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) December 4, 1998


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



                                   California
                 (State or Other Jurisdiction of Incorporation)


                                    333-63805
                            (Commission File Number)
                                   33-0459135
                      (I.R.S. Employer Identification No.)


 16355 Laguna Canyon, 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
- -------           --------------------


1.1               Underwriting Agreement

4.1               Trust Agreement

4.2               Indenture

10.1              Sale and Servicing Agreement

10.2              Receivables Purchase Agreement

10.3              Receivables Purchase Agreement

10.4              Receivables Purchase Agreement

10.5              Note Policy

10.6              Endorsement No. 1 to Note Policy



                                       -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.


Dated:   December 18, 1998



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



                              By:  /s/ Jeffrey P. Fritz
                                   --------------------------
                                       Jeffrey P. Fritz
                                       Senior Vice President





                                                                  EXECUTION COPY









                        CPS AUTO RECEIVABLES TRUST 1998-4
                $ 32,500,000 5.473% Class A-1 Asset Backed Notes
                $ 77,500,000 5.790% Class A-2 Asset Backed Notes
                $ 81,375,000 5.740% Class A-3 Asset Backed Notes
                $100,000,000 5.690% Class A-4 Asset Backed Notes
                $ 18,625,000 5.890% Class A-5 Asset Backed Notes


                             UNDERWRITING AGREEMENT

                                                              December 2, 1998

Wheat First Securities, Inc. acting through
First Union Capital Markets, a division of
 Wheat First Securities, Inc.
One First Union Center, TW-9
301 South College Street
Charlotte, NC 28288-0610


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 sell to you in your capacity as the Underwriter
(the  "Underwriter"),   $32,500,000  aggregate  principal  amount  of  CPS  Auto
Receivables  Trust 1998-4 5.473% Asset Backed  Notes,  Class A-1 (the "Class A-1
Notes"),  $77,500,000  aggregate  principal amount of 5.790% Asset Backed Notes,
Class A-2 (the  "Class A-2 Notes",  $81,375,000  aggregate  principal  amount of
5.740%  Asset  Backed  Notes,  Class A-3 (the "Class A-3  Notes"),  $100,000,000
aggregate  principal amount of 5.690% Asset Backed Notes,  Class A-4 (the "Class
A-4 Notes") and $18,625,000  aggregate  principal  amount of 5.890% Asset Backed
Notes,  Class A-5 (the "Class A-5 Notes" and, together with the Class A-1 Notes,
Class A-2 Notes,  Class A-3 Notes,  and Class A-4 Notes,  the "Class A Notes" or
"Notes").  The Notes will be issued by CPS Auto  Receivables  Trust  1998-4 (the
"Trust")  pursuant to the Indenture  (the  "Indenture")  dated as of December 1,
1998  among the Trust and  Norwest  Bank  Minnesota,  National  Association,  as
trustee  (the  "Trustee").  The assets of the Trust will  include,  among  other
things,  a pool  of  retail  installment  sale  contracts  and  all  rights  and
obligations  thereunder (the  "Receivables"),  all payments received  thereunder
after October 21, 1998 (the "Cutoff  Date"),  security  interests in the new and
used  automobiles,  light trucks,  vans and minivans  securing the  Receivables,
certain bank accounts and the proceeds  thereof,  the Policy (for the benefit of
the 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 December 1, 1998,
among the Trust,  CPS,  as  servicer  (in such  capacity,  the  "Servicer")  the
Company, as Seller, Loan Servicing  Enterprise ("LSE"), as Backup Servicer,  and
Norwest  Bank  Minnesota,  National  Association,  as  Trustee.  Loan  Servicing
Enterprise will act as the "Backup Servicer" for this  transaction.  The Company
and CPS will also  undertake  to cause the Note  Insurer to issue the Policy for
the benefit of the  Noteholders.  A portion of the Receivables  will be acquired
from Samco Acceptance Corp.  ("Samco") and Linc Acceptance Company LLC ("Linc"),
which are affiliates of the Company.

         The Class A-1 Notes will be issued in an aggregate  principal amount of
$32,500,000 and will bear interest at an annual rate equal to 5.473% (the "Class
A-1  Interest  Rate").  The  Class A-2  Notes  will be  issued  in an  aggregate
principal  amount of $77,500,000  and will bear interest at an annual rate equal
to 5.790% (the "Class A-2 Interest Rate"). The Class A-3 Notes will be issued in
an aggregate principal amount of $81,375,000 and will bear interest at an annual
rate equal to 5.740% (the Class A-3 Interest Rate"). The Class A-4 Notes will be
issued in an aggregate  principal  amount of $100,000,000 and will bear interest
at an annual rate equal to 5.690% (the "Class A-4 Interest Rate"). The Class A-5
Notes will be issued in an aggregate  principal  amount of $18,625,000  and will
bear interest at an annual rate equal to 5.890% (the "Class A-5 Interest Rate").
The  aggregate  principal  amount of the Notes will equal 100 % 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.

         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.

         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, SAMCO AND LINC

         The Company, with respect to the Company, and CPS, with respect to CPS,
Samco,  with  respect to Samco,  and Linc,  with  respect to Linc,  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.  333-63805),
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
Regulations and has become and remains  effective.  CPS has complied,  and is in
compliance,  with the conditions for the use of a Registration Statement on Form
S-3.  There are no  contracts  or  documents  that are  required  to be filed as
exhibits to the Registration Statement pursuant to the 1933 Act or the rules and
regulations  thereunder that have not been so filed. 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
required by the 1933 Act and the 1933 Act Regulations  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, the Registration  Statement did or will, and
when the Final  Prospectus is first filed (if required) in accordance  with Rule
424(b) and on the Closing  Date (as defined  below),  the Final  Prospectus  (as
supplemented  and amended as of the Closing  Date) will,  comply in all material
respects  with  the  applicable  requirements  of the  1933  Act,  the  1933 Act
Regulations,  the Securities  Exchange Act of 1934, as amended (the "1934 Act"),
and the rules and regulations  thereunder (the "1934 Act  Regulations");  on the
Effective  Date,  the  Registration  Statement  did not or will not  contain any
untrue  statement of a material fact or omit to state any material fact required
to be stated  therein or necessary in order to make the  statements  therein not
misleading;  and, on the  Effective  Date,  the Final  Prospectus,  if not filed
pursuant  to Rule  424(b),  did not or will not,  and on the date of any  filing
pursuant  to Rule  424(b) and on the  Closing  Date,  the Final  Prospectus  (as
supplemented  and amended in the case of the Closing Date) will not, include any
untrue  statement of a material fact or omit to state a material fact  necessary
in order to make the statements therein not misleading;  provided, however, that
none of CPS, the Company,  Samco or Linc makes any 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 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 Note Insurer set forth
under  the  heading  "THE  INSURER"  in or  incorporated  by  reference  in  the
Preliminary  Final  Prospectus and the Final  Prospectus,  or the  Computational
Materials (as defined in Section  3(b)(ii)  hereof)  except as it relates to the
failure of Company Provided  Information (as defined in Section 9(a)(ii) hereof)
to be accurate in all material respects.

         (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 on and  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 (the  "Prospectus  Supplement"),
         together with the Base Prospectus 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.

                  "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, together with any supplement thereto, distributed from time
         to time.

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

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

                  "Rule 415", "Rule 424", "Rule 430A" and "Regulation S-K" refer
         to such rules or regulations 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.
         333-63805).

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

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

         (e) 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 effect on it.

         (f) Linc is a limited liability  company duly formed,  validly existing
and in good  standing  under  the  laws of  Delaware  and is duly  qualified  to
transact  business  as a  foreign  entity  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 effect on it.

         (g) Since the respective dates as of which  information is given in the
Registration Statement and the Final Prospectus, there has not been any material
adverse change,  or any development which could reasonably be expected to result
in  a  material  adverse  change,  in  or  affecting  the  financial   position,
shareholders'  equity,  business or properties,  or results of operations of the
Company, CPS, Samco or Linc or the Company's or CPS's, Samco's or Linc'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,
as of such respective date.

         (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 and applicable  State  securities or Blue Sky
laws 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 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) The  Commission  has not
issued an order  preventing or suspending the use of any Prospectus  relating to
the proposed offering of the Notes, nor instituted  proceedings for that purpose
(and no  proceedings  for such purpose  are, to the  knowledge of the Company or
CPS, contemplated). No injunction, restraining order or order of any nature by a
federal or state court of competent  jurisdiction  has, to the  knowledge of the
Company or CPS, been issued which would  prevent the issuance of the Notes.  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.

         (j) 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 and the Final Prospectus
or from which  information  is so  incorporated  by  reference,  as of the dates
thereof  and 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.

         (k) Each of the Company,  CPS,  Linc 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, Linc 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  (the  "Department"),  whichever  date is later,  or if the
information  included in the Final  Prospectus,  if any,  concerning  either the
Company's,  CPS's,  Linc'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,
Linc 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.

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

         (m) Each of the  Company,  CPS,  Linc 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 Linc Purchase Agreement, the Insurance Agreement,
the  Indemnification  Agreement,  the  Spread  Account  Agreement,  the  Lockbox
Agreement,  the  Backup  Servicing  Agreement  and the  Servicing  and  Lock-Box
Processing Assumption Agreement  (collectively,  the "Basic Documents"),  and to
consummate the transactions contemplated hereby and thereby.

         (n) The Notes will conform in all material  respects to the description
thereof contained in the Registration Statement and the Final Prospectus.  On or
before  the  Closing  Date,  the  direction  by the  Company  to the  Trustee to
authenticate the Notes will have been duly authorized by the Company,  the Notes
will  have  been  duly   executed  and   delivered  by  the  Company  and,  when
authenticated  by the Trustee in accordance with the Indenture 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.

         (o) This Agreement and each Basic  Document to which the Company,  CPS,
Samco or Linc is a party has been duly  authorized,  executed  and  delivered by
each of the Company, CPS, Linc and Samco, as applicable, and constitutes a valid
and  binding  agreement  of  each  of the  Company,  CPS,  Linc  and  Samco,  as
applicable,  enforceable against the Company,  CPS, Linc 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.

         (p) None of the Company,  CPS,  Samco or Linc is in breach or violation
of its  Articles of  Incorporation,  Charter or  Certificate  of  Formation,  as
applicable, or By-Laws or Limited Liability Company Agreement, as applicable, or
in default in the performance or observance of any credit or security  agreement
or other  agreement or  instrument  to which it is a party or by which it or its
properties  may be  bound,  or in  violation  of any  applicable  law,  statute,
regulation, order or ordinance of any governmental body having jurisdiction over
it,  which  breach or  violation  would  have a material  adverse  effect on the
ability of the Company or CPS or Samco or Linc to perform its obligations  under
any of the Basic Documents or the Notes.

         (q) The  issuance and delivery of the Notes,  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 and applicable  State  securities or Blue Sky
laws 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,   Charter  or  Certificate  of  Formation,  as
applicable,  or By-Laws or Limited  Liability  Company Agreement of the Company,
CPS, Samco or Linc, any statute,  order or regulation applicable to the Company,
CPS,  Samco or Linc of any  court,  regulatory  body,  administrative  agency or
governmental body having  jurisdiction over the Company,  CPS, Samco or Linc 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,  CPS,  Samco or Linc (other than in favor of the  Trustee,  the
Owner  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,
CPS, Samco or Linc is a party or by which the Company, CPS, Samco or Linc may be
bound or to which any of the  property or assets of the Company,  CPS,  Samco or
Linc 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,  CPS,  Samco  or Linc  or  materially  adverse  to the
transactions contemplated by this Agreement or the Basic Documents.

         (r) 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
Notes have been or will have been paid at or prior to the Closing Date.

         (s) The CPS  Receivables  are  chattel  paper as defined in the Uniform
Commercial  Code as in effect in the State of California,  which is the State in
which the chief executive  office of CPS is located.  The Samco  Receivables are
chattel  paper as defined  in the  Uniform  Commercial  Code as in effect in the
State of Texas,  which is the State in which the chief executive office of Samco
is located.  The Linc  Receivables  are chattel  paper as defined in the Uniform
Commercial Code as in effect in the State of Connecticut,  which is the State in
which the chief executive office of Linc is located.

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

         (u)  Pursuant  to  the  CPS  Purchase  Agreement,  the  Samco  Purchase
Agreement and the Linc Purchase Agreement,  CPS, Samco and Linc 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 forecoming  (collectively,  the
"Trust  Property").  Immediately prior to the transfer of any CPS Receivables to
the Company, CPS will be the sole owner of all right, title and interest in, and
will have good and marketable title to, the CPS Receivables.  Immediately  prior
to the transfer of any Samco Receivables to the Company,  Samco will be the sole
owner of all right,  title and  interest  in, and will have good and  marketable
title to, the Samco  Receivables.  Immediately prior to the transfer of any Linc
Receivables to the Company,  Linc will be the sole owner of all right, title and
interest in, and has good and  marketable  title to, the Linc  Receivables.  The
assignment  of the  Receivables,  including  all  the  other  Conveyed  Property
including  the  proceeds  thereof,  to the  Company  pursuant  to  the  Purchase
Agreements,  vests in the  Company  all  interests  which  are  purported  to be
conveyed  thereby,   free  and  clear  of  any  liens,   security  interests  or
encumbrances.

         (v) 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

         (w) 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")  (i)
evidencing  the transfer of the CPS  Receivables  to the Company shall have been
filed in the Office of the  Secretary of State of the State of  California  (the
"CPS  Financing   Statement"),   (ii)  evidencing  the  transfer  of  the  Samco
Receivables  to the Company shall have been filed in the Office of the Secretary
of  State of the  State  of  Texas  (the  "Samco  Financing  Statement"),  (iii)
evidencing  the transfer of the Linc  Receivables to the Company shall have been
filed in the Office of the Secretary of State of the State of  Connecticut  (the
"Linc Financing Statement"),  (iv) evidencing the transfer of the Receivables by
the Company to the Trust shall have been filed in the Office of the Secretary of
State of the State of California (the "Company  Financing  Statement"),  and (v)
evidencing the pledge of the  Receivables by the Trust to the Trustee shall have
been filed in the Office of the Secretary of State of the State of Delaware (the
"Trust  Financing  Statement")  and  there  shall  be no  unreleased  statements
affecting  the  Receivables  filed in any such office  other than the  Financing
Statements.

         (x) If a court  concludes that (i) the transfer of the CPS  Receivables
from CPS to the Company is a sale,  then the  interest of the Company in the CPS
Receivables  and the  proceeds  thereof,  will be perfected by virtue of the CPS
Financing Statement having been filed in the office of the Secretary of State of
the State of California  and  possession of the chattel  paper  evidencing  such
Receivables  by the  Trustee,  (ii) the transfer of the Samco  Receivables  from
Samco to the  Company is a sale,  then the  interest of the Company in the Samco
Receivables and the proceeds  thereof,  will be perfected by virtue of the Samco
Financing Statement having been filed in the office of the Secretary of State of
the  State  of  Texas  and  possession  of the  chattel  paper  evidencing  such
Receivables  by the Trustee or (iii) the transfer of the Linc  Receivables  from
Linc to the  Company is a sale,  then the  interest  of the  Company in the Linc
Receivables  and the proceeds  thereof,  will be perfected by virtue of the Linc
Financing Statement having been filed in the office of the Secretary of State of
the State of  Connecticut  and possession of the chattel paper  evidencing  such
Receivables by the Trustee.

         (y) If a court  concludes that (i) the transfer of the CPS  Receivables
from  CPS to the  Company  is not a sale,  the CPS  Purchase  Agreement  and the
transactions  contemplated thereby constitute a grant by CPS to the Company of a
valid security interest in the CPS Receivables and the proceeds  thereof,  which
security interest will be a first priority perfected security interest by virtue
of the CPS Financing  Statement having been filed in the office of the Secretary
of  State  of the  State of  California  and  possession  of the  chattel  paper
evidencing  such  Receivables  by the  Trustee,  (ii) the  transfer of the Samco
Receivables  from  Samco  to the  Company  is not a  sale,  the  Samco  Purchase
Agreement and the transactions  contemplated thereby constitute a grant by Samco
to the Company of a valid  security  interest in the Samco  Receivables  and the
proceeds  thereof,  which security  interest will be a first priority  perfected
security  interest by virtue of the Samco Financing  Statement having been filed
in the office of the Secretary of State of the State of Texas and  possession of
the  chattel  paper  evidencing  such  Receivables  by the Trustee and (iii) the
transfer of the Linc  Receivables  from Linc to the  Company is not a sale,  the
Linc Purchase Agreement and the transactions  contemplated  thereby constitute a
grant  by  Linc  to the  Company  of a  valid  security  interest  in  the  Linc
Receivables and the proceeds  thereof,  which security  interest will be a first
priority perfected  security interest by virtue of the Linc Financing  Statement
having  been  filed in the  office  of the  Secretary  of State of the  State of
Connecticut and possession of the chattel paper  evidencing such  Receivables by
the Trustee.  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,  Texas  and  Connecticut  referred  to above and the  execution  and
delivery of the Purchase Agreements, is necessary to perfect the interest or the
security  interest of the Company in the  Receivables  and the proceeds  thereof
against third parties.

         (z) If a court concludes that the transfer of the Receivables  from the
Company  to  the  Trust  is a  sale,  then  the  interest  of the  Trust  in the
Receivables,  the other Trust Property and the proceeds thereof, will be a first
priority  perfected  security  interest  by  virtue  of  the  Company  Financing
Statement having been filed in the office of the Secretary of State of the State
of California and possession of the chattel paper evidencing such Receivables by
the Trustee. 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 a
first priority  perfected  security  interest by virtue of the Company Financing
Statement having been filed in the office of the Secretary of State of the State
of California and possession of the chattel paper evidencing such Receivables by
the  Trustee.  No filing or other  action,  other than the filing of the Company
Financing  Statement  in the  office of the  Secretary  of State of the State of
California  referred  to  above,  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.

         (aa) The security interest of the Trustee in the Receivables, the other
Trust  Property and the proceeds  thereof,  will be a first  priority  perfected
security  interest by virtue of the Trust Financing  Statement having been filed
in the office of the Secretary of State of the State of Delaware and  possession
of the chattel paper evidencing such  Receivables by the Trustee.  The Indenture
and the transactions contemplated thereby constitute a grant by the Trust to the
Trustee  of a valid  security  interest  in the  Receivables,  the  other  Trust
Property and the  proceeds  thereof,  which  security  interest  will be a first
priority perfected security interest by virtue of the Trust Financing  Statement
having  been  filed in the  office  of the  Secretary  of State of the  State of
Delaware and possession of the chattel paper  evidencing such Receivables by the
Trustee No filing or other action,  other than the filing of the Trust Financing
Statement  in the  office of the  Secretary  of State of the  State of  Delaware
referred to above, the execution and delivery of the Indenture and possession of
the chattel paper  evidencing such  Receivables by the Trustee,  is necessary to
perfect the security interest of the Trustee in the Receivables and the proceeds
thereof against third parties.

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

         (cc) The Indenture has been duly  qualified  under the Trust  Indenture
Act of 1939, as amended.

         (dd) Except as disclosed in the Final Prospectus, there are no actions,
suits,  proceedings or  investigations  pending,  to the actual knowledge of the
Company,  CPS, Samco or Linc, or threatened  against the Company,  CPS, Samco or
Linc before any court, administrative agency or other tribunal (A) asserting the
invalidity  of the Basic  Documents  or the Notes,  (B)  seeking to prevent  the
issuance  of  the  Notes  or  the   consummation  of  any  of  the  transactions
contemplated by the Basic  Documents,  (C) which would reasonably be expected to
materially and adversely affect CPS, the Company,  Samco, Linc or the Trust, (D)
which would  reasonably be expected to materially and adversely affect the Basic
Documents  or the Notes,  (E) which would  reasonably  be expected to  adversely
affect  the  federal  income  tax  attributes  of  the  Notes  described  in the
Prospectus, or (F) which would reasonably be expected to have a material adverse
effect  upon  the  transactions  contemplated  herein  and  in the  other  Basic
Documents.

         (ee) Each of the Company, CPS, Samco and Linc has all licenses, permits
and consents  necessary to conduct its  business as presently  conducted  and to
perform its obligations under this Agreement and the Basic Documents and none of
CPS, Samco, Linc or the Company has received notice of any pending or threatened
revocation thereof (except,  in any case, to the extent that the failure to have
same is not reasonably  likely to have a material  adverse effect on the ability
of such party to so conduct its  business or to perform  its  obligations  under
this Agreement and the Basic Documents).

         (ff) As of the Closing  Date and each date of  purchase of  Receivables
thereafter,  neither  CPS or the  Company,  as the case may be,  nor any  Person
acting on CPS or the  Company's,  as the case may be,  behalf will have offered,
transferred,  pledged, sold or otherwise disposed of any of its right, title and
interest in the  Receivables,  the Basic Documents other than as contemplated by
this Agreement,  and the Basic Documents; and upon the execution and delivery of
the Basic  Documents  and the  execution  and delivery of the Notes,  CPS or the
Company,  as the case may be, will have taken all necessary steps to convey good
and  marketable  title to the  Notes to the  Underwriter,  in each case free and
clear of any Liens.

         (gg) Except as  disclosed  in the Final  Prospectus,  each of CPS,  the
Company,  Samco,  and  Linc,  as the case may be,  is  unaware  of any  facts or
circumstances,  other than facts or  circumstances  affecting (i) originators of
sub-prime  automobile  retail  installment  sale  contracts,   (ii)  issuers  of
asset-backed  securities secured by sub-prime automobile retail installment sale
contracts,  or (iii) issuers of  securities,  generally,  that would  materially
adversely affect CPS', the Company's,  Samco's,  and Linc's, as the case may be,
ability to perform its obligations  under the Basic Documents or its obligations
with respect to the Receivables.

         (hh) Except as disclosed in the Final  Prospectus or in the most recent
report  filed on Form 10Q (the  "Form  10Q"),  there  has not been any  material
adverse change in the business, operations,  financial condition,  properties or
assets of CPS,  the  Company,  Samco and Linc  since  September  30,  1998.  The
financial  statements  included therein  (together with notes and schedules,  if
any, thereto) fairly present the financial condition of CPS, the Company,  Samco
and Linc, as of the dates indicated,  for the periods  specified,  in conformity
with generally  accepted  accounting  principles  applied on a consistent  basis
during such periods,  except as indicated therein.  Since the date of the latest
audited  financial  statements  (together with the notes and schedules,  if any,
thereto) previously delivered to the Underwriter, any of CPS, the Company, Samco
and Linc have not sustained any material loss or interference  with its business
from court or governmental action, order or decree, or otherwise, and, there has
not been any  material  reduction  in the income or  capital  of the  respective
entities (as such terms are used in the audited financial statements of CPS, the
Company, Samco and Linc) or a material adverse change in the financial condition
of CPS,  the  Company,  Samco and Linc or any material  adverse  change,  or any
development  involving a prospective material adverse change in or affecting the
general affairs, management, financial position or results of operations of CPS,
the Company,  Samco and Linc,  which would adversely  affect the ability of CPS,
the Company,  Samco and Linc to perform their obligations hereunder or under the
other  Basic  Documents,  except  as  otherwise  set  forth or  incorporated  by
reference in the Registration Statement (including, without limitation, the 10Q)
or as set forth in the Final Prospectus, as of the date of the Final Prospectus.

2.       PURCHASE, SALE AND DELIVERY OF THE NOTES.

         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  set forth in  Schedule  I
hereto, at the purchase price specified in Schedule I with respect to each Class
of Notes.

         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.  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 10:00 a.m. (New York time) on December 4,
1998,  or at such  other time as is  mutually  agreed  (such  time being  herein
referred  to as  the  "Closing  Date")  against  delivery  of the  Global  Notes
representing  all of the Notes.  The Notes 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 Effective Date of the  Registration  Statement.  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  Underwriter  may prepare and provide to prospective  investors
certain  Computational  Materials,  ABS Term Sheets or Collateral Term Sheets in
connection with its offering of the Notes, subject to the following conditions:

(i)               The  Underwriter  shall  comply with the  requirements  of the
                  No-Action  Letter of May 20, 1994 issued by the  Commission to
                  Kidder,   Peabody   Acceptance   Corporation   I  and  certain
                  affiliates,   as  made   applicable   to  other   issuers  and
                  underwriters  by the  Commission in response to the request of
                  the  Public   Securities   Association   dated  May  24,  1994
                  (collectively,  the "Kidder/PSA Letter"), and the requirements
                  of the  No-Action  Letter of  February  17, 1995 issued by the
                  Commission  to the  Public  Securities  Association  (the "PSA
                  Letter"  and,  together  with  the  Kidder/PSA   Letter,   the
                  "No-Action Letters").

(ii)              For purposes hereof,  "Computational Materials" shall have the
                  meaning  given such term in the No-Action  Letters,  but shall
                  include  only  those  Computational  Materials  that have been
                  prepared  or  delivered  to   prospective   investors  by  the
                  Underwriter.  For  purposes  hereof,  "ABS  Term  Sheets"  and
                  "Collateral  Term Sheets"  shall have the meanings  given such
                  terms in the PSA Letter but shall  include only those ABS Term
                  Sheets or  Collateral  Term Sheets that have been  prepared or
                  delivered to prospective investors by the Underwriter.

(iii)             The  Underwriter   shall  provide  to  CPS  any  Computational
                  Materials, ABS Term Sheets or Collateral Term Sheets which are
                  provided to  investors  no later than the second  Business Day
                  preceding  the date  such  Computational  Materials,  ABS Term
                  Sheets or  Collateral  Term  Sheets are  required  to be filed
                  pursuant to the applicable  No-Action Letters. The Underwriter
                  may  provide  copies of the  foregoing  in a  consolidated  or
                  aggregated  form  including  all  information  required  to be
                  filed.

(iv)              In  the  event  that  CPS,  the  Company  or  the  Underwriter
                  discovers an error in the  Computational  Materials,  ABS Term
                  Sheets or Collateral Term Sheets, which, in the opinion of any
                  of CPS,  the  Company or the  Underwriter,  is  material,  the
                  Underwriter shall prepare corrected  Computational  Materials,
                  ABS Term Sheets or Collateral  Term Sheets and deliver them to
                  CPS for filing pursuant to Section 4(n).

4.       COVENANTS OF THE COMPANY AND CPS.

         The Company and CPS, covenant and agree with the Underwriter that:

         (a) CPS has caused the  Registration  Statement to become effective and
as soon as reasonably practicable thereafter, shall 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
neither  CPS nor  the  Company  will  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 or
any  State  securities   commission  or  authority  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,  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  Notes  by the  Underwriter  if  such  document  would  be  deemed  to be
incorporated by reference into the Registration  Statement or Final  Prospectus.
The  Company  will use its  reasonable  efforts  to cause any  amendment  to the
Registration Statement to become effective as promptly as possible.

         (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 the Underwriter at or before the Closing Date, or as
requested,  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.  During the period when
a prospectus is required by law to be delivered in  connection  with the sale of
the Notes pursuant to the  Underwriting  Agreement,  the Company will file, on a
timely and complete  basis,  all documents  that are required to be filed by the
Company  with the  Commission  pursuant to Sections 13, 14, or 15(d) of the 1934
Act.  If  during  the  period in which a  prospectus  is  required  by law to be
delivered by the  Underwriter or 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 opinion of the Underwriter,  it becomes  necessary to amend or
supplement the Final  Prospectus so that the Final Prospectus as then amended or
supplemented  would not include any untrue statement of a material fact, or omit
to state any material  fact  required to be stated  therein or necessary to make
the statements  therein, in the light of the circumstances under which they were
made,  not  misleading,  or if it is necessary  for any other reason to amend or
supplement the Final  Prospectus to comply with the 1933 Act, to promptly notify
the  Underwriter  thereof  and upon its  request  to  prepare  and file with the
Commission,  at the Company's own expense, an amendment or supplement which will
correct such statement or omission and which will effect such compliance.

         (e) The Company will cooperate  with the  Underwriter in endeavoring to
qualify  the  Notes  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 Notes, except that the Company will
not be  obligated  to  qualify  the  Notes 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.
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 request for  distribution of
the Notes.

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

         (g) Until the retirement of the Notes,  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.

         (h) The  Company,  CPS,  Linc 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,  Linc or Samco  possesses  or can acquire  without
unreasonable effort or expense, including any and all documentation requested in
connection with the Underwriter's due diligence efforts regarding information in
the Registration Statement and the Final Prospectus and in order to evidence the
accuracy or completeness  of any of the conditions  contained in this Agreement;
and all actions  taken by the Company or CPS to authorize  the sale of the Notes
shall be satisfactory in form and substance to the Underwriter.

         (i) The Company  will cause the Trust to make  generally  available  to
Class A Noteholders  as soon as  practicable,  but no later than fifteen  months
after the filing of the Final Prospectus,  as amended or supplemented,  pursuant
to Rule 424 under the 1933 Act, an earnings  statement  of the Trust  covering a
period of at least twelve  consecutive  months  beginning  after such filing and
satisfying the  provisions of Section 11(a) of the 1933 Act (including  Rule 158
promulgated thereunder).

         (j) With  respect  to any  period  as to  which  any of the  Notes  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 1934
Act, as amended,  and (ii) such additional  information  concerning the business
and financial  condition of the Company,  CPS, Samco and Linc as the Underwriter
may from time to time reasonably request.

         (k) On or before the Closing  Date,  the Company,  CPS,  Samco and Linc
shall cause the respective computer records of the Company,  CPS, Samco and Linc
relating to the  Receivables to be marked to show the Trust's  ownership of, and
the  Trustee's  security  interest in, the  Receivables,  and from and after the
Closing  Date none of the  Company,  CPS,  Samco or Linc  shall  take any action
inconsistent with the Trust's  ownership of, or the Trustee's  security interest
in,  such  Receivables,  other  than as  expressly  permitted  by the  Sale  and
Servicing Agreement or any other Basic Document.

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

         (m) 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.

         (n) CPS  shall  file or  cause  to be filed  with  the  Commission,  in
accordance with the No-Action  Letters,  any Computational  Materials,  ABS Term
Sheets  and  Collateral   Term  Sheets  provided  that  CPS  has  received  such
Computational  Materials,  ABS Term Sheets and Collateral Term Sheets at least 2
Business Days prior to the time for filing same.

         (o) CPS and the  Company  agree  that,  so long as the  Notes  shall be
outstanding,  it will  deliver to the  Underwriter  upon  request,  all  monthly
servicing reports and any other reports available to the holders of Notes.

         (p) The Company,  CPS, Samco and Linc agree that any person  designated
in writing by the  Underwriter  may consult  with the proper  officials  and the
Company,  CPS, Samco and Linc shall use their reasonable  efforts to arrange the
cooperation of the officials of their affiliates (including, without limitation,
officials in charge of servicing the  Receivables) at such times and as often as
you may reasonably  request  regarding the information  required to be furnished
pursuant to Section 4(o) or regarding the  performance of the Company's,  CPS's,
Samco's  or  Linc's  representations,   warranties,   covenants  and  agreements
contained  in this  Agreement  or the other Basic  Documents  or  regarding  the
information  required  to be  furnished  pursuant  to the  Basic  Documents.  In
addition,  the  Company,  CPS,  Samco  and Linc  agree to  provide  any  further
information and  documentation as may reasonably be requested by the Underwriter
regarding any of the matters set forth herein or in the Basic Documents.

5.       SURVIVAL.

         CPS,  the  Company,  Samco  and Linc  agree  that the  representations,
warranties,  covenants and agreements made by them herein, in any certificate or
other instrument  delivered  pursuant hereto and in the Basic Documents shall be
deemed to be relied upon by you, notwithstanding any investigation heretofore or
hereafter made by or on behalf of you, and that such representations, warranties
and  agreements  made by CPS,  the  Company,  Samco and Linc shall  survive  the
delivery and payment for the Notes.

6.       COSTS AND EXPENSES.

         (a) At  Closing,  in  consideration  of the mutual  promises  contained
herein,  the Company and CPS will pay from the proceeds of this  transaction  to
the  Underwriter a  structuring  and  securitization  fee in the amount of Eight
Hundred Two Thousand  Four Hundred  Twenty-Five  Dollars  ($802,425)  by fedwire
transfer  in  immediately  available  funds  to an  account  designated  by  the
Underwriter.  The foregoing obligation shall be the joint and several obligation
of CPS and the Company.

         (b) The Company, Samco, Linc 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,  Linc 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 Notes 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,  CPS, Linc and Samco;  (ii) the
fees and expenses of Dewey Ballantine LLP as counsel to the  Underwriter,  (iii)
the fees and  expenses  of Mayer,  Brown & Platt and other  counsel to CPS,  the
Company, Samco and Linc, if any; (iv) the cost of printing and delivering to, or
as requested  by, the  Underwriter  copies of the  Registration  Statement,  the
Preliminary Final Prospectuses,  the Final Prospectus, this Agreement, the Basic
Documents, the Computational Materials and the listing application in respect of
the  Class A  Notes,  the  Blue  Sky  Survey,  if any,  and any  supplements  or
amendments thereto; (v) the filing fees of the Commission; (vi) any fees charged
by the Rating Agencies for rating the Notes;  (vii) the fees and expenses of the
Underwriter  (including  legal fees and expenses) in connection  with compliance
with Blue Sky laws;  (viii) the fees and  expenses  of the Trustee and the Owner
Trustee,  the  Collateral  Agent,  the Backup  Servicer  and Lockbox  Processor,
including the fees and  disbursements of counsel for the Trustee and counsel for
the Owner  Trustee,  the  Collateral  Agent,  the Backup  Servicer  and  Lockbox
Processor,  in connection with the Notes,  the Sale and Servicing  Agreement and
the other Basic  Documents to which any of the foregoing,  as  applicable,  is a
party;  and (ix) the  initial  payment  of  Premium  under the  Policy.  If this
Agreement  shall not be  consummated  because the conditions in Section 7 hereof
are not satisfied,  or because this  Agreement is terminated by the  Underwriter
pursuant  to  Section  11(a)  hereof,  or by reason of any  failure,  refusal or
inability  on the  part  of the  Company,  Linc,  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,  except to the extent such failure
to satisfy  said  condition  or to comply with said terms shall be solely due to
the default or omission of the  Underwriter,  then the Company,  Linc, 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 Notes or in contemplation of performing their  obligations  hereunder
upon receipt of a written request therefor; but none of the Company, Samco, Linc
or CPS shall in any event be liable to the Underwriter for damages on account of
loss of  anticipated  profits  from the sale of the Notes.  Except to the extent
expressly set forth in this Section 6, the Underwriter  shall be responsible for
its own costs and expenses.

7.       CONDITIONS TO THE OBLIGATIONS OF THE UNDERWRITER.

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

         (a)  The   Registration   Statement  shall  be  effective.   The  Final
Prospectus,  and any  supplement  thereto,  shall be 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 Notes.

         (b) The Underwriter  shall have received a letter or letters,  dated as
of the  date  of the  Computational  Materials,  and  as of  the  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 or
financial  position of the Company,  CPS,  Linc,  Samco or any  Affiliate of the
Company or CPS which, in the judgment of the Underwriter, materially impairs the
investment  quality of the Notes or the ability of CPS to act as Servicer;  (ii)
any  downgrading in the rating of any debt  securities or preferred stock of the
Company,  CPS,  Samco,  Linc  or  any  Affiliate  of the  Company  or CPS by any
"nationally recognized statistical rating organization" (as defined for purposes
of Rule 436(g) under the Securities  Act), or any public  announcement  that any
such  organization  has  under  surveillance  or review  its  rating of any debt
securities or preferred stock of the Company,  CPS, Samco, Linc 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 or maximum prices for trading on such
exchange,  or any suspension of trading of any  securities of the Company,  CPS,
Samco,  Linc or any  Affiliate  of the Company or CPS, on any exchange or in the
over-the-counter  market; (iv) any banking moratorium  declared by Federal,  New
York or California authorities; or (v) any outbreak or escalation of 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 Notes on the terms and in the manner
set forth in the Final Prospectus.

         (d)  The  Company,  CPS,  Samco  and  Linc  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 Notes 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 (i) the Class A-1 Notes have been rated  "P-1" by Moody's  and
"A-1+" by  Standard & Poor's,  respectively,  and (ii) the Notes  other than the
Class A-1 Notes have been rated "Aaa" by Moody's and "AAA" by Standard & Poor's,
respectively.

         (g) The  Underwriter  shall have  received  from Mayer,  Brown & Platt,
special  counsel  for CPS,  Samco,  Linc (with  respect to New York law) 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 Pullman & Comley,  LLC,
special Connecticut counsel for Linc, opinions dated the Closing Date, addressed
to the Underwriter in a form satisfactory to the Underwriter.

         (i) 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,  with respect to the status of the Trust and the
Notes for federal income tax purposes.

         (j) The Underwriter  shall have received from Dewey  Ballantine LLP, an
opinion dated the Closing Date,  addressed to the  Underwriter,  with respect to
such matters as the Underwriter  shall require and the Company,  Linc, Samco and
CPS shall  have  furnished  or  caused  to be  furnished  to such  counsel  such
documents  as they may  reasonably  request for the purpose of enabling  them to
pass upon such matters.

         (k) The  Underwriter  shall have received from in-house  counsel to the
Trustee,  the Standby  Servicer,  the Backup  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.

         (l) 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.

         (m) 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.

         (n) The  Underwriter  shall have received from in-house  counsel to the
Insurer,  an opinion  addressed to the  Underwriter,  dated the Closing Date, in
form and substance satisfactory to the Underwriter and its counsel.

         (o) 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. 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.

         (p) At the Closing  Date,  the Company,  CPS, Linc 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, Linc or Samco,  as the case, may be, in which each such officer shall state
that: (i) the representations and warranties of the Company, CPS, Linc or Samco,
as  applicable,  in this Agreement are true and correct on and as of the Closing
Date; (ii) the Company, CPS, Linc 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,
Linc 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 and the Company, he or she has carefully examined
the Registration  Statement and the Final Prospectus and, in his or her opinion,
as of the Effective Date of the Registration Statement, the statements contained
in the Registration Statement were true and correct, as of the date of the Final
Prospectus,  the  statements  contained  in the Final  Prospectus  were true and
correct,  and as of the Closing Date the  Registration  Statement  and the Final
Prospectus  do not contain any untrue  statement  of a material  fact or omit to
state a material fact with respect to the Company,  CPS, Linc or Samco 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,
Linc or Samco  which  should  have  been  set  forth  in a  supplement  to or an
amendment  of the  Final  Prospectus  which  has not  been so set  forth in such
supplement or amendment;  and (vi) with respect to the certificate  delivered by
the Company and CPS,  subsequent to the respective dates as of which information
is given in the Registration Statement and the Final Prospectus,  there has been
no material adverse change, or any development with respect to the Company, CPS,
Linc 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, Linc or Samco, except as contemplated by the Final Prospectus
or as described in such certificate.

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

         (r) 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 the State of  California  reflecting
the sale and 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 Company,  (ii) the office of the Secretary of State of the State of Texas
reflecting  the sale  and  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 the State of  Connecticut  reflecting the sale and assignment of the interest
of Linc in the Linc  Receivables  included  in the  Receivables  and the related
other Trust Property and the proceeds thereof to the Company, (iv) the office of
the Secretary of State of California  reflecting  the sale and assignment of the
interest of the Company in the  Receivables and the related other Trust Property
and the  proceeds  thereof to the Trust and (v) 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.

         (s) The Company shall have  furnished to the  Underwriter  either (i) a
certificate  of a  responsible  officer  of FSA  stating,  or (ii)  an  executed
agreement  by FSA by which it  represents  and  warrants,  that the  information
contained in the sections of the  Prospectus  Supplement  entitled "The Policy",
"The  Insurer"  and with  respect  to the  Insurer,  the  financial  information
incorporated  therein by  reference  under the heading  "Where You Can Find More
Information", are true and correct in all material respects.

         (t) The Company shall have furnished to the Underwriter from counsel in
each state in which 10% or more of the Obligors on the Receivables, by aggregate
principal balance,  are located, a favorable opinion as to the lack of necessity
of noting the Trust's  security  interest on the  certificates  of title for the
Financed Vehicles to maintain its first priority security  interest,  subject to
certain exceptions and qualifications.

         (u) 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.

         (v) 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.

         (w) The  Underwriter  shall have  received a  certificate  of the Owner
Trustee  regarding  the  execution  of the  Notes.  The  Underwriter  shall have
received  a   certificate   of  the  Trustee   regarding  the   acceptance   and
authentication of the Notes.

         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  Dewey
Ballantine LLP, counsel for the Underwriter.

         In rendering  the  above-mentioned  opinions,  counsel may rely, to the
extent  deemed  proper  and  as  stated  therein,  as  to  matters  of  fact  on
certificates of responsible officers of CPS, the Company, Samco, Linc, the Trust
and public  officials.  In rendering such opinion,  such counsel may rely to the
extent  deemed  proper  and as stated  therein,  as to  matters  of state law of
jurisdictions  other than the jurisdictions in which such counsel is admitted to
practice,  and opinions of local counsel satisfactory to the special counsel for
the Underwriter. Each opinion shall be addressed to 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 Notes 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) (i) The Company, Samco, Linc 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 Section 15 of the 1933 Act or Section  20(a) of 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 (A) any untrue
statement or alleged  untrue  statement of any  material  fact  contained in the
Registration Statement,  the Base Prospectus,  any Preliminary Final Prospectus,
the Final  Prospectus,  or any  amendment  or  supplement  thereto  (other  than
information  contained  therein under the heading "the Insurer" and  information
incorporated  by reference  under such heading),  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 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 none
of the  Company,  Samco,  Linc,  nor CPS will be  liable in any such case to the
extent that any such loss, claim,  damage or liability arises out of or is based
upon an untrue  statement or alleged  untrue  statement,  or omission or alleged
omission  made  in  the  Registration  Statement,   the  Base  Prospectus,   any
Preliminary  Final  Prospectus,  the  Final  Prospectus,  or  any  amendment  or
supplement  thereto, in reliance upon and in conformity with written information
furnished to the Company or CPS, as the case may be, by, through or on behalf of
the Underwriter  specifically for use therein;  provided,  further, that none of
the Company,  Samco,  Linc 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, ABS Term Sheets or Collateral Term Sheets,
except to the extent expressly provided in (ii) below. This indemnity  agreement
will be in addition to any liability which the Company,  Samco,  Linc or CPS may
otherwise have. The indemnity  agreement of the Company,  Samco, Linc and CPS in
this  Agreement is subject to the condition  that,  insofar as it relates to any
untrue statement, alleged untrue statement, omission or alleged omission made in
the  Registration  Statement,   the  Base  Prospectus,   any  Preliminary  Final
Prospectus or in the Final Prospectus,  or any amendment or supplement  thereto,
such indemnity  agreement  shall not inure to the benefit of the  Underwriter if
the  Underwriter  failed  to send or give a copy  of the  Final  Prospectus,  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,  as  applicable,  as so amended or  supplemented,  was
required under the 1933 Act to be delivered to such person.

         (ii) The Company, Samco, Linc 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 Section 15 of the 1933 Act or Section  20(a) of the 1934 Act,  to the
same extent as the  indemnity  from each of the Company and CPS contained in (i)
above, 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, any ABS
Term Sheet or any Collateral  Term Sheet provided by the  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  (in each
case, to the extent that such untrue  statement or alleged  untrue  statement or
omission or alleged  omission  results from the failure of the Company  Provided
Information  to be accurate in all material  respects)  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 each of the
Company,  Samco, Linc and CPS under this subsection (ii) shall be in addition to
any other  liability  which such party may  otherwise  have.  "Company  Provided
Information"  means the information  contained in the data tape delivered by CPS
to the  Underwriter  dated as of October 22, 1998  containing  information  with
respect to the  Receivables  as of the Cutoff  Date,  as well as any static pool
information set forth in the Computational Materials.

         (iii) CPS, Samco, Linc, the Company and the Underwriter acknowledge and
agree that the only information  furnished or to be furnished by the Underwriter
to the Company,  Samco, Linc or CPS 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 third sentence of the third  paragraph on the front cover page and in the
fourth paragraph on the front cover page of the Final Prospectus  concerning the
terms of the offering by the Underwriter (insofar as such information relates to
the Underwriter),  and the information  under the caption  "Underwriting" in the
Prospectus Supplement (the "Underwriter Information").

         (b) (i) The  Underwriter  will indemnify and hold harmless each of CPS,
Samco, Linc and the Company,  each of their directors,  officers,  employees and
agents and each person,  if any, who controls  CPS,  Samco,  Linc or the Company
within the  meaning  of Section 15 of the 1933 Act or Section  20(a) of the 1934
Act, to the same extent as the  foregoing  indemnity  from each of the  Company,
Samco, Linc and CPS to the Underwriter,  its directors,  officers, employees and
agents and each person who  controls 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,  or any amendment or supplement  thereto,  in
reliance upon the Underwriter  Information.  This indemnity agreement will be in
addition to any liability which the Underwriter may otherwise have.

         (ii) The Underwriter agrees to indemnify and hold harmless the Company,
CPS, Samco, Linc, the respective  officers,  directors,  employees and agents of
any such party,  and each person who controls the  Company,  CPS,  Samco or Linc
within the  meaning  of Section 15 of the 1933 Act or Section  20(a) of the 1934
Act, if any,  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,
any ABS Term Sheet or any Collateral  Term Sheet  distributed by the 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 (except in
each case, to the extent that such untrue  statement or alleged untrue statement
or omission or alleged omission results from the failure of the Company Provided
Information  to be accurate in all material  respects);  and will reimburse each
such 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.

         (iii) The  Underwriter  shall,  no later than the Business Day prior to
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 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 CPS 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)  (i) 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,  CPS,
Samco  and  Linc on the one  hand  and the  Underwriter  on the  other  from the
offering of the Notes. If, however,  the allocation  provided by the immediately
preceding  sentence is not  permitted by applicable  law then each  indemnifying
party shall contribute to such amount paid or payable by such indemnified  party
in such proportion as is appropriate to reflect not only such relative  benefits
but also the relative  fault of the Company,  CPS, Samco or Linc 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,  CPS, Samco and
Linc 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,  CPS,  Samco and Linc bear to the
total  underwriting  discounts and commissions,  received by the Underwriter (in
each case as set forth in the table on the cover page of the Final  Prospectus).
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,  CPS, Samco or Linc 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.

         (ii) The Company,  CPS, Samco,  Linc 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), (A) the  Underwriter  shall not be required to contribute any
amount in excess of the underwriting discounts and commissions applicable to the
Notes  purchased  by the  Underwriter  and (B) 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,  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  indemnity  and
contribution  agreements contained in this Section 9 and the representations and
warranties  of each of the  Company,  CPS,  Samco  and  Linc  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,  CPS,
Samco, Linc or their respective directors,  officers, employees or agents or any
persons  controlling  the  Underwriter,  the Company,  CPS, Samco or Linc,  (ii)
acceptance  of any  Notes  and  payment  thereof  or  hereunder,  and  (iii) any
termination of this Agreement. A successor to the Underwriter, the Company, CPS,
Samco or Linc, their respective directors, officers, employees or agents, or any
person  controlling the  Underwriter,  the Company,  CPS, Samco or Linc shall be
entitled  to the  benefits  of the  indemnity,  contribution  and  reimbursement
agreements contained in this Section 9.

10.      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 or to such other  address as may be  designated  by a
party hereto by prior written notice to all other parties:

                  if to the Underwriter, to the following address:

                  Wheat First Securities, Inc. acting through
                  First Union Capital Markets, a division of
                  Wheat First Securities, Inc.
                  One First Union Center, TW-9
                  301 South College Street
                  Charlotte, NC 28288-0610
                  Attention:  Reggie Imamura and
                              Rodney Sanders
                  Facsimile No.:  (704) 374-3254

                  if to the Company, at the following address:

                  CPS Receivables Corp.
                  2 Ada
                  Irvine, California  92618
                  Attention:     Charles Bradley, Jr.
                  Facsimile No.:  (949) 753-6805

                  if to CPS, at the following address:

                  Consumer Portfolio Services, Inc.
                  2 Ada
                  Irvine, California  92618
                  Attention:     Charles Bradley, Jr.
                  Facsimile No.:  (949) 753-6805

                  if to Samco, at the following address:

                  Samco Acceptance Corp.
                  8150 N.  Central Expressway
                  Suite 600
                  Lock-Box 39
                  Dallas, Texas  75206
                  Attention:  Alex B. Louis
                  Facsimile No.:  (214) 691-2166
                  if to Linc, at the following address:

                  Linc Acceptance Company LLC
                  One Selleck Street
                  Norwalk, Connecticut  06855
                  Attention:  Joe Gilbert
                  Facsimile No.:  (203) 838-7390

11.      TERMINATION.

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

                  (i) at any  time  prior  to the  Closing  Date,  if any of the
         following  has  occurred:  (A) since the  respective  dates as of which
         information  is  given  in the  Registration  Statement  and the  Final
         Prospectus,  any material adverse change or any development involving a
         prospective  material  adverse  change  in  the  business,  properties,
         results of  operations,  financial  condition or business  prospects of
         CPS, Samco, Linc or the Company, whether or not arising in the ordinary
         course of business,  (B) 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 in the financial markets of the
         United States would, in the Underwriter's  reasonable judgment, make it
         impracticable to market the Notes or to enforce  contracts for the sale
         of the Notes, (C) any suspension of trading in securities  generally on
         the New York Stock  Exchange or the American  Stock Exchange or minimum
         or maximum  prices for trading have been fixed,  or maximum  ranges for
         prices for securities  have been required,  by either of said exchanges
         or by order of the  Securities  and  Exchange  Commission  or any other
         governmental authority, (D) 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 Company,  CPS, Samco
         or Linc, (E)  declaration  of a banking  moratorium by United States or
         New York State authorities, (F) any downgrading or the giving of notice
         of any intended or potential downgrading in the rating of the Company's
         CPS's, Samco's or Linc's debt securities by any "nationally  recognized
         statistical  rating  organization"  (as  defined  for  purposes of Rule
         436(g) under the 1934 Act), (G) the suspension of trading of the Common
         Stock by the  Commission  on the New  York  Stock  Exchange  or (H) 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

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

         (b) Unless the  Underwriter  has  breached its  obligations  under this
Agreement,  this Agreement may not be terminated by CPS, the Company, Samco, and
Linc without the written consent of the Underwriter until after March 31, 1999.

         (c) In the  event  of any such  termination,  no  party  will  have any
liability to any other party hereto,  except as otherwise provided in Sections 6
or 9 hereof.

12.      SUCCESSORS.

         Subject to the following sentence,  this Agreement has been and is made
solely for the benefit of the Underwriter,  CPS, Samco, Linc 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,  except that no Purchaser will be bound
by any part of this Agreement. No other person will have any right or obligation
hereunder.

13.      GOVERNING LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL.

         (A) THIS  AGREEMENT  SHALL BE GOVERNED BY AND  CONSTRUED IN  ACCORDANCE
WITH, THE INTERNAL LAWS (AS OPPOSED TO CONFLICT OF LAWS PROVISIONS) OF THE STATE
OF NEW YORK.

         (B)  THE  UNDERWRITER,   CPS,  THE  COMPANY,  SAMCO,  AND  LINC  HEREBY
IRREVOCABLY SUBMIT TO THE NON-EXCLUSIVE  JURISDICTION OF THE COURTS OF THE STATE
OF NEW YORK  AND THE  UNITED  STATES  DISTRICT  COURT  LOCATED  IN THE  SOUTHERN
DISTRICT OF NEW YORK, AND EACH  IRREVOCABLY  WAIVES PERSONAL  SERVICE OF ANY AND
ALL PROCESS  UPON IT AND  CONSENTS  THAT ALL SUCH  SERVICE OF PROCESS BE MADE BY
REGISTERED MAIL DIRECTED TO THE RESPECTIVE  ADDRESS SET FORTH HEREIN AND SERVICE
SO MADE SHALL BE DEEMED TO BE COMPLETED FIVE DAYS AFTER THE SAME SHALL HAVE BEEN
DEPOSITED IN THE U.S. MAILS, POSTAGE PREPAID. THE UNDERWRITER, CPS, THE COMPANY,
SAMCO, AND LINC EACH HEREBY  IRREVOCABLY  WAIVE ANY OBJECTION BASED ON FORUM NON
CONVENIENS,  ANY  OBJECTION TO  JURISDICTION,  AND ANY OBJECTION TO VENUE OF ANY
ACTION  INSTITUTED  HEREUNDER  AND  CONSENTS  TO THE  GRANTING  OF SUCH LEGAL OR
EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY THE COURT.  NOTHING IN THIS SECTION
SHALL AFFECT THE RIGHT OF ANY OF THE  UNDERWRITER,  CPS, THE COMPANY,  SAMCO, OR
LINC, AS THE CASE MAY BE, TO SERVE LEGAL  PROCESS IN ANY OTHER MANNER  PERMITTED
BY LAW OR AFFECT  ITS  RIGHT TO BRING  ANY  ACTION  OR  PROCEEDING  AGAINST  THE
UNDERWRITER  OR ITS  PROPERTY  OR CPS,  THE  COMPANY,  SAMCO,  OR LINC OR  THEIR
PROPERTY IN THE COURT OF ANY OTHER JURISDICTION.

         (C) THE  UNDERWRITER,  CPS,  THE COMPANY,  SAMCO,  AND LINC EACH HEREBY
IRREVOCABLY WAIVE ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE,
WHETHER SOUNDING IN CONTRACT, TORT, OR OTHERWISE ARISING OUT OF, CONNECTED WITH,
RELATED TO, OR IN CONNECTION WITH THIS AGREEMENT.  INSTEAD, ANY DISPUTE RESOLVED
IN COURT WILL BE RESOLVED IN A BENCH TRIAL WITHOUT A JURY.

14.      MISCELLANEOUS.

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

         (b) 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.

         (c) 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.

         (d) This  Agreement  and the  documents  referred  to herein  and to be
delivered  pursuant hereto  constitute the entire agreement  between the parties
pertaining to the subject  matter  hereof and  supersede  all prior  agreements,
understandings,  negotiations and discussions,  whether oral or written,  of the
parties.

         (e) 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.

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

         (g) 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.]





         If the foregoing  Agreement 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 parties and signatories
hereto 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:


                                LINC ACCEPTANCE COMPANY LLC


                                By:
                                   Name:
                                   Title:


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

WHEAT FIRST SECURITIES, INC. acting through
FIRST UNION CAPITAL MARKETS, a
division of WHEAT FIRST SECURITIES, INC.


By:
   Name:
   Title:








                                                               SCHEDULE I


                        Principal Amount             Purchase
         Class          to be Purchased                Price
         -----          ---------------           ---------------
          A-1               $32,500,000           $ 32,369,970.75
          A-2               $77,500,000           $ 77,110,353.25
          A-3               $81,375,000           $ 80,934,972.83
          A-4              $100,000,000           $ 99,442,770.00
          A-5               $18,625,000           $ 18,496,262.14
         Total             $310,000,000           $308,354,328.96
         =====             ============           ===============




                                                              EXECUTION COPY










                      AMENDED AND RESTATED TRUST AGREEMENT


                          Dated as of December 1, 1998

                                     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.....................................25
SECTION 7.3.  Representations and Warranties..............................26
SECTION 7.4.  Reliance; Advice of Counsel.................................26
SECTION 7.5.  Not Acting in Individual Capacity...........................26
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.......................27

                                  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...............................28
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



24309526





                                                                         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  December 1, 1998
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  September  11,  1998  (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 consideration, and the mutual terms and covenants contained herein, the
parties hereto agree as follows:

                                   ARTICLE I.

                                   Definitions

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

         "Agreements"  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 Purchase  Agreements,  the Spread Account
Agreement, the Spread Account Agreement Supplement, the Insurance Agreement, the
Indenture,  the Lockbox  Agreement,  the  Underwriting  Agreement  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.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  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.

         "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  December  1, 1998,
among the Trust and Norwest Bank Minnesota, National Association, as Trustee, as
the same may be amended and supplemented from time to time.

         "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
September 11, 1998 between the Depositor and the Owner Trustee.

         "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.





                                        2





         "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.

         "Paying Agent" shall mean Bankers Trust Company.

         "Percentage  Interest" means the undivided  percentage  interest in the
Owner Trust Estate represented by a Certificate.

         "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 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"  shall  mean the  Sale and  Servicing
Agreement among the Trust, the Depositor,  Consumer  Portfolio  Services,  Inc.,
Loan Servicing  Enterprise,  as Backup  Servicer,  and the Trustee,  dated as of
December 1, 1998 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  Master  Spread  Account
Agreement, amended and restated as of December 1, 1998, 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.

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





                                        3





         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 1998-4",  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.

         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.





                                        4





         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;

                  (ii) with the  proceeds of the sale of the Notes,  to fund the
         Pre-Funding Account, the Interest Reserve Account and (on behalf of the
         Depositor) 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  constitute the initial Owner
Trust Estate.  The Depositor shall pay  organizational  expenses of the Trust as
they may arise.





                                        5





         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 an entity  separate from the Depositor,  and (ii) if the Depositor is
not the Holder of 100 percent of the Certificates (either directly or indirectly
through wholly-owned  non-corporate  subsidiaries),  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,  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 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




                                        6





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 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




                                        7





         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.
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 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 the  Certificates on such date. 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 2.10(a),
if all  Certificates  are held solely by the Depositor,  the application of this
Section 2.10(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:





                                        8





                  (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 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;





                                        9





                  (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
         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 and shall represent a 100% Percentage  Interest.  The
Certificates  shall be  executed  on behalf of the Trust by manual or  facsimile
signature of an authorized officer of the Owner Trustee in minimum denominations
of  5%  Percentage  Interest.  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




                                       10





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  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.

         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




                                       11





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  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,  except  the  Depositor,  if  the
Depositor  is the  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:





                                       12





                           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.




                                       13






                  (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 of like Percentage Interest 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 like
Percentage  Interest 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
("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 protected  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 Percentage Interest.  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




                                       14





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.
If three or more Holders of  Certificates or one or more Holders of Certificates
evidencing not less than 25% aggregate  Percentage  Interest 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




                                       15





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:

                  (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   Certificateholder  is
         required;

                  (c) the amendment of the Indenture by a supplemental indenture
         in  circumstances  where the  consent of any  Certificateholder  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 Depositor 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 10.1 thereof or (b) except as expressly provided in the Basic Documents,
sell the Receivables after the termination of the Indenture.




                                       16





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
Certificateholder of a certificate signed by such Certificateholder,  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.

         (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%  aggregate  Percentage  Interest  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.





                                       17





         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.


                                   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




                                       18





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.


                                   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 $32,500,000,  Class A-2 Notes in the
aggregate  principal  amount of  $77,500,000,  Class A-3 Notes in the  aggregate
principal  amount of  $81,375,000,  Class A-4 Notes in the  aggregate  principal
amount of $100,000,000 and Class A-5 Notes in the aggregate  principal amount of
$18,625,000.  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




                                       19





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.

         (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




                                       20





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  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)




                                       21





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;

                  (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




                                       22





         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.

         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




                                       23





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  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




                                       24





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.

         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
obligor 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,




                                       25





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.

         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.




                                       26





         (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 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.






                                       27





                                   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.  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.




                                       28





         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, 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




                                       29





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 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




                                       30





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.


                                   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  and the
Trustee,   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 and the Trustee and the consent of
the  Certificateholders  evidencing  not  less  than  a  majority  by  aggregate
Percentage  Interest and, to the extent such amendment  materially and adversely
affects  the  interests  of the  Noteholders,  with the  consent of  Noteholders
evidencing  not less than a  majority  of the  aggregate  outstanding  principal
amount of the Notes (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




                                       31





aforesaid percentage of the aggregate  outstanding principal amount of the Notes
and the aggregate Percentage Interest required to consent to any such amendment,
without the consent of the Holders of all the  outstanding  Notes and Holders of
all outstanding Certificates.

         For purposes of  determining  the extent to which an amendment does not
have a material adverse effect on the Noteholders, the Owner Trustee may rely on
an Opinion of Counsel, which may be based upon a certificate of the Servicer.

         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 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




                                       32





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., 16355 Laguna Canyon, Irvine, CA 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.

         (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




                                       33





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 Owner Trustee, the Trustee, the
Noteholders,  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.

         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.







                                       34





         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:









                                       35





                               FORM OF CERTIFICATE

                                                                      EXHIBIT A



NUMBER                                            Percentage Interest: [     %]
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.

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

                            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 CPS RECEIVABLES  CORP. is the registered owner of [
%] Percentage Interest nonassessable, fully-paid, beneficial interest in certain
distributions of CPS Auto  Receivables  Trust 1998-4 (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)
                                  not in its individual
                                  capacity but solely or
                                  as Owner Trustee


                                  By:


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


                                  By: Bankers Trust Company
                                      ---------------------
                                      Authenticating Agent


                                  By:


Date:_______________________________


         The Trust was created  pursuant to a Trust  Agreement  dated as of [ ],
1998, between the Depositor and Bankers Trust (Delaware),  as Owner Trustee (the
"Owner  Trustee"),  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 [ ],  1998  between  the  Trust  and  Norwest  Bank
Minnesota,  National  Association,  as Trustee and  collateral  agent,  are five
classes of Notes  designated  as "Class A-1 [ ]% Asset Backed Notes" (the "Class
A-1 Notes"), "Class A-2 [ ]% Asset Backed Notes" (the "Class A-2 Notes"), "Class
A-3 [ ]% Asset Backed Notes" (the "Class A-3 Notes")"Class A-4 [ ]% Asset Backed
Notes"  (the "Class A-4  Notes")  and "Class A-5 [ ]% Asset  Backed  Notes" (the
"Class A-5 Notes",  and together with the Class A-1 Notes,  the Class A-2 Notes,
the Class A-3 Notes and the Class A-4 Notes,  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
received  thereunder after the Cutoff Date,  security  interests in the vehicles
financed thereby, certain bank accounts and the proceeds thereof, proceeds from




                                        3





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 [ ], 1998 between
Consumer Portfolio Services,  Inc. and the Depositor,  all right to and interest
of the Depositor in and to the Purchase  Agreement dated as of [ ], 1998 between
Samco  Acceptance  Corp.  and the  Depositor,  all right to and  interest of the
Depositor  in and to the Purchase  Agreement  dated as of [ ], 1998 between Linc
Acceptance Company LLC 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 [ ], 1998, 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
Percentage  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,  in the event  that  Certificates  are held by any  person  other than the
Depositor,  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.  In such event,  the  Depositor and such 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.]





                                        4





         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 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 1998-4



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




                                  By: _______________________________
                                      Name:
                                      Title:




Date: [              ], 1998





                                        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
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 aggregate Percentage  Interest.  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.  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  Percentage  Interest 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.











         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.






                                        2





                                   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 1998-4

         This  Certificate  of Trust of CPS Auto  Receivables  Trust 1998-4 (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 1998-4.

         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:










                                                          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  1998-4  [ ]%  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,  between CPS Receivables Corp. and Bankers Trust
(Delaware), as Owner Trustee.

                                       [TRANSFEREE]


                                       By:
                                          Name:
                                          Title:





                                        2





                                                             EXECUTION COPY







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



                        CPS AUTO RECEIVABLES TRUST 1998-4

                       Class A-1 5.473% Asset-Backed Notes
                       Class A-2 5.790% Asset-Backed Notes
                       Class A-3 5.740% Asset-Backed Notes
                       Class A-4 5.690% Asset-Backed Notes
                       Class A-5 5.890% Asset-Backed Notes
                        ---------------------------------

                                    INDENTURE

                          Dated as of December 1, 1998

                       -----------------------------------
                  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...........11
SECTION 1.3.   Other Definitional Provisions...............................11

                                   ARTICLE II

                                    The Notes

SECTION 2.1.   Form........................................................12
SECTION 2.2.   Execution, Authentication and Delivery......................12
SECTION 2.3.   Temporary Notes.............................................13
SECTION 2.4.   Registration; Registration of Transfer and Exchange.........13
SECTION 2.5.   Mutilated, Destroyed, Lost or Stolen Notes..................15
SECTION 2.6.   Persons Deemed Owner........................................16
SECTION 2.7.   Payment of Principal and Interest; Defaulted Interest.......16
SECTION 2.8.   Cancellation................................................17
SECTION 2.9.   Release of Collateral.......................................17
SECTION 2.10.  Book-Entry Notes............................................18
SECTION 2.11.  Notices to Clearing Agency..................................18
SECTION 2.12.  Definitive Notes............................................19

                                   ARTICLE III

                                    Covenants

SECTION 3.1.   Payment of Principal and Interest...........................19
SECTION 3.2.   Maintenance of Office or Agency.............................19
SECTION 3.3.   Money for Payments to be Held in Trust......................20
SECTION 3.4.   Existence...................................................21
SECTION 3.5.   Protection of Trust Estate..................................21
SECTION 3.6.   Opinions as to Trust Estate.................................22
SECTION 3.7.   Performance of Obligations; Servicing of Receivables........23
SECTION 3.8.   Negative Covenants..........................................24
SECTION 3.9.   Annual Statement as to Compliance...........................24
SECTION 3.10.  Issuer May Consolidate, Etc. Only on Certain Terms..........25





                                       -i-





SECTION 3.11.  Successor or Transferee.....................................27
SECTION 3.12.  No Other Business...........................................27
SECTION 3.13.  No Borrowing................................................27
SECTION 3.14.  Servicer's Obligations......................................27
SECTION 3.15.  Guarantees, Loans, Advances and Other Liabilities...........28
SECTION 3.16.  Capital Expenditures........................................28
SECTION 3.17.  Compliance with Laws........................................28
SECTION 3.18.  Restricted Payments.........................................28
SECTION 3.19.  Notice of Events of Default.................................28
SECTION 3.20.  Further Instruments and Acts................................28
SECTION 3.21.  Amendments of Sale and Servicing Agreement
               and Trust Agreement.........................................28
SECTION 3.22.  Income Tax Characterization.................................29

                                   ARTICLE IV

                           Satisfaction and Discharge

SECTION 4.1.   Satisfaction and Discharge of Indenture.....................29
SECTION 4.2.   Application of Trust Money..................................30
SECTION 4.3.   Repayment of Moneys Held by Note Paying Agent...............30

                                    ARTICLE V

                                    Remedies

SECTION 5.1.   Events of Default...........................................30
SECTION 5.2.   Rights Upon Event of Default................................32
SECTION 5.3.   Collection of Indebtedness and Suits for
               Enforcement by Trustee......................................33
SECTION 5.4.   Remedies....................................................36
SECTION 5.5.   Optional Preservation of the Receivables....................37
SECTION 5.6.   Priorities..................................................37
SECTION 5.7.   Limitation of Suits.........................................38
SECTION 5.8.   Unconditional Rights of Noteholders To Receive Principal
                 and Interest..............................................39
SECTION 5.9.   Restoration of Rights and Remedies..........................39
SECTION 5.10.  Rights and Remedies Cumulative..............................40
SECTION 5.11.  Delay or Omission Not a Waiver..............................40
SECTION 5.12.  Control by Noteholders......................................40
SECTION 5.13.  Waiver of Past Defaults.....................................41
SECTION 5.14.  Undertaking for Costs.......................................41
SECTION 5.15.  Waiver of Stay or Extension Laws............................41






                                      -ii-





                                   ARTICLE VI

                                   The Trustee

SECTION 6.1.   Duties of Trustee...........................................42
SECTION 6.2.   Rights of Trustee...........................................43
SECTION 6.3.   Individual Rights of Trustee................................45
SECTION 6.4.   Trustee's Disclaimer........................................45
SECTION 6.5.   Notice of Defaults..........................................45
SECTION 6.6.   Reports by Trustee to Holders...............................45
SECTION 6.7.   Compensation and Indemnity..................................45
SECTION 6.8.   Replacement of Trustee......................................46
SECTION 6.9.   Successor Trustee by Merger.................................47
SECTION 6.10.  Appointment of Co-Trustee or Separate Trustee...............48
SECTION 6.11.  Eligibility: Disqualification...............................49
SECTION 6.12.  Preferential Collection of Claims Against Issuer............49
SECTION 6.13.  Appointment and Powers......................................49
SECTION 6.14.  Performance of Duties.......................................50
SECTION 6.15.  Limitation on Liability.....................................50
SECTION 6.16.  Reserved....................................................50
SECTION 6.17.  Successor Trustee...........................................50
SECTION 6.18.  [Reserved]..................................................51
SECTION 6.19.  Representations and Warranties of the Trustee...............52
SECTION 6.20.  Waiver of Setoffs...........................................52
SECTION 6.21.  Control by the Controlling Party............................52

                                   ARTICLE VII

                         Noteholders' Lists and Reports

SECTION 7.1.   Issuer To Furnish To Trustee Names and Addresses
               of Noteholders..............................................53
SECTION 7.2.   Preservation of Information; Communications
               to Noteholders..............................................53
SECTION 7.3.   Reports by Issuer...........................................53
SECTION 7.4.   Reports by Trustee..........................................54

                                  ARTICLE VIII

                Collection of Money and Releases of Trust Estate

SECTION 8.1.   Collection of Money.........................................54
SECTION 8.2.   Release of Trust Estate.....................................54
SECTION 8.3.   Opinion of Counsel..........................................55






                                      -iii-





                                   ARTICLE IX

                             Supplemental Indentures

SECTION 9.1.   Supplemental Indentures Without Consent of Noteholders......55
SECTION 9.2.   Supplemental Indentures with Consent of Noteholders.........56
SECTION 9.3.   Execution of Supplemental Indentures........................58
SECTION 9.4.   Effect of Supplemental Indenture............................58
SECTION 9.5.   Conformity With Trust Indenture Act.........................58
SECTION 9.6.   Reference in Notes to Supplemental Indentures...............58

                                    ARTICLE X

                               Redemption of Notes

SECTION 10.1.  Redemption..................................................59
SECTION 10.2.  (a)  Form of Redemption Notice..............................59
SECTION 10.3.  Notes Payable on Redemption Date............................60

                                   ARTICLE XI

                                  Miscellaneous

SECTION 11.1.  Compliance Certificates and Opinions, etc...................60
SECTION 11.2.  Form of Documents Delivered to Trustee......................62
SECTION 11.3.  Acts of Noteholders.........................................63
SECTION 11.4.  Notices, etc., to Trustee, Issuer and Rating Agencies.......63
SECTION 11.5.  Notices to Noteholders; Waiver..............................64
SECTION 11.6.  Alternate Payment and Notice Provisions.....................65
SECTION 11.7.  Conflict with Trust Indenture Act...........................65
SECTION 11.8.  Effect of Headings and Table of Contents....................66
SECTION 11.9.  Successors and Assigns......................................66
SECTION 11.10. Severability................................................66
SECTION 11.11. Benefits of Indenture.......................................66
SECTION 11.12. Legal Holidays..............................................66
SECTION 11.13. Governing Law...............................................66
SECTION 11.14. Counterparts................................................66
SECTION 11.15. Recording of Indenture......................................66
SECTION 11.16. Trust Obligation............................................67
SECTION 11.17. No Petition.................................................67
SECTION 11.18. Inspection..................................................67







                                      -iv-





Exhibit A-1    Form of Class A-1 Note
Exhibit A-2    Form of Class A-2 Note
Exhibit A-3    Form of Class A-3 Note
Exhibit A-4    Form of Class A-4 Note
Exhibit A-5    Form of Class A-5 Note
Exhibit B      Form of Depository Agreement





                                       -v-








         INDENTURE  dated as of December 1, 1998,  between CPS AUTO  RECEIVABLES
TRUST  1998-4,  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 5.473%
Asset-Backed Notes (the "Class A-1 Notes"),  Class A-2 5.790% Asset-Backed Notes
(the "Class A-2  Notes"),  Class A-3 5.740%  Asset-Backed  Notes (the "Class A-3
Notes"),  Class A-4 5.690% Asset-Backed Notes (the "Class A-4 Notes"), Class A-5
5.890%  Asset-Backed  Notes (the "Class A-5 Notes" and,  together with the Class
A-1 Notes, the Class A-2 Notes, the Class A-3 Notes and the Class A-4 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 December 1, 1998 (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 (as defined below) 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 all monies received thereunder after











         the Cutoff Date and all Net Liquidation  Proceeds received with respect
         to such Receivables after the Cutoff Date;

                  (ii) all right,  title and interest of the Seller now existing
         or hereafter  arising or acquired in and to the Subsequent  Receivables
         listed in Schedule A to the related  Subsequent  Transfer Agreement and
         all monies received thereunder after the related Subsequent Cutoff Date
         and  all  Net  Liquidation  Proceeds  received  with  respect  to  such
         Subsequent Receivables on or after the related Subsequent Cutoff Date;

                  (iii) 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;

                  (iv) 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 securing the Receivables or the Obligors thereunder;

                  (v) all right,  title and interest of the Issuer in and to the
         Purchase Agreements,  including a direct right to cause CPS to purchase
         Receivables from the Trust pursuant to the CPS Purchase Agreement under
         the circumstances specified therein;

                  (vi)  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);

                  (vii) all right,  title and  interest  of the Issuer 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;

                  (viii) the Receivable File related to each Receivable;

                  (ix) all  amounts  and  property  from time to time held in or
         credited to the Collection Account, the Note Distribution  Account, the
         Pre-Funding  Account,  the  Lockbox  Account  or the  Interest  Reserve
         Account; and

                  (x) 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





                                       -2-





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

         "Amount  Financed" with respect to a Receivable  shall have the meaning
specified in the Sale and Servicing Agreement.






                                       -3-





         "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  Spread  Account  Supplement,   the  Insurance  Agreement,  the
Indemnification  Agreement,  the Lockbox Agreement, the Line Purchase Agreement,
the Samco  Purchase  Agreement,  the CPS Purchase  Agreement,  the  Underwriting
Agreement  and  other  documents  and   certificates   delivered  in  connection
therewith.

         "Book Entry Notes" means a beneficial interest in the 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 5.4730% per annum.

         "Class  A-1  Notes"  means the Class A-1  5.4730%  Asset-Backed  Notes,
substantially in the form of Exhibit A-1.

         "Class A-2 Interest Rate" means 5,790% per annum.

         "Class  A-2  Notes"  means  the Class A-2  5.790%  Asset-Backed  Notes,
substantially in the form of Exhibit A-2.

         "Class A-3 Interest Rate" means 5.740% per annum.





                                       -4-





         "Class  A-3  Notes"  means  the Class A-3  5.740%  Asset-Backed  Notes,
substantially in the form of Exhibit A-3.

         "Class A-4 Interest Rate" means 5.690% per annum.

         "Class  A-4  Notes"  means  the Class A-4  5.690%  Asset-Backed  Notes,
substantially in the form of Exhibit A-4.

         "Class A-5 Interest Rate" means 5.890% per annum.

         "Class  A-5  Notes"  means  the Class A-5  5.890%  Asset-Backed  Notes,
substantially in the form of Exhibit A-5.

         "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 December 4, 1998.

         "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.

         "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 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.





                                       -6-





         "Independent"  means,  when used with respect to any specified  Person,
that the person (a) is in fact independent of the Issuer, any other obligor 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 obligor,  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,  (ii) Class A-2 Notes,  the Class A-2  Interest  Rate,
(iii) Class A-3 Notes,  the Class A-3 Interest Rate,  (iv) Class A-4 Notes,  the
Class A-4 Interest Rate and (v) Class A-5 Notes, the Class A-5 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.

         "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,  Class  A-2 Note,  a Class A-3 Note,  a
Class A-4 Note or a Class A-5 Note.






                                       -7-





         "Note Owner" means, with respect to a 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  Register"  and "Note  Registrar"  have the  respective  meanings
specified in Section 2.4.

         "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 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






                                       -8-





                  (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.

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

         "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





                                       -9-





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 tenth day of the calendar  month in which such  Payment  Date or  Redemption
Date occurs.

         "Redemption  Date"  means,  in the case of a  redemption  of the  Notes
pursuant to Section  10.1,  the Payment  Date  specified  by the Servicer or the
Issuer pursuant to Section 10.1.

         "Redemption  Price"  means,  in the case of a  redemption  of the Notes
pursuant to Section 10.1, 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.

         "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 December 1, 1998, among the Issuer,  the Seller,  the Servicer,  the
Backup Servicer and the Trustee as Standby 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.






                                      -10-





         "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.

         "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.






                                      -11-





         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.

                  (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,  the Class A-2 Notes,  the
Class A-3  Notes,  the Class  A-4  Notes and the Class A-5  Notes,  in each case
together  with  the  Trustee's  certificate  of  authentication,   shall  be  in
substantially  the form set  forth  in  Exhibits  A-1,  A-2,  A-3,  A-4 and A-5,
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,  A-2 and A-3 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.





                                      -12-





         (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.

         (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  $32,500,000,  Class A-2  Notes  for  original  issue in an
aggregate principal amount of $77,500,000, Class A-3 Notes for original issue in
an aggregate principal amount of $81,375,000, Class A-4 Notes for original issue
in an  aggregate  principal  amount  of  $100,000,000,  and  Class A-5 Notes for
original issue in an aggregate principal amount of $18,625,000. Class A-1 Notes,
Class  A-2  Notes,  Class  A-3  Notes,  Class  A-4  Notes  and  Class  A-5 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  without charge to
the Holder 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. 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





                                      -13-





regulations as it may prescribe,  the Issuer shall provide for the  registration
of Notes and the  registration  of  transfers  of Notes.  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(a)
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(a) 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, A-2, A-3, A-4 and A-5 and duly
executed by, the Holder thereof or such Holder's  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.






                                      -14-





         (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 (i) 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 4975 of the  Internal  Revenue Code or
(ii) the acquisition and holding of the Notes will be covered by a Department of
Labor class exemption.

         (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
Notes.

         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 and 8-406 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  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.






                                      -15-





         (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,  the Note Insurer
and any agent of the  Issuer,  the  Trustee  or 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,  for all other  purposes  whatsoever  and
whether or not such Note be overdue,  and none of the Issuer,  the Note Insurer,
the Trustee nor any agent of the Issuer,  the Note Insurer or the Trustee  shall
be affected by notice to the contrary.

         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,
the  Class A-2  Note,  the Class A-3 Note,  the Class A-4 Note and the Class A-5
Note set forth in Exhibits A-1, A-2,  A-3, A-4 and A-5,  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), 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,  the Class A-2
Notes, the Class A-3 Notes, the





                                      -16-





Class A-4 Notes and the Class A-5 Notes set forth in  Exhibits  A-1,  A-2 , A-3,
A-4 and A-5  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
in the manner and under the circumstances 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  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





                                      -17-





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 Notes, upon original issuance, will
be issued in the form of typewritten Notes representing the Book-Entry Notes, to
be  delivered  to DTC or to the Trustee as  custodian  for the initial  Clearing
Agency,  by,  or on behalf  of,  the  Issuer.  Such  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 Note,  except as provided in
Section  2.12.  Unless  and  until  definitive,   fully  registered  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 Notes and
         the giving of instructions or directions  hereunder) as the sole Holder
         of the 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 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 Notes
         evidencing  a specified  percentage  of the  Outstanding  Amount of the
         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  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





                                      -18-





         Owners and payment of reproduction and postage expenses 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 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 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 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 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 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  on each Payment Date all amounts  deposited
in the Note  Distribution  Account pursuant to the Sale and Servicing  Agreement
(i) for the benefit of the Class A-1 Notes, to the Class A-1  Noteholders,  (ii)
for the benefit of the Class A-2 Notes, to the Class A-2 Noteholders,  (iii) for
the benefit of the Class A-3 Notes, to the Class A-3  Noteholders;  (iv) for the
benefit of the Class A-4  Notes,  to the Class A-4  Noteholders  and (v) for the
benefit of the Class A-5 Notes, to the Class A-5  Noteholders.  Amounts properly
withheld under the Code by any Person from a payment to any





                                      -19-





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  shall  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 shall:

                  (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;

                  (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






                                      -20-





                  (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 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





                                      -21-





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;

                  (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





                                      -22-





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.

         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





                                      -23-





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  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, 1999 and





                                      -24-





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

                  (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 Delaware  Business
         Trust  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  indenture  comply with
         this Article III and that all conditions precedent herein provided





                                      -25-





         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 Delaware  Business Trust 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;

                  (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





                                      -26-





         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
         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  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 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 1998-4 will
be released from every  covenant and 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 1998-4 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 Funding Period, 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  shall be used  exclusively  to fund  the  Issuer's  purchase  of the
Receivables and the other





                                      -27-





assets  specified in the Sale and Servicing  Agreement,  to fund the Pre-Funding
Account,  the Interest  Reserve Account and (on behalf of the Issuer) 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.

         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.






                                      -28-





         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 tax, state and local income tax franchise tax 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.


                                   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






                                      -29-





                  (C) the Issuer has  delivered  (i) to the Trustee and the Note
         Insurer an  Officer's  Certificate,  an Opinion of Counsel  and (ii) if
         required by the TIA, to 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,  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.  (a) "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 and such default shall continue for





                                      -30-





         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

                  (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 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,  which decree or
         order  shall  remain  unstayed  and  in  effect  for  a  period  of  60
         consecutive days; or

                  (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





                                      -31-





         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.

         (b) 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;

                  SECOND: for amounts due and unpaid on the Sequential Pay Notes
         and the  Class  A-4  Notes for  principal,  to the  Holders  of (x) the
         Sequential Pay Notes, the Sequential Pay Noteholders' Percentage of the
         Noteholders' Principal Distributable Amount, sequentially, first to pay
         principal of the Class A-1 Notes until the outstanding principal amount
         of the Class A-1 Notes has been reduced to zero,  then to pay principal
         of the Class A-2 Notes until the  outstanding  principal  amount of the
         Class A-2 Notes has been  reduced to zero and then to pay  principal of
         the Class A-3 Notes until the outstanding principal amount of the Class
         A-3 Notes has been  reduced  to zero and (y) the Class A-4  Notes,  the
         Class  A-4  Noteholders'   Percentage  of  the  Noteholders'  Principal
         Distributable Amount; and

                  THIRD:  for  amounts  due and  unpaid  to Class  A-5 Notes for
         principal,  according  to the order of  payment  set  forth in  Section
         5.8(a)(iv) of the Sale and Servicing Agreement.






                                      -32-





         (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
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 5.13.

         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 and such  default  continues  for a period of five days,
the Issuer will,  upon demand of the Trustee,  pay to it, for the benefit of the
Holders of the Notes,  the whole  amount  then due and payable on such Notes for
principal and interest, with interest upon





                                      -33-





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 subject to 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 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 (x) are
taken only to enforce the Issuer's obligations to redeem the principal amount of
Notes and (y) are taken only  against  the  portion of the  Collateral,  if any,
consisting  of the  Pre-Funding  Account,  the  Interest  Reserve  Account,  any
investments therein and any proceeds thereof.





                                      -34-





         (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

                  (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.






                                      -35-





         (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.  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):

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

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






                                      -36-





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

                           (B)  either

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

                                    (y) 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.

         In determining such sufficiency or insufficiency with respect to clause
(y),  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,  the Total Distribution  Amount,  including
any money or property  collected pursuant to Section 5.4 of this Indenture shall
be applied by the Trustee on the related  Payment Date in the following order of
priority:

                  FIRST: amounts due and owing and required to be distributed to
         the  Servicer,  the Standby  Servicer,  the Backup  Servicer,the  Owner
         Trustee, the Trustee and the Collateral Agent,  respectively,  pursuant
         to  priorities  (i)  through  (v) 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;






                                      -37-





                  SECOND: 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;

                  THIRD:  for amounts due and unpaid on the Sequential Pay Notes
         and the  Class  A-4  Notes for  principal,  to the  Holders  of (x) the
         Sequential Pay Notes, the Sequential Pay Noteholders' Percentage of the
         Noteholders' Principal Distributable Amount, sequentially, first to pay
         principal of the Class A-1 Notes until the outstanding principal amount
         of the Class A-1 Notes has been reduced to zero,  then to pay principal
         of the Class A-2 Notes until the  outstanding  principal  amount of the
         Class A-2 Notes has been  reduced to zero and then to pay  principal of
         the Class A-3 Notes until the outstanding principal amount of the Class
         A-3 Notes has been  reduced  to zero and (y) the Class A-4  Notes,  the
         Class  A-4  Noteholders'   Percentage  of  the  Noteholders'  Principal
         Distributable Amount; and

                  FOURTH:  for  amounts  due and  unpaid  to Class A-5 Notes for
         principal,  according  to the order of  payment  set  forth in  Section
         5.8(a)(iv) of the Sale and Servicing Agreement.

                  FIFTH: 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);

                  SIXTH:  in the event any Person other than the Backup Servicer
         or the  Standby  Servicer  becomes  the  successor  Servicer,  to  such
         successor   Servicer,   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 the successor Servicer; and

                  SEVENTH:  to the Collateral Agent to be applied as provided in
         the Master Spread Account Agreement;

provided that any amounts collected from the Pre-Funding Account or the Interest
Reserve Account shall be applied solely to the payment of amounts due and unpaid
on the Notes for principal for  distribution  to Noteholders in accordance  with
Section 10.1(b) and,  second,  in accordance with Section 5.7(b) of the Sale and
Servicing  Agreement and, third,  in accordance  with  priorities  FIRST through
SIXTH above.

         (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 such record date, the payment date and the amount to be paid.






                                      -38-





         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:

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






                                      -39-





         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;

                  (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






                                      -40-





                  (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 or Event
of 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 Event of Default or impair
any right consequent thereto.

         Upon any such waiver,  such Default or Event of 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 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





                                      -41-





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.

         (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.






                                      -42-





         (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.

         (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) Subject to Sections 6.1 and 6.2,
the Trustee shall be protected and shall incur no liability to the Issuer or any
Issuer Secured Party in relying upon





                                      -43-





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, except to the extent the Trustee has actual
knowledge  to the  contrary  or as  required  pursuant to Section 6.1 or Section
6.2(g) the Trustee shall not be required to make any  independent  investigation
with respect thereto.

         (b) Before the Trustee acts or refrains from acting,  it may require an
Officer's  Certificate.  Subject to Section  6.1(c),  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.

         (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 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 in accordance with
Section 6.1.

         (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





                                      -44-





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 the 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.

         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,  the  Collateral  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 30 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, if any), 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 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  reimburse the Trustee,  pursuant to Section 5.7(b) of the Sale and
Servicing Agreement,  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





                                      -45-





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 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(a)(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 recourse of the Trustee  hereunder and under the Basic Documents
shall be to the Trust Estate only and specifically  shall not be recourse to the
assets of the Depositor or any Noteholder.  In addition, the Trustee agrees that
its  recourse  to the Issuer,  the Trust  Estate,  the Seller and  amounts  held
pursuant to the Master 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  (unless an Insurer
Default shall have occurred and be continuing), shall, remove the Trustee 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,  insolvency  or other  similar law, or
consents to the appointment of or taking





                                      -46-





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 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





                                      -47-





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 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





                                      -48-





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 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





                                      -49-





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 Controlling Party and as provided
in Section 5.12. 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.  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.  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.  Reserved.

         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,





                                      -50-





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 Note Insurer (or, if an
Insurer Default has occurred and is continuing,  by Holders of Notes  evidencing
more than 50% of the  principal  balance  of the  Notes)  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 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





                                      -51-





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  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.






                                      -52-





                                   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 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





                                      -53-





                  (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, 1999,  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 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.





                                      -54-





         (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.

         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;





                                      -55-





                  (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;

                  (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 not inconsistent with the foregoing.

         (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 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 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





                                      -56-





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

                  (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





                                      -57-





         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.

         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 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





                                      -58-





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 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,  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.

         (b) In the event that on the Payment Date on or  immediately  following
the last day of the Funding Period, any portion of the Pre-Funded Amount remains
on deposit in the Pre-Funding Account after giving effect to the purchase of all
Subsequent  Receivables,  including any such purchase on such Payment Date, each
class of Notes will be redeemed in part,  on a pro rata basis,  in an  aggregate
principal  amount  equal to the  Class  A-1  Prepayment  Amount,  the  Class A-2
Prepayment  Amount,  the Class A-3 Prepayment  Amount,  the Class A-4 Prepayment
Amount and the Class A-5 Prepayment Amount.

         SECTION 10.2. (a) Form of Redemption Notice. Notice of redemption under
Section 10.1 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





                                      -59-





         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), 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 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;






                                      -60-





                  (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 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





                                      -61-





         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 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,





                                      -62-





it is intended that 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  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;

                  (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





                                      -63-





         receipt to the Issuer addressed to: CPS Auto Receivables  Trust 1998-4,
         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; or

                  (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,  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 Group, a
Division of The McGraw Hill Companies,  26 Broadway (15th Floor),  New York, New
York 10004, Attention:  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





                                      -64-





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 herein  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 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.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.






                                      -65-





         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.

         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





                                      -66-





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 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  Articles  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.





                                      -67-






         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 1998-4,

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


                                  By:
                                     Name:
                                     Title:




                                  NORWEST BANK MINNESOTA, NATIONAL
                                  ASSOCIATION


                                  By:
                                     Name:
                                     Title:







                                      -68-





                      EXHIBIT A-1 [Form of Class A-1 Note]

REGISTERED                                                        $32,500,000
No. R-A-1

                       SEE REVERSE FOR CERTAIN DEFINITIONS

                                                          CUSIP NO. 12615WAR2


         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 1998-4

                       CLASS A-1 5.473% ASSET-BACKED NOTES

         CPS Auto  Receivables  Trust  1998-4,  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  THIRTY-TWO  MILLION  FIVE  HUNDRED
THOUSAND  DOLLARS  payable  on each  Payment  Date  in an  amount  equal  to 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
December 1999 Payment Date (the "Class A-1 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 current Payment Date; provided that for the December 1998 Payment
Date interest will accrue for the number of days from and including  December 4,
1998 to and including December 14, 1998. Interest will be calculated on



                                      A-1-1






the basis of a 360-day  year and the  actual  number  of days  elapsed  from and
including  the most recent  Payment Date on which  interest has been paid.  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 1998-4

                            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:  December 4, 1998             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 5.473%  Asset-Backed Notes (herein called the "Class
A-1 Notes"),  all issued  under an Indenture  dated as of December 1, 1998 (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,  the Class A-2 Notes,  the Class A-3  Notes,  the
Class A-4 Notes and the Class A-5 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 December 15, 1998.

         As described  above,  the entire unpaid  principal  amount of this Note
shall be due and payable on the earlier of the Class A-1 Final Scheduled Payment
Date and the  Redemption  Date,  if any,  pursuant  to  Section  10.1(a)  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 a majority  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, 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



                                      A-1-5






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 (a) 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,  and (b)  pursuant  to  Section
10.1(b) of the Indenture,  in part, on a pro rata basis,  on the Payment Date on
or  immediately  following the last day of the Funding  Period in the event that
any Pre-Funded Amount remains on deposit in the Pre-Funding Account after giving
effect  to the  purchase  of all  Subsequent  Receivables,  including  any  such
purchase on the Redemption Date.

         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,


                                      A-1-6






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 Issuer,
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 Issuer, 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 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.

         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 (i) 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 4975 of the  Internal  Revenue Code or
(ii) the acquisition and holding of the Notes will be covered by a Department of
Labor class exemption.

         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



                                      A-1-7







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.

         Anything  herein to the contrary  notwithstanding,  except as expressly
provided in the Indenture or the Basic  Documents,  neither the 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-1-8







                                   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-1-9







                      [Form of Class A-2 Note] EXHIBIT A-2

REGISTERED                                                           $77,500,000

No. R-A-2

                       SEE REVERSE FOR CERTAIN DEFINITIONS

                                                             CUSIP NO. 12615WAS0


         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 1998-4

                       CLASS A-2 5.790% ASSET-BACKED NOTES

         CPS Auto  Receivables  Trust  1998-4,  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  SEVENTY-SEVEN  MILLION FIVE HUNDRED
THOUSAND  DOLLARS  payable  on each  Payment  Date  in an  amount  equal  to 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
February 2002 Payment Date (the "Class A- 2 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 current Payment Date; provided that for the December 1998 Payment
Date interest will accrue for the number of days from and



                                      A-2-1







including December 4, 1998 to and including December 14, 1998.  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-2-2







         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 1998-4

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




                                            By:
                                               Name:
                                               Title:



                                      A-2-3







                     TRUSTEE'S CERTIFICATE OF AUTHENTICATION

         This  is one of the  Notes  designated  above  and  referred  to in the
within-mentioned Indenture.

Date:  December 4, 1998            NORWEST BANK MINNESOTA, NATIONAL
                                   ASSOCIATION, not in its
                                   individual capacity, but solely
                                   as Trustee


                                   By:
                                      Authorized Signatory


                                      A-2-4







                                [REVERSE OF NOTE]

         This  Note is one of a duly  authorized  issue of Notes of the  Issuer,
designated as its Class A-2 5.790%  Asset-Backed Notes (herein called the "Class
A-2 Notes"),  all issued  under an Indenture  dated as of December 1, 1998 (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,  the Class A-2 Notes,  the Class A-3  Notes,  the
Class A-4 Notes and the Class A-5 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 December 15, 1998.

         As described  above,  the entire unpaid  principal  amount of this Note
shall be due and payable on the earlier of the Class A-2 Final Scheduled Payment
Date and the  Redemption  Date,  if any,  pursuant  to  Section  10.1(a)  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 a majority  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



                                      A-2-5







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 (a) 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,  and (b)  pursuant  to  Section
10.1(b) of the Indenture,  in part, on a pro rata basis,  on the Payment Date on
or  immediately  following the last day of the Funding  Period in the event that
any Pre-Funded Amount remains on deposit in the Pre-Funding Account after giving
effect  to the  purchase  of all  Subsequent  Receivables,  including  any  such
purchase on the Redemption Date.

         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


                                      A-2-6







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 Issuer, 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 Issuer,  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 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.

         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 (i) 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 4975 of the  Internal  Revenue Code or
(ii) the acquisition and holding of the Notes will be covered by a Department of
Labor class exemption.

         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



                                      A-2-7







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 the 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-2-8







                                   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-2-9







                      [Form of Class A-3 Note] EXHIBIT A-3

REGISTERED                                                           $81,375,000

No. R-A-3

                       SEE REVERSE FOR CERTAIN DEFINITIONS

                                                             CUSIP NO. 12615WAT8



         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 1998-4

                       CLASS A-3 5.740% ASSET-BACKED NOTES

         CPS Auto  Receivables  Trust  1998-4,  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  EIGHTY-ONE  MILLION  THREE HUNDRED
SEVENTY-FIVE THOUSAND DOLLARS payable on each Payment Date in an amount equal to
the aggregate  amount,  if any,  payable from the Note  Distribution  Account in
respect of  principal  on the Class A-3 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 September 2003 Payment Date (the "Class A-3 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 current Payment



                                      A-3-1







Date;  provided that for the December 15, 1998 Payment Date interest will accrue
for the  number of days from and  including  December  4, 1998 to and  including
December 14, 1998.  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-3-2







         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 1998-4

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




                                       By:
                                          Name:
                                          Title:



                                      A-3-3







                     TRUSTEE'S CERTIFICATE OF AUTHENTICATION

         This  is one of the  Notes  designated  above  and  referred  to in the
within-mentioned Indenture.

Date:    December 4, 1998             NORWEST BANK MINNESOTA, NATIONAL
                                      ASSOCIATION, not in its
                                      individual capacity, but solely
                                      as Trustee


                                      By:
                                         Authorized Signatory


                                      A-3-4







                                [REVERSE OF NOTE]

         This  Note is one of a duly  authorized  issue of Notes of the  Issuer,
designated as its Class A-3 5.470%  Asset-Backed Notes (herein called the "Class
A-3 Notes"),  all issued  under an Indenture  dated as of December 1, 1998 (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,  the Class A-2 Notes,  the Class A-3  Notes,  the
Class A-4 Notes and the Class A-5 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-3 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 December 15, 1998.

         As described  above,  the entire unpaid  principal  amount of this Note
shall be due and payable on the earlier of the Class A-3 Final Scheduled Payment
Date and the  Redemption  Date,  if any,  pursuant  to  Section  10.1(a)  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 a majority  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-3 Notes shall be made pro rata to the Class A-3 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



                                      A-3-5







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-3 Interest Rate to the extent lawful.

         As provided in the Indenture, the Notes may be redeemed (a) pursuant to
Section 10.1 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,  and (b) pursuant to Section  10.1(b)
of the  Indenture,  in part,  on a pro rata  basis,  on the  Payment  Date on or
immediately  following the last day of the Funding  Period in the event that any
Pre-Funded  Amount  remains on deposit in the  Pre-Funding  Account after giving
effect  to the  purchase  of all  Subsequent  Receivables,  including  any  such
purchase on the Redemption Date.

         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



                                      A-3-6







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 Issuer, 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 Issuer,  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 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.

         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 (i) 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 4975 of the  Internal  Revenue Code or
(ii) the acquisition and holding of the Notes will be covered by a Department of
Labor class exemption.

         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



                                      A-3-7







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 the 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-3-8







                                   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-3-9







                      [Form of Class A-4 Note] EXHIBIT A-4

REGISTERED                                                          $100,000,000

No. R-A-4

                       SEE REVERSE FOR CERTAIN DEFINITIONS

                                                             CUSIP NO. 12615WAU5



         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 1998-4

                       CLASS A-4 5.690% ASSET-BACKED NOTES

         CPS Auto  Receivables  Trust  1998-4,  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 ONE HUNDRED MILLION DOLLARS payable on
each Payment Date in an amount equal to the aggregate  amount,  if any,  payable
from the Note  Distribution  Account in respect  of  principal  on the Class A-4
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  September  2003  Payment Date (the
"Class A-4 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 current Payment Date; provided that
for the December 15, 1998



                                      A-4-1







Payment  Date  interest  will  accrue for the number of days from and  including
December 14, 1998 to and including  December 4, 1998.  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-4-2







         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 1998-4

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




                                           By:
                                              Name:
                                              Title:



                                      A-4-3





                     TRUSTEE'S CERTIFICATE OF AUTHENTICATION

         This  is one of the  Notes  designated  above  and  referred  to in the
within-mentioned Indenture.

Date:    December 4, 1998              NORWEST BANK MINNESOTA, NATIONAL
                                       ASSOCIATION, not in its
                                       individual capacity, but solely
                                       as Trustee


                                       By:
                                          Authorized Signatory


                                      A-4-4






                                [REVERSE OF NOTE]

         This  Note is one of a duly  authorized  issue of Notes of the  Issuer,
designated as its Class A-4 5.690%  Asset-Backed Notes (herein called the "Class
A-4 Notes"),  all issued  under an Indenture  dated as of December 1, 1998 (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,  the Class A-2 Notes,  the Class A-3  Notes,  the
Class A-4 Notes and the Class A-5 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-4 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 December 15, 1998.

         As described  above,  the entire unpaid  principal  amount of this Note
shall be due and payable on the earlier of the Class A-4 Final Scheduled Payment
Date and the  Redemption  Date,  if any,  pursuant  to  Section  10.1(a)  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 a majority  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-4 Notes shall be made pro rata to the Class A-3 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



                                      A-4-5







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-4 Interest Rate to the extent lawful.

         As provided in the Indenture, the Notes may be redeemed (a) pursuant to
Section 10.1 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,  and (b) pursuant to Section  10.1(b)
of the  Indenture,  in part,  on a pro rata  basis,  on the  Payment  Date on or
immediately  following the last day of the Funding  Period in the event that any
Pre-Funded  Amount  remains on deposit in the  Pre-Funding  Account after giving
effect  to the  purchase  of all  Subsequent  Receivables,  including  any  such
purchase on the Redemption Date.

         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


                                      A-4-6







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 Issuer, 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 Issuer,  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 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.

         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 (i) 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 4975 of the  Internal  Revenue Code or
(ii) the acquisition and holding of the Notes will be covered by a Department of
Labor class exemption.

         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


                                      A-4-7







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 the 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-4-8







                                   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-4-9







                      [Form of Class A-5 Note] EXHIBIT A-5

REGISTERED                                                           $18,625,000

No. R-A-4

                       SEE REVERSE FOR CERTAIN DEFINITIONS

                                                             CUSIP NO. 12615WAV3



         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 1998-4

                       CLASS A-5 5.890% ASSET-BACKED NOTES

         CPS Auto  Receivables  Trust  1998-4,  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  EIGHTEEN  MILLION  SIX  HUNDRED
TWENTY-FIVE  THOUSAND DOLLARS payable on each Payment Date in an amount equal to
the aggregate  amount,  if any,  payable from the Note  Distribution  Account in
respect of  principal  on the Class A-5 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 September 2005 Payment Date (the "Class A-5 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 current Payment


                                      A-5-1







Date;  provided that for the December 15, 1998 Payment Date interest will accrue
for the  number of days from and  including  December  4, 1998 to and  including
December 14, 1998.  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-5-2







         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 1998-4

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




                                        By:
                                           Name:
                                           Title:



                                      A-5-3







                     TRUSTEE'S CERTIFICATE OF AUTHENTICATION

         This  is one of the  Notes  designated  above  and  referred  to in the
within-mentioned Indenture.

Date:    December 4, 1998           NORWEST BANK MINNESOTA, NATIONAL
                                    ASSOCIATION, not in its
                                    individual capacity, but solely
                                    as Trustee


                                    By:
                                       Authorized Signatory


                                      A-5-4







                                [REVERSE OF NOTE]

         This  Note is one of a duly  authorized  issue of Notes of the  Issuer,
designated as its Class A-5 5.890%  Asset-Backed Notes (herein called the "Class
A-5 Notes"),  all issued  under an Indenture  dated as of December 1, 1998 (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,  the Class A-2 Notes,  the Class A-3  Notes,  the
Class A-4 Notes and the Class A-5 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-5 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 December 15, 1998.

         As described  above,  the entire unpaid  principal  amount of this Note
shall be due and payable on the earlier of the Class A-5 Final Scheduled Payment
Date and the  Redemption  Date,  if any,  pursuant  to  Section  10.1(a)  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 a majority  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-5 Notes shall be made pro rata to the Class A-5 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

                                      A-5-5







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-5 Interest Rate to the extent lawful.

         As provided in the Indenture, the Notes may be redeemed (a) pursuant to
Section 10.1 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,  and (b) pursuant to Section  10.1(b)
of the  Indenture,  in part,  on a pro rata  basis,  on the  Payment  Date on or
immediately  following the last day of the Funding  Period in the event that any
Pre-Funded  Amount  remains on deposit in the  Pre-Funding  Account after giving
effect  to the  purchase  of all  Subsequent  Receivables,  including  any  such
purchase on the Redemption Date.

         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

                                      A-5-6







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 Issuer, 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 Issuer,  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 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.

         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 (i) 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 4975 of the  Internal  Revenue Code or
(ii) the acquisition and holding of the Notes will be covered by a Department of
Labor class exemption.

         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


                                      A-5-7







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 the 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-5-8







                                   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-5-9






                                                           EXHIBIT B



                          Form of Depository Agreement



                               See Following Page




                                                       EXECUTION COPY









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

                               SALE AND SERVICING

                                    AGREEMENT

                                      among

                      CPS AUTO RECEIVABLES TRUST 1998-4, as
                                     Issuer,

                            CPS RECEIVABLES CORP., as
                                     Seller,

                      CONSUMER PORTFOLIO SERVICES, INC., as
                                    Servicer

                                CSC LOGIC/MSA LLP
                        d/b/a Loan Servicing Enterprise,
                               as Backup Servicer

                                       and

                NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION, as
                          Standby Servicer and Trustee

                                   Dated as of
                                December 1, 1998

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










         SALE AND SERVICING  AGREEMENT  dated as of December 1, 1998,  among CPS
AUTO  RECEIVABLES  TRUST 1998-4, a Delaware  business trust (the "Issuer"),  CPS
RECEIVABLES CORP., a California  corporation (the "Seller"),  CONSUMER PORTFOLIO
SERVICES,  INC., a California  corporation (the  "Servicer"),  CSC LOGIC/MAS LLP
d/b/a  LOAN  SERVICING  ENTERPRISE  ("Loan  Servicing  Enterprise"),  as  Backup
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., Samco Acceptance Corp. or Linc
Acceptance  Company LLC through motor vehicle  dealers and  independent  finance
companies;

         WHEREAS  the  Seller  has  purchased  such  receivables  from  Consumer
Portfolio Services, Inc., Samco Acceptance Corp. and Linc Acceptance Company LLC
and is willing to sell such receivables to the Issuer;

         WHEREAS the Issuer desires to purchase  additional  receivables arising
in  connection  with motor  vehicle  retail  installment  sale  contracts  to be
acquired on or after the Cutoff Date by Consumer Portfolio Services, Inc., Samco
Acceptance  Corp., or Linc Acceptance  Company LLC through motor vehicle dealers
and independent finance companies;

         WHEREAS  the  Seller  has   agreements  to  purchase  such   additional
receivables from Consumer Portfolio  Services,  Inc., Samco Acceptance Corp. and
Linc  Acceptance  Company  LLC 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.











         "Addition  Notice"  means,  with respect to any transfer of  Subsequent
Receivables  to the Trust pursuant to Section 2.2 of this  Agreement,  notice of
the Seller's  election to transfer  Subsequent  Receivables  to the Trust,  such
notice to designate the related  Subsequent  Transfer  Date and the  approximate
principal amount of Subsequent  Receivables to be transferred on such Subsequent
Transfer Date.

         "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).

         "Backup  Servicer" mean Loan Servicing  Enterprise,  in its capacity as
Backup Servicer pursuant to the terms of the Backup Servicing  Agreement,  dated
as of December 1, 1998,  among CPS, the Loan Servicing  Enterprise,  the Insurer
and the Trustee.

         "Backup  Servicing  Agreement"  means  that  certain  Backup  Servicing
Agreement  dated as of December 1, 1998,  among Loan Servicing,  Enterprise,  as
Backup  Servicer,  CPS as  Servicer,  the Issuer,  and Norwest  Bank  Minnesota,
National Association, as Trustee and Standby Servicer.

         "Backup  Servicing Fee" means the fee payable to the Backup Servicer so
long as the Backup  Servicer is not the  Servicer,  on each  Payment Date in the
amount specified in the Backup Servicing Agreement.




                                       -2-





         "Bank of  America"  means Bank of America  National  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,  the  Lockbox  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.

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

         "Certificate"  has  the  meaning  assigned  to such  term in the  Trust
Agreement.

         "Certificateholder"  has the meaning assigned to such term in the Trust
Agreement.

         "Class" means the Class A-1 Notes,  the Class A-2 Notes,  the Class A-3
Notes, the Class A-4 Notes and the Class A-5 Notes, as the context requires.

         "Class A Note Majority" means the Holders of Notes evidencing more than
50% of the outstanding principal amount of the Notes.

         "Class  A-1 Final  Scheduled  Payment  Date"  means the  December  1999
Payment Date.

         "Class A-1 Interest Rate" means 5.473% 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.

         "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, plus interest
on such  Class A-1  Noteholder's  Interest  Carryover  Shortfall,  to the extent
permitted by law, at the Class A-1 Interest Rate to, but excluding,  the current
Payment Date.





                                       -3-





         "Class A-1 Noteholders' Monthly Interest Distributable Amount" means an
amount  equal to the  product  of (i) the  Class  A-1  Interest  Rate,  (ii) the
outstanding  principal  balance  of the  Class  A-1 notes as of the close of the
preceding  Payment Date (or, in the case of the initial  Payment Date, as of the
Closing  Date)  after  giving  effect to all  distributions  on  account  of the
principal on such preceding Payment Date and (iii) a fraction,  the numerator of
which is the actual number of days elapsed in the applicable  Class A-1 Interest
Period and the denominator of which is 360.

         "Class  A-1  Notes"  has  the  meaning  assigned  to  such  term in the
Indenture.

         "Class A-1  Prepayment  Amount"  means,  as of the  Payment  Date on or
immediately following the last day of the Funding Period, after giving effect to
any  transfer of  Subsequent  Receivables  on such date,  an amount equal to the
Class A-1  Noteholders'  pro rata share  (based on the  respective  then-current
outstanding  principal  amount of all  Notes) of the  Pre-Funded  Amount on such
Payment  Date  (after  giving  effect  to any  application  thereof  to  acquire
Subsequent  Receivables on such Payment  Date);  provided that, if the aggregate
remaining  Pre-Funded  Amount as of such Payment Date is $100,000 or less,  then
the Class A-1 Prepayment Amount will equal the Pre-Funded Amount.

         "Class  A-2 Final  Scheduled  Payment  Date"  means the  February  2002
Payment Date.

         "Class A-2 Interest Rate" means 5.790% 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.

         "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, plus interest
on such  Class A-2  Noteholder's  Interest  Carryover  Shortfall,  to the extent
permitted by law, at the Class A-2 Interest Rate to, but excluding,  the current
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  outstanding  principal  amount of the Class
A-2 Notes and (iii) a  fraction,  the  numerator  of which is the number of days
from and including the Closing Date to and including December 14, 1998 (assuming
that there are 30 days in each month of the year) 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 outstanding principal amount of the Class




                                       -4-





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.

         "Class A-2  Prepayment  Amount"  means,  as of the  Payment  Date on or
immediately following the last day of the Funding Period, after giving effect to
any  transfer of  Subsequent  Receivables  on such date,  an amount equal to the
Class A-2  Noteholders'  pro rata share  (based on the  respective  then-current
outstanding  principal  amount of all  Notes) of the  Pre-Funded  Amount on such
Payment  Date  (after  giving  effect  to any  application  thereof  to  acquire
Subsequent  Receivables on such Payment  Date);  provided that, if the aggregate
remaining  Pre-Funded  Amount as of such Payment Date is $100,000 or less,  then
the Class A-2 Prepayment Amount will be zero.

         "Class A-3 Final  Scheduled  Payment  Date"  means the  September  2003
Payment Date.

         "Class A-3 Interest Rate" means 5.740% per annum.

         "Class A-3  Noteholders'  Interest  Carryover  Shortfall"  means,  with
respect to any Payment Date, the excess of the Class A-3  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-3 Noteholders' Interest Distributable Amount.

         "Class A-3  Noteholders'  Interest  Distributable  Amount" means,  with
respect  to any  Payment  Date,  the sum of the Class A-3  Noteholders'  Monthly
Interest   Distributable   Amount  of  such  Payment  Date  and  the  Class  A-3
Noteholders'  Interest Carryover  Shortfall for such Payment Date, plus interest
on such  Class A-3  Noteholder's  Interest  Carryover  Shortfall,  to the extent
permitted by law, at the Class A-3 Interest Rate to, but excluding,  the current
Payment Date.

         "Class A-3 Noteholders'  Monthly Interest  Distributable  Amount" means
(a) for the first  Payment Date, an amount equal to the product of (i) the Class
A-3 Interest Rate, (ii) the initial  outstanding  principal  amount of the Class
A-3 Notes and (iii) a  fraction,  the  numerator  of which is the number of days
from and including the Closing Date to and including December 14, 1998 (assuming
that  there are 30 days in each month of the year) and (ii) 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-3 Interest  Rate
and (ii) the outstanding principal amount of the Class A-3 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-3  Notes"  has  the  meaning  assigned  to  such  term in the
Indenture.





                                       -5-





         "Class A-3  Prepayment  Amount"  means,  as of the  Payment  Date on or
immediately following the last day of the Funding Period, after giving effect to
any  transfer of  Subsequent  Receivables  on such date,  an amount equal to the
Class A-3  Noteholders'  pro rata share  (based on the  respective  then-current
outstanding  principal  amount of all  Notes) of the  Pre-Funded  Amount on such
Payment  Date  (after  giving  effect  to any  application  thereof  to  acquire
Subsequent  Receivables on such Payment  Date);  provided that, if the aggregate
remaining  Pre-Funded  Amount as of such Payment Date is $100,000 or less,  then
the Class A-3 Prepayment Amount will be zero.

         "Class A-4 Final  Scheduled  Payment  Date"  means the  September  2003
Payment Date.

         "Class A-4 Interest Rate" means 5.690% per annum.

         "Class A-4  Noteholders'  Interest  Carryover  Shortfall"  means,  with
respect to any Payment Date, the excess of the Class A-4  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-4 Noteholders' Interest Distributable Amount.

         "Class A-4  Noteholders'  Interest  Distributable  Amount" means,  with
respect  to any  Payment  Date,  the sum of the Class A-4  Noteholders'  Monthly
Interest   Distributable   Amount  of  such  Payment  Date  and  the  Class  A-4
Noteholders'  Interest Carryover  Shortfall for such Payment Date, plus interest
on such  Class A-4  Noteholder's  Interest  Carryover  Shortfall,  to the extent
permitted by law, at the Class A-4 Interest Rate to, but excluding,  the current
Payment Date.

         "Class A-4 Noteholders'  Monthly Interest  Distributable  Amount" means
(a) for the first  Payment Date, an amount equal to the product of (i) the Class
A-4 Interest Rate, (ii) the initial  outstanding  principal  amount of the Class
A-4 Notes and (iii) a  fraction,  the  numerator  of which is the number of days
from and including the Closing Date to and including December 14, 1998 (assuming
that  there are 30 days in each month of the year) and (ii) 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-4 Interest  Rate
and (ii) the outstanding principal amount of the Class A-4 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-4 Noteholders'  Percentage" means, with respect to any Payment
Date on which any principal of the Class A-4 Notes is outstanding,  a percentage
equal to 100% minus the Sequential Pay Noteholders'  Percentage;  provided that,
if principal  of any Class A-4 Notes is still  outstanding  after the  principal
amount  of the  Sequential  Pay Notes has been  reduced  to zero,  the Class A-4
Noteholders' Percentage will be 100% until the Class A-4 Notes have been paid in
full.

         "Class  A-4  Notes"  has  the  meaning  assigned  to  such  term in the
Indenture.




                                       -6-





         "Class A-4  Prepayment  Amount"  means,  as of the  Payment  Date on or
immediately following the last day of the Funding Period, after giving effect to
any  transfer of  Subsequent  Receivables  on such date,  an amount equal to the
Class A-4  Noteholders'  pro rata share  (based on the  respective  then-current
outstanding  principal  amount of all  Notes) of the  Pre-Funded  Amount on such
Payment  Date  (after  giving  effect  to any  application  thereof  to  acquire
Subsequent  Receivables on such Payment  Date);  provided that, if the aggregate
remaining  Pre-Funded  Amount as of such Payment Date is $100,000 or less,  then
the Class A-4 Prepayment Amount will be zero.

         "Class A-5 Final  Scheduled  Payment  Date"  means the  September  2005
Payment Date.

         "Class A-5 Interest Rate" means 5.890% per annum.

         "Class A-5  Noteholders'  Interest  Carryover  Shortfall"  means,  with
respect to any Payment Date, the excess of the Class A-3  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-5 Noteholders' Interest Distributable Amount.

         "Class A-5  Noteholders'  Interest  Distributable  Amount" means,  with
respect  to any  Payment  Date,  the sum of the Class A-5  Noteholders'  Monthly
Interest   Distributable   Amount  of  such  Payment  Date  and  the  Class  A-5
Noteholders'  Interest Carryover  Shortfall for such Payment Date, plus interest
on such  Class A-5  Noteholder's  Interest  Carryover  Shortfall,  to the extent
permitted by law, at the Class A-5 Interest Rate to, but excluding,  the current
Payment Date.

         "Class A-5 Noteholders'  Monthly Interest  Distributable  Amount" means
(a) for the first  Payment Date, an amount equal to the product of (i) the Class
A-5 Interest Rate, (ii) the initial  outstanding  principal  amount of the Class
A-5 Notes and (iii) a  fraction,  the  numerator  of which is the number of days
from and including the Closing Date to and including December 14, 1998 (assuming
that  there are 30 days in each month of the year) and (ii) 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-5 Interest  Rate
and (ii) the outstanding principal amount of the Class A-5 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-5  Notes"  has  the  meaning  assigned  to  such  term in the
Indenture.

         "Class A-5  Prepayment  Amount"  means,  as of the  Payment  Date on or
immediately following the last day of the Funding Period, after giving effect to
any  transfer of  Subsequent  Receivables  on such date,  an amount equal to the
Class A-5  Noteholders'  pro rata share  (based on the  respective  then-current
outstanding  principal  amount of all  Notes) of the  Pre-Funded  Amount on such
Payment  Date  (after  giving  effect  to any  application  thereof  to  acquire
Subsequent  Receivables on such Payment  Date);  provided that, if the aggregate
remaining




                                       -7-





Pre-Funded  Amount as of such Payment  Date is $100,000 or less,  then the Class
A-5 Prepayment Amount will be zero.

         "Closing Date" means December 4, 1998.

         "Code" shall have the meaning specified in Section 3.2.

         "Collateral"  shall  have  the  meaning  assigned  to such  term in the
Indenture.

         "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 0.0075% of the aggregate
outstanding  principal  amount  of the  Notes  on  the  last  day of the  second
preceding Collection 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 of days from the Closing Date to but excluding the first Payment Date and
the  denominator  of  which  is  360,  (ii)  0.0075%  and  (iii)  the  aggregate
outstanding principal amount of the Notes 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 Cutoff Date and ending on the
close of business on November 30, 1998. With respect to each subsequent  Payment
Date,  the  preceding  calendar  month.  Any  amount  stated "as of the close of
business  on 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.

         "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.





                                       -8-





         "CPS" means Consumer Portfolio Services, Inc., a California corporation
and its successors.

         "CPS  Purchase  Agreement"  means the  Purchase  Agreement  dated as of
December 1, 1998 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"  shall have the meaning specified in the CPS Purchase
Agreement.

         "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  Receivable  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
Receivable 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 21, 1998.

         "Dealer" means, with respect to a Receivable, the seller of the related
Financed  Vehicle,  who originated and assigned such Receivable to CPS, Samco or
Linc, 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:

                  (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




                                       -9-





         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




                                      -10-





         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  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




                                      -11-





         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;

                  (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)
                  who 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




                                      -12-





                  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;

                  (f) in each case of delivery  contemplated pursuant to clauses
         (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;





                                      -13-





         (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.

         "Eligible  Servicer" means a Person approved to act as "Servicer" under
this Agreement by a Class A Note Majority.

         "ERISA" shall have the meaning specified in Section 3.2.

         "Extension  Percentage" means the percentage  equivalent of a fraction,
the  numerator  of  which  is  the  aggregate   Principal  Balance  of  extended
Receivables  in that  Collection  Period  and the  denominator  of  which is the
Aggregate Principal Balance on the first day of such Collection Period.

         "FDIC" means the Federal Deposit Insurance Corporation.

         "Final  Scheduled  Payment  Date"  means with  respect to the Class A-1
Notes, the Class A-1 Final Scheduled Payment Date, with respect to the Class A-2
Notes, the Class A-2 Final Scheduled Payment Date, with respect to the Class A-3
Notes, the Class A-3 Final Scheduled Payment Date, with respect to the Class A-4
Notes, the Class A-4 Final Scheduled




                                      -14-





Payment  Date and with  respect  to the  Class  A-5  Notes,  the Class A-5 Final
Scheduled 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.

         "First LSE Payment Date" means the Payment Date  occurring in the first
calendar month after the calendar month in which the LSE Assumption Date occurs.

         "First LSE  Servicing  Fee" means with respect to the First LSE Payment
Date, an amount equal to the product of (a) $1.75 per Receivable in the Trust as
of the last day of the  related  Collection  Period and (b) a  fraction  (i) the
numerator of which is the number of days in the related  Collection  Period from
and after the LSE Assumption Date and (ii) the denominator of which is 30.

         "Funding  Period"  means the  period  beginning  on and  including  the
Closing Date and ending on the first to occur of (a) the first date on which the
amount  on  deposit  in the  Pre-Funding  Account  (after  giving  effect to any
transfers therefrom in connection with the transfer of Subsequent Receivables to
the Issuer on such date) is less than  $100,000,  (b) the date on which an Event
of Default  or a Servicer  Termination  Event  occurs,  (c) the date on which an
Insolvency Event occurs with respect to the Seller and (d) February 20, 1999.

         "Holder" shall have the meaning specified in the Indenture.

         "Indemnification  Agreement" means the Indemnification  Agreement among
the Note Insurer,  CPS, the Seller and the Underwriter,  dated as of December 1,
1998, as such agreement may be amended,  supplemented or otherwise modified from
time to time in accordance with the terms thereof.

         "Indenture"  means the Indenture dated as of December 1, 1998,  between
the Issuer and Norwest Bank Minnesota,  National Association, as Trustee, as the
same may be amended,  supplemented  or otherwise  modified  from time to time in
accordance with the terms thereof.

         "Initial  Receivable" means each retail installment sale contract for a
Financed  Vehicle which,  as of the Closing Date, is listed on Schedule A (which
Schedule A may be in the form of  microfiche)  and all  rights  and  obligations
thereunder  except for  Initial  Receivables  that shall have  become  Purchased
Receivables.

         "Initial  Spread Account  Deposit" shall have the meaning  specified in
the Spread Account Supplement.

         "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




                                      -15-





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 December 1, 1998,
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   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




                                      -16-





         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  Rate"  means  the  Class A-1  Interest  Rate,  the Class A-2
Interest  Rate,  the Class A-3 Interest Rate, the Class A-4 Interest Rate or the
Class A-5 Interest Rate, as applicable.

         "Interest  Reserve  Account"  means  the  account  designated  as such,
established and maintained pursuant to Section 5.2.

         "Interest Reserve Account Initial Deposit" means $224,122.50.

         "Investment  Earnings" means,  with respect to any Payment Date and any
Trust  Account,  the  investment  earnings  on  amounts on deposit in such Trust
Account on such Payment Date.

         "Issuer" means CPS Auto Receivables Trust 1998-4.

         "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.

         "Linc" means Linc Acceptance Company LLC and its successors.

         "Linc Purchase  Agreement"  means the Purchase  Agreement,  dated as of
December 1, 1998 by and between Linc 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 Linc  Receivables  by the
Seller from Linc.

         "Linc  Receivables"  shall  have  the  meaning  specified  in the  Linc
Purchase Agreement.

         "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 Receivable Payment of more than ten dollars
for 120 (or, if the related Financed Vehicle has been repossessed,  210) or more
days as of the end of a Collection Period or (iv) with respect to which proceeds
have been




                                      -17-





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(b).

         "Lockbox Agreement" means the Three Party Agreement Relating to Lockbox
Services,  dated as of December 1, 1998, by and among the Lockbox Processor, the
Servicer,  the  Seller  and the  Trustee,  as  such  agreement  may be  amended,
supplemented or otherwise  modified 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.

         "LSE  Assumption  Date" means the date, if any, on which Loan Servicing
Enterprise becomes the successor Servicer under this Agreement.

         "LSE Servicing Fee" has the meaning specified in Section 4.8.

         "Mandatory  Redemption  Date" means the first  Payment Date on or after
the last day of the Funding Period.

         "Master  Spread  Account  Agreement"  means the Master  Spread  Account
Agreement  amended and restated as of July 15, 1998 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" (a) prior to the LSE Assumption Date, 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  Vehicles and the cost of legal
counsel with the  enforcement of a defaulted  Receivable,  (ii) amounts that are
required to be refunded to the Obligor on such  Receivable;  provided,  however,
that the Net  Liquidation  Proceeds with respect to any  Receivable  shall in no
event be less than zero;  and (b) on and after the LSE Assumption  Date,  means,
with respect to each Collection Period, the aggregate of all




                                      -18-





amounts  realized during such  Collection  Period with respect to all Liquidated
Receivables  (other than amounts  withdrawn from the Spread Account and drawings
under the Note Policy) net of (i) the aggregate  reasonable expenses incurred by
the Servicer during such Collection  Period in connection with the collection of
Liquidated   Receivables  and  the  repossession  and  disposition  of  Financed
Vehicles,  (ii) the  aggregate  portion  of the  amounts  realized  during  such
Collection  Period that are required to be refunded to Obligors under Liquidated
Receivables and (iii) amounts  described in clauses (b)(i) and (b)(ii)  relating
to prior  Collection  Periods  which  were not  reimbursed  in prior  Collection
Periods;  provided,  however,  that the Net Liquidation Proceeds with respect to
any Collection Period shall in no event be less than zero.

         "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 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"  means as of the close of  business  on any Payment
Date, a seven-digit decimal figure equal to the outstanding  principal amount of
the Notes divided by the original outstanding principal amount of the Notes.

         "Note  Prepayment  Amount" means, as of the Payment Date the sum of (i)
the  Class A-1  Prepayment  Amount  for such  Payment  Date,  (ii) the Class A-2
Prepayment  Amount for such Payment Date, (iii) the Class A-3 Prepayment  Amount
for such Payment  Date,  (iv) the Class A-4  Prepayment  Amount for such Payment
Date and (v) the Class A-5 Prepayment Amount for such Payment Date.

         "Noteholder" shall have the meaning specified in the Indenture.

         "Noteholders' Interest Distributable Amount" means, with respect to any
Payment Date, the sum of (i) the Class A-1 Noteholders'  Interest  Distributable
Amount  for  such  Payment  Date,  (ii)  the  Class  A-2  Noteholders'  Interest
Distributable  Amount for such Payment  Date,  (iii) the Class A-3  Noteholders'
Interest  Distributable  Amount  for  such  Payment  Date,  (iv) the  Class  A-4
Noteholders'  Interest  Distributable  Amount for such  Payment Date and (v) the
Class A-5 Noteholders' Interest Distributable Amount for such Payment Date..





                                      -19-





         "Noteholders'  Percentage"  will be 100%  until  the  Notes are paid in
full.

         "Noteholders' Principal Carryover Shortfall" means, with respect to any
Payment Date, the excess of the 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  Noteholders'
Principal Distributable Amount.

         "Noteholders'  Principal  Distributable  Amount" means, with respect to
any Payment Date (other than the Final  Scheduled  Payment Date for any Class of
Notes), the Noteholders'  Percentage of the Principal  Distributable Amount. The
Noteholders' Principal  Distributable Amount on the Final Scheduled Payment Date
for a Class of Notes will equal the  greater  of (i) the  outstanding  principal
amount  of such  Class of Notes  and (ii)  the  Noteholders'  Percentage  of the
Principal Distributable Amount.

         "Obligor" on a Receivable  means the purchaser or  co-purchasers of the
Financed Vehicle and any other Person who owes payments under the Receivable.

         "Officer's  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.

         "Original  Pool  Balance"  means the sum,  as of any date,  of the Pool
Balance as of the Cutoff Date, plus the initial Pre-Funded Amount.

         "Other Conveyed  Property" means all property conveyed by the Seller to
the Trust  pursuant to Sections  2.1(b)  through (i) of this  Agreement  and all
property described in Sections 2.2(a)(ii) through (viii) of this Agreement which
is  conveyed  by the  Seller  to the Trust  pursuant  to a  Subsequent  Transfer
Agreement.

         "Outgoing  Servicer  Fee" means,  with respect to the First LSE Payment
Date,  an amount equal to the product of (a) one twelfth times 2.00% of the Pool
Balance  as of the close of  business  on the last day of the  second  preceding
Collection Period and (b) a fraction (i) the numerator of which is the number of
days in the related  Collection Period prior to the LSE Assumption Date and (ii)
the denominator of which is 30.





                                      -20-





         "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.

         "Owner Trust Estate" has the meaning assigned to such term in the Trust
Agreement.

         "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 December 15, 1998.

         "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
Seller for the benefit of the Securityholders and the Note Insurer,  established
and maintained pursuant to Section 4.2.

         "Preference Claim" shall have the meaning specified in Section 6.2(b).

         "Pre-Funded Amount" means, with respect to any Payment Date, the amount
on deposit in the Pre-Funding Account, (exclusive of Pre-Funding Earnings) which
initially shall be $34,352,728.96.

         "Pre-Funding Account" has the meaning specified in Section 5.1.

         "Pre-Funding  Earnings"  means any  Investment  Earnings  on amounts on
deposit in the Pre-Funding Account.

         "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 Receivable 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  Receivable  Payments  actually  received on or prior to such day
allocable to principal  using 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




                                      -21-





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,  the  Samco
Purchase Agreement and/or the Linc 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),
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 the Class A Notes.




                                      -22-





         "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 allocable to principal.

         "Receivable Files" means the documents specified in Section 3.3.

         "Receivables"  means,  collectively,  the Initial  Receivables  and the
Subsequent Receivables.

         "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.

         "Requisite  Reserve  Amount" as of any date during the  Funding  Period
will equal the product of:

                  (i) 1/360th of the difference between

                                    (A)  the  weighted  average  of  each of the
                           Interest  Rates for each class of Notes (based on the
                           outstanding  principal  amount of each  class on such
                           date); and

                                    (B) an  assumed  yield of 2.5% per  annum on
                           investments of funds in the Pre-Funding Account;

                  (ii) the Pre-Funded Amount on such date; and

                  (iii) the number of days  remaining  until the Payment Date in
         February 1999;

provided that, upon the expiration of the Funding Period,  the Requisite Reserve
Amount will be zero.

         "Responsible  Officer"  shall have the meaning  specified  in the Trust
Agreement.

         "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, and its
successors.




                                      -23-





         "Samco Purchase  Agreement" means the Purchase  Agreement,  dated as of
December 1, 1998 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.

         "Samco  Receivables"  shall  have the  meaning  specified  in the Samco
Purchase Agreement.

         "Scheduled  Receivable  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).

         "Schedule of Receivables"  means the schedule of all retail installment
sales contracts and promissory notes held as part of the Trust which is attached
hereto as Schedule A, as amended or supplemented from time to time.

         "Securities" means the Notes and the Certificates.

         "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.

         "Sequential Pay  Noteholders'  Percentage"  means,  with respect to any
Payment Date on which any principal of the Sequential Pay Notes is  outstanding,
the  percentage  equivalent  of a  fraction  (a) the  numerator  of which is the
aggregate  initial  principal  amount  of the  Sequential  Pay Notes and (b) the
denominator  of which is the aggregate of the initial  principal  amounts of the
Sequential Pay Notes and the Class A-4 Notes; provided that, if principal of any
Sequential  Pay Notes is still  outstanding  after the  principal  amount of the
Class  A-4 Notes has been  reduced  to zero,  the  Sequential  Pay  Noteholders'
Percentage will be 100% until the Sequential Pay Notes have been paid in full.

         "Sequential  Pay Notes" means the Class A-1 Notes,  the Class A-2 Notes
and the Class A-3 Notes.

         "Series 1998-4 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.





                                      -24-





         "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  and  Lockbox  Processing  Assumption  Agreement"  means the
Servicing and Lockbox Processing Assumption  Agreement,  dated as of December 1,
1998  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.

         "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.

         "Spread Account  Supplement"  means the Series 1998-4 Supplement to the
Master  Spread  Account  Agreement  dated as of  December 1, 1998 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  Ratings Group, 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
0.025% of the aggregate  outstanding  principal  amount of the Notes on the last
day of the second preceding Collection Period;  provided,  however,  that on the
first  Payment Date the Standby  Servicer  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) 0.025% and (iii)
the aggregate outstanding principal amount of the Notes as of the Closing Date.

         "Standby Servicer" means Norwest Bank Minnesota,  National Association,
in its capacity as Standby  Servicer  pursuant to the terms of the Servicing and
Lockbox Processing




                                      -25-





Assumption  Agreement  or such  Person  as shall  have  been  appointed  Standby
Servicer pursuant to Section 9.2(c).

         "Subsequent  Cutoff Date" means (i) the last day of the month preceding
the month in which particular  Subsequent  Receivables are conveyed to the Trust
pursuant  to this  Agreement  or  (ii)  if any  such  Subsequent  Receivable  is
originated in the month of the related  Subsequent  Transfer  Date,  the date of
origination.

         "Subsequent  Purchase  Agreement" means an agreement by and between the
Seller and CPS, the Seller and Samco,  or the Seller and Linc  pursuant to which
the Seller will acquire Subsequent Receivables.

         "Subsequent  Receivables"  means  the  Receivables  transferred  to the
Issuer  pursuant  to Section  2.2,  which  shall be listed on  Schedule A to the
related Subsequent Transfer Agreement.

         "Subsequent  Spread  Account  Deposit"  means,  with  respect  to  each
Subsequent  Transfer  Date, an amount equal to 3.0% of the  aggregate  Principal
Balance of related  Subsequent  Receivables as of the related  Subsequent Cutoff
Date  transferred  to the Trust on such  Subsequent  Transfer  Date from amounts
released from the Pre-Funding Account.

         "Subsequent  Transfer  Agreement" means the agreement among the Issuer,
the Seller and the Servicer, substantially in the form of Exhibit A.

         "Subsequent   Transfer   Date"  means,   with  respect  to   Subsequent
Receivables, any date, occurring not more frequently than once per month, during
the Funding Period on which Subsequent  Receivables are to be transferred to the
Trust  pursuant  to this  Agreement,  and a  Subsequent  Transfer  Agreement  is
executed and delivered to the Trust.

         "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 5.3 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.





                                      -26-





         "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 September 11,
1998,  as amended and  restated as of December 1, 1998,  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  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 and Section 2.2, together with certain monies received after (i) the
Cutoff  Date  (with  respect  to  Initial  Receivables)  and  (ii)  the  related
Subsequent Cutoff Date (with respect to Subsequent  Receivables),  the Insurance
Policies, the Collection Account (including all Eligible Investments therein and
all proceeds  therefrom),  the Lockbox  Account,  the Pre-Funding  Account,  the
Interest Reserve Account and certain other rights under this Agreement. Although
the Seller has pledged the Series 1998-4 Spread Account to the Collateral  Agent
pursuant  to the Master  Spread  Account  Agreement,  the Series  1998-4  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 in 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 in an amount equal to one-twelfth  of 0.0075% of the aggregate  outstanding
principal amount of the Notes 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) 0.0075% and (iii) the aggregate  outstanding principal amount
of the Notes as of the Closing




                                      -27-





Date and/or (B) any amounts payable to the Owner Trustee pursuant to Section 8.1
of the Trust Agreement, as applicable.

         "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.

         (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.






                                      -28-





                                   ARTICLE II

                            CONVEYANCE OF RECEIVABLES

         SECTION 2.1. Conveyance of Initial 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 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):

                  (a) all right,  title and interest of the Seller in and to the
         Initial Receivables listed in Schedule A hereto and all monies received
         thereunder  after  the  Cutoff  Date and all Net  Liquidation  Proceeds
         received  with  respect to such  Initial  Receivables  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  Initial  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  securing  the Initial  Receivables  or the Obligors
         thereunder;

                  (d) all right,  title and interest of the Seller in and to the
         Purchase Agreements,  including a direct right to cause CPS to purchase
         Receivables from the Trust pursuant to the CPS Purchase Agreement under
         the circumstances specified therein;

                  (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 Initial  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  under an Initial  Receivable  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 Initial Receivable;

                  (g) all  amounts  and  property  from  time to time held in or
         credited  to the  Collection  Account,  the  Pre-Funding  Account,  the
         Interest Reserve Account or the Lockbox Account;

                  (h)  the proceeds of any and all of the foregoing; and




                                      -29-





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

         SECTION 2.2.  Conveyance of Subsequent Receivables.

         (a) Subject to the  conditions  set forth in  paragraph  (b) below,  in
consideration of the Issuer's delivery on each related Subsequent  Transfer Date
to or upon the order of the Seller of the amount described in Section 5.10(a) to
be delivered to the Seller, the Seller will, on the related Subsequent  Transfer
Date,  sell,  transfer,  assign,  set over and  otherwise  convey to the  Issuer
without recourse (subject to the obligations set forth herein):

                  (i) all right,  title and interest of the Seller in and to the
         Subsequent  Receivables  listed in Schedule A to the related Subsequent
         Transfer Agreement and all monies received thereunder after the related
         Subsequent Cutoff Date and all Net Liquidation  Proceeds and Recoveries
         received with respect to such Subsequent  Receivables after the related
         Subsequent Cutoff Date;

                  (ii) all right, title and interest of the Seller in and to the
         security  interests  in  the  Financed  Vehicles  granted  by  Obligors
         pursuant to the  Subsequent  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;

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

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

                  (v) 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 Subsequent 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




                                      -30-





         under a Subsequent Receivable or his or her obligations with respect to
         a  Financed  Vehicle  and  any  recourse  to  Dealers  for  any  of the
         foregoing;

                  (vi)  the   Receivable   File   related  to  each   Subsequent
         Receivable;

                  (vii)  the proceeds of any and all of the foregoing; and

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

         (b) The Seller shall transfer to the Issuer the Subsequent  Receivables
and the other  property and rights  related  thereto  described in paragraph (a)
above only upon the satisfaction of each of the following conditions on or prior
to the related Subsequent Transfer Date:

                  (i) the Seller  shall have  provided  the  Trustee,  the Owner
         Trustee,  the Note  Insurer  and the Rating  Agencies  with an Addition
         Notice not later than three days prior to such Subsequent Transfer Date
         and shall have provided any information  reasonably requested by any of
         the foregoing with respect to the related Subsequent Receivables;

                  (ii) the Seller shall have  delivered to the Owner Trustee and
         the Trustee a duly executed  Subsequent  Transfer Agreement which shall
         include  supplements  to  Schedule A,  listing  the related  Subsequent
         Receivables;

                  (iii) the Seller shall,  to the extent required by Section 4.2
         of  this  Agreement,  have  deposited  in the  Collection  Account  all
         collections in respect of the related Subsequent Receivables;

                  (iv) as of each Subsequent Transfer Date, (A) the Seller shall
         not be  insolvent  and shall not  become  insolvent  as a result of the
         transfer of Subsequent  Receivables on such  Subsequent  Transfer Date,
         (B) the Seller shall not intend to incur or believe that it shall incur
         debts that would be beyond its ability to pay as such debts mature, (C)
         such  transfer  shall not have been made with actual  intent to hinder,
         delay or defraud any Person and (D) the assets of the Seller  shall not
         constitute unreasonably small capital to carry out its business as then
         conducted;

                  (v)  the Funding Period shall not have terminated;





                                      -31-





                  (vi)  after  giving  effect  to  any  transfer  of  Subsequent
         Receivables on a Subsequent  Transfer Date, the Receivables  then owned
         by  the  Trust  shall  meet  the  following   criteria  (based  on  the
         characteristics  of the Initial  Receivables on the Initial Cutoff Date
         and the Subsequent Receivables on the related Subsequent Cutoff Dates):
         (a) the weighted  average APR of such Receivables will not be less than
         0.25% below the weighted average APR of the Initial  Receivables on the
         Cutoff  Date,  (b)  the  weighted   average   remaining  term  of  such
         Receivables  will be  within a range of 12 to 72  months,  (c) not more
         than 90% of the aggregate  principal  balance of such  Receivables will
         represent  financing of used Financed Vehicles and (d) no fewer than 50
         % of the Subsequent  Receivables will be originated under the CPS alpha
         program,  (e) not more than 8% of the  Subsequent  Receivables  will be
         originated under the CPS delta program,  (f) not more than 5.25% of the
         Subsequent  Receivables  will be  originated  under the CPS first  time
         buyer  program  and (g) no fewer  than 20% and no more  than 30% of the
         Subsequent  Receivables  will be  originated  under  the  CPS  standard
         program,  and the Trust,  the Trustee,  the Owner  Trustee and the Note
         Insurer  shall  have  received  written  confirmation  from a  firm  of
         certified  independent public accountants as to the satisfaction of the
         criteria in clauses (a) through (g) above;

                  (vii) each of the  representations  and warranties made by the
         Seller   pursuant  to  Section  3.1  with  respect  to  the  Subsequent
         Receivables to be transferred on such Subsequent Transfer Date shall be
         true and correct as of the related  Subsequent  Transfer  Date, and the
         Seller  shall have  performed  all  obligations  to be  performed by it
         hereunder on or prior to such Subsequent Transfer Date;

                  (viii) the Seller  shall,  at its own expense,  on or prior to
         the  Subsequent  Transfer Date indicate in its computer  files that the
         Subsequent  Receivables identified in the Subsequent Transfer Agreement
         have been sold to the Trust pursuant to this Agreement;

                  (ix) the  Seller  shall  have  taken any  action  required  to
         maintain the first priority perfected  ownership interest of the Issuer
         in the Owner Trust  Estate and the first  priority  perfected  security
         interest of the Trustee in the Collateral;

                  (x) no selection  procedures  adverse to the  interests of the
         Securityholders  or the  Note  Insurer  shall  have  been  utilized  in
         selecting the Subsequent Receivables;

                  (xi) the addition of any such Subsequent Receivables shall not
         result  in a  material  adverse  tax  consequence  to the  Trust or the
         Noteholders;

                  (xii)  the  Seller  shall  have  delivered  (A) to the  Rating
         Agencies and the Note Insurer an Opinion of Counsel with respect to the
         transfer of such Subsequent  Receivables  substantially  in the form of
         the Opinion of Counsel  delivered  to the Rating  Agencies and the Note
         Insurer  on the  Closing  Date and (B) to the  Trustee  the  Opinion of
         Counsel required by Section 13.2(i)(i);





                                      -32-





                  (xiii) each Rating Agency shall have confirmed that the rating
         on the  Notes  shall not be  withdrawn  or  reduced  as a result of the
         transfer of such Subsequent Receivables to the Trust;

                  (xiv) the Note  Insurer (so long as no Insurer  Default  shall
         have occurred and be continuing),  in its absolute and sole discretion,
         shall have approved the transfer of such Subsequent  Receivables to the
         Issuer and the Note Insurer shall have been reimbursed for any fees and
         expenses  incurred by the Note Insurer in connection  with the granting
         of such approval;

                  (xv) the Seller shall  simultaneously  transfer the Subsequent
         Spread  Account  Deposit to the  Collateral  Agent with  respect to the
         Subsequent  Receivables  transferred on such Subsequent  Transfer Date;
         and

                  (xvi) the Seller shall have delivered to the Note Insurer, the
         Owner Trustee and the Trustee an Officers'  Certificate  confirming the
         satisfaction  of each condition  precedent  specified in this paragraph
         (b).

         The Seller covenants that in the event any of the foregoing  conditions
precedent are not  satisfied  with respect to any  Subsequent  Receivable on the
date required as specified above,  the Seller will  immediately  repurchase such
Subsequent  Receivable from the Issuer,  at a price equal to the Purchase Amount
thereof, in the manner specified in Section 3.2.

         SECTION 2.3.  Transfers  Intended as Sales.  It is the intention of the
Seller that each transfer and assignment  contemplated  by this Agreement  shall
constitute a sale of the related  Receivables  and other Trust Property from the
Seller to the Issuer and the  beneficial  interest  in and title to the  related
Receivables and 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 Section  2.1 and  Section 2.2 for the benefit of the  Noteholders
and the Note Insurer.

         SECTION 2.4.  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 or 2.2, 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




                                      -33-





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 Notes  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.


                                   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 for the  benefit of the  Noteholders  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, in the case of the Initial  Receivables,  and as of the related Subsequent
Transfer  Date,  in case of the  Subsequent  Receivables,  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 and, with respect to the Linc Receivables, Linc) in
         connection with the sale of Financed  Vehicles by the Dealers,  (2) has
         created a valid,  subsisting,  and enforceable first priority perfected
         security  interest  in favor  of CPS (or,  with  respect  to the  Samco
         Receivables,  Samco and, with respect to the Linc Receivables, Linc) in
         the Financed Vehicle,  which security interest has been assigned by CPS
         (or, with respect to the Samco Receivables,  Samco and, with respect to
         the Linc Receivables,  Linc) to the Seller,  which in turn has assigned
         such  security  interest to the Trust which 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




                                      -34-





         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
         14.9%, (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 88.63% of the aggregate Principal Balance of
         the Initial  Receivables,  constituting 91.11% of the number of Initial
         Receivables,  as of the  Cutoff  Date,  represents  financing  of  used
         automobiles,  light  trucks,  vans or  minivans;  the  remainder of the
         Initial Receivables represent financing of new vehicles;  approximately
         52.45% of the aggregate Principal Balance of the Initial Receivables as
         of the  Cutoff  Date  were  originated  under  the CPS  Alpha  Program;
         approximately  7.82% of the aggregate  Principal Balance of the Initial
         Receivables as of the Cutoff Date were  originated  under the CPS Delta
         Program;  approximately 5.24% of the aggregate Principal Balance of the
         Initial Receivables as of the Cutoff Date were originated under the CPS
         First  Time  Buyer  Program;  approximately  28.33%  of  the  aggregate
         Principal  Balance  of the  Receivables  as of  the  Cutoff  Date  were
         originated under the CPS Standard Program;  approximately  3.76% of the
         aggregate Principal Balance of the Initial Receivables as of the Cutoff
         Date were originated  under the CPS Super Alpha Program;  approximately
         2.39% of the aggregate  Principal Balance of the Initial Receivables as
         of  the  Cutoff   Date  were   originated   under  the  Linc   Program;
         approximately  4.62% of the aggregate  Principal Balance of the Initial
         Receivables as of the Cutoff Date are Samco Receivables;  approximately
         2.39%  of the  Initial  Receivables  as of the  Cutoff  Date  are  Linc
         Receivables;  no Initial  Receivable  shall have a payment that is more
         than 30 days  overdue as of the Cutoff  Date;  15.76% of the  aggregate
         Principal Balance of the Initial  Receivables as of the Cutoff Date are
         Rule of 78's Receivables and 84.24% of the aggregate  Principal Balance
         of the Initial  Receivables  as of the Cutoff Date are Simple  Interest
         Receivables;  each  Initial  Receivable  shall  have a final  scheduled
         payment  due no  later  than  September  27,  2004;  and  each  Initial
         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 complied at the time the related




                                      -35-





         Receivable  was  originated  or  made  and at  the  execution  of  this
         Agreement (or the applicable Subsequent Transfer 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.

                  (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, in
         the case of the Initial  Receivables,  or after the related  Subsequent
         Transfer Date, in the case of the Subsequent Receivables).

                  (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.  Except as  permitted  under  Section 4.2, no
         provision of a Receivable has been waived.

                  (viii) No Amendments.  Except as permitted  under Section 4.2,
         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  (with  respect  to the
         Initial Receivables) or the Subsequent Cutoff Date (with respect to the
         related Subsequent Receivables),




                                      -36-





         (a) there are no liens or claims  existing or which have been filed for
         work, labor,  storage or materials  relating to a Financed Vehicle that
         shall be liens  prior to, or equal or  coordinate  with,  the  security
         interest in the  Financed  Vehicle  granted by the  Receivable  and (b)
         there is no lien against the related  Financed  Vehicle for  delinquent
         taxes.

                  (xi)   No   Default;   Repossession.    Except   for   payment
         delinquencies  continuing  for a period of not more than thirty days as
         of the Cutoff  Date (with  respect to the Initial  Receivables)  or the
         Subsequent  Cutoff  Date  (with  respect  to  the  related   Subsequent
         Receivables),   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  (except
         in a manner consistent with Section 4.2); and no Financed Vehicle shall
         have been  repossessed  as of the  Cutoff  Date  (with  respect  to the
         Initial Receivables) or the Subsequent Cutoff Date (with respect to the
         related Subsequent Receivables).

                  (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 with respect to the Linc
         Receivables,  Linc) and its  successors  and  assigns as an  additional
         insured,  (B) each  Receivable  that  finances the cost of premiums for
         credit life and credit  accident and health  insurance is covered by an
         insurance  policy  or  certificate  of  insurance  naming  CPS (or with
         respect to the Samco  Receivables,  Samco and, with respect to the Linc
         Receivables, Linc) as policyholder (creditor) under each such insurance
         policy and  certificate of insurance and (C) as to each Receivable that
         finances  the cost of an  extended  service  contract,  the  respective
         Financed Vehicle which secures the Receivable is covered by an extended
         service contract.

                  (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.




                                      -37-





                  (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 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,  a "Form RD108"  stamped by the Department of
         Motor  Vehicles)  will be received  within 180 days and will show,  CPS
         (or, with respect to the Samco  Receivables,  Samco or, with respect to
         the Linc  Receivables,  Linc) named as the original secured party under
         the  related  Receivable  as the  holder of a first  priority  security
         interest  in  such  Financed  Vehicle,  and (B) if the  Receivable  was
         originated  in a State in which  the  filing of a  financing  statement
         under the UCC is  required  to  perfect a  security  interest  in motor
         vehicles,  such filings or recordings  have been duly made and show CPS
         (or, with respect to the Samco  Receivables,  Samco or, with respect to
         the Linc  Receivables,  Linc) 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 has not yet been  returned from the Registrar
         of Titles,  CPS (or, with respect to the Samco  Receivables,  Samco or,
         with  respect  to the Linc  Receivables,  Linc)  has  received  written
         evidence from the related Dealer that such title document  showing CPS,
         Samco or Linc (as applicable) as first lienholder has been applied for.

                  (xix) Valid and Binding Obligation of Obligor. Each Receivable
         is the legal,  valid and binding  obligation  in writing of the Obligor
         thereunder and is enforceable in accordance with its terms, except only
         as such enforcement may be limited by




                                      -38-





         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)  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.

                  (xxi)  Origination  Date.  Each  Receivable has an origination
         date on or after November 1, 1997.

                  (xxii)  Maturity  of  Receivables.   Each  Receivable  has  an
         original  term to  maturity  of not more than 72 months;  the  weighted
         average original term to maturity of the Initial  Receivables was 57.84
         months as of the Cutoff Date;  the  remaining  term to maturity of each
         Receivable  was 72 months or less as of the Cutoff Date (in the case of
         the Initial  Receivables) or the Subsequent Cutoff Date (in the case of
         the related  Subsequent  Receivables);  the weighted average  remaining
         term to maturity of the Initial  Receivables was 55.87 months as of the
         Cutoff Date.

                  (xxiii) Scheduled Receivable Payments. Each Initial Receivable
         had an  original  principal  balance  of not less than $0 nor more than
         $30,000.00.

                  (xxiv)  Origination  of  Receivables.  Based  on  the  billing
         address of the  Obligors  and the  Principal  Balances as of the Cutoff
         Date,  approximately  17.84% of the aggregate  Principal Balance of the
         Initial  Receivables  represents  Receivables  that were  originated in
         California.

                  (xxv)  Post-Office Box. On or prior to the next billing period
         after the Cutoff Date (in the case of the Initial  Receivables)  or the
         Subsequent  Cutoff  Date  (in  the  case  of  the  related   Subsequent
         Receivables),  CPS will  notify  each  Obligor  to make  payments  with
         respect to its  respective  Receivables  after the Cutoff  Date (in the
         case of the Initial  Receivables) or the Subsequent Cutoff Date (in the
         case of the related Subsequent Receivables) 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.





                                      -39-





                  (xxvi)  Location of Receivable  Files.  A complete  Receivable
         File with respect to each  Receivable  has been or prior to the Closing
         Date or the related  Subsequent  Transfer Date, as applicable,  will be
         delivered to the Trustee at the location listed in Schedule B.

                  (xxvii) Casualty. No Financed Vehicle has suffered a Casualty.

                  (xxviii)  Principal  Balance/Number  of  Contracts.  As of the
         Cutoff  Date,  the total  aggregate  principal  balance of the  Initial
         Receivables was $275,647,271.04.  The Initial Receivables are evidenced
         by 21,655 Contracts.

                  (xxix)  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
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 (pursuant to the CPS Purchase  Agreement) 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 or the  Noteholders 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  (pursuant  to the CPS
Purchase   Agreement)  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)(5) or (A)(6) 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




                                      -40-





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  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 has 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 and, with respect to the
         Linc Receivables,  Linc) 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 and,
         with respect to the Linc Receivables, Linc) 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 and, with respect to
         the Linc Receivables, Linc) as secured party.





                                      -41-





         (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 4.2 have been so  deposited)  and shall
request delivery of the Receivable and Receivable File to the Servicer.

         SECTION 3.4.  Acceptance  of Receivable  Files by Trustee.  The Trustee
acknowledges  receipt  of  files  which  the  Seller  has  represented  are  the
Receivable  Files for the Initial  Receivables.  The Trustee has  reviewed  such
Receivable Files and has determined that it has received a file for each Initial
Receivable identified in Schedule A to this Agreement.  Prior to each Subsequent
Transfer  Date,  the  Seller  will  cause to be  delivered  to the  Trustee  the
Receivable  Files for the Subsequent  Receivables to be transferred to the Trust
on such  Subsequent  Transfer Date. 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 or applicable
Subsequent  Transfer Date to determine whether such Receivable Files contain the
documents  referred to in Sections  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 the
applicable  Subsequent Transfer 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;  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
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,




                                      -42-





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 applicable  Subsequent
Transfer  Date)  or,  if such day is not a  Business  Day,  the next  succeeding
Business  Day,  the  Trustee  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 C 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 D 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.  Prior to the LSE Assumption Date,
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.  From and after the LSE
Assumption Date, the Servicer agrees that its servicing of the Receivables shall
be carried out in accordance with customary and usual procedures of institutions
which service motor  vehicle  retail  installment  sales  contracts  and, to the
extent  more  exacting,  the  degree of skill and  attention  that the  Servicer
exercises from time




                                      -43-





to time  with  respect  to all  comparable  Motor  Vehicle  receivables  that it
services for itself.  In performing such duties,  the Servicer shall comply with
its current servicing  policies and procedures,  as such servicing  policies and
procedures may be amended from time to time, so long as such amendments will not
materially  adversely  affect the interests of the  Noteholders.  The Servicer's
duties shall  include  collection  and 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) Prior to the LSE Assumption  Date,  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  promptly  after the Closing  Date (or the  Subsequent  Transfer  Date,  as
applicable)  the Servicer  shall  notify each Obligor to make all payments  with
respect  to the  Receivables  to the  Post-Office  Box.  From and  after the LSE
Assumption Date, 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 the Receivables and Insurance Policies in such manner
as will, in the reasonable  judgment of the Servicer,  maximize the amount to be
received by the Issuer with respect  thereto.  The Servicer is authorized in its
discretion  to waive any  prepayment  charge,  late payment  charge or any other
similar  fees that may be collected  in the  ordinary  course of  servicing  any
Receivable.  The Servicer will provide each Obligor with a monthly  statement in
order to notify such Obligors to




                                      -44-





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 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.  From and after the LSE  Assumption  Date,  the Servicer may grant
extensions,  rebates or adjustments on a Receivable,  or modify the original due
date of a  Receivable  (i) if such  extensions  are limited to two (2),  one (1)
month  extensions  in any  consecutive  twelve (12) month  period,  (ii) six (6)
consecutive payments have been made by the Obligor at the time such extension is
made,  (iii) a sufficient  amount of interest  due shall have been  collected to
forward  the due date and (iv) the  percentage  equivalent  of a  fraction,  the
numerator  of  which  is the sum of the  Extension  Percentages  for each of the
current  Collection Period and the three preceding  Collection  perdiods and the
denominator of which is 4, is less than or equal to 3.5%. From and after the LSE
Assumption  Date,  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.  In no event shall the principal balance of a Receivable
be reduced,  except in connection  with a settlement in the event the Receivable
becomes  a  Defaulted  Receivable.  Notwithstanding  anything  to  the  contrary
contained  herein,  if the Servicer  (whether or not the LSE Assumption Date has
occurred)  extends the date for final  payment by the Obligor of any  Receivable
beyond the last day of the penultimate Collection Period preceding the Class A-5
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 or Loan Servicing  Enterprise,  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  Receivable  Payment  on
Receivables.

         (b) The Trustee shall  establish the Lockbox Account in the name of the
Seller  for  the  benefit  of  the  Trustee  for  the  further  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




                                      -45-





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 Seller 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 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 Notes
evidencing more than 50% of the outstanding  principal  balance of the 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 Notes
evidencing more than 50% of the outstanding  principal  balance of the 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.




                                      -46-





         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 Receivable 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  (if CPS is 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, with respect to the Linc Receivables,  Linc)
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 and, with respect to the Linc
Receivables,  Linc) 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.

         (b) To the extent  applicable,  prior to the LSE  Assumption  Date, 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)  (the  "Insurance
Policies")  which, but for the actions of the Servicer,  would have been covered
thereunder.  From and after the LSE Assumption  Date, to the extent  applicable,
the  Servicer  shall use  reasonable  efforts not to take any action which would
result in noncoverage  under any of the Insurance  Policies  which,  but for the
actions of the Servicer,  would have been covered thereunder.  The Servicer,  on
behalf of the Trust, shall take such




                                      -47-





reasonable  action as shall be  necessary  to permit  recovery  under any of the
Insurance  Policies.  Any amounts  collected  by the  Servicer  under any of the
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,
re-recording,  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 the CPS's  designation  as the secured party on the
certificate of title is in its capacity as Servicer as agent of the Trust.

         (b) After the LSE  Assumption  Date,  consistent  with the policies and
procedures  required by this  Agreement,  the Servicer  shall take such steps on
behalf of the Trust as are  customary  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, re-recording,  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 reasonable
steps to  re-perfect or continue the  perfection  of such  security  interest on
behalf of the Trust as customary because of the relocation of a Financed Vehicle
(if  LSE  receives  notice  from  the  applicable  motor  vehicle   registration
authority) or for any other reason.

         (c) 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 agrees to pay all expenses related to such




                                      -48-





perfection  or  re-perfection  and to take all action  necessary  therefor.  The
Servicer  hereby  agrees  to pay all  expenses  related  to such  perfection  or
re-perfection 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 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  and  waivers  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 of the applicable Servicer 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 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.





                                      -49-





         SECTION 4.8.  Servicing Fee. The "Servicing  Fee" for each Payment Date
prior to the First LSE Payment  Date shall be equal to the result of one twelfth
times  2.00% of the Pool  Balance 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 result of  one-twelfth  times  2.00% of the Pool  Balance as of the
Cutoff Date.  The "LSE  Servicing Fee" for each Payment Date after the first LSE
Payment Date shall be equal to $1.75 per  Receivable in the Trust as of the last
day of the  related  Collection  Period.  On the First  LSE  Payment  Date,  the
Servicing  Fee payable to the outgoing  Servicer  shall be equal to the Outgoing
Servicer  Fee and the LSE  Servicing  Fee payable to Loan  Servicing  Enterprise
shall be equal to the First LSE  Servicing  Fee. The  Servicing  Fee and the LSE
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.  The LSE Servicing Fee also shall include
expenses for special forms including late notices,  specially  requested letters
and notices, freight, tapes, postage on special forms, letters and late notices,
communications,  lock-box  charges  and  any  other  expenses  approved  by  the
Controlling Party. If the Standby Servicer becomes the successor  Servicer,  the
"Servicing Fee" payable to the Standby  Servicer as successor  Servicer shall be
determined in accordance  with the Servicing and Lockbox  Processing  Assumption
Agreement.

         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(b) and for the
Owner  Trustee to send  statements  to  Certificateholders  pursuant  to Section
5.5(c) 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, 1999,  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,  1999) 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




                                      -50-





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  Noteholder  and the  Owner  Trustee  shall  forward a copy to each
Certificateholder.

         (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.  Unless Loan
Servicing  Enterprise  is the  Servicer,  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,  1999,  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, 1999), 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 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 and the
stated  amount of  Liquidated  Receivables,  if any,  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




                                      -51-





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. Annual Independent Accountants' Report. If Loan Servicing
Enterprise  is the  Servicer,  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 to deliver to
the Issuer, the Trustee,  the Backup Servicer,  the Note Insurer and each Rating
Agency,  on or  before  April 30 (or 120 days  after  the end of the  Servicer's
fiscal year,  if other than  December  31) of each year,  beginning on April 30,
1999, with respect to the twelve months ended the immediately preceding December
31 (or other  applicable  date) (or such other period as shall have elapsed from
the LSE  Assumption  Date to the date of such  certificate),  a  statement  (the
"Accountants'  Report")  addressed to the  management  of the  Servicer,  to the
Issuer, the Trustee,  the Backup Servicer and to the Note Insurer, to the effect
that such firm has audited the books and records of the  Servicer and issued its
report  thereon,  and that (1) such audit 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) the firm is  independent  of the Servicer
within the meaning of the Code of Professional  Ethics of the American Institute
of Certified  Public  Accountants,  and (3) certain agreed upon  procedures were
performed  pursuant  to "SAS 70"  with  respect  to  certain  randomly  selected
Servicer's  Certificates and except as disclosed in the Accountants'  Report, no
exceptions or errors in the Servicer's Certificates were found.

         SECTION 4.13. 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 provide  access as
provided in this Section as a result of such  obligation  shall not constitute a
breach of this Section.

         SECTION 4.14. 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




                                      -52-





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 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
         Class A-3 Noteholders'  Interest  Distributable  Amount,  the Class A-4
         Noteholders' Interest  Distributable Amount, the Class A-5 Noteholders'
         Interest  Distributable  Amount,  the   Certificateholders'   Principal
         Distributable  Amount,  the Standby Fee, the Servicing Fee, the Trustee
         Fee,  the  Collateral  Agent  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  4.15.  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 March 31,  1999,  which term
shall be extendible by the Note Insurer for successive quarterly terms ending on
each successive March 31, June 30, September 30 and




                                      -53-





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 Trustee shall,  within
five  days  thereafter,  give  written  notice of such  non-receipt  to the Note
Insurer.

         SECTION 4.16.  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.

         SECTION 4.17.  Costs and Expenses.

         After  the  LSE  Assumption  Date,  except  as  set  forth  in  Section
9.4(b)(i)(D),  all costs and expenses incurred by the Loan Servicing  Enterprise
as Servicer in carrying out its duties  hereunder  shall be paid or caused to be
paid by Loan Servicing  Enterprise out of the Servicing Fee to be paid to LSE as
Servicer pursuant to Section 5.7(b).


                                    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.





                                      -54-





                  (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.

                  (iii) The Trustee,  on behalf of the  Noteholders and the Note
Insurer,  shall establish and maintain in its own name an Eligible  Account (the
"Pre-Funding 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.

         (b)  Funds  on  deposit  in the  Collection  Account,  the  Pre-Funding
Account,  the  Note  Distribution  Account  and  the  Interest  Reserve  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  or,  after the LSE  Assumption
Date, by the Controlling Party (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 Trust  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. If Loan Servicing Enterprise becomes the successor Servicer hereunder,
Loan Servicing  Enterprise shall not be responsible for directing the investment
of funds in any Trust Account.

         (c) All investment  earnings of moneys  deposited in the Trust Accounts
shall be deposited (or caused to be deposited) by 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.





                                      -55-





         (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) an 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 Trust Accounts) and all such
funds,  investments,  proceeds and income  shall be part of the Trust  Property.
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 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  Accounts;  and,  except as
         otherwise provided herein,  each such Eligible 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 (x) in any jurisdiction governed
         by the 1978 Revision to Article 8 of the UCC, a financial  intermediary
         (as such term is defined in Section  8-313(4) of the UCC) acting solely
         for the  Trustee or (y) in any  jurisdiction  that has adopted the 1994
         Revision to Article 8 of the UCC, a  securities  intermediary  (as such
         term is defined in Section 8-102(a)(14) of the UCC) acting on behalf of
         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




                                      -56-





         continued  book-entry  registration  of such Trust Account  Property as
         described in such paragraph;

                  (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; and

                  (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
         their respective duties hereunder.

         SECTION 5.2.  Interest Reserve Account.

         (a) The Servicer  shall cause the Trustee to establish  and maintain an
Eligible Account (the "Interest  Reserve  Account") with the Trustee,  bearing a
designation  clearly  indicating  that the funds  deposited  therein are held in
trust for the benefit of the Noteholders and the Note Insurer.

         (b) On or prior to the Closing Date, the Seller shall deposit an amount
equal to the Interest  Reserve Account Initial Deposit into the Interest Reserve
Account.

         (c) On the Determination Date for each of the December 1998 and January
1999 Payment Dates, to the extent that the Servicer's Certificate indicates that
the  funds on  deposit  in the  Interest  Reserve  Account  are in excess of the
Requisite  Reserve  Amount for such Payment Date, the Trustee will withdraw such
excess  from the  Interest  Reserve  Account  and  deposit  such  amount  in the
Collection  Account for  distribution  pursuant to Section 5.7(b) on the related
Payment Date. Any amounts remaining in the Interest Reserve Account on the first
Payment Date  occurring  on or after the end of the Funding  Period after taking
into account the transfer pursuant to Section 5.7(a)(i) shall be remitted by the
Trustee  to  the  Seller.   Upon  any  such  distribution  to  the  Seller,  the
Noteholders,  the  Certificateholders  and the Note Insurer will have no further
rights in, or claims to, such amounts.

         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)(ii) 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




                                      -57-





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 prior thereto the Servicer 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  Receivable 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  to make the  payments  required to be made on the related  Payment
Date pursuant to Sections  5.7(b)(i)  through  (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  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) through (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.

         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 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




                                      -58-





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.

         SECTION 5.7.  Distributions.

         (a) On each Payment Date during the Funding Period,  the Trustee (based
on the  information  contained in the  Servicer's  Certificate  delivered on the
related   Determination   Date)   shall  make  the   following   transfers   and
distributions:

                  (i)  from  the  Interest  Reserve  Account  to the  Collection
         Account, in immediately  available funds, the amount withdrawn from the
         Interest  Reserve  Account  pursuant to Section  5.2(c) with respect to
         such Payment Date.

         (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  Standby  Servicer,  from  the  Total  Distribution
         Amount,  any amount  deposited in the  Collection  Account  pursuant to
         Section  5.5(a)  and any  amount  deposited  in the  Collection  Amount
         pursuant to Section  5.12(a) in respect of Standby Fees, so long as CPS
         is the Servicer and Norwest Bank Minnesota, National Association is the
         Standby  Servicer,  the  Standby Fee and all unpaid  Standby  Fees from
         prior Collection Periods;

                  (ii) to the  Backup  Servicer,  from  the  Total  Distribution
         Amount (as such Total Distribution  Amount has been reduced by payments
         pursuant to clause (i) above,  any amount  deposited in the  Collection
         Account  pursuant  to Section  5.5(a) and any amount  deposited  in the
         Collection  Amount  pursuant  to  Section  5.12(a) in respect of Backup
         Servicing Fees, so long as the Backup Servicer is not the Servicer, the
         Backup  Servicing Fee and all unpaid Backup  Servicing  Fees from prior
         Collection Periods;

                  (iii) to the Servicer,  from the Total Distribution Amount (as
         such Total Distribution Amount has been reduced by payments pursuant to
         clauses  (i)  through  (iii)  above),   any  amount  deposited  in  the
         Collection  Account pursuant to Section 5.5(a) and any amount deposited
         in the  Collection  Account  pursuant to Section  5.12(a) in respect of
         Servicing Fees or LSE Servicing  Fee, if applicable,  the Servicing Fee
         and all  unpaid  Servicing  Fees  and LSE  Servicing  Fees  from  prior
         Collection  Periods  and all  reimbursements  to which the  Servicer is
         entitled pursuant to Section 5.3;

                  (iv) to any  successor  Servicer  from the Total  Distribution
         Amount (as such Total Distribution  Amount has been reduced by payments
         pursuant to clauses (i) through (iii) above),  any amount  deposited in
         the  Collection  Account  pursuant  to  Section  5.5(a)  and any amount
         deposited  in the  Collection  Account  pursuant to Section  5.12(a) in
         respect of Servicing  Fees,  to the extent not  previously  paid by the
         predecessor Servicer pursuant to




                                      -59-





         this  Agreement,  reasonable  transition  expenses  (up to a maximum of
         $75,000  for all such  expenses)  incurred in  becoming  the  successor
         Servicer;

                  (v) to the Trustee and the Owner Trustee,  pro rata,  from the
         Total Distribution  Amount (as such Total Distribution  Amount has been
         reduced by payments  pursuant to clauses (i) through (iv)  above),  any
         amount  deposited in the Collection  Account pursuant to Section 5.5(a)
         and any amount deposited in the Collection  Account pursuant to Section
         5.12(a) in respect of Trustee  Fees,  the Trustee  Fees and  reasonable
         out-of-pocket  expenses thereof  (including  counsel fees and expenses)
         and  all  unpaid  Trustee  Fees  and  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 (v) and expenses  payable to the
         Collateral  Agent  pursuant  to clause (vi) below shall be limited to a
         total of $50,000 per annum;

                  (vi) to the  Collateral  Agent,  from the  Total  Distribution
         Amount (as such Total Distribution  Amount has been reduced by payments
         pursuant to clauses (i) through (v) above), any amount deposited in the
         Collection  Account pursuant to Section 5.5(a) and any amount deposited
         in the  Collection  Account  pursuant to Section  5.12(a) in respect of
         fees and  expenses  of the  Collateral  Agent,  all  fees and  expenses
         payable to the Collateral Agent with respect to 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) and any amount
         deposited  in the  Collection  Account  pursuant to Section  5.5(a) and
         Sections  5.12(a)(iii),  the Noteholders' Interest Distributable Amount
         for such Payment Date;

                  (viii)  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 (vii) above) and any amount
         deposited  in the  Collection  Account  pursuant to Section  5.5(a) and
         Section 5.12(a)(ii) and (iii), the Noteholders' Principal Distributable
         Amount plus the Noteholders' Principal Carryover Shortfall, if any;

                  (ix) 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  (viii)  above),  amounts  advanced
         pursuant  to  Section  9.4(b)(i)(D),  and any amount  deposited  in the
         Collection Account pursuant to Section 5.5(a), any amounts owing to the
         Note Insurer under this  Agreement and the Insurance  Agreement and not
         paid;

                  (x) to the  Collateral  Agent,  for  deposit  into the  Spread
         Account, the remaining Total Distribution Amount, if any;





                                      -60-





provided,  however,  that, (A) following an acceleration of the Notes or, (B) if
an Insurer Default shall have occurred and be continuing and an Event of Default
pursuant  to  Sections  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,  the Total Distribution  Amount
shall be paid 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  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 Notes, the amount in the Note Distribution  Account shall
         be applied to the  payment of such  interest on each Class of Notes pro
         rata on the basis of the amount of accrued and unpaid  interest  due on
         each Class of Notes;

                  (ii) to the Class A-1  Noteholders on account of the Class A-1
         Prepayment Amount, to the Class A-2 Noteholders on account of the Class
         A-2 Prepayment  Amount,  to the Class A-3 Noteholders on account of the
         Class A-3 Prepayment Amount, to the Class A-4 Noteholders on account of
         the Class A-4  Prepayment  Amount,  to the  Class  A-5  Noteholders  on
         account of the Class A-5 Prepayment  Amount,  pro rata, on the basis of
         the Class A-1 Prepayment  Amount,  the Class A-2 Prepayment Amount, the
         Class A-3 Prepayment Amount, the Class A-4 Prepayment Amount, the Class
         A-5   Prepayment   Amount  and  any  amounts   deposited  in  the  Note
         Distribution Account pursuant to Section 5.10(b);

                  (iii)  concurrently,  to the Holders of (x) the Sequential Pay
         Notes, the Sequential Pay  Noteholders'  Percentage of the Noteholders'
         Principal Distributable Amount, sequentially, first to pay principal of
         the Class A-1 Notes until the outstanding principal amount of the Class
         A-1 Notes has been reduced to zero,  then to pay principal of the Class
         A-2 Notes until the outstanding principal amount of the Class A-2 Notes
         has been  reduced  to zero and then to pay  principal  of the Class A-3
         Notes until the outstanding principal amount of the Class A-3 Notes has
         been  reduced  to zero and (y) the  Class  A-4  Notes,  the  Class  A-4
         Noteholders'  Percentage of the  Noteholders'  Principal  Distributable
         Amount; and

                  (iv)  then,  on the  Payment  Date on  which  the  outstanding
         principal amount of the Sequential Pay Notes and the Class A-4 Notes is
         reduced to zero, the remaining portion




                                      -61-





         of the Noteholders' Principal  Distributable Amount to pay principal of
         the Class A-5 Notes and then,  on each  Payment  Date  thereafter,  the
         Noteholders'  Principal  Distributable  Amount to pay  principal of the
         Class A-5 Notes until the outstanding principal amount of the Class A-5
         Notes has been reduced to zero.

         (b) On each Payment Date, the Trustee shall send to each Noteholder the
statement  or  statements  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 (c).
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
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.





                                      -62-





         SECTION 5.9.  [RESERVED].

         SECTION 5.10.  Pre-Funding Account.

         (a) On the Closing  Date,  the Trustee will  deposit,  on behalf of the
Seller, in the Pre-Funding Account  $37,352,728.96 from the proceeds of the sale
of the Notes. On each Subsequent  Transfer Date, the Servicer shall instruct the
Trustee to withdraw  from the  Pre-Funding  Account  (i) an amount  equal to the
Principal  Balance of the  Subsequent  Receivables  transferred to the Issuer on
such Subsequent Transfer Date and to distribute such amount to or upon the order
of the Seller upon  satisfaction  of the  conditions set forth in this Agreement
with respect to such transfer and (ii) an amount equal to the Subsequent  Spread
Account  Deposit  on such  Subsequent  Transfer  Date upon  satisfaction  of the
conditions set forth in this Agreement with respect to such transfer.

         (b) If the  Pre-Funded  Amount has not been reduced to zero on the date
on which the Funding  Period ends,  after giving effect to any reductions in the
Pre-Funded  Amount on such date,  the  Servicer  shall  instruct  the Trustee to
withdraw  from the  Pre-Funding  Account on the  Mandatory  Redemption  Date the
Pre-Funded Amount (exclusive of any Pre-Funding  Earnings) and deposit an amount
equal to the Note Prepayment Amount in the Note Distribution Account.

         (c) All  Pre-Funding  Earnings  will  be  deposited  in the  Collection
Account on each  Payment  Date and  deemed to be part of the Total  Distribution
Amount.

         SECTION 5.11.  Statements to  Securityholders.  (a) 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
         the Class A-1  Notes,  the Class A-2 Notes,  the Class A-3  Notes,  the
         Class A-4 Notes and the Class A-5 Notes, respectively;

                  (ii) the amount of such distribution  allocable to interest on
         or with respect to the Class A-1 Notes,  the Class A-2 Notes, the Class
         A-3 Notes, the Class A-4 Notes and the Class A-5 Notes, respectively;

                  (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;





                                      -63-





                  (v) the aggregate  outstanding  principal amount of each Class
         of Notes,  the Note Pool  Factor for each Class of Notes  after  giving
         effect to payments  allocated  to principal  reported  under clause (i)
         above;

                  (vi) the amount of the Servicing Fee paid to the Servicer with
         respect to the related  Collection Period, and the amount of any unpaid
         Servicing  Fees and the change in such  amount  from the prior  Payment
         Date;

                  (vii) the amount of each of the Standby  Fee,  the Trustee Fee
         and the Collateral Agent Fee paid to the Standby Servicer,  the Trustee
         and the Collateral  Agent,  as applicable,  with respect to the related
         Collection  Period,  and the amount of any unpaid Standby Fees, Trustee
         Fees and  Collateral  Agent Fees and the change in such amount from the
         prior Payment Date;

                  (viii)   the  Class  A-1   Noteholders'   Interest   Carryover
         Shortfall, the Class A-2 Noteholders' Interest Carryover Shortfall, the
         Class A-3  Noteholders'  Interest  Carryover  Shortfall,  the Class A-4
         Noteholders'  Interest Carryover Shortfall,  the Class A-5 Noteholders'
         Interest Carryover  Shortfall and the Noteholders'  Principal Carryover
         Shortfall;

                  (ix) 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 Receivable Payments for (a) 31 to 59 days, (b) 60 to 89 days,
         (c) 90 to 119 days,  (d) 120 to 149 days,  (e) 150 to 179 days, (f) 180
         to 209 days and (g) 210 days or more;

                  (x) the amount of the aggregate  Realized Losses,  if any, for
         the second preceding Collection Period;

                  (xi) the  amount  of any  payments  made with  respect  to the
         related Payment Date pursuant to Sections  5.12(a)(i),  (ii) and (iii),
         respectively;

                           (xii) 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;

                  (xiii) for Payment  Dates during the Funding  Period (if any),
         the remaining Pre-Funded Amount;

                  (xiv) for the final  Subsequent  Transfer  Date, the amount of
         any  remaining  Pre-Funded  Amount  that has not been  used to fund the
         purchase of Subsequent Receivables; and





                                      -64-





                  (xv)  the  cumulative  amount  of  Realized  Losses,  from the
         Initial Cutoff Date to the last day of the related Collection Period.

Each amount set forth pursuant to paragraphs  (i),  (ii),  (iii),  (vi),  (vii),
(viii) and (xi) 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.

         (b) Within 60 days after the end of each  calendar  year,  the Servicer
shall  deliver to the Trustee a statement  setting forth the amounts paid during
such  preceding  calendar  year in respect of (i)  principal of the Notes,  (ii)
interest on the Notes and (iii)  Servicing  Fees. The Trustee shall mail to each
person who at any time during  such  preceding  calendar  year shall have been a
Noteholder of record and received any payment in respect of such Notes.

         (c) Within ten days of each  Payment  Date,  the Servicer (or after the
Assumption  Date,  the Issuer)  shall  cause to be filed with the United  States
Securities  and  Exchange  Commission  under  cover  of Form  8-K the  statement
prepared for Securityholders pursuant to Section 5.11(a). The Servicer (or after
the  Assumption  Date,  the Issuer) shall provide  notice thereof to the Trustee
within five days of such filing.  If the Trustee  shall not have  received  such
notice within  eleven days after any Payment Date,  the Trustee shall notify the
Servicer (or after the Assumption  Date,  the Issuer) of such failure.  If after
such notification to the Servicer (or after the Assumption Date, the Issuer) the
Trustee  shall  not  have  received  notice  of the  Servicer's  (or  after  the
Assumption  Date, the Issuer's)  compliance  with this Section 5.11(c) as of the
close of business on the fifteenth  day after a Payment Date,  the Trustee shall
immediately  notify the Controlling Party of such failure.  The Servicer (if CPS
is not the Servicer) shall deliver to the Owner Trustee a copy of such statement
on each Determination Date.

         (d) Within 60 days after the close of each calendar  year, the Servicer
(or after the  Assumption  Date,  the  Issuer)  shall cause to be filed with the
United States  Securities and Exchange  Commission an annual report with respect
to the Trust on Form 10-K,  which  shall  contain  the  information  required by
Section  5.11(b).  The Servicer (or after the Assumption Date, the Issuer) shall
provide notice thereof within five days of such filing. If the Trustee shall not
have received such notice within 65 days after the end of any calendar year, the
Trustee shall notify the Servicer (or after the Assumption  Date, the Issuer) of
such failure.  If after such  notification to the Servicer the Trustee shall not
have  received  notice of the  Servicer's  (or after the  Assumption  Date,  the
Issuer's)  compliance  with this Section  5.11(d) as of the close of business on
the 90th day after the close of the calendar year, the Trustee shall immediately
notify the Controlling Party of such failure.

         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'




                                      -65-





Principal  Distributable  Amount to the extent that the principal balance of the
Notes as of the Determination Date preceding such Payment Date exceeds the Class
A Noteholders'  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.


                                   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 amounts deposited by
the Note Insurer  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)(vi)  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 under the Note Policy by the Note Insurer  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
Noteholder  any Note Policy  Claim Amount from the Note Insurer and (ii) deposit
the same in the Note Distribution  Account for distribution to 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




                                      -66-





from the Series 1998-4 Spread Account with respect to such Notes,  and shall not
discharge the  obligations of the Trust with respect  thereto.  The Note Insurer
shall,  to the extent it makes any  payment  with  respect to the 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 respect to the
Notes by or on behalf of the Note Insurer, the Trustee and the Noteholders shall
assign to the Note  Insurer all rights to the  payment of interest or  principal
with  respect to the 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 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
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 Note.  The Note  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
Noteholders  the  obligations  of  the  Note  Insurer  under  the  Note  Policy.
Notwithstanding  any other  provision of this Agreement or any Basic  Documents,
the  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 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 Notes by mail that,  in the
event that any Noteholder's  payment is so recoverable,  such 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  Notes,  if any,  which  have  been  made by the  Trustee  and
subsequently  recovered from  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  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  Noteholder  directly  (unless 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




                                      -67-





make such payment to the Trustee for  distribution to such 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 agrees 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.


                                   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, in the case
of Initial  Receivables,  and as of the applicable  Subsequent Transfer Date, in
the  case  of  Subsequent  Receivables,  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




                                      -68-





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  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




                                      -69-





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.

         (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 16355 Laguna Canyon, Irvine, CA 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),
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.




                                      -70-





         (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.

         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 occurred 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 the Other Conveyed  Property 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 clauses (a), (b) or (c) above.





                                      -71-





         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, in
the case of Initial  Receivables,  and as of the applicable  Subsequent Transfer
Date, in the case of Subsequent  Receivables,  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 as a corporation  and in good standing  under
the laws of the State of  California,  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.

         (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




                                      -72-





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 the Basic  Documents  to which it is a
party  and to  carry  out its  terms  and  their  terms,  respectively,  and the
execution, delivery and performance of this Agreement and the Basic Documents to
which it is a party 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, 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.




                                      -73-





         (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: 16355 Laguna Canyon, Irvine, CA 92618.

         (j) Year 2000 Compliance.  The Servicer covenants that its computer and
other systems used in servicing the Receivables will be modified to operate in a
manner such that on and after  January 1, 2000 (i) the  Servicer can service the
Receivables in accordance with the terms of this Agreement and (ii) the Servicer
can operate its business in substantially  the same manner as it is operating on
the date hereof.  The Servicer shall certify in writing to the Standby  Servicer
no later than June 30, 1999 that it is in compliance  with this Section  9.1(j).
This Section 9.1(j) shall not be applicable to Loan Servicing Enterprise if Loan
Servicing Enterprise becomes the successor Servicer.

         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  Noteholders  from  and  against  any and all  costs,
         expenses,  losses, damages,  claims and liabilities,  arising out of or
         resulting  from the use,  ownership,  repossession  or operation by the
         Servicer or any Affiliate thereof of any Financed Vehicle;

                  (ii) The Servicer  (unless Loan  Servicing  Enterprise  is the
         Servicer)  shall  indemnify,  defend and hold  harmless the Trust,  the
         Trustee, the Owner Trustee, the Standby Servicer, the Note Insurer, and
         the  Noteholders  from and  against  any taxes  that may at any time be
         asserted  against any of such parties with respect to the  transactions
         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 Notes)
         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  Noteholders  from and  against  any and all  costs,
         expenses,  losses, claims,  damages, and liabilities to the extent that
         such cost,




                                      -74-





         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  Noteholders  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
         the  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 Owner 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 Noteholders 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
Noteholder  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 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,




                                      -75-





lease or  succession,  the  successor  or  surviving  entity shall be capable of
fulfilling the duties of CPS contained in this  Agreement.  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 be deemed made as of the date of the consummation of such transaction) and
no event that, 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 Owner Trustee and the Trustee,  respectively, 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.





                                      -76-





         SECTION 9.4. Limitation on Liability of Servicer,  Standby Servicer and
Others.

         (a) 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 kind  prima  facie  properly  executed  and
submitted by any Person respecting any matters arising under this Agreement.

         (b) In the event  Loan  Servicing  Enterprise  shall  become  successor
Servicer, it shall not be bound by any of the provisions in Sections 9.2 or 9.4.
Notwithstanding  anything in this  Agreement to the  contrary,  the liability of
Loan Servicing  Enterprise for  performance of its obligations as Servicer under
this Agreement shall be limited as follows:

                  (i) Loan  Servicing  Enterprise  nor any of its  directors  or
         officers or  employees  or agents  shall be under any  liability to the
         Trust or the Security  holders,  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 Loan Servicing  Enterprise against any liability that
         would  otherwise be imposed by reason of a breach of this  Agreement or
         willful  misfeasance,  bad faith or gross negligence in the performance
         of  duties.  Loan  Servicing  Enterprise  and  any  director,  officer,
         partner,  employee or agent of Loan  Servicing  Enterprise  may rely in
         good faith on the written advice of counsel or, absent actual knowledge
         that such document has not been properly executed and submitted or that
         the  contents  thereof  are not true in any  material  respect,  on any
         document of any kind prima facie properly executed and submitted by any
         Person respecting any matters arising under this Agreement.

                           (A)  Loan  Servicing  Enterprise  shall  be  strictly
                  accountable  for  all  payments   actually  received  by  such
                  parties, respectively, on the Receivables under the Contracts.

                           (B) In no event shall Loan  Servicing  Enterprise  be
                  liable for any  consequential or special  damages,  including,
                  but not limited to,  damages for loss of profits,  goodwill or
                  prospective business opportunity.

                           (C) All software from third parties, whether provided
                  by the Servicer or any party to the Agreement or another Basic
                  Document,  is without  warranty by Loan Servicing  Enterprise,
                  which only  assumes  the duty to review such  software  and to
                  subject  it to  reasonable  testing  prior  to use.  The  only
                  warranties  made by Loan  Servicing  Enterprise are to perform
                  the obligations contained in this




                                      -77-





                  Agreement  and  there  are no  other  warranties,  express  or
                  implied,  including  but not  limited  to  merchantability  or
                  fitness for a particular purpose.

                           (D)  In the  event  of the  assumption  of  servicing
                  duties by Loan Servicing Enterprise under this Agreement, Loan
                  Servicing  Enterprise  shall accept and rely on accounting and
                  operations  records of the predecessor  servicer,  without any
                  obligation to audit or otherwise  examine such records (except
                  to the extent provided in the Backup Servicing Agreement), and
                  neither  shall have any duty,  responsibility,  obligation  or
                  liability  (herein the foregoing  are together  referred to as
                  "Liabilities", or individually, as a "Liability") for the acts
                  or omissions of the  predecessor  servicer.  In the event that
                  the  records of the  predecessor  servicer  shall  contain any
                  error,  inaccuracy or omission (herein referred to together as
                  "Errors") and Loan Servicing  Enterprise  shall determine that
                  such  Errors  could  cause or  materially  contribute  to Loan
                  Servicing  Enterprise's  inability to perform its  obligations
                  hereunder in accordance with the standard of care specified in
                  this Agreement and Loan Servicing Enterprise shall have relied
                  upon such data or information contained in such records in its
                  performance   hereunder  (herein  referred  to  as  "Continued
                  Errors"),  Loan Servicing Enterprise shall not incur Liability
                  for  such  Errors  or  Continued  Errors,  or for  any  error,
                  inaccuracy  or omission in work  performed  by Loan  Servicing
                  Enterprise  to the  extent  that  such  error,  inaccuracy  or
                  omission  was caused by such Error in  predecessor  servicer's
                  records.  In the event that Loan Servicing  Enterprise becomes
                  aware of  Errors  or  Continued  Errors,  and  Loan  Servicing
                  Enterprise  determines  that such Errors or  Continued  Errors
                  impair  in  a  material   respect   its  ability  to  continue
                  performance  under this Agreement,  Loan Servicing  Enterprise
                  shall,  with the prior consent of the Note Insurer (so long as
                  no Insurer Default shall have occurred and be continuing), use
                  its best efforts to reconstruct  and reconcile such data as it
                  deems  necessary  at the  expense of the Note  Insurer (if the
                  Note  Insurer  shall have given the  aforementioned  consent).
                  Reimbursement   for  expenses   incurred  by  Loan   Servicing
                  Enterprise in connection with  reconstruction of such data, or
                  correction of such Errors or Continued Errors shall be payable
                  by the Note  Insurer  promptly  upon receipt of an invoice for
                  such amounts  delivered by Loan  Servicing  Enterprise  to the
                  Note Insurer.

                  (ii) Loan  Servicing  Enterprise  shall not be bound by any of
         the  Basic   Documents  other  than  this  Agreement  and  the  Lockbox
         Agreement.

                  (iii) Loan  Servicing  Enterprise  shall not be liable for any
         taxes of any kind  asserted  against  the  Trust,  except for any taxes
         asserted  against the Trust as a result of Loan Servicing  Enterprise's
         gross  negligence,  bad  faith,  willful  misconduct  or  breach of its
         obligations or unlawful acts.

         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




                                      -78-





receivables  with  the  prior  written  consent  of  the  Controlling  Party  as
determined pursuant to Section 13.15; 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.

         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 Class A Note  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 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 Note 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.  Notwithstanding  anything to the
contrary  contained  herein, if Loan Servicing  Enterprise is the Servicer,  the
Servicer may  terminate its  appointment  as Servicer if it does not receive the
portion of the LSE Servicing  Fee defined in the second  sentence of Section 4.8
(the "Backup Fee Component"), which failure continues unremedied for a period of
90 days after receipt by the Controlling Party of written notice of such failure
and that it intends to terminate its  appointment  if such failure to pay is not
remedied within such 90 day period.  which written notice shall explicitly state
that failure to pay the Backup Fee Component, if not cured within 90 days of the
date thereof,  will give Loan  Servicing  Enterprise  the right to terminate its
appointment as Servicer.






                                      -79-





                                    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 Noteholders 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; or

         (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); or

         (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  Noteholders
(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,  the Trustee and the Note  Insurer by the Holders of Notes
evidencing not less than 25% of the  outstanding  principal  amount of the Notes
or,  after the 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; or

         (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




                                      -80-





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 shall have been made,  and the  incorrectness  of such  representation,
warranty  or  statement  has a  material  adverse  effect  on the  Trust  or the
Noteholders  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 Notes
evidencing not less than 25% of the  outstanding  principal  amount of the Notes
or,  after the 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)  Failure of the  Servicer  (i) to perform  the filing  required  by
Section  5.11(c) by the close of business on the fifteenth day after any Payment
Date or (ii) to perform the filing  required by Section  5.11(d) by the close of
business on the 90th day after the close of any calendar year; or

         (h) 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

         (i) So long as an  Insurer  Default  shall  not  have  occurred  and be
continuing, an Insurance Agreement Event of Default shall have occurred; or

         (j) 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
(to the extent it has knowledge thereof) or Holders of Notes evidencing not less
than 25% of the  outstanding  principal  amount of the Notes, by notice given in
writing to the Servicer  (and to the Trustee if given by the Note Insurer or the
Noteholders) 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 outgoing  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);




                                      -81-





provided,  however,  that 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 that shall at the time be held
by the  terminated  Servicer and a computer tape in readable form as of the most
recent Business Day containing all information necessary to enable the successor
Servicer  to  service  the  Receivables  and the Other  Conveyed  Property.  All
reasonable costs and expenses (including attorneys' fees) incurred in connection
with  transferring any Receivable  Files to the successor  Servicer and amending
this Agreement to reflect such  succession as Servicer  pursuant to this Section
10.2 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.

         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




                                      -82-





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;  provided,  however,  that the
Servicer  shall not be relieved of its duties,  obligations  and  liabilities as
Servicer  until a successor  Servicer has assumed such duties,  obligations  and
liabilities.  Notwithstanding  the  preceding  sentence,  if neither the Standby
Servicer  nor any other  successor  Servicer  shall  have  assumed  the  duties,
obligations  and  liabilities  of  Servicer  within 45 days of the  termination,
non-extension  or  resignation  described in this Section 10.3, the Servicer may
petition a court of competent  jurisdiction to appoint any Eligible  Servicer as
the successor to the Servicer.  Pending appointment as successor  Servicer,  the
Standby  Servicer (or such other Person as shall have been appointed by the Note
Insurer) shall act as successor  Servicer  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.  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 and Lockbox Processing  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  therefor  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  Class  A  Note  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  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.




                                      -83-





         (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  (unless an Insurer Default shall have occurred and be continuing),
a Class A Note  Majority  may, on behalf of all the  Securityholders,  waive any
default  by 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,  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 Sections  10.1(c)  though (i) 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  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). To exercise such
option,  the  Servicer  shall  (subject  to the  proviso  below)  deposit in the
Collection  Account  pursuant  to Section 5.6 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




                                      -84-





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; provided,  however, that the amount to be paid for such purchase shall be
sufficient to pay the full amount of principal  and  interest,  if any, then due
and payable on the Notes.

         (b)  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.

         (c) Following the  satisfaction  and discharge of the Indenture and the
payment  in  full  of  the   principal  of  and  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 under 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(b), 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




                                      -85-





         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 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 a Noteholder 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 Certificateholders;  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.

         (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




                                      -86-





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 as such 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 Trust Estate  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,
the Trustee and the Note Insurer at any time during normal business hours.

         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.






                                      -87-





                                  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 Trustee,  and a Class A Note
Majority 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
affected  thereby and the Holders (as defined in the Trust Agreement) of all the
outstanding Certificates affected thereby;  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.

         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.




                                      -88-





         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)(i)
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 this  Agreement  relating to (i) the Spread
Account Supplement,  the Spread Account, the Requisite Amount (as defined in the
Master Spread  Account  Agreement or the Spread Account  Supplement),  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 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 to the Issuer, the Owner
Trustee,  the Trustee and the Note  Insurer,  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




                                      -89-





principal  executive office 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 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 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 this
         Agreement and, if required pursuant to Section 13.1, of each amendment,
         an Opinion of Counsel,  in form and substance  satisfactory to the Note
         Insurer,  stating that, in the opinion of such counsel,  either (A) all
         financing statements and continuation statements have been executed and




                                      -90-





         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 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 Backup Servicer, 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.,  16355 Laguna Canyon,  Irvine,  CA 92618, (b) in the
case of the Servicer to Consumer Portfolio  Services,  Inc.,16355 Laguna Canyon,
Irvine, CA 92618,  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; (g) in the
case of the Backup  Servicer to Loan  Servicing  Enterprise at 9330 LBJ Freeway,
Suite 300, Dallas, TX 75243, Attn: John Kilgore; and (h) in the case of Standard
& Poor's  Ratings  Group,  to  Standard & Poor's,  a Division of The McGraw Hill
Companies, 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




                                      -91-





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 principal amount of the outstanding Notes.

         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, the Certificateholders (including the Seller), the Trustee
and the  Noteholders,  as  third-party  beneficiaries.  The Note 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 Note 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 and the 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.

         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 all right, title and interest of the




                                      -92-





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 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.




                                      -93-





         (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.  Note 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 in the Trustee acting, unless otherwise specified,
at the  direction  of a Class A Note  Majority.  From and after such time as the
Notes  have been paid in full,  any  provision  giving  the Note  Insurer or the
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,
unless otherwise specified.  The Note 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 Note Insurer may
give or withhold any consent hereunder in its sole and absolute discretion.






                                      -94-





         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 1998-4
                           
                                    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:
                           
                           
                           CSC LOGIC/MSA LLP, d/b/a/ LOAN
                           SERVICING ENTERPRISE, as Backup Servicer
                           
                                    By:
                                       Name:
                                       Title:





                                      -95-






                                                                      SCHEDULE A


                             SCHEDULE OF RECEIVABLES











                                                                       EXHIBIT A


                          SUBSEQUENT TRANSFER AGREEMENT


         TRANSFER  No.  __ of  Subsequent  Receivables  pursuant  to a Sale  and
Servicing  Agreement,  dated  as  of  December  1,  1998,  among  THE  CPS  AUTO
RECEIVABLES  TRUST  1998-4,  a  Delaware  business  trust  (the  "Issuer"),  CPS
RECEIVABLES CORP., a California  corporation (the "Seller"),  CONSUMER PORTFOLIO
SERVICES,  INC.  a  California  corporation  (the  "Servicer"),  LOAN  SERVICING
ENTERPRISE,  as  Backup  Servicer  (the  "Backup  Servicer")  and  NORWEST  BANK
MINNESOTA, NATIONAL ASSOCIATION, a national banking association, in its capacity
as Trustee (the "Trustee").

                              W I T N E S S E T H:

         WHEREAS pursuant to the Sale and Servicing Agreement, the Seller wishes
to convey to the Issuer the Subsequent  Receivables listed on Schedule A hereto;
and

         WHEREAS the Issuer is willing to accept such conveyance  subject to the
terms and conditions hereof;

         NOW,  THEREFORE,  the Issuer,  the Seller, the Servicer and the Trustee
hereby agree as follows:

         SECTION 1. Defined Terms.  Capitalized terms used herein shall have the
meanings  ascribed to them in the Sale and Servicing  Agreement unless otherwise
defined herein.

         "Subsequent  Cutoff Date" shall mean,  with  respect to the  Subsequent
Receivables conveyed hereby, [ ], 199[ ].

         "Subsequent  Transfer Date" shall mean,  with respect to the Subsequent
Receivables conveyed hereby, [ ], 199[ ].

         SECTION 2. Schedule of  Receivables.  Annexed hereto is a supplement to
Schedule A to the Sale and  Servicing  Agreement  listing the  Receivables  that
constitute the Subsequent Receivables to be conveyed pursuant to this Subsequent
Transfer agreement on the Subsequent Transfer Date.

         SECTION 3. Conveyance of Subsequent  Receivables.  In  consideration of
the Issuer's delivery to or upon the order of the Seller of  $____________,  the
Seller does hereby sell, transfer,  assign, set over and otherwise convey to the
Issuer, without recourse (except as

                                       A-1







expressly  provided in the Sale and Servicing  Agreement),  all right, title and
interest of the Seller in and to:

                  (a) all right,  title and interest of the Seller in and to the
         Subsequent Receivables listed in Schedule A to this Subsequent Transfer
         Agreement  and all  monies  received  thereunder  after the  Subsequent
         Cutoff Date and all Net Liquidation  Proceeds  received with respect to
         such Subsequent Receivables after the Subsequent 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  Subsequent  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  securing the Subsequent  Receivables or the Obligors
         thereunder;

                  (d) all right,  title and interest of the Seller in and to the
         Subsequent Purchase  Agreements,  including a direct right to cause CPS
         to purchase 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 Subsequent 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 under a Subsequent  Receivable 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 Subsequent Receivable;

                  (g) the proceeds of any and all of the foregoing;

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


                                       A-2







         It is the  intention  of the Seller that the  transfer  and  assignment
contemplated by this Subsequent  Transfer  Agreement shall  constitute a sale of
the Subsequent  Receivables  and Other Conveyed  Property from the Seller to the
Issuer and the beneficial  interest in and title to the  Subsequent  Receivables
and the Other Conveyed  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
Subsequent Transfer Agreement shall constitute a grant of a security interest in
the   property   referred  to  in  this   Section  3  for  the  benefit  of  the
Securityholders and the Note Insurer.

         SECTION 4.  Representations  and  Warranties of the Seller.  The Seller
hereby  represents  and warrants to the Issuer as of the date of this  Agreement
and as of the Subsequent Transfer Date that:

                  (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 Subsequent  Receivables and the related 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 Subsequent Transfer 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  Subsequent  Receivables  and the related  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  Subsequent  Transfer  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 Subsequent Transfer
         Agreement  effects  a  valid  sale,  transfer  and  assignment  of  the
         Subsequent   Receivables  and  the  related  Other  Conveyed  Property,
         enforceable against the Seller and creditors of and purchasers from the
         Seller; and this Subsequent  Transfer 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  terms,  except as
         enforceability may be limited by bankruptcy,

                                       A-3







         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  Subsequent  Transfer  Agreement  and  the  Basic
         Documents and the fulfillment of the terms of this Subsequent  Transfer
         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
         Subsequent  Transfer  Agreement,  the  Securities  or any of the  Basic
         Documents,  (B)  seeking  to  prevent  the  consummation  of any of the
         transactions  contemplated by this Subsequent Transfer 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
         Subsequent  Transfer  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.

                  (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 16355 Laguna Canyon, Irvine, CA 92618.

                  (j) Principal Balance.  The aggregate Principal Balance of the
         Subsequent  Receivables  listed on the supplement to Schedule A annexed
         hereto and conveyed to the

                                       A-4







         Issuer  pursuant  to  this  Subsequent  Transfer  Agreement  as of  the
         Subsequent Cutoff Date is $____________.


         SECTION  5.  Conditions  Precedent.  The  obligation  of the  Issuer to
acquire the Receivables hereunder is subject to the satisfaction, on or prior to
the Subsequent Transfer Date, of the following conditions precedent:

                  (a)    Representations    and   Warranties.    Each   of   the
         representations  and warranties made by the Seller in Section 4 of this
         Subsequent  Transfer  Agreement  and  with  respect  to the  Subsequent
         Receivables in Section 3.1 of the Sale and Servicing Agreement shall be
         true  and  correct  as of the  date  of  this  Agreement  and as of the
         Subsequent Transfer Date.

                  (b)  Sale  and  Servicing  Agreement  Conditions.  Each of the
         conditions  set  forth in  Section  2.2(b)  of the  Sale and  Servicing
         Agreement shall have been satisfied.

                  (c) Additional Information. The Seller shall have delivered to
         the Issuer such  information as was reasonably  requested by the Issuer
         to satisfy  itself as to (i) the  accuracy of the  representations  and
         warranties set forth in Section 4 of this Agreement and with respect to
         the  Subsequent  Receivables  in Section 3.1 of the Sale and  Servicing
         Agreement and (ii) the satisfaction of the conditions set forth in this
         Section 5.

         SECTION 6.  Acceptance  of  Receivable  Files by  Trustee.  The Trustee
acknowledges  receipt  of  files  which  the  Seller  has  represented  are  the
Receivable Files for the Subsequent  Receivables.  The Trustee has reviewed such
Receivable  Files  and has  determined  that it has  received  a file  for  each
Subsequent  Receivable  identified  in  Schedule A to this  Subsequent  Transfer
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.

         SECTION  7.   Ratification  of  Agreement.   As  supplemented  by  this
Agreement,  the Sale and  Servicing  Agreement is in all  respects  ratified and
confirmed  and the Sale  and  Servicing  Agreement  as so  supplemented  by this
Agreement shall be read, taken and construed as one and the same instrument.

         SECTION 8. Counterparts.  This Agreement may be executed in two or more
counterparts (and by different parties in separate counterparts),  each of which
shall be an original but all of which together shall constitute one and the same
instrument.

         SECTION 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,

                                       A-5







RIGHTS AND REMEDIES OF THE PARTIES  HEREUNDER  SHALL BE DETERMINED IN ACCORDANCE
WITH SUCH LAWS.

                                       A-6








         IN WITNESS WHEREOF, the Issuer, the Seller and the Servicer have caused
this  Agreement to be duly  executed  and  delivered  by their  respective  duly
authorized officers as of the day and year first above written.

                           CPS AUTO RECEIVABLES
                           TRUST 1998-4
                           
                                    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
                           Trustee
                           
                                    By ___________________________
                                       Name:
                                       Title:
                           
                           LOAN SERVICING ENTERPRISE, as Backup
                           Servicer
                           
                                    By:
                                         Name:
                                         Title:



                                       A-7







                                                                       EXHIBIT B


                             SERVICER'S CERTIFICATE










                                                                       EXHIBIT C


                                  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 1998-4 (the  "Trust")  under the Sale and Servicing
Agreement  (the "Sale and Servicing  Agreement"),  dated as of December 1, 1998,
among CPS Auto  Receivables  Trust 1998-4,  CPS  Receivables  Corp.,  as Seller,
Consumer Portfolio Services,  Inc., as Servicer,  Loan Servicing Enterprise,  as
Backup 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 D


                         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
December 1, 1998 among CPS Auto  Receivables  Trust 1998-4,  Consumer  Portfolio
Services,  Inc., as servicer,  CPS Receivables Corp., as seller,  Loan Servicing
Enterprise,   as  Backup   Servicer,   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 E


                    FORM OF MONTHLY SECURITYHOLDER STATEMENT









                                                                     EXHIBIT F-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 1998-4 (the "Trust") under the Sale
and  Servicing  Agreement  (the  "Sale and  Servicing  Agreement"),  dated as of
December 1, 1998,  among the Trust, CPS Receivables  Corp., as Seller,  Consumer
Portfolio  Services,  Inc., as Servicer,  Loan Servicing  Enterprise,  as Backup
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 F-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 1998-4 (the "Trust") under the Sale
and  Servicing  Agreement  (the  "Sale and  Servicing  Agreement"),  dated as of
December 1, 1998,  among the Trust, CPS Receivables  Corp., as Seller,  Consumer
Portfolio  Services,   Inc.,  as  Servicer  (the  "Servicer"),   Loan  Servicing
Enterprise,   as  Backup   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.................................27

                                   ARTICLE II

                            CONVEYANCE OF RECEIVABLES

SECTION 2.1.  Conveyance of Initial Receivables.............................28
SECTION 2.2.  Conveyance of Subsequent Receivables..........................29
SECTION 2.3.  Transfers Intended as Sales...................................32
SECTION 2.4.  Further Encumbrance of Trust Property.........................33

                                   ARTICLE III

                                 THE RECEIVABLES

SECTION 3.1.  Representations and Warranties of Seller......................33
SECTION 3.2.  Repurchase upon Breach........................................39
SECTION 3.3.  Custody of Receivables Files..................................40
SECTION 3.4.  Acceptance of Receivable Files by Trustee.....................41
SECTION 3.5.  Access to Receivable Files....................................42

                                   ARTICLE IV

                   ADMINISTRATION AND SERVICING OF RECEIVABLES

SECTION 4.1.  Duties of the Servicer........................................43
SECTION 4.2.  Collection of Receivable Payments; Modifications
               of Receivables; Lockbox Agreements...........................43
SECTION 4.3.  Realization Upon Receivables..................................46
SECTION 4.4.  Insurance.....................................................46
SECTION 4.5.  Maintenance of Security Interests in Vehicles.................47
SECTION 4.6.  Additional Covenants of Servicer..............................48
SECTION 4.7.  Purchase of Receivables Upon Breach of Covenant...............48
SECTION 4.8.  Servicing Fee.................................................49
SECTION 4.9.  Servicer's Certificate........................................49

                                       -i-






                                TABLE OF CONTENTS
                                   (continued)

                                                                            Page

SECTION 4.10.  Annual Statement as to Compliance, Notice of
                Servicer Termination Event..................................49
SECTION 4.11.  Annual Independent Accountants' Report.......................50
SECTION 4.12.  Annual Independent Accountants' Report.......................51
SECTION 4.13.  Access to Certain Documentation and Information
                Regarding Receivables.......................................51
SECTION 4.14.  Verification of Servicer's Certificate.......................51
SECTION 4.15.  Retention and Termination of Servicer........................52
SECTION 4.16.  Fidelity Bond................................................53
SECTION 4.17.  Costs and Expenses...........................................53

                                    ARTICLE V

                         TRUST ACCOUNTS; DISTRIBUTIONS;
                          STATEMENTS TO SECURITYHOLDERS

SECTION 5.1.  Establishment of Trust Accounts...............................54
SECTION 5.2.  Interest Reserve Account......................................57
SECTION 5.3.  Certain Reimbursements to the Servicer........................57
SECTION 5.4.  Application of Collections....................................57
SECTION 5.5.  Withdrawals from Spread Account...............................58
SECTION 5.6.  Additional Deposits...........................................58
SECTION 5.7.  Distributions.................................................58
SECTION 5.8.  Note Distribution Account.....................................60
SECTION 5.9.  [RESERVED]....................................................62
SECTION 5.10.  Pre-Funding Account..........................................62
SECTION 5.11.  Statements to Securityholders................................63
SECTION 5.12.  Optional Deposits by the Note Insurer; Notice of Waivers.....65

                                   ARTICLE VI

                                 THE NOTE POLICY

SECTION 6.1.  Claims Under Note Policy......................................65
SECTION 6.2.  Preference Claims.............................................67
SECTION 6.3.  Surrender of Note Policy......................................68

                                   ARTICLE VII

                                   [RESERVED]



                                      -ii-
24322039.1 121898 1031E 95226288





                                TABLE OF CONTENTS
                                   (continued)

                                                                            Page

                                  ARTICLE VIII

                                   THE SELLER

SECTION 8.1.  Representations of Seller.....................................68
                          (a)  Organization and Good Standing...............68
                          (b)  Due Qualification............................68
                          (c)  Power and Authority..........................68
                          (d)  Valid Sale, Binding Obligations..............69
                          (e)  No Violation.................................69
                          (f)  No Proceedings...............................69
                          (g)  No Consents..................................69
                          (h)  Tax Returns..................................69
                          (i)  Chief Executive Office.......................69
SECTION 8.2.  [RESERVED]....................................................70
SECTION 8.3.  Liability of Seller; Indemnities..............................70
SECTION 8.4.  Merger or Consolidation of, or Assumption of the
               Obligations of, Seller.......................................70
SECTION 8.5.  Limitation on Liability of Seller and Others..................71
SECTION 8.6.  Seller May Own Certificates or Notes..........................71

                                   ARTICLE IX

                                  THE SERVICER

SECTION 9.1.  Representations of Servicer...................................72
                          (a)  Organization and Good Standing...............72
                          (b)  Due Qualification............................72
                          (c)  Power and Authority..........................72
                          (d)  Binding Obligation...........................72
                          (e)  No Violation.................................72
                          (f)  No Proceedings...............................73
                          (g)  No Consents..................................73
                          (h)  Taxes........................................73
                          (i)  Chief Executive Office.......................73
SECTION 9.2.  Liability of Servicer; Indemnities............................74
SECTION 9.3.  Merger or Consolidation of, or Assumption of the
               Obligations of, the Servicer or Standby Servicer.............75
SECTION 9.4.  Limitation on Liability of Servicer, Standby
               Servicer and Others..........................................76
SECTION 9.5.  Delegation of Duties..........................................78
SECTION 9.6.  Servicer and Standby Servicer Not to Resign...................78


                                      -iii-






                                TABLE OF CONTENTS
                                   (continued)

                                                                            Page

                                    ARTICLE X

                                     DEFAULT

SECTION 10.1.  Servicer Termination Event...................................79
SECTION 10.2.  Consequences of a Servicer Termination Event.................80
SECTION 10.3.  Appointment of Successor.....................................82
SECTION 10.4.  Notification to Noteholders and Certificateholders...........83
SECTION 10.5.  Waiver of Past Defaults......................................83
SECTION 10.6.  Action Upon Certain Failures of the Servicer.................83

                                   ARTICLE XI

                                   TERMINATION

SECTION 11.1.  Optional Purchase of All Receivables.........................84

                                   ARTICLE XII

                      ADMINISTRATIVE DUTIES OF THE SERVICER

SECTION 12.1.  Administrative Duties........................................84
                          (a)  Duties with Respect to the Indenture.........84
                          (b)  Duties with Respect to the Issuer............85
                          (c)  Tax Matters..................................86
                          (d)  Non-Ministerial Matters......................86
                          (e)  Exceptions...................................86
                          (f)  Limitation of Standby Servicer's
                                Obligations.................................87
SECTION 12.2.  Records......................................................87
SECTION 12.3.  Additional Information to be Furnished to the Issuer.........87

                                  ARTICLE XIII

                            MISCELLANEOUS PROVISIONS

SECTION 13.1.  Amendment....................................................87
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

                                      -iv-






                                TABLE OF CONTENTS
                                   (continued)

                                                                            Page

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.........92
SECTION 13.13. Independence of the Servicer.................................93
SECTION 13.14. No Joint Venture.............................................93
SECTION 13.15. Note Insurer as Controlling Party............................93



                                       -v-







                                TABLE OF CONTENTS


SCHEDULES

Schedule A           -     Schedule of Receivables
Schedule B           -     Location for Delivery of Receivable Files


EXHIBITS

Exhibit A            -     Form of Subsequent Transfer Agreement
Exhibit B            -     Form of Servicer's Certificate
Exhibit C            -     Form of Trust Receipt
Exhibit D            -     Form of Servicing Officer's Certificate
Exhibit E            -     Form of Monthly Securityholder Statement
Exhibit F-1          -     Form of Trustee's Certificate Pursuant to
                           Section 3.2 or 3.4
Exhibit F-2          -     Form of Trustee's Certificate Pursuant to
                           Section 4.7 or 11.1





                                      -vi-




                                                          EXECUTION COPY

                                   ASSIGNMENT

         For value  received,  on this 4th day of December,  1998 in  accordance
with  the  Purchase  Agreement  dated  as  of  December  1,  1998,  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  Initial  CPS
Receivables  listed in the Schedule of CPS  Receivables  and all monies received
thereunder after the Cutoff Date and all Net Liquidation  Proceeds received with
respect to such  Initial CPS  Receivables;  (ii) the  security  interests in the
Financed  Vehicles  granted by Obligors  pursuant to the Initial 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 Initial CPS  Receivables or the
Obligors  thereunder;  (iv) refunds for the costs of extended service  contracts
with respect to Financed Vehicles securing the Initial 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 an Initial
CPS  Receivable  and any recourse to Dealers for any of the  foregoing;  (v) the
Receivable File related to each Initial CPS Receivable; (vi) the proceeds of any
and all of the  foregoing  and (vii) 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 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.  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  Initial  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 the day and year first above written.



                                    CONSUMER PORTFOLIO SERVICES, INC.


                                    By:
                                       Name: Jeffrey P. Fritz
                                       Title:   Chief Financial Officer


                                       -2-






                                                             EXECUTION COPY

         PURCHASE  AGREEMENT  dated  as of  December  1,  1998,  by and  between
CONSUMER  PORTFOLIO  SERVICES,  INC., a California  corporation  (the "Seller"),
having its principal executive office at 16355 Laguna Canyon,  Irvine, CA 92618,
and CPS RECEIVABLES CORP., a California  corporation (the  "Purchaser"),  having
its principal executive office at 16355 Laguna, CA 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  and the Linc  Receivables  will be  transferred  by the  Purchaser,
pursuant to the Sale and Servicing  Agreement (as hereinafter  defined),  to CPS
Auto Receivables Trust 1998-4,  which Trust will issue notes under the Indenture
(as hereinafter  defined)  representing  indebtedness of the Trust (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 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):

         "Agreements"  means,   collectively,   this  Purchase  Agreement,  each
Subsequent Purchase Agreement and the Assignments.

         "Assignment"  means the  Initial  Assignments,  and/or  any  Subsequent
Assignment.










         "Base  Prospectus"  means the Prospectus  dated November 9, 1998,  with
respect to CPS Auto Receivables Trusts and any amendment or supplement thereto.

         "Closing Date" means December 4, 1998.

         "CPS" means Consumer Portfolio Services, Inc., a California corporation
and its successors and assigns.

         "CPS Receivables"  means the Initial CPS Receivables and the Subsequent
CPS Receivables.

         "Indenture"  means the Indenture of even date herewith between CPS Auto
Receivables  Trust  1998-4,  as issuer,  and Norwest  Bank  Minnesota,  National
Association, as trustee.

         "Initial Assignment" means the Initial CPS Assignment, the Initial Linc
Assignment and/or the Initial Samco Assignment.

         "Initial CPS Assignment"  means the assignment  dated December 4, 1998,
by the Seller to the  Purchaser,  relating  to the  purchase  of the Initial 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.

         "Initial CPS Receivable"  means each retail  installment  sale contract
for a Financed  Vehicle that appears on the Initial  Schedule of CPS Receivables
and all rights thereunder.

         "Initial Linc  Assignment"  means the assignment  substantially  in the
form of Exhibit A to the Linc Purchase Agreement.

         "Initial Linc Receivable"  means each retail  installment sale contract
for a Financed  Vehicle that appears on the Initial Schedule of Linc Receivables
and all rights thereunder.

         "Initial Receivable" means an Initial Samco Receivable, an Initial Linc
Receivable and/or an Initial CPS Receivable.

         "Initial Receivables Purchase Price" means $256,332,177.00.

         "Initial Samco  Assignment"  means the assignment  substantially in the
form of Exhibit A to the Samco Purchase Agreement.

         "Initial Samco Receivable" means each retail  installment sale contract
for a Financed Vehicle that appears on the Initial Schedule of Samco Receivables
and all rights thereunder.


                                       -2-







         "Initial Schedule of CPS Receivables" means the list of CPS Receivables
annexed hereto as of the Closing Date as Exhibit B.

         "Initial Schedule of Linc Receivables"  means the list of Initial Samco
Receivables  annexed as of the  Closing  Date as Exhibit B to the Linc  Purchase
Agreement.

         "Initial Schedule of Samco Receivables" means the list of Initial Samco
Receivables  annexed as of the Closing  Date as Exhibit B to the Samco  Purchase
Agreement.

         "Initial  Transferred CPS Property" shall have the meaning specified in
Section 2.1(a) hereof.

         "Initial  Transferred  Property"  shall have the meaning  specified  in
Section 2.1(a) hereof.

         "Initial Transferred Linc Property" shall have the meaning specified in
the Linc Purchase Agreement.

         "Initial  Transferred  Samco Property" shall have the meaning specified
in the Samco Purchase Agreement.

         "Linc" means Linc Acceptance  Company LLC, a Delaware limited liability
company, and its successors and assigns.

         "Linc  Purchase  Agreement"  means the Purchase  Agreement of even date
herewith,  between Linc Acceptance  Company LLC, 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.

         "Linc Receivable" shall have the meaning specified in the Linc Purchase
Agreement.

         "Obligor(s)" means the purchaser or co-purchasers of a Financed Vehicle
or any other Person who owes or may be liable for payments under a Receivable.

         "Offering  Documents"  means  the  Prospectus  Supplement  and the Base
Prospectus.

         "Prospectus  Supplement" means the Prospectus Supplement dated December
2, 1998,  relating  to the public  offering  of the 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.


                                       -3-







         "Purchaser" means CPS Receivables Corp., a California corporation,  and
its successors and assigns.

         "Receivables"  means,  collectively,  the  CPS  Receivables,  the  Linc
Receivables and the Samco Receivables.

         "Repurchase  Event"  shall have the  meaning  specified  in Section 6.2
hereof.

         "Sale and Servicing  Agreement" means the Sale and Servicing  Agreement
of even date herewith among CPS Auto Receivables  Trust 1998-4,  as issuer,  CPS
Receivables Corp., as seller,  Consumer Portfolio  Services,  Inc., as 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 Purchase  Agreement"  means the Purchase  Agreement of even date
herewith 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 Initial CPS Receivables
annexed hereto as Exhibit B, as  supplemented by each Schedule of Subsequent CPS
Receivables.

         "Schedule  of  Linc  Receivables"   means  the  list  of  Initial  Linc
Receivables annexed as Exhibit B to the Linc Purchase Agreement, as supplemented
by each Schedule of Subsequent Linc Receivables.

         "Schedule  of  Receivables"  means,  collectively,  the Schedule of CPS
Receivables,  the  Schedule  of Linc  Receivables  and  the  Schedule  of  Samco
Receivables.

         "Schedule  of  Samco  Receivables"  means  the  list of  Initial  Samco
Receivables  annexed  as  Exhibit  B  to  the  Samco  Purchase   Agreement,   as
supplemented by each Schedule of Subsequent Samco Receivables.

         "Schedule  of  Subsequent  CPS  Receivables"  means the schedule of all
motor vehicle retail financing  agreements sold and transferred to the Purchaser
pursuant to a Subsequent Purchase  Agreement,  which schedule shall be deemed to
supplement the Schedule of CPS  Receivables and shall be attached to the related
Subsequent Assignment (and may be in the form of microfiche).

                                       -4-








         "Schedule of  Subsequent  Linc  Receivables"  means the schedule of all
Linc Receivables sold and transferred to the Purchaser  pursuant to a Subsequent
Linc  Purchase  Agreement,  which  schedule  shall be deemed to  supplement  the
Schedule of Linc  Receivables  and shall be  attached to the related  Subsequent
Assignment  delivered under the Linc Purchase  Agreement (and may be in the form
of microfiche).

         "Schedule of Subsequent  Samco  Receivables"  means the schedule of all
Samco Receivables sold and transferred to the Purchaser pursuant to a Subsequent
Samco  Purchase  Agreement,  which  schedule  shall be deemed to supplement  the
Schedule of Samco  Receivables  and shall be attached to the related  Subsequent
Assignment  delivered under the Samco Purchase Agreement (and may be in the form
of microfiche).

         "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.

         "Standard Program" means the CPS Standard Program.

         "Subsequent Assignment" means a Subsequent CPS Assignment, a Subsequent
Linc Assignment or a Subsequent Samco Assignment, as applicable.

         "Subsequent  Closing  Date"  means  any  day on  which  Subsequent  CPS
Receivables or Subsequent Samco  Receivables are sold to the Purchaser  pursuant
to a Subsequent Purchase Agreement.

         "Subsequent CPS Assignment"  means an assignment  substantially  in the
form of  Exhibit A to the form of  Subsequent  Purchase  Agreement  attached  as
Exhibit C hereto.

         "Subsequent  CPS  Purchase   Agreement"  means  a  subsequent  purchase
agreement which shall be in substantially the form of Exhibit C to this Purchase
Agreement by which the Seller will transfer Subsequent CPS Receivables.

         "Subsequent  CPS Receivable"  means each Receivable  transferred to the
Purchaser  pursuant to a Subsequent CPS Assignment  which shall be listed on the
Schedule of  Subsequent  CPS  Receivables  attached  to the  related  Subsequent
Assignment.

         "Subsequent  Linc Assignment"  shall have the meaning  specified in the
Linc Purchase Agreement.


                                       -5-







         "Subsequent  Linc  Purchase  Agreement"  means  a  subsequent  purchase
agreement,  which  shall be in  substantially  the form of Exhibit C to the Linc
Purchase   Agreement,   by  which  the  Seller  will  transfer  Subsequent  Linc
Receivables.

         "Subsequent  Linc Receivable"  shall have the meaning  specified in the
Linc Purchase Agreement.

         "Subsequent  Purchase  Agreement"  means the  Subsequent  CPS  Purchase
Agreement,  the Subsequent Linc Purchase  Agreement  and/or the Subsequent Samco
Purchase Agreement.

         "Subsequent   Receivables"   means  a  Subsequent  CPS  Receivable,   a
Subsequent Linc Receivable and/or a Subsequent Samco Receivable.

         "Subsequent  Receivables  Purchase  Price"  shall,  with respect to any
Subsequent  Receivables,  have the meaning  specified in the related  Subsequent
Purchase Agreement.

         "Subsequent  Samco  Assignment" shall have the meaning specified in the
Samco Purchase Agreement.

         "Subsequent  Samco  Purchase  Agreement"  means a  subsequent  purchase
agreement,  which shall be in  substantially  the form of Exhibit C to the Samco
Purchase  Agreement,   by  which  the  Seller  will  transfer  Subsequent  Samco
Receivables.

         "Subsequent  Samco  Receivable" shall have the meaning specified in the
Samco Purchase Agreement.

         "Subsequent  Transferred CPS Property" shall have the meaning specified
in each Subsequent CPS Purchase Agreement.

         "Subsequent  Transferred  Property" shall have the meaning specified in
Section 2.2(a).

         "Subsequent Transferred Linc Property" shall have the meaning specified
in each Subsequent Linc Purchase Agreement.

         "Subsequent   Transferred   Samco  Property"  shall  have  the  meaning
specified in each Subsequent Samco Purchase Agreement.

         "Transferred  CPS Property" means the Initial  Transferred CPS Property
and the Subsequent Transferred CPS Property.

         "Transferred  Linc  Property"  shall have the meaning  specified in the
Linc Purchase Agreement.


                                       -6-







         "Transferred   Property"  means  the  Transferred  CPS  Property,   the
Transferred Linc 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  1998-4  created by the
Trust Agreement.

         "Trust  Agreement"  means the Amended and Restated  Trust  Agreement of
even date herewith between CPS Receivables  Corp. and Bankers Trust  (Delaware),
as Owner Trustee.

         "UCC" means the Uniform Commercial Code, as in effect from time to time
in the relevant jurisdictions.

         "Underwriter"  means First Union Capital  Markets,  a division of Wheat
First Securities, Inc..

         "Underwriting  Agreement" means the Underwriting  Agreement relating to
the Notes, dated as of December 2, 1998, among the Underwriter, CPS, Samco, Linc
and the Purchaser.


                                   ARTICLE II

                        PURCHASE AND SALE OF RECEIVABLES

         2.1.  Purchase and Sale of Initial  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 Initial  CPS  Receivables  and the other  Initial
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 Initial  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 Initial CPS  Receivables  listed in the Initial  Schedule of CPS Receivables
and all

                                       -7-







monies  received  thereunder  after  the  Cutoff  Date  and all Net  Liquidation
Proceeds  received  with  respect  to such  Initial  CPS  Receivables;  (ii) the
security  interests in the Financed Vehicles granted by Obligors pursuant to the
Initial 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 Initial
CPS  Receivables  or the  Obligors  thereunder;  (iv)  refunds  for the costs of
extended  service  contracts  with  respect to Financed  Vehicles  securing  the
Initial CPS  Receivables,  refunds of unearned  premiums  with respect to credit
life and credit accident and health insurance policies or certificates  covering
an Obligor  under an Initial  CPS  Receivable  or Financed  Vehicle  securing an
Initial 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 Initial CPS Receivable; (vi) the proceeds of any and all of
the  foregoing  and (vii) 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 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 "Initial  Transferred  CPS
Property" and together with the  Transferred  Samco Property and the Transferred
Linc Property, the "Initial Transferred Property").

                  (b) Initial  Receivables  Purchase Price. In consideration for
the Initial CPS Receivables and other Initial Transferred  Property described in
Section 2.1(a),  the Purchaser shall, on the Closing Date, pay to the Seller the
Initial  Receivables  Purchase Price. An amount equal to  $248,062,758.87 of the
Initial  Receivables  Purchase  Price  shall be paid to the Seller in cash.  The
remaining  $8,269,418.13  of the  Initial  Receivables  Purchase  Price shall be
deemed paid and returned to the Purchaser and be  considered a  contribution  to
the Purchaser's  capital.  The portion of the Initial Receivables Purchase Price
to be paid in cash shall be by federal wire transfer (same day) funds.

         2.2.  Purchase  and  Sale of  Subsequent  Receivables.  On the  related
Subsequent  Closing  Date,  subject to the terms and  conditions  of the related
Subsequent CPS 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,  each  Subsequent CPS Purchase
Agreement  and the Sale and  Servicing  Agreement),  all of the Seller's  right,
title and interest in, to and under the Subsequent CPS Receivables and the other
Subsequent  Transferred  CPS Property  relating  thereto.  The conveyance to the
Purchaser of the Subsequent CPS Receivables and other Subsequent Transferred CPS
Property  relating thereto is intended as a sale free and clear of all liens and
it is intended that

                                       -8-







the  Subsequent  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  Subsequent  Receivables.   On  the  related
Subsequent Closing Date the Seller shall sell, transfer, assign, grant, set over
and  otherwise  convey  to  the  Purchaser,  without  recourse  (subject  to the
obligations in this Purchase  Agreement,  each Subsequent CPS Purchase Agreement
and in the Sale and Servicing  Agreement),  all right, title and interest of the
Seller  in and to (i) the  Subsequent  CPS  Receivables  listed  in the  related
Schedule of Subsequent CPS Receivables and all monies received  thereunder after
the related  Subsequent  Cutoff Date and all Net Liquidation  Proceeds  received
with respect to such Subsequent CPS Receivables;  (ii) the security interests in
the  Financed  Vehicles  granted by  Obligors  pursuant  to the  Subsequent  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 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  Subsequent  CPS
Receivables or the Obligors  thereunder;  (iv) refunds for the costs of extended
service  contracts with respect to Financed Vehicles securing the Subsequent CPS
Receivables, refunds of unearned premiums with respect to credit life and credit
accident and health  insurance  policies or certificates  covering an Obligor or
Financed  Vehicle  securing  the  Subsequent  CPS  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 Subsequent CPS
Receivable;  (vi) the  proceeds  of any and all of the  foregoing  and (vii) 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 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 "Subsequent Transferred CPS Property" and together
with any Subsequent  Transferred  Samco Property or Subsequent  Transferred Linc
Property, the "Subsequent Transferred Property").

                  (b) The Seller shall  transfer to the Purchaser the Subsequent
CPS  Receivables  and the  Subsequent  Transferred  CPS Property as described in
paragraph  (a)  above  only  upon  the  satisfaction  of each  of the  following
conditions on or prior to the related Subsequent Closing Date:

                  (i) the Seller  shall have  provided  the  Trustee,  the Owner
         Trustee,  the Note  Insurer  and the Rating  Agencies  with an Addition
         Notice not later than three days prior to such Subsequent  Closing Date
         and shall have provided any information

                                       -9-







         reasonably  requested  by any  of the  foregoing  with  respect  to the
         Subsequent CPS Receivables;

                  (ii) the Seller shall have  delivered to the Owner Trustee and
         the  Trustee  a  duly  executed   Subsequent  CPS  Purchase  Agreement,
         substantially  in  the  form  of  Exhibit  C,  which  shall  include  a
         supplement to the Schedule of CPS  Receivables,  listing the Subsequent
         CPS  Receivables to be transferred  on the related  Subsequent  Closing
         Date;

                  (iii) the Seller shall,  to the extent required by Section 4.2
         of the Sale and Servicing  Agreement,  have deposited in the Collection
         Account all collections in respect of the Subsequent CPS Receivables;

                  (iv) as of each Subsequent  Closing Date, (A) the Seller shall
         not be  insolvent  and shall not  become  insolvent  as a result of the
         transfer of Subsequent CPS Receivables on such Subsequent Closing Date,
         (B) the Seller shall not intend to incur or believe that it shall incur
         debts that would be beyond its ability to pay as such debts mature, (C)
         such  transfer  shall not have been made with actual  intent to hinder,
         delay or defraud any Person and (D) the assets of the Seller  shall not
         constitute unreasonably small capital to carry out its business as then
         conducted;

                  (v)  the Funding Period shall not have terminated;

                  (vi) after  giving  effect to any transfer of  Subsequent  CPS
         Receivables  on a  Subsequent  Closing Date (and any  Subsequent  Samco
         Receivables  transferred  to the Purchaser on such  Subsequent  Closing
         Date), the Receivables shall meet the following  criteria (based on the
         characteristics  of the Initial  Receivables on the Initial Cutoff Date
         and the Subsequent Receivables on the related Subsequent Cutoff Dates):
         (A) the weighted  average APR of such Receivables will not be less than
         0.25% below the weighted average APR of the Initial  Receivables on the
         Cutoff  Date,  (B)  the  weighted   average   remaining  term  of  such
         Receivables will be within a range of 12 to72 months, (C) not more than
         90% of  the  aggregate  principal  balance  of  such  Receivables  will
         represent financing of used Financed Vehicles, (D) no fewer than 50% of
         the  Subsequent  Receivables  will  be  originated  under  the  "Alpha"
         program,  (E) no more than 5.25% of the Subsequent  Receivables will be
         originated under the "First Time Buyer" program,  (F) no fewer than 20%
         and no more than 30% of the Subsequent  Receivables  will be originated
         under the "Standard" program, and (G) the Trust, the Trustee, the Owner
         Trustee and the Note Insurer shall have received  written  confirmation
         from a firm  of  certified  independent  public  accountants  as to the
         satisfaction of the criteria in clauses (A) through (F) above;

                  (vii) each of the  representations  and warranties made by the
         Seller   pursuant  to  Section  3.2  with  respect  to  the  Subsequent
         Receivables to be transferred on such Subsequent  Closing Date shall be
         true and correct as of the related Subsequent

                                      -10-







         Closing Date, and the Seller shall have performed all obligations to be
         performed by it hereunder on or prior to such Subsequent Closing Date;

                  (viii) the Seller  shall,  at its own expense,  on or prior to
         the  Subsequent  Closing Date  indicate in its computer  files that the
         Subsequent  Receivables identified in the Subsequent Purchase Agreement
         have been sold to the  Purchaser  pursuant  to the  related  Subsequent
         Purchase  Agreement and  subsequently to the Trust pursuant to the Sale
         and Servicing Agreement;

                  (ix) the  Seller  shall  have  taken any  action  required  to
         maintain the first priority  perfected  ownership interest of the Trust
         in the Owner Trust  Estate and the first  priority  perfected  security
         interest of the Trustee in the Collateral;

                  (x) no selection  procedures  adverse to the  interests of the
         Noteholders  or the Note Insurer  shall have been utilized in selecting
         the Subsequent CPS Receivables;

                  (xi) the addition of any such Subsequent CPS Receivables shall
         not result in a material  adverse tax  consequence  to the Trust or the
         Noteholders;

                  (xii)  the  Seller  shall  have  delivered  (A) to the  Rating
         Agencies and the Note Insurer an Opinion of Counsel with respect to the
         transfer of such Subsequent CPS Receivables  substantially  in the form
         of the Opinion of Counsel delivered to the Rating Agencies and the Note
         Insurer on the related  Subsequent  Closing Date and (B) to the Trustee
         the Opinion of Counsel  required by Section  13.2(i)(1) of the Sale and
         Servicing Agreement;

                  (xiii) each Rating Agency shall have confirmed that the rating
         on the  Notes  shall not be  withdrawn  or  reduced  as a result of the
         transfer of such Subsequent CPS Receivables to the Trust;

                  (xiv)  all  conditions  precedent  specified  in the  Sale and
         Servicing Agreement with respect to the transfer of such Subsequent CPS
         Receivables  to the Trust by the Purchaser  shall have been  satisfied;
         and

                  (xv) the Seller  shall have  delivered to the Note Insurer and
         the Trustee an Officers'  Certificate  confirming the  satisfaction  of
         each condition precedent specified in this paragraph (b).

         2.3. The Closing.  The sale and purchase of the Initial 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  will  sell  the  Initial  Samco  Receivables  to the
Purchaser,  (b) the Linc Purchase Agreement pursuant to which Linc will sell the
Linc Receivables to the Purchaser, (c) the Sale and Servicing Agreement

                                      -11-







pursuant to which the Purchaser will assign all of its right, title and interest
in and to the Initial Receivables and the other Initial Transferred  Property to
the Trust  for the  benefit  of the  Securityholders,  (d) the  Trust  Agreement
pursuant to which the Trust shall be formed and the Certificates issued, (e) the
Indenture  pursuant  to which  the  Trust  will  issue  the  Notes,  and (f) the
Underwriting  Agreement  pursuant to which the Purchaser shall sell the Notes to
the Underwriter.


                                   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 the
Closing  Date  and each  Subsequent  Closing  Date  (which  representations  and
warranties shall survive the Closing Date and each Subsequent 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

                                      -12-







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 and each  Subsequent  Closing Date (which  representations  and
warranties shall survive the Closing Date and each Subsequent 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

                                      -13-







         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 Sections 2.1 and 2.2,  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

                                      -14-







         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 Linc
Receivables) and the other  Transferred  Property  relating thereto on which the
Purchaser relies in accepting the Receivables and the other Transferred Property
relating thereto.  Such representations and warranties speak as of the execution
and delivery of this  Agreement  and as of the Closing  Date, in the case of the
Initial  Receivables,  and as of the related Subsequent Closing Date, in case of
the Subsequent Receivables, but shall survive the sale, transfer, and assignment
of the Receivables and the other  Transferred  Property  relating thereto to the
Purchaser and the subsequent  assignments and transfers pursuant to the Sale and
Servicing Agreement and the Indenture:

                  (i) Origination  Date. Each Receivable has an origination date
         on or after November 1, 1997.

                  (ii) Principal  Balance/Number of Contracts.  As of the Cutoff
         Date, the total aggregate  principal balance of the Initial Receivables
         was  $275,647,271.04.  The Initial  Receivables are evidenced by 21,655
         Contracts.

                  (iii) Maturity of Receivables. Each Receivable has an original
         term to  maturity  of not more than 72  months;  the  weighted  average
         original term to maturity of the Initial  Receivables  was 57.84 months
         as of the Cutoff Date (in the case of the Initial  Receivables)  or the
         Subsequent  Cutoff  Date  (in  the  case  of  the  related   Subsequent
         Receivables); the remaining term to maturity of each Initial Receivable
         was 72 months  or less as of the  Cutoff  Date;  the  weighted  average
         remaining term to maturity of the Initial  Receivables was 55.87 months
         as of the Cutoff Date.

                  (iv)  Characteristics of Receivables.  (a) Each Receivable (1)
         has been originated in the United States of America by a Dealer for the
         retail  sale of a  Financed  Vehicle  in the  ordinary  course  of such
         Dealer's business,  has been fully and properly executed by the parties
         thereto and has been  purchased by the Seller (or,  with respect to the
         Samco  Receivables,  Samco and,  with respect to the Linc  Receivables,
         Linc) in connection with the sale of Financed Vehicles by the Dealers,

                                      -15-







         (2) has created a valid,  subsisting,  and  enforceable  first priority
         security interest in favor of the Seller (or, with respect to the Samco
         Receivables,  Samco and, with respect to the Linc Receivables, Linc) in
         the Financed Vehicle,  which security interest has been assigned by the
         Seller (or,  with  respect to the Samco  Receivables,  Samco and,  with
         respect to the Linc Receivables,  Linc) to the Purchaser, which in turn
         has assigned such security  interest to the Trust  pursuant to the Sale
         and  Servicing  Agreement  which  will in  turn  assign  such  security
         interest  to  the  Trustee,  (3)  contains  customary  and  enforceable
         provisions  such that the rights and remedies of the holder or assignee
         thereof shall be adequate for realization against the collateral of the
         benefits of the security,  (4) provides for level monthly payments that
         fully  amortize the Amount  Financed over the original term (except for
         the last payment,  which may be different  from the level  payment) and
         yield  interest  at the  Annual  Percentage  Rate,  (5)  has an  Annual
         Percentage  Rate of not  less  than  14.9%,  (6) that is a Rule of 78's
         Receivable  provides for, in the event that such Receivable is prepaid,
         a prepayment that fully pays the Principal  Balance and includes a full
         month's interest, in the month of prepayment,  at the Annual Percentage
         Rate, (7) is a Rule of 78's Receivable or a Simple Interest Receivable,
         and (8) was  originated by a Dealer and was sold by the Dealer  without
         any fraud or misrepresentation on the part of such Dealer.

                  (v) Approximately 88.63% of the aggregate Principal Balance of
         the Initial  Receivables,  constituting 91.11% of the number of Initial
         Receivables,  as of the  Cutoff  Date,  represents  financing  of  used
         automobiles,  light  trucks,  vans or  minivans;  the  remainder of the
         Initial Receivables represent financing of new vehicles;  approximately
         7.82% of the aggregate  Principal Balance of the Initial Receivables as
         of  the  Cutoff  Date  were  originated   under  the  "Delta"  program;
         approximately  52.45% of the aggregate Principal Balance of the Initial
         Receivables  as of the Cutoff  Date were  originated  under the "Alpha"
         program;  approximately 5.24% of the aggregate Principal Balance of the
         Initial  Receivables  as of the Cutoff Date were  originated  under the
         "First  Time  Buyer"  program;  approximately  28.33% of the  aggregate
         Principal Balance of the Initial Receivables as of the Cutoff Date were
         originated  under the "Standard"  program;  approximately  2.39% of the
         aggregate Principal Balance of the Initial Receivables as of the Cutoff
         Date were originated under the Linc program; and approximately 3.76% of
         the aggregate  Principal  Balance of the Initial  Receivables as of the
         Cutoff  Date  were   originated   under  the  "Super  Alpha"   program;
         approximately  2.39% of the aggregate  Principal Balance of the Initial
         Receivables as of the Cutoff Date are Linc  Receivables;  approximately
         4.62% of the aggregate  Principal Balance of the Initial Receivables as
         of the Cutoff Date are Samco  Receivables;  no Initial Receivable shall
         have a payment that is more than 30 days overdue as of the Cutoff Date;
         15.76% of the aggregate Principal Balance of the Initial Receivables as
         of the  Cutoff  Date are Rule of 78's  Receivables  and  84.24%  of the
         aggregate Principal Balance of the Initial Receivables as of the Cutoff
         Date are Simple Interest  Receivables;  each Initial  Receivable  shall
         have a final  scheduled  payment due no later than  September 27, 2004;
         and each  Initial  Receivable  was  originated  on or before the Cutoff
         Date.

                                      -16-







                  (vi)  Scheduled  Payments.  Each  Receivable  had an  original
         principal balance of not less than $0 nor more than $30,000.01.

                  (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  17.84% of the Initial Receivables were originated
         in California.

                  (ix)  Post-Office  Box. On or prior to the next billing period
         after the Cutoff Date (in the case of the Initial  Receivables)  or the
         Subsequent  Cutoff  Date  (in  the  case  of  the  related   Subsequent
         Receivables), the Seller will notify each Obligor to make payments with
         respect to its  respective  Receivables  after the Cutoff  Date (in the
         case of the Initial  Receivables) or the Subsequent Cutoff Date (in the
         case of the related Subsequent Receivables) 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 or the related Subsequent Closing Date, as applicable,
         will be delivered  to the Trustee at the location  listed in Schedule B
         to the  Sale  and  Servicing  Agreement.  There  is only  one  original
         executed copy of each Receivable.

                  (xi)  Schedule  of  Receivables;   Selection  Procedures.  The
         information  with respect to the  Receivables set forth in the Schedule
         of CPS  Receivables,  the Schedule of Linc Receivables and the Schedule
         of Samco Receivables is true and correct in all material respects as of
         the close of business on the Cutoff Date,  and no selection  procedures
         adverse to the  Securityholders  have been  utilized in  selecting  the
         Receivables.

                  (xii)  Compliance with Law. Each  Receivable,  the sale of the
         Financed Vehicle and the sale of any physical  damage,  credit life and
         credit accident and health insurance and any extended service contracts
         complied at the time the related  Receivable was originated or made and
         at the  execution  of  this  Agreement  (or the  applicable  Subsequent
         Transfer Agreement) complies in all material respects with all

                                      -17-







         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,  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.

                  (xiv) No Government  Obligor.  None of the Receivables are due
         from the  United  States of  America  or any State or from any  agency,
         department,  or  instrumentality of the United States of America or any
         State.

                  (xv) Security Interest in Financed Vehicle.  Immediately prior
         to the sale, assignment, and transfer thereof, each Receivable shall be
         secured by a validly  perfected first priority security interest in the
         Financed  Vehicle in favor of the Seller (or, with respect to the Samco
         Receivables,  Samco and, with respect to the Linc Receivables, Linc) as
         secured party,  and such security  interest is prior to all other liens
         upon and security interests in such Financed Vehicle which now exist or
         may hereafter arise or be created (except, as to priority,  for any tax
         liens or  mechanics'  liens which may arise after the Closing  Date, in
         the case of the Initial  Receivables  or, after the related  Subsequent
         Closing Date, in the case of the Subsequent Receivables).

                  (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.


                                      -18-







                  (xix)  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.

                  (xx) No Liens.  As of the  Cutoff  Date  (with  respect to the
         Initial Receivables) or the Subsequent Cutoff Date (with respect to the
         related  Subsequent  Receivables),  (a),  there  are no liens or claims
         existing or which have been filed for work, labor, storage or materials
         relating to a Financed  Vehicle  that shall be liens prior to, or equal
         or  coordinate  with,  the security  interest in the  Financed  Vehicle
         granted by the  Receivable and (b) there is no lien against the related
         Financed Vehicle for delinquent taxes.

                  (xxi)   No   Default;   Repossession.   Except   for   payment
         delinquencies  continuing  for a period of not more than thirty days as
         of the Cutoff  Date (with  respect to the Initial  Receivables)  or the
         Subsequent  Cutoff  Date  (with  respect  to  the  related   Subsequent
         Receivables),   no  default,  breach,  violation  or  event  permitting
         acceleration  under the terms of any  Receivable  has occurred;  and no
         continuing  condition  that  with  notice  or the  lapse of time  would
         constitute  a  default,   breach,   violation,   or  event   permitting
         acceleration  under the terms of any Receivable has arisen; and none of
         the Seller,  Samco or Linc shall waive and none of the three has waived
         any  of  the  foregoing;  and  no  Financed  Vehicle  shall  have  been
         repossessed  as of  the  Cutoff  Date  (with  respect  to  the  Initial
         Receivables) or the Subsequent Cutoff Date (with respect to the related
         Subsequent Receivables).

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

                  (xxiii)  Title.  It is the  intention  of the Seller  that the
         transfer and assignment  herein  contemplated  constitute a sale of the
         CPS Receivables  and other  Transferred CPS Property from the Seller to
         the Purchaser and that the beneficial

                                      -19-







         interest in and title to such CPS Receivables and other Transferred CPS
         Property not be part of the debtor's  estate in the event of the filing
         of a bankruptcy  petition by or against the Seller under any bankruptcy
         law. No CPS Receivable or other Transferred CPS Property has been sold,
         transferred,  assigned,  or pledged  by the Seller to any Person  other
         than the  Purchaser or any such pledge has been released on or prior to
         the Closing  Date.  Immediately  prior to the transfer  and  assignment
         herein  contemplated,  the Seller had good and marketable title to each
         CPS Receivable  and other  Transferred  CPS Property,  and was the sole
         owner  thereof,  free and  clear of all  liens,  claims,  encumbrances,
         security  interests,  and rights of others  and,  immediately  upon the
         transfer thereof, the Purchaser shall have good and marketable title to
         each such CPS Receivable and other  Transferred CPS Property,  and will
         be the sole owner thereof,  free and clear of all liens,  encumbrances,
         security  interests,  and rights of others,  and the  transfer has been
         perfected under the UCC.

                  (xxiv) Lawful  Assignment.  No Receivable has been  originated
         in, or is  subject  to the laws of, any  jurisdiction  under  which the
         sale, transfer, and assignment of such Receivable under this Agreement,
         the Linc Purchase  Agreement or the Samco Purchase  Agreement  shall be
         unlawful,  void,  or voidable.  None of the Seller,  Samco nor Linc has
         entered  into any  agreement  with any account  debtor that  prohibits,
         restricts  or  conditions   the   assignment  of  any  portion  of  the
         Receivables.

                  (xxv)  All  Filings  Made.  All  filings  (including,  without
         limitation,  UCC  filings)  necessary in any  jurisdiction  to give the
         Purchaser  a  first  priority  perfected   ownership  interest  in  the
         Receivables  and the other  Transferred  CPS  Property  have been made,
         taken or performed.

                  (xxvi) Chattel Paper.  Each  Receivable  constitutes  "chattel
         paper" under the UCC.

                  (xxvii)  Valid  and  Binding   Obligation  of  Obligor.   Each
         Receivable  is the legal,  valid and binding  obligation of the Obligor
         thereunder and is enforceable in accordance with its terms, except only
         as such enforcement may be limited by bankruptcy, insolvency or similar
         laws affecting the enforcement of creditors' rights generally,  and all
         parties to such 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;  the terms of such
         Receivable have not been waived or modified in any respect.

                  (xxviii) 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

                                      -20-







         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 or,  with  respect to the Linc  Receivables,
         Linc) named as the original secured party under the related  Receivable
         as the holder of a first  priority  security  interest in such Financed
         Vehicle,  and (B) if the  Receivable was originated in a State in which
         the  filing  of a  financing  statement  under the UCC is  required  to
         perfect  a  security  interest  in  motor  vehicles,  such  filings  or
         recordings have been duly made and show the Seller (or, with respect to
         the Samco Receivables,  Samco or, with respect to the Linc Receivables,
         Linc) named as the original secured party under the related Receivable,
         and in either  case,  the Trustee  has the same rights as such  secured
         party has or would have (if such secured  party were still the owner of
         the  Receivable)  against  all  parties  claiming  an  interest in such
         Financed  Vehicle.  With respect to each Receivable for which the title
         document of the related Financed Vehicle has not yet been returned from
         the Registrar of Titles,  the Seller has received written evidence from
         the  related  Dealer that such title  document  showing the Seller (or,
         with  respect to the Samco  Receivables,  Samco or, with respect to the
         Linc Receivables,  Linc) and received written evidence from the related
         Dealer that such title document  showing the Seller as first lienholder
         has been applied for.

                  (xxix)  Casualty.  No Financed Vehicle related to a Receivable
         has suffered a Casualty.

                  (xxx)  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.

                  (xxxi)  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.



                                      -21-







                                   ARTICLE IV

                                   CONDITIONS

         4.1. Conditions to Obligation of the Purchaser. On the Closing Date and
on each Subsequent Closing Date, the obligation of the Purchaser to purchase the
related  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 Closing Date
or the related Subsequent  Closing Date, as applicable,  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 or the  related
Subsequent Closing Date, as applicable.

         (b) Computer Files Marked. The Seller shall, at its own expense,  on or
prior to the Closing Date or the related Subsequent Closing Date, as applicable,
indicate in its computer files that the related 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 as of, and after giving effect to all transfers of Receivables  on,
the Closing Date or the related Subsequent Closing Date, as applicable.

         (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 Closing Date
or the related Subsequent Closing Date, as applicable.

         (d) Documents to be delivered by the Seller at the Closing.

                  (i) The  Assignment.  On the  Closing  Date,  the Seller  will
         execute  and  deliver  the  Initial  CPS  Assignment.  The  Initial CPS
         Assignment  shall be substantially in the form of Exhibit A hereto . On
         each  Subsequent  Closing Date, the Seller will execute and deliver the
         related  Subsequent  Assignment.  Each Subsequent  Assignment  shall be
         substantially  in the  form of  Exhibit  A to the  form  of  Subsequent
         Purchase Agreement attached as Exhibit C 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

                                      -22-







         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 Closing
         Date and each Subsequent  Transfer Closing Date, the Seller shall cause
         to be  recorded  and  filed,  at its  own  expense,  appropriate  UCC-2
         termination statements (or UCC-3 termination statements,  as applicable
         in the relevant UCC jurisdiction)  executed by General Electric Capital
         Corporation  ("GECC") or First Union  National Bank ("First  Union") 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 the  interest of GECC or First  Union,  as
         applicable  interest  in the  related  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 the  Closing  Date  or  Subsequent  Closing  Date,  as
         applicable.

                  (iv) Other  Documents.  On or prior to the Closing  Date,  the
         Seller  shall  deliver  such  other  documents  as  the  Purchaser  may
         reasonably request.

         (e) Other  Transactions.  The  transactions  contemplated  by the Trust
Agreement,  the Indenture,  the Sale and Servicing Agreement, the Samco Purchase
Agreement,  the Linc Purchase Agreement, and the Underwriting Agreement shall be
consummated on the Closing Date or Subsequent Closing Date, as applicable.

         4.2.  Conditions  to Obligation  of the Seller.  The  obligation of the
Seller to sell the Initial Receivables or Subsequent Receivables, as applicable,
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 or Subsequent Closing Date, as applicable,  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 or  Subsequent  Closing  Date,  as
applicable.

         (b) Receivables Purchase Price. On the Closing Date, the Purchaser will
deliver to the Seller the  Initial  Receivables  Purchase  Price as  provided in
Section  2.1(b).  The Seller hereby  directs the Purchaser to wire such purchase
price pursuant to wire instructions to be delivered to the Purchaser on or prior
to the Initial Closing Date. On each Subsequent Closing Date, the Purchaser will
deliver  to the  Seller  the  Subsequent  Receivables  Purchase  Price  for  the
Subsequent CPS Receivables to be transferred to the Purchaser on such Subsequent
Closing Date.



                                      -23-







                                    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 Note 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 Note 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

                                      -24-







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 and,  with  respect to the Linc
Receivables, Linc).

         5.3. Chief Executive  Office.  During the term of the Receivables,  the
Seller will  maintain its chief  executive  office in one of the United  States,
except Louisiana or Vermont.

         5.4. Costs and Expenses.  The Seller agrees to pay all reasonable costs
and  disbursements  in  connection  with the  perfection,  as against  all third
parties,  of the  Purchaser's  right,  title  and  interest  in  and to the  CPS
Receivables.

                                      -25-







         5.5. Delivery of Receivable Files. On or prior to the Closing Date, the
Seller shall deliver the  Receivable  Files for the Initial  Receivables  to the
Trustee  at the  location  specified  in  Schedule  B to the Sale and  Servicing
Agreement. On or prior to each Subsequent Closing Date, the Seller shall deliver
the Receivable  Files for the related  Subsequent  Receivables to the Trustee at
the location  specified in Schedule B to the Sale and Servicing  Agreement.  The
Seller shall have until the last day of the second  Collection  Period following
receipt  from the Trustee of  notification,  pursuant to Section 3.4 of the Sale
and  Servicing  Agreement,  that there has been a failure to deliver a file with
respect to a Receivable  (including a Samco  Receivable or a Linc Receivable) or
that a file is unrelated to the Receivables identified in Schedule A to the Sale
and Servicing  Agreement or that any of the documents referred to in Section 3.3
of the Sale and Servicing  Agreement are not contained in a Receivable  File, to
deliver such file or any of the aforementioned documents required to be included
in such Receivable File to the Trustee.  Unless such defect with respect to such
Receivable  File shall have been cured by the last day of the second  Collection
Period following  discovery thereof by the Trustee,  the Seller hereby agrees to
repurchase  any  such  Receivable  from  the  Trust  as of  such  last  day.  In
consideration  of the  purchase of the  Receivable,  the Seller  shall remit the
Purchase Amount in the manner specified in Section 4.5 of the Sale and Servicing
Agreement.  The  sole  remedy  hereunder  of  the  Trustee,  the  Trust  or  the
Securityholders  with  respect  to a breach  of this  Section  5.5,  shall be to
require the Seller to repurchase  the  Receivable  pursuant to this Section 5.5.
Upon receipt of the Purchase Amount,  the Trustee shall release to the Seller or
its  designee  the  related  Receivable  File and shall  execute and deliver all
instruments of transfer or assignment,  without recourse, as are prepared by the
Seller and  delivered to the Trustee and are  necessary to vest in the Seller or
such designee title to the Receivable.

         5.6.  Indemnification.  (a) Subject to the  limitation  of remedies set
forth in Section 6.2 hereof with respect to a breach of any  representations and
warranties  contained in Section 3.2(b) hereof,  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.


                                      -26-







         (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  securities  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 breach of this covenant 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 Note 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

                                      -27-







affected   Receivables   (including  any  affected  Samco  Receivables  or  Linc
Receivables)  hereunder  ("Repurchase  Events"), at the Purchase Amount from the
Trust.  Unless the breach of any of the Seller's  representations and warranties
shall have been cured by the last day of the second  Collection Period following
the  discovery  thereof  by or notice to the  Purchaser  and the  Seller of such
breach,  the Seller  shall  repurchase  any  Receivable  if such  Receivable  is
materially  and  adversely  affected  by the  breach  as of the last day of such
second Collection Period (or, at the Seller's option,  the last day of the first
Collection  Period  following the  discovery)  and, in the event that the breach
relates to a  characteristic  of the  Receivables in the  aggregate,  and if the
Trust is  materially  and adversely  affected by such breach,  unless the breach
shall  have been  cured by such  second  Collection  Period,  the  Seller  shall
purchase such aggregate  Principal  Balance of Receivables,  such that following
such purchase such representation  shall be true and correct with respect to the
remainder of the  Receivables in the  aggregate.  The provisions of this Section
6.2 are  intended  to grant the  Trustee a direct  right  against  the Seller to
demand performance hereunder,  and in connection therewith the Seller waives any
requirement  of prior demand  against the  Purchaser  and waives any defaults it
would have against the Purchaser with respect to such repurchase obligation. Any
such  purchase  shall take place in the manner  specified  in Section 4.7 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 Note
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 Note Insurer,  the Trust and the Noteholders 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

                                      -28-







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 conveyances  hereunder and under each Subsequent Purchase
Agreement  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 Initial CPS
Receivables  and the other Initial  Transferred  CPS Property being delivered to
the Purchaser on the Closing Date, and other property conveyed hereunder and all
proceeds  of any of the  foregoing  for the  purpose  of  securing  payment  and
performance of the Securities and the repayment of amounts owed to the Purchaser
from the Seller.

         6.5. Trust. The Seller  acknowledges that the Purchaser will,  pursuant
to the Sale and  Servicing  Agreement,  sell the  Receivables  to the  Trust and
assign its rights under this Purchase Agreement, the Linc Purchase Agreement and
the Samco  Purchase  Agreement to the Trust,  and that the  representations  and
warranties  contained in this  Agreement and the rights of the  Purchaser  under
this  Purchase  Agreement,  including  under  Sections  6.2 and 6.4  hereof  are
intended  to  benefit  such  Trust  and the  Securityholders.  The  Seller  also
acknowledges  that the Trustee on behalf of the  Securityholders  as assignee of
the Purchaser's rights hereunder may directly enforce,  without making any prior
demand on the Purchaser, all the rights of the Purchaser hereunder including the
rights under  Sections 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 Note Insurer; provided, however, that any such
amendment that materially  adversely affects the rights of the Noteholders under
the Sale and  Servicing  Agreement  must be consented to by the holders of Notes
representing more than 50% of the outstanding principal amount of Notes.

         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

                                      -29-







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
Note Insurer  shall be third party  beneficiaries  with respect to this Purchase
Agreement, provided, however, that no third party

                                      -30-







other  than the  Trustee  for the  benefit of the  Securityholders  and the Note
Insurer 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.]

                                      -31-







         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:   Jeffrey P. Fritz
                                     Title:  Chief Financial Officer



                                   CONSUMER PORTFOLIO SERVICES, INC.


                                   By
                                     Name:   Jeffrey P. Fritz
                                     Title:  Chief Financial Officer









                                                                  Exhibit A

                                   ASSIGNMENT

         For value  received,  on this [ ] day of [ ], 1998, in accordance  with
the  Purchase  Agreement  dated as of [ ], 1998,  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 Initial CPS  Receivables  listed in
the Schedule of CPS  Receivables,  and all monies received  thereunder after the
Cutoff  Date and all Net  Liquidation  Proceeds  received  with  respect to such
Initial 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 Initial CPS Receivables or the Obligors  thereunder;  (iv)
refunds for the costs of extended  service  contracts  with  respect to Financed
Vehicles securing the Initial 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 an Initial CPS Receivable and any
recourse to Dealers for any of the foregoing; (v) the Receivable File related to
each Initial CPS  Receivable;  (vi) the proceeds of any and all of the foregoing
and (vii) 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 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. 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
Initial 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.

                                       A-1







         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 the day and year first above written.



                                       CONSUMER PORTFOLIO SERVICES, INC.


                                       By:
                                          Name:   Jeffrey P. Fritz
                                          Title:  Chief Financial Officer


                                       A-2







                                    Exhibit B
                           Schedule of CPS Receivables

                               See Following Page


                                       A-1







                                                            EXHIBIT C


                      FORM OF SUBSEQUENT PURCHASE AGREEMENT


         THIS  SUBSEQUENT   PURCHASE   AGREEMENT  (this   "Subsequent   Purchase
Agreement") is made and entered into as of , by and between  CONSUMER  PORTFOLIO
SERVICES,  INC., a California  corporation  (the "Seller"),  and CPS RECEIVABLES
CORP., a California  corporation  (together with its successors and assigns, the
"Purchaser").

                              W I T N E S S E T H:

         WHEREAS, the Purchaser,  as purchaser,  has agreed to purchase from the
Seller, as seller, and the Seller,  pursuant to the Purchase Agreement (the "CPS
Purchase Agreement") dated as of [ ], 1998 between the Purchaser and the Seller,
is transferring  to the Purchaser the Subsequent CPS  Receivables  listed on the
Schedule  of  Subsequent  CPS  Receivables  annexed  hereto  as  Exhibit  A (the
"Subsequent CPS Receivables") and related Subsequent Transferred CPS Property.

         NOW,  THEREFORE,  in  consideration  of the  premises  and  the  mutual
agreements hereinafter contained, and for other good and valuable consideration,
the receipt of which is acknowledged, the Purchaser and the Seller, intending to
be legally bound, hereby agree as follows:

                                   Definitions

         SECTION 1. Capitalized terms used herein without  definition shall have
the respective meanings assigned to such terms in the CPS Purchase Agreement.

         SECTION  2.  Conveyance  of  Subsequent  CPS  Receivables.   For  value
received, in accordance with the CPS Purchase Agreement,  the Seller does hereby
sell, assign, transfer and otherwise convey unto the Purchaser, without recourse
(but without  limitation of its obligations  under the CPS Purchase  Agreement),
all right,  title and interest of the Seller in and to: (i) the  Subsequent  CPS
Receivables listed in the Schedule of Subsequent CPS Receivables  annexed hereto
as  Exhibit A and all  monies  received  thereunder  after [ ] (the  "Subsequent
Cutoff  Date") and all Net  Liquidation  Proceeds  received with respect to such
Subsequent CPS Receivables; (ii) the security interests in the Financed Vehicles
granted by Obligors  pursuant to the  Subsequent 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 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


                                       C-1







Vehicles  securing the  Subsequent CPS  Receivables or the Obligors  thereunder;
(iv)  refunds  for the costs of  extended  service  contracts  with  respect  to
Financed Vehicles  securing the Subsequent CPS Receivables,  refunds of unearned
premiums  with respect to credit life and credit  accident and health  insurance
policies or certificates  covering an Obligor or Financed  Vehicle  securing the
Subsequent  CPS  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 Subsequent CPS Receivable;  (vi) the proceeds of
any and all of the foregoing and (vii) 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 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 "Subsequent  Transferred CPS Property" and together with any
Subsequent   Transferred  Samco  Property  and/or  Subsequent  Transferred  Linc
Property, the "Subsequent Transferred Property").

         SECTION  3.  Consideration  for  Subsequent  Transferred  Property.  In
consideration   for  the  Subsequent  CPS  Receivables   and  other   Subsequent
Transferred  CPS  Property,  subject  to the terms and  conditions  hereof,  the
purchase price for the Subsequent CPS Receivables,  in the amount of $[ ], shall
be paid by the Purchaser on the Subsequent Closing Date as follows:  (i) $[ ] in
cash shall be paid to the Seller  and (ii) $[ ] which  shall be deemed  paid and
returned to the Purchaser as a contribution to capital.

         SECTION 4. Conveyance as Sale of Receivables Not Financing. The parties
hereto  intend that the  conveyance  hereunder be a sale of the  Subsequent  CPS
Receivables  and the related  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  Subsequent  CPS  Receivables  and  the  related
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 Subsequent CPS
Receivables  and the related  Transferred  CPS Property  being  delivered to the
Purchaser on the Subsequent  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.

         SECTION 5. Representations and Warranties of the Seller. This Agreement
is made  pursuant to and upon the  representations,  warranties,  covenants  and
agreements on the part

                                       C-2







of the Seller  contained in the CPS Purchase  Agreement and is to be governed by
the CPS Purchase Agreement. All of such representations,  warranties,  covenants
and agreements are hereby  incorporated  herein and are in full force and effect
as though specifically set forth herein.

         SECTION  6.  Representations  and  Warranties  of the  Purchaser.  This
Agreement  is  made  pursuant  to  and  upon  the  representations,  warranties,
covenants  and  agreements  on the part of the  Purchaser  contained  in the CPS
Purchase Agreement and is to be governed by the CPS Purchase  Agreement.  All of
such   representations,   warranties,   covenants  and   agreements  are  hereby
incorporated  herein and are in full force and effect as though specifically set
forth herein.



                                       C-3







         IN WITNESS  WHEREOF,  the  undersigned  has caused this Agreement to be
duly executed  this __ day of  _________,  but effective as of the date and year
first written above.


                                     CONSUMER PORTFOLIO SERVICES, INC.,
                                     as Seller



                                     By:
                                        Name:
                                        Title:



                                     CPS RECEIVABLES CORP.,
                                     as Purchaser



                                     By:
                                        Name:
                                        Title:



                                       C-4







                   EXHIBIT A TO SUBSEQUENT PURCHASE AGREEMENT

                          FORM OF SUBSEQUENT ASSIGNMENT

         For value received,  in accordance with the Purchase Agreement dated as
of [ ], 1998, as heretofore  amended,  supplemented  or otherwise  modified (the
"CPS Purchase Agreement"), among the undersigned, as Seller, and CPS Receivables
Corp. (the "Purchaser"),  the undersigned does hereby transfer,  assign,  grant,
set over and otherwise convey to 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  Subsequent  CPS
Receivables listed in the Schedule of Subsequent CPS Receivables  annexed hereto
as  Exhibit A and all  monies  received  thereunder  after [ ] (the  "Subsequent
Cutoff  Date") and all Net  Liquidation  Proceeds  received with respect to such
Subsequent CPS Receivables; (ii) the security interests in the Financed Vehicles
granted by Obligors  pursuant to the  Subsequent 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 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 Subsequent CPS Receivables or the Obligors thereunder; (iv) refunds
for the costs of extended  service  contracts with respect to Financed  Vehicles
securing the  Subsequent  CPS  Receivables,  refunds of unearned  premiums  with
respect to credit  life and credit  accident  and health  insurance  policies or
certificates covering an Obligor or Financed Vehicle securing the Subsequent CPS
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 Subsequent CPS  Receivable;  (vi) the proceeds of any and all of
the  foregoing  and (vii) 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 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 "Subsequent Transferred CPS
Property" and together with any Subsequent  Transferred  Samco  Property  and/or
Subsequent Transferred Linc Property, the "Subsequent Transferred Property").

         The foregoing  assignment,  transfer and conveyance 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  Subsequent CPS  Receivables,  the  Receivable  Files,  any
insurance policies or any agreement or instrument relating to any of them.


                                       C-5






         This  Assignment  is made  pursuant  to and upon  the  representations,
warranties  and agreements on the part of each 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  principles  of
conflicts of law.

         IN WITNESS  WHEREOF,  the undersigned have caused this Assignment to be
duly executed as of [ ], 199__.

                                     CONSUMER PORTFOLIO SERVICES, INC.


                                     By:
                                        Name:
                                        Title:


                                       C-6





                                                            EXECUTION COPY

                                   ASSIGNMENT

         For value  received,  on this 4th day of December,  1998, in accordance
with  the  Purchase  Agreement  dated  as  of  December  1,  1998,  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
Initial Samco  Receivables  listed in the Schedule of Samco  Receivables and all
monies  received  thereunder  after  the  Cutoff  Date  and all Net  Liquidation
Proceeds  received  with respect to such  Initial  Samco  Receivables;  (ii) the
security  interests in the Financed Vehicles granted by Obligors pursuant to the
Initial 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 Initial
Samco  Receivables  or the  Obligors  thereunder;  (iv) refunds for the costs of
extended  service  contracts  with  respect to Financed  Vehicles  securing  the
Initial 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 Initial 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
Initial Samco Receivable;  (vi) the proceeds of any and all of the foregoing and
(vii) 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 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. 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
Initial 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 day and year first above written.




                                         SAMCO ACCEPTANCE CORP.


                                         By:
                                            Name:  Jeffrey P. Fritz
                                            Title: Chief Financial Officer


                                       -2-






                                                           EXECUTION COPY

         PURCHASE  AGREEMENT  dated as of December 1, 1998, by and between SAMCO
ACCEPTANCE  CORP., a Delaware  corporation (the "Seller"),  having its principal
executive office at 8150 North Central Expressway,  Dallas, Texas, 75206 and CPS
RECEIVABLES  CORP.,  a  California  corporation  (the  "Purchaser"),  having its
principal executive office at 16355 Laguna Canyon, Irvine, CA 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 and Linc Receivables will be transferred by the Purchaser,  pursuant
to the  Sale and  Servicing  Agreement  (as  hereinafter  defined),  to CPS Auto
Receivables  Trust 1998-4,  which Trust will issue notes under the Indenture (as
hereinafter  defined)  representing  indebtedness of the Trust (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):

         "Agreements"  means,   collectively,   this  Purchase  Agreement,  each
Subsequent Purchase Agreement and the Assignments

         "Assignment"  means  the  Initial  Assignments  and/or  any  Subsequent
Assignment.

         "Base  Prospectus"  means the Prospectus  dated November 9, 1998,  with
respect to









CPS Auto Receivables Trusts and any amendment or supplement thereto.

         "Closing Date" means December 4, 1998.

         "CPS"  means   Consumer   Portfolio   Services,   Inc.,   a  California
corporation, and its successors and assigns.

         "CPS  Purchase  Agreement"  means the  purchase  agreement  dated as of
December 1, 1998, 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.

         "Indenture"  means the Indenture of even date herewith between CPS Auto
Receivables  Trust  1998-4,  as issuer  and  Norwest  Bank  Minnesota,  National
Association, as trustee.

         "Initial Assignment" means the assignment dated December 4, 1998 by the
Seller  to  the  Purchaser,  relating  to the  purchase  of  the  Initial  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.

         "Initial CPS Receivables"  shall have the meaning  specified in the CPS
Purchase Agreement.

         "Initial Linc Receivable"  shall have the meaning specified in the Linc
Purchase Agreement.

         "Initial Receivable" means an Initial Samco Receivable,  an Initial CPS
Receivable and/or an Initial Linc Receivable.

         "Initial Samco  Receivables"  shall have the meaning  specified in this
Purchase Agreement.

         "Initial Schedule of Samco Receivables" means the list of Initial Samco
Receivables annexed hereto as of the Closing Date as Exhibit B.

         "Initial  Transferred CPS Property" shall have the meaning specified in
the CPS Purchase Agreement.

         "Initial Transferred Linc Property" shall have the meaning specified in
the Linc Purchase Agreement.


                                       -2-







         "Initial  Transferred  Property"  shall have the meaning  specified  in
Section 2.1(a) hereof.

         "Initial  Transferred  Samco Property" shall have the meaning specified
in Section 2.1(a) hereof.

         "Linc" means Linc Acceptance  Company LLC, a Delaware limited liability
company, and its successors and assigns.

         "Linc  Purchase  Agreement"  means the purchase  agreement of even date
herewith,  between Linc, 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.

         "Linc Receivable" shall have the meaning specified in the Linc Purchase
Agreement.

         "Obligor(s)" means the purchaser or co-purchasers of a Financed Vehicle
or any other Person who owes or may be liable for payments under a Receivable.

         "Offering  Documents"  means  the  Prospectus  Supplement  and the Base
Prospectus.

         "Prospectus  Supplement" means the Prospectus Supplement dated December
2, 1998,  relating  to the public  offering  of the 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"  means,  collectively,   the  CPS  Receivables,  the  Linc
Receivables and the Samco Receivables.

         "Receivables Purchase Price" means $12,723,240.00.

         "Repurchase  Event"  shall have the  meaning  specified  in Section 6.2
hereof.

         "Sale and Servicing  Agreement" means the Sale and Servicing  Agreement
of even date herewith,  among CPS Auto Receivables Trust 1998-4, CPS Receivables
Corp., as seller,  Consumer Portfolio Services,  Inc., as 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.


                                       -3-







         "Samco" means Samco Acceptance Corp., a Delaware  corporation,  and its
successors and assigns.

         "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 Initial CPS Receivables
annexed as  Exhibit B to the CPS  Purchase  Agreement  as  supplemented  by each
Schedule of Subsequent CPS Receivables.

         "Schedule  of  Linc  Receivables"   means  the  list  of  Initial  Linc
Receivables  annexed as Exhibit B to the Linc Purchase Agreement as supplemented
by each Schedule of Subsequent Linc Receivables.

         "Schedule of Receivables" means the Schedule of Samco Receivables,  the
Schedule of Linc Receivables and/or the Schedule of CPS Receivables.

         "Schedule  of  Samco  Receivables"  means  the  list of  Initial  Samco
Receivables  annexed  hereto as Exhibit B as  supplemented  by each  Schedule of
Subsequent Samco Receivables.

         "Schedule  of  Subsequent  CPS  Receivables"  shall  have  the  meaning
specified in the CPS Purchase Agreement.

         "Subsequent Linc  Receivables"  shall have the meaning specified in the
Linc Purchase Agreement.

         "Schedule of Subsequent  Samco  Receivables"  means the schedule of all
motor vehicle retail financing  agreements sold and transferred to the Purchaser
pursuant to a Subsequent Purchase  Agreement,  which schedule shall be deemed to
supplement  the  Schedule  of  Receivables  and shall be attached to the related
Subsequent Assignment (and may be in the form of microfiche).

         "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.


                                       -4-







         "Subsequent Assignment" means a Subsequent CPS Assignment, a Subsequent
Linc Assignment or a Subsequent Samco Assignment, as applicable.

         "Subsequent  Closing  Date"  means  any day on which  Subsequent  Samco
Receivables  are  sold  to  the  Purchaser  pursuant  to a  Subsequent  Purchase
Agreement.

         "Subsequent CPS Receivable" shall have the meaning specified in the CPS
Purchase Agreement.

         "Subsequent  Linc Receivable"  shall have the meaning  specified in the
Linc Purchase Agreement.

         "Subsequent  Purchase Agreement" means a subsequent purchase agreement,
which  shall  be in  substantially  the  form  of  Exhibit  C to  this  Purchase
Agreement, by which the Seller will transfer Subsequent Samco Receivables.

         "Subsequent   Receivables"   means  a  Subsequent  CPS  Receivable,   a
Subsequent Linc Receivable, and/or a Subsequent Samco Receivable.

         "Subsequent Samco Receivable" means each Receivable  transferred to the
Purchaser pursuant to a Subsequent Samco Assignment which shall be listed on the
Schedule  of  Subsequent   Receivables   attached  to  the  related   Subsequent
Assignment.

         "Subsequent  Transferred  Property" shall have the meaning specified in
Section 2.2(a).

         "Subsequent   Transferred   Samco  Property"  shall  have  the  meaning
specified in each Subsequent Purchase Agreement.

         "Transferred CPS Property" shall have the meaning  specified in the CPS
Purchase Agreement.

         "Transferred  Linc  Property"  shall have the meaning  specified in the
Linc Purchase Agreement.

         "Transferred  Property"  shall have the  meaning  specified  in Section
2.1(a) hereof.

         "Transferred   Property"  means  the  Transferred  CPS  Property,   the
Transferred Linc Property and the Transferred Samco Property.

         "Transferred  Samco  Property"  shall  have the  meaning  specified  in
Section 2.1(a) hereof.

         "Trust"  means the CPS Auto  Receivables  Trust  1998-4  created by the
Trust Agreement.



                                       -5-







         "Trust  Agreement"  means the Amended and Restated  Trust  Agreement of
even date herewith between CPS Receivables  Corp. and Bankers Trust  (Delaware),
as Owner Trustee.

         "UCC" means the Uniform Commercial Code, as in effect from time to time
in the relevant jurisdictions.

         "Underwriter"  means First Union Capital  Markets,  a division of Wheat
First Securities, Inc.

         "Underwriting  Agreement" means the Underwriting  Agreement relating to
the Notes, dated as of December 2, 1998, among the Underwriter, CPS, Samco, Linc
and the Purchaser.


                                   ARTICLE II

                        PURCHASE AND SALE OF RECEIVABLES

         2.1.  Purchase and Sale of Initial  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  Initial
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  Initial  Samco  Receivables   listed  in  the  Initial  Schedule  of  Samco
Receivables and all monies received thereunder after the Cutoff Date and all Net
Liquidation  Proceeds  received with respect to such Initial 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



                                       -6-







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;  (vi) the
proceeds  of any and all of the  foregoing  and (vii)  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 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 "Initial  Transferred  Samco Property" and together with the
Initial Transferred CPS Property and the Initial Transferred Linc Property,  the
"Initial Transferred Property").

                  (b) Initial  Receivables  Purchase Price. In consideration for
the Initial Samco  Receivables  and other  Initial  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.  Purchase  and  Sale of  Subsequent  Receivables.  On the  related
Subsequent  Closing  Date,  subject to the terms and  conditions  of the related
Subsequent 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,  each Subsequent Purchase Agreement
and the Sale and  Servicing  Agreement),  all of the Seller's  right,  title and
interest  in,  to and  under  the  Subsequent  Samco  Receivables  and the other
Subsequent  Transferred Samco Property  relating thereto.  The conveyance to the
Purchaser of the Subsequent Samco  Receivables and other Subsequent  Transferred
Samco  Property  relating  thereto is  intended  as a sale free and clear of all
liens and it is intended  that the  Subsequent  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  Subsequent  Receivables.   On  the  related
Subsequent Closing Date the Seller shall sell, transfer, assign, grant, set over
and  otherwise  convey  to  the  Purchaser,  without  recourse  (subject  to the
obligations  in  this  Purchase   Agreement,   each  Subsequent  Samco  Purchase
Agreement, and the Sale and Servicing Agreement),  all right, title and interest
of the  Seller  in and to (i) the  Subsequent  Samco  Receivables  listed in the
related  Schedule  of  Subsequent  Samco  Receivables  and all  monies  received
thereunder  after the related  Subsequent  Cutoff  Date and all Net  Liquidation
Proceeds  received with respect to such Subsequent Samco  Receivables;  (ii) the
security  interests in the Financed Vehicles granted by Obligors pursuant to the
Subsequent  Samco  Receivables  and any  other  interest  of the  Seller in such
Financed Vehicles, including, without limitation, the certificates of title or,



                                       -7-







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
Subsequent Samco  Receivables or the Obligors  thereunder;  (iv) refunds for the
costs of extended service  contracts with respect to Financed  Vehicles securing
the Subsequent 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  Subsequent  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 Subsequent Samco Receivable; (vi) the proceeds of any and all of
the  foregoing  and (vii) 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 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 "Subsequent Transferred Samco
Property"  and  together  with any  Subsequent  Transferred  CPS  Property,  the
"Subsequent Transferred Property").

                  (b) The Seller shall  transfer to the Purchaser the Subsequent
Samco Receivables and the Subsequent  Transferred Samco Property as described in
paragraph  (a)  above  only  upon  the  satisfaction  of each  of the  following
conditions on or prior to the related Subsequent Closing Date:

                  (i) the Seller  shall have  provided  the  Trustee,  the Owner
         Trustee,  the Note  Insurer  and the Rating  Agencies  with an Addition
         Notice not later than three days prior to such Subsequent  Closing Date
         and shall have provided any information  reasonably requested by any of
         the foregoing with respect to the Subsequent Samco Receivables;

                  (ii) the Seller shall have  delivered to the Owner Trustee and
         the   Trustee   a  duly   executed   Subsequent   Purchase   Agreement,
         substantially  in  the  form  of  Exhibit  C,  which  shall  include  a
         supplement to the Schedule of Samco Receivables, listing the Subsequent
         Samco Receivables to be transferred on related Subsequent Closing Date;

                  (iii) the Seller shall,  to the extent required by Section 4.2
         of the Sale and Servicing  Agreement,  have deposited in the Collection
         Account all collections in respect of the Subsequent Samco Receivables;

                  (iv) as of each Subsequent  Closing Date, (A) the Seller shall
         not be  insolvent  and shall not  become  insolvent  as a result of the
         transfer of Subsequent  Samco  Receivables on such  Subsequent  Closing
         Date, (B) the Seller shall not intend to incur or believe that it shall
         incur  debts  that  would be beyond  its  ability  to pay as such debts
         mature, (C) such

                                       -8-







         transfer  shall not have been made with actual intent to hinder,  delay
         or  defraud  any  Person  and (D) the  assets of the  Seller  shall not
         constitute unreasonably small capital to carry out its business as then
         conducted;

                  (v)  the Funding Period shall not have terminated;

                  (vi) after giving effect to any transfer of  Subsequent  Samco
         Receivables on a Subsequent  Closing Date, the  Receivables  shall meet
         the following  criteria  (based on the  characteristics  of the Initial
         Receivables on the Initial  Cutoff Date and the Subsequent  Receivables
         on the related  Subsequent Cutoff Dates):  (A) the weighted average APR
         of such  Receivables  will not be less than  0.25%  below the  weighted
         average  APR of the Initial  Receivables  on the Cutoff  Date,  (B) the
         weighted  average  remaining term of such  Receivables will be within a
         range  of 12 to 72  months,  (C) not  more  than  90% of the  aggregate
         principal balance of such Receivables will represent  financing of used
         Financed Vehicles,  (D) no fewer than 50% of the Subsequent Receivables
         will be originated under the "Alpha"  program,  (E) not more than 8% of
         the  Subsequent  Receivables  will  be  originated  under  the  "Delta"
         program,  (F) no more than 5.25% of the Subsequent  Receivables will be
         originated under the "First Time Buyer" program,  (G) no fewer than 20%
         and no more than 30% of the Subsequent  Receivables  will be originated
         under the "Standard" program, and (H) the Trust, the Trustee, the Owner
         Trustee and the Note Insurer shall have received  written  confirmation
         from a firm  of  certified  independent  public  accountants  as to the
         satisfaction of the criteria in clauses (A) through (G) above;

                  (vii) each of the  representations  and warranties made by the
         Seller  pursuant to Section 3.2 with  respect to the  Subsequent  Samco
         Receivables to be transferred on such Subsequent  Closing Date shall be
         true and correct as of the related  Subsequent  Closing  Date,  and the
         Seller  shall have  performed  all  obligations  to be  performed by it
         hereunder on or prior to such Subsequent Closing Date;

                  (viii) the Seller  shall,  at its own expense,  on or prior to
         the  Subsequent  Closing Date  indicate in its computer  files that the
         Subsequent  Samco  Receivables  identified in the  Subsequent  Purchase
         Agreement  have  been sold to the  Purchaser  pursuant  to the  related
         Subsequent Purchase Agreement and subsequently to the Trust pursuant to
         the Sale and Servicing Agreement;

                  (ix) the  Seller  shall  have  taken any  action  required  to
         maintain the first priority  perfected  ownership interest of the Trust
         in the Owner Trust  Estate and the first  priority  perfected  security
         interest of the Trustee in the Collateral;

                  (x) no selection  procedures  adverse to the  interests of the
         Noteholders  or the Note Insurer  shall have been utilized in selecting
         the Subsequent Samco Receivables;


                                       -9-







                  (xi) the  addition of any such  Subsequent  Samco  Receivables
         shall not result in a material  adverse tax consequence to the Trust or
         the Noteholders;

                  (xii)  the  Seller  shall  have  delivered  (A) to the  Rating
         Agencies and the Note Insurer an Opinion of Counsel with respect to the
         transfer of such Subsequent Samco Receivables substantially in the form
         of the Opinion of Counsel delivered to the Rating Agencies and the Note
         Insurer on the related  Closing Date and (B) to the Trustee the Opinion
         of Counsel  required by Section  13.2(i)(1)  of the Sale and  Servicing
         Agreement;

                  (xiii) each Rating Agency shall have confirmed that the rating
         on the  Notes  shall not be  withdrawn  or  reduced  as a result of the
         transfer of such Subsequent Samco Receivables to the Trust;

                  (xiv)  all  conditions  precedent  specified  in the  Sale and
         Servicing Agreement with respect to the transfer of such Subsequent CPS
         Receivables  to the Trust by the Purchaser  shall have been  satisfied;
         and

                  (xv) the Seller  shall have  delivered to the Note Insurer and
         the Trustee an Officers'  Certificate  confirming the  satisfaction  of
         each condition precedent specified in this paragraph (b).

         2.3.  The  Closing.   The  sale  and  purchase  of  the  Initial  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
Initial  Closing  Date,  simultaneously  with the  closings  under:  (a) the CPS
Purchase  Agreement  pursuant to which CPS will sell the Initial CPS Receivables
to the  Purchaser (b) the Linc  Purchase  Agreement  pursuant to which Linc will
sell the Linc Receivables to the Purchaser, (c) the Sale and Servicing Agreement
pursuant to which the Purchaser will assign all of its right, title and interest
in and to the  Receivables and the other  Transferred  Property to the Trust for
the benefit of the  Securityholders,  (d) the Trust Agreement  pursuant to which
the  Trust  shall be  formed  and the  Certificates  issued,  (e) the  Indenture
pursuant  to which the Trust  will  issue the  Notes,  and (f) the  Underwriting
Agreement  pursuant  to  which  the  Purchaser  shall  sell  the  Notes  to  the
Underwriter.


                                   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 the
Closing  Date  and each  Subsequent  Closing  Date  (which  representations  and
warranties shall survive the Closing Date and each Subsequent Closing Date):


                                      -10-







         (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.


                                      -11-







         (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 and each  Subsequent  Closing Date (which  representations  and
warranties shall survive the Closing Date and each Subsequent 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 Initial Samco  Receivables
         and the  other  Initial  Transferred  Samco  Property  conveyed  to the
         Purchaser  pursuant  to  Sections  2.1  and  2.2,  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

                                      -12-







         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 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 Initial  Closing Date or
Subsequent  Closing Date on which such Samco  Receivable is  transferred  to the
Purchaser and shall survive the sale, transfer, and

                                      -13-







assignment of the Samco  Receivables  and the other  Transferred  Samco Property
relating  thereto to the Purchaser and the subsequent  assignments and transfers
pursuant to the Sale and Servicing Agreement and the Indenture:

                  (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  or the  related  Subsequent  Transfer  Date,  as
         applicable,  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 as the same may be amended by subsequent
         Schedules  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  priority  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 the Closing  Date, in
         the case of the Initial  Receivables,  or after the related  Subsequent
         Transfer Date, in the case of the Subsequent Receivables).

                  (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 (with  respect to the Initial  Receivables)  or the
         Subsequent  Cutoff  Date  (with  respect  to  the  related   Subsequent
         Receivables),   no  default,  breach,  violation  or  event  permitting
         acceleration under the terms of any Samco Receivable has occurred;  and
         no

                                      -14-







         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  (with  respect  to  the  Initial
         Receivables) or the Subsequent Cutoff Date (with respect to the related
         Subsequent Receivables).

                  (viii)  Title.  It is the  intention  of the  Seller  that the
         transfer and assignment  herein  contemplated  constitute a sale of the
         Samco  Receivables and other Transferred Samco Property from the Seller
         to the Purchaser and that the beneficial  interest in and title to such
         Samco  Receivables and other  Transferred Samco Property not be part of
         the debtor's estate in the event of the filing of a bankruptcy petition
         by or against the Seller under any bankruptcy law. No Samco  Receivable
         or  other  Transferred  Samco  Property  has  been  sold,  transferred,
         assigned,  or  pledged  by the  Seller  to any  Person  other  than the
         Purchaser  or any  such  pledge  has been  released  on or prior to the
         Closing Date.  Immediately  prior to any transfer and assignment herein
         contemplated,  the Seller had good and  marketable  title to each Samco
         Receivable and other Transferred Samco Property, and was the sole owner
         thereof,  free and clear of all liens, claims,  encumbrances,  security
         interests,  and rights of others  and,  immediately  upon the  transfer
         thereof,  the Purchaser  shall have good and  marketable  title to each
         such Samco Receivable and other Transferred Samco Property, and will be
         the sole  owner  thereof,  free and clear of all  liens,  encumbrances,
         security  interests,  and rights of others,  and the  transfer has been
         perfected under the UCC.

                  (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.


                                      -15-







                  (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 Initial Samco Receivables  pursuant to
this  Agreement  shall  be  "without  recourse"  to 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  and on  each  Subsequent  Closing  Date,  the  obligation  of the
Purchaser  to  purchase  the  related  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 Closing Date
or the related Subsequent  Closing Date, as applicable,  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 or the  related
Subsequent Closing Date, as applicable.

         (b) Computer Files Marked. The Seller shall, at its own expense,  on or
prior  to  the  Closing  Date,  or  the  related  Subsequent  Closing  Date,  as
applicable,  indicate in its computer  files that the related 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 as of, and after giving effect to all transfers of Receivables  on,
the Closing Date or the related Subsequent Closing Date, as applicable.

         (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 or the related Subsequent Closing Date, as applicable.


                                      -16-







         (d) Documents to be delivered by the Seller on each Closing Date.

                  (i) The  Assignment.  On the  Closing  Date,  the Seller  will
         execute and deliver the Initial  Samco  Assignment.  The Initial  Samco
         Assignment  shall be substantially in the form of Exhibit A hereto . On
         each  Subsequent  Closing Date, the Seller will execute and deliver the
         related Subsequent  Assignment.  Each Subsequent Assignment shall be in
         the form of  Exhibit  A to the form of  Subsequent  Purchase  Agreement
         attached as Exhibit C 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.

                  (iii)  Other  Documents.  On or prior to the  Closing  Date or
         Subsequent  Closing Date, as applicable,  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 Linc  Purchase  Agreement,  the  Underwriting  Agreement and the
Certificate  Purchase  Agreement  shall be  consummated  on the Closing Date, or
Subsequent Closing Date, as applicable.

         4.2.  Conditions  to Obligation  of the Seller.  The  obligation of the
Seller to sell the Initial Samco Receivables or Subsequent Samco Receivables, as
applicable,  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, or Subsequent Closing Date, as applicable, 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,  or  Subsequent  Closing  Date,  as
applicable.

         (b)  Receivables  Purchase  Price.  The  Purchaser  will deliver to the
Seller the purchase price for the Initial 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,

                                      -17-







or the related  Subsequent  Closing  Date,  as  applicable.  On each  Subsequent
Closing  Date,   the  Purchaser  will  deliver  to  the  Seller  the  Subsequent
Receivables   Purchase  Price  for  the  Subsequent  Samco   Receivables  to  be
transferred to the Purchaser on such Subsequent 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.

         (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 Note 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 Note 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.

                                      -18-







         (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.

         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

                                      -19-







Servicing  Agreement  the  Receivables  Files  relating  to  the  Initial  Samco
Receivables.  On or prior to each  Subsequent  Closing  Date,  the Seller  shall
deliver the  Receivable  Files for the  related  Subsequent  Receivables  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  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 4.7 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) Subject to the  limitation  of remedies set
forth in Section 6.2 hereof with respect to a breach of any  representations and
warranties  contained in Section 3.2(b) hereof,  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 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

                                      -20-







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  securities  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 breach of this covenant 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 Note 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
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

                                      -21-







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  with  respect to CPS in Section  4.7 of the
Sale and Servicing Agreement. The sole remedy hereunder of the Noteholders,  the
Trust,  the Note 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 Note Insurer, the Trust and the
Noteholders  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 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 conveyances  hereunder and under each Subsequent Purchase
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
Initial Samco Receivables and the other Initial Transferred Samco Property being
delivered to the  Purchaser on the Closing  Date,  and other  property  conveyed
hereunder

                                      -22-







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.  In the event that the assignment of a Samco  Receivable to the
Purchaser is insufficient,  without a notation on the related Financed Vehicle's
certificate  of title,  or  without  fulfilling  any  additional  administrative
requirements  under  the laws of the  state in which  the  Financed  Vehicle  is
located, to perfect a security interest in the related Financed Vehicle in favor
of the  Purchaser,  the  Seller and  Purchaser  hereby  agree that the  Seller's
designation as the secured party on the  certificate of title is in its capacity
as agent of the Purchaser and the Purchaser's transferees.

         6.5. Trust. The Seller  acknowledges that the Purchaser will,  pursuant
to the Sale and  Servicing  Agreement,  sell the  Receivables  to the  Trust and
assign its rights under this Purchase Agreement, the Linc Purchase Agreement and
the  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  Sections 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 Note Insurer; provided, however, that any such amendment
that materially  adversely  affects the rights of the Noteholders under the Sale
and  Servicing   Agreement  must  be  consented  to  by  the  holders  of  Notes
representing more than 50% of the outstanding principal amount of Notes.

         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.

         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.


                                      -23-







         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
Note 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 Note  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.]

                                      -24-







         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:  Jeffrey P. Fritz
                                         Title: Chief Financial Officer



                                       SAMCO ACCEPTANCE CORP.


                                       By:
                                          Name:
                                          Title:



                                      -25-







                                                           Exhibit A

                                   ASSIGNMENT

         For value  received,  on this [ ] day [ ], 1998, in accordance with the
Purchase Agreement dated as of [ ], 1998, 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 Initial Samco Receivables listed in the Schedule
of Samco  Receivables and all monies received  thereunder  after the Cutoff Date
and all Net  Liquidation  Proceeds  received  with respect to such Initial 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 Initial Samco Receivables or the Obligors  thereunder;  (iv) refunds for the
costs of extended service  contracts with respect to Financed  Vehicles securing
the Initial  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 Initial 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 Initial Samco Receivable; (vi) the proceeds of any and all of the foregoing
and (vii) 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 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. 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 day and year first above written.




                                  SAMCO ACCEPTANCE CORP.


                                  By:
                                     Name:
                                     Title:


                                       -2-







                                    Exhibit B
                          Schedule of Samco Receivables

                               See Following Page








                                                                 EXHIBIT C


                      FORM OF SUBSEQUENT PURCHASE AGREEMENT


         THIS  SUBSEQUENT   PURCHASE   AGREEMENT  (this   "Subsequent   Purchase
Agreement")  is made and  entered  into as of by and  between  SAMCO  ACCEPTANCE
CORP., a Delaware  corporation  (the  "Seller"),  and CPS  RECEIVABLES  CORP., a
California   corporation   (together  with  its  successors  and  assigns,   the
"Purchaser").

                              W I T N E S S E T H:

         WHEREAS, the Purchaser,  as purchaser,  has agreed to purchase from the
Seller,  as seller,  and the Seller,  pursuant to the  Purchase  Agreement  (the
"Samco Purchase Agreement") dated as of [ ], 1998, between the Purchaser and the
Seller, is transferring to the Purchaser the Subsequent Samco Receivables listed
on the Schedule of Subsequent Samco Receivables annexed hereto as Exhibit A (the
"Subsequent  Samco  Receivables")  and  related  Subsequent   Transferred  Samco
Property.

         NOW,  THEREFORE,  in  consideration  of the  premises  and  the  mutual
agreements hereinafter contained, and for other good and valuable consideration,
the receipt of which is acknowledged, the Purchaser and the Seller, intending to
be legally bound, hereby agree as follows:

                                   Definitions

         SECTION 1. Capitalized terms used herein without  definition shall have
the respective meanings assigned to such terms in the Samco Purchase Agreement.

         SECTION  2.  Conveyance  of  Subsequent  Samco  Receivables.  For value
received,  in  accordance  with the Samco  Purchase  Agreement,  the Seller does
hereby sell, assign,  transfer and otherwise convey unto the Purchaser,  without
recourse (but without  limitation of its  obligations  under the Samco  Purchase
Agreement),  all  right,  title and  interest  of the  Seller in and to: (i) the
Subsequent  Samco  Receivables  listed  in  the  Schedule  of  Subsequent  Samco
Receivables annexed hereto as Exhibit A and all monies received thereunder after
[ ] (the  "Subsequent  Cutoff Date") and all Net Liquidation  Proceeds  received
with respect to such Subsequent Samco  Receivables;  (ii) the security interests
in the Financed  Vehicles  granted by Obligors  pursuant to the Subsequent 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 Subsequent  Samco
Receivables or the Obligors thereunder; (iv) refunds

                                       -2-







for the costs of extended  service  contracts with respect to Financed  Vehicles
securing the Subsequent  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  Subsequent
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 Subsequent Samco  Receivable;  (vi) the proceeds of any and
all of the foregoing and (vii) 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 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  "Subsequent  Transferred
Samco Property" and together with any Subsequent Transferred CPS Property and/or
any  Subsequent   Transferred   Line  Property,   the  "Subsequent   Transferred
Property").

         SECTION  3.  Consideration  for  Subsequent  Transferred  Property.  In
consideration   for  the  Subsequent  Samco  Receivables  and  other  Subsequent
Transferred  Samco  Property,  subject to the terms and conditions  hereof,  the
purchase  price  for  the  Subsequent  Samco  Receivables,   in  the  amount  of
$_________,  shall  be  paid by the  Purchaser  in  cash  to the  Seller  on the
Subsequent Closing Date.

         SECTION 4. Conveyance as Sale of Receivables Not Financing. The parties
hereto intend that the conveyance  hereunder be a sale of the  Subsequent  Samco
Receivables  and the related  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  Subsequent  Samco  Receivables  and the  related
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  Subsequent  Samco
Receivables  and the related  Transferred  Samco Property being delivered to the
Purchaser on the Subsequent  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.

         SECTION 5. Representations and Warranties of the Seller. This Agreement
is made  pursuant to and upon the  representations,  warranties,  covenants  and
agreements on the part of the Seller  contained in the Samco Purchase  Agreement
and  is  to  be  governed  by  the  Samco  Purchase   Agreement.   All  of  such
representations, warranties, covenants and


                                       -3-







agreements  are hereby  incorporated  herein and are in full force and effect as
though specifically set forth herein.

         SECTION  6.  Representations  and  Warranties  of the  Purchaser.  This
Agreement  is  made  pursuant  to  and  upon  the  representations,  warranties,
covenants and  agreements  on the part of the  Purchaser  contained in the Samco
Purchase Agreement and is to be governed by the Samco Purchase Agreement. All of
such   representations,   warranties,   covenants  and   agreements  are  hereby
incorporated  herein and are in full force and effect as though specifically set
forth herein.



                                       -4-







         IN WITNESS  WHEREOF,  the  undersigned  has caused this Agreement to be
duly executed  this __ day of  _________,  but effective as of the date and year
first written above.

                                  SAMCO ACCEPTANCE CORP., as Seller



                                  By:
                                     Name:
                                     Title:



                                  CPS RECEIVABLES CORP.,
                                  as Purchaser



                                  By:
                                     Name:
                                     Title:

                                       -5-







                   EXHIBIT A TO SUBSEQUENT PURCHASE AGREEMENT

                          FORM OF SUBSEQUENT ASSIGNMENT

         For value received,  in accordance with the Purchase Agreement dated as
of [ ], 1998, as heretofore  amended,  supplemented  or otherwise  modified (the
"Samco  Purchase  Agreement"),   among  the  undersigned,  as  Seller,  and  CPS
Receivables  Corp.  (the  "Purchaser"),  the undersigned  does hereby  transfer,
assign, grant, set over and otherwise convey to 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  Subsequent  Samco  Receivables  listed in the Schedule of Subsequent  Samco
Receivables annexed hereto as Exhibit A and all monies received thereunder after
[ ] and all Net  Liquidation  Proceeds  received with respect to such Subsequent
Samco Receivables;  (ii) the security interests in the Financed Vehicles granted
by Obligors  pursuant to the Subsequent 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  Subsequent  Samco  Receivables  or the Obligors  thereunder;  (iv)
refunds for the costs of extended  service  contracts  with  respect to Financed
Vehicles securing the Subsequent 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  Subsequent
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 Subsequent  Samco  Receivable;(vi)  the proceeds of any and
all of the foregoing and (vii) 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 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  "Subsequent  Transferred
Samco Property" and together with any Subsequent Transferred CPS Property and/or
Subsequent Transferred Linc Property, the "Subsequent Transferred Property").

         The foregoing  assignment,  transfer and conveyance 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 Subsequent  Samco  Receivables,  the Receivable  Files,  any
insurance policies or any agreement or instrument relating to any of them.


                                       A-1






         This  Assignment  is made  pursuant  to and upon  the  representations,
warranties  and agreements on the part of each 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  principles  of
conflicts of law.

         IN WITNESS  WHEREOF,  the undersigned have caused this Assignment to be
duly executed as of __________.

                                       SAMCO ACCEPTANCE CORP.


                                       By:
                                          Name:
                                          Title:



                                       A-2







                                                              EXECUTION COPY

                                   ASSIGNMENT

         For value  received,  on this 4th day of December,  1998, in accordance
with  the  Purchase  Agreement  dated  as  of  December  1,  1998,  between  the
undersigned  (the "Seller") and CPS  Receivables  Corp. (the  "Purchaser")  (the
"Linc Purchase Agreement"),  the undersigned does hereby sell, transfer,  assign
and  otherwise  convey  unto the  Purchaser,  without  recourse  (subject to the
obligations  in  the  Linc  Purchase   Agreement  and  the  Sale  and  Servicing
Agreement),  all  right,  title  and  interest  of the  Seller in and to (i) the
Initial  Linc  Receivables  listed in the Schedule of Linc  Receivables  and all
monies  received  thereunder  after  the  Cutoff  Date  and all Net  Liquidation
Proceeds  received  with  respect to such  Initial  Linc  Receivables;  (ii) the
security  interests in the Financed Vehicles granted by Obligors pursuant to the
Initial Linc  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 Initial
Linc  Receivables  or the  Obligors  thereunder;  (iv)  refunds for the costs of
extended  service  contracts  with  respect to Financed  Vehicles  securing  the
Initial Linc  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 Initial Linc 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
Initial Linc  Receivable;  (vi) the proceeds of any and all of the foregoing and
(vii) 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 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. 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
Initial Linc 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 Linc
Purchase Agreement and is to be governed by the Linc Purchase Agreement.

         Capitalized  terms used herein and not otherwise defined shall have the
meanings assigned to them in the Linc 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 the day and year first above written.




                                  LINC ACCEPTANCE COMPANY LLC


                                  By:
                                     Name:
                                     Title:


                                       -2-




                                                            EXECUTION COPY

         PURCHASE  AGREEMENT  dated as of this  December 1, 1998, by and between
LINC  ACCEPTANCE   COMPANY  LLC,  a  Delaware  limited  liability  company  (the
"Seller"), having its principal executive office at One Selleck Street, Norwalk,
Connecticut  06855,  and CPS RECEIVABLES  CORP., a California  corporation  (the
"Purchaser"),  having its  principal  executive  office at 16355 Laguna  Canyon,
Irvine, CA 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 Linc Receivables (as hereinafter defined),  are to be sold
by the Seller to the  Purchaser,  which Linc  Receivables  together with the CPS
Receivables and Samco Receivables will be transferred by the Purchaser, pursuant
to the  Sale and  Servicing  Agreement  (as  hereinafter  defined),  to CPS Auto
Receivables  Trust 1998-4,  which Trust will issue notes under the Indenture (as
hereinafter  defined)  representing  indebtedness of the Trust (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):

         "Agreements"  means,   collectively,   this  Purchase  Agreement,  each
Subsequent Purchase Agreement and the Assignments.

         "Assignment"  means  the  Initial  Assignments  and/or  any  Subsequent
Assignment.


                                       -1-







         "Base  Prospectus"  means the Prospectus  dated November 9, 1998,  with
respect to CPS Auto Receivables Trusts and any amendment or supplement thereto.

         "Closing Date" means December 4, 1998.

         "CPS"  means   Consumer   Portfolio   Services,   Inc.,   a  California
corporation, and its successors and assigns.

         "CPS  Purchase  Agreement"  means the  purchase  agreement of even date
herewith,  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.

         "Indenture" means the Indenture of even date herewith, between CPS Auto
Receivables  Trust  1998-4,  as issuer  and  Norwest  Bank  Minnesota,  National
Association, as trustee.

         "Initial  Assignment"  means the assignment  dated December 1, 1998, by
the Seller to the  Purchaser,  relating  to the  purchase  of the  Initial  Linc
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 attached hereto as Exhibit A.

         "Initial CPS  Receivable"  shall have the meaning  specified in the CPS
Purchase Agreement.

         "Initial Linc Receivable"  shall have the meaning specified in the Linc
Purchase Agreement.

         "Initial Receivable" means an Initial Samco Receivable,  an Initial CPS
Receivable and/or an Initial Linc Receivable.

         "Initial  Samco  Receivable"  shall have the meaning  specified  in the
Samco Purchase Agreement.

         "Initial Schedule of Linc  Receivables"  means the list of Initial Linc
Receivables annexed hereto as of the Closing Date as Exhibit B.

         "Initial  Transferred CPS Property" shall have the meaning specified in
the CPS Purchase Agreement.

         "Initial  Transferred  Property"  shall have the meaning  specified  in
Section 2.1(a) hereof.

                                       -2-







         "Initial Transferred Linc Property" shall have the meaning specified in
Section 2.1(a) hereof.

         "Initial  Transferred  Samco Property" shall have the meaning specified
in the Samco Purchase Agreement.

         "Linc" means Linc Acceptance  Company LLC, a Delaware limited liability
company, and its successors and assigns.

         "Linc  Assignments"  means the Initial  Assignment  and any  Subsequent
Assignment.

         "Linc  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.

         "Linc  Receivable"means the Initial Linc Receivables and the Subsequent
Linc Receivables.

         "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.

         "Prospectus  Supplement" means the Prospectus Supplement dated December
2, 1998,  relating  to the public  offering  of the 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"  means,  collectively,   the  CPS  Receivables,  the  Linc
Receivables and the Samco Receivables.

         "Receivables Purchase Price" means $6,591,854.00.

         "Repurchase  Event"  shall have the  meaning  specified  in Section 6.2
hereof.

         "Sale and Servicing  Agreement" means the Sale and Servicing  Agreement
of even date herewith,  among CPS Auto Receivables Trust 1998-4, CPS Receivables
Corp., as seller,  Consumer Portfolio Services,  Inc., as 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.


                                       -3-







         "Samco Purchase  Agreement"  means the purchase  agreement of even date
herewith,  between Samco Acceptance  Company LLC, as seller, and CPS Receivables
Corp., as purchaser.

         "Samco  Receivable"  shall  have the  meaning  specified  in the  Samco
Purchase Agreement.

         "Schedule  of CPS  Receivables"  means  the  list  of CPS  Receivables,
annexed as Exhibit B, to the CPS Purchase  Agreement,  as  supplemented  by each
Schedule of Subsequent CPS Receivables.

         "Schedule of Receivables"  means the list of Linc Receivables,  annexed
hereto as  Exhibit  B, as  supplemented  by each  Schedule  of  Subsequent  Linc
Receivables.

         "Schedule of Samco  Receivables"  means the list of Samco  Receivables,
annexed as Exhibit B to the Samco Purchase  Agreement,  as  supplemented by each
Schedule of Subsequent Samco Receivables.

         "Schedule  of  Subsequent  CPS  Receivables"  shall  have  the  meaning
specified in the CPS Purchase Agreement.

         "Schedule  of  Subsequent  Samco  Receivables"  shall have the  meaning
specified in the Samco Purchase Agreement.

         "Schedule of  Subsequent  Linc  Receivables"  means the schedule of all
motor vehicle retail financing  agreements sold and transferred to the Purchaser
pursuant to a Subsequent Purchase  Agreement,  which schedule shall be deemed to
supplement  the  Schedule  of  Receivables  and shall be attached to the related
Subsequent Assignment (and may be in the form of microfiche).

         "Seller"  means  Linc  Acceptance   Company  LLC,  a  Delaware  limited
liability  company,  in its capacity as seller of the Linc  Receivables  and the
other  Transferred  Linc  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.

         "Subsequent Assignment" means a Subsequent CPS Assignment, a Subsequent
Linc Assignment or a Subsequent Samco Assignment, as applicable.

         "Subsequent CPS Assignment" shall have the meaning specified in the CPS
Purchase Agreement.


                                       -4-







         "Subsequent Linc Assignment"  means an assignment  substantially in the
form of  Exhibit A to the form of  Subsequent  Purchase  Agreement  attached  as
Exhibit C hereto.

         "Subsequent  Samco  Assignment" shall have the meaning specified in the
Samco Purchase Agreement.

         "Subsequent  Closing  Date"  means  any day on  which  Subsequent  Linc
Receivables  are  sold  to  the  Purchaser  pursuant  to a  Subsequent  Purchase
Agreement.

         "Subsequent CPS Receivable" shall have the meaning specified in the CPS
Purchase Agreement.

         "Subsequent Linc Receivable"  means each Receivable  transferred to the
Purchaser  pursuant  to a  Subsequent  Assignment  which  shall be listed on the
Schedule  of  Subsequent   Receivables   attached  to  the  related   Subsequent
Assignment.

         "Subsequent  Purchase  Agreement" means a subsequent purchase agreement
which shall be in substantially the form of Exhibit C to this Purchase Agreement
by which the Seller will transfer Subsequent Linc Receivables.

         "Subsequent   Receivables"   means  a  Subsequent  CPS  Receivable,   a
Subsequent Linc Receivable, a Subsequent Samco Receivable.

         "Subsequent  Receivables  Purchase  Price"  shall,  with respect to any
Subsequent  Receivables,  have the meaning  specified in the related  Subsequent
Purchase Agreement.

         "Subsequent  Samco  Receivable" shall have the meaning specified in the
Samco Purchase Agreement.

         "Subsequent  Transferred  Property" shall have the meaning specified in
Section 2.2(a)

         "Subsequent Transferred Linc Property" shall have the meaning specified
in each Subsequent Purchase Agreement.

         "Transferred CPS Property" shall have the meaning  specified in the CPS
Purchase Agreement.

         "Transferred Linc Property" means the Initial Transferred Linc Property
and the Subsequent Transferred Linc Property.

         "Transferred   Property"  means  the  Transferred  CPS  Property,   the
Transferred Linc Property and the Transferred Samco Property.



                                       -5-







         "Transferred  Samco Property"  shall have the meaning  specified in the
Samco Purchase Agreement.

         "Trust"  means the CPS Auto  Receivables  Trust  1998-4  created by the
Trust Agreement.

         "Trust  Agreement"  means the Amended and Restated  Trust  Agreement of
even date herewith between CPS Receivables  Corp. and Bankers Trust  (Delaware),
as Owner Trustee.

         "UCC" means the Uniform Commercial Code, as in effect from time to time
in the relevant jurisdictions.

         "Underwriter"  means First Union Capital  Markets,  a division of Wheat
First Securities, Inc..

         "Underwriting  Agreement" means the Underwriting  Agreement relating to
the Notes, of even date herewith,  among the  Underwriter,  CPS, Linc, Samco and
the Purchaser.


                                   ARTICLE II

                        PURCHASE AND SALE OF RECEIVABLES

         2.1.  Purchase and Sale of Initial  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 Linc Receivables and the other Initial Transferred
Linc  Property  relating  thereto.  The  conveyance to the Purchaser of the Linc
Receivables and other  Transferred Linc Property relating thereto is intended as
a sale free and clear of all liens and it is intended that the Transferred  Linc
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 Initial Linc Receivables  listed in the Schedule of Linc Receivables and all
monies  received  thereunder  after  the  Cutoff  Date  and all Net  Liquidation
Proceeds  received  with  respect to such  Initial  Linc  Receivables;  (ii) the
security  interests in the Financed Vehicles granted by Obligors pursuant to the
Linc Receivables and any other interest of the Seller in such Financed Vehicles,
including, without limitation, the certificates of title or, with respect to



                                       -6-







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 Linc Receivables or
the  Obligors  thereunder;  (iv)  refunds  for the  costs  of  extended  service
contracts  with  respect to Financed  Vehicles  securing  the Linc  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 Linc 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 Linc  Receivable;  (vi) the proceeds of
any and all of the foregoing and (vii) 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 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 "Initial  Transferred  Linc  Property" and together with the
Transferred  CPS  Property  and the  Transferred  Samco  Property,  the "Initial
Transferred Property").

         (b)  Initial  Receivables  Purchase  Price.  In  consideration  for the
Initial Linc Receivables and other Initial  Transferred Linc 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.  Purchase  and  Sale of  Subsequent  Receivables.  On the  related
Subsequent  Closing  Date,  subject to the terms and  conditions  of the related
Subsequent 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,  each Subsequent Purchase Agreement
and the Sale and  Servicing  Agreement),  all of the Seller's  right,  title and
interest  in,  to and  under  the  Subsequent  Linc  Receivables  and the  other
Subsequent  Transferred Linc Property  relating  thereto.  The conveyance to the
Purchaser of the Subsequent Linc  Receivables and other  Subsequent  Transferred
Linc Property relating thereto is intended as a sale free and clear of all liens
and it is intended  that the  Subsequent  Transferred  Linc  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  Subsequent  Receivables.  On the  related  Subsequent
Closing  Date the Seller  shall  sell,  transfer,  assign,  grant,  set over and
otherwise convey to the Purchaser,  without recourse (subject to the obligations
in this Purchase  Agreement,  each Subsequent Purchase Agreement and in the Sale
and Servicing Agreement),  all right, title and interest of the Seller in and to
(i) the Subsequent Linc Receivables listed in the related

                                       -7-







Schedule of Subsequent Linc Receivables and all monies received thereunder after
the related  Subsequent  Cutoff Date and all Net Liquidation  Proceeds  received
with respect to such Subsequent Linc Receivables; (ii) the security interests in
the  Financed  Vehicles  granted by  Obligors  pursuant to the  Subsequent  Linc
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  Subsequent  Linc
Receivables or the Obligors  thereunder;  (iv) refunds for the costs of extended
service contracts with respect to Financed Vehicles securing the Subsequent Linc
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  Subsequent  Linc  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  Subsequent
Linc Receivable; (vi) the proceeds of any and all of the foregoing and (vii) 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 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 "Subsequent Transferred Linc Property" and together
with any Subsequent Transferred CPS Property and/or Subsequent Transferred Samco
Property, the "Subsequent Transferred Property").

         (b) The Seller shall  transfer to the  Purchaser  the  Subsequent  Linc
Receivables  and the  Subsequent  Transferred  Linc  Property  as  described  in
paragraph  (a)  above  only  upon  the  satisfaction  of each  of the  following
conditions on or prior to the related Subsequent Closing Date:

                  (i) the Seller  shall have  provided  the  Trustee,  the Owner
         Trustee,  the Note  Insurer  and the Rating  Agencies  with an Addition
         Notice not later than three days prior to such Subsequent  Closing Date
         and shall have provided any information  reasonably requested by any of
         the foregoing with respect to the Subsequent Linc Receivables;

                  (ii) the Seller shall have  delivered to the Owner Trustee and
         the   Trustee   a  duly   executed   Subsequent   Purchase   Agreement,
         substantially  in  the  form  of  Exhibit  C,  which  shall  include  a
         supplement to the Schedule of Linc Receivables,  listing the Subsequent
         Linc  Receivables to be transferred on the related  Subsequent  Closing
         Date;


                                       -8-







                  (iii) the Seller shall,  to the extent required by Section 4.2
         of the Sale and Servicing  Agreement,  have deposited in the Collection
         Account all collections in respect of the Subsequent Linc Receivables;

                  (iv) as of each Subsequent  Closing Date, (A) the Seller shall
         not be  insolvent  and shall not  become  insolvent  as a result of the
         transfer of Subsequent  Linc  Receivables  on such  Subsequent  Closing
         Date, (B) the Seller shall not intend to incur or believe that it shall
         incur  debts  that  would be beyond  its  ability  to pay as such debts
         mature,  (C) such transfer  shall not have been made with actual intent
         to hinder, delay or defraud any Person and (D) the assets of the Seller
         shall  not  constitute  unreasonably  small  capital  to carry  out its
         business as then conducted;

                  (v) the Funding Period shall not have terminated;

                  (vi) after giving  effect to any transfer of  Subsequent  Linc
         Receivables on a Subsequent  Closing Date, the  Receivables  shall meet
         the following  criteria  (based on the  characteristics  of the Initial
         Receivables on the Initial  Cutoff Date and the Subsequent  Receivables
         on the related  Subsequent Cutoff Dates):  (A) the weighted average APR
         of such  Receivables  will not be less than  0.25%  below the  weighted
         average  APR of the Initial  Receivables  on the Cutoff  Date,  (B) the
         weighted  average  remaining term of such  Receivables will be within a
         range  of 12 to 72  months,  (C) not  more  than  90% of the  aggregate
         principal balance of such Receivables will represent  financing of used
         Financed Vehicles,  (D) no fewer than 50% of the Subsequent Receivables
         will be originated under the "Alpha"  program,  (E) not more than 8% of
         the Subsequent  Receivables will be originated under the Delta program,
         (F) no more than 5.25% of the Subsequent Receivables will be originated
         under the "First Time Buyer" program, (G) no fewer than 20% and no more
         than 30% of the  Subsequent  Receivables  will be originated  under the
         "Standard" program,  and (H) the Trust, the Trustee,  the Owner Trustee
         and the Note Insurer shall have received  written  confirmation  from a
         firm of certified independent public accountants as to the satisfaction
         of the criteria in clauses (A) through (G) above;

                  (vii) each of the  representations  and warranties made by the
         Seller  pursuant to Section  3.2 with  respect to the  Subsequent  Linc
         Receivables to be transferred on such Subsequent  Closing Date shall be
         true and correct as of the related  Subsequent  Closing  Date,  and the
         Seller  shall have  performed  all  obligations  to be  performed by it
         hereunder on or prior to such Subsequent Closing Date;

                  (viii) the Seller  shall,  at its own expense,  on or prior to
         the  Subsequent  Closing Date  indicate in its computer  files that the
         Subsequent  Linc  Receivables  identified  in the  Subsequent  Purchase
         Agreement  have  been sold to the  Purchaser  pursuant  to the  related
         Subsequent Purchase Agreement and subsequently to the Trust pursuant to
         the Sale and Servicing Agreement;


                                       -9-







                  (ix) the  Seller  shall  have  taken any  action  required  to
         maintain the first priority  perfected  ownership interest of the Trust
         in the Owner Trust  Estate and the first  priority  perfected  security
         interest of the Trustee in the Collateral;

                  (x) no selection  procedures  adverse to the  interests of the
         Noteholders  or the Note Insurer  shall have been utilized in selecting
         the Subsequent Linc Receivables;

                  (xi) the  addition  of any such  Subsequent  Linc  Receivables
         shall not result in a material  adverse tax consequence to the Trust or
         the Noteholders;

                  (xii)  the  Seller  shall  have  delivered  (A) to the  Rating
         Agencies and the Note Insurer an Opinion of Counsel with respect to the
         transfer of such Subsequent Linc Receivables  substantially in the form
         of the Opinion of Counsel delivered to the Rating Agencies and the Note
         Insurer on the related  Closing Date and (B) to the Trustee the Opinion
         of Counsel  required by Section  13.2(i)(1)  of the Sale and  Servicing
         Agreement;

                  (xiii) each Rating Agency shall have confirmed that the rating
         on the  Notes  shall not be  withdrawn  or  reduced  as a result of the
         transfer of such Subsequent Linc Receivables to the Trust;

                  (xiv)  all  conditions  precedent  specified  in the  Sale and
         Servicing Agreement with respect to the transfer of such Subsequent CPS
         Receivables  to the Trust by the Purchaser  shall have been  satisfied;
         and

                  (xv) the Seller  shall have  delivered to the Note Insurer and
         the Trustee an Officers'  Certificate  confirming the  satisfaction  of
         each condition precedent specified in this paragraph (b).

         2.3. The Closing. The sale and purchase of the Initial Linc 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 Initial Closing Date,
simultaneously  with the closings under: (a) the CPS Purchase Agreement pursuant
to which CPS will sell the Initial CPS  Receivables  to the  Purchaser,  (b) the
Samco  Purchase  Agreement  pursuant to which Samco will sell the Initial  Samco
Receivables to the Purchaser,  (c) the Sale and Servicing  Agreement pursuant to
which the Purchaser  will assign all of its right,  title and interest in and to
the Initial Receivables and the other Initial Transferred  Property to the Trust
for the  benefit of the  Securityholders,  (d) the Trust  Agreement  pursuant to
which the Trust shall be formed and the Certificates  issued,  (e) the Indenture
pursuant  to which the Trust  will  issue the  Notes,  and (f) the  Underwriting
Agreement  pursuant  to  which  the  Purchaser  shall  sell  the  Notes  to  the
Underwriter.



                                      -10-







                                   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 the
Closing Date (which  representations  and  warranties  shall survive the Closing
Date and each Subsequent 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 Linc 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,

                                      -11-







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 and each  Subsequent  Closing Date (which  representations  and
warranties shall survive the Closing Date and each Subsequent 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 Linc 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 Linc  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 Initial Linc Receivables and
         the other Initial  Transferred Linc Property  conveyed to the Purchaser
         pursuant to Sections 2.1 and 2.2,  enforceable against creditors of and
         purchasers from the Seller; and this

                                      -12-







         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 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.


                                      -13-







                  (ix) Fraudulent Conveyance. The Seller is not selling the Linc
         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 Linc Receivables to the Purchaser.

         (b) The Seller makes the following representations and warranties as to
the Linc Receivables and the other Transferred Linc Property relating thereto on
which the  Purchaser  relies in  accepting  the Linc  Receivables  and the other
Transferred Linc Property relating thereto.  Such representations and warranties
speak as of the execution  and delivery of this  Agreement and as of the Closing
Date, in the case of the Initial  Receivables,  and as of the related Subsequent
Transfer  Date,  in case of the  Subsequent  Receivables,  but shall survive the
sale, transfer, and assignment of the Linc Receivables and the other Transferred
Linc Property  relating thereto to the Purchaser and the subsequent  assignments
and transfers pursuant to the Sale and Servicing Agreement and the Indenture:

                  (i) Location of Receivable  Files;  One  Original.  A complete
         Receivable  File with respect to each Initial Linc  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 Linc Receivable.

                  (ii)  Schedule  of  Receivables;   Selection  Procedures.  The
         information  with  respect  to the Linc  Receivables  set  forth in the
         Schedule of Linc  Receivables  as the same may be amended by subsequent
         Schedules  of Linc  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 Linc Receivables.

                  (iii) Security Interest in Financed Vehicle. Immediately prior
         to the sale,  assignment,  and transfer  thereof,  each Linc Receivable
         shall  be  secured  by a  validly  perfected  first  priority  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 the Closing  Date, in
         the case of the Initial  Receivables,  or after the related  Subsequent
         Closing Date, in the case of the Subsequent Receivables).

                  (iv) Linc  Receivables in Force.  No Linc  Receivable has been
         satisfied, subordinated or rescinded, nor has any Financed Vehicle been
         released from the lien granted by the related Linc  Receivable in whole
         or in part.

                  (v) No Waiver.  No  provision  of a Linc  Receivable  has been
         waived.


                                      -14-







                  (vi) No  Amendments.  No Linc  Receivable  has  been  amended,
         except  as  such  Linc  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 (with  respect to the Initial  Receivables)  or the
         Subsequent   Cutoff  Date  (wth  respect  to  the  related   Subsequent
         Receivables),   no  default,  breach,  violation  or  event  permitting
         acceleration  under the terms of any Linc 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 Linc Receivable has arisen; and the
         Seller shall not waive and has not waived any of the foregoing;  and no
         Financed Vehicle securing a Linc Receivable shall have been repossessed
         as of the Cutoff Date (with respect to the Initial  Receivables) or the
         Subsequent  Cutoff  Date  (with  respect  to  the  related   Subsequent
         Receivables).

                  (viii)  Title.  It is the  intention  of the  Seller  that the
         transfer and assignment  herein  contemplated  constitute a sale of the
         Linc Receivables and other Transferred Linc Property from the Seller to
         the  Purchaser  and that the  beneficial  interest in and title to such
         Linc Receivables and other Transferred Linc Property not be part of the
         debtor's estate in the event of the filing of a bankruptcy  petition by
         or against the Seller under any bankruptcy  law. No Linc  Receivable or
         other Transferred Linc Property has been sold,  transferred,  assigned,
         or pledged by the Seller to any Person other than the  Purchaser or any
         such  pledge  has  been  released  on or  prior  to the  Closing  Date.
         Immediately prior to any transfer and assignment  herein  contemplated,
         the Seller had good and  marketable  title to each Linc  Receivable and
         other Transferred Linc Property,  and was the sole owner thereof,  free
         and clear of all liens, claims,  encumbrances,  security interests, and
         rights  of others  and,  immediately  upon the  transfer  thereof,  the
         Purchaser  shall  have  good and  marketable  title to each  such  Linc
         Receivable and other  Transferred  Linc Property,  and will be the sole
         owner  thereof,  free and clear of all  liens,  encumbrances,  security
         interests,  and rights of others,  and the transfer has been  perfected
         under the UCC.

                  (ix) Lawful Assignment. No Linc Receivable has been originated
         in, or is  subject  to the laws of, any  jurisdiction  under  which the
         sale,  transfer,  and  assignment  of such  Linc  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 Linc
         Receivables.

                  (x)  All  Filings  Made.  All  filings   (including,   without
         limitation,  UCC  filings)  necessary in any  jurisdiction  to give the
         Purchaser a first priority

                                      -15-







         perfected  ownership  interest  in the Linc  Receivables  and the other
         Transferred Linc Property have been made, taken or performed.

                  (xi) Casualty. No Financed Vehicle related to a 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 Linc  Receivables  (including,  but not limited to under
         dealer reserves) as a result of the purchase of the Linc Receivables.

                  (xiii)  Full  Amount  Advanced.  The full  amount of each Linc
         Receivable  has  been  advanced  to  each  Obligor,  and  there  are no
         requirements for future advances thereunder. No Obligor with respect to
         a Linc  Receivable  has any option under the Linc  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 Initial Linc  Receivables  pursuant to
this  Agreement  shall  be  "without  recourse"  to 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  and on  each  Subsequent  Closing  Date,  the  obligation  of the
Purchaser  to  purchase  the  related  Linc   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 Closing Date
or the related Subsequent  Closing Date, as applicable,  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 or the  related
Subsequent Closing Date, as applicable.

         (b) Computer Files Marked. The Seller shall, at its own expense,  on or
prior to the Closing Date or the related Subsequent Closing Date, as applicable,
indicate in its computer files that the related Linc  Receivables have been sold
to the Purchaser  pursuant to the  Agreements and shall deliver to the Purchaser
the Schedule of Linc Receivables certified by the Chairman,  the President,  the
Vice President or the Treasurer of the Seller to

                                      -16-







be true, correct and complete as of, and after giving effect to all transfers of
Receivables  on, the Closing Date or the related  Subsequent  Closing  Date,  as
applicable.

         (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 or the related Subsequent Closing Date, as applicable.

         (d) Documents to be delivered by the Seller on each Closing Date.

                  (i) The  Assignment.  On the  Closing  Date,  the Seller  will
         execute  and  deliver the Initial  Linc  Assignment.  The Initial  Linc
         Assignment shall be  substantially in the form of Exhibit A hereto.  On
         each  Subsequent  Closing Date, the Seller will execute and deliver the
         related Subsequent  Assignment.  Each Subsequent Assignment shall be in
         the form of Exhibit A to the form of the Subsequent  Purchase Agreement
         attached as Exhibit C 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  Linc
         Receivables and the other Transferred Linc 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 Linc  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 the Closing Date.

                  (iii)  Other  Documents.  On or prior to the  Closing  Date or
         Subsequent  Closing Date, as applicable,  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 Initial CPS
Purchase Agreement, the Samco Purchase Agreement, the Underwriting Agreement and
the Certificate  Purchase  Agreement shall be consummated on the Closing Date or
Subsequent Closing Date, as applicable.

         4.2.  Conditions  to Obligation  of the Seller.  The  obligation of the
Seller to sell the Initial Receivables or Subsequent Receivables, as applicable,
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 or

                                      -17-







Subsequent  Closing Date, as  applicable,  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 or  Subsquent  Closing  Date,  as
applicable.

                  (b)  Receivables  Purchase  Price.  On the Closing  Date,  the
         Purchaser will deliver to the Seller the Initial  Receivables  Purchase
         Price as  provided in Section  2.1(b).  The Seller  hereby  directs the
         Purchaser  to wire  such  purchase  price  to wire  instructions  to be
         delivered to the Purchaser on or prior to the Initial  Closing Date. On
         each Subsequent  Closing Date, the Purchaser will deliver to the Seller
         the  Subsequent  Receivables  Purchase  Price for the  Subsequent  Linc
         Receivables  to be  transferred  to the  Purchaser  on such  Subsequent
         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 Linc Receivables and the other
Transferred  Linc  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 Linc Receivables and the other  Transferred Linc
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.

         (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 Note 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

                                      -18-







Note  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 Linc Receivables hereunder,  the Seller's master computer records (including
any back-up archives) that refer to a Linc Receivable shall indicate clearly the
interest of the Purchaser in such Linc  Receivable and that such Linc Receivable
is owned by the  Purchaser.  Indication of the  Purchaser's  ownership of a Linc
Receivable  shall be deleted from or modified on the Seller's  computer  systems
when,  and only  when,  the Linc  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 Linc 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 Linc  Receivable,  shall indicate clearly
that such Linc  Receivable  has been sold and is owned by the  Purchaser  unless
such Linc 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 Linc Receivable.

         (f) List of Receivables.  Upon request, the Seller shall furnish to the
Purchaser,  within  five  Business  Days,  a list of all  Linc  Receivables  (by
contract number and name of Obligor) then owned by the Purchaser,  together with
a reconciliation of such list to the Schedule of Linc 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 Linc
Receivables  against all claims of third parties  claiming  through or under the
Seller.


                                      -19-







         5.3. Chief Executive  Office.  During the term of the Linc 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  Linc
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 Initial Receivables. On or prior to each Subsequent Closing Date, the Seller
shall deliver the Receivable Files for the related Subsequent Receivables 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  of  notification  that  there has been a failure  to
deliver a file with respect to a Linc  Receivable or that a file is unrelated to
the Receivables  identified in Schedule A to the Sale and Servicing Agreement or
that any of the  documents  referred to in Section 3.3 of the Sale and Servicing
Agreement are not contained in a Receivable File, to deliver such file or any of
the aforementioned  documents required to be included in such Receivable File to
the Trustee.  Unless such defect with respect to such Receivable File shall have
been cured by the last day of the second Collection  Period following  discovery
thereof by the Trustee and notice  thereof to Linc,  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 4.7 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) Subject to the  limitation  of remedies set
forth in Section 6.2 hereof with respect to a breach of any  representations and
warranties  contained in Section 3.2(b) hereof,  the Seller shall  indemnify the
Purchaser for any  liability as a result of the failure of a Linc  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 related to a Linc
Receivable.


                                      -20-







         (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  securities  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 breach of this covenant 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 Linc Receivable.

         6.2. Repurchase Events. The Seller hereby covenants and agrees with the
Purchaser for the benefit of the  Purchaser,  the Trustee,  the Note 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

                                      -21-







affected  Linc  Receivables  hereunder  ("Repurchase  Events"),  at the Purchase
Amount from the Trust. Unless the breach of any of the Seller's  representations
and  warranties  shall have been cured by the last day of the second  Collection
Period  following  the  discovery  thereof by or notice to the Purchaser and the
Seller of such breach,  the Seller shall  repurchase any Linc Receivable if such
Linc  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 Linc  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 Linc Receivables, such
that following such purchase such representation  shall be true and correct with
respect  to the  remainder  of  the  Linc  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  with  respect  to  CPS in  Section  4.7 of  the  Sale  and  Servicing
Agreement. The sole remedy hereunder of the Securityholders, the Trust, the Note
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
Linc Receivables pursuant to this Agreement;  provided, however, that the Seller
shall  indemnify the Trustee,  the Note Insurer,  the Trust and the  Noteholders
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 Linc
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
Linc  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 all the Purchaser's  right, title and
interest  in and to such  Linc  Receivables,  and  all  security  and  documents
relating thereto.

         6.4.  Conveyance  as Sale of  Receivables  Not  Financing.  The parties
hereto intend that the  conveyances  under the  Agreements be a sale of the Linc
Receivables and the other



                                      -22-







Transferred  Linc  Property from the Seller to the Purchaser and not a financing
secured by such  assets;  and the  beneficial  interest in and title to the Linc
Receivables  and the other  Transferred  Linc 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  Connecticut)  and  applicable  law, and the Seller
hereby grants to the Purchaser a first priority  perfected security interest in,
to and under the Initial Linc Receivables and the other Initial Transferred Linc
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.  In the  event  that the
assignment  of a Linc  Receivable to the  Purchaser is  insufficient,  without a
notation on the related  Financed  Vehicle's  certificate  of title,  or without
fulfilling  any  additional  administrative  requirements  under the laws of the
state in which the Financed Vehicle is located,  to perfect a security  interest
in the  related  Financed  Vehicle  in favor of the  Purchaser,  the  Seller and
Purchaser hereby agree that the Seller's designation as the secured party on the
certificate  of title is in its  capacity  as  agent  of the  Purchaser  and the
Purchaser's transferees.

         6.5. Trust. The Seller  acknowledges that the Purchaser will,  pursuant
to the Sale and  Servicing  Agreement,  sell the  Receivables  to the  Trust and
assign its rights under this Purchase  Agreement,  the Samco 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  Sections 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 Note Insurer; provided, however, that any such amendment
that materially  adversely  affects the rights of the Noteholders under the Sale
and  Servicing   Agreement  must  be  consented  to  by  the  holders  of  Notes
representing more than 50% of the outstanding principal amount of Notes.

         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.


                                      -23-







         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  Linc  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
Note 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 Note  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.]

                                      -24-







         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:



                                    LINC ACCEPTANCE COMPANY LLC


                                    By:
                                       Name:
                                       Title:



                                      -25-







                                                                Exhibit A

                                   ASSIGNMENT

         For value  received,  on this [ ] day of [ ], 1998, in accordance  with
the  Purchase  Agreement  dated as of [ ], 1998,  between the  undersigned  (the
"Seller")  and CPS  Receivables  Corp.  (the  "Purchaser")  (the "Linc  Purchase
Agreement"),  the undersigned does hereby sell,  transfer,  assign and otherwise
convey unto the Purchaser,  without recourse  (subject to the obligations in the
Linc Purchase Agreement and the Sale and Servicing Agreement),  all right, title
and interest of the Seller in and to (i) the Initial Linc Receivables  listed in
the Schedule of Linc  Receivables and all monies received  thereunder  after the
Cutoff  Date and all Net  Liquidation  Proceeds  received  with  respect to such
Initial Linc Receivables;  (ii) the security  interests in the Financed Vehicles
granted by Obligors  pursuant to the Linc  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 Initial Linc Receivables or the Obligors  thereunder;  (iv) refunds
for the costs of extended  service  contracts with respect to Financed  Vehicles
securing the Initial Linc 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 Initial Linc 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
Initial Linc  Receivable;  (vi) the proceeds of any and all of the foregoing and
(vii) 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 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. 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
Linc 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 Linc
Purchase Agreement and is to be governed by the Linc Purchase Agreement.

         Capitalized  terms used herein and not otherwise defined shall have the
meanings assigned to them in the Linc 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 the day and year first above written.




                                       LINC ACCEPTANCE COMPANY LLC


                                       By:
                                          Name:
                                          Title:


                                       -2-







                                                            Exhibit B

                          Schedule of Linc Receivables

                               See Following Page







                                                           Exhibit C

                      FORM OF SUBSEQUENT PURCHASE AGREEMENT

         THIS  SUBSEQUENT   PURCHASE   AGREEMENT  (this   "Subsequent   Purchase
Agreement")  is made  and  entered  into as of by and  between  LINC  ACCEPTANCE
COMPANY  LLC, a Delaware  limited  liability  company  (the  "Seller"),  and CPS
RECEIVABLES  CORP., a California  corporation  (together with its successors and
assigns, the "Purchaser").

                              W I T N E S S E T H:

         WHEREAS the  Purchaser,  as purchaser,  has agreed to purchase from the
Seller, as seller, and the Seller, pursuant to the Purchase Agreement (the "Linc
Purchase  Agreement")  dated as of [ ],  1998,  between  the  Purchaser  and the
Seller, is transferring to the Purchaser the Subsequent Linc Receivables  listed
on the Schedule of Subsequent Linc Receivables  annexed hereto as Exhibit A (the
"Subsequent Linc Receivables") and related Subsequent Transferred Linc Property.

         NOW,  THEREFORE,  in  consideration  of the  premises  and  the  mutual
agreements hereinafter contained, and for other good and valuable consideration,
the receipt of which is acknowledged, the Purchaser and the Seller, intending to
be legally bound, hereby agree as follows:

                                   Definitions

         SECTION 1. Capitalized terms used herein without  definition shall have
the respective meanings assigned to such terms in the Linc Purchase Agreement.

         SECTION  2.  Conveyance  of  Subsequent  Linc  Receivables.  For  value
received, in accordance with the Linc Purchase Agreement, the Seller does hereby
sell, assign, transfer and otherwise convey unto the Purchaser, without recourse
(but without  limitation of its obligations under the Linc Purchase  Agreement),
all right,  title and interest of the Seller in and to: (i) the Subsequent  Linc
Receivables listed in the Schedule of Subsequent Linc Receivables annexed hereto
as  Exhibit A and all  monies  received  thereunder  after [ ] (the  "Subsequent
Cutoff  Date") and all Net  Liquidation  Proceeds  received with respect to such
Subsequent  Linc  Receivables;  (ii)  the  security  interests  in the  Financed
Vehicles granted by Obligors pursuant to the Subsequent Linc 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  Subsequent  Linc  Receivables  or the Obligors
thereunder;  (iv)  refunds  for the costs of  extended  service  contracts  with
respect to Financed Vehicles securing the

                                       -2-







Subsequent Linc 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 Subsequent Linc 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
Subsequent  Linc  Receivable;  (vi) the proceeds of any and all of the foregoing
and (vii) 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 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 "Subsequent Transferred Linc Property"
and together with any Subsequent  Transferred CPS Property and/or any Subsequent
Transferred Samco Property, the "Subsequent Transferred Property").

         SECTION  3.  Consideration  for  Subsequent  Transferred  Property.  In
consideration   for  the  Subsequent  Linc   Receivables  and  other  Subsequent
Transferred  Linc  Property,  subject to the terms and  conditions  hereof,  the
purchase price for the Subsequent Linc Receivables, in the amount of $_________,
shall be paid by the Purchaser in cash to the Seller on the  Subsequent  Closing
Date.

         SECTION 4. Conveyance as Sale of Receivables Not Financing. The parties
hereto intend that the  conveyance  hereunder be a sale of the  Subsequent  Linc
Receivables  and the related  Transferred  Linc  Property from the Seller to the
Purchaser  and not a  financing  secured  by  such  assets;  and the  beneficial
interest  in and  title  to the  Subsequent  Linc  Receivables  and the  related
Transferred  Linc 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
____________)  and applicable law, and the Seller hereby grants to the Purchaser
a first  priority  perfected  security  interest in, to and under the Subsequent
Linc  Receivables and the related  Transferred  Linc Property being delivered to
the  Purchaser on the  Subsequent  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.

         SECTION 5. Representations and Warranties of the Seller. This Agreement
is made  pursuant to and upon the  representations,  warranties,  covenants  and
agreements on the part of the Seller  contained in the Linc  Purchase  Agreement
and  is  to  be  governed  by  the  Linc   Purchase   Agreement.   All  of  such
representations, warranties, covenants and agreements are

                                       -3-







hereby  incorporated  herein  and  are  in  full  force  and  effect  as  though
specifically set forth herein.

         SECTION  6.  Representations  and  Warranties  of the  Purchaser.  This
Agreement  is  made  pursuant  to  and  upon  the  representations,  warranties,
covenants  and  agreements  on the part of the  Purchaser  contained in the Linc
Purchase Agreement and is to be governed by the Linc Purchase Agreement.  All of
such   representations,   warranties,   covenants  and   agreements  are  hereby
incorporated  herein and are in full force and effect as though specifically set
forth herein.

         IN WITNESS  WHEREOF,  the undersigned  have caused this Agreement to be
duly executed  this __ day of  _________,  but effective as of the date and year
first written above.

                                       LINC ACCEPTANCE COMPANY LLC,
                                       as Seller



                                       By:
                                          Name:
                                          Title:


                                       CPS RECEIVABLES CORP.,
                                       as Purchaser



                                       By:
                                          Name:
                                          Title:

                                       -4-







                   EXHIBIT A TO SUBSEQUENT PURCHASE AGREEMENT

                          FORM OF SUBSEQUENT ASSIGNMENT

         For value received,  in accordance with the Purchase Agreement dated as
of [ ], 1998, as heretofore  amended,  supplemented  or otherwise  modified (the
"Linc  Purchase  Agreement"),   among  the  undersigned,   as  Seller,  and  CPS
Receivables  Corp.  (the  "Purchaser"),  the undersigned  does hereby  transfer,
assign, grant, set over and otherwise convey to the Purchaser,  without recourse
(subject to the  obligations  in the Linc  Purchase  Agreement  and the Sale and
Servicing  Agreement) all right, title and interest of the Seller in and to: (i)
the  Subsequent  Linc  Receivables  listed in the  Schedule of  Subsequent  Linc
Receivables annexed hereto as Exhibit A and all monies received thereunder after
[ ] (the "Subsequent  Cutoff Date") and all Liquidation  Proceeds and Recoveries
received with respect to such  Subsequent  Linc  Receivables;  (ii) the security
interests  in  the  Financed  Vehicles  granted  by  Obligors  pursuant  to  the
Subsequent  Linc  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
Subsequent  Linc  Receivables or the Obligors  thereunder;  (iv) refunds for the
costs of extended service  contracts with respect to Financed  Vehicles securing
the Subsequent Linc  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 Subsequent Linc 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  Subsequent  Linc  Receivable;  (vi)  the  proceeds  of any  and all of the
foregoing and (vii) 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 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 "Subsequent Transferred Linc
Property"  and together  with any  Subsequent  Transferred  CPS Property  and/or
Subsequent Transferred Samco Property, the "Subsequent Transferred Property").

         The foregoing  assignment,  transfer and conveyance 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 Subsequent  Linc  Receivables,  the Receivable  Files,  any
insurance policies or any agreement or instrument relating to any of them.


                                       -5-






         This  Assignment  is made  pursuant  to and upon  the  representations,
warranties  and agreements on the part of each of the  undersigned  contained in
the  Linc  Purchase  Agreement  and  is to be  governed  by  the  Linc  Purchase
Agreement.

         Capitalized  terms used herein and not otherwise defined shall have the
meanings assigned to them in the Linc 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  principles  of
conflicts of law.

         IN WITNESS  WHEREOF,  the undersigned have caused this Assignment to be
duly executed as of __________.

                                       LINC ACCEPTANCE COMPANY LLC


                                       By:
                                          Name:
                                          Title:



                                       -6-



                                                              FINANCIAL GUARANTY
                                                                INSURANCE POLICY


OBLIGOR: CPS Auto Receivables Trust 1998-4                  Policy No.:  50749-N
OBLIGATIONS: $310,000,000 Asset Backed Notes
             in Classes A-1, A-2, A-3, A-4            Date of Issuance:  12/4/98
             and A-5 as described in
             Endorsement No. 1.

         FINANCIAL  SECURITY   ASSURANCE  INC.   ("Financial   Security"),   for
consideration  received,  hereby  UNCONDITIONALLY AND IRREVOCABLY  GUARANTEES to
each  Holder,  subject  only to the terms of this Policy  (which  includes  each
endorsement  hereto),  the full and complete payment by the Obligor of Scheduled
Payments of principal of, and interest on, the Obligations.

         For  the  further   protection  of  each  Holder,   Financial  Security
irrevocably and unconditionally guarantees:

                  (a) payment of the amount of any distribution of principal of,
         or interest on, the Obligations  made during the Term Of This Policy to
         such  Holder  that is  subsequently  avoided  in  whole or in part as a
         preference  payment  under  applicable  law (such payment to be made by
         Financial Security in accordance with Endorsement No. 1 hereto).

                  (b)  payment  of any  amount  required  to be paid  under this
         Policy by Financial Security following Financial  Security's receipt of
         notice as described in Endorsement No. 1 hereto.

         Financial  Security shall be subrogated to the rights of each Holder to
receive payments under the Obligations to the extent of any payment by Financial
Security hereunder.

         Except to the extent expressly  modified by an endorsement  hereto, the
following  terms  shall have the  meanings  specified  for all  purposes of this
Policy.  "Holder" means the  registered  owner of any Obligation as indicated on
the  registration  books  maintained  by or on  behalf of the  Obligor  for such
purpose or, if the Obligation is in bearer form,  the holder of the  Obligation.
"Scheduled  Payments"  means  payments which are scheduled to be made during the
Term Of This Policy in  accordance  with the original  terms of the  Obligations
when  issued  and  without  regard  to any  amendment  or  modification  of such
Obligations  thereafter;  payments which become due on an accelerated basis as a
result of (a) a default by the  Obligor,  (b) an  election by the Obligor to pay
principal on an accelerated  basis or (c) any other cause,  shall not constitute
"Scheduled  Payments"  unless  Financial  Security  shall  elect,  in  its  sole
discretion,  to pay such principal due upon such acceleration  together with any
accrued interest to the date of  acceleration.  "Term Of This Policy" shall have
the meaning set forth in Endorsement No. 1 hereto.

         This Policy sets forth in full the  undertaking of Financial  Security,
and shall not be  modified,  altered  or  affected  by any  other  agreement  or
instrument,  including any modification or amendment thereto,  or by the merger,
consolidation  or  dissolution  of the Obligor.  Except to the extent  expressly
modified by an endorsement  hereto,  the premiums paid in respect of this Policy
are nonrefundable for any reason  whatsoever,  including  payment,  or provision
being made for payment,  of the Obligations  prior to maturity.  This Policy may
not be canceled or revoked  during the Term Of This  Policy.  THIS POLICY IS NOT
COVERED BY THE PROPERTY/CASUALTY INSURANCE SECURITY FUND SPECIFIED IN ARTICLE 76
OF THE NEW YORK INSURANCE LAW.

         In witness whereof,  FINANCIAL  SECURITY ASSURANCE INC. has caused this
Policy to be executed on its behalf by its Authorized Officer.

                                 FINANCIAL SECURITY ASSURANCE INC.
                                  /s/ Russell B. Brewer II


                                 By_______________________________
                                   Authorized Officer



A subsidiary of Financial Security Assurance Holdings Ltd.
350 Park Avenue, New York, N.Y. 10022-6022                        (212) 826-0100
Form 100NY (5/89)

                                ENDORSEMENT NO. 1


FINANCIAL SECURITY                                               350 Park Avenue
ASSURANCE INC.                                          New York, New York 10022


OBLIGOR:          CPS Auto Receivables Trust 1998-4

OBLIGATIONS:       $32,500,000 Class A-1 5.473% Asset Backed Notes
                   $77,500,000 Class A-2 5.790% Asset Backed Notes
                   $81,375,000 Class A-3 5.740% Asset Backed Notes
                  $100,000,000 Class A-4 5.690% Asset Backed Notes
                   $18,625,000 Class A-5 5.890% Asset Backed Notes

Policy No.:  50749-N

Date of Issuance:  December 4, 1998

         1.  Definitions.  For all purposes of this Policy,  the terms specified
below shall have the meanings or constructions provided below. Capitalized terms
used herein and not otherwise defined herein shall have the meanings provided in
the Indenture unless otherwise specified.

         "Business  Day"  means any day other  than a  Saturday,  Sunday,  legal
holiday or other day on which commercial banking institutions in the City of New
York or Minneapolis, Minnesota, the State in which the principal corporate trust
office  of the  Indenture  Trustee  is  located,  or any other  location  of any
successor  Servicer,  successor  Indenture  Trustee,  successor Owner Trustee or
successor  Collateral Agent are authorized or obligated by law, executive order,
or governmental decree to remain closed.

         "Holder"  shall not  include  the  Obligor,  CPS or any  affiliates  or
successors thereof in the event the Obligor, or any such affiliate or successor,
is a registered or beneficial owner of the Obligation.

         "Indenture" means the Indenture,  dated as of December 1, 1998, between
the Obligor and Norwest Bank Minnesota, National Association, as Trustee.

         "Indenture Trustee" means Norwest Bank Minnesota, National Association,
in its  capacity  as  Trustee  under the  Indenture  and any  successor  in such
capacity.

         "Policy" means this Financial  Guaranty  Insurance  Policy and includes
each endorsement thereto.

         "Receipt" and "Received" mean actual delivery to Financial Security and
to the Fiscal Agent (as defined  below),  if any,  prior to 12:00 noon, New York
City time,  on a Business Day;  delivery  either on a day that is not a Business
Day, or after 12:00 noon,  New York City time,  shall be deemed to be receipt on
the next succeeding  Business Day. If any notice or certificate  given hereunder
by the  Indenture  Trustee is not in proper form or is not  properly  completed,
executed  or  delivered,  it shall be  deemed  not to have  been  Received,  and
Financial  Security or its Fiscal Agent shall  promptly so advise the  Indenture
Trustee and the Indenture Trustee may submit an amended notice.

         "Scheduled  Payments" means, as to each Payment Date, the payment to be
made to Holders in accordance  with the original terms of the  Obligations  when
issued and without regard to any  subsequent  amendment or  modification  of the
Obligations  or of the Indenture  except  amendments or  modifications  to which
Financial  Security has given its prior written  consent,  in an amount equal to
(i) the  Noteholders'  Interest  Distributable  Amount and (ii) the Noteholders'
Principal Distributable Amount. Scheduled Payments do not include payments which
become due on an accelerated  basis as a result of (a) a default by the Obligor,
(b) an election by the Obligor to pay principal on an accelerated basis, (c) the
occurrence  of an Event of Default  under the  Indenture or (d) any other cause,
unless Financial Security elects, in its sole discretion,  to pay in whole or in
part such principal due upon acceleration, together with any accrued interest to
the date of  acceleration.  In the event  Financial  Security does not so elect,
this  Policy  will  continue  to  guarantee  payment  on the  Class A  Notes  in
accordance with their original terms.  Scheduled  Payments shall not include (x)
any  portion  of a  Noteholders'  Interest  Distributable  Amount due to Class A
Noteholders  because a notice and  certificate  in proper  form as  required  by
paragraph 2 hereof was not timely  Received by  Financial  Security,  or (y) any
portion  of  a  Noteholders'  Interest  Distributable  Amount  due  to  Class  A
Noteholders   representing  interest  on  any  Noteholders'  Interest  Carryover
Shortfall  accrued from and  including the date of payment of the amount of such
Noteholders'  Interest  Carryover  Shortfall  pursuant hereto,  unless Financial
Security elects, in its sole discretion, to pay such amount in whole or in part.
Scheduled  Payments  shall  not  include  any  amounts  due  in  respect  of the
Obligations  attributable to any increase in interest rate, penalty or other sum
payable by the  Obligor by reason of any  default or event of default in respect
of the Obligations,  or by reason of any  deterioration of the credit worthiness
of the Obligor,  nor shall  Scheduled  Payments  include,  nor shall coverage be
provided under this Policy in respect of, any taxes, withholding or other charge
with  respect  to any  Holder  imposed  by  any  governmental  authority  due in
connection with the payment of any Scheduled Payment to a Holder.

         "Term Of This Policy"  means the period from and  including the Closing
Date to and including the latest of the date on which (i) all Scheduled Payments
have been paid or deemed to be paid  within the  meaning  of Section  4.1 of the
Indenture;  (ii) any period during which any  Scheduled  Payment could have been
avoided in whole or in part as a preference payment under applicable bankruptcy,
insolvency,  receivership  or similar  law shall have  expired  and (iii) if any
proceedings  requisite to avoidance as a preference  payment have been commenced
prior to the  occurrence  of (i) and (ii),  a final and  nonappealable  order in
resolution of each such proceeding has been entered.

         2. Notices and Conditions to Payment in Respect of Scheduled  Payments.
Following  Receipt by Financial  Security of a notice and  certificate  from the
Indenture  Trustee  in the  form  attached  as  Exhibit  A to this  Endorsement,
Financial Security will pay any amount payable hereunder in respect of Scheduled
Payments on the Obligations out of the funds of Financial  Security on the later
to occur of (a) 12:00  noon,  New York City  time,  on the  third  Business  Day
following  such Receipt;  and (b) 12:00 noon, New York City time, on the date on
which such payment is due on the Obligations.  Payments due hereunder in respect
of  Scheduled  Payments  will be  disbursed  to the  Indenture  Trustee  by wire
transfer of immediately available funds.

         Financial  Security  shall be entitled to pay any amount  hereunder  in
respect of Scheduled  Payments on the  Obligations,  including any amount due on
the  Obligations  on an  accelerated  basis,  whether  or  not  any  notice  and
certificate  shall have been Received by Financial  Security as provided  above;
provided,  however,  that by  acceptance  of this Policy the  Indenture  Trustee
agrees to provide upon request to Financial Security a notice and certificate in
respect of any such payment by Financial  Security.  Financial Security shall be
entitled to pay hereunder any amount due on the  Obligations  on an  accelerated
basis at any  time or from  time to  time,  in  whole  or in part,  prior to the
scheduled date of payment thereof;  Scheduled  Payments insured  hereunder shall
not include  interest,  in respect of principal paid hereunder on an accelerated
basis,  accruing  from after the date of such  payment of  principal.  Financial
Security's  obligations  hereunder  in respect of  Scheduled  Payments  shall be
discharged to the extent funds are  disbursed by Financial  Security as provided
herein whether or not such funds are properly applied by the Indenture Trustee.

         3. Notices and  Conditions to Payment in Respect of Scheduled  Payments
Avoided  as  Preference  Payments.  If any  Scheduled  Payment  is  avoided as a
preference  payment under  applicable  bankruptcy,  insolvency,  receivership or
similar  law,  Financial  Security  will pay  such  amount  out of the  funds of
Financial  Security on the later of (a) the date when due to be paid pursuant to
the Order referred to below or (b) the first to occur of (i) the fourth Business
Day following Receipt by Financial  Security from the Indenture Trustee of (A) a
certified  copy of the  order  of the  court or other  governmental  body  which
exercised  jurisdiction  to the  effect  that the Holder is  required  to return
principal of or interest paid on the Obligations  during the Term Of This Policy
because such payments were  avoidable as preference  payments  under  applicable
bankruptcy law (the "Order"), (B) a certificate of the Holder that the Order has
been entered and is not subject to any stay and (C) an assignment  duly executed
and delivered by the Holder, in such form as is reasonably required by Financial
Security,  and  provided  to  the  Holder  by  Financial  Security,  irrevocably
assigning to Financial  Security all rights and claims of the Holder relating to
or arising under the Obligations  against the estate of the Obligor or otherwise
with respect to such preference payment or (ii) the date of Receipt by Financial
Security from the Indenture Trustee of the items referred to in clauses (A), (B)
and (C) above if, at least four  Business  Days  prior to such date of  Receipt,
Financial Security shall have Received written notice from the Indenture Trustee
that such items were to be delivered on such date and such date was specified in
such notice.  Such payment  shall be  disbursed  to the  receiver,  conservator,
debtor-in-possession  or trustee in bankruptcy named in the Order and not to the
Indenture  Trustee or any Holder  directly  (unless a Holder has previously paid
such amount to the  receiver,  conservator,  debtor-in-possession  or trustee in
bankruptcy  named in the Order, in which case such payment shall be disbursed to
the Indenture Trustee for distribution to such Holder upon proof of such payment
reasonably   satisfactory  to  Financial  Security).   In  connection  with  the
foregoing, Financial Security shall have the rights provided pursuant to Section
6.2 of the Sale and Servicing Agreement.

         4.  Governing  Law.  This Policy shall be governed by and  construed in
accordance  with the laws of the State of New York without  giving effect to the
conflict of laws principles thereof.

         5. Fiscal Agent. At any time during the Term Of This Policy,  Financial
Security may appoint a fiscal  agent (the  "Fiscal  Agent") for purposes of this
Policy  by  written  notice  to the  Indenture  Trustee  at the  notice  address
specified in the Indenture  specifying the name and notice address of the Fiscal
Agent.  From and  after the date of  receipt  of such  notice  by the  Indenture
Trustee,  (i) copies of all notices and  documents  required to be  delivered to
Financial Security pursuant to this Policy shall be simultaneously  delivered to
the Fiscal  Agent and to  Financial  Security  and shall not be deemed  Received
until Received by both,  and (ii) all payments  required to be made by Financial
Security under this policy may be made directly by Financial  Security or by the
Fiscal Agent on behalf of Financial  Security.  The Fiscal Agent is the agent of
Financial  Security only and the Fiscal Agent shall in no event be liable to any
Holder for any acts of the Fiscal Agent or any failure of Financial  Security to
deposit,  or cause to be deposited,  sufficient funds to make payments due under
the Policy.

         6. Waiver of Defenses.  To the fullest  extent  permitted by applicable
law, Financial Security agrees not to assert, and hereby waives, for the benefit
of each Holder,  all rights (whether by  counterclaim,  setoff or otherwise) and
defenses  (including,  without  limitation,  the  defenses  of  fraud),  whether
acquired by subrogation, assignment or otherwise, to the extent that such rights
and defenses may be  available  to  Financial  Security to avoid  payment of its
obligations under this Policy in accordance with the express  provisions of this
Policy.

     7. Notices.  All notices to be given  hereunder shall be in writing (except
as otherwise  specifically  provided  herein) and shall be mailed by  registered
mail or personally delivered or telecopied to Financial Security as follows:

                  Financial Security Assurance Inc.
                  350 Park Avenue
                  New York, NY  10022
                  Attention:  Senior Vice President - Transaction Oversight
                  Telecopy No.:   (212) 339-3518
                  Confirmation:   (212) 826-0100

         Financial  Security  may specify a different  address or  addresses  by
writing mailed or delivered to the Indenture Trustee.

         8.  Priorities.  In the event that any term or provision of the face of
this  Policy  is  inconsistent  with the  provisions  of this  Endorsement,  the
provisions of this Endorsement shall take precedence and shall be binding.

         9. Exclusions From Insurance Guaranty Funds. This Policy is not covered
by the Property/Casualty  Insurance Security Fund specified in Article 76 of the
New York  Insurance  Law.  This Policy is not  covered by the Florida  Insurance
Guaranty  Association  created  under  Part  II of  Chapter  631 of the  Florida
Insurance Code. In the event that Financial  Security were to become  insolvent,
any  claims  arising  under  this  Policy  are  excluded  from  coverage  by the
California Insurance Guaranty Association,  established pursuant to Article 14.2
of Chapter 1 of Part 2 of Division 1 of the California Insurance Code.

         10.  Surrender of Policy.  The Indenture  Trustee shall  surrender this
Policy to Financial  Security for  cancellation  upon  expiration of the Term Of
This Policy.

         IN WITNESS WHEREOF,  FINANCIAL  SECURITY ASSURANCE INC. has caused this
Endorsement No. 1 to be executed by its Authorized Officer.


                                            FINANCIAL SECURITY ASSURANCE INC.


                                            By:  /s/ Russell B Brewer II
                                               ------------------------------
                                                Authorized Officer




Policy No:  50749-N                          Date of Issuance:  December 4, 1998

                                    EXHIBIT A

                              To Endorsement No. 1


                         NOTICE OF CLAIM AND CERTIFICATE
                        (Letterhead of Indenture Trustee)


Financial Security Assurance Inc.
350 Park Avenue
New York, NY  10022
Attention:  Senior Vice President

         Re:      CPS Auto Receivables Trust 1998-4

         The undersigned,  a duly authorized  officer of Norwest Bank Minnesota,
National  Association (the "Indenture  Trustee"),  hereby certifies to Financial
Security  Assurance  Inc.  ("Financial  Security"),  with reference to Financial
Guaranty  Insurance  Policy No.  50749-N dated  December 4, 1998 (the  "Policy")
issued by  Financial  Security  in respect of the  $32,500,000  Class A-1 5.473%
Asset Backed Notes, $77,500,000 Class A-2 5.790% Asset Backed Notes, $81,375,000
Class A-3 5.740% Asset Backed Notes,  $100,000,000 Class A-4 5.690% Asset Backed
Notes  and   $18,625,000   Class  A-5   5.890%   Asset   Backed   Notes  of  the
above-referenced Trust (the "Obligations"), that:

         (i) The Indenture Trustee is the Trustee under the Indenture.

         (ii) The sum of all amounts on deposit (or  scheduled to be on deposit)
in the Note  Distribution  Account and available for distribution to the Holders
pursuant to the Indenture  will be $_________  (the  "Shortfall")  less than the
aggregate amount of Scheduled Payments due on ___________________.

         (iii) The Indenture  Trustee is making a claim under the Policy for the
Shortfall to be applied to the payment of Scheduled Payments.

         (iv) The Indenture Trustee agrees that, following receipt of funds from
Financial  Security,  it shall (a) hold such amounts in trust and apply the same
directly to the payment of Scheduled  Payments on the Obligations  when due; (b)
not apply such funds for any other  purpose;  (c) not commingle  such funds with
other funds held by the Indenture Trustee and (d) maintain an accurate record of
such payments with respect to each Obligation and the corresponding claim on the
Policy  and  proceeds  thereof,  and,  if  the  Obligation  is  required  to  be
surrendered or presented for such payment,  shall stamp on each such  Obligation
the legend  $"[insert  applicable  amount]  paid by  Financial  Security and the
balance  hereof has been  cancelled  and  reissued"  and then shall deliver such
Obligation to Financial Security.

         (v) The Indenture Trustee, on behalf of the Holders,  hereby assigns to
Financial  Security the rights of the Holders with respect to the Obligations to
the extent of any payments under the Policy, including,  without limitation, any
amounts due to the Holders in respect of securities law violations  arising from
the offer and sale of the Obligations.  The foregoing  assignment is in addition
to, and not in  limitation  of,  rights of  subrogation  otherwise  available to
Financial  Security in respect of such payments.  Payments to Financial Security
in  respect  of the  foregoing  assignment  shall in all cases be subject to and
subordinate  to the rights of the Holders to receive all  Scheduled  Payments in
respect of the  Obligations.  The  Indenture  Trustee shall take such action and
deliver such instruments as may be reasonably requested or required by Financial
Security to effectuate the purpose or provisions of this clause (v).

         (vi) The Indenture  Trustee on its behalf and on behalf of the Holders,
hereby  appoints  Financial  Security  as  agent  and  attorney-in-fact  for the
Indenture  Trustee and each such Holder in any legal  proceeding with respect to
the Obligations. The Indenture Trustee hereby agrees that, so long as an Insurer
Default (as defined in the Indenture) shall not exist, Financial Security may at
any time during the  continuation  of any  proceeding  by or against the Obligor
under the United  States  Bankruptcy  Code or any other  applicable  bankruptcy,
insolvency,   receivership,   rehabilitation  or  similar  law  (an  "Insolvency
Proceeding")  direct  all  matters  relating  to  such  Insolvency   Proceeding,
including  without  limitation,  (A)  all  matters  relating  to  any  claim  in
connection with an Insolvency Proceeding seeking the avoidance as a preferential
transfer of any payment  made with  respect to the  Obligations  (a  "Preference
Claim"), (B) the direction of any appeal of any order relating to any Preference
Claim at the  expense of  Financial  Security  but subject to  reimbursement  as
provided  in the  Insurance  Agreement  and  (C)  the  posting  of  any  surety,
supersedeas  or  performance  bond  pending any such appeal.  In  addition,  the
Indenture Trustee hereby agrees that Financial  Security shall be subrogated to,
and the  Indenture  Trustee on its behalf and on behalf of each  Holder,  hereby
delegates and assigns, to the fullest extent permitted by law, the rights of the
Indenture  Trustee and each Holder in the conduct of any Insolvency  Proceeding,
including,  without  limitation,  all  rights  of  any  party  to  an  adversary
proceeding or action with respect to any court order issued in  connection  with
any such Insolvency Proceeding.

         (vii)  Payment  should be made by wire  transfer  directed  to [SPECIFY
ACCOUNT].

         Unless the context otherwise  requires,  capitalized terms used in this
Notice of Claim and  Certificate  and not defined herein shall have the meanings
provided in the Policy.






         IN WITNESS  WHEREOF,  the Indenture  Trustee has executed and delivered
this Notice of Claim and Certificate as of the ____ day of _____________, ____.


                                   NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION
                                   as Indenture Trustee


                                   By_________________________________
                                   Title______________________________




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

For Financial Security or
Fiscal Agent Use Only

Wire transfer sent on ____________ by ___________________________

Confirmation Number _____________________.