  the amount set forth in such Receivable as required to be paid
by the Obligor in such Collection Period (without giving effect to deferments of
payments  pursuant  to  Section  4.2  or any  rescheduling  of  payments  in any
insolvency or similar proceedings).

         "Securities" means the Notes and the Certificates.

         "Security  Majority"  means  a  majority  by  principal  amount  of the
Noteholders so long as the Notes are  outstanding  and a majority by Certificate
Balance of the Certificateholders thereafter.

         "Securityholders" means the Noteholders and the Certificateholders.

         "Seller" means CPS Receivables Corp., a California corporation, and its
successors in interest to the extent permitted hereunder.

         "Series 1997-4 Spread  Account"  means the account  designated as such,
established and maintained pursuant to the Spread Account Supplement.

         "Servicer" means Consumer Portfolio Services,  Inc., as the servicer of
the Receivables, and each successor Servicer pursuant to Section 10.3.

         "Servicer Termination Event" means an event specified in Section 10.1.

         "Servicer's  Certificate" means a certificate completed and executed by
a Servicing Officer and delivered pursuant to Section 4.9,  substantially in the
form of Exhibit B.

         "Servicing   Assumption   Agreement"  means  the  Servicing  Assumption
Agreement,  dated as of October 1, 1997 among CPS, the Standby  Servicer and the
Trustee,  as the same may be amended,  supplemented  or otherwise  modified from
time to time in accordance with the terms thereof.

         "Servicing Fee" has the meaning specified in Section 4.8.

                                      -21-





         "Servicing  Fee  Rate"  shall  be 2.00%  per  annum,  payable  monthly,
provided,  however, that if the Standby Servicer becomes the successor Servicer,
the  "Servicing  Rate"  shall be  equal to a  percentage  per  annum  determined
pursuant to the Servicing Assumption Agreement not to exceed 3.00% per annum.

         "Servicing  Officer"  means any Person  whose name appears on a list of
Servicing  Officers  delivered to the Trustee and the Note Insurer,  as the same
may be amended from time to time.

         "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 the actual number of days in the calendar  year) elapsed since the preceding
payment of interest  was made and the  remainder of such payment is allocable to
principal.

         "Simple Interest Receivable" means a Receivable 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.

         "Specified  Spread Account  Requisite Amount" has the meaning specified
in the Spread Account Supplement.

         "Spread Account  Supplement"  means the Series 1997-4 Supplement to the
Master  Spread  Account  Agreement  dated as of  October  1, 1997 among the Note
Insurer,  the  Seller and the  Collateral  Agent,  as the same may be  modified,
supplemented or otherwise amended in accordance with the terms thereof.

         "Standard  &  Poor's"  means  Standard  &  Poor's,  a  division  of The
McGraw-Hill Companies, or its successor.

         "Standby Fee" means the fee payable to the Standby  Servicer so long as
CPS is the Servicer,  on each Payment Date in an amount equal to  one-twelfth of
0.06% of the aggregate  outstanding  principal  amount of the  Securities on the
last day of the second preceding Collection Period;  provided,  however, that on
the first  Payment  Date the Trustee will be entitled to receive an amount equal
to the product of (i) the  percentage  equivalent of a fraction the numerator of
which is the  number  days  from the  Closing  Date to but  excluding  the first
Payment  Date and the  denominator  of which is 360,  (ii)  0.06%  and (iii) the
aggregate outstanding principal amount of the Securities as of the Closing Date.


                                      -22-





         "Standby Servicer" means Norwest Bank Minnesota,  National Association,
in its  capacity  as Standby  Servicer  pursuant  to the terms of the  Servicing
Assumption  Agreement  or such  Person  as shall  have  been  appointed  Standby
Servicer pursuant to Section 9.2(c).

         "Target Payment Date" means the first Payment Date on which the Class A
Target Amount equals or exceeds the then  outstanding  principal  balance of the
Class A Notes.

         "Total  Distribution  Amount" means,  for each Payment Date, the sum of
the following amounts with respect to the preceding  Collection  Period: (i) all
collections on the Receivables,  (ii) Net Liquidation  Proceeds  received during
the Collection Period with respect to Liquidated Receivables; (iii) all Purchase
Amounts  deposited  in the  Collection  Account  during the  related  Collection
Period; (iv) Investment Earnings for the related Payment Date; (v) following the
acceleration  of the Notes pursuant to Section 5.2 of the Indenture,  the amount
of money or property  collected  pursuant to Section 5.7 of the Indenture  since
the preceding  Payment Date by the Trustee or Controlling Party for distribution
pursuant to Section 5.6 and  Section  5.8 hereof;  and (vi) the  proceeds of any
purchase or sale of the assets of the Trust described in Section 11.1 hereof.

         "Trigger Event" has the meaning  assigned thereto in the Spread Account
Supplement.

         "Trust" means the Issuer.

         "Trust  Account  Property"  means the Trust  Accounts,  all amounts and
investments  held from time to time in any Trust Account (whether in the form of
deposit  accounts,  Physical  Property,  book-entry  securities,  uncertificated
securities or otherwise), and all proceeds of the foregoing.

         "Trust Accounts" has the meaning assigned thereto in Section 5.1.

         "Trust  Agreement"  means the Trust  Agreement  dated as of  October 9,
1997,  as amended and  restated as of October 16, 1997,  between the Seller,  as
Depositor,  and the  Owner  Trustee,  as the  same  may be  further  amended  or
supplemented from time to time.

         "Trust  Officer"  means,  (i) in the  case  of the  Trustee,  any  vice
president,  any assistant vice president, any assistant secretary, any assistant
treasurer,  any trust officer,  or any other officer of the Trustee  customarily
performing  functions  similar to those performed by any of the above designated
officers and also means,  with respect to a particular  corporate  trust matter,
any other officer to whom such matter is referred

                                      -23-





because of his knowledge of and  familiarity  with the particular  subject,  and
(ii) in the case of the Owner Trustee, any officer in the corporate trust office
of the Owner Trustee or any agent of the Owner Trustee under a power of attorney
with direct  responsibility  for the  administration of this Agreement or any of
the Basic Documents on behalf of the Owner Trustee.

         "Trust Property" means the property and proceeds  conveyed  pursuant to
Section 2.1,  together with certain monies paid on or after the Cutoff Date, the
Insurance Policies,  the Collection Account (including all Eligible  Investments
therein  and all  proceeds  therefrom),  the Lockbox  Account and certain  other
rights under this Agreement.  Although the Seller has pledged the Spread Account
to the  Trustee  and the Note  Insurer  pursuant  to the Master  Spread  Account
Agreement,  the Spread Account shall not under any circumstances be deemed to be
a part of or otherwise includable in the Trust or the Trust Property.

         "Trust Receipt" has the meaning assigned thereto by Section 3.5.

         "Trustee"  means the Person acting as Trustee under the Indenture,  its
successors in interest and any successor trustee under the Indenture.

         "Trustee  Fee" means (A) the fee payable to the Trustee on each Payment
Date an  amount  equal to  one-twelfth  of 0.01%  of the  aggregate  outstanding
principal  amount  of the  Securities  on the last day of the  second  preceding
Collection Period; provided, however, that on the first Payment Date the Trustee
will be entitled to receive an amount equal to the product of (i) the percentage
equivalent  of a fraction  the  numerator  of which is the number  days from the
Closing Date to but  excluding  the first  Payment Date and the  denominator  of
which is 360, (ii) 0.01% and (iii) the aggregate outstanding principal amount of
the  Securities  as of the  Closing  Date (B) any  amounts  payable to the Owner
Trustee pursuant to Section 4.11 of the Trust Agreement.

         "UCC" means the Uniform  Commercial  Code as in effect in the  relevant
jurisdiction on the date of the Agreement.

         SECTION 1.2.  Other Definitional Provisions.

         (a) Capitalized terms used herein and not otherwise defined herein have
the meanings  assigned to them in the Indenture or, if not defined  therein,  in
the Trust Agreement.

         (b) All terms defined in this Agreement shall have the defined meanings
when used in any  instrument  governed  hereby and in any  certificate  or other
document made or delivered pursuant hereto unless otherwise defined therein.

                                      -24-





         (c)  Accounting  terms used but not  defined or partly  defined in this
Agreement,  in any  instrument  governed  hereby or in any  certificate or other
document made or delivered  pursuant  hereto,  to the extent not defined,  shall
have the respective  meanings given to them under generally accepted  accounting
principles  as in effect on the date of this  Agreement or any such  instrument,
certificate or other document, as applicable. To the extent that the definitions
of accounting terms in this Agreement or in any such instrument,  certificate or
other document are inconsistent  with the meanings of such terms under generally
accepted accounting  principles,  the definitions contained in this Agreement or
in any such instrument, certificate or other document shall control.

         (d) The words  "hereof,"  "herein,"  "hereunder"  and words of  similar
import when used in this Agreement  shall refer to this Agreement as a whole and
not to any particular provision of this Agreement.

         (e)  Section,   Schedule  and  Exhibit  references  contained  in  this
Agreement  are  references  to  Sections,  Schedules  and Exhibits in or to this
Agreement  unless  otherwise  specified;  and the term  "including"  shall  mean
"including without limitation."

         (f) The  definitions  contained in this Agreement are applicable to the
singular as well as the plural forms of such terms and to the  masculine as well
as to the feminine and neuter genders of such terms.

         (g) Any agreement,  instrument or statute defined or referred to herein
or in any instrument or certificate  delivered in connection herewith means such
agreement,  instrument  or statute as the same may from time to time be amended,
modified or supplemented and includes (in the case of agreements or instruments)
references  to  all  attachments  and  instruments  associated  therewith;   all
references to a Person include its permitted successors and assigns.


                                   ARTICLE II

                            CONVEYANCE OF RECEIVABLES

         SECTION  2.1.  Conveyance  of  Receivables.  In  consideration  of  the
Issuer's  delivery to or upon the order of the Seller on the Closing Date of the
net  proceeds  from the sale of the  Notes  and the  Certificates  and the other
amounts to be distributed from time to time to the Seller in accordance with the
terms of this Agreement, the Seller does hereby sell, transfer, assign, set over
and otherwise convey to the Issuer, without recourse (subject to the obligations
set forth herein):

                                      -25-





                  (a) all right,  title and interest of the Seller in and to the
         Receivables   listed  in  Schedule  A  hereto  and,   with  respect  to
         Receivables  that are Rule of 78's  Receivables,  all  monies due or to
         become due thereon after the Cutoff Date (including  Scheduled Payments
         due after the Cutoff Date (including principal  prepayments relating to
         such Scheduled Payments) but received by the Seller or CPS on or before
         the Cutoff  Date) and,  with  respect  to  Receivables  that are Simple
         Interest  Receivables,  all monies received thereunder after the Cutoff
         Date and all Net  Liquidation  Proceeds  received  with respect to such
         Receivables on or after the Cutoff Date;

                  (b) all right,  title and interest of the Seller in and to the
         security  interests  in  the  Financed  Vehicles  granted  by  Obligors
         pursuant  to the  Receivables  and any other  interest of the Seller in
         such Financed Vehicles, including, without limitation, the certificates
         of title or,  with  respect to such  Financed  Vehicles in the State of
         Michigan, all other evidence of ownership with respect to such Financed
         Vehicles;

                  (c) all right,  title and interest of the Seller in and to any
         proceeds  from claims on any  physical  damage,  credit life and credit
         accident and health insurance policies or certificates  relating to the
         Financed Vehicles or the Obligors;

                  (d) all right,  title and interest of the Seller in and to the
         Purchase Agreements,  including a direct right to cause CPS to purchase
         Initial Receivables from the Trust under certain circumstances;

                  (e) all  right,  title and  interest  of the  Seller in and to
         refunds for the costs of extended  service  contracts  with  respect to
         Financed  Vehicles securing  Receivables,  refunds of unearned premiums
         with respect to credit life and credit  accident  and health  insurance
         policies or certificates covering an Obligor or Financed Vehicle or his
         or her obligations  with respect to a Financed Vehicle and any recourse
         to Dealers for any of the foregoing;

                  (f)  the Receivable File related to each Receivable;

                  (g) all  amounts  and  property  from  time to time held in or
         credited to the Collection Account or the Lockbox Account; and

                  (h)  the proceeds of any and all of the foregoing.


                                      -26-





         It is the  intention  of the Seller that the  transfer  and  assignment
contemplated  by this Agreement  shall  constitute a sale of the Receivables and
other Trust Property from the Seller to the Issuer and the  beneficial  interest
in and title to the  Receivables  and the other Trust Property shall not be part
of the Seller's estate in the event of the filing of a bankruptcy petition by or
against the Seller under any bankruptcy law. In the event that,  notwithstanding
the intent of the Seller,  the transfer and  assignment  contemplated  hereby is
held not to be a sale,  this  Agreement  shall  constitute a grant of a security
interest in the property  referred to in this Section 2.1 for the benefit of the
Securityholders and the Note Insurer.

         SECTION 2.2.  [RESERVED].

         SECTION 2.3.  Further Encumbrance of Trust Property.

         (a)  Immediately  upon the conveyance to the Trust by the Seller of any
item of the Trust  Property  pursuant  to  Section  2.1,  all  right,  title and
interest of the Seller in and to such item of Trust  Property  shall  terminate,
and all such right,  title and interest  shall vest in the Trust,  in accordance
with the  Trust  Agreement  and  Sections  3802 and 3805 of the  Business  Trust
Statute (as defined in the Trust Agreement).

         (b)  Immediately  upon the vesting of the Trust  Property in the Trust,
the Trust shall have the sole right to pledge or otherwise encumber,  such Trust
Property.  Pursuant to the Indenture,  the Trust shall grant a security interest
in the Trust  Property to secure the  repayment of the Notes.  The  Certificates
shall represent  beneficial  ownership interests in the Trust Property,  and the
Certificateholders  shall be  entitled  to receive  distributions  with  respect
thereto as set forth herein.

         (c)  Following  the  payment in full of the Notes and the  release  and
discharge of the Indenture, all covenants of the Issuer under Article III of the
Indenture shall,  until all amounts due in respect of the Certificates have been
paid  in  full,  remain  as  covenants  of the  Issuer  for the  benefit  of the
Certificateholders,  enforceable by the Certificateholders to the same extent as
such covenants were enforceable by the Noteholders prior to the discharge of the
Indenture.  Any  rights  of the  Trustee  under  Article  III of the  Indenture,
following the discharge of the Indenture, shall vest in the Certificateholders.

         (d)  The  Trustee  shall,  at  such  time as  there  are no  Securities
outstanding  and all sums due to the Trustee  pursuant to the Indenture and this
Agreement,  have been paid,  release any remaining portion of the Trust Property
to the Certificateholders.


                                      -27-





                                   ARTICLE III

                                 THE RECEIVABLES

         SECTION 3.1. Representations and Warranties of Seller. The Seller makes
the following  representations  and warranties as to the Receivables to the Note
Insurer,  the Issuer and to the Trustee on which the Issuer  relies in acquiring
the Receivables and on which the Note Insurer relies in issuing the Note Policy.
Such  representations  and warranties  speak as of the execution and delivery of
this Agreement and as of the Closing Date, but shall survive the sale,  transfer
and  assignment of the  Receivables  to the Issuer and the pledge thereof to the
Trustee pursuant to the Indenture.

                  (i)  Characteristics  of Receivables.  (A) Each Receivable (1)
         has been originated in the United States of America by a Dealer for the
         retail  sale of a  Financed  Vehicle  in the  ordinary  course  of such
         Dealer's business,  has been fully and properly executed by the parties
         thereto and has been  purchased  by CPS (or,  with respect to the Samco
         Receivables, Samco) in connection with the sale of Financed Vehicles by
         the Dealers, (2) has created a valid, subsisting, and enforceable first
         priority  perfected security interest in favor of CPS (or, with respect
         to the  Samco  Receivables,  Samco)  in  the  Financed  Vehicle,  which
         security  interest  has been  assigned by CPS (or,  with respect to the
         Samco  Receivables,  Samco) to the Seller,  which in turn has  assigned
         such  security  interest to the  Trustee,  (3) contains  customary  and
         enforceable  provisions such that the rights and remedies of the holder
         or assignee  thereof  shall be  adequate  for  realization  against the
         collateral  of the  benefits of the  security,  (4)  provides for level
         monthly  payments  that fully  amortize  the Amount  Financed  over the
         original term (except for the last payment, which may be different from
         the level  payment) and yield interest at the Annual  Percentage  Rate,
         (5) has an Annual Percentage Rate of not less than 16.95%,  (6) that is
         a Rule of 78's Receivable provides for, in the event that such contract
         is prepaid,  a  prepayment  that fully pays the  Principal  Balance and
         includes a full month's  interest,  in the month of prepayment,  at the
         Annual  Percentage  Rate, (7) is a Rule of 78's  Receivable or a Simple
         Interest Receivable, and (8) was originated by a Dealer and was sold by
         the Dealer without any fraud or  misrepresentation  on the part of such
         Dealer.

                  (B) Approximately 87.26% of the aggregate Principal Balance of
         the Receivables,  constituting 89.86% of the number of contracts, as of
         the  Cutoff  Date,  represents  financing  of used  automobiles,  light
         trucks, vans or minivans; the remainder of the Receivables represent

                                      -28-





         financing  of  new  automobiles,   light  trucks,   vans  or  minivans;
         approximately   21.43%  of  the  aggregate  Principal  Balance  of  the
         Receivables  as of the  Cutoff  Date  were  originated  in the State of
         California;  approximately 51.55% of the aggregate Principal Balance of
         the  Receivables  as of the Cutoff Date were  originated  under the CPS
         alpha program;  approximately  8.40% of the aggregate Principal Balance
         of the Receivables as of the Cutoff Date were originated  under the CPS
         delta program;  approximately 14.69% of the aggregate Principal Balance
         of the Receivables as of the Cutoff Date were originated  under the CPS
         first  time  buyer  program;  approximately  25.36%  of  the  aggregate
         Principal  Balance of the  Receivables  were  originated  under the CPS
         standard  program;  approximately  4.48%  of  the  aggregate  Principal
         Balance of the Receivables are Samco  Receivables;  no Receivable shall
         have a payment that is more than 30 days overdue as of the Cutoff Date;
         29.00% of the aggregate  Principal  Balance of the Receivables are Rule
         of 78's  Receivables and 71.00% of the aggregate  Principal  Balance of
         the Receivables are Simple Interest Receivables;  each Receivable shall
         have a final scheduled payment due no later than October 31, 2002; each
         Receivable  has an original term to maturity of not more than 60 months
         and a weighted  average original term to maturity of 56.07 months and a
         remaining  term to  maturity  of not more than 60 months and a weighted
         average remaining term to maturity of 56.79 months; and each Receivable
         was originated on or before the Cutoff Date.

                  (ii) Schedule of Receivables.  The information with respect to
         the  Receivables  set forth in Schedule A to this Agreement is true and
         correct in all  material  respects  as of the close of  business on the
         Cutoff Date,  and no selection  procedures  adverse to the  Noteholders
         have been utilized in selecting the Receivables.

                  (iii)  Compliance with Law. Each  Receivable,  the sale of the
         Financed Vehicle and the sale of any physical  damage,  credit life and
         credit  accident and health  insurance  and any extended  warranties or
         service contracts (including the disclosures relating thereto) complied
         at the time the related  Receivable  was  originated or made and at the
         execution of this Agreement  complies in all material respects with all
         requirements  of  applicable  Federal,   State,  and  local  laws,  and
         regulations thereunder including,  without limitation,  usury laws, the
         Federal  Truth-in-Lending  Act, the Equal Credit  Opportunity  Act, the
         Fair Credit Reporting Act, the Fair Debt Collection  Practices Act, the
         Federal  Trade  Commission  Act, the  Magnuson-Moss  Warranty  Act, the
         Federal Reserve Board's Regulations B and Z, the Soldiers' and Sailors'
         Civil Relief Act of 1940, the Texas

                                      -29-





         Consumer Credit Code, the California  Automobile  Sales Finance Act and
         State  adaptations  of the  National  Consumer  Act and of the  Uniform
         Consumer  Credit Code, and other consumer  credit laws and equal credit
         opportunity and disclosure laws.

                  (iv) No Government  Obligor.  None of the  Receivables are due
         from the  United  States of  America  or any State or from any  agency,
         department,  or  instrumentality of the United States of America or any
         State.

                  (v)  Security  Interest  in  Financed   Vehicle.   Immediately
         subsequent to the sale,  assignment and transfer  thereof to the Trust,
         each Receivable shall be secured by a validly  perfected first priority
         security  interest  in the  Financed  Vehicle  in favor of the Trust as
         secured party,  and such security  interest is prior to all other liens
         upon and security interests in such Financed Vehicle which now exist or
         may hereafter arise or be created (except, as to priority,  for any tax
         liens or mechanics' liens which may arise after the Closing Date).

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

                  (vii) No Waiver. No provision of a Receivable has been waived.

                  (viii) No Amendments.  No Receivable has been amended,  except
         as such  Receivable  may have been  amended to grant  extensions  which
         shall not have  numbered  more than (a) one  extension  of one calendar
         month  in  any  calendar  year  or (b)  three  such  extensions  in the
         aggregate.

                  (ix) No Defenses. No right of rescission, setoff, counterclaim
         or defense  exists or has been asserted or  threatened  with respect to
         any  Receivable.  The  operation of the terms of any  Receivable or the
         exercise  of any  right  thereunder  will not  render  such  Receivable
         unenforceable  in whole  or in part or  subject  to any  such  right of
         rescission, setoff, counterclaim, or defense.

                  (x) No  Liens.  As of the  Cutoff  Date  there are no liens or
         claims  existing or which have been filed for work,  labor,  storage or
         materials  relating to a Financed Vehicle that shall be liens prior to,
         or equal or  coordinate  with,  the  security  interest in the Financed
         Vehicle granted by the Receivable.


                                      -30-





                  (xi)   No   Default;   Repossession.    Except   for   payment
         delinquencies  continuing  for a period of not more than thirty days as
         of the Cutoff Date, no default,  breach,  violation or event permitting
         acceleration  under the terms of any  Receivable  has occurred;  and no
         continuing  condition  that  with  notice  or the  lapse of time  would
         constitute   a  default,   breach,   violation   or  event   permitting
         acceleration  under the terms of any  Receivable  has  arisen;  and the
         Seller shall not waive and has not waived any of the foregoing;  and no
         Financed Vehicle shall have been repossessed as of the Cutoff Date.

                  (xii)   Insurance;   Other.  (A)  Each  Obligor  has  obtained
         insurance  covering  the  Financed  Vehicle as of the  execution of the
         Receivable  insuring  against  loss  and  damage  due to  fire,  theft,
         transportation,   collision  and  other  risks  generally   covered  by
         comprehensive and collision coverage,  and each Receivable requires the
         Obligor to obtain and  maintain  such  insurance  naming CPS (or,  with
         respect to the Samco Receivables, Samco) and its successors and assigns
         as an additional insured, (B) each Receivable 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 CPS
         (or with  respect  to the Samco  Receivables,  Samco)  as  policyholder
         (creditor)   under  each  such  insurance  policy  and  certificate  of
         insurance  and (C) as to each  Receivable  that finances the cost of an
         extended  service  contract,  the  respective  Financed  Vehicle  which
         secures the Receivable is covered by an extended service contract.

                  (xiii)  Title.  It is the  intention  of the  Seller  that the
         transfer and assignment  herein  contemplated  constitute a sale of the
         Receivables  from the  Seller  to the  Trust  and  that the  beneficial
         interest in and title to such  Receivables  not be part of the Seller's
         estate  in the  event of the  filing  of a  bankruptcy  petition  by or
         against the Seller under any  bankruptcy  law. No  Receivable  has been
         sold,  transferred,  assigned,  or  pledged by the Seller to any Person
         other than the Trust.  Immediately prior to the transfer and assignment
         herein  contemplated,  the Seller had good and marketable title to each
         Receivable and was the sole owner thereof, free and clear of all liens,
         claims,  encumbrances,  security interests,  and rights of others, and,
         immediately upon the transfer thereof, the Trust for the benefit of the
         Noteholders  and the Note Insurer shall have good and marketable  title
         to each such  Receivable and will be the sole owner  thereof,  free and
         clear of all liens,  encumbrances,  security  interests,  and rights of
         others, and the transfer has been perfected under the UCC.


                                      -31-





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

                  (xv)  All  Filings  Made.  All  filings  (including,   without
         limitation,  UCC  filings)  necessary in any  jurisdiction  to give the
         Trust a first priority perfected  ownership interest in the Receivables
         and the  proceeds  thereof and the other  Conveyed  Property  have been
         made, taken or performed.

                  (xvi) Receivable File; One Original.  CPS has delivered to the
         Trustee a complete  Receivable  File with  respect to each  Receivable.
         There is only one original executed copy of each Receivable.

                  (xvii) Chattel Paper.  Each  Receivable  constitutes  "chattel
         paper" under the UCC.

                  (xviii) Title Documents.  (A) If the Receivable was originated
         in a State  in which  notation  of a  security  interest  on the  title
         document of the related  Financed  Vehicle is required or  permitted to
         perfect  such  security  interest,  the title  document  of the related
         Financed Vehicle for such Receivable  shows, or if a new or replacement
         title  document  is being  applied  for with  respect to such  Financed
         Vehicle the title document (or, with respect to Receivables  originated
         in the State of Michigan,  all other evidence of ownership with respect
         to such  Financed  Vehicle)  will be received  within 180 days and will
         show, CPS (or, with respect to the Samco  Receivables,  Samco) named as
         the original  secured party under the related  Receivable as the holder
         of a first priority security interest in such Financed Vehicle, and (B)
         if the  Receivable  was  originated in a State in which the filing of a
         financing  statement  under the UCC is  required  to perfect a security
         interest in motor  vehicles,  such filings or recordings have been duly
         made and show CPS (or,  with respect to the Samco  Receivables,  Samco)
         named as the original secured party under the related  Receivable,  and
         in either case, the Trust has the same rights as such secured party has
         or would  have (if such  secured  party  were  still  the  owner of the
         Receivable)  against all parties  claiming an interest in such Financed
         Vehicle.  With respect to each  Receivable for which the title document
         of the  related  Financed  Vehicle has not yet been  returned  from the
         Registrar of Titles, CPS has

                                      -32-





         received  written  evidence  from the  related  Dealer  that such title
         document showing CPS (or, with respect to the Samco Receivables, Samco)
         as first lienholder has been applied for.

                  (xix) Valid and Binding Obligation of Obligor. Each Receivable
         is the legal,  valid and binding  obligation of the Obligor  thereunder
         and is  enforceable in accordance  with its terms,  except only as such
         enforcement  may be limited by  bankruptcy,  insolvency or similar laws
         affecting the  enforcement  of  creditors'  rights  generally,  and all
         parties to such contract had full legal capacity to execute and deliver
         such contract and all other documents  related thereto and to grant the
         security interest purported to be granted thereby.

                  (xx)  Tax  Liens.  As of the  Cutoff  Date,  there  is no lien
         against the related Financed Vehicle for delinquent taxes.

                  (xxi)  Characteristics  of  Obligors.  As of the  date of each
         Obligor's  application  for the loan from which the related  Receivable
         arises,  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 is not
         discharged,  (c) had not been the  subject  of more  than one  Federal,
         State or other bankruptcy,  insolvency or similar  proceeding,  and (d)
         was domiciled in the United States.

                  (xxii)  Origination  Date.  Each Receivable has an origination
         date on or after May 25, 1996.

                  (xxiii)  Maturity  of  Receivables.  Each  Receivable  has  an
         original  term to  maturity  of not more than 60 months;  the  weighted
         average original term to maturity of the Receivables is 56.79 months as
         of the Cutoff Date; the remaining  term to maturity of each  Receivable
         was 60 months  or less as of the  Cutoff  Date;  the  weighted  average
         remaining  term to maturity of the  Receivables  was 56.07 months as of
         the Cutoff Date.

 
                                      -33-





                  (xxiv)  Scheduled  Payments.  Each  Receivable had an original
         principal  balance of not less than $2,499.45 nor more than  $28,237.48
         had an outstanding  principal balance as of the Cutoff Date of not less
         than  $1,891.10  nor more  than  $28,127.77  and has a first  Scheduled
         Payment due on or prior to November 20, 1997.

                  (xxv) Origination of Receivables. Based on the billing address
         of the  Obligors  and the  Principal  Balances  as of the Cutoff  Date,
         approximately   21.43%  of  the  aggregate  Principal  Balance  of  the
         Receivables  represents Receivables that were originated in California,
         approximately   8.49%  of  the  aggregate   Principal  Balance  of  the
         Receivables  represents  Receivables  that  were  originated  in Texas,
         approximately   7.77%  of  the  aggregate   Principal  Balance  of  the
         Receivables  represents  Receivables  that were  originated in Florida,
         approximately   5.95%  of  the  aggregate   Principal  Balance  of  the
         Receivables represents Receivables that were originated in Pennsylvania
         and the  remaining  58.37% of the  aggregate  Principal  Balance of the
         Receivables  represents  Receivables  that  were  originated  in  other
         States.

                  (xxvi) Post-Office Box. On or prior to the next billing period
         after the Cutoff Date,  CPS will notify each  Obligor to make  payments
         with  respect  to its  respective  Receivables  after the  Cutoff  Date
         directly to the  Post-Office  Box, and will provide each Obligor with a
         monthly  statement  in order to enable such  Obligors to make  payments
         directly to the Post-Office Box.

                  (xxvii)  Location of Receivable  Files. A complete  Receivable
         File with respect to each  Receivable  has been or prior to the Closing
         Date  will be  delivered  to the  Trustee  at the  location  listed  in
         Schedule B.

                  (xxviii)   Casualty.   No  Financed  Vehicle  has  suffered  a
         Casualty.

                  (xxix) Principal Balance/Number of Contracts. As of the Cutoff
         Date, the total  aggregate  principal  balance of the  Receivables  was
         $100,567,598.60. The Receivables are evidenced by 8,355 Contracts.

                  (xxx) Full Amount Advanced. The full amount of each Receivable
         has been advanced to each Obligor,  and there are no  requirements  for
         future advances thereunder.  The Obligor with respect to the Receivable
         does not have any option under the Receivable to borrow from any person
         additional funds secured by the Financed Vehicle.

         SECTION 3.2.  Repurchase upon Breach.

         (a) The Seller,  the Servicer,  the Note Insurer,  the Trustee or (upon
actual  knowledge of a Responsible  Officer  thereof) the Owner Trustee,  as the
case may be,  shall  inform the other  parties to this  Agreement  promptly,  in


                                      -34-





writing,  upon the discovery of any breach of the Seller's  representations  and
warranties  made  pursuant to Section  3.1  (without  regard to any  limitations
therein as to the Seller's  knowledge).  Unless the breach shall have been cured
by the last day of the second  Collection Period following the discovery thereof
by the Trustee or the Note Insurer or receipt by the Trustee,  the Owner Trustee
and the Note  Insurer of notice from the Seller or the  Servicer of such breach,
CPS  shall  repurchase  any  Receivable  if the  value  of  such  Receivable  is
materially  and  adversely  affected  by the  breach  as of the last day of such
second  Collection  Period  (or,  at CPS's  option,  the  last day of the  first
Collection  Period  following the  discovery)  and, in the event that the breach
relates to a  characteristic  of the  Receivables in the  aggregate,  and if the
interests of the Trust, the Noteholders or the Certificateholders are materially
and adversely  affected by such breach,  unless the breach shall have been cured
by the last day of such  second  Collection  Period,  CPS  shall  purchase  such
aggregate  Principal  Balance of Receivables,  such that following such purchase
such  representation  shall be true and correct with respect to the remainder of
the  Receivables  in the  aggregate.  In  consideration  of the  purchase of the
Receivable,  CPS shall remit the  Purchase  Amount,  in the manner  specified in
Section 5.6. For purposes of this Section,  the Purchase  Amount of a Receivable
which is not consistent  with the warranty  pursuant to Section  3.1(i)(A)(4) or
(A)(5) shall include such additional amount as shall be necessary to provide the
full amount of interest as contemplated  therein. The sole remedy of the Issuer,
the Owner Trustee,  the Trustee,  the  Securityholders  or the Note Insurer with
respect to a breach of  representations  and warranties  pursuant to Section 3.1
shall be to enforce CPS's  obligation to purchase such  Receivables  pursuant to
the CPS Purchase  Agreement;  provided,  however,  that CPS shall  indemnify the
Trustee, the Owner Trustee, the Standby Servicer, the Collateral Agent, the Note
Insurer, the Trust and the Securityholders against all costs, expenses,  losses,
damages,  claims and  liabilities,  including  reasonable  fees and  expenses of
counsel, which may be asserted against or incurred by any of them as a result of
third  party  claims  arising  out of the  events or facts  giving  rise to such
breach.  Upon receipt of the Purchase Amount and written  instructions  from the
Servicer,  the  Trustee  shall  release  to  CPS  or its  designee  the  related
Receivables  File and shall execute and deliver all  reasonable  instruments  of
transfer or  assignment,  without  recourse,  as are  prepared by the Seller and
delivered to the Trustee and necessary to vest in CPS or such designee  title to
the Receivable including a Trustee's  Certificate in the form of Exhibit F-1. If
it is determined  that  consummation  of the  transactions  contemplated by this
Agreement and the other transaction documents referenced in this Agreement,  the
servicing and operation of the Trust  pursuant to this  Agreement and such other
documents,  or the ownership of a Note or Certificate by a Holder  constitutes a
violation of the prohibited transaction rules of the Employee Retirement Income

                                      -35-





Security Act of 1974,  as amended  ("ERISA"),  or the  Internal  Revenue Code of
1986,  as amended  (the  "Code") or any  successor  statutes of similar  impact,
together with the  regulations  thereunder,  to which no statutory  exception or
administrative  exemption  applies,  such  violation  shall not be  treated as a
breach of the Seller's  representations  and warranties made pursuant to Section
3.1 if not otherwise such a breach.

         (b) Pursuant to Section 2.1 of this  Agreement,  the Seller conveyed to
the Trust all of the  Seller's  right,  title and  interest  in its  rights  and
benefits,  but none of its obligations or burdens, under the Purchase Agreements
including  the Seller's  rights under the Purchase  Agreements  and the delivery
requirements,   representations  and  warranties  and  the  cure  or  repurchase
obligations  of  CPS  under  the  CPS  Purchase  Agreement.  The  Seller  hereby
represents and warrants to the Trust that such assignment is valid,  enforceable
and effective to permit the Trust to enforce such  obligations  of CPS under the
CPS Purchase Agreement.

         SECTION 3.3.  Custody of Receivables Files.

         (a) In  connection  with  the  sale,  transfer  and  assignment  of the
Receivables  and the  other  Conveyed  Property  to the Trust  pursuant  to this
Agreement  the Trustee  shall act as  custodian  of the  following  documents or
instruments  in its  possession  which shall be  delivered  to the Trustee on or
before the Closing Date (with respect to each Receivable):

                  (i) The fully executed  original of the  Receivable  (together
         with  any  agreements  modifying  the  Receivable,   including  without
         limitation any extension agreements);

                  (ii) The original certificate of title in the name of CPS (or,
         with respect to the Samco  Receivables,  Samco) or such  documents that
         CPS shall keep on file,  in accordance  with its customary  procedures,
         evidencing the security  interest of CPS (or, with respect to the Samco
         Receivables,  Samco) in the Financed Vehicle or, if not yet received, a
         copy of the application  therefor  showing CPS (or, with respect to the
         Samco Receivables, Samco) as secured party.

         (b) Upon payment in full of any  Receivable,  the Servicer  will notify
the  Trustee  pursuant to a  certificate  of an officer of the  Servicer  (which
certificate shall include a statement to the effect that all amounts received in
connection  with  such  payments  which  are  required  to be  deposited  in the
Collection  Account  pursuant to Section 4.1 have been so  deposited)  and shall
request delivery of the Receivable and Receivable File to the Servicer.

                                      -36-





         SECTION 3.4.  Acceptance  of Receivable  Files by Trustee.  The Trustee
acknowledges  receipt  of  files  which  the  Seller  has  represented  are  the
Receivable  Files.  The  Trustee  has  reviewed  the  Receivable  Files  and has
determined  that it has  received  a file  for  each  Receivable  identified  in
Schedule  A to this  Agreement.  The  Trustee  declares  that it holds  and will
continue  to hold such files and any  amendments,  replacements  or  supplements
thereto and all other  Trust  Assets as Trustee in trust for the use and benefit
of all present  and future  Securityholders.  The Trustee  agrees to review each
file  delivered  to it no later than 45 days after the Closing Date to determine
whether  such  Receivable  Files  contain the  documents  referred to in Section
3.3(i) and (ii).  If the Trustee has found or finds that a file for a Receivable
has not been received, or that a file is unrelated to the Receivables identified
in  Schedule A to this  Agreement  or that any of the  documents  referred to in
Section 3.3(i) or (ii) are not contained in a Receivable File, the Trustee shall
inform CPS,  the Seller,  the Owner  Trustee and the Note Insurer  promptly,  in
writing, of the failure to receive a file with respect to such Receivable (or of
the  failure  of any of  the  aforementioned  documents  to be  included  in the
Receivable  File) or  shall  return  to CPS as the  Seller's  designee  any file
unrelated to a Receivable  identified in Schedule A to this  Agreement (it being
understood  that  the  Trustee's  obligation  to  review  the  contents  of  any
Receivable File shall be limited as set forth in the preceding sentence). Unless
such defect with  respect to such  Receivable  File shall have been cured by the
last day of the second  Collection  Period  following  discovery  thereof by the
Trustee,  CPS shall  repurchase  any such  Receivable  as of such  last day.  In
consideration  of the purchase of the  Receivable,  CPS shall remit the Purchase
Amount,  in the manner specified in Section 5.6. The sole remedy of the Trustee,
the Trust,  or the  Securityholders  with  respect to a breach  pursuant to this
Section  3.4 shall be to require  CPS to  purchase  the  applicable  Receivables
pursuant to this  Section 3.4.  Upon receipt of the Purchase  Amount and written
instructions from the Servicer, the Trustee shall release to CPS or its designee
the  related  Receivable  File and shall  execute  and  deliver  all  reasonable
instruments of transfer or assignment,  without recourse, as are prepared by CPS
and  delivered to the Trustee and are  necessary to vest in CPS or such designee
title to the Receivable including a Trustee's Certificate in the form of Exhibit
F-1. The Trustee shall make a list of Receivables for which an application for a
certificate  of title but not an original  certificate of title or, with respect
to  Receivables  originated in the State of Michigan,  a "Form RD108" stamped by
the Department of Motor  Vehicles,  is included in the Receivable File as of the
date of its review of the  Receivable  Files and  deliver a copy of such list to
the Servicer,  the Owner Trustee and the Note Insurer.  On the date which is 180
days following the Closing Date or the next succeeding Business Day, the Trustee

                                      -37-





shall inform CPS and the other parties to this Agreement and the Note Insurer of
any  Receivable  for which  the  related  Receivable  File on such date does not
include an original  certificate of title or, with respect to Financed  Vehicles
in the State of  Michigan,  for which the related  Receivable  File on such date
does not include a "Form RD108" stamped by the Department of Motor Vehicles, and
CPS  shall  repurchase  any such  Receivable  as of the last day of the  current
Collection Period.

         SECTION 3.5. Access to Receivable  Files.  The Trustee shall permit the
Servicer and the Note Insurer access to the  Receivable  Files at all reasonable
times during the Trustee's normal business hours. The Trustee shall,  within two
Business  Days of the  request of the  Servicer,  the Owner  Trustee or the Note
Insurer, execute such documents and instruments as are prepared by the Servicer,
the Owner  Trustee or the Note  Insurer and  delivered  to the  Trustee,  as the
Servicer,  the Owner Trustee or the Note Insurer  deems  necessary to permit the
Servicer, in accordance with its customary servicing procedures,  to enforce the
Receivable on behalf of the Trust and any related  insurance  policies  covering
the Obligor, the Receivable or Financed Vehicle so long as such execution in the
Trustee's  sole  discretion  does not conflict with this  Agreement and will not
cause it undue risk or liability.  The Trustee shall not be obligated to release
any document from any Receivable  File unless it receives a trust receipt signed
by a Servicing  Officer in the form of Exhibit B hereto  (the "Trust  Receipt").
Such Trust Receipt shall obligate the Servicer to return such document(s) to the
Trustee when the need therefor no longer exists unless the  Receivable  shall be
liquidated,  in which case, upon receipt of a certificate of a Servicing Officer
substantially  in the form of  Exhibit C hereto to the effect  that all  amounts
required  to be  deposited  in the  Collection  Account  with  respect  to  such
Receivable  have been so  deposited,  the Trust Receipt shall be released by the
Trustee to the Servicer.


                                   ARTICLE IV

                   ADMINISTRATION AND SERVICING OF RECEIVABLES

         SECTION 4.1.  Duties of the Servicer.  The  Servicer,  as agent for the
Trust, the  Securityholders and the Note Insurer (to the extent provided herein)
shall manage,  service,  administer and make collections on the Receivables with
reasonable  care,  using that degree of skill and attention  customary and usual
for  institutions  which  service  motor vehicle  retail  installment  contracts
similar to the Receivables  and, to the extent more exacting,  that the Servicer
exercises with respect to all comparable automotive receivables that it services
for itself or others. The Servicer's duties shall include collection and

                                      -38-





posting  of  all   payments,   responding  to  inquiries  of  Obligors  on  such
Receivables,   investigating   delinquencies,   sending  payment  statements  to
Obligors,  reporting tax  information to Obligors,  accounting for  collections,
furnishing  monthly and annual statements to the Trustee,  the Owner Trustee and
the Note Insurer with respect to distributions.  Without limiting the generality
of the  foregoing,  and  subject to the  servicing  standards  set forth in this
Agreement,  the Servicer is authorized and empowered by the Trust to execute and
deliver,  on behalf of  itself,  the Trust or the  Securityholders,  any and all
instruments  of  satisfaction  or  cancellation,  or partial or full  release or
discharge,   and  all  other  comparable  instruments,   with  respect  to  such
Receivables or to the Financed  Vehicles  securing such  Receivables  and/or the
certificates  of title or,  with  respect to  Financed  Vehicles in the State of
Michigan, other evidence of ownership with respect to such Financed Vehicles. If
the Servicer  shall  commence a legal  proceeding to enforce a  Receivable,  the
Trust shall thereupon be deemed to have automatically  assigned,  solely for the
purpose of collection,  such  Receivable to the Servicer.  If in any enforcement
suit or legal  proceeding  it shall be held that the  Servicer may not enforce a
Receivable  on the  ground  that it shall not be a real party in  interest  or a
holder entitled to enforce such  Receivable,  the Trust shall, at the Servicer's
expense and direction, take steps to enforce such Receivable, including bringing
suit in its name or the name of the Securityholders.  The Servicer shall prepare
and furnish,  and the Trustee and the Owner Trustee shall execute, any powers of
attorney and other documents  reasonably  necessary or appropriate to enable the
Servicer to carry out its servicing and administrative duties hereunder.

         SECTION  4.2.  Collection  of  Receivable  Payments;  Modifications  of
Receivables; Lockbox Agreements.

         (a) Consistent with the standards,  policies and procedures required by
this  Agreement,  the  Servicer  shall make  reasonable  efforts to collect  all
payments  called for under the terms and  provisions of the  Receivables  as and
when the same shall become due and shall follow such collection procedures as it
follows with respect to all comparable  automotive  receivables that it services
for itself or others;  provided,  however,  that the Servicer  shall notify each
Obligor to make all payments with respect to the  Receivables to the Post-Office
Box. The Servicer will provide each Obligor with a monthly statement in order to
notify such  Obligors to make  payments  directly to the  Post-Office  Box.  The
Servicer shall allocate collections between principal and interest in accordance
with  the  customary  servicing  procedures  it  follows  with  respect  to  all
comparable  automotive  receivables that it services for itself or others and in
accordance  with the terms of this  Agreement.  Except as  provided  below,  the
Servicer, for so long as CPS is the Servicer, may

                                      -39-





grant extensions on a Receivable;  provided,  however, that the Servicer may not
grant more than one  extension per calendar year with respect to a Receivable or
grant an extension with respect to a Receivable for more than one calendar month
or  grant  more  than  three  extensions  in the  aggregate  with  respect  to a
Receivable  without the prior written  consent of the Note Insurer and provided,
further,  that if the Servicer extends the date for final payment by the Obligor
of any  Receivable  beyond  the last day of the  penultimate  Collection  Period
preceding  the Final  Scheduled  Payment Date,  it shall  promptly  purchase the
Receivable  from the Trust in  accordance  with the terms of Section  4.7 hereof
(and for purposes  thereof,  the Receivable shall be deemed to be materially and
adversely affected by such breach). If the Servicer is not CPS, the Servicer may
not make any extension on a Receivable  without the prior written consent of the
Note Insurer.  The Servicer may in its discretion  waive any late payment charge
or any other fees that may be collected  in the  ordinary  course of servicing a
Receivable.  Notwithstanding  anything to the  contrary  contained  herein,  the
Servicer  shall  not  agree  to any  alteration  of  the  interest  rate  on any
Receivable or of the amount of any Scheduled Payment on Receivables.

         (b) The Trustee shall  establish the Lockbox Account in the name of the
Trustee for the benefit of the Securityholders and the Note Insurer. Pursuant to
the  Lockbox  Agreement,  the  Trustee  has  authorized  the  Servicer to direct
dispositions  of funds on  deposit  in the  Lockbox  Account  to the  Collection
Account (but not to any other  account),  and no other Person,  save the Lockbox
Processor  and the  Trustee,  has  authority to direct  disposition  of funds on
deposit  in the  Lockbox  Account.  The  Trustee  shall  have  no  liability  or
responsibility with respect to the Lockbox Processor's  directions or activities
as set forth in the preceding sentence. The Lockbox Account shall be established
pursuant to and maintained in accordance with the Lockbox Agreement and shall be
a demand deposit  account  initially  established  and  maintained  with Bank of
America,  or at the request of the Note Insurer (unless an Insurer Default shall
have occurred and be continuing) an Eligible  Account  satisfying  clause (i) of
the  definition  thereof;  provided,  however,  that the Trustee  shall give the
Servicer  prior  written  notice of any change  made at the  request of the Note
Insurer in the location of the Lockbox Account.  The Trustee shall establish and
maintain the  Post-Office  Box at a United States Post Office Branch in the name
of the Trustee for the benefit of the Securityholders and the Note Insurer.

         (c) Notwithstanding any Lockbox Agreement,  or any of the provisions of
this  Agreement  relating to the Lockbox  Agreement,  the Servicer  shall remain
obligated and liable to the Trust, the Trustee and Securityholders for servicing
and  administering the Receivables and the other Conveyed Property in accordance
with

                                      -40-





the  provisions  of this  Agreement  without  diminution  of such  obligation or
liability by virtue thereof.

         (d) In the event the Servicer  shall for any reason no longer be acting
as such, the Standby Servicer or a successor Servicer shall thereupon assume all
of the  rights  and  obligations  of the  outgoing  Servicer  under the  Lockbox
Agreement. In such event, the successor Servicer shall be deemed to have assumed
all of the  outgoing  Servicer's  interest  therein  and to  have  replaced  the
outgoing  Servicer as a party to the Lockbox  Agreement to the same extent as if
such Lockbox Agreement had been assigned to the successor Servicer,  except that
the  outgoing  Servicer  shall not  thereby  be  relieved  of any  liability  or
obligations on the part of the outgoing  Servicer to the Lockbox Bank under such
Lockbox Agreement. The outgoing Servicer shall, upon request of the Trustee, but
at the expense of the outgoing  Servicer,  deliver to the successor Servicer all
documents  and records  relating to the Lockbox  Agreement  and an accounting of
amounts  collected  and  held by the  Lockbox  Bank and  otherwise  use its best
efforts to effect the orderly and efficient transfer of any Lockbox Agreement to
the  successor  Servicer.  In the  event  that the Note  Insurer  (so long as an
Insurer Default shall not have occurred and be continuing) or Holders of Class A
Notes evidencing more than 50% of the outstanding principal balance of the Class
A Notes (if an Insurer  Default  shall have  occurred and be  continuing)  shall
elect to change the identity of the Lockbox Bank, the Servicer,  at its expense,
shall cause the Lockbox  Bank to deliver,  at the  direction of the Note Insurer
(so long as an Insurer  Default  shall not have occurred and be  continuing)  or
Holders of Class A Notes  evidencing more than 50% of the outstanding  principal
balance of the Class A Notes (if an Insurer  Default  shall have occurred and be
continuing)  to the Trustee or a  successor  Lockbox  Bank,  all  documents  and
records  relating  to the  Receivables  and  all  amounts  held  (or  thereafter
received) by the Lockbox Bank  (together with an accounting of such amounts) and
shall  otherwise  use its best  efforts  to effect  the  orderly  and  efficient
transfer of the Lockbox arrangements.

         (e) On each  Business  Day,  pursuant  to the  Lockbox  Agreement,  the
Lockbox  Processor  will  transfer any payments  from  Obligors  received in the
Post-Office Box to the Lockbox  Account.  Within two Business Days of receipt of
funds into the Lockbox  Account,  the  Servicer  shall cause the Lockbox Bank to
transfer funds from the Lockbox Account to the Collection  Account. In addition,
the Servicer  shall remit all payments by or on behalf of the Obligors  received
by  the  Servicer  with  respect  to  the  Receivables   (other  than  Purchased
Receivables),  and all  Liquidation  Proceeds  no later  than the  Business  Day
following receipt directly  (without deposit into any intervening  account) into
the Lockbox Account or the Collection Account.


                                      -41-





         SECTION 4.3. Realization Upon Receivables.  On behalf of the Trust, the
Securityholders  and the Note Insurer,  the Servicer shall use its best efforts,
consistent  with the  servicing  procedures  set forth  herein,  to repossess or
otherwise  convert the ownership of the Financed Vehicle securing any Receivable
as to which the  Servicer  shall  have  determined  eventual  payment in full is
unlikely.  The Servicer shall commence efforts to repossess or otherwise convert
the ownership of a Financed  Vehicle on or prior to the date that an Obligor has
failed to make more than 90% of a Scheduled Payment thereon in excess of $10 for
120 days or more; provided, however, that the Servicer may elect not to commence
such efforts within such time period if in its good faith judgment it determines
either that it would be impracticable  to do so or that the proceeds  ultimately
recoverable  with respect to such Receivable  would be increased by forbearance.
The Servicer shall follow such  customary and usual  practices and procedures as
it shall deem necessary or advisable in its servicing of automotive receivables,
consistent  with the  standards  of care set  forth in  Section  4.2,  which may
include  reasonable  efforts to realize upon any recourse to Dealers and selling
the Financed  Vehicle at public or private sale. The foregoing  shall be subject
to the  provision  that,  in any case in which the Financed  Vehicle  shall have
suffered  damage,  the Servicer  shall not expend funds in  connection  with the
repair or the repossession of such Financed Vehicle unless it shall determine in
its discretion that such repair and/or  repossession  will increase the proceeds
ultimately recoverable with respect to such Receivable by an amount greater than
the amount of such expenses.

         SECTION 4.4.  Insurance.

         (a) The Servicer,  in  accordance  with the  servicing  procedures  and
standards  set forth  herein,  shall  require that (i) each  Obligor  shall have
obtained  insurance  covering  the  Financed  Vehicle,  as of  the  date  of the
execution  of the  Receivable,  insuring  against  loss and  damage due to fire,
theft,   transportation,   collision  and  other  risks  generally   covered  by
comprehensive and collision coverage and each Receivable requires the Obligor to
maintain such physical loss and damage insurance naming CPS (or, with respect to
the Samco  Receivables,  Samco) and its  successors and assigns as an additional
insured, (ii) each Receivable that finances the cost of premiums for credit life
and credit  accident and health  insurance is covered by an insurance  policy or
certificate  naming CPS (or,  with respect to the Samco  Receivables,  Samco) as
policyholder  (creditor) and (iii) as to each  Receivable that finances the cost
of an extended service contract,  the respective  Financed Vehicle which secures
the Receivable is covered by an extended service contract.


                                      -42-





         (b) To the extent  applicable,  the Servicer  shall not take any action
which would result in noncoverage  under any of the insurance  policies referred
to in Section 4.4(a) which, but for the actions of the Servicer, would have been
covered  thereunder.  The  Servicer,  on behalf of the  Trust,  shall  take such
reasonable  action as shall be  necessary  to permit  recovery  under any of the
foregoing insurance policies. Any amounts collected by the Servicer under any of
the foregoing  insurance  policies shall be deposited in the Collection  Account
pursuant to Section 5.2.

         SECTION 4.5.  Maintenance of Security Interests in Vehicles.

         (a)  Consistent  with the  policies  and  procedures  required  by this
Agreement,  the  Servicer  shall  take such  steps on behalf of the Trust as are
necessary  to  maintain  perfection  of the  security  interest  created by each
Receivable  in the  related  Financed  Vehicle,  including  but not  limited  to
obtaining the execution by the Obligors and the recording,  registering, filing,
rerecording,  re-filing,  re-recording,   re-registering  and  refiling  of  all
security  agreements,   financing  statements  and  continuation  statements  or
instruments  as are necessary to maintain the security  interest  granted by the
Obligors under the  respective  Receivables.  The Trustee hereby  authorizes the
Servicer,  and the  Servicer  agrees,  to take any and all  steps  necessary  to
re-perfect or continue the perfection of such security interest on behalf of the
Trust as necessary  because of the  relocation of a Financed  Vehicle or for any
other reason.  In the event that the  assignment of a Receivable to the Trust 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  Financed  Vehicle is  located,  to perfect a
security  interest in the related  Financed  Vehicle in favor of the Trust,  the
Servicer  hereby  agrees  that CPS's  designation  as the  secured  party on the
certificate of title is in its capacity as Servicer as agent of the Trust.

         (b) Upon the occurrence of an Insurance Agreement Event of Default, the
Note Insurer may (so long as an Insurer  Default  shall not have occurred and be
continuing)  instruct the Trustee and the Servicer to take or cause to be taken,
or, if an Insurer Default shall have occurred, upon the occurrence of a Servicer
Termination  Event, the Trustee and the Servicer shall take or cause to be taken
such  action as may,  in the opinion of counsel to the  Trustee,  which  opinion
shall not be an expense of the Trustee,  be  necessary to perfect or  re-perfect
the security  interests in the Financed Vehicles securing the Receivables in the
name of the Trust by amending the title  documents of such Financed  Vehicles or
by such other reasonable means as may, in the opinion of counsel to the Trustee,
which opinion  shall not be an expense of the Trustee,  be necessary or prudent.
CPS hereby

                                      -43-





agrees to pay all expenses  related to such  perfection or  reperfection  and to
take all  action  necessary  therefor.  The  Servicer  hereby  agrees to pay all
expenses  related  to such  perfection  or  reperfection  and to take all action
necessary  therefor.  In  addition,  prior  to the  occurrence  of an  Insurance
Agreement Event of Default,  the Controlling  Party may instruct the Trustee and
the  Servicer to take or cause to be taken such action as may, in the opinion of
counsel to the  Controlling  Party,  be necessary to perfect or  re-perfect  the
security  interest in the Financed  Vehicles  underlying the  Receivables in the
name of the Trust,  including by amending the title  documents of such  Financed
Vehicles or by such other  reasonable means as may, in the opinion of counsel to
the Controlling Party, be necessary or prudent;  provided,  however, that if the
Controlling Party requests (unless an Insurer Default shall have occurred and be
continuing)  that the title  documents be amended prior to the  occurrence of an
Insurance Agreement Event of Default, the out-of-pocket expenses of the Servicer
or the  Trustee  in  connection  with such  action  shall be  reimbursed  to the
Servicer or the Trustee, as applicable, by the Controlling Party.

         SECTION 4.6. Additional  Covenants of Servicer.  The Servicer shall not
release the Financed Vehicle securing each Receivable from the security interest
granted by such Receivable in whole or in part except in the event of payment in
full by the Obligor  thereunder or  repossession,  nor shall the Servicer impair
the rights of the  Securityholders  in such Receivables,  nor shall the Servicer
amend a Receivable,  except that  extensions  may be granted in accordance  with
Section 4.2.

         SECTION 4.7.  Purchase of  Receivables  Upon Breach of  Covenant.  Upon
discovery by any of the  Servicer,  the Note  Insurer,  the Owner Trustee or the
Trustee of a breach of any of the  covenants set forth in Section  4.2(a),  4.4,
4.5 or 4.6, the party  discovering  such breach shall give prompt written notice
to the others; provided, however, that the failure to give any such notice shall
not affect any  obligation  of the Servicer  under this Section 4.7.  Unless the
breach  shall have been cured by the last day of the  second  Collection  Period
following such discovery  (or, at the Servicer's  election,  the last day of the
first following  Collection Period),  the Servicer shall purchase any Receivable
materially  and  adversely  affected by such  breach.  In  consideration  of the
purchase of such Receivable, the Servicer shall remit the Purchase Amount in the
manner specified in Section 5.6. The sole remedy of the Trustee,  the Trust, the
Owner Trustee,  the Note Insurer or the Securityholders with respect to a breach
of  Section  4.2(a),  4.4,  4.5 or 4.6  shall  be to  require  the  Servicer  to
repurchase Receivables pursuant to this Section 4.7; provided, however, that the
Servicer  shall  indemnify the Trustee,  the Standby  Servicer,  the  Collateral
Agent, the Note Insurer, the Owner Trustee, the Trust and the

                                      -44-





Securityholders  against  all  costs,  expenses,  losses,  damages,  claims  and
liabilities,  including  reasonable  fees and expenses of counsel,  which may be
asserted  against or incurred  by any of them as a result of third party  claims
arising  out of the  events  or  facts  giving  rise  to such  breach.  If it is
determined that the management,  administration and servicing of the Receivables
and operation of the Trust pursuant to this Agreement constitutes a violation of
the  prohibited  transaction  rules of  ERISA or the Code to which no  statutory
exception or  administrative  exemption  applies,  such  violation  shall not be
treated as a breach of Section  4.2(a),  4.4, 4.5 or 4.6 if not otherwise such a
breach.

         SECTION  4.8.  Servicing  Fee.  (a) The  Servicing  Fee for the initial
Payment Date shall be equal to the sum of (i) the product of (x) the  percentage
equivalent  of a fraction  the  numerator  of which is the number  days from the
Closing Date to but  excluding  the first  Payment Date and the  denominator  of
which is 360,  (y) 2.00% and (z) the Pool Balance as of the close of business on
the  second  preceding  Collection  Period  plus  (ii)  the  product  of (x) the
percentage  equivalent  of a fraction the  numerator of which is the number days
from  the  Closing  Date  to but  excluding  the  first  Payment  Date  and  the
denominator  of  which  is 360,  (y)  0.08%  and (z) the  aggregate  outstanding
principal  amount of the  Securities as of the close of business on the last day
of the second preceding Collection Period; provided,  however, that with respect
to the first  Payment Date the Servicer  will be entitled to receive a Servicing
Fee  equal  to the sum of (i)  the  product  of  one-twelfth  times  2.0% of the
Original  Pool Balance plus (ii) the product of  one-twelfth  times 0.08% of the
aggregate outstanding principal amount of the Securities as of the Closing Date.
The  Servicing  Fee  shall  also  include  all  late  fees,  prepayment  charges
including,  in the case of a Rule of 78's Receivable that is prepaid in full, to
the extent not  required  by law to be  remitted  to the  related  Obligor,  the
difference  between the Principal  Balance of such Rule of 78's Receivable (plus
accrued  interest to the date of prepayment)  and the principal  balance of such
Receivable  computed  according to the "Rule of 78's", and other  administrative
fees or similar  charges  allowed by applicable law with respect to Receivables,
collected (from whatever source) on the Receivables.

         SECTION 4.9. Servicer's  Certificate.  By 10:00 a.m., Minneapolis time,
on each Determination Date, the Servicer shall deliver to the Trustee, the Owner
Trustee,  the Note  Insurer,  the Rating  Agencies  and the Seller a  Servicer's
Certificate  containing  all  information  necessary  to make the  distributions
pursuant to Section 5.7  (including,  if required,  withdrawals  from the Spread
Account)  for the  Collection  Period  preceding  the  date  of such  Servicer's
Certificate and all information  necessary for the Trustee to send statements to
the Noteholders and the Note Insurer  pursuant to Sections 5.8(a) and 5.9(b) and
for the Owner

                                      -45-





Trustee to send statements to Certificateholders  pursuant to Section 5.5 of the
Trust Agreement.  Receivables to be purchased by the Servicer or to be purchased
by CPS shall be  identified  by the  Servicer by account  number with respect to
such Receivable (as specified in Schedule A).

         SECTION 4.10.  Annual  Statement as to  Compliance,  Notice of Servicer
Termination Event.

         (a) The Servicer shall deliver to the Owner Trustee,  the Trustee,  the
Standby Servicer,  the Note Insurer and each Rating Agency, on or before July 31
of each year  beginning  July 31, 1998,  an Officer's  Certificate,  dated as of
March  31 of such  year,  stating  that (i) a review  of the  activities  of the
Servicer during the preceding 12-month period (or, in the case of the first such
certificate,  the  period  from the  Cutoff  Date to March 31,  1998) and of its
performance under this Agreement has been made under such officer's  supervision
and (ii) to the best of such  officer's  knowledge,  based on such  review,  the
Servicer has fulfilled all its obligations under this Agreement  throughout such
year (or, in the case of the first such certificate,  such shorter period),  or,
if  there  has  been a  default  in the  fulfillment  of  any  such  obligation,
specifying  each such  default  known to such  officer and the nature and status
thereof.  The  Trustee  shall  send a copy of such  certificate  and the  report
referred to in Section 4.11 to the Rating Agencies.  The Trustee shall forward a
copy of such  certificate  as well as the report  referred to in Section 4.11 to
each Securityholders.

         (b) The Servicer shall deliver to the Owner Trustee,  the Trustee,  the
Standby  Servicer,  the Note  Insurer,  the  Collateral  Agent,  and each Rating
Agency,  promptly after having obtained knowledge thereof, but in no event later
than  two  (2)  Business  Days  thereafter,   written  notice  in  an  Officer's
Certificate  of any event  which with the giving of notice or lapse of time,  or
both, would become a Servicer Termination Event under Section 10.1.

         SECTION 4.11.  Annual  Independent  Accountants'  Report.  The Servicer
shall  cause  a firm  of  nationally  recognized  independent  certified  public
accountants (the "Independent Accountants"),  who may also render other services
to the Servicer or to the Seller, to deliver to the Trustee,  the Owner Trustee,
the Standby Servicer, the Note Insurer and each Rating Agency, on or before July
31 of each year  beginning  July 31, 1998, a report dated as of March 31 of such
year (the "Accountants'  Report") and reviewing the Servicer's activities during
the  preceding  12-month  period (or, in the case of the first such report,  the
period  from the  Cutoff  Date to March  31,  1998),  addressed  to the Board of
Directors  of the  Servicer,  to the Owner  Trustee,  the  Trustee,  the Standby
Servicer and to the Note Insurer, to the effect that such

                                      -46-





firm has examined the financial statements of the Servicer and issued its report
therefor and that such  examination  (1) was made in accordance  with  generally
accepted  auditing  standards,  and  accordingly  included  such  tests  of  the
accounting  records and such other auditing  procedures as such firm  considered
necessary  in the  circumstances;  (2)  included  tests  relating  to auto loans
serviced for others in accordance  with the  requirements  of the Uniform Single
Audit Program for Mortgage Bankers (the "Program"), to the extent the procedures
in the Program are  applicable  to the servicing  obligations  set forth in this
Agreement;  (3) included an examination of the  delinquency  and loss statistics
relating to the Servicer's  portfolio of automobile and light truck  installment
sales  contracts;  and (4)  except as  described  in the  report,  disclosed  no
exceptions or errors in the records relating to automobile and light truck loans
serviced for others that, in the firm's  opinion,  paragraph four of the Program
requires such firm to report.  The accountant's  report shall further state that
(1) a  review  in  accordance  with  agreed  upon  procedures  was made of three
randomly selected Servicer Certificates;  (2) except as disclosed in the report,
no exceptions  or errors in the Servicer  Certificates  were found;  and (3) the
delinquency and loss information,  relating to the Receivables  contained in the
Servicer Certificates were found to be accurate. In the event such firm requires
the  Trustee,  the Owner  Trustee  and/or the  Standby  Servicer to agree to the
procedures  performed by such firm, the Servicer  shall direct the Trustee,  the
Owner  Trustee  and/or the Standby  Servicer,  as  applicable,  in writing to so
agree; it being understood and agreed that the Trustee, the Owner Trustee and/or
the Standby  Servicer  will  deliver  such  letter of  agreement  in  conclusive
reliance upon the direction of the Servicer,  and neither the Trustee, the Owner
Trustee nor the Standby Servicer makes any independent  inquiry or investigation
as to, and shall have no obligation or liability in respect of, the sufficiency,
validity or correctness of such procedures.

         The  Report  will also  indicate  that the firm is  independent  of the
Servicer within the meaning of the Code of  Professional  Ethics of the American
Institute of Certified Public Accountants.

         SECTION 4.12. Access to Certain Documentation and Information Regarding
Receivables.  The Servicer shall provide to representatives of the Trustee,  the
Owner Trustee,  the Standby Servicer and the Note Insurer  reasonable  access to
the documentation regarding the Receivables.  In each case, such access shall be
afforded  without  charge but only upon  reasonable  request  and during  normal
business  hours.  Nothing in this Section shall  derogate from the obligation of
the Servicer to observe any applicable law prohibiting disclosure of information
regarding the Obligors, and the failure of the Servicer to

                                      -47-





provide access as provided in this Section as a result of such obligation  shall
not constitute a breach of this Section.

         SECTION 4.13. Verification of Servicer's Certificate.  (a) On or before
the fifth  calendar day of each month,  the Servicer will deliver to the Trustee
and the Standby Servicer a computer diskette (or other electronic  transmission)
in a format  acceptable  to the  Trustee  and the  Standby  Servicer  containing
information  with respect to the  Receivables as of the close of business on the
last day of the preceding  Collection  Period which information is necessary for
preparation of the Servicer's  Certificate.  The Standby Servicer shall use such
computer   diskette  (or  other  electronic   transmission)  to  verify  certain
information specified in Section 4.13(b) contained in the Servicer's Certificate
delivered by the Servicer,  and the Standby  Servicer  shall notify the Servicer
and the Note Insurer of any  discrepancies  on or before the second Business Day
following the Determination Date. In the event that the Standby Servicer reports
any  discrepancies,  the  Servicer  and the Standby  Servicer  shall  attempt to
reconcile  such  discrepancies  prior to the  second  Business  Day prior to the
related  Payment Date,  but in the absence of a  reconciliation,  the Servicer's
Certificate shall control for the purpose of calculations and distributions with
respect to the related Payment Date. In the event that the Standby  Servicer and
the Servicer are unable to reconcile  discrepancies with respect to a Servicer's
Certificate  by the related  Payment  Date,  the Servicer  shall cause a firm of
independent  certified public  accountants,  at the Servicer's expense, to audit
the Servicer's Certificate and, prior to the fifth calendar day of the following
month,  reconcile the discrepancies.  The effect, if any, of such reconciliation
shall be  reflected  in the  Servicer's  Certificate  for such  next  succeeding
Determination  Date.  Other  than  the  duties  specifically  set  forth in this
Agreement, the Standby Servicer shall have no obligations hereunder,  including,
without limitation, to supervise,  verify, monitor or administer the performance
of the Servicer.  The Standby  Servicer  shall have no liability for any actions
taken or omitted by the  Servicer.  The duties and  obligations  of the  Standby
Servicer shall be determined solely by the express  provisions of this Agreement
and no  implied  covenants  or  obligations  shall be read into  this  Agreement
against the Standby Servicer.

         (b) The  Standby  Servicer  shall  review each  Servicer's  Certificate
delivered pursuant to Section 4.13(a) and shall:

                  (i) confirm that such  Servicer's  Certificate  is complete on
         its face;

                  (ii) load the  computer  diskette  (which shall be in a format
         acceptable to the Standby Servicer) received from the

                                      -48-





         Servicer pursuant to Section 4.13(a) hereof, confirm that such computer
         diskette is in a readable  form and calculate and confirm the Principal
         Balance of each Receivable for the most recent Payment Date;

                  (iii)  confirm  that  the  Total   Distribution   Amount,  the
         Principal  Distributable  Amount,  the Class A  Noteholders'  Principal
         Distributable Amount, the Class A-1 Noteholders' Interest Distributable
         Amount, the Class A-2 Noteholders'  Interest  Distributable Amount, the
         Certificateholders'      Interest     Distributable     Amount,     the
         Certificateholders'  Principal  Distributable  Amount, the Standby Fee,
         the Servicing Fee, the Trustee Fee, the amount on deposit in the Spread
         Account,  and the Premium in the  Servicer's  Certificate  are accurate
         based solely on the recalculation of the Servicer's Certificate; and

                  (iv)  confirm the  calculation  of the  performance  tests set
         forth in the Spread Account Agreement.

         SECTION  4.14.  Retention  and  Termination  of Servicer.  The Servicer
hereby  covenants and agrees to act as such under this  Agreement for an initial
term commencing on the Closing Date and ending on December 31, 1997,  which term
shall be extendible by the Note Insurer for successive quarterly terms ending on
each  successive  March 31, June 30,  September  30 and  December 31 (or, at the
discretion of the Note Insurer exercised  pursuant to revocable written standing
instructions  from  time to  time  to the  Servicer  and  the  Trustee,  for any
specified  number of terms greater than one),  until such time as the Notes have
been paid in full, all amounts due to the Certificateholders  have been paid and
until the  Termination  of the Trust.  Each such notice  (including  each notice
pursuant to standing instructions, which shall be deemed delivered at the end of
successive  terms for so long as such  instructions  are in effect) (a "Servicer
Extension Notice") shall be delivered by the Note Insurer to the Trustee and the
Servicer. The Servicer hereby agrees that, upon its receipt of any such Servicer
Extension Notice,  the Servicer shall become bound, for the duration of the term
covered by such Servicer  Extension  Notice, to continue as the Servicer subject
to and in accordance with the other provisions of this Agreement.  If an Insurer
Default has occurred and is continuing,  the term of the Servicer's  appointment
hereunder shall be deemed to have been extended until such time, if any, as such
Insurer Default has been cured unless such  appointment is terminated  sooner in
accordance  with the terms of this  Agreement).  Until  such time as an  Insurer
Default shall have occurred and be continuing,  the Trustee agrees that if as of
the fifteenth day prior to the last day of any term of the Servicer, the Trustee
shall not have received any Servicer Extension Notice from the Note Insurer, the

                                      -49-





Trustee  shall,  within  five  days  thereafter,  give  written  notice  of such
non-receipt to the Note Insurer.

         SECTION 4.15.  Fidelity  Bond.  The Servicer  shall maintain a fidelity
bond in such form and amount as is customary for entities acting as custodian of
funds and documents in respect of consumer  contracts on behalf of institutional
investors.


                                    ARTICLE V

                         TRUST ACCOUNTS; DISTRIBUTIONS;
                          STATEMENTS TO SECURITYHOLDERS

         SECTION 5.1.  Establishment of Trust Accounts.

         (a) (i) The  Trustee,  on  behalf of the  Securityholders  and the Note
Insurer,  shall establish and maintain in its own name an Eligible  Account (the
"Collection  Account"),  bearing a designation clearly indicating that the funds
deposited therein are held for the benefit of the Trustee on behalf of the
Securityholders and the Note Insurer.

                  (ii)  The  Trustee,  on  behalf  of  the  Noteholders,   shall
establish  and  maintain  in  its  own  name  an  Eligible  Account  (the  "Note
Distribution Account"),  bearing a designation clearly indicating that the funds
deposited  therein  are held for the  benefit  of the  Trustee  on behalf of the
Noteholders and the Note Insurer.  The Note Distribution Account shall initially
be established with the Trustee.

         (b)  Funds  on  deposit  in  the   Collection   Account  and  the  Note
Distribution Account  (collectively,  the "Trust Accounts") shall be invested by
the  Trustee  (or any  custodian  with  respect  to funds on deposit in any such
account) in Eligible  Investments  selected in writing by the Servicer (pursuant
to standing  instructions or otherwise).  All such Eligible Investments shall be
held by or on behalf of the Trustee for the  benefit of the  Noteholders  and/or
the  Certificateholders  and the Note  Insurer,  as  applicable.  Other  than as
permitted by the Rating  Agencies and the Note Insurer,  funds on deposit in any
Account shall be invested in Eligible  Investments that will mature so that such
funds will be available at the close of business on the Business Day immediately
preceding the following  Payment Date. Funds deposited in a Trust Account on the
day  immediately  preceding a Payment  Date upon the  maturity  of any  Eligible
Investments are not required to be invested overnight.  All Eligible investments
will be held to maturity.

         (c) All investment  earnings of moneys  deposited in the Trust Accounts
shall be deposited (or caused to be deposited) by

                                      -50-





the  Trustee in the  Collection  Account  for  distribution  pursuant to Section
5.7(b),  and any loss resulting from such  investments  shall be charged to such
account.  The Servicer will not direct the Trustee to make any investment of any
funds held in any of the Trust Accounts unless the security interest granted and
perfected in such account will continue to be perfected in such  investment,  in
either case without any further  action by any Person,  and, in connection  with
any  direction to the Trustee to make any such  investment,  if requested by the
Trustee,  the  Servicer  shall  deliver to the  Trustee  an Opinion of  Counsel,
acceptable to the Trustee, to such effect.

         (d) The  Trustee  shall not in any way be held  liable by reason of any
insufficiency  in any of the  Trust  Accounts  resulting  from  any  loss on any
Eligible  Investment  included  therein  except for losses  attributable  to the
Trustee's  negligence  or bad  faith or its  failure  to make  payments  on such
Eligible  Investments  issued by the  Trustee,  in its  commercial  capacity  as
principal obligor and not as trustee, in accordance with their terms.

         (e) If (i) the Servicer shall have failed to give investment directions
for any funds on  deposit  in the Trust  Accounts  to the  Trustee  by 2:00 p.m.
Eastern  Time (or such other time as may be agreed by the Issuer and Trustee) on
any Business  Day; or (ii) a Default or Event of Default shall have occurred and
be  continuing  with  respect  to the Notes  but the  Notes  shall not have been
declared  due and  payable,  or, if such Notes shall have been  declared due and
payable following an Event of Default,  amounts collected or receivable from the
Trust  Property are being  applied as if there had not been such a  declaration;
then the Trustee shall, to the fullest extent  practicable,  invest and reinvest
funds in the Trust Accounts in one or more Eligible Investments.

         (f) The  Trustee  shall  possess all right,  title and  interest in all
funds on deposit  from time to time in the Trust  Accounts  and in all  proceeds
thereof  (including all Investment  Earnings on the Collection  Account) and all
such funds,  investments,  proceeds  and income shall be part of the Owner Trust
Estate.  Except as otherwise  provided herein, the Trust Accounts shall be under
the sole dominion and control of the Trustee for the benefit of the  Noteholders
and/or the  Certificateholders,  as the case may be, and the Note Insurer. If at
any time  any of the  Trust  Accounts  ceases  to be an  Eligible  Account,  the
Servicer  with the consent of the Note Insurer  shall within five  Business Days
establish a new Trust Account as an Eligible Account and shall transfer any cash
and/or any  investments to such new Trust  Account.  The Servicer shall promptly
notify the Rating  Agencies and the Owner  Trustee of any change in the location
of any of the aforementioned accounts. In connection with the foregoing, the

                                      -51-





Servicer  agrees  that,  in the  event  that any of the Trust  Accounts  are not
accounts  with the  Trustee,  the  Servicer  shall notify the Trustee in writing
promptly upon any of such Trust Accounts ceasing to be an Eligible Account.

         (g) With  respect to the Trust  Account  Property,  the Trustee  agrees
that:

                  (A) any  Trust  Account  Property  that  is  held  in  deposit
         accounts shall be held solely in Eligible Deposit Accounts; and, except
         as otherwise provided herein,  each such Eligible Deposit Account shall
         be subject to the exclusive  custody and control of the Trustee and the
         Trustee shall have sole signature authority with respect thereto;

                  (B) any  Trust  Account  Property  that  constitutes  Physical
         Property or "certificated securities" shall be delivered to the Trustee
         in accordance with paragraph (i)(a) or (ii)(b),  as applicable,  of the
         definition  of  "Delivery"  and  shall be  held,  pending  maturity  or
         disposition, solely by the Trustee or a financial intermediary (as such
         term is defined in Section  8-313(4) of the UCC) acting  solely for the
         Trustee;

                  (C) any Trust Account  Property that is a book-entry  security
         held through the Federal Reserve System pursuant to Federal  book-entry
         regulations  shall be delivered in accordance with paragraph  (i)(b) or
         (ii)(c),  as  applicable,  of the definition of "Delivery" and shall be
         maintained by the Trustee,  pending  maturity or  disposition,  through
         continued  book-entry  registration  of such Trust Account  Property as
         described in such paragraph; and

                  (D) any  Trust  Account  Property  that is an  "uncertificated
         security" under Article 8 of the UCC and that is not governed by clause
         (C)  above  shall  be  delivered  to the  Trustee  in  accordance  with
         paragraph  (i)(c) or  (ii)(d),  as  applicable,  of the  definition  of
         "Delivery" and shall be maintained by the Trustee,  pending maturity or
         disposition,  through  continued  registration of the Trustee's (or its
         nominee's) ownership of such security.

                  (E) The Servicer  shall have the power,  revocable by the Note
         Insurer or,  with the consent of the Note  Insurer by the Trustee or by
         the Owner  Trustee  with the consent of the  Trustee,  to instruct  the
         Trustee to make  withdrawals  and payments from the Trust  Accounts for
         the purpose of permitting the Servicer and the Trustee to carry out its
         respective duties hereunder.


                                      -52-





         SECTION 5.2.  [RESERVED].

         SECTION 5.3. Certain  Reimbursements to the Servicer. The Servicer will
be entitled to be reimbursed  from amounts on deposit in the Collection  Account
with  respect to a  Collection  Period for amounts  previously  deposited in the
Collection  Account but later  determined  by the Servicer to have resulted from
mistaken  deposits or postings or checks returned for  insufficient  funds.  The
amount to be reimbursed  hereunder  shall be paid to the Servicer on the related
Payment Date pursuant to Section 5.7(b)(i) upon certification by the Servicer of
such amounts and the provision of such  information  to the Trustee and the Note
Insurer as may be  necessary  in the  opinion of the Note  Insurer to verify the
accuracy  of such  certification.  In the event  that the Note  Insurer  has not
received  evidence   satisfactory  to  it  of  the  Servicer's   entitlement  to
reimbursement  pursuant  to this  Section,  the Note  Insurer  shall  (unless an
Insurer  Default shall have occurred and be continuing)  give the Trustee notice
to such  effect,  following  receipt  of  which  the  Trustee  shall  not make a
distribution  to the Servicer in respect of such amount pursuant to Section 5.7,
or if the Servicer  prior thereto has been  reimbursed  pursuant to Section 5.7,
the Trustee shall withhold such amounts from amounts otherwise  distributable to
the Servicer on the next succeeding Payment Date.

         SECTION 5.4.  Application  of  Collections.  All  collections  for each
Collection Period shall be applied by the Servicer as follows:

         With respect to each  Receivable  (other than a Purchased  Receivable),
payments by or on behalf of the Obligor shall be applied,  in the case of a Rule
of 78's  Receivable,  first,  to the  Scheduled  Payment  of  such  Rule of 78's
Receivable  and,  second,  to any late fees accrued with respect to such Rule of
78's Receivable and, in the case of a Simple  Interest  Receivable,  to interest
and principal in accordance with the Simple Interest Method.

         SECTION 5.5. Withdrawals from Spread Account. (a) In the event that the
Servicer's  Certificate with respect to any Determination  Date shall state that
the  Total  Distribution  Amount  with  respect  to such  Determination  Date is
insufficient  (taking into  account the  application  of the Total  Distribution
Amount to the payment  required to be made on the related  Payment Date pursuant
to Section  5.7(b)(vi)) to make the payments  required to be made on the related
Payment Date pursuant to Section  5.7(b)(i),  (ii), (iii),  (iv), (v), (vii) and
(viii) (such deficiency being a "Deficiency  Claim Amount"),  then on the fourth
Business Day  immediately  preceding the related Payment Date, the Trustee shall
deliver to the Collateral  Agent, the Owner Trustee,  the Note Insurer,  and the
Servicer, by hand delivery, telex or

                                      -53-





facsimile transmission,  a written notice (a "Deficiency Notice") specifying the
Deficiency  Claim Amount for such Payment  Date.  Such  Deficiency  Notice shall
direct the Collateral Agent to remit such Deficiency Claim Amount (to the extent
of  the  funds  available  to be  distributed  pursuant  to the  Spread  Account
Agreement) to the Trustee for deposit in the Collection Account and distribution
pursuant to Sections  5.7(b)(i),  (ii),  (iii),  (iv), (v), (vii) and (viii), as
applicable.

         (b) Any  Deficiency  Notice shall be delivered by 10:00 a.m.,  New York
City time, on the fourth  Business Day preceding  such Payment Date. The amounts
distributed  by the  Collateral  Agent to the Trustee  pursuant to a  Deficiency
Notice shall be deposited by the Trustee into the Collection Account pursuant to
Section 5.6.

         (c) In the event that the  Servicer's  Certificate  with respect to any
Determination Date shall state that the Total  Distribution  Amount with respect
to such Payment  Date is  insufficient  to make the payments to the  Certificate
Distribution Account required to be made on the related Payment Date pursuant to
Section  5.7(b)(vi) or (x) (such deficiency  being a "Certificate  Deficiency"),
then on the fourth Business Day immediately  preceding the related Payment Date,
the Trustee shall  deliver to the  Collateral  Agent,  the Owner Trustee and the
Servicer, by hand delivery,  telex or facsimile  transmission,  a written notice
specifying the amount of the Certificate  Deficiency for such Payment Date. Such
notice shall direct the Collateral Agent to remit to the Trustee an amount equal
to such  Certificate  Deficiency  (but only to the extent that,  pursuant to the
Master  Spread  Account  Agreement,  funds are required to be released  from the
Spread  Account to the Seller on the related  Payment Date and are available for
application  on account of such  Certificate  Deficiency)  for deposit  into the
Collection  Account  and,  distribution  pursuant to Section  5.7(b)(vi)  and/or
Section  5.7(b)(x),  and any funds so remitted to the Trustee shall be deemed to
have been released to the Seller and paid to the Trustee at the direction of the
Seller.

         SECTION 5.6.  Additional Deposits.

         (a) The Servicer or CPS, as the case may be, shall  deposit or cause to
be  deposited  in the  Collection  Account the  aggregate  Purchase  Amount with
respect to Purchased  Receivables  and the Servicer shall deposit or cause to be
deposited  therein all amounts to be paid under Section 4.8(b) or 11.1. All such
deposits  shall be made, in  immediately  available  funds,  on the Business Day
preceding the Determination  Date. On or before the third Business Day preceding
each Payment Date, the Trustee shall remit to the Collection Account any amounts
delivered to the Trustee by the Collateral Agent pursuant to Section 5.5.


                                      -54-





         SECTION 5.7.  Distributions.

         (a)  RESERVED

         (b) On  each  Payment  Date,  the  Trustee  (based  on the  information
contained in the Servicer's  Certificate  delivered on the related Determination
Date) shall make the following distributions in the following order of priority:

                  (i) to the Servicer,  from the Total Distribution  Amount, the
         Servicing  Fee and all  unpaid  Servicing  Fees from  prior  Collection
         Periods;  provided,  however,  that as long as CPS is the  Servicer and
         Norwest Bank Minnesota,  National  Association is the Standby Servicer,
         the Trustee will first pay to the Standby Servicer out of the Servicing
         Fee otherwise payable to CPS an amount equal to the Standby Fee;

                  (ii) in the event the Standby  Servicer  becomes the successor
         Servicer,  to the Standby Servicer from the Total  Distribution  Amount
         (as such  Total  Distribution  Amount  has  been  reduced  by  payments
         pursuant to clause (i) above), to the extent not previously paid by the
         predecessor  Servicer  pursuant  to the Sale and  Servicing  Agreement,
         reasonable transition expenses (up to a maximum of $50,000 for all such
         expenses) incurred in becoming successor Servicer;

                  (iii) to the  Trustee  and the Owner  Trustee,  from the Total
         Distribution Amount (as such Total Distribution Amount has been reduced
         by payments  pursuant to clauses (i) and (ii) above),  the fees payable
         thereto for services  pursuant to the Indenture and the Trust Agreement
         (the "Trustee  Fee") and  reasonable  out-of-pocket  expenses  thereof,
         (including  counsel fees and expenses) and all unpaid  Trustee Fees and
         all unpaid reasonable  out-of-pocket  expenses  (including counsel fees
         and expenses) from prior Collection Periods;  provided,  however,  that
         unless an Event of  Default  shall  have  occurred  and be  continuing,
         expenses  payable to the Trustee and the Owner Trustee pursuant to this
         clause (iii) and expenses  payable to the Collateral  Agent pursuant to
         clause (iv) below shall be limited to a total of $50,000 per annum;

                  (iv) to the  Collateral  Agent,  from the  Total  Distribution
         Amount (as such Total Distribution  Amount has been reduced by payments
         pursuant to clauses (i) through  (iii)  above),  all fees and  expenses
         payable to the Collateral Agent with respect to such Payment Date;



                                      -55-




                  (v)  to  the  Note  Distribution   Account,   from  the  Total
         Distribution Amount (as such Total Distribution Amount has been reduced
         by payments  pursuant  Total to clauses (i) through  (iv)  above),  the
         Class A  Noteholders'  Interest  Distributable  Amount for such Payment
         Date;

                  (vi)  unless  an  Event  of  Default  has   occurred   and  is
         continuing,  to the Certificate  Distribution  Account,  from the Total
         Distribution Amount (as such Total Distribution Amount has been reduced
         by  payments   pursuant   to  clauses  (i)  through  (v)  above),   the
         Certificateholders'  Interest  Distributable  Amount,  for such Payment
         Date;

                  (vii)  to  the  Note  Distribution  Account,  from  the  Total
         Distribution Amount (as such Total Distribution Amount has been reduced
         by payments  pursuant to clauses (i) through (vi)  above),  the Class A
         Noteholders'  Principal  Distributable  Amount plus,  on the  Mandatory
         Redemption  Date, the Class A Note  Prepayment  Amount for such Payment
         Date;

                  (viii) to the Note Insurer, from the Total Distribution Amount
         (as such Total  Distribution  Amount has been reduced by payments  made
         pursuant to clauses (i) through (vii) above),  any amounts owing to the
         Note Insurer under this  Agreement and the Insurance  Agreement and not
         paid;

                  (ix) in the event any Person  other than the Standby  Servicer
         becomes the successor Servicer,  to such successor  Servicer,  from the
         Total Distribution  Amount (as such Total Distribution  Amount has been
         reduced by payments  pursuant to clauses (i) through  (viii)  above) to
         the extent not previously paid by the predecessor Servicer,  reasonable
         transition  expenses (up to a maximum of $50,000 for all such expenses)
         incurred in acting as successor Servicer;

                  (x) unless an Event of Default has occurred and is continuing,
         to the Certificate  Distribution  Account,  from the Total Distribution
         Amount (as such Total Distribution  Amount has been reduced by payments
         pursuant to clauses (i) through  (ix) above),  the  Certificateholders'
         Principal Distributable Amount for such Payment Date;

                  (xi) until the Target  Payment Date, to the Note  Distribution
         Account,  the remaining Total Distribution  Amount, if any, for payment
         to the  holders  of the  then  paying  Class A Notes  as a  payment  of
         principal;

                  (xii)  if an Event  of  Default  shall  have  occurred  and be
         continuing,  to the Certificate  Distribution  Account,  from the Total
         Distribution Amount (as such Total Distribution Amount has been reduced
         by  payments   pursuant  to  clauses  (i)  through  (xi)  above),   the
         Certificateholders'  Interest  Distributable  Amount  for such  Payment
         Date;

                                      -56-






                  (xiii)  if an Event of  Default  shall  have  occurred  and be
         continuing,  to the Certificate  Distribution  Account,  from the Total
         Distribution Amount (as such Total Distribution Amount has been reduced
         by  payments  pursuant  to  clauses  (i)  through  (xii)  above),   the
         Certificateholders'  Principal  Distributable  Amount for such  Payment
         Date;

                  (xiv) after the Target Payment Date, to the Collateral  Agent,
         for deposit into the Spread Account,  the remaining Total  Distribution
         Amount, if any;

provided,  however,  that, (A) following an acceleration of the Notes, (B) if an
Insurer  Default shall have  occurred and be continuing  and an Event of Default
pursuant to Section 5.1(i), 5.1(ii), 5.1(iv), 5.1(v) or 5.1(vi) of the Indenture
shall have occurred and be continuing or (C) the receipt of Insolvency  Proceeds
pursuant to Section 11.1(b),  the Total Distribution  Amount (including any such
Insolvency    Proceeds)   shall   be   paid   to   the   Noteholders   and   the
Certificateholders, pursuant to Section 5.6(a) of the Indenture.

         (c) In the event  that the  Collection  Account is  maintained  with an
institution  other than the Trustee,  the Servicer shall instruct and cause such
institution to make all deposits and distributions pursuant to Section 5.7(b) on
the related Payment Date.

         SECTION 5.8.  Note Distribution Account.

         (a) On each Payment Date,  the Trustee shall  distribute all amounts on
deposit in the Note Distribution  Account to Noteholders in respect of the Notes
to the extent of amounts due and unpaid on the Notes for  principal and interest
in the following amounts and in the following order of priority:

                  (i) to the  Holders  of the Class A Notes the Class A Interest
         Distributable  Amount;  provided that if there are not sufficient funds
         in the Note  Distribution  Account to pay the entire amount then due on
         each  Class of  Class A  Notes,  the  amount  in the Note  Distribution
         Account  shall be applied to the payment of such interest on each Class
         of Class A Notes pro rata on the basis of the  amount  of  accrued  and
         unpaid interest due on each Class of Class A Notes;

                  (ii) to the  Holders  of the  Class  A-1  Notes,  the  Class A
         Noteholders'  Principal  Distributable  Amount  until  the  outstanding
         principal balance of the Class A-1 Notes is reduced to zero; and


                                      -57-





                  (iii) to the  Holders  of the  Class  A-2  Notes,  the Class A
         Noteholders'   Principal   Distributable  Amount  (as  reduced  by  any
         distribution  on such  Payment  Date  pursuant to (iv) above) until the
         outstanding  principal  balance  of the Class A-2 Notes is  reduced  to
         zero; and

         (b) On each Payment Date, the Trustee shall send to each Noteholder the
statement  provided to the  Trustee by the  Servicer  pursuant  to Section  5.11
hereof on such Payment Date.

         (c) In the event that any  withholding  tax is  imposed on the  Trust's
payment (or  allocations  of income) to a Noteholder,  such tax shall reduce the
amount otherwise distributable to the Noteholder in accordance with this Section
5.8.  The Trustee is hereby  authorized  and  directed  to retain  from  amounts
otherwise  distributable to the Noteholders  sufficient funds for the payment of
any tax that is  legally  owed by the Trust  (but such  authorization  shall not
prevent the Trustee from contesting any such tax in appropriate proceedings, and
withholding  payment of such tax, if  permitted  by law,  pending the outcome of
such  proceedings).  The amount of any withholding tax imposed with respect to a
Noteholder  shall be treated as cash  distributed to such Noteholder at the time
it is withheld by the Trust and remitted to the  appropriate  taxing  authority.
If, after  consultations with experienced  counsel,  the Trustee determines that
there is a reasonable likelihood that withholding tax is payable with respect to
a distribution (such as a distribution to a non-US Noteholder),  the Trustee may
in its sole discretion withhold such amounts in accordance with this clause (d).
In the  event  that a  Noteholder  wishes  to  apply  for a  refund  of any such
withholding tax, the Trustee shall reasonably  cooperate with such Noteholder in
making such claim so long as such Noteholder agrees to reimburse the Trustee for
any out-of-pocket expenses incurred.

         (d)  Distributions  required to be made to  Noteholders  on any Payment
Date shall be made to each  Noteholder  of record on the  preceding  Record Date
either by wire transfer,  in immediately available funds, to the account of such
Holder at a bank or other entity having appropriate  facilities therefor, if (i)
such Noteholder  shall have provided to the Note Registrar  appropriate  written
instructions  at least five  Business  Days prior to such  Payment Date and such
Holder's  Notes in the  aggregate  evidence  a  denomination  of not  less  than
$1,000,000 or (ii) such Noteholder is the Seller, or an Affiliate  thereof,  or,
if not,  by check  mailed  to such  Noteholder  at the  address  of such  holder
appearing in the Note Register; provided, however, that, unless Definitive Notes
have been issued  pursuant to Section  2.12 of the  Indenture,  with  respect to
Notes  registered  on the Record Date in the name of the nominee of the Clearing
Agency (initially, such nominee to be Cede & Co.), distributions will be made by
wire transfer in immediately available funds to the account designated by such

                                      -58-





nominee. Notwithstanding the foregoing, the final distribution in respect of any
Note (whether on the Final Scheduled  Payment Date or otherwise) will be payable
only  upon  presentation  and  surrender  of such  Note at the  office or agency
maintained for that purpose by the Note Registrar pursuant to Section 2.4 of the
Indenture.

         SECTION 5.9.  [RESERVED].

         SECTION 5.10.  [RESERVED].

         SECTION  5.11.  Statements  to  Securityholders.  On or  prior  to each
Payment  Date,  the Servicer  shall provide to the Trustee and the Owner Trustee
(with a copy to the Note  Insurer and the Rating  Agencies)  for the Trustee and
Owner Trustee to forward to each  Securityholder  of record a statement  setting
forth at least the following information as to the Notes and the Certificates to
the extent applicable:

                  (i) the amount of such distribution  allocable to principal of
         each Class of Notes and the Certificates;

                  (ii) the amount of such distribution  allocable to interest on
         or with respect to each Class of Notes and the Certificates;

                  (iii) the amount of such  distribution  payable out of amounts
         withdrawn  from the Spread  Account or  pursuant to a claim on the Note
         Policy;

                  (iv) the Pool  Balance as of the close of business on the last
         day of the preceding Collection Period;

                  (v) the aggregate  outstanding  principal amount of each Class
         of Notes and the Certificates, the Note Pool Factor for each such Class
         and the  Certificate  Pool  Factor  after  giving  effect  to  payments
         allocated to principal reported under clause (i) above;

                  (vi) the amount of the Servicing Fee (inclusive of the Standby
         Fee paid to the Standby  Servicer) paid to the Servicer with respect to
         the related  Collection  Period, and the amount of any unpaid Servicing
         Fees  (inclusive of the Standby Fee) and the change in such amount from
         that of the prior Payment Date;

                  (vii) the Class A Noteholders'  Interest Carryover  Shortfall,
         the  Certificateholders'  Interest  Carryover  Shortfall,  the  Class A
         Noteholders' Principal Carryover Shortfall, and the Certificateholders'
         Principal Carryover Shortfall;


                                      -59-





                  (viii)  the  number of  Receivables  and the  aggregate  gross
         amount  scheduled to be paid thereon,  including  unearned  finance and
         other charges,  for which the related Obligors are delinquent in making
         scheduled payments between 31 and 59 days and 60 days or more;

                  (ix) the amount of the aggregate  Realized Losses, if any, for
         the second preceding Collection Period;

                  (x)  the  number  and  the  aggregate   Purchase  Amounts  for
         Receivables,  if any, that were  repurchased in such period and summary
         information  as  to  losses  and  delinquencies  with  respect  to  the
         Receivables; and

                  (xi) the  cumulative  amount  of  Realized  Losses,  since the
         Cutoff Date to the last day of the related Collection Period.

Each amount set forth pursuant to paragraph (i), (ii),  (iii),  (vi),  (vii) and
(x) above  shall be  expressed  as a dollar  amount  per  $1,000 of the  initial
principal  balance  of  the  Notes  (or  Class  thereof)  or  Certificates,   as
applicable.

         SECTION 5.12. Optional Deposits by the Note Insurer; Notice of Waivers.
(a) The Note Insurer shall at any time, and from time to time, with respect to a
Payment Date, have the option (but shall not be required,  except as provided in
Section  6.1(a))  to  deliver  amounts  to the  Trustee  for  deposit  into  the
Collection  Account for any of the following  purposes:  (i) to provide funds in
respect of the payment of fees or  expenses  of any  provider of services to the
Trust with respect to such Payment  Date,  (ii) to  distribute as a component of
the Class A Noteholders'  Principal  Distributable Amount to the extent that the
Class A Balance as of the Determination Date preceding such Payment Date exceeds
the Class A Percentage  of the Pool Balance as of such  Determination  Date,  or
(iii) to include such amount as part of the Total  Distribution  Amount for such
Payment  Date to the extent that without such amount a draw would be required to
be made on the Policy.

         (b) If the Note Insurer  waives the  satisfaction  of any of the events
that might  trigger an event of default  under the  Insurance  Agreement  and so
notifies  the Trustee in writing  pursuant to Section  5.02(d) of the  Insurance
Agreement, the Trustee shall notify Moody's of such waiver.


                                      -60-





                                   ARTICLE VI

                                 THE NOTE POLICY

         SECTION 6.1.  Claims Under Note Policy.

         (a) In the event that the Trustee has  delivered  a  Deficiency  Notice
with  respect to any  Determination  Date  pursuant to Section  5.5 hereof,  the
Trustee  shall on the related Draw Date  determine  whether the  application  of
funds in accordance with Section 5.7(b), together with any Note Insurer Optional
Deposit  pursuant to Section 5.12 and the  application of any  Deficiency  Claim
Amount  pursuant  to  Section  5.5  would  result  in  a  shortfall  in  amounts
distributable pursuant to Sections 5.7(b)(v) and 5.7(b)(vii) on any Payment Date
(any such  shortfall,  a "Note Policy Claim  Amount").  If the Note Policy Claim
Amount for such Payment Date is greater than zero,  the Trustee shall furnish to
the Note Insurer no later than 12:00 noon New York City time on the related Draw
Date a completed  Notice of Claim (as defined in clause (b) below) in the amount
of the Note Policy Claim Amount.  Amounts paid by the Note Insurer pursuant to a
claim  submitted  under this Section 6.1. shall be deposited by the Trustee into
the Note Distribution  Account for payment to Noteholders on the related Payment
Date.

         (b) Any notice delivered by the Trustee to the Note Insurer pursuant to
Section 6.1(a) shall specify the Note Policy Claim Amount claimed under the Note
Policy and shall  constitute a "Notice of Claim" (as defined in the Note Policy)
under the Note Policy. In accordance with the provisions of the Note Policy, the
Note  Insurer is required to pay to the  Trustee  the Note Policy  Claim  Amount
properly  claimed  thereunder by 12:00 noon, New York City time, on the later of
(i) the third Business Day (as defined in the Note Policy)  following receipt on
a Business Day of the Notice of Claim, and (ii) the applicable Payment Date. Any
payment made by the Note Insurer  under the Note Policy shall be applied  solely
to the payment of the Notes, and for no other purpose.

         (c) The Trustee shall (i) receive as  attorney-in-fact  of each Class A
Noteholder  any Note Policy  Claim Amount from the Note Insurer and (ii) deposit
the  same  in  the  Note  Distribution  Account  for  distribution  to  Class  A
Noteholders. Any and all Note Policy Claim Amounts disbursed by the Trustee from
claims made under the Note Policy shall not be  considered  payment by the Trust
or from the Series 1997-4 Spread  Account with respect to such Notes,  and shall
not discharge the  obligations  of the Trust with respect  thereto.  The Insurer
shall,  to the extent it makes any  payment  with  respect to the Class A Notes,
become subrogated to the rights of the recipients of such payments to the extent
of such payments. Subject to and conditioned upon any payment with

                                      -61-





respect to the Class A Notes by or on behalf of the Note  Insurer,  the  Trustee
and the Class A  Noteholders  shall assign to the Note Insurer all rights to the
payment of interest  or  principal  with  respect to the Class A Notes which are
then due for payment to the extent of all payments made by the Note Insurer, and
the Note Insurer may exercise any option,  vote,  right,  power or the like with
respect to the Class A Notes to the extent that it has made payment  pursuant to
the Note Policy. To evidence such subrogation, the Note Registrar (as defined in
the  Indenture)  shall  note the Note  Insurer's  rights  as  subrogee  upon the
register of  Noteholders  upon receipt from the Note Insurer of proof of payment
by the  Note  Insurer  of any  Noteholders'  Interest  Distributable  Amount  or
Noteholders' Principal  Distributable Amount. The foregoing subrogation shall in
all cases be  subject to the rights of the Class A  Noteholders  to receive  all
Scheduled Payments (as defined in the Note Policy) in respect of the Notes.

         (d) The Trustee shall keep a complete and accurate  record of all funds
deposited  by the  Note  Insurer  into  the Note  Distribution  Account  and the
allocation of such funds to payment of interest on and principal paid in respect
of any Class A Note. The Insurer shall have the right to inspect such records at
reasonable times upon one Business Day's prior notice to the Trustee.

         (e) The  Trustee  shall be entitled to enforce on behalf of the Class A
Noteholders  the  obligations  of  the  Note  Insurer  under  the  Note  Policy.
Notwithstanding  any other  provision of this Agreement or any Basic  Documents,
the Class A  Noteholders  are not  entitled  to make any  claims  under the Note
Policy or institute proceedings directly against the Note Insurer.

         SECTION 6.2.  Preference Claims.

         (a) In the event that the Trustee has  received a certified  copy of an
order of the  appropriate  court that any  Scheduled  Payment (as defined in the
Note  Policy)  paid on a Class A Note has been  avoided in whole or in part as a
preference payment under applicable  bankruptcy law, the Trustee shall so notify
the Note Insurer,  shall comply with the provisions of the Note Policy to obtain
payment by the Note Insurer of such avoided  payment,  and shall, at the time it
provides notice to the Note Insurer, notify Holders of the Class A Notes by mail
that, in the event that any Class A Noteholder's payment is so recoverable, such
Class A Noteholder will be entitled to payment pursuant to the terms of the Note
Policy. The Trustee shall furnish to the Note Insurer its records evidencing the
payments of principal of and interest on Class A Notes,  if any, which have been
made by the Trustee and subsequently recovered from Class A Noteholders, and the
dates on which  such  payments  were  made.  Pursuant  to the  terms of the Note
Policy, the Note Insurer will make such payment on behalf of the

                                      -62-





Class A Noteholder to the receiver, conservator, debtor-in-possession or trustee
in bankruptcy  named in the order (as defined in the Note Policy) and not to the
Trustee or any Class A  Noteholder  directly  (unless a Class A  Noteholder  has
previously paid such payment to the receiver, conservator,  debtor-in-possession
or trustee in bankruptcy,  in which case the Note Insurer will make such payment
to the Trustee for  distribution  to such Class A Noteholder  upon proof of such
payment reasonably satisfactory to the Note Insurer).

         (b)  The  Trustee  shall  promptly  notify  the  Note  Insurer  of  any
proceeding  or the  institution  of any action (of which the  Trustee has actual
knowledge)  seeking the avoidance as a preferential  transfer  under  applicable
bankruptcy,   insolvency,   receivership,   rehabilitation  or  similar  law  (a
"Preference  Claim") of any  distribution  made with respect to the Notes.  Each
Holder,  by its purchase of Notes,  and the Trustee hereby agree that so long as
an Insurer  Default shall not have occurred and be continuing,  the Note Insurer
may at  any  time  during  the  continuation  of any  proceeding  relating  to a
Preference Claim direct all matters relating to such Preference Claim including,
without limitation, (i) the direction of any appeal of any order relating to any
Preference Claim and (ii) the posting of any surety,  supersedeas or performance
bond pending any such appeal at the expense of the Note Insurer,  but subject to
reimbursement as provided in the Insurance Agreement.  In addition,  and without
limitation of the foregoing,  as set forth in Section  6.1(c),  the Note Insurer
shall be subrogated to, and each  Noteholder and the Trustee hereby delegate and
assign,  to the fullest  extent  permitted by law, the rights of the trustee and
each  Noteholder in the conduct of any  proceeding  with respect to a Preference
Claim,  including,  without limitation,  all rights of any party to an adversary
proceeding  action with respect to any court order issued in connection with any
such Preference Claim.

         SECTION 6.3.  Surrender of Note Policy. The Trustee shall surrender the
Note Policy to the Note Insurer for  cancellation  upon the  expiration  of such
policy in accordance with the terms thereof.





                                      -63-





                                   ARTICLE VII

                                   [RESERVED]



                                  ARTICLE VIII

                                   THE SELLER

         SECTION 8.1.  Representations of Seller. The Seller makes the following
representations  on which the Note  Insurer  shall be  deemed to have  relied in
executing  and  delivering  the Note Policy and on which the Issuer is deemed to
have relied in acquiring the Receivables.  The  representations  speak as of the
execution and delivery of this  Agreement and as of the Closing Date,  and shall
survive the sale of the  Receivables to the Issuer and the pledge thereof to the
Trustee pursuant to the Indenture.

                  (a) Organization  and Good Standing.  The Seller has been duly
         organized  and is validly  existing as a  corporation  in good standing
         under the laws of the State of California,  with power and authority to
         own its properties  and to conduct its business as such  properties are
         currently  owned and such business is currently  conducted,  and had at
         all relevant times,  and now has,  power,  authority and legal right to
         acquire,  own and sell the Receivables and the other Conveyed  Property
         transferred to the Trust.

                  (b) Due  Qualification.  The  Seller is duly  qualified  to do
         business as a foreign  corporation in good  standing,  and has obtained
         all necessary  licenses and approvals in all jurisdictions in which the
         ownership  or lease of property or the  conduct of its  business  shall
         require such qualifications.

                  (c)  Power  and  Authority.  The  Seller  has  the  power  and
         authority to execute and deliver this Agreement and the Basic Documents
         to which it is a party and to carry  out its  terms  and  their  terms,
         respectively;  the  Seller  has full  power and  authority  to sell and
         assign the Receivables  and the Other Conveyed  Property to be sold and
         assigned to and deposited with the Trust by it and has duly  authorized
         such  sale  and  assignment  to the  Trust by all  necessary  corporate
         action;  and the execution,  delivery and performance of this Agreement
         and the Basic  Documents  to which the Seller is a party have been duly
         authorized by the Seller by all necessary corporate action.

                  (d) Valid Sale, Binding Obligations.  This Agreement effects a
         valid sale,  transfer and assignment of the  Receivables  and the Other
         Conveyed Property,  enforceable against the Seller and creditors of and
         purchasers from the Seller;  and this Agreement and the Basic Documents
         to which the Seller is a party, when duly executed and delivered, shall
         constitute  legal,   valid  and  binding   obligations  of  the  Seller
         enforceable in accordance with their respective

                                      -64-





         terms,   except  as  enforceability   may  be  limited  by  bankruptcy,
         insolvency,   reorganization   or  other  similar  laws  affecting  the
         enforcement of creditors' rights generally and by equitable limitations
         on the  availability of specific  remedies,  regardless of whether such
         enforceability is considered in a proceeding in equity or at law.

                  (e)  No  Violation.   The  consummation  of  the  transactions
         contemplated  by  this  Agreement  and  the  Basic  Documents  and  the
         fulfillment  of the terms of this  Agreement  and the  Basic  Documents
         shall not conflict  with,  result in any breach of any of the terms and
         provisions of or constitute  (with or without notice,  lapse of time or
         both) a default under the  certificate of  incorporation  or by-laws of
         the Seller,  or any indenture,  agreement,  mortgage,  deed of trust or
         other  instrument  to  which  the  Seller  is a party or by which it is
         bound,  or result in the creation or imposition of any Lien upon any of
         its properties pursuant to the terms of any such indenture,  agreement,
         mortgage,  deed of trust  or other  instrument,  other  than the  Basic
         Documents,  or violate any law, order, rule or regulation applicable to
         the  Seller of any court or of any  federal or state  regulatory  body,
         administrative  agency  or other  governmental  instrumentality  having
         jurisdiction over the Seller or any of its properties.

                  (f) No Proceedings. There are no proceedings or investigations
         pending or, to the Seller's  knowledge,  threatened against the Seller,
         before  any  court,  regulatory  body,  administrative  agency or other
         tribunal or governmental  instrumentality  having jurisdiction over the
         Seller  or  its   properties  (A)  asserting  the  invalidity  of  this
         Agreement, the Securities or any of the Basic Documents, (B) seeking to
         prevent the issuance of the  Securities or the  consummation  of any of
         the  transactions  contemplated  by this  Agreement or any of the Basic
         Documents,   (C)  seeking  any   determination  or  ruling  that  might
         materially  and adversely  affect the  performance by the Seller of its
         obligations under, or the validity or enforceability of, this Agreement
         or any of the Basic Documents,  or (D) relating to the Seller and which
         might adversely affect the federal or state income,  excise,  franchise
         or similar tax attributes of the Securities.

                  (g) No Consents. No consent, approval,  authorization or order
         of or declaration or filing with any governmental authority is required
         for the issuance or sale of the Securities or the  consummation  of the
         other transactions contemplated by this Agreement,  except such as have
         been duly made or obtained.


                                      -65-





                  (h) Tax  Returns.  The Seller has filed on a timely  basis all
         tax  returns  required  to be filed by it and  paid all  taxes,  to the
         extent that such taxes have become due.

                  (i) Chief Executive Office.  The chief executive office of the
         Seller is at 2 Ada, Irvine, California 92618.

         SECTION 8.2.  [RESERVED].

         SECTION  8.3.  Liability  of Seller;  Indemnities.  The Seller shall be
liable in accordance herewith only to the extent of the obligations specifically
undertaken by the Seller under this Agreement.

         (a) The Seller shall  indemnify,  defend and hold  harmless the Issuer,
the Owner Trustee,  the Note Insurer,  the Standby Servicer and the Trustee from
and against  any taxes that may at any time be asserted  against any such Person
with respect to the  transactions  contemplated in this Agreement and any of the
Basic  Documents  (except any income taxes arising out of fees paid to the Owner
Trustee,  the Trustee,  the Standby Servicer and the Note Insurer and except any
taxes to which the Owner  Trustee,  or the Trustee may otherwise be subject to),
including any sales,  gross receipts,  general  corporation,  tangible  personal
property,  privilege  or license  taxes  (but,  in the case of the  Issuer,  not
including  any taxes  asserted  with  respect to,  federal or other income taxes
arising out of  distributions on the Notes and the  Certificates)  and costs and
expenses in defending against the same.

         (b) The Seller shall  indemnify,  defend and hold  harmless the Issuer,
the Owner Trustee,  the Trustee,  the Note Insurer and the Securityholders  from
and  against  any  loss,  liability  or  expense  incurred  by reason of (i) the
Seller's willful misfeasance,  bad faith or negligence in the performance of its
duties  under  this  Agreement,  or by  reason  of  reckless  disregard  of  its
obligations  and  duties  under  this  Agreement  and (ii) the  Seller's  or the
Issuer's  violation of Federal or state  securities  laws in connection with the
offering and sale of the Notes and the Certificates.

         (c) The Seller  shall  indemnify,  defend and hold  harmless  the Owner
Trustee,  the Trustee,  and the Standby  Servicer and its  officers,  directors,
employees  and agents  from and  against  any and all costs,  expenses,  losses,
claims,  damages and liabilities  arising out of, or incurred in connection with
the  acceptance or  performance of the trusts and duties set forth herein and in
the Basic Documents except to the extent that such cost,  expense,  loss, claim,
damage  or  liability  shall be due to the  willful  misfeasance,  bad  faith or
negligence (except for errors in judgment) of the Owner Trustee.

                                      -66-





         Indemnification  under this Section  shall survive the  resignation  or
removal  of the  Owner  Trustee  or the  Trustee  and  the  termination  of this
Agreement or the  Indenture or the Trust  Agreement,  as  applicable,  and shall
include   reasonable  fees  and  expenses  of  counsel  and  other  expenses  of
litigation.  If the Seller shall have made any  indemnity  payments  pursuant to
this  Section  and the  Person to or on behalf  of whom such  payments  are made
thereafter  shall  collect any of such amounts  from  others,  such Person shall
promptly repay such amounts to the Seller, without interest.

         SECTION  8.4.  Merger  or  Consolidation   of,  or  Assumption  of  the
Obligations  of,  Seller.  Any Person (a) into which the Seller may be merged or
consolidated, (b) which may result from any merger or consolidation to which the
Seller shall be a party or (c) which may succeed to the properties and assets of
the Seller  substantially as a whole, which Person in any of the foregoing cases
executes an agreement of assumption  to perform  every  obligation of the Seller
under this Agreement, shall be the successor to the Seller hereunder without the
execution  or filing of any document or any further act by any of the parties to
this Agreement;  provided,  however, that (i) the Seller shall have received the
written consent of the Note Insurer prior to entering into any such transaction,
(ii) immediately after giving effect to such  transaction,  no representation or
warranty  made  pursuant to Section 3.1 shall have been breached and no Servicer
Termination  Event, and no event which,  after notice or lapse of time, or both,
would become a Servicer Termination Event shall have happened and be continuing,
(iii) the Seller shall have delivered to the Owner Trustee,  the Trustee and the
Note  Insurer an  Officers'  Certificate  and an Opinion of Counsel each stating
that such  consolidation,  merger or succession and such agreement of assumption
comply with this Section and that all conditions precedent, if any, provided for
in this Agreement relating to such transaction have been complied with, (iv) the
Rating  Agency  Condition  shall  have  been  satisfied  with  respect  to  such
transaction  and (v) the Seller shall have delivered to the Owner  Trustee,  the
Trustee and the Note Insurer an Opinion of Counsel  stating that, in the opinion
of such counsel, either (A) all financing statements and continuation statements
and amendments  thereto have been executed and filed that are necessary fully to
preserve  and  protect  the  interest  of the  Owner  Trustee  and the  Trustee,
respectively, in the Receivables and reciting the details of such filings or (B)
no such action  shall be  necessary  to  preserve  and  protect  such  interest.
Notwithstanding  anything herein to the contrary, the execution of the foregoing
agreement of assumption and compliance with clauses (i), (ii),  (iii),  (iv) and
(v) above shall be conditions to the consummation of the  transactions  referred
to in clause (a), (b) or (c) above.


                                      -67-





         SECTION 8.5.  Limitation on Liability of Seller and Others.  The Seller
and any  director or officer or employee or agent of the Seller may rely in good
faith on the advice of  counsel  or on any  document  of any kind,  prima  facie
properly  executed and submitted by any Person  respecting  any matters  arising
under any Basic Document. The Seller shall not be under any obligation to appear
in,  prosecute  or defend any legal action that shall not be  incidental  to its
obligations under this Agreement,  and that in its opinion may involve it in any
expense or liability.

         SECTION 8.6. Seller May Own  Certificates or Notes.  The Seller and any
Affiliate  thereof may in its individual or any other capacity  become the owner
or pledgee of  Certificates or Notes with the same rights as it would have if it
were not the Seller or an Affiliate thereof, except as expressly provided herein
or in any Basic  Document.  Notes or Certificates so owned by the Seller or such
Affiliate shall have an equal and proportionate  benefit under the provisions of
the Basic Documents, without preference, priority or distinction as among all of
the Notes or Certificates; provided, however, that any Notes owned by the Seller
or any Affiliate thereof, during the time such Notes are so owned by them, shall
be without  voting  rights for any purpose set forth in the Basic  Documents and
the Notes shall not be entitled to the benefits of the Note  Policy.  The Seller
shall notify the Owner Trustee,  the Trustee and the Note Insurer promptly after
it or any of its Affiliates become the owner of a Certificate or a Note.


                                   ARTICLE IX

                                  THE SERVICER

         SECTION  9.1.  Representations  of  Servicer.  The  Servicer  makes the
following  representations  on which  the Note  Insurer  shall be deemed to have
relied in executing  and  delivering  the Note Policy and on which the Issuer is
deemed to have relied in acquiring the Receivables. The representations speak as
of the execution  and delivery of this  Agreement and as of the Closing Date and
shall survive the sale of the  Receivables  to the Issuer and the pledge thereof
to the Trustee pursuant to the Indenture.

                  (a) Organization and Good Standing. The Servicer has been duly
         organized and is validly  existing and in good standing  under the laws
         of its  jurisdiction of organization,  with power,  authority and legal
         right  to own  its  properties  and to  conduct  its  business  as such
         properties   are  currently   owned  and  such  business  is  presently
         conducted,  and had at all  relevant  times,  and  shall  have,  power,
         authority and legal right to acquire, own and service the Receivables;


                                      -68-





                  (b) Due  Qualification.  The Servicer is duly  qualified to do
         business as a foreign corporation in good standing and has obtained all
         necessary  licenses and approvals,  in all  jurisdictions  in which the
         ownership  or  lease  of  property  or  the  conduct  of  its  business
         (including  the  servicing  of the  Receivables  as  required  by  this
         Agreement) requires or shall require such qualification;

                  (c)  Power  and  Authority.  The  Servicer  has the  power and
         authority to execute and deliver this Agreement and its Basic Documents
         and to carry  out its  terms and  their  terms,  respectively,  and the
         execution,   delivery  and   performance  of  this  Agreement  and  the
         Servicer's Basic Documents have been duly authorized by the Servicer by
         all necessary corporate action;

                  (d) Binding Obligation. This Agreement and the Basic Documents
         to which the  Servicer is a party  shall  constitute  legal,  valid and
         binding  obligations  of the Servicer  enforceable  in accordance  with
         their  respective  terms,  except as  enforceability  may be limited by
         bankruptcy, insolvency, reorganization, or other similar laws affecting
         the  enforcement  of  creditors'  rights  generally  and  by  equitable
         limitations on the  availability  of specific  remedies,  regardless of
         whether such  enforceability is considered in a proceeding in equity or
         at law;

                  (e)  No  Violation.   The  consummation  of  the  transactions
         contemplated  by this Agreement and the Basic Documents to which to the
         Servicer is a party, and the fulfillment of the terms of this Agreement
         and the Basic  Documents  to which the  Servicer is a party,  shall not
         conflict with,  result in any breach of any of the terms and provisions
         of, or constitute  (with or without  notice or lapse of time) a default
         under, the articles of incorporation or bylaws of the Servicer,  or any
         indenture,  agreement,  mortgage,  deed of trust or other instrument to
         which  the  Servicer  is a party  or by which it is bound or any of its
         properties are subject,  or result in the creation or imposition of any
         Lien  upon  any of its  properties  pursuant  to the  terms of any such
         indenture,  agreement,  mortgage,  deed of trust  or other  instrument,
         other than the Basic  Documents,  or violate  any law,  order,  rule or
         regulation applicable to the Servicer of any court or of any federal or
         state  regulatory  body,  administrative  agency or other  governmental
         instrumentality  having  jurisdiction  over the  Servicer or any of its
         properties;

                  (f) No Proceedings. There are no proceedings or investigations
         pending  or,  to  the  Servicer's  knowledge,  threatened  against  the
         Servicer, before any court,

                                      -69-





         regulatory   body,   administrative   agency  or  other   tribunal   or
         governmental  instrumentality  having jurisdiction over the Servicer or
         its properties (A) asserting the invalidity of this Agreement or any of
         the Basic  Documents,  (B)  seeking  to  prevent  the  issuance  of the
         Securities or the consummation of any of the transactions  contemplated
         by this  Agreement  or any of the Basic  Documents,  or (C) seeking any
         determination  or ruling that might materially and adversely affect the
         performance by the Servicer of its  obligations  under, or the validity
         or  enforceability  of, this  Agreement,  the  Securities or any of the
         Basic  Documents  or (D)  relating  to the  Servicer  and  which  might
         adversely  affect the federal or state  income,  excise,  franchise  or
         similar tax attributes of the Securities;

                  (g) No Consents. No consent, approval,  authorization or order
         of or declaration or filing with any governmental authority is required
         for the issuance or sale of the Securities or the  consummation  of the
         other transactions contemplated by this Agreement,  except such as have
         been duly made or obtained.

                  (h) Taxes.  The  Servicer  has filed on a timely basis all tax
         returns  required  to be filed by it and paid all taxes,  to the extent
         that such taxes have become due.

                  (i) Chief Executive Office. The Servicer hereby represents and
         warrants to the Trustee that the Servicer's principal place of business
         and chief  executive  office is, and for the four months  preceding the
         date of this Agreement has been, located at: 2 Ada, Irvine, California.

         SECTION 9.2.  Liability of Servicer; Indemnities.

         (a) The Servicer  (in its  capacity as such) shall be liable  hereunder
only to the extent of the obligations in this Agreement specifically  undertaken
by the Servicer and the representations made by the Servicer.

         (i) The Servicer  shall defend,  indemnify and hold harmless the Trust,
the Trustee, the Owner Trustee, the Standby Servicer,  the Note Insurer, and the
Securityholders from and against any and all costs, expenses,  losses,  damages,
claims and liabilities,  arising out of or resulting from the use,  ownership or
operation by the Servicer or any Affiliate thereof of any Financed Vehicle;

         (ii) The Servicer shall indemnify,  defend and hold harmless the Trust,
the Trustee, the Owner Trustee, the Standby Servicer,  the Note Insurer, and the
Securityholders  from and  against  any taxes  that may at any time be  asserted
against any of such parties with respect to the transactions


                                      -70-





contemplated in this Agreement,  including, without limitation, any sales, gross
receipts, general corporation,  tangible personal property, privilege or license
taxes (but not including any federal or other income taxes,  including franchise
taxes  asserted  with  respect  to,  and as of the  date  of,  the  sale  of the
Receivables  and the Other  Conveyed  Property to the Trust or the  issuance and
original sale of the Securities) and costs and expenses in defending against the
same;

         (iii) The Servicer shall indemnify, defend and hold harmless the Trust,
the Trustee,  the Owner Trustee, the Standby Servicer,  the Note Insurer,  their
respective  officers,  directors,  agents and employees and the  Securityholders
from and against  any and all costs,  expenses,  losses,  claims,  damages,  and
liabilities  to the extent that such cost,  expense,  loss,  claim,  damage,  or
liability  arose out of, or was imposed upon the Trust,  the Trustee,  the Owner
Trustee, the Standby Servicer,  the Note Insurer or the Securityholders  through
the  negligence,  willful  misfeasance  or  bad  faith  of the  Servicer  in the
performance  of its  duties  under  this  Agreement  or by  reason  of  reckless
disregard of its obligations and duties under this Agreement.

         (iv) The  Servicer  shall  indemnify,  defend,  and hold  harmless  the
Trustee,  the Owner Trustee,  the Standby Servicer and the Collateral Agent from
and  against all costs,  expenses,  losses,  claims,  damages,  and  liabilities
arising out of or incurred in connection  with the  acceptance or performance of
the trusts and duties herein contained or in the Trust Agreement, if any, except
to the extent that such cost,  expense,  loss, claim,  damage or liability:  (A)
shall be due to the willful  misfeasance,  bad faith, or negligence  (except for
errors in judgment) of the Trustee,  the Owner Trustee,  the Standby Servicer or
Collateral  Agent,  as applicable or (B) relates to any tax other than the taxes
with respect to which the Servicer  shall be required to indemnify  the Trustee,
the Standby Servicer or the Collateral Agent.

         (b) Notwithstanding the foregoing,  the Servicer shall not be obligated
to defend,  indemnify,  and hold  harmless any  Securityholders  for any losses,
claims,  damages or liabilities  incurred by any Securityholders  arising out of
claims, complaints,  actions and allegations relating to Section 406 of ERISA or
Section 4975 of the Code as a result of the purchase or holding of a Security by
such  Securityholder  with the assets of a plan  subject to such  provisions  of
ERISA or the Code or the servicing, management and operation of the Trust.

         (c) For purposes of this  Section 9.2, in the event of the  termination
of the rights and obligations of the Servicer (or any successor thereto pursuant
to Section 9.3) as Servicer pursuant

                                      -71-





to Section 10.1, or a resignation by such Servicer  pursuant to this  Agreement,
such  Servicer  shall be  deemed to be the  Servicer  pending  appointment  of a
successor  Servicer  pursuant to Section  10.2.  The  provisions of this Section
9.2(c)  shall in no way affect the  survival  pursuant to Section  9.2(d) of the
indemnification by the Servicer provided by Section 9.2(a).

         (d)   Indemnification   under  this  Section  9.2  shall   survive  the
termination of this Agreement and any  resignation or removal of CPS as Servicer
and shall  include  reasonable  fees and  expenses  of counsel  and  expenses of
litigation.  If the Servicer shall have made any indemnity  payments pursuant to
this  Section and the  recipient  thereafter  collects  any of such amounts from
others, the recipient shall promptly repay such amounts to the Servicer, without
interest.

         SECTION  9.3.  Merger  or  Consolidation   of,  or  Assumption  of  the
Obligations of, the Servicer or Standby Servicer.

         (a) CPS shall not merge or consolidate  with any other person,  convey,
transfer or lease substantially all its assets as an entirety to another Person,
or permit any other  Person to become the  successor to CPS's  business  unless,
after the merger, consolidation,  conveyance, transfer, lease or succession, the
successor or surviving  entity shall be capable of fulfilling  the duties of CPS
contained in this  Agreement and shall be acceptable to the  Controlling  Party,
and, if an Insurer  Default shall have occurred and be  continuing,  shall be an
Eligible  Servicer.  Any  corporation  (i)  into  which  CPS  may be  merged  or
consolidated, (ii) resulting from any merger or consolidation to which CPS shall
be a party, (iii) which acquires by conveyance, transfer, or lease substantially
all of the assets of CPS, or (iv)  succeeding  to the business of CPS, in any of
the  foregoing  cases shall  execute an agreement of assumption to perform every
obligation  of CPS under this  Agreement  and,  whether  or not such  assumption
agreement  is  executed,  shall be the  successor  to CPS 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, anything in this Agreement to the contrary
notwithstanding;  provided,  however,  that  nothing  contained  herein shall be
deemed to  release  CPS from any  obligation.  CPS shall  provide  notice of any
merger,  consolidation  or  succession  pursuant  to this  Section  to the Owner
Trustee,  the  Trustee,  the  Securityholders,  the Note Insurer and each Rating
Agency.  Notwithstanding the foregoing,  CPS shall not merge or consolidate with
any other  Person or permit  any  other  Person to become a  successor  to CPS's
business,  unless (x) immediately  after giving effect to such  transaction,  no
representation or warranty made pursuant to Section 9.1 shall have been breached
(for purposes hereof, such  representations and warranties shall speak as of the
date of the consummation of such transaction) and no event that,

                                      -72-





after notice or lapse of time,  or both,  would  become an  Insurance  Agreement
Event of  Default  shall have  occurred  and be  continuing,  (y) CPS shall have
delivered to the Owner Trustee,  the Trustee,  the Rating  Agencies and the Note
Insurer an  Officer's  Certificate  and an Opinion of Counsel  each stating that
such consolidation, merger or succession and such agreement of assumption comply
with this Section and that all  conditions  precedent,  if any,  provided for in
this Agreement relating to such transaction have been complied with, and (z) CPS
shall have delivered to the Owner Trustee,  the Trustee, the Rating Agencies and
the Note Insurer an Opinion of Counsel,  stating in the opinion of such counsel,
either (A) 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 Trust in the Receivables and the Other Conveyed Property and
reciting  the details of the filings or (B) no such action shall be necessary to
preserve and protect such interest.

         (b) Any corporation  (i) into which the Standby  Servicer may be merged
or  consolidated,  (ii) resulting from any merger or  consolidation to which the
Standby Servicer shall be a party, (iii) which acquires by conveyance,  transfer
or lease  substantially  all of the  assets  of the  Standby  Servicer,  or (iv)
succeeding  to the  business of the Standby  Servicer,  in any of the  foregoing
cases shall execute an agreement of  assumption  to perform every  obligation of
the Standby  Servicer under this Agreement and,  whether or not such  assumption
agreement is executed, shall be the successor to the Standby 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,  anything in this Agreement to the
contrary notwithstanding; provided, however, that nothing contained herein shall
be deemed to release the Standby Servicer from any obligation.

         SECTION 9.4. Limitation on Liability of Servicer,  Standby Servicer and
Others.

         Neither the Servicer,  the Standby Servicer nor any of the directors or
officers or  employees or agents of the  Servicer or Standby  Servicer  shall be
under any liability to the Trust or the  Securityholders,  except as provided in
this  Agreement,  for any action taken or for refraining  from the taking of any
action pursuant to this Agreement;  provided, however, that this provision shall
not protect the Servicer,  the Standby  Servicer or any such person  against any
liability  that  would  otherwise  be  imposed  by  reason  of a breach  of this
Agreement or willful misfeasance,  bad faith or negligence in the performance of
duties. CPS, the Standby Servicer and any director,  officer,  employee or agent
of CPS or the Standby  Servicer may rely in good faith on the written  advice of
counsel or on any document of any

                                      -73-





kind prima facie  properly  executed and submitted by any Person  respecting any
matters arising under this Agreement.

         SECTION  9.5.  Delegation  of  Duties.  The  Servicer  may at any  time
delegate duties under this Agreement to sub-contractors  who are in the business
of  servicing  automotive  receivables  with the prior  written  consent  of the
Controlling  Party as  determined  pursuant  to  Section  13.15 and  (unless  an
Insurance  Agreement  Event of Default  shall have occurred and be continuing or
Norwest Bank  Minnesota,  National  Association  shall then be the Servicer) the
Holders of Certificates  evidencing  more than 50% of the outstanding  principal
balance of the  Certificates;  provided,  however,  that no such  delegation  or
sub-contracting  of duties by the  Servicer  shall  relieve the  Servicer of its
responsibility  with respect to such  duties;  and  provided  further,  that the
consent of the Holders of the requisite percentage of the outstanding  principal
balance of the  Certificates  shall not be unreasonably  withheld or delayed and
shall be deemed to have been given unless,  on or before the Objection  Date (as
defined below),  the Trustee shall have received  Objection  Notices (as defined
below)  from  Holders  of  Certificates   representing  more  than  50%  of  the
outstanding  principal balance of the Certificates.  Upon written request of the
Servicer,  the Trustee shall deliver to each  Certificateholder  of record as of
the most recent  Record Date a notice (a  "Delegation  Notice")  prepared by the
Servicer  (i)  specifying  the duties the Servicer  proposes to  delegate,  (ii)
identifying the  sub-contractor  to whom it proposes to delegate such duties and
(iii)  informing  such  Certificateholder  that if it  wishes  to  object to the
proposed  delegation  of duties,  it must deliver a written  notice of objection
(specifying in reasonable  detail the reasons for its objection;  such notice of
objection  an  "Objection  Notice")  on or  before  the date  specified  in such
Delegation Notice (the "Objection  Date"),  which Objection Date shall be a date
which is not more than 10  Business  Days after the date the  Servicer  delivers
such Delegation Notice to the Trustee.

         SECTION 9.6.  Servicer and Standby  Servicer Not to Resign.  Subject to
the  provisions  of Section 9.3,  neither the Servicer nor the Standby  Servicer
shall resign from the  obligations and duties imposed on it by this Agreement as
Servicer or Standby  Servicer  except upon a  determination  that by reason of a
change in legal  requirements the performance of its duties under this Agreement
would cause it to be in violation of such legal  requirements  in a manner which
would have a material adverse effect on the Servicer or the Standby Servicer, as
the case may be, and the Note Insurer (so long as an Insurer  Default  shall not
have occurred and be continuing) or a Security  Majority (if an Insurer  Default
shall have occurred and be continuing)  does not elect to waive the  obligations
of the  Servicer  or the  Standby  Servicer,  as the case may be, to perform the
duties which render it legally unable to act or to delegate those duties to

                                      -74-





another  Person.  Any  such  determination  permitting  the  resignation  of the
Servicer or Standby Servicer shall be evidenced by an Opinion of Counsel to such
effect  delivered and acceptable to the Trustee,  the Owner Trustee and the Note
Insurer (unless an Insurer  Default shall have occurred and be  continuing).  No
resignation of the Servicer shall become  effective until, so long as no Insurer
Default shall have occurred and be continuing, the Standby Servicer or an entity
acceptable  to the Note  Insurer  shall have  assumed the  responsibilities  and
obligations of the Servicer or, if an Insurer Default shall have occurred and be
continuing,  the Standby  Servicer or a successor  Servicer  that is an Eligible
Servicer shall have assumed the  responsibilities and obligations of the Standby
Servicer.  No resignation of the Standby  Servicer shall become effective until,
so long as no Insurer  Default shall have occurred and be continuing,  an entity
acceptable to the Security Insurer shall have assumed the  responsibilities  and
obligations  of the  Standby  Servicer  or, if an  Insurer  Default  shall  have
occurred  and be  continuing  a Person that is an Eligible  Servicer  shall have
assumed the responsibilities and obligations of the Standby Servicer;  provided,
however,  that in the event a successor Standby Servicer is not appointed within
60 days after the Standby  Servicer has given notice of its  resignation and has
provided  the  Opinion of Counsel  required  by this  Section  9.6,  the Standby
Servicer may petition a court for its removal.


                                    ARTICLE X

                                     DEFAULT

         SECTION  10.1.  Servicer   Termination  Event.  For  purposes  of  this
Agreement,  each of the  following  shall  constitute  a  "Servicer  Termination
Event":

         (a)  Any  failure  by  the  Servicer  to  deliver  to the  Trustee  for
distribution  to  Securityholders  any  proceeds  or payment  required  to be so
delivered  under the terms of this  Agreement  that  continues  unremedied for a
period of two  Business  Days (one  Business  Day with  respect  to  payment  of
Purchase  Amounts)  after  written  notice is received by the Servicer  from the
Trustee or the Note Insurer  (unless an Insurer  Default shall have occurred and
be  continuing) or after  discovery of such failure by a Responsible  officer of
the Servicer;

         (b)  Failure by the  Servicer  to deliver to the  Trustee  and the Note
Insurer  (so  long  as an  Insurer  Default  shall  not  have  occurred  and  be
continuing), the Servicer's Certificate within five days after the date on which
such Servicer's Certificate is required to be delivered,  or failure on the part
of the Servicer to observe its  covenants  and  agreements  set forth in Section
9.3(a);

                                      -75-





         (c) Failure on the part of the Servicer  duly to observe or perform any
other covenants or agreements of the Servicer set forth in this Agreement, which
failure (i)  materially  and  adversely  affects  the rights of  Securityholders
(determined without regard to the availability of funds under the Policy), or of
the  Note  Insurer  (unless  an  Insurer  Default  shall  have  occurred  and be
continuing),  and (ii)  continues  unremedied  for a period of 30 days after the
date on which written notice of such failure, requiring the same to be remedied,
shall have been given (1) to the  Servicer by the Trustee or the Note Insurer or
(2) to the  Servicer  and to the Trustee and the Note  Insurer by the Holders of
Class A Notes evidencing not less than 25% of the outstanding  principal balance
of the Class A Notes or,  after the Class A Notes have been paid in full and all
outstanding  Reimbursement Obligations and other amounts due to the Note Insurer
have been paid in full, by the Holders of Certificates  evidencing not less than
25% of the outstanding principal balance of the Certificates;

         (d) The entry of a decree or order by a court or agency or  supervisory
authority  having  jurisdiction  in  the  premises  for  the  appointment  of  a
conservator, receiver, or liquidator for the Servicer or the Seller (or, so long
as  CPS  is  Servicer,  any of the  Servicer's  Affiliates)  in any  bankruptcy,
insolvency,  readjustment  of debt,  marshaling  of assets and  liabilities,  or
similar  proceedings,  or for the winding up or liquidation of its affairs,  and
the  continuance of any such decree or order unstayed and in effect for a period
of 60 consecutive days; or

         (e) The  consent by the  Servicer  or the Seller (or, so long as CPS is
Servicer, any of the Servicer's Affiliates) to the appointment of a conservator,
trustee, receiver or liquidator in any bankruptcy,  insolvency,  readjustment of
debt,  marshalling  of assets  and  liabilities,  or similar  proceedings  of or
relating to the Servicer or the Seller (or, so long as CPS is  Servicer,  any of
the Servicer's  Affiliates) of or relating to substantially all of its property;
or the  Servicer  or the  Seller  (or,  so long as CPS is  Servicer,  any of the
Servicer's Affiliates) or the Seller shall admit in writing its inability to pay
its debts generally as they become due, file a petition to take advantage of any
applicable  insolvency or  reorganization  statute,  make an assignment  for the
benefit of its creditors, or voluntarily suspend payment of its obligations; or

         (f) Any  representation,  warranty or statement of the Servicer made in
this Agreement or any certificate,  report or other writing  delivered  pursuant
hereto shall prove to be  incorrect in any material  respect as of the time when
the same

                                      -76-





shall have been made, and the incorrectness of such representation,  warranty or
statement has a material adverse effect on the Trust or the Securityholders and,
within 30 days after  written  notice  thereof  shall have been given (1) to the
Servicer by the Trustee or the Note  Insurer or (2) to the  Servicer  and to the
Trustee and the Note Insurer by the Holders of Class A Notes evidencing not less
than 25% of the outstanding principal balance of the Class A Notes or, after the
Class  A  Notes  have  been  paid in  full  and  all  outstanding  Reimbursement
Obligations and other amounts due to the Note Insurer have been paid in full, by
the  Holders of  Certificates  evidencing  not less than 25% of the  outstanding
principal balance of the Certificates, the circumstances or condition in respect
of which such representation, warranty or statement was incorrect shall not have
been eliminated or otherwise cured; or

         (g) So long as an  Insurer  Default  shall  not  have  occurred  and be
continuing,  the Note  Insurer  shall not have  delivered  a Servicer  Extension
Notice pursuant to Section 4.14; or

         (h) So long as an  Insurer  Default  shall  not  have  occurred  and be
continuing, an Insurance Agreement Event of Default or under any other Insurance
and Indemnity  Agreement  relating to any Series an Event of Default  thereunder
shall have occurred; or

         (i) A claim is made under the Note Policy.

         SECTION  10.2.  Consequences  of a  Servicer  Termination  Event.  If a
Servicer Termination Event shall occur and be continuing,  the Note Insurer (or,
if an Insurer  Default shall have occurred and be continuing  either the Trustee
or holders of Notes  evidencing not less than 25% of the  outstanding  principal
amount  of the  Notes,  or, if the Notes  have  been  paid in full,  holders  of
Certificates evidencing not less than 25% of the outstanding principal amount of
the Certificates) (to the extent it has knowledge  thereof),  by notice given in
writing to the Servicer  (and to the Trustee if given by the Note Insurer or the
Securityholders)  or by non-extension of the term of the Servicer as referred to
in Section 4.14 may terminate all of the rights and  obligations of the Servicer
under this  Agreement.  The Servicer  shall be entitled to its pro rata share of
the Servicing Fee for the number of days in the  Collection  Period prior to the
effective  date of its  termination.  On or after the receipt by the Servicer of
such  written  notice  or upon  termination  of the  term of the  Servicer,  all
authority,  power,  obligations and  responsibilities of the Servicer under this
Agreement,  whether with  respect to the Notes,  the  Certificates  or the Other
Conveyed  Property or otherwise,  automatically  shall pass to, be vested in and
become obligations and  responsibilities  of the Standby Servicer (or such other
successor  Servicer  appointed by the  Controlling  Party under  Section  10.3);
provided, however, that

                                      -77-





the successor  Servicer  shall have no liability  with respect to any obligation
which was required to be performed by the terminated  Servicer prior to the date
that the successor  Servicer  becomes the Servicer or any claim of a third party
based  on any  alleged  action  or  inaction  of the  terminated  Servicer.  The
successor  Servicer is authorized and empowered by this Agreement to execute and
deliver, on behalf of the terminated Servicer, as attorney-in-fact or otherwise,
any and all documents and other  instruments  and to do or accomplish  all other
acts or things necessary or appropriate to effect the purposes of such notice of
termination, whether to complete the transfer and endorsement of the Receivables
and the other  Conveyed  Property  and  related  documents  to show the Trust as
lienholder or secured party on the related Lien Certificates,  or otherwise. The
terminated Servicer agrees to cooperate with the successor Servicer in effecting
the termination of the  responsibilities  and rights of the terminated  Servicer
under  this  Agreement,  including,  without  limitation,  the  transfer  to the
successor  Servicer for  administration  by it of all cash amounts that shall at
the time be held by the terminated  Servicer for deposit, or have been deposited
by the terminated  Servicer,  in the Collection  Account or thereafter  received
with respect to the  Receivables  and the delivery to the successor  Servicer of
all Receivable  Files and a computer tape in readable form as of the most recent
Business  Day  containing  all  information  necessary  to enable the  successor
Servicer  or a  successor  Servicer  to service  the  Receivables  and the Other
Conveyed Property. All reasonable costs and expenses (including attorneys' fees)
incurred in connection with  transferring  the Receivable Files to the successor
Servicer and amending  this  Agreement  to reflect such  succession  as Servicer
pursuant to this Section  10.1 shall be paid by the  predecessor  Servicer  upon
presentation  of  reasonable  documentation  of  such  costs  and  expenses.  In
addition, any successor Servicer shall be entitled to payment from the immediate
predecessor  Servicer for reasonable  transition expenses incurred in connection
with acting as successor  Servicer,  and to the extent not so paid, such payment
shall be made pursuant to Section 5.7(b)  hereof.  Upon receipt of notice of the
occurrence of Servicer  Termination Event, the Trustee shall give notice thereof
to the Rating  Agencies.  If requested by the Controlling  Party,  the successor
Servicer shall  terminate the Lockbox  Agreement and direct the Obligors to make
all payments under the Receivables  directly to the successor Servicer (in which
event the successor  Servicer  shall  process such  payments in accordance  with
Section 4.2(e)),  or to a lockbox  established by the successor  Servicer at the
direction of the Controlling  Party, at the successor  Servicer's  expense.  The
terminated  Servicer  shall grant the Trustee,  the  successor  Servicer and the
Controlling Party reasonable access to the terminated Servicer's premises at the
terminated Servicer's expense.


                                      -78-





         SECTION 10.3.  Appointment of Successor.

         (a) On and after the time the Servicer receives a notice of termination
pursuant to Section 10.2, upon  non-extension  of the servicing term as referred
to in Section 4.14, or upon the resignation of the Servicer  pursuant to Section
9.6,  the  predecessor  Servicer  shall  continue  to perform its  functions  as
Servicer under this Agreement,  in the case of termination,  only until the date
specified  in such  termination  notice  or, if no such date is  specified  in a
notice  of  termination,  until  receipt  of such  notice  and,  in the  case of
expiration  and  non-renewal  of the term of the Servicer upon the expiration of
such term, and, in the case of  resignation,  until the later of (x) the date 45
days from the delivery to the Trustee of written notice of such  resignation (or
written  confirmation  of such  notice)  in  accordance  with the  terms of this
Agreement  and (y) the date upon which the  predecessor  Servicer  shall  become
unable  to act as  Servicer,  as  specified  in the  notice of  resignation  and
accompanying  Opinion of Counsel.  In the event of  termination of the Servicer,
Norwest Bank Minnesota,  National Association, as Standby Servicer, shall assume
the  obligations  of Servicer  hereunder  on the date  specified in such written
notice (the "Assumption  Date") pursuant to the Servicing  Assumption  Agreement
or, in the event that the Note Insurer shall have determined that a Person other
than the Standby  Servicer  shall be the successor  Servicer in accordance  with
Section 10.2, on the date of the execution of a written assumption  agreement by
such  Person  to  serve  as  successor  Servicer.  Notwithstanding  the  Standby
Servicer's  assumption of, and its agreement to perform and observe, all duties,
responsibilities and obligations of CPS as Servicer under this Agreement arising
on and after the Assumption  Date,  the Standby  Servicer shall not be deemed to
have assumed or to become liable for, or otherwise  have any liability  for, any
duties,  responsibilities,  obligations or liabilities of CPS or any predecessor
Servicer arising on or before the Assumption  Date,  whether provided for by the
terms of this  Agreement,  arising by operation of law or otherwise,  including,
without limitation, any liability for, any duties, responsibilities, obligations
or  liabilities  of CPS or any  predecessor  Servicer  arising  on or before the
Assumption Date under Section 4.7 or 9.2 of this  Agreement,  regardless of when
the  liability,  duty,  responsibility  or obligation of CPS or any  predecessor
Servicer  therefore  arose,  whether  provided  by the terms of this  Agreement,
arising by  operation of law or  otherwise.  Notwithstanding  the above,  if the
Standby Servicer shall be legally unable or unwilling to act as Servicer, and an
Insurer Default shall have occurred and be continuing, the Standby Servicer, the
Trustee or a Security Majority may petition a court of competent jurisdiction to
appoint  any  Eligible  Servicer  as  the  successor  to the  Servicer.  Pending
appointment  pursuant to the preceding sentence,  the Standby Servicer shall act
as successor Servicer

                                      -79-





unless it is legally unable to do so, in which event the outgoing Servicer shall
continue to act as Servicer  until a successor  has been  appointed and accepted
such  appointment.  Subject to Section 9.6, no provision of this Agreement shall
be construed as relieving the Standby  Servicer of its  obligation to succeed as
successor  Servicer  upon the  termination  of the Servicer  pursuant to Section
10.2,  the  resignation  of  the  Servicer   pursuant  to  Section  9.6  or  the
non-extension  of the servicing term of the Servicer,  as referred to in Section
4.14. If upon the  termination  of the Servicer  pursuant to Section 10.2 or the
resignation  of the  Servicer  pursuant to Section 9.6,  the  Controlling  Party
appoints a  successor  Servicer  other than the  Standby  Servicer,  the Standby
Servicer shall not be relieved of its duties as Standby Servicer hereunder.

         (b) Any  successor  Servicer  shall be  entitled  to such  compensation
(whether  payable out of the  Collection  Account or  otherwise) as the Servicer
would  have been  entitled  to under  this  Agreement  if the  Servicer  had not
resigned or been terminated hereunder.

         SECTION 10.4. Notification to Noteholders and Certificateholders.  Upon
any termination of, or appointment of a successor to, the Servicer,  the Trustee
shall give  prompt  written  notice  thereof to each  Securityholder,  the Owner
Trustee and to the Rating Agencies.

         SECTION 10.5.  Waiver of Past Defaults.  Subject to the approval of the
Note  Insurer,  the  Holders  of Class A Notes  evidencing  more than 50% of the
outstanding  principal  balance of the Class A Notes or, after the Class A Notes
have been paid in full, the Holders of Certificates  evidencing more than 50% of
the outstanding principal balance of the Certificates,  may on behalf of all the
Noteholders  and  Certificateholders,  waive any default be the  Servicer in the
performance of its obligations under this Agreement and the consequences thereof
(except a default in making any required deposits to or payments from any of the
Trust  Accounts in accordance  with the terms of this  Agreement.  Upon any such
waiver of a past default,  such default  shall cease to exist,  and any Servicer
Termination  Event arising  therefrom  shall be deemed to have been remedied for
every purpose of this  Agreement.  No such waiver shall extend to any subsequent
or other default or impair any right consequent thereto.

         SECTION  10.6.  Action Upon Certain  Failures of the  Servicer.  In the
event that the  Trustee  shall have  knowledge  of any  failure of the  Servicer
specified in Section 10.1 which would give rise to a right of termination  under
such Section upon the  Servicer's  failure to remedy the same after notice,  the
Trustee shall give notice thereof to the Servicer and the Note Insurer.  For all
purposes of this Agreement (including, without limitation,

                                      -80-





Section 6.2(b) and this Section  10.6),  the Trustee shall not be deemed to have
knowledge  of any failure of the  Servicer as  specified  in Section 10.1 unless
notified  thereof  in  writing  by  the  Servicer,  the  Note  Insurer  or  by a
Securityholder.  The Trustee shall be under no duty or obligation to investigate
or inquire as to any  potential  failure of the  Servicer  specified  in Section
10.1.


                                   ARTICLE XI

                                   TERMINATION

         SECTION 11.1.  Optional Purchase of All Receivables.

         (a) (i) On the last day of any  Collection  Period as of which the Pool
Balance  shall be less than or equal to 10% of the Original  Pool  Balance,  the
Servicer  and the Seller each shall have the option to purchase  the Owner Trust
Estate,  other than the Trust  Accounts (with the consent of the Note Insurer if
such purchase  would result in a claim on the Note Policy or would result in any
amount  owing  to the Note  Insurer  under  the  Insurance  Agreement  remaining
unpaid); provided, however, that the amount to be paid for such purchase (as set
forth in the following  sentence)  shall be sufficient to pay the full amount of
principal, premium, if any, and interest then due and payable on the Securities.
To exercise such option,  the Servicer or the Seller,  as the case may be, shall
deposit pursuant to Section 5.6 in the Collection Account an amount equal to the
aggregate   Purchase   Amount   for  the   Receivables   (including   Liquidated
Receivables),  plus the appraised value of any other property held by the Trust,
such  value  to be  determined  by an  appraiser  mutually  agreed  upon  by the
Servicer,  the Note Insurer and the Trustee,  and shall succeed to all interests
in and to the Trust.

         (b) Upon any sale of the assets of the Trust pursuant to Section 9.2 of
the Trust  Agreement,  the  Servicer  shall  instruct the Trustee to deposit the
proceeds from such sale after all payments and reserves therefrom (including the
expenses  of such  sale)  have  been  made (the  "Insolvency  Proceeds")  in the
Collection Account.

         (c)  Notice  of any  termination  of the  Trust  shall  be given by the
Servicer, which notice shall include, among other things, the items specified in
Section 9.1(c) of the Trust Agreement,  to the Owner Trustee,  the Trustee,  the
Note Insurer and the Rating  Agencies as soon as practicable  after the Servicer
has received notice thereof.

         (d) Following the  satisfaction  and discharge of the Indenture and the
payment in full of the principal of and

                                      -81-





interest on the Notes, the Certificateholders  will succeed to the rights of the
Noteholders  hereunder  and the Owner Trustee will succeed to the rights of, and
assume the obligations of, the Trustee to this Agreement.


                                   ARTICLE XII

                      ADMINISTRATIVE DUTIES OF THE SERVICER

         SECTION 12.1.  Administrative Duties.

         (a) Duties with Respect to the  Indenture.  The Servicer  shall perform
all its duties and the duties of the Issuer  under the  Indenture.  In addition,
the  Servicer  shall  consult  with the  Owner  Trustee  as the  Servicer  deems
appropriate regarding the duties of the Issuer under the Indenture. The Servicer
shall monitor the  performance  of the Issuer and shall advise the Owner Trustee
when action is necessary to comply with the Issuer's duties under the Indenture.
The  Servicer  shall  prepare  for  execution  by the Issuer or shall  cause the
preparation  by  other  appropriate  Persons  of all  such  documents,  reports,
filings,  instruments,  certificates and opinions as it shall be the duty of the
Issuer to prepare, file or deliver pursuant to the Indenture.  In furtherance of
the foregoing,  the Servicer shall take all necessary action that is the duty of
the Issuer to take pursuant to the  Indenture,  including,  without  limitation,
pursuant to Sections 2.7, 3.5, 3.6, 3.7, 3.9,  3.10,  3.17,  5.1, 5.4, 7.3, 8.3,
9.2, 9.3, 11.1 and 11.15 of the Indenture.

         (b) Duties with Respect to the Issuer.

                  (i) In  addition  to the duties of the  Servicer  set forth in
this  Agreement or any of the Basic  Documents,  the Servicer shall perform such
calculations  and shall prepare for execution by the Issuer or the Owner Trustee
or  shall  cause  the  preparation  by  other  appropriate  Persons  of all such
documents, reports, filings, instruments,  certificates and opinions as it shall
be the duty of the  Issuer or the Owner  Trustee  to  prepare,  file or  deliver
pursuant  to this  Agreement  or any of the Basic  Documents  or under state and
federal tax and  securities  laws, and at the request of the Owner Trustee shall
take all  appropriate  action that it is the duty of the Issuer to take pursuant
to this Agreement or any of the Basic Documents,  including, without limitation,
pursuant to Sections 2.6 and 2.11 of the Trust Agreement. In accordance with the
directions of the Issuer or the Owner Trustee,  the Servicer  shall  administer,
perform or supervise the performance of such other activities in connection with



                                      -82-




the Collateral  (including the Basic Documents) as are not covered by any of the
foregoing  provisions and as are expressly  requested by the Issuer or the Owner
Trustee and are reasonably within the capability of the Servicer.

                  (ii) Notwithstanding  anything in this Agreement or any of the
Basic Documents to the contrary,  the servicer shall be responsible for promptly
notifying  the Owner  Trustee and the Trustee in the event that any  withholding
tax is imposed on the Issuer's  payments (or  allocations of income) to an owner
(as defined in the Trust  Agreement) as contemplated  this  Agreement.  Any such
notice  shall be in  writing  and  specify  the  amount of any  withholding  tax
required  to be withheld  by the Owner  Trustee or the Trustee  pursuant to such
provision.

                  (iii) Notwithstanding  anything in this Agreement or the Basic
Documents to the contrary,  the Servicer shall be responsible for performance of
the duties of the  Issuer or the  Seller  set forth in Section  5.1 of the Trust
Agreement with respect to, among other things,  accounting and reports to owners
(as defined in the Trust Agreement);  provided,  however,  that once prepared by
the Servicer the Owner Trustee shall retain  responsibility for the distribution
of the Schedule K-1s necessary to enable each  Certificateholder  to prepare its
federal and state income tax returns.

                  (iv) The  Servicer  shall  perform the duties of the  Servicer
specified  in Section  10.2 of the Trust  Agreement  required to be performed in
connection with the  resignation or removal of the Owner Trustee,  and any other
duties  expressly  required to be performed by the Servicer under this Agreement
or any of the Basic Documents.

                  (v) In carrying out the  foregoing  duties or any of its other
obligations under this Agreement,  the Servicer may enter into transactions with
or otherwise deal with any of its Affiliates;  provided, however, that the terms
of any such  transactions or dealings shall be in accordance with any directions
received  from the  Issuer  and  shall be, in the  Servicer's  opinion,  no less
favorable to the Issuer in any material respect.

         (c) Tax Matters.  The Servicer shall prepare and file, on behalf of the
Seller, all tax returns, tax elections,  financial statements and such annual or
other reports of the Issuer as are necessary for  preparation  of tax reports as
provided in Article V of the Trust Agreement, including without limitation forms
1099 and 1066. All tax returns will be signed by the Seller.


                                      -83-





         (d)  Non-Ministerial  Matters.  With  respect  to  matters  that in the
reasonable judgment of the Servicer are non-ministerial,  the Servicer shall not
take any action  pursuant to this Article XII unless  within a  reasonable  time
before the taking of such  action,  the Servicer  shall have  notified the Owner
Trustee and the Trustee of the proposed  action and the Owner  Trustee and, with
respect to items (i),  (ii),  (iii) and (iv) below,  the Trustee  shall not have
withheld  consent or provided an alternative  direction.  For the purpose of the
preceding sentence, "non-ministerial matters" shall include:

                  (i)  the amendment of or any supplement to the Indenture;

                  (ii) the  initiation of any claim or lawsuit by the Issuer and
the compromise of any action,  claim or lawsuit brought by or against the Issuer
(other than in connection with the collection of the Receivables);

                  (iii) the amendment,  change or modification of this Agreement
or any of the Basic Documents;

                  (iv) the appointment of successor Note  Registrars,  successor
Paying  Agents  and  successor   Trustees  pursuant  to  the  Indenture  or  the
appointment of Successor  Servicers or the consent to the assignment by the Note
Registrar, Paying Agent or Trustee of its obligations under the Indenture; and

                  (v) the removal of the Trustee.

         (e)  Exceptions.  Notwithstanding  anything  to the  contrary  in  this
Agreement  except as expressly  provided herein or in the other Basic Documents,
the Servicer,  in its capacity  hereunder,  shall not be obligated to, and shall
not, (1) make any payments to the  Noteholders or  Certificateholders  under the
Basic Documents,  (2) sell the Indenture Trust Property  pursuant to Section 5.5
of the Indenture, (3) take any other action that the Issuer directs the Servicer
not to take on its behalf or (4) in connection with its duties  hereunder assume
any indemnification obligation of any other Person.

         (f) Limitation of Standby Servicer's Obligations.  The Standby Servicer
or any successor Servicer shall not be responsible for any obligations or duties
of the servicer under Section 12.1.

         SECTION 12.2. Records. The Servicer shall maintain appropriate books of
account and records relating to services  performed under this Agreement,  which
books of account and records shall be accessible for inspection by the Issuer at
any time during normal business hours.

                                      -84-





         SECTION 12.3. Additional Information to be Furnished to the Issuer. The
Servicer  shall  furnish  to the  Issuer  from  time  to  time  such  additional
information regarding the Collateral as the Issuer shall reasonably request.


                                  ARTICLE XIII

                            MISCELLANEOUS PROVISIONS

         SECTION 13.1.  Amendment.

         (a) This  Agreement  may be  amended  from time to time by the  parties
hereto,  with the consent of the Trustee (which consent may not be  unreasonably
withheld),  with the prior  written  consent of the Note  Insurer (so long as no
Insurer  Default has occurred and is continuing)  but without the consent of any
of the Noteholders or the Certificateholders,  to cure any ambiguity, to correct
or supplement  any provisions in this  Agreement,  to comply with any changes in
the Code, or to make any other  provisions  with respect to matters or questions
arising under this Agreement which shall not be inconsistent with the provisions
of this  Agreement or the  Insurance  Agreement;  provided,  however,  that such
action shall not, as  evidenced by an Opinion of Counsel  delivered to the Owner
Trustee and the Trustee,  adversely affect in any material respect the interests
of any  Noteholder  or  Certificateholder;  provided  further that if an Insurer
Default  has  occurred  and is  continuing,  such  action  shall not  materially
adversely affect the interests of the Note Insurer.

         This  Agreement  may also be amended  from time to time by the  parties
hereto,  with the consent of the Note Insurer,  the consent of the Trustee,  the
consent of the Holders of Class A Notes  evidencing  not less than a majority of
the  outstanding  principal  amount of the Class A Notes and the  consent of the
Holders (as defined in the Trust Agreement) of Certificates  evidencing not less
than a  majority  of the  Certificate  Balance  for the  purpose  of adding  any
provisions to or changing in any manner or eliminating  any of the provisions of
this  Agreement or of modifying in any manner the rights of the  Noteholders  or
the  Certificateholders;  provided,  however,  that no such amendment  shall (a)
increase  or reduce in any  manner the  amount  of, or  accelerate  or delay the
timing of, collections of payments on Receivables or distributions that shall be
required to be made for the benefit of the Noteholders or the Certificateholders
or (b) reduce the aforesaid  percentage of the outstanding  principal  amount of
each Class of Notes or the  Certificates,  the Holders of which are  required to
consent to any such  amendment,  without  the  consent of the Holders of all the
outstanding Notes and the Holders (as defined in the Trust Agreement) of all the
outstanding Certificates, of each Class affected thereby;

                                      -85-





provided  further,  that if an Insurer  Default has occurred and is  continuing,
such  action  shall not  materially  adversely  affect the  interest of the Note
Insurer.

         Promptly  after the  execution of any such  amendment  or consent,  the
Trustee shall furnish written notification of the substance of such amendment or
consent to each Securityholder and the Rating Agencies.

         It shall not be  necessary  for the  consent of  Certificateholders  or
Noteholders  pursuant  to this  Section to approve  the  particular  form of any
proposed amendment or consent,  but it shall be sufficient if such consent shall
approve the substance  thereof.  The manner of obtaining  such consents (and any
other  consents  of  Noteholders  or  Certificateholders  provided  for in  this
Agreement) and of evidencing the  authorization  of any action by Noteholders or
Certificateholders  shall be  subject  to such  reasonable  requirements  as the
Trustee or the Owner Trustee, as applicable, may prescribe.

         Prior to the  execution of any amendment to this  Agreement,  the Owner
Trustee and the Trustee shall be entitled to receive and rely upon an Opinion of
Counsel  stating that the execution of such amendment is authorized or permitted
by this Agreement and the Opinion of Counsel  referred to in Section  13.2(i)(1)
has been delivered. The Owner Trustee, the Standby Servicer and the Trustee may,
but shall not be obligated to, enter into any such  amendment  which affects the
Issuer's,  the Owner  Trustee's,  the Standby  Servicer's or the  Trustee's,  as
applicable, own rights, duties or immunities under this Agreement or otherwise.

         (b)  Notwithstanding  anything  to the  contrary  contained  in Section
13.1(a)  above,  the  provisions  of the  Agreement  relating  to (i) the Spread
Account Supplement,  the Spread Account,  the Specified Spread Account Requisite
Amount, a Trigger Event or any component  definition of a Trigger Event and (ii)
any additional sources of funds which may be added to the Spread Account or uses
of funds on deposit in the Spread  Account  may be amended in any respect by the
Seller, the Servicer,  the Note Insurer and the Collateral Agent (the consent of
which shall not be withheld or delayed with respect to any  amendment  that does
not adversely affect the Collateral Agent) without the consent of, or notice to,
the Noteholders or the Certificateholders.

         SECTION 13.2.  Protection of Title to Trust.

         (a) The  Seller  or  Servicer  or both  shall  execute  and  file  such
financing  statements  and  cause to be  executed  and filed  such  continuation
statements,  all in such  manner and in such  places as may be  required  by law
fully to  preserve,  maintain  and  protect  the  interest of the Issuer and the
interests of the Trustee in

                                      -86-





the Receivables and in the proceeds thereof.  The Seller shall deliver (or cause
to be  delivered)  to the  Note  Insurer,  the  Owner  Trustee  and the  Trustee
file-stamped  copies of, or filing  receipts for, any document filed as provided
above, as soon as available following such filing.

         (b) Neither the Seller nor the Servicer shall change its name, identity
or  corporate  structure  in any  manner  that  would,  could or might  make any
financing statement or continuation statement filed in accordance with paragraph
(a) above  seriously  misleading  within the meaning of section  9-402(7) of the
UCC,  unless it shall have given the Note  Insurer,  the Owner  Trustee  and the
Trustee at least five days' prior written notice thereof and shall have promptly
filed  appropriate  amendments to all previously  filed financing  statements or
continuation statements.  Promptly upon such filing, the Seller or the Servicer,
as the case may be,  shall  deliver an Opinion of Counsel in form and  substance
reasonably  satisfactory  to the Note Insurer,  stating either (A) all financing
statements  and  continuation  statements  have been executed and filed that are
necessary  fully to  preserve  and  protect  the  interest  of the Trust and the
Trustee  in the  Receivables,  and  reciting  the  details  of such  filings  or
referring to prior  Opinions of Counsel in which such details are given,  or (B)
no such action shall be necessary to preserve and protect such interest.

         (c) Each of the Seller and the  Servicer  shall have an  obligation  to
give the Note Insurer, the Owner Trustee and the Trustee at least 60 days' prior
written  notice of any  relocation  of its principal  executive  office if, a; a
result of such  relocation,  the applicable  provisions of the UCC would require
the filing of any amendment of any previously  filed  financing or  continuation
statement or of any new  financing  statement  and shall  promptly file any such
amendment.  The Servicer  shall at all times  maintain each office from which it
shall service Receivables, and its principal executive office, within the United
States of America.

         (d)  The  servicer  shall  maintain  accounts  and  records  as to each
Receivable  accurately and in sufficient detail to permit (i) the reader thereof
to know at any  time the  status  of such  Receivable,  including  payments  and
recoveries   made  and  payments  owing  (and  the  nature  of  each)  and  (ii)
reconciliation  between  payments  or  recoveries  on (or with  respect to) each
Receivable and the amounts from time to time deposited in the Collection Account
in respect of such Receivable.

         (e) The Servicer shall maintain its computer  systems so that, from and
after the time of sale under this  Agreement of the  Receivables  to the Issuer,
the Servicer's  master  computer  records  (including any backup  archives) that
refer to a Receivable shall

                                      -87-





indicate  clearly  the  interest of the Trust in such  Receivable  and that such
Receivable  is owned by the  Trust.  Indication  of the  Trust's  interest  in a
Receivable shall be deleted from or modified on the Servicer's  computer systems
when,  and only when,  the  related  Receivable  shall have been paid in full or
repurchased.

         (f) If at any time the Seller or the  Servicer  shall  propose to sell,
grant a security  interest in or otherwise  transfer any interest in  automotive
receivables  to any  prospective  purchaser,  lender  or other  transferee,  the
Servicer shall give to such  prospective  purchaser,  lender or other transferee
computer  tapes,  records or  printouts  (including  any  restored  from  backup
archives) that, if they shall refer in any manner  whatsoever to any Receivable,
shall  indicate  clearly that such  Receivable has been sold and is owned by the
Trust.

         (g) The Servicer shall permit the Trustee, the Standby Servicer and the
Note Insurer and its agents at any time during normal business hours to inspect,
audit,  and make copies of and abstracts from the Servicer's  records  regarding
any Receivable.

         (h) Upon request,  the Servicer shall furnish to the Note Insurer,  the
Owner  Trustee or to the  Trustee,  within  five  Business  Days,  a list of all
Receivables  (by contract  number and name of Obligor)  then held as part of the
Trust,  together  with  a  reconciliation  of  such  list  to  the  Schedule  of
Receivables  and to each of the Servicer's  Certificates  furnished  before such
request indicating removal of Receivables from the Trust.

         (i) The Servicer  shall deliver to the Note Insurer,  the Owner Trustee
and the Trustee:

                  (i) promptly after the execution and delivery of the Agreement
         and,  if required  pursuant  to Section  13.1,  of each  amendment,  an
         Opinion of Counsel  stating that,  in the opinion of such  counsel,  in
         form and substance reasonably  satisfactory to the Note Insurer, either
         (A) all financing  statements  and  continuation  statements  have been
         executed and filed that are necessary fully to preserve and protect the
         interest of the Trust and the Trustee in the Receivables,  and reciting
         the details of such filings or  referring to prior  Opinions of Counsel
         in  which  such  details  are  given,  or (B) no such  action  shall be
         necessary to preserve and protect such interest; and

                  (ii) within 90 days after the  beginning of each calendar year
         beginning with the first calendar year beginning more than three months
         after the Cutoff Date, an Opinion of Counsel, dated as of a date during
         such 90-day  period,  stating  that,  in the  opinion of such  counsel,
         either (A) all financing  statements and  continuation  statements have
         been executed and

                                      -88-





         filed that are necessary  fully to preserve and protect the interest of
         the Trust and the Trustee in the Receivables,  and reciting the details
         of such filings or referring to prior Opinions of Counsel in which such
         details are given, or (B) no such action shall be necessary to preserve
         and protect such interest.

         Each  Opinion of Counsel  referred to in clause (i) or (ii) above shall
specify any action necessary (as of the date of such opinion) to be taken in the
following year to preserve and protect such interest.

         SECTION 13.3. Notices. All demands,  notices and communications upon or
to the  Seller,  the  Servicer,  the Owner  Trustee,  the  Trustee or the Rating
Agencies  under this Agreement  shall be in writing,  personally  delivered,  or
mailed by certified mail, return receipt requested,  and shall be deemed to have
been duly given upon  receipt  (a) in the case of the Seller to CPS  Receivables
Funding Corp., 2 Ada, Irvine,  California 92618, (b) in the case of the Servicer
to Consumer  Portfolio  Services,  Inc., 2 Ada, Irvine,  California,  Attention:
Chief Financial officer,  (c) in the case of the Issuer or the Owner Trustee, at
the Corporate Trust Office of the Owner Trustee,  (d) in the case of the Trustee
or the Collateral  Agent, at the Corporate Trust Office,  (e) in the case of the
Note Insurer,  to 350 Park Avenue,  New York, New York 10022  Attention:  Senior
Vice President,  Surveillance  (Telecopy:  (212)  339-3547);  (f) in the case of
Moody's,  to Moody's  Investors  Service,  Inc., ABS Monitoring  Department,  99
Church  Street,  New York,  New York  10007;  and (g) in the case of  Standard &
Poor's,  to Standard & Poor's Ratings Group, 25 Broadway,  15th Floor, New York,
New York 10004,  Attention:  Asset Backed  Surveillance  Department.  Any notice
required or permitted to be mailed to a Noteholder or Certificateholder shall be
given by first class  mail,  postage  prepaid,  at the address of such Holder as
shown in the Certificate Register or Note Register, as applicable. Any notice so
mailed  within  the time  prescribed  in the  Agreement  shall  be  conclusively
presumed  to have been  duly  given,  whether  or not the  Certificateholder  or
Noteholder shall receive such notice.

         SECTION 13.4. Assignment.  This Agreement shall inure to the benefit of
and be binding  upon the  parties  hereto and their  respective  successors  and
permitted  assigns.  Notwithstanding  anything to the contrary contained herein,
except as provided ln Sections 8.4 and 9.3 and as provided in the  provisions of
this Agreement  concerning the  resignation of the Servicer,  this Agreement may
not be assigned by the Seller or the Servicer  without the prior written consent
of the Owner Trustee,  the Trustee,  the Standby  Servicer,  the Trustee and the
Note Insurer (or if an Insurer Default shall have occurred and be continuing the
Holders of Notes evidencing not less than 66% of the

                                      -89-





principal amount of the outstanding  Notes and the Holders of Certificates,  the
aggregate Certificate Balance of which is not less than 66%.

         SECTION 13.5.  Limitations on Rights of Others.  The provisions of this
Agreement  are solely for the benefit of the parties  hereto and for the benefit
of the Owner  Trustee and the  Certificateholders  (including  the Seller),  the
Trustee and the Noteholders,  as third-party beneficiaries.  The Insurer and its
successors  and assigns shall be a third-party  beneficiary to the provisions of
this  Agreement,  and shall be entitled to rely upon and  directly  enforce such
provisions of this  Agreement so long as no Insurer  Default shall have occurred
and be continuing.  Except as expressly stated otherwise,  any right of the Note
Insurer to direct,  appoint,  consent to,  approve of, or take any action  under
this  Agreement,  shall be a right exercised by the Note Insurer in its sole and
absolute discretion. The Insurer may disclaim any of its rights and powers under
this Agreement (but not its duties and  obligations  under the Note Policy) upon
delivery of a written  notice to the Owner Trustee.  Nothing in this  Agreement,
whether  express or implied,  shall be construed to give to any other Person any
legal or equitable right,  remedy or claim in the Owner Trust Estate or under or
in  respect  of  this  Agreement  or any  covenants,  conditions  or  provisions
contained herein.

         SECTION 13.6.  Severability.  Any provision of this  Agreement  that is
prohibited or unenforceable in any jurisdiction  shall, as to such jurisdiction,
be ineffective to the extent of such  prohibition  or  unenforceability  without
invalidating  the  remaining  provisions  hereof,  and any such  prohibition  or
unenforceability   in  any   jurisdiction   shall  not   invalidate   or  render
unenforceable such provision in any other jurisdiction.

         SECTION 13.7. Separate Counterparts.  This Agreement may be executed by
the parties hereto in separate counterparts,  each of which when so executed and
delivered  shall  be an  original,  but all  such  counterparts  shall  together
constitute but one and the same instrument.

         SECTION  13.8.  Headings.  The  headings  of the various  Articles  and
Sections  herein are for  convenience  of reference only and shall not define or
limit any of the terms or provisions hereof.

         SECTION  13.9.  Governing  Law.  THIS  AGREEMENT  SHALL BE CONSTRUED IN
ACCORDANCE  WITH THE LAWS OF THE STATE OF NEW  YORK,  WITHOUT  REFERENCE  TO ITS
CONFLICT OF LAW  PROVISIONS,  AND THE  OBLIGATIONS,  RIGHTS AND  REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.


                                      -90-





         SECTION 13.10.  Assignment to Trustee.  The Seller hereby  acknowledges
and  consents  to any  mortgage,  pledge,  assignment  and  grant of a  security
interest by the Issuer to the Trustee  pursuant to the Indenture for the benefit
of the  Noteholders  of ail right,  title and  interest of the Issuer in, to and
under the Receivables and/or the assignment of any or all of the Issuer's rights
and obligations hereunder to the Trustee.

         SECTION 13.11.  Nonpetition Covenants.

         (a)  Notwithstanding  any  prior  termination  of this  Agreement,  the
Servicer and the Seller  shall not,  prior to the date which is one year and one
day  after  the  termination  of this  Agreement  with  respect  to the  Issuer,
acquiesce,  petition  or  otherwise  invoke  or cause the  Issuer to invoke  the
process of any court or  government  authority  for the purpose of commencing or
sustaining  a case  against the Issuer  under any  federal or state  bankruptcy,
insolvency  or similar  law or  appointing  a  receiver,  liquidator,  assignee,
trustee, custodian,  sequestrator or other similar official of the Issuer or any
substantial  part of its property,  or ordering the winding up or liquidation of
the affairs of the Issuer.

         (b)  Notwithstanding  any  prior  termination  of this  Agreement,  the
Servicer  shall  not,  prior to the date  that is one year and one day after the
termination of this Agreement with respect to the Seller, acquiesce to, petition
or  otherwise  invoke or cause the Seller to invoke the  process of any court or
government  authority for the purpose of commencing or sustaining a case against
the Seller  under any federal or state  bankruptcy,  insolvency  or similar law,
appointing a receiver, liquidator,  assignee, trustee, custodian,  sequestrator,
or other similar official of the Seller or any substantial part of its property,
or ordering the winding up or liquidation of the affairs of the Seller.

         SECTION 13.12.  Limitation of Liability of Owner Trustee and
Trustee.

         (a)  Notwithstanding  anything  contained herein to the contrary,  this
Agreement  has  been  countersigned  by  Bankers  Trust  (Delaware)  not  in its
individual  capacity but solely in its  capacity as Owner  Trustee of the Issuer
and in no event shall Bankers Trust  (Delaware) in its  individual  capacity or,
except as expressly  provided in the Trust Agreement,  as Owner Trustee have any
liability for the representations,  warranties,  covenants,  agreements or other
obligations of the Issuer  hereunder or in any of the  certificates,  notices or
agreements  delivered  pursuant hereto, as to all of which recourse shall be had
solely to the assets of the Issuer.  For all purposes of this Agreement,  in the
performance of its duties or obligations hereunder or in the

                                      -91-





performance  of any duties or  obligations  of the Issuer  hereunder,  the Owner
Trustee  shall be subject  to, and  entitled to the  benefits  of, the terms and
provisions of Articles VI, VII and VIII of the Trust Agreement.

         (b)  Notwithstanding  anything  contained herein to the contrary,  this
Agreement has been executed and  delivered by Norwest Bank  Minnesota,  National
Association,  not in its  individual  capacity but solely as Trustee and Standby
Servicer and in no event shall  Norwest Bank  Minnesota,  National  Association,
have any liability for the representations, warranties, covenants, agreements or
other obligations of the Issuer hereunder or in any of the certificates, notices
or agreements  delivered  pursuant hereto,  as to all of which recourse shall be
had solely to the assets of the Issuer.

         (c) In no event shall Norwest Bank Minnesota,  National Association, in
any of its  capacities  hereunder,  be deemed to have  assumed any duties of the
Owner  Trustee under the Delaware  Business  Trust  Statute,  common law, or the
Trust Agreement.

         SECTION 13.13.  Independence of the Servicer.  For all purposes of this
Agreement,  the Servicer  shall be an  independent  contractor  and shall not be
subject to the  supervision of the Issuer,  the Trustee and Standby  Servicer or
the Owner  Trustee  with  respect  to the  manner in which it  accomplishes  the
performance of its obligations  hereunder.  Unless expressly  authorized by this
Agreement,  the Servicer  shall have no  authority  to act for or represent  the
Issuer or the Owner  Trustee  in any way and  shall not  otherwise  be deemed an
agent of the Issuer or the Owner Trustee.

         SECTION 13.14.  No Joint Venture.  Nothing  contained in this Agreement
(i) shall  constitute the Servicer and either of the Issuer or the Owner Trustee
as  members  of  any  partnership,   joint  venture,   association,   syndicate,
unincorporated  business or other  separate  entity,  (ii) shall be construed to
impose any  liability  as such on any of them or (iii) shall be deemed to confer
on any of  them  any  express,  implied  or  apparent  authority  to  incur  any
obligation or liability on behalf of the others.

         SECTION  13.15.  Insurer  as  Controlling  Party.  Each  Noteholder  by
purchase  of the Notes  held by it  acknowledges  that the  Trustee,  as partial
consideration  of the  issuance  of the Note  Policy,  has agreed  that the Note
Insurer shall have certain  rights  hereunder for so long as no Insurer  Default
shall  have  occurred  and be  continuing.  So long as an  Insurer  Default  has
occurred and is continuing,  any provision  giving the Note Insurer the right to
direct,  appoint  or  consent  to,  approve  of, or take any  action  under this
Agreement  shall be  inoperative  during the period of such Insurer  Default and
such right shall instead vest

                                      -92-





in the  Trustee  acting  at the  direction  of the  holders  of  Class  A  Notes
evidencing,  unless otherwise specified,  more than 50% of the principal balance
of the Class A Notes.  From and after  such time as the Class A Notes  have been
paid in full,  any provision  giving the Note Insurer or the Class A Noteholders
the right to direct, appoint or consent to, approve of, or take any action under
this  Agreement  shall be  inoperative  and such right shall instead vest in the
Trustee  acting at the direction of the holders of the  Certificates  evidencing
more than 50% of the principal  balance of the  Certificates,  unless  otherwise
specified.  The Insurer  may  disclaim  any of its rights and powers  under this
Agreement (but not its duties and obligations under the Policy) upon delivery of
a written  notice to the  Trustee.  The Insurer may give or withhold any consent
hereunder in its sole and absolute discretion.



                                      -93-





         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their  respective duly authorized  officers as of
the day and the year first above written.

                                   CPS AUTO RECEIVABLES
                                   TRUST 1997-4

                                        by
                                        BANKERS TRUST (DELAWARE),
                                        not in its individual
                                        capacity, but solely as Owner
                                        Trustee on behalf of the Trust

                                        By ___________________________
                                           Name:
                                           Title:


                                  CPS RECEIVABLES CORP., as Seller

                                        By ___________________________
                                           Name:
                                           Title:


                                  CONSUMER PORTFOLIO SERVICES, INC.,
                                  as Servicer

                                        By ___________________________
                                           Name:
                                           Title:


                                  NORWEST BANK MINNESOTA, NATIONAL
                                  ASSOCIATION,

                                        not in its individual
                                        capacity, but solely as
                                        Standby Servicer and Trustee

                                        By ___________________________
                                           Name:
                                           Title:


                                      -94-





                                                                     SCHEDULE A


                             SCHEDULE OF RECEIVABLES







                                                                      EXHIBIT A

                             SERVICER'S CERTIFICATE








                                                                      EXHIBIT B


                                  TRUST RECEIPT
                           PURSUANT TO SECTION 3.5 OF
                        THE SALE AND SERVICING AGREEMENT


         Consumer Portfolio Services,  Inc., as Servicer (the "Servicer") of the
CPS Auto  Receivables  Trust 1997-4 (the  "Trust")  under the Sale and Servicing
Agreement  (the "Sale and  Servicing  Agreement"),  dated as of October 1, 1997,
among CPS Receivables Trust 1997-4, CPS Receivables  Corp., as Seller,  Consumer
Portfolio  Services,  Inc., as Servicer,  and Norwest Bank  Minnesota,  National
Association, as Trustee and Standby Servicer, does hereby acknowledge receipt of
the  documents  relating to the  Receivables,  each of which  documents  and the
Receivables  to which they are  related  are listed on the  attached  Schedule 1
hereto. The Servicer  furthermore agrees to return such documents to the Trustee
in accordance with the terms of the Sale and Servicing Agreement.

         IN  WITNESS  WHEREOF I have  hereunto  set my hand this __ day of ____,
19__.

                                           CONSUMER PORTFOLIO SERVICES, INC.,
                                             as Servicer


                                           By:
                                              Name:
                                              Title:



Acknowledged By:

NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION,
  as Trustee


By:
   Name:
   Title:






                                                                      EXHIBIT C


                         SERVICING OFFICER'S CERTIFICATE
                             PURSUANT TO SECTION 3.5
                       OF THE SALE AND SERVICING AGREEMENT


         The undersigned,  ______________, hereby certifies that (s)he is a duly
elected and qualified  officer of the Servicer,  and hereby further certifies as
follows:

         The  Receivable  described  below  has been  fully  liquidated  and all
amounts  required to be deposited in the Collection  Account with respect to the
Receivable and the Obligor described below have been so deposited.

         Servicer
         Loan No.:
         Obligor's Name:

         Capitalized  terms used herein which are not defined  herein shall have
the meanings  ascribed to them in the Sale and Servicing  Agreement  dated as of
October 1, 1997 among CPS Auto  Receivables  Trust  1997-4,  Consumer  Portfolio
Services,  Inc., as servicer, CPS Receivables Corp., as seller, and Norwest Bank
Minnesota, National Association, as trustee and standby servicer.

         IN WITNESS  WHEREOF,  I have hereunto set my hand on and as of this ___
day of ______________, 19___.


                                     -----------------------------
                                     Name:
                                     Title:







                                                                      EXHIBIT D

                    FORM OF MONTHLY SECURITYHOLDER STATEMENT






                                                                     EXHIBIT E-1


                              TRUSTEE'S CERTIFICATE
                       PURSUANT TO SECTIONS 3.2 OR 3.4 OF
                        THE SALE AND SERVICING AGREEMENT


         Norwest  Bank  Minnesota,   National   Association,   as  trustee  (the
"Trustee") of the CPS Auto Receivables Trust 1997-4 (the "Trust") under the Sale
and  Servicing  Agreement  (the  "Sale and  Servicing  Agreement"),  dated as of
October 1, 1997,  among the Trust,  CPS Receivables  Corp., as Seller,  Consumer
Portfolio  Services,  Inc., as Servicer,  and Norwest Bank  Minnesota,  National
Association,  as Trustee  and Standby  Servicer,  does  hereby  sell,  transfer,
assign,  and otherwise  convey to Consumer  Portfolio  Services,  Inc.,  without
recourse,  representation,  or warranty,  all of the Trustee's right, title, and
interest in and to all of the  Receivables (as defined in the Sale and Servicing
Agreement)  identified  in the attached  Servicer's  Certificate  as  "Purchased
Receivables," which are to be repurchased by Consumer Portfolio  Services,  Inc.
pursuant to Section 3.2 or Section 3.4 of the Sale and  Servicing  Agreement and
all security and documents relating thereto.

         IN  WITNESS  WHEREOF I have  hereunto  set my hand this __ day of ____,
19__.


                                       NORWEST BANK MINNESOTA, NATIONAL
                                         ASSOCIATION, as Trustee


                                       By:______________________________
                                          Name:
                                          Title:










                                                                    Exhibit E-2


                              TRUSTEE'S CERTIFICATE
                       PURSUANT TO SECTIONS 4.7 OR 11.1 OF
                        THE SALE AND SERVICING AGREEMENT


         Norwest  Bank  Minnesota,   National   Association,   as  trustee  (the
"Trustee") of the CPS Auto Receivables Trust 1997-4 (the "Trust") under the Sale
and  Servicing  Agreement  (the  "Sale and  Servicing  Agreement"),  dated as of
October 1, 1997,  among the Trust,  CPS Receivables  Corp., as Seller,  Consumer
Portfolio  Services,  Inc.,  as Servicer  (the  "Servicer"),  and  Norwest  Bank
Minnesota,  National Association,  as Trustee and Standby Servicer,  does hereby
sell, transfer,  assign, and otherwise convey to the Servicer, without recourse,
representation,  or warranty, all of the Trustee's right, title, and interest in
and to all of the Receivables  (as defined in the Sale and Servicing  Agreement)
identified in the attached  Servicer's  Certificate as "Purchased  Receivables,"
which are to be repurchased  by the Servicer  pursuant to Section 4.7 or Section
11.1 of the Sale and Servicing Agreement and all security and documents relating
thereto.

         IN  WITNESS  WHEREOF I have  hereunto  set my hand this __ day of ____,
19__.


                                          NORWEST BANK MINNESOTA, NATIONAL
                                            ASSOCIATION, as Trustee


                                           By:_______________________________
                                              Name:
                                              Title:





                                TABLE OF CONTENTS


                                                                           Page
                                                                           ----

                                    ARTICLE I

                                   DEFINITIONS

SECTION 1.1.  Definitions......................................................1
SECTION 1.2.  Other Definitional Provisions...................................26

                                   ARTICLE II

                            CONVEYANCE OF RECEIVABLES

SECTION 2.1.  Conveyance of Receivables.......................................27
SECTION 2.2.  [RESERVED]......................................................28
SECTION 2.3.  Further Encumbrance of Trust Property...........................28

                                   ARTICLE III

                                 THE RECEIVABLES

SECTION 3.1.  Representations and Warranties of Seller........................29
SECTION 3.2.  Repurchase upon Breach..........................................36
SECTION 3.3.  Custody of Receivables Files....................................37
SECTION 3.4.  Acceptance of Receivable Files by Trustee.......................38
SECTION 3.5.  Access to Receivable Files......................................39

                                   ARTICLE IV

                   ADMINISTRATION AND SERVICING OF RECEIVABLES

SECTION 4.1.  Duties of the Servicer..........................................40
SECTION 4.2.  Collection of Receivable Payments;
                Modifications of Receivables; Lockbox Agreements..............40
SECTION 4.3.  Realization Upon Receivables....................................43
SECTION 4.4.  Insurance.......................................................43
SECTION 4.5.  Maintenance of Security Interests in Vehicles...................44
SECTION 4.6.  Additional Covenants of Servicer................................45
SECTION 4.7.  Purchase of Receivables Upon Breach of Covenant.................45
SECTION 4.8.  Servicing Fee...................................................46
SECTION 4.9.  Servicer's Certificate..........................................47
SECTION 4.10. Annual Statement as to Compliance, Notice of Servicer
                Termination Event.............................................47
SECTION 4.11. Annual Independent Accountants' Report..........................48
SECTION 4.12. Access to Certain Documentation and Information Regarding 
                Receivables...................................................49
SECTION 4.13. Verification of Servicer's Certificate..........................49
SECTION 4.14. Retention and Termination of Servicer...........................50
SECTION 4.15. Fidelity Bond...................................................51






                                TABLE OF CONTENTS
                                   (continued)
                                                                           Page
                                                                           ----

                                    ARTICLE V

                         TRUST ACCOUNTS; DISTRIBUTIONS;
                          STATEMENTS TO SECURITYHOLDERS

SECTION 5.1.  Establishment of Trust Accounts.................................51
SECTION 5.2.  [RESERVED]......................................................54
SECTION 5.3.  Certain Reimbursements to the Servicer..........................54
SECTION 5.4.  Application of Collections......................................54
SECTION 5.5.  Withdrawals from Spread Account.................................55
SECTION 5.6.  Additional Deposits.............................................56
SECTION 5.7.  Distributions...................................................56
SECTION 5.8.  Note Distribution Account.......................................58
SECTION 5.9.  [RESERVED]......................................................60
SECTION 5.10. [RESERVED]......................................................60
SECTION 5.11. Statements to Securityholders...................................60
SECTION 5.12. Optional Deposits by the Note Insurer; Notice of Waivers........61

                                   ARTICLE VI

                                 THE NOTE POLICY

SECTION 6.1.  Claims Under Note Policy........................................62
SECTION 6.2.  Preference Claims...............................................63
SECTION 6.3.  Surrender of Note Policy........................................64

                                   ARTICLE VII

                                   [RESERVED]


                                  ARTICLE VIII

                                   THE SELLER

SECTION 8.1.  Representations of Seller.......................................65
                (a)  Organization and Good Standing...........................65
                (b)  Due Qualification........................................65
                (c)  Power and Authority......................................65
                (d)  Valid Sale, Binding Obligations..........................65
                (e)  No Violation.............................................66
                (f)  No Proceedings...........................................66
                (g)  No Consents..............................................66
                (h)  Tax Returns..............................................67
                (i)  Chief Executive Office...................................67
SECTION 8.2.  [RESERVED]......................................................67
SECTION 8.3.  Liability of Seller; Indemnities................................67
SECTION 8.4.  Merger or Consolidation of, or Assumption
                of the Obligations of, Seller.................................68
SECTION 8.5.  Limitation on Liability of Seller and Others....................69
SECTION 8.6.  Seller May Own Certificates or Notes............................69





                                TABLE OF CONTENTS
                                   (continued)

                                                                           Page
                                                                           ----
                                   ARTICLE IX

                                  THE SERVICER

SECTION 9.1.  Representations of Servicer.....................................69
                (a)  Organization and Good Standing...........................69
                (b)  Due Qualification........................................70
                (c)  Power and Authority......................................70
                (d)  Binding Obligation.......................................70
                (e)  No Violation.............................................70
                (f)  No Proceedings...........................................71
                (g)  No Consents..............................................71
                (h)  Taxes....................................................71
                (i)  Chief Executive Office...................................71
SECTION 9.2.  Liability of Servicer; Indemnities..............................71
SECTION 9.3.  Merger or Consolidation of, or Assumption of
                the Obligations of, the Servicer or Standby Servicer..........73
SECTION 9.4.  Limitation on Liability of Servicer, Standby Servicer and 
                Others........................................................74
SECTION 9.5.  Delegation of Duties............................................75
SECTION 9.6.  Servicer and Standby Servicer Not to Resign.....................75

                                    ARTICLE X

                                     DEFAULT

SECTION 10.1.  Servicer Termination Event.....................................76
SECTION 10.2.  Consequences of a Servicer Termination Event...................78
SECTION 10.3.  Appointment of Successor.......................................80
SECTION 10.4.  Notification to Noteholders and
                 Certificateholders...........................................81
SECTION 10.5.  Waiver of Past Defaults........................................81
SECTION 10.6.  Action Upon Certain Failures of the Servicer...................82

                                   ARTICLE XI

                                   TERMINATION

SECTION 11.1.  Optional Purchase of All Receivables...........................82











                                TABLE OF CONTENTS
                                   (continued)

                                                                           Page
                                                                           ----
                                   ARTICLE XII

                      ADMINISTRATIVE DUTIES OF THE SERVICER

SECTION 12.1.  Administrative Duties..........................................83
                 (a)  Duties with Respect to the Indenture....................83
                 (b)  Duties with Respect to the Issuer.......................83
                 (c)  Tax Matters.............................................85
                 (d)  Non-Ministerial Matters.................................85
                 (e)  Exceptions..............................................85
                 (f)  Limitation of Standby Servicer's
                      Obligations.............................................86
SECTION 12.2.  Records........................................................86
SECTION 12.3.  Additional Information to be Furnished to the Issuer...........86

                                  ARTICLE XIII

                            MISCELLANEOUS PROVISIONS

SECTION 13.1.  Amendment......................................................86
SECTION 13.2.  Protection of Title to Trust...................................88
SECTION 13.3.  Notices........................................................90
SECTION 13.4.  Assignment.....................................................91
SECTION 13.5.  Limitations on Rights of Others................................91
SECTION 13.6.  Severability...................................................91
SECTION 13.7.  Separate Counterparts..........................................91
SECTION 13.8.  Headings.......................................................92
SECTION 13.9.  Governing Law..................................................92
SECTION 13.10. Assignment to Trustee..........................................92
SECTION 13.11. Nonpetition Covenants..........................................92
SECTION 13.12. Limitation of Liability of Owner Trustee and Trustee...........93
SECTION 13.13. Independence of the Servicer...................................93
SECTION 13.14. No Joint Venture...............................................93
SECTION 13.15. Insurer as Controlling Party...................................94






                                TABLE OF CONTENTS


SCHEDULES

Schedule A   -  Schedule of Receivables


EXHIBITS

Exhibit A    -  Form of Servicer's Certificate
Exhibit B    -  Form of Trust Receipt
Exhibit C    -  Form of Servicing Officer's Certificate
Exhibit D    -  Form of Monthly Securityholder Statement
Exhibit E    -  Form of Trustee's Certificate





                                                                   Exhibit 10.8

                                                                 EXECUTION COPY


                                   ASSIGNMENT

         For value received,  in accordance with the Purchase Agreement dated as
of October 1, 1997,  between the undersigned  (the "Seller") and CPS Receivables
Corp. (the  "Purchaser")  (the "CPS Purchase  Agreement"),  the undersigned does
hereby sell, transfer,  assign and otherwise convey unto the Purchaser,  without
recourse (subject to the obligations in the CPS Purchase  Agreement and the Sale
and Servicing Agreement),  all right, title and interest of the Seller in and to
(i) the CPS  Receivables  listed in the Schedule of CPS  Receivables  and,  with
respect to Rule of 78's  Receivables,  all  monies due or to become due  thereon
after the Cutoff Date  (including  Scheduled  Payments due after the Cutoff Date
(including  principal  prepayments  relating  to such  Scheduled  Payments)  but
received by the Seller on or before the Cutoff Date) and, with respect to Simple
Interest  Receivables,  all monies received thereunder after the Cutoff Date and
all  Liquidation  Proceeds  and  Recoveries  received  with  respect to such CPS
Receivables;  (ii) the security  interests in the Financed  Vehicles  granted by
Obligors pursuant to the CPS Receivables and any other interest of the Seller in
such Financed Vehicles, including, without limitation, the certificates of title
or, with respect to Financed  Vehicles in the State of Michigan,  other evidence
of ownership  with respect to such  Financed  Vehicles;  (iii) any proceeds from
claims on any  physical  damage,  credit  life and  credit  accident  and health
insurance  policies or certificates  relating to the Financed  Vehicles securing
the CPS Receivables;  (iv) refunds for the costs of extended  service  contracts
with  respect to Financed  Vehicles  securing  the CPS  Receivables,  refunds of
unearned  premiums  with  respect to credit life and credit  accident and health
insurance  policies or certificates  covering an Obligor or Financed  Vehicle or
his or her  obligations  with  respect  to a Financed  Vehicle  related to a CPS
Receivable  and  any  recourse  to  Dealers  for any of the  foregoing;  (v) the
Receivable File related to each CPS Receivable; and (vi) the proceeds of any and
all of the foregoing. The foregoing sale does not constitute and is not intended
to  result  in  any  assumption  by  the  Purchaser  of  any  obligation  of the
undersigned to the Obligors, insurers or any other Person in connection with the
CPS Receivables,  the related  Receivable  Files, any insurance  policies or any
agreement or instrument relating to any of them.

         This  Assignment  is made  pursuant  to and upon  the  representations,
warranties  and agreements on the part of the  undersigned  contained in the CPS
Purchase Agreement and is to be governed by the CPS Purchase Agreement.

         Capitalized  terms used herein and not otherwise defined shall have the
meanings assigned to them in the CPS Purchase Agreement.

         THIS  ASSIGNMENT  SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE INTERNAL  LAWS OF THE STATE OF NEW YORK  WITHOUT  REGARD TO CONFLICTS OF LAW
PRINCIPLES.









         IN WITNESS  WHEREOF,  the  undersigned has caused this Assignment to be
duly executed as of October 17, 1997.

                                       CONSUMER PORTFOLIO SERVICES, INC.



                                       By:________________________________
                                          Name:
                                          Title:







                                                                EXECUTION COPY

         PURCHASE  AGREEMENT  dated as of this  October 1, 1997,  by and between
CONSUMER  PORTFOLIO  SERVICES,  INC., a California  corporation  (the "Seller"),
having its principal  executive office at 2 Ada, Irvine,  California  92618, and
CPS RECEIVABLES CORP., a California  corporation (the  "Purchaser"),  having its
principal executive office at 2 Ada, Irvine, California 92618.

         WHEREAS,  in the regular course of its business,  the Seller  purchases
and  services  through  its auto loan  programs  certain  motor  vehicle  retail
installment sale contracts  secured by new and used  automobiles,  light trucks,
vans or minivans acquired from motor vehicle dealers.

         WHEREAS,  the  Seller  and the  Purchaser  wish to set  forth the terms
pursuant to which the CPS Receivables (as hereinafter  defined),  are to be sold
by the Seller to the Purchaser,  which CPS  Receivables  together with the Samco
Receivables  will be  transferred  by the  Purchaser,  pursuant  to the Sale and
Servicing  Agreement (as hereinafter  defined),  to CPS Auto  Receivables  Trust
1997-4  to be  created  thereunder,  which  Trust  will  issue  notes  under the
Indenture (as hereinafter defined)  representing  indebtedness of the Trust (the
"Class A Notes" or  "Notes")  and  certificates  under the Trust  Agreement  (as
hereinafter  defined)  representing  beneficial  interests  in  the  Trust  (the
"Certificates" and, together with the Notes, the "Securities").

         NOW,  THEREFORE,  in  consideration  of the  foregoing,  other good and
valuable consideration, and the mutual terms and covenants contained herein, the
parties hereto agree as follows:


                                    ARTICLE I

                               CERTAIN DEFINITIONS

         Terms not defined in this Agreement shall have the meaning set forth in
the Sale and  Servicing  Agreement  and if not defined  therein,  shall have the
meanings set forth in the Indenture.  As used in this  Agreement,  the following
terms shall, unless the context otherwise requires,  have the following meanings
(such meanings to be equally  applicable to the singular and plural forms of the
terms defined):

         "Agreement" means this Purchase Agreement.

         "Assignment" means the CPS Assignment and/or the Samco Assignment.

         "Base  Prospectus"  means the Prospectus  dated October 16, 1997,  with
respect to CPS Auto Receivables Trusts and any amendment or supplement thereto.

         "Closing Date" means October 17, 1997.






         "CPS" means Consumer Portfolio Services, Inc., a California corporation
and its successors and assigns.

         "CPS  Assignment"  means the assignment  dated October 17, 1997, by the
Seller to the  Purchaser,  relating to the purchase of the CPS  Receivables  and
certain other property related thereto by the Purchaser from the Seller pursuant
to this Agreement,  which shall be in substantially  the form attached hereto as
Exhibit A.

         "CPS  Receivables"  means each retail  installment  sale contract for a
Financed  Vehicle that appears on the Schedule of CPS Receivables and all rights
thereunder.

         "Indenture"  means the Indenture  dated as of October 1, 1997,  between
CPS Auto  Receivables  Trust  1997-4,  as issuer,  and Norwest  Bank  Minnesota,
National Association, as trustee.

         "Obligor(s)" means the purchaser or co-purchasers of a Financed Vehicle
or any other Person who owes or may be liable for payments under a Receivable.

         "Offering  Documents"  means  the  Prospectus   Supplement,   the  Base
Prospectus and the Private Placement Memorandum.

         "Private Placement  Memorandum" means the Private Placement Memorandum,
dated October 16, 1997,  relating to the private  placement of the  Certificates
and any amendment or supplement thereto.

         "Prospectus  Supplement" means the Prospectus  Supplement dated October
16, 1997, relating to the public offering of the Class A Notes and any amendment
or supplement thereto.

         "Purchase  Agreement" means this Purchase Agreement,  as this agreement
may be  amended,  supplemented  or  otherwise  modified  from  time  to  time in
accordance with the terms hereof.

         "Purchaser" means CPS Receivables Corp., a California corporation,  and
its successors and assigns.

         "Receivables"  means,  collectively,  the CPS Receivables and the Samco
Receivables.

         "Receivables Purchase Price" means $96,062,170.18.

         "Repurchase  Event"  shall have the  meaning  specified  in Section 6.2
hereof.

         "Sale and Servicing  Agreement" means the Sale and Servicing  Agreement
dated as of October 1, 1997, among CPS Auto Receivables Trust 1997-4, as issuer,
CPS  Receivables  Corp.,  as  seller,  Consumer  Portfolio  Services,  Inc.,  as
originator of the Receivables and servicer, and Norwest Bank Minnesota, National
Association, as trustee and standby






servicer,  as such agreement may be amended,  supplemented or otherwise modified
from time to time in accordance with the terms thereof.

         "Samco" means Samco Acceptance Corp., a Delaware  corporation,  and its
successors and assigns.

         "Samco  Assignment"  means the assignment  substantially in the form of
Exhibit A to the Samco Purchase Agreement.

         "Samco  Purchase  Agreement"  means the Purchase  Agreement dated as of
October 1, 1997,  between Samco Acceptance Corp., as seller, and CPS Receivables
Corp., as purchaser, as such agreement may be amended, supplemented or otherwise
modified from time to time in accordance with the terms thereof.

         "Samco  Receivable"  shall  have the  meaning  specified  in the  Samco
Purchase Agreement.

         "Schedule of CPS Receivables" means the list of CPS Receivables annexed
hereto as Exhibit B.

         "Schedule  of  Receivables"  means,  collectively,  the Schedule of CPS
Receivables and the Schedule of Samco Receivables.

         "Schedule  of Samco  Receivables"  means the list of Samco  Receivables
annexed as Exhibit B to the Samco Purchase Agreement.

         "Seller"  means  Consumer  Portfolio   Services,   Inc.,  a  California
corporation,  in its capacity as seller of the CPS Receivables and the other CPS
Transferred Property relating thereto, and its successors and assigns.

         "Servicer"  means  Consumer  Portfolio  Services,  Inc.,  a  California
corporation, in its capacity as Servicer of the Receivables,  and its successors
and assigns.

         "Transferred CPS Property" shall have the meaning  specified in Section
2.1(a) hereof.

         "Transferred  Property"  means the  Transferred  CPS  Property  and the
Transferred Samco Property.

         "Transferred  Samco Property"  shall have the meaning  specified in the
Samco Purchase Agreement.

         "Trust"  means the CPS Auto  Receivables  Trust  1997-4  created by the
Trust Agreement.







         "Trust  Agreement"  means the Trust  Agreement  dated as of  October 9,
1997,  between CPS  Receivables  Corp.  and Bankers Trust  (Delaware),  as Owner
Trustee as amended and restated pursuant to an amendment dated as of October 17,
1997 between the same parties.

         "UCC" means the Uniform Commercial Code, as in effect from time to time
in the relevant jurisdictions.

         "Underwriter" means Greenwich Capital Markets, Inc.

         "Underwriting  Agreement"  means  the  Underwriting  Agreement,   dated
October 16, 1997, among the Underwriter,  CPS, Samco and the Purchaser  relating
to the Class A Notes and the Certificates.


                                   ARTICLE II

                        PURCHASE AND SALE OF RECEIVABLES

         2.1. Purchase and Sale of Receivables.  On the Closing Date, subject to
the terms and conditions of this Purchase  Agreement,  the Seller agrees to sell
to the Purchaser,  and the Purchaser agrees to purchase from the Seller, without
recourse (subject to the obligations in this Purchase Agreement and the Sale and
Servicing  Agreement),  all of the Seller's right, title and interest in, to and
under  the CPS  Receivables  and the other  Transferred  CPS  Property  relating
thereto.  The  conveyance  to the  Purchaser  of the CPS  Receivables  and other
Transferred CPS Property  relating  thereto is intended as a sale free and clear
of all liens and it is intended  that the  Transferred  CPS  Property  and other
property of the Purchaser  shall not be part of the Seller's estate in the event
of the  filing of a  bankruptcy  petition  by or against  the  Seller  under any
bankruptcy law.

         (a) Transfer of  Receivables.  On the Closing  Date and  simultaneously
with the  transactions to be consummated  pursuant to the Trust  Agreement,  the
Indenture and the Sale and Servicing Agreement, the Seller shall sell, transfer,
assign, grant, set over and otherwise convey to the Purchaser,  without recourse
(subject to the obligations herein and in the Sale and Servicing Agreement), all
right, title and interest of the Seller in and to (i) the CPS Receivables listed
in  the  Schedule  of  CPS  Receivables  and,  with  respect  to  Rule  of  78's
Receivables,  all  monies  due or to become due  thereon  after the Cutoff  Date
(including  Scheduled  Payments due after the Cutoff Date  (including  principal
prepayments  relating to such Scheduled  Payments) but received by the Seller on
or before the Cutoff Date) and, with respect to Simple Interest Receivables, all
monies received  thereunder  after the Cutoff Date and all Liquidation  Proceeds
and Recoveries received with respect to such CPS Receivables;  (ii) the security
interests  in the  Financed  Vehicles  granted by  Obligors  pursuant to the CPS
Receivables  and any other  interest  of the Seller in such  Financed  Vehicles,
including,  without  limitation,  the  certificates of title or, with respect to
Financed  Vehicles in the State of Michigan,  other  evidence of ownership  with
respect  to such  Financed  Vehicles;  (iii)  any  proceeds  from  claims on any
physical damage,  credit life and credit accident and health insurance  policies
or certificates relating to the Financed Vehicles securing the CPS






Receivables or the Obligors  thereunder;  (iv) refunds for the costs of extended
service   contracts  with  respect  to  Financed   Vehicles   securing  the  CPS
Receivables, refunds of unearned premiums with respect to credit life and credit
accident and health insurance policies or certificates covering an Obligor under
a CPS  Receivable or Financed  Vehicle  securing a CPS  Receivable or his or her
obligations  with respect to a Financed  Vehicle and any recourse to Dealers for
any of the foregoing;  (v) the Receivable  File related to each CPS  Receivable;
and  (vi)  the  proceeds  of any and  all of the  foregoing  (collectively,  the
"Transferred CPS Property" and together with the Transferred Samco Property, the
"Transferred Property").

         (b)  Receivables   Purchase  Price.  In   consideration   for  the  CPS
Receivables and other  Transferred  Property  described in Section  2.1(a),  the
Purchaser shall, on the Closing Date, pay to the Seller the Receivables Purchase
Price. An amount equal to $92,257,412.92 of the Receivables Purchase Price shall
be paid to the Seller in cash. The remaining  $3,804,757.26  of the  Receivables
Purchase  Price  shall be  deemed  paid and  returned  to the  Purchaser  and be
considered a contribution to capital.  The portion of the  Receivables  Purchase
Price to paid in cash be by federal wire transfer (same day) funds.

         2.2. The Closing.  The sale and purchase of the CPS  Receivables  shall
take place at a closing (the "Closing") at the offices of Mayer,  Brown & Platt,
1675 Broadway, New York, New York 10019-5820 on the Closing Date, simultaneously
with the closings  under:  (a) the Samco  Purchase  Agreement  pursuant to which
Samco Acceptance Corp. will sell the Samco Receivables to CPS Receivables Corp.,
(b) the Sale and Servicing Agreement pursuant to which the Purchaser will assign
all of its right,  title and  interest in and to the  Receivables  and the other
Transferred  Property to the Trust for the benefit of the  Securityholders,  (c)
the  Trust  Agreement  pursuant  to which  the  Trust  shall be  formed  and the
Certificates  issued,  (d) the Indenture  pursuant to which the Trust will issue
the Notes, (e) the Underwriting Agreement pursuant to which the Trust shall sell
the Class A Notes to the Underwriter and (f) the Certificate  Purchase Agreement
pursuant  to which the  Purchaser  shall  sell the  Certificates  to one or more
investors.


                                   ARTICLE III

                         REPRESENTATIONS AND WARRANTIES

         3.1.  Representations  and Warranties of the  Purchaser.  The Purchaser
hereby  represents  and  warrants  to the Seller as of the date hereof and as of
each Closing  Date (which  representations  and  warranties  shall  survive such
Closing Date):

         (a)  Organization  and Good  Standing.  The  Purchaser  has  been  duly
organized and is validly  existing as a corporation  in good standing  under the
laws of the State of California,  with power and authority to own its properties
and to conduct its business as such properties shall be currently owned and such
business is presently conducted,  and had at all relevant times, and shall have,
power, authority and legal right to acquire and own the Receivables.






         (b) Due  Qualification.  The Purchaser is duly qualified to do business
as a foreign  corporation  in good  standing,  and has  obtained  all  necessary
licenses and approvals in all  jurisdictions  in which the ownership or lease of
property or the conduct of its business shall require such qualifications.

         (c) Power and  Authority.  The Purchaser has the power and authority to
execute and deliver the Agreements and to carry out its terms and the execution,
delivery and  performance  of the  Agreements  have been duly  authorized by the
Purchaser by all necessary corporate action.

         (d) Binding Obligation.  The Agreements shall constitute a legal, valid
and binding  obligation of the  Purchaser  enforceable  in  accordance  with its
terms.

         (e) No  Violation.  The  execution,  delivery  and  performance  by the
Purchaser  of  the  Agreements  and  the   consummation   of  the   transactions
contemplated  hereby and the  fulfillment  of the terms  hereof do not  conflict
with,  result in a breach of any of the terms and  provisions of, nor constitute
(with or  without  notice or lapse of time) a default  under,  the  articles  of
incorporation  or  by-laws  of  the  Purchaser,  or  any  indenture,  agreement,
mortgage,  deed of trust, or other  instrument to which the Purchaser is a party
or by  which it is bound or to which  any of its  properties  are  subject;  nor
result in the  creation  or  imposition  of any lien upon any of its  properties
pursuant to the terms of any indenture,  agreement,  mortgage, deed of trust, or
other instrument (other than the Basic  Documents);  nor violate any law, order,
rule or regulation applicable to the Purchaser of any court or of any Federal or
State   regulatory   body,   administrative   agency   or   other   governmental
instrumentality having jurisdiction over the Purchaser or its properties.

         (f) No Proceedings. There are no proceedings or investigations pending,
or to the Purchaser's best knowledge,  threatened,  before any court, regulatory
body,  administrative  agency  or  other  governmental   instrumentality  having
jurisdiction over the Purchaser or its properties:  (A) asserting the invalidity
of the Agreements or the Securities;  (B) seeking to prevent the issuance of the
Securities or the  consummation of any of the  transactions  contemplated by the
Agreements;  (C) seeking any  determination  or ruling that might materially and
adversely  affect the performance by the Purchaser of its obligations  under, or
the validity or  enforceability  of, the  Agreements or the  Securities;  or (D)
relating to the Purchaser and which might adversely  affect the Federal or State
income, excise, franchise or similar tax attributes of the Securities.

         (g) No Consents.  No consent,  approval,  authorization  or order of or
declaration or filing with any governmental authority is required to be obtained
by the Purchaser for the issuance or sale of the Securities or the  consummation
of the other transactions  contemplated by the Agreements,  the Trust Agreement,
the Indenture or the Sale and Servicing Agreement, except such as have been duly
made or obtained.







         3.2.  Representations  and  Warranties  of the  Seller.  (a) The Seller
hereby  represents and warrants to the Purchaser as of the date hereof and as of
the Closing Date:

                  (i) Organization  and Good Standing.  The Seller has been duly
         organized  and is validly  existing as a  corporation  in good standing
         under the laws of the State of California,  with power and authority to
         own its properties and to conduct its business as such properties shall
         be currently owned and such business is presently  conducted and had at
         all relevant times, and shall have, power, authority and legal right to
         acquire, own and service the Receivables.

                  (ii) Due  Qualification.  The Seller is duly  qualified  to do
         business as a foreign  corporation in good  standing,  and has obtained
         all necessary  licenses and approvals in all jurisdictions in which the
         ownership  or  lease  of  property  or  the  conduct  of  its  business
         (including  the  origination  and the servicing of the  Receivables  as
         required  by the Sale  and  Servicing  Agreement)  shall  require  such
         qualifications.

                  (iii)  Power  and  Authority.  The  Seller  has the  power and
         authority to execute and deliver the  Agreements and to carry out their
         terms;  the Seller has full power and  authority to sell and assign the
         property  sold and assigned to the  Purchaser  and has duly  authorized
         such sale and  assignment to the  Purchaser by all necessary  corporate
         action;  and the execution,  delivery and performance of the Agreements
         have been duly  authorized  by the  Seller by all  necessary  corporate
         action.

                  (iv) Valid Sale; Binding  Obligation.  This Purchase Agreement
         effects a valid sale,  transfer and  assignment of the CPS  Receivables
         and the  other  Transferred  CPS  Property  conveyed  to the  Purchaser
         pursuant  to  Section  2.1,   enforceable   against  creditors  of  and
         purchasers  from the Seller;  and this  Agreement  shall  constitute  a
         legal,  valid and  binding  obligation  of the  Seller  enforceable  in
         accordance with its terms.

                  (v) No Violation.  The execution,  delivery and performance by
         the Seller of the Agreements and the  consummation of the  transactions
         contemplated  hereby  and the  fulfillment  of the terms  hereof do not
         conflict with,  result in any breach of any of the terms and provisions
         of, nor constitute  (with or without notice or lapse of time) a default
         under,  the articles of  incorporation,  as amended,  or by-laws of the
         Seller, or any indenture,  agreement, mortgage, deed of trust, or other
         instrument to which the Seller is a party or by which it is bound or to
         which any of its properties are subject;  nor result in the creation or
         imposition of any lien upon any of its properties pursuant to the terms
         of any such  indenture,  agreement,  mortgage,  deed of trust, or other
         instrument  (other  than the Basic  Documents);  nor  violate  any law,
         order,  rule or regulation  applicable to the Seller of any court or of
         any Federal or State  regulatory body,  administrative  agency or other
         governmental instrumentality having jurisdiction over the Seller or its
         properties.

                  (vi)   No   Proceedings.   There   are   no   proceedings   or
         investigations pending, or to the Seller's best knowledge,  threatened,
         before any court, regulatory






         body,  administrative  agency,  or other  governmental  instrumentality
         having  jurisdiction  over the Seller or its properties:  (A) asserting
         the  invalidity  of the  Agreements or the  Securities;  (B) seeking to
         prevent the issuance of the  Securities or the  consummation  of any of
         the  transactions  contemplated  by the  Agreements;  (C)  seeking  any
         determination  or ruling that might materially and adversely affect the
         performance by the Seller of its obligations  under, or the validity or
         enforceability of, the Agreements or the Securities; or (D) relating to
         the  Seller  and which  might  adversely  affect  the  Federal or State
         income, excise, franchise or similar tax attributes of the Securities.

                  (vii) No  Consents.  No consent,  approval,  authorization  or
         order of or  declaration or filing with any  governmental  authority is
         required for the issuance or sale of the Securities or the consummation
         of the other  transactions  contemplated by the  Agreements,  the Trust
         Agreement,  the Indenture or the Sale and Servicing  Agreement,  except
         such as have been duly made or obtained.

                  (viii)  Financial  Condition.  The Seller  has a positive  net
         worth and is able to and does pay its  liabilities as they mature.  The
         Seller  is not in  default  under  any  obligation  to pay money to any
         Person  except for  matters  being  disputed in good faith which do not
         involve an  obligation of the Seller on a promissory  note.  The Seller
         will not use the proceeds  from the  transactions  contemplated  by the
         Agreements  to  give  any  preference  to  any  creditor  or  class  of
         creditors,  and  this  transaction  will  not  leave  the  Seller  with
         remaining assets which are  unreasonably  small compared to its ongoing
         operations.

                  (ix) Fraudulent Conveyance.  The Seller is not selling the CPS
         Receivables  to the  Purchaser  with any  intent  to  hinder,  delay or
         defraud any of its creditors; the Seller will not be rendered insolvent
         as a result of the sale of the CPS Receivables to the Purchaser.

         (b) The Seller makes the following representations and warranties as to
the  Receivables  (including the Samco  Receivables)  and the other  Transferred
Property  relating  thereto  on which  the  Purchaser  relies in  accepting  the
Receivables  and  the  other  Transferred   Property   relating  thereto.   Such
representations  and warranties  speak with respect to each Receivable as of the
Closing  Date and  shall  survive  the sale,  transfer,  and  assignment  of the
Receivables and the other Transferred Property relating thereto to the Purchaser
and the subsequent  assignment  and transfer  pursuant to the Sale and Servicing
Agreement:

                  (i) Origination  Date. Each Receivable has an origination date
         on or after May 25, 1996.

                  (ii) Principal  Balance/Number of Contracts.  As of the Cutoff
         Date, the total  aggregate  principal  balance of the  Receivables  was
         $100,567,598.60. The Receivables are evidenced by 8,355 Contracts.

                  (iii) Maturity of Receivables. Each Receivable has an original
         term to  maturity  of not more than 60  months;  the  weighted  average
         original term to maturity






         of the Receivables is 56.79 months as of the Cutoff Date; the remaining
         term to  maturity  of each  Receivable  was 60 months or less as of the
         Cutoff Date;  the weighted  average  remaining  term to maturity of the
         Receivables was 56.07 months as of the Cutoff Date.

                  (iv)  Characteristics of Receivables.  (a) Each Receivable (1)
         has been originated in the United States of America by a Dealer for the
         retail  sale of a  Financed  Vehicle  in the  ordinary  course  of such
         Dealer's business,  has been fully and properly executed by the parties
         thereto and has been  purchased by the Seller (or,  with respect to the
         Samco  Receivables,  Samco)  in  connection  with the sale of  Financed
         Vehicles  by the  Dealers,  (2) has  created a valid,  subsisting,  and
         enforceable  first  priority  security  interest in favor of the Seller
         (or,  with  respect to the Samco  Receivables,  Samco) in the  Financed
         Vehicle,  which security  interest has been assigned by the Seller (or,
         with respect to the Samco Receivables,  Samco) to the Purchaser,  which
         in turn has assigned such security  interest to the Trustee pursuant to
         the  Pooling  and  Servicing  Agreement,  (3)  contains  customary  and
         enforceable  provisions such that the rights and remedies of the holder
         or assignee  thereof  shall be  adequate  for  realization  against the
         collateral  of the  benefits of the  security,  (4)  provides for level
         monthly  payments  that fully  amortize  the Amount  Financed  over the
         original term (except for the last payment, which may be different from
         the level  payment) and yield interest at the Annual  Percentage  Rate,
         (5) has an Annual Percentage Rate of not less than 16.95%,  (6) that is
         a Rule  of  78's  Receivable  provides  for,  in the  event  that  such
         Receivable  is  prepaid,  a  prepayment  that fully pays the  Principal
         Balance  and  includes  a  full  month's  interest,  in  the  month  of
         prepayment,  at the  Annual  Percentage  Rate,  (7) is a Rule  of  78's
         Receivable or a Simple Interest Receivable, and (8) was originated by a
         Dealer   and  was   sold  by  the   Dealer   without   any   fraud   or
         misrepresentation on the part of such Dealer.

                  (v) Approximately 87.26% of the aggregate Principal Balance of
         the Receivables,  constituting 89.86% of the number of Receivables,  as
         of the Cutoff Date,  represents  financing of used  automobiles,  light
         trucks,  vans or minivans;  the remainder of the Receivables  represent
         financing  of  new  automobiles,   light  trucks,   vans  or  minivans;
         approximately   21.43%  of  the  aggregate  Principal  Balance  of  the
         Receivables  as of the  Cutoff  Date  were  originated  in the State of
         California;  approximately 51.55% of the aggregate Principal Balance of
         the  Receivables  as of the Cutoff Date were  originated  under the CPS
         alpha program;  approximately  8.40% of the aggregate Principal Balance
         of the Receivables as of the Cutoff Date were originated  under the CPS
         delta program;  approximately 14.69% of the aggregate Principal Balance
         of the Receivables as of the Cutoff Date were originated  under the CPS
         first time buyer  program;  and  approximately  25.36% of the aggregate
         Principal  Balance of the  Receivables  were  originated  under the CPS
         standard  program;  approximately  4.48%  of  the  aggregate  Principal
         Balance of the Receivables are Samco  Receivables;  no Receivable shall
         have a payment that is more than 30 days overdue as of the Cutoff Date;
         29.00% of the aggregate  Principal  Balance of the Receivables are Rule
         of 78's  Receivables and 71.00% of the aggregate  Principal  Balance of
         the Receivables are Simple Interest Receivables;  each Receivable shall
         have a final






         scheduled  payment due no later than October 31, 2002;  each Receivable
         has an  original  term to  maturity  of not more than 60 months  and an
         average  original term to maturity of 56.79 months and a remaining term
         to maturity of not more than 60 months and an average remaining term to
         maturity of 56.07  months;  and each  Receivable  was  originated on or
         before the Cutoff Date.

                  (vi)  Scheduled  Payments.  Each  Receivable  had an  original
         principal  balance of not less than $2,499.45 nor more than $28,237.48,
         has an outstanding  principal balance as of the Cutoff Date of not less
         than $1,891.10 and not more than  $28,127.77 and has a first  Scheduled
         Payment due on or prior to November 20, 1997.

                  (vii)  Characteristics  of  Obligors.  As of the  date of each
         Obligor's  application  for the loan from which the related  Receivable
         arises,  each Obligor on any  Receivable  (a) did not have any material
         past  due  credit   obligations   or  any  personal  or  real  property
         repossessed  or wages  garnished  within  one year prior to the date of
         such  application,  unless such amounts have been repaid or  discharged
         through  bankruptcy,  (b) was not the subject of any Federal,  State or
         other bankruptcy,  insolvency or similar proceeding pending on the date
         of application that is not discharged,  (c) had not been the subject of
         more than one Federal, State or other bankruptcy, insolvency or similar
         proceeding, and (d) was domiciled in the United States.

                  (viii)  Origination  of  Receivables.  Based  on  the  billing
         address of the  Obligors  and the  Principal  Balances as of the Cutoff
         Date,  approximately  21.43%  of the  Receivables  were  originated  in
         California,  approximately  8.49% of the Receivables were originated in
         Texas,  approximately  7.77%  of the  Receivables  were  originated  in
         Florida,  5.95% of the Receivables  were originated in Pennsylvania and
         the remaining  58.37% of the  Receivables  were originated in all other
         States.

                  (ix)  Post-Office  Box. On or prior to the next billing period
         after the Cutoff  Date,  the Seller will  notify  each  Obligor to make
         payments with respect to its  respective  Receivables  after the Cutoff
         Date  directly to the  Post-Office  Box,  and will provide each Obligor
         with a monthly  statement  in order to  enable  such  Obligors  to make
         payments directly to the Post-Office Box.

                  (x) Location of Receivable  Files;  One  Original.  A complete
         Receivable  File with respect to each  Receivable  has been or prior to
         the  Closing  Date will be  delivered  to the  Trustee at the  location
         listed in Schedule B to the Sale and Servicing Agreement. There is only
         one original executed copy of each Receivable.

                  (xi)  Schedule  of  Receivables;   Selection  Procedures.  The
         information  with respect to the  Receivables set forth in the Schedule
         of CPS  Receivables  and the Schedule of Samco  Receivables is true and
         correct in all  material  respects  as of the close of  business on the
         Cutoff Date, and no selection procedures adverse to the Securityholders
         have been utilized in selecting the Receivables.







                  (xii)  Compliance with Law. Each  Receivable,  the sale of the
         Financed Vehicle and the sale of any physical  damage,  credit life and
         credit accident and health insurance and any extended service contracts
         complied at the time the related  Receivable was originated or made and
         at the execution of this  Agreement  complies in all material  respects
         with all requirements of applicable Federal,  State and local laws, and
         regulations thereunder including,  without limitation,  usury laws, the
         Federal  Truth-in-Lending  Act, the Equal Credit  Opportunity  Act, the
         Fair Credit Reporting Act, the Fair Debt Collection  Practices Act, the
         Federal  Trade  Commission  Act, the  Magnuson-Moss  Warranty  Act, the
         Federal Reserve Board's Regulations B and Z, the Soldiers' and Sailors'
         Civil  Relief  Act  of  1940,  the  Texas  Consumer  Credit  Code,  the
         California  Automobile Sales Finance Act, and state  adaptations of the
         National  Consumer Act and of the Uniform  Consumer  Credit  Code,  and
         other consumer credit laws and equal credit  opportunity and disclosure
         laws.

                  (xiii)  Binding  Obligation.  Each  Receivable  represents the
         genuine,  legal, valid and binding payment obligation in writing of the
         Obligor,  enforceable  by the  holder  thereof in  accordance  with its
         terms.

                  (xiv) No Government  Obligor.  None of the Receivables are due
         from the  United  States of  America  or any State or from any  agency,
         department,  or  instrumentality of the United States of America or any
         State.

                  (xv) Security Interest in Financed Vehicle.  Immediately prior
         to the sale, assignment, and transfer thereof, each Receivable shall be
         secured by a validly  perfected first priority security interest in the
         Financed  Vehicle in favor of the Seller (or, with respect to the Samco
         Receivables,  Samco) as secured  party,  and such security  interest is
         prior to all other liens upon and security  interests in such  Financed
         Vehicle which now exist or may hereafter  arise or be created  (except,
         as to priority,  for any tax liens or mechanics'  liens which may arise
         after the Closing Date).

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

                  (xvii)  No  Waiver.  No  provision  of a  Receivable  has been
         waived.

                  (xviii) No Amendments.  No Receivable has been amended, except
         as such  Receivable  may have been  amended to grant  extensions  which
         shall not have  numbered  more than (a) one  extension  of one calendar
         month  in  any  calendar  year  or (b)  three  such  extensions  in the
         aggregate.

                  (xix)  No  Defenses.  As of the  Closing  Date,  no  right  of
         rescission, setoff, counterclaim or defense exists or has been asserted
         or  threatened  with respect to any  Receivable.  The  operation of the
         terms of any  Receivable or the exercise of any right  thereunder  will
         not render such Receivable unenforceable in whole or in part or subject
         to any such right of rescission, setoff, counterclaim, or defense.






                  (xx) No Liens.  As of the Cutoff  Date,  there are no liens or
         claims  existing or which have been filed for work,  labor,  storage or
         materials  relating to a Financed Vehicle that shall be liens prior to,
         or equal or  coordinate  with,  the  security  interest in the Financed
         Vehicle granted by the Receivable.

                  (xxi)   No   Default;   Repossession.   Except   for   payment
         delinquencies  continuing  for a period of not more than thirty days as
         of the Cutoff Date, no default,  breach,  violation or event permitting
         acceleration  under the terms of any  Receivable  has occurred;  and no
         continuing  condition  that  with  notice  or the  lapse of time  would
         constitute  a  default,   breach,   violation,   or  event   permitting
         acceleration  under the terms of any Receivable has arisen; and neither
         the  Seller nor Samco  shall  waive and  neither  has waived any of the
         foregoing;  and no Financed  Vehicle shall have been  repossessed as of
         the Cutoff Date.

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

                  (xxiii)  Title.  It is the  intention  of the Seller  that the
         transfer and assignment  herein  contemplated  constitute a sale of the
         CPS  Receivables  from  the  Seller  to  the  Purchaser  and  that  the
         beneficial interest in and title to such CPS Receivables not be part of
         the debtor's estate in the event of the filing of a bankruptcy petition
         by or against the Seller under any  bankruptcy  law. No CPS  Receivable
         has been sold,  transferred,  assigned, or pledged by the Seller to any
         Person other than the Purchaser or any such pledge has been released on
         or prior to the Closing  Date.  Immediately  prior to the  transfer and
         assignment  herein  contemplated,  the Seller  had good and  marketable
         title to each CPS Receivable,  and was the sole owner thereof, free and
         clear of all  liens,  claims,  encumbrances,  security  interests,  and
         rights  of others  and,  immediately  upon the  transfer  thereof,  the
         Purchaser  shall  have  good  and  marketable  title  to each  such CPS
         Receivable,  and will be the sole owner thereof,  free and clear of all
         liens, encumbrances,  security interests, and rights of others, and the
         transfer has been perfected under the UCC.

                  (xxiv) Lawful  Assignment.  No Receivable has been  originated
         in, or is  subject  to the laws of, any  jurisdiction  under  which the
         sale, transfer,  and assignment of such Receivable under this Agreement
         or the Samco Purchase






         Agreement shall be unlawful, void, or voidable.  Neither the Seller nor
         Samco has  entered  into any  agreement  with any  account  debtor that
         prohibits, restricts or conditions the assignment of any portion of the
         Receivables.

                  (xxv)  All  Filings  Made.  All  filings  (including,  without
         limitation,  UCC  filings)  necessary in any  jurisdiction  to give the
         Purchaser  a  first  priority  perfected   ownership  interest  in  the
         Receivables  and the other  Transferred  CPS  Property  have been made,
         taken or performed.

                  (xxvi) Chattel Paper.  Each  Receivable  constitutes  "chattel
         paper" under the applicable UCC.

                  (xxvii)  Valid  and  Binding   Obligation  of  Obligor.   Each
         Receivable  is the legal,  valid and binding  obligation of the Obligor
         thereunder and is enforceable in accordance with its terms, except only
         as such enforcement may be limited by bankruptcy, insolvency or similar
         laws affecting the enforcement of creditors' rights generally,  and all
         parties to such contract had full legal capacity to execute and deliver
         such contract and all other documents  related thereto and to grant the
         security interest purported to be granted thereby.

                  (xxviii) Tax Liens.  As of the Cutoff  Date,  there is no lien
         against any Financed Vehicle for delinquent taxes.

                  (xxix) Title  Documents.  (A) If the Receivable was originated
         in a State  in which  notation  of a  security  interest  on the  title
         document of the related  Financed  Vehicle is required or  permitted to
         perfect such security interest,  the title document for such Receivable
         shows,  or if a new or replacement  title document is being applied for
         with respect to such  Financed  Vehicle the title  document  (or,  with
         respect to Receivables  originated in the State of Michigan,  all other
         evidence of ownership  with respect to such  Financed  Vehicle) will be
         received within 180 days and will show, the Seller (or, with respect to
         the Samco Receivables, Samco) named as the original secured party under
         the  related  Receivable  as the  holder of a first  priority  security
         interest  in  such  Financed  Vehicle,  and (B) if the  Receivable  was
         originated  in a State in which  the  filing of a  financing  statement
         under the UCC is  required  to  perfect a  security  interest  in motor
         vehicles,  such filings or recordings  have been duly made and show the
         Seller (or, with respect to the Samco Receivables,  Samco) named as the
         original  secured  party  under the related  Receivable,  and in either
         case,  the  Trustee has the same  rights as such  secured  party has or
         would  have  (if  such  secured  party  were  still  the  owner  of the
         Receivable)  against all parties  claiming an interest in such Financed
         Vehicle.  With respect to each  Receivable for which the title document
         of the  related  Financed  Vehicle has not yet been  returned  from the
         Registrar of Titles,  the Seller has received written evidence from the
         related  Dealer that such title  document  showing the Seller (or, with
         respect to the Samco  Receivables,  Samco) as first lienholder has been
         applied for.

                  (xxx) Casualty. No Financed Vehicle has suffered a Casualty.






                  (xxxi) Obligation to Dealers or Others.  The Purchaser and its
         assignees will assume no obligation to Dealers or other  originators or
         holders of the Receivables (including,  but not limited to under dealer
         reserves) as a result of the purchase of the Receivables.

                  (xxxii)  Full  Amount  Advanced.   The  full  amount  of  each
         Receivable  has  been  advanced  to  each  Obligor,  and  there  are no
         requirements for future advances thereunder.  No Obligor has any option
         under a Receivable to borrow from any Person  additional  funds secured
         by the related Financed Vehicle.

         (c) The  representations  and  warranties  contained in this  Agreement
shall not be  construed as a warranty or guaranty by the Seller as to the future
payments  by any  Obligor.  The  sale of the CPS  Receivables  pursuant  to this
Agreement shall be "without recourse" except for the representations, warranties
and  covenants  made by the Seller in this  Agreement or the Sale and  Servicing
Agreement.


                                   ARTICLE IV

                                   CONDITIONS

         4.1.  Conditions  to  Obligation of the  Purchaser.  On the  applicable
Closing Date, the obligation of the Purchaser to purchase the CPS Receivables is
subject to the satisfaction of the following conditions:

         (a)  Representations  and  Warranties  True.  The  representations  and
warranties  of the Seller  hereunder  shall be true and  correct on the  related
Closing  Date with the same  effect as if then made,  and the Seller  shall have
performed  all  obligations  to be performed by it hereunder on or prior to such
Closing Date.

         (b) Computer Files Marked. The Seller shall, at its own expense,  on or
prior to the Related  Closing Date,  indicate in its computer files that the CPS
Receivables have been sold to the Purchaser  pursuant to this Purchase Agreement
and shall deliver to the Purchaser the Schedule of CPS Receivables  certified by
the Chairman,  the President,  the Vice President or the Treasurer of the Seller
to be true, correct and complete.

         (c) Receivable Files  Delivered.  The Seller shall, at its own expense,
deliver the related  Receivable Files to the Trustee at the offices specified in
Schedule B to the Pooling  and  Servicing  Agreement  on or prior to the related
Closing Date.

         (d) Documents to be delivered by the Seller at the Closing.

                  (i) The  Assignment.  On each  Closing  Date,  the Seller will
         execute and deliver the Assignment  which shall be substantially in the
         form of Exhibit A hereto.







                  (ii)  Evidence  of UCC-1  Filing.  On or prior to the  Closing
         Date,  the Seller  shall record and file,  at its own expense,  a UCC-1
         financing   statement  in  each   jurisdiction  in  which  required  by
         applicable law, executed by the Seller, as seller or debtor, and naming
         the  Purchaser,   as  purchaser  or  secured  party,   naming  the  CPS
         Receivables and the other Transferred CPS Property  conveyed  hereafter
         as  collateral,  meeting  the  requirements  of the  laws of each  such
         jurisdiction  and in such manner as is  necessary  to perfect the sale,
         transfer,  assignment  and  conveyance of such CPS  Receivables  to the
         Purchaser.  The Seller  shall  deliver a  file-stamped  copy,  or other
         evidence satisfactory to the Purchaser of such filing, to the Purchaser
         on or prior to such Closing Date.

                  (iii)  Evidence  of UCC-2  Filing.  On or prior to the related
         Closing Date,  the Seller shall cause to be recorded and filed,  at its
         own  expense,  appropriate  UCC-2  termination  statements  executed by
         General Electric Capital  Corporation  ("GECC") in each jurisdiction in
         which required by applicable law,  meeting the requirements of the laws
         of each such jurisdiction and in such manner as is necessary to release
         GECC's interest in the Receivables,  including without limitation,  the
         security  interests in the Financed  Vehicles  securing the Receivables
         and any proceeds of such  security  interests or the  Receivables.  The
         Seller  shall  deliver  a   file-stamped   copy,   or  other   evidence
         satisfactory  to the  Purchaser of such filing,  to the Purchaser on or
         prior to such Closing Date.

                  (iv) Other Documents. On or prior to the related Closing Date,
         the Seller shall  deliver such other  documents  as the  Purchaser  may
         reasonably request.

         (e) Other  Transactions.  The  transactions  contemplated  by the Trust
Agreement,  the Indenture,  the Sale and Servicing Agreement, the Samco Purchase
Agreement,  the Underwriting  Agreement and the Certificate  Purchase  Agreement
shall be consummated on the Closing Date.

         4.2.  Conditions  to Obligation  of the Seller.  The  obligation of the
Seller to sell the  Receivables to the Purchaser is subject to the  satisfaction
of the following conditions:

         (a)  Representations  and  Warranties  True.  The  representations  and
warranties of the Purchaser  hereunder  shall be true and correct on the Closing
Date with the same effect as if then made,  and the Seller shall have  performed
all obligations to be performed by it hereunder on or prior to the Closing Date.

         (b) Receivables Purchase Price. At the Closing Date, the Purchaser will
deliver to the Seller the CPS Receivables  Purchase Price as provided in Section
2.1(b).  The Seller hereby directs the Purchaser to wire  $92,257,412.92  of the
Receivables  Purchase  Price  to  Bank  of  America,  ABA:  121000358,   Account
#1458425131,  Consumer Portfolio Services, Inc. pursuant to wire instructions to
be delivered to the Purchaser on or prior to the Closing Date.








                                    ARTICLE V

                             COVENANTS OF THE SELLER

         The Seller  agrees with the  Purchaser as follows;  provided,  however,
that to the extent  that any  provision  of this  ARTICLE V  conflicts  with any
provision of the Sale and Servicing Agreement,  the Sale and Servicing Agreement
shall govern:

         5.1.  Protection of Right, Title and Interest.

         (a)  Filings.  The Seller  shall  cause all  financing  statements  and
continuation  statements and any other necessary  documents  covering the right,
title and  interest of the  Purchaser  in and to the  Receivables  and the other
Transferred Property to be promptly filed, and at all times to be kept recorded,
registered  and filed,  all in such manner and in such places as may be required
by law fully to  preserve  and  protect  the right,  title and  interest  of the
Purchaser hereunder to the Receivables and the other Transferred  Property.  The
Seller shall deliver to the Purchaser file stamped copies of, or filing receipts
for, any document  recorded,  registered or filed as provided  above, as soon as
available  following such  recordation,  registration  or filing.  The Purchaser
shall  cooperate  fully with the Seller in connection  with the  obligations set
forth  above and will  execute  any and all  documents  reasonably  required  to
fulfill  the intent of this  Section  5.1(a).  In the event the Seller  fails to
perform its obligations under this subsection,  the Purchaser or the Trustee may
do so at the expense of the Seller.

         (b)  Name and  Other  Changes.  At least 60 days  prior to the date the
Seller makes any change in its name, identity or corporate structure which would
make any financing statement or continuation  statement filed in accordance with
paragraph (a) above seriously misleading within the applicable provisions of the
UCC or any title  statute,  the Seller shall give the  Trustee,  the Insurer (so
long as an Insurer  Default shall not have occurred and be  continuing)  and the
Purchaser  written  notice of any such  change and no later than five days after
the effective date thereof,  shall file appropriate amendments to all previously
filed financing statements or continuation statements. At least 60 days prior to
the date of any relocation of its principal  executive office,  the Seller shall
give the  Trustee,  the  Insurer (so long as an Insurer  Default  shall not have
occurred and be  continuing)  and the Purchaser  written notice thereof if, as a
result of such  relocation,  the applicable  provisions of the UCC would require
the filing of any amendment of any previously  filed  financing or  continuation
statement  or of any new  financing  statement  and the Seller shall within five
days after the effective date thereof,  file any such amendment or new financing
statement.  The Seller  shall at all times  maintain  each  office from which it
shall service Receivables, and its principal executive office, within the United
States of America.

         (c)  Accounts  and  Records.  The Seller  shall  maintain  accounts and
records as to each CPS Receivable  accurately and in sufficient detail to permit
the  reader  thereof  to know at any time  the  status  of such CPS  Receivable,
including  payments and  recoveries  made and payments  owing (and the nature of
each).







         (d)  Maintenance  of Computer  Systems.  The Seller shall  maintain its
computer  systems so that,  from and after the time of sale hereunder of the CPS
Receivables to the Purchaser,  the Seller's master computer  records  (including
any back-up  archives) that refer to a CPS Receivable shall indicate clearly the
interest of the Purchaser in such CPS Receivable and that such CPS Receivable is
owned  by the  Purchaser.  Indication  of  the  Purchaser's  ownership  of a CPS
Receivable  shall be deleted from or modified on the Seller's  computer  systems
when,  and  only  when,  the CPS  Receivable  shall  have  been  paid in full or
repurchased.

         (e) Sale of Other Receivables.  If at any time the Seller shall propose
to sell, grant a security interest in, or otherwise transfer any interest in any
automobile or light-duty truck  receivables  (other than the CPS Receivables) to
any prospective purchaser, lender, or other transferee, the Seller shall give to
such prospective purchaser, lender, or other transferee computer tapes, records,
or print-outs (including any restored from back-up archives) that, if they shall
refer in any manner  whatsoever to any CPS  Receivable,  shall indicate  clearly
that such CPS Receivable has been sold and is owned by the Purchaser unless such
CPS Receivable has been paid in full or repurchased.

         (f) Access to Records.  The Seller shall permit the  Purchaser  and its
agents at any time during  normal  business  hours to inspect,  audit,  and make
copies of and abstracts from the Seller's records regarding any Receivable.

         (g) List of Receivables.  Upon request, the Seller shall furnish to the
Purchaser, within five Business Days, a list of all CPS Receivables (by contract
number  and name of  Obligor)  then  owned  by the  Purchaser,  together  with a
reconciliation of such list to the Schedule of CPS Receivables.

         5.2. Other Liens or Interests. Except for the conveyances hereunder and
pursuant to the Sale and Servicing Agreement,  the Seller will not sell, pledge,
assign or transfer  to any other  Person,  or grant,  create,  incur,  assume or
suffer to exist any lien on any  interest  therein,  and the Seller shall defend
the right, title, and interest of the Purchaser in, to and under the Receivables
against all claims of third  parties  claiming  through or under the Seller (or,
with respect to the Samco Receivables, Samco).

         5.3. Chief Executive  Office.  During the term of the Receivables,  the
Seller will  maintain its chief  executive  office in one of the United  States,
except Louisiana or Vermont.

         5.4. Costs and Expenses.  The Seller agrees to pay all reasonable costs
and  disbursements  in  connection  with the  perfection,  as against  all third
parties,  of the  Purchaser's  right,  title  and  interest  in  and to the  CPS
Receivables.

         5.5. Delivery of Receivable Files. On or prior to the Closing Date, the
Seller  shall  deliver  the  Receivable  Files to the  Trustee  at the  location
specified in Schedule B to the Sale and  Servicing  Agreement.  The Seller shall
have until the last day of the second  Collection  Period following receipt from
the Trustee of  notification,  pursuant to Section 3.4 of the Sale and Servicing
Agreement, that there has been a failure to deliver a file with respect to a






Receivable  (including  a Samco  Receivable)  or that a file is unrelated to the
Receivables identified in Schedule A to the Sale and Servicing Agreement or that
any of the  documents  referred  to in  Section  3.3 of the Sale  and  Servicing
Agreement are not contained in a Receivable File, to deliver such file or any of
the aforementioned  documents required to be included in such Receivable File to
the Trustee.  Unless such defect with respect to such Receivable File shall have
been cured by the last day of the second Collection  Period following  discovery
thereof  by the  Trustee,  the  Seller  hereby  agrees  to  repurchase  any such
Receivable from the Trust as of such last day. In  consideration of the purchase
of the  Receivable,  the Seller  shall remit the  Purchase  Amount in the manner
specified in Section 4.5 of the Sale and  Servicing  Agreement.  The sole remedy
hereunder of the  Trustee,  the Trust or the  Securityholders  with respect to a
breach of this Section  5.5,  shall be to require the Seller to  repurchase  the
Receivable  pursuant to this Section 5.5.  Upon receipt of the Purchase  Amount,
the Trustee shall  release to the Seller or its designee the related  Receivable
File and shall execute and deliver all  instruments  of transfer or  assignment,
without recourse, as are prepared by the Seller and delivered to the Trustee and
are necessary to vest in the Seller or such designee title to the Receivable.

         5.6. Indemnification.  (a) The Seller shall indemnify the Purchaser for
any  liability as a result of the failure of a Receivable  to be  originated  in
compliance  with  all  requirements  of law  and for  any  breach  of any of its
representations and warranties contained herein.

         (b) The Seller shall defend, indemnify, and hold harmless the Purchaser
from and against  any and all costs,  expenses,  losses,  damages,  claims,  and
liabilities,  arising out of or resulting from the use, ownership,  or operation
by the Seller or any Affiliate thereof of a Financed Vehicle.

         (c) The Seller shall defend, indemnify, and hold harmless the Purchaser
from and  against  any and all taxes,  except for taxes on the net income of the
Purchaser,  that may at any time be asserted  against the Purchaser with respect
to the transactions  contemplated  herein,  including,  without limitation,  any
sales,  gross  receipts,   general  corporation,   tangible  personal  property,
privilege,  or license  taxes and costs and  expenses in  defending  against the
same.

         (d) The Seller shall defend, indemnify, and hold harmless the Purchaser
from and  against  any and all  costs,  expenses,  losses,  damages,  claims and
liabilities  to the  extent  that such cost,  expense,  loss,  damage,  claim or
liability  arose  out  of,  or was  imposed  upon  the  Purchaser  through,  the
negligence,  willful misfeasance,  or bad faith of the Seller in the performance
of its duties  under the  Agreement,  or by reason of reckless  disregard of the
Seller's obligations and duties under the Agreement.

         (e) The Seller shall defend, indemnify, and hold harmless the Purchaser
from and against all costs, expenses,  losses,  damages,  claims and liabilities
arising out of or incurred in connection  with the  acceptance or performance of
the  Seller's  trusts  and  duties  as  Servicer  under  the Sale and  Servicing
Agreement,  except to the extent that such cost, expense, loss, damage, claim or
liability  shall be due to the willful  misfeasance,  bad faith,  or  negligence
(except for errors in judgment) of the Purchaser.






         Indemnification  under this Section 5.6 shall include  reasonable  fees
and  expenses  of  litigation  and  shall  survive  payment  of  the  Notes  and
Certificates. These indemnity obligations shall be in addition to any obligation
that the Seller may otherwise have.

         5.7. Sale. The Seller agrees to treat this  conveyance for all purposes
(including without limitation tax and financial  accounting  purposes) as a sale
on all relevant  books,  records,  tax returns,  financial  statements and other
applicable documents.

         5.8.  Non-Petition.  In the event of any breach of a representation and
warranty made by the Purchaser  hereunder,  the Seller covenants and agrees that
it will not take any action to pursue any remedy that it may have hereunder,  in
law, in equity or  otherwise,  until a year and a day have passed since the date
on which all  certificates  issued by the Trust or a similar trust formed by the
Purchaser  have been paid in full.  The  Purchaser  and the  Seller  agree  that
damages  will not be an adequate  remedy for such breach and that this  covenant
may be specifically enforced by the Purchaser or by the Trust.


                                   ARTICLE VI

                            MISCELLANEOUS PROVISIONS

         6.1.  Obligations of Seller.  The  obligations of the Seller under this
Agreement  shall not be  affected  by reason of any  invalidity,  illegality  or
irregularity of any Receivable.

         6.2. Repurchase Events. The Seller hereby covenants and agrees with the
Purchaser  for the benefit of the  Purchaser,  the Trustee,  the Insurer and the
Securityholders,  that (i) the  occurrence  of a breach  of any of the  Seller's
representations  and  warranties  contained in Section  3.2(b)  hereof  (without
regard to any limitations regarding the Seller's knowledge) and (ii) the failure
of the Seller to timely  comply  with its  obligations  pursuant  to Section 5.5
hereof, shall constitute events obligating the Seller to repurchase the affected
Receivables  (including any affected Samco Receivables)  hereunder  ("Repurchase
Events"), at the Purchase Amount from the Trust. Unless the breach of any of the
Seller's representations and warranties shall have been cured by the last day of
the second Collection Period following the discovery thereof by or notice to the
Purchaser  and the  Seller of such  breach,  the  Seller  shall  repurchase  any
Receivable if such Receivable is materially and adversely affected by the breach
as of the last day of such second Collection Period (or, at the Seller's option,
the last day of the first Collection Period following the discovery) and, in the
event that the breach  relates to a  characteristic  of the  Receivables  in the
aggregate, and if the Trust is materially and adversely affected by such breach,
unless the breach shall have been cured by such second  Collection  Period,  the
Seller shall purchase such aggregate Principal Balance of Receivables, such that
following  such  purchase  such  representation  shall be true and correct  with
respect to the remainder of the Receivables in the aggregate.  The provisions of
this Section 6.2 are  intended to grant the Trustee a direct  right  against the
Seller to demand performance  hereunder,  and in connection therewith the Seller
waives any  requirement  of prior demand  against the  Purchaser  and waives any
defaults it would have against the  Purchaser  with  respect to such  repurchase
obligation. Any such purchase shall






take place in the manner  specified  in  Section  5.6 of the Sale and  Servicing
Agreement. For purposes of this Section 6.2, the Purchase Amount of a Receivable
which is not consistent with the warranty  pursuant to Section  3.2(b)(iv)(a)(5)
or  (iv)(a)(6)  shall  include such  additional  amount as shall be necessary to
provide the full amount of interest  as  contemplated  therein.  The sole remedy
hereunder of the  Securityholders,  the Trust,  the Insurer,  the Trustee or the
Purchaser  against the Seller with respect to any  Repurchase  Event shall be to
enforce the Seller's obligation to repurchase such Receivables  pursuant to this
Agreement;  provided,  however, that the Seller shall indemnify the Trustee, the
Insurer, the Trust and the Securityholders against all costs, expenses,  losses,
damages,  claims and  liabilities,  including  reasonable  fees and  expenses of
counsel,  which may be asserted  against or incurred by any of them, as a result
of third party  claims  arising  out of the events or facts  giving rise to such
breach.  Upon  receipt of the Purchase  Amount,  the  Purchaser  shall cause the
Trustee to release the related Receivables File to the Seller and to execute and
deliver all  instruments of transfer or  assignment,  without  recourse,  as are
necessary to vest in the Seller  title to the  Receivable.  Notwithstanding  the
foregoing,   if  it  is  determined  that   consummation  of  the   transactions
contemplated by the Sale and Servicing  Agreement,  the Indentures and the other
transaction  documents referenced in such Agreement,  servicing and operation of
the Trust pursuant to Trust Agreement and such other documents, or the ownership
of a Security by a Holder constitutes a violation of the prohibited  transaction
rules  of the  Employee  Retirement  Income  Security  Act of 1974,  as  amended
("ERISA"),  or the Internal  Revenue Code of 1986, as amended ("Code") for which
no statutory exception or administrative exemption applies, such violation shall
not be treated as a Repurchase Event.

         6.3. Seller's Assignment of Purchased Receivables.  With respect to all
Receivables repurchased by the Seller pursuant to this Agreement,  the Purchaser
shall assign,  without  recourse except as provided  herein,  representation  or
warranty,  to the Seller all the Purchaser's right, title and interest in and to
such Receivables, and all security and documents relating thereto.

         6.4.  Conveyance  as Sale of  Receivables  Not  Financing.  The parties
hereto intend that the conveyance hereunder be a sale of the CPS Receivables and
the other  Transferred  CPS Property  from the Seller to the Purchaser and not a
financing  secured by such assets;  and the beneficial  interest in and title to
the CPS Receivables and the other  Transferred CPS Property shall not be part of
the Seller's  estate in the event of the filing of a  bankruptcy  petition by or
against the Seller under any  bankruptcy  law. In the event that any  conveyance
hereunder is for any reason not  considered a sale, the parties intend that this
Agreement  constitute a security  agreement under the UCC (as defined in the UCC
as in effect in the State of  California)  and  applicable  law,  and the Seller
hereby grants to the Purchaser a first priority  perfected security interest in,
to and under the CPS  Receivables  and the other  Transferred CPS Property being
delivered to the  Purchaser on the Closing  Date,  and other  property  conveyed
hereunder  and all proceeds of any of the  foregoing for the purpose of securing
payment and  performance  of the Securities and the repayment of amounts owed to
the Purchaser from the Seller.

         6.5. Trust. The Seller  acknowledges that the Purchaser will,  pursuant
to the Sale and  Servicing  Agreement,  sell the  Receivables  to the  Trust and
assign its rights under this






Purchase  Agreement and the Samco Purchase  Agreement to the Trust, and that the
representations and warranties contained in this Agreement and the rights of the
Purchaser  under this Purchase  Agreement,  including under Sections 6.2 and 6.4
hereof are  intended to benefit such Trust and the  Securityholders.  The Seller
also acknowledges that the Trustee on behalf of the  Securityholders as assignee
of the Purchaser's  rights  hereunder may directly  enforce,  without making any
prior  demand  on the  Purchaser,  all the  rights  of the  Purchaser  hereunder
including  the rights  under  Section  6.2 and 6.4  hereof.  The  Seller  hereby
consents to such sale and assignment.

         6.6.  Amendment.  This  Purchase  Agreement may be amended from time to
time by a written  amendment  duly  executed and delivered by the Seller and the
Purchaser with the consent of the Insurer; provided,  however, that (i) any such
amendment  that  materially   adversely  affects  the  rights  of  the  Class  A
Noteholders  under the Sale and Servicing  Agreement must be consented to by the
holders of Class A Notes representing more than 50% of the outstanding principal
amount of Class A Notes and (ii) any amendment that materially adversely affects
the rights of the Certificateholders under the Sale and Servicing Agreement must
be consented to by the holders of Certificates representing more than 50% of the
Certificate Balance.

         6.7.  Accountants'  Letters.  (a) KPMG Peat Marwick LLP will review the
characteristics of the Receivables and will compare those characteristics to the
information with respect to the Receivables contained in the Offering Documents;
(b) The Seller will  cooperate  with the  Purchaser and KPMG Peat Marwick LLP in
making  available all information and taking all steps  reasonably  necessary to
permit such accountants to complete the review set forth in Section 6.7(a) above
and to deliver the letters  required of them under the  Underwriting  Agreement;
and (c) KPMG Peat Marwick LLP will deliver to the Purchaser a letter,  dated the
Closing Date, in the form previously  agreed to by the Seller and the Purchaser,
with  respect to the  financial  and  statistical  information  contained in the
Offering  Documents  under the captions  "CPS's  Automobile  Contract  Portfolio
- --Delinquency  and  Loss  Experience"  and  "The  Receivables   Pool",   certain
information  relating to the  Receivables  on magnetic  tape  obtained  from the
Seller and the  Purchaser and with respect to such other  information  as may be
agreed in the form of letter.

         6.8.  Waivers.  No  failure  or delay on the part of the  Purchaser  in
exercising any power,  right or remedy under the  Agreements  shall operate as a
waiver  thereof,  nor shall any single or partial  exercise  of any such  power,
right or remedy preclude any other or further  exercise  thereof or the exercise
of any other power, right or remedy.

         6.9. Notices.  All communications and notices pursuant hereto to either
party shall be in writing or by telegraph or telex and addressed or delivered to
it at its address  (or in case of telex,  at its telex  number at such  address)
shown in the opening portion of this Purchase Agreement or at such other address
as may be  designated  by it by notice to the other party and, if mailed or sent
by telegraph or telex,  shall be deemed given when mailed,  communicated  to the
telegraph office or transmitted by telex.







         6.10. Costs and Expenses.  The Seller will pay all expenses incident to
the performance of its obligations under this Purchase  Agreement and the Seller
agrees to pay all reasonable  out-of-pocket costs and expenses of the Purchaser,
excluding  fees and expenses of counsel,  in connection  with the  perfection as
against third parties of the Purchaser's right, title and interest in and to the
CPS  Receivables  and  security  interests  in the  Financed  Vehicles  and  the
enforcement of any obligation of the Seller hereunder.

         6.11.  Representations of the Seller and the Purchaser.  The respective
agreements,  representations,  warranties and other statements by the Seller and
the Purchaser set forth in or made  pursuant to this  Purchase  Agreement  shall
remain in full force and effect and will survive the closing  under  Section 2.2
hereof.

         6.12.  Confidential  Information.  The  Purchaser  agrees  that it will
neither use nor disclose to any Person the names and  addresses of the Obligors,
except in connection with the enforcement of the Purchaser's  rights  hereunder,
under the CPS Receivables, under the Sale and Servicing Agreement or as required
by law.

         6.13.  Headings  and  Cross-References.  The  various  headings in this
Agreement are included for convenience  only and shall not affect the meaning or
interpretation of any provision of this Purchase  Agreement.  References in this
Purchase  Agreement  to Section  names or numbers  are to such  Sections of this
Purchase Agreement.

         6.14.  Third Party  Beneficiaries.  The parties hereto hereby expressly
agree that each of the Trustee for the  benefit of the  Securityholders  and the
Insurer  shall  be third  party  beneficiaries  with  respect  to this  Purchase
Agreement, provided, however, that no third party other than the Trustee for the
benefit of the  Securityholders  and the Credit Enhancer shall be deemed a third
party beneficiary of this Purchase Agreement.

         6.15.  Governing Law. THIS PURCHASE  AGREEMENT AND THE ASSIGNMENT SHALL
BE GOVERNED BY AND CONSTRUED IN  ACCORDANCE  WITH THE INTERNAL LAWS OF THE STATE
OF NEW YORK WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.

         6.16.  Counterparts.  This Purchase Agreement may be executed in two or
more  counterparts and by different  parties on separate  counterparts,  each of
which shall be an original,  but all of which together shall  constitute one and
the same instrument.


                    [Rest of page intentionally left blank.]





         IN WITNESS  WHEREOF,  the parties  hereby  have  caused  this  Purchase
Agreement to be executed by their respective  officers thereunto duly authorized
as of the date and year first above written.


                                           CPS RECEIVABLES CORP.


                                           By:_______________________________
                                              Name:
                                              Title:



                                            CONSUMER PORTFOLIO SERVICES, INC.


                                            By:______________________________
                                               Name:
                                               Title:







                                                                      Exhibit A

                                   ASSIGNMENT

         For value received,  in accordance with the Purchase Agreement dated as
of October 1, 1997,  between the undersigned  (the "Seller") and CPS Receivables
Corp. (the  "Purchaser")  (the "CPS Purchase  Agreement"),  the undersigned does
hereby sell, transfer,  assign and otherwise convey unto the Purchaser,  without
recourse (subject to the obligations in the CPS Purchase  Agreement and the Sale
and Servicing Agreement),  all right, title and interest of the Seller in and to
(i) the CPS  Receivables  listed in the Schedule of CPS  Receivables  and,  with
respect to Rule of 78's  Receivables,  all  monies due or to become due  thereon
after the Cutoff Date  (including  Scheduled  Payments due after the Cutoff Date
(including  principal  prepayments  relating  to such  Scheduled  Payments)  but
received by the Seller on or before the Cutoff Date) and, with respect to Simple
Interest  Receivables,  all monies received thereunder after the Cutoff Date and
all  Liquidation   Proceeds  and  Recoveries   received  with  respect  to  such
Receivables;  (ii) the security  interests in the Financed  Vehicles  granted by
Obligors pursuant to the CPS Receivables and any other interest of the Seller in
such Financed Vehicles, including, without limitation, the certificates of title
or, with respect to Financed  Vehicles in the State of Michigan,  other evidence
of ownership  with respect to such  Financed  Vehicles;  (iii) any proceeds from
claims on any  physical  damage,  credit  life and  credit  accident  and health
insurance  policies or certificates  relating to the Financed  Vehicles securing
the CPS Receivables;  (iv) refunds for the costs of extended  service  contracts
with  respect to Financed  Vehicles  securing  the CPS  Receivables,  refunds of
unearned  premiums  with  respect to credit life and credit  accident and health
insurance  policies or certificates  covering an Obligor or Financed  Vehicle or
his or her  obligations  with  respect  to a Financed  Vehicle  related to a CPS
Receivable  and  any  recourse  to  Dealers  for any of the  foregoing;  (v) the
Receivable File related to each CPS Receivable; and (vi) the proceeds of any and
all of the foregoing. The foregoing sale does not constitute and is not intended
to  result  in  any  assumption  by  the  Purchaser  of  any  obligation  of the
undersigned to the Obligors, insurers or any other Person in connection with the
CPS Receivables,  the related  Receivable  Files, any insurance  policies or any
agreement or instrument relating to any of them.

         This  Assignment  is made  pursuant  to and upon  the  representations,
warranties  and agreements on the part of the  undersigned  contained in the CPS
Purchase Agreement and is to be governed by the CPS Purchase Agreement.

         Capitalized  terms used herein and not otherwise defined shall have the
meanings assigned to them in the CPS Purchase Agreement.

         THIS  ASSIGNMENT  SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE INTERNAL  LAWS OF THE STATE OF NEW YORK  WITHOUT  REGARD TO CONFLICTS OF LAW
PRINCIPLES.



                                       A-1





         IN WITNESS  WHEREOF,  the  undersigned has caused this Assignment to be
duly executed as of [ ].


                                            CONSUMER PORTFOLIO SERVICES, INC.


                                            By:_______________________________
                                               Name:
                                               Title:















                                       A-2




                                    Exhibit B
                           Schedule of CPS Receivables

                               See Following Page





















                                                                   Exhibit 10.9

                                                                  EXECUTION COPY

                                   ASSIGNMENT

         For value received,  in accordance with the Purchase Agreement dated as
of October 1, 1997,  between the undersigned (the "Seller") and Samco Acceptance
Corp. (the "Purchaser") (the "Samco Purchase  Agreement"),  the undersigned does
hereby sell, transfer,  assign and otherwise convey unto the Purchaser,  without
recourse  (subject to the  obligations in the Samco  Purchase  Agreement and the
Sale and Servicing  Agreement),  all right,  title and interest of the Seller in
and to (i) the Samco  Receivables  listed in the  Schedule of Samco  Receivables
and, with respect to Rule of 78's  Receivables,  all monies due or to become due
thereon after the Cutoff Date (including Scheduled Payments due after the Cutoff
Date (including  principal  prepayments relating to such Scheduled Payments) but
received by the Seller on or before the Cutoff Date) and, with respect to Simple
Interest  Receivables,  all monies received thereunder after the Cutoff Date and
all  Liquidation  Proceeds and  Recoveries  received  with respect to such Samco
Receivables;  (ii) the security  interests in the Financed  Vehicles  granted by
Obligors  pursuant to the Samco Receivables and any other interest of the Seller
in such Financed Vehicles,  including,  without limitation,  the certificates of
title or, with  respect to Financed  Vehicles  in the State of  Michigan,  other
evidence of ownership with respect to Financed Vehicles; (iii) any proceeds from
claims on any  physical  damage,  credit  life and  credit  accident  and health
insurance  policies or certificates  relating to the Financed  Vehicles securing
the Samco Receivables;  (iv) refunds for the costs of extended service contracts
with respect to Financed  Vehicles  securing the Samco  Receivables,  refunds of
unearned  premiums  with  respect to credit life and credit  accident and health
insurance  policies or  certificates  covering  an Obligor or  Financed  Vehicle
securing the Samco  Receivables or his or her obligations with respect to such a
Financed  Vehicle and any recourse to Dealers for any of the foregoing;  (v) the
Receivable File related to each Samco  Receivable;  and (vi) the proceeds of any
and all of the  foregoing.  The foregoing  sale does not  constitute  and is not
intended to result in any  assumption by the Purchaser of any  obligation of the
undersigned to the Obligors, insurers or any other Person in connection with the
Samco Receivables, the Receivable Files, any insurance policies or any agreement
or instrument relating to any of them.

         This  Assignment  is made  pursuant  to and upon  the  representations,
warranties and agreements on the part of the undersigned  contained in the Samco
Purchase Agreement and is to be governed by the Samco Purchase Agreement.

         Capitalized  terms used herein and not otherwise defined shall have the
meanings assigned to them in the Samco Purchase Agreement.

         THIS  ASSIGNMENT  SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE INTERNAL  LAWS OF THE STATE OF NEW YORK  WITHOUT  REGARD TO CONFLICTS OF LAW
PRINCIPLES.






         IN WITNESS  WHEREOF,  the  undersigned has caused this Assignment to be
duly executed as of October 16, 1997.


                                                     SAMCO ACCEPTANCE CORP.



                                                     By:_______________________
                                                        Name:
                                                        Title:







                                                                  EXECUTION COPY

         PURCHASE  AGREEMENT  dated as of this  October 1, 1997,  by and between
SAMCO  ACCEPTANCE  CORP.,  a Delaware  corporation  (the  "Seller"),  having its
principal executive office at 8150 North Central Expressway, Suite 600, Lock-Box
39, Dallas,  Texas,  and CPS RECEIVABLES  CORP., a California  corporation  (the
"Purchaser"), having its principal executive office at 2 Ada, Irvine, California
92618.

         WHEREAS,  in the regular course of its business,  the Seller  purchases
and  services  through  its auto loan  programs  certain  motor  vehicle  retail
installment sale contracts  secured by new and used  automobiles,  light trucks,
vans or minivans acquired from motor vehicle dealers.

         WHEREAS,  the  Seller  and the  Purchaser  wish to set  forth the terms
pursuant to which the Samco Receivables (as hereinafter defined), are to be sold
by the Seller to the Purchaser,  which Samco  Receivables  together with the CPS
Receivables  will be  transferred  by the  Purchaser,  pursuant  to the Sale and
Servicing  Agreement (as hereinafter  defined),  to CPS Auto  Receivables  Trust
1997-4  to be  created  thereunder,  which  Trust  will  issue  notes  under the
Indenture (as hereinafter defined)  representing  indebtedness of the Trust (the
"Class A Notes" or the "Notes") and  certificates  under the Trust Agreement (as
hereinafter  defined)  representing  beneficial  interests  in  the  Trust  (the
"Certificates" and, together with the Notes, the "Securities").

         NOW,  THEREFORE,  in  consideration  of the  foregoing,  other good and
valuable consideration, and the mutual terms and covenants contained herein, the
parties hereto agree as follows:


                                    ARTICLE I

                               CERTAIN DEFINITIONS

         Terms not defined in this Purchase Agreement shall have the meaning set
forth in the Sale and Servicing  Agreement  and, if not defined  therein,  shall
have the meaning set forth in the Indenture. As used in this Purchase Agreement,
the  following  terms shall,  unless the context  otherwise  requires,  have the
following  meanings (such meanings to be equally  applicable to the singular and
plural forms of the terms defined):

         "Agreement" means this Purchase Agreement.

         "Base  Prospectus"  means the Prospectus  dated October 16, 1997,  with
respect to CPS Auto Receivables Trusts and any amendment or supplement thereto.

         "Closing Date" means October 17, 1997.


                                       -1-





         "CPS"  means   Consumer   Portfolio   Services,   Inc.,   a  California
corporation, and its successors and assigns.

         "CPS  Purchase  Agreement"  means the  purchase  agreement  dated as of
October 1, 1997, between Consumer Portfolio  Services,  Inc., as seller, and CPS
Receivables Corp., as purchaser, as such agreement may be amended,  supplemented
or otherwise modified from time to time in accordance with the terms thereof.

         "CPS Receivable"  shall have the meaning  specified in the CPS Purchase
Agreement.

         "CPS Transferred  Property" shall have the meaning specified in the CPS
Purchase Agreement

         "Indenture"  means the Indenture  dated as of October 1, 1997,  between
CPS Auto  Receivables  Trust  1997-4,  as issuer  and  Norwest  Bank  Minnesota,
National Association, as trustee.

         "Obligor(s)" means the purchaser or co-purchasers of a Financed Vehicle
or any other Person who owes or may be liable for payments under a Receivable.

         "Offering  Documents"  means  the  Prospectus   Supplement,   the  Base
Prospectus and the Private Placement Memorandum.

         "Private Placement  Memorandum" means the Private Placement Memorandum,
dated October 16, 1997,  relating to the private  placement of the  Certificates
and any amendment or supplement thereto.

         "Prospectus  Supplement" means the Prospectus  Supplement dated October
16, 1997, relating to the public offering of the Class A Notes and any amendment
or supplement thereto.

         "Purchase  Agreement" means this Purchase Agreement,  as this agreement
may be  amended,  supplemented  or  otherwise  modified  from  time  to  time in
accordance with the terms hereof.

         "Purchaser" means CPS Receivables Corp., a California corporation,  and
its successors and assigns.

         "Receivable"  shall  have the  meaning  specified  in the  Pooling  and
Servicing Agreement.

         "Receivables Purchase Price" means $4,505,428.42.

         "Repurchase  Event"  shall have the  meaning  specified  in Section 6.2
hereof.

                                       -2-





         "Sale and Servicing  Agreement" means the Sale and Servicing  Agreement
dated as of  October 1,  1997,  among CPS Auto  Receivables  Trust  1997-4,  CPS
Receivables Corp., as seller,  Consumer Portfolio Services,  Inc., as originator
of  the  Receivables  and  servicer,   and  Norwest  Bank  Minnesota,   National
Association,  as Trustee and standby servicer, as such agreement may be amended,
supplemented  or otherwise  modified  from time to time in  accordance  with the
terms thereof.

         "Samco" means Samco Acceptance Corp., a Delaware  corporation,  and its
successors and assigns.

         "Samco  Assignment" means the assignment dated October 17, 1997, by the
Seller to the Purchaser,  relating to the purchase of the Samco  Receivables and
certain other property related thereto by the Purchaser from the Seller pursuant
to this Purchase Agreement which shall be substantially in the form of Exhibit A
to this Purchase Agreement.

         "Samco  Purchase  Agreement"  means this  Purchase  Agreement,  as this
agreement may be amended,  supplemented or otherwise  modified from time to time
in accordance with the terms hereof.

         "Samco  Receivable"  means each retail  installment sale contract for a
Financed  Vehicle  that  appears on the  Schedule of Samco  Receivables  and all
rights thereunder.

         "Schedule of CPS Receivables" means the list of CPS Receivables annexed
as Exhibit B to the CPS Purchase Agreement.

         "Schedule  of  Receivables"  means the  Schedule  of Samco  Receivables
and/or the CPS Schedule of Receivables.

         "Schedule  of Samco  Receivables"  means the list of Samco  Receivables
annexed hereto as Exhibit B.

         "Seller" means Samco Acceptance Corp., a Delaware  corporation,  in its
capacity  as seller of the Samco  Receivables  and the other  Transferred  Samco
Property relating thereto, and its successors and assigns.

         "Servicer"  means  Consumer  Portfolio  Services,  Inc.,  a  California
corporation, in its capacity as Servicer of the Receivables,  and its successors
and assigns.

         "Transferred CPS Property" shall have the meaning  specified in the CPS
Purchase Agreement.

         "Transferred  Property"  shall have the  meaning  specified  in Section
2.1(a) hereof.


                                      -3-





         "Transferred  Samco  Property"  shall  have the  meaning  specified  in
Section 2.1(a) hereof.

         "Trust"  means the CPS Auto  Receivables  Trust  1997-4  created by the
Trust Agreement.

         "Trust  Agreement"  means the Trust  Agreement  between CPS Receivables
Corp.  and Bankers  Trust  (Delaware),  as Owner  Trustee dated as of October 9,
1997, as amended and restated as of October 17, 1997.

         "UCC" means the Uniform Commercial Code, as in effect from time to time
in the relevant jurisdictions.

         "Underwriter" means Greenwich Capital Markets, Inc.

         "Underwriting  Agreement"  means  the  Underwriting  Agreement,   dated
October 16, 1997, among the Underwriter,  CPS, Samco and the Purchaser  relating
to the Class A Notes and the Certificates.


                                   ARTICLE II

                        PURCHASE AND SALE OF RECEIVABLES

         2.1. Purchase and Sale of Receivables.  On the Closing Date, subject to
the terms and conditions of this Purchase  Agreement,  the Seller agrees to sell
to the Purchaser,  and the Purchaser agrees to purchase from the Seller, without
recourse (subject to the obligations in this Purchase Agreement and the Sale and
Servicing  Agreement),  all of the Seller's right, title and interest in, to and
under the Samco  Receivables and the other  Transferred  Samco Property relating
thereto.  The  conveyance  to the Purchaser of the Samco  Receivables  and other
Transferred Samco Property relating thereto is intended as a sale free and clear
of all liens and it is intended that the  Transferred  Samco  Property and other
property of the Purchaser  shall not be part of the Seller's estate in the event
of the  filing of a  bankruptcy  petition  by or against  the  Seller  under any
bankruptcy law.

         (a) Transfer of  Receivables.  On the Closing  Date and  simultaneously
with the  transactions to be consummated  pursuant to the Trust  Agreement,  the
Indenture and the Sale and Servicing Agreement, the Seller shall sell, transfer,
assign, grant, set over and otherwise convey to the Purchaser,  without recourse
(subject to the obligations herein and in the Sale and Servicing Agreement), all
right,  title and  interest  of the  Seller in and to (i) the Samco  Receivables
listed in the Schedule of Samco  Receivables  and,  with respect to Rule of 78's
Receivables,  all  monies  due or to become due  thereon  after the Cutoff  Date
(including  Scheduled  Payments due after the Cutoff Date  (including  principal
prepayments  relating to such Scheduled  Payments) but received by the Seller on
or before the Cutoff Date) and, with

                                       -4-





respect to Simple Interest Receivables, all monies received thereunder after the
Cutoff Date and all Liquidation Proceeds and Recoveries received with respect to
such Samco  Receivables;  (ii) the security  interests in the Financed  Vehicles
granted by Obligors  pursuant to the Samco Receivables and any other interest of
the  Seller  in such  Financed  Vehicles,  including,  without  limitation,  the
certificates  of title or,  with  respect to  Financed  Vehicles in the State of
Michigan,  other evidence of ownership with respect to Financed Vehicles;  (iii)
any proceeds from claims on any physical damage, credit life and credit accident
and health insurance policies or certificates  relating to the Financed Vehicles
securing the Samco Receivables or the Obligors thereunder;  (iv) refunds for the
costs of extended service  contracts with respect to Financed  Vehicles securing
the Samco Receivables,  refunds of unearned premiums with respect to credit life
and credit accident and health  insurance  policies or certificates  covering an
Obligor  or  Financed  Vehicle  securing  the  Samco  Receivables  or his or her
obligations  with respect to such a Financed Vehicle and any recourse to Dealers
for any of the  foregoing;  (v)  the  Receivable  File  related  to  each  Samco
Receivable; and (vi) the proceeds of any and all of the foregoing (collectively,
the "Transferred Samco Property" and together with the Transferred CPS Property,
the "Transferred Property").

         (b)  Receivables   Purchase  Price.  In  consideration  for  the  Samco
Receivables and other  Transferred  Samco Property  described in Section 2.1(a),
the  Purchaser  shall,  on the Closing Date,  pay to the Seller the  Receivables
Purchase Price by federal wire transfer (same day) funds.

         2.2. The Closing.  The sale and purchase of the Samco Receivables shall
take place at a closing (the "Closing") at the offices of Mayer,  Brown & Platt,
1675 Broadway, New York, New York 10019-5820 on the Closing Date, simultaneously
with the closings under:  (a) the CPS Purchase  Agreement  pursuant to which CPS
will  sell  the CPS  Receivables  to CPS  Receivables  Corp.,  (b) the  Sale and
Servicing  Agreement  pursuant  to which the  Purchaser  will  assign all of its
right,  title and interest in and to the Receivables  and the other  Transferred
Property  to the Trust for the  benefit  of the  Securityholders,  (c) the Trust
Agreement  pursuant  to which the Trust  shall be  formed  and the  Certificates
issued,  (d) the Indenture pursuant to which the Trust will issue the Notes, (e)
the  Underwriting  Agreement  pursuant to which the Trust shall sell the Class A
Notes to the Underwriter and (f) the Certificate  Purchase Agreement pursuant to
which the Purchaser shall sell the Certificates to one or more investors.


                                   ARTICLE III

                         REPRESENTATIONS AND WARRANTIES

         3.1.  Representations  and Warranties of the  Purchaser.  The Purchaser
hereby  represents  and  warrants  to the Seller as of the date hereof and as of
each Closing  Date (which  representations  and  warranties  shall  survive such
Closing Date):

                                       -5-





         (a)  Organization  and Good  Standing.  The  Purchaser  has  been  duly
organized and is validly  existing as a corporation  in good standing  under the
laws of the State of California,  with power and authority to own its properties
and to conduct its business as such properties shall be currently owned and such
business is presently conducted,  and had at all relevant times, and shall have,
power, authority and legal right to acquire and own the Samco Receivables.

                  (b) Due  Qualification.  The Purchaser is duly qualified to do
business  as a  foreign  corporation  in good  standing,  and has  obtained  all
necessary  licenses and approvals in all jurisdictions in which the ownership or
lease  of  property  or  the  conduct  of  its  business   shall   require  such
qualifications.

         (c) Power and  Authority.  The Purchaser has the power and authority to
execute and deliver the Agreements and to carry out its terms and the execution,
delivery and  performance  of the  Agreements  has been duly  authorized  by the
Purchaser by all necessary corporate action.

         (d) Binding Obligation.  The Agreements shall constitute a legal, valid
and binding  obligation of the  Purchaser  enforceable  in  accordance  with its
terms.

         (e) No  Violation.  The  execution,  delivery  and  performance  by the
Purchaser  of  the  Agreements  and  the   consummation   of  the   transactions
contemplated  hereby and the  fulfillment  of the terms  hereof do not  conflict
with,  result in a breach of any of the terms and  provisions of, nor constitute
(with or  without  notice or lapse of time) a default  under,  the  articles  of
incorporation  or  by-laws  of  the  Purchaser,  or  any  indenture,  agreement,
mortgage,  deed of trust, or other  instrument to which the Purchaser is a party
or by  which it is bound or to which  any of its  properties  are  subject;  nor
result in the  creation  or  imposition  of any lien upon any of its  properties
pursuant to the terms of any indenture,  agreement,  mortgage, deed of trust, or
other instrument (other than the Basic  Documents);  nor violate any law, order,
rule or regulation applicable to the Purchaser of any court or of any Federal or
State   regulatory   body,   administrative   agency   or   other   governmental
instrumentality having jurisdiction over the Purchaser or its properties.

         (f) No Proceedings. There are no proceedings or investigations pending,
or to the Purchaser's best knowledge,  threatened,  before any court, regulatory
body,  administrative  agency  or  other  governmental   instrumentality  having
jurisdiction over the Purchaser or its properties:  (A) asserting the invalidity
of the Agreements or the Securities;  (B) seeking to prevent the issuance of the
Securities or the  consummation of any of the  transactions  contemplated by the
Agreements;  (C) seeking any  determination  or ruling that might materially and
adversely  affect the performance by the Purchaser of its obligations  under, or
the validity or  enforceability  of, the  Agreements or the  Securities;  or (D)
relating to the Purchaser and which might adversely  affect the Federal or State
income, excise, franchise or similar tax attributes of the Securities.


                                       -6-





         (g) No Consents.  No consent,  approval,  authorization  or order of or
declaration or filing with any governmental authority is required to be obtained
by the Purchaser for the issuance or sale of the Securities or the  consummation
of the other transactions  contemplated by the Agreements,  the Trust Agreement,
the Indenture or the Sale and Servicing Agreement, except such as have been duly
made or obtained.

         3.2.  Representations  and  Warranties  of the  Seller.  (a) The Seller
hereby  represents and warrants to the Purchaser as of the date hereof and as of
each Closing Date:

                  (i) Organization  and Good Standing.  The Seller has been duly
         organized  and is validly  existing as a  corporation  in good standing
         under the laws of the State of  Delaware,  with power and  authority to
         own its properties and to conduct its business as such properties shall
         be currently owned and such business is presently  conducted and had at
         all relevant times, and shall have, power, authority and legal right to
         acquire, and own the Samco Receivables.

                  (ii) Due  Qualification.  The Seller is duly  qualified  to do
         business as a foreign  corporation in good  standing,  and has obtained
         all necessary  licenses and approvals in all jurisdictions in which the
         ownership  or  lease  of  property  or  the  conduct  of  its  business
         (including the origination of the Samco  Receivables as required by the
         Sale and Servicing Agreement) shall require such qualifications.

                  (iii)  Power  and  Authority.  The  Seller  has the  power and
         authority  to execute and deliver this  Agreement  and to carry out its
         terms;  the Seller has full power and  authority to sell and assign the
         property  sold and assigned to the  Purchaser  and has duly  authorized
         such sale and  assignment to the  Purchaser by all necessary  corporate
         action;  and the execution,  delivery and performance of the Agreements
         has been  duly  authorized  by the  Seller by all  necessary  corporate
         action.

                  (iv) Valid Sale; Binding Obligation.  This Agreement effects a
         valid sale,  transfer and assignment of the Samco  Receivables  and the
         other Transferred Samco Property conveyed to the Purchaser  pursuant to
         Section 2.1,  enforceable  against creditors of and purchasers from the
         Seller;  and this Agreement shall constitute a legal, valid and binding
         obligation of the Seller enforceable in accordance with its terms.

                  (v) No Violation.  The execution,  delivery and performance by
         the Seller of the Agreements and the  consummation of the  transactions
         contemplated  hereby  and the  fulfillment  of the terms  hereof do not
         conflict with,  result in any breach of any of the terms and provisions
         of, nor constitute  (with or without notice or lapse of time) a default
         under,  the articles of  incorporation,  as amended,  or by-laws of the
         Seller, or any indenture,  agreement, mortgage, deed of trust, or other
         instrument to which the Seller is a party or by which it is bound or to
         which any of its properties are subject;  nor result in the creation or
         imposition of any lien upon any

                                       -7-





         of  its  properties  pursuant  to the  terms  of  any  such  indenture,
         agreement, mortgage, deed of trust, or other instrument (other than the
         Basic  Documents);  nor  violate  any law,  order,  rule or  regulation
         applicable  to the  Seller  of any  court  or of any  Federal  or State
         regulatory   body,   administrative   agency   or  other   governmental
         instrumentality having jurisdiction over the Seller or its properties.

                  (vi)   No   Proceedings.   There   are   no   proceedings   or
         investigations pending, or to the Seller's best knowledge,  threatened,
         before any court,  regulatory  body,  administrative  agency,  or other
         governmental instrumentality having jurisdiction over the Seller or its
         properties:  (A)  asserting  the  invalidity  of the  Agreements or the
         Securities;  (B) seeking to prevent the issuance of the  Securities  or
         the  consummation  of  any  of  the  transactions  contemplated  by the
         Agreements;   (C)  seeking  any  determination  or  ruling  that  might
         materially  and adversely  affect the  performance by the Seller of its
         obligations under, or the validity or enforceability of, the Agreements
         or the  Securities;  or (D)  relating  to the  Seller  and which  might
         adversely  affect the Federal or State  income,  excise,  franchise  or
         similar tax attributes of the Securities.

                  (vii) No  Consents.  No consent,  approval,  authorization  or
         order of or  declaration or filing with any  governmental  authority is
         required for the issuance or sale of the Securities or the consummation
         of the other  transactions  contemplated by the  Agreements,  the Trust
         Agreement,  the Indenture or the Sale and Servicing  Agreement,  except
         such as have been duly made or obtained.

                  (viii)  Financial  Condition.  The Seller  has a positive  net
         worth and is able to and does pay its  liabilities as they mature.  The
         Seller  is not in  default  under  any  obligation  to pay money to any
         Person  except for  matters  being  disputed in good faith which do not
         involve an  obligation of the Seller on a promissory  note.  The Seller
         will not use the proceeds from the  transactions  contemplated  by this
         Agreement to give any preference to any creditor or class of creditors,
         and this  transaction  will not leave the Seller with remaining  assets
         which are unreasonably small compared to its ongoing operations.

                  (ix)  Fraudulent  Conveyance.  The Seller is not  selling  the
         Samco Receivables to the Purchaser with any intent to hinder,  delay or
         defraud any of its creditors; the Seller will not be rendered insolvent
         as a result of the sale of the Samco Receivables to the Purchaser.

         (b) The Seller makes the following representations and warranties as to
the Samco  Receivables and the other Transferred Samco Property relating thereto
on which the Purchaser  relies in accepting the Samco  Receivables and the other
Transferred Samco Property relating thereto. Such representations and warranties
speak with  respect to each Samco  Receivable  as of the Closing  Date and shall
survive the sale,  transfer,  and  assignment of the Samco  Receivables  and the
other Transferred Samco Property relating thereto to the

                                       -8-





Purchaser and the subsequent  assignment  and transfer  pursuant to the Sale and
Servicing Agreement:

                  (i) Location of Receivable  Files;  One  Original.  A complete
         Receivable File with respect to each Samco Receivable has been or prior
         to the Closing  Date will be  delivered  to the Trustee at the location
         listed in Schedule B to the Sale and Servicing Agreement. There is only
         one original executed copy of each Samco Receivable.

                  (ii)  Schedule  of  Receivables;   Selection  Procedures.  The
         information  with  respect  to the Samco  Receivables  set forth in the
         Schedule  of Samco  Receivables  is true and  correct  in all  material
         respects as of the close of business on the related Cutoff Date, and no
         selection  procedures adverse to the Securityholders have been utilized
         in selecting the Samco Receivables.

                  (iii) Security Interest in Financed Vehicle. Immediately prior
         to the sale,  assignment,  and transfer thereof,  each Samco Receivable
         shall be secured by a validly  perfected first security interest in the
         related  Financed  Vehicle in favor of the Seller as secured party, and
         such  security  interest is prior to all other liens upon and  security
         interests in such  Financed  Vehicle  which now exist or may  hereafter
         arise or be  created  (except,  as to  priority,  for any tax  liens or
         mechanics' liens which may arise after each Closing Date).

                  (iv) Samco  Receivables in Force. No Samco Receivable has been
         satisfied, subordinated or rescinded, nor has any Financed Vehicle been
         released from the lien granted by the related Samco Receivable in whole
         or in part.

                  (v) No Waiver.  No  provision of a Samco  Receivable  has been
         waived.

                  (vi) No  Amendments.  No Samco  Receivable  has been  amended,
         except  as such  Samco  Receivable  may  have  been  amended  to  grant
         extensions which shall not have numbered more than (a) one extension of
         one calendar month in any calendar year or (b) three such extensions in
         the aggregate.

                  (vii)   No   Default;   Repossession.   Except   for   payment
         delinquencies  continuing  for a period of not more than thirty days as
         of the Cutoff Date, no default,  breach,  violation or event permitting
         acceleration under the terms of any Samco Receivable has occurred;  and
         no  continuing  condition  that with  notice or the lapse of time would
         constitute  a  default,   breach,   violation,   or  event   permitting
         acceleration  under the terms of any Samco  Receivable has arisen;  and
         the Seller shall not waive and has not waived any of the foregoing; and
         no  Financed  Vehicle  securing  a Samco  Receivable  shall  have  been
         repossessed as of the Cutoff Date.


                                       -9-





                  (viii)  Title.  It is the  intention  of the  Seller  that the
         transfer and assignment  herein  contemplated  constitute a sale of the
         Samco  Receivables  from  the  Seller  to the  Purchaser  and  that the
         beneficial  interest in and title to such Samco Receivables not be part
         of the  debtor's  estate  in the event of the  filing  of a  bankruptcy
         petition by or against the Seller  under any  bankruptcy  law. No Samco
         Receivable  has been  sold,  transferred,  assigned,  or pledged by the
         Seller to any Person  other than the  Purchaser  or any such pledge has
         been  released on or prior to the  related  Closing  Date.  Immediately
         prior to any transfer and assignment  herein  contemplated,  the Seller
         had good and  marketable  title to each Samco  Receivable,  and was the
         sole owner thereof, free and clear of all liens, claims,  encumbrances,
         security  interests,  and rights of others  and,  immediately  upon the
         transfer thereof, the Purchaser shall have good and marketable title to
         each such Samco  Receivable,  and will be the sole owner thereof,  free
         and clear of all liens, encumbrances, security interests, and rights of
         others, and the transfer has been perfected under the UCC.

                  (ix)  Lawful   Assignment.   No  Samco   Receivable  has  been
         originated  in, or is subject to the laws of,  any  jurisdiction  under
         which the sale, transfer, and assignment of such Samco Receivable under
         the Agreements shall be unlawful, void, or voidable. The Seller has not
         entered  into any  agreement  with any account  debtor that  prohibits,
         restricts  or  conditions  the  assignment  of any portion of the Samco
         Receivables.

                  (x)  All  Filings  Made.  All  filings   (including,   without
         limitation,  UCC  filings)  necessary in any  jurisdiction  to give the
         Purchaser a first priority  perfected  ownership  interest in the Samco
         Receivables  and the other  Transferred  Samco Property have been made,
         taken or performed.

                  (xi)  Casualty.   No  Financed  Vehicle  related  to  a  Samco
         Receivable has suffered a Casualty.

                  (xii)  Obligation to Dealers or Others.  The Purchaser and its
         assignees will assume no obligation to Dealers or other  originators or
         holders of the Samco Receivables  (including,  but not limited to under
         dealer reserves) as a result of the purchase of the Samco Receivables.

                  (xiii)  Full  Amount  Advanced.  The full amount of each Samco
         Receivable  has  been  advanced  to  each  Obligor,  and  there  are no
         requirements for future advances thereunder. No Obligor with respect to
         a Samco  Receivable has any option under the Samco Receivable to borrow
         from any  Person  additional  funds  secured  by the  related  Financed
         Vehicle.

         (c) The  representations  and  warranties  contained in this  Agreement
shall not be  construed as a warranty or guaranty by the Seller as to the future
payments  by any  Obligor.  The sale of the Samco  Receivables  pursuant to this
Agreement shall be "without recourse" to

                                      -10-





the Seller except for the representations,  warranties and covenants made by the
Seller in this Purchase Agreement.


                                   ARTICLE IV

                                   CONDITIONS

         4.1.  Conditions  to  Obligation of the  Purchaser.  On the  applicable
Closing Date, the obligation of the Purchaser to purchase the Samco  Receivables
is subject to the satisfaction of the following conditions:

         (a)  Representations  and  Warranties  True.  The  representations  and
warranties  of the Seller  hereunder  shall be true and  correct on the  related
Closing  Date with the same  effect as if then made,  and the Seller  shall have
performed  all  obligations  to be performed by it hereunder on or prior to such
Closing Date.

         (b) Computer Files Marked. The Seller shall, at its own expense,  on or
prior to the  Closing  Date,  indicate  in its  computer  files  that the  Samco
Receivables have been sold to the Purchaser pursuant to the Agreements and shall
deliver to the  Purchaser  the  Schedule of Samco  Receivables  certified by the
Chairman, the President, the Vice President or the Treasurer of the Seller to be
true, correct and complete.

         (c) Receivable Files  Delivered.  The Seller shall, at its own expense,
deliver the related  Receivable Files to the Trustee at the offices specified in
Schedule  B to the  Sale and  Servicing  Agreement  on or  prior to the  related
Closing Date.

         (d) Documents to be delivered by the Seller on each Closing Date.

                  (i) The  Assignment.  On each  Closing  Date,  the Seller will
         execute and deliver the applicable Assignment.  The Assignment shall be
         substantially in the form of Exhibit A hereto.

                  (ii)  Evidence  of UCC-1  Filing.  On or prior to the  related
         Closing Date,  the Seller shall record and file, at its own expense,  a
         UCC-1  financing  statement in each  jurisdiction  in which required by
         applicable law, executed by the Seller, as seller or debtor, and naming
         the  Purchaser,  as  purchaser  or  secured  party,  naming  the  Samco
         Receivables and the other Transferred Samco Property conveyed hereafter
         as  collateral,  meeting  the  requirements  of the  laws of each  such
         jurisdiction  and in such manner as is  necessary  to perfect the sale,
         transfer,  assignment and  conveyance of such Samco  Receivables to the
         Purchaser.  The Seller  shall  deliver a  file-stamped  copy,  or other
         evidence satisfactory to the Purchaser of such filing, to the Purchaser
         on or prior to such Closing Date.


                                      -11-





                  (iii) Other  Documents.  On or prior to the Closing Date,  the
         Seller  shall  deliver  such  other  documents  as  the  Purchaser  may
         reasonably request.

         (e) Other  Transactions.  The  transactions  contemplated  by the Trust
Agreement,  the Indenture,  the Sale and Servicing  Agreement,  the CPS Purchase
Agreement,  the Underwriting  Agreement and the Certificate  Purchase  Agreement
shall be consummated on the Closing Date.

         4.2.  Conditions  to Obligation  of the Seller.  The  obligation of the
Seller  to sell  the  Samco  Receivables  to the  Purchaser  is  subject  to the
satisfaction of the following conditions on each Closing Date:

         (a)  Representations  and  Warranties  True.  The  representations  and
warranties of the Purchaser  hereunder  shall be true and correct on the Closing
Date with the same effect as if then made,  and the Seller shall have  performed
all obligations to be performed by it hereunder on or prior to the Closing Date.

         (b)  Receivables  Purchase  Price.  The  Purchaser  will deliver to the
Seller the purchase price for the related Samco Receivables (on the Closing Date
as provided in Section 2.1(b)).  The Seller hereby directs the Purchaser to wire
such  purchase  price  pursuant  to wire  instructions  to be  delivered  to the
Purchaser on or prior to the Closing Date.


                                    ARTICLE V

                             COVENANTS OF THE SELLER

         The Seller agrees with the Purchaser as follows:

         5.1.     Protection of Right, Title and Interest.

         (a)  Filings.  The Seller  shall  cause all  financing  statements  and
continuation  statements and any other necessary  documents  covering the right,
title and  interest of the  Purchaser  in and to the Samco  Receivables  and the
other  Transferred  Samco Property to be promptly filed,  and at all times to be
kept recorded,  registered  and filed,  all in such manner and in such places as
may be  required  by law fully to  preserve  and  protect  the right,  title and
interest  of the  Purchaser  hereunder  to the Samco  Receivables  and the other
Transferred  Samco  Property.  The Seller  shall  cause to be  delivered  to the
Purchaser file stamped copies of, or filing receipts for, any document recorded,
registered  or filed as provided  above,  as soon as  available  following  such
recordation,  registration  or filing.  The Purchaser shall cooperate fully with
the Seller in connection  with the  obligations set forth above and will execute
any and all documents  reasonably required to fulfill the intent of this Section
5.1(a).  In the event the Seller  fails to perform  its  obligations  under this
subsection, the Purchaser or the Trustee may do so at the expense of the Seller.

                                      -12-





         (b)  Name and  Other  Changes.  At least 60 days  prior to the date the
Seller makes any change in its name, identity or corporate structure which would
make any financing statement or continuation  statement filed in accordance with
paragraph (a) above seriously misleading within the applicable provisions of the
UCC or any title  statute,  the Seller shall give the  Trustee,  the Insurer (so
long as an Insurer  Default shall not have occurred and be  continuing)  and the
Purchaser  written  notice of any such  change and no later than five days after
the effective date thereof,  shall file appropriate amendments to all previously
filed financing statements or continuation statements. At least 60 days prior to
the date of any relocation of its principal  executive office,  the Seller shall
give the  Trustee,  the  Insurer (so long as an Insurer  Default  shall not have
occurred and be  continuing)  and the Purchaser  written notice thereof if, as a
result of such  relocation,  the applicable  provisions of the UCC would require
the filing of any amendment of any previously  filed  financing or  continuation
statement  or of any new  financing  statement  and the Seller shall within five
days after the effective date thereof,  file any such amendment or new financing
statement.  The Seller  shall at all times  maintain  each  office from which it
shall service Receivables, and its principal executive office, within the United
States of America.

         (c)  Maintenance  of Computer  Systems.  The Seller shall  maintain its
computer  systems so that,  from and after the time of sale to the  Purchaser of
the Samco Receivables hereunder, the Seller's master computer records (including
any back-up  archives) that refer to a Samco  Receivable  shall indicate clearly
the  interest  of the  Purchaser  in such Samco  Receivable  and that such Samco
Receivable is owned by the Purchaser. Indication of the Purchaser's ownership of
a Samco  Receivable  shall be deleted from or modified on the Seller's  computer
systems when, and only when, the Samco  Receivable  shall have been paid in full
or repurchased.

         (d) Sale of Other Receivables.  If at any time the Seller shall propose
to sell, grant a security interest in, or otherwise transfer any interest in any
automobile or light-duty truck receivables (other than the Samco Receivables) to
any prospective purchaser, lender, or other transferee, the Seller shall give to
such prospective purchaser, lender, or other transferee computer tapes, records,
or print-outs (including any restored from back-up archives) that, if they shall
refer in any manner whatsoever to any Samco  Receivable,  shall indicate clearly
that such Samco  Receivable  has been sold and is owned by the Purchaser  unless
such Samco Receivable has been paid in full or repurchased.

         (e) Access to Records.  The Seller shall permit the  Purchaser  and its
agents at any time during  normal  business  hours to inspect,  audit,  and make
copies  of  and  abstracts  from  the  Seller's  records   regarding  any  Samco
Receivable.

         (f) List of Receivables.  Upon request, the Seller shall furnish to the
Purchaser,  within  five  Business  Days,  a list of all Samco  Receivables  (by
contract number and name of Obligor) then owned by the Purchaser,  together with
a reconciliation of such list to the Schedule of Samco Receivables.


                                      -13-





         5.2. Other Liens or Interests. Except for the conveyances hereunder and
pursuant to the Sale and Servicing Agreement,  the Seller will not sell, pledge,
assign or transfer  to any other  Person,  or grant,  create,  incur,  assume or
suffer to exist any lien on any  interest  therein,  and the Seller shall defend
the right,  title,  and  interest  of the  Purchaser  in, to and under the Samco
Receivables  against all claims of third parties  claiming  through or under the
Seller.

         5.3. Chief Executive Office.  During the term of the Samco Receivables,
the Seller will maintain its chief executive office in one of the United States,
except Louisiana or Vermont.

         5.4. Costs and Expenses.  The Seller agrees to pay all reasonable costs
and  disbursements  in  connection  with the  perfection,  as against  all third
parties,  of the  Purchaser's  right,  title  and  interest  in and to the Samco
Receivables.

         5.5. Delivery of Receivable Files. On or prior to the Closing Date, the
Seller shall cause to be  delivered to the Trustee at the location  specified in
Schedule B to the Sale and Servicing Agreement the Receivables Files relating to
the Samco  Receivables.  The Seller  shall have until the last day of the second
Collection  Period  following  receipt  of  notification  that  there has been a
failure to deliver a file with respect to a Samco  Receivable  or that a file is
unrelated to the Receivables  identified in Schedule A to the Sale and Servicing
Agreement  or that any of the  documents  referred to in Section 3.3 of the Sale
and Servicing  Agreement are not contained in a Receivable File, to deliver such
file or any of the  aforementioned  documents  required  to be  included in such
Receivable  File  to the  Trustee.  Unless  such  defect  with  respect  to such
Receivable  File shall have been cured by the last day of the second  Collection
Period following  discovery  thereof by the Trustee and notice thereof to Samco,
the Seller hereby agrees to repurchase any such  Receivable from the Trust as of
such last day. In  consideration  of the purchase of the Receivable,  the Seller
shall remit the  Purchase  Amount in the manner  specified in Section 4.5 of the
Sale and  Servicing  Agreement.  The sole remedy  hereunder of the Trustee,  the
Trust or the Securityholders with respect to a breach of this Section 5.5, shall
be to require the Seller to repurchase the  Receivable  pursuant to this Section
5.5.  Upon  receipt of the Purchase  Amount,  the Trustee  shall  release to the
Seller or its designee the related Receivable File and shall execute and deliver
all instruments of transfer or assignment,  without recourse, as are prepared by
the Seller and  delivered to the Trustee and are necessary to vest in the Seller
or such designee title to the Receivable.

         5.6. Indemnification.  (a) The Seller shall indemnify the Purchaser for
any liability as a result of the failure of a Samco  Receivable to be originated
in  compliance  with all  requirements  of law and for any  breach of any of its
representations and warranties contained herein.

         (b) The Seller shall defend, indemnify, and hold harmless the Purchaser
from and against  any and all costs,  expenses,  losses,  damages,  claims,  and
liabilities, arising

                                      -14-





out of or resulting from the use,  ownership,  or operation by the Seller or any
Affiliate thereof of a Financed Vehicle related to a Samco Receivable.

         (c) The Seller shall defend, indemnify, and hold harmless the Purchaser
from and  against  any and all taxes,  except for taxes on the net income of the
Purchaser,  that may at any time be asserted  against the Purchaser with respect
to the transactions  contemplated  herein,  including,  without limitation,  any
sales,  gross  receipts,   general  corporation,   tangible  personal  property,
privilege,  or license  taxes and costs and  expenses in  defending  against the
same.

         (d) The Seller shall defend, indemnify, and hold harmless the Purchaser
from and  against  any and all  costs,  expenses,  losses,  damages,  claims and
liabilities  to the  extent  that such cost,  expense,  loss,  damage,  claim or
liability  arose  out  of,  or was  imposed  upon  the  Purchaser  through,  the
negligence,  willful misfeasance,  or bad faith of the Seller in the performance
of its duties under the  Agreements,  or by reason of reckless  disregard of the
Seller's obligations and duties under the Agreements.

         Indemnification  under this Section 5.6 shall include  reasonable  fees
and  expenses  of  litigation  and  shall  survive  payment  of  the  Notes  and
Certificates. These indemnity obligations shall be in addition to any obligation
that the Seller may otherwise have.

         5.7. Sale. The Seller agrees to treat this  conveyance for all purposes
(including without limitation tax and financial  accounting  purposes) as a sale
on all relevant  books,  records,  tax returns,  financial  statements and other
applicable documents.

         5.8.  Non-Petition.  In the event of any breach of a representation and
warranty made by the Purchaser  hereunder,  the Seller covenants and agrees that
it will not take any action to pursue any remedy that it may have hereunder,  in
law, in equity or  otherwise,  until a year and a day have passed since the date
on which all  certificates  issued by the Trust or a similar trust formed by the
Purchaser  have been paid in full.  The  Purchaser  and the  Seller  agree  that
damages  will not be an adequate  remedy for such breach and that this  covenant
may be specifically enforced by the Purchaser or by the Trust.


                                   ARTICLE VI

                            MISCELLANEOUS PROVISIONS

         6.1.  Obligations  of Seller.  The  obligations of the Seller under the
Agreements  shall not be affected  by reason of any  invalidity,  illegality  or
irregularity of any Samco Receivable.

         6.2. Repurchase Events. The Seller hereby covenants and agrees with the
Purchaser  for the benefit of the  Purchaser,  the Trustee,  the Insurer and the
Securityholders,

                                      -15-





that (i) the occurrence of a breach of any of the Seller's  representations  and
warranties contained in Section 3.2(b) hereof (without regard to any limitations
regarding the Seller's  knowledge)  and (ii) the failure of the Seller to timely
comply with its  obligations  pursuant to Section 5.5 hereof,  shall  constitute
events  obligating  the Seller to  repurchase  the  affected  Samco  Receivables
hereunder  ("Repurchase  Events"), at the Purchase Amount from the Trust. Unless
the breach of any of the Seller's representations and warranties shall have been
cured by the last day of the second  Collection  Period  following the discovery
thereof by or notice to the Purchaser and the Seller of such breach,  the Seller
shall repurchase any Samco Receivable if such Samco Receivable is materially and
adversely  affected by the breach as of the last day of such  second  Collection
Period (or, at the Seller's option,  the last day of the first Collection Period
following  the  discovery)  and,  in the  event  that the  breach  relates  to a
characteristic  of the Samco  Receivables in the aggregate,  and if the Trust is
materially and adversely  affected by such breach,  unless the breach shall have
been cured by such second  Collection  Period,  the Seller shall  purchase  such
aggregate  Principal  Balance of Samco  Receivables,  such that  following  such
purchase  such  representation  shall be true and  correct  with  respect to the
remainder of the Samco  Receivables  in the  aggregate.  The  provisions of this
Section 6.2 are intended to grant the Trustee a direct right  against the Seller
to demand performance  hereunder,  and in connection therewith the Seller waives
any requirement of prior demand against the Purchaser and waives any defaults it
would have against the Purchaser with respect to such repurchase obligation. Any
such  purchase  shall take place in the manner  specified  in Section 5.6 of the
Sale and Servicing Agreement.  The sole remedy hereunder of the Securityholders,
the Trust,  the Insurer,  the Trustee or the  Purchaser  against the Seller with
respect to any Repurchase  Event shall be to enforce the Seller's  obligation to
repurchase such Samco Receivables pursuant to this Agreement; provided, however,
that the Seller  shall  indemnify  the Trustee,  the Insurer,  the Trust and the
Securityholders  against  all  costs,  expenses,  losses,  damages,  claims  and
liabilities,  including  reasonable  fees and expenses of counsel,  which may be
asserted  against or incurred by any of them,  as a result of third party claims
arising out of the events or facts giving rise to such  breach.  Upon receipt of
the  Purchase  Amount,  the  Purchaser  shall  cause the  Trustee to release the
related  Receivables  File  to  the  Seller  and  to  execute  and  deliver  all
instruments of transfer or  assignment,  without  recourse,  as are necessary to
vest in the Seller title to the Samco Receivable. Notwithstanding the foregoing,
if it is determined that  consummation of the  transactions  contemplated by the
Sale and Servicing Agreement and the other transaction  documents  referenced in
such Agreement,  servicing and operation of the Trust pursuant to such Agreement
and such other documents, or the ownership of a Security by a Holder constitutes
a violation  of the  prohibited  transaction  rules of the  Employee  Retirement
Income Security Act of 1974, as amended ("ERISA"),  or the Internal Revenue Code
of 1986, as amended ("Code") for which no statutory  exception or administrative
exemption applies, such violation shall not be treated as a Repurchase Event.

         6.3. Seller's Assignment of Purchased Receivables.  With respect to all
Samco  Receivables  repurchased by the Seller  pursuant to the  Agreements,  the
Purchaser   shall  assign,   without   recourse   except  as  provided   herein,
representation or warranty, to the Seller

                                      -16-





all the Purchaser's  right, title and interest in and to such Samco Receivables,
and all security and documents relating thereto.

         6.4.  Conveyance  as Sale of  Receivables  Not  Financing.  The parties
hereto intend that the  conveyance  under this  Agreement be a sale of the Samco
Receivables  and the other  Transferred  Samco  Property  from the Seller to the
Purchaser  and not a  financing  secured  by  such  assets;  and the  beneficial
interest in and title to the Samco  Receivables and the other  Transferred Samco
Property shall not be part of the Seller's  estate in the event of the filing of
a bankruptcy  petition by or against the Seller under any bankruptcy law. In the
event that any conveyance hereunder is for any reason not considered a sale, the
parties intend that this Agreement constitute a security agreement under the UCC
(as defined in the UCC as in effect in the State of Texas) and  applicable  law,
and the  Seller  hereby  grants  to the  Purchaser  a first  priority  perfected
security  interest  in,  to and  under  the  Samco  Receivables  and  the  other
Transferred Samco Property being delivered to the Purchaser on the Closing Date,
and other property  conveyed  hereunder and all proceeds of any of the foregoing
for the purpose of securing  payment and  performance  of the Securities and the
repayment of amounts owed to the Purchaser from the Seller.

         6.5. Trust. The Seller  acknowledges that the Purchaser will,  pursuant
to the Sale and  Servicing  Agreement,  sell the  Receivables  to the  Trust and
assign its rights under this Purchase  Agreement and the CPS Purchase  Agreement
to  the  Trustee  for  the  benefit  of  the   Securityholders,   and  that  the
representations and warranties contained in this Agreement and the rights of the
Purchaser  under this Purchase  Agreement,  including under Sections 6.2 and 6.4
hereof are  intended to benefit such Trust and the  Securityholders.  The Seller
also acknowledges that the Trustee on behalf of the  Securityholders as assignee
of the Purchaser's  rights  hereunder may directly  enforce,  without making any
prior  demand  on the  Purchaser,  all the  rights  of the  Purchaser  hereunder
including  the rights  under  Section  6.2 and 6.4  hereof.  The  Seller  hereby
consents to such sale and assignment.

         6.6.  Amendment.  This  Agreement may be amended from time to time by a
written  amendment  duly  executed and delivered by the Seller and the Purchaser
with the consent of the Insurer; provided,  however, that (i) any such amendment
that materially  adversely  affects the rights of the Class A Noteholders  under
the Sale and Servicing  Agreement must be consented to by the holders of Class A
Notes representing more than 50% of the outstanding  principal amount of Class A
Notes,  and (ii) any amendment that materially  adversely  affects the rights of
the Certificateholders  under the Sale and Servicing Agreement must be consented
to by the holders of Certificates  representing more than 50% of the Certificate
Balance.

         6.7.  Waivers.  No  failure  or delay on the part of the  Purchaser  in
exercising any power,  right or remedy under the  Agreements  shall operate as a
waiver  thereof,  nor shall any single or partial  exercise  of any such  power,
right or remedy preclude any other or further  exercise  thereof or the exercise
of any other power, right or remedy.


                                      -17-





         6.8. Notices.  All communications and notices pursuant hereto to either
party shall be in writing or by telegraph or telex and addressed or delivered to
it at its address  (or in case of telex,  at its telex  number at such  address)
shown in the opening  portion of this  Agreement or at such other address as may
be  designated  by it by  notice to the other  party  and,  if mailed or sent by
telegraph  or telex,  shall be deemed  given when  mailed,  communicated  to the
telegraph office or transmitted by telex.

         6.9. Costs and Expenses.  The Seller will pay all expenses  incident to
the performance of its obligations under this Purchase Agreement.

         6.10.  Representations of the Seller and the Purchaser.  The respective
agreements,  representations,  warranties and other statements by the Seller and
the Purchaser set forth in or made  pursuant to this  Purchase  Agreement  shall
remain in full force and effect and will survive each closing hereunder.

         6.11.  Confidential  Information.  The  Purchaser  agrees  that it will
neither use nor disclose to any Person the names and  addresses of the Obligors,
except in connection with the enforcement of the Purchaser's  rights  hereunder,
under  the  Samco  Receivables,  under the Sale and  Servicing  Agreement  or as
required by law.

         6.12.  Headings  and  Cross-References.  The  various  headings in this
Purchase  Agreement are included for  convenience  only and shall not affect the
meaning  or  interpretation  of  any  provision  of  this  Purchase   Agreement.
References  in this  Purchase  Agreement to Section names or numbers are to such
Sections of this Purchase Agreement.

         6.13.  Third Party  Beneficiaries.  The parties hereto hereby expressly
agree that each of the Trustee for the  benefit of the  Securityholders  and the
Insurer  shall  be third  party  beneficiaries  with  respect  to this  Purchase
Agreement, provided, however, that no third party other than the Trustee for the
benefit of the  Securityholders  and the  Insurer  shall be deemed a third party
beneficiary of this Purchase Agreement.

         6.14.  Governing Law. THIS PURCHASE AGREEMENT AND THE ASSIGNMENTS SHALL
BE GOVERNED BY AND CONSTRUED IN  ACCORDANCE  WITH THE INTERNAL LAWS OF THE STATE
OF NEW YORK WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.

         6.15.  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  together  shall  constitute one and the
same instrument.



                    [Rest of page intentionally left blank.]

                                      -18-





         IN WITNESS WHEREOF, the parties hereby have caused this Agreement to be
executed by their respective  officers  thereunto duly authorized as of the date
and year first above written.


                                                     CPS RECEIVABLES CORP.


                                                     By:_______________________
                                                        Name:
                                                        Title:



                                                     SAMCO ACCEPTANCE CORP.


                                                     By:_______________________
                                                        Name:
                                                        Title:




                                      -19-





                                                                      Exhibit A

                                   ASSIGNMENT

         For value received,  in accordance with the Purchase Agreement dated as
of October 1, 1997,  between the undersigned  (the "Seller") and CPS Receivables
Corp. (the "Purchaser") (the "Samco Purchase  Agreement"),  the undersigned does
hereby sell, transfer,  assign and otherwise convey unto the Purchaser,  without
recourse  (subject to the  obligations in the Samco  Purchase  Agreement and the
Sale and Servicing  Agreement),  all right,  title and interest of the Seller in
and to (i) the Samco  Receivables  listed in the  Schedule of Samco  Receivables
and, with respect to Rule of 78's  Receivables,  all monies due or to become due
thereon after the Cutoff Date (including Scheduled Payments due after the Cutoff
Date (including  principal  prepayments relating to such Scheduled Payments) but
received by the Seller on or before the Cutoff Date) and, with respect to Simple
Interest  Receivables,  all monies received thereunder after the Cutoff Date and
all  Liquidation   Proceeds  and  Recoveries   received  with  respect  to  such
Receivables;  (ii) the security  interests in the Financed  Vehicles  granted by
Obligors  pursuant to the Samco Receivables and any other interest of the Seller
in such Financed Vehicles,  including,  without limitation,  the certificates of
title or, with  respect to Financed  Vehicles  in the State of  Michigan,  other
evidence of ownership with respect to Financed Vehicles; (iii) any proceeds from
claims on any  physical  damage,  credit  life and  credit  accident  and health
insurance  policies or certificates  relating to the Financed  Vehicles securing
the Samco Receivables;  (iv) refunds for the costs of extended service contracts
with respect to Financed  Vehicles  securing the Samco  Receivables,  refunds of
unearned  premiums  with  respect to credit life and credit  accident and health
insurance  policies or  certificates  covering  an Obligor or  Financed  Vehicle
securing the Samco  Receivables or his or her obligations with respect to such a
Financed  Vehicle and any recourse to Dealers for any of the foregoing;  (v) the
Receivable File related to each Samco  Receivable;  and (vi) the proceeds of any
and all of the  foregoing.  The foregoing  sale does not  constitute  and is not
intended to result in any  assumption by the Purchaser of any  obligation of the
undersigned to the Obligors, insurers or any other Person in connection with the
Samco Receivables, the Receivable Files, any insurance policies or any agreement
or instrument relating to any of them.

         This  Assignment  is made  pursuant  to and upon  the  representations,
warranties and agreements on the part of the undersigned  contained in the Samco
Purchase Agreement and is to be governed by the Samco Purchase Agreement.

         Capitalized  terms used herein and not otherwise defined shall have the
meanings assigned to them in the Samco Purchase Agreement.

         THIS  ASSIGNMENT  SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE INTERNAL  LAWS OF THE STATE OF NEW YORK  WITHOUT  REGARD TO CONFLICTS OF LAW
PRINCIPLES.

                                       -1-





         IN WITNESS  WHEREOF,  the  undersigned has caused this Assignment to be
duly executed as of ________.




                                                     SAMCO ACCEPTANCE CORP.


                                                     By:_______________________
                                                        Name:
                                                        Title:












                                       -2-




                                    Exhibit B
                          Schedule of Samco Receivables

                               See Following Page