DEPOSITOR PURCHASE AGREEMENT
between
FLAGSHIP AUTO LOAN FUNDING LLC 1999-II
as Seller
and
PRUDENTIAL SECURITIES SECURED FINANCING CORPORATION
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
SECTION 2.2. Optional Purchase of All Auto Loans.............................4
SECTION 2.3. Conditions to Depositor's Obligations...........................5
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.1. Representations and Warranties of Flagship LLC as Seller........5
SECTION 3.2. Representations and Warranties of Prudential as Purchaser.......7
ARTICLE IV
COVENANTS OF FLAGSHIP LLC
SECTION 4.1. Protection of Title of Prudential and the Trust.................9
SECTION 4.2. Other Liens or Interests.......................................10
SECTION 4.3. Costs and Expenses.............................................10
ARTICLE V
MISCELLANEOUS
SECTION 5.1. Liability of Flagship LLC......................................10
SECTION 5.2. Merger or Consolidation of Flagship LLC........................10
SECTION 5.3. Limitation on Liability of Flagship LLC and Others.............11
SECTION 5.4. Conveyance of the Auto Loans and the Other Conveyed Property
to the Issuer..................................................11
SECTION 5.5. Amendment......................................................11
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SECTION 5.6. Notices.......................................................12
SECTION 5.7. Merger and Integration........................................12
SECTION 5.8. Severability of Provisions....................................13
SECTION 5.9. GOVERNING LAW.................................................13
SECTION 5.10. Counterparts..................................................13
SECTION 5.11. Nonpetition Covenant..........................................13
SECTION 5.12. Assignment....................................................13
SECTION 5.13. Third-Party Beneficiaries.....................................13
SECTION 5.14. Successors and Assigns........................................13
SCHEDULE A -- Schedule of Auto Loans
SCHEDULE B -- Legal Proceedings
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DEPOSITOR PURCHASE AGREEMENT, dated as of November 1, 1999 (this
"Agreement"), between Flagship Auto Loan Funding LLC 1999-II, a limited
liability company, as seller ("Flagship LLC"), and Prudential Securities Secured
Financing Corporation, a Delaware corporation, as purchaser ("Prudential").
WHEREAS, Flagship LLC has purchased the Auto Loans and the Other Conveyed
Property from Flagship Credit Corporation pursuant to the Sale and Servicing
Agreement.
WHEREAS, Prudential, as Purchaser, has agreed to purchase from Flagship
LLC, as Seller, and Flagship LLC has agreed to sell and transfer to Prudential,
the Auto Loans and the Other Conveyed Property pursuant to this Agreement.
WHEREAS, Prudential will sell, transfer and assign its interest in the Auto
Loans and the Other Conveyed Property to the Issuer pursuant to the Owner Trust
Purchase 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 Flagship LLC 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 Sale and Servicing Agreement (as
defined below). Whenever capitalized and used in this Agreement, the following
words shall have the following meanings:
"Other Conveyed Property" means, with respect to the Auto Loans:
(i) all right, title and interest of Flagship LLC 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 Flagship LLC in and to the
security interests in the Financed Vehicles granted by Obligors
pursuant to the Auto Loans and any other interest of Flagship LLC in
such Financed Vehicles, including, without limitation, the
certificates of title related thereto;
(iii) all right, title and interest of Flagship LLC 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 Flagship LLC in and to
related contracts, including third party contracts and dealer
agreements;
(v) all right, title and interest of Flagship LLC 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 Flagship LLC under the Sale and Servicing
Agreement; and
(x) the proceeds of any and all of the foregoing.
"Purchase Amount" means, with respect to an Auto Loan, the amount, as of
the close of business on the last day of a Collection Period, required to prepay
in full such Auto Loan under the terms thereof including the outstanding
Principal Balance of the related Auto Loans plus all accrued and unpaid interest
and interest to the end of the month of purchase, in the event such Auto Loan
has been repurchased by the Originator, the Seller or by the Servicer pursuant
to the terms of the Transaction Documents.
"Purchaser" means Prudential Securities Secured Financing Corporation.
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"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 Flagship Auto Loan Funding LLC 1999-II.
"Trust" means Flagship Auto Receivables Owner Trust 1999-2, the trust
formed under the Trust Agreement.
"Trust Agreement" shall have the meaning assigned to that term in the Sales
and Servicing Agreement.
"Trust Certificates" means the Certificates issued by the Trust pursuant to
the Trust Agreement.
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 Sale 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, Flagship LLC,
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Prudential or of any predecessor or successor of Flagship Credit Corporation,
Flagship LLC or Prudential.
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,
Flagship LLC hereby sells, contributes, transfers, assigns and otherwise conveys
to Prudential, without recourse (but without limitation of its obligations in
this Agreement), and Prudential hereby purchases and accepts, all right, title
and interest of Flagship LLC in and to the Auto Loans listed in Schedule A and
the Other Conveyed Property with respect thereto. It is the intention of
Flagship LLC and Prudential that the transfer and assignment contemplated by
this Agreement shall constitute a sale of the Auto Loans and the Other Conveyed
Property from Flagship LLC to Prudential and the beneficial interest in and
title to the Auto Loans and the Other Conveyed Property shall not be part of
Flagship LLC's estate in the event of the filing of a bankruptcy petition by or
against Flagship LLC under any bankruptcy law. If, notwithstanding the intent of
Flagship LLC and Prudential, the transfer and assignment contemplated hereby is
held not to be a sale and/or contribution, Flagship LLC hereby grants a first
priority security interest to Prudential 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 Flagship LLC
to Prudential, on the Closing Date, Prudential shall (i) pay to Flagship LLC
$249,062,500.00, and (ii) after giving full effect to the transactions
contemplated by the Owner Trust Purchase Agreement and the conveyance of
property thereunder, sell, assign, transfer, set over and otherwise convey unto
Flagship LLC, without recourse, all of its right, title and interest (legal and
beneficial) in, to and with respect to the Trust Certificates, the Trust
Agreement, the Trust or in property conveyed to the Trust and any and all legal
or equitable rights, choses in action, interests and other forms of property of
any nature whatsoever (if any remain) relating to the Trust and the Trust's
property, such conveyance to be in the form attached as Schedule C.
SECTION 2.2. Optional Purchase of All Auto Loans
(a) (i) On the last day of any Collection Period as of which the
outstanding aggregate principal balance of the Notes shall be less than or equal
to 10% of the initial aggregate principal balance of the Notes, Flagship LLC
shall have the option to purchase all remaining Auto Loans from the Issuer (with
the consent of the Insurer if such purchase would result in a claim on the
Policy or would result in any amount owing to the Insurer under the Insurance
Agreement remaining unpaid).
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To exercise such option, Flagship LLC shall (subject to the proviso below)
deposit in the Collection Account an amount equal to the aggregate Purchase
Amount for such Auto Loans (including Charged-off Auto Loans), plus the
appraised value of any other property held by the Issuer, such value to be
determined by an appraiser mutually agreed upon by Flagship LLC, the Insurer and
the Indenture Trustee, and shall succeed to all interests in and to the Issuer;
provided, however, that the amount to be paid for such purchase shall be
sufficient to pay the full amount of principal and interest, if any, then due
and payable on the Notes and all amounts due to the Insurer under the
Transaction Documents.
(b) Notice of the optional purchase of all the Auto Loans shall be given by
Flagship LLC to the Issuer, the Indenture Trustee, the Depositor, the Insurer
and the Rating Agencies.
SECTION 2.3. Conditions to Depositor's Obligations. It shall be a condition
to the obligations of the Depositor hereunder that all of the conditions to the
obligations of the Underwriter under the Underwriting Agreement shall have been
satisfied.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.1. Representations and Warranties of Flagship LLC as Seller. By
its execution of this Agreement, Flagship LLC makes the following
representations and warranties on which Prudential relies in purchasing the Auto
Loans and the Other Conveyed Property with respect thereto and in transferring
the Auto Loans and the Other Conveyed Property with respect thereto to the
Issuer under the Owner Trust Purchase Agreement. 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 sale, transfer and assignment
thereof by Prudential to the Issuer under the Owner Trust Purchase Agreement,
and the subsequent pledge thereof by the Issuer to the Indenture Trustee under
the Indenture. Flagship LLC and Prudential agree that Prudential will assign to
the Issuer all of Prudential's rights and interests under the Agreement and 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 Flagship LLC in the Indenture Trustee's own name on behalf of the
Noteholders and the Insurer.
(a) Organization and Good Standing. Flagship LLC has been duly organized
and is validly existing as a limited liability company 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 Prudential.
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(b) Due Qualification. Flagship LLC 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
Flagship LLC or its ability to perform its obligations under this Agreement.
(c) Power and Authority. Flagship LLC 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; Flagship LLC
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 Prudential
hereunder and has duly authorized such sale and assignment to Prudential by all
necessary corporate action; and the execution, delivery and performance of this
Agreement and the Transaction Documents to which Flagship LLC is a party have
been duly authorized by Flagship LLC 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 Flagship LLC and creditors of and purchasers from Flagship
LLC; and this Agreement and the Transaction Documents to which Flagship LLC is a
party, when duly executed and delivered, shall constitute legal, valid and
binding obligations of Flagship LLC 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 formation or
LLC agreement of Flagship LLC, or any indenture, agreement, mortgage, deed of
trust or other instrument to which Flagship LLC 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 Flagship LLC of any
court or of any federal or state regulatory body, administrative agency or other
governmental instrumentality having jurisdiction over Flagship LLC or any of its
properties.
(f) No Proceedings. There are no proceedings or investigations pending or,
to Flagship LLC's knowledge, threatened against Flagship LLC, before any court,
regulatory body, administrative agency or other tribunal or governmental
instrumentality having jurisdiction over Flagship LLC 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
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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 Flagship LLC of its obligations under, or
the validity or enforceability of, this Agreement or any of the Transaction
Documents, or (D) relating to Flagship LLC 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. Flagship LLC 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 Flagship LLC is
at 0 Xxxxxxxxxxxxx Xxxxx, Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000.
SECTION 3.2. Representations and Warranties of Prudential as Purchaser. By
its execution of this Agreement, Prudential makes the following representations
and warranties on which Flagship LLC relies in selling, assigning, transferring
and conveying the Auto Loans and the Other Conveyed Property to Prudential
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
sale, transfer and assignment thereof by Prudential to Prudential and the sale,
transfer and assignment thereof by Prudential to the Issuer under the Owner
Trust Purchase Agreement, and the pledge thereof by the Issuer to the Indenture
Trustee pursuant to the Indenture.
(a) Organization and Good Standing. Prudential has been duly organized and
is validly existing as a 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 hereunder.
(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.
(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
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their terms, respectively; Prudential 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 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.
(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.
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(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 at
One Xxx Xxxx Xxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000.
In the event of any breach of a representation and warranty made by Prudential
hereunder, Flagship LLC covenants and agrees that Flagship LLC 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 formed by the Issuer, or any obligations, notes or other securities
issued by Prudential have been paid in full. Flagship LLC and Prudential agree
that damages will not be an adequate remedy for such breach and that this
covenant may be specifically enforced by Prudential or by the Indenture Trustee
on behalf of the Noteholders and the Insurer.
ARTICLE IV
COVENANTS OF FLAGSHIP LLC
SECTION 4.1. Protection of Title of Prudential and the Trust.
(a) Flagship LLC 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 Prudential 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. Flagship LLC
shall deliver (or cause to be delivered) to Prudential, 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 Flagship LLC
fails to perform its obligations under this subsection, Prudential, the Owner
Trustee or the Indenture Trustee may do so, at the expense of Flagship LLC.
(b) Flagship LLC shall not change its name, identity or corporate structure
in any manner that would make any financing statement or continuation statement
filed by Flagship LLC (or by Prudential, the Trust or the Indenture Trustee on
behalf of Flagship LLC ) in accordance with Section 4.1(a) seriously misleading
within the meaning of the applicable provisions of the UCC or any title statute,
unless Flagship LLC shall have given Prudential, 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.
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(c) Flagship LLC shall give Prudential, 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. Flagship LLC 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 Flagship LLC 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, Flagship
LLC 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 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), Flagship LLC 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. Flagship LLC 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 favor of
Prudential, 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 Flagship
LLC, the Issuer or Prudential 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 the Lien of Prudential, 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. Flagship LLC 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.
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ARTICLE V
MISCELLANEOUS
SECTION 5.1. Liability of Flagship LLC. Flagship LLC shall be liable in
accordance herewith only to the extent of the obligations of this Agreement
specifically undertaken by Flagship LLC and its representations and warranties.
SECTION 5.2. Merger or Consolidation of Flagship LLC. Flagship LLC shall
not merge or consolidate with any other Person or permit any other Person to
become the successor to all or substantially all of Flagship LLC's business or
assets unless the Insurer has given its prior written consent and any such
successor corporation shall execute an agreement of assumption of every
obligation of Flagship LLC under its Transaction Documents and, whether or not
such assumption agreement is executed, shall be the successor to Flagship LLC
under this Agreement without the execution or filing of any document (or any
further act on the part of any of the parties to this Agreement). Flagship LLC
shall provide prompt notice of any merger, consolidation or succession pursuant
to this Section 5.2 to the Owner Trustee, the Indenture Trustee, the Insurer and
each Rating Agency. Notwithstanding the foregoing, Flagship LLC shall not merge
or consolidate with any other Person or permit any other Person to become a
successor to Flagship LLC's business, unless: (i) immediately after giving
effect to such transaction, no representation or warranty made pursuant to
Section 3.1 shall have been breached in any material respect (for purposes
hereof, such representations and warranties shall speak as of the date of the
consummation of such transaction); (ii) Flagship LLC shall have delivered to the
Owner Trustee, the Indenture Trustee, the Insurer and each Rating Agency 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 5.2 and that all conditions precedent, if any, provided for in this
Agreement relating to such transaction have been complied with; and (iii)
Flagship LLC shall have delivered to the Owner Trustee, the Indenture Trustee,
the Insurer and each Rating Agency 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 interests of Prudential, the Issuer and
the Indenture Trustee in the Auto Loans or (B) no such action shall be necessary
to preserve and protect such interest.
SECTION 5.3. Limitation on Liability of Flagship LLC and Others. Flagship
LLC and any director or officer or employee or agent of Flagship LLC 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. Flagship LLC 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 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. Flagship LLC acknowledges that Prudential intends, pursuant to
the Owner Trust Purchase Agreement, to convey the Auto Loans and the Other
Conveyed Property, together with its respective
11
rights under this Agreement, to the Issuer on the date hereof. Flagship LLC
acknowledges and consents to such conveyance and waives any further notice
thereof and covenants and agrees that the representations and warranties of
Flagship LLC contained in this Agreement, and the rights of Prudential
hereunder, are intended to benefit the Indenture Trustee, the Trust, the
Noteholders and the Insurer. In furtherance of the foregoing, Flagship LLC
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, Flagship LLC shall be directly liable to the
Indenture Trustee, the Insurer and the Trust (notwithstanding any failure by the
Servicer, the Backup Servicer or Prudential to perform its duties and
obligations hereunder or under the Sale and Servicing Agreement), and that the
Owner Trustee and the Indenture Trustee may enforce the duties and obligations
of Flagship LLC under this Agreement against Flagship LLC for the benefit of the
Trust, the Noteholders and the Insurer, respectively.
SECTION 5.5. Amendment.
(a) This Agreement may be amended by Flagship LLC and Prudential 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 Flagship LLC
and Prudential 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
required to consent to any such amendment or any waiver hereunder, without the
consent of the Holders of all Notes then outstanding.
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(c) Prior to the execution of any such amendment or consent under Section
5.5(a) or (b), Flagship LLC 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 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 OBLIGATIONS, RIGHTS AND REMEDIES OF
THE PARTIES UNDER THIS AGREEMENT SHALL BE DETERMINED IN ACCORDANCE WITH SUCH
LAWS.
13
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, Flagship LLC
shall not petition or otherwise invoke the process of any court or government
authority for the purpose of commencing or sustaining a case against Prudential
under any federal or state bankruptcy, insolvency or similar law or appointing a
receiver, liquidator, assignee, trustee, custodian, sequestrator or other
similar official of Prudential or any substantial part of its property, or
ordering the winding up or liquidation of the affairs of Prudential.
SECTION 5.12. Assignment. Notwithstanding anything to the contrary
contained in this Agreement, except as provided in Section 5.2, this Agreement
may not be assigned by Flagship LLC or Prudential.
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.
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IN WITNESS WHEREOF, the parties have caused this Depositor Purchase
Agreement to be duly executed by their respective officers, effective as of the
day and year first above written.
FLAGSHIP AUTO LOAN FUNDING LLC 1999-
II, as Seller
By:
---------------------------------
Name:
Title:
PRUDENTIAL SECURITIES SECURED
FINANCING CORPORATION, as Purchaser
By:
---------------------------------
Name:
Title:
SCHEDULE A
SCHEDULE OF AUTO LOANS
On file with the Indenture Trustee.
A-1
SCHEDULE B
LEGAL PROCEEDINGS
None.
B-1
SCHEDULE C
ASSIGNMENT
For value received, in accordance with and subject to the Depositor
Purchase Agreement dated as of November 1, 1999 (the "Depositor Purchase
Agreement"), between the undersigned and Flagship Auto Loan Funding LLC 1999-II
("Flagship LLC"), and after giving full effect to the transactions contemplated
by the Owner Trust Purchase Agreement and the conveyance of property thereunder,
the undersigned does hereby sell, assign, transfer, set over and otherwise
convey unto the Seller, without recourse, all of its right, title and interest
(legal and beneficial) in, to and with respect to the Trust Certificates, the
Trust Agreement, the Trust or in property conveyed to the Trust and any and all
legal or equitable rights, choses in action, interests and other forms of
property of any nature whatsoever (if any remain) relating to the Trust and the
Trust's property.
Capitalized terms not defined herein have the meanings set forth in the
Depositor Purchase Agreement.
[SIGNATURE PAGE FOLLOWS]
C-1
IN WITNESS WHEREOF, the undersigned has caused this Assignment to be duly
executed as of November 24, 1999.
PRUDENTIAL SECURITIES SECURED FINANCING
CORPORATION
By:
------------------------------------
Name:
Title:
C-2
