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EXHIBIT 10.7
U.S. AUTOMOBILE ACCEPTANCE CORPORATION
CONTINUING PURCHASE AND SALE AGREEMENT
THIS PURCHASE AND SALE AGREEMENT, dated as of __________________________ (the
"Agreement"), is made and entered into by and between U.S. AUTOMOBILE ACCEPTANCE
SNP-IV, INC. (the "Purchaser"), and ___________________________________________
(the "Seller"). The Purchaser is a corporation with its principal place of
business at 0000 XX 00xx, Xxxxx X-000, Xxxxxxxx Xxxx, XX 00000. The Seller's
principal place of business is at _____________________________________________.
Subject to the terms hereof, the Seller agrees to convey, and the Purchaser
agrees to acquire, the new and used automobile and light-duty truck installment
sale contracts and installment loan agreements now, previously and hereafter
acquired, (collectively, the "Contracts").
In consideration of the premises and the mutual agreements hereinafter set
forth, the receipt and sufficiency of which are hereby acknowledged, the
Purchaser and the Seller agree as follows:
ARTICLE 1
DEFINITIONS
Whenever used herein, unless the context otherwise requires the following words
and phrases have the following meanings:
SECTION 1.1 AMOUNT FINANCED shall mean as to any Contract the amount financed
under the Contract toward the purchase price of the Financed Vehicle and related
closing costs as shown in the contract documentation evidencing such Contract
and as disclosed for Truth-In-Lending purposes.
SECTION 1.2 AGREEMENT shall mean this Purchase and Sale Agreement and all
amendments hereof and supplements hereto.
SECTION 1.3 ANNUAL PERCENTAGE RATE OR APR shall mean as to any Contract
and any time, the contractual rate of interest then being borne by such
Contract, as determined therein.
SECTION 1.4 CLOSING DATE shall mean the dates as the Seller and the Purchaser
shall agree.
SECTION 1.5 COMPUTER TAPE shall mean the computer tape, floppy disks and
print-outs generated by the Seller which provided information relating to the
Contracts.
SECTION 1.6 CONTRACT shall mean the automobile and light-duty truck installment
sale contracts described in the Contract Schedule. The Contracts include,
without limitation, all related security interests and any rights to receive
payments which are received pursuant thereto from and after the purchase Date.
SECTION 1.7 CONTRACT FILE shall mean as to any Contract (a) the original copy of
the Contract, (b) the original certificate of title for the related Financed
Vehicle with the first lien therein in favor of the Seller noted thereon, (c)
any extension, modification or waiver agreement(s) relating to such Contract,
and (d) all documents evidencing the existence of any Insurance Policies.
SECTION 1.8 PURCHASE DATE shall mean the date the contract is purchased by the
purchaser or such other date as the purchaser and seller shall agree.
SECTION 1.9 FINANCED VEHICLE shall mean the Motor Vehicle, together with all
accessions thereto, securing an Obligor's indebtedness under a Contract.
SECTION 1.10 INSURANCE POLICIES shall mean all physical damage, comprehensive
and collision, fire and theft insurance policies maintained by the Obligors with
respect to the Financed Vehicles, the vendor's single interest insurance policy
providing coverage upon repossession of a Financed Vehicle, and any credit life
and disability insurance maintained by or on behalf of the Obligors and
benefiting the holders of the Contracts.
SECTION 1.11 MOTOR VEHICLE shall mean a used automobile or light-duty truck.
SECTION 1.12 OBLIGOR shall mean each person who is indebted under, or has
guaranteed, a Contract, or who has acquired a Financed Vehicle subject to a
Contract.
SECTION 1.13 PERSON shall mean any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, incorporated organization, or
government or any agency or political subdivision thereof.
SECTION 1.14 UCC shall mean the Uniform Commercial Code as now in effect in the
relevant jurisdiction or as hereafter amended.
ARTICLE 2
SALE AND CONVEYANCE OF CONTRACTS; POSSESSION OF CONTRACT FILES
SECTION 2.1 SALE AND CONVEYANCE OF CONTRACTS(a) The Seller, concurrently with
the execution and delivery hereof, does hereby sell, transfer, assign, set over
and convey to the Purchaser all right, title and interest of the Seller in, to
and under: (i) the Contracts, including all payments of principal and interest,
late charges and other similar payments due thereon and accruing after the
Purchase Date; (ii) The security interests created by the Contracts, and other
rights of the Seller arising out of such security interests, in the Financed
Vehicles; (iii) all Insurance Policies relating to the Financed Vehicles or the
Contracts; (iv) all documents and information contained in the Contract Files;
and (v) all proceeds derived from any of the foregoing. (b) At the request of
the Purchaser, the Seller will, at the Seller's expense, promptly: (i) take or
cause to be taken any further action necessary or appropriate to effect or
perfect the sale and conveyance made hereby; (ii) execute or cause to be
executed such documents and instruments as are necessary or appropriate to
effect or perfect the sale and conveyance made hereby; and (iii) obtain from
third parties all documents, instruments, waivers and releases necessary, and
to take all other action requested by the Purchaser, to facilitate the sale and
conveyance made hereby.
SECTION 2.2 PURCHASE PRICE; PAYMENTS. (a) The purchase price for the Contracts
shall be the amount set forth on the purchaser's funding commitment. Upon
satisfaction of the conditions in the commitment, the Purchaser shall pay the
Purchase Price to the Seller. (b) The Purchaser shall be entitled to all
payments on the Contracts received on and after the Purchase Date, including
uncollected but earned interest.
SECTION 2.3. INDEMNITY BY THE SELLER.
The Seller shall protect, defend, indemnify and hold the Purchaser and its
assigns and their attorneys, accountants, employees, officers and directors
harmless from and against all losses, liabilities, damages, judgments, claims,
counterclaims, demands, actions, proceedings, costs and expenses (including
reasonable attorneys' fees) of every kind and character resulting from or
relating to or arising out of (a) the inaccuracy, nonfulfillment or breach of
any representation, warranty, covenant or agreement made by the Seller herein,
or (b) any legal action, including any counterclaim, to the extent it is based
upon alleged facts that, if true, would constitute a breach of any
representation, warranty, covenant, of violation of a state of federal consumer
protection law, or agreement made by the Seller herein, or (c) any actions or
omissions of the Seller or any employee or agent of the Seller, or any reckless
or willful misconduct with respect to any of the Contracts or the Financed
Vehicles.
ARTICLE 3
REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE SELLER
SECTION 3.1. REPRESENTATIONS AND WARRANTIES OF THE SELLER. The Seller hereby
represents and warrants to, and agrees with, the Purchaser as of the Closing
Date as follows:
ORGANIZATION AND GOOD STANDING. The Seller has the power to own
its assets and to transact the business in which it is currently engaged. The
Seller is duly qualified to do business and is in good standing in each
jurisdiction in which the character of the business transacted.
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AUTHORIZATION; BINDING OBLIGATIONS. The Seller has the power and authority to
make, execute, deliver and perform this Agreement and effect all of the
transactions contemplated to be performed by it under this Agreement, and has
taken all necessary action to authorize the execution, delivery and performance
of this Agreement.
NO VIOLATIONS. The execution, delivery and performance of this Agreement by the
Seller will not violate any provision of any existing law or regulation or any
order or decree of any court of competent jurisdiction applicable to the Seller
or the charter or bylaws of the Seller, or constitute a material breach of any
mortgage, indenture, loan agreement or other contract to which the seller is a
party or by which the Seller may be bound.
LITIGATION. No litigation or administrative proceeding of or before any court,
tribunal or governmental body is currently pending or, to the knowledge of the
Seller, threatened against the Seller or any of its properties, including
specifically the Contracts.
SECTION 3.2. WARRANTIES AS TO EACH CONTRACT. The Seller hereby makes the
following warranties as to each Contract conveyed by it to the Purchaser
hereunder:
CHARACTERISTICS OF CONTRACTS. The Contract (i) has been originated by the Seller
in the ordinary course of the Seller's business and has been fully and properly
executed by the parties thereto, (ii) is secured by a valid, subsisting, and
enforceable first priority security interest in favor of the Seller in the
Financed Vehicle, which security interest is assignable by the Seller to the
Purchaser, (iii) contains customary and enforceable provisions such as to render
the rights and remedies of the holder thereof adequate for realization against
the collateral for the benefits of the security provided thereby, (iv) provides
for payments which fully amortize the Amount Financed over the original term and
provide interest at the related APR over the term of the loan, (v) provides for,
in the event the Contract is prepaid, a prepayment that fully prepays the
outstanding principal balance thereof and includes accrued and unpaid interest
at least through the date of prepayment in an amount equal to the APR and (vi)
has not, as of the Purchase Date, been modified as a result of the Soldiers' and
Sailors' Civil Relief Act of 1940, as amended.
CONTRACT SCHEDULE. The information set forth in the Contract Schedule with
respect to such Contract was true and correct as of the opening of business on
the Closing Date, and the Closing Date principal balance and the APR of each
such Contract have been accurately and correctly calculated.
COMPLIANCE WITH LAW. The Contract, and the sale of the related Financed Vehicle,
complied with at the time it was originated or made, and will comply as of the
Purchase Date, in all respects with all requirements of applicable federal,
state and local laws, and regulations thereunder, including without limitation,
the Federal Truth-In-Lending Act, the Equal Credit Opportunity Act, the Fair
Credit Billing Act, the Fair Credit Reporting Act, the Fair Debt Collection
Practices Act, Federal Reserve Board Regulations B, Z and AA, any state
adaptations of the National Consumer Credit Protection Act, any state
adaptations of the Uniform Consumer Credit Code, and, to the best of Seller's
information and belief, any other applicable consumer credit, equal opportunity,
and disclosure laws.
BINDING OBLIGATION. The Contract constitutes the genuine, bona-fide, valid, and
binding obligation of the Obligor, enforceable by the holder thereof in
accordance with its terms, except as enforcement may be limited by bankruptcy,
insolvency, reorganization or other similar laws affecting the enforcement of
creditors' rights generally and the application of equitable principles
(regardless of whether such enforcement is considered in a proceeding or in
equity or at law). No Obligor has filed or had filed against it any protection
for relief, rearrangement of its debts or other protection from its creditors
under any state or federal bankruptcy or insolvency laws.
CONTRACTS IN FORCE. The Contract has not been satisfied, subordinated, waived,
restricted, rescinded or held to be invalid or unenforceable, and the Financed
Vehicle has not been released from the lien granted by the Contract in whole or
in part.
NO AMENDMENT OR WAIVER. No provision of the Contract has been amended, waived,
altered or modified in any respect, except pursuant to a document, instrument or
writing included in the Contract File and reflected in the Electronic Ledger and
no such amendment, waiver, alteration or modification causes such Contract not
to conform to the other warranties contained in this Section, nor renders it
invalid or unenforceable.
NO DEFENSES. The Contract is not subject to any right of rescission, setoff,
counterclaim or defense including the defense of usury, and the operation of any
of the terms of the Contract, or the exercise of any right thereunder, will not
render the Contract unenforceable in whole or in part or subject to any right of
rescission, right of cancellation, setoff, counterclaim or defense, including
the defense of usury and no such right of rescission, right of cancellation,
setoff, counterclaim or defense has been asserted with respect thereto. The
interest rate charged in each Contract is lawful in the jurisdiction governing
the transactions.
NO LIENS. There are no undisclosed liens or claims, including liens for work,
labor, materials or unpaid state or federal taxes relating to the Financed
Vehicle, that are or may be liens prior to, or equal to or coordinate with, the
lien granted by the Contract.
GOOD TITLE. The Contract has not been sold, assigned, hypothecated, pledged or
otherwise conveyed by the Seller to any person other than the Purchaser, and,
immediately prior to the transfer and assignment herein contemplated, the Seller
(i) had good and marketable title to the Contract free and clear of any
encumbrance, equity, lien, pledge, charge, claim, security interest or other
right or title of any third party, (ii) was the sole owner thereof, and (iii)
had full right, power and authority to transfer and assign the Contract to the
Purchaser without lien, claim or interest of any kind by any Person.
Immediately upon the transfer and assignment of the Contract to the Purchaser,
the Purchaser shall have good and marketable title to the Contract, free and
clear of any encumbrance, equity, lien, pledge, charge, claim, security interest
or other right or title of any other Person and the transfer will be valid and
enforceable under the UCC.
LAWFUL ASSIGNMENT. The Contract has not been originated in, and is not subject
to the laws of, any jurisdiction under which the sale, transfer and assignment
of such Contract hereunder or pursuant to which transfers of the Contracts are
unlawful, void or voidable.
ALL FILINGS MADE. All filings, including UCC filings, necessary in any
jurisdiction to give the Purchaser a first priority perfected security interest
(or ownership interest) in the Contract have been made.
ONE ORIGINAL. There is only one original executed Contract, which has been
conveyed by the Seller to the Purchaser.
OBLIGATIONS; NO IMPAIRMENT. The Seller has fulfilled all obligations on its part
to be fulfilled under, or in connection with, the Contract in a timely manner
and has done nothing to impair the rights of the Purchaser in the Contract or
the proceeds thereof.
NO FRAUD OR MISREPRESENTATIONS. The Contract was originated without any conduct
constituting fraud or misrepresentation, failure of consideration, or forgery or
alteration.
POSSESSION. Immediately after the Purchase Date, the Purchaser will have
possession of the original Contract and the related Contract File, and the
original title to the automobile securing the Contract, and there are and there
will be no undisclosed custodial agreements in effect adversely affecting the
right or ability of the Seller to make, or cause to be made, any delivery
required hereunder.
TAXES. All ad valorem or excise taxes of any nature or description whatsoever
and all recording fees and title transfer costs relating to the Contracts have
been paid in full.
INFORMATION. All financial statements, tax returns, journals, ledgers, customer
applications, xxxxxxx sheets, and all other information furnished to the
Purchaser in connection with the purchase of the Contracts was or will be at the
time furnished true and correct in all respects, and the Seller has not made any
untrue statement of material fact or omitted to state any material fact to the
Purchaser or any of its officers and agents in connection with the purchase by
the Purchaser of the Contracts.
DOWN PAYMENT. The seller acknowledges that the amount of the down payment shown
on the contract is material information upon which the purchaser has relied in
negotiating the amount to be paid to the seller, and seller therefore represents
and warrants that the down payment reflected on the contract has actually been
paid, and is not subject to any set-off, refund, or rebate.
SECTION 3.3. OTHER WARRANTIES AS TO THE CONTRACTS. The Seller represents and
warrants that:
AMOUNTS. The aggregate future payments, both principal and interest, of the
Contract/s as of the Purchase Date were equal to the amount set forth in the
contract/s.
CHARACTERISTICS. The Contracts had the following characteristics in the as of
the Purchase Date: (i) each Contract is a retail installment sales contract for
the purposes of used Financed Vehicle statutes; (ii) each Contract was
originated in the State of Oklahoma; (iii) all Financed Vehicles securing the
Contracts have never been titled as salvaged, reconditioned, reconstructed, or
flood damaged Motor Vehicles and (iv) the mileage of each vehicle is as
represented in the purchase agreements.
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MARKING RECORDS. By the Closing Date, the Seller will have caused the portions
of the Electronic Ledger relating to the Contracts to be clearly an
unambiguously marked to show that such Contracts are owned by the Purchaser and,
upon the Purchaser's request, shall provide the Purchaser with evidence of such
marking.
NO ASSIGNMENT. The Seller has not taken any action to convey any right to any
Person that would result in such Person having a right to payments received
under the Insurance Policies or payments due under the Contract that is senior
to, or equal with, that of the Purchaser.
SECTION 3.4 MISREPRESENTATIONS; BREACH OF WARRANTIES AND/OR COVENANTS. In the
event of seller misrepresentation, breach of warranties or covenants of the
seller, seller will immediately upon demand by the purchaser, repurchase any
contracts affected by said misrepresentation or breach. The repurchase price
shall be the principal amount owed on each affected contract, plus accrued
interest, cost of repossession, legal costs, and any other cost or damages
incurred by the purchaser related to said misrepresentation or breach.
ARTICLE 4
OBLIGOR PAYMENT DEFAULTS; FULL AND LIMITED RECOURSE
See Attached - Insert
ARTICLE 5
MISCELLANEOUS PROVISIONS
SECTION 5.1. AMENDMENT. This Agreement may be amended from time to time by the
Seller and the Purchaser by written agreement signed by the Seller and the
Purchaser.
SECTION 5.2. DISPUTES. In the event of a dispute regarding the breach of any
representations or warranty, or the performance of this agreement, and if the
Seller and the Purchaser cannot otherwise agree, the matter shall be submitted
to binding arbitration under the International Rules of the American Arbitration
Association, before an independent qualified expert by both parties in Oklahoma
City, Oklahoma.
SECTION 5.3. FURTHER ASSURANCES. In order to facilitate enforcement of the
Investor's rights hereunder with respect to the Contracts and the Financed
Vehicles, the Seller shall, promptly after the request by the Purchaser or its
assigns, and at the Seller's expense, do and perform or cause to be done and
performed every reasonable act and thing necessary or advisable to carry out to
the intent of this Agreement (including, without limitation, that the Purchaser
has the right and ability to enforce payment and performance of the Contracts.)
The Seller hereby grants a limited power of attorney to the Purchaser for the
specific purpose of exercising all rights and remedies the Seller would have
with respect to the Contracts and the Financed Vehicles securing them, but for
sale of the Contracts to the Purchaser.
SECTION 5.4. COUNTERPARTS. For the purpose of facilitating the execution of this
Agreement as herein provided and for other purposes, this Agreement may be
executed simultaneously in any number of counterparts, each of which
counterparts shall be deemed to be an original, and such counterparts shall
constitute but one and the same instrument
SECTION 5.5. SURVIVAL. The obligations of the Seller and the Purchaser under
this Agreement and the representations and warranties in Article III shall
survive the sale of the Contracts to the Purchaser.
SECTION 5.6. GOVERNING LAW. This Agreement shall be construed in accordance with
the laws of the State of Oklahoma and the obligations, rights and remedies of
the parties hereunder shall be determined in accordance with such laws without
giving effect to the conflict of laws principles thereof. This Agreement is
performable in Dallas County, Texas and Oklahoma County, Oklahoma which is
proper venue for all legal proceedings.
SECTION 5.7. NOTICES. All demands, notices and communications hereunder shall be
in writing and shall be deemed to have been duly given if delivered personally,
telecopied (with receipt confirmed by telephone call to the person, or a member
of the department, specified for attention) or mailed by first class mail,
postage prepaid as follows:
IF TO PURCHASER:
U.S. AUTOMOBILE ACCEPTANCE SNP-IV, INC.
0000 XX 00XX #X-000
XXXXXXXX XXXX, XXXXXXXX 00000
IF TO SELLER:
---------------------------------------------------
---------------------------------------------------
--------------------------------------------------- or to such other address as may hereafter be furnished by
either party to the other.
SECTION 5.8. SEVERABILITY OF PROVISIONS. If any one or more of the covenants,
agreements, provisions or terms of this Agreement shall be held invalid for any
reason whatsoever, then such covenants, agreements, provisions or terms shall be
deemed severable from the remaining covenants, agreements, provisions or terms
of this Agreement and shall in no way affect the validity or enforceability of
the other provisions of this Agreement.
SECTION 5.9. NO PARTNERSHIP. Nothing herein contained shall be deemed or
construed to create a co-partnership or joint venture between the parties
hereto.
SECTION 6.0. SUCCESSOR AND ASSIGNS. This Agreement shall inure to the benefit of
and be binding upon the Seller and the Purchaser and their respective successors
and assigns.
IN WITNESS WHEREOF, the Seller and the Purchaser have caused their names to be
signed hereto by their respective officers thereunto duly authorized as of the
day and year first above written.
SELLER: BY:
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NAME: TITLE:
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PURCHASER:U.S. AUTOMOBILE ACCEPTANCE SNP IV, INC. BY:
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NAME: TITLE:
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FORM OF XXXX OF SALE
____________________________________________, (the "Seller") hereby
absolutely sells, transfers, assigns, sets-over and conveys to U. S. AUTOMOBILE
ACCEPTANCE SNP-IV, INC., the ("Purchaser"), all rights, title, and interest in
and to:
(a) the Contracts, including all payment of principal and
interest, late charges and other similar payments due now,
previously, and hereafter acquired thereon and accruing after
the Purchase Date, and all payments on the Contracts received
prior to the Purchase Date which have not been applied to the
amount due on the Contracts as of the Purchase Date;
(b) the security interests created by the Contracts, and other
rights of the Seller rising out of such security interests, in
the Financed Vehicles;
(c) all Insurance Policies relating to the Financed Vehicles or
the Contracts;
(d) all documents and information contained in the Contract Files;
(e) all proceeds derived from any of the foregoing.
Terms not defined herein have the meanings assigned to them in the Sale
and Purchase Agreement, dated between the Seller and the Purchaser.
This Xxxx of Sale shall be governed by the laws of the United States
without regard to conflicts of laws rules thereof.
DATED: ____________________________
By:________________________________
Name_______________________________
Title:_____________________________
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RESOLUTIONS
I, SECRETARY OF ______________________________________________CERTIFY THAT
THE FOLLOWING RESOLUTIONS HAVE BEEN DULY ADOPTED BY THE BOARD OF DIRECTORS OF
__________________________________ AND THAT SUCH RESOLUTIONS HAVE NOT BEEN
AMENDED OR RESCINDED AS OF THIS DATE.
"Resolved that the officers of the corporations are hereby authorize to
execute such documents and take such actions as may be necessary to complete the
sale of the contracts to that certain Sale and Purchase Agreement dated
___________________ by and between this corporation and U.S. AUTOMOBILE
ACCEPTANCE SNP-IV, INC.
Signed this _____ day of ____________, 199_.
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SECRETARY
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INCUMBENCY CERTIFICATE
DATE:_______________________
This will certify that __________________________________, whose signature
appears on the Sale and Purchase Agreement dated ______________________, is the
_______________________ of _____________________________________________ and is
authorized and empowered to execute such Sale and Purchase Agreement on behalf
of such corporation.
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Signature/Corporate Officer
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Printed Name/Title
This certificate is furnished as Secretary of .
--------------------------------
----------------------------------
Signature/Corporate Officer
----------------------------------
Printed Name/Title
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INSERT OPTIONS TO CONTINUING PURCHASE AND SALE AGREEMENT - ARTICLE 4
1. OBLIGOR PAYMENT DEFAULTS; FULL RECOURSE; REPURCHASE AGREEMENT
SECTION 4.1 FULL RECOURSE PERIOD. Cash Repurchase of
Defaulting Contracts. In the event any Obligor defaults on a Contract
prior to or on the due date of _____ monthly installment(s), Seller
agrees to immediately repurchase such Contract or Contracts. Payment to
Purchaser for repurchase of Contracts will be made within ten (10)
business days following the default. Repurchased Contracts will be paid
for in an amount that will cause no loss of principal or interest to
the purchasers.
SECTION 4.2 DEFAULT. The Obligor shall be in default on a
Contract if he fails to perform any payment obligation, fails to obtain
or maintain property damage insurance, or commits any action or fails
to take any action that would give rise to the right of repossession
under the Contract.
SECTION 4.3 RESALE OF REPOSSESSION. Seller agrees to offer for
resale, at Purchaser's option, vehicles that Purchaser has repossessed
that were collateral on Contracts purchased from Seller. Seller agrees
to use reasonable efforts to sell the vehicles on Contracts that will
be acceptable to Purchaser.
2. OBLIGOR DEFAULTS; DELINQUENCIES; REPLACEMENT OF CONTRACTS
SECTION 4.1 CASH REPURCHASE OR REPLACEMENT OF DELINQUENT
CONTRACTS. In the event any of the Contracts become delinquent for a
period of thirty (30) days or more, Seller agrees to immediately
repurchase or replace such Contract or Contracts, with a Contract or
Contracts, acceptable to Purchaser, secured by title to automobiles or
light trucks, with the same net outstanding principal balance, the same
aggregate interest rate and similar remaining payment terms and number
of payments die so as to cause no loss of principal or interest to
Purchaser. If Contracts are to be repurchased, this event will occur
within ten (10) business days following the thirty (30) calendar days
of delinquency. Repurchased Contracts will be paid for in an amount
that will cause no loss of principal or interest to the purchasers. The
replacement Contracts shall be a similar instrument of like amount with
similar provisions secured by collateral of equal or greater fair
market value and shall be replaced within ten (10) business days
following the thirtieth (30) calendar day of delinquency. A cash
adjustment will be made for replacement Contract differences at the
time of the change. Replacement Contracts will be considered the same
as a newly purchased Contract and will be treated accordingly if the
Contract becomes delinquent.
3. OBLIGOR DEFAULTS; FULL AND LIMITED RECOURSE; REPLACEMENT OF CONTRACTS
SECTION 4.1 CLASS A VEHICLES DEFINED. A vehicles qualifies as
a Class A vehicle if, at the Closing Date as defined in Section 1.4,
the vehicle:
(a) is a passenger car and
(i) has less than 50,000 actual miles, and
(ii) the difference between the current calendar year and the
model year as stated on the certificate of title is 6 or less.
(b) is a truck and
(i) has less than 60,000 actual miles, and
(ii) the difference between the current calendar year and the
model year as stated on the certificate of title is 6 or less.
SECTION 4.2 CLASS B VEHICLES DEFINED. Any vehicle that does
not qualify as a Class A vehicle is a Class B vehicle.
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SECTION 4.3 RECOURSE ON DEFAULTING CLASS A CONTRACTS. On any
Contract on a Class A vehicle that goes into default at any time prior
to or on the due date of the _____ monthly installment, or before the
end of ____ months form the Closing date on Contracts that are not
payable monthly, the seller agrees to repurchase the Contract. The
repurchase price shall be the amount paid to Seller by Purchaser,
reduced by any principal reduction made by the debtor prior to default,
and increased by any unpaid interest that has accrued prior to default.
Seller also agrees to reimburse Purchaser for any attorney fees and
court costs incurred by Purchaser in obtaining possession of the
vehicle. Default, for purpose of this Article 4, shall include any
conditions of default stated in the retail installment contract, and
(1) any payment default, (2) any vehicle that is wrecked, (3) any
bankruptcy filing by the debtor, (4) any skip that can not be located,
and (5) any vehicle deemed by Purchaser, in its sole discretion, to be
inoperable or in unsatisfactory mechanical and operating condition.
SECTION 4.4 RECOURSE ON DEFAULTING CLASS B CONTRACTS. (A) On
any Contract on a Class B vehicle that goes into default at any time
prior to on the due day of the ____ monthly installment, or before the
end or ___ months from the closing date on Contracts that are not
payable monthly, the seller agrees to repurchase the Contract. The
repurchase price shall be the amount paid to Seller by Purchaser,
reduced by any principal reduction made by the debtor prior to default,
and increased by any unpaid interest that has accrued prior to default.
Seller also agrees to reimburse Purchaser for any attorney fees and
court costs incurred by Purchaser in obtaining Possession of the
vehicle. Default, for purpose of this Article 4, shall include any
conditions of default stated in the retail installment contract, and
(1) any payment default, (2) any vehicle that is wrecked, (3) any
bankruptcy filing by the debtor, (4) any skip that can not be located,
and (5) any vehicle deemed by Purchaser, in its sole discretion, to be
inoperable or in unsatisfactory mechanical and operating condition. (B)
On any Contract on a Class B vehicle that goes into default during the
period of ___ days beginning the day after the repurchase period
referred to above expires, the Purchase shall have limited recourse
against Seller as described below:
(1) Seller shall have the option or repurchasing the Contract
under the terms of Section 4.4 (a) above; (2) ____ of any
deficiency remaining after the vehicle is sold at a wholesale
auto auction, with the proceeds first applied using the
repurchase formula act set forth in Section 4.4 (a). (3)
Replacement of the Contract with a new Contract generated by
selling the vehicle in a retail transaction approved by
Purchaser. If the sale is approved by Purchaser, the Seller
shall retain the down payment received or ten percent of the
selling price, whichever is less, as compensation for
reselling the vehicle. The Seller shall pay one-half the cost
of reconditioning the vehicle for resale up to a maximum of
$_____ as the Seller's share. If the vehicle is re-sold in a
transaction accepted by Purchaser within 45 days of the time
the vehicle is reconditioned, and the new Contract is properly
assigned to Purchase, the Seller will have no further
obligation to Purchaser with regard to the original Contract.
If the Seller fails, the Seller shall sell the vehicle at a
wholesale auto auction, applying the proceeds first to the
repurchase formula described in Section 4.4 (a) above. If any
deficiency remains, the Seller shall immediately pay one-half
of the deficiency to Purchaser.
SECTION 4.5 RESALE OF REPOSSESSION. Seller agrees to offer for
resale, at Purchaser's option, vehicles that Purchaser has repossessed
that were collateral on Contracts purchased by Purchaser from Seller.
Seller agrees to use reasonable efforts to sell the vehicles on
Contracts that will be acceptable to Purchaser.
4. OBLIGOR DEFAULT; RESALE OF REPOSSESSION
SECTION 4.1 RESALE OF REPOSSESSION. Seller agrees to offer for
resale, at Purchaser's option, vehicles that Purchaser has repossessed
that were collateral on Contracts purchased by Purchaser from Seller.
Seller agrees to use reasonable efforts to sell the vehicles on
Contracts that will be acceptable to Purchaser.
5. OBLIGOR DEFAULT; OTHER DEALER RECOURSE
SECTION 5.2 ASSIGNMENT. This Assignment is subject to the
provisions set out below in the paragraph(s) initialed by Assignor, if
any.
