PURCHASE AGREEMENT
PURCHASE AGREEMENT, dated as of January 1, 1998, by and between First
Investors Financial Services, Inc., a Texas corporation (the "SELLER"), having
its principal executive office at 000 Xxxxxx Xxxxx, Xxxxx 000, Xxxxxxx, Xxxxx
00000, and First Investors Auto Capital Corporation, a Delaware corporation
("FIACC"), having its principal executive office at 000
Xxxxxx Xxxxx, Xxxxx 000, Xxxxxxx, Xxxxx 00000.
WHEREAS, in the regular course of its business, the Seller purchases motor
vehicle installment sales contracts secured by new and used automobiles and
light duty trucks from motor vehicle dealers and others; and
WHEREAS, the Seller and FIACC desire to set forth their agreement pursuant
to which certain of such installment sales contracts are to be sold and
transferred by the Seller to FIACC from time to time;
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
All capitalized terms used but not otherwise defined herein shall have the
meanings given to such terms in the Security Agreement (as defined below). As
used in this Agreement, the following terms shall, unless the context otherwise
requires, have the following meanings (such meanings to be equally applicable to
the singular and plural forms of the terms defined).
AGREEMENT: This Purchase Agreement as such agreement may be amended,
modified and/or restated.
ASSIGNMENT: The document of assignment substantially in the form attached to
this Agreement as Exhibit A.
EFFECTIVE TIME: With respect to the sale of any Receivable pursuant to this
Agreement, the time at which FIACC pays to or for the account of Seller, the
Purchase Price of such Receivable.
FIACC: First Investors Auto Capital Corporation, a Delaware corporation.
PRECOMPUTED RECEIVABLE: Any Receivable under which the portion of a payment
allocable to earned interest and the portion allocable to the Amount Financed is
determined according to the sum of periodic balances or the sum of monthly
balances or any equivalent method of calculating monthly actuarial receivables.
PURCHASE AMOUNT: The sum of (i) the outstanding Principal Balance of the related
Receivable and (ii) accrued and unpaid interest to the end of the month of
purchase at the APR of the related Receivable. The Purchase Amount shall include
any out-of-pocket expenses of the Servicer which are otherwise reimbursable to
the Servicer by FIACC under the Servicing Agreement.
PURCHASE PRICE: With respect to any Receivable sold by the Seller to FIACC
pursuant to this Agreement, the outstanding Principal Balance of such
Receivable, computed in accordance with the Simple Interest Method, as of the
applicable Effective Time.
PURCHASED RECEIVABLE: Any Receivable, any interest in which is transferred by
the Seller to FIACC at any time under this Agreement, together with the Related
Security related to such Receivable.
RELATED SECURITY: As to any Receivable, (i) the interest of the Seller in all
security interests and liens in or on the Financed Vehicle and any accessions
thereto granted by an Obligor pursuant to such Receivable; (ii) the interest of
the Seller in any proceeds from claims on Credit Insurance, or other insurance
policies covering such Financed Vehicle or Obligor; (iii) the interest of the
Seller in all rebates or premiums and other amounts relating to insurance
policies and other items financed under such Receivables as of the Effective
Time.
SECURITY AGREEMENT: That certain Security Agreement dated as of January 1, 1998
among FIACC, as debtor, First Union Capital Markets Corp., as Deal Agent and
Collateral Agent, and the Seller, as such agreement may be amended or
supplemented in accordance with the terms thereof.
SELLER: First Investors Financial Services, Inc., a Texas corporation.
UCC: Shall have the meaning ascribed to it in the Security Agreement.
ARTICLE II
PURCHASE AND SALE OF RECEIVABLES
From time to time until the termination of this Agreement, the Seller
shall sell and transfer Receivables to FIACC, and FIACC shall purchase and pay
for such Receivables, as follows:
(a) SELECTION OF RECEIVABLES. The Seller shall select Receivables for sale
to FIACC hereunder in such amounts and at such times as the Seller shall
determine in its sole discretion; however, the Seller shall not use any
selection procedure that would result in a material adverse
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effect on the Secured Party, the Noteholder, the Deal Agent, the Liquidity
Agent, the Credit Support Provider, any Liquidity Provider or the Company. The
Seller's selection of any Receivable for sale to FIACC shall be conclusively
evidenced by the tender of such Receivable pursuant to clause (b) immediately
following.
(b) TENDER OF RECEIVABLES. The Seller shall tender a Receivable for sale
to FIACC by delivering such Receivable to or as directed by FIACC, together with
all documentation pertaining to such Receivable, which documentation shall
include a validly executed Assignment with respect to such Receivable.
(c) TRANSFER OF RECEIVABLES. As of the Effective Time with respect to any
Receivable, the Seller shall sell, transfer, assign and otherwise convey to
FIACC, without recourse, a 100% interest in (i) all right, title and interest of
the Seller in and to such Receivable, and all monies paid thereon, and due
thereon, at or after the Effective Time, as applicable, whether such amounts are
considered accounts, general intangibles or other property; (ii) all Related
Security; and (iii) the proceeds of any and all of the foregoing.
(d) PAYMENT FOR RECEIVABLES. As of the Effective Time with respect to any
Receivable, FIACC shall purchase and pay for such Receivable by causing the
Purchase Price thereof to be paid to the Seller in cash; provided, however that
at the discretion of the Seller, any number of specified Receivables may be
assigned and transferred to FIACC from time to time as a capital contribution by
Seller to FIACC in the amount of the aggregate Purchase Price otherwise
applicable thereto.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
3.1 REPRESENTATIONS AND WARRANTIES OF FIACC.
FIACC hereby represents and warrants to the Seller as of the date hereof:
(a) ORGANIZATION, ETC. FIACC has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State of
Delaware, and has full corporate power and authority to execute and deliver this
Agreement and to perform the terms and provisions hereof.
(b) DUE AUTHORIZATION AND NO VIOLATION. This Agreement has been duly
authorized, executed and delivered by FIACC, and is the valid, binding and
enforceable obligation of FIACC except as the same may be limited by insolvency,
bankruptcy, reorganization or other laws relating to or affecting the
enforcement of creditors' rights or by general equity principles. The
consummation of the transactions contemplated by this Agreement, and the
fulfillment of the terms thereof, will not conflict with or result in a breach
of any of the terms or provisions of, or constitute a default under (in each
case material to FIACC), or (except as contemplated by the Security Agreement)
result in the creation or imposition of any Lien, charge or encumbrance (in
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each case material to FIACC) upon any of the property or assets of FIACC
pursuant to the terms of any indenture, mortgage, deed of trust, loan agreement,
guarantee, lease financing agreement or similar agreement or instrument under
which FIACC is a debtor or guarantor, nor will such action result in any
violation of the provisions of the Certificate of Incorporation or the By-laws
of FIACC.
(c) NO LITIGATION. No legal or governmental proceedings are pending to
which FIACC is a party or of which any property of FIACC is the subject, and no
such proceedings are threatened or contemplated by governmental authorities or
threatened by others other than such proceedings which will not have a material
adverse effect upon the general affairs, financial position, net worth or
results of operations (on an annual basis) of FIACC and will not materially and
adversely affect the performance by FIACC of its obligations under, or the
validity and enforceability of, this Agreement.
3.2 REPRESENTATIONS AND WARRANTIES OF THE SELLER.
(a) The Seller hereby represents and warrants to FIACC as of the date
hereof:
(i) ORGANIZATION, ETC. The Seller has been duly incorporated and is
validly existing as a corporation in good standing under the laws of the
State of Texas, and is duly qualified to transact business and is in good
standing in each jurisdiction in the United States of America in which the
conduct of its business or the ownership of its property requires such
qualification.
(ii) POWER AND AUTHORITY. The Seller has full power and authority to
sell and assign the property to be sold and assigned to FIACC hereunder
and has duly authorized such sale and assignment to FIACC by all necessary
corporate action. This Agreement has been duly authorized, executed and
delivered by the Seller and shall constitute the legal, valid and binding
obligation of the Seller except as the same may be limited by insolvency,
bankruptcy, reorganization or other laws relating to or affecting the
enforcement of creditors' rights or by general equity principles.
(iii) NO VIOLATION. The consummation of the transactions
contemplated by this Agreement, and the fulfillment of the terms thereof,
will not conflict with or result in a breach of any of the terms or
provisions of, or constitute a default under (in each case material to the
Seller and its subsidiaries considered as a whole), or result in the
creation or imposition of any adverse claim, charge or encumbrance (in
each case material to the Seller and its subsidiaries considered as a
whole) upon any of the property or assets of the Seller pursuant to the
terms of any indenture, mortgage, deed of trust, loan agreement,
guarantee, lease financing agreement or similar agreement or instrument
under which the Seller is a debtor or guarantor, nor will such action
result in any violation of the provisions of the Articles of Incorporation
or the By-laws of the Seller.
(iv) NO PROCEEDINGS. No legal or governmental proceedings are
pending to which the Seller is a party or of which any property of the
Seller is the subject, and no
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such proceedings are threatened or contemplated by governmental
authorities or threatened by others, other than such proceedings which
will not have a material adverse effect upon the validity or
collectability of the Receivables, or upon the general affairs, financial
position, net worth or results of operations (on an annual basis) of the
Seller and its subsidiaries considered as a whole and will not materially
and adversely affect the performance by the Seller of its obligations
under, or the validity and enforceability of, this Agreement.
(v) NO ADVERSE EVENTS. No event has occurred that would have a
material adverse effect on the Receivables, the ability of the Seller to
collect the Receivables or to perform its obligations hereunder or the
ability of FIACC to collect the Receivables.
(b) The Seller makes the following representations and warranties as to
the Receivables on which FIACC relies in purchasing the Receivables. Such
representations and warranties speak as of the execution and delivery of this
Agreement, and as of the Effective Time with respect to each Receivable, but
shall survive the sale, transfer, and assignment of the Receivables to FIACC:
(i) Immediately prior to the Effective Time the Seller had a valid
and enforceable first priority security interest in the related Financed
Vehicle, and such security interest had been duly perfected and was prior
to all other present and future liens and security interests (except
future tax liens and liens that, by statute, may be granted priority over
previously perfected security interests) that now exist or may hereafter
arise, and the Seller had the full right to assign such security interest
to FIACC.
(ii) On and after the Effective Time, there shall exist under such
Receivable a valid, subsisting, and enforceable first priority perfected
security interest in the related Financed Vehicle (other than, as to the
priority of such security interest, any statutory lien arising by
operation of law after the Effective Time which is prior to such interest)
and, following the grant of all of the Seller's right, title and interest
in and to such security interest to FIACC, at such time as enforcement of
such security interest is sought there shall exist in favor of FIACC a
valid, subsisting, and enforceable first priority perfected security
interest (other than, as to the priority of such security interest, any
statutory lien arising by operation of law after the Effective Time which
is prior to such interest) in the related Financed Vehicle.
(iii) If such Receivable was originated in a state in which notation
of a security interest on the title document for the Financed Vehicle
securing such Receivable is required or permitted to perfect such security
interest, the title document for such Financed Vehicle shows, or if a new
or replacement title document is being applied for with respect to such
Financed Vehicle the title document will show, the Seller as the sole
holder of a security interest in such Financed Vehicle. If such 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 as the sole holder of a first priority security interest in such
Financed
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Vehicle, and in either case FIACC has the same rights as the Seller has or
would have (if the Seller were still the owner of a Purchased Receivable)
against the Obligor and all creditors of the Obligor claiming an interest
in such Financed Vehicle.
(iv) Immediately prior to the Effective Time: (i) such Receivable
had not been sold, assigned, or pledged by the Seller to any Person; (ii)
the Seller had good and marketable title thereto free and clear of any
encumbrance, equity, pledge, charge, claim or security interest; (iii) the
Seller was the sole owner thereof and had full right to sell the
Receivable to FIACC and upon the sale thereof to FIACC, FIACC will have
good and marketable title thereto and will own such Receivables free and
clear of any encumbrances. Such Receivable was acquired by the Seller,
from an Originator with which the Seller does business, pursuant to an
Originator Agreement between the Seller and such Originator. Such
Originator had full right to assign to the Seller such Receivable and the
security interest in the related Financed Vehicle. The Seller has full
right to sell to FIACC such Receivable and the security interest in the
related Financed Vehicle.
(v) As of the Effective Time, there is no lien against the related
Financed Vehicle for delinquent taxes.
(vi) Such Receivable, and the sale of the Financed Vehicle securing
such Receivable, where applicable, complied, at the time it was made, and
now complies, in all material respects with applicable state and federal
laws (and regulations thereunder), including, without limitation, usury,
disclosure and consumer protection laws, equal credit opportunity, fair
credit reporting, truth-in-lending or other similar laws, the Federal
Trade Commission Act, and applicable state laws regulating retail
installment sales contracts in general and motor vehicle retail
installment sales contracts and loans in particular, and the receipt of
interest on, and the ownership of, such Receivable by FIACC will not
violate any such laws and the related Obligor has no right of rescission
or cancellation, claims or defenses, set-offs, or counterclaims of any
kind whatsoever as to or against the contract evidencing a related
Receivable.
(vii) The Receivable constitutes the entire agreement between the
Seller (as assignee of the related Originator) and the related Obligor.
(viii) At the time of origination of such Receivable, the proceeds
of such Receivable were fully disbursed, and there is no requirement for
future advances thereunder, and all fees and expenses in connection with
the origination of such Receivable have been paid.
(ix) As of the Effective Time, there is no default, breach,
violation or event of acceleration existing under any such Receivable and
no event which, with the passage of time or with notice or with both,
would constitute a default, breach, violation or event of acceleration
under any such Receivable. The Seller has not waived any such default,
breach, violation or event of acceleration.
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(x) In connection with the Seller's acquisition of such Receivable,
the Seller required the related Originator or Obligor to furnish evidence
that the related Financed Vehicle was covered by a comprehensive and
collision insurance policy naming the Seller as loss payee and insuring
against loss and damage due to fire, theft, transportation, collision and
other risks generally covered by comprehensive and collision coverage in
an amount equal to the actual cash value of the related Financed Vehicle.
(xi) Such Receivable contains customary and enforceable provisions
such as to render the rights and remedies of the holder thereof adequate
for the realization against the related Financed Vehicle of the benefits
of the security.
(xii) The collection practices used with respect to such Receivable
have been in all material respects legal, proper, prudent and customary in
the automobile installment sales contract or installment loan servicing
business as applied with respect to obligors with credit standings
comparable to that of the Obligor.
(xiii) [reserved].
(xiv) The related Obligor does not have any other motor vehicle
retail installment sale contracts owing to the Seller which are 60 or more
days past due or defaulted at the Effective Time.
(xv) Such Receivable is not due from an Obligor who has defaulted
under a previous Receivable with the Seller.
(xvi) The Originator that sold such Receivable to the Seller has
entered into an Originator Agreement and such Originator Agreement
constitutes the entire agreement between the Seller and the related
Originator with respect to the sale of such Receivable to the Seller, such
Originator Agreement was, at the time of the origination of such
Receivable, in full force and effect and the legal, valid, binding and
enforceable obligation of such Originator (subject to applicable
bankruptcy and insolvency laws and other similar laws affecting the
enforcement of creditors' rights generally and to principles of equity,
regardless of whether enforcement is sought in a proceeding in equity or
at law); there have been no material defaults by such Originator or by the
Seller under such Originator Agreement; the Seller has fully performed all
of its obligations under such Originator Agreement; the Seller has not
made any statements or representations to such Originator inconsistent
with any term of such Originator Agreement; the purchase price for such
Receivable has been paid in full by the Seller, there is no other payment
due to such Originator from the Seller for the purchase of such
Receivable, such Originator has no right, title or interest in or to any
Receivable; there is no prior course of dealing between such Originator
and the Seller which will affect the terms of such Originator Agreement;
any additional payment that may be owed to such Originator by the Seller
is a corporate obligation of the Seller.
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(xvii) The Seller has provided to the Servicer the sole original
counterpart of such Receivable, as amended, and the related title document
or the application for title document, previously in the possession of the
Seller.
(xviii) Such Receivable constitutes "chattel paper" for purposes of
Section 9-105(a)(ii) and 9-308 of the UCC. The Seller's electronic ledgers
have been marked as provided in Section 2.1 and 2.2 of the Security
Agreement with respect to such Receivable.
(xix) Such Receivable was not originated in, nor is it subject to
the law of, any jurisdiction, the laws of which would make unlawful the
sale, transfer or assignment of such Receivable, under this Agreement,
including any repurchase in accordance with this Agreement.
(xx) Such Receivable is in full force and effect in accordance with
its respective terms and neither the Seller nor the related Obligor has
suspended or reduced any payments or obligations due or to become due
thereunder by reason of a default by the other party to such Receivable;
there are no proceedings pending, or to the best of the Seller's
knowledge, threatened, asserting insolvency of the related Obligor, there
has been no previous default on such Receivable that resulted in
repossession of the related Financed Vehicle; and there are no proceedings
pending, or to the best of the Seller's knowledge, threatened, wherein the
related Obligor or any governmental agency has alleged that such
Receivable is illegal or unenforceable.
(xxi) Each contract evidencing a Receivable being acquired by FIACC
is substantially similar to one of the Seller's standard form contracts
attached to the Security Agreement as Exhibit K except for immaterial
modifications or deviations therefrom in accordance with state law which
will not have a material adverse effect on FIACC or any pledgee from FIACC
and will not reduce the scheduled payments thereunder or other payments
due under the Receivables.
(xxii) The Seller has duly fulfilled all obligations to be fulfilled
on the Seller's part under or in connection with the origination,
acquisition and disposition of such Receivable, including, without
limitation, giving any notices or consents necessary to effect the
acquisition of such Receivables by FIACC, and has done nothing to impair
the rights of the Secured Parties in such Receivables or payments with
respect thereto. The Seller has obtained all necessary licenses, permits
and charters required to be obtained by the Seller, which failure to
obtain would render any Receivable, this Agreement, the Note, the Note
Purchase Agreement or the Security Agreement unenforceable and would have
a material adverse effect on FIACC or any pledgees of FIACC.
(xxiii) The Originator that originated such Receivable was selected
by the Seller based on such Originator's financial and operating history.
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(xxiv) The contract securing such Receivable arose from a bona fide
sale in the ordinary course of the Originator's business.
(xxv) Such Receivable represents the sale of goods described in the
contract evidencing the Receivable.
(xxvi) Such Receivable is exclusive and contains all the terms and
conditions of the related contract.
(xxvii) To the best of the Seller's knowledge, all signatures,
names, addresses, telephone numbers, figures and other statements of fact
set forth in the contract evidencing the Receivable are genuine, true and
correct.
(xxviii) To the best of the Seller's knowledge, no part of the down
payment, or any installment, has been loaned by the Originator to the
related Obligor.
(xxix) To the best of the Seller's knowledge, all credit information
provided to FIACC is true and correct and reported as received from the
Obligor.
(xxx) To the best of the Seller's knowledge, the Obligor is in fact
the primary or sole operator of the related Financed Vehicle.
(xxxi) Each Receivable constitutes an Eligible
Receivable.
(xxxii) The sale of the Extended Service Agreement to the related
Obligor complied at the time of such sale with all applicable state and
federal laws (and regulations thereunder), including without limitation,
insurance, usury, disclosure and consumer protection laws, equal credit
opportunity, fair credit reporting, truth-in-lending or other similar
laws, the Federal Trade Commission Act, and applicable state laws
regulating extended service agreements and insurance, and the ownership of
such Extended Service Agreement will not violate any such laws.
(xxxiii) To the best of the Seller's knowledge, each Extended
Service Agreement and each credit life insurance policy and each accident
and health policy related to such Financed Vehicle or an Obligor is the
legal, valid and binding obligation of each party thereto, and is
enforceable in accordance with its terms.
(xxxiv) To the best of the Seller's knowledge, any party obligated
to perform services under an Extended Service Agreement relating to a
Financed Vehicle, any credit life insurance policy or any accident and
health policy related to a Financed Vehicle or an Obligor have complied
with all licensing, insurance or other laws applicable to them in
connection with the origination, servicing, performance or administration
thereof.
(xxxv) The Collateral Agent will be entitled to receive all amounts
due to an Obligor or lienholder upon cancellation by an Obligor of an
Extended Service Agreement
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or any credit life insurance policy and accident and health insurance
policy relating to a Financed Vehicle or an Obligor.
(xxxvi) All rights (but not obligations) of the Seller under each
Extended Service Agreement and each credit life insurance policy and
accident and health insurance policy relating to a Financed Vehicle or an
Obligor have been assigned by the Seller to FIACC.
(xxxvii) No Receivable has been satisfied, subordinated, or
rescinded, nor has any Financed Vehicle been released, in whole or in
part, from the lien granted by the related Receivable.
(xxxviii) It is the intention of the Seller that each transfer and
assignment contemplated by this Agreement constitute a sale of the related
Receivables from the Seller to FIACC and that the beneficial interest in
and title to the Receivables 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.
ARTICLE IV
CONDITIONS
4.1 CONDITIONS TO OBLIGATIONS OF FIACC.
The obligation of FIACC to purchase the 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 at the Effective
Time with respect to each Receivable, with the same effect as if then made.
(b) DOCUMENTS TO BE DELIVERED BY THE SELLER.
(i) THE ASSIGNMENT. As provided herein, the Seller shall have
executed and delivered an Assignment, which shall be substantially in the
form of Exhibit A hereto.
(ii) EVIDENCE OF UCC FILING. The Seller shall have recorded and
filed, at its own expense, a UCC-1 financing statement in each
jurisdiction in which filing is required by applicable law, executed by
the Seller, as seller of the Receivables, and naming FIACC, as purchaser
of the Receivables, and the Collateral Agent, as assignee, describing the
Receivables and the other property conveyed hereunder, meeting the
requirements of the laws of each jurisdiction and in such manner as is
necessary to perfect the sale, transfer, assignment and conveyance of such
Receivables to FIACC. The Seller shall deliver to FIACC, the Collateral
Agent and the Deal Agent a file-stamped copy, or other evidence
satisfactory to FIACC, the Collateral Agent and the Deal Agent of such
filing.
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(iii) OTHER DOCUMENTS. All other documents in the possession of the
Seller relating to the Receivables and any other document requested by the
Deal Agent to be delivered shall have been delivered by the Seller.
4.2 CONDITIONS TO OBLIGATIONS OF THE SELLER.
The obligation of the Seller to sell the Receivables to FIACC is subject
to the satisfaction of the following conditions:
(a) REPRESENTATION AND WARRANTIES TRUE. The representations and warranties
of FIACC hereunder shall be true and correct at the Effective Time with the same
effect as if then made.
(b) RECEIVABLES PURCHASE PRICE. At the Effective Time with respect to each
Receivable, FIACC shall have delivered to the Seller the Purchase Price of each
Receivable, as provided in clause (d) of Article II, above or, the Seller shall
have determined to make a capital contribution of such Receivables as provided
herein.
ARTICLE V
COVENANTS OF THE SELLER
The Seller agrees with FIACC as follows:
5.1 PROTECTION OF RIGHT, TITLE AND INTEREST.
(a) The Seller shall execute and file such financing statements and cause
to be executed and filed such continuation statements and any required
documentation all in such manner and in such places as may be required by law
fully to preserve, maintain and protect the ownership interest of FIACC in the
Purchased Receivables and in the proceeds thereof. The Seller shall deliver (or
cause to be delivered) to FIACC and the Deal Agent filed-stamped copies of, or
filing receipts for, any document filed as provided above, as soon as available
following such filing.
(b) The Seller shall not change its name, identity, or corporate structure
in any manner that would, could, or might make any financing statement or
continuation statement filed by the Seller in accordance with paragraph (a)
above seriously misleading within the meaning of Section 9-402 of the UCC,
unless it shall have given FIACC, the Collateral Agent and the Deal Agent at
least sixty days' prior written notice thereof and shall have filed appropriate
amendments to all previously filed financing statements or continuation
statements prior to such changes.
(c) The Seller shall give FIACC, the Deal Agent and the Collateral Agent
at least sixty days' prior written notice of any relocation of its principal
executive office if, as a result of such relocation, the applicable provisions
of the UCC would require the filing of any amendment
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of any previously filed financing or continuation statement or of any new
financing statement and shall file any such amendment prior to any such
relocation. The Seller shall at all times maintain its principal executive
office within the United States of America.
(d) The Seller shall maintain its computer systems so that, from and after
the time of sale hereunder of the Receivables to FIACC, the Seller's master
computer records (including any back-up archives) that refer to a Purchased
Receivable shall indicate clearly the interest of FIACC in such Purchased
Receivable and that such Purchased Receivable is owned by FIACC. Indication of
FIACC's ownership of a Purchased Receivable shall be deleted from or modified on
the Seller's computer systems when, and only when, the Purchased Receivable
shall have been paid in full or repurchased.
(e) If at any time the Seller 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 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 Purchased Receivable, the same shall
indicate clearly that such Purchased Receivable has been sold to and is owned by
FIACC.
(f) Upon the written request of the Collateral Agent, upon written request
from the Secured Parties, the Seller shall cause the following notation to be
stamped on the face of the retail installments sales contract evidencing such
Receivable: "FIRST INVESTORS FINANCIAL SERVICES, INC. HAS SOLD AND ASSIGNED ALL
RIGHT, TITLE AND INTEREST IN THIS CONTRACT TO FIRST INVESTORS AUTO CAPITAL
CORPORATION, WHICH HAS GRANTED A SECURITY INTEREST IN THIS CONTRACT TO FIRST
UNION CAPITAL MARKETS CORP., AS COLLATERAL AGENT FOR CERTAIN SECURED PARTIES."
(g) Within sixty days after the Effective Time with respect to each
Purchased Receivable, the Seller shall give written notice by regular mail,
addressed to the Obligor under such Receivable, in form acceptable to FIACC, to
the effect that such Purchased Receivable has been sold and assigned to FIACC.
(h) The Seller shall permit FIACC and its agents and the Deal Agent 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 Purchased
Receivable.
(i) The Seller shall, or shall cause the Servicer to, provide a list to
the Deal Agent of all Purchased Receivables, such list to be delivered to the
Deal Agent, as of the end of each March, June, September and December, on the
fifteenth Business Day after the end of each such month, beginning with March,
1998. Upon request, the Seller shall furnish to FIACC and the Deal Agent, within
five Business Days, a list of all Purchased Receivables (by contract number and
name of Obligor) previously sold to FIACC pursuant to this Agreement.
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(j) The Seller will not amend, and shall not permit any amendment to any
Extended Service Agreement relating to the Financed Vehicles related to the
Purchased Receivables which would adversely affect its ability and right to
receive refunds under such contracts, or which would adversely affect the rights
of any of the Deal Agent, the Liquidity Agent, the Secured Party, the
Noteholder, any Liquidity Provider, the Credit Support Provider or the Company.
(k) The Seller agrees, for the benefit of the Deal Agent, to take all
reasonable measures to enforce any right to a refund due to it under any
Extended Service Agreement related to the Purchased Receivables.
5.2 OTHER LIENS OR INTERESTS.
Except for the conveyances hereunder, the Seller will not sell, pledge,
assign or transfer to any other Person, or grant, create, incur, assume or
suffer to exist any adverse claim on any interest in the Purchased Receivables,
and the Seller shall defend the right, title, and interest of FIACC in, to and
under the Purchased Receivables against all claims of third parties claiming
through or under the Seller.
5.3 COSTS AND EXPENSES.
The Seller agrees to pay all reasonable costs and disbursements in
connection with the perfection, as against all third parties, of FIACC's right,
title and interest in and to the Purchased Receivables, including, without
limitation, Financed Vehicles and the Seller shall take, at its expense, any
additional action required by FIACC, the Deal Agent or the Collateral Agent in
order to protect FIACC's and the Collateral Agent's (on behalf of the Secured
Parties) interests in the Purchased Receivables, including, without limitation,
the Financed Vehicles and, in connection therewith, shall execute and file such
financing statements, or amendments thereto, continuation statements, and such
other instruments, documents, or notices as may be requested by FIACC or the
Collateral Agent.
5.4 INDEMNIFICATION.
The Seller shall indemnify FIACC, the Collateral Agent and each Secured
Party under the Security Agreement for any liability as a result of the failure
of a Purchased Receivable to be originated in compliance with all requirements
of law and for any breach of any of its representations and warranties contained
herein. These indemnity obligations shall be in addition to any obligation that
the Seller may otherwise have.
5.5 SALE.
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.
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5.6 SELLER'S RECEIPT OF PAYMENT.
Seller agrees that any amounts received by Seller in respect of any of the
Purchased Receivables after the Effective Time applicable thereto shall be
received in trust for the benefit of FIACC, shall be segregated from other funds
of the Seller and shall immediately be paid over to the Collection Account in
the same form as so received (with any necessary endorsement).
ARTICLE VI
MISCELLANEOUS PROVISIONS
6.1 OBLIGATION OF SELLER.
The obligations of the Seller under this Agreement shall not be affected
by reason of the invalidity, illegality or irregularity of any Receivable.
6.2 REPURCHASE EVENTS.
The Seller hereby covenants and agrees with FIACC (for the benefit of the
Collateral Agent, for the benefit of the Secured Party), that the Seller shall
promptly repurchase from FIACC any Purchased Receivable, for the Purchase Amount
in cash, with respect to which either of the following events ("REPURCHASE
EVENTS") shall have occurred: (i) any representation and warranty of the Seller
contained in Section 3.2(b) shall have been breached with respect to such
Purchased Receivable as of the Effective Time, or (ii) FIACC, or any servicing
agent who may at the time be servicing such Purchased Receivable for FIACC,
shall have failed to receive, within sixty days following the applicable
Effective Time, (A) a Tax Collector's Receipt for Texas Title
Application/Registration/Motor Vehicle Tax (commonly known as a "white slip") in
proper form, (B) a Certificate of Title in proper form issued by the Texas
Department of Transportation, or (C) the equivalent certificates or
registrations in proper form issued by the appropriate authorities of other
states if applicable, reflecting FIACC (or the Seller) as the lienholder thereon
with respect to the Financed Vehicle covered by such Purchased Receivable. This
repurchase obligation of the Seller shall constitute the sole remedy of FIACC
and the Collateral Agent under the Security Agreement against the Seller with
respect to any Repurchase Event. With respect to all Purchased Receivables
repurchased by the Seller pursuant to this Agreement, FIACC shall assign,
without recourse, representation or warranty, to the Seller all of FIACC's
right, title and interest in and to such Purchased Receivables, and all security
and documents relating thereto.
6.3 TERMINATION.
The obligations of the Seller to sell Receivables to FIACC, and of FIACC
to purchase Receivables from the Seller, pursuant to this Agreement shall
terminate at such time as all amounts due and payable by FIACC under the
Security Agreement are paid in full; provided, however, that (i) the
representations and warranties of Seller pursuant to Section 3.2(b) of this
Agreement, insofar as they relate to Receivables sold to FIACC pursuant to this
Agreement prior to such termination, shall survive such termination; (ii) with
respect to all such Purchased
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Receivables, the obligations of Seller set forth
in Section 5.1, 5.2, 5.3 and 5.6 pertaining to the protection of such Purchased
Receivables, and the obligation of Seller set forth in Section 5.4 pertaining to
indemnification under certain circumstances, shall survive such termination; and
(iii) with respect to all Purchased Receivables, the repurchase obligations of
Seller pursuant to Section 6.2 shall survive such termination.
6.4 AMENDMENT.
This Agreement may be amended from time to time by a written instrument
duly executed and delivered by the Seller and FIACC; PROVIDED, HOWEVER, that no
such amendment shall be effective without a prior written consent of the Deal
Agent.
6.5 COLLATERAL ASSIGNMENT.
Notwithstanding anything to the contrary contained herein, the Seller (i)
acknowledges and consents that FIACC has assigned its rights hereunder and its
interest herein as collateral pursuant to the Security Agreement for the benefit
of the Secured Party, and (ii) agrees to attorn to the Collateral Agent in the
event of its succession to the rights and interest of FIACC hereunder by reason
of foreclosure or otherwise.
6.6 POWER OF ATTORNEY.
The parties recognize that, notwithstanding the sale and assignment of a
Receivable to FIACC pursuant to this Agreement, it may not be practicable under
applicable state recordation procedures to substitute FIACC for the Seller as
the lienholder identified on the certificate of title or similarly recorded
instrument pertaining to the related Financed Vehicle. Accordingly, with respect
to each Purchased Receivable, the Seller hereby grants to FIACC, and to any
servicing agent who may service such Purchased Receivable for FIACC, an
irrevocable power of attorney, coupled with interest, to enforce, in the name,
place and stead of the Seller, all rights and remedies of the holder of such
Purchased Receivable and of the security interests in the related Financed
Vehicle. The Seller agrees to provide, promptly upon the request of FIACC or
such servicer, any additional documentation which they may reasonably require to
evidence, or otherwise to more perfectly vest, the irrevocable power of attorney
granted hereby. The Seller also agrees, as provided in the Security Agreement,
to execute such documents as are required under Section 501.114 of the Texas
Certificate of Title Act to assign the liens recorded on the Certificates of
Title covering the Financed Vehicles from the Seller to FIACC, if the Collateral
Agent shall have reasonably determined that such assignment is necessary to the
enforcement of the related Purchased Receivable or Receivables.
6.7 WAIVERS.
No failure or delay on the part of any party in exercising any power,
right or remedy under this Agreement shall operate as a waiver thereof, nor
shall any single or partial exercise of any power, right or remedy preclude any
other further exercise thereof or the exercise of any other power, right or
remedy.
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6.8 NOTICES.
All communications and notices directed to either party pursuant to this
Agreement shall be in writing addressed or delivered to it at its address shown
in the introductory paragraph of this Agreement and to the Deal Agent at: First
Union Capital Markets Corp., Xxx Xxxxx Xxxxx Xxxxxx, XX-0, Xxxxxxxxx, Xxxxx
Xxxxxxxx 00000, Attn: Conduit Administration or at such other address as may be
designated by it by notice to other party and, if mailed or transmitted by
facsimile transmission, shall be deemed given when mailed or transmitted.
6.9 COSTS AND EXPENSES.
The Seller will pay all expenses incident to the performance of its
obligations under this Agreement and the Seller agrees to pay all reasonable
out-of-pocket costs and expenses of FIACC, in connection with the perfection as
against third parties of FIACC's right, title and interest in and to the
Purchased Receivables and the enforcement of any obligation of the Seller
hereunder.
6.10 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 provisions of this
Agreement.
6.11 GOVERNING LAW.
This Agreement and the Assignment shall be governed by and construed in
accordance with the laws of the State of Texas.
6.12 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.
6.13 NO PROCEEDINGS.
For so long as the Company shall have any short-term commercial paper
notes outstanding and for one year and one day thereafter, the Seller agrees
that it will not file any involuntary petition or otherwise institute any
bankruptcy, reorganization, arrangement, insolvency or liquidation proceeding or
other proceeding under any federal or state bankruptcy or similar law against
FIACC.
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6.14 THIRD PARTY BENEFICIARY.
Each of the parties hereto agree that the Deal Agent, as agent, is a third
party beneficiary of this Agreement.
6.15 ASSIGNMENT.
This Agreement may not be assigned by either party hereto without the
prior written consent of the Deal Agent.
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IN WITNESS WHEREOF, the parties hereby have caused this Agreement to be
executed by their respective officers thereunder to duly authorized as of the
date and year first above written.
FIRST INVESTORS FINANCIAL SERVICES, INC.
By: /s/ XXXXXX X. DUCK
Xxxxxx X. Duck,
Vice President and Treasurer
FIRST INVESTORS AUTO CAPITAL CORPORATION
By: /s/ XXXXXX X. DUCK
Xxxxxx X. Duck,
Vice President and Treasurer
Exhibit A
Assignment
FOR VALUE RECEIVED, in accordance with the Purchase Agreement dated as of
January 1, 1998 (the "PURCHASE AGREEMENT") between the undersigned and First
Investors Auto Capital Corporation (the "PURCHASER"), the undersigned does
hereby sell, assign, transfer and otherwise convey unto the Purchaser, without
recourse, all right, title and interest of the undersigned in and to:
(A) all motor vehicle installment sales contracts, any interest in which
may from time to time be transferred by the undersigned to the Purchaser under
the Purchase Agreement (the "PURCHASED RECEIVABLES") and all monies paid
thereon, and due thereon, at or after the Effective Time as applicable, whether
such amounts are considered accounts, general intangibles or other property;
(B) together with (i) the interest of the undersigned in all security
interests and liens in or on the Financed Vehicle and any accessions thereto
granted by an Obligor pursuant to the Purchased Receivables, and all monies paid
thereon, and due thereon, at or after the Effective Time, as applicable whether
such amounts are considered accounts, general intangibles or other property,
(ii) the interest of the undersigned in any proceeds from claims on any physical
damage, credit life, credit disability, Credit Insurance or other insurance
policies covering such Financed Vehicle or Obligor, (iii) the interest of the
undersigned in all rebates of premiums and other amounts relating to insurance
policies and other items financed under the Purchased Receivables as of the
Effective Time, and (iv) the proceeds of any and all of the foregoing.
This Assignment is made pursuant to and upon the representations,
warranties and agreements on the part of the undersigned contained in the
Purchase Agreement and is to be governed by the Purchase Agreement.
Capitalized terms used herein and not otherwise defined shall have the
meanings ascribed to them in the Purchase Agreement.
IN WITNESS WHEREOF, the undersigned has caused this Assignment to be duly
executed, effective as of the Effective Date of this Assignment as provided in
the Purchase Agreement.
FIRST INVESTORS FINANCIAL SERVICES, INC.
By: ___________________________________
Name: ____________________________
Title: ___________________________
