EXHIBIT 10.1
EXECUTION COPY
PURCHASE AGREEMENT
between
ADVANTA AUTO FINANCE CORPORATION
Seller
and
ADVANTA AUTO RECEIVABLES CORP. I
Purchaser
dated as of
June 1, 1998
TABLE OF CONTENTS
Page
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ARTICLE I DEFINITIONS ........................................................1
SECTION 1.1 General........................................................1
SECTION 1.2 Specific Terms.................................................1
SECTION 1.3 Usage of Terms.................................................3
SECTION 1.4 Certain References.............................................3
SECTION 1.5 No Recourse....................................................3
SECTION 1.6 Action by or Consent of Noteholders and
Certificateholders.............................................3
SECTION 1.7 Material Adverse Effect........................................3
ARTICLE II CONVEYANCE OF THE RECEIVABLES AND THE OTHER CONVEYED PROPERTY......4
SECTION 2.1 Conveyance of the Receivables and the Other Conveyed
Property.......................................................4
ARTICLE III REPRESENTATIONS AND WARRANTIES....................................5
SECTION 3.1 Representations and Warranties of Seller.......................5
SECTION 3.2 Representations and Warranties of Purchaser....................7
ARTICLE IV COVENANTS OF SELLER................................................9
SECTION 4.1 Protection of Title of Purchaser...............................9
SECTION 4.2 Other Liens or Interests......................................11
SECTION 4.3 Costs and Expenses............................................11
SECTION 4.4 Indemnification...............................................11
ARTICLE V REPURCHASES........................................................13
SECTION 5.1 Repurchase of Receivables Upon Breach of Warranty.............13
SECTION 5.2 Reassignment of Purchased Receivables.........................14
SECTION 5.3 Waivers.......................................................14
ARTICLE VI MISCELLANEOUS.....................................................14
SECTION 6.1 Liability of Seller...........................................14
SECTION 6.2 Merger or Consolidation of Seller or Purchaser................14
SECTION 6.3 Limitation on Liability of Seller and Others..................15
SECTION 6.4 Seller May Own Notes or Certificates..........................15
SECTION 6.5 Amendment.....................................................15
SECTION 6.6 Notices.......................................................16
SECTION 6.7 Merger and Integration........................................17
SECTION 6.8 Severability of Provisions....................................17
SECTION 6.9 Intention of the Parties......................................17
SECTION 6.10 Governing Law.................................................17
SECTION 6.11 Counterparts..................................................17
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SECTION 6.12 Conveyance of the Receivables and the Other Conveyed
Property to the Issuer........................................17
SECTION 6.13 Nonpetition Covenant..........................................18
EXHIBITS
SCHEDULE A Schedule of Receivables
SCHEDULE B Representations and Warranties of Seller
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PURCHASE AGREEMENT
THIS PURCHASE AGREEMENT, dated as of June 1, 1998, executed
between Advanta Auto Receivables Corp. I, a Nevada corporation, as purchaser
("Purchaser"), and Advanta Auto Finance Corporation, a Nevada corporation, as
seller ("Seller").
W I T N E S S E T H:
WHEREAS, Purchaser has agreed to purchase from Seller, and
Seller, pursuant to this Agreement, is transferring to Purchaser the
Receivables and Other Conveyed Property;
NOW, THEREFORE, in consideration of the premises and the
mutual agreements hereinafter contained, and for other good and valuable
consideration, the receipt of which is acknowledged, Purchaser and Seller,
intending to be legally bound, hereby agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1 General. Capitalized terms used herein without
definition shall have the respective meanings assigned to such terms in the
Sale and Servicing Agreement dated as of June 1, 1998, by and among Seller, in
its capacity as Master Servicer, Advanta Automobile Receivables Trust 1998-1,
as Issuer, Purchaser, as Seller, and Norwest Bank Minnesota, National
Association, as Indenture Trustee and Trust Collateral Agent.
SECTION 1.2 Specific Terms. Whenever used in this Agreement,
the following words and phrases, unless the context otherwise requires, shall
have the following meanings:
"Agreement" means this Purchase Agreement and all amendments
hereof and supplements hereto.
"Closing Date" means June 29, 1998.
"Flow Receivable" means any Receivable purchased by Seller
pursuant to a flow purchase agreement.
"Indenture Trustee" means Norwest Bank Minnesota, National
Association, and any successor Indenture Trustee appointed and acting pursuant
to the Indenture.
"Issuer" means Advanta Automobile Receivables Trust 1998-1.
"Other Conveyed Property" means all money, instruments,
rights and other property that are subject or intended to be subject to the
lien and security interest of the Indenture (including all property and
interests granted to the Trust Collateral Agent), including all proceeds
thereof, other than the Receivables.
"Owner Trustee" means Wilmington Trust Company, not in its
individual capacity but solely as Owner Trustee appointed and acting pursuant
to the Trust Agreement.
"Pool Receivable" means a Receivable purchased by Seller
pursuant to a pool purchase agreement.
"Receivables" means the Receivables listed on the Schedule
of Receivables attached hereto as Schedule A.
"Related Documents" means the Notes, the Certificates, the
Custodian Agreement (if any), the Sale and Servicing Agreement, the Indenture,
the Trust Agreement, the Policy, the Master Spread Account Agreement, the
Master Spread Account Agreement Supplement, the Insurance and Indemnity
Agreement, the Indemnification Agreement and the Underwriting Agreement. The
Related Documents to be executed by any party are referred to herein as "such
party's Related Documents" or "its Related Documents" or by a similar
expression.
"Repurchase Event" means the occurrence of a breach of any
of Seller's representations and warranties hereunder or any other event which
requires the repurchase of a Receivable by Seller under the Sale and Servicing
Agreement.
"Sale and Servicing Agreement" means the Sale and Servicing
Agreement referred to in Section 1.1 hereof.
"Schedule of Receivables" means the schedule of Receivables
sold and transferred pursuant to this Agreement which is attached hereto as
Schedule A.
"Schedule of Representations" means the Schedule of
Representations and Warranties attached hereto as Schedule B.
"Security Majority" means a majority by principal amount of
the Noteholders so long as the Notes are outstanding and a majority by
principal amount of the Certificateholders thereafter.
"Trust Collateral Agent" means Norwest Bank Minnesota,
National Association, as trust collateral agent and any successor trust
collateral agent appointed and acting pursuant to the Sale and Servicing
Agreement.
"Trustee" means Norwest Bank Minnesota, National
Association, as Indenture Trustee appointed and acting pursuant to the Sale
and Servicing Agreement.
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"Unaffiliated Originator" means any third party originator
or owner of Receivables.
SECTION 1.3 Usage of Terms. With respect to all terms used
in this Agreement, the singular includes the plural and the plural includes
the singular; words importing any 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 Sale and Servicing Agreement; references
to Persons include their permitted successors and assigns; any form of the
word "include" shall be deemed to be followed by the words "without
limitation"; "the words "herein", "hereof" and "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any particular
Article, Section or other subdivision; and Article, Section, Schedule and
Exhibit references, unless otherwise specified, refer to Articles and Sections
of and Schedules and Exhibits to this Agreement.
SECTION 1.4 Certain References. All references to the
Principal Balance of a Receivable as of any date of determination shall refer
to the close of business on such day, or as of the first day of a Monthly
Period shall refer to the opening of business on such day. All references to
the last day of a Monthly Period shall refer to the close of business on such
day.
SECTION 1.5 No Recourse. Without limiting the obligations of
Seller hereunder, 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
Seller, or of any predecessor or successor of Seller.
SECTION 1.6 Action by or Consent of Noteholders and
Certificateholders. Whenever any provision of this Agreement refers to action
to be taken, or consented to, by Noteholders or Certificateholders, such
provision shall be deemed to refer to the Certificateholder or Noteholder, as
the case may be, of record as of the Record Date immediately preceding the
date on which such action is to be taken, or consent given, by Noteholders or
Certificateholders. Solely for the purposes of any action to be taken, or
consented to, by Noteholders or Certificateholders, any Note or Certificate
registered in the name of Seller or any Affiliate thereof shall be deemed not
to be outstanding; provided, however, that, solely for the purpose of
determining whether the Indenture Trustee or the Trust Collateral Agent is
entitled to rely upon any such action or consent, only Notes or Certificates
which the Owner Trustee, the Indenture Trustee or the Trust Collateral Agent,
respectively, knows to be so owned shall be so disregarded.
SECTION 1.7 Material Adverse Effect. Whenever a
determination is to be made under this Agreement as to whether a given event,
action, course of conduct or set of facts or circumstances could or would have
a material adverse effect on the Certificateholders, the Noteholders or the
Trust (or any similar or analogous
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determination), such determination shall be made without taking into account
the funds available from claims under the Policy. Whenever a determination is
to be made under this Agreement whether a breach of a representation, warranty
or covenant has or could have a material adverse effect on a Receivable or the
interest therein of the Trust, the Noteholders, the Certificateholders or the
Insurer (or any similar or analogous determination), such determination shall
be made by the Insurer in its reasonable discretion and after notifying the
Trustee and Seller of such potential breach or (x) if an Insurer Default shall
have occurred and be continuing, or (y) upon (i) the expiration of the Policy
in accordance with the terms thereof and (ii) the payment of all amounts owing
to the Insurer under the Sale and Servicing Agreement and the Insurance
Agreement, by a Security Majority.
ARTICLE II
CONVEYANCE OF THE RECEIVABLES
AND THE OTHER CONVEYED PROPERTY
SECTION 2.1 Conveyance of the Receivables and the Other
Conveyed Property.
(a) Subject to the terms and conditions of this Agreement,
Seller hereby sells, transfers, assigns, and otherwise conveys to Purchaser
without recourse (but without limitation of its obligations in this
Agreement), and Purchaser hereby purchases, all right, title and interest of
Seller in and to:
(i) the Receivables and all monies paid or payable
thereon on or after the Cutoff Date (including amounts due
on or before the Cutoff Date but received by Seller on or
after the Cutoff Date);
(ii) the security interests in the Financed Vehicles
granted by Obligors pursuant to the Receivables and any
other interest of Seller in such Financed Vehicles;
(iii) any proceeds and the right to receive proceeds
with respect to the Receivables from claims on any
physical damage, credit life or disability insurance
policies, if any, covering Financed Vehicles or Obligors,
including rebates of insurance premiums relating to the
Receivables and any proceeds from the liquidation of the
Receivables;
(iv) all rights of Seller against Dealers or
Unaffiliated Originators pursuant to Dealer Agreements,
Dealer Assignments or Unaffiliated Originator Receivables
Purchase Agreements;
(v) all rights under any Service Contracts on the
related Financed Vehicles;
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(vi) the related Receivables Files and any and all
other documents that Seller keeps on file in accordance
with its customary procedures relating to the Receivables,
the Obligors or the Financed Vehicles;
(vii) property (including the right to receive future
Net Liquidation Proceeds) that secures a Receivable and
that has been acquired by or on behalf of Purchaser
pursuant to liquidation of such Receivable;
(viii) the proceeds of any and all of the foregoing.
It is the intention of Seller and Purchaser that the
transfer and assignment contemplated by this Agreement shall constitute a sale
of the Receivables and the Other Conveyed Property from Seller to Purchaser,
conveying good title thereto free and clear of any liens, and the beneficial
interest in and title to the Receivables and the Other Conveyed Property shall
not be part of Seller's estate in the event of the filing of a bankruptcy
petition by or against Seller under any bankruptcy or similar law.
(b) Simultaneously with the conveyance of the Receivables
and the Other Conveyed Property to Purchaser, Purchaser shall pay or cause to
be paid to or upon the order of Seller an amount equal to the book value of
the Receivables on the books and records of Seller (the "Book Value"), by wire
transfer of immediately available funds. Notwithstanding the foregoing, if
Seller so elects by written or oral notice to Purchaser, Seller shall have the
right to receive an amount of immediately available funds less than the Book
Value, in which event the difference between the Book Value and the amount of
immediately available funds actually paid to Seller shall be treated as a
contribution by Seller to the capital of Purchaser.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.1 Representations and Warranties of Seller. Seller
makes the following representations and warranties as of the date hereof on
which Purchaser relies in purchasing the Receivables and the Other Conveyed
Property and in transferring the Receivables and the Other Conveyed Property
to the Issuer under the Sale and Servicing Agreement and on which the Insurer
will rely in issuing the Policy. Such representations are made as of the
execution and delivery of this Agreement but shall survive the sale, transfer
and assignment of the Receivables and the Other Conveyed Property hereunder,
and the sale, transfer and assignment thereof by Purchaser to the Issuer under
the Sale and Servicing Agreement. Seller and Purchaser agree that Purchaser
will assign to Issuer all Purchaser's rights under this Agreement and that the
Indenture Trustee will thereafter be entitled to enforce this Agreement
against Seller in the Indenture Trustee's own name on behalf of the
Securityholders.
(i) Schedule of Representations. The representations
and warranties set forth on the Schedule of
Representations with respect to the Receivables as of the
date hereof.
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(ii) Organization and Good Standing. Seller has been
duly organized and is validly existing as a corporation in
good standing under the laws of the State of Nevada, 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 Receivables and the
Other Conveyed Property to be transferred to Purchaser.
(iii) Due Qualification. Seller is duly qualified to
do business as a foreign corporation in good standing, and
has obtained all necessary licenses and approvals in all
jurisdictions in which the ownership or lease of its
property or the conduct of its business requires such
qualification.
(iv) Power and Authority. Seller has the power and
authority to execute and deliver this Agreement and its
Related Documents and to carry out its terms and their
terms, respectively; Seller has full power and authority
to sell and assign the Receivables and the Other Conveyed
Property to be sold and assigned to and deposited with
Purchaser hereunder and has duly authorized such sale and
assignment to Purchaser by all necessary corporate action;
and the execution, delivery and performance of this
Agreement and Seller's Related Documents have been duly
authorized by Seller by all necessary corporate action.
(v) Valid Sale; Binding Obligations. This Agreement
and Seller's Related Documents have been duly executed and
delivered, shall effect a valid sale, transfer and
assignment of the Receivables and the Other Conveyed
Property to Purchaser, enforceable against Seller and
creditors of and purchasers from Seller; and this
Agreement and Seller's Related Documents constitute legal,
valid and binding obligations of Seller enforceable in
accordance with their respective terms, except as
enforceability may be limited by bankruptcy, insolvency,
reorganization or other similar laws affecting the
enforcement of creditors' rights generally and by
equitable limitations on the availability of specific
remedies, regardless of whether such enforceability is
considered in a proceeding in equity or at law.
(vi) No Violation. The consummation of the
transactions contemplated by this Agreement and the
Related Documents and the fulfillment of the terms of this
Agreement and the Related 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 articles of
incorporation or bylaws of Seller, or any indenture,
agreement, mortgage, deed of trust or other instrument to
which Seller is a party or by which it is bound, or result
in the creation or imposition of any Lien upon any of its
properties pursuant to the terms of any such indenture,
agreement, mortgage, deed of trust or other instrument
(other than this Agreement, the Master Spread Account
Agreement, the Sale and Servicing Agreement and the
Indenture and any instruments, certificates and other
documents executed pursuant to the provisions thereof), or
violate any law, order, rule or regulation applicable to
Seller of any court or of any federal or state
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regulatory body, administrative agency or other
governmental instrumentality having jurisdiction over
Seller or any of its properties.
(vii) No Proceedings. There are no proceedings or
investigations pending or, to Seller's knowledge,
threatened against Seller, before any court, regulatory
body, administrative agency or other tribunal or
governmental instrumentality having jurisdiction over
Seller or its properties (i) asserting the invalidity of
this Agreement or any of the Related Documents, (ii)
seeking to prevent the issuance of the Notes or the
consummation of any of the transactions contemplated by
this Agreement or any of the Related Documents, (iii)
seeking any determination or ruling that might materially
and adversely affect the performance by Seller of its
obligations under, or the validity or enforceability of,
this Agreement or any of the Related Documents or (iv)
seeking to affect adversely the federal income tax or
other federal, state or local tax attributes of, or
seeking to impose any excise, franchise, transfer or
similar tax upon, the transfer and acquisition of the
Receivables and the Other Conveyed Property hereunder or
under the Sale and Servicing Agreement.
(viii) Chief Executive Office. The chief executive
office of Seller is located at 000 Xxxxxx Xxxxxx Xxxxx,
Xxxxx 000, Xxxx Xxxxxxxxxx, XX 00000.
(ix) No Consents. Seller is not required to obtain
the consent of any other party or any consent, license,
approval or authorization, or registration or declaration
with, any governmental authority, bureau or agency in
connection with the execution, delivery, performance,
validity or enforceability of this Agreement which has not
already been obtained.
(x) Approvals. All approvals, authorizations,
consents, order or other actions of any person,
corporation or other organization, or of any court,
governmental agency or body or official, required in
connection with the execution and delivery by Seller of
this Agreement and the consummation of the transactions
contemplated hereby or will be taken or obtained on or
prior to the Closing Date.
SECTION 3.2 Representations and Warranties of Purchaser.
Purchaser makes the following representations and warranties, on which Seller
relies in selling, assigning, transferring and conveying the Receivables and
the Other Conveyed Property to Purchaser hereunder. Such representations are
made as of the execution and delivery of this Agreement, but shall survive the
sale, transfer and assignment of the Receivables and the Other Conveyed
Property hereunder and the sale, transfer and assignment thereof by Purchaser
to the Issuer under the Sale and Servicing Agreement.
(i) Organization and Good Standing. Purchaser has
been duly organized and is validly existing and in good
standing as a corporation under the laws of the State of
Nevada, with the 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 has, full power,
authority
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and legal right to acquire and own the Receivables and the
Other Conveyed Property, and to transfer the Receivables
and the Other Conveyed Property to the Issuer pursuant to
the Sale and Servicing Agreement.
(ii) Due Qualification. Purchaser is duly qualified
to do business as a foreign corporation in good standing,
and has obtained all necessary licenses and approvals in
all jurisdictions where the failure to do so would
materially and adversely affect Purchaser's ability to
acquire the Receivables or the Other Conveyed Property,
and to transfer the Receivables and the Other Conveyed
Property to the Issuer pursuant to the Sale and Servicing
Agreement, or the validity or enforceability of the
Receivables and the Other Conveyed Property or to perform
Purchaser's obligations hereunder and under Purchaser's
Related Documents.
(iii) Power and Authority. Purchaser has the power,
authority and legal right to execute and deliver this
Agreement and to carry out the terms hereof and to acquire
the Receivables and the Other Conveyed Property hereunder;
and the execution, delivery and performance of this
Agreement and all of the documents required pursuant
hereto have been duly authorized by Purchaser by all
necessary action.
(iv) No Consent Required. Purchaser is not required
to obtain the consent of any other Person, or any consent,
license, approval or authorization or registration or
declaration with, any governmental authority, bureau or
agency in connection with the execution, delivery or
performance of this Agreement and the Related Documents,
except for such as have been obtained, effected or made.
(v) Binding Obligation. This Agreement constitutes a
legal, valid and binding obligation of Purchaser,
enforceable against Purchaser in accordance with its
terms, subject, as to enforceability, to applicable
bankruptcy, insolvency, reorganization, conservatorship,
receivership, liquidation and other similar laws and to
general equitable principles.
(vi) No Violation. The execution, delivery and
performance by Purchaser of this Agreement, the
consummation of the transactions contemplated by this
Agreement and the Related Documents and the fulfillment of
the terms of this Agreement and the Related Documents do
not and will not conflict with, result in any breach of
any of the terms and provisions of, or constitute (with or
without notice or lapse of time) a default under, the
certificate of incorporation or bylaws of Purchaser, or
conflict with or breach any of the terms or provisions of,
or constitute (with or without notice or lapse of time) a
default under, any indenture, agreement, mortgage, deed of
trust or other instrument to which Purchaser is a party or
by which Purchaser is bound or to which any of its
properties are subject, or result in the creation or
imposition of any Lien upon any of its properties pursuant
to the terms of any such indenture, agreement, mortgage,
deed of trust or other instrument (other than the Sale and
Servicing Agreement, the Master Spread Account Agreement
and the Indenture and any instruments, certificates and
other
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documents executed pursuant to the provisions thereof), or
violate any law, order, rule or regulation, applicable to
Purchaser or its properties, of any federal or state
regulatory body, any court, administrative agency, or
other governmental instrumentality having jurisdiction
over Purchaser or any of its properties.
(vii) No Proceedings. There are no proceedings or
investigations pending, or, to the knowledge of Purchaser,
threatened against Purchaser, before any court, regulatory
body, administrative agency, or other tribunal or
governmental instrumentality having jurisdiction over
Purchaser or its properties: (i) asserting the invalidity
of this Agreement or any of the Related Documents, (ii)
seeking to prevent the consummation of any of the
transactions contemplated by this Agreement or any of the
Related Documents, (iii) seeking any determination or
ruling that might materially and adversely affect the
performance by Purchaser of its obligations under, or the
validity or enforceability of, this Agreement or any of
the Related Documents or (iv) that may adversely affect
the federal or state income tax attributes of, or seeking
to impose any excise, franchise, transfer or similar tax
upon, the transfer and acquisition of the Receivables and
the Other Conveyed Property hereunder or the transfer of
the Receivables and the Other Conveyed Property to the
Issuer pursuant to the Sale and Servicing Agreement.
(viii) Approvals. All approvals, authorizations,
consents, orders or other actions of any person,
corporation or other organization, or of any court,
governmental agency or body or official, required in
connection with the execution and delivery by Purchaser of
this Agreement and the consummation of the transactions
contemplated hereby or will be taken or obtained on or
prior to the Closing Date.
In the event of any breach of a representation and warranty
made by Purchaser hereunder, Seller covenants and agrees that it will not take
any action to pursue any remedy that it may have hereunder, in law, in equity
or otherwise, until a year and a day have passed since the date on which all
Notes, Certificates, pass-through certificates or other similar securities
issued by Purchaser, or a trust or similar vehicle formed by Purchaser, have
been paid in full. Seller and Purchaser agree that damages will not be an
adequate remedy for such breach and that this covenant may be specifically
enforced by Purchaser, Issuer or by the Indenture Trustee on behalf of the
Noteholders and Owner Trustee on behalf of the Certificateholders.
ARTICLE IV
COVENANTS OF SELLER
SECTION 4.1 Protection of Title of Purchaser.
(a) At or prior to the Closing Date, Seller shall have filed
or caused to be filed a UCC-1 financing statement, executed by Seller as
seller or debtor, naming Purchaser as purchaser or secured party and
describing the Receivables and the Other Conveyed Property being sold by it to
Purchaser as collateral, with the office of the
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Secretary of State of the State of Nevada and in such other locations as
Purchaser shall have required and as shall be necessary to perfect the
security interest of Purchaser in the collateral. From time to time
thereafter, Seller 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 Purchaser under this Agreement, of the Issuer under
the Sale and Servicing Agreement and of the Trust Collateral Agent under the
Indenture in the Receivables and the Other Conveyed Property and in the
proceeds thereof. Seller shall deliver (or cause to be delivered) to
Purchaser, the Trust Collateral Agent and the Insurer file-stamped copies of,
or filing receipts for, any document filed as provided above, as soon as
available following such filing. In the event that Seller fails to perform its
obligations under this subsection, Purchaser, Issuer or the Trust Collateral
Agent may do so, at the expense of Seller.
(b) Seller shall not change its name, identity, or corporate
structure in any manner that would, could or might make any financing
statement or continuation statement filed by Seller (or by Purchaser, Issuer
or the Trust Collateral Agent on behalf of Seller) in accordance with
paragraph (a) above seriously misleading within the meaning of ss. 9-402(7) of
the UCC, unless it shall have given Purchaser, Issuer and the Trust Collateral
Agent at least 30 days' prior written notice thereof, and shall promptly file
appropriate amendments to all previously filed financing statements and
continuation statements.
(c) Seller shall give Purchaser, the Issuer, the Insurer (so
long as an Insurer Default shall not have occurred and be continuing) and the
Trust Collateral Agent 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. Seller shall at all times maintain each office
from which it services Receivables and its principal executive office within
the United States of America.
(d) Prior to the Closing Date Seller has maintained accounts
and records as to each Receivable accurately and in sufficient detail to
permit (i) the reader thereof to know at any time as of or prior to the
Closing Date the status of such Receivable, including payments and recoveries
made and payments owing (and the nature of each) and (ii) reconciliation
between payments or recoveries on (or with respect to) each Receivable and the
Principal Balance as of the Closing Date. Seller shall maintain its computer
systems so that, from and after the time of sale under this Agreement of the
Receivables to Purchaser, and the conveyance of the Receivables by Purchaser
to the Issuer, Seller's master computer records (including archives) that
shall refer to a Receivable indicate clearly that such Receivable has been
sold to Purchaser and has been conveyed by Purchaser to the Issuer. Indication
of the Issuer's ownership of a Receivable shall be deleted from or modified on
Seller's computer systems when, and only when, the Receivable shall become a
Purchased Receivable or shall have been paid in full.
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(e) If at any xxxx Xxxxxx shall propose to sell, grant a
security interest in, or otherwise transfer any interest in any motor vehicle
receivables to any prospective purchaser, lender or other transferee, Seller
shall give to such prospective purchaser, lender, or other transferee computer
tapes, records, or print-outs (including any restored from archives) that, if
they shall refer in any manner whatsoever to any Receivable (other than a
Purchased Receivable), shall indicate clearly that such Receivable has been
sold to Purchaser, sold by Purchaser to Issuer, and is owned by the Issuer.
SECTION 4.2 Other Liens or Interests. Except for the
conveyances hereunder, Seller will not sell, pledge, assign or transfer to any
other Person, or grant, create, incur, assume or suffer to exist any Lien on
the Receivables or the Other Conveyed Property or any interest therein, and
Seller shall defend the right, title, and interest of Purchaser and the Issuer
in and to the Receivables and the Other Conveyed Property against all claims
of third parties claiming through or under Seller.
SECTION 4.3 Costs and Expenses. Seller shall pay all
reasonable costs and disbursements in connection with the performance of its
obligations hereunder and under its Related Documents.
SECTION 4.4 Indemnification.
(a) Seller shall defend, indemnify and hold harmless
Purchaser, the Issuer, the Trust Collateral Agent, the Indenture Trustee, the
Owner Trustee, the Noteholders and the Certificateholders from and against any
and all costs, expenses, losses, damages, claims, and liabilities, arising out
of or resulting from any breach of any of Seller's representations and
warranties contained herein.
(b) Seller shall defend, indemnify and hold harmless
Purchaser, the Issuer, the Trust Collateral Agent, the Indenture Trustee, the
Owner Trustee, the Noteholders and the Certificateholders from and against any
and all costs, expenses, losses, damages, claims, and liabilities, arising out
of or resulting from the use, ownership or operation by Seller or any
affiliate thereof of a Financed Vehicle.
(c) Seller shall defend, indemnify and hold harmless
Purchaser, the Issuer, the Trust Collateral Agent, the Indenture Trustee, the
Owner Trustee, the Noteholders and the Certificateholders against any and all
costs, expenses, losses, damages, claims and liabilities arising out of or
resulting from any action taken, or failed to be taken, by it in respect of
any portion of the Receivables other than in accordance with this Agreement or
the Sale and Servicing Agreement.
(d) Seller agrees to pay, and shall defend, indemnify and
hold harmless Purchaser, the Issuer, the Trust Collateral Agent, the Indenture
Trustee, the Owner Trustee, the Noteholders and the Certificateholders from
and against any taxes that may at any time be asserted against Purchaser, the
Issuer, the Trust Collateral Agent, the Indenture Trustee, the Owner Trustee,
the Noteholders and the Certificateholders with respect to the transactions
contemplated in this Agreement, including, without limitation, any sales,
gross receipts, general corporation, tangible or intangible personal property,
11
privilege, or license taxes (but not including any taxes asserted with respect
to, and as of the date of, the sale, transfer and assignment of the
Receivables and the Other Conveyed Property to Purchaser and by Purchaser to
the Issuer or the issuance and original sale of the Notes or the Certificates,
or asserted with respect to ownership of the Receivables and Other Conveyed
Property which shall be indemnified by Seller pursuant to clause (e) below, or
federal, state or other income taxes, arising out of distributions on the
Notes or the Certificates or transfer taxes arising in connection with the
transfer of the Notes or the Certificates) and costs and expenses in defending
against the same, arising by reason of the acts to be performed by Seller
under this Agreement or imposed against such Persons.
(e) Seller agrees to pay, and to indemnify, defend and hold
harmless Purchaser, the Issuer, the Trust Collateral Agent, the Indenture
Trustee, the Owner Trustee, the Noteholders and the Certificateholders from,
any taxes which may at any time be asserted against such Persons with respect
to, and as of the date of, the conveyance or ownership of the Receivables or
the Other Conveyed Property hereunder and the conveyance or ownership of the
Receivables under the Sale and Servicing Agreement or the issuance and
original sale of the Notes or the Certificates, including, without limitation,
any sales, gross receipts, personal property, tangible or intangible personal
property, privilege or license taxes (but not including any federal or other
income taxes, including franchise taxes, arising out of the transactions
contemplated hereby or transfer taxes arising in connection with the transfer
of the Notes or the Certificates) and costs and expenses in defending against
the same, arising by reason of the acts to be performed by Seller under this
Agreement or imposed against such Persons.
(f) Seller shall defend, indemnify, and hold harmless
Purchaser, the Issuer, the Trust Collateral Agent, the Indenture Trustee, the
Owner Trustee, the Noteholders and the Certificateholders from and against any
and all costs, expenses, losses, claims, damages, and liabilities to the
extent that such cost, expense, loss, claim, damage, or liability arose out
of, or was imposed upon any of such Persons through the negligence, willful
misfeasance, or bad faith of Seller in the performance of its duties under
this Agreement or by reason of reckless disregard of Seller's obligations and
duties under this Agreement.
(g) Seller shall indemnify, defend and hold harmless
Purchaser, the Issuer, the Trust Collateral Agent, the Indenture Trustee, the
Owner Trustee, the Noteholders and the Certificateholders from and against any
loss, liability or expense incurred by reason of the violation by Seller of
federal or state securities laws in connection with the registration or the
sale of the Notes or the Certificates.
(h) Seller shall indemnify, defend and hold harmless
Purchaser, the Issuer, the Trust Collateral Agent, the Indenture Trustee, the
Owner Trustee, the Noteholders and the Certificateholders from and against any
loss, liability or expense imposed upon, or incurred by, any of such Persons
as result of the failure of any Receivable, or the sale of the related
Financed Vehicle, to comply with all requirements of applicable law.
12
(i) Seller shall defend, indemnify, and hold harmless
Purchaser from and against all costs, expenses, losses, claims, damages, and
liabilities arising out of or incurred in connection with the acceptance or
performance of Seller's trusts and duties as Master Servicer under the Sale
and Servicing Agreement, except to the extent that such cost, expense, loss,
claim, damage, or liability shall be due to the willful misfeasance, bad
faith, or negligence (except for errors in judgment) of Purchaser.
Indemnification under this Section 4.4 shall include
reasonable fees and expenses of counsel and expenses of litigation and shall
survive termination of the Notes and the Certificates. The indemnity
obligations hereunder shall be in addition to any obligation that Seller may
otherwise have.
ARTICLE V
REPURCHASES
SECTION 5.1 Repurchase of Receivables Upon Breach of
Warranty. Upon the occurrence of a Repurchase Event, Seller shall, unless the
breach which is the subject of such Repurchase Event shall have been cured in
all material respects, repurchase the Receivable relating thereto from the
Issuer by the last day of the first full calendar month following the
discovery by Seller or receipt by Seller of notice of such breach and,
simultaneously with the repurchase of the Receivable, Seller shall deposit the
Purchase Amount in full, without deduction or offset, to the Collection
Account, pursuant to Section 3.2 of the Sale and Servicing Agreement. It is
understood and agreed that, except as set forth in Section 6.1 hereof, the
obligation of Seller to repurchase any Receivable, as to which a breach
occurred and is continuing, shall, if such obligation is fulfilled, constitute
the sole remedy against Seller for such breach available to Purchaser, the
Issuer, the Insurer, the Noteholders, the Certificateholders, the Trust
Collateral Agent on behalf of the Noteholders or the Owner Trustee on behalf
of Certificateholders. The provisions of this Section 5.1 are intended to
grant the Issuer and the Trust Collateral Agent a direct right against Seller
to demand performance hereunder, and in connection therewith, Seller waives
any requirement of prior demand against Purchaser with respect to such
repurchase obligation. Any such repurchase shall take place in the manner
specified in Section 3.2 of the Sale and Servicing Agreement. Notwithstanding
any other provision of this Agreement or the Sale and Servicing Agreement to
the contrary, the obligation of Seller under this Section shall not terminate
upon a termination of Seller as Master Servicer under the Sale and Servicing
Agreement and shall be performed in accordance with the terms hereof
notwithstanding the failure of the Master Servicer or Purchaser to perform any
of their respective obligations with respect to such Receivable under the Sale
and Servicing Agreement.
In addition to the foregoing and notwithstanding whether the
related Receivable shall have been purchased by Seller, Seller shall indemnify
the Issuer, the Trust Collateral Agent, the Indenture Trustee, the Owner
Trustee, the Insurer, the Noteholders and the Certificateholders against all
costs, expenses, losses, damages, claims and liabilities, including reasonable
fees and expenses of counsel, which may be
13
asserted against or incurred by any of them as a result of third party claims
arising out of the events or facts giving rise to such Repurchase Events.
SECTION 5.2 Reassignment of Purchased Receivables. Upon
deposit in the Collection Account of the Purchase Amount of any Receivable
repurchased by Seller under Section 5.1 hereof, Purchaser and the Issuer shall
take such steps as may be reasonably requested by Seller in order to sell,
assign, convey and otherwise transfer to Seller all right, title and interest
of each of Purchaser and the Issuer in and to such Receivable and all security
and documents and all Other Conveyed Property conveyed to Purchaser or the
Issuer directly relating thereto, without recourse, representation or
warranty, except as to the absence of liens, charges or encumbrances created
by or arising as a result of actions of Purchaser or the Issuer. Such
assignment shall be a sale and assignment outright, and not for security. If,
following the reassignment of a Purchased Receivable, in any enforcement suit
or legal proceeding, it is held that Seller may not enforce any such
Receivable on the ground that it shall not be a real party in interest or a
holder entitled to enforce the Receivable, Purchaser and the Issuer shall, at
the expense of Seller, take such steps as Seller deems reasonably necessary to
enforce the Receivable, including bringing suit in Purchaser's or in the
Issuer's name.
SECTION 5.3 Waivers. No failure or delay on the part of
Purchaser, or the Issuer as assignee of 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 future exercise thereof or the exercise of any other
power, right or remedy.
ARTICLE VI
MISCELLANEOUS
SECTION 6.1 Liability of Seller. Seller shall be liable in
accordance herewith only to the extent of the obligations in this Agreement
specifically undertaken by Seller and the representations and warranties of
Seller.
SECTION 6.2 Merger or Consolidation of Seller or Purchaser.
Any corporation or other entity (i) into which Seller or Purchaser may be
merged or consolidated, (ii) resulting from any merger or consolidation to
which Seller or Purchaser is a party or (iii) succeeding to the business of
Seller or Purchaser, in the case of Purchaser, which corporation has a
certificate of incorporation containing provisions relating to limitations on
business and other matters substantively identical to those contained in
Purchaser's certificate of incorporation, provided that in any of the
foregoing cases such corporation shall execute an agreement of assumption to
perform every obligation of Seller or Purchaser, as the case may be, under
this Agreement and, whether or not such assumption agreement is executed,
shall be the successor to Seller or Purchaser, as the case may be, hereunder
(without relieving Seller or Purchaser of its responsibilities hereunder, if
it survives such merger or consolidation) without the execution or filing of
any document or any further action by any of the parties to this Agreement.
Notwithstanding the foregoing, so long as an Insurer Default shall not have
14
occurred and be continuing, Purchaser shall not merge or consolidate with any
other Person or permit any other Person to become the successor to Purchaser's
business without the prior written consent of the Insurer. Seller or Purchaser
shall promptly inform the other party, the Issuer, the Trust Collateral Agent,
the Owner Trustee and, so long as an Insurer Default shall not have occurred
and be continuing, the Insurer of such merger, consolidation or purchase and
assumption. Notwithstanding the foregoing, as a condition to the consummation
of the transactions referred to in clauses (i), (ii) and (iii) above, (x)
immediately after giving effect to such transaction, no representation or
warranty made pursuant to Sections 3.1 and 3.2 of this Agreement shall have
been breached (for purposes hereof, such representations and warranties shall
speak as of the date of the consummation of such transaction) and no event
that, after notice or lapse of time, or both, would become an event of default
under the Insurance Agreement, shall have occurred and be continuing, (y)
Seller or Purchaser, as applicable, shall have delivered written notice of
such consolidation, merger or purchase and assumption to the Rating Agencies
prior to the consummation of such transaction and shall have delivered to the
Issuer and the Trust Collateral Agent an Officer's Certificate and an Opinion
of Counsel each stating that such consolidation, merger or succession and such
agreement of assumption comply with this Section 6.2 and that all conditions
precedent, if any, provided for in this Agreement relating to such transaction
have been complied with, and (z) Seller or Purchaser, as applicable, shall
have delivered to the Issuer and the Trust Collateral Agent an Opinion of
Counsel, stating, in the opinion of such counsel, either (A) all financing
statements and continuation statements and amendments thereto have been
executed and filed that are necessary to preserve and protect the interest of
the Issuer and the Trust Collateral Agent in the Receivables and reciting the
details of the filings or (B) no such action shall be necessary to preserve
and protect such interest.
SECTION 6.3 Limitation on Liability of Seller and Others.
Seller and any director, officer, employee or agent 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. Seller shall not be under any obligation to appear in, prosecute or
defend any legal action that is not incidental to its obligations under this
Agreement or its Related Documents and that in its opinion may involve it in
any expense or liability.
SECTION 6.4 Seller May Own Notes or Certificates. Subject to
the provisions of the Sale and Servicing Agreement, Seller and any Affiliate
of Seller may in its individual or any other capacity become the owner or
pledgee of Notes or Certificates with the same rights as it would have if it
were not Seller or an Affiliate thereof.
SECTION 6.5 Amendment.
(a) This Agreement may be amended by Seller and Purchaser
with the prior written consent of the Insurer (so long as an Insurer Default
shall not have occurred and be continuing) and with prior written notice to
the Rating Agencies but without the consent of the Trust Collateral Agent, the
Owner Trustee or any of the Certificateholders or Noteholders (i) to cure any
ambiguity or (ii) to correct any provisions in this
15
Agreement; provided, however, that such action shall not adversely affect in
any material respect the interests of any Certificateholder or Noteholder.
(b) This Agreement may also be amended from time to time by
Seller and Purchaser, with the prior written consent of the Insurer (so long
as an Insurer Default shall not have occurred and be continuing), with prior
written notice to the Rating Agencies and with the consent of the Trust
Collateral Agent and, if required, a Security Majority in accordance with the
Sale and Servicing Agreement, 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 Certificateholders or
Noteholders; provided, however, Seller provides the Trust Collateral Agent
with an Opinion of Counsel, (which may be provided by Seller's internal
counsel) that no such amendment shall 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 on any Note or
Certificate.
(c) It shall not be necessary for the consent of
Certificateholders or Noteholders pursuant to this Section to approve the
particular form of any proposed amendment or consent, but it shall be
sufficient if such consent shall approve the substance thereof. The manner of
obtaining such consents and of evidencing the authorization of the execution
thereof by Certificateholders or Noteholders shall be subject to such
reasonable requirements as the Trust Collateral Agent may prescribe, including
the establishment of record dates. The consent of a Holder of a Certificate or
a Note given pursuant to this Section or pursuant to any other provision of
this Agreement shall be conclusive and binding on such Holder and on all
future Holders of such Certificate or Note and of any Certificate or Note
issued upon the transfer thereof or in exchange thereof or in lieu thereof
whether or not notation of such consent is made upon the Certificate or Note.
Prior to the execution of any amendment to this Agreement,
the Trustee, the Trust Collateral Agent, if requested, shall be entitled to
receive and rely upon an Opinion of Counsel stating that the execution of such
amendment is authorized or permitted by this Agreement and that all conditions
precedent to the execution and delivery of such amendment have been satisfied.
SECTION 6.6 Notices. All demands, notices and communications
to Seller or Purchaser hereunder shall be in writing, personally delivered, or
sent by telecopier (subsequently confirmed in writing), reputable overnight
courier or mailed by certified mail, return receipt requested, and shall be
deemed to have been given upon receipt (a) in the case of Seller, to Advanta
Auto Finance Corporation, 000 Xxxxxx Xxxxxx Xxxxx, Xxxxx 000, Xxxx Xxxxxxxxxx,
Xxxxxxxxxxxx 00000, Attention: Legal Department, or (b) in the case of
Purchaser, to Advanta Auto Receivables Corp. I, 0000 Xxxxxxxxx Xxx, Xxxxx 000,
Xxxx, Xxxxxx 00000 or such other address as shall be designated by a party in
a written notice delivered to the other party or to the Issuer, Owner Trustee
or the Trust Collateral Agent, as applicable.
16
SECTION 6.7 Merger and Integration. Except as specifically
stated otherwise herein, this Agreement and Related 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
and the Related Documents. This Agreement may not be modified, amended, waived
or supplemented except as provided herein.
SECTION 6.8 Severability of Provisions. If any one or more
of the covenants, provisions or terms of this Agreement shall be for any
reason whatsoever held invalid, then such covenants, provisions or terms shall
be deemed severable from the remaining covenants, provisions or terms of this
Agreement and shall in no way affect the validity or enforceability of the
other provisions of this Agreement.
SECTION 6.9 Intention of the Parties. The execution and
delivery of this Agreement shall constitute an acknowledgment by Seller and
Purchaser that they intend that the assignment and transfer herein
contemplated constitute a sale and assignment outright, and not for security,
of the Receivables and the Other Conveyed Property, conveying good title
thereto free and clear of any Liens, from Seller to Purchaser, and that the
Receivables and the Other Conveyed Property shall not be a part of Seller's
estate in the event of the bankruptcy, reorganization, arrangement, insolvency
or liquidation proceeding, or other proceeding under any federal or state
bankruptcy or similar law, or the occurrence of another similar event, of or
with respect to Seller. In the event that such conveyance is determined to be
made as security for a loan made by Purchaser, the Issuer, the Noteholders or
the Certificateholders to Seller, the parties intend that Seller shall have
granted to Purchaser a security interest in all of Seller's right, title and
interest in and to the Receivables and the Other Conveyed Property conveyed
pursuant to Section 2.1 hereof, and that this Agreement shall constitute a
security agreement under applicable law and shall have granted such security
interest.
SECTION 6.10 Governing Law. This Agreement shall be
construed in accordance with the laws of the State of New York without regard
to the principles of conflicts of laws thereof and the obligations, rights and
remedies of the parties under this Agreement shall be determined in accordance
with such laws.
SECTION 6.11 Counterparts. For the purpose of facilitating
the execution of this Agreement 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 all of which counterparts
shall constitute but one and the same instrument.
SECTION 6.12 Conveyance of the Receivables and the Other
Conveyed Property to the Issuer. Seller acknowledges that Purchaser intends,
pursuant to the Sale and Servicing Agreement, to convey the Receivables and
the Other Conveyed Property, together with its rights under this Agreement, to
the Issuer on the date hereof. Seller acknowledges and consents to such
conveyance and pledge and waives any further notice thereof and covenants and
agrees that the representations and warranties of Seller contained in this
Agreement and the rights of Purchaser hereunder are intended to benefit
17
the Insurer, the Issuer, the Owner Trustee, the Trust Collateral Agent, the
Noteholders and the Certificateholders. In furtherance of the foregoing,
Seller covenants and agrees to perform its duties and obligations hereunder,
in accordance with the terms hereof for the benefit of the Insurer, the
Issuer, the Owner Trustee, the Trust Collateral Agent, the Noteholders and the
Certificateholders and that, notwithstanding anything to the contrary in this
Agreement, Seller shall be directly liable to the Issuer, the Owner Trustee,
the Trust Collateral Agent, the Noteholders and the Certificateholders
(notwithstanding any failure by the Master Servicer, or Purchaser to perform
their respective duties and obligations hereunder or under Related Documents)
and that the Trust Collateral Agent may enforce the duties and obligations of
Seller under this Agreement against Seller for the benefit of the Insurer, the
Owner Trustee, the Trust Collateral Agent, the Noteholders and the
Certificateholders.
SECTION 6.13 Nonpetition Covenant. Neither Purchaser nor
Seller shall petition or otherwise invoke the process of any court or
government authority for the purpose of commencing or sustaining a case
against Purchaser or the Issuer under any federal or state bankruptcy,
insolvency or similar law or appointing a receiver, liquidator, assignee,
trustee, custodian, sequestrator or other similar official of Purchaser or the
Issuer or any substantial part of their respective property, or ordering the
winding up or liquidation of the affairs of Purchaser or the Issuer.
[Signature Page Follows]
18
IN WITNESS WHEREOF, the parties have caused this Purchase
Agreement to be duly executed by their respective officers as of the day and
year first above written.
ADVANTA AUTO FINANCE CORPORATION,
as Seller
By /s/ Xxxx Xxxxxxxxx
---------------------------
Name: Xxxx Xxxxxxxxx
Title: Vice President
ADVANTA AUTO RECEIVABLES CORP. I,
as Purchaser
By /s/ Xxxx Xxxxxxxxx
---------------------------
Name: Xxxx Xxxxxxxxx
Title: Vice President
Acknowledged and Accepted:
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION,
As Trustee and Trust Collateral Agent
By /s/ Xxxxxx X. Xxxxxxxxxx
----------------------------
Name: Xxxxxx X. Xxxxxxxxxx
Title: Corporate Trust Officer
19
SCHEDULE A
SCHEDULE OF RECEIVABLES
[See the Attached Pages]
SCH-A-1
SCHEDULE B
REPRESENTATIONS AND WARRANTIES OF SELLER
1. Characteristics of Receivables. Each Receivable (A) was originated
by a Dealer for the retail sale of a Financed Vehicle in the ordinary course
of such Dealer's business in accordance with either (i) Seller's credit
policies or (ii) credit policies which were reviewed by Seller prior to a
purchase of a Receivable by Seller and such Dealer had all necessary licenses
and permits to originate Receivables in the state where such Dealer was
located, was fully and properly executed by the parties thereto, was
purchased, directly or indirectly, by an Unaffiliated Originator or Seller
from such Dealer under an existing Dealer Agreement or pursuant to a Dealer
Assignment and was validly assigned by such Dealer to an Unaffiliated
Originator or Seller pursuant to a Dealer Assignment and then validly assigned
by an Unaffiliated Originator to Seller (if applicable), (B) contains
customary and enforceable provisions such as to render the rights and remedies
of the holder thereof adequate for realization against the collateral
security, (C) is a Receivable which provides for level monthly payments
(provided that the period in the first Collection Period and the payment in
the final Collection Period of the Receivable may be minimally different from
the normal period and level payment) which, if made when due, shall fully
amortize the Amount Financed over the original term and (D) has not been
amended or collections with respect to which waived, other than as evidenced
in the Receivable File relating thereto.
2. No Fraud or Misrepresentation. Each Receivable was (A) originated
by a Dealer, (B) was sold by the Dealer, directly or indirectly, to Seller or
to an Unaffiliated Originator, (C) was sold by the Dealer or the Unaffiliated
Originator to Seller and by Seller to Purchaser without any fraud or
misrepresentation in any case.
3. Compliance with Law. All requirements of applicable federal, state
and local laws, and regulations thereunder (including, without limitation,
usury laws, the Federal Truth-in-Lending Act, the Equal Credit Opportunity
Act, the Fair Credit Billing Act, the Fair Credit Reporting Act, the Fair Debt
Collection Practices Act, the Federal Trade Commission Act, the Xxxx-Xxxxxxxx
Warranty Act, the Federal Reserve Board's Regulations "B" and "Z", the
Soldiers' and Sailors' Civil Relief Act of 1940, as amended, each applicable
state Motor Vehicle Retail Installment Sales Act, and state adaptations of the
National Consumer Act and of the Uniform Consumer Credit Code and other
consumer credit laws and equal credit opportunity and disclosure laws) in
respect of the Receivables, each and every sale of Financed Vehicles and the
sale of any physical damage, credit life and credit accident and health
insurance and any extended service contracts have been complied with in all
material respects, and each Receivable and the sale of the Financed Vehicle
evidenced by each Receivable complied at the time it was originated or made
and now complies in all material respects with all applicable legal
requirements.
4. Origination. Each Receivable was originated in the United States
and materially conforms to all requirements of the "Dealer Underwriting Guide"
applicable to
A-1
such Receivable at the time of origination, or with respect to Receivables
assigned to Seller, at the time of such assignment.
5. Binding Obligation. Each Receivable represents the genuine, legal,
valid and binding payment obligation of the Obligor thereon, enforceable by
the holder thereof in accordance with its terms, except (A) as enforceability
may be limited by bankruptcy, insolvency, reorganization or 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 and (B)
as such Receivable may be modified by the application after the Cutoff Date of
the Soldiers' and Sailors' Civil Relief Act of 1940, as amended; and all
parties to each Receivable had full legal capacity to execute and deliver such
Receivable and all other documents related thereto and to grant the security
interest purported to be granted thereby.
6. No Government Obligor. No Obligor is the United States of America
or any State or any agency, department, subdivision or instrumentality
thereof.
7. Obligor Bankruptcy. At the related Cutoff Date, no Obligor had
been identified on the records of Seller as being the subject of a current
bankruptcy proceeding.
8. Schedule of Receivables. The information set forth in the Schedule
of Receivables has been produced from the Electronic Ledger and was true and
correct in all material respects as of the close of business on the related
Cutoff Date.
9. Marking Records. By the Closing Date, Seller will have caused the
portions of the Electronic Ledger relating to the Receivables to be clearly
and unambiguously identified to show that the Receivables have been sold to
Purchaser by Seller and resold by Purchaser to the Trust in accordance with
the terms of the Sale and Servicing Agreement.
10. Computer Tape. The Computer Tape made available by Seller to
Purchaser on the Closing Date, was complete and accurate as of the related
Cutoff Date and includes a description of the same Receivables that are
described in the Schedule of Receivables.
11. Adverse Selection. No selection procedures adverse to the
Securityholders or the Insurer were utilized in selecting the Receivables from
those receivables owned by Purchaser or purchased by Seller from Unaffiliated
Originators or Dealers which met the selection criteria contained in the Sale
and Servicing Agreement.
12. Chattel Paper. The Receivables constitute chattel paper within
the meaning of the UCC as in effect in the States of Delaware, Nevada,
Pennsylvania and New York.
13. One Original. There is only one original executed copy of each
Receivable.
A-2
14. Receivable Files Complete. There exists a Receivable File
pertaining to each Receivable and such Receivable File contains, without
limitation, subject to any exceptions which may appear on any exception report
delivered by the Trust Collateral Agent on the Closing Date to the Insurer,
the Owner Trustee, Seller and the Master Servicer and which Seller shall have
30 Business Days to cure, (a) a fully executed original of the Receivable, (b)
the original, or in certain specific instances, a copy of the original, Lien
Certificate or application therefor together with an assignment of the Lien
Certificate executed by the Dealer or the Unaffiliated Originator to Seller
and by Seller to Purchaser and an assignment of the Lien Certificate executed
by Purchaser to the Trustee, (c) an original credit application or copy
thereof signed by the Obligor. Each of such documents which is required to be
signed by the Obligor has been signed by the Obligor in the appropriate spaces
and (d) evidence of any Insurance Policy. All blanks on any form described in
clauses (a), (b) and (c) above have been properly filled in and each form has
otherwise been correctly prepared. Notwithstanding the above, a copy of the
complete Receivable File for each Receivable, which fulfills the documentation
requirements of the Dealer Underwriting Guide as in effect at the time of
purchase is in the possession of the Master Servicer or its bailee.
15. Receivables in Force. No Receivable has been satisfied,
subordinated or rescinded, and the Financed Vehicle securing each such
Receivable has not been released from the lien of the related Receivable in
whole or in part. No terms of any Receivable have been waived, altered or
modified in any respect since its origination, except by instruments or
documents identified in the Receivable File. No Receivable has been modified
as a result of application of the Soldiers' and Sailors' Civil Relief Act of
1940, as amended.
16. Lawful Assignment. No Receivable was originated in, or is subject
to the laws of, any jurisdiction the laws of which would make unlawful, void
or voidable the sale, transfer and assignment of such Receivable under this
Agreement or pursuant to transfers of the Securities. Seller has not entered
into any agreement with any account debtor that prohibits, restricts or
conditions the assignment of any portion of the Receivables.
17. Good Title. No Receivable has been sold, transferred, assigned or
pledged by Seller to any Person other than Purchaser and the Issuer;
immediately prior to the conveyance of the Receivables to Purchaser pursuant
to this Agreement, Seller was the sole owner thereof and had good and
indefeasible title thereto, free of any Lien and, upon execution and delivery
of this Agreement by Seller, Purchaser shall have good and indefeasible title
to and will be the sole owner of such Receivables, free of any Lien. No Dealer
has a participation in, or other right to receive, proceeds of any Receivable.
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 related
Insurance Policies or the related Dealer Agreements, Dealer Assignments or
Unaffiliated Originator Receivables Purchase Agreements or to payments due
under such Receivables.
18. Security Interest in Financed Vehicle. Each Receivable created or
shall create a valid, binding and enforceable first priority security interest
in favor of Seller, the
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Trust Collateral Agent or an Unaffiliated Originator in the Financed Vehicle.
The Lien Certificate and original certificate of title for each Financed
Vehicle show, or if a new or replacement Lien Certificate is being applied for
with respect to such Financed Vehicle the Lien Certificate will be received
within 180 days of the Closing Date and will show Seller, the Trust Collateral
Agent, Bankers Trust Company or an Unaffiliated Originator named as the
original secured party under each Receivable as the holder of a first priority
security interest in such Financed Vehicle. With respect to each Receivable
for which the Lien Certificate has not yet been returned from the Registrar of
Titles, Seller has received written evidence from the related Dealer that such
Lien Certificate showing Seller, the Trust Collateral Agent, Bankers Trust
Company or an Unaffiliated Originator or Bankers Trust Company as first
lienholder has been applied for and (i) the Unaffiliated Originator's security
interest has been validly assigned to Seller, pursuant to the Unaffiliated
Originator Receivables Purchase Agreement, if applicable and (ii) Seller's
security interest has been validly assigned to Purchaser pursuant to this
Agreement. Immediately after the sale, transfer and assignment thereof by
Seller to Purchaser and from Purchaser to the Trust, each Receivable will be
secured by an enforceable and perfected first priority security interest in
the Financed Vehicle in favor of the Trustee as secured party, which security
interest is prior to all other Liens upon and security interests in such
Financed Vehicle which now exist or may hereafter arise or be created (except,
as to priority, for any lien for taxes, labor or materials affecting a
Financed Vehicle arising subsequent to the Cutoff Date). As of the related
Cutoff Date there were no Liens or claims for taxes, work, labor or materials
affecting a Financed Vehicle which are or may be Liens prior or equal to the
Liens of the related Receivable. If the Receivable was originated in a state
in which a filing or recording is required of the secured party to perfect a
security interest in motor vehicles, such filings or recordings have been duly
made to show Seller, the Trust Collateral Agent or an Unaffiliated Originator
as the Original Secured Party under the related Receivable.
19. All Filings Made. All filings (including, without limitation, UCC
filings) required to be made by any Person and actions required to be taken or
performed by any Person in any jurisdiction to give the Trust a first priority
perfected lien on, or ownership interest in, the Receivables and the proceeds
thereof and the Other Conveyed Property have been made, taken or performed.
20. No Impairment. Seller has not done anything to convey any right
to any Person that would result in such Person having a right to payments due
under the Receivable or otherwise to impair the rights of the Trust,
Purchaser, the Insurer, the Trustee, the Trust Collateral Agent and the
Securityholders in any Receivable or the proceeds thereof.
21. Receivable Not Assumable. No Receivable is assumable by another
Person in a manner which would release the Obligor thereof from such Obligor's
obligations to Seller with respect to such Receivable.
22. No Defenses. No Receivable is subject to any right of rescission,
setoff, counterclaim or defense and no such right has been asserted or
threatened with respect to any Receivable.
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23. No Default. There has been no default, breach, violation or event
permitting acceleration under the terms of any Receivable (other than payment
delinquencies of not more than 29 days as of the Cut-Off Date and other than
payment delinquencies of more than 29 days which have been cured and which the
Obligor of such Receivable has had no further delinquency of more than 29
days), and no condition exists or event has occurred and is continuing that
with notice, the lapse of time or both would constitute a default, breach,
violation or event permitting acceleration under the terms of any Receivable,
and there has been no waiver of any of the foregoing. As of the related Cutoff
Date no Financed Vehicle had been repossessed.
24. Insurance. At the time of origination of each Receivable, the
related Financed Vehicle is covered by a comprehensive and collision insurance
policy (i) in an amount at least equal to the lesser of, excluding any
deductible, (a) its maximum insurable value or (b) the principal amount due
from the Obligor under the related Receivable, (ii) naming Seller or an
Unaffiliated Originator and its successors and assigns as loss payee and (iii)
insuring against loss and damage due to fire, theft, transportation, collision
and other risks generally covered by comprehensive and collision coverage.
Each Receivable requires the Obligor to maintain physical loss and damage
insurance, naming Seller or an Unaffiliated Originator and its successors and
assigns as additional insured parties, and each Receivable permits the holder
thereof to obtain physical loss and damage insurance at the expense of the
Obligor if the Obligor fails to do so. No Financed Vehicle is insured under a
policy of Force-Placed Insurance on the related Cutoff Date.
25. Certain Characteristics of Receivables. (i) Each Receivable had a
remaining maturity, as of the Cutoff Date, of at least 8 months but not more
than 60 months; (ii) each Receivable had an original maturity of at least 24
months but not more than 66 months; (iii) each Receivable had an original
principal balance of at least $3,000 and not more than $30,000; (iv) each
Receivable had a Principal Balance as of the Cutoff Date of at least $800 and
not more than $30,000; (v) each Receivable has an Annual Percentage Rate of at
least 10.00% and not more than 29.00%; (vi) no Receivable was more than 30
days past due as of the Cutoff Date; (vii) no funds have been advanced by
Seller, the Master Servicer, any Unaffiliated Originator, any Dealer, or
anyone acting on behalf of any of them in order to cause any Receivable to
qualify under subclause (vi) of this clause 25; (viii) no Receivable has a
final scheduled payment date after June, 2003; (ix) the Principal Balance of
each Receivable set forth in Schedule of Receivables is true and accurate as
of the Cutoff Date, and (x) as of the Cutoff Date, approximately 12.6% of the
aggregate Principal Balance for all the Receivables is attributable to loans
for the purchase of new Financed Vehicles, and approximately 87.4% of the
aggregate Principal Balance for all the Receivables is attributable to loans
for the purchase of used Financed Vehicles.
26. Certain Characteristics of Flow Receivables. With respect to each
Flow Receivable(i) the minimum credit bureau risk or FICO score for the
related Obligor was 540 as reported on the related credit report, (ii) the
related Obligor had prior automobile credit history as reported by either
Equifax, TransUnion or TRW and (iii) such Receivable was originated in
accordance with Seller's established underwriting guidelines
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and no exception to such guidelines was made to take into account the size of
the downpayment provided by the related Obligor.
27. Servicing Conversion. As of the Closing Date, all of the Pool
Receivables are being serviced by the Master Servicer and, except with respect
to Pool Receivables with aggregate Principal Balances not in excess of
$27,000,000, at least one payment has been received by the Master Servicer
from the related Obligor with respect to such Pool Receivable.
