EXHIBIT 10.6
MASTER PURCHASE AND SALE AGREEMENT
This MASTER PURCHASE AND SALE AGREEMENT (this "Agreement"), dated and
effective as of the date set forth on the signature page of this Agreement, is
made and entered into by and between AutoPrime, Inc., a Delaware corporation
(the "Purchaser"), and the entity more particularly described on the signature
page of this Agreement (the "Seller").
WHEREAS, subject to the terms of this Agreement, Seller desires to
sell, and Purchaser desires to purchase, from time to time, pools of retail
installment sales contracts secured by first priority liens on automobiles and
light-duty trucks (collectively, the "Contracts").
NOW, THEREFORE, in consideration of the mutual premises and promises of
the parties, the receipt and sufficiency of which are hereby acknowledged, and
in reliance on the representations, warranties, covenants, and conditions
contained herein, Purchaser and Seller agree as follows:
ARTICLE I
Definitions
Whenever used herein, unless the context otherwise requires, the
following words and phrases have the following meanings:
Section 1.1 Amount Financed shall mean, as to any Contract, the
purchase price of the Financed Vehicle and the related closing costs, as shown
in the documentation evidencing such Contract, less any down payment previously
paid on such Financed Vehicle.
Section 1.2 Agreement shall mean this Master Purchase and Sale
Agreement and all amendments and supplements hereto.
Section 1.3 Annual Percentage Rate or APR shall mean, as to any
Contract and at any time, the contractual rate of interest then being borne by
such Contract, as determined therein.
Section 1.4 Xxxx of Sale shall mean each xxxx of sale, in the form
attached hereto as Exhibit A, delivered by Seller pursuant to Section 2.4
hereof.
Section 1.5 Closing Date shall mean the date agreed by the parties and
set forth on each Contract Schedule delivered in accordance with the terms of
this Agreement, which is, as to any Pool of Contracts purchased hereunder, the
date at which Purchaser purchases such Pool of Contracts from Seller in
accordance with, and subject to, the terms and provisions of this Agreement.
Section 1.6 Computer Tape shall mean the computer tapes, floppy disks,
and/or print-outs generated by Seller that provide information relating to the
Contracts.
Section 1.7 Contract(s) shall mean the retail installment sales
contracts secured by first priority liens on automobiles and light-duty trucks,
delivered to Purchaser from time to time and described in a Contract Schedule.
Each Contract includes, without limitation, all related security interests and
any rights to receive payments which are received pursuant thereto from and
after the related Cut-Off Date.
Section 1.8 Contract File shall mean as to any Contract (a) the
original copy of the Contract, (b) the original certificate of title for the
related Financed Vehicle with the first lien granted in favor of Seller noted
thereon, (c) any extension, modification, or waiver agreement(s) relating to
such Contract, (d) all documents evidencing the existence of any Insurance
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Policies, (e) the executed credit application of Obligor, (f) a credit report
detailing the Obligor's credit history from a credit reporting service, and (g)
copies of all other documentation regarding Obligor generated by Seller or
executed by the Obligor.
Section 1.9 Contract Schedule shall mean the list attached as Addendum
I to each Xxxx of Sale delivered by Seller on each Closing Date pursuant to
Section 2.4 and Section 2.5 hereof, identifying the Contracts to be purchased
and sold on and as of such Closing Date, and which (a) identifies each Contract
by contract number plus the name and address of the Obligor and (b) sets forth
as to each Contract: (i) the original selling price of the Financed Vehicle,
(ii) the make and model of each Financed Vehicle, (iii) the unpaid principal
balance due on the Contract as of the related Cut-Off Date, (iv) the number of
payments past due on the Contract as of the related Cut-Off Date, (v) the amount
of each scheduled payment due from the Obligor, (vi) the APR, (viii) the final
payment date, and (ix) the most recent payment date.
Section 1.10 Credit Code shall mean those laws in effect in the State
from time to time which govern the making and collection of motor vehicle
installment sales contracts.
Section 1.11 Cut-Off Date shall mean the date set forth on each
Contract Schedule delivered in accordance with the terms of this Agreement,
which is, as to any Contract purchased hereunder, the date as of which such
Contract is offered by Seller for purchase, the date as of which such contract
is actually accepted or deemed accepted by Purchaser for purchase, and the date
as of which the corresponding Contract Schedule is based.
Section 1.12 Electronic Ledger shall mean the electronic master record
of the installment sale contracts or installments loans of Seller.
Section 1.13 Financed Vehicle shall mean the Motor Vehicle, together
with all accessions thereto, securing an Obligor's indebtedness under a
Contract.
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Section 1.14 Insurance Policies shall mean all physical damage,
comprehensive and collision, fire and theft insurance policies maintained by the
Obligors with respect to the Financed Vehicles, the vendor's single interest
insurance policy providing coverage upon repossession of a Financed Vehicle, and
any credit life and disability insurance maintained by or on behalf of the
Obligors and benefiting the holders of the Contracts.
Section 1.15 Motor Vehicle shall mean a used automobile or light-duty
truck.
Section 1.16 Obligors shall mean each person, other than Seller, who is
indebted under or has guaranteed a Contract or who has acquired a Financed
Vehicle subject to a Contract.
Section 1.17 Person shall mean any individual, corporation,
partnership, joint venture, association, joint-stock company, trust,
incorporated organization, or government or any agency or political subdivision
thereof.
Section 1.18 Pool shall mean each pool of Contracts delivered for
purchase by Purchaser pursuant to Section 2.1 hereof.
Section 1.19 Servicing Agreement shall mean the Servicing Agreement,
dated the same date as this Agreement, executed between Seller, or Seller's
affiliate, and Purchaser.
Section 1.20 Servicing File shall mean all legal documents, accounting
records and other items (including comments on collection efforts) maintained by
or on behalf of Seller with respect to a Contract and not included in the
Contract File therefor, and the Computer Tape and any other machine readable
tapes, floppy magnetic diskettes, optical storage disks, or other computer
memory containing same.
Section 1.21 State shall mean the one or more local, state, or federal
governmental jurisdictions in which the transactions described herein occur.
Section 1.22 UCC shall mean the Uniform Commercial Code as now in
effect in the relevant State, as such Uniform Commercial Code may be
subsequently amended.
ARTICLE II
Purchase and Sale of Contracts
Section 2.1 Purchase and Sale of Contracts. On the Closing Date,
Seller shall sell, transfer, assign, and deliver to Purchaser, and Purchaser
shall purchase, accept, and receive from Seller, a Pool of Contracts, subject to
the terms of this Agreement. At any time after the Closing Date, Seller may,
from time to time, submit additional Contracts or Pools of Contracts to
Purchaser for purchase in accordance with, and subject to, the terms and
provisions of this Agreement.
Section 2.2 Conveyance and Delivery of Contracts.
(a) With respect to each Contract actually purchased by Purchaser
pursuant to this Agreement, Seller, on the Closing Date, shall sell, transfer,
assign, endorse, set over, convey, and deliver to Purchaser all right, title,
and interest of Seller in, to, and under:
(i) the Contracts accepted by Purchaser on such Closing Date,
including all payments of principal and interest, lawful late charges, and other
similar payments due thereon and accruing after the related Cut-Off Date, and
all payments on the Contracts received prior to or after the related Cut-Off
Date which have not been applied to the amounts due on the Contracts as of the
related Cut-Off Date;
(ii) the liens and security interests created by the
Contracts, and other rights of Seller arising out of such liens and security
interests, in the Financed Vehicles;
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(iii) the interest of Seller, if any, in all Insurance
Policies relating to the Financed Vehicles or the Contracts,
(iv) all documents and information contained in the Contract
Files and the Servicing Files;
(v) the Electronic Ledger; and
(vi) all proceeds derived from any of the foregoing.
(b) SELLER AND PURCHASER ACKNOWLEDGE AND AGREE THAT THIS AGREEMENT IS
AN AGREEMENT FOR THE PURCHASE AND SALE OF CONTRACTS ONLY AND IS NOT A LOAN
TRANSACTION AND THAT NO TERM OR PROVISION CONTAINED IN THIS AGREEMENT SHALL BE
CONSTRUED TO THE CONTRARY.
Section 2.3 Purchase Price; Payments.
(a) The purchase price for each Contract shall be the amount set forth
on Addendum II to the Xxxx of Sale with respect to such Contract (the "Purchase
Price"). Upon satisfaction of the conditions in Section 2.4 and Section 2.5
hereof with respect to each Contract, Purchaser shall pay the Purchase Price for
such Contract to Seller.
(b) For each Contract purchased by Purchaser, Purchaser shall be
entitled to all payments on such Contract received on and after the related
Cut-Off Date, including accrued interest. In addition, all payments on each
Contract received by Seller prior to the related Cut-Off Date which (i) have not
been applied to the amount due on such Contract as of the related Cut-Off Date
and (ii) were not utilized to calculate the unpaid principal balance of such
Contract, shall be the property of Purchaser and forwarded to Purchaser by
Seller on the Closing Date or promptly thereafter when received by Seller.
Section 2.4 Conditions to Effectiveness of Agreement; Deliveries at
Closing. The effectiveness of this Agreement and all of Purchaser's obligations
hereunder is subject to Purchaser having received on or before the Closing Date
the following items (unless waived by Purchaser in writing), each of which shall
be dated as of the Closing Date:
(a) copies of appropriate resolutions of Seller certified by
the Secretary of Seller (if Seller is a corporation), in the form of Exhibit B
attached hereto, or other documentation of the authority of the Person executing
all documents required hereunder on behalf of Seller authorizing Seller to enter
into and perform this Agreement, each Xxxx of Sale, the Servicing Agreement and
any and all other documents, obligations, and transactions contemplated
hereunder and thereunder;
(b) an executed Servicing Agreement;
(c) an executed incumbency certificate (if Seller is a corporation), in
the form of Exhibit C attached hereto, or other evidence of the signatures of
the representatives of Seller signing this Agreement, each Xxxx of Sale, and the
Servicing Agreement;
(d) an executed Owner's Agreement, in the form attached hereto as
Exhibit D;
(e) an executed Power of Attorney in the form attached hereto as
Exhibit E;
(f) an executed Xxxx of Sale conveying Seller's interest in
the Contracts to be delivered on such Closing Date from Seller to Purchaser;
(g) a UCC search in each jurisdiction requested by Purchaser,
the results of which are satisfactory to Purchaser in Purchaser's sole
discretion;
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(h) a title report issued by a reputable title reporting agency
approved by Purchaser with respect to each Financed Vehicle securing each
of the Contracts purchased;
(i) with respect to each Contract purchased, a copy of the
Contract, all Insurance Policies, the Contract File, the Servicing File, the
certificate of title or other document evidencing lien or security interests
created by the Contract, and the Electronic Ledger; and
(j) all other documents that may be requested by Purchaser.
Section 2.5 Conditions to Subsequent Sales of Contracts. Purchaser's
decision to purchase Contracts or Pools of Contracts which Seller may, from time
to time, submit to Purchaser for purchase after the Closing Date pursuant to
this Agreement shall be subject to the satisfaction of the conditions set forth
in Sections 2.4(f), (g), (h), (i), and (j) with respect to each such Contract as
of the applicable Cut-Off Date.
ARTICLE III
Representations and Warranties of Seller
Section 3.1 Representations and Warranties of Seller. Seller hereby
represents and warrants to, and agrees and covenants with, Purchaser as of the
Closing Date and each Cut-Off Date as follows:
(a) Organization and Good Standing. Seller is duly organized and
validly existing under the laws of its jurisdiction of incorporation or other
formation, has the power to own its assets, including but not limited to the
Contracts, and to transact business in the State in which it is currently
engaged. Seller is duly qualified to do business and is in good standing in the
State and in each other jurisdiction in which the character of the business
transacted by it or properties owned or leased by it or the purchase and sale of
the Contracts requires such qualification and in which the failure so to qualify
would have an adverse effect on the performance of Seller hereunder or the
enforceability of any of the Contracts.
(b) Authorization; Binding Obligations. Seller has all requisite power
and authority to make, execute, and deliver this Agreement, to perform its
obligations under this Agreement, and to effect all of the transactions
contemplated to be performed by it under this Agreement, and has taken all
necessary action to authorize the execution, delivery, and performance of this
Agreement and to consummate the transactions contemplated hereby. When executed
and delivered, this Agreement will constitute the legal, valid, and binding
obligation of Seller enforceable in accordance with its terms.
(c) No Consent Required. Seller is not required to obtain the consent
of any other party nor is any consent, license, approval, or authorization from,
or registration or declaration with, the State or any governmental authority,
bureau, or agency required in connection with Seller's execution, delivery, or
performance of this Agreement, or, if required, Seller has previously obtained
any such required consent, license, approval, authorization, registration, or
declaration.
(d) No Violations. The execution, delivery, and performance of this
Agreement and the transactions contemplated hereby by Seller will not violate
any provision of any existing law or regulation or any order or decree of any
court of competent jurisdiction applicable to Seller or the charter or bylaws of
Seller, or constitute a breach of any mortgage, indenture, loan agreement, or
other contract to which Seller is a party or by which Seller may be bound.
(e) Litigation. No litigation or administrative proceeding of or before
any court, tribunal, or governmental body is currently pending or, to the
knowledge of Seller, threatened against Seller or any of its properties,
including specifically the Contracts, Financed Vehicles, or Insurance Policies,
or with respect to this Agreement.
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(f) Sale of Contracts. Each sale of Contracts pursuant to this
Agreement shall be reflected on Seller's balance sheet and other financial
statements as a sale of assets by Seller. Seller shall not take any action or
omit to take any action which would cause the transfer of any Contract to
Purchaser to be treated as anything other than a sale to Purchaser of all of
Seller's right, title, and interest in and to such Contract.
Section 3.2 Representations and Warranties as to Each Contract. Seller
hereby makes the following representations and warranties as to each Contract or
Pool of Contracts conveyed by it to Purchaser hereunder.
(a) Characteristics of Contracts. The Contract (i) has been originated
by Seller in the ordinary course of Seller's business and has been fully and
properly executed by the parties thereto, (ii) is secured by a valid,
subsisting, and enforceable first priority lien and security interest in favor
of Seller in the Financed Vehicle, which lien and security interest are
assignable by Seller to Purchaser, (iii) contains customary and enforceable
provisions such as to render the rights and remedies of the holder thereof
adequate for realization against the collateral securing such Contract,
including the Financed Vehicle, (iv) provides for payments which fully amortize
the Amount Financed over the original term and provide interest at the related
APR over the term of the Contract, (v) provides for, in the event the Contract
is prepaid, a prepayment that fully prepays the outstanding principal balance
thereof and includes accrued and unpaid interest at least through the date of
prepayment in an amount equal to the APR, and (vi) has not, as of the related
Cut-Off Date, been modified as a result of the Soldiers' and Sailors' Civil
Relief Act of 1940, as amended.
(b) Contract Schedule. The information set forth in the Contract
Schedule with respect to such Contract was true and correct as of the opening of
business on the related Cut-Off Date, and the principal balance and the APR of
the Contract as of the related Cut-Off Date have been accurately and correctly
calculated in all documents within the related Contract File and is accurately
and correctly shown on the Contract Schedule. All reports delivered to Purchaser
by Seller regarding payments made by Obligor subsequent to the Cut-Off Date will
be, when delivered, true and correct.
(c) Down Payment. The down payment paid by the Obligor on each
Contract was paid by such Obligor to Seller in the amount and form as set forth
on each Contract.
(d) Compliance with Law. The Contract and the sale of the related
Financed Vehicle complied at the time it was originated or made, and will comply
as of the Closing Date and the related Cut-Off Date, with all requirements of
State law and any other applicable federal, state and local laws, and
regulations thereunder, including, without limitation, laws relating to usury,
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, Federal Reserve Board Regulations B, Z and AA, any state
adaptations of the National Consumer Credit Protection Act, any state
adaptations of the Uniform Consumer Credit Code, and, to the best of Seller's
knowledge, any other applicable consumer credit, equal opportunity, and
disclosure laws.
(e) Binding Obligation. The Contract constitutes the genuine,
bona-fide, valid, and binding obligation of the Obligor, enforceable by the
holder thereof in accordance with its terms.
(f) Solvency of Obligors. To Seller's knowledge, no voluntary or
involuntary petition or complaint is pending by or against Obligor seeking
bankruptcy of Obligor or the appointment of a receiver or trustee of Obligor, or
of all or substantially all of the assets of Obligor; and no order, order for
relief, judgment, or decree is pending or threatened seeking the appointment of
a receiver or trustee of Obligor, or of all substantially all of the assets of
Obligor.
(g) No Government Obligor. The Obligor is not the United States of
America or any State thereof, or any agency, department, political subdivision,
or instrumentality of the United States of America or any State thereof.
(h) Contracts in Force. The Contract has not been pledged, encumbered,
satisfied, subordinated, waived, restricted, rescinded, or held to be invalid or
unenforceable, and the Financed Vehicle has not been released from the lien
granted by the Contract in whole or in part nor has the Financed Vehicle been
damaged to such degree that materially affects the value of the Financed Vehicle
since the date of sale of the Financed Vehicle to Obligor.
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(i) No Amendment or Waiver. No provision of the Contract has been
amended, waived, altered, or modified in any respect, except pursuant to a
document, instrument, or writing included in the Contract File and reflected in
the Electronic Ledger, and no such amendment, waiver, alteration, or
modification causes such Contract or the lien and security interest granted by
the Contract against the Financed Vehicle not to conform to the other
representations and warranties contained in this Agreement, nor renders it
invalid or unenforceable.
(j) No Defenses. The Contract is not subject to any right of
rescission, setoff, counterclaim, or defense including, without limitation, the
defense or claim of usury, and the operation of any of the terms of the
Contract, or the exercise of any right thereunder, will not render the Contract
unenforceable in whole or in part or subject to any claim, cause of action,
right of rescission, right of cancellation, setoff, counterclaim, or defense
including, without limitation, the defense or claim of usury, and no such claim,
cause of action, right of rescission, right of cancellation, setoff,
counterclaim, or defense has been asserted by Obligor with respect thereto.
(k) No Liens. There are no undisclosed liens or claims, including liens
for work, labor, materials, or unpaid state or federal taxes relating to the
Financed Vehicle, that are or may be liens prior to, equal to, or subordinate to
the lien granted by the Contract against the Financed Vehicle.
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(l) No Default. Except for payment delinquencies of which Seller has
notified Purchaser in writing, no default, breach, violation, or event
permitting acceleration under the terms of the Contract exists, and no
continuing condition that with notice or lapse of time, or both, would
constitute a default, breach, violation, or event permitting acceleration under
the terms of the Contract exists, and Seller has not waived any of the
foregoing.
(m) Good Title. Neither the Contract nor any of Seller's interests
therein has been sold, assigned, hypothecated, pledged, or otherwise conveyed by
Seller to any person other than Purchaser and, immediately prior to the transfer
and assignment herein contemplated, Seller (i) had good and marketable title to
the Contract free and clear of any encumbrance, equity, lien, pledge, charge,
claim, security interest, or other right or title of any third party, (ii) was
the sole owner and holder of the Contract and all rights thereunder, and (iii)
had full right, power, and authority to transfer and assign the Contract to
Purchaser. Immediately upon the transfer and assignment of the Contract to
Purchaser, Purchaser shall have good and marketable title to the Contract, free
and clear of any encumbrance, equity, lien, pledge, charge, claim, security
interest, or other right or title of any other Person and the transfer will be
valid and enforceable under the laws of the State.
(n) Lawful Assignment. The Contract has not been originated in, and is
not subject to the laws of, any jurisdiction under which the sale, transfer, and
assignment of such Contract hereunder to Purchaser or pursuant to which
transfers of the Contracts to Purchaser are unlawful, void, or voidable.
(o) All Filings Made. All filings, including UCC filings, necessary in
any jurisdiction to give Purchaser an ownership interest (or a first priority
perfected security interest) in the Contract have been made.
(p) One Original. There is only one original executed Contract and
related certificate of title, which has been conveyed, endorsed, and delivered
by Seller to Purchaser.
(q) No Fraud or Misrepresentations. The Contract was originated without
any conduct constituting fraud or misrepresentation, failure of consideration,
or forgery or alteration.
(r) Possession. On the related Closing Date, Purchaser will receive
possession of the original Contract and the related Contract File, and there are
and there will be no agreements in effect adversely affecting the right or
ability of Seller to make, or cause to be made, any delivery required hereunder.
(s) Bulk Transfer Laws. The transfer, assignment, and conveyance of the
Contract and the Contract Files by Seller pursuant to this Agreement are not
subject to bulk transfer or any similar statutory provisions in effect in any
applicable jurisdiction.
(t) Taxes. All ad valorem, excise, and other taxes of any nature or
description whatsoever and all recording fees and title transfer costs relating
to the Contracts and the Financial Vehicles have been paid in full by Seller.
(u) Information. All financial statements, tax returns, journals,
ledgers, and other information furnished to Purchaser in connection with the
purchase of the Contracts was or will be at the time furnished true and correct
in all respects, and Seller has not made any untrue statement of material fact
or omitted to state any material fact to Purchaser or any of its officers and
agents in connection with the purchase of the Contracts by Purchaser. No
material adverse change has occurred in the business, prospects, profits,
properties, operations, or condition, financial or otherwise, except as
disclosed to Purchaser in such delivered information.
(v) No Assignment. 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 Insurance Policies or payments due under any Contract that is
senior to, equal with, or subordinate to that of Purchaser.
(w) Characteristics. The Contracts in each Pool had the following
characteristics as of the related Cut-Off Date: (i) each Contract is a retail
installment sales contract for the purposes of used Financed Vehicle statutes;
and (ii) none of the Financed Vehicles securing the Contracts has been titled as
salvaged, reconditioned, or reconstructed Motor Vehicles.
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(x) Computer Tape. The Computer Tape relating to the Pool made
available by Seller was complete and accurate as of the related Cut-Off Date and
includes a description of the same Contracts that are described in the Contract
Schedule.
(y) Marking Records. On or before the Closing Date, Seller will have
caused the portions of the Electronic Ledger relating to the Contracts to be
purchased as of the related Cut-Off Date to be clearly and unambiguously marked
to show that such Contracts are owned by Purchaser and, upon Purchaser's
request, shall provide Purchaser with evidence of such marking.
(z) Other. Without limiting any of the foregoing, Seller further
represents and warrants as to each Contract the following: (i) the Contract is
in form and substance in compliance with all applicable governmental
requirements; (ii) the Contract is the only instrument executed for the purchase
of the property described therein and is and will continue to be free from
defenses, offsets and counterclaims; (iii) all statements contained in each
Contract are true and correct and the unpaid balance as shown therein is
correct; (iv) any down payment in any Contract has been made in cash and not its
equivalent unless otherwise stated in each Contract; (v) no part of the down
payment described in any Contract and reflected as paid has been loaned or given
directly or indirectly by Seller to Obligor; (vi) the Financed Vehicle described
in the Contract has been delivered; (vii) each sale evidenced by said Contract
was completed in accordance with governmental requirements affecting such sale,
including, but not limited to, the Federal Truth-in-Lending Act, the Xxxxxxxx
and Xxxx Warranty Federal Trade Commission Improvement Act and Warrant Act,
Federal Equal Credit Opportunity Act, The Federal Trade Commission Act, and all
applicable state and local laws and regulations; (viii) all required disclosures
to Obligor were made in accordance with all governmental requirements; (ix) the
Obligor in each Contract had the legal capacity to enter into said Contract; and
(x) the names and signatures on each Contract are not forged, fictitious or
assumed and are true and correct.
ARTICLE IV
Covenants of Seller
Seller hereby agrees to keep, perform, and fully discharge the
following covenants and agreements:
Section 4.1 Effecting and Perfecting Each Sale of Contracts. At the
request of Purchaser, Seller will, at Seller's expense, promptly:
(i) take or cause to be taken any further action necessary or
appropriate to effect and perfect each sale and conveyance of each Contract made
hereunder;
(ii) execute or cause to be executed such documents and
instruments as are necessary or appropriate to effect and perfect each sale and
conveyance of each Contract made hereunder;
(iii) obtain from third parties all documents, instruments,
waivers, and releases necessary, and to take all other actions requested by
Purchaser, to facilitate each sale and conveyance of each Contract made
hereunder; and
(iv) execute a notice letter to the Obligors informing them of
the existence of this transaction and the sale and assignment of the applicable
Contract, and Seller hereby grants Purchaser the authority to mail such notice
letter to, or otherwise contact, Obligors informing them of the existence of
this transaction and the sale and assignment of the applicable Contract.
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Without limiting the generality of the foregoing, at Purchaser's
request, Seller will send appropriate notices of the transfer of the Contracts
to insurers under the Insurance Policies covering the Financed Vehicles securing
the Contracts and will send appropriate notices to the Obligors under the
Contracts.
Section 4.2 Certificate of Title. Seller has delivered and assigned to
Purchaser the original certificate of title with respect to each Financed
Vehicle that is the subject of each Contract purchased by Purchaser hereunder,
and Seller will not request any governmental agency to issue or cause to be
issued any copy of such certificate of title, except upon the written request of
Purchaser. If a temporary certificate of title has been obtained and delivered
to Purchaser, Seller will promptly obtain a permanent certificate of title,
reflecting Seller's lien, and deliver it to Purchaser as soon as it is obtained.
Section 4.3 No Future Lien. After the sale to Purchaser of any
Contract, Seller will not create or cause to be created any lien or claim that
is prior to or equal to the lien granted by the Contract against the Financed
Vehicle, including a lien for any work, labor, materials, or unpaid state or
federal taxes relating to a Financed Vehicle.
Section 4.4 Replacement and Repurchase of Contracts. Seller will
perform or cause to be performed the replacement and repurchase obligations set
forth in Article V of this Agreement.
Section 4.5 Relocation of Principal Executive Office. Seller shall give
Purchaser at least thirty (30) days prior written notice of any relocation of
its principal executive office and if, as a result of such relocation, the
applicable provisions of the UCC would require the filing of any amendment of
any previously filed financing or continuation statement or of any new financing
statement, Seller shall execute and deliver to Purchaser such amended or
replacement financing statement.
Section 4.6 Notice of Breach. Seller covenants and agrees to give
Purchaser prompt written notice upon discovery of a breach of any
representation, warranty, or covenant of this Agreement and upon the discovery
of any delinquency in the payment of unpaid principal and interest on any
Contract by Obligor.
ARTICLE V
Repurchase and Replacement of Contracts
Section 5.1 Repurchase and Replacement Obligation. Upon the occurrence
of a Triggering Event (as defined below), Seller agrees to replace or repurchase
any of the Contracts subject to such Triggering Event in the manner and within
the time period as provided in this Article V.
Section 5.2 Replacement of Contracts. Upon the occurrence of a
Triggering Event, Seller may elect to replace any Contract by delivering to
Purchaser a replacement contract (a "Replacement Contract"), which is acceptable
to Purchaser, within the time specified in this Article V. The Replacement
Contract delivered by Seller must be secured by a first priority lien on an
automobile and/or light-duty truck and must contain an equivalent pay-off amount
as of the date of exchange, the same term, the same APR, and such other terms
and provisions acceptable to Purchaser. To the extent Purchaser, in its sole
discretion, accepts a Replacement Contract with a term, APR, or pay-off amount
that varies in any way from that of the Contract to be replaced, the resulting
yield on the investment for Purchaser must be equivalent. Seller will pay to
Purchaser, or vice versa, an amount at the date of exchange which will make the
exchange exact as to value and yield. Seller shall reimburse Purchaser for any
and all expenses incurred by Purchaser with respect to any Contract replaced in
accordance with this Article V. The decision to accept or reject a Replacement
Contract is in the Purchaser's sole discretion, and Purchaser is under no
obligation to accept a Contract offered by Seller as a replacement. If Purchaser
does not accept the Replacement Contract, Seller must repurchase the delinquent
Contract from Purchaser pursuant to Section 5.5 hereof.
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Section 5.3 Manner of Replacement. If Purchaser accepts the Replacement
Contract offered by Seller, Seller shall promptly deliver to Purchaser the
Contract File related to the Replacement Contract, together with the documents
required to be delivered pursuant to Section 2.5 hereof. Upon receipt by
Purchaser of each of the foregoing (unless receipt of any is expressly waived by
Purchaser), Purchaser shall promptly deliver to Seller the Contract to be
replaced, the Contract File related to the Contract to be replaced, and all
other documents in the possession of Purchaser related to the Contract to be
replaced.
Section 5.4 Continuing Obligations of Seller on Replacement Contracts.
Seller agrees and acknowledges that the representations, warranties, covenants,
and other obligations of Seller arising under this Agreement with respect to all
Contracts shall continue and be enforceable with respect to any such Replacement
Contracts, including, but not limited to, the obligations and conditions of
Seller contained in Article II, the representations and warranties contained in
Article III hereof, the covenants of Seller contained in Article IV hereof, and
the repurchase and replacement obligations contained in this Article V.
Section 5.5 Repurchase of Contracts. Upon the occurrence of a
Triggering Event, Seller may elect to repurchase any Contract within the time
specified in this Article V. The purchase price for the Contract to be
repurchased shall be the payoff amount on the Contract plus all accrued and
unpaid interest thereon, less one-half of the unearned discount on the Contract
at the date of exchange. In addition, Seller shall reimburse Purchaser for any
and all expenses incurred by Purchaser with respect to such Contract. Upon the
receipt by Purchaser of the repurchase price together with any expenses as set
forth in this Section 5.5, Purchaser shall promptly deliver to Seller the
Contract to be repurchased, the Contract File related to the repurchased
Contract, and all other documents in the possession of Purchaser related to the
repurchased Contract.
Section 5.6 Triggering Events. For purposes of this Article V, a
Triggering Event shall mean:
(a) a breach by Seller of any representation, warranty, or covenant
contained in this Agreement and such breach has not been cured in all material
respects within five (5) days of Seller's receipt of notice of such breach from
Purchaser; or
(b) if any payment due under any Contract becomes delinquent for a
period of thirty (30) days or more.
Section 5.7 Timing of Seller's Repurchase and Replacement Obligations.
Seller must complete its repurchase and replacement obligations pursuant to this
Article V within five (5) days of the expiration of the cure period set forth in
Section 5.6(a) or within ten (10) days following the date at which a Contract
becomes delinquent for thirty (30) days as set forth in Section 5.6(b).
Section 5.8 Right and First Option to Purchase or Exchange Contracts.
Seller hereby agrees that in the event and during such time of a default by
Seller under the terms of this Agreement, including, without limitation, the
failure of Seller to timely repurchase or replace any Contract pursuant to this
Article V, then, in such event, Seller will not sell, assign, encumber, or
otherwise transfer or dispose to any third party any retail installment sales
contract owned by Seller and secured by first priority liens on automobiles and
light-duty trucks unless Seller first offers such contract to Purchaser either
for (a) purchase at a price to be calculated in accordance with the terms of
this Agreement or (b) exchange in accordance with Section 5.2, with such
election to be made by Purchaser in Purchaser's sole discretion. Purchaser will
have five (5) business days following the presentment of any contracts by Seller
to exercise the right and first option granted hereunder. If Purchaser notifies
Seller of its intent not to purchase or exchange such contracts or if Purchaser
fails to notify Seller of its intention within such five (5) day period, Seller
may sell, assign, encumber, or otherwise transfer or dispose of such contracts
to any third party. Seller agrees and acknowledges that the representations,
warranties, covenants, and other obligations of Seller arising under this
Agreement with respect to all Contracts shall continue and be enforceable with
respect to any contracts purchased or exchanged by Purchaser pursuant to this
Section 5.8, including, but not limited to, the obligations and conditions of
Seller contained in Article II, the representations and warranties contained in
Article III hereof, the covenants of Seller contained in Article IV hereof, and
the repurchase and replacement obligations contained in this Article V.
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ARTICLE VI
Indemnification
Seller hereby agrees to protect, defend, indemnify, and hold Purchaser
and its assigns and their respective attorneys, accountants, employees, agents,
officers, and directors harmless from and against all losses, liabilities,
damages, judgments, claims, counterclaims, demands, actions, proceedings, costs
and expenses (including reasonable attorneys' fees) of every kind and character
resulting from, relating to, or arising out of this Agreement and the
transactions contemplated hereby including, without limitation, those resulting
from, relating to, or arising out of (a) the inaccuracy, nonfulfillment, or
breach of any representation, warranty, covenant, or agreement made by Seller
herein or in the documents described in Section 2.4 or Section 2.5 hereof, (b)
any legal action, including any counterclaim, to the extent it is based upon
alleged facts that, if true, would constitute a breach of any representation,
warranty, covenant, or agreement made by Seller herein or in the documents
described in Section 2.4 or Section 2.5 hereof, (c) any actions or omissions of
Seller or any employee or agent of Seller, or any negligent, reckless or willful
misconduct of Seller or any employee or agent of Seller, occurring prior to the
Cut-Off Date with respect to any Contract or the Financed Vehicle, or (d) the
violation or claim of violation of any of the State's laws by Seller or any
person acting for or on behalf of Seller.
ARTICLE VII
Miscellaneous Provisions
Section 7.1 Amendment. This Agreement may be amended from time to
time by Seller and Purchaser only by written agreement signed by Seller and
Purchaser.
Section 7.2. Disputes. In the event of a dispute regarding the terms of
this Agreement, the breach of any representation or warranty contained herein,
or any matter arising hereunder, if Seller and Purchaser cannot otherwise agree,
the matter shall be submitted to binding arbitration under the Commercial Rules
of the American Arbitration Association before an independent qualified expert
in Dallas, Texas. Purchaser and Seller agree that an arbitrator may, in addition
to any other remedy at law or equity, award punitive, consequential, or special
damages against a party for any claim, controversy, or dispute arising under or
in any way relating to this Agreement, whether arising in equity, contract, or
tort (including, without limitation, any claim for fraud or negligence).
Section 7.3 Injunctive Relief; Specific Performance. Notwithstanding
the foregoing terms of Section 7.2, Purchaser and Seller acknowledge and agree
that the failure of any party to perform its agreements and covenants under this
Agreement will cause irreparable injury to the other party for which damages,
even if available, will not be an adequate remedy. Accordingly, each party
hereby consents and agrees to the issuance of injunctive relief by any court of
law of competent jurisdiction (a) in the event of a dispute regarding the terms
of the Agreement, the breach of any representation, warranty, or covenant
contained in the Agreement, or any other dispute, controversy, or claim between
the Purchaser and Seller arising under or in any way related to the Agreement or
the transactions contemplated thereby or (b) to compel specific performance of
such party's obligations and to the granting by any court of the remedy of
specific performance of its obligations under this Agreement.
Section 7.4 Remedies. Purchaser and Seller agree that (a) all rights
and remedies under this Agreement are cumulative and that no election or
exercise of any right or remedy will be deemed an exclusion of any other right
or remedy and (b) unless expressly stated, no right or remedy under this
Agreement will be deemed a limitation on any other right or remedy.
Section 7.5 Further Assurances. In order to facilitate enforcement of
Purchaser's rights hereunder with respect to any Contract and Financed Vehicle,
Seller shall, promptly after the request by Purchaser or its assigns, and at
Seller's expense, do and perform or cause to be done and performed every
reasonable act and thing necessary or advisable to carry out to the intent of
this Agreement (including, without limitation, ensuring that Purchaser has the
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right and ability to enforce payment and performance of the Contracts). Seller
hereby grants an irrevocable power of attorney coupled with an interest to
Purchaser for the specific purpose of exercising all rights and remedies Seller
would have with respect to the Contracts, titles to motor vehicles serving as
collateral, and the Financed Vehicles securing them, but for sale of the
Contracts to Purchaser. Seller hereby authorizes Purchaser to send the notice
letter to Obligors informing them of the existence of this transaction and the
assignment of the applicable Contract.
Section 7.6 Counterparts. This Agreement may be executed simultaneously
in any number of counterparts, each of which shall be deemed to be an original,
and all of such counterparts shall constitute one and the same Agreement.
Section 7.7 Survival. The obligations of Seller and Purchaser under
this Agreement, including, but not limited to, the representations and
warranties set forth in Article III, the covenants set forth in Article IV, the
repurchase and replacement obligations set forth in Article V, and the
obligations of Seller contained in Article VI shall survive the sale of
Contracts to Purchaser.
Section 7.8 Notices. All demands, notices, and communications hereunder
shall be in writing and shall be deemed to have been duly given if delivered
personally, delivered by a national overnight delivery service, or mailed by
first class mail, postage prepaid, to the address of each party set forth on the
signature page of this Agreement, which address is the principal place of
business of such party unless otherwise indicated.
Section 7.9 Severability of Provisions. If any one or more of the
covenants, agreements, provisions, or terms of this Agreement shall be held
invalid for any reason whatsoever, then such covenants, agreements, provisions,
or terms shall be deemed severable from the remaining covenants, agreements,
provisions, or terms of this Agreement and shall in no way affect the validity
or enforceability of the other provisions of this Agreement.
Section 7.10 No Partnership. Nothing herein contained shall be deemed
or construed to create a co-partnership or joint venture between the parties
hereto.
Section 7.11 Governing Law. This Agreement shall be construed in
accordance with the laws of the State of Texas and the obligations, rights, and
remedies of the parties hereunder shall be determined in accordance with such
laws without giving effect to the conflict of laws principles thereof. This
Agreement is performable in Dallas County, Texas, which is proper venue for all
legal proceedings. Each of the parties expressly consents to the personal
jurisdiction of the courts of the State of Texas.
Section 7.12 Successor and Assigns. This Agreement shall inure to the
benefit of and be binding upon Seller and Purchaser and their respective
successors and assigns; provided, however, that this Agreement may not be
assigned by Seller without the prior written consent of Purchaser. Purchaser may
sell, assign, hypothecate, pledge, or otherwise convey this Agreement or any
Contract purchased hereunder without the prior written consent of Seller.
Section 7.13. Attorneys' Fees and Costs. If attorneys' fees or other
costs are incurred to secure performance of any obligations under the Agreement,
or to establish damages for the breach thereof or to obtain any other
appropriate relief at law or equity, whether by way of prosecution or defense,
the prevailing party shall be entitled to recover reasonable attorneys' fees and
costs incurred in connection therewith.
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IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
signed and delivered by its duly authorized officers or representatives on this
12th day of January, 1999.
SELLER: PURCHASER:
------ ---------
ACE Motor Company AutoPrime, Inc.
By: /s/ Xxxxxxx Xxxxxx By: /s/ Xxxxxx X. Xxxxxx
---------------------- -------------------------
Title: President Title: Director of Marketing
Address: 0000 Xxxxxx Xxxx Address: 000 Xxxxxxxx Xxxxx
Xxxxx 000 Xxxxx 0000
Xxxxxx, Xxxxx 00000 Xxxxxx, Xxxxx 00000
STATE OF TEXAS
COUNTY OF DALLAS
The foregoing instrument was acknowledged before me this 12th day of
January, 1999 by Xxxxxxx Xxxxxx, President of ACE Motor Company, a Texas
corporation.
/s/ Xxxx X. Xxxxxxx
------------------------
Notary Public in and for
said County and State
My commission expires: 10-16-2001
(SEAL)
STATE OF TEXAS
COUNTY OF DALLAS
The foregoing instrument was acknowledged before me this 12th day of
January, 1999 by Xxxxxx X. Xxxxxx, Director of Marketing of AutoPrime, Inc., a
Delaware corporation.
/s/ Xxxx X. Xxxxxxx
My commission expires: 10-16-2001 ---------------------------------
(SEAL) Notary Public in and for
said County and State
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