EXECUTION COPY
Exhibit 10.1
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PURCHASE AGREEMENT
among
M&I XXXXXXXX & XXXXXX BANK,
M&I NORTHWOODS III LLC
and
BANK ONE, NATIONAL ASSOCIATION
(as agent on behalf of Preferred Receivables Funding Corporation)
as Transferors
and
M&I DEALER AUTO SECURITIZATION, LLC
as Purchaser
Dated as of November 13, 2003
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TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS.......................................................2
SECTION 1.1. Definitions................................................2
SECTION 1.2. Other Interpretive Provisions..............................2
ARTICLE II PURCHASE OF RECEIVABLES...........................................2
SECTION 2.1. Purchase of Receivables....................................2
SECTION 2.2. Funding Dates..............................................3
SECTION 2.3. Receivables Purchase Price For The Initial Purchased
Assets.....................................................4
SECTION 2.4. Receivables Purchase Price for Subsequent Receivables......4
SECTION 2.5. Sale of Receivables........................................4
ARTICLE III REPRESENTATIONS AND WARRANTIES....................................5
SECTION 3.1. Representations and Warranties of Purchaser................5
SECTION 3.2. Representations and Warranties of M&I Bank.................6
SECTION 3.3. Representations and Warranties of Northwoods...............8
SECTION 3.4. Representations and Warranties of Bank One.................9
ARTICLE IV COVENANTS OF TRANSFERORS.........................................10
SECTION 4.1. Protection of Title to Purchased Assets...................10
SECTION 4.2. Liability of M&I Bank; Indemnities........................11
SECTION 4.3. Purchase of Receivables on a Funding Date.................13
ARTICLE V MISCELLANEOUS PROVISIONS.........................................13
SECTION 5.1. Obligations of Transferors................................13
SECTION 5.2. Bankruptcy Petition.......................................13
SECTION 5.3. Subsequent Transfer to Owner Trustee and Indenture
Trustee...................................................13
SECTION 5.4. Amendment.................................................13
SECTION 5.5. Waivers...................................................15
SECTION 5.6. Notices...................................................15
SECTION 5.7. Costs and Expenses........................................15
SECTION 5.8. Representations to Survive................................15
SECTION 5.9. Governing Law.............................................15
SECTION 5.10. Counterparts..............................................15
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TABLE OF CONTENTS
(continued)
Page
SECTION 5.11. Third Party Beneficiaries.................................16
Exhibit A Location of Parties
Schedule A Perfection Representations, Warranties and Covenants
Schedule of Receivables
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PURCHASE AGREEMENT
This PURCHASE AGREEMENT (as from time to time amended, supplemented or
otherwise modified and in effect, this "Agreement") dated as of November 13,
2003 by and among M&I XXXXXXXX & ILSLEY BANK, a Wisconsin banking corporation
("M&I Bank"), M&I NORTHWOODS III LLC, a Delaware limited liability company
("Northwoods"), BANK ONE, NATIONAL ASSOCIATION, a national banking association
(as agent on behalf of Preferred Receivables Funding Corporation) ("Bank One";
and together with M&I Bank and Northwoods, the "Transferors") and M&I DEALER
AUTO SECURITIZATION, LLC, a Delaware limited liability company (the
"Purchaser").
WHEREAS, in the regular course of its business, M&I Bank or its Affiliates
purchases Motor Vehicle Loans secured by new and used automobiles and light
trucks from motor vehicle dealers; and
WHEREAS, M&I Bank desires to transfer certain interests in Motor Vehicle
Loans to the Purchaser; and
WHEREAS, M&I Bank has transferred certain interests in certain other Motor
Vehicle Loans to the Transferors pursuant to a financing arrangement and the
Transferors desire to transfer such interests in such Motor Vehicle Loans to the
Purchaser; and
WHEREAS, the Purchaser desires to purchase from M&I Bank a portfolio of
Motor Vehicle Loans and desires to purchase from the Transferors a portfolio of
Motor Vehicle Loans arising in connection with Motor Vehicle Loans purchased by
M&I Bank from Dealers and purchased by Preferred Receivables Funding Corporation
("PREFCO"); and
WHEREAS, M&I Bank is willing to transfer its interest in such Motor Vehicle
Loans to the Purchaser on the Closing Date and on each Funding Date; and
WHEREAS, the Transferors under the financing arrangement are willing to
transfer their interests in such Motor Vehicle Loans to the Purchaser on the
Closing Date.
WHEREAS, following the transfer of such Motor Vehicle Loans from the
Transferors to the Purchaser, the Purchaser will transfer such Motor Vehicle
Loans to M&I Auto Loan Trust 2003-1 (the "Trust") pursuant to the Sale and
Servicing Agreement dated as of November 13, 2003 among M&I Bank, as servicer,
the Purchaser, as seller, the Trust and BNY Midwest Trust Co., as indenture
trustee.
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. Capitalized terms are used in this Agreement as
defined in Appendix X to the Sale and Servicing Agreement among the Trust, the
Purchaser, as seller, M&I Bank, as servicer, and BNY Midwest Trust Co., as
indenture trustee.
SECTION 1.2. Other Interpretive Provisions. For purposes of this
Agreement, unless the context otherwise requires: (a) accounting terms not
otherwise defined in this Agreement, and accounting terms partly defined in this
Agreement to the extent not defined, shall have the respective meanings given to
them under generally accepted accounting principles; (b) terms defined in
Article 9 of the UCC and not otherwise defined in this Agreement are used as
defined in that Article; (c) the words "hereof," "herein" and "hereunder" and
words of similar import refer to this Agreement as a whole and not to any
particular provision of this Agreement; (d) references to any Article, Section,
Schedule or Exhibit are references to Articles, Sections, Schedules and Exhibits
in or to this Agreement and references to any paragraph, subsection, clause or
other subdivision within any Section or definition refer to such paragraph,
subsection, clause or other subdivision of such Section or definition; (e) the
term "including" means "including without limitation"; (f) except as otherwise
expressly provided herein, references to any law or regulation refer to that law
or regulation as amended from time to time and include any successor law or
regulation; (g) references to any Person include that Person's successors and
assigns; and (h) headings are for purposes of reference only and shall not
otherwise affect the meaning or interpretation of any provision hereof.
ARTICLE II
PURCHASE OF RECEIVABLES
SECTION 2.1. Purchase of Receivables.
Effective as of the Closing Date and immediately prior to the transactions
pursuant to the Indenture, the Sale and Servicing Agreement and the Trust
Agreement, each of the Transferors do hereby sell, transfer, assign, set over
and otherwise convey to the Purchaser, without recourse, subject to the
obligations herein (collectively the "Initial Purchased Assets"), all of its
right, title and interest in and to:
(a) the Receivables identified on the Schedule of Receivables delivered on
the Closing Date, and all moneys received thereon after the Initial Cutoff
Date;
(b) the security interests in the Financed Vehicles granted by Obligors
pursuant to the Receivables and any other interest in the Financed Vehicles
and any other property that shall secure the Receivables;
(c) any proceeds with respect to the Receivables from claims on any
Insurance Policies covering Financed Vehicles or the obligors;
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(d) any rebates of premiums relating to Insurance Policies and any rebates
of other items such as extended warranties financed under the Receivables,
in each case, to the extent Servicer would, in accordance with its
customary practices, apply such amounts to the Principal Balance of the
related Receivable;
(e) any proceeds from (A) any Receivable repurchased by a Dealer, pursuant
to a Dealer Agreement, as a result of a breach of representation or
warranty in the related Dealer Agreement, (B) a default by an Obligor
resulting in the repossession of the Financed Vehicle under the applicable
Motor Vehicle Loan or (C) any Dealer Recourse or other rights relating to
the Receivables under Dealer Agreements;
(f) any instrument or document relating to the Receivables; and
(g) the proceeds of any and all of the foregoing.
SECTION 2.2. Funding Dates. Effective on each Funding Date, M&I Bank does
hereby sell, transfer, assign, set over and otherwise convey to the Purchaser,
without recourse, subject to the obligations herein (collectively the
"Subsequent Purchased Assets" and, together with the Initial Purchased Assets,
the "Purchased Assets"), all of its right, title and interest in and to:
(a) the Subsequent Receivables identified on the Schedule of Receivables
delivered on the related Funding Date, and all moneys received thereon
after the related Subsequent Cutoff Date;
(b) the security interests in the Financed Vehicles granted by Obligors
pursuant to the Subsequent Receivables and any other interest in the
Financed Vehicles and any other property that shall secure the Subsequent
Receivables;
(c) any proceeds with respect to the Subsequent Receivables from claims on
any Insurance Policies covering Financed Vehicles or the obligors;
(d) any rebates of premiums relating to Insurance Policies and any rebates
of other items such as extended warranties financed under the Subsequent
Receivables, in each case, to the extent Servicer would, in accordance with
its customary practices, apply such amounts to the Principal Balance of the
related Subsequent Receivable;
(e) any proceeds from (A) any Subsequent Receivable repurchased by a
Dealer, pursuant to a Dealer Agreement, as a result of a breach of
representation or warranty in the related Dealer Agreement, (B) a default
by an Obligor resulting in the repossession of the Financed Vehicle under
the applicable Motor Vehicle Loan or (C) any Dealer Recourse or other
rights relating to the Subsequent Receivables under Dealer Agreements;
(f) any instrument or document relating to the Subsequent Receivables; and
(g) the proceeds of any and all of the foregoing.
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The purchase of the Subsequent Receivables on each Funding Date by the
Purchaser shall be made in accordance with this Agreement and the provisions of
the Sale and Servicing Agreement. On each Funding Date (a) M&I Bank will
transfer and assign all of its right, title and interest in and to the
Subsequent Receivables and other Subsequent Purchased Assets to the Purchaser,
(b) the Purchaser will sell all of its right, title and interest in and to the
Subsequent Receivables and other Trust Property to the Trust, and (c) the Trust
will grant all of its right, title and interest in and to the Subsequent
Receivables and other Trust Property to the Indenture Trustee for the benefit of
the Noteholders. The Subsequent Receivables transferred on each Funding Date and
the Receivables transferred on the Closing Date are collectively referred to
herein as the "Receivables".
SECTION 2.3. Receivables Purchase Price For The Initial Purchased Assets.
On the Closing Date in consideration for the Initial Purchased Assets being
transferred to the Purchaser on such date the Purchaser shall pay a purchase
price equal to the aggregate Principal Balance of the Receivables as of the
Initial Cut-Off Date (the "Initial Purchase Price") by:
(a) paying to Bank One (for the benefit of PREFCO), $538,430,336.61 in
cash;
(b) paying to M&I Bank, $154,121,820.33 in cash; and
(c) if the aggregate Initial Purchase Price to be paid for such Initial
Purchased Assets exceeds the amount of any cash payments pursuant to
clauses (a) and (b), an interest in such Initial Purchased Assets in an
amount equal to such excess shall automatically be considered to have been
contributed to the Purchaser by M&I Bank as a capital contribution.
SECTION 2.4. Receivables Purchase Price for Subsequent Receivables. On
each Funding Date in consideration for the Subsequent Purchased Assets being
transferred to the Purchaser on such date the Purchaser shall pay a purchase
price equal to the aggregate Principal Balance of the Subsequent Receivables
being transferred on such date as of the related Subsequent Cut-Off Date (the
"Subsequent Purchase Price") by (a) making a cash payment to M&I Bank to the
extent that the Purchaser has received any payments on such Funding Date in
respect of the purchase of such Subsequent Purchased Assets by the Trust on such
Funding Date under the Sale and Servicing Agreement and (b) if the aggregate
Subsequent Purchase Price to be paid for such Subsequent Purchased Assets
exceeds the amount of any cash payments pursuant to clause (a), an interest in
such Subsequent Purchased Assets in an amount equal to such excess shall
automatically be considered to have been contributed to the Purchaser by M&I
Bank as a capital contribution.
SECTION 2.5. Sale of Receivables. It is the express intention of the
Transferors and the Purchaser that:
(a) the assignment and transfer herein contemplated constitute a sale of
the Receivables and the other Purchased Assets described in Sections 2.1
and 2.2 above, conveying good title thereto free and clear of any Liens,
encumbrances, security interests or rights of other Persons, from the
Transferors to the Purchaser; and
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(b) the Receivables and the other Purchased Assets described in Sections
2.1 and 2.2 above not be a part of M&I Bank's estate, Northwood's estate,
Bank One's estate or PREFCO's estate in the event of a bankruptcy or
insolvency of M&I Bank, Northwoods, Bank One or PREFCO, respectively.
If, notwithstanding the intention of the Transferors and the Purchaser,
such conveyance is deemed to be a pledge in connection with a financing or is
otherwise deemed not to be a sale, the Transferors hereby grant, and the parties
intend that the Transferors shall have granted, to the Purchaser a first
priority perfected security interest in all of the Transferors' right, title and
interest in the items of the Purchased Assets and all proceeds of the foregoing,
and that this Agreement shall constitute a security agreement under applicable
law and the Purchaser shall have all of the rights and remedies of a secured
party and creditor under the UCC as in force in the relevant jurisdictions.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.1. Representations and Warranties of Purchaser. The Purchaser
hereby makes the following representations and warranties on the Closing Date
and on each Funding Date upon which the Transferors may rely. Such
representations are made as of the execution and delivery of this Agreement, but
shall survive the sale, transfer and assignment of the Receivables to the
Purchaser.
(a) Organization and Good Standing. The Purchaser has been duly organized
and is validly existing as a limited liability company in good standing
under the laws of the State of Delaware, and has full power and authority
to execute and deliver this Agreement and to perform the terms and
provisions hereof.
(b) Power and Authority. The Purchaser has full power, authority and legal
right to execute, deliver, and perform this Agreement and has taken all
necessary action to authorize the execution, delivery, and performance by
it of this Agreement.
(c) No Consent Required. No approval, authorization, consent, license or
other order or action of, or filing or registration with, any governmental
authority, bureau or agency is required in connection with the execution,
delivery or performance by the Purchaser of this Agreement or the
consummation of the transactions contemplated hereby.
(d) Binding Obligation. This Agreement has been duly executed and
delivered by the Purchaser and this Agreement constitutes a legal, valid
and binding obligation of the Purchaser, enforceable against the Purchaser
in accordance with its terms, subject, as to enforceability, to applicable
bankruptcy, insolvency, reorganization, conservatorship, receivership,
liquidation and other similar laws affecting the enforcement of the rights
of creditors generally and to equitable limitations on the availability of
specific remedies.
(e) No Violation. The execution, delivery and performance by the Purchaser
of this Agreement and the consummation of the transactions contemplated
hereby will not
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conflict with, result in any breach of the terms and provisions of,
constitute (with or without notice or lapse of time) a material default
under, or result in the creation or imposition of any Lien under any of its
material properties pursuant to the terms of, (i) the limited liability
company agreement of the Purchaser, (ii) any material indenture, contract,
lease, mortgage, deed of trust or other instrument or agreement to which
the Purchaser is a party or by which the Purchaser is bound or to which any
of its properties are subject, or (iii) any law, order, rule or regulation
applicable to the Purchaser of any federal or state regulatory body or any
court, administrative agency or other governmental instrumentality having
jurisdiction over the Purchaser.
(f) No Proceedings. There are no proceedings or investigations pending,
or, to the knowledge of the Purchaser, threatened, before any court,
regulatory body, administrative agency, or other tribunal or governmental
instrumentality having jurisdiction over the Purchaser or its properties:
(i) asserting the invalidity of this Agreement or the transactions
contemplated herein, (ii) seeking to prevent the consummation of any of the
transactions contemplated by this Agreement, (iii) 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, this Agreement or the transactions contemplated herein,
or (iv) that may materially and adversely affect this Agreement or the
transactions contemplated hereby.
SECTION 3.2. Representations and Warranties of M&I Bank. M&I Bank hereby
makes the following representations and warranties on the Closing Date and on
each Funding Date upon which the Purchaser, Northwoods and Bank One may rely.
Such representations are made as of the execution and delivery of this
Agreement, but shall survive the sale, transfer and assignment of its interest
in the Purchased Assets to the Purchaser.
(a) Organization and Good Standing. M&I Bank has been duly organized and
is validly existing as a state banking corporation in good standing under
the laws of the State of Wisconsin, with the power and authority to own its
properties and to conduct its business as such properties are presently
owned and such business is presently conducted and had at all relevant
times, and has, power, authority and legal right to acquire, own and sell
the Purchased Assets pursuant to Article II.
(b) Power and Authority. M&I Bank has the power, authority and legal right
to execute and deliver this Agreement and to carry out its terms and to
sell and assign the Purchased Assets; and the execution, delivery and
performance of this Agreement has been duly authorized by M&I Bank by all
necessary corporate action.
(c) No Consent Required. No approval, authorization, consent, license or
other order or action of, or filing or registration with, any governmental
authority, bureau or agency is required in connection with the execution,
delivery or performance by M&I of this Agreement or the consummation of the
transactions contemplated hereby, other than the filing of UCC financing
statements.
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(d) Valid Sale; Binding Obligation. M&I Bank intends this Agreement to
effect a valid sale, transfer, and assignment of the Receivables and the
other properties and rights included in the Purchased Assets conveyed by
M&I Bank to the Purchaser hereunder, enforceable against creditors of and
purchasers from M&I Bank; and this Agreement constitutes a legal, valid and
binding obligation of M&I Bank, enforceable against M&I Bank in accordance
with its terms, subject, as to enforceability, to applicable bankruptcy,
insolvency, reorganization, conservatorship, receivership, liquidation and
other similar laws affecting enforcement of the rights of creditors
generally and to equitable limitations on the availability of specific
remedies.
(e) No Violation. The execution, delivery and performance by M&I Bank of
this Agreement and the consummation of the transactions contemplated hereby
will not conflict with, result in any material breach of any of the terms
and provisions of, constitute (with or without notice or lapse of time) a
material default under or result in the creation or imposition of any Lien
upon any of its material properties pursuant to the terms of, (i) the
articles of incorporation or bylaws of M&I Bank, (ii) any material
indenture, contract, lease, mortgage, deed of trust or other instrument or
agreement to which M&I Bank is a party or by which M&I Bank is bound, or
(iii) any law, order, rule or regulation applicable to M&I Bank of any
federal or state regulatory body or any court, administrative agency, or
other governmental instrumentality having jurisdiction over M&I Bank.
(f) No Proceedings. There are no proceedings or investigations pending,
or, to the knowledge of M&I Bank, threatened, before any court, regulatory
body, administrative agency, or other tribunal or governmental
instrumentality having jurisdiction over M&I Bank or its properties: (i)
asserting the invalidity of this Agreement or the transactions contemplated
herein, (ii) seeking to prevent the consummation of any of the transactions
contemplated by this Agreement, (iii) seeking any determination or ruling
that might materially and adversely affect the performance by M&I Bank of
its obligations under, or the validity or enforceability of, this Agreement
or the transactions contemplated herein, or (iv) that may materially and
adversely affect this Agreement or the transactions contemplated hereby.
(g) Chief Executive Office. The chief executive office of M&I Bank is set
forth in Exhibit A attached hereto.
(h) Official Record. This Agreement and all other documents related hereto
to which M&I Bank is a party have been approved by M&I Bank's or its
Affiliates board of directors, loan committee or executive committee, which
approval is reflected in the minutes of such board or committee and shall
continuously from time to time of each such document's execution, be
maintained as an official record of M&I Bank.
(i) Perfection Representations. The Perfection Representations shall be a
part of this Agreement.
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SECTION 3.3. Representations and Warranties of Northwoods. Northwoods
hereby makes the following representations and warranties on the Closing Date
upon which the Purchaser, M&I Bank and Bank One may rely. Such representations
are made as of the execution and delivery of this Agreement, but shall survive
the sale, transfer and assignment of its interest in the Purchased Assets to the
Purchaser.
(a) Organization and Good Standing. Northwoods has been duly organized and
is validly existing as a limited liability company in good standing under
the laws of Delaware, with the power and authority to own its properties
and to conduct its business as such properties are presently owned and such
business is presently conducted and had at all relevant times, and has,
power, authority and legal right to acquire, own and sell the Purchased
Assets pursuant to Article II.
(b) Power and Authority. Northwoods has the power, authority and legal
right to execute and deliver this Agreement and to carry out its terms and
to sell and assign the Initial Purchased Assets; and the execution,
delivery and performance of this Agreement has been duly authorized by
Northwoods by all necessary corporate action.
(c) No Consent Required. No approval, authorization, consent, license or
other order or action of, or filing or registration with, any governmental
authority, bureau or agency is required in connection with the execution,
delivery or performance by Northwoods of this Agreement or the consummation
of the transactions contemplated hereby, other than the filing of UCC
financing statements.
(d) Valid Sale; Binding Obligation. Northwoods intends this Agreement to
effect a valid sale, transfer, and assignment of the Receivables and the
other properties and rights included in the Initial Purchased Assets
conveyed by Northwoods to the Purchaser hereunder, enforceable against
creditors of and purchasers from Northwoods; and this Agreement constitutes
a legal, valid and binding obligation of Northwoods, enforceable against
Northwoods in accordance with its terms, subject, as to enforceability, to
applicable bankruptcy, insolvency, reorganization, conservatorship,
receivership, liquidation and other similar laws affecting enforcement of
the rights of creditors generally and to equitable limitations on the
availability of specific remedies.
(e) No Violation. The execution, delivery and performance by Northwoods of
this Agreement and the consummation of the transactions contemplated hereby
will not conflict with, result in any material breach of any of the terms
and provisions of, constitute (with or without notice or lapse of time) a
material default under or result in the creation or imposition of any Lien
upon any of its material properties pursuant to the terms of, (i) the
certificate of incorporation or bylaws of Northwoods, (ii) any material
indenture, contract, lease, mortgage, deed of trust or other instrument or
agreement to which Northwoods is a party or by which Northwoods is bound,
or (iii) any law, order, rule or regulation applicable to Northwoods of any
federal or state regulatory body or any court, administrative agency, or
other governmental instrumentality having jurisdiction over Northwoods.
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(f) No Proceedings. There are no proceedings or investigations pending,
or, to the knowledge of Northwoods, threatened, before any court,
regulatory body, administrative agency, or other tribunal or governmental
instrumentality having jurisdiction over Northwoods or its properties: (i)
asserting the invalidity of this Agreement or the transactions contemplated
herein, (ii) seeking to prevent the consummation of any of the transactions
contemplated by this Agreement, (iii) seeking any determination or ruling
that might materially and adversely affect the performance by Northwoods of
its obligations under, or the validity or enforceability of, this Agreement
or the transactions contemplated herein, or (iv) that may materially and
adversely affect this Agreement or the transactions contemplated hereby.
(g) Chief Executive Office. The chief executive office of Northwoods is
set forth in Exhibit A attached hereto.
SECTION 3.4. Representations and Warranties of Bank One. Bank One hereby
makes the following representations and warranties on the Closing Date upon
which the Purchaser, Northwoods and M&I Bank may rely. Such representations are
made as of the execution and delivery of this Agreement, but shall survive the
sale, transfer and assignment of its interest in the Purchased Assets (as agent
on behalf of PREFCO) to the Purchaser.
(a) Organization and Good Standing. Bank One has been duly organized and
is validly existing as a national banking association in good standing,
with the power and authority to own its properties and to conduct its
business as such properties are presently owned and such business is
presently conducted and had at all relevant times, and has, power,
authority and legal right to acquire, own and sell the Purchased Assets
pursuant to Article II.
(b) Power and Authority. Bank One has the power, authority and legal right
to execute and deliver this Agreement and to carry out its terms and to
sell and assign the Purchased Assets (as agent on behalf of PREFCO); and
the execution, delivery and performance of this Agreement has been duly
authorized by Bank One by all necessary corporate action.
(c) No Consent Required. No approval, authorization, consent, license or
other order or action of, or filing or registration with, any governmental
authority, bureau or agency is required in connection with the execution,
delivery or performance by Bank One (as agent on behalf of PREFCO) of this
Agreement or the consummation of the transactions contemplated hereby,
other than the filing of UCC financing statements.
(d) Valid Sale; Binding Obligation. Bank One intends this Agreement to
effect a valid sale, transfer, and assignment of the Receivables and the
other properties and rights included in the Purchased Assets conveyed by
Bank One to the Purchaser hereunder, enforceable against creditors of and
the Purchasers from Bank One; and this Agreement constitutes a legal, valid
and binding obligation of Bank One, enforceable against Bank One in
accordance with its terms, subject, as to enforceability, to applicable
bankruptcy, insolvency, reorganization, conservatorship, receivership,
liquidation and other similar
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laws affecting enforcement of the rights of creditors generally and to
equitable limitations on the availability of specific remedies.
(e) No Violation. The execution, delivery and performance by Bank One of
this Agreement and the consummation of the transactions contemplated hereby
will not conflict with, result in any material breach of any of the terms
and provisions of, constitute (with or without notice or lapse of time) a
material default under or result in the creation or imposition of any Lien
upon any of its material properties pursuant to the terms of, (i) the
certificate of incorporation or bylaws of Bank One, (ii) any material
indenture, contract, lease, mortgage, deed of trust or other instrument or
agreement to which Bank One is a party or by which Bank One is bound, or
(iii) any law, order, rule or regulation applicable to Bank One of any
federal or state regulatory body or any court, administrative agency, or
other governmental instrumentality having jurisdiction over Bank One.
(f) Chief Executive Office. The chief executive office of Bank One is set
forth in Exhibit A attached hereto.
ARTICLE IV
COVENANTS OF TRANSFERORS
The Transferors covenant and agree with the Purchaser as follows:
SECTION 4.1. Protection of Title to Purchased Assets. On the Closing Date
and on each Funding Date, M&I Bank 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 Purchaser, the Trust and Indenture
Trustee in the Receivables and the proceeds thereof. M&I Bank shall deliver (or
cause to be delivered) to the Purchaser file-stamped copies of, or filing
receipts for, any document filed as provided above, as soon as available
following such filing.
(a) the Transferors shall not change their 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 9-507 of the UCC,
unless it shall have given the Purchaser, the Trust and Indenture Trustee
at least 30 days' prior written notice thereof and shall have promptly
filed appropriate amendments to all previously filed financing statements
or continuation statements.
(b) the Transferors shall give the Purchaser, the Trust and Indenture
Trustee at least 60 days' prior written notice of any relocation of its
principal executive office or any change in its jurisdiction or
organization if, as a result of such relocation or reorganization, 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 or new
financing statement.
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(c) M&I Bank or its Affiliates shall maintain its computer systems
relating to installment loan recordkeeping so that, from and after the time
of sale under this Agreement of its Receivables, M&I Bank's or its
Affiliate's master computer records (including any backup archives) that
refer to a Receivable shall indicate clearly the interest of the Purchaser,
the Trust and Indenture Trustee in such Receivable and that such Receivable
has been sold to the Purchaser and by the Purchaser to the Trust and is
owned by the Trust and has been pledged to Indenture Trustee pursuant to
the Indenture. Indication of the Purchaser's, the Trust's and Indenture
Trustee's interest in a Receivable shall be deleted from or modified on M&I
Bank's or its Affiliate's computer systems when, and only when, the related
Receivable shall have been paid in full or purchased by Servicer.
(d) If at any time M&I Bank or its Affiliates 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, M&I
Bank or its Affiliates shall give or cause to be given 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 to the Purchaser and then sold by the Purchaser to
the Trust and pledged to Indenture Trustee.
(e) M&I Bank shall, upon receipt by M&I Bank of reasonable prior notice,
permit the Purchaser, the Trust and Indenture Trustee, and their respective
agents at any time during normal business hours to inspect, audit and make
copies of and abstracts from M&I Bank's or its Affiliate's records
regarding any Receivable.
(f) Upon request at any time, the Purchaser, the Trust or Indenture
Trustee shall have reasonable grounds to believe that such request is
necessary in connection with the performance of their duties under this
Agreement, M&I Bank or its Affiliates shall furnish or cause to be
furnished to the Purchaser, the Trust and Indenture Trustee within 30
Business Days, a list of all Receivables (by contract number and name of
Obligor) conveyed to the Purchaser hereunder and then owned by the Trust
and pledged to Indenture Trustee, together with a reconciliation of such
list to the Schedule of Receivables and to each of Servicer's Reports
furnished before such request indicating removal of Receivables from the
Trust.
SECTION 4.2. Liability of M&I Bank; Indemnities. M&I Bank shall be liable
in accordance herewith only to the extent of the obligations specifically
undertaken by M&I Bank or its Affiliates under this Agreement.
(a) M&I Bank shall indemnify, defend and hold harmless the Purchaser, the
Trust and Indenture Trustee (individually and in its capacity as such) and
their respective officers, directors, employees and agents from and against
any taxes that may at any time be asserted against any such Person with
respect to, and on the date of, the sale of the Receivables to the
Purchaser, including any sales, gross receipts, general corporation,
tangible personal property, privilege or license taxes (but, not including
any taxes
11
asserted with respect to federal or other income taxes arising out of this
Agreement and the other Basic Documents) and costs and expenses in
defending against the same.
(b) M&I Bank shall indemnify, defend and hold harmless the Purchaser,
Bank One (as agent for PREFCO), the Trust, the Owner Trustee (individually
and in its capacity as such), Indenture Trustee (individually and in its
capacity as such), the Certificateholder, the Noteholders and the officers,
directors, employees and agents of the Purchaser, Bank One (as agent for
PREFCO), Owner Trustee and Indenture Trustee from and against any and all
costs, expenses, losses, claims, damages and liabilities to the extent
arising out of, or imposed upon such Person through or as a result of (i)
M&I Bank's or its Affiliates willful misfeasance, bad faith or gross
negligence in the performance of its duties under this Agreement or any
other Basic Document, (ii) the failure of any Receivable conveyed by M&I
Bank to the Purchaser hereunder, or the sale of the related Financed
Vehicle, to comply with all requirements of applicable law, (iii) any
breach of any of M&I Bank's representations, warranties or covenants
contained herein or in any other Basic Document; provided, however, any
indemnification amounts owed pursuant to this Section 4.2 with respect of a
Receivable shall give effect to and not be duplicative of the Purchase
Amounts paid by M&I Bank pursuant to Section 3.2 of the Sale and Servicing
Agreement, and (iv) the use, ownership or operation by M&I Bank or any of
its Affiliates of a Financed Vehicle prior to each relevant Cutoff Date.
Indemnification under this Section 4.2 shall survive the termination of this
Agreement or any other Basic Document and the resignation or removal of Owner
Trustee or Indenture Trustee and shall include reasonable fees and expenses of
counsel and other expenses of litigation. If any suit, action, proceeding
(including any governmental or regulatory investigation), claim or demand shall
be brought or asserted against any Person in respect of which indemnity may be
sought pursuant to this Section 4.2, such Person (the "Indemnified Person")
shall promptly notify M&I Bank in writing, and M&I Bank, upon request of the
Indemnified Person, shall retain counsel reasonably satisfactory to the
Indemnified Person to represent the Indemnified Person and any others M&I Bank
designates in such proceeding and shall pay the reasonable fees and expenses of
such counsel related to such proceeding. M&I Bank shall not be liable for any
settlement of any claim or proceeding effected without its written consent, but
if settled with such consent or if there be a final judgment for the plaintiff,
M&I Bank agrees to indemnify any Indemnified Person from and against any loss or
liability by reason of such settlement or judgment. M&I Bank shall not, without
the prior written consent of the Indemnified Person, effect any settlement of
any pending or threatened proceeding in respect of which any Indemnified Person
is or could have been a party and indemnity could have been sought hereunder by
such Indemnified Person, unless such settlement includes an unconditional
release of such Indemnified Person from all liability on claims that are the
subject matter of such proceeding. If M&I Bank shall have made any indemnity
payments pursuant to this Section 4.2 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 M&I Bank, without interest.
SECTION 4.3. Purchase of Receivables on a Funding Date. M&I Bank shall use
its best efforts in good faith to make available for assignment to the
Purchaser, on each Funding
12
Date, all Receivables acquired by M&I Bank which meet the eligibility criteria
set forth in the Sale and Servicing Agreement as of such date. This covenant and
agreement shall be for the benefit of the Purchaser, the Trust and the Indenture
Trustee and any such Person may enforce its legal or equitable rights, remedies
or claims hereunder.
ARTICLE V
MISCELLANEOUS PROVISIONS
SECTION 5.1. Obligations of Transferors. The obligations of the
Transferors under this Agreement shall not be affected by reason of any
invalidity, illegality or irregularity of any Receivable.
SECTION 5.2. Bankruptcy Petition. M&I Bank, Bank One and the Purchaser
each hereby covenants and agrees that, prior to the date that is one year and
one day after the payment in full of all outstanding senior indebtedness of
Northwoods, it will not institute against, or join any other Person in
instituting against Northwoods any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceedings or other similar proceeding under the laws
of the United States or any state of the United States.
SECTION 5.3. Subsequent Transfer to the Trust and Indenture Trustee. The
Transferors acknowledge that:
(a) the Purchaser will, pursuant to the Sale and Servicing Agreement, sell
the Receivables to the Trust and assign its rights under this Agreement to
the Trust for the benefit of the Noteholders and the Certificateholder, and
that the representations and warranties contained in this Agreement and the
rights of the Purchaser under Section 2.1 and Section 2.2 of this Agreement
are intended to benefit the Trust, the Noteholders and the
Certificateholder. The Transferors hereby consent to such sale and
assignment.
(b) The Trust will, pursuant to the Indenture, pledge the Receivables and
its rights under this Agreement to Indenture Trustee for the benefit of the
Noteholders, and the representations and warranties contained in this
Agreement and the rights of the Purchaser under this Agreement are intended
to benefit Indenture Trustee and the Noteholders. The Transferors hereby
consent to such pledge.
SECTION 5.4. Amendment. (a) This Agreement may be amended by the
Transferors and the Purchaser, with the consent of the Trust and Indenture
Trustee (which consent may not be unreasonably withheld), but without the
consent of any of the Noteholders or the Certificateholders:
(i) to cure any ambiguity or defect, to correct or supplement any
provisions in this Agreement or for the purpose of adding any
provisions to or changing in any manner or eliminating any of the
provisions in this Agreement; provided that such action shall not
adversely affect in any material respect the interests of any
Noteholder or Certificateholder;
13
(ii) (A) to add, modify or eliminate such provisions as may be
necessary or advisable in order to enable all or a portion of M&I Auto
Loan Trust 2003-1 to qualify as, and to permit an election to be made
to cause all or a portion of M&I Auto Loan Trust 2003-1 to be treated
as, a "financial asset securitization investment trust" under the
Code, and (B) in connection with any such election, to modify or
eliminate existing provisions set forth in this Agreement relating to
the intended federal income tax treatment of the Notes or Certificates
and the Trust in the absence of the election; it being a condition to
any such amendment that the Rating Agency Condition shall have been
met; and
(iii) to add, modify or eliminate such provisions as may be necessary
or advisable in order to enable (a) the transfer to Owner Trustee of
all or any portion of the Receivables to be recognized as a sale under
GAAP by the Purchaser to the Trust, (b) the Trust to avoid becoming a
member of the Purchaser's consolidated group under GAAP or (c) M&I
Bank or the Purchaser, or any of their Affiliates, to otherwise comply
with or obtain more favorable treatment under any law or regulation or
any accounting rule or principle; it being a condition to any such
amendment that the Rating Agency condition shall have been met.
(b) This Agreement may also be amended from time to time by the
Transferors and the Purchaser, with the consent of Servicer, Owner Trustee
and Indenture Trustee, the consent of the Holders of Notes evidencing not
less than a majority of the Outstanding Amount of the Notes and the consent
of the Holders of Certificates evidencing not less than a majority of the
Certificate Percentage Interests for the purpose of adding any provisions
to or changing in any manner or eliminating any of the provisions of this
Agreement; provided that no such amendment shall (i) 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 Certificateholder or (ii)
reduce the aforesaid percentage of the Outstanding Amount of the Notes and
the Certificate Percentage Interests, the Holders of which are required to
consent to any such amendment, without the consent of the Holders of all
the outstanding Notes and the Holders of all the outstanding Certificate of
each class affected thereby.
(c) Prior to the execution of any such amendment or consent, the Purchaser
shall furnish written notification of the substance of such amendment or
consent to each Rating Agency, Owner Trustee, and Indenture Trustee.
Promptly after the execution of any such amendment or consent, the
Purchaser shall furnish written notification of the substance of such
amendment or consent to each Noteholder, Certificateholder, Owner Trustee
and Indenture Trustee.
(d) It shall not be necessary for the consent of Certificateholder or
Noteholders pursuant to this Section 5.4 to approve the particular form of
any proposed amendment or consent, but it shall be sufficient if such
consent shall approve the substance thereof.
14
(e) Prior to the execution of any amendment to this Agreement, Owner
Trustee and Indenture Trustee shall be entitled to receive and conclusively
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. Owner Trustee and Indenture Trustee may, but shall not be
obligated to, enter into any such amendment which affects Owner Trustee's
or Indenture Trustee's, as applicable, own rights, duties or immunities
under this Agreement or otherwise.
SECTION 5.5. Waivers. No failure or delay on the part of the Purchaser 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 such power,
right or remedy preclude any other or further exercise thereof or the exercise
of any other power, right or remedy.
SECTION 5.6. Notices. All demands, notices and communications pursuant to
this Agreement to either party shall be in writing, personally delivered, or
sent by telecopier, overnight mail or mailed by certified mail, return receipt
requested, and shall be deemed to have been duly given upon receipt at the
address set forth in Exhibit A attached hereto or at such other address as may
be designated by it by notice to the other party.
SECTION 5.7. Costs and Expenses. M&I Bank will pay all expenses incident
to the performance of its obligations under this Agreement and all expenses in
connection with the perfection as against third parties of the Purchaser's
right, title and interest in and to the Receivables and the Purchaser agrees to
pay expenses incident to the performance of its obligations under this
Agreement.
SECTION 5.8. Representations to Survive. The respective agreements,
representations, warranties and other statements by M&I Bank, Northwoods, Bank
One and the Purchaser set forth in or made pursuant to this Agreement shall
remain in full force and effect and will survive the Closing Date and each
Funding Date and any sale, transfer or assignment of the Receivables by the
Purchaser.
SECTION 5.9. 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 5.10. 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.
SECTION 5.11. Third Party Beneficiaries. Each of Owner Trustee
(individually and in its capacity as such), Indenture Trustee (individually and
in its capacity as such) and the other Persons referred to in Section 4.2 is an
intended third party beneficiary of the indemnities of M&I Bank set forth in
Section 4.2 and the other provisions of this Agreement in favor of such Persons.
It is acknowledged and agreed that such indemnities and other provisions may be
15
enforced by or on behalf of such Persons against M&I Bank to the same extent as
if it were a party hereto.
[SIGNATURE PAGES FOLLOW]
16
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.
M&I XXXXXXXX & XXXXXX BANK, as
Transferor on the Closing Date and on
each Funding Date
By: /s/ Xxxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Senior Vice President
S-1
M&I NORTHWOODS III LLC, as Transferor
on the Closing Date
By: /s/ Xxxxxx X. Xxxxxx
------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: President
S-2
BANK ONE, NATIONAL ASSOCIATION (as agent
on behalf of Preferred Receivables
Funding Corporation), as Transferor on
the Closing Date
By: /s/ R. Xxxx Xxxxxxxxx
-------------------------------------
Name: R. Xxxx Xxxxxxxxx
Title: Director, Capital Markets
S-3
M&I DEALER AUTO SECURITIZATION, LLC, as
Purchaser
By: /s/ Xxxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: President
S-4
EXHIBIT A
LOCATION OF PARTIES
M&I XXXXXXXX & ILSLEY BANK
Address for Notice:
000 Xxxxx Xxxxx Xxxxxx XX0
Xxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxxx Xxxx
BANK ONE, NATIONAL ASSOCIATION (as agent for PREFCO)
Address for Notice:
0 Xxxx Xxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
M&I DEALER AUTO SECURITIZATION, LLC
Address for Notice:
000 Xxxxx Xxxxx Xxxxxx XX0
Xxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxxx Xxxx
M&I NORTHWOODS III LLC
Address for Notice:
000 Xxxxx Xxxxx Xxxxxx XX0
Xxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxxx Xxxx
Exh.A
SCHEDULE A
PERFECTION REPRESENTATIONS, WARRANTIES AND COVENANTS
In addition to the representations, warranties and covenants contained in
the Purchase Agreement, M&I Bank hereby represents, warrants, and covenants to
the Purchaser as to itself as follows on the Closing Date and on each Payment
Date thereafter:
1. The Purchase Agreement creates a valid and continuing security
interest (as defined in UCC Section 9-102) in the Receivables in favor of the
Purchaser, which security interest is prior to all other Liens, and is
enforceable as such as against creditors of and the Purchasers from M&I Bank,
Northwoods and Bank One.
2. The Receivables constitute "tangible chattel paper" within the meaning
of UCC Section 9-102.
3. M&I Bank has taken all steps necessary to perfect its security
interest against the Obligors in the property securing the Receivables that
constitute chattel paper.
4. The Transferors own and have good and marketable title to the
Receivables free and clear of any Lien, claim or encumbrance of any Person,
excepting only Liens for taxes, assessments or similar governmental charges or
levies incurred in the ordinary course of business that are not yet due and
payable or as to which any applicable grace period shall not have expired, or
that are being contested in good faith by proper proceedings and for which
adequate reserves have been established, but only so long as foreclosure with
respect to such a Lien is not imminent and the use and value of the property to
which the Lien attaches is not impaired during the pendency of such proceeding.
5. Servicer has caused or will have caused, within ten days after the
effective date of the Indenture, the filing of all appropriate financing
statements in the proper filing office in the appropriate jurisdictions under
applicable law in order to perfect the sale of the Receivables from M&I Bank,
Northwoods and Bank One to the Purchaser, the transfer and sale of the
Receivables from the Purchaser to the Trust, and the security interest in the
Receivables granted to Indenture Trustee under the Indenture.
6. With respect to Receivables that constitute tangible chattel paper,
such tangible chattel paper is in the possession of the Custodian and Indenture
Trustee has received a written acknowledgment from the Custodian that the
Custodian is holding such tangible chattel paper solely on behalf and for the
benefit of Indenture Trustee.
7. Servicer has not authorized the filing of, or is aware of, any
financing statements against either Bank One, M&I Bank, the Purchaser or
Servicer that include a description of collateral covering the Receivables, the
Purchased Assets and proceeds related thereto other than any financing statement
(i) relating to the sale of Receivables by M&I Bank or its Affiliates,
Northwoods and Bank One to the Purchaser under the Purchase Agreement, (ii)
relating to the sale of Receivables by the Purchaser to the Trust under the Sale
and Servicing Agreement, (iii)
Sch.A-1
relating to the security interest granted to Indenture Trustee under the
Indenture, or (iv) that has been terminated.
8. Servicer is not aware of any judgment, ERISA or tax Lien filings
against either Bank One, M&I Bank, the Purchaser or Servicer.
9. None of the tangible chattel paper that constitute or evidence the
Receivables has any marks or notations indicating that they have been pledged,
assigned or otherwise conveyed to any Person other than Indenture Trustee.
10. Survival of Perfection Representations. Notwithstanding any other
provision of the Purchase Agreement, the Sale and Servicing Agreement, the
Indenture or any other Basic Document, the Perfection Representations contained
in this Schedule shall be continuing, and remain in full force and effect
(notwithstanding any replacement of Servicer or termination of Servicer's rights
to act as such), until such time as all obligations under the Purchase
Agreement, the Sale and Servicing Agreement and the Indenture have been finally
and fully paid and performed.
11. No Waiver. The parties hereto: (i) shall not, without obtaining a
confirmation of the then-current rating of the Notes, waive any of the
Perfection Representations; (ii) shall provide the Ratings Agencies with prompt
written notice of any breach of the Perfection Representations; and (iii) shall
not, without obtaining a confirmation of the then-current rating of the Notes
(as determined after any adjustment or withdrawal of the ratings following
notice of such breach), waive a breach of any of the Perfection Representations.
Sch.A-2
SCHEDULE OF RECEIVABLES
On File with the Servicer
