EXECUTION COPY
PURCHASE AGREEMENT
between
ADVANTA AUTO FINANCE CORPORATION
Seller
and
ADVANTA AUTO RECEIVABLES CORP. I
Purchaser
dated as of
December 1, 1997
TABLE OF CONTENTS
Page
----
ARTICLE I DEFINITIONS ...................................................................................1
SECTION 1.1 General..........................................................................1
SECTION 1.2 Specific Terms...................................................................1
SECTION 1.3 Usage of Terms...................................................................3
SECTION 1.4 Certain References...............................................................3
SECTION 1.5 No Recourse......................................................................3
SECTION 1.6 Action by or Consent of Noteholders and Certificateholders.......................3
SECTION 1.7 Material Adverse Effect..........................................................3
ARTICLE II CONVEYANCE OF THE RECEIVABLES AND THE OTHER CONVEYED PROPERTY.................................4
SECTION 2.1 Conveyance of the Receivables and the Other Conveyed Property....................4
ARTICLE III REPRESENTATIONS AND WARRANTIES...............................................................5
SECTION 3.1 Representations and Warranties of Seller.........................................5
SECTION 3.2 Representations and Warranties of Purchaser......................................7
ARTICLE IV COVENANTS OF SELLER...........................................................................9
SECTION 4.1 Protection of Title of Purchaser.................................................9
SECTION 4.2 Other Liens or Interests........................................................10
SECTION 4.3 Costs and Expenses..............................................................11
SECTION 4.4 Indemnification.................................................................11
ARTICLE V REPURCHASES ..................................................................................13
SECTION 5.1 Repurchase of Receivables Upon Breach of Warranty...............................13
SECTION 5.2 Reassignment of Purchased Receivables...........................................13
SECTION 5.3 Waivers.........................................................................14
ARTICLE VI MISCELLANEOUS................................................................................14
SECTION 6.1 Liability of Seller.............................................................14
SECTION 6.2 Merger or Consolidation of Seller or Purchaser..................................14
SECTION 6.3 Limitation on Liability of Seller and Others....................................15
SECTION 6.4 Seller May Own Notes or Certificates............................................15
SECTION 6.5 Amendment.......................................................................15
SECTION 6.6 Notices.........................................................................16
SECTION 6.7 Merger and Integration..........................................................16
SECTION 6.8 Severability of Provisions......................................................16
SECTION 6.9 Intention of the Parties........................................................17
SECTION 6.10 Governing Law...................................................................17
SECTION 6.11 Counterparts....................................................................17
i
SECTION 6.12 Conveyance of the Receivables and the Other Conveyed Property to the Issuer.....17
SECTION 6.13 Nonpetition Covenant............................................................18
EXHIBITS
SCHEDULE A Schedule of Receivables
SCHEDULE B Representations and Warranties of the Seller
ii
PURCHASE AGREEMENT
THIS PURCHASE AGREEMENT, dated as of December 1, 1997, executed between
Advanta Auto Receivables Corp. I, a Nevada corporation, as purchaser
("Purchaser"), and Advanta Auto Finance Corporation, a Nevada corporation, as
seller ("Seller").
W I T N E S S E T H :
WHEREAS, Purchaser has agreed to purchase from Seller, and Seller, pursuant
to this Agreement, is transferring to Purchaser the Receivables and Other
Conveyed Property.
NOW, THEREFORE, in consideration of the premises and the mutual agreements
hereinafter contained, and for other good and valuable consideration, the
receipt of which is acknowledged, Purchaser and Seller, intending to be legally
bound, hereby agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1 General. Capitalized terms used herein without definition shall
have the respective meanings assigned to such terms in the Sale and Servicing
Agreement dated as of December 1, 1997, by and among the Seller, in its capacity
as Master Servicer, Advanta Automobile Receivables Trust 1997-2, as Issuer, the
Purchaser, as Seller and Norwest Bank Minnesota, National Association, as
Indenture Trustee and Trust Collateral Agent.
SECTION 1.2 Specific Terms. Whenever used in this Agreement, the following
words and phrases, unless the context otherwise requires, shall have the
following meanings:
"Agreement" means this Purchase Agreement and all amendments hereof and
supplements hereto.
"Bulk Receivable" means a Receivable purchased by the Seller pursuant to a
bulk purchase agreement.
"Closing Date" means December 23, 1997.
"Flow Receivable" means any Receivable purchased by the Seller pursuant to
a flow purchase agreement.
"Indenture Trustee" means Norwest Bank Minnesota, National Association, and
any successor Indenture Trustee appointed and acting pursuant to the Indenture.
"Issuer" means Advanta Automobile Receivables Trust 1997-2.
"Other Conveyed Property" means all money, instruments, rights and other
property that are subject or intended to be subject to the lien and security
interest of the Indenture (including all property and interests granted to the
Trust Collateral Agent), including all proceeds thereof, other than the
Receivables.
"Owner Trustee" means Wilmington Trust Company, as Owner Trustee appointed
and acting pursuant to the Trust Agreement.
"Receivables" means the Receivables listed on the Schedules of Receivables
attached hereto as Schedule A.
"Related Documents" means the Notes, the Certificates, the Custodian
Agreement, the Sale and Servicing Agreement, the Indenture, the Trust Agreement,
the Policy, the Spread Account Agreement, the Spread Account Agreement
Supplement, the Insurance Agreement, the Indemnification Agreement and the
Underwriting Agreement. The Related Documents to be executed by any party are
referred to herein as "such party's Related Documents," "its Related Documents"
or by a similar expression.
"Repurchase Event" means the occurrence of a breach of any of Seller's
representations and warranties hereunder or any other event which requires the
repurchase of a Receivable by Seller under the Sale and Servicing Agreement.
"Sale and Servicing Agreement" means the Sale and Servicing Agreement
referred to in Section 1.1 hereof.
"Schedule of Receivables" means the schedule of Receivables sold and
transferred pursuant to this Agreement which is attached hereto as Schedule A.
"Schedule of Representations" means the Schedule of Representations and
Warranties attached hereto as Schedule B.
"Security Majority" means a majority by principal amount of the Noteholders
so long as the Notes are outstanding and a majority by principal amount of the
Certificateholders thereafter.
"Trust Collateral Agent" means Norwest Bank Minnesota, National
Association, as trust collateral agent and any successor trust collateral agent
appointed and acting pursuant to the Sale and Servicing Agreement.
"Trustee" means Norwest Bank Minnesota, National Association, as Indenture
Trustee appointed and acting pursuant to the Sale and Servicing Agreement.
"Unaffiliated Originator" means any third party originator or owner of
Receivables.
2
SECTION 1.3 Usage of Terms. With respect to all terms used in this
Agreement, the singular includes the plural and the plural includes the
singular; words importing any gender include the other gender; references to
"writing" include printing, typing, lithography, and other means of reproducing
words in a visible form; references to agreements and other contractual
instruments include all subsequent amendments thereto or changes therein entered
into in accordance with their respective terms and not prohibited by this
Agreement or the Sale and Servicing Agreement; references to Persons include
their permitted successors and assigns; the terms "include" or "including" mean
"include without limitation" or "including without limitation; "the words
"herein", "hereof" and "hereunder" and other words of similar import refer to
this Agreement as a whole and not to any particular Article, Section or other
subdivision, and Article, Section, Schedule and Exhibit references, unless
otherwise specified, refer to Articles and Sections of Schedules and Exhibits to
this Agreement.
SECTION 1.4 Certain References. All references to the Principal Balance of
a Receivable as of any date of determination shall refer to the close of
business on such day, or as of the first day of a Monthly Period shall refer to
the opening of business on such day. All references to the last day of a Monthly
Period shall refer to the close of business on such day.
SECTION 1.5 No Recourse. Without limiting the obligations of Seller
hereunder, no recourse may be taken, directly or indirectly, under this
Agreement or any certificate or other writing delivered in connection herewith
or therewith, against any stockholder, officer or director, as such, of Seller,
or of any predecessor or successor of Seller.
SECTION 1.6 Action by or Consent of Noteholders and Certificateholders.
Whenever any provision of this Agreement refers to action to be taken, or
consented to, by Noteholders or Certificateholders, such provision shall be
deemed to refer to the Certificateholder or Noteholder, as the case may be, of
record as of the Record Date immediately preceding the date on which such action
is to be taken, or consent given, by Noteholders or Certificateholders. Solely
for the purposes of any action to be taken, or consented to, by Noteholders or
Certificateholders, any Note or Certificate registered in the name of the Seller
or any Affiliate thereof shall be deemed not to be outstanding; provided,
however, that, solely for the purpose of determining whether the Indenture
Trustee or the Trust Collateral Agent is entitled to rely upon any such action
or consent, only Notes or Certificates which the Owner Trustee, the Indenture
Trustee or the Trust Collateral Agent, respectively, knows to be so owned shall
be so disregarded.
SECTION 1.7 Material Adverse Effect. Whenever a determination is to be made
under this Agreement as to whether a given event, action, course of conduct or
set of facts or circumstances could or would have a material adverse effect on
the Certificateholders, the Noteholders or the Trust (or any similar or
analogous determination), such determination shall be made without taking into
account the funds available from claims under the Policy. Whenever a
determination is to be made under this Agreement whether a breach of a
representation, warranty or covenant has or could
3
have a material adverse effect on a Receivable or the interest therein of the
Trust, the Noteholders, the Certificateholders or the Insurer (or any similar or
analogous determination), such determination shall be made by the Insurer in its
reasonable discretion and after notifying the Trustee and the Seller of such
potential breach or (x) if an Insurer Default shall have occurred and be
continuing, or (y) upon (i) the expiration of the Policy in accordance with the
terms thereof and (ii) the payment of all amounts owing to the Insurer under the
Sale and Servicing Agreement and the Insurance Agreement, by a Security
Majority.
ARTICLE II
CONVEYANCE OF THE RECEIVABLES
AND THE OTHER CONVEYED PROPERTY
SECTION 2.1 Conveyance of the Receivables and the Other Conveyed Property.
(a) Subject to the terms and conditions of this Agreement, Seller hereby
sells, transfers, assigns, and otherwise conveys to Purchaser without recourse
(but without limitation of its obligations in this Agreement), and Purchaser
hereby purchases, all right, title and interest of Seller in and to:
(i) the Receivables and all monies paid or payable thereon on or after
the Cutoff Date (including amounts due on or before the Cutoff Date but
received by the Seller on or after the Cutoff Date);
(ii) the security interests in the Financed Vehicles granted by
Obligors pursuant to the Receivables and any other interest of the Seller
in such Financed Vehicles;
(iii) any proceeds and the right to receive proceeds with respect to
the Receivables from claims on any physical damage, credit life or
disability insurance policies, if any, covering Financed Vehicles or
Obligors, including rebates of insurance premiums relating to the
Receivables and any proceeds from the liquidation of the Receivables;
(iv) all rights of the Seller against Dealers pursuant to Dealer
Agreements, Dealer Assignments or Unaffiliated Originator Receivables
Purchase Agreements;
(v) all rights under any Service Contracts on the related Financed
Vehicles;
(vi) the related Receivables Files and any and all other documents
that the Seller keeps on file in accordance with its customary procedures
relating to the Receivables, the Obligors or the Financed Vehicles;
4
(vii) property (including the right to receive future Net Liquidation
Proceeds) that secures a Receivable and that has been acquired by or on
behalf of the Purchaser pursuant to liquidation of such Receivable;
(viii) the proceeds of any and all of the foregoing.
It is the intention of Seller and Purchaser that the transfer and
assignment contemplated by this Agreement shall constitute a sale of the
Receivables and the Other Conveyed Property from Seller to Purchaser, conveying
good title thereto free and clear of any liens, and the beneficial interest in
and title to the Receivables and the Other Conveyed Property shall not be part
of Seller's estate in the event of the filing of a bankruptcy petition by or
against Seller under any bankruptcy or similar law.
(b) Simultaneously with the conveyance of the Receivables and the Other
Conveyed Property to Purchaser, Purchaser has paid or caused to be paid to or
upon the order of Seller an amount equal to the book value of the Receivables on
the books and records of the Seller, by wire transfer of immediately available
funds.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.1 Representations and Warranties of Seller. Seller makes the
following representations and warranties as of the date hereof on which
Purchaser relies in purchasing the Receivables and the Other Conveyed Property
and in transferring the Receivables and the Other Conveyed Property to the
Issuer under the Sale and Servicing Agreement and on which the Insurer will rely
in issuing the Policy. Such representations are made as of the execution and
delivery of this Agreement but shall survive the sale, transfer and assignment
of the Receivables and the Other Conveyed Property hereunder, and the sale,
transfer and assignment thereof by Purchaser to the Issuer under the Sale and
Servicing Agreement. Seller and Purchaser agree that Purchaser will assign to
Issuer all Purchaser's rights under this Agreement and that the Indenture
Trustee will thereafter be entitled to enforce this Agreement against Seller in
the Indenture Trustee's own name on behalf of the Securityholders.
(i) Schedule of Representations. The representations and warranties
set forth on the Schedule of Representations with respect to the
Receivables as of the date hereof.
(ii) Organization and Good Standing. Seller has been duly organized
and is validly existing as a corporation in good standing under the laws of
the State of Nevada, with power and authority to own its properties and to
conduct its business as such properties are currently owned and such
business is currently conducted, and had at all relevant times, and now
has, power, authority and legal right to acquire, own and sell the
Receivables and the Other Conveyed Property to be transferred to Purchaser.
5
(iii) Due Qualification. Seller is duly qualified to do business as a
foreign corporation in good standing, and has obtained all necessary
licenses and approvals in all jurisdictions in which the ownership or lease
of its property or the conduct of its business requires such qualification.
(iv) Power and Authority. Seller has the power and authority to
execute and deliver this Agreement and its Related Documents and to carry
out its terms and their terms, respectively; Seller has full power and
authority to sell and assign the Receivables and the Other Conveyed
Property to be sold and assigned to and deposited with Purchaser hereunder
and has duly authorized such sale and assignment to Purchaser by all
necessary corporate action; and the execution, delivery and performance of
this Agreement and Seller's Related Documents have been duly authorized by
Seller by all necessary corporate action.
(v) Valid Sale; Binding Obligations. This Agreement and Seller's
Related Documents have been duly executed and delivered, shall effect a
valid sale, transfer and assignment of the Receivables and the Other
Conveyed Property to the Purchaser, enforceable against Seller and
creditors of and purchasers from Seller; and this Agreement and Seller's
Related Documents constitute legal, valid and binding obligations of Seller
enforceable in accordance with their respective terms, except as
enforceability may be limited by bankruptcy, insolvency, reorganization or
other similar laws affecting the enforcement of creditors' rights generally
and by equitable limitations on the availability of specific remedies,
regardless of whether such enforceability is considered in a proceeding in
equity or at law.
(vi) No Violation. The consummation of the transactions contemplated
by this Agreement and the Related Documents and the fulfillment of the
terms of this Agreement and the Related Documents shall not conflict with,
result in any breach of any of the terms and provisions of or constitute
(with or without notice, lapse of time or both) a default under, the
articles of incorporation or bylaws of Seller, or any indenture, agreement,
mortgage, deed of trust or other instrument to which Seller is a party or
by which it is bound, or result in the creation or imposition of any Lien
upon any of its properties pursuant to the terms of any such indenture,
agreement, mortgage, deed of trust or other instrument, other than this
Agreement, the Spread Account Agreement, the Sale and Servicing Agreement
and the Indenture, or violate any law, order, rule or regulation applicable
to Seller of any court or of any federal or state regulatory body,
administrative agency or other governmental instrumentality having
jurisdiction over Seller or any of its properties.
(vii) No Proceedings. There are no proceedings or investigations
pending or, to Seller's knowledge, threatened against Seller, before any
court, regulatory body, administrative agency or other tribunal or
governmental instrumentality having jurisdiction over Seller or its
properties (i) asserting the invalidity of this Agreement or any of the
Related Documents, (ii) seeking to prevent the issuance of the Notes or the
consummation of any of the transactions contemplated by this
6
Agreement or any of the Related Documents, (iii) seeking any determination
or ruling that might materially and adversely affect the performance by
Seller of its obligations under, or the validity or enforceability of, this
Agreement or any of the Related Documents or (iv) seeking to affect
adversely the federal income tax or other federal, state or local tax
attributes of, or seeking to impose any excise, franchise, transfer or
similar tax upon, the transfer and acquisition of the Receivables and the
Other Conveyed Property hereunder or under the Sale and Servicing
Agreement.
(viii) Chief Executive Office. The chief executive office of Seller is
located at 000 Xxxxxx Xxxxxx Xxxxx, Xxxxx 000, Xxxx Xxxxxxxxxx, XX 00000.
(ix) No Consents. The Seller is not required to obtain the consent of
any other party or any consent, license, approval or authorization, or
registration or declaration with, any governmental authority, bureau or
agency in connection with the execution, delivery, performance, validity or
enforceability of this Agreement which has not already been obtained.
(x) Approvals. All approvals, authorizations, consents, order or other
actions of any person, corporation or other organization, or of any court,
governmental agency or body or official, required in connection with the
execution and delivery by the Seller of this Agreement and the consummation
of the transactions contemplated hereby or will be taken or obtained on or
prior to the Closing Date.
SECTION 3.2 Representations and Warranties of Purchaser. Purchaser makes
the following representations and warranties, on which Seller relies in selling,
assigning, transferring and conveying the Receivables and the Other Conveyed
Property to Purchaser hereunder. Such representations are made as of the
execution and delivery of this Agreement, but shall survive the sale, transfer
and assignment of the Receivables and the Other Conveyed Property hereunder and
the sale, transfer and assignment thereof by Purchaser to the Issuer under the
Sale and Servicing Agreement.
(i) Organization and Good Standing. Purchaser has been duly organized
and is validly existing and in good standing as a corporation under the
laws of the State of Nevada, with the power and authority to own its
properties and to conduct its business as such properties are currently
owned and such business is currently conducted, and had at all relevant
times, and has, full power, authority and legal right to acquire and own
the Receivables and the Other Conveyed Property, and to transfer the
Receivables and the Other Conveyed Property to the Issuer pursuant to the
Sale and Servicing Agreement.
(ii) Due Qualification. Purchaser is duly qualified to do business as
a foreign corporation in good standing, and has obtained all necessary
licenses and approvals in all jurisdictions where the failure to do so
would materially and adversely affect Purchaser's ability to acquire the
Receivables or the Other Conveyed Property, and to transfer the Receivables
and the Other Conveyed
7
Property to the Issuer pursuant to the Sale and Servicing Agreement, or the
validity or enforceability of the Receivables and the Other Conveyed
Property or to perform Purchaser's obligations hereunder and under the
Purchaser's Related Documents.
(iii) Power and Authority. Purchaser has the power, authority and
legal right to execute and deliver this Agreement and to carry out the
terms hereof and to acquire the Receivables and the Other Conveyed Property
hereunder; and the execution, delivery and performance of this Agreement
and all of the documents required pursuant hereto have been duly authorized
by Purchaser by all necessary action.
(iv) No Consent Required. Purchaser is not required to obtain the
consent of any other Person, or any consent, license, approval or
authorization or registration or declaration with, any governmental
authority, bureau or agency in connection with the execution, delivery or
performance of this Agreement and the Related Documents, except for such as
have been obtained, effected or made.
(v) Binding Obligation. This Agreement constitutes a legal, valid and
binding obligation of Purchaser, enforceable against Purchaser in
accordance with its terms, subject, as to enforceability, to applicable
bankruptcy, insolvency, reorganization, conservatorship, receivership,
liquidation and other similar laws and to general equitable principles.
(vi) No Violation. The execution, delivery and performance by
Purchaser of this Agreement, the consummation of the transactions
contemplated by this Agreement and the Related Documents and the
fulfillment of the terms of this Agreement and the Related Documents do not
and will not conflict with, result in any breach of any of the terms and
provisions of, or constitute (with or without notice or lapse of time) a
default under, the certificate of incorporation or bylaws of Purchaser, or
conflict with or breach any of the terms or provisions of, or constitute
(with or without notice or lapse of time) a default under, any indenture,
agreement, mortgage, deed of trust or other instrument to which Purchaser
is a party or by which Purchaser is bound or to which any of its properties
are subject, or result in the creation or imposition of any Lien upon any
of its properties pursuant to the terms of any such indenture, agreement,
mortgage, deed of trust or other instrument (other than the Sale and
Servicing Agreement and the Spread Account Agreement and the Indenture), or
violate any law, order, rule or regulation, applicable to Purchaser or its
properties, of any federal or state regulatory body, any court,
administrative agency, or other governmental instrumentality having
jurisdiction over Purchaser or any of its properties.
(vii) No Proceedings. There are no proceedings or investigations
pending, or, to the knowledge of Purchaser, threatened against Purchaser,
before any court, regulatory body, administrative agency, or other tribunal
or governmental instrumentality having jurisdiction over Purchaser or its
properties: (i) asserting the invalidity of this Agreement or any of the
Related Documents, (ii) seeking to
8
prevent the consummation of any of the transactions contemplated by this
Agreement or any of the Related Documents, (iii) seeking any determination
or ruling that might materially and adversely affect the performance by
Purchaser of its obligations under, or the validity or enforceability of,
this Agreement or any of the Related Documents or (iv) that may adversely
affect the federal or state income tax attributes of, or seeking to impose
any excise, franchise, transfer or similar tax upon, the transfer and
acquisition of the Receivables and the Other Conveyed Property hereunder or
the transfer of the Receivables and the Other Conveyed Property to the
Issuer pursuant to the Sale and Servicing Agreement.
(viii) Approvals. All approvals, authorizations, consents, orders or
other actions of any person, corporation or other organization, or of any
court, governmental agency or body or official, required in connection with
the execution and delivery by the Purchaser of this Agreement and the
consummation of the transactions contemplated hereby or will be taken or
obtained on or prior to the Closing Date.
In the event of any breach of a representation and warranty made by
Purchaser hereunder, Seller covenants and agrees that it will not take any
action to pursue any remedy that it may have hereunder, in law, in equity or
otherwise, until a year and a day have passed since the date on which all Notes,
Certificates, pass-through certificates or other similar securities issued by
Purchaser, or a trust or similar vehicle formed by Purchaser, have been paid in
full. Seller and Purchaser agree that damages will not be an adequate remedy for
such breach and that this covenant may be specifically enforced by Purchaser,
Issuer or by the Indenture Trustee on behalf of the Noteholders and Owner
Trustee on behalf of the Certificateholders.
ARTICLE IV
COVENANTS OF SELLER
SECTION 4.1 Protection of Title of Purchaser.
(a) At or prior to the Closing Date, Seller shall have filed or caused to
be filed a UCC-1 financing statement, executed by Seller as seller or debtor,
naming Purchaser as purchaser or secured party and describing the Receivables
and the Other Conveyed Property being sold by it to Purchaser as collateral,
with the office of the Secretary of State of the State of Nevada and in such
other locations as Purchaser shall have required and as shall be necessary to
perfect the security interest of Purchaser in the collateral. From time to time
thereafter, Seller shall execute and file such financing statements and cause to
be executed and filed such continuation statements, all in such manner and in
such places as may be required by law fully to preserve, maintain and protect
the interest of Purchaser under this Agreement, of the Issuer under the Sale and
Servicing Agreement and of the Trust Collateral Agent under the Indenture in the
Receivables and the Other Conveyed Property and in the proceeds thereof. Seller
shall deliver (or cause to be delivered) to Purchaser, the Trust Collateral
Agent and the Insurer file-stamped copies of, or filing receipts for, any
document filed as provided above, as
9
soon as available following such filing. In the event that Seller fails to
perform its obligations under this subsection, Purchaser, Issuer or the Trust
Collateral Agent may do so, at the expense of Seller.
(b) Seller shall not change its name, identity, or corporate structure in
any manner that would, could or might make any financing statement or
continuation statement filed by Seller (or by Purchaser, Issuer or the Trust
Collateral Agent on behalf of Seller) in accordance with paragraph (a) above
seriously misleading within the meaning of ss. 9-402(7) of the UCC, unless it
shall have given Purchaser, Issuer and the Trust Collateral Agent at least 30
days' prior written notice thereof, and shall promptly file appropriate
amendments to all previously filed financing statements and continuation
statements.
(c) Seller shall give Purchaser, the Issuer, the Insurer (so long as an
Insurer Default shall not have occurred and be continuing) and the Trust
Collateral Agent at least 30 days' prior written notice of any relocation of its
principal executive office if, as a result of such relocation, the applicable
provisions of the UCC would require the filing of any amendment of any
previously filed financing or continuation statement or of any new financing
statement. Seller shall at all times maintain each office from which it services
Receivables and its principal executive office within the United States of
America.
(d) Prior to the Closing Date Seller has maintained accounts and records as
to each Receivable accurately and in sufficient detail to permit (i) the reader
thereof to know at any time as of or prior to the Closing Date the status of
such Receivable, including payments and recoveries made and payments owing (and
the nature of each) and (ii) reconciliation between payments or recoveries on
(or with respect to) each Receivable and the Principal Balance as of the Closing
Date. Seller shall maintain its computer systems so that, from and after the
time of sale under this Agreement of the Receivables to Purchaser, and the
conveyance of the Receivables by Purchaser to the Issuer, Seller's master
computer records (including archives) that shall refer to a Receivable indicate
clearly that such Receivable has been sold to Purchaser and has been conveyed by
Purchaser to the Issuer. Indication of the Issuer's ownership of a Receivable
shall be deleted from or modified on Seller's computer systems when, and only
when, the Receivable shall become a Purchased Receivable or shall have been paid
in full.
(e) If at any xxxx Xxxxxx shall propose to sell, grant a security interest
in, or otherwise transfer any interest in any motor vehicle receivables to any
prospective purchaser, lender or other transferee, Seller shall give to such
prospective purchaser, lender, or other transferee computer tapes, records, or
print-outs (including any restored from archives) that, if they shall refer in
any manner whatsoever to any Receivable (other than a Purchased Receivable),
shall indicate clearly that such Receivable has been sold to Purchaser, sold by
Purchaser to Issuer, and is owned by the Issuer.
SECTION 4.2 Other Liens or Interests. Except for the conveyances hereunder,
Seller will not sell, pledge, assign or transfer to any other Person, or grant,
10
create, incur, assume or suffer to exist any Lien on the Receivables or the
Other Conveyed Property or any interest therein, and Seller shall defend the
right, title, and interest of Purchaser and the Issuer in and to the Receivables
and the Other Conveyed Property against all claims of third parties claiming
through or under Seller.
SECTION 4.3 Costs and Expenses. Seller shall pay all reasonable costs and
disbursements in connection with the performance of its obligations hereunder
and under its Related Documents.
SECTION 4.4 Indemnification.
(a) Seller shall defend, indemnify and hold harmless Purchaser, the Issuer,
the Trust Collateral Agent, the Indenture Trustee, the Owner Trustee, the
Noteholders and the Certificateholders from and against any and all costs,
expenses, losses, damages, claims, and liabilities, arising out of or resulting
from any breach of any of Seller's representations and warranties contained
herein.
(b) Seller shall defend, indemnify and hold harmless Purchaser, the Issuer,
the Trust Collateral Agent, the Indenture Trustee, the Owner Trustee, the
Noteholders and the Certificateholders from and against any and all costs,
expenses, losses, damages, claims, and liabilities, arising out of or resulting
from the use, ownership or operation by Seller or any affiliate thereof of a
Financed Vehicle.
(c) Seller shall defend, indemnify and hold harmless Purchaser, the Issuer,
the Trust Collateral Agent, the Indenture Trustee, the Owner Trustee, the
Noteholders and the Certificateholders against any and all costs, expenses,
losses, damages, claims and liabilities arising out of or resulting from any
action taken, or failed to be taken, by it in respect of any portion of the
Receivables other than in accordance with this Agreement or the Sale and
Servicing Agreement.
(d) Seller agrees to pay, and shall defend, indemnify and hold harmless
Purchaser, the Issuer, the Trust Collateral Agent, the Indenture Trustee, the
Owner Trustee, the Noteholders and the Certificateholders from and against any
taxes that may at any time be asserted against Purchaser, the Issuer, the Trust
Collateral Agent, the Indenture Trustee, the Owner Trustee, the Noteholders and
the Certificateholders with respect to the transactions contemplated in this
Agreement, including, without limitation, any sales, gross receipts, general
corporation, tangible or intangible personal property, privilege, or license
taxes (but not including any taxes asserted with respect to, and as of the date
of, the sale, transfer and assignment of the Receivables and the Other Conveyed
Property to Purchaser and by Purchaser to the Issuer or the issuance and
original sale of the Notes or the Certificates, or asserted with respect to
ownership of the Receivables and Other Conveyed Property which shall be
indemnified by Seller pursuant to clause (e) below, or federal, state or other
income taxes, arising out of distributions on the Notes or the Certificates or
transfer taxes arising in connection with the transfer of the Notes or the
Certificates) and costs and expenses in defending against the same, arising by
reason of the acts to be performed by Seller under this Agreement or imposed
against such Persons.
11
(e) Seller agrees to pay, and to indemnify, defend and hold harmless
Purchaser, the Issuer, the Trust Collateral Agent, the Indenture Trustee, the
Owner Trustee, the Noteholders and the Certificateholders from, any taxes which
may at any time be asserted against such Persons with respect to, and as of the
date of, the conveyance or ownership of the Receivables or the Other Conveyed
Property hereunder and the conveyance or ownership of the Receivables under the
Sale and Servicing Agreement or the issuance and original sale of the Notes or
the Certificates, including, without limitation, any sales, gross receipts,
personal property, tangible or intangible personal property, privilege or
license taxes (but not including any federal or other income taxes, including
franchise taxes, arising out of the transactions contemplated hereby or transfer
taxes arising in connection with the transfer of the Notes or the Certificates)
and costs and expenses in defending against the same, arising by reason of the
acts to be performed by Seller under this Agreement or imposed against such
Persons.
(f) Seller shall defend, indemnify, and hold harmless Purchaser, the
Issuer, the Trust Collateral Agent, the Indenture Trustee, the Owner Trustee,
the Noteholders and the Certificateholders from and against any and all costs,
expenses, losses, claims, damages, and liabilities to the extent that such cost,
expense, loss, claim, damage, or liability arose out of, or was imposed upon any
of such Persons through the negligence, willful misfeasance, or bad faith of
Seller in the performance of its duties under this Agreement or by reason of
reckless disregard of Seller's obligations and duties under this Agreement.
(g) Seller shall indemnify, defend and hold harmless Purchaser, the Issuer,
the Trust Collateral Agent, the Indenture Trustee, the Owner Trustee, the
Noteholders and the Certificateholders from and against any loss, liability or
expense incurred by reason of the violation by Seller of federal or state
securities laws in connection with the registration or the sale of the Notes or
the Certificates.
(h) Seller shall indemnify, defend and hold harmless Purchaser, the Issuer,
the Trust Collateral Agent, the Indenture Trustee, the Owner Trustee, the
Noteholders and the Certificateholders from and against any loss, liability or
expense imposed upon, or incurred by, any of such Persons as result of the
failure of any Receivable, or the sale of the related Financed Vehicle, to
comply with all requirements of applicable law.
(i) Seller shall defend, indemnify, and hold harmless Purchaser from and
against all costs, expenses, losses, claims, damages, and liabilities arising
out of or incurred in connection with the acceptance or performance of Seller's
trusts and duties as Master Servicer under the Sale and Servicing Agreement,
except to the extent that such cost, expense, loss, claim, damage, or liability
shall be due to the willful misfeasance, bad faith, or negligence (except for
errors in judgment) of Purchaser.
Indemnification under this Section 4.4 shall include reasonable fees and
expenses of counsel and expenses of litigation and shall survive termination of
the Notes and the Certificates. The indemnity obligations hereunder shall be in
addition to any obligation that Seller may otherwise have.
12
ARTICLE V
REPURCHASES
SECTION 5.1 Repurchase of Receivables Upon Breach of Warranty. Upon the
occurrence of a Repurchase Event, Seller shall, unless the breach which is the
subject of such Repurchase Event shall have been cured in all material respects,
repurchase the Receivable relating thereto from the Issuer by the last day of
the first full calendar month following the discovery by the Seller of receipt
by the Seller of notice of such breach and, simultaneously with the repurchase
of the Receivable, Seller shall deposit the Purchase Amount in full, without
deduction or offset, to the Collection Account, pursuant to Section 3.2 of the
Sale and Servicing Agreement. It is understood and agreed that, except as set
forth in Section 6.1 hereof, the obligation of Seller to repurchase any
Receivable, as to which a breach occurred and is continuing, shall, if such
obligation is fulfilled, constitute the sole remedy against Seller for such
breach available to Purchaser, the Issuer, the Insurer, the Noteholders, the
Certificateholders, the Trust Collateral Agent on behalf of the Noteholders or
the Owner Trustee on behalf of Certificateholders. The provisions of this
Section 5.1 are intended to grant the Issuer and the Trust Collateral Agent a
direct right against Seller to demand performance hereunder, and in connection
therewith, Seller waives any requirement of prior demand against Purchaser with
respect to such repurchase obligation. Any such repurchase shall take place in
the manner specified in Section 3.2 of the Sale and Servicing Agreement.
Notwithstanding any other provision of this Agreement or the Sale and Servicing
Agreement to the contrary, the obligation of Seller under this Section shall not
terminate upon a termination of Seller as Master Servicer under the Sale and
Servicing Agreement and shall be performed in accordance with the terms hereof
notwithstanding the failure of the Master Servicer or Purchaser to perform any
of their respective obligations with respect to such Receivable under the Sale
and Servicing Agreement.
In addition to the foregoing and notwithstanding whether the related
Receivable shall have been purchased by Seller, Seller shall indemnify the
Issuer, the Trust Collateral Agent, the Indenture Trustee, the Owner Trustee,
the Insurer, the Noteholders and the Certificateholders against all costs,
expenses, losses, damages, claims and liabilities, including reasonable fees and
expenses of counsel, which may be asserted against or incurred by any of them as
a result of third party claims arising out of the events or facts giving rise to
such Repurchase Events.
SECTION 5.2 Reassignment of Purchased Receivables. Upon deposit in the
Collection Account of the Purchase Amount of any Receivable repurchased by
Seller under Section 5.1 hereof, Purchaser and the Issuer shall take such steps
as may be reasonably requested by Seller in order to assign to Seller all of
Purchaser's and the Issuer's right, title and interest in and to such Receivable
and all security and documents and all Other Conveyed Property conveyed to
Purchaser and the Issuer directly relating thereto, without recourse,
representation or warranty, except as to the absence of liens, charges or
encumbrances created by or arising as a result of actions of Purchaser or the
Issuer. Such assignment shall be a sale and assignment outright, and not for
security. If, following the reassignment of a Purchased Receivable, in any
enforcement suit or legal
13
proceeding, it is held that Seller may not enforce any such Receivable on the
ground that it shall not be a real party in interest or a holder entitled to
enforce the Receivable, Purchaser and the Issuer shall, at the expense of
Seller, take such steps as Seller deems reasonably necessary to enforce the
Receivable, including bringing suit in Purchaser's or in the Issuer's name.
SECTION 5.3 Waivers. No failure or delay on the part of Purchaser, or the
Issuer as assignee of Purchaser, in exercising any power, right or remedy under
this Agreement shall operate as a waiver thereof, nor shall any single or
partial exercise of any such power, right or remedy preclude any other or future
exercise thereof or the exercise of any other power, right or remedy.
ARTICLE VI
MISCELLANEOUS
SECTION 6.1 Liability of Seller. Seller shall be liable in accordance
herewith only to the extent of the obligations in this Agreement specifically
undertaken by Seller and the representations and warranties of Seller.
SECTION 6.2 Merger or Consolidation of Seller or Purchaser. Any corporation
or other entity (i) into which Seller or Purchaser may be merged or
consolidated, (ii) resulting from any merger or consolidation to which Seller or
Purchaser is a party or (iii) succeeding to the business of Seller or Purchaser,
in the case of Purchaser, which corporation has a certificate of incorporation
containing provisions relating to limitations on business and other matters
substantively identical to those contained in Purchaser's certificate of
incorporation, provided that in any of the foregoing cases such corporation
shall execute an agreement of assumption to perform every obligation of Seller
or Purchaser, as the case may be, under this Agreement and, whether or not such
assumption agreement is executed, shall be the successor to Seller or Purchaser,
as the case may be, hereunder (without relieving Seller or Purchaser of its
responsibilities hereunder, if it survives such merger or consolidation) without
the execution or filing of any document or any further action by any of the
parties to this Agreement. Notwithstanding the foregoing, so long as an Insurer
Default shall not have occurred and be continuing, Purchaser shall not merge or
consolidate with any other Person or permit any other Person to become the
successor to Purchaser's business without the prior written consent of the
Insurer. Seller or Purchaser shall promptly inform the other party, the Issuer,
the Trust Collateral Agent, the Owner Trustee and, so long as an Insurer Default
shall not have occurred and be continuing, the Insurer of such merger,
consolidation or purchase and assumption. Notwithstanding the foregoing, as a
condition to the consummation of the transactions referred to in clauses (i),
(ii) and (iii) above, (x) immediately after giving effect to such transaction,
no representation or warranty made pursuant to Sections 3.1 and 3.2 of this
Agreement shall have been breached (for purposes hereof, such representations
and warranties shall speak as of the date of the consummation of such
transaction) and no event that, after notice or lapse of time, or both, would
become an event of default under the Insurance Agreement, shall have occurred
and be continuing, (y) Seller or Purchaser, as applicable, shall have
14
delivered written notice of such consolidation, merger or purchase and
assumption to the Rating Agencies prior to the consummation of such transaction
and shall have delivered to the Issuer and the Trust Collateral Agent an
Officer's Certificate and an Opinion of Counsel each stating that such
consolidation, merger or succession and such agreement of assumption comply with
this Section 6.2 and that all conditions precedent, if any, provided for in this
Agreement relating to such transaction have been complied with, and (z) Seller
or Purchaser, as applicable, shall have delivered to the Issuer and the Trust
Collateral Agent an Opinion of Counsel, stating, in the opinion of such counsel,
either (A) all financing statements and continuation statements and amendments
thereto have been executed and filed that are necessary to preserve and protect
the interest of the Issuer and the Trust Collateral Agent in the Receivables and
reciting the details of the filings or (B) no such action shall be necessary to
preserve and protect such interest.
SECTION 6.3 Limitation on Liability of Seller and Others. Seller and any
director, officer, employee or agent may rely in good faith on the advice of
counsel or on any document of any kind prima facie properly executed and
submitted by any Person respecting any matters arising under this Agreement.
Seller shall not be under any obligation to appear in, prosecute or defend any
legal action that is not incidental to its obligations under this Agreement or
its Related Documents and that in its opinion may involve it in any expense or
liability.
SECTION 6.4 Seller May Own Notes or Certificates. Subject to the provisions
of the Sale and Servicing Agreement, Seller and any Affiliate of Seller may in
its individual or any other capacity become the owner or pledgee of Notes or
Certificates with the same rights as it would have if it were not Seller or an
Affiliate thereof.
SECTION 6.5 Amendment.
(a) This Agreement may be amended by Seller and Purchaser with the prior
written consent of the Insurer (so long as an Insurer Default shall not have
occurred and be continuing) and with prior written notice to the Rating Agencies
but without the consent of the Trust Collateral Agent, the Owner Trustee or any
of the Certificateholders or Noteholders (i) to cure any ambiguity or (ii) to
correct any provisions in this Agreement; provided, however, that such action
shall not adversely affect in any material respect the interests of any
Certificateholder or Noteholder.
(b) This Agreement may also be amended from time to time by Seller and
Purchaser, with the prior written consent of the Insurer (so long as an Insurer
Default shall not have occurred and be continuing), with prior written notice to
the Rating Agencies and with the consent of the Trust Collateral Agent and, if
required, a Security Majority in accordance with the Sale and Servicing
Agreement, for the purpose of adding any provisions to or changing in any manner
or eliminating any of the provisions of this Agreement, or of modifying in any
manner the rights of the Certificateholders or Noteholders; provided, however,
the Seller provides the Trust Collateral Agent with an Opinion of Counsel,
(which may be provided by the Seller's internal counsel) that no such amendment
shall increase or reduce in any manner the amount of, or accelerate or
15
delay the timing of, collections of payments on Receivables or distributions
that shall be required to be made on any Note or Certificate.
(c) It shall not be necessary for the consent of Certificateholders or
Noteholders pursuant to this Section to approve the particular form of any
proposed amendment or consent, but it shall be sufficient if such consent shall
approve the substance thereof. The manner of obtaining such consents and of
evidencing the authorization of the execution thereof by Certificateholders or
Noteholders shall be subject to such reasonable requirements as the Trust
Collateral Agent may prescribe, including the establishment of record dates. The
consent of a Holder of a Certificate or a Note given pursuant to this Section or
pursuant to any other provision of this Agreement shall be conclusive and
binding on such Holder and on all future Holders of such Certificate or Note and
of any Certificate or Note issued upon the transfer thereof or in exchange
thereof or in lieu thereof whether or not notation of such consent is made upon
the Certificate or Note.
Prior to the execution of any amendment to this Agreement, the Trustee, the
Trust Collateral Agent, if requested, shall be entitled to receive and rely upon
an Opinion of Counsel stating that the execution of such amendment is authorized
or permitted by this Agreement and that all conditions precedent to the
execution and delivery of such amendment have been satisfied.
SECTION 6.6 Notices. All demands, notices and communications to Seller or
Purchaser hereunder shall be in writing, personally delivered, or sent by
telecopier (subsequently confirmed in writing), reputable overnight courier or
mailed by certified mail, return receipt requested, and shall be deemed to have
been given upon receipt (a) in the case of Seller, to Advanta Auto Finance
Corporation, 000 Xxxxxx Xxxxxx Xxxxx, Xxxxx 000, Xxxx Xxxxxxxxxx, Xxxxxxxxxxxx
00000, Attention: Legal Department, or (b) in the case of Purchaser, to Advanta
Auto Receivables Corp. I, 0000 Xxxxxxxxx Xxx, Xxxxx 000, Xxxx, Xxxxxx 00000 or
such other address as shall be designated by a party in a written notice
delivered to the other party or to the Issuer, Owner Trustee or the Trust
Collateral Agent, as applicable.
SECTION 6.7 Merger and Integration. Except as specifically stated otherwise
herein, this Agreement and Related Documents set forth the entire understanding
of the parties relating to the subject matter hereof, and all prior
understandings, written or oral, are superseded by this Agreement and the
Related Documents. This Agreement may not be modified, amended, waived or
supplemented except as provided herein.
SECTION 6.8 Severability of Provisions. If any one or more of the
covenants, provisions or terms of this Agreement shall be for any reason
whatsoever held invalid, then such covenants, provisions or terms shall be
deemed severable from the remaining covenants, provisions or terms of this
Agreement and shall in no way affect the validity or enforceability of the other
provisions of this Agreement.
16
SECTION 6.9 Intention of the Parties. The execution and delivery of this
Agreement shall constitute an acknowledgment by Seller and Purchaser that they
intend that the assignment and transfer herein contemplated constitute a sale
and assignment outright, and not for security, of the Receivables and the Other
Conveyed Property, conveying good title thereto free and clear of any Liens,
from Seller to Purchaser, and that the Receivables and the Other Conveyed
Property shall not be a part of Seller's estate in the event of the bankruptcy,
reorganization, arrangement, insolvency or liquidation proceeding, or other
proceeding under any federal or state bankruptcy or similar law, or the
occurrence of another similar event, of, or with respect to Seller. In the event
that such conveyance is determined to be made as security for a loan made by
Purchaser, the Issuer, the Noteholders or the Certificateholders to Seller, the
parties intend that Seller shall have granted to Purchaser a security interest
in all of Seller's right, title and interest in and to the Receivables and the
Other Conveyed Property conveyed pursuant to Section 2.1 hereof, and that this
Agreement shall constitute a security agreement under applicable law and shall
have granted such security interest.
SECTION 6.10 Governing Law. This Agreement shall be construed in accordance
with the laws of the State of New York without regard to the principles of
conflicts of laws thereof and the obligations, rights and remedies of the
parties under this Agreement shall be determined in accordance with such laws.
SECTION 6.11 Counterparts. For the purpose of facilitating the execution of
this Agreement and for other purposes, this Agreement may be executed
simultaneously in any number of counterparts, each of which counterparts shall
be deemed to be an original, and all of which counterparts shall constitute but
one and the same instrument.
SECTION 6.12 Conveyance of the Receivables and the Other Conveyed Property
to the Issuer. Seller acknowledges that Purchaser intends, pursuant to the Sale
and Servicing Agreement, to convey the Receivables and the Other Conveyed
Property, together with its rights under this Agreement, to the Issuer on the
date hereof. Seller acknowledges and consents to such conveyance and pledge and
waives any further notice thereof and covenants and agrees that the
representations and warranties of Seller contained in this Agreement and the
rights of Purchaser hereunder are intended to benefit the Insurer, the Issuer,
the Owner Trustee, the Trust Collateral Agent, the Noteholders and the
Certificateholders. In furtherance of the foregoing, Seller covenants and agrees
to perform its duties and obligations hereunder, in accordance with the terms
hereof for the benefit of the Insurer, the Issuer, the Owner Trustee, the Trust
Collateral Agent, the Noteholders and the Certificateholders and that,
notwithstanding anything to the contrary in this Agreement, Seller shall be
directly liable to the Issuer, the Owner Trustee, the Trust Collateral Agent,
the Noteholders and the Certificateholders (notwithstanding any failure by the
Master Servicer, or the Purchaser to perform their respective duties and
obligations hereunder or under Related Documents) and that the Trust Collateral
Agent may enforce the duties and obligations of Seller under this Agreement
against Seller for the benefit of the Insurer, the Owner Trustee, the Trust
Collateral Agent, the Noteholders and the Certificateholders.
17
SECTION 6.13 Nonpetition Covenant. Neither Purchaser nor Seller shall
petition or otherwise invoke the process of any court or government authority
for the purpose of commencing or sustaining a case against the Purchaser or the
Issuer under any federal or state bankruptcy, insolvency or similar law or
appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator or
other similar official of the Purchaser or the Issuer or any substantial part of
their respective property, or ordering the winding up or liquidation of the
affairs of the Purchaser or the Issuer.
[Signature Page Follows]
18
IN WITNESS WHEREOF, the parties have caused this Purchase Agreement to be
duly executed by their respective officers as of the day and year first above
written.
ADVANTA AUTO FINANCE CORPORATION,
as Seller
By /s/ Xxxxx Xxxxxx
-----------------------------------
Name: Xxxxx Xxxxxx
Title: President
ADVANTA AUTO RECEIVABLES CORP. I,
as Purchaser
By /s/ Xxxxx Xxxxxx
-----------------------------------
Name: Xxxxx Xxxxxx
Title: President
Acknowledged and Accepted:
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION,
As Trustee and Trust Collateral Agent
By /s/ Xxxxxx Xxxxxxxxxx
------------------------------------
Name: Xxxxxx X. Xxxxxxxxxx
Title: Corporate Trust Officer
[Signature Page for Purchase Agreement]
19
SCHEDULE A
SCHEDULE OF RECEIVABLES
SCH-A-1
SCHEDULE B
REPRESENTATIONS AND WARRANTIES OF SELLER
1. Characteristics of Receivables. Each Receivable (A) was originated by a
Dealer for the retail sale of a Financed Vehicle in the ordinary course of such
Dealer's business in accordance with either (i) the Seller's credit policies or
(ii) credit policies which were reviewed by the Seller prior to a purchase of a
Receivable by the Seller and such Dealer had all necessary licenses and permits
to originate Receivables in the state where such Dealer was located, was fully
and properly executed by the parties thereto, was purchased, directly or
indirectly, by an Unaffiliated Originator from such Dealer under an existing
Dealer Agreement or pursuant to a Dealer Assignment with an Unaffiliated
Originator and was validly assigned by such Dealer to an Unaffiliated Originator
pursuant to a Dealer Assignment and then validly assigned by an Unaffiliated
Originator to the Seller (B) contains customary and enforceable provisions such
as to render the rights and remedies of the holder thereof adequate for
realization against the collateral security, (C) is a Receivable which provides
for level monthly payments (provided that the period in the first Collection
Period and the payment in the final Collection Period of the Receivable may be
minimally different from the normal period and level payment) which, if made
when due, shall fully amortize the Amount Financed over the original term and
(D) has not been amended or collections with respect to which waived, other than
as evidenced in the Receivable File relating thereto.
2. No Fraud or Misrepresentation. Each Receivable was (A) originated by a
Dealer, (B) and was sold by the Dealer, directly or indirectly, to an
Unaffiliated Originator, (C) was sold by an Unaffiliated Originator to the
Seller and by the Seller to the Purchaser without any fraud or misrepresentation
in any case.
3. Compliance with Law. All requirements of applicable federal, state and
local laws, and regulations thereunder (including, without limitation, usury
laws, the Federal Truth-in-Lending Act, the Equal Credit Opportunity Act, the
Fair Credit Billing Act, the Fair Credit Reporting Act, the Fair Debt Collection
Practices Act, the Federal Trade Commission Act, the Xxxx-Xxxxxxxx Warranty Act,
the Federal Reserve Board's Regulations "B" and "Z", the Soldiers' and Sailors'
Civil Relief Act of 1940, as amended, each applicable state Motor Vehicle Retail
Installment Sales Act, and state adaptations of the National Consumer Act and of
the Uniform Consumer Credit Code and other consumer credit laws and equal credit
opportunity and disclosure laws) in respect of the Receivables, each and every
sale of Financed Vehicles and the sale of any physical damage, credit life and
credit accident and health insurance and any extended service contracts have
been complied with in all material respects, and each Receivable and the sale of
the Financed Vehicle evidenced by each Receivable complied at the time it was
originated or made and now complies in all material respects with all applicable
legal requirements.
4. Origination. Each Receivable was originated in the United States and
materially conforms to all requirements of the "Dealer Underwriting Guide"
applicable to
A-1
such Receivable at the time of origination, or with respect to Receivables
assigned to the Seller, at the time of such assignment.
5. Binding Obligation. Each Receivable represents the genuine, legal, valid
and binding payment obligation of the Obligor thereon, enforceable by the holder
thereof in accordance with its terms, except (A) as enforceability may be
limited by bankruptcy, insolvency, reorganization or similar laws affecting the
enforcement of creditors' rights generally and by equitable limitations on the
availability of specific remedies, regardless of whether such enforceability is
considered in a proceeding in equity or at law and (B) as such Receivable may be
modified by the application after the Cutoff Date of the Soldiers' and Sailors'
Civil Relief Act of 1940, as amended; and all parties to each Receivable had
full legal capacity to execute and deliver such Receivable and all other
documents related thereto and to grant the security interest purported to be
granted thereby.
6. No Government Obligor. No Obligor is the United States of America or any
State or any agency, department, subdivision or instrumentality thereof.
7. Obligor Bankruptcy. At the related Cutoff Date, no Obligor had been
identified on the records of the Seller as being the subject of a current
bankruptcy proceeding.
8. Schedule of Receivables. The information set forth in the Schedule of
Receivables has been produced from the Electronic Ledger and was true and
correct in all material respects as of the close of business on the related
Cutoff Date.
9. Marking Records. By the Closing Date, the Seller will have caused the
portions of the Electronic Ledger relating to the Receivables to be clearly and
unambiguously identified to show that the Receivables have been sold to the
Purchaser by the Seller and resold by the Purchaser to the Trust in accordance
with the terms of the Sale and Servicing Agreement.
10. Computer Tape. The Computer Tape made available by the Seller to the
Purchaser on the Closing Date, was complete and accurate as of the related
Cutoff Date and includes a description of the same Receivables that are
described in the Schedule of Receivables.
11. Adverse Selection. No selection procedures adverse to the
Securityholders or the Insurer were utilized in selecting the Receivables from
those receivables owned by the Purchaser or purchased by the Seller from
Unaffiliated Originators which met the selection criteria contained in the Sale
and Servicing Agreement.
12. Chattel Paper. The Receivables constitute chattel paper within the
meaning of the UCC as in effect in the States of Delaware, Nevada, Pennsylvania
and New York.
13. One Original. There is only one original executed copy of each
Receivable.
A-2
14. Receivable Files Complete. There exists a Receivable File pertaining to
each Receivable and such Receivable File contains, without limitation, subject
to any exceptions which may appear on any exception report delivered by the
Trust Collateral Agent on the Closing Date to the Insurer, the Owner Trustee,
the Seller and the Master Servicer and which the Seller shall have 30 Business
Days to cure, (a) a fully executed original of the Receivable, (b) the original,
or in certain specific instances, a copy of the original, Lien Certificate or
application therefor together with an assignment of the Lien Certificate
executed by the Unaffiliated Originator to the Seller and by the Seller to the
Purchaser and an assignment of the Lien Certificate executed by the Purchaser to
the Trustee, (c) an original credit application or copy thereof signed by the
Obligor. Each of such documents which is required to be signed by the Obligor
has been signed by the Obligor in the appropriate spaces and (d) evidence of any
Insurance Policy. All blanks on any form described in clauses (a), (b) and (c)
above have been properly filled in and each form has otherwise been correctly
prepared. Notwithstanding the above, a copy of the complete Receivable File for
each Receivable, which fulfills the documentation requirements of the Dealer
Underwriting Guide as in effect at the time of purchase is in the possession of
the Master Servicer or its bailee.
15. Receivables in Force. No Receivable has been satisfied, subordinated or
rescinded, and the Financed Vehicle securing each such Receivable has not been
released from the lien of the related Receivable in whole or in part. No terms
of any Receivable have been waived, altered or modified in any respect since its
origination, except by instruments or documents identified in the Receivable
File. No Receivable has been modified as a result of application of the
Soldiers' and Sailors' Civil Relief Act of 1940, as amended.
16. Lawful Assignment. No Receivable was originated in, or is subject to
the laws of, any jurisdiction the laws of which would make unlawful, void or
voidable the sale, transfer and assignment of such Receivable under this
Agreement or pursuant to transfers of the Securities. The Seller has not entered
into any agreement with any account debtor that prohibits, restricts or
conditions the assignment of any portion of the Receivables.
17. Good Title. No Receivable has been sold, transferred, assigned or
pledged by the Seller to any Person other than the Purchaser and the Issuer;
immediately prior to the conveyance of the Receivables to the Purchaser pursuant
to this Agreement, the Seller was the sole owner thereof and had good and
indefeasible title thereto, free of any Lien and, upon execution and delivery of
this Agreement by the Seller, the Purchaser shall have good and indefeasible
title to and will be the sole owner of such Receivables, free of any Lien. No
Dealer has a participation in, or other right to receive, proceeds of any
Receivable. The Seller has not taken any action to convey any right to any
Person that would result in such Person having a right to payments received
under the related Insurance Policies or the related Dealer Agreements, Dealer
Assignments or Unaffiliated Originator Receivables Purchase Agreements or to
payments due under such Receivables.
A-3
18. Security Interest in Financed Vehicle. Each Receivable created or shall
create a valid, binding and enforceable first priority security interest in
favor of the Seller, the Trust Collateral Agent or an Unaffiliated Originator in
the Financed Vehicle. The Lien Certificate and original certificate of title for
each Financed Vehicle show, or if a new or replacement Lien Certificate is being
applied for with respect to such Financed Vehicle the Lien Certificate will be
received within 180 days of the Closing Date and will show the Seller, the Trust
Collateral Agent, Bankers Trust Company or an Unaffiliated Originator named as
the original secured party under each Receivable as the holder of a first
priority security interest in such Financed Vehicle. With respect to each
Receivable for which the Lien Certificate has not yet been returned from the
Registrar of Titles, the Seller has received written evidence from the related
Dealer that such Lien Certificate showing the Seller, the Trust Collateral
Agent, Bankers Trust Company or an Unaffiliated Originator or Bankers Trust
Company as first lienholder has been applied for and (i) the Unaffiliated
Originator's security interest has been validly assigned to the Seller, pursuant
to the Unaffiliated Originator Receivables Purchase Agreement, if applicable and
(ii) the Seller's security interest has been validly assigned to the Purchaser
pursuant to this Agreement. Immediately after the sale, transfer and assignment
thereof by the Seller to the Purchaser and from the Purchaser to the Trust, each
Receivable will be secured by an enforceable and perfected first priority
security interest in the Financed Vehicle in favor of the Trustee as secured
party, which security interest is prior to all other Liens upon and security
interests in such Financed Vehicle which now exist or may hereafter arise or be
created (except, as to priority, for any lien for taxes, labor or materials
affecting a Financed Vehicle arising subsequent to the Cutoff Date). As of the
related Cutoff Date there were no Liens or claims for taxes, work, labor or
materials affecting a Financed Vehicle which are or may be Liens prior or equal
to the Liens of the related Receivable. If the Receivable was originated in a
state in which a filing or recording is required of the secured party to perfect
a security interest in motor vehicles, such filings or recordings have been duly
made to show the Seller, the Trust Collateral Agent or an Unaffiliated
Originator as the Original Secured Party under the related Receivable.
19. All Filings Made. All filings (including, without limitation, UCC
filings) required to be made by any Person and actions required to be taken or
performed by any Person in any jurisdiction to give the Trust a first priority
perfected lien on, or ownership interest in, the Receivables and the proceeds
thereof and the Other Conveyed Property have been made, taken or performed.
20. No Impairment. 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
the Receivable or otherwise to impair the rights of the Trust, the Purchaser,
the Insurer, the Trustee, the Trust Collateral Agent and the Securityholders in
any Receivable or the proceeds thereof.
21. Receivable Not Assumable. No Receivable is assumable by another Person
in a manner which would release the Obligor thereof from such Obligor's
obligations to the Seller with respect to such Receivable.
A-4
22. No Defenses. No Receivable is subject to any right of rescission,
setoff, counterclaim or defense and no such right has been asserted or
threatened with respect to any Receivable.
23. No Default. There has been no default, breach, violation or event
permitting acceleration under the terms of any Receivable (other than payment
delinquencies of not more than 29 days as of the Cut-Off Date and other than
payment delinquencies of more than 29 days which have been cured and which the
Obligor of such Receivable has had no further delinquency of more than 29 days),
and no condition exists or event has occurred and is continuing that with
notice, the lapse of time or both would constitute a default, breach, violation
or event permitting acceleration under the terms of any Receivable, and there
has been no waiver of any of the foregoing. As of the related Cutoff Date no
Financed Vehicle had been repossessed.
24. Insurance. At the time of origination of each Receivable, the related
Financed Vehicle is covered by a comprehensive and collision insurance policy
(i) in an amount at least equal to the lesser of, excluding any deductible, (a)
its maximum insurable value or (b) the principal amount due from the Obligor
under the related Receivable, (ii) naming the Seller or an Unaffiliated
Originator and its successors and assigns as loss payee and (iii) insuring
against loss and damage due to fire, theft, transportation, collision and other
risks generally covered by comprehensive and collision coverage. Each Receivable
requires the Obligor to maintain physical loss and damage insurance, naming the
Seller or an Unaffiliated Originator and its successors and assigns as
additional insured parties, and each Receivable permits the holder thereof to
obtain physical loss and damage insurance at the expense of the Obligor if the
Obligor fails to do so. No Financed Vehicle is insured under a policy of
Force-Placed Insurance on the related Cutoff Date.
25. Certain Characteristics of Receivables. (i) Each Receivable had a
remaining maturity, as of the Cutoff Date, of at least 8 months but not more
than 65 months; (ii) each Receivable had an original maturity of at least 24
months but not more 72 months; (iii) each Receivable had an original principal
balance of at least $3,000 and not more than $30,000; (iv) each Receivable had a
principal balance as of the Cutoff Date of at least $640 and not more than
$30,000; (v) each Receivable has an Annual Percentage Rate of at least 8% and
not more than 32.00%; (vi) no Receivable was more than 30 days past due as of
the Cutoff Date; (vii) no funds have been advanced by the Seller, the Master
Servicer, any Unaffiliated Originator, any Dealer, or anyone acting on behalf of
any of them in order to cause any Receivable to qualify under subclause (vi) of
this clause 25; (viii) no Receivable has a final scheduled payment date after
_______; (ix) the principal balance of each Receivable set forth in the Schedule
of Receivables is true and accurate as of the Cutoff Date and (x) as of the
Cutoff Date, approximately 81% by the aggregate principal balance of the
Receivables is attributable to loans for the purchase of used financed vehicles
and approximately 19% of the aggregate Principal Balance for all the Receivables
is attributable to loans for the purchase of used Financed Vehicles.
26. Certain Characteristics of Flow Receivables. With respect to each Flow
Receivable(i) the minimum credit bureau risk or FICO score for the related
Obligor was
A-5
540 as reported on the related credit report, (ii) the related Obligor had prior
automobile credit history as reported by either Equifax, TransUnion or TRW and
(iii) such Receivable was originated in accordance with the Seller's established
underwriting guidelines and no exception to such guidelines was made to take
into account the size of the downpayment provided by the related Obligor.
27. Servicing Conversion. As of the Closing Date, all of the Bulk
Receivables are being serviced by the Master Servicer and, except with respect
to Bulk Receivables with aggregate Principal Balances not in excess of
$10,000,000, at least one payment has been received by the Master Servicer from
the related Obligor with respect to such Bulk Receivable..
A-6
