ASSET PURCHASE AGREEMENT
Exhibit
10.1
This
is
an ASSET PURCHASE AGREEMENT (this “Agreement”), dated as of November 3, 2006, by
and between FIRSTPLUS Auto Group, Inc., a Texas corporation (the “Buyer”), and
Xxxxx Xxxxxxx (the “Seller”).
RECITALS
WHEREAS,
the Seller is engaged in the business of executing motor vehicle retail
installment sale contracts with motor vehicle purchasers, creating the
contracts, the related receivables and servicing rights; and
WHEREAS,
the Buyer desires to enter into an agreement with the Seller, pursuant to which
the Buyer will purchase from the Seller, and Seller will sell to Buyer, such
contracts and the related receivables and servicing rights; and
WHEREAS,
the Seller is willing to sell all such contracts and receivables and servicing
rights; and
NOW,
THEREFORE, in consideration of the premises and the mutual covenants herein
contained, the parties hereto agree as follows:
ARTICLE
I
DEFINITIONS
Section
1.1 Definitions.
As
used
herein, the following words and phrases shall have the following meanings,
unless the content clearly requires otherwise:
“Agreement”
shall mean this Asset Purchase Agreement, as it may from time to time be
amended, supplemented or otherwise modified in accordance with the terms hereof.
“Amount
Financed” means, with respect to a Receivable, the aggregate amount advanced
under such Receivable toward the purchase price of the Financed Vehicles and
any
related costs, including amounts advanced in respect of accessories, insurance
premiums, service, car club and warranty contracts, other items customarily
financed as part of motor vehicle retail installment sale contracts or
promissory notes, and related costs.
“Ancillary
Servicing Income” means, all compensation, other than the Servicing Fees, to
which the servicer of the Receivables is entitled to receive as provided in
each
of the Servicing Agreements, including without limitation, prepayment fees,
late
fees, bad check charges, telefacsimile fees, assumption fees, subordination
fees, premiums, and interest, income or other direct monetary benefits relating
to accounts into which payments with respect to the Receivables (including
payments of principal and interest) are deposited and held.
“Closing
Date” means November 3, 2006.
“Conveyed
Property” means any and all of the property described in the Section 2.1
below.
“Cut-off
Date” means November 3, 2006.
“Dealer”
means a dealer who sold a Financed Vehicle and who originated and assigned
the
respective Receivable to the Seller or an Originator under a Dealer
Agreement.
“Dealer
Agreement” means any agreement between the Seller or an Originator and a Dealer
relating to the acquisition of Receivables from a Dealer by the Seller or an
Originator.
“Dealer
Assignment” means, with respect to a Receivable, the executed assignment
executed by a Dealer conveying such Receivable to an Originator.
“Due
Date”
means, with respect to a Receivable, the date on which a payment on such
Receivable is due.
“Financed
Vehicle” means an automobile or light-duty truck, together with all accessions
thereto, securing an Obligor’s indebtedness under the respective
Receivable.
“Governmental
Authority” means (a) any federal, state, county, municipal or foreign government
or political subdivision thereof, (b) any governmental or quasi-governmental
agency, authority, board, bureau, commission, department, instrumentality or
public body, (c) any court or administrative tribunal or (d) with respect to
any
Person, any arbitration tribunal or other non-governmental authority to the
jurisdiction of which such Person has consented.
“Lien”
means a security interest, lien, charge, pledge, equity, or encumbrance of
any
kind.
“Lien
Certificate” means, with respect to a Financed Vehicle, an original certificate
of title, certificate of lien or other notification issued by the Registrar
of
Titles of the applicable state to a secured party which indicates that the
lien
of the secured party on the Financed Vehicle is recorded on the original
certificate of title. In any jurisdiction in which the original certificate
of
title is required to be given to the Obligor, the term “Lien Certificate” shall
mean only a certificate or notification issued to a secured party.
“Lockbox
Account” means any bank account into which collections under the Receivables are
deposited.
“Lockbox
Agreement” means a letter agreement among a bank, the Seller, and a Servicer
relating to one or more Lockbox Accounts, as the same may be amended,
supplemented, amended and restated or otherwise modified from time to time
in
accordance with the terms thereof.
“Obligor”
on a Receivable means the purchaser or co-purchasers of the Financed Vehicle
and
any other Person who owes payments under the Receivable.
“Officers’
Certificate” means a certificate signed by (i) the Chairman of the Board,
President, Executive Vice President, Senior Vice President, Vice President,
or
Assistant Vice President of the Person delivering such certificate, or (ii)
by a
Servicing Official in the case of the Servicer, and in each case delivered
pursuant to this Agreement.
“Opinion
of Counsel” means a written opinion singed by legal counsel to the Person
delivering such opinion.
“Originator”
means consumer finance companies, depository institutions and other financial
institutions engaged in the financing of motor vehicle retail installment sale
contracts from whom the Seller acquired Receivables; provided, however, that
“Originators” shall not include Dealers.
“Originator
Agreement” means an agreement pursuant to which the Seller acquired Receivables
from an Originator.
“Person”
means any individual, corporation, estate, partnership, joint venture,
association, joint stock company, trust (including any beneficiary thereof),
unincorporated organization or government or any agency or political subdivision
thereof or any other entity.
“Principal
Balance” means, with respect to any Receivable, as of any date, the Amount
Financed minus the principal portion of each payment applied to such Receivable
and processed by the Servicer on or before such date.
“Receivable”
means each motor vehicle retail installment sale contract and security agreement
(including any and all rights to receive payments thereunder on and after the
Cut-off Date and security interests in the Financed Vehicle securing such
contract or note) assigned and transferred to the Buyer hereunder as of the
Closing Date.
“Receivable
Documents” means, with respect to a Receivable, all papers and documents
(including those contained in the Receivable File) and all other papers and
records (including computerized data) of whatever kind or description, required
to document the Receivable or to service the Receivable.
“Receivables
Files” means with respect to a Receivable, the fully executed original of such
Receivable; the original Title Document or UCC financing statement evidencing
that the security interest in a Financed Vehicle granted to the Seller under
such Receivable has been perfected under applicable state law (except for any
Title Documents or UCC financing statements not returned from the applicable
public records office, in which case the Seller will deliver to the Buyer,
on
the Closing Date a Seller’s Certificate indicating that the original of such
Title Document has been applied for at, or the original of such UCC financing
statement was delivered to, such public office and shows the Seller as the
lienholder or secured party and that the Seller will deliver the originals
thereof when returned from such office); the original of any assumption
agreement or any modification, extension or refinancing agreement; and the
original application of the related Obligor to obtain the financing extended
by
such Receivable.
“Receivables
Purchase Price” means $520,000, with a 20% hold back for credit enhancement for
the benefit of the Buyer (the “Hold Back Amount”). An initial payment of
$208,000 (or 40% of the Receivables Purchase Price) will be paid on the Closing
Date by
wire
transfer of immediately available funds, in lawful money of the United States
of
America, to the bank account of Seller as notified in writing to
Buyer.
A
second installment payment of $208,000 (or 40% of the Receivables Purchase
Price) will be paid 60 days subsequent to the Cut-off Date on January 2, 2007
by
wire
transfer of immediately available funds, in lawful money of the United States
of
America, to the bank account of Seller as notified in writing to
Buyer.
The
initial 20% Hold Back Amount of $104,000 will be released to the Seller on
a
monthly basis by
wire
transfer of immediately available funds, in lawful money of the United States
of
America, to the bank account of Seller as notified in writing to
Buyer
when the
cumulative collections on the notes in the Receivable Schedule is greater than
the $526,000. For each month end, the amount of the Hold Back Amount to be
released to Seller will be the amount of cumulative collections on the notes
in
the Receivable Schedule in excess of $526,000.
“Receivables
Schedule” means the schedule of Receivables attached hereto as Schedule
A,
such
schedule identifying each Receivable being transferred and assigned to the
Trust
pursuant to this Agreement by the name of the Obligor and setting forth as
to
each such Receivable its Principal Balance as of the Cut-off Date, loan number,
the annual percentage rate (as such term is used with respect to the federal
Truth-in-Lending Act) of interest borne by, and indicated on, such Receivable,
scheduled monthly payment of principal and interest, final maturity date and
original principal amount.
“Registrar
of Titles” means, with respect to any state, the governmental agency or body
responsible for the registration of, and the issuance of certificates of title
relating to, motor vehicles and liens thereon.
“Seller’s
Certificate” means a certificate signed by Seller and delivered pursuant to this
Agreement.
“Servicer”
means the servicer of the Receivables with whom the Buyer has entered into a
Servicing Agreement, if any, and each successor Servicer.
“Servicing
Agreements” means each of the agreements which govern the rights and obligations
with respect to the servicing of the receivables.
“Servicing
Fees” means with respect to each Receivable, the fee that the servicer of such
Receivable is entitled to receive in accordance with the related Servicing
Agreements.
“Servicing
Files” means with respect to each of the receivables, the documents, files and
other items, including but not limited to, the related Receivable File, the
computer files, data disks, books, records, data tapes, notes and all additional
documents generated as a result of or utilized in connection with the
origination of such Receivable and/or are necessary to service such
Receivable.
“Servicing
Rights” means with respect to each Receivable, all of Seller’s right, title, and
interest in and to each of the Servicing Agreements, including (a) all rights
to
service and collect amounts due under the receivables; (b) any payments or
monies payable to, or to be received for, servicing the Receivables, including
without limitation, Servicing Fees and any Ancillary Servicing Income; (c)
all
agreements or documents creating, defining or evidencing any such Servicing
Rights and all rights of the Seller thereunder, including, but not limited
to,
any clean-up calls and termination options; (d) possession and use of any and
all Servicing Files pertaining to the Receivables; and (e) all rights, powers
and privileges incident to any of the foregoing.
“Servicing
Official” means any employee of the Servicer involved in, or responsible for,
the administration and servicing of the Receivables whose name appears on a
list
of servicing employees furnished to the Buyer by the Servicer, as such list
may
from time to time be amended.
“Title
Documents” means, with respect to any Financed Vehicle, the actual motor vehicle
title or certificate of title for such Financed Vehicle issued by the Registrar
of Titles or other government agency in the jurisdiction in which such Financed
Vehicle is registered; alternatively, in those certain jurisdictions whose
law
requires that the original of the actual motor vehicle title or certificate
of
title be possessed by the Obligor, then, in lieu of the actual title or
certificate of title, Title Documents shall mean such duplicate titles,
certificates or other documents as are permitted, required and/or contemplated
to be possessed by the secured party under the laws of such
jurisdiction.
“Transaction
Documents” means this Agreement and any other agreements, documents or
instruments contemplated by or to be executed and delivered in connection with
this Agreement.
“UCC”
means the Uniform Commercial Code as in effect in the relevant jurisdiction
on
the date of the Agreement.
Section
1.2 Other
Definitional Provisions.
(a) All
terms
defined in this Agreement shall have the defined meanings when used in any
instrument governed hereby and in any certificate or other document made or
delivered pursuant hereto unless otherwise defined therein.
(b) As
used
in this Agreement, in any instrument governed hereby and in any certificate
or
other document made or delivered pursuant hereto or thereto, accounting terms
not defined in this Agreement or in any such instrument, certificate or other
document, and accounting terms partly defined in this Agreement or in any such
instrument, certificate or other document to the extent not defined, shall
have
the respective meanings given to them under generally accepted accounting
principles as in effect on the date of this Agreement or any such instrument,
certificate or other document, as applicable. To the extent that the definitions
of accounting terms in this Agreement or in any such instrument, certificate
or
other document are inconsistent with the meanings of such terms under generally
accepted accounting principles, the definitions contained in this Agreement
or
in any such instrument, certificate or other document shall
control.
(c) Any
agreement, instrument or statute defined or referred to herein or in any
instrument or certificate delivered in connection herewith means such agreement,
instrument or statute as from time to time amended, modified or supplemented
and
includes (in the case of agreements or instruments) references to all
attachments thereto and instruments incorporated therein; references to a Person
are also to its permitted successors and assigns.
Section
1.3 Usage
of Terms. With
respect to all terms used in this Agreement, the singular includes the plural
and the plural includes the singular; words importing any gender include the
other gender; references to “writing” include printing, typing, lithography, and
other means of reproducing words in a visible form; references to agreements
and
other contractual instruments include all subsequent amendments thereto or
changes therein entered into in accordance with their respective terms and
not
prohibited by this Agreement; references to Persons include their permitted
successors and assigns; the terms “include” or “including” mean “include without
limitation” or “including without limitation”; the words “herein”, “hereof” and
“hereunder” and other words of similar import refer to this Agreement as a whole
and not to any particular Article, Section or other subdivision, and Article,
Section, Schedule and Exhibit references, unless otherwise specified, refer
to
Articles, Sections, Schedules and Exhibits to this Agreement.
Section
1.4. Certain
References. All
references to the Principal Balance of a Receivable as of any date of
determination shall refer to the close of business on such day.
Section
1.5. Calculations
as to Principal and Interest in Respect of Receivables. For
all
purposes of this Agreement the allocation of a payment on a Receivable between
principal and interest shall be made based upon the amortization method provided
in such Receivable. For purposes of allocating a pay-ahead payment on a
Receivable between principal and interest, the pay-ahead shall be deemed to
have
been received on the date it was actually due. For all purposes of this
Agreement, no amount shall be treated as collected under a Receivable until
such
amount has been deposited into the Lockbox Account.
ARTICLE
II
SALE
OF RECEIVABLES
Section
2.1. Sale
of Receivables. Subject
to the satisfaction of the conditions precedent set forth in Article III hereof,
on the Closing Date in consideration of the Buyer’s delivery to or upon the
order of the Seller by wire transfer in immediately available funds to the
account designated by Seller in accordance with the definition of the
Receivables Purchase Price, the Seller shall sell, transfer, assign, pledge,
set
over and otherwise convey to the Buyer, without recourse (subject to the
obligations set forth herein), all right, title and interest of the Seller
in,
to and under:
(a) the
Receivables and all moneys received thereon on or after the Cut-off Date;
(b) all
security interests in the Financed Vehicles granted by Obligors pursuant to
the
Receivables sold and any other interest of the Seller in such Financed Vehicles;
(c) all
proceeds and all rights to receive proceeds with respect to the Receivables
sold
from claims on any physical damage, credit life or disability insurance policies
covering Financed Vehicles or Obligors and any proceeds from the liquidation
of
such Receivables;
(d) all
of
Seller’s right, title and interest in and to (i) the Servicing Rights, (ii) the
Servicing Files, and (iii) the Servicing Agreements;
(e) the
related Receivables Files and any and all other documents that the Seller keeps
on file in accordance with its customary procedures relating to the Receivables,
the Obligors or the Financed Vehicles; and
(f) all
proceeds of any and all of the foregoing.
Section
2.2 Nature
of Transaction.
It
is the
intention of the Seller that each sale and assignment contemplated by this
Agreement shall constitute a sale of the Receivables and other property from
the
Seller to the Buyer and the beneficial interest in and title to the Receivables
and the Conveyed Property shall not be part of the Seller’s estate in the event
of the filing of a bankruptcy petition by or against the Seller under any
bankruptcy law. In the event that, notwithstanding the intent of the Seller,
the
sale and assignment contemplated hereby is held not to be a sale, this Agreement
shall constitute a security agreement, and the Seller hereby grants to the
Buyer
a security interest in all of the Conveyed Property, whether now owned or
hereafter acquired and wherever located. At the request of the Buyer, the
Seller, at its expense, will take all action necessary or advisable to perfect
and protect such security interest, free and clear of all Liens.
Section
2.3 Further
Encumbrance of Conveyed Property; Additional Covenants of the
Seller.
(a) Immediately
upon the conveyance to the Buyer by the Seller of any item of the Conveyed
Property, all right, title and interest of the Seller in and to such item of
Conveyed Property shall terminate, and all such right, title and interest shall
vest in the Buyer.
(b) Immediately
upon the vesting of the Conveyed Property in the Buyer, the Buyer shall have
the
sole right to transfer, sell, pledge or otherwise encumber, the Conveyed
Property.
(c) Without
limiting the foregoing, the Seller covenants as follows:
(i) Liens
in Force.
The
Financed Vehicle securing each Receivable shall not be released by the Seller
in
whole or in part from the security interest granted under the Receivable, except
upon payment in full of the Receivable or as otherwise contemplated herein
and
the Seller shall not take or permit any action inconsistent with the foregoing;
(ii) No
Impairment.
The
Seller shall do nothing to impair the rights of the Buyer in the Receivables,
the Dealer Agreements, the Dealer Assignments, Originator Agreements, the
Insurance Policies or any other property or interest comprising the Other
Conveyed Property;
(iii) No
Amendments.
The
Seller shall not take or permit any action to extend or otherwise amend the
terms of any Receivable; and
(iv) Restrictions
on Liens.
The
Seller shall not: (i) create or incur or agree to create or incur, or consent
to
cause (upon the happening of a contingency or otherwise) the creation,
incurrence or existence of any Lien or restriction on transferability of the
Receivables or of any Conveyed Property except for the Lien in favor of the
Buyer, and the restrictions on transferability imposed by this Agreement or
(ii)
sign or file under the UCC of any jurisdiction any financing statement or sign
any security agreement authorizing any secured party thereunder to file such
financing statement, with respect to the Receivables or to any Conveyed
Property. The Seller will take no action to cause any Receivable to be evidenced
by an instrument (as such term is defined in the relevant UCC).
Section
2.4 Power
of Attorney.
The
Seller hereby irrevocably constitutes and appoints the Buyer and any officer
or
agent thereof, with full power of substitution, as its true and lawful
attorney-in-fact with full irrevocable power and authority in the name of the
Seller or in its own name, to take, any and all actions and to execute any
and
all documentation which the Buyer at any time and from time to time deems
necessary or desirable to: (a) convey to the Buyer all of the Seller's right,
title and interest in and to each Receivable and any and all of the other
Conveyed Property, (b) to permit the Buyer to exercise the rights and remedies
provided for herein and in the related Receivable Documents and Receivables
Files, (c) to permit the Buyer to sell, transfer, pledge, convey, make any
agreement with respect to or otherwise deal with any of the Receivables and
other Conveyed Property as the absolute owner thereof for all purposes, and
to
do, at the Buyer's option at any time, or from time to time, all acts and things
which the Buyer deems necessary to protect, preserve, maintain, or realize
upon
the Receivables and other Conveyed Property. THIS POWER OF ATTORNEY IS A POWER
COUPLED WITH AN INTEREST AND SHALL BE IRREVOCABLE. This power of attorney is
conferred on the Buyer to protect, preserve, maintain and realize upon its
interest in the Receivables and the other Conveyed Property.
ARTICLE
III
CONDITIONS
PRECEDENT
Section
3.1 Deliveries
by the Seller. In
addition to the receipt of documents and satisfaction of other conditions set
forth in Article II hereto, the following shall have been delivered, and shall
be satisfactory in form and substance to the Buyer such documents, instruments
and certificates as the Buyer may reasonably request.
ARTICLES
IV
THE
RECEIVABLES
Section
4.1 Representations
and Warranties of the Seller.
The
Seller makes the following representations and warranties as to the Receivables
on which the Buyer is deemed to have relied in acquiring the Receivables. Such
representations and warranties speak as of the execution and delivery of this
Agreement and as of the Closing Date with respect to the Receivables sold on
such date, but shall survive the sale, transfer and assignment of the
Receivables to the Buyer:
(a) immediately
prior to the Closing Date, the Seller had a valid, subsisting and enforceable
security interest in the related Financed Vehicle, and such security interest
had been duly perfected and was prior to all other present and future liens
and
security interests (except future tax liens and liens that, by statute, may
be
granted priority over previously perfected security interests) that now exist
or
may hereafter arise, and the Seller had the full right to assign such security
interest to the Buyer;
(b) on
and
after the Closing Date, there shall exist under the Receivable a valid,
subsisting and enforceable first priority perfected security interest in the
Financed Vehicle securing such Receivable (other than, as to the priority of
such security interest, any statutory lien arising by operation of law after
the
Closing Date which is prior to such interest) and at such time as enforcement
of
such security interest is sought there shall exist a valid, subsisting and
enforceable first priority perfected security interest in such Financed Vehicle
in favor of the Buyer (other than, as to the priority of such security interest,
any statutory lien arising by operation of law after the Closing Date, which
is
prior to such interest);
(c) no
Receivable has been sold, assigned or pledged to any other Person or any such
pledge has been released; immediately prior to the transfer and assignment
herein contemplated, the Seller has good and marketable title thereto free
and
clear of any lien, encumbrance, equity, pledge, charge, claim or security
interest and is the sole owner thereof and has full right to transfer such
Receivable to the Buyer. 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 Dealer Agreements, Originator Agreements,
payments due under such Receivable or any insurance policy benefiting the holder
of the Receivable providing loss or physical damage, credit life, credit
disability, theft, mechanical breakdown or similar coverage with respect to
any
Receivable;
(d) upon
the
transfers pursuant to Section 2.1, the Buyer will have a first priority
ownership or security interest in each such Receivable free and clear of any
encumbrance, lien, pledge, charge, claim, security interest or rights of others;
the purchase of each such Receivable by the Seller from a Dealer or Originator
was not an extension of financing to such Dealer or Originator;
(e) there
is
no lien against any related Financed Vehicle for delinquent taxes;
(f) there
is
no right of rescission, offset, defense or counterclaim to the obligation of
the
related Obligor to pay the unpaid principal or interest due under such
Receivable; the operation of the terms of such Receivable or the exercise of
any
right thereunder will not render such Receivable unenforceable in whole or
in
part or subject to any right of rescission, offset, defense or counterclaim,
and
no such right of rescission, offset, defense or counterclaim has been asserted;
(g) no
Receivable is assumable by another Person in a manner which would release the
Obligor thereon from such Obligor’s obligations to the Seller with respect to
such Receivable;
(h) there
are
no prior liens or claims for work, labor or material affecting any related
Financed Vehicle which are or may become a lien prior to or equal with the
security interest granted by such Receivable;
(i) each
Receivable and the sale of the related Financed Vehicle complied at the time
it
was originated or made, and at the date such Receivable is sold by the Seller
to
the Buyer, complies, in all material respects, with all requirements of
applicable Federal, state and local laws and regulations thereunder, including,
without limitation, usury laws, the Federal Truth-in-Lending Act, the Equal
Credit Opportunity Act, the Federal Trade Commission Act, the Fair Credit
Billing Act, the Fair Credit Reporting Act, the Fair Debt Collection Practices
Act, the Xxxxxxxx-Xxxx Warranty Act, the Federal Reserve Board’s Regulations B
and Z, the Federal Trade Commission Credit Practices Rule, state unfair and
deceptive trade practice laws, and state adaptations of the National Consumer
Act and of the Uniform Consumer Credit Code, and any other applicable consumer
credit, equal credit opportunity and disclosure laws;
(j) each
such
Receivable is a legal, valid and binding obligation of the Obligor thereunder
and is enforceable in accordance with its terms, except only as such enforcement
may be limited by laws affecting the enforcement of creditors’ rights generally
whether enforcement is sought in a proceeding in equity or at law, and all
parties to such Receivable had full legal capacity to execute such Receivable
and all documents related thereto and to grant the security interest purported
to be granted thereby at the time of execution and grant;
(k) as
of the
Closing Date, the terms of each such Receivable have not been impaired, waived,
altered or modified in any respect, except by written instruments that are
part
of the Receivable Documents, and no such Receivable has been satisfied,
subordinated or rescinded;
(l) at
the
time of origination of each such Receivable, the proceeds of such Receivable
were fully disbursed, there is no requirement for future advances thereunder,
and all fees and expenses in connection with the origination of such Receivable
have been paid;
(m) there
is
no default, breach, violation or event of acceleration existing under any such
Receivable and no event which, with the passage of time or with notice or with
both, would constitute a default, breach, violation or event of acceleration
under any such Receivable or would otherwise affect the value or marketability
of such contract; the Seller has not waived any such default, breach, violation
or event of acceleration; and as of the Cut-off Date, the related Financed
Vehicle has not been repossessed;
(n) at
the
origination date of each such Receivable, the related Financed Vehicle was
covered by a comprehensive and collision insurance policy (a) in an amount
at
least equal to the lesser of (i) the actual cash value of the related Financed
Vehicle or (ii) the unpaid balance owing of such Receivable, less the amount
of
the add-on finance charge that, under the term of such Receivable, would be
required to be refunded or credited to the related Obligor in accordance with
such Receivable if such Receivable were then prepaid in full, (b) naming the
Seller as a loss payee and (c) insuring against loss and damage due to fire,
theft, transportation, collision and other risks generally covered by
comprehensive and collision coverage; each Receivable requires the Obligor
to
maintain physical loss and damage insurance, naming the Seller as an additional
insured party;
(o) each
such
Receivable that was acquired by the Seller from either a Dealer with which
it
ordinarily does business or from an Originator; such Dealer or Originator,
as
applicable, had full right to assign to the Seller such Receivable and the
security interest in the related Financed Vehicle (and the Dealer that assigned
any such Receivable to any such Originator had full right to assign to such
Originator such Receivable and the security interest in the related Financed
Vehicle) and the Dealer’s or Originator’s assignment thereof to the Seller is
legal, valid and binding (and any assignment by an Dealer to any Originator
is
legal, valid and binding);
(p) each
such
Receivable contains customary and enforceable provisions such as to render
the
rights and remedies of the holder thereof adequate for the realization against
the related Financed Vehicle of the benefits of the security;
(q) scheduled
payments under each such Receivable are due monthly (or, in the case of the
first payment, no later than the forty-fifth day after the date of the
Receivable) in substantially equal amounts to maturity (other than with respect
to those Receivables designated as balloon contracts on the related Receivables
Schedule), and will be sufficient to fully amortize such Receivable at maturity,
assuming that each scheduled payment is made on its Due Date; such scheduled
payments are applicable only to payment of principal and interest on such
Receivable and not to the payment of any insurance premiums (although the
proceeds of the extension of credit on such Receivable may have been used to
pay
insurance premiums); and the original term to maturity of each such Receivable
was not more than 60 months;
(r) each
Receivable provides for, in the event that such contract is prepaid, a
prepayment that fully pays the principal balance and includes accrued but unpaid
interest through the date of prepayment in an amount at least equal to the
annual Percentage rate;
(s) the
collection practices used with respect to each such Receivable have been in
all
material respects legal, proper, prudent and customary in the automobile
installment sales contract or installment loan servicing business;
(t) there
is
only one original of each such Receivable, the Seller or a servicer is currently
in possession of the Receivable Documents for such Receivable and there are
no
custodial agreements in effect adversely affecting the rights of the Seller
to
make the deliveries required hereunder on the Closing Date;
(u) as
of the
Cut-off Date, no Obligor was the subject of a current bankruptcy proceeding;
(v) with
respect to each Due Period, the aggregate of the interest due on all the
Receivables in such Due Period from scheduled payments is in excess of the
Servicing Fee due;
(w) the
Receivables constitute “chattel paper” within the meaning of the UCC as in
effect in the applicable jurisdiction and all filings (including without
limitation, UCC filings) required to be made and all actions required to be
taken or performed by any Person in any jurisdiction to give the Seller a first
priority perfected lien on, or ownership interest in, the Receivables and the
proceeds thereof have been made, taken or performed;
(x) the
information regarding such Receivables set forth in the Receivables Schedule
is
true and correct in all material respects at the Cut-off Date and the Closing
Date; each Receivable was originated in the United States of America and at
the
time of origination, materially conformed to all requirements of the Seller’s
underwriting policies and guidelines then in effect; and no Obligor is the
United States of America or any state or any agency, department, subdivision
or
instrumentality thereof;
(y) by
the
Closing Date, the Seller will have caused the portions of the Seller’s servicing
records relating to the Receivables to be clearly and unambiguously marked
to
show that the Receivables constitute part of the Conveyed Property and are
owned
by the Buyer in accordance with the terms of this Agreement;
(z) the
computer tape or listing made available by the Seller to the Buyer 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 Receivables
Schedule;
(aa) 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. The Seller has not entered
into any agreement that prohibits, restricts or conditions the assignment of
any
portion of the Receivables;
(bb) the
Obligor of each Receivable is required to make payments to a Lockbox Account
that is subject to a Lockbox Agreement; and
(ee) no
Receivable provides for a prepayment penalty.
Section
4.2 Repurchase
upon Breach.
The
Seller, the Servicer or the Buyer, as the case may be, shall inform the other
parties to this Agreement promptly, in writing, (i) upon the discovery of any
breach of the Seller’s representations and warranties made pursuant to Section
4.1, and (ii) of any Receivable for which the related Lien Certificate has
not
been received within 30 days following the Closing Date with respect thereto
(for purposes of this Section 4.2, each of the foregoing referred to as a
“breach”). As of the last day of the month in which the Seller, the Servicer or
the Buyer, as the case may be, discovers the breach, or in which the Seller
receives notice of such breach, unless such breach is cured by such date, the
Seller shall have an obligation to repurchase any Receivable that is adversely
affected and/or in which the interests of the Buyer are adversely affected
by
any such breach. The sole remedy of the Buyer with respect to a breach of
representations and warranties pursuant to Section 4.1 and the agreement
contained in this Section shall be the repurchase of Receivables and Seller
indemnity pursuant to this Section, subject to the conditions contained herein.
The Buyer shall have no duty to conduct any affirmative investigation as to
the
occurrence of any conditions requiring the repurchase of any Receivable pursuant
to this Section.
In
addition to the foregoing and notwithstanding whether the related Receivable
shall have been purchased by the Seller, the Seller shall indemnify the Buyer
and any Servicer and any of their respective officers, directors, employees
or
agents, 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 breach.
ARTICLE
V
REPRESENTATIONS,
WARRANTIES AND COVENANTS OF THE PARTIES; INDEMNITIES
Section
5.1 Representations,
Warranties and Covenants of the Seller. The
Seller makes the following representations on which the Buyer is deemed to
have
relied in acquiring the Receivables. The representations speak as of the
execution and delivery of this Agreement and as of Closing Date with respect
to
the Receivables sold on such date, and shall survive the sale of the Receivables
to the Buyer and
the
Closing Date.
(a) The
Seller has the power and authority to execute and deliver this Agreement and
the
other Transaction Documents to which it is a party and to carry out its terms
and their terms, respectively; the Seller has full power and authority to sell
and assign the Receivables and the Conveyed Property to be sold and assigned
to
and deposited with the Buyer by it.
(b) This
Agreement effects a valid sale, transfer and assignment of the Receivables
and
the Conveyed Property, enforceable against the Seller and creditors of and
purchasers from the Seller; and this Agreement and the other Transaction
Documents to which the Seller is a party, when duly executed and delivered,
shall constitute legal, valid and binding obligations of the Seller enforceable
in accordance with their respective terms.
(c) The
Seller is in compliance in all material respects with ERISA and there is no
lien
of the Pension Benefit Guaranty Corporation on any of the Receivables or
Conveyed Property.
(d) The
consummation of the transactions contemplated by this Agreement and the other
Transaction Documents to which the Seller is a party and the fulfillment of
the
terms of this Agreement and the other Transaction Documents to which the Seller
is a party 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 of the Seller, or any indenture, agreement, mortgage, deed of trust
or
other instrument to which the Seller is a party or by which it is bound, or
result in the creation or imposition of any Lien upon any of its properties
pursuant to the terms of any such indenture, agreement, mortgage, deed of trust
or other instrument, other than this Agreement, or violate any law, order,
rule
or regulation applicable to the Seller of any court or of any federal or state
regulatory body, administrative agency or other governmental instrumentality
having jurisdiction over the Seller or any of its properties.
(e) There
are
no proceedings or investigations pending or, to the Seller’s knowledge,
threatened, against the Seller, before any court, regulatory body,
administrative agency or other tribunal or governmental instrumentality having
jurisdiction over the Seller or its properties (i) asserting the invalidity
of
this Agreement or any of the other Transaction Documents, (ii) seeking to
prevent the consummation of any of the transactions contemplated by this
Agreement or any of the other Transaction Documents, (iii) seeking any
determination or ruling that might materially and adversely affect the
Receivables or the performance by the Seller of its obligations under, or the
validity or enforceability of, this Agreement or any of the other Transaction
Documents, (iv) seeking to adversely affect the federal income tax or other
federal, state or local tax attributes of the transactions contemplated by
the
Transaction Documents, or (v) involving any Receivable.
(f) (i)
The
Seller is not required to obtain the consent of any other party or any consent,
license, approval or authorization, or registration or declaration with, any
Governmental Authority, bureau or agency in connection with the execution,
delivery, performance, validity or enforceability of this Agreement or any
other
Transaction Document which has not already been obtained, and (ii) the Seller
has obtained or made all necessary consents, approvals, waivers and
notifications of creditors, lessors, and other non-governmental Persons, in
each
case, in connection with the execution and delivery of this Agreement and the
other Transaction Documents and the consummation of the transactions
contemplated herein and therein.
(g) No
statement, report or other document furnished or to be furnished pursuant to
this Agreement or in connection with the transaction contemplated hereby
contains or will, when furnished, contain any untrue statement of a material
fact or omits or will, when furnished, omit to state a material fact necessary
to make the statements contained therein not misleading, in light of the
circumstances under which they were made.
(h) The
Seller has filed all federal, state, county, local and foreign income, franchise
and other tax returns required to be filed by it through the date hereof, and
has paid all taxes reflected as due thereon.
(i) Seller
is
solvent and will not become insolvent after giving effect to the transactions
contemplated hereunder; Seller is paying its debts as they become due; Seller,
after giving effect to the contemplated transactions, will have adequate capital
to conduct its business.
The
Seller shall indemnify the Buyer and any Servicer, their respective officers,
directors, agents and employees, and hold each of them harmless against any
and
all damages (including all expenses and legal fees) resulting from a breach
of
the representations and warranties set forth in this Section 5.1.
(j) Seller
has sold the vehicles collateralizing the Receivables to the borrowers on an
“As
Is” basis and the Receivables are not encumbered in any way by any warranties
made by Seller to the borrowers related to the vehicle sales.
Section
5.2. Liability
of Seller; Indemnities. The
Seller shall be liable in accordance herewith only to the extent of the
obligations specifically undertaken by the Seller under this
Agreement.
(a) The
Seller shall indemnify, defend and hold harmless the Buyer and any Servicer
(if
other than the Seller) from and against any taxes that may at any time be
asserted against any such Person with respect to, and as of the date of, each
sale of Receivables to the Buyer including any sales, gross receipts, general
corporation, tangible or intangible personal property, privilege or license
taxes (but not including any taxes asserted with respect to ownership of the
Receivables or federal or other income taxes, including franchise taxes measured
by net income) and all costs and expenses in defending against the same.
(b) The
Seller shall indemnify, defend and hold harmless the Buyer and any Servicer
(if
other than the Seller) from and against any loss, liability or expense incurred
by reason of the Seller’s willful malfeasance, bad faith or negligence in the
performance of its duties under this Agreement, or by reason of reckless
disregard of its obligations and duties under this Agreement.
(c) Indemnification
under this Section 5.3 shall survive the termination of this Agreement and
shall
include all reasonable fees and expenses of counsel and other expenses of
litigation. If the Seller shall have made any indemnity payments pursuant to
this Section and the Person to or on behalf of whom such payments are made
thereafter shall collect any of such amounts from others, such Person shall
promptly repay such amounts to the Seller, without interest.
Section
5.3 Limitation
on Liability of Seller and Others. The
Seller and any director or officer or employee or agent of the Seller 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 any Transaction Document. The Seller shall not be under any
obligation to appear in, prosecute or defend any legal action that shall not
be
incidental to its obligations under this Agreement, and that in its opinion
may
involve it in any expense or liability.
Section
5.4 Representations
and Warranties of the Buyer. The
Buyer
makes the following representations on which the Seller is deemed to have relied
in entering this Agreement. The representations speak as of the execution and
delivery of this Agreement and as of Closing Date.
(a) The
Buyer
has been duly organized and is validly existing as a limited liability in good
standing under the laws of the State of Texas, with power and authority to
own
its properties and to conduct its business as such properties are currently
owned and such business is currently conducted, and had at all relevant times,
and now has, power, authority and legal right to purchase and own the
Receivables and the Conveyed Property.
(b) The
Buyer
is duly qualified to do business as a foreign corporation in good standing
and
has obtained all necessary licenses and approvals in all jurisdictions where
the
failure to do so would materially and adversely affect Seller’s ability to sell
the Receivables and the Conveyed Property to the Buyer pursuant to this
Agreement, or the validity or enforceability of the Receivables and the Conveyed
Property or to perform Seller’s obligations hereunder and under the other
Transaction Documents.
(c) The
Buyer
has the power and authority to execute and deliver this Agreement and the other
Transaction Documents to which it is a party and to carry out its terms and
their terms, respectively; the Buyer has full power and authority to purchase
the Receivables and the Conveyed Property to be purchased by it and has duly
authorized such purchase from the Seller by all necessary limited liability
company action; and the execution, delivery and performance of this Agreement
and the other Transaction Documents to which the Buyer is a party have been
duly
authorized by the Buyer by all necessary limited liability company action.
(d) The
consummation of the transactions contemplated by this Agreement and the other
Transaction Documents to which the Buyer is a party and the fulfillment of
the
terms of this Agreement and the other Transaction Documents to which the Buyer
is a party 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 regulations or articles of organization of the Buyer, or
any
indenture, agreement, mortgage, deed of trust or other instrument to which
the
Buyer is a party or by which it is bound, or result in the creation or
imposition of any Lien upon any of its properties pursuant to the terms of
any
such indenture, agreement, mortgage, deed of trust or other instrument, other
than this Agreement, or violate any law, order, rule or regulation applicable
to
the Buyer of any court or of any federal or state regulatory body,
administrative agency or other governmental instrumentality having jurisdiction
over the Buyer or any of its properties.
(e) There
are
no proceedings or investigations pending or, to the Buyer’s knowledge,
threatened, against the Buyer, before any court, regulatory body, administrative
agency or other tribunal or governmental instrumentality having jurisdiction
over the Buyer or its properties (i) asserting the invalidity of this Agreement
or any of the other Transaction Documents or (ii) seeking to prevent the
consummation of any of the transactions contemplated by this Agreement or any
of
the other Transaction Documents.
(f) (i)
The
Buyer is not required to obtain the consent of any other party or any consent,
license, approval or authorization, or registration or declaration with, any
Governmental Authority, bureau or agency in connection with the execution,
delivery, performance, validity or enforceability of this Agreement or any
other
Transaction Document which has not already been obtained, and (ii) the Buyer
has
obtained or made all necessary consents, approvals, waivers and notifications
of
creditors, lessors, and other non-governmental Persons, in each case, in
connection with the execution and delivery of this Agreement and the other
Transaction Documents and the consummation of the transactions contemplated
herein and therein.
ARTICLE
VI
MISCELLANEOUS
PROVISIONS
Section
6.1. Amendment.
This
Agreement may only be amended in writing from time to time by the parties
hereto.
Section
6.2 Protection
of Title.
(a) The
Seller shall execute and file such financing statements and cause to be executed
and filed such continuation statements, all in such manner and in such places
as
may be required by law fully to preserve, maintain and protect the interest
of
the Buyer in the Conveyed Property and in the proceeds thereof. The Seller
shall
deliver (or cause to be delivered) to the Buyer file-stamped copies of, or
filing receipts for, any document filed as provided above, as soon as available
following such filing.
(b) Without
limiting any other provision of this Agreement, neither the Seller nor the
Servicer shall change its name, identity or corporate structure in any manner
that would, could or might make any financing statement or continuation
statement filed in accordance with paragraph (a) above seriously misleading
within the meaning of Section 9-402(7) of the Relevant UCC, unless it shall
have
given the Buyer at least 15 days’ prior written notice thereof and shall have
promptly filed appropriate amendments to all previously filed financing
statements or continuation statements. Promptly upon such filing, the Seller
shall deliver an Opinion of Counsel in form and substance reasonably
satisfactory to the Buyer, stating either (A) all financing statements and
continuation statements have been executed and filed that are otherwise required
hereunder to be filed by the Seller or the Servicer, as applicable, that are
necessary fully to preserve and protect the interest of the Buyer in the
Receivables, and reciting the details of such filings or referring to prior
opinions of Counsel in which such details are given, or (B) no such action
shall
be necessary to preserve and protect such interest.
(c) The
Seller shall have an obligation to give the Buyer at least 60 days’ prior
written notice of any relocation of its principal executive office if, as a
result of such relocation, the applicable provisions of the relevant UCC would
require the filing of any amendment of any previously filed financing or
continuation statement or of any new financing statement and shall promptly
file
any such amendment.
(d) If
at any
time the Seller shall propose to sell, grant a security interest in or otherwise
transfer any interest in automotive receivables to any prospective purchaser,
lender or other transferee, the Seller or the Servicer, as applicable, shall
give to such prospective purchaser, lender or other transferee computer tapes,
records or printouts (including any restored from backup archives) that, if
they
shall refer in any manner whatsoever to any Receivable, shall indicate clearly
that such Receivable has been sold and is owned by the Buyer.
Section
6.3 Notices.
All
demands, notices and communications upon or to the Seller or the Buyer under
this Agreement shall be in writing, personally delivered, or mailed by overnight
courier, express mail or certified mail, return receipt requested, and shall
be
deemed to have been duly given upon receipt by such Person at its address
specified below:
if
to
Buyer:
FIRSTPLUS
Auto Group, Inc.
0000
X.
X’Xxxxxx Xxxx. 0xx
Xxxxx
Xxxxxx,
Xxxxx 00000
Attn:
Xxx
Xxxxxxxxx
Telecopy:
000 000 0000
with
a
copy to:
Jenkens
& Xxxxxxxxx, P.C.
0000
Xxxx
Xxxxxx, Xxxxx 0000
Xxxxxx,
Xxxxx 00000
Attn:
Xxxx Xxxxxx
Telecopy:
(000) 000-0000
if
to
Seller:
Xxxxx
Xxxxxxx
0000
X.
X’Xxxxxx Xxxx. 0xx
Xxxxx
Xxxxxx,
Xxxxx 00000
Telecopy:
000 000 0000
Section
6.4 Assignment.
This
Agreement shall inure to the benefit of and be binding upon the parties hereto
and their respective successors and permitted assigns. Notwithstanding anything
to the contrary contained herein, this Agreement may not be assigned by the
Seller without the prior written consent of the Buyer.
Section
6.5 Limitations
on Rights of Others. The
provisions of this Agreement are solely for the benefit of the parties hereto
and their respective successors and permitted assigns. 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 Property or under
or
in respect of this Agreement or any covenants, conditions or provisions
contained herein.
Section
6.6 Severability.
Any
provision of this Agreement that is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in
any
other jurisdiction.
Section
6.7 Separate
Counterparts. This
Agreement may be executed by the parties hereto in separate counterparts, each
of which when so executed and delivered shall be an original, but all such
counterparts shall together constitute but one and the same
instrument.
Section
6.8 Headings.
The
headings of the various Articles and Sections herein are for convenience of
reference only and shall not define or limit any of the terms or provisions
hereof.
Section
6.9 Consents
to Jurisdiction. Each
of
the parties hereto irrevocably submits to the jurisdiction of any court in
the
State of Texas located in the city and county of Dallas, and any appellate
court
from any thereof, in any action, suit or proceeding brought against it and
related to or in connection with this Agreement, the other Transaction Documents
or the transactions contemplated hereunder or thereunder or for recognition
or
enforcement of any judgment and each of the parties hereto irrevocably and
unconditionally agrees that all claims in respect of any such suit or action
or
proceeding may be heard or determined in such Dallas state court or, to the
extent permitted by law, in such federal court. Each of the parties hereto
agrees that a final judgment in any such action, suit or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment
or
in any other manner provided by law. To the extent permitted by applicable
law,
each of the parties hereby waives and agrees not to assert by way of motion,
as
a defense or otherwise in any such suit, action or proceeding, any claim that
it
is not personally subject to the jurisdiction of such courts, that the suit,
action or proceeding is brought in an inconvenient forum, that the venue of
the
suit, action or proceeding is improper or that this Agreement or any of the
other Transaction Documents or the subject matter hereof or thereof may not
be
litigated in or by such courts. Nothing
contained in this Security Agreement shall limit or affect the rights of any
party hereto to serve process in any other manner permitted by law or to start
legal proceedings relating to any of the Transaction Documents against the
Seller, the Servicer, the Buyer or their respective property in the courts
of
any jurisdiction.
Section
6.10 TRIAL
BY JURY WAIVED. EACH OF THE PARTIES HERETO WAIVES, TO THE FULLEST EXTENT
PERMITTED BY LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY
LITIGATION ARISING DIRECTLY OR INDIRECTLY OUT OF, UNDER OR IN CONNECTION WITH
THIS AGREEMENT, ANY OF THE OTHER TRANSACTION DOCUMENTS OR ANY OF THE
TRANSACTIONS CONTEMPLATED HEREUNDER OR THEREUNDER. EACH OF THE PARTIES HERETO
(A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY
HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE
EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES
THAT IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER TRANSACTION
DOCUMENTS TO WHICH IT IS A PARTY, BY AMONG OTHER THINGS, THIS
WAIVER.
Section
6.11 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.
[Signature
page follows.]
IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and delivered by their respective duly authorized officers as of the
day and the year first above written.
|
BUYER:
|
||
|
FIRSTPLUS
Auto Group, Inc.
|
||
|
By:
|
/s/
Xxx Xxxxxxxxx
|
|
|
Name:
|
Xxx
Xxxxxxxxx
|
|
|
Title:
|
Chief
Financial Officer
|
|
|
SELLER:
|
||
|
|
/s/ Xxxxx Xxxxxxx | |
|
|
Xxxxx
Xxxxxxx, individually and doing business as Xxxxxx Auto
Group
|
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