OWNER TRUST PURCHASE AGREEMENT
between
PRUDENTIAL SECURITIES SECURED FINANCING CORPORATION
as Seller
and
FLAGSHIP AUTO RECEIVABLES OWNER TRUST 1999-2
as Purchaser
----------------------------
Dated as of November 1, 1999
----------------------------
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
SECTION 1.1. Definitions....................................................1
SECTION 1.2. Usage of Terms.................................................3
SECTION 1.3. Section References.............................................3
SECTION 1.4. Action by or Consent of Noteholders............................3
SECTION 1.5. No Recourse....................................................3
ARTICLE II
CONVEYANCE OF THE AUTO LOANS
AND THE OTHER CONVEYED PROPERTY
SECTION 2.1. Conveyance of the Auto Loans and the Other Conveyed
Property.......................................................3
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.1. Representations and Warranties of Prudential as Seller.........4
SECTION 3.2. Representations and Warranties of the Issuer as Purchaser......6
ARTICLE IV
COVENANTS OF PRUDENTIAL
SECTION 4.1. Protection of Title of the Issuer and the Trust................8
SECTION 4.2. Other Liens or Interests.......................................9
SECTION 4.3. Costs and Expenses.............................................9
ARTICLE V
MISCELLANEOUS
SECTION 5.1. Liability of Prudential........................................9
SECTION 5.2. [Reserved]....................................................10
SECTION 5.3. Limitation on Liability of Prudential and Others..............10
SECTION 5.4. Conveyance of the Auto Loans and the Other Conveyed Property
to the Issuer.................................................10
SECTION 5.5. Amendment.....................................................10
SECTION 5.6. Notices.......................................................11
SECTION 5.7. Merger and Integration........................................11
SECTION 5.8. Severability of Provisions....................................11
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SECTION 5.9. GOVERNING LAW.................................................12
SECTION 5.10. Counterparts..................................................12
SECTION 5.11. Nonpetition Covenant..........................................12
SECTION 5.12. Assignment....................................................12
SECTION 5.13. Third-Party Beneficiaries.....................................12
SECTION 5.14. Successors and Assigns........................................12
SECTION 5.15. Limitation of Liability.......................................13
SCHEDULE A -- Schedule of Auto Loans
SCHEDULE B -- Legal Proceedings
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OWNER TRUST PURCHASE AGREEMENT, dated as of November 1, 1999 (this
"Agreement"), between Prudential Securities Secured Financing Corporation, a
Delaware corporation, as seller ("Prudential") and Flagship Auto Receivables
Owner Trust 1999-2, a trust, as purchaser (the "Issuer").
WHEREAS, Flagship LLC has purchased the Auto Loans and the Other Conveyed
Property from Flagship Credit Corporation pursuant to the Sales and Servicing
Agreement.
WHEREAS, Prudential has purchased the Auto Loans, the Other Conveyed
Property and the rights of Flagship LLC under the Sales and Servicing Agreement
from Flagship LLC.
WHEREAS, Prudential will sell, transfer and assign its interest in the Auto
Loans, the Other Conveyed Property and its rights under the Depositor Purchase
Agreement to the Issuer pursuant to this Agreement, and the Issuer will pledge
the Auto Loans and Other Conveyed Property to the Indenture Trustee pursuant to
the Indenture.
NOW, THEREFORE, in consideration of the mutual agreements contained herein,
Prudential and the Issuer hereby agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. Definitions. Capitalized terms used but not defined herein
shall have the meanings set forth in the Sales and Servicing Agreement (as
defined below). Whenever capitalized and used in this Agreement, the following
words shall have the following meanings:
"Certificate" has the meaning assigned to that term in the Trust Agreement.
"Flagship LLC" means Flagship Auto Loan Funding LLC 1999-II.
"Other Conveyed Property" means, with respect to the Auto Loans:
(i) all right, title and interest of Prudential in and to all
monies received with respect to the Auto Loans after the Cut-off Date
and all Actual Recovery Amounts received with respect to such Auto
Loans after the Cut-off Date;
(ii) all right, title and interest of Prudential in and to the
security interests in the Financed Vehicles granted by Obligors
pursuant to the Auto Loans and any other interest of Prudential in
such Financed Vehicles, including, without limitation, the
certificates of title related thereto;
(iii) all right, title and interest of Prudential in and to any
proceeds from claims on any physical damage, credit life and credit
accident and health insurance policies or certificates relating to the
Financed Vehicles securing the Auto Loans or the Obligors thereunder;
(iv) all right, title and interest of Prudential in and to
related contracts, including third party contracts and dealer
agreements;
(v) all right, title and interest of Prudential in and to refunds
for the costs of extended service contracts with respect to Financed
Vehicles securing Auto Loans, refunds of unearned premiums with
respect to credit life and credit accident and health insurance
policies or certificates covering an Obligor or Financed Vehicle under
an Auto Loan or his or her obligations with respect to a Financed
Vehicle and any recourse to Dealers for any of the foregoing;
(vi) the Loan File related to each Auto Loan;
(vii) all amounts and property from time to time held in or
credited to the Collection Account;
(viii) all present and future claims, demands, causes and choses
in action in respect of any or all of the foregoing and all payments
on or under and all proceeds of every kind and nature whatsoever in
respect of any or all of the foregoing, including all proceeds of the
conversion, voluntary or involuntary, into cash or other liquid
property, all cash proceeds, accounts, accounts receivable, notes,
drafts, acceptances, chattel paper, checks, deposit accounts,
insurance proceeds, condemnation awards, rights to payment of any and
every kind and other forms of obligations and Auto Loans, instruments
and other property which at any time constitute all or part of or are
included in the proceeds of any of the foregoing;
(ix) the rights of Prudential under the Depositor Purchase
Agreement, including (without limitation) the rights of Flagship LLC
under the Sales and Servicing Agreement; and
(x) the proceeds of any and all of the foregoing.
"Purchaser" means Flagship Auto Receivables Owner Trust 1999-2.
"Sales and Servicing Agreement" means the Sales and Servicing Agreement
dated as of November 1, 1999 among Flagship LLC, Flagship Credit Corporation, as
originator and servicer, the Issuer, the Indenture Trustee and the Back-up
Servicer.
"Seller" means Prudential Securities Secured Financing Corporation.
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"Trust Agreement" means the trust agreement, dated as of November 1, 1999,
by and between Prudential Securities Secured Financing Corporation and First
Union National Bank, relating to Flagship Auto Receivables Owner Trust 1999-2,
as the same may be amended, supplemented, and/or restated in accordance with its
terms.
SECTION 1.2. Usage of Terms. With respect to all terms used in this
Agreement, the singular includes the plural and the plural the singular; words
importing one gender include the other gender; references to "writing" include
printing, typing, lithography, and other means of reproducing words in a visible
form; references to agreements and other contractual instruments include all
subsequent amendments thereto or changes therein entered into in accordance with
their respective terms and not prohibited by this Agreement or the Sales and
Servicing Agreement; references to Persons include their permitted successors
and assigns; and the terms "include" or "including" mean "include without
limitation" or "including without limitation."
SECTION 1.3. Section References. All references to Articles, Sections,
paragraphs, subsections, exhibits and schedules shall be to such portions of
this Agreement unless otherwise specified.
SECTION 1.4. Action by or Consent of Noteholders. Whenever any provision of
this Agreement refers to action to be taken or consented to by Noteholders, such
provision shall be deemed to refer to Noteholders of record as of the Record
Date preceding the date on which such action is to be taken or consent given by
Noteholders. Solely for the purposes of any action to be taken, or consented to
by Noteholders, any Note registered in the name of Flagship Credit Corporation,
Flagship LLC or any Affiliate thereof shall be deemed not to be outstanding;
provided, however, that, solely for the purpose of determining whether the
Indenture Trustee is entitled to rely upon any such action or consent, only
Notes which the Indenture Trustee knows to be so owned shall be so disregarded.
SECTION 1.5. No Recourse. No recourse may be taken, directly or indirectly,
under this Agreement or any certificate or other writing delivered in connection
herewith or therewith, against any stockholder, officer or director, as such, of
Flagship Credit Corporation, Prudential, the Issuer or of any predecessor or
successor of Flagship Credit Corporation, Prudential or the Issuer.
ARTICLE II
CONVEYANCE OF THE AUTO LOANS
AND THE OTHER CONVEYED PROPERTY
SECTION 2.1. Conveyance of the Auto Loans and the Other Conveyed Property.
(a) Conveyance. Subject to the terms and conditions of this Agreement,
Prudential hereby sells, contributes, transfers, assigns and otherwise conveys
to the Issuer, without recourse (but without limitation of its obligations in
this Agreement), and the Issuer hereby purchases and accepts,
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all right, title and interest of Prudential in and to the Auto Loans listed in
Schedule A and the Other Conveyed Property with respect thereto. It is the
intention of Prudential and the Issuer that the transfer and assignment
contemplated by this Agreement shall constitute a sale of the Auto Loans and the
Other Conveyed Property from Prudential to the Issuer and the beneficial
interest in and title to the Auto Loans and the Other Conveyed Property shall
not be part of Prudential's estate in the event of the filing of a bankruptcy
petition by or against Prudential under any bankruptcy law. If, notwithstanding
the intent of Prudential and the Issuer, the transfer and assignment
contemplated hereby is held not to be a sale and/or contribution, Prudential
hereby grants a first priority security interest to the Issuer in the property
conveyed pursuant to this Section 2.1(a), and this Agreement shall be construed
so as to further such intent.
(b) Auto Loans Purchase Amount. Simultaneously with the conveyance of the
Auto Loans and the Other Conveyed Property with respect thereto by Prudential to
the Issuer, on the Closing Date, the Issuer shall transfer to Prudential the
Notes issued under the Indenture and the Certificates issued under the Trust
Agreement.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.1. Representations and Warranties of Prudential as Seller. By its
execution of this Agreement, Prudential makes the following representations and
warranties on which the Issuer relies in purchasing the Auto Loans and the Other
Conveyed Property with respect thereto and in pledging the Auto Loans and the
Other Conveyed Property with respect thereto to the Indenture Trustee under the
Indenture. Unless otherwise specified, such representations and warranties speak
as of the Closing Date, but shall survive the sale, contribution, transfer and
assignment of the Auto Loans and the Other Conveyed Property hereunder, and the
subsequent pledge thereof by the Issuer to the Indenture Trustee under the
Indenture. Prudential and the Issuer agree that the Issuer will pledge all of
such interests to the Indenture Trustee, and that the Indenture Trustee will
thereafter be entitled to enforce this Agreement directly against Prudential in
the Indenture Trustee's own name on behalf of the Noteholders and the Insurer.
(a) Organization and Good Standing. Prudential has been duly organized and
is validly existing as a Delaware corporation in good standing under the laws of
the State of Delaware, with power and authority to own its properties and to
conduct its business as such properties are currently owned and such business is
currently conducted, and had at all relevant times, and now has, power,
authority and legal right to acquire, own and sell the Auto Loans and the Other
Conveyed Property transferred to the Issuer.
(b) Due Qualification. Prudential is duly qualified to do business as a
foreign corporation in good standing, and has obtained all necessary licenses
and approvals in all jurisdictions in which the ownership or lease of property
or the conduct of its business shall require such qualifications, in each case,
except where failure to do so will not have a material adverse effect on
Prudential or its ability to perform its obligations under this Agreement.
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(c) Power and Authority. Prudential has the power and authority to execute
and deliver this Agreement and the Transaction Documents to which it is a party
and to carry out its terms and their terms, respectively; Prudential has full
power and authority to sell and assign the Auto Loans and the Other Conveyed
Property to be sold and assigned to and deposited with the Issuer hereunder and
has duly authorized such sale and assignment to the Issuer by all necessary
corporate action; and the execution, delivery and performance of this Agreement
and the Transaction Documents to which Prudential is a party have been duly
authorized by Prudential by all necessary corporate action.
(d) Valid Sale, Binding Obligations. This Agreement effects a valid sale,
transfer and assignment of the Auto Loans and the Other Conveyed Property,
enforceable against Prudential and creditors of and purchasers from Prudential;
and this Agreement and the Transaction Documents to which Prudential is a party,
when duly executed and delivered, shall constitute legal, valid and binding
obligations of Prudential enforceable in accordance with their respective terms,
except as enforceability may be limited by bankruptcy, insolvency,
reorganization or other similar laws affecting the enforcement of creditors'
rights generally and by equitable limitations on the availability of specific
remedies, regardless of whether such enforceability is considered in a
proceeding in equity or at law.
(e) No Violation. The consummation of the transactions contemplated by this
Agreement and the Transaction Documents and the fulfillment of the terms of this
Agreement and the Transaction Documents shall not conflict with, result in any
breach of any of the terms and provisions of or constitute (with or without
notice, lapse of time or both) a default under the certificate of incorporation
or by-laws of Prudential, or any indenture, agreement, mortgage, deed of trust
or other instrument to which Prudential is a party or by which it is bound, or
result in the creation or imposition of any Lien upon any of its properties
pursuant to the terms of any such indenture, agreement, mortgage, deed of trust
or other instrument, other than the Transaction Documents, or violate any law,
order, rule or regulation applicable to Prudential of any court or of any
federal or state regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over Prudential or any of its properties.
(f) No Proceedings. There are no proceedings or investigations pending or,
to Prudential's knowledge, threatened against Prudential, before any court,
regulatory body, administrative agency or other tribunal or governmental
instrumentality having jurisdiction over Prudential or its properties (A)
asserting the invalidity of this Agreement, the Notes or any of the Transaction
Documents, (B) seeking to prevent the issuance of the Notes or the consummation
of any of the transactions contemplated by this Agreement or any of the
Transaction Documents, (C) seeking any determination or ruling that might
materially and adversely affect the performance by Prudential of its obligations
under, or the validity or enforceability of, this Agreement or any of the
Transaction Documents, or (D) relating to Prudential and which might adversely
affect the federal or state income, excise, franchise or similar tax attributes
of the Notes.
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(g) No Consents. No consent, approval, authorization or order of or
declaration or filing with any governmental authority is required for the
issuance or sale of the Notes or the consummation of the other transactions
contemplated by this Agreement, except such as have been duly made or obtained.
(h) Tax Returns. Prudential has filed on a timely basis all tax returns
required to be filed by it and paid all taxes, to the extent that such taxes
have become due.
(i) Chief Executive Office. The chief executive office of Prudential is Xxx
Xxx Xxxx Xxxxx, 00xx Xxxxx, Xxx Xxxx, XX 00000.
SECTION 3.2. Representations and Warranties of the Issuer as Purchaser. By
its execution of this Agreement, the Issuer makes the following representations
and warranties on which Prudential relies in selling, assigning, transferring
and conveying the Auto Loans and the Other Conveyed Property to the Issuer
hereunder. Unless otherwise specified, such representations and warranties speak
as of the Closing Date, but shall survive the sale, contribution, transfer and
assignment of the Auto Loans and the Other Conveyed Property hereunder, and the
pledge thereof by the Issuer to the Indenture Trustee pursuant to the Indenture.
(a) Organization and Good Standing. The Issuer has been duly organized and
is validly existing as a trust in good standing under the laws of the State of
Delaware, with power and authority to own its properties and to conduct its
business as such properties are currently owned and such business is currently
conducted, and had at all relevant times, and now has, power, authority and
legal right to acquire, own and sell the Auto Loans and the Other Conveyed
Property transferred hereunder.
(b) Due Qualification. The Issuer is duly qualified to do business as a
foreign corporation in good standing, and has obtained all necessary licenses
and approvals in all jurisdictions in which the ownership or lease of property
or the conduct of its business shall require such qualifications, in each case,
except where failure to do so will not have a material adverse effect on the
Issuer or its ability to perform its obligations under this Agreement.
(c) Power and Authority. The Issuer has the power and authority to execute
and deliver this Agreement and the Transaction Documents to which it is a party
and to carry out its terms and their terms, respectively; the Issuer has full
power and authority to acquire the Auto Loans and the Other Conveyed Property to
be sold and assigned to and deposited with the Issuer by it; and the execution,
delivery and performance of this Agreement and the Transaction Documents to
which the Issuer is a party have been duly authorized by the Issuer by all
necessary corporate action.
(d) Valid Sale, Binding Obligations. This Agreement effects a valid sale,
transfer and assignment of the Auto Loans and the Other Conveyed Property,
enforceable against the Issuer and creditors of and purchasers from the Issuer;
and this Agreement and the Transaction Documents to which the Issuer is a party,
when duly executed and delivered, shall constitute legal, valid and
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binding obligations of the Issuer enforceable in accordance with their
respective terms, except as enforceability may be limited by bankruptcy,
insolvency, reorganization or other similar laws affecting the enforcement of
creditors' rights generally and by equitable limitations on the availability of
specific remedies, regardless of whether such enforceability is considered in a
proceeding in equity or at law.
(e) No Violation. The consummation of the transactions contemplated by this
Agreement and the Transaction Documents and the fulfillment of the terms of this
Agreement and the Transaction Documents shall not conflict with, result in any
breach of any of the terms and provisions of or constitute (with or without
notice, lapse of time or both) a default under the Trust Agreement, or any
indenture, agreement, mortgage, deed of trust or other instrument to which the
Issuer is a party or by which it is bound, or result in the creation or
imposition of any Lien upon any of its properties pursuant to the terms of any
such indenture, agreement, mortgage, deed of trust or other instrument, other
than the Transaction Documents, or violate any law, order, rule or regulation
applicable to the Issuer of any court or of any federal or state regulatory
body, administrative agency or other governmental instrumentality having
jurisdiction over the Issuer or any of its properties.
(f) No Proceedings. There are no proceedings or investigations pending or,
to the Issuer's knowledge, threatened against the Issuer, before any court,
regulatory body, administrative agency or other tribunal or governmental
instrumentality having jurisdiction over the Issuer or its properties (A)
asserting the invalidity of this Agreement, the Notes or any of the Transaction
Documents, (B) seeking to prevent the issuance of the Notes or the consummation
of any of the transactions contemplated by this Agreement or any of the
Transaction Documents, (C) seeking any determination or ruling that might
materially and adversely affect the performance by the Issuer of its obligations
under, or the validity or enforceability of, this Agreement or any of the
Transaction Documents, or (D) relating to the Issuer and which might adversely
affect the federal or state income, excise, franchise or similar tax attributes
of the Notes.
(g) No Consents. No consent, approval, authorization or order of or
declaration or filing with any governmental authority is required for the
issuance or sale of the Notes or the consummation of the other transactions
contemplated by this Agreement, except such as have been duly made or obtained.
(h) Tax Returns. The Issuer has filed on a timely basis all tax returns
required to be filed by it and paid all taxes, to the extent that such taxes
have become due.
(i) Chief Executive Office. The chief executive office of the Issuer is at
c/o First Union National Bank, One Xxxxxx Square, 000 Xxxx Xxxxxx, Xxxxxxxxxx,
Xxxxxxxx 00000.
In the event of any breach of a representation and warranty made by the Issuer
hereunder, Prudential covenants and agrees that Prudential will not take any
action to pursue any remedy that either may have hereunder, in law, in equity or
otherwise, until a year and a day have passed since the date on which all Notes
or other similar securities issued by the Trust, or another trust or similar
vehicle
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formed by the Issuer, or any obligations, notes or other securities issued by
the Issuer have been paid in full. Prudential and the Issuer agree that damages
will not be an adequate remedy for such breach and that this covenant may be
specifically enforced by the Issuer or by the Indenture Trustee on behalf of the
Noteholders and the Insurer.
ARTICLE IV
COVENANTS OF PRUDENTIAL
SECTION 4.1. Protection of Title of the Issuer and the Trust.
(a) Prudential shall execute, file, record and register such financing
statements and cause to be executed, filed, recorded and registered such
continuation and other statements or documents, all in such manner and in such
places as may be required by law fully to preserve, maintain and protect the
interests of the Issuer under this Agreement, and of the Trust and the Indenture
Trustee under the Indenture and the Sales and Servicing Agreement, in the Auto
Loans and the Other Conveyed Property, and in the proceeds thereof. Prudential
shall deliver (or cause to be delivered) to the Issuer, the Owner Trustee, the
Insurer and the Indenture Trustee file-stamped copies of, or filing receipts
for, any document recorded, registered or filed as provided above, as soon as
available following such recordation, registration or filing. If Prudential
fails to perform its obligations under this subsection, the Issuer, the Owner
Trustee or the Indenture Trustee may do so, at the expense of Prudential.
(b) Prudential shall not change its name, identity or corporate structure
in any manner that would make any financing statement or continuation statement
filed by Prudential (or by the Issuer, the Trust or the Indenture Trustee on
behalf of Prudential ) in accordance with Section 4.1(a) seriously misleading
within the meaning of the applicable provisions of the UCC or any title statute,
unless Prudential shall have given the Issuer, the Owner Trustee, the Insurer
and the Indenture Trustee at least 30 days prior written notice thereof, and
shall promptly file appropriate amendments to all previously filed financing
statements and continuation statements.
(c) Prudential shall give the Issuer, the Owner Trustee, the Insurer and
the Indenture Trustee at least 30 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 of
any previously filed financing or continuation statement or of any new financing
statement. Prudential shall at all times maintain each office from which it
services Auto Loans and its principal executive office within the United States
of America.
(d) If at any time Prudential proposes to sell, grant a security interest
in, or otherwise transfer any interest in automotive receivables (other than the
Auto Loans) to any prospective purchaser, lender or other transferee, Prudential
shall give to such prospective purchaser, lender or other transferee computer
tapes, records or print-outs (including any restored from backup archives) that,
if they shall refer in any manner whatsoever to any Auto Loan, indicate clearly
that such Auto
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Loan is owned by the Trust and pledged to the Indenture Trustee (unless such
Auto Loan has been paid in full or purchased).
(e) Promptly after taking the foregoing actions described in Sections
4.1(b) or (c), Prudential shall deliver to the Indenture Trustee, the Insurer
and the Owner Trustee an Opinion of Counsel either (i) stating that, in the
opinion of such counsel, all financing statements and continuation statements
have been executed and filed that are necessary to preserve and protect the
interest of the Indenture Trustee in the Auto Loans and the Other Conveyed
Property, and reciting the details of such filings or referring to prior
Opinions of Counsel in which such details are given, or (ii) stating that, in
the opinion of such counsel, no such action is necessary to preserve and protect
such interest.
SECTION 4.2. Other Liens or Interests. Prudential shall not (i) create,
incur or suffer to exist, or agree to create, incur or suffer to exist, or
consent to cause or permit in the future (upon the happening of a contingency or
otherwise) the creation, incurrence or existence of any Lien on, or restriction
on transferability of, the Auto Loans, except for the Lien in its favor, the
Lien in favor of the Issuer, the Lien in favor of the Indenture Trustee for the
benefit of the Noteholders and the Insurer and the restrictions on
transferability imposed by the Transaction Documents or (ii) sign or file under
the UCC of any jurisdiction any financing statement that names Prudential,
Flagship LLC or the Issuer as a debtor, or sign any security agreement
authorizing any secured party thereunder to file any such financing statement,
with respect to the Auto Loans, except in each case any such instrument solely
securing the rights and preserving its Lien, the Lien of the Issuer and the Lien
of the Indenture Trustee, for the benefit of the Noteholders and the Insurer or
as otherwise permitted under this Agreement or the Transaction Documents.
SECTION 4.3. Costs and Expenses. Prudential shall pay all reasonable costs
and disbursements in connection with the performance of its obligations
hereunder and under the Sales and Servicing Agreement and its Transaction
Documents.
ARTICLE V
MISCELLANEOUS
SECTION 5.1. Liability of Prudential. Prudential shall be liable in
accordance herewith only to the extent of the obligations of this Agreement
specifically undertaken by Prudential and its representations and warranties.
SECTION 5.2. [Reserved]
SECTION 5.3. Limitation on Liability of Prudential and Others. Prudential
and any director or officer or employee or agent of Prudential may rely in good
faith on the advice of counsel or on any document of any kind prima facie
properly executed and submitted by any Person respecting any matters arising
under this Agreement. Prudential shall not be under any obligation
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to appear in, prosecute or defend any legal action that is not incidental to its
obligations under this Agreement and that in its opinion may involve it in any
expense or liability.
SECTION 5.4. Conveyance of the Auto Loans and the Other Conveyed Property
to the Issuer. Prudential acknowledges that the Issuer intends, pursuant to the
Indenture, to convey the Auto Loans and the Other Conveyed Property, together
with its respective rights under this Agreement, to the Indenture Trustee on the
date hereof. Prudential acknowledges and consents to such conveyance and waives
any further notice thereof and covenants and agrees that the representations and
warranties of Prudential contained in this Agreement, and the rights of the
Issuer hereunder, are intended to benefit the Indenture Trustee, the Trust, the
Noteholders and the Insurer. In furtherance of the foregoing, Prudential
covenants and agrees to perform its duties and obligations hereunder in
accordance with the terms hereof for the benefit of the Indenture Trustee, the
Trust, the Insurer and the Noteholders and that, notwithstanding anything to the
contrary in this Agreement, Prudential shall be directly liable to the Indenture
Trustee, the Insurer and the Trust (notwithstanding any failure by the Servicer,
the Backup Servicer or the Issuer to perform its duties and obligations
hereunder or under the Sales and Servicing Agreement), and that the Owner
Trustee and the Indenture Trustee may enforce the duties and obligations of
Prudential under this Agreement against Prudential for the benefit of the Trust,
the Noteholders and the Insurer, respectively.
SECTION 5.5. Amendment.
(a) This Agreement may be amended by Prudential and the Issuer without the
consent of any of the Certificateholder or the Noteholders, but with the consent
of the Insurer, (i) to cure any ambiguity, (ii) to correct or supplement any
provisions in this Agreement or (iii) for the purpose of adding any provision to
or changing in any manner or eliminating any provision of this Agreement or of
modifying in any manner the rights of the Noteholders, provided, that any such
action under this clause (iii) shall not, as evidenced by an Opinion of Counsel
delivered to the Owner Trustee, the Indenture Trustee, the Insurer and each
Rating Agency, adversely affect in any material respect the interests of the
Noteholders or the Insurer.
(b) This Agreement may also be amended from time to time by Prudential and
the Issuer with the consent of the Insurer and a Note Majority (which consent of
any Holder of a Note given pursuant to this Section 5.5(b) or pursuant to any
other provision of this Agreement shall be conclusive and binding on such Holder
and on all future Holders of such Note and of any Note issued upon the transfer
thereof or in exchange thereof or in lieu thereof whether or not notation of
such consent is made upon the Note), for the purpose of adding any provisions to
or changing in any manner or eliminating any of the provisions of this
Agreement, or of modifying in any manner the rights of the Noteholders;
provided, however, that the Rating Agency Condition shall have been satisfied
with respect to any such amendment prior to the execution thereof; and provided,
further, 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 Auto
Loans, payments that shall be required to be made on any Note, the interest rate
payable on any Note, or (ii) reduce the aforesaid percentage
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required to consent to any such amendment or any waiver hereunder, without the
consent of the Holders of all Notes then outstanding.
(c) Prior to the execution of any such amendment or consent under Section
5.5(a) or (b), Prudential shall furnish five days prior written notification of
such amendment or consent to each Rating Agency and the Insurer.
(d) Promptly after the execution of any such amendment or consent under
Section 5.5(b), the Indenture Trustee shall furnish a copy of such amendment or
consent to the Insurer and each Noteholder.
(e) It shall not be necessary for the consent of the Noteholders pursuant
to Section 5.5(b) to approve the particular form of any proposed amendment or
consent, but it shall be sufficient if such consent shall approve the substance
thereof. The manner of obtaining such consents and of evidencing the
authorization of the execution thereof by the Noteholders shall be subject to
such reasonable requirements as the Indenture Trustee may prescribe.
SECTION 5.6. Notices. All demands, notices and communications under this
Agreement shall be in writing, personally delivered or mailed by certified mail,
return receipt requested, and shall be deemed to have been duly given upon
receipt at the address set forth in Section 9.4 of the Sales and Servicing
Agreement. Any notice required or permitted to be mailed to a Noteholder shall
be given by first class mail, postage prepaid, at the address of such Holder as
shown in the Note Register, and any notice so mailed within the time prescribed
in this Agreement shall be conclusively presumed to have been duly given,
whether or not the Noteholder receives such notice.
SECTION 5.7. Merger and Integration. Except as specifically stated
otherwise herein, this Agreement, the Sales and Servicing Agreement and the
Transaction Documents set forth the entire understanding of the parties relating
to the subject matter hereof, and all prior understandings, written or oral, are
superseded by this Agreement, the Sales and Servicing Agreement and the
Transaction Documents. This Agreement may not be modified, amended, waived or
supplemented except as provided herein.
SECTION 5.8. Severability of Provisions. If any one or more of the
covenants, agreements, provisions or terms of this Agreement shall be for any
reason whatsoever held invalid, 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. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO
THE PRINCIPLES OF CONFLICTS OF LAWS THEREOF (OTHER THAN SECTION 5-1401 OF THE
NEW YORK GENERAL OBLIGATIONS LAW) AND THE
11
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES UNDER THIS AGREEMENT SHALL BE
DETERMINED IN ACCORDANCE WITH SUCH LAWS.
SECTION 5.10. Counterparts. This Agreement may be executed simultaneously
in any number of counterparts, each of which counterparts shall be deemed to be
an original, and all of which counterparts shall constitute but one and the same
instrument.
SECTION 5.11. Nonpetition Covenant. Until one year and one day following
the payment in full of all amounts due in respect of the Notes, neither
Prudential nor the Trust shall petition or otherwise invoke the process of any
court or government authority for the purpose of commencing or sustaining a case
against the other party, Flagship LLC or Flagship Special Member, Inc. under any
federal or state bankruptcy, insolvency or similar law or appointing a receiver,
liquidator, assignee, trustee, custodian, sequestrator or other similar official
of the Issuer or any substantial part of its property, or ordering the winding
up or liquidation of the affairs of the Issuer.
SECTION 5.12. Assignment. Notwithstanding anything to the contrary
contained in this Agreement, except as provided in the Transaction Documents,
this Agreement may not be assigned by Prudential or the Issuer.
SECTION 5.13. Third-Party Beneficiaries. This Agreement shall inure to the
benefit of and be binding upon the parties hereto and their respective
successors and permitted assigns. Except as otherwise provided in this Article
V, no other Person shall have any right or obligation hereunder except that the
Insurer and the Indenture Trustee shall be express third party beneficiaries of
this Agreement entitled to enforce the provisions hereof as if each were a party
hereto. Nothing in this Agreement, express or implied, shall give to any Person,
other than the parties hereto and their successors hereunder and permitted
assigns, any benefit or any legal or equitable right, remedy or claim under this
Agreement.
SECTION 5.14. Successors and Assigns. This Agreement shall be binding upon
the parties hereof and their respective successors and assigns, and shall inure
to the benefit of and be enforceable by the parties hereof and their respective
successors and assigns permitted hereunder. All covenants and agreements
contained herein shall be binding upon, and inure to the benefit of the Trust,
the Indenture Trustee, the Insurer and the Noteholders and their respective
permitted successors and assigns, if any. Any request, notice, direction,
consent, waiver or other instrument or action by any Noteholder shall bind its
successors and assigns.
SECTION 5.15. Limitation of Liability. Notwithstanding any other provision
herein or elsewhere, this Agreement has been executed and delivered by First
Union National Bank, not in its individual capacity, but solely in its capacity
as Owner Trustee of Flagship Auto Receivables Owner Trust 1999-2 (the "Trust"),
in no event shall First Union National Bank have any liability (except with
respect to its own grossly negligent action or failure to act) in respect of the
representations, warranties, or obligations of the Trust hereunder or under any
other document, as to all if which recourse shall be had solely to the assets of
the Trust, and for all purposes of this Agreement and
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each other document, First Union National Bank shall be entitled to the benefits
of the Amended and Restated Trust Agreement of the Trust.
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IN WITNESS WHEREOF, the parties have caused this Owner Trust Purchase
Agreement to be duly executed by their respective officers, effective as of the
day and year first above written.
PRUDENTIAL SECURITIES SECURED
FINANCING CORPORATION, as Seller
By:
-----------------------------
Name:
Title:
FLAGSHIP AUTO RECEIVABLES OWNER
TRUST 1999-2, as Purchaser
By: FIRST UNION NATIONAL BANK,
not in its individual
capacity, but solely as
Owner Trustee
By:
-----------------------------
Name:
Title:
SCHEDULE A
SCHEDULE OF AUTO LOANS
On file with the Indenture Trustee.
A-1
SCHEDULE B
LEGAL PROCEEDINGS
None.
B-1
