EXHIBIT 10.1
EXECUTION COPY
PURCHASE AGREEMENT
between
THE FINANCE COMPANY, Seller
and
TFC RECEIVABLES CORPORATION IV, Purchaser
dated as of March 30, 2001
TABLE OF CONTENTS
Page
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ARTICLE I DEFINITIONS.................................................................... 1
SECTION 1.1 General................................................................... 1
SECTION 1.2 Specific Terms............................................................ 2
SECTION 1.3 Usage of Terms............................................................ 3
SECTION 1.4 Certain References........................................................ 3
SECTION 1.5 No Recourse............................................................... 3
SECTION 1.6 Action by or Consent of Noteholders and Certificateholders................ 3
SECTION 1.7 Material Adverse Effect................................................... 4
ARTICLE II CONVEYANCE OF THE RECEIVABLES AND THE OTHER CONVEYED PROPERTY.................. 4
SECTION 2.1 Conveyance of the Receivables and the Other Conveyed Property............. 4
ARTICLE III REPRESENTATIONS AND WARRANTIES................................................. 6
SECTION 3.1 Representations and Warranties of Seller.................................. 6
SECTION 3.2 Representations and Warranties of Purchaser............................... 9
ARTICLE IV COVENANTS OF SELLER............................................................ 12
SECTION 4.1 Protection of Title of Purchaser.......................................... 12
SECTION 4.2 Other Liens or Interests.................................................. 13
SECTION 4.3 Costs and Expenses........................................................ 13
SECTION 4.4 Indemnification........................................................... 14
ARTICLE V REPURCHASES.................................................................... 16
SECTION 5.1 Repurchase of Receivables Upon Breach of Warranty......................... 16
SECTION 5.2 Reassignment of Purchased Receivables..................................... 16
SECTION 5.3 Waivers................................................................... 17
ARTICLE VI MISCELLANEOUS.................................................................. 17
SECTION 6.1 Liability of Seller....................................................... 17
SECTION 6.2 Merger or Consolidation of Seller or Purchaser............................ 17
SECTION 6.3 Limitation on Liability of Seller and Others.............................. 18
SECTION 6.4 Seller May Own Notes or Certificates...................................... 18
SECTION 6.5 Amendment................................................................. 19
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SECTION 6.6 Notices................................................................... 20
SECTION 6.7 Merger and Integration.................................................... 20
SECTION 6.8 Severability of Provisions................................................ 20
SECTION 6.9 Intention of the Parties.................................................. 20
SECTION 6.10 Governing Law............................................................. 21
SECTION 6.11 Counterparts.............................................................. 21
SECTION 6.12 Conveyance of the Receivables and the Other Conveyed Property to the
Issuer.................................................................... 21
SECTION 6.13 Nonpetition Covenant...................................................... 21
SECTION 6.14 Third Party Beneficiary................................................... 21
SECTION 6.15 Limitation of Liability................................................... 22
SCHEDULES
SCHEDULE A Schedule of Receivables
SCHEDULE B Representations and Warranties of Seller
SCHEDULE C The Finance Company Charge-Off Policy
SCHEDULE D Assignment
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PURCHASE AGREEMENT
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THIS PURCHASE AGREEMENT, dated as of March 30, 2001, executed between TFC
Receivables Corporation IV, a Delaware corporation, as purchaser ("Purchaser"),
and The Finance Company, a Virginia corporation, as seller ("Seller").
W I T N E S S E T H:
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WHEREAS, Seller and Purchaser are entering into this Agreement to provide for,
among other things, the acquisition by Purchaser of all of the right, title and
interests of Seller in and to the Receivables and the Other Conveyed Property on
the Closing Date;
WHEREAS, as a precondition to the effectiveness of this Agreement, Seller, the
Trustee, the Trust Collateral Agent, the Back-up Servicer, the Successor
Servicer, the Insurer and the Issuer will enter into the Sale and Servicing
Agreement to provide for the servicing of the Receivables;
WHEREAS, Purchaser is and will be conveying to the Issuer, among other things,
all of Purchaser's rights derived under this Agreement and the Sale and
Servicing Agreement, and Seller and Purchaser each agree that all covenants,
representations, warranties and agreements made by it in this Agreement with
respect to itself or the Receivables shall also be for the benefit of the
Trustee, on behalf of the Noteholders, and the Insurer;
WHEREAS, in connection with the issuance of the Notes, Seller will transfer the
Receivables or other consideration to Purchaser in exchange for such Notes;
WHEREAS, the transfer will be effected by this Agreement and an Assignment
between Seller and Purchaser, and the list of Receivables so conveyed will be
listed on Schedule A attached hereto;
WHEREAS, Purchaser has agreed to purchase from Seller, and Seller, pursuant to
this Agreement, is transferring to Purchaser the Receivables and Other Conveyed
Property;
NOW, THEREFORE, in consideration of the premises and the mutual agreements
hereinafter contained, and for other good and valuable consideration, the
receipt of which is acknowledged, Purchaser and Seller, intending to be legally
bound, hereby agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1 General. Capitalized terms used herein without
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definition shall have the respective meanings assigned to such terms in the Sale
and Servicing Agreement dated as of March 30, 2001, by and among Asset Guaranty
Insurance Company, as Insurer, The Finance Company, in its capacity as Servicer,
TFC Automobile
Receivables Trust 2001-1, as Issuer, TFC Receivables Corporation IV, as Seller,
Xxxxx Fargo Bank Minnesota, National Association, as Back-up Servicer and Trust
Collateral Agent and Xxxxx Fargo Financial America, Inc., as Successor Servicer.
SECTION 1.2 Specific Terms. Whenever used in this Agreement, the
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following words and phrases, unless the context otherwise requires, shall have
the following meanings:
"Agreement" means this Purchase Agreement and all amendments hereof
and supplements hereto.
"Closing Date" means April 2, 2001.
"Contracts Purchase Price" shall mean $80,000,002.
"Indenture Trustee" means Xxxxx Fargo Bank Minnesota, National
Association, and any successor Indenture Trustee appointed and acting pursuant
to the Indenture.
"Issuer" means TFC Automobile Receivables Trust 2001-1.
"Other Conveyed Property" means all money, instruments, rights and
other property that are subject or intended to be subject to the lien and
security interest of the Indenture (including all property and interests granted
to the Trust Collateral Agent), including all proceeds thereof, other than the
Receivables.
"Owner Trustee" means Wilmington Trust Company, not in its individual
capacity but solely as Owner Trustee appointed and acting pursuant to the Trust
Agreement.
"Receivables" means the Receivables listed on the Schedule of
Receivables attached hereto as Schedule A.
"Related Documents" means the Notes, the Certificates, the Custodian
Agreement (if any), the Sale and Servicing Agreement, the Indenture, the Trust
Agreement, the Note Policy, Servicer Termination Side Letter, the Insurance
Agreement, the Indemnification Agreement, the Note Purchase Agreement, the
Standby Processing Agreement, and the Premium Letter. The Related Documents to
be executed by any party are referred to herein as "such party's Related
Documents" or "its Related Documents" or by a similar expression.
"Repurchase Event" means the occurrence of a breach of any of Seller's
representations and warranties hereunder or any other event which requires the
repurchase of a Receivable by Seller or Purchaser under the Sale and Servicing
Agreement.
"Sale and Servicing Agreement" means the Sale and Servicing Agreement
referred to in Section 1.1 hereof.
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"Schedule of Receivables" means the schedule of Receivables sold and
transferred pursuant to this Agreement which is attached hereto as Schedule A.
"Schedule of Representations" means the Schedule of Representations
and Warranties attached hereto as Schedule B.
"Security Majority" means a majority by principal amount of the
Noteholders so long as the Notes are outstanding and a majority by principal
amount of the Certificateholders thereafter.
"Trust Collateral Agent" means Xxxxx Fargo Bank Minnesota, National
Association, as trust collateral agent and any successor trust collateral agent
appointed and acting pursuant to the Sale and Servicing Agreement.
SECTION 1.3 Usage of Terms. With respect to all terms used in this
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Agreement, the singular includes the plural and the plural includes the
singular; words importing any gender include the other gender; references to
"writing" include printing, typing, lithography, and other means of reproducing
words in a visible form; references to agreements and other contractual
instruments include all subsequent amendments thereto or changes therein entered
into in accordance with their respective terms and not prohibited by this
Agreement or the Sale and Servicing Agreement; references to Persons include
their permitted successors and assigns; any form of the word "include" shall be
deemed to be followed by the words "without limitation"; "the words "herein",
"hereof" and "hereunder" and other words of similar import refer to this
Agreement as a whole and not to any particular Article, Section or other
subdivision; and Article, Section, Schedule and Exhibit references, unless
otherwise specified, refer to Articles and Sections of and Schedules and
Exhibits to this Agreement.
SECTION 1.4 Certain References. All references to the Principal
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Balance of a Receivable as of any date of determination shall refer to the close
of business on such day, or as of the first day of a Monthly Period shall refer
to the opening of business on such day. All references to the last day of a
Monthly Period shall refer to the close of business on such day.
SECTION 1.5 No Recourse. Without limiting the obligations of Seller
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hereunder, no recourse may be taken, directly or indirectly, under this
Agreement or any certificate or other writing delivered in connection herewith
or therewith, against any stockholder, officer or director, as such, of Seller,
or of any predecessor or successor of Seller.
SECTION 1.6 Action by or Consent of Noteholders and
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Certificateholders. Whenever any provision of this Agreement refers to action
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to be taken, or consented to, by Noteholders or Certificateholders, such
provision shall be deemed to refer to the Certificateholder or Noteholder, as
the case may be, of record as of the Record Date immediately preceding the date
on which such action is to be taken, or consent given, by Noteholders or
Certificateholders. Solely for the purposes of any action to be taken, or
consented to, by Noteholders or Certificateholders, any Note or
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Certificate registered in the name of Seller or any Affiliate thereof shall be
deemed not to be outstanding; provided, however, that, solely for the purpose of
determining whether the Indenture Trustee or the Trust Collateral Agent is
entitled to rely upon any such action or consent, only Notes or Certificates
which the Owner Trustee, the Indenture Trustee or the Trust Collateral Agent,
respectively, knows to be so owned shall be so disregarded.
SECTION 1.7 Material Adverse Effect. Whenever used in the Basic
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Documents, "Material Adverse Effect" or "material adverse effect" means (i) when
used with respect to any action, event, fact or other matter or thing, means
that such action, event, fact or other matter or thing will not, individually or
in the aggregate, have a material adverse effect on (a) the Trust, the Trust
Property or Collateral, (b) the existence, perfection or priority of the
security interests of the Trust Collateral Agent in the Collateral, (c) the
ability of the Trust Collateral Agent on behalf of the Noteholders to collect
on, liquidate, or foreclose against, the Collateral in accordance with the
Indenture, (d) the validity, enforceability, or the performance of any Person's
obligations under, or with respect to, the Basic Documents, or the validity,
enforceability, or performance of any Person's obligations under or with respect
to, or the payment of, the Notes, (e) the transactions contemplated by the Basic
Documents, (f) the business, operations, condition (financial or otherwise) or
prospects of TFC, Purchaser or the Issuer, (g) or the interests, right and/or
remedies hereunder, or otherwise with respect to the Collateral, or the Trust
Collateral Agent, the Trustee, the Insurer or any of the Noteholders (which
determination shall be made, in each case, without giving effect to the
existence of the Note Policy) and (ii) when used in relation to or in connection
with any Person also means that such action, event, fact or other matter or
thing shall not, individually or in the aggregate, have a material adverse
effect on the business, operations, condition (financial otherwise) or prospects
of such Person.
ARTICLE II
CONVEYANCE OF THE RECEIVABLES
AND THE OTHER CONVEYED PROPERTY
SECTION 2.1 Conveyance of the Receivables and the Other Conveyed
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Property.
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(a) Subject to the terms and conditions of this Agreement,
Seller hereby sells, transfers, assigns, and otherwise conveys to Purchaser
without recourse (but without limitation of its obligations in this Agreement),
and Purchaser hereby purchases, all right, title and interest of Seller in and
to:
(i) the Receivables and all monies paid or payable thereon on or
after the Cutoff Date (including amounts due on or before the Cutoff Date
but received by Seller on or after the Cutoff Date);
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(ii) the security interests in the Financed Vehicles granted by
Obligors pursuant to the Receivables and any other interest of Seller in
such Financed Vehicles;
(iii) any proceeds and the right to receive proceeds with respect to
the Receivables from claims on any physical damage, credit life or
disability insurance policies, if any, covering Financed Vehicles or
Obligors, and any proceeds from the liquidation of the Receivables;
(iv) all rights of Seller against Dealers pursuant to Dealer
Agreements or Dealer Assignments;
(v) all rights under any Service Contracts on the related Financed
Vehicles;
(vi) the related Receivables Files and any and all other documents
that Seller keeps on file in accordance with its customary procedures
relating to the Receivables, the Obligors or the Financed Vehicles;
(vii) property (including the right to receive future Net
Liquidation Proceeds) that secures a Receivable and that has been acquired
by or on behalf of Purchaser pursuant to liquidation of such Receivable;
(viii) the rights under the Standby Processing Agreement;
(ix) all of the Other Conveyed Property; and
(x) the proceeds of any and all of the foregoing.
It is the intention of Seller and Purchaser that the transfer and assignment
contemplated by this Agreement shall constitute a valid and enforceable sale of
the Receivables and the Other Conveyed Property from Seller to Purchaser,
conveying good title thereto, free and clear of any encumbrances or liens, and
the beneficial interest in and title to the Receivables and the Other Conveyed
Property shall not be part of Seller's estate in the event of the filing of a
bankruptcy petition by or against Seller under any bankruptcy or similar law,
and Seller delivers to Purchaser an assignment in the form attached hereto as
Schedule D with respect to the Receivables to be sold (the "Assignment").
However, in the event that, notwithstanding the intent of the parties hereto,
the Receivables are held to be property of Seller's estate, or if for any reason
this Agreement is held or deemed to create a security interest in the
Receivables, then (a) this agreement and the Assignment shall also be deemed to
be a security agreement within the meaning of Article 1, Article 8 and Article 9
of the Uniform Commercial Code as in effect in the State of New York and (b) the
transfers of the Receivables provided for in this Agreement and the Assignment
shall be deemed to be a grant by Seller to Purchaser of, and Seller hereby
grants to Purchaser, a security interest in all of Seller's rights, title and
interest in and to the Receivables. Seller hereby represents and warrants that
all Receivables transferred, assigned to and originated on behalf of Purchaser
hereunder shall be eligible contracts and that all assets conformed with the
Schedule of Representations and that all the Receivables acquired by Purchaser
do and shall conform with all of the requirements
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hereof. Seller hereby acknowledges that its transfer and assignment of the
Receivables to Purchaser is absolute and irrevocable, without reservation or
retention of any interests whatsoever by Seller.
To the extent that Seller shall retain any files or documentation, written or
electronic (collectively, "documents") pertaining to the Receivables, it shall
hold such documents in trust for the benefit of the Indenture Trustee as the
owner thereof. The possession of any such documents pertaining to the
Receivables by Seller (or any affiliate thereof other than Purchaser) is at the
will of Purchaser and for the sole purpose of servicing such Receivables, and
such retention and possession by Seller (or any affiliate thereof other than
Purchaser) is in a custodial capacity in its role as Servicer under the Sale and
Servicing Agreement and the Related Documents. The documents retained by Seller
relating to the Receivables shall be segregated from the books and records of
Seller and shall be marked appropriately to reflect clearly the transfer by
Seller of the Receivables to Purchaser.
(b) Simultaneously with the conveyance of the Receivables and
the Other Conveyed Property to Purchaser, Purchaser shall pay or cause to be
paid to or upon the order of Seller the Contracts Purchase Price. An amount
equal to approximately 75.3% of the Contracts Purchase Price shall be paid to
Seller in cash. The remaining approximately 24.7% of the Contracts Purchase
Price shall be deemed paid and returned to Purchaser and be considered a
contribution to capital. The portion of the Contracts Purchase Price to be paid
in cash shall be by wire transfer of immediately available funds.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.1 Representations and Warranties of Seller. Seller
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makes the following representations and warranties as of the date hereof on
which Purchaser relies in purchasing the Receivables and the Other Conveyed
Property and in transferring the Receivables and the Other Conveyed Property to
the Issuer under the Sale and Servicing Agreement and on which the Insurer will
rely in issuing the Note Policy, on which the Noteholders rely in purchasing the
Notes, and on which the Indenture Trustee relies in entering into the Related
Documents. Such representations are made as of the execution and delivery of
this Agreement but shall survive the sale, transfer and assignment of the
Receivables and the Other Conveyed Property hereunder, and the sale, transfer
and assignment thereof by Purchaser to the Issuer under the Sale and Servicing
Agreement. Seller and Purchaser agree that Purchaser will assign to Issuer all
Purchaser's rights under this Agreement and that the Trust Collateral Agent will
thereafter be entitled to enforce this Agreement against Seller in the Trust
Collateral Agent's own name on behalf of the Noteholders.
(i) Schedule of Representations. The representations and warranties
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set forth on the Schedule of Representations with respect to the
Receivables are true and correct as of the date hereof.
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(ii) Organization and Good Standing. Seller has been duly organized
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and is validly existing as a corporation in good standing under the laws of
the Commonwealth of Virginia, with power and authority to own its
properties and to conduct its business as such properties are currently
owned and such business is currently conducted, or is proposed to be
conducted, and had at all relevant times, and now has, power, authority and
legal right to acquire, own and sell the Receivables and the Other Conveyed
Property to be transferred to Purchaser.
(iii) Due Qualification. Seller is duly qualified to do business
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as a foreign corporation and is 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 acquisition and sale of the Receivables,
requires such qualification.
(iv) Power and Authority. Seller has the power and authority to
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execute and deliver this Agreement and its Related Documents and to perform
its obligations under this Agreement and its Related Documents; Seller has
full power and authority to sell and assign the Receivables and the Other
Conveyed Property to be sold and assigned to and deposited with Purchaser
hereunder and has duly authorized such sale and assignment to Purchaser by
all necessary corporate action; and the execution, delivery and performance
of this Agreement and Seller's Related Documents have been duly authorized
by Seller by all necessary corporate action.
(v) Valid Sale; Binding Obligations. This Agreement and Seller's
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Related Documents have been duly executed and delivered, shall effect a
valid sale, transfer and assignment of the Receivables and the Other
Conveyed Property to Purchaser, enforceable against Seller and creditors of
and purchasers from Seller and as a result of such sale, transfer and
assignment, Purchaser shall have a valid, first priority perfected
ownership interest in such Receivables and the Other Conveyed Property.
This Agreement and Seller's Related Documents constitute legal, valid and
binding obligations of Seller enforceable in accordance with their
respective terms, except as enforceability may be limited by bankruptcy,
insolvency, reorganization or other similar laws affecting the enforcement
of creditors' rights generally and by equitable limitations on the
availability of specific remedies, regardless of whether such
enforceability is considered in a proceeding in equity or at law.
(vi) No Violation. The consummation of the transactions
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contemplated by this Agreement and the Related Documents and the
fulfillment of the terms of this Agreement and the Related Documents shall
not conflict with, result in any breach of any of the terms and provisions
of or constitute (with or without notice, lapse of time or both) a default
under, the articles of incorporation or bylaws of Seller, or any indenture,
agreement, mortgage, deed of trust or other instrument to which Seller is a
party or by which it is bound, or result in the creation or imposition of
any Lien upon any of its properties pursuant to the terms of any such
indenture, agreement, mortgage, deed of trust or other instrument (other
than
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this Agreement, the Sale and Servicing Agreement and the Indenture and any
instruments, certificates and other documents executed pursuant to the
provisions thereof), or violate any law, order, rule or regulation
applicable to Seller of any court or of any federal or state regulatory
body, administrative agency or other governmental instrumentality having
jurisdiction over Seller or any of its properties.
(vii) No Proceedings. There are no proceedings or investigations
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pending or, to Seller's knowledge, after due inquiry, threatened against
Seller, before any court, regulatory body, administrative agency or other
tribunal or governmental instrumentality having jurisdiction over Seller or
its properties (i) asserting the invalidity of this Agreement or any of the
Related Documents, (ii) seeking to prevent the issuance of the Notes or the
consummation of any of the transactions contemplated by this Agreement or
any of the Related Documents, (iii) seeking any determination or ruling
that might materially and adversely affect the business, the operations,
the condition (financial or otherwise) or the prospects of Seller or affect
the performance by Seller of its obligations under, or the validity or
enforceability of, this Agreement or any of the Related Documents, (iv)
seeking to affect adversely the federal income tax or other federal, state
or local tax attributes of, or seeking to impose any excise, franchise,
transfer or similar tax upon, the transfer and acquisition of the
Receivables and the Other Conveyed Property hereunder or under the Sale and
Servicing Agreement or (v) that have a material adverse effect on the
Receivables.
(viii) Chief Executive Office. The chief executive office of Seller
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Seller is located at 0000 Xxxxx Xxxx Xxxx, Xxxxx 000X, Xxxxxxx, Xxxxxxxx
00000.
(ix) No Consents. Seller is not required to obtain the consent of
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any other party or any consent, license, approval or authorization, or
registration or declaration with, any governmental authority, bureau or
agency in connection with the execution, delivery, performance, validity or
enforceability of this Agreement which has not already been obtained.
(x) Approvals. All approvals, authorizations, consents, order or
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other actions of any person, corporation or other organization, or of any
court, governmental agency or body or official, required in connection with
the execution and delivery by Seller of this Agreement and the consummation
of the transactions contemplated hereby or will be taken or obtained on or
prior to the Closing Date.
(xi) Name. The legal name of Seller is as set forth in this
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Agreement, Seller has not changed its name during the six years prior to
the Closing Date and does not have any trade names, fictitious names,
assumed names or "doing business" names.
(xii) Solvency. Seller is solvent and will not become insolvent
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after giving effect to the transactions contemplated by the Basic
Documents. Seller is paying its debts as they become due and, after giving
effect to the transactions
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contemplated by the Basic Documents, will have adequate capital to conduct
its business.
(xiii) Pension Plan. All pension or profit sharing plans of Seller
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have been fully funded in accordance with applicable obligations.
(xiv) Substantive Consolidation. Seller, in its individual capacity
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and as Servicer confirms that the statement contained under "assumptions of
fact" in the opinion of Weil, Gotshal & Xxxxxx LLP regarding substantive
consolidation matters delivered to Seller on the Closing Date are true and
correct with respect to itself, and that Seller will comply with any
covenants or obligations assumed to be complied with by it therein as if
such covenants and obligations were set forth herein.
(xv) Sole Stockholder. Seller is the sole stockholder of Purchaser,
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and all of the shares of stock have been fully paid for and are owned of
record, free and clear of all mortgages, assignments, pledges and security
interests.
SECTION 3.2 Representations and Warranties of Purchaser.
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Purchaser makes the following representations and warranties, on which Seller
relies in selling, assigning, transferring and conveying the Receivables and the
Other Conveyed Property to Purchaser hereunder, on which the Noteholders rely in
purchasing the Notes, and on which the Indenture Trustee relies in entering into
the Related Documents. Such representations are made as of the execution and
delivery of this Agreement, but shall survive the sale, transfer and assignment
of the Receivables and the Other Conveyed Property hereunder and the sale,
transfer and assignment thereof by Purchaser to the Issuer under the Sale and
Servicing Agreement.
(i) Organization and Good Standing. Purchaser has been duly
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organized and is validly existing and in good standing as a corporation
under the laws of the State of Delaware, with the power and authority to
own its properties and to conduct its business as such properties are
currently owned and such business is currently conducted, and had at all
relevant times, and has, full power, authority and legal right to acquire
and own the Receivables and the Other Conveyed Property, and to transfer
the Receivables and the Other Conveyed Property to the Issuer pursuant to
the Sale and Servicing Agreement.
(ii) Due Qualification. Purchaser is duly qualified to do business
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as a foreign corporation in good standing, and has obtained all necessary
licenses and approvals in all jurisdictions where the failure to do so
would materially and adversely affect Purchaser's ability to acquire the
Receivables or the Other Conveyed Property, and to transfer the Receivables
and the Other Conveyed Property to the Issuer pursuant to the Sale and
Servicing Agreement, or the validity or enforceability of the Receivables
and the Other Conveyed Property or to perform Purchaser's obligations
hereunder and under Purchaser's Related Documents.
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(iii) Power and Authority. Purchaser has the power, authority and
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legal right to execute and deliver this Agreement and to carry out the
terms hereof and to acquire the Receivables and the Other Conveyed Property
hereunder; and the execution, delivery and performance of this Agreement
and all of the documents required pursuant hereto have been duly authorized
by Purchaser by all necessary action.
(iv) No Consent Required. Purchaser is not required to obtain the
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consent of any other Person, or any consent, license, approval or
authorization or registration or declaration with, any governmental
authority, bureau or agency in connection with the execution, delivery or
performance of this Agreement and the Related Documents, except for such as
have been obtained, effected or made.
(v) Binding Obligation. This Agreement constitutes a legal, valid
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and binding obligation of Purchaser, enforceable against Purchaser in
accordance with its terms, subject, as to enforceability, to applicable
bankruptcy, insolvency, reorganization, conservatorship, receivership,
liquidation and other similar laws and to general equitable principles.
(vi) No Violation. The execution, delivery and performance by
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Purchaser of this Agreement, the consummation of the transactions
contemplated by this Agreement and the Related Documents and the
fulfillment of the terms of this Agreement and the Related Documents do not
and will not conflict with, result in any breach of any of the terms and
provisions of, or constitute (with or without notice or lapse of time) a
default under, the certificate of incorporation or bylaws of Purchaser, or
conflict with or breach any of the terms or provisions of, or constitute
(with or without notice or lapse of time) a default under, any indenture,
agreement, mortgage, deed of trust or other instrument to which Purchaser
is a party or by which Purchaser is bound or to which any of its properties
are subject, or result in the creation or imposition of any Lien upon any
of its properties pursuant to the terms of any such indenture, agreement,
mortgage, deed of trust or other instrument (other than the Sale and
Servicing Agreement, and the Indenture and any instruments, certificates
and other documents executed pursuant to the provisions thereof), or
violate any law, order, rule or regulation, applicable to Purchaser or its
properties, of any federal or state regulatory body, any court,
administrative agency, or other governmental instrumentality having
jurisdiction over Purchaser or any of its properties.
(vii) No Proceedings. There are no proceedings or investigations
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pending, or, to the knowledge of Purchaser, threatened against Purchaser,
before any court, regulatory body, administrative agency, or other tribunal
or governmental instrumentality having jurisdiction over Purchaser or its
properties: (i) asserting the invalidity of this Agreement or any of the
Related Documents, (ii) seeking to prevent the consummation of any of the
transactions contemplated by this Agreement or any of the Related
Documents, (iii) seeking any determination or ruling that might materially
and adversely affect the business, the operations, the condition (financial
or otherwise) or the prospects of Purchaser or the
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performance by Purchaser of its obligations under, or the validity or
enforceability of, this Agreement or any of the Related Documents or (iv)
that may adversely affect the federal or state income tax attributes of, or
seeking to impose any excise, franchise, transfer or similar tax upon, the
transfer and acquisition of the Receivables and the Other Conveyed Property
hereunder or the transfer of the Receivables and the Other Conveyed
Property to the Issuer pursuant to the Sale and Servicing Agreement.
(viii) Approvals. All approvals, authorizations, consents, licenses,
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orders or other actions of any person, corporation or other organization,
or of any court, governmental agency or body or official, required in
connection with the execution and delivery by Purchaser of this Agreement
and the consummation of the transactions contemplated hereby, including,
without limitation, the purchase of the Receivables, has been taken, or
will be taken or obtained on or prior to the Closing Date.
(ix) Since the formation of Purchaser (a) Purchaser has incurred no
debt other than trade payables and expense accruals in connection with its
operations in the normal course of business; (b) Purchaser has maintained
its books and records separate from the books and records of any other
entity, has maintained separate bank accounts and no funds of Purchaser
have been commingled with funds of any other entity; (c) Purchaser has kept
in full effect its existence, rights and franchises as a corporation under
the laws of the State of Delaware, and has obtained and preserved its
qualification to do business as a foreign corporation in each jurisdiction
in which such qualification is or shall be necessary to protect the
validity and enforceability of the Receivables; (d) Purchaser does not own
any subsidiary and has not loaned or advanced any moneys to, or made an
investment in, any Person; (e) Purchaser has not made any capital
expenditures; (f) Purchaser has not guaranteed, except with respect to its
obligation to repurchase or substitute Receivables pursuant to the terms of
this Agreement and the Indenture (directly or indirectly), endorsed or is
otherwise contingently liable (directly or indirectly) for the obligations
of, or owned or purchased any stock, obligations or securities of or any
other interest in, or made any capital contribution to, any Person; and (g)
Purchaser has not engaged in any other action that bears on whether the
separate legal identity of Purchaser will be respected, including without
limitation (l) has not held itself out as being liable for the debts of any
of any other party, (2) has not acted other than in its corporate name and
through its duly authorized officers or agents, and (3) has not created,
incurred, assumed, or in any manner become liable in respect of any
indebtedness except trade payables and expense accruals incurred in the
ordinary course of business and which are incidental to its business
purpose.
In the event of any breach of a representation and warranty made by Purchaser
hereunder, Seller covenants and agrees that it will not take any action to
pursue any remedy that it may have hereunder, in law, in equity or otherwise,
until a year and a day have passed since the date on which all Notes,
Certificates, pass-through certificates or other similar securities issued by
Purchaser, or a trust or similar vehicle formed by Purchaser, have
11
been paid in full. Seller and Purchaser agree that damages will not be an
adequate remedy for such breach and that this covenant may be specifically
enforced by Purchaser, Issuer or by the Indenture Trustee on behalf of the
Noteholders and Owner Trustee on behalf of the Certificateholders.
ARTICLE IV
COVENANTS OF SELLER
-------------------
SECTION 4.1 Protection of Title of Purchaser.
--------------------------------
(a) At or prior to the Closing Date, Seller shall have filed or
caused to be filed a UCC-1 financing statement, executed by Seller as seller or
debtor, naming Purchaser as purchaser or secured party and describing the
Receivables and the Other Conveyed Property being sold by it to Purchaser as
collateral, with the office of the Secretary of State of the Commonwealth of
Virginia, the office of the Clerk of the City of Norfolk, Virginia and in such
other locations as Purchaser shall have required and as shall be necessary to
perfect the security interest of Purchaser in the collateral. From time to time
thereafter, Seller shall execute and file such additional financing statements
and cause to be executed and filed such continuation statements, all in such
manner and in such places as may be required by law fully to preserve, maintain
and protect the interest of Purchaser under this Agreement, of the Issuer under
the Sale and Servicing Agreement and of the Trust Collateral Agent under the
Indenture in the Receivables and the Other Conveyed Property and in the proceeds
thereof. Seller shall deliver (or cause to be delivered) to Purchaser, the Trust
Collateral Agent and the Insurer file-stamped copies of, or filing receipts for,
any document filed as provided above, as soon as available following such
filing. In the event that Seller fails to perform its obligations under this
subsection, Purchaser, Issuer or the Trust Collateral Agent may do so, at the
expense of Seller.
(b) Seller shall not change its name, identity, or corporate
structure in any manner that would, could or might make any financing statement
or continuation statement filed by Seller (or by Purchaser, Issuer or the Trust
Collateral Agent on behalf of Seller) in accordance with paragraph (a) above
misleading within the meaning of (S) 9-402(7) of the UCC, unless it shall have
given Purchaser, Issuer and the Trust Collateral Agent at least 60 days' prior
written notice thereof, and shall have provided evidence of appropriate
amendments to all previously filed financing statements and continuation
statements acceptable to the Controlling Party.
(c) Seller shall give Purchaser, the Issuer, the Insurer (so
long as an Insurer Default shall not have occurred and be continuing) and the
Trust Collateral Agent at least 60 days' prior written notice of any relocation
of its principal place of business or chief executive office if, as a result of
such relocation, the applicable provisions of the UCC would require the filing
of any amendment of any previously filed financing or continuation statement or
of any new financing statement and Seller shall provide evidence of appropriate
filings required by the UCC acceptable to the Controlling Party. Seller shall at
all times maintain each office from which it services Receivables and its
12
principal place of business and chief executive office within the United States
of America.
(d) Prior to the Closing Date, Seller has maintained accounts
and records as to each Receivable accurately and in sufficient detail to permit
(i) the reader thereof to know at any time as of or prior to the Closing Date
the status of such Receivable, including payments and recoveries made and
payments owing (and the nature of each) and (ii) reconciliation between payments
or recoveries on (or with respect to) each Receivable and the Principal Balance
as of the Closing Date. Seller shall maintain its computer systems so that, from
and after the time of sale under this Agreement of the Receivables to Purchaser,
and the conveyance of the Receivables by Purchaser to the Issuer, Seller's
master computer records (including archives) that shall refer to a Receivable
indicate clearly that such Receivable has been sold to Purchaser and has been
conveyed by Purchaser to the Issuer. Indication of the Issuer's ownership of a
Receivable shall be deleted from or modified on Seller's computer systems when,
and only when, the Receivable shall become a Purchased Receivable or shall have
been paid in full.
(e) If at any xxxx Xxxxxx shall propose to sell, grant a
security interest in, or otherwise transfer any interest in any motor vehicle
receivables to any prospective purchaser, lender or other transferee, Seller
shall give to such prospective purchaser, lender, or other transferee computer
tapes, records, or print-outs (including any restored from archives) that, if
they shall refer in any manner whatsoever to any Receivable (other than a
Purchased Receivable), shall indicate clearly that such Receivable has been sold
to Purchaser, sold by Purchaser to Issuer, and is owned by the Issuer.
SECTION 4.2 Other Liens or Interests. (a)Except for the
------------------------
conveyances hereunder, Seller will not sell, pledge, assign or transfer to any
other Person, or grant, create, incur, assume or suffer to exist any Lien on the
Receivables or the Other Conveyed Property or any interest therein, and Seller
shall defend the right, title, and interest of Purchaser and the Issuer in and
to the Receivables and the Other Conveyed Property against all claims of third
parties claiming through or under Seller. Seller shall notify Purchaser, the
Trustee and the Insurer promptly after becoming aware of any Lien or any
Receivable.
(b) Seller will perform the transactions contemplated by this
Agreement in a manner that is consistent with Purchaser's ownership interest in
the Receivables and Seller will respond to all third party inquiries confirming
the transfer of the Receivables and the Other Conveyed Property to Purchaser.
(c) Seller will not make any material amendments to its Charge-
Off Policy without obtaining the prior written consent of the Controlling Party
and giving prior written notice of such amendment to the Rating Agency.
SECTION 4.3 Costs and Expenses. Seller shall pay all
------------------
reasonable costs and disbursements in connection with the performance of its
obligations hereunder and under its Related Documents.
13
SECTION 4.4 Indemnification.
---------------
(a) Seller shall defend, indemnify and hold harmless Purchaser,
the Issuer, the Trust Collateral Agent, the Indenture Trustee, the Insurer, the
Owner Trustee, the Noteholders and the Certificateholders from and against any
and all costs, expenses, losses, damages, claims, and liabilities, arising out
of or resulting from any breach of any of Seller's representations and
warranties contained herein.
(b) Seller shall defend, indemnify and hold harmless Purchaser,
the Insurer, the Issuer, the Trust Collateral Agent, the Indenture Trustee, the
Owner Trustee, the Noteholders and the Certificateholders from and against any
and all costs, expenses, losses, damages, claims, and liabilities, arising out
of or resulting from the use, ownership or operation by Seller or any affiliate
thereof of a Financed Vehicle.
(c) Seller shall defend, indemnify and hold harmless Purchaser,
the Insurer, the Issuer, the Trust Collateral Agent, the Indenture Trustee, the
Owner Trustee, the Noteholders and the Certificateholders against any and all
costs, expenses, losses, damages, claims and liabilities arising out of or
resulting from any action taken, or failed to be taken, by it in respect of any
portion of the Receivables other than in accordance with this Agreement or the
Sale and Servicing Agreement.
(d) Seller agrees to pay, and shall defend, indemnify and hold
harmless Purchaser, the Issuer, the Trust Collateral Agent, the Insurer, the
Indenture Trustee, the Owner Trustee, the Noteholders and the Certificateholders
from and against any taxes that may at any time be asserted against Purchaser,
the Issuer, the Trust Collateral Agent, the Indenture Trustee, the Owner
Trustee, the Noteholders and the Certificateholders with respect to the
transactions contemplated in this Agreement, including, without limitation, any
sales, gross receipts, general corporation, tangible or intangible personal
property, privilege, or license taxes (but not including any taxes asserted with
respect to, and as of the date of, the sale, transfer and assignment of the
Receivables and the Other Conveyed Property to Purchaser and by Purchaser to the
Issuer or the issuance and original sale of the Notes or the Certificates, or
asserted with respect to ownership of the Receivables and Other Conveyed
Property which shall be indemnified by Seller pursuant to clause (e) below, or
federal, state or other income taxes, arising out of distributions on the Notes
or the Certificates or transfer taxes arising in connection with the transfer of
the Notes or the Certificates) and costs and expenses in defending against the
same, arising by reason of the acts to be performed by Seller under this
Agreement or imposed against such Persons.
(e) Seller agrees to pay, and to indemnify, defend and hold
harmless Purchaser, the Issuer, the Trust Collateral Agent, the Indenture
Trustee, the Insurer, the Owner Trustee, the Noteholders and the
Certificateholders from, any taxes which may at any time be asserted against
such Persons with respect to, and as of the date of, the conveyance or ownership
of the Receivables or the Other Conveyed Property hereunder and the conveyance
or ownership of the Receivables and the Other Conveyed Property under the Sale
and Servicing Agreement or the issuance and original sale of the Notes or
14
the Certificates, including, without limitation, any sales, gross receipts,
personal property, tangible or intangible personal property, privilege or
license taxes (but not including any federal or other income taxes, including
franchise taxes, arising out of the issuance and ownership of the Notes or the
transactions contemplated hereby or transfer taxes arising in connection with
the transfer of the Notes or the Certificates) and costs and expenses in
defending against the same, arising by reason of the acts to be performed by
Seller under this Agreement or imposed against such Persons.
(f) Seller shall defend, indemnify, and hold harmless Purchaser,
the Insurer, the Issuer, the Trust Collateral Agent, the Indenture Trustee, the
Owner Trustee, the Noteholders and the Certificateholders from and against any
and all costs, expenses, losses, claims, damages, and liabilities to the extent
that such cost, expense, loss, claim, damage, or liability arose out of, or was
imposed upon any of such Persons through the negligence, willful misfeasance, or
bad faith of Seller in the performance of its duties under this Agreement or by
reason of reckless disregard of Seller's obligations and duties under this
Agreement.
(g) Seller shall indemnify, defend and hold harmless Purchaser,
the Insurer, the Issuer, the Trust Collateral Agent, the Indenture Trustee, the
Owner Trustee, the Noteholders and the Certificateholders from and against any
and all costs, claims, damages and any loss, liability or expense incurred by
reason of the violation by Seller of federal or state securities laws in
connection with the registration or the sale of the Notes or the Certificates.
(h) Seller shall indemnify, defend and hold harmless Purchaser,
the Insurer, the Issuer, the Trust Collateral Agent, the Indenture Trustee, the
Owner Trustee, the Noteholders and the Certificateholders from and against any
loss, liability or expense imposed upon, or incurred by, any of such Persons as
result of the failure of any Receivable, or the sale of the related Financed
Vehicle, to comply with all requirements of applicable law.
(i) Seller shall defend, indemnify, and hold harmless Purchaser
from and against all costs, expenses, losses, claims, damages, and liabilities
arising out of or incurred in connection with the acceptance or performance of
Seller's trusts and duties as Servicer under the Sale and Servicing Agreement,
except to the extent that such cost, expense, loss, claim, damage, or liability
shall be due to the willful misfeasance, bad faith, or negligence (except for
errors in judgment) of Purchaser.
Indemnification under this Section 4.4 shall include reasonable fees and
expenses of counsel and expenses of litigation incurred by the Noteholders,
Trust Collateral Agent, Insurer or the Trustee in connection with enforcement of
this Agreement and shall survive termination of the Notes and the Certificates.
The indemnity obligations hereunder shall be in addition to any obligation that
Seller may otherwise have.
15
ARTICLE V
REPURCHASES
-----------
SECTION 5.1 Repurchase of Receivables Upon Breach of Warranty.
-------------------------------------------------
Upon the occurrence of a Repurchase Event, Seller shall, unless the breach which
is the subject of such Repurchase Event shall have been cured in all material
respects, repurchase the Receivable relating thereto from the Issuer as promptly
as possible but in no event later than by the last day of the first full
calendar month following the discovery by Seller or receipt by Seller of notice
of such breach and, simultaneously with the repurchase of the Receivable, Seller
shall deposit the Purchase Amount in full, without deduction or offset, to the
Collection Account, pursuant to Section 3.2 of the Sale and Servicing Agreement.
It is understood and agreed that, except as set forth in Section 6.1 hereof, the
obligation of Seller to repurchase any Receivable, as to which a breach occurred
and is continuing, shall, if such obligation is fulfilled, constitute the sole
remedy against Seller for such breach available pursuant to this Agreement
(subject to the next paragraph of this Section 5.1) to Purchaser, the Issuer,
the Insurer, the Noteholders, the Certificateholders, the Trust Collateral Agent
on behalf of the Noteholders or the Owner Trustee on behalf of
Certificateholders. The provisions of this Section 5.1 are intended to grant the
Issuer and the Trust Collateral Agent a direct right against Seller to demand
performance hereunder, and in connection therewith, Seller waives any
requirement of prior demand against Purchaser with respect to such repurchase
obligation. Any such repurchase shall take place in the manner specified in
Section 3.2 of the Sale and Servicing Agreement. Notwithstanding any other
provision of this Agreement or the Sale and Servicing Agreement to the contrary,
the obligation of Seller under this Section shall not terminate upon a
termination of Seller as Servicer under the Sale and Servicing Agreement and
shall be performed in accordance with the terms hereof notwithstanding the
failure of the Servicer or Purchaser to perform any of their respective
obligations with respect to such Receivable under the Sale and Servicing
Agreement.
In addition to the foregoing and notwithstanding whether the
related Receivable shall have been purchased by Seller, Seller shall indemnify
the Issuer, the Trust Collateral Agent, the Indenture Trustee, the Owner
Trustee, the Insurer, the Noteholders and the Certificateholders against all
costs, expenses, losses, damages, claims and liabilities, including reasonable
fees and expenses of counsel, which may be asserted against or incurred by any
of them as a result of third party claims arising out of the events or facts
giving rise to such Repurchase Events.
SECTION 5.2 Reassignment of Purchased Receivables. Upon
-------------------------------------
deposit in the Collection Account of the Purchase Amount of any Receivable
repurchased by Seller under Section 5.1 hereof, Purchaser and the Issuer shall
take such steps as may be reasonably requested by Seller in order to sell,
assign, convey and otherwise transfer to Seller all right, title and interest of
each of Purchaser and the Issuer in and to such Receivable and all security and
documents and all Other Conveyed Property conveyed to Purchaser or the Issuer
directly relating thereto, without recourse, representation or
16
warranty, except as to the absence of liens, charges or encumbrances created by
or arising as a result of actions of Purchaser or the Issuer. Such assignment
shall be a sale and assignment outright, and not for security. If, following the
reassignment of a Purchased Receivable, in any enforcement suit or legal
proceeding, it is held that Seller may not enforce any such Receivable on the
ground that it shall not be a real party in interest or a holder entitled to
enforce the Receivable, Purchaser and the Issuer shall, at the expense of
Seller, take such steps as Seller deems reasonably necessary to enforce the
Receivable, including bringing suit in Purchaser's or in the Issuer's name.
SECTION 5.3 Waivers. No failure or delay on the part of
-------
Purchaser, or the Issuer as assignee of Purchaser, in exercising any power,
right or remedy under this Agreement shall operate as a waiver thereof, nor
shall any single or partial exercise of any such power, right or remedy preclude
any other or future exercise thereof or the exercise of any other power, right
or remedy.
ARTICLE VI
MISCELLANEOUS
-------------
SECTION 6.1 Liability of Seller. Seller shall be liable in
-------------------
accordance herewith only to the extent of the obligations in this Agreement
specifically undertaken by Seller and the representations and warranties of
Seller.
SECTION 6.2 Merger or Consolidation of Seller or Purchaser. Any
----------------------------------------------
corporation or other entity (i) into which Seller or Purchaser may be merged or
consolidated, (ii) resulting from any merger or consolidation to which Seller or
Purchaser is a party or (iii) succeeding to the business of Seller or Purchaser,
in the case of Purchaser, which corporation has a certificate of incorporation
containing provisions relating to limitations on business and other matters
substantively identical to those contained in Purchaser's certificate of
incorporation, provided that in any of the foregoing cases such corporation
shall execute an agreement of assumption to perform every obligation of Seller
or Purchaser, as the case may be, under this Agreement and, whether or not such
assumption agreement is executed, shall be the successor to Seller or Purchaser,
as the case may be, hereunder (without relieving Seller or Purchaser of its
responsibilities hereunder, if it survives such merger or consolidation) without
the execution or filing of any document or any further action by any of the
parties to this Agreement. Notwithstanding the foregoing, so long as an Insurer
Default shall not have occurred and be continuing and (a) there are Notes
outstanding, (b) any amounts due to the Insurer remain unpaid or (c) the Note
Policy has not expired in accordance with its terms, Purchaser shall not merge
or consolidate with any other Person or permit any other Person to become the
successor to Purchaser's business without the prior written consent of the
Controlling Party. Seller or Purchaser shall promptly inform the other party,
the Issuer, the Trust Collateral Agent, the Owner Trustee and, so long as an
Insurer Default shall not have occurred and be continuing and (a) there are
Notes outstanding, (b) any amounts due to the Insurer remain unpaid or (c) the
Note Policy has not expired in accordance with its terms, the Controlling Party
of such merger, consolidation or purchase and assumption. Notwithstanding the
foregoing, as a condition to the
17
consummation of the transactions referred to in clauses (i), (ii) and (iii)
above, (w) the Rating Agency Condition shall have been satisfied, (x)
immediately after giving effect to such transaction, no representation or
warranty made pursuant to Sections 3.1 and 3.2 of this Agreement shall have been
breached (for purposes hereof, such representations and warranties shall speak
as of the date of the consummation of such transaction) and no event that, after
notice or lapse of time, or both, would become an event of default under the
Insurance Agreement, shall have occurred and be continuing, (y) Seller or
Purchaser, as applicable, shall have delivered written notice of such
consolidation, merger or purchase and assumption to the Rating Agency prior to
the consummation of such transaction and shall have delivered to the Issuer, the
Controlling Party and the Trust Collateral Agent an Officer's Certificate and an
Opinion of Counsel each stating that such consolidation, merger or succession
and such agreement of assumption comply with this Section 6.2 and that all
conditions precedent, if any, provided for in this Agreement relating to such
transaction have been complied with, and (z) Seller or Purchaser, as applicable,
shall have delivered to the Issuer, the Insurer and the Trust Collateral Agent
an Opinion of Counsel, stating, in the opinion of such counsel, either (A) all
financing statements and continuation statements and amendments thereto have
been executed and filed that are necessary to preserve and protect the interest
of the Issuer and the Trust Collateral Agent in the Receivables and reciting the
details of the filings or (B) no such action shall be necessary to preserve and
protect such interest.
SECTION 6.3 Limitation on Liability of Seller and Others.
--------------------------------------------
Seller and any director, officer, employee or agent may rely in good faith on
the advice of counsel or on any document of any kind prima facie properly
executed and submitted by any Person respecting any matters arising under this
Agreement. Seller shall not be under any obligation to appear in, prosecute or
defend any legal action that is not incidental to its obligations under this
Agreement or its Related Documents and that in its opinion may involve it in any
expense or liability.
SECTION 6.4 Seller May Own Notes or Certificates. Subject to
------------------------------------
the provisions of the Sale and Servicing Agreement, the Trust Agreement, the
Indenture and the Insurance Agreement, Seller and any Affiliate of Seller may in
its individual or any other capacity become the owner or pledgee of Notes or
Certificates with the same rights as it would have if it were not Seller or an
Affiliate thereof.
18
SECTION 6.5 Amendment.
---------
(a) This Agreement may be amended by Seller and Purchaser with
the prior written consent of the Insurer (so long as an Insurer Default shall
not have occurred and be continuing and (a) there are Notes outstanding, (b) any
amounts due to the Insurer remain unpaid or (c) the Note Policy has not expired
in accordance with its terms) and with prior written notice to the Rating Agency
but without the consent of the Trust Collateral Agent, the Owner Trustee or any
of the Certificateholders or Noteholders (i) to cure any ambiguity or (ii) to
correct any provisions in this Agreement; provided, however, that such action
shall not adversely affect in any material respect the interests of any
Certificateholder or Noteholder.
(b) This Agreement may also be amended from time to time by
Seller and Purchaser, with the prior written consent of the Insurer (so long as
an Insurer Default shall not have occurred and be continuing and (a) there are
Notes outstanding, (b) any amounts due to the Insurer remain unpaid or (c) the
Note Policy has not expired in accordance with its terms), with prior written
notice to the Rating Agency and with the consent of the Trust Collateral Agent
and, if required, a Security Majority in accordance with the Sale and Servicing
Agreement, for the purpose of adding any provisions to or changing in any manner
or eliminating any of the provisions of this Agreement, or of modifying in any
manner the rights of the Certificateholders or Noteholders; provided, however,
Seller provides the Trust Collateral Agent with an Opinion of Counsel, (which
may be provided by Seller's internal counsel) that no such amendment shall
increase or reduce in any manner the amount of, or accelerate or delay the
timing of, collections of payments on Receivables or distributions that shall be
required to be made on any Note or Certificate.
(c) It shall not be necessary for the consent of
Certificateholders or Noteholders pursuant to this Section to approve the
particular form of any proposed amendment or consent, but it shall be sufficient
if such consent shall approve the substance thereof. The manner of obtaining
such consents and of evidencing the authorization of the execution thereof by
Certificateholders or Noteholders shall be subject to such reasonable
requirements as the Trust Collateral Agent may prescribe, including the
establishment of record dates. The consent of a Holder of a Certificate or a
Note given pursuant to this Section or pursuant to any other provision of this
Agreement shall be conclusive and binding on such Holder and on all future
Holders of such Certificate or Note and of any Certificate or Note issued upon
the transfer thereof or in exchange thereof or in lieu thereof whether or not
notation of such consent is made upon the Certificate or Note.
Prior to the execution of any amendment to this Agreement, the
Indenture Trustee or the Trust Collateral Agent, if requested, shall be entitled
to receive and rely upon an Opinion of Counsel stating that the execution of
such amendment is authorized or permitted by this Agreement and that all
conditions precedent to the execution and delivery of such amendment have been
satisfied.
19
SECTION 6.6 Notices. All demands, notices and communications
-------
to Seller, Purchaser, the Insurer or the Noteholders hereunder shall be in
writing, personally delivered, or sent by telecopier (subsequently confirmed in
writing), reputable overnight courier or mailed by certified mail, return
receipt requested, and shall be deemed to have been given upon receipt (a) in
the case of Seller, to The Finance Company, Attention: Chief Financial Officer,
0000 Xxxxx Xxxx Xxxx, Xxxxx 000X, Xxxxxxx, Xxxxxxxx 00000, (b) in the case of
Purchaser, to TFC Receivables Corporation IV, Attention: Chief Financial
Officer, 0000 Xxxxx Xxxx Xxxx, Xxxxx 000X, Xxxxxxx, Xxxxxxxx 00000, (c) in the
case of the Insurer, to Asset Guaranty Insurance Company, Attention: Manager
Asset-Backed Surveillance, 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000-0000,
with a copy to the Senior Vice President - Transaction Oversight, or (d) in the
case of the Xxx Xxxxxx - Private Placement Noteholders, c/o AEGON USA Investment
Management, Inc., Attention: Xxx Xxxxxxxx, 000 Xxxx Xxxxxx Xxxxxx, Xxxxxxxxxx,
Xxxxxxxx 00000 and AEGON USA Management, Inc., Attention: Director of Private
Placements, 0000 Xxxxxxxx Xxxx XX, Xxxxx Xxxxxx, Xxxx 00000-0000 or such other
address as shall be designated by a party in a written notice delivered to the
other party or to the Issuer, Owner Trustee or the Trust Collateral Agent, as
applicable.
SECTION 6.7 Merger and Integration. Except as specifically
----------------------
stated otherwise herein, this Agreement and Related Documents set forth the
entire understanding of the parties relating to the subject matter hereof, and
all prior understandings, written or oral, are superseded by this Agreement and
the Related Documents. This Agreement may not be modified, amended, waived or
supplemented except as provided herein.
SECTION 6.8 Severability of Provisions. If any one or more of
--------------------------
the covenants, provisions or terms of this Agreement shall be for any reason
whatsoever held invalid, then such covenants, provisions or terms shall be
deemed severable from the remaining covenants, provisions or terms of this
Agreement and shall in no way affect the validity or enforceability of the other
provisions of this Agreement.
SECTION 6.9 Intention of the Parties. The execution and delivery
------------------------
of this Agreement shall constitute an acknowledgment by Seller and Purchaser
that they intend that the assignment and transfer herein contemplated constitute
a sale and assignment outright, and not for security, of the Receivables and the
Other Conveyed Property, conveying good title thereto free and clear of any
Liens, from Seller to Purchaser, and that the Receivables and the Other Conveyed
Property shall not be a part of Seller's estate in the event of the bankruptcy,
reorganization, arrangement, insolvency or liquidation proceeding, or other
proceeding under any federal or state bankruptcy or similar law, or the
occurrence of another similar event, of or with respect to Seller. In the event
that such conveyance is determined to be made as security for a loan made by
Purchaser, the Issuer, the Noteholders or the Certificateholders to Seller, the
parties intend that Seller shall have granted to Purchaser a first priority,
perfected security interest in all of Seller's right, title and interest in and
to the Receivables and the Other Conveyed Property conveyed pursuant to Section
2.1 hereof, and that this Agreement shall constitute a security agreement under
applicable law and shall have granted such security interest.
20
SECTION 6.10 Governing Law. This Agreement shall be construed in
-------------
accordance with the laws of the State of New York, including Section 5-1401 of
the General Obligations Laws but otherwise without regard to the principles of
conflicts of laws thereof and the obligations, rights and remedies of the
parties under this Agreement shall be determined in accordance with such laws.
SECTION 6.11 Counterparts. For the purpose of facilitating the
------------
execution of this Agreement and for other purposes, this Agreement may be
executed simultaneously in any number of counterparts, each of which
counterparts shall be deemed to be an original, and all of which counterparts
shall constitute but one and the same instrument.
SECTION 6.12 Conveyance of the Receivables and the Other Conveyed
----------------------------------------------------
Property to the Issuer. Seller acknowledges that Purchaser intends, pursuant to
----------------------
the Sale and Servicing Agreement, to convey the Receivables and the Other
Conveyed Property, together with its rights under this Agreement, to the Issuer
on the date hereof. Seller acknowledges and consents to such conveyance and
pledge and waives any further notice thereof and covenants and agrees that the
representations and warranties of Seller contained in this Agreement and the
rights of Purchaser hereunder are intended to benefit the Insurer, the Issuer,
the Owner Trustee, the Trust Collateral Agent, the Noteholders and the
Certificateholders. In furtherance of the foregoing, Seller covenants and agrees
to perform its duties and obligations hereunder, in accordance with the terms
hereof for the benefit of the Insurer, the Issuer, the Owner Trustee, the Trust
Collateral Agent, the Noteholders and the Certificateholders and that,
notwithstanding anything to the contrary in this Agreement, Seller shall be
directly liable to the Issuer, the Insurer, the Owner Trustee, the Trust
Collateral Agent, the Noteholders and the Certificateholders (notwithstanding
any failure by the Servicer, or Purchaser to perform their respective duties and
obligations hereunder or under Related Documents) and that the Trust Collateral
Agent may enforce the duties and obligations of Seller under this Agreement
against Seller for the benefit of the Insurer, the Owner Trustee, the Trust
Collateral Agent, the Noteholders and the Certificateholders.
SECTION 6.13 Nonpetition Covenant. Neither Purchaser nor Seller
--------------------
shall petition or otherwise invoke the process of any court or government
authority for the purpose of commencing or sustaining a case against Purchaser
or the Issuer under any federal or state bankruptcy, insolvency or similar law
or appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator
or other similar official of Purchaser or the Issuer or any substantial part of
their respective property, or ordering the winding up or liquidation of the
affairs of Purchaser or the Issuer.
SECTION 6.14 Third Party Beneficiary. The Insurer, the
-----------------------
Noteholders and the Trustee shall be third party beneficiaries of this
Agreement. The Insurer, the Noteholders and the Trustee, and each of their
respective successors and assigns, shall be a third party beneficiary to the
provisions of this Agreement, and the Insurer shall be entitled to rely upon and
directly enforce such provisions of this Agreement so long as no Insurer Default
shall have occurred and be continuing and (a) there are Notes outstanding, (b)
any amounts due to the Insurer remain unpaid or (c) the Note Policy has
21
not expired in accordance with its terms. Except as expressly stated otherwise
herein, any right of the Insurer to direct, appoint, consent to, approve of, or
take any action under this Agreement, shall be a right exercised by the Insurer
in its reasonable discretion. The Insurer may disclaim any of its rights and
powers under this Agreement (but not its duties and obligations under the Note
Policy) upon delivery of a written notice to the Trust Collateral Agent. Nothing
in this Agreement, whether express or implied, shall be construed to give to any
other Person any legal or equitable right, remedy or claim in the Trust Property
or under or in respect of this Agreement or any covenants, conditions or
provisions contained herein.
SECTION 6.15 Limitation of Liability. It is expressly understood
-----------------------
and agreed by the parties hereto that (a) this Agreement is executed and
delivered by Wilmington Trust Company, not individually or personally but solely
as Owner Trustee of the Issuer under the Trust Agreement, in the exercise of the
powers and authority conferred and vested in it, (b) each of the
representations, undertakings and agreements herein made on the part of the
Issuer is made and intended not as personal representations, undertakings and
agreements by Wilmington Trust Company but is made and intended for the purpose
for binding only the Issuer, (c) nothing herein contained shall be construed as
creating any liability on Wilmington Trust Company individually or personally,
to perform any covenant either expressed or implied contained herein, all such
liability, if any, being expressly waived by the parties to this Agreement and
by any person claiming by, through or under them and (d) under no circumstances
shall Wilmington Trust Company be personally liable for the payment of any
indebtedness or expenses of the Issuer or be liable for the breach or failure of
any obligation, representation, warranty or covenant made or undertaking by the
Issuer under this Agreement or any related documents.
[Signature Page Follows]
22
IN WITNESS WHEREOF, the parties have caused this Purchase Agreement to be duly
executed by their respective officers as of the day and year first above
written.
THE FINANCE COMPANY, as Seller
By_________________________________
Name:
Title:
TFC RECEIVABLES CORPORATION IV, as Purchaser
By_________________________________
Name:
Title:
Acknowledged and Accepted:
XXXXX FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION,
As Trustee and Trust Collateral Agent
By_________________________________
Name:
Title:
[Signature Page for Purchase Agreement]
SCHEDULE A
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SCHEDULE OF RECEIVABLES
[Distributed at Closing]
SCHEDULE B
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REPRESENTATIONS AND WARRANTIES OF SELLER
1. Characteristics of Receivables. Each Receivable (A) was originated by a
------------------------------
Dealer for the retail sale of a Financed Vehicle in the ordinary course of
such Dealer's business in accordance with either (i) TFC's credit policies
or (ii) credit policies which were reviewed by TFC prior to a purchase of a
Receivable by TFC and such Dealer had all necessary licenses and permits to
originate Receivables in the state where such Dealer was located, was fully
and properly executed by the parties thereto was purchased by TFC from such
Dealer under an existing Dealer Agreement or pursuant to a Dealer
Assignment, was validly assigned by such Dealer to TFC pursuant to the
Dealer Agreement or the Dealer Assignment, was validly assigned by TFC to
the Seller, and was validly assigned by the Seller to the Trust and pledged
by the Trust to the Trust Collateral Agent, (B) contains customary and
enforceable provisions such as to render the rights and remedies of the
holder thereof adequate for realization against the collateral security,
(C) is a Receivable which provides for level Scheduled Receivable Payments
(provided that the payment in the first Monthly Period and the payment in
the final Monthly Period of the Receivable may be minimally different from
the normal period and level payment) which, if made when due, shall fully
amortize the Amount Financed over the original term, (D) provides for, in
the event that the related Contract is prepaid, a prepayment that fully
pays the principal balance of such related Contract and includes accrued
but unpaid interest through the date of prepayment in an amount at least
equal to the annual percentage rate, (E) has not been amended or rewritten,
or collections with respect to which deferred or waived, other than as
evidenced in the Receivable File relating thereto, (F) that is a military
Receivable, has an original term of eleven (11) to forty-eight (48) months
or that is a civilian Receivable, has an original term of eleven (11) to
sixty (60) months, (G) that has been acquired by TFC and, if a monthly pay
contract which is not more than thirty (30) days delinquent, the related
Obligor does not have other Receivables owing to TFC that are more than
thirty (30) days delinquent or defaulted, (H) that has been acquired by TFC
and, if a non- monthly-pay contract, is not more than thirty (30) days
delinquent nor is it defaulted based on the Company's methodology in effect
for converting non- monthly pay Receivables to a daily delinquency
equivalent as such methodology is described in Schedule 1 of the Insurance
Agreement nor does the Obligor have other Receivables owing to TFC that are
more than thirty (30) days delinquent or defaulted, (I) has a final
Scheduled Receivable Payment due no less than eight (8) months before the
Final Receivable Payment Date, (J) has an annual percentage rate of not
less than 9.9%, (K) has a remaining Principal Balance of not more than
$24,411, (L) has not been extended beyond its original term, except in
keeping with the TFC's stated policies and procedures for deferments
contained in the August 1, 1992 memo attached as part of Exhibit E to the
Sale and Servicing Agreement, which allows for up to two, one-month
deferments in any twelve month period not to exceed up to four, one- month
deferments over the life of a monthly-pay contract, (M) satisfies, the
requirements under TFC's Credit Guidelines as in effect on August 31, 1999,
in all material respects (except with respect to (a) changes associated
with certain memorandums previously delivered to the Insurer relating to
allowing total loss protection instead of comprehensive vehicle insurance
and (b) a new lending program called, Special E4 Program) including but not
limited to, down-payment provisions, (N) was purchased through an approved
Dealer of TFC, (O) is due from a U.S. citizen in the case of military
Receivables and a U.S. resident in the case of civilian Receivables and is
denominated in U.S. dollars, (P) is secured by a Financed Vehicle and a
valid first priority perfected security interest is in effect with respect
to such Financed Vehicle, (Q) is owned solely by TFC free and clear of any
lien, claim, or other encumbrance, excluding liens that will be released no
later than the Closing Date, (R) with respect to the related security
interest in the related Financed Vehicle is perfected and with clear legal
right of repossession, (S) that is a Point-of-Sale Receivable, was secured
by a vehicle with total loss protection coverage or covered by an Insurance
Policy, and naming TFC as loss payee on the date the loan advance was made,
(T) meets, in all material respects, all applicable requirements of
federal, state, and local laws and regulations, (U) is not subject to any
right of setoff by the Obligor and (V) will be clearly marked in the books
and records of TFC as being sold to Seller, and from Seller to Issuer and
liened to the Trust Collateral Agent.
2. No Fraud or Misrepresentation. Each Receivable (A) was originated by a
-----------------------------
Dealer, (B) was sold by the Dealer to TFC and (C) was sold by TFC to the
Seller and by the Seller to the Trust without any fraud or
misrepresentation in any case.
3. Compliance with Law. All requirements of applicable federal, state and
-------------------
local laws, and regulations thereunder (including usury laws, the Federal
Truth-in- Lending Act, the Equal Credit Opportunity Act, the Fair Credit
Billing Act, the Fair Credit Reporting Act, the Fair Debt Collection
Practices Act, the Federal Trade Commission Act, the Xxxx-Xxxxxxxx Warranty
Act, the Federal Reserve Board's Regulations "B" and "Z", the Soldiers' and
Sailors' Civil - - Relief Act of 1940, as amended, each applicable state
Motor Vehicle Retail Installment Sales Act, and state adaptations of the
National Consumer Act and of the Uniform Consumer Credit Code and other
consumer credit laws and equal credit opportunity and disclosure laws) in
respect of the Receivables, the Financed Vehicles and the sale of any
physical damage, credit life and credit accident and health insurance and
any extended service contracts, have been complied with in all material
respects by TFC and the Seller, as applicable, and each Receivable, the
sale of the Financed Vehicle evidenced by each Receivable and the sale of
any physical damage, credit life and credit accident and health insurance
and any extended service contracts complied at the time it was originated
or made in all material respects and now complies in all material respects
with all applicable legal and regulatory requirements.
4. Origination. Each Point-of-Sale Receivable was originated in the United
-----------
States and materially conforms to all requirements of the "Dealer
------
Underwriting Guide" applicable to such Receivable at the time assigned to
------------------
TFC, at the time of such assignment.
5. Binding Obligation. Each Receivable represents the genuine, legal, valid
------------------
and binding payment obligation of the Obligor thereon, enforceable by the
holder thereof in
accordance with its terms, except (A) as enforceability may be limited by
bankruptcy, insolvency, reorganization or similar laws affecting the
enforcement of creditors' rights generally and by equitable limitations on
the availability of specific remedies, regardless of whether such
enforceability is considered in a proceeding in equity or at law and (B) as
such Receivable may be modified by the application after the Cut-Off Date
of the Soldiers' and Sailors' Civil Relief Act of 1940, as amended; and all
parties to each Receivable had full legal capacity to execute and deliver
such Receivable and all other documents related thereto and to grant the
security interest purported to be granted thereby.
6. No Government Obligor. No Obligor is the United States of America or any
---------------------
State or any agency, department, subdivision or instrumentality thereof.
7. Obligor Bankruptcy. At the Cut-Off Date, no Obligor had been the subject
------------------
of a current bankruptcy proceeding.
8. Schedule of Receivables. The information set forth in the Schedule of
Receivables has been produced from the Electronic Ledger and was true and
correct in all material respects as of the close of business on the Cut-Off
Date as delivered on the Closing Date.
9. Marking Records. By the Closing Date, the Seller will have caused the
portions of the Electronic Ledger relating to the Receivables to be clearly
and unambiguously identified to show that the Receivables have been sold to
the Seller by TFC and resold by the Seller to the Trust in accordance with
the terms of the Sale and Servicing Agreement.
10. Computer Tape. The Computer Tape made available by the Seller to the Trust
Collateral Agent on the Closing Date was complete and accurate as of the
Cut- Off Date and includes a description of the same Receivables that are
described in the Schedule of Receivables.
11. Adverse Selection. No selection procedures adverse to the Noteholders or
the Insurer were utilized in selecting the Receivables from those
receivables owned by TFC which met the selection criteria contained in the
Sale and Servicing Agreement.
12. Chattel Paper. The Receivables constitute chattel paper within the meaning
of the UCC as in effect in the State of New York, Delaware, Virginia and
Minnesota.
13. One Original. There is only one original executed copy of each Receivable.
------------
14. Receivable Files Complete. There exists a Receivable File pertaining to
-------------------------
each Receivable and such Receivable File contains, without limitation,
subject to any exceptions which may appear on any exception report
delivered by the Trust Collateral Agent, (a) a fully executed original of
the Receivable and (b) the original Lien Certificate or application
therefor together with an assignment of the Lien Certificate executed by
the Unaffiliated Originator and TFC by TFC to the Seller, and, an
assignment of the Lien Certificate executed by the Seller to the Trustee.
Each
of such documents which is required to be signed by the Obligor has been
signed by the Obligor in the appropriate spaces. All blanks on any form
described in clauses (a) and (b) above have been properly filled in and
each form has otherwise been correctly prepared. Notwithstanding the above,
a copy of the complete Receivable File for each Receivable, which fulfills
the documentation requirements of the Dealer Underwriting Guide as in
effect at the time of purchase is in the possession of the Servicer or its
bailee.
15. Receivables in Force. No Receivable has been satisfied, subordinated or
--------------------
rescinded, and the Financed Vehicle securing each such Receivable has not
been released from the lien of the related Receivable in whole or in part.
No terms of any Receivable have been waived, altered or modified in any
respect since its origination, except by instruments or documents
identified in the Receivable File. No Receivable has been modified as a
result of application of the Soldiers' and Sailors' Civil Relief Act of
1940, as amended.
16. Lawful Assignment. No Receivable was originated in, or is subject to the
-----------------
laws of, any jurisdiction the laws of which would make unlawful, void or
voidable the sale, transfer and assignment of such Receivable under this
Agreement or pursuant to transfers of the Securities. The Seller has not
entered into any agreement with any account debtor that prohibits,
restricts or conditions the assignment of any portion of the Receivables.
17. Good Title. No Receivable has been sold, transferred, assigned or pledged
----------
by the Seller to any Person other than the Issuer; immediately prior to the
conveyance of the Receivables to the Trust pursuant to this Agreement, the
Seller was the sole owner thereof and had good and indefeasible title
thereto, free (except with respect to GE Capital, which lien of GE Capital
has been released (as of the Closing Date)) of any Lien and, upon execution
and delivery of this Agreement by the Seller, the Trust shall have good and
indefeasible title to and will be the sole owner of such Receivables, free
of any Lien other than the Lien of the Trust Collateral Agent. No Dealer
has a participation in, or other right to receive, proceeds of any
Receivable. The Seller has not taken any action to convey any right to any
Person that would result in such Person having a right to payments received
under the related Insurance Policies or the related Dealer Agreements or
Dealer Assignments or to payments due under such Receivables.
18. Security Interest in Financed Vehicle. Each Receivable created or will
-------------------------------------
create a valid, binding and enforceable first priority security interest in
favor of TFC or the Trust Collateral Agent in the Financed Vehicle. The
Lien Certificate and original certificate of title for each Financed
Vehicle show, or if a new or replacement Lien Certificate is being applied
for with respect to such Financed Vehicle the Lien Certificate will be
received within 180 days of the Closing Date, and will show TFC or the
Trust Collateral Agent named as the original secured party under each
Receivable as the holder of a first priority security interest in such
Financed Vehicle. With respect to each Receivable for which the Lien
Certificate has not yet been returned from the Registrar of Titles, TFC has
received written evidence from the
related Dealer that such Lien Certificate showing TFC or the Trust
Collateral Agent as first lienholder has been applied for and (i) TFC's
security interest has been validly assigned to the Seller pursuant to the
Purchase Agreement and (ii) the Seller's security interest has been validly
assigned by the Seller to the Trust pursuant to this Agreement and (iii)
the Trust's security interest has been validly pledged to the Trust
Collateral Agent pursuant to the Indenture. Immediately after the sale,
transfer and assignment thereof by the Seller to the Trust, each Receivable
will be secured by an enforceable and perfected first priority security
interest in the Financed Vehicle in favor of the Trustee as secured party,
which security interest is prior to all other Liens upon and security
interests in such Financed Vehicle which now exist or may hereafter arise
or be created (except, as to priority, for any lien for taxes, labor or
materials affecting a Financed Vehicle arising subsequent to the Cut- Off
Date). As of the Cut-Off Date there were no Liens or claims for taxes,
work, labor or materials affecting a Financed Vehicle which are or may be
Liens prior or equal to the Liens of the related Receivable.
19. All Filings Made. All filings (including UCC filings) required to be made
----------------
by any Person and actions required to be taken or performed by any Person
in any jurisdiction to give the Trust Collateral Agent a first priority
perfected lien on the Receivables and the proceeds thereof and the Other
Conveyed Property have been made, taken or performed.
20. No Impairment. Neither TFC nor the Seller has done anything to convey any
-------------
right to any Person that would result in such Person having a right to
payments due under the Receivable or otherwise to impair the rights of the
Trust, the Insurer, the Trustee, the Trust Collateral Agent and the
Noteholders in any Receivable or the proceeds thereof.
21. Receivable Not Assumable. No Receivable is assumable by another Person in a
------------------------
manner which would release the Obligor thereof from such Obligor's
obligations to the Seller with respect to such Receivable.
22. No Default. As of the Cut-Off Date, no Receivable was in default and no
----------
condition existed or event occurred that constituted a default, breach,
violation or event permitting acceleration under the terms of any
Receivable, and there has been no waiver of any of the foregoing. As of the
Cut-Off Date no Financed Vehicle had been repossessed.
23. Insurance. At the time of origination of each Receivable that is
---------
Point-of-Sale Product, the related Financed Vehicle was covered by an
Insurance Policy which was (i) in an amount at least equal to the lesser
of, excluding any deductible, (a) its maximum insurable value or (b) the
principal amount due from the Obligor under the related Receivable, (ii)
naming TFC and its successors and assigns as loss payee and (iii) insuring
against loss and damage due to fire, theft, transportation, collision and
other risks generally covered by either a physical loss and damage
Insurance Policy or the combination of TFC's Total Loss Protection and GAP.
No Financed Vehicle is insured under a policy of Force-Placed Insurance on
the Cut-Off Date.
24. Certain Characteristics of Receivables. (i) No Receivable was more than 30
--------------------------------------
days past due as of the Cut-Off Date; (ii) no funds have been advanced by
the Seller, the Servicer, any Dealer, or anyone acting on behalf of any of
them in order to cause any Receivable to qualify under subclause (i) of
this clause 24; (iii) the Principal Balance of each Receivable set forth in
the Schedule of Receivables is true and accurate as of the Cut-Off Date.
25. Direct Payment. All Receivable are secured by Financed Vehicles on which at
--------------
least one payment has been made directly to TFC subsequent to the date TFC
has purchased such Receivable.
26. Military Assistance Corporation. As of the Closing Date, Fort Xxxx National
-------------------------------
Bank ("FKNB") has been directed by TFC, and evidence of FKNB's
----
acknowledgment has been received to directly transfer to the Collection
Account all amounts received by it pursuant to the Military Assistance
Corporation ("MAC") program.
---
27. Annual Percentage. As of the Cut-Off Date, no more than 8.55% of the
-----------------
Receivables (by Principal Balance) have annual percentage rates of less
than 13.0% and the weighted average annual percentage rate for the entire
pool is no less than 18.60%.
SCHEDULE C
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THE FINANCE COMPANY CHARGE-OFF POLICY
SCHEDULE D
----------
ASSIGNMENT
