EXHIBIT 10.1
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PURCHASE AGREEMENT
between
UNITED FIDELITY BANK, FSB,
as Originator
and
UNITED FIDELITY FINANCE, LLC,
as Transferor
Dated as of _______________, _____
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TABLE OF CONTENTS
Page
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ARTICLE I CERTAIN DEFINITIONS..............................................1
ARTICLE II PURCHASE AND SALE OF RECEIVABLES................................2
ARTICLE III REPRESENTATIONS AND WARRANTIES.................................5
ARTICLE IV CONDITIONS.................................................... 20
ARTICLE V COVENANTS OF THE ORIGINATOR.....................................23
ARTICLE VI MISCELLANEOUS PROVISIONS.......................................27
EXHIBIT A - Form of Initial Assignment
EXHIBIT B - Form of Subsequent Assignment
SCHEDULE A - Schedule of Receivables
PURCHASE AGREEMENT, dated as of _______________, _____, by and between
United Fidelity Bank, FSB, a federal savings association under the laws of the
United States (the "Originator"), and United Fidelity Finance, LLC, a Delaware
limited liability company (the "Transferor").
WHEREAS, in the regular course of its business, the Originator originates,
purchases and services through its auto loan programs certain motor vehicle
retail installment sale contracts secured by new and used automobiles, vans,
sport utility vehicles or light duty trucks acquired from motor vehicle dealers;
WHEREAS, the Originator and the Transferor wish to set forth the terms
pursuant to which the Initial Receivables are to be sold by the Originator to
the Transferor, which Initial Receivables together with the other Trust Property
related thereto will be conveyed by the Transferor to United Fidelity Auto
Receivables Trust [_____-_____] (the "Issuer") pursuant to the Sale and
Servicing Agreement, dated as of _______________, _____ (the "Sale and Servicing
Agreement"), among the Originator, the Issuer, the Transferor, United Fidelity
Bank, FSB, as Master Servicer, ______________________________, as Trust
Collateral Agent, and ______________________________, as Back-up Servicer; and
WHEREAS, the Originator and the Transferor wish to set forth the terms
pursuant to which Subsequent Receivables are to be sold by the Originator to the
Transferor on the related Subsequent Transfer Dates, which Subsequent
Receivables together with the other Trust Property related thereto will be
conveyed by the Transferor to the Issuer pursuant to the Sale and Servicing
Agreement and the related Transfer Agreements.
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
The following terms used herein shall have the following meanings:
"Initial Receivables Purchase Price" shall have the meaning specified in
Section 2.1(b).
"Initial Transferred Property" shall have the meaning specified in Section
2.1(a).
"FDIC Receivership Regulation" means 12 CFR Section 360.6 and any successor
provision.
"Subsequent Transferred Property" shall have the meaning specified in
Section 2.3(a).
"Transferred Property" means the Initial Transferred Property or the
Subsequent Transferred Property, as applicable.
"Underwriter(s)" shall have the meaning specified in Section 2.2.
Capitalized terms used but not defined herein shall have the same meanings
as in the Sale and Servicing Agreement.
1.1. Action by or Consent of Noteholders. Whenever any provision of this
Purchase Agreement refers to action to be taken, or consented to, by
Noteholders, such provision shall be deemed to refer to Noteholders of record as
of the Record Date immediately preceding the date on which such action is to be
taken, or consent given, by Noteholders. Solely for the purposes of any action
to be taken, or consented to, by Noteholders, any Note registered in the name of
the Originator or any Affiliate thereof (other than a Note pledged by the
Originator or an Affiliate to a nonaffiliated third party) shall be deemed not
to be outstanding and the aggregate principal balance evidenced thereby shall
not be taken into account in determining whether the requisite principal balance
necessary to effect any such action or consent has been obtained; provided,
however, that, solely for the purpose of determining whether the Indenture
Trustee or Trust Collateral Agent is entitled to rely upon any such action or
consent, only Notes the Indenture Trustee or Trust Collateral Agent knows to be
so owned shall be so disregarded.
1.2. Material Adverse Effect. Whenever a determination is to be made under
this Purchase 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 Issuer or the Noteholders (or any similar or analogous determination),
such determination shall be made without taking into account the funds available
from claims under the Note Policy. Whenever a determination is to be made under
this Purchase Agreement whether a breach of a representation, warranty or
covenant has or could have a material adverse effect on a Receivable or the
interest therein of the Issuer, the Noteholders or the Note Insurer (or any
similar or analogous determination), such determination shall be made by the
Note Insurer in its sole discretion so long as no Insurer Default shall have
occurred and be continuing.
ARTICLE II
PURCHASE AND SALE OF RECEIVABLES
2.1. Purchase and Sale of Initial Receivables. On the Closing Date, subject
to the terms and conditions of this Purchase Agreement, the Originator agrees to
sell to the Transferor, and the Transferor agrees to purchase from the
Originator, without recourse (subject to the obligations in this Purchase
Agreement and the Sale and Servicing Agreement), all of the Originator's right,
title and interest in, to and under the Initial Receivables and the other
Initial Transferred Property relating thereto. Each conveyance to the Transferor
of the Initial Receivables and other Initial Transferred Property relating
thereto is intended as a sale free and clear of all liens and it is intended
that such Initial Transferred Property and other property of the Transferor
shall not be part of the Originator's estate in the event that the Originator
becomes insolvent or a conservator or receiver is appointed for the Originator.
(a) Transfer of Initial Receivables. On the Closing Date and simultaneously
with the transactions to be consummated pursuant to the Sale and Servicing
Agreement, the Originator shall sell, transfer, assign, grant, set over and
otherwise convey to the Transferor,
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without recourse (subject to the obligations herein and in the Sale and
Servicing Agreement), all of its right, title and interest in, to and under: (i)
the Initial Receivables listed in Schedule A hereto and all amounts due on or
after the Initial Cut-off Date and received after the Initial Cut-off Date; (ii)
the security interests in the Financed Vehicles granted by Obligors pursuant to
the Initial Receivables and any accessions thereto, and any other interest of
the Originator in such Financed Vehicles and accessions, including, without
limitation, the certificates of title and other evidence of ownership with
respect to such Financed Vehicles; (iii) any proceeds from claims on any
physical damage, credit life or disability, GAP or other insurance policies
thereon covering the Financed Vehicles or the Obligors relating to the Initial
Receivables and any proceeds from the liquidation of Initial Receivables or
Financed Vehicles, (iv) all property (including the right to receive future
Liquidation Proceeds) that secures an Initial Receivable and that has been
acquired by or on behalf of the Transferor pursuant to the liquidation of such
Initial Receivable; (v) the Dealer Recourse relating to the Initial Receivables;
(vi) rebates or refunds of premiums and other amounts relating to insurance
policies and other items financed under the Initial Receivables or otherwise
covering an Obligor or a Financed Vehicle; (vii) all amounts and property from
time to time held in or credited to any of the Trust Accounts and the Lock-Box
Account (to the extent such amounts and property in the Lock-Box Account relate
to the Initial Receivables); (viii) the Receivable Files and all other documents
that the Originator keeps on file in accordance with its customary procedures
relating to the Initial Receivables, or the Obligors or Financed Vehicles
relating thereto; and (ix) the proceeds of any and all of the foregoing
(collectively, the property set forth in clauses (i) through (ix) above the
"Initial Transferred Property").
(b) Initial Receivables Purchase Price. In consideration for the Initial
Receivables and the other Initial Transferred Property described in Section
2.1(a), the Transferor shall, on the Closing Date, pay to the Originator an
amount equal to $[_____________] (the "Initial Receivables Purchase Price"). In
addition, on the Closing Date, the Originator will be deemed to have made a
capital contribution to the Transferor equal to the difference between the
Principal Balance of the Receivables (as of the Initial Cut-off Date)
transferred by the Originator to the Transferor on such date and the cash
proceeds so received by the Originator in consideration thereof. All monies paid
to the Originator pursuant to this Section 2.1(b) shall be paid by federal wire
transfer (same day) funds.
2.2. The Closing. The sale and purchase of the Initial Receivables and the
other Initial Transferred Property relating thereto shall take place at a
closing (the "Closing") at the offices of [_______________], [address] on the
Closing Date, simultaneously with the closings under: (a) the Sale and Servicing
Agreement pursuant to which the Transferor will convey all of its right, title
and interest in and to the Initial Receivables and the other Trust Property
related thereto to the Issuer; (b) the Indenture pursuant to which the Issuer
will pledge all of its right, title and interest in and to the Receivables and
the other Collateral to the Indenture Trustee for the benefit of the Noteholders
and the Note Insurer; (c) the Trust Agreement pursuant to which the Issuer shall
be formed and the Certificate issued to the Transferor; and (d) the Underwriting
Agreement pursuant to which City Securities Corporation (the "Underwriter") will
agree to purchase the Notes from the Issuer.
2.3. Purchase and Sale of Subsequent Receivables. On each Subsequent
Transfer Date, subject to the terms and conditions of this Purchase Agreement
and Section
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2.02(b) of the Sale and Servicing Agreement, the Originator agrees to sell to
the Transferor, and the Transferor agrees to purchase from the Originator,
without recourse (subject to the obligations in this Purchase Agreement, the
related Transfer Agreement and the Sale and Servicing Agreement), all of the
Originator's right, title and interest in, to and under the related Subsequent
Receivables and the other Subsequent Transferred Property relating thereto. The
conveyance to the Transferor of the related Subsequent Receivables and other
Subsequent Transferred Property relating thereto is intended as a sale free and
clear of all liens (other than the lien of the Indenture) and it is intended
that the Subsequent Transferred Property and other property of the Transferor
shall not be part of the Originator's estate in the event that the Originator
becomes insolvent or a conservator or receiver is appointed for the Originator.
(a) Transfer of Subsequent Receivables. On each Subsequent Transfer Date,
the Originator shall sell, assign, grant, set over and otherwise convey to the
Transferor (without recourse subject to the obligations set forth herein and in
the related Transfer Agreement and the Sale and Servicing Agreement), all of its
right, title and interest in, to, and under: (i) the Subsequent Receivables
listed on Schedule A to the related Subsequent Assignment and all amounts due
thereunder after the applicable Subsequent Cut-off Date and all amounts due
thereunder before the applicable Subsequent Cut-off Date but received after such
Subsequent Cut-off Date; (ii) the security interests in the Financed Vehicles
granted by Obligors pursuant to the Subsequent Receivables and any accessions
thereto, and any other interest of the Originator in such Financed Vehicles and
accessions, including, without limitation, the certificates of title and other
evidences of ownership with respect to such Financed Vehicles; (iii) any
proceeds from claims on any physical damage, credit life or disability, GAP or
other insurance policies thereon covering the Financed Vehicles or the Obligors
relating to the Subsequent Receivables and any proceeds from the liquidation of
the Subsequent Receivables or Financed Vehicles; (iv) all property (including
the right to receive future Liquidation Proceeds) that secures a Subsequent
Receivable and that has been acquired by or on behalf of the Issuer pursuant to
the liquidation of such Subsequent Receivable; (v) the Dealer Recourse relating
to the Subsequent Receivables; (vi) rebates or refunds of premiums and other
amounts relating to insurance policies and other items financed under the
Subsequent Receivables or otherwise covering an Obligor or a Financed Vehicle;
(vii) all amounts and property from time to time held in or credited to any of
the Trust Accounts or the Lock-Box Account (to the extent such amounts and
property in the Lock-Box Account relate to the Subsequent Receivables); (viii)
the Receivable Files and all other documents that the Originator keeps on file
in accordance with its customary procedures relating to the Subsequent
Receivables, or the Obligors or Financed Vehicles relating thereto; and (ix) the
proceeds of any and all of the foregoing (collectively, the property set forth
in clauses (i) through (ix) above, the "Subsequent Transferred Property").
(b) Subsequent Receivables Purchase Price. In consideration for the
Subsequent Receivables and other Subsequent Transferred Property described in
Section 2.3(a), the Transferor shall pay the related amount (the "Subsequent
Receivables Purchase Price") to the Originator. In addition, on each Subsequent
Transfer Date, the Originator will be deemed to have made a capital contribution
to the Transferor equal to the difference between the Principal Balance of the
Receivables (as of the related Subsequent Cut-off Date) transferred by the
Originator to the Transferor on such date and the cash proceeds so received by
the Originator in consideration thereof. All monies paid to the Originator
pursuant to this Section 2.3(b) shall be paid by federal wire transfer (same
day) funds.
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2.4. Subsequent Closings. The sale and purchase of the Subsequent
Receivables and the other Subsequent Transferred Property relating thereto shall
take place at one or more closings at the offices of [_______________],
[address] on the related Subsequent Transfer Dates.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
3.1. Representations and Warranties of the Transferor. The Transferor
hereby represents and warrants to the Originator as of the date hereof, on the
Closing Date and on each Subsequent Transfer Date, on which the Originator
relies in selling the Receivables and the other Transferred Property, on which
the Issuer relies in pledging the Receivables and the other Collateral to the
Indenture Trustee under the Indenture and on which the Note Insurer will rely in
issuing the Note Policy:
(a) Organization and Good Standing. The Transferor is duly organized and
validly existing as a limited liability company under the laws of the State of
Delaware, with the limited liability company power and authority to own its
properties and to conduct its business as such properties are currently owned
and such business is presently conducted, and had at all relevant times, and
has, the limited liability company power, authority and legal right to acquire
and own the Receivables and the other Transferred Property and to convey the
Receivables and the other Transferred Property to the Issuer pursuant to the
Sale and Servicing Agreement and each Transfer Agreement, and to perform its
other obligations under this Purchase Agreement, the Sale and Servicing
Agreement, each Transfer Agreement and any other Basic Documents to which it is
a party.
(b) Due Qualification. The Transferor is duly qualified to do business as a
foreign limited liability company 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 (including, without
limitation, the purchase of the Receivables from the Originator hereunder, the
conveyance of the Receivables by the Transferor pursuant to the Sale and
Servicing Agreement and each Transfer Agreement, and the performance of its
other obligations under this Purchase Agreement, the Sale and Servicing
Agreement, each Transfer Agreement and the other Basic Documents to which it is
a party) shall require such qualifications, licenses and/or approvals, other
than where the failure to obtain such license or approval would not have a
material adverse effect on the ability of the Transferor to perform its
obligations under this Purchase Agreement, the Sale and Servicing Agreement,
each Transfer Agreement or any other Basic Document to which it is a party, on
any Receivable or on the interest therein of the Issuer, the Noteholders or the
Note Insurer.
(c) Power and Authority. The Transferor has the power and authority to
execute and deliver this Purchase Agreement, each Transfer Agreement and the
other Basic Documents to which it is a party and to carry out their respective
terms and the execution, delivery and performance of this Purchase Agreement,
each Transfer Agreement and the other Basic Documents to which it is a party
have been duly authorized by the Transferor by all necessary limited liability
company action.
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(d) Binding Obligation. Each of this Purchase Agreement, each Transfer
Agreement, the Sale and Servicing Agreement and each other Basic Document to
which the Transferor is a party shall constitute a legal, valid and binding
obligation of the Transferor enforceable in accordance with its terms, except
only as such enforcement may be limited by bankruptcy, insolvency or similar
laws affecting the enforcement of creditors' rights generally.
(e) No Violation. The execution, delivery and performance by the Transferor
of this Purchase Agreement, each Transfer Agreement and the other Basic
Documents to which it is a party and the consummation of the transactions
contemplated hereby and thereby and the fulfillment of the terms hereof and
thereof do not conflict with, result in a breach of any of the terms and
provisions of, nor constitute (with or without notice or lapse of time) a
default under, the certificate of formation or limited liability company
agreement of the Transferor, or any indenture, agreement, mortgage, deed of
trust, or other instrument to which the Transferor is a party or by which it is
bound or to which any of its properties are subject; nor result in the creation
or imposition of any Lien upon any of its properties pursuant to the terms of
any indenture, agreement, mortgage, deed of trust, or other instrument (other
than the Basic Documents); nor violate any law, order, rule or regulation
applicable to the Transferor of any court or of any Federal or State regulatory
body, administrative agency or other governmental instrumentality having
jurisdiction over the Transferor or its properties.
(f) No Proceedings. There are no proceedings or investigations pending, or
to the Transferor's best knowledge, threatened, before any court, regulatory
body, administrative agency or other governmental instrumentality having
jurisdiction over the Transferor or its properties: (A) asserting the invalidity
of this Purchase Agreement, any Transfer Agreement, the Sale and Servicing
Agreement, the Notes, the Certificate, or any other Basic Document; (B) seeking
to prevent the issuance of the Notes or the consummation of any of the
transactions contemplated by this Purchase Agreement, any Transfer Agreement,
the Sale and Servicing Agreement or any other Basic Document to which it is a
party; (C) seeking any determination or ruling that might materially and
adversely affect the performance by the Transferor of its obligations under, or
the validity or enforceability of, this Purchase Agreement, the Sale and
Servicing Agreement, any Transfer Agreement, the Notes or any other Basic
Document to which it is a party; or (D) relating to the Transferor and which
might adversely affect the Federal or State income, excise, franchise or similar
tax attributes of the Notes.
(g) No Consents. No consent, approval, authorization or order of or
declaration or filing with any governmental authority is required to be obtained
by the Transferor for the issuance or sale of the Notes or the consummation of
the other transactions contemplated by this Purchase Agreement, any Transfer
Agreement, the Sale and Servicing Agreement or any other Basic Document to which
it is a party, except such as have been duly made or obtained or where the
failure to obtain such consent, approval, authorization, order or declaration,
or to make such filing, would not have a material adverse effect on the ability
of the Transferor to perform its obligations under this Purchase Agreement, any
Transfer Agreement, the Sale and Servicing Agreement or any other Basic Document
to which it is a party or on any Receivable or the interest therein of the
Issuer, the Noteholders or the Note Insurer.
(h) Valid Assignment. Each Initial Receivable has been validly assigned by
the Transferor to the Issuer on the Closing Date pursuant to the Sale and
Servicing Agreement
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and each Subsequent Receivable will be validly assigned to the Issuer on the
related Subsequent Transfer Date pursuant to the Sale and Servicing Agreement
and the related Transfer Agreement; and no Receivable has been sold,
transferred, assigned or pledged by the Transferor to any Person other than the
Issuer.
3.2. Representations and Warranties of the Originator.
(a) The Originator hereby represents and warrants to the Transferor as of
the date hereof, on the Closing Date and on each Subsequent Transfer Date on
which the Transferor relies in acquiring the Receivables and the other
Transferred Property and in conveying the Receivables and the other Trust
Property to the Issuer under the Sale and Servicing Agreement and each Transfer
Agreement, on which the Issuer relies in pledging the Receivables and the other
Collateral to the Indenture Trustee under the Indenture and on which the Note
Insurer will rely in issuing the Note Policy:
(i) Organization and Good Standing. The Originator is duly organized
and validly existing as a federally-chartered savings association in good
standing under the federal laws of the United States of America, with the
power and authority to own its properties and to conduct its business as
such properties are currently owned and such business is presently
conducted and had at all relevant times, and has, the power, authority and
legal right to originate, acquire, own, sell and service the Receivables
and to perform its other obligations under this Purchase Agreement, each
Transfer Agreement and the other Basic Documents to which it is a party.
(ii) Due Qualification. The Originator 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
(including, without limitation, the purchase of motor vehicle retail
installment sale contracts, the sale of the Receivables to the Transferor
hereunder, the servicing of the Receivables as required by the Sale and
Servicing Agreement and its other obligations hereunder, under the Sale and
Servicing Agreement, each Transfer Agreement and the other Basic Documents
to which it is a party) shall require such qualifications, licenses and/or
approvals, other than where the failure to obtain such license,
qualification or approval would not have a material adverse effect on the
ability of the Transferor to perform its obligations under this Purchase
Agreement, the Sale and Servicing Agreement, each Transfer Agreement or any
other Basic Document to which it is a party or on any Receivable or the
interest therein of the Transferor, the Issuer, the Noteholders or the Note
Insurer.
(iii) Power and Authority. The Originator has the corporate power and
authority to execute and deliver this Purchase Agreement, each Transfer
Agreement and the other Basic Documents to which it is a party and to carry
out their respective terms; the Originator has full corporate power and
authority to sell and assign the property sold and assigned by it to the
Transferor hereunder and has duly authorized such sale and assignment by it
to the Transferor by all necessary corporate action; and the execution,
delivery and performance of this Purchase Agreement, each Transfer
Agreement and the
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other Basic Documents to which it is a party have been duly authorized by
the Originator by all necessary corporate action.
(iv) Valid Sale; Binding Obligation. This Purchase Agreement effects a
valid sale, transfer and assignment of the Initial Receivables and the
other Initial Transferred Property conveyed to the Transferor pursuant to
Section 2.1 hereof, enforceable against creditors of and purchasers from
the Originator; each Subsequent Assignment shall constitute a valid sale,
transfer and assignment of the Subsequent Receivables and other related
Subsequent Transferred Property conveyed to the Transferor thereunder and
pursuant to Section 2.3 hereof, enforceable against creditors of and
purchasers from the Originator; each Transfer Agreement shall constitute a
valid sale, transfer and assignment of the related Subsequent Receivables
and other related Subsequent Transferred Property conveyed to the Issuer
thereunder and pursuant to the Sale and Servicing Agreement, enforceable
against creditors of and purchasers from the Transferor; and each of this
Purchase Agreement, each Transfer Agreement and each other Basic Document
to which it is a party shall constitute a legal, valid and binding
obligation of the Originator, enforceable in accordance with their
respective terms, except only as such enforcement may be limited by
bankruptcy, insolvency or similar laws affecting the enforcement of
creditors' rights generally.
(v) No Violation. The execution, delivery and performance by the
Originator of this Purchase Agreement, each Transfer Agreement and the
other Basic Documents to which it is a party and the consummation of the
transactions contemplated hereby and thereby and the fulfillment of the
terms hereof and thereof 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 charter or by-laws of
the Originator, or any indenture, agreement, mortgage, deed of trust, or
other instrument to which the Originator is a party or by which it 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 Basic Documents); or violate any law, order, rule or
regulation applicable to the Originator of any court or of any Federal or
State regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over the Originator or its properties,
in each case other than any such Lien, conflict, breach, default or
violation which would not have a material adverse effect on the interest of
the Noteholders, the Transferor, the Issuer or the Note Insurer, in any
Receivable or on the ability of the Originator to perform its obligations
under this Purchase Agreement, any Transfer Agreement, the Sale and
Servicing Agreement or any other Basic Document to which it is a party.
(vi) No Proceedings. There are no proceedings or investigations
pending, or to the Originator's best knowledge, threatened, before any
court, regulatory body, administrative agency, or other governmental
instrumentality having jurisdiction over the Originator or its properties:
(A) asserting the invalidity of this Purchase Agreement, any Transfer
Agreement, the Sale and Servicing Agreement, any of the other Basic
Documents to which it is a party, the Notes or the Certificate; (B) seeking
to prevent the issuance of the Notes or the Certificate or the consummation
of any of the transactions
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contemplated by this Purchase Agreement, any Transfer Agreement, the Sale
and Servicing Agreement or any other Basic Document to which it is a party;
(C) seeking any determination or ruling that might materially and adversely
affect the performance by the Originator of its obligations under, or the
validity or enforceability of, this Purchase Agreement, the Sale and
Servicing Agreement, any Transfer Agreement, any of the other Basic
Documents to which it is a party, the Notes or the Certificate; (D)
relating to the Originator and which might adversely affect the Federal or
State income, excise, franchise or similar tax attributes of the Notes; or
(E) that could have a material adverse effect on the Receivables or the
interest therein of the Transferor, the Issuer, the Noteholders or the Note
Insurer.
(vii) No Consents. No consent, approval, authorization or order of or
declaration or filing with any governmental authority is required to be
obtained by the Originator for the issuance or sale of the Notes or the
consummation of the other transactions contemplated by this Purchase
Agreement, the Sale and Servicing Agreement, any Transfer Agreement or any
of the other Basic Documents to which the Originator is a party, except
such as have been duly made or obtained, other than the failure to obtain
such consent, approval, authorization, order or declaration, or to make
such filing, would not have a material adverse effect on the ability of the
Originator to perform its obligations under the Basic Documents to which it
is a party or on any Receivable or the interest therein of the Transferor,
the Issuer, the Noteholders, the Certificateholder or the Note Insurer.
(viii) Financial Condition. The Originator has a positive net worth
and is able to and does pay its liabilities as they mature. The Originator
is not in default under any material obligation to pay money to any person
except for matters being disputed in good faith which do not involve an
obligation of the Originator on a promissory note. The Originator will not
use the proceeds from the transactions contemplated by this Purchase
Agreement to give any preference to any creditor or class of creditors, and
this transaction will not leave the Originator with remaining assets which
are unreasonably small compared to its ongoing operations.
(ix) Fraudulent Conveyance. The Originator is not selling the Initial
Receivables or the Subsequent Receivables sold by it to the Transferor with
any intent to hinder, delay or defraud any of its creditors; the Originator
will not be rendered insolvent as a result of such sale of the Initial
Receivables or the Subsequent Receivables to the Transferor.
(x) Certificate, Statements and Reports. The officers certificates,
statements, reports and other documents prepared by the Originator and
furnished by the Originator to the Transferor, the Note Insurer or the
Underwriter(s) pursuant to this Purchase Agreement, any Transfer Agreement
or any other Basic Document to which the Originator is a party, and in
connection with the transactions contemplated hereby or thereby, when taken
as a whole, do not contain any untrue statement of a material fact or omit
to state a material fact necessary to make the statements contained herein
or therein not misleading.
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(xi) Originator's Intention. The Initial Receivables and other Initial
Transferred Property are being transferred, and the Subsequent Receivables
and the other Subsequent Transferred Property will be transferred by the
Originator, with the intention of removing them from the Originator's
estate pursuant to the Federal Deposit Insurance Act and the FDIC
Receivership Regulations.
(xii) Adequate Consideration. The Originator has received adequate
consideration for the transfer of the Initial Receivables and the other
Initial Transferred Property and will upon the transfer thereof receive
adequate consideration for the Subsequent Receivables and any Subsequent
Transferred Property.
(xiii) FDIC Receivership Regulation. The transfers of the Initial
Receivables and the other Initial Transferred Property and the Subsequent
Receivables and the other Subsequent Transferred Property by the Originator
meet all of the conditions for sale accounting treatment under generally
accepted accounting principles and such transfers otherwise meet the
requirements necessary under the FDIC Receivership Regulation for such
transfers to be respected by the FDIC notwithstanding the FDIC's powers to
reclaim, disaffirm or repudiate contracts under 12 U.S.C. Section 1821(e).
(xiv) Compliance with FDIC Written Agreement Requirements. The
Originator has taken and will continue to take all necessary action for
this Purchase Agreement, each Transfer Agreement and the other Basic
Documents to which it is a party to be enforceable against the FDIC
notwithstanding Sections 11(d)(9), Section 11(n)(4)(I) and Section 13(e) of
the Federal Deposit Insurance Act.
(b) The Originator hereby makes each of the following representations and
warranties with respect to the Receivables for the benefit of the Transferor,
the Issuer, and the Note Insurer on which the Transferor relies in acquiring the
Receivables and other Transferred Property and in conveying the Receivables and
the other Trust property to the Issuer under the Sale and Servicing Agreement
and each Transfer Agreement, on which the Issuer relies in pledging the
Receivables and the other Collateral to the Indenture Trustee under the
Indenture and on which the Note Insurer will rely in issuing the Note Policy.
Such representations and warranties speak (unless otherwise specified) as of the
execution and delivery of this Purchase Agreement on the Closing Date (as to
Receivables transferred to the Trust on the Closing Date) and each Subsequent
Transfer Date (as to Receivables transferred to the Trust on such Subsequent
Transfer Date), but shall in each case survive the sale, transfer, and
assignment of the Receivables to the Transferor, the subsequent sale, transfer,
and assignment to the Issuer and the pledge thereof to the Indenture Trustee
pursuant to the Indenture.
(i) With respect to each Receivable, the Origination Date of such
Receivable is, or will be, as applicable, on or after [___________].
(ii) To the best of the Originator's knowledge, each Receivable (a)
has been originated in the United States of America by a Dealer for the
retail sale of a Financed Vehicle in the ordinary course of such Dealer's
business, such Dealer had all necessary licenses and permits to originate
such Receivable in the State where such Dealer was located, has been fully
and properly executed by the parties thereto, has been purchased
10
by the Originator from such Dealer, under an existing Dealer Agreement with
the Originator, in connection with the sale of Financed Vehicles by the
Dealer, and has been validly assigned by such Dealer to the Originator, and
in turn has been validly assigned by the Originator to the Transferor
pursuant to this Purchase Agreement and the related Assignment, (b) creates
a valid, subsisting, and enforceable first priority security interest for
the benefit of the Originator in the Financed Vehicle, which security
interest has been, in turn, validly assigned by the Originator to the
Transferor, (c) contains customary and enforceable provisions such that the
rights and remedies of the holder thereof shall be adequate for realization
against the collateral of the benefits of the security, (d) provides for
level monthly payments (provided that the payment in the first or last
month in the life of the Receivable may be minimally different from the
level payment) that fully amortize the Amount Financed by maturity and
yield interest at the Annual Percentage Rate over an original term of no
less than [__] months and no greater than [__] months; provided, however,
that Receivables may have an original term up to __ months only with the
Note Insurer's prior consent, (e) provides for, in the event that such
Receivable is prepaid in full, a prepayment that fully pays the Principal
Balance, (f) is a Simple Interest Receivable and (g) was originated by a
Dealer to an Obligor and was originated and sold by the Dealer to the
Originator, without any fraud or misrepresentation on the part of such
Dealer or on the part of the Obligor.
(iii) The information set forth in Schedule A to this Purchase
Agreement, as the same may be supplemented from time to time in accordance
with the terms hereof, is true and correct in all material respects as of
the close of business on each Cut-off Date, and no selection procedures
adverse to the Noteholders or the Note Insurer have been or will be
utilized in selecting the Receivables.
(iv) Each Receivable and the sale of the related Financed Vehicle and
the sale of any extended warranty protection plan costs, or of physical
damage, credit life or disability insurance included in the Amount Financed
related thereto complied at the time it was originated or made and complies
at the execution of this Purchase Agreement with respect to an Initial
Receivable, or at the execution of the related Subsequent Assignment in the
case of a Subsequent Receivable, in all material respects with 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
Reporting Act, the Fair Debt Collection Practices Act, the Federal Trade
Commission Act, the Xxxxxxxx-Xxxx Warranty Act, the Federal Reserve Board's
Regulations B and Z (including amendments to the Federal Reserve's Official
Staff Commentary to Regulation Z effective October 1, 1998 concerning
negative equity loans), the Soldiers' and Sailors' Civil Relief Act of
1940, as amended, 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.
(v) Each Receivable represents the genuine, legal, valid, and binding
payment obligation in writing of the Obligor, enforceable by the holder
thereof in accordance with its terms subject to the effect of bankruptcy,
insolvency, reorganization, or other similar laws affecting the enforcement
of creditors' rights generally and to general principles of equity, no
Obligor has any right of action against the Originator or the Transferor or
any
11
right to any offset, counterclaim or rescission , no such right has been
asserted or threatened with respect to any Receivable, 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.
(vi) None of the Receivables is due from the United States of America
or any State or from any agency, department, or instrumentality of the
United States of America or any State.
(vii) To the knowledge of the Originator, no Obligor was the subject
of a bankruptcy proceeding at the time of origination of the related
Receivable.
(viii) Immediately prior to the sale, assignment, and transfer hereof
pursuant to this Purchase Agreement and, with respect to the Initial
Receivables, the Initial Assignment, or with respect to the Subsequent
Receivables, the related Subsequent Receivables Assignment, as applicable,
each Receivable was secured by a validly perfected first priority security
interest in the Financed Vehicle for the benefit of the Originator as
secured party and such 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 or any other non-consensual lien affecting a
Financed Vehicle arising subsequent to the Closing Date or the related
Subsequent Transfer Date, as applicable), or all necessary and appropriate
actions had been commenced (including the filing of the related
applications for certificates of title with the related department of motor
vehicles) that would result in the valid perfection of a first priority
security interest in the Financed Vehicle in favor of the Trust Collateral
Agent for the benefit of the Transferor as secured party. Immediately after
the sale, assignment and transfer thereof to the Trust, although the
related certificates of title will not indicate the Trust as secured party,
each Receivable will be secured by an enforceable and perfected first
priority security interest in the Financed Vehicle in favor of the Trust
Collateral Agent as secured party for the benefit of the Noteholders and
the Note Insurer, which security interest is prior to all other Liens in
such Financed Vehicle.
(ix) Based on the location of the Dealers and the Principal Balances
of the Initial Receivables as of the Initial Cut-off Date, approximately
[__]% of the Initial Receivables were originated in Indiana, Kentucky and
Illinois, and no more than [__]% of the Initial Receivables were originated
in any other single state. As of each Subsequent Transfer Date, no more
than [__]% of the Receivables (based on the Principal Balances of the
Receivables as of the applicable Cut-off Date) will have been originated in
any single state other than Indiana, Kentucky and Illinois.
(x) No later than 15 days after the Closing Date or the applicable
Subsequent Transfer Date, each Obligor will have been notified by the
Originator to make payments with respect to its respective Receivable
directly to the Lock-Box, and will provide each Obligor with a monthly
statement in order to enable such Obligor to make payments directly to the
Lock-Box.
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(xi) No Receivable has been satisfied, subordinated, or rescinded, nor
has any Financed Vehicle been released from the Lien granted by the related
Receivable in whole or in part.
(xii) No provision of a Receivable has been waived, altered, amended
or modified in any respect since its origination, except by instruments or
documents contained in the related Receivable File on the Closing Date or
the related Subsequent Transfer Date, as applicable. No Receivable has been
modified as a result of application of the Soldiers' and Sailors' Civil
Relief Act of 1940, as amended.
(xiii) To the best of the Originator's knowledge, no liens or claims
have been filed for work, labor, storage 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 Receivable.
(xiv) Except for contractual delinquencies continuing for a period of
not more than 30 days as of the Cut-off Date, no default, breach,
violation, or event permitting acceleration under the terms of any
Receivable has occurred and there was no material misrepresentation by any
Obligor on such Obligor's credit application; and no continuing condition
that with notice or the lapse of time would constitute a default, breach,
violation, or event permitting acceleration under the terms of any
Receivable has arisen and the Originator shall not waive and has not waived
any of the foregoing.
(xv) At the time of origination of a Receivable, the Originator, in
accordance with its customary procedures, has determined that the Obligor
has obtained physical damage insurance covering the Financed Vehicle or has
applied for such insurance (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 of such Receivable, (ii) naming the Originator 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 damage and each Receivable requires the Obligor
to obtain and maintain such insurance naming the Originator and its
successors and assigns as an additional insured or loss payee, (B) each
Receivable that finances the cost of premiums for physical damage, credit
life or disability insurance is covered by an insurance policy and
certificate of insurance naming the Originator as policyholder (creditor)
or loss payee under each such insurance policy and certificate of insurance
and (C) as to each Receivable that finances the cost of an extended
warranty protection plan, the respective Financed Vehicle which secures the
Receivable is covered by such extended warranty protection plan.
(xvi) It is the intention of the Originator that each transfer and
assignment herein contemplated pursuant to Section 2.1 or Section 2.3, as
applicable, will constitute on the Closing Date or the Subsequent Transfer
Date, as applicable, a sale and contribution of the Receivables from the
Originator to the Transferor and that the beneficial interest in and title
to the Receivables not be part of the Originator's respective estate in the
event the Originator becomes insolvent or a conservator or receiver is
appointed for the Originator. No Receivable has been sold, transferred,
assigned, or pledged by the Originator to any Person other than the
Transferor except with respect to
13
any such pledge that has been released on or prior to the Closing Date or
the applicable Subsequent Transfer Date. Immediately prior to each transfer
and assignment of each Receivable herein contemplated pursuant to Section
2.1 or Section 2.3, as applicable, the Originator will have good and
marketable title to such Receivable free and clear of all Liens and rights
of others and, immediately upon the transfer thereof, the Trust shall have
good and marketable title to such Receivable, free and clear of all Liens
and rights of others; and each such transfer has been perfected under the
UCC. Without limiting the generality of the foregoing, no Dealer has any
right, title or interest in respect of any Receivable. The Originator 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 any insurance
policies related to the Receivables or the Financed Vehicles or the related
Dealer Agreements or to payments due under such Receivables, other than
granting certain Liens which will be released on or prior to the Closing
Date or the related Subsequent Transfer Date.
(xvii) No Receivable has been originated in, or is subject to the laws
of, any jurisdiction under which the sale, transfer, and assignment of such
Receivable under this Purchase Agreement shall be unlawful, void, or
voidable. The Originator has not entered into any agreement with any
account debtor that prohibits, restricts or conditions the assignment of
any portion of the Receivables.
(xviii) All filings (including, without limitation, UCC filings)
necessary in any jurisdiction to give the Transferor a first priority
perfected ownership interest in the Receivables and the proceeds thereof
and the other Transferred Property (other than the Financed Vehicles) will
be made on or prior to the Closing Date or the related Subsequent Transfer
Date, as applicable.
(xix) Each Receivable constitutes "chattel paper" as defined in the
UCC.
(xx) Each Receivable transferred to the Transferor had an original
term to maturity of no less than 12 months and no greater than 84 months
and a remaining term to maturity of at least one month but not greater than
84 months as of the applicable Cut-off Date; provided that Receivables may
have an original and/or remaining term to maturity up to [__] months only
with the prior consent of the Note Insurer. Each Receivable was originated
on or before the applicable Cut-off Date.
(xxi) The weighted average original term to maturity of the Initial
Receivables is [__] months as of the Initial Cut-off Date and the weighted
average remaining term to maturity of the Initial Receivables was [__]
months as of the Initial Cut-off Date. No greater than [____]% by aggregate
Principal Balance of the Initial Receivables as of the Initial Cut-off Date
have an APR of less than [____]% and the weighted average APR of the
Initial Receivables as of the Initial Cut-off Date is [__]%.
(xxii) There is only one original executed copy of each Receivable,
and such original and a complete Receivable File with respect to each
Receivable will be delivered to the Trust Collateral Agent on or prior to
the Closing Date with respect to an Initial
14
Receivable or, with respect to a Subsequent Receivable, will be delivered
to the Trust Collateral Agent on or prior to the related Subsequent
Transfer Date.
(xxiii) As of the applicable Cut-off Date, no Financed Vehicle related
to a Receivable has suffered a Casualty.
(xxiv) The Originator and its assignees has not assumed any obligation
to Dealers or other originators or holders of the Receivables (including,
but not limited to, under dealer reserves) as a result of its purchase of
the Receivables.
(xxv) No Receivable is assumable by another Person in a manner which
would release the Obligor thereof from such Obligor's obligations to the
Originator with respect to such Receivable.
(xxvi) Each Receivable is payable in U.S. dollars, and, to the best of
the Originator's knowledge, the Obligor thereon is an individual who is a
U.S. resident.
(xxvii) Each Receivable has a final Scheduled Receivable Payment at
least six months prior to the Stated Final Maturity.
(xxviii) The weighted average of the number of Scheduled Receivable
Payments that have been due under the Receivables since origination is at
least one.
(xxix) Each Receivable has a Principal Balance of at least $[___] and
not greater than $[_____] as of the Cut-off Date; provided, however, that
Receivables may have a Principal Balance greater than $[_____] only with
the consent of the Note Insurer.
(xxx) No advances were made on behalf of the Obligor to satisfy any of
the representations and warranties set forth herein with respect to the
related Receivable.
(xxxi) No Financed Vehicle was repossessed on or prior to the
applicable Cut-off Date, except for Financed Vehicles subject to
Receivables on which the Obligor has paid, on or prior to the due date
therefor, the [four] Scheduled Receivable Payments due immediately prior to
the applicable Cut-off Date.
(xxxii) Each Receivable satisfies in all material respects the
requirements under the Originator's underwriting guidelines that were in
effect as of the date the Receivable was purchased. Each Receivable
originated by a Dealer was underwritten by the Originator pursuant to and
in accordance with agreed upon and well articulated underwriting and
documentation standards. The collection practices used with respect to each
Receivable have been in all respects legal, proper, prudent and customary
in the motor vehicle financing and servicing business.
(xxxiii) The servicing of each Receivable and the collection practices
relating thereto have been lawful and in accordance with the standards set
forth in the Sale and Servicing Agreement; other than the Subservicer, the
Master Servicer and the Back-up Servicer, no other person has the right to
service any Receivable.
15
(xxxiv) There are no proceedings pending, or to the best of the
Originator's knowledge, threatened, wherein the Obligor or any governmental
agency has alleged that any Receivable is illegal or unenforceable.
(xxxv) As of the Closing Date or the related Subsequent Transfer Date,
as applicable, the Originator will have duly fulfilled all obligations to
be fulfilled on the lender's part under or in connection with the
origination, acquisition and assignment of the Receivables and the related
Transferred Property, including, without limitation, giving any notices or
consents necessary to effect the acquisition of the Receivables and the
related Transferred Property by the Transferor, the subsequent acquisition
by the Trust pursuant to the Sale and Servicing Agreement and the related
Transfer Agreement, as applicable, and the pledge thereof to the Indenture
Trustee pursuant to the Indenture. the Originator has not done anything to
convey any right to any Person that would result in such Person having a
right to payments due under any Receivables (other than granting Liens
thereon that will be released on or prior to the Closing Date or the
related Subsequent Transfer Date, as applicable) or otherwise done anything
to impair the rights of the Transferor, the Trust, the Noteholders or the
Note Insurer in payments with respect thereto.
(xxxvi) Each sale, transfer, assignment and conveyance of the
Receivables and the related Transferred Property by the Originator
hereunder pursuant to Section 2.1 or Section 2.3 or the subsequent sale to
the Issuer pursuant to the Sale and Servicing Agreement and the related
Transfer Agreement, as applicable, or the pledge by the Issuer to the
Indenture Trustee pursuant to the Indenture is not subject to and will not
result in any tax, fee or governmental charge payable by the Originator,
the Transferor, the Issuer or the Trust Collateral Agent to any federal,
state or local government ("Transfer Taxes") other than Transfer Taxes
which have or will be paid by the Originator as due. In the event that the
Issuer, the Transferor, the Indenture Trustee or the Trust Collateral Agent
receives actual notice of any Transfer Taxes arising out of the transfer,
assignment and conveyance of the Receivables and the related Transferred
Property pursuant to Section 2.1 or Section 2.3 or the subsequent sale to
the Issuer pursuant to the Sale and Servicing Agreement and the related
Transfer Agreement, as applicable, or the pledge by the Issuer to the
Indenture Trustee pursuant to the Indenture, on written demand by the
Issuer, the Transferor, the Indenture Trustee or the Trust Collateral
Agent, or upon the Originator's otherwise being given notice thereof by the
Issuer, the Transferor, the Indenture Trustee or the Trust Collateral
Agent, the Originator shall pay, and otherwise indemnify and hold the
Transferor, the Issuer, the Indenture Trustee, the Trust Collateral Agent
and the Note Insurer harmless, on an after-tax basis, from and against any
and all such Transfer Taxes (it being understood that the Noteholders, the
Indenture Trustee, the Trust Collateral Agent, the Transferor, the Issuer
and the Note Insurer shall have no obligation to pay such Transfer Taxes).
(xxxvii) Each Dealer that originated a Receivable for sale to the
Originator has been selected by the Originator based on the Originator's
underwriting criteria, its financial and operating history and record of
compliance with requirements of applicable Federal and state law. Each
Dealer from whom the Originator purchases Receivables directly has entered
into an agreement with the Originator providing for the sale of motor
16
vehicle loans from time to time by such Dealer to the Originator and is
authorized to originate Receivables for sale to the Originator under the
Originator's underwriting guidelines.
(xxxviii) The Originator used no selection procedures that identified
the Receivables as being less desirable or valuable than other comparable
motor vehicle loans originated or acquired by the Originator.
(xxxix) The Computer Tape from which the selection of the Initial
Receivables being acquired on the Closing Date was made available to the
accountants that are providing a comfort letter to the Underwriter(s) and
the Note Issuer in connection with any information contained in the
Prospectus, and such information is complete and accurate as of the Initial
Cut-off Date and the Closing Date in all material respects and includes a
description of the same Receivables that are described in the Prospectus
and on Schedule A hereto and the payments due hereunder as of the Closing
Date.
(xl) By the Closing Date or the related Subsequent Transfer Date, as
applicable, the Originator will have caused the portions of the
Subservicer's servicing records relating to the Receivables to be clearly
and unambiguously marked to show that the Receivables constitute part of
the Transferred Property, have been transferred to the Transferor and
subsequently to the Issuer and are owned by the Issuer in accordance with
the terms of the Sale and Servicing Agreement.
(xli) As of the Closing Date or the related Subsequent Transfer Date,
there is no lien against any Financed Vehicle for delinquent taxes.
(xlii) At the time of origination of each Receivable, the proceeds of
such Receivable were fully disbursed. There is no requirement for future
advances thereunder, and all fees and expenses in connection with the
origination of such Receivable have been paid.
(xliii) No Receivable is due from an Obligor who has defaulted under a
previous contract with the Originator.
(xliv) The Dealer that sold each Receivable to the Originator has
entered into a Dealer Agreement and such Dealer Agreement (along with any
addenda thereto) constitutes the entire agreement between the Originator
and the related Dealer with respect to the sale of such Receivable to the
Originator. Each such Dealer Agreement is in full force and effect and is
the legal, valid and binding obligation of such Dealer, there have been no
material defaults by such Dealer or by the Originator under such Dealer
Agreement; the Originator has fully performed all of its obligations under
such Dealer Agreement; the Originator has not made any statements or
representations to such Dealer (whether written or oral) inconsistent with
any term of such Dealer Agreement; the purchase price (as specified in the
applicable Dealer Agreement, if any) for such Receivable has been paid in
full by the Originator; there is no other payment due to such Dealer from
the Originator for the purchase of such Receivable; such Dealer has no
right, title or interest in or to any Receivable; there is no prior course
of dealing between such
17
Dealer and the Originator which will affect the terms of such Dealer
Agreement; any payment owed to such Dealer by the Originator is a corporate
obligation of the Originator in the nature of a bonus for amounts collected
by the Originator in excess of the purchase price for a Receivable.
(xlv) Each Receivable contains provisions requiring the Obligor to
assume all risk of loss or malfunction of the related Financed Vehicle and
to maintain liability insurance with respect thereto, requiring the Obligor
to pay all sales, use, property, excise and other similar taxes imposed on
or with respect to the related Financed Vehicle and making the Obligor
liable for all payments required to be made thereunder, without any setoff,
counterclaim or defense for any reason whatsoever, subject only to the
Obligor's right of quiet enjoyment.
(xlvi) No Receivable provides for the substitution, exchange or
addition of any Financed Vehicle subject to such Receivable.
(xlvii) The rights with respect to each Receivable are assignable by
the Originator without the consent of any Person other than consents which
will have been obtained on or before the Closing Date or the related
Subsequent Transfer Date, as applicable.
(xlviii) To the best of the Originator's knowledge, no Obligor is a
Person involved in re-leasing or re-selling the Financed Vehicles.
(xlix) The Trust Collateral Agent will hold the certificate of title
or the application for a certificate of title for each of the Financed
Vehicles within 45 days of the Closing Date, or with respect to a
Subsequent Receivable, will hold the certificate of title or the
application for a certificate of title for each of the related Financed
Vehicles as of the related Subsequent Transfer Date, and the Subservicer
will obtain within 180 days of the Closing Date or the related Subsequent
Transfer Date, as applicable, and deliver to the Trust Collateral Agent
certificates of title with respect to each Financed Vehicle as to which the
Trust Collateral Agent holds only such application.
(l) No Receivable has been extended, rewritten or is subject to any
forbearance, or any other such modified payment plan other than in
accordance with the Originator's collection policies and procedures (of
which the Trust Collateral Agent retains a copy and which is available from
the Trust Collateral Agent upon request) as in effect on the Closing Date
or the related Subsequent Transfer Date, as applicable.
(li) This Purchase Agreement has been duly authorized, executed and
delivered by the Originator and the Transferor and constitutes the legal,
valid, binding obligation of each such entity, enforceable against it in
accordance with its terms. This Purchase Agreement (including, without
limitation, the provisions of Section 6.2 hereof relating to the
reacquisition of the Receivables in certain events) is in full force and
effect and there have been no defaults hereunder by the Originator or the
Transferor, and the Transferor and the Originator have performed all of
their obligations thereunder as of the Closing Date and the Subsequent
Transfer Date, as applicable. The full purchase price
18
payable by the Transferor for the Initial Receivables and the Subsequent
Receivables as provided in this Purchase Agreement will be paid in full by
the Transferor for the purchase thereof on or prior to the Closing Date or
the related Subsequent Transfer Date, as applicable. All right, title and
interest of the Originator in or to the Initial Receivables has been sold
by the Originator to the Transferor pursuant to this Purchase Agreement and
the Initial Assignment in accordance with the terms hereof, and the
Originator does not claim any right, title or interest in or to any of the
Receivables. All right, title and interest of the Originator in or to the
Subsequent Receivables will be sold by the Originator to the Transferor
pursuant to this Purchase Agreement and the related Subsequent Assignment
in accordance with the terms hereof, and the Originator will not claim any
right, title or interest in or to any of the Receivables.
(lii) The Originator, at the time of origination of each Receivable
and as of Closing Date, with respect to the Initial Receivables, and as of
the applicable Pre-Funding Receivable Transfer Date, with respect to the
Subsequent Receivables, was in possession of all state and local licenses
(including all debt collection licenses) required for it to acquire and own
such Receivable and service such Receivable in accordance with the
Originator's collection policies and procedures in effect on such date and
to perform its services as Subservicer (including, without limitation, the
services to be performed as Servicer) under the Sale and Servicing
Agreement, and none of such licenses has been suspended, revoked or
terminated, except where the failure of the Originator to obtain and
maintain any such license could not have a material adverse effect on the
Issuer, the Note Insurer, the Noteholders or any Receivable or the
Originator's ability to perform its obligations as Originator and
Subservicer under the Basic Documents.
(c) The representations and warranties contained in (i) this Purchase
Agreement are made as of the execution and delivery of this Purchase Agreement,
and (ii) in each Transfer Agreement are made as of the execution and delivery of
such Transfer Agreement, but in each case shall survive the sale, transfer and
assignment of the related Receivables and the other related Transferred Property
hereunder, the conveyance thereof by the Transferor to the Issuer under the Sale
and Servicing Agreement and the related Transfer Agreement, as applicable, and
the pledge thereof by the Issuer to the Indenture Trustee under the Indenture.
The Originator and the Transferor agree that the Transferor will assign to the
Issuer all of the Transferor's rights under this Purchase Agreement and each
Assignment, the Issuer will assign to the Indenture Trustee all of the Issuer's
rights under this Purchase Agreement and each Assignment and that the Indenture
Trustee shall thereafter be entitled to enforce this Purchase Agreement and each
Assignment directly against the Originator in the Indenture Trustee's own name
on behalf of the Noteholders; provided, however, that the representations and
warranties of the Originator in this Purchase Agreement shall not be construed
as a warranty or guaranty by the Originator as to the future payments by any
Obligor. Each sale of a Receivable pursuant to this Purchase Agreement and the
related Assignment shall be "without recourse" except for the representations,
warranties and covenants made by the Originator in this Purchase Agreement or
the related Transfer Agreement.
19
ARTICLE IV
CONDITIONS
4.1. Conditions to Obligations of the Transferor. (a) The obligation of the
Transferor to purchase the Initial Receivables is subject to the satisfaction of
the following conditions:
(i) Representations and Warranties True. (a) The representations and
warranties of the Originator hereunder shall be true and correct on the
Closing Date with the same effect as if then made, and the Originator shall
have performed all obligations to be performed by the Originator hereunder
on or prior to the Closing Date.
(ii) Computer Files Marked. The Originator shall, at its own expense,
on or prior to the Closing Date, indicate in its computer files that the
Initial Receivables have been sold by the Originator to the Transferor
pursuant to this Purchase Agreement, conveyed to the Issuer pursuant to the
Sale and Servicing Agreement and pledged to the Indenture Trustee pursuant
to the Indenture and shall deliver to the Transferor the Schedule of
Receivables certified by the Chairman, the President, any Vice President or
the Treasurer of the Originator to be true, correct and complete.
(iii) Receivable Files Delivered. The Originator shall, at its own
expense, deliver the Receivable Files relating to the Initial Receivables
to the Trust Collateral Agent on or prior to the Closing Date.
(iv) Documents to be delivered by the Originator at the Closing.
(A) The Initial Assignment. At the Closing, the Originator will
execute and deliver an Initial Assignment. The Initial Assignment
shall be substantially in the form of Exhibit A hereto.
(B) Evidence of UCC-1 Filing. On or prior to the Closing Date,
the Originator shall record and file, at its own expense, a UCC-1
financing statement in [Indiana] and each other jurisdiction required
by applicable law (if any), executed by the Originator, as seller or
debtor, and naming the Transferor, as purchaser or secured party,
naming the applicable Initial Receivables and the other Initial
Transferred Property conveyed hereunder as collateral, 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 such Initial Receivables to the Transferor. The
Originator shall deliver a file-stamped copy, or other evidence
satisfactory to the Transferor and the Note Insurer of such filing, to
the Transferor and the Note Insurer on or prior to the Closing Date.
(C) Evidence of UCC-3 Filings. On or prior to the Closing Date,
the Originator shall cause to be recorded and filed, at its own
expense [any applicable UCC-3 releases].
20
(D) Legal Opinions. The Originator shall have delivered to the
Transferor, the Note Insurer and the Underwriter(s) the legal opinions
of Xxxxx XxXxxxx LLP, with respect to bankruptcy (including true sale
and nonconsolidation), corporate, tax and such other matters as the
Note Insurer, the Underwriter(s) and their counsel shall request, in
each case, dated the Closing Date and satisfactory in form and
substance to the Note Insurer, the Underwriter(s) and their respective
counsel.
(E) Other Documents. On or prior to the Closing Date, the
Originator shall deliver such other documents as the Transferor or the
Note Insurer may reasonably request.
(v) Other Transactions. The transactions contemplated by the Sale and
Servicing Agreement, the Indenture and the Underwriting Agreement in
respect of the Receivables shall be consummated on the Closing Date.
(b) The obligation of the Transferor to purchase Subsequent Receivables on
the related Subsequent Transfer Dates is subject to the satisfaction of the
following conditions:
(i) Representations and Warranties True. The representations and
warranties of the Originator hereunder and under the related Transfer
Agreement shall be true and correct on the related Subsequent Transfer Date
with the same effect as if then made, and the Originator shall have
performed all obligations to be performed by the Originator hereunder on or
prior to the related Subsequent Transfer Date.
(ii) Computer Files Marked. The Originator shall, at its own expense,
on or prior to the related Subsequent Transfer Date, indicate in its
computer files that the related Subsequent Receivables have been sold by
the Originator to the Transferor pursuant to this Purchase Agreement and
shall deliver to the Transferor the related supplement to the Schedule of
Receivables to be attached hereto as Schedule A, certified by the Chairman,
the President, any Vice President or the Treasurer of the Originator to be
true, correct and complete.
(iii) Receivable Files Delivered. The Originator shall, at its own
expense, deliver the Receivable Files relating to such Subsequent
Receivables to the Trust Collateral Agent on or prior to the related
Subsequent Transfer Date.
(iv) Documents to be delivered by the Originator on the related
Subsequent Transfer Date.
(A) The Subsequent Receivables Assignment. On each Subsequent
Transfer Date, the Originator, as applicable, will execute and deliver
the related Subsequent Receivables Assignment. The Subsequent
Assignment shall be substantially in the form of Exhibit B hereto.
(B) Evidence of UCC-1 Filing. On or prior to the related
Subsequent Transfer Date, the Originator shall record and file, at its
own expense, a UCC-1 financing statement in Indiana and every other
jurisdiction required by applicable law (if any), executed by the
Originator, as seller or debtor, and naming the Transferor, as
purchaser
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or secured party, naming the related Subsequent Receivables and the
other Subsequent Transferred Property conveyed hereunder as
collateral, 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 such Subsequent Receivables to
the Transferor. The Originator shall deliver a file-stamped copy, or
other evidence satisfactory to the Transferor and the Note Insurer of
such filing, to the Transferor and the Note Insurer on or prior to the
related Subsequent Transfer Date.
(C) Evidence of UCC-3 Filings. On or prior to the related
Subsequent Transfer Date, the Originator shall, to the extent
applicable, cause to be recorded and filed, at its own expense any
applicable UCC-3 releases.
(D) Legal Opinions. The Originator shall have delivered to the
Transferor, the Note Insurer and the Underwriter(s) the legal opinions
of Xxxxx XxXxxxx LLP, in each case, dated the related Subsequent
Transfer Date and satisfactory in form and substance to the Note
Insurer, the Underwriter(s) and their respective counsel.
(E) Other Documents. On or prior to the related Subsequent
Transfer Date, the Originator shall deliver such other documents as
the Transferor or the Note Insurer may reasonably request.
(F) Other Transactions. The transactions contemplated by the Sale
and Servicing Agreement, the Indenture and the Underwriting Agreement
in respect of the Receivables shall be consummated on the Closing
Date.
4.2. Conditions to Obligations of the Originator. (a) The obligation of the
Originator to sell the Initial Receivables to the Transferor is subject to the
satisfaction of the following conditions:
(i) Representations and Warranties True. The representations and
warranties of the Transferor hereunder shall be true and correct on the
Closing Date with the same effect as if then made, and the Transferor shall
have performed all obligations to be performed by it hereunder on or prior
to the Closing Date.
(ii) Receivables Purchase Price. At the Closing Date, the Transferor
shall deliver to, or at the direction of, the Originator, the Initial
Receivables Purchase Price as provided in Section 2.1(b), pursuant to wire
instructions to be delivered to the Transferor on or prior to the Closing
Date.
(b) The obligation of the Originator to sell Subsequent Receivables to the
Transferor on the related Subsequent Transfer Date is subject to the
satisfaction of the following conditions:
(i) Representations and Warranties True. The representations and
warranties of the Transferor hereunder shall be true and correct on the
related Subsequent Transfer Date with the same effect as if then made, and
the Transferor shall have performed all obligations to be performed by it
hereunder on or prior to the related Subsequent Transfer Date.
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(ii) Subsequent Receivables Purchase Price. On the related Subsequent
Transfer Date, the Transferor shall deliver to, or at the direction of, the
Originator, the related Subsequent Receivables Purchase Price as provided
in Section 2.3(b), pursuant to wire instructions to be delivered to the
Transferor on or prior to the related Subsequent Transfer Date.
ARTICLE V
COVENANTS OF THE ORIGINATOR
The Originator agrees with the Transferor as follows; provided, however,
that to the extent that any provision of this ARTICLE V conflicts with any
provision of the Sale and Servicing Agreement, the Sale and Servicing Agreement
shall govern:
5.1. Protection of Right, Title and Interest.
(a) Filings. The Originator shall cause all financing statements and
continuation statements and any other necessary documents covering the right,
title and interest of the Transferor in and to the Receivables and the other
Transferred Property 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
Transferor hereunder, the Issuer under the Sale and Servicing Agreement and the
Indenture Trustee on behalf of the Noteholders and the Note Insurer under the
Indenture to the Receivables and the other Transferred Property. The Originator
shall deliver to the Transferor, the Indenture Trustee and the Note Insurer 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 Transferor shall cooperate fully with the Originator
in connection with the obligations set forth above and will execute any and all
documents reasonably required to fulfill the intent of this Section 5.1(a). In
the event the Originator fail to perform their obligations under this
subsection, the Transferor or the Trust Collateral Agent may do so at the
expense of the Originator.
(b) Name and Other Changes. At least 60 days prior to the date the
Originator makes any change in its name, identity or corporate structure which
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 Originator shall give the Trust Collateral
Agent, the Note Insurer and the Transferor written notice of any such change and
no later than five days after the effective date thereof, shall file appropriate
amendments to all previously filed financing statements or continuation
statements. At least 60 days prior to the date of any relocation of its
principal executive office or jurisdiction of organization, the Originator shall
give the Trust Collateral Agent, the Note Insurer and the Transferor written
notice thereof 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 and the
Originator shall within five days after the effective date thereof, file any
such amendment or new financing statement. The Originator shall at all times
maintain each office from which it shall service Receivables, and its principal
executive office, within the United States of America.
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(c) Accounts and Records. The Originator shall maintain accounts and
records as to each Receivable accurately and in sufficient detail to permit the
reader thereof to know at any time the status of such Receivable, including
payments and recoveries made and payments owing (and the nature of each).
(d) Maintenance of Computer Systems. The Originator shall maintain its
computer systems so that, from and after the time of conveyance hereunder of the
Receivables to the Transferor, the conveyance of the Receivables to the Issuer
and the pledge of the Receivables to the Indenture Trustee, the Originator's
master computer records (including any back-up archives) that refer to a
Receivable shall indicate clearly that such Receivable has been sold the
Transferor and thereafter conveyed to the Issuer and pledged to the Indenture
Trustee. Indication of the Transferor's, Issuer's and Indenture Trustee's
respective interest in a Receivable shall be deleted from or modified on the
Originator's computer systems when, and only when, the Receivable shall have
been paid in full or repurchased.
(e) Sale of Other Receivables. If at any time the Originator shall propose
to sell, grant a security interest in, or otherwise transfer any interest in any
automobile, van, sport utility vehicle or light duty truck installment sale
contracts (other than the Receivables) to any prospective purchaser, lender, or
other transferee, the Originator shall give to such prospective purchaser,
lender or other transferee computer tapes, records, or print-outs (including any
restored from back-up archives) that, if they shall refer in any manner
whatsoever to any Receivable, shall indicate clearly that such Receivable has
been pledged to the Indenture Trustee unless such Receivable has been paid in
full or repurchased.
(f) Access to Records. The Originator shall, upon reasonable notice, permit
the Transferor, the Note Insurer, the Indenture Trustee, the Trust Collateral
Agent, the Servicer and their respective agents at any time during normal
business hours to inspect, audit, and make copies of and abstracts from the
Originator's records regarding any Receivable.
(g) List of Receivables. Upon request, the Originator shall furnish to the
Transferor, within five Business Days, a list of all Receivables (by contract
number and name of Obligor) then owned by the Transferor, together with a
reconciliation of such list to the Schedule of Receivables.
(h) Other Actions. The Originator shall from time to time, at its expense,
promptly execute and deliver all further instruments and documents (including,
without limitation, powers of attorney for the benefit of the Servicer) and take
all further action that may be necessary or desirable to permit the Servicer to
perform its obligations under the Sale and Servicing Agreement, including,
without limitation, the Servicer's obligation to preserve and maintain the
perfected security interest of the Indenture Trustee in the Receivables and the
Financed Vehicles.
5.2. Other Liens or Interests. Except for the conveyances hereunder, the
conveyances pursuant to the Sale and Servicing Agreement and each Transfer
Agreement and the pledge pursuant to the Indenture, the Originator will not
sell, pledge, assign or transfer to any other Person, or grant, create, incur,
assume or suffer to exist any Lien on any interest therein, and the Originator
shall defend the right, title, and interest of the Transferor, the Issuer and
the
24
Indenture Trustee in, to and under the Receivables against all claims of third
parties claiming through or under the Originator; provided, however, that the
Originator's obligations under this Section 5.2 shall terminate upon the
termination of the Issuer pursuant to the Sale and Servicing Agreement.
5.3. Chief Executive Office. During the term of the Receivables, the
Originator will maintain its chief executive office in one of the United States
of America.
5.4. Costs and Expenses. The Originator will pay all expenses incident to
the performance of the Originator's obligations under this Purchase Agreement
and the Originator agrees to pay all reasonable out-of-pocket costs and expenses
of the Transferor, excluding fees and expenses of counsel to the Transferor, in
connection with the perfection as against third parties of the Issuer's and the
Indenture Trustee's right, title and interest in and to the Receivables and
security interests in the Financed Vehicles and the enforcement of any
obligation of the Originator hereunder.
5.5. Delivery of Receivable Files. On or prior to the Closing Date, in the
case of the Initial Receivables, or the related Subsequent Transfer Date, in the
case of the Subsequent Receivables, [the Originator shall deliver the related
Contact Files to the Trust Collateral Agent]. The Originator, following receipt
from the Trust Collateral Agent of notification that there has been a failure to
deliver a Receivable File with respect to a Receivable or that any of the
documents referred to in the definition of the term "Receivable File" is not
contained in a Receivable File shall deliver such Receivable File or any of the
aforementioned documents required to be included in such Receivable File to the
Trust Collateral Agent no later than the Closing Date or the related Subsequent
Transfer Date, as applicable. Unless such defect with respect to such Receivable
File shall have been cured by the last day of the first Collection Period
following discovery thereof, the Originator hereby agrees to repurchase any such
Receivable from the Issuer as of such last day. In consideration of the purchase
of the Receivable, the Originator shall remit the Purchase Amount in the manner
specified in Section 5.05(a) of the Sale and Servicing Agreement. The sole
remedy hereunder of the Indenture Trustee, the Trust Collateral Agent, the
Issuer or the Noteholders with respect to a breach of this Section 5.5 shall be
to require the Originator to repurchase the Receivable pursuant to this Section
5.5; provided, however, that the Originator shall indemnify the Owner Trustee,
the Issuer, the Indenture Trustee, the Trust Collateral Agent, the Note Insurer,
the Indenture Trustee, the Back-up Servicer, the Collateral Agent, the
Noteholders, the Certificateholder and their respective officers, directors and
employees 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 a Repurchase Event. Upon receipt of the Purchase
Amount and any related indemnity payments, the Trust Collateral Agent shall
release to the Originator or its designee the related Receivable File and shall
execute and deliver all instruments of transfer or assignment, without recourse,
as are prepared by the Originator and delivered to the Trust Collateral Agent
and are necessary to vest in the Originator or such designee the Transferor's
and the Issuer's right, title and interest in the Receivable.
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5.6. Indemnification.
(a) The Originator shall defend, indemnify and hold harmless the
Transferor, the Note Insurer, the Indenture Trustee, the Back-up Servicer, the
Collateral Agent, the Trust Collateral Agent, the Owner Trustee, the Issuer, the
Noteholders and the Certificateholder for any liability as a result of the
failure of a Receivable to be originated in compliance with all requirements of
law and for any breach of any of its representations and warranties contained
herein or in the related Transfer Agreement.
(b) The Originator shall defend, indemnify and hold harmless the
Transferor, the Note Insurer, the Indenture Trustee, the Back-up Servicer, the
Collateral Agent, the Trust Collateral Agent, the Owner Trustee, the Issuer, the
Noteholders and the Certificateholder 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 the Originator or any Affiliate thereof
of a Financed Vehicle.
(c) The Originator shall defend, indemnify and hold harmless the
Transferor, the Note Insurer, the Indenture Trustee, the Back-up Servicer, the
Collateral Agent, the Trust Collateral Agent, the Owner Trustee, the Issuer, the
Noteholders and the Certificateholder 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 the Originator in respect of any portion
of the Trust Property other than in accordance with this Purchase Agreement, any
Transfer Agreement or any other Basic Document.
(d) The Originator shall defend, indemnify and hold harmless the
Transferor, the Note Insurer, the Indenture Trustee, the Back-up Servicer, the
Collateral Agent, the Trust Collateral Agent, the Owner Trustee, the Issuer, the
Noteholders and the Certificateholder from and against any and all taxes, except
for taxes on the net income of the Transferor, the Note Insurer, the Indenture
Trustee, the Back-up Servicer, the Collateral Agent, the Trust Collateral Agent,
the Owner Trustee, the Issuer, the Noteholders or the Certificateholder, as the
case may be, that may at any time be asserted against the Transferor with
respect to the transactions contemplated herein and in each Transfer Agreement,
including, without limitation, any sales, general corporation, tangible personal
property, privilege, or license taxes and costs and expenses in defending
against the same.
(e) The Originator shall defend, indemnify and hold harmless the
Transferor, the Note Insurer, the Indenture Trustee, the Back-up Servicer, the
Collateral Agent, the Trust Collateral Agent, the Owner Trustee, the Issuer, the
Noteholders and the Certificateholder from and against any and all costs,
expenses, losses, damages, claims and liabilities to the extent that such cost,
expense, loss, damage, claim or liability arose out of, or was imposed upon the
Transferor, the Note Insurer, the Indenture Trustee, the Back-up Servicer, the
Collateral Agent, the Trust Collateral Agent, the Owner Trustee, the Issuer, the
Noteholders and the Certificateholder, as the case may be, through the
negligence, willful misfeasance, or bad faith of the Originator in the
performance of its duties under this Purchase Agreement, any Transfer Agreement
or any other Basic Document to which it is a party, or by reason of reckless
disregard of the Originator's obligations and duties under this Purchase
Agreement, any Transfer Agreement or any other Basic Document to which it is a
party.
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(f) The Originator shall defend, indemnify and hold harmless the
Transferor, the Note Insurer, the Indenture Trustee, the Back-up Servicer, the
Collateral Agent, the Trust Collateral Agent, the Owner Trustee, the Issuer, the
Noteholders and the Certificateholder from and against all costs, expenses,
losses, damages, claims and liabilities arising out of or incurred in connection
with the acceptance or performance of the Originator's duties under this
Purchase Agreement or any Transfer Agreement and the other Basic Documents to
which it is a party, including the trusts and duties as Servicer under the Sale
and Servicing Agreement, except to the extent that such cost, expense, loss,
damage, claim or liability shall be due to the willful misfeasance, bad faith or
negligence of the Transferor, the Note Insurer, the Indenture Trustee, the
Back-up Servicer, the Collateral Agent, the Trust Collateral Agent, the Owner
Trustee, the Issuer, the Noteholders or the Certificateholder, as the case may
be.
(g) The Originator shall defend, indemnify and hold harmless the
Transferor, the Note Insurer, the Indenture Trustee, the Back-up Servicer, the
Collateral Agent, the Trust Collateral Agent, the Owner Trustee, the Issuer, the
Noteholders and the Certificateholder against any and all costs, expenses,
losses, damages, claims and liabilities arising out of or resulting from the
failure of any Receivable or the sale of the related Financed Vehicle to comply
with all requirements of applicable law.
Indemnification under this Section shall include reasonable fees and
expenses of litigation and shall survive termination of the Issuer. These
indemnity obligations shall be in addition to any obligation that the Originator
may otherwise have.
5.7. Sale. The Originator agrees to treat each conveyance hereunder for all
purposes (including, without limitation, tax and financial accounting purposes)
as a sale on all relevant books, records, tax returns, financial statements and
other applicable documents.
5.8. Non-Petition. The Originator, solely in its capacity as a creditor of
the Transferor, covenants and agrees that it shall not, until a year and a day
have passed since the date on which all securities issued by the Issuer or a
similar trust formed by the Transferor have been paid in full, petition or
otherwise invoke the process of commencing or sustaining an involuntary case
against the Transferor 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 Transferor or any substantial part
of its property, or ordering the winding up or liquidation of the affairs of the
Transferor. The Transferor and the Originator agree that damages will not be an
adequate remedy for such breach and that this covenant may be specifically
enforced by the Transferor or by the Indenture Trustee on behalf of the Issuer.
ARTICLE VI
MISCELLANEOUS PROVISIONS
6.1. Obligations of the Originator. The obligations of the Originator under
this Purchase Agreement and each Transfer Agreement shall not be affected by
reason of any invalidity, illegality or irregularity of any Receivable.
27
6.2. Repurchase Events. The Originator hereby covenants and agrees with the
Transferor for the benefit of the Transferor, the Issuer, the Indenture Trustee,
the Trust Collateral Agent, the Note Insurer, the Noteholders and the
Certificateholder, that (i) the occurrence of a breach of any of the
Originator's representations and warranties contained in Section 3.2(b) hereof
or Section 4 of the related Transfer Agreement, as applicable (in each case
without regard to any limitations regarding the Originator's knowledge), and
(ii) the failure of the Originator to timely comply with its obligations
pursuant to Section 5.5 hereof, shall constitute events obligating the
Originator to repurchase the affected Receivables hereunder ("Repurchase
Events"), at the Purchase Amount from the Issuer. Unless the breach of any of
the Originator's representations and warranties shall have been cured by the
last day of the first full Collection Period following the discovery thereof by
or notice to the Originator of such breach, the Originator shall repurchase any
Receivable if such Receivable or the interest therein of the Transferor, the
Issuer, the Noteholders, the Certificateholder or the Note Insurer is materially
and adversely affected by the breach, as of such last day. The provisions of
this Section 6.2 are intended to grant the Indenture Trustee a direct right
against the Originator acting at the direction or with the consent of the Note
Insurer to demand performance hereunder, and in connection therewith the
Originator waives any requirement of prior demand against the Transferor and
waives any defaults it would have against the Transferor with respect to such
repurchase obligation. In addition to the foregoing, the Originator shall be
under an obligation to promptly purchase from the Transferor (in its capacity as
Transferor under the Sale and Servicing Agreement) any Receivable required to be
repurchased by the Transferor pursuant to a breach of its obligations in the
Sale and Servicing Agreement, including, without limitation, the Transferor's
repurchase obligations set forth in Section 3.02 of the Sale and Servicing
Agreement. Any such purchase described in this Section shall take place in the
manner specified in Section 5.05 of the Sale and Servicing Agreement. The sole
remedy (except as otherwise set forth below) hereunder of the Noteholders, the
Certificateholder, the Issuer, the Note Insurer, the Indenture Trustee or the
Transferor against the Originator with respect to any Repurchase Event shall be
to enforce the Originator's obligation to repurchase such Receivables pursuant
to this Purchase Agreement; provided, however, that the Originator shall
indemnify the Owner Trustee, the Issuer, the Indenture Trustee, the Trust
Collateral Agent, the Note Insurer, the Indenture Trustee, the Back-up Servicer,
the Collateral Agent, the Noteholders, the Certificateholder and their
respective officers, directors and employees 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 a
Repurchase Event. Upon receipt of the Purchase Amount and any related indemnity
payments, the Trust Collateral Agent shall release the related Receivable File
to the Originator and execute and deliver all instruments of transfer or
assignment, without recourse, as are necessary to vest in the Originator the
Transferor's and the Issuer's right, title and interest in the Receivable.
6.3. Originator's Assignment of Purchased Receivables. With respect to all
Receivables repurchased by the Originator pursuant to this Purchase Agreement,
the Transferor shall assign, without recourse except as provided herein,
representation or warranty, to the Originator all the Transferor's right, title
and interest in and to such Receivables, and all security and documents relating
thereto.
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6.4. Conveyance as Sale of Receivables Not Financing. The parties hereto
intend that each conveyance hereunder and under the Assignments be a sale of the
related Receivables and the other Transferred Property relating thereto from the
Originator to the Transferor and not a financing secured by such assets; and the
beneficial interest in and title to such Receivables and the other Transferred
Property shall not be part of the Originator's respective estate in the event
the Originator becomes insolvent or a conservator or receiver is appointed for
the Originator. In the event that any conveyance hereunder or under any
Assignment is for any reason not considered a sale, the parties intend that this
Purchase Agreement or such Assignment constitute a security agreement under the
UCC (as defined in the UCC as in effect in the State of New York) and applicable
law, and the Originator hereby grants to the Transferor a first priority
security interest in, to and under the Receivables and the other Transferred
Property being delivered to the Transferor on the Closing Date and each
Subsequent Transfer Date, and other property conveyed hereunder and all proceeds
of any of the foregoing for the purpose of securing payment and performance of
the Notes and the Certificate and the repayment of amounts owed to the
Transferor from the Originator.
6.5. Assignment of Rights. The Originator acknowledges that (i) the
Transferor will, pursuant to the Sale and Servicing Agreement in the case of the
Initial Receivables, and pursuant to the Sale and Servicing Agreement and the
related Transfer Agreement in the case of the Subsequent Receivables, convey the
Receivables and assign its rights under this Purchase Agreement to the Issuer
and (ii) the Issuer will, pursuant to the Indenture, pledge all of its right,
title and interest in the Receivables and the other Transferred Property and
pledge its rights under this Purchase Agreement, the Sale and Servicing
Agreement and each Transfer Agreement to the Indenture Trustee for the benefit
of the Noteholders and the Note Insurer, and that the representations and
warranties contained in this Purchase Agreement and each Transfer Agreement and
the rights of the Transferor under this Purchase Agreement and each Transfer
Agreement, including, without limitation, under Section 6.2 hereof, are intended
to benefit the Noteholders and the Note Insurer. The Originator also acknowledge
that the Indenture Trustee on behalf of the Noteholders and the Note Insurer, as
assignees of the Transferor's rights hereunder may directly enforce, without
making any prior demand on the Transferor, all the rights of the Transferor
hereunder, including, without limitation, the rights under Section 6.2 hereof.
The Originator hereby consents to such sale and assignment.
6.6. Amendment. This Purchase Agreement may be amended from time to time by
a written amendment duly executed and delivered by the Originator and the
Transferor with the prior written consent of the Note Insurer; provided,
however, that any such amendment that materially and adversely affects the
rights of the Noteholders must be consented to by the Majority Noteholders. The
parties hereto agree to provide the Rating Agencies with prior notice of, and a
copy of, any amendment to this Purchase Agreement.
6.7. Accountants' Letters. (a) Deloitte & Touche will review in accordance
with procedures previously agreed to by the Originator and the Transferor,
certain information with respect to the characteristics of the Receivables; (b)
the Originator will cooperate with the Transferor and Deloitte & Touche in
making available all information and taking all steps reasonably necessary to
permit such accountants to complete the review necessary to provide the
confirmation set forth in clause (a) above and to deliver the letters required
of them under the Underwriting Agreement; and (c) Deloitte & Touche will deliver
to the Transferor and the Note
29
Insurer a letter, dated the Closing Date or such later date as the Prospectus
shall be available and a letter or letters dated each Subsequent Transfer Date,
each in the form previously agreed to by the Originator, the Transferor and the
Note Insurer, with respect to certain financial and statistical information
contained in the Prospectus [and Private Placement Memoranda], certain
information relating to the Receivables on magnetic tape or other electronic
format obtained from the Originator and the Transferor and with respect to such
other information as may be agreed in the form of letter.
6.8. Waivers. No failure or delay on the part of the Transferor in
exercising any power, right or remedy under this Purchase Agreement, any
Assignment or any Transfer 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 further exercise thereof or the exercise of any other power, right
or remedy.
6.9. Notices. All demands, notices, and communications upon or to either
party or the Note Insurer under this Agreement shall be in writing, personally
delivered, mailed by certified mail, return receipt requested or delivered by
overnight courier, and shall be deemed to have been duly given upon receipt. In
the case of the Originator at the following address: United Fidelity Bank, FSB,
18 N.W. Fourth Street, P. O. Xxx 0000, Xxxxxxxxxx, Xxxxxxx 00000-0000,
Attention: President; at the following phone number: (000) 000-0000; and at the
following fax number (000) 000-0000. In the case of the Transferor at the
following address: United Fidelity Finance, LLC, 00 X.X. Xxxxxx Xxxxxx, P. O.
Xxx 0000, Xxxxxxxxxx, Xxxxxxx 00000-0000, Attention: President; at the following
phone number: [_____________]; and at the following fax number [_____________].
In the case of the Note Insurer, to: ______________________,
______________________, _______________, __________ _____, Attention:
______________________________, Confirmation: _________, Telecopy No. __________
(in each case in which notice or other communication to _______________ refers
to an Event of Default, a claim on the Policy or with respect to which failure
on the part of _______________ to respond shall be deemed to constitute consent
or acceptance, then a copy of such notice of other communication should also be
sent to the attention of each of the General Counsel and the Head-Financial
Guaranty Group and shall be marked to indicate "URGENT MATERIAL ENCLOSED");
6.10. Confidential Information. The Transferor agrees that it will neither
use nor disclose to any person the names and addresses of the Obligors, except
in connection with the enforcement of the Transferor's rights hereunder, under
the Receivables, under the Sale and Servicing Agreement or as required by law.
6.11. Headings and Cross-References. The various headings in this Purchase
Agreement are included for convenience only and shall not affect the meaning or
interpretation of any provision of this Purchase Agreement. References in this
Purchase Agreement to Section names or numbers are to such Sections of this
Purchase Agreement.
6.12. Third Party Beneficiaries. The parties hereto hereby expressly agree
that each of the Indenture Trustee for the benefit of the Noteholders and the
Note Insurer, and the Note Insurer, shall be third party beneficiaries with
respect to this Purchase Agreement, each Assignment and each Transfer Agreement;
provided, however, that no third party other than the
30
Indenture Trustee for the benefit of the Noteholders and the Note Insurer, and
the Note Insurer, is a third party beneficiary of this Purchase Agreement, each
Assignment and each Transfer Agreement, and each such party may rely on the
representations, warranties, covenants and agreements of the Originator herein
and therein as if they were addressed to each of them. As a third party
beneficiary to the provisions of this Purchase Agreement, each Assignment and
each Transfer Agreement, the Note Insurer and its successors and assigns shall
be entitled to rely upon and directly enforce the provisions of this Purchase
Agreement, each Assignment and each Transfer Agreement so long as no Insurer
Default shall have occurred and be continuing. Except as expressly stated
otherwise herein or in the Basic Documents, any right of the Note Insurer to
direct, appoint, consent to, approve of, or take any action under this Purchase
Agreement, shall be a right exercised by the Note Insurer in its sole and
absolute discretion. The Note Insurer may disclaim any of its rights and powers
under this Purchase Agreement (but not its duties and obligations under the
Policy) upon delivery of a written notice to the Indenture Trustee.
6.13. Governing Law. THIS PURCHASE AGREEMENT AND EACH ASSIGNMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF
NEW YORK WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES (EXCEPT WITH REGARD TO
THE UCC).
6.14. Counterparts. This Purchase Agreement may be executed in two or more
counterparts and by different parties on separate counterparts, each of which
shall be an original, but all of which together shall constitute one and the
same instrument.
6.15. Effect of Policy Expiration Date. Notwithstanding anything to the
contrary set forth herein, all references to any right of the Note Insurer to
direct, appoint, consent to, accept, approve of, take or omit to take any action
under this Purchase Agreement or any other Basic Document shall be inapplicable
at all times after the Policy Expiration Date, and (i) if such reference
provides for another party or parties to take or omit to take such action
following an Insurer Default, such party or parties shall also be entitled to
take or omit to take such action following the Policy Expiration Date and (ii)
if such reference does not provide for another party or parties to take or omit
to take such action following an Insurer Default, then the Indenture Trustee
acting at the direction of the Majority Noteholders shall have the right to take
or omit to take any such action following the Policy Expiration Date. In
addition, any other provision of this Purchase Agreement or any other Basic
Document which is operative based in whole or in part on whether an Insurer
Default has or has not occurred shall, at all times on or after the Policy
Expiration Date, be deemed to refer to whether or not the Policy Expiration Date
has occurred.
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IN WITNESS WHEREOF, the parties hereto have caused this PURCHASE AGREEMENT
to be executed by their respective officers thereunto duly authorized as of the
date and year first above written.
UNITED FIDELITY BANK, FSB,
As Originator
By:
--------------------------------------
Name:
Title:
UNITED FIDELITY FINANCE, LLC
As Transferor
By:
--------------------------------------
Name:
Title:
[Signature Page to the Purchase Agreement]
