Exhibit 10.3
RECEIVABLES PURCHASE AGREEMENT
between
NATIONAL CITY BANK,
as Seller,
and
NATIONAL CITY VEHICLE RECEIVABLES INC.,
as Depositor
Dated as of [___]
TABLE OF CONTENTS
PAGE
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Article I
Certain Definitions
Article II
Conveyance of Receivables
Section 2.01 Conveyance of Receivables.......................................................3
Section 2.02. The Closing....................................................................4
Article III
Representations and Warranties
Section 3.01. Representations and Warranties of the Depositor................................4
Section 3.02. Representations and Warranties of the Seller...................................6
Article IV
Conditions
Section 4.01. Conditions to Obligation of the Depositor.....................................16
Section 4.02. Conditions to Obligation of the Seller........................................16
Article V
Covenants of the Seller
Section 5.01. Protection of Right, Title and Interest.......................................18
Section 5.02. Other Liens or Interests......................................................18
Section 5.03. Costs and Expenses............................................................19
Section 5.04. Hold Harmless.................................................................19
Article VI
Indemnification
Section 6.01. Indemnification...............................................................20
Section 6.02. Contribution..................................................................22
Article VII
Miscellaneous Provisions
Section 7.01. Obligations of Seller.........................................................23
Section 7.02. Repurchase Events.............................................................23
Section 7.03. Depositor Assignment of Repurchased Receivables...............................23
Section 7.04. Transfer to the Issuer........................................................23
Section 7.05. Amendment.....................................................................23
Section 7.06. Waivers.......................................................................24
Section 7.07. Notices.......................................................................24
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Section 7.08. Costs and Expenses............................................................24
Section 7.09. Representations of the Seller and the Depositor...............................24
Section 7.10. Confidential Information......................................................25
Section 7.11. Headings and Cross-References.................................................25
Section 7.12. GOVERNING LAW.................................................................25
Section 7.13. Counterparts..................................................................25
Section 7.14. Third Party Beneficiary.......................................................25
Section 7.15. No Proceedings................................................................25
Exhibit A Matters Addressed in Opinion of Seller's Counsel
Schedule I Initial Data Schedule
Schedule II Final Schedule of Receivables
Schedule III Location of Receivable Files
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RECEIVABLES PURCHASE AGREEMENT dated as of [___], between NATIONAL CITY
BANK, a national banking association as seller (the "Seller") and NATIONAL CITY
VEHICLE RECEIVABLES INC, a Delaware corporation, as depositor (the "Depositor").
RECITALS
WHEREAS, in the regular course of its business, the Seller has
originated or purchased certain [retail installment sales contracts, retail
installment loans, purchase money notes or other notes] secured by [new and used
automobiles, light-duty trucks, motorcycles, recreational vehicles, vans,
minivans and/or sport utility vehicles].;
WHEREAS, the Seller and the Depositor wish to set forth the terms
pursuant to which such contracts and loan notes are to be sold by the Seller to
the Depositor; and
WHEREAS, the Depositor intends, concurrently with its purchase
hereunder, to convey all of its right, title and interest in and to all of such
contracts and loan notes to [ISSUER] (the "Issuer") pursuant to a Sale and
Servicing Agreement dated as of [___] (the "Sale and Servicing Agreement"), by
and among the Issuer, the Depositor, the Seller, National City Bank, as
Servicer, Administrator and Custodian, and [INDENTURE TRUSTEE], as Indenture
Trustee, and the Issuer intends to pledge all of its right, title and interest
in and to such contracts and loan notes to the Indenture Trustee pursuant to the
Indenture dated as of [___] (the "Indenture"), by and between the Issuer and the
Indenture Trustee.
NOW, THEREFORE, in consideration of the foregoing, other good and
valuable consideration and the mutual terms and covenants contained herein, the
parties hereto agree as follows:
Article I
Certain Definitions
Terms not defined in this Agreement shall have the meanings assigned
thereto in the Sale and Servicing Agreement or the Indenture. As used in this
Agreement, the following terms shall, unless the context otherwise requires,
have the following meanings (such meanings to be equally applicable to the
singular and plural forms of the terms defined):
"8-K FILING" shall mean the filing by the Depositor, dated [___], with
the United States Securities and Exchange Commission on Form 8-K concerning the
Receivables listed on Schedule B hereto.
"AGREEMENT" shall mean this Receivables Purchase Agreement, as the same
may be amended and supplemented from time to time.
"CONVEYED ASSETS" shall have the meaning set forth in Section 2.01.
"DEPOSITOR" shall mean National City Vehicle Receivables Inc., a
Delaware corporation, its successors and assigns.
"INDENTURE" shall have the meaning set forth in the recitals.
"LIEN CERTIFICATE" means with respect to a Financed Vehicle, an original
certificate of title, certificate of lien or other notification issued by the
Registrar of Titles of the applicable State to a secured party which indicates
that the lien of the secured party on the Financed Vehicle is recorded on the
original certificate of title. In any jurisdiction in which the original
certificate of title is required to be given to the Obligor, the term "Lien
Certificate" shall mean only a certificate or notification issued to a secured
party.
"PROSPECTUS" shall have the meaning set forth in the Underwriting
Agreement.
"PROSPECTUS SUPPLEMENT" means the Prospectus Supplement dated [___]
relating to [ISSUER].
"RECEIVABLES" shall mean the Receivables listed on Schedule II hereto
(which Schedule may be in the form of microfiche).
"REGISTRAR OF TITLES" means with respect to any State, the governmental
agency or body responsible for the registration of, and the issuance of
certificates of title relating to, motor vehicles and liens thereon.
"REGISTRATION STATEMENT" means Registration Statement No. 333-[___]
filed by the Depositor with the Securities and Exchange Commission in the form
in which it became effective on [___].
"REPURCHASE EVENT" shall have the meaning specified in Section 7.02.
"SALE AND SERVICING AGREEMENT" shall have the meaning set forth in the
recitals.
"SCHEDULES OF RECEIVABLES" shall mean the lists of Receivables annexed
hereto as Schedule I and Schedule II (which Schedules may be in the form of
microfiche).
"SELLER" shall mean National City Bank and its successors and assigns.
"SUBSEQUENT RECEIVABLE" shall mean any Receivable originated after the
Initial Cutoff Date.
"TRANSFER DATE" shall mean the Closing Date.
"UNDERWRITERS" means each of Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated, [___] and [___].
"UNDERWRITING AGREEMENT" means the Underwriting Agreement dated [___]
relating to [ISSUER] between the Depositor and the Underwriters.
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Article II
Conveyance of Receivables
Section 2.01. CONVEYANCE OF RECEIVABLES.
(a) In consideration of the Depositor's delivery to or upon
the order of the Seller on the Closing Date of (i) $[___] (the "Purchase Price")
and (ii) an uncertificated residual beneficial ownership interest in the Trust,
the Seller does hereby sell, transfer, assign, set over and otherwise convey to
the Depositor, without recourse (subject to the obligations of the Seller set
forth herein) all right, title, and interest of the Seller in and to:
(i) the Receivables and all monies received thereon
after the Initial Cutoff Date in the case of Receivables originated on
or before the Initial Cutoff Date and all monies received thereon on or
after the date of origination in the case of Receivables originated
after the Initial Cutoff Date;
(ii) the security interests in the Financed Vehicles
and any accessions thereto granted by the related Obligors pursuant to
the Receivables and any other interest of the Seller in such Financed
Vehicles;
(iii) any Liquidation Proceeds and any other proceeds
with respect to the Receivables from insurance policies covering
Financed Vehicles or Obligors;
(iv) [the amount of any remaining balance on a
Receivable actually cancelled in accordance with the terms of any GAP
protection applicable to such Receivable];
(v) any property that shall have secured a Receivable
and that shall have been acquired by or on behalf of the Seller;
(vi) all documents and other items contained in the
Receivable Files;
(vii) all proceeds from any Receivable purchased or
repurchased by a Dealer pursuant to a Dealer Agreement; and
(viii) the proceeds of any and all of the foregoing
(collectively, with the assets listed in clauses (i) through (vii)
above, the "Conveyed Assets").
(b) The Seller and the Depositor intend that the transfer of
assets by the Seller to the Depositor pursuant to this Agreement be a sale of
the ownership interest in such assets to the Depositor, rather than the mere
granting of a security interest to secure a borrowing. In the event, however,
that such transfer is deemed not to be a sale but to be of a mere security
interest to secure a borrowing, the Seller shall be deemed to have hereby
granted to the Depositor a security interest in all accounts, money, chattel
paper, securities, instruments, documents, deposit accounts, certificates of
deposit, letters of credit, advices of credit, banker's acceptances,
uncertificated securities, general intangibles, contract rights, goods and other
property consisting
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of, arising from or relating to such Conveyed Assets, which security interest
shall be perfected and of first priority, and this Agreement shall constitute a
security agreement under applicable law. Pursuant to the Sale and Servicing
Agreement and Section 7.04 hereof, the Depositor may sell, transfer and assign
to the Issuer (i) all or any portion of the assets assigned to the Depositor
hereunder, (ii) all or any portion of the Depositor's rights against the Seller
under this Agreement and (iii) all proceeds thereof. Such assignment may be made
by the Depositor with or without an assignment by the Depositor of its rights
under this Agreement, and without further notice to or acknowledgement from the
Seller. The Seller waives, to the extent permitted under applicable law, all
claims, causes of action and remedies, whether legal or equitable (including any
right of setoff), against the Depositor or any assignee of the Depositor
relating to such action by the Depositor in connection with the transactions
contemplated by the Sale and Servicing Agreement.
Section 2.02. THE CLOSING. The sale and purchase of the Receivables
shall take place at a closing at [___] on the Closing Date, simultaneously with
the closing under (a) the Sale and Servicing Agreement, (b) the Indenture and
(c) the Trust Agreement.
Article III
Representations and Warranties
Section 3.01. REPRESENTATIONS AND WARRANTIES OF THE DEPOSITOR. The
Depositor hereby represents and warrants as follows to the Seller and the
Indenture Trustee as of the date hereof and the Transfer Date:
(a) ORGANIZATION AND GOOD STANDING. The Depositor is duly
organized and validly existing as a corporation in good standing under the laws
of the State of Delaware, with the corporate power and authority to own its
properties and to conduct its business as such properties are currently owned
and such business is currently conducted.
(b) DUE QUALIFICATION. The Depositor 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 the Depositor's ability to acquire the
Receivables or the validity or enforceability of the Receivables.
(c) POWER AND AUTHORITY. The Depositor has the corporate power
and authority to execute, deliver and perform this Agreement and the other Basic
Documents to which it is a party and to carry out their respective terms; the
Depositor has full power and authority to sell and assign the property to be
sold and assigned to and deposited with the Issuer, and the Depositor shall have
duly authorized such sale and assignment to the Issuer by all necessary
corporate action; and the execution, delivery and performance of this Agreement
and the other Basic Documents to which the Depositor is a party have been duly
authorized by the Depositor by all necessary corporate action.
(d) BINDING OBLIGATION. This Agreement and the other Basic
Documents to which the Depositor is a party, when duly executed and delivered by
the other parties hereto and thereto, shall constitute legal, valid and binding
obligations of the Depositor, enforceable against the Depositor in accordance
with their respective terms, except as the enforceability thereof may
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be limited by bankruptcy, insolvency, reorganization or similar laws now or
hereafter in effect relating to or affecting creditors' rights generally and to
general principles of equity (whether applied in a proceeding at law or in
equity).
(e) NO VIOLATION. The consummation of the transactions
contemplated by this Agreement and the fulfillment of the terms hereof do 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 or both) a default under,
the charter or bylaws of the Depositor, or any indenture, agreement or other
instrument to which the Depositor is a party or by which it is bound, or violate
any law, rules or regulation applicable to the Depositor of any court or federal
or state regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over the Depositor.
(f) NO PROCEEDINGS. There are no proceedings or investigations
pending or, to the Depositor's knowledge, threatened against the Depositor
before any court, regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over the Depositor or its properties (i)
asserting the invalidity of this Agreement or any other Basic Document to which
the Depositor is a party, (ii) seeking to prevent the consummation of any of the
transactions contemplated by this Agreement or any other Basic Document to which
the Depositor is a party or (iii) seeking any determination or ruling that might
materially and adversely affect the performance by the Depositor of its
obligations under, or the validity or enforceability of, this Agreement or any
other Basic Document to which the Depositor is a party.
(g) NO CONSENTS. The Depositor is not required to obtain the
consent of any other party or any consent, license, approval, registration,
authorization, or declaration of or with any governmental authority, bureau or
agency in connection with the execution, delivery, performance, validity, or
enforceability of this Agreement or any other Basic Document to which it is a
party that has not already been obtained.
Section 3.02. REPRESENTATIONS AND WARRANTIES OF THE SELLER.
(a) The Seller hereby represents and warrants as follows to
the Depositor and the Indenture Trustee as of the date hereof and as of the
Transfer Date:
(i) ORGANIZATION AND GOOD STANDING. The Seller is a
national banking association duly organized and validly existing as a
banking institution under the laws of the United States and continues
to hold a valid certificate to do business as such, and has the power
to own its assets and to transact the business in which it is currently
engaged. The Seller is duly authorized to transact business and has
obtained all necessary licenses and approvals, and is in good standing
in each jurisdiction in which the character of the business transacted
by it or any properties owned or leased by it requires such
authorization.
(ii) POWER AND AUTHORITY. The Seller has the power
and authority to make, execute, deliver and perform this Agreement and
all of the transactions contemplated under this Agreement and the other
Basic Documents to which the Seller is a party, and has taken all
necessary action to authorize the execution, delivery and performance
of this Agreement and the other Basic Documents to which the Seller is
a
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party. When executed and delivered, this Agreement and the other Basic
Documents to which the Seller is a party will constitute legal, valid
and binding obligations of the Seller enforceable in accordance with
their respective terms, except as enforcement of such terms may be
limited by bankruptcy, insolvency or similar laws affecting the
enforcement of creditors' rights generally and by the availability of
equitable remedies and except as enforcement of such terms may be
limited by receivership, conservatorship and supervisory powers of bank
regulatory agencies generally.
(iii) NO VIOLATION. The execution, delivery and
performance by the Seller of this Agreement and the other Basic
Documents to which the Seller is a party will not violate any provision
of any existing state, federal or, to the best knowledge of the Seller,
local law or regulation or any order or decree of any court applicable
to the Seller or any provision of the articles of association or
incorporation or the bylaws of the Seller, or constitute a breach of
any mortgage, indenture, contract or other agreement to which the
Seller is a party or by which the Seller may be bound or result in the
creation or imposition of any lien upon any of the Seller's properties
pursuant to any such mortgage, indenture, contract or other agreement
(other than this Agreement).
(iv) NO PROCEEDINGS. There are no proceedings or
investigations pending or, to the Seller's knowledge, threatened
against the Seller before any court, regulatory body, administrative
agency or other governmental instrumentality having jurisdiction over
the Seller or its properties (i) asserting the invalidity of this
Agreement or any other Basic Document to which the Seller is a party,
(ii) seeking to prevent the consummation of any of the transactions
contemplated by this Agreement or any other Basic Document to which the
Seller is a party or (iii) seeking any determination or ruling that
might materially and adversely affect the performance by the Seller of
its obligations under, or the validity or enforceability of, this
Agreement or any other Basic Document to which the Seller is a party.
(v) CHIEF EXECUTIVE OFFICE. The chief executive
office of the Seller is located at 0000 Xxxx 0xx Xxxxxx, Xxxxxxxxx,
Xxxx 00000.
(vi) NO CONSENTS. The Seller is not required to
obtain the consent of any other party or any consent, license,
approval, registration, authorization, or declaration of or with any
governmental authority, bureau or agency in connection with the
execution, delivery, performance, validity, or enforceability of this
Agreement or any other Basic Document to which it is a party that has
not already been obtained.
(vii) NO NOTICE. The Seller represents and warrants
that it acquired title to the Receivables in good faith, without notice
of any adverse claim.
(viii) BULK TRANSFER. The Seller represents and
warrants that the transfer, assignment and conveyance of the
Receivables by the Seller pursuant to this Agreement are not subject to
the bulk transfer laws or any similar statutory provisions in effect in
any applicable jurisdiction.
(ix) SELLER INFORMATION. No certificate of an
officer, statement or document furnished in writing or report delivered
pursuant to the terms hereof by the
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Seller contains any untrue statement of a material fact or omits to
state any material fact necessary to make the certificate, statement,
document or report not misleading.
(x) ORDINARY COURSE. The transactions contemplated by
this Agreement and the other Basic Documents to which the Seller is a
party are in the ordinary course of the Seller's business.
(xi) SOLVENCY. The Seller is not insolvent, nor will
the Seller be made insolvent by the transfer of the Receivables, nor
does the Seller anticipate any pending insolvency.
(xii) LEGAL COMPLIANCE. The Seller is not in
violation of, and the execution and delivery by the Seller of this
Agreement and the other Basic Documents to which the Seller is a party
and its performance and compliance with the terms of this Agreement and
the other Basic Documents to which the Seller is a party will not
constitute a violation with respect to, any order or decree of any
court or any order or regulation of any federal, state, municipal or
governmental agency having jurisdiction, which violation would
materially and adversely affect the Seller's condition (financial or
otherwise) or operations or any of the Seller's properties or
materially and adversely affect the performance of any of its duties
under the Basic Documents.
(xiii) CREDITORS. The Seller did not sell the
Receivables to the Depositor with any intent to hinder, delay or
defraud any of its creditors.
(b) The Seller makes the following representations and
warranties with respect to the Receivables, on which the Depositor relies in
accepting the Receivables and in transferring the Receivables to the Issuer
under the Sale and Servicing Agreement, and on which the Issuer relies in
pledging the same to the Indenture Trustee. Such representations and warranties
speak as of the execution and delivery of this Agreement and as of the Transfer
Date, but shall survive the sale, transfer and assignment of the Receivables to
the Depositor, the subsequent sale, transfer and assignment of the Receivables
by the Depositor to the Issuer pursuant to the Sale and Servicing Agreement and
the pledge of the Receivables by the Issuer to the Indenture Trustee pursuant to
the Indenture.
(i) CHARACTERISTICS OF RECEIVABLES. Each Receivable
(A) was originated in the United States of America by the Seller or by
a Dealer located in the United States of America for the retail sale of
a Financed Vehicle, in each case, in the ordinary course of the
applicable Dealer's business in accordance with the Seller's credit
policies as of the date of origination or acquisition of the related
Receivable, is payable in United States dollars, has been fully and
properly executed by the parties thereto, has been originated by the
Seller through or purchased by the Seller from such Dealer under an
existing Dealer Agreement (or approved form of assignment) and, in the
case of each Receivable originated by a Dealer and sold to the Seller,
has been validly assigned by such Dealer to the Seller, (B) has created
or shall create a valid, subsisting and enforceable first priority
perfected security interest in favor of the Seller in the Financed
Vehicle, which security interest is assignable by the Seller and
reassignable by the assignee, (C) contains customary and enforceable
provisions such that the rights and remedies of the holder thereof are
adequate for realization against the collateral of the
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benefits of the security, (D) provides for fixed level monthly payments
(provided that the payment in the last month of the term of the
Receivable may be minimally different from the level scheduled
payments) that fully amortize the Amount Financed by maturity and yield
interest at the APR and (E) amortizes using the simple interest method.
(ii) COMPLIANCE WITH LAW. Each Receivable complied at
the time it was originated or made, and at the Closing Date complies,
in all material respects with all requirements of applicable federal,
state and, to the best knowledge of the Seller, local laws, rulings and
regulations thereunder.
(iii) 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 thereof 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
Transfer Date of the Soldiers and Sailors Civil Relief Act of 1940, as
amended.
(iv) NO GOVERNMENT OBLIGOR. No Receivable is due from
the United States of America or any State or any agency, department,
subdivision or instrumentality thereof.
(v) OBLIGOR BANKRUPTCY. To the best of the Seller's
knowledge, at the Cutoff Date with respect to the Initial Receivables
and at the Subsequent Cutoff Date with respect to the Subsequent
Receivables, no Obligor is or has been, since the origination of the
related Receivable, the subject of a bankruptcy proceeding.
(vi) SCHEDULES OF RECEIVABLES. With respect to the
Receivables, the information set forth in Schedule II to this Agreement
is true and correct in all material respects as of the close of
business on the Closing Date.
(vii) MARKING RECORDS. By the Transfer Date, the
Seller will have caused its computer and accounting records relating to
each Receivable to be marked to show that the Receivables have been
sold to the Depositor by the Seller and transferred and assigned by the
Depositor to the Issuer in accordance with the terms of the Sale and
Servicing Agreement and pledged by the Issuer to the Indenture Trustee
in accordance with the terms of the Indenture.
(viii) COMPUTER TAPE. The computer tape regarding the
receivables listed on Schedule I hereto made available by the Seller to
the Depositor for use in preparing the Prospectus Supplement was
complete and accurate in all material respects as of the Initial Cutoff
Date and as of the date of the Prospectus Supplement and the computer
tape regarding the Receivables to be made available by the Seller to
the Depositor for use in preparing the 8-K Filing and Schedule II
hereto is complete and accurate in all material respects as of the
Closing Date.
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(ix) NO ADVERSE SELECTION. No selection procedures
believed by the Seller to be adverse to the Noteholders or the
Certificateholders were utilized in selecting the Receivables.
(x) CHATTEL PAPER. Each Receivable constitutes
chattel paper within the meaning of the UCC as in effect in the State
of origination.
(xi) ONE ORIGINAL. There is only one original
executed copy of each Receivable.
(xii) RECEIVABLES IN FORCE. No Receivable has been
satisfied, subordinated or rescinded, nor has any Financed Vehicle been
released from the Lien of the related Receivable in whole or in part.
None of the terms of any Receivable has been waived, altered or
modified in any respect since its origination, except by instruments or
documents identified in the related Receivable File; and no Receivable
has been granted an extension except as noted in the servicing records
of such Receivable and each such extension has been granted in
accordance with the Seller's extension policy set forth in Exhibit D-1
to the Sale and Servicing Agreement. No Receivable has been modified as
a result of the application of the Soldiers' and Sailors' Civil Relief
Act of 1940, as amended.
(xiii) LAWFUL ASSIGNMENT. No Receivable has been
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 the Sale and
Servicing Agreement, as applicable, or the pledge of such Receivable
under the Indenture.
(xiv) TITLE. It is the intention of the Seller that
the transfers and assignments herein contemplated constitute sales of
the Receivables from the Seller to the Depositor and that the
beneficial interest in and title to the Receivables not be part of the
debtor's estate in the event of the appointment of a receiver or
conservator for the Seller under any receivership, bankruptcy law,
insolvency or banking law. Immediately prior to the Closing Date, no
Receivable has been sold, transferred, assigned or pledged by the
Seller to any Person other than to the Depositor or pursuant to this
Agreement. Immediately prior to the transfers and assignments herein
contemplated, the Seller has good and marketable title to each
Receivable free and clear of all Liens, and, immediately upon the
transfer thereof, the Depositor shall have good and marketable title to
each Receivable, free and clear of all Liens and, immediately upon the
transfer thereof from the Depositor to the Issuer in accordance with
the terms of the Sale and Servicing Agreement and the representations
and warranties of the Depositor set forth therein, the Issuer shall
have good and marketable title to each Receivable, free and clear of
all Liens and, immediately upon the pledge thereof from the Issuer to
the Indenture Trustee in accordance with the terms of the Indenture,
the Indenture Trustee shall have a first priority perfected security
interest in each Receivable.
(xv) SECURITY INTEREST IN FINANCED VEHICLE.
Immediately prior to its sale, assignment and transfer to the Depositor
pursuant to this Agreement, each Receivable is secured by a first
priority perfected security interest in the related Financed
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Vehicle in favor of the Seller as secured party, or all necessary and
appropriate actions have been commenced that will result in the valid
perfection of a first priority security interest in such Financed
Vehicle in favor of the Seller as secured party. The Lien Certificate
for each Financed Vehicle shows, or if a new or replacement Lien
Certificate is being applied for with respect to such Financed Vehicle
such Lien Certificate shall be received within 120 days of the Closing
Date and shall show, the Seller or its predecessor in interest named as
the original secured party under each Receivable as the holder of a
first priority security interest in such Financed Vehicle. Each
Dealer's security interest in any Receivable originated by such Dealer
has been validly assigned by the Dealer to the Seller. The Seller's
security interest has been validly assigned to the Depositor pursuant
to this Agreement.
(xvi) ALL FILINGS MADE. All filings (including UCC
filings) required to be made in any jurisdiction to give the Issuer a
first perfected ownership interest in the Receivables and the Indenture
Trustee a first priority perfected security interest in the Receivables
have been made or will be made on the Closing Date.
(xvii) NO DEFENSES. No Receivable is subject to any
right of rescission, setoff, counterclaim, dispute or defense,
including the defense of usury, whether arising out of transactions
concerning the Receivable or otherwise, and the operation of any terms
of the Receivable or the exercise by the Seller or the Obligor of any
right under the Receivable will not render the Receivable unenforceable
in whole or in part, and no such right of rescission, setoff,
counterclaim, dispute or defense, including the defense of usury, has
been asserted with respect thereto.
(xviii) 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 Cutoff Date, 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. On or prior to the applicable Transfer
Date, no Financed Vehicle has been repossessed.
(xix) INSURANCE. The Seller, in accordance with its
customary procedures, has required that the Obligor obtains physical
damage insurance covering each Financed Vehicle (i) in an amount at
least equal to the lesser of (a) the actual cash value of the related
Financed Vehicle or (b) the unpaid principal balance owing on such
Receivable, (ii) naming the Seller as a 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 and, under the terms of the related Receivable, the Obligor is
required to maintain such insurance.
(xx) FINAL SCHEDULED MATURITY DATE. No Receivable has
a final scheduled payment date later than six months prior to the
Certificate Final Scheduled Distribution Date.
(xxi) CERTAIN CHARACTERISTICS OF THE RECEIVABLES. As
of the Initial Cutoff Date (in the case
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of the Initial Receivables) or the date of origination (in the case of
the Subsequent Receivables), as applicable, (A) each Receivable had an
original maturity of not less than 12 or more than 84 months and (B) no
Receivable was more than 30 days past due.
(xxii) NO FOREIGN OBLIGOR. All of the Receivables are
due from Obligors who are citizens, or legal resident aliens, of the
United States of America.
(xxiii) NO EXTENSIONS. The number or timing of
scheduled payments has not been changed on any Receivable on or before
the Closing Date, except as reflected on the computer tape delivered in
connection with the sale of the Receivables.
(xxiv) SCHEDULED PAYMENTS. Each Receivable had a
first scheduled payment due on or prior to 67 calendar days after the
Closing Date. Each Obligor has been instructed to make all scheduled
payments to the Seller. To the best knowledge of the Seller, each
Obligor has paid the entire down payment called for by the contract.
(xxv) NO FLEET SALES. None of the Receivables have
been included in a "fleet" sale (i.e., a sale to any single Obligor of
more than seven Financed Vehicles).
(xxvi) RECEIVABLE FILES COMPLETE. There exists a
Receivable File pertaining to each Receivable and such Receivable File
contains, without limitation, (A) a fully executed original of the
Receivable, (B) the original Lien Certificate together with such other
documents that the Seller shall keep on file in accordance with its
customary procedures evidencing the security interest of the Seller in
the related Financed Vehicle, and (C) any and all other documents that
the Servicer shall have kept on file in accordance with its customary
procedures relating to a Receivable, an Obligor or a Financed Vehicle.
Each of such documents that is required to be signed by the Obligor has
been signed by the Obligor in the appropriate spaces. 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 in all
material respects. Notwithstanding the above, the complete Receivable
File for each Receivable, (x) shall fulfill the documentation
requirements of the Seller's credit policies as in effect on the date
of origination of such Receivable and (y) is in possession of the
Servicer or the Custodian, as applicable, on the Transfer Date. The
blanket power of attorney granted to the Indenture Trustee, a security
agreement and the original Lien Certificate are the only documents
necessary to permit the Indenture Trustee to submit the Lien
Certificate for each Financed Vehicle for retitling in the name of the
Indenture Trustee as secured party in the event such retitling were
required or otherwise permitted under the Basic Documents.
(xxvii) NO FRAUD OR MISREPRESENTATION. Each
Receivable that was originated by a Dealer and was sold by the Dealer
to the Seller, to the best of the Seller's knowledge, was so originated
and sold without fraud or misrepresentation on the part of such Dealer
in either case.
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(xxviii) RECEIVABLES NOT ASSUMABLE. No Receivable is
assumable by another person in a manner which would release the Obligor
thereof from such Obligor's obligations to the Seller with respect to
such Receivable.
(xxix) TAX LIENS. To the best of the Seller's
knowledge, there is no Lien against any Financed Vehicle for delinquent
taxes.
(xxx) NO IMPAIRMENT. The 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 a Receivable or otherwise to
impair the rights of the Depositor in any Receivable or the proceeds
thereof.
(xxxi) SERVICING. Each Receivable has been serviced
in conformity with all applicable laws, rules and regulation and in
conformity with the Seller's policies and procedures which are
consistent with customary, prudent industry standards.
(xxxii) CORPORATE OBLIGORS. Less than [___]% of the
Receivables are due from Obligors who are not natural persons.
(xxxiii) NO LIENS. No Liens or claims have been filed
for work, labor, or materials relating to a Financed Vehicle that are
prior to, or equal or coordinate with, the security interest in the
Financed Vehicle granted by the related Receivable.
(xxxiv) APR. No Receivable has an APR of less than
[___]% and the weighted average coupon on the pool of Receivables is at
least [___]%.
(xxxv) REMAINING TERM. Each Receivable has a
remaining term of at least three months and no more than 72 months.
(xxxvi) SEASONING. The weighted average number of
months since the initial installment due date for the Receivables is at
least [___] months.
(xxxvii) REMAINING BALANCE. Each Receivable has a
remaining balance of at least $[___] and no more than $[___].
(xxxviii) NEW VEHICLES. At least [___]% of the
aggregate principal balance of the Receivables is secured by Financed
Vehicles which were new at the date of origination.
(xxxix) INITIAL PAYMENT. The Obligor with respect to
each Receivable originated prior to [___] has made at least one
scheduled payment.
(xl) NO PROCEEDINGS. As of the Transfer Date, there
are no proceedings pending, nor to the best of the Seller's knowledge,
threatened, wherein the Obligor or any governmental agency has alleged
that any Receivable is illegal or unenforceable.
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(xli) DEALER AGREEMENT. Each Dealer from whom the
Seller purchases Receivables directly has entered into a Dealer
Agreement with the Seller providing for the sale of Receivables from
time to time by such Dealer to the Seller or uses an approved form of
assignment. Each Dealer Agreement and assignment form is substantially
in the form attached to the Sale and Servicing Agreement as Exhibit D,
except for immaterial modifications or deviations from the Dealer
Agreement or assignment form. Such modifications and deviations from
the Dealer Agreement or assignment form will not have a material
adverse effect on the Noteholders or Certificateholders. Such Dealer
Agreement and/or the assignment and related documentation signed by or
provided to the Dealer, constitutes the entire agreement between the
Seller and the related Dealer with respect to the sale of such
Receivable to the Seller. Each applicable Dealer Agreement and form of
assignment is in full force and effect, there have been no material
defaults by the Seller under such Dealer Agreement; the Seller has
fully performed all of its obligations under such Dealer Agreement or
form of assignment; the Seller has not made any statements or
representations to such Dealer (whether written or oral) inconsistent
with any term of such Dealer Agreement or form of assignment; the
purchase price for such Receivable has been paid in full, other than
any dealer reserve, by the Seller; and any payment owed to such Dealer
by the Seller is a corporate obligation of the Seller.
(xlii) SELLER'S OBLIGATIONS. The Seller has duly
fulfilled all obligations to be fulfilled on its part under or in
connection with the origination, acquisition and/or assignment of the
Receivables.
(xliii) NO CONSENT. To the best of the Seller's
knowledge, no notice to or consent from any Obligor is necessary to
effect the acquisition of the Receivables by the Depositor or the Trust
or the pledge of the Receivables by the Trust to the Indenture Trustee.
(xliv) NO TRANSFER TAXES. The sale, transfer,
assignment and conveyance of the Receivables by the Seller pursuant to
this Agreement is not subject to and will not result in any tax, fee or
governmental charge payable by the Seller, the Issuer or the Indenture
Trustee to any federal, state or local government ("Transfer Taxes")
other than Transfer Taxes which have been or will be paid by the Seller
as due. In the event the Issuer or the Indenture Trustee receives
actual notice of any Transfer Taxes arising out of the transfer,
assignment and conveyance of the Receivables, on written demand by the
Issuer or the Indenture Trustee, or upon the Seller's otherwise being
given notice thereof by the Issuer or the Indenture Trustee, the Seller
shall pay, and otherwise indemnify and hold the Issuer and the
Indenture Trustee harmless, on an after-tax basis, from and against any
and all such Transfer Taxes (it being understood that the Noteholders,
the Indenture Trustee and the Issuer shall have no obligation to pay
such Transfer Taxes).
(xlv) OTHER RECEIVABLES. Neither the Obligor on any
Receivable nor any of its affiliates is the obligor on Receivables with
an aggregate principal amount representing more than [___]% of the
Original Pool Balance.
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(xlvi) AGGREGATE BALANCE. The Original Pool Balance
is equal to $[___].
(xlvii) GEOGRAPHIC DISTRIBUTION. As of the Initial
Cutoff Date [___]%, [___]%, [___]%, [___]%, [___]% and [___]% of the
Receivables (based on principal balance and location of the applicable
Dealer) were located in [___], [___], [___], [___], [____] and [___],
respectively.
(xlviii) NO ADVANCES. No advances have been made to
Obligors in order to meet any representation or warranty herein set
forth; provided, however, that Receivables may have had up to three
extensions prior to the Cutoff Date, subject to the following: (A) each
such extension was made in conformity with the Extension Policy and (B)
each extended Receivable satisfies in all material respects all
applicable requirements under the Seller's credit and collection
policies as of the date of its origination.
(xlix) AMOUNT FINANCED. At the time each Receivable
was originated, the Amount Financed was fully disbursed. There is no
requirement for future advances of principal thereunder, and all fees
and expenses in connection with the origination of such Receivable have
been paid.
(l) OFFICIAL RECORD. This Agreement is and shall
remain at all times prior to the termination hereof an official record
of the Seller as referred to in Section 13(e) of the Federal Deposit
Insurance Act, as amended by 12 U.S.C. Section 1823(e).
(li) NO CONSUMER LEASES. No Receivable constitutes
a "consumer lease" under either (a) the UCC as in effect in the
jurisdiction whose law governs the Receivable or (b) the Consumer
Leasing Act, 15 USC 1667.
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Article IV
Conditions
Section 4.01. CONDITIONS TO OBLIGATION OF THE DEPOSITOR. The obligation
of the Depositor to purchase the Receivables is subject to the satisfaction of
the following conditions:
(a) REPRESENTATIONS AND WARRANTIES TRUE. The representations
and warranties of the Seller hereunder shall be true and correct in all material
respects on the Transfer Date with the same effect as if then made, and the
Seller shall have performed all obligations to be performed by it hereunder on
or prior to the Transfer Date.
(b) COMPUTER FILES MARKED. The Seller shall, at its own
expense, on or prior to the Transfer Date, indicate in its computer files that
the Receivables have been sold to the Depositor pursuant to this Agreement and
deliver to the Depositor the Schedules of Receivables, certified by the Seller's
President, Vice President or Treasurer to be true, correct and complete.
(c) DOCUMENTS TO BE DELIVERED BY THE SELLER ON THE TRANSFER
DATE:
(i) RESERVED.
(ii) EVIDENCE OF UCC FILING. On or prior to the
Closing Date, the Seller shall record and file, at its own expense, a
UCC-1 financing statement in each of the State of [___] and [____]
County [___], executed by the Seller, as seller or debtor, and naming
the Depositor, as secured party, describing the Receivables and the
other assets assigned to the Depositor pursuant to Section 2.01,
meeting the requirements of the laws of each such jurisdiction and in
such manner as is necessary to perfect the sale, transfer, assignment
and conveyance of the Receivables and such other assets to the
Depositor. The Seller shall deliver to the Depositor a file-stamped
copy or other evidence satisfactory to the Depositor of such filing on
or prior to the Transfer Date.
(iii) OPINIONS OF SELLER'S COUNSEL. On or prior to
the Closing Date, the Depositor shall have received the opinions of
counsel to the Seller, in form and substance satisfactory to the
Depositor, as to the matters set forth in Exhibit A hereto and such
other matters as the Depositor has heretofore requested or may
reasonably request.
(iv) OTHER DOCUMENTS. Such other documents as the
Depositor may reasonably request.
(d) OTHER TRANSACTIONS. The transactions contemplated by the
Sale and Servicing Agreement, the Indenture and the Trust Agreement to be
consummated on the Transfer Date shall be consummated on such date.
Section 4.02. CONDITIONS TO OBLIGATION OF THE SELLER. The obligation of
the Seller to sell the Receivables to the Depositor is subject to the
satisfaction of the following conditions:
(a) REPRESENTATIONS AND WARRANTIES TRUE. The representations
and warranties of the Depositor hereunder shall be true and correct on the
Transfer Date with the same effect as if
15
then made, and the Depositor shall have performed all obligations to be
performed by it hereunder on or prior to the Transfer Date.
(b) RECEIVABLES PURCHASE PRICE. On the Transfer Date, the
Depositor shall have delivered to the Seller the purchase price specified in
Section 2.01 hereof.
(c) OPINION OF COUNSEL. The Depositor shall have furnished to
the Seller an Opinion of Counsel, dated the Closing Date, to the effect that:
(i) the Depositor has been duly incorporated and is
validly existing as a corporation in good standing under the laws of
the State of Delaware, with full corporate power and authority to own
its properties and conduct its business as described in the Prospectus;
(ii) each of this Agreement, the Sale and Servicing
Agreement and the Trust Agreement has been duly authorized, executed
and delivered by the Depositor and constitutes a legal, valid and
binding obligation of the Depositor, enforceable against the Depositor
in accordance with its terms except as limited by bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance,
receivership, conservatorship or similar laws relating to or affecting
creditors' rights generally or the rights of creditors, or of the FDIC
as insurer, regulator, conservator or receiver, of banks the accounts
of which are insured by the FDIC in particular and except that such
counsel need express no opinion as to the availability of equitable
remedies or the enforceability of rights of indemnification for
violations of federal securities laws;
(iii) no consent, approval, authorization or order
of, or filing with, any court or governmental agency or body is
required for the consummation by the Depositor of the transactions
contemplated herein or in this Agreement, the Sale and Servicing
Agreement, the Trust Agreement or the Indenture (collectively, the
"Basic Documents"), except such as may be required under the blue sky
or securities laws of any jurisdiction in connection with the purchase
and sale of the Notes and Certificates by the Underwriters, the filing
of the UCC-1 financing statements relating to the conveyance of the
Receivables and the other Trust Property by the Seller to the Depositor
and of the Receivables and the other Trust Property by the Depositor to
the Trust and by the Trust to the Indenture Trustee for the benefit of
the Noteholders and the filing of the UCC-1 financing statements
relating to the security interests in the Eligible Investments included
in the Reserve Account, and such other approvals (which shall be
specified in such opinion) as have been obtained and such filings as
have been made or are in the process of being made; and
(iv) none of the issue and sale of the Notes and
Certificates, the execution and delivery of this Agreement, the Sale
and Servicing Agreement, the Trust Agreement or this Agreement, the
consummation of any other of the transactions herein or therein
contemplated or the fulfillment of the terms hereof or thereof will
conflict with, result in a breach or violation of, or constitute a
default under, the charter or bylaws of the Depositor or the terms of
any indenture or other agreement or instrument known to such counsel
and to which the Depositor is a party or by which it is bound, or any
judgment, order or decree known to such counsel to be applicable to the
Depositor of any
16
court, regulatory body, administrative agency, governmental body, or
arbitrator having jurisdiction over the Depositor.
(d) OTHER TRANSACTIONS. The transactions contemplated by the
Sale and Servicing Agreement, the Indenture and the Trust Agreement to be
consummated on the Transfer Date shall be consummated on such date.
Article V
Covenants of the Seller
The Seller agrees with the Depositor and the Indenture Trustee as
follows:
Section 5.01. PROTECTION OF RIGHT, TITLE AND INTEREST.
(a) FILINGS. The Seller shall cause at its own expense all
financing statements and continuation statements and any other necessary
documents covering the right, title and interest of the Seller, the Depositor,
the Trust and the Indenture Trustee, respectively, in and to the Receivables and
the other property included in the Trust Estate to be promptly filed and at all
times to be kept recorded, registered and filed, all in such manner and in such
places as may be required by law fully to preserve and protect the right, title
and interest of the Depositor hereunder, the Trust under the Sale and Servicing
Agreement and the Indenture Trustee under the Indenture in and to the
Receivables and the other property included in the Trust Estate. The Seller
shall deliver to the Depositor 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.
The Depositor shall cooperate fully with the Seller in connection with the
obligations set forth above and will execute any and all documents reasonably
required to fulfill the intent of this paragraph.
(b) NAME CHANGE. If the Seller makes any change in its name,
identity or corporate structure that would make any financing statement or
continuation statement filed in accordance with paragraph (a) above seriously
misleading within the applicable provisions of the UCC or any title statute, the
Seller shall give the Depositor, the Indenture Trustee and the Owner Trustee
written notice thereof at least 45 days prior to such change and shall promptly
file such financing statements or amendments as may be necessary to continue the
perfection of the Depositor's interest in the property conveyed pursuant to
Section 2.01.
Section 5.02. OTHER LIENS OR INTERESTS. Except for the conveyances
hereunder and pursuant to the Basic Documents, the Seller shall not sell,
pledge, assign or transfer to any Person, or grant, create, incur, assume, or
suffer to exist any Lien on, or any interest in, to or under the Receivables,
and the Seller shall defend the right, title and interest of the Depositor, the
Trust and the Indenture Trustee in, to and under the Receivables against all
claims of third parties claiming through or under the Seller.
Section 5.03. COSTS AND EXPENSES. The Seller agrees to pay all
reasonable costs and disbursements in connection with the perfection, as against
all third parties claiming through or under the Seller, of the Depositor's, the
Issuer's and the Indenture Trustee's right, title and interest in and to the
Receivables and the other property included in the Trust Estate.
17
Section 5.04. HOLD HARMLESS. The Seller shall protect, defend,
indemnify and hold the Depositor, the Issuer, the Underwriters and their
respective assigns and their employees, officers, directors and agents harmless
from and against all losses, liabilities, claims and damages of every kind and
character, including any legal or other expenses reasonably incurred, as
incurred, resulting from or relating to or arising out of (i) the inaccuracy,
nonfulfillment or breach of any representation, warranty, covenant or agreement
made by the Seller in this Agreement, (ii) any legal action, including, without
limitation, any counterclaim, that has either been settled by the litigants or
has proceeded to judgment by a court of competent jurisdiction, in either case
to the extent it is based upon alleged facts that, if true, would constitute a
breach of any representation, warranty, covenant or agreement made by the Seller
in this Agreement, (iii) any actions or omissions of the Seller occurring prior
to the Transfer Date with respect to any of the Receivables or Financed Vehicles
or (iv) any failure of a Receivable to be originated in compliance with all
applicable requirements of law. These indemnity obligations shall be in addition
to any obligation that the Seller may otherwise have.
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Article VI
Indemnification
Section 6.01. INDEMNIFICATION.
(a) The Seller agrees to indemnify and hold harmless the
Depositor and each Underwriter, each of their respective directors, each officer
of the Depositor who signed the Registration Statement, and each person or
entity who controls the Depositor or any Underwriter or any such person, within
the meaning of Section 15 of the Securities Act, against any and all losses,
claims, damages or liabilities, joint and several, to which the Depositor or any
Underwriter, or any such person or entity may become subject, under the
Securities Act or otherwise, and will reimburse the Depositor and each
Underwriter, and each such controlling person for any legal or other expenses
reasonably incurred by the Depositor or such Underwriter or such controlling
person in connection with investigating or defending any such loss, claims,
damages or liabilities insofar as such losses, claims, damages or liabilities
(or actions in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of any material fact made by the Seller
contained in (i) the Prospectus Supplement or any amendment or supplement to the
Prospectus Supplement or (ii) the Seller Collateral Information (as defined
below) or the omission or the alleged omission to state therein a material fact
necessary in order to make the statements in the Prospectus Supplement or any
amendment or supplement to the Prospectus Supplement or Seller Collateral
Information, in the light of the circumstance under which they were made, not
misleading, but, in each case, only to the extent that such untrue statement or
alleged untrue statement or omission or alleged omission relates to the
information contained in the Prospectus Supplement under the captions: "SUMMARY
OF TERMS OF THE CERTIFICATES - Composition of the Receivables"; "RISK FACTORS";
"NATIONAL CITY BANK"; and "THE RECEIVABLES POOL"; and in the Base Prospectus
under the caption "NATIONAL CITY BANK'S ORIGINATION AND SERVICING PROCEDURES"
(such information, the "Seller Information"). This indemnity agreement will be
in addition to any liability which the Seller may otherwise have to the
Depositor or the Underwriters or any affiliate thereof pursuant to Section 5.04
of this Agreement or otherwise. The Seller shall not be liable to the Depositor
or the Underwriters for Seller Collateral Information with respect to any untrue
statement or alleged untrue statement or omission or alleged omission (a "Pool
Error") contained on any tape that is Seller Collateral Information if such Pool
Error was corrected in a tape subsequently provided to the Depositor by the
Seller prior to the date of the Prospectus Supplement. "Seller Collateral
Information" as used herein means the information contained on any computer tape
furnished to the Depositor by the Seller concerning the Receivables or other
assets comprising the Trust, including the computer tapes referenced in Section
3.02(b)(viii).
(b) The Depositor agrees to indemnify and hold harmless the
Seller and each person who controls the Seller within the meaning of Section 15
of the Securities Act against any and all losses, claims, damages or
liabilities, joint and several, to which the Seller, or any such person or
entity may become subject, under the Securities Act or otherwise, and will
reimburse the Seller and each such controlling person for any legal or other
expenses reasonably incurred by the Seller or such controlling person in
connection with investigating or defending any such losses, claims, damages or
liabilities insofar as such losses, claims, damages or liabilities (or actions
in respect thereof) arise out of or are based upon (i) any untrue statement or
alleged untrue statement of material fact contained in the Registration
Statement or any amendment or
19
supplement thereto or the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading or (ii) any untrue statement or alleged untrue statement
of any material fact contained in the Prospectus Supplement or the Prospectus or
any amendment or supplement to the Prospectus Supplement or the Prospectus or
the omission or the alleged omission to state therein a material fact necessary
in order to make the statements in the Prospectus Supplement or the Prospectus
or any amendment or supplement to the Prospectus Supplement, in the light of the
circumstances under which they were made, not misleading, but only to the extent
that such untrue statement or alleged untrue statement or omission or alleged
omission relates to the information contained in the Prospectus Supplement or
the Prospectus other than the Seller Information and except to the extent that
any untrue statement or alleged untrue statement or omission or alleged omission
relates to any inaccuracy contained or omission from Seller Collateral
Information with respect to which any Pool Error was not corrected prior to the
date of the Prospectus Supplement or the Prospectus. This indemnity agreement
will be in addition to any liability which the Depositor may otherwise have.
(c) Promptly after receipt by any indemnified party under this
Article VI of notice of any claim or the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made against any
indemnifying party under this Article VI, notify the indemnifying party in
writing of the claim or the commencement of that action; provided, however, that
the failure to notify an indemnifying party shall not relieve it from any
liability which it may have under this Article VI except to the extent it has
been materially prejudiced by such failure; provided, further, that the failure
to notify any indemnifying party shall not relieve it from any liability which
it may have to any indemnified party otherwise than under this Article VI.
If any such claim or action shall be brought against an
indemnified party, and it shall notify the indemnifying party thereof, the
indemnifying party shall be entitled to participate therein and, to the extent
that it wishes, jointly with any other similarly notified indemnifying party, to
assume the defense thereof with counsel reasonably satisfactory to the
indemnified party. After notice from the indemnifying party to the indemnified
party of its election to assume the defense of such claim or action, the
indemnifying party shall not be liable to the indemnified party under this
Article VI for any legal or other expenses subsequently incurred by the
indemnified party in connection with the defense thereof other than reasonable
costs of investigation.
Any indemnified party shall have the right to employ separate
counsel in any such action and to participate in the defense thereof, but the
fees and expenses of such counsel shall be at the expense of such indemnified
party unless: (i) the employment thereof has been specifically authorized by the
indemnifying party in writing; (ii) such indemnified party shall have been
advised by such counsel that there may be one or more legal defenses available
to it which are different from or additional to those available to the
indemnifying party and in the reasonable judgment of such counsel it is
appropriate for such indemnified party to employ separate counsel; or (iii) the
indemnifying party has failed to assume the defense of such action and employ
counsel reasonably satisfactory to the indemnified party, in which case, if such
indemnified party notifies the indemnifying party in writing that it elects to
employ separate counsel at the expense of the indemnifying party, the
indemnifying party shall not have the right to assume the defense of such action
on behalf of such indemnified party, it being understood,
20
however, the indemnifying party shall not, in connection with any one such
action or separate but substantially similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances, be
liable for the reasonable fees and expenses of more than one separate firm of
attorneys (in addition to local counsel) at any time for all such indemnified
parties, which firm shall be designated in writing by the Depositor, if the
indemnified parties under this Article VI consist of the Depositor, or by the
Seller, if the indemnified parties under this Article VI consist of the Seller.
Each indemnified party, as a condition of the indemnity
agreements contained in Section 6.01(a) and (b), shall use its commercially
reasonable efforts to cooperate with the indemnifying party in the defense of
any such action or claim. An indemnifying party will not, without the prior
written consent of the indemnified parties, settle or compromise or consent to
the entry of any judgment with respect to any pending or threatened claim,
action, suit or proceeding in respect of which indemnification or contribution
may be sought hereunder (whether or not the indemnified parties are actual or
potential parties to such claim or action) unless such settlement, compromise or
consent includes an unconditional release of each indemnified party from all
liability arising out of such claim, action, suit or proceeding.
Section 6.02. CONTRIBUTION. In order to provide for just and equitable
contribution in circumstances in which the indemnity agreement provided for in
this Article is for any reason held to be unenforceable although applicable in
accordance with its terms, the Seller, on the one hand, and the Depositor, on
the other, shall contribute to the aggregate losses, liabilities, claims,
damages and expenses of the nature contemplated by said indemnity agreement
incurred by the Seller and the Depositor in such proportions as shall be
appropriate to reflect the relative benefits received by the Seller on the one
hand and the Depositor on the other from the sale of the Receivables such that
the Depositor is responsible for that portion represented by the underwriting
discount set forth on the cover page of the Prospectus Supplement, and the
Seller shall be responsible for the balance; provided, however, that no person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the 0000 Xxx) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. For purposes of this Section, each
person, if any, who controls the Depositor within the meaning of Section 15 of
the 1933 Act shall have the same rights to contribution as the Depositor and
each person, if any, who controls the Seller within the meaning of Section 15 of
the 1933 Act shall have the same rights to contribution as the Seller.
Notwithstanding anything in this Section 6.02 to the contrary, the Depositor
shall not be required to contribute an amount in excess of the amount of the
underwriting discount appearing on the cover page of the Prospectus Supplement.
Article VII
Miscellaneous Provisions
Section 7.01. OBLIGATIONS OF SELLER. The obligations of the Seller
under this Agreement shall not be affected by reason of any invalidity,
illegality or irregularity of any Receivable.
Section 7.02. REPURCHASE EVENTS. The Seller hereby covenants and agrees
with the Depositor for the benefit of the Depositor, the Indenture Trustee, the
Issuer, the Owner Trustee, the Certificateholders and the Noteholders that the
occurrence of a breach of any of the Seller's
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representations and warranties contained in Section 3.02(b) that materially and
adversely affects the interests of the Issuer, the Indenture Trustee, the Owner
Trustee, the Certificateholders or the Noteholders in any Receivable, without
regard to any limitation set forth in such representation or warranty concerning
the knowledge of the Seller as to the facts stated therein, shall constitute an
event obligating the Seller to repurchase the Receivables to which such failure
or breach is applicable (each, a "Repurchase Event"), at the Purchase Amount,
from the Depositor or from the Issuer, as applicable, unless any such failure or
breach shall have been cured by the last day of the first Collection Period
commencing after the discovery or notice thereof by or to the Seller or the
Servicer.
Section 7.03. DEPOSITOR ASSIGNMENT OF REPURCHASED RECEIVABLES. With
respect to all Receivables repurchased by the Seller pursuant to this Agreement,
the Depositor shall assign, without recourse, representation or warranty, to the
Seller all of the Depositor's right, title and interest in and to such
Receivables and all security and documents relating thereto.
Section 7.04. TRANSFER TO THE ISSUER. The Seller acknowledges and
agrees that (1) the Depositor will, pursuant to the Sale and Servicing
Agreement, transfer and assign the Receivables and assign its rights under this
Agreement with respect thereto to the Issuer and, pursuant to the Indenture, the
Issuer will pledge the Receivables to the Indenture Trustee, and (2) the
representations and warranties contained in this Agreement and the rights of the
Depositor under this Agreement, including under Section 7.02, are intended to
benefit the Issuer, the Noteholders and the Certificateholder. The Seller hereby
consents to such transfers and assignments and agree that enforcement of a right
or remedy hereunder by the Indenture Trustee, the Owner Trustee or the Issuer
shall have the same force and effect as if the right or remedy had been enforced
or executed by the Depositor.
Section 7.05. AMENDMENT. This Agreement may be amended from time to
time, with prior written notice to the Rating Agencies, but without the consent
of the Noteholders or the Certificateholders, by a written amendment duly
executed and delivered by the Seller and the Depositor, 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
Noteholders or Certificateholders; provided that such amendment shall not, as
evidenced by an Opinion of Counsel, materially and adversely affect the interest
of any Noteholder or Certificateholder; provided further, that such action shall
be deemed not to adversely affect in any material respect the interests of any
Noteholder or Certificateholder and no Opinion of Counsel to that effect shall
be required if the person requesting the amendment obtains a letter from the
Rating Agencies stating that the amendment would not result in the downgrading
or withdrawal of the ratings of then assigned to the Notes and the Certificates.
This Agreement may also be amended by the Seller and the Depositor, with prior
written notice to the Rating Agencies and the prior written consent of [Holders
of Notes evidencing at least a majority of the Outstanding Amount of the Class
[A] Notes, Holders of Class [B] Notes evidencing at least a majority of the
Class [B] Note Balance and Holders of Class [C] Certificates evidencing at least
a majority of the Class [C] Certificate Balance (excluding, for purposes of this
Section 7.05, Certificates held by the Seller or any of its affiliates)], 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 or the Certificateholders; provided, however, that no such
amendment may (i) increase or reduce in any manner the amount of, or accelerate
or delay the timing of, collections of payments on Receivables or distributions
that are required to be made for the benefit of
22
Noteholders or Certificateholders or (ii) reduce the aforesaid percentage of
[the Class [A] Notes, the Class [B] Notes or the Class [C] Certificates] that is
required to consent to any such amendment, without the consent of the Holders of
all the outstanding Notes and Certificates.
Section 7.06. WAIVERS. No failure or delay on the part of the
Depositor, the Issuer or the Indenture Trustee in exercising any power, right or
remedy under this Agreement or the Xxxx of Sale shall operate as a waiver
thereof, nor shall any single or partial exercise of any such power, right or
remedy preclude any other or further exercise thereof or the exercise of any
other power, right or remedy.
Section 7.07. NOTICES. All demands, notices and communications under
this Agreement shall be in writing, personally delivered, faxed and followed by
first class mail, or mailed by certified mail, return receipt requested, and
shall be deemed to have been duly given upon receipt (a) in the case of the
Depositor, to 0000 Xxxx 0xx Xxxxxx, Xxxxxxxxx, Xxxx 00000, Attention: Xxxxx X.
Xxxxxxx.; (b) in the case of the Servicer, Administrator and Custodian, to 0000
Xxxx 0xx Xxxxxx, Xxxxxxxxx, Xxxx 00000, Attention: Xxxxx X. Xxxxxxx, (c) in the
case of the Seller, 0000 Xxxx 0xx Xxxxxx, Xxxxxxxxx, Xxxx 00000, Attention:
Xxxxx X. Xxxxxxx; (d) in the case of the Issuer or the Owner Trustee, at the
Corporate Trust Administration Department (as defined in the Trust Agreement);
(e) in the case of [RATING AGENCY], to [ADDRESS], Attention: [___], and (f) in
the case of [RATING AGENCY], to [ADDRESS], Attention: [___]; or, as to each of
the foregoing, at such other address as shall be designated by written notice to
the other parties.
Section 7.08. COSTS AND EXPENSES. The Seller shall pay all expenses
incident to the performance of its obligations under this Agreement and the
Seller agrees to pay all reasonable out-of-pocket costs and expenses of the
Depositor, in connection with the perfection of the Depositor's, the Issuer's
and the Indenture Trustee's right, title and interest in and to the Receivables
and the enforcement of any obligation of the Seller hereunder as contemplated by
the Basic Documents.
Section 7.09. REPRESENTATIONS OF THE SELLER AND THE DEPOSITOR. The
respective agreements, representations, warranties and other statements by the
Seller and the Depositor set forth in or made pursuant to this Agreement shall
remain in full force and effect and will survive the closing under Section 2.02
and the transfers and assignments referred to in Section 7.04.
Section 7.10. CONFIDENTIAL INFORMATION. The Depositor agrees that it
will neither use nor disclose to any Person the names and addresses of the
Obligors or any other personally identifiable information of an Obligor, except
in connection with the enforcement of the Depositor's rights hereunder, under
the Receivables, under the Sale and Servicing Agreement or any other Basic
Document, or as required by any of the foregoing or by law.
Section 7.11. HEADINGS AND CROSS-REFERENCES. The various headings in
this Agreement are included for convenience only and shall not affect the
meaning or interpretation of any provision of this Agreement. References in this
Agreement to section names or numbers are to such Sections of this Agreement.
Section 7.12. GOVERNING LAW. THIS AGREEMENT AND THE ASSIGNMENT SHALL BE
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES
23
HEREUNDER OR THEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Section 7.13. COUNTERPARTS. This Agreement may be executed in
counterparts, each of which shall be an original, but all of which together
shall constitute one and the same instrument.
Section 7.14. THIRD PARTY BENEFICIARY. The Indenture Trustee is an
express third party beneficiary of this Agreement and shall be entitled to
enforce the provisions of this Agreement as if it were a party hereto.
Section 7.15. NO PROCEEDINGS. So long as this Agreement is in effect,
and for one year plus one day following its termination, each of the Seller and
the Depositor agrees that it will not file any involuntary petition or otherwise
institute any bankruptcy, reorganization arrangement, insolvency or liquidation
proceeding or other proceedings under any federal or state bankruptcy law or
similar law against the Trust.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective duly authorized officers as of the date and year
first above written.
NATIONAL CITY BANK, as Seller
By:
-----------------------------------------
Name:
Title:
NATIONAL CITY VEHICLE RECEIVABLES INC.,
as Depositor
By:
-----------------------------------------
Name:
Title:
25
EXHIBIT A
MATTERS ADDRESSED IN OPINION OF SELLER'S COUNSEL
[As set forth in Section 8(e) and Section 8(k) of the Underwriting Agreement.]
SCHEDULE I
Initial Data Schedule
---------------------
[On file with the Indenture Trustee]
SCHEDULE II
Final Schedule of Receivables
-----------------------------
[On file with the Indenture Trustee]
SCHEDULE III
Location of Receivable Files
----------------------------
[---]
