EXHIBIT 10.4
RECEIVABLES PURCHASE AGREEMENT
between
BMW FINANCIAL SERVICES NA, LLC,
as Seller,
and
BMW FS SECURITIES LLC,
as Depositor
Dated as of September 1, 2006
TABLE OF CONTENTS
PAGE
ARTICLE I CERTAIN DEFINITIONS..........................................3
ARTICLE II CONVEYANCE OF RECEIVABLES....................................5
SECTION 2.01 Conveyance of Receivables............................5
SECTION 2.02 The Closing..........................................6
ARTICLE III REPRESENTATIONS AND WARRANTIES...............................6
SECTION 3.01 Representations and Warranties of the Depositor......6
SECTION 3.02 Representations and Warranties of the Seller.........8
ARTICLE IV CONDITIONS..................................................20
SECTION 4.01 Conditions to Obligation of the Depositor...........20
SECTION 4.02 Conditions to Obligation of the Seller..............21
ARTICLE V COVENANTS OF THE SELLER AND THE DEPOSITOR...................22
SECTION 5.01 Protection of Right, Title and Interest.............22
SECTION 5.02 Other Liens or Interests............................23
SECTION 5.03 Costs and Expenses..................................23
SECTION 5.04 Hold Harmless.......................................23
ARTICLE VI MISCELLANEOUS PROVISIONS....................................24
SECTION 6.01 Obligations of Seller...............................24
SECTION 6.02 Repurchase Events...................................24
SECTION 6.03 Depositor Assignment of Repurchased Receivables.....24
SECTION 6.04 Transfer to the Issuer..............................24
SECTION 6.05 Amendment...........................................24
SECTION 6.06 Waivers.............................................25
SECTION 6.07 Notices.............................................25
SECTION 6.08 Costs and Expenses..................................26
SECTION 6.09 Representations of the Seller and the Depositor.....26
SECTION 6.10 Confidential Information............................26
SECTION 6.11 Headings and Cross-References.......................26
SECTION 6.12 Governing Law.......................................26
SECTION 6.13 Counterparts........................................26
i
TABLE OF CONTENTS
(CONTINUED)
PAGE
SECTION 6.14 Third Party Beneficiary.............................26
SECTION 6.15 No Proceedings......................................26
ii
EXHIBITS
EXHIBIT A Matters Addressed in Opinion of Seller's Counsel
EXHIBIT B Prospectus Supplement
SCHEDULE I Schedule of Receivables
SCHEDULE II Location of Receivable Files
SCHEDULE III Receivable File Schedule
THIS RECEIVABLES PURCHASE AGREEMENT dated as of September 1,
2006, is between BMW FINANCIAL SERVICES NA, LLC, a Delaware limited liability
company ("BMW FS"), as the seller (the "Seller") and BMW FS SECURITIES LLC, a
Delaware limited liability company, as depositor (the "Depositor").
RECITALS
WHEREAS, in the regular course of its business, BMW FS has
purchased certain motor vehicle retail installment sale contracts and promissory
notes secured by new and used automobiles, light trucks and motorcycles from
certain motor vehicle dealers directly or indirectly through BMW Bank of North
America;
WHEREAS, the Seller and the Depositor wish to set forth the terms
pursuant to which such contracts are to be sold by the Seller to the Depositor;
and
WHEREAS, the Depositor intends, concurrently with its purchase
hereunder, to convey all of its right, title and interest in and to all of such
contracts to BMW Vehicle Owner Trust 2006-A (the "Issuer") pursuant to a Sale
and Servicing Agreement dated as of September 1, 2006 (the "Sale and Servicing
Agreement"), by and among the Issuer, the Depositor, the Seller, Servicer,
Administrator and Custodian, and Deutsche Bank Trust Company Americas, as
Indenture Trustee, and the Issuer intends to pledge all of its right, title and
interest in and to such contracts to the Indenture Trustee pursuant to the
Indenture dated as of September 1, 2006 (the "Indenture"), by and between the
Issuer and the Indenture Trustee.
NOW, THEREFORE, in consideration of the foregoing, other good and
valuable consideration and the mutual terms and covenants contained herein, the
parties hereto agree as follows:
ARTICLE I
CERTAIN DEFINITIONS
Terms not defined in this Agreement shall have the meanings
assigned thereto in the Sale and Servicing Agreement, the Underwriting Agreement
or the Indenture, as the case may be. As used in this Agreement, the following
terms shall, unless the context otherwise requires, have the following meanings
(such meanings to be equally applicable to the singular and plural forms of the
terms defined):
"Agreement" shall mean this Receivables Purchase Agreement, as
the same may be amended and supplemented from time to time.
"BMW Bank" shall mean BMW Bank of North America.
"BMW FS" shall mean BMW Financial Services NA, LLC.
"Conveyed Assets" shall have the meaning set forth in Section
2.01.
"Depositor" shall mean BMW FS Securities LLC, a Delaware limited
liability company, and its successors and assigns.
"Indenture" shall have the meaning set forth in the recitals.
"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 such 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.
"Prospectus" shall have the meaning set forth in the Underwriting
Agreement.
"Prospectus Supplement" means the Prospectus Supplement dated
September 13, 2006, relating to the BMW Vehicle Owner Trust 2006-A in the form
attached hereto as Exhibit B.
"Receivable" shall mean any Contract listed on Schedule I hereto
(which Schedule may be in the form of microfiche).
"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.
"Registration Statement" means Registration Statement No.
333-133845 filed by the Depositor with the Securities and Exchange Commission in
the form in which it became effective on August 11, 2006.
"Repurchase Event" shall have the meaning specified in Section
6.02.
"Sale and Servicing Agreement" shall have the meaning set forth
in the recitals.
"Schedule of Receivables" shall mean the list of Receivables
annexed hereto as Schedule I (which Schedule may be in the form of microfiche).
"Seller" shall mean BMW FS, and its successor and assigns.
"Transfer Date" shall mean the Closing Date.
"Underwriters" means each of Barclays Capital Inc., Banc of
America Securities LLC, Credit Suisse Securities (USA) LLC, Merrill Lynch,
Pierce, Fenner & Smith Incorporated and Greenwich Capital Markets, Inc.
3
"Underwriting Agreement" means the Underwriting Agreement dated
September 13, 2006, relating to BMW Vehicle Owner Trust 2006-A among BMW FS, the
Depositor and Barclays Capital Inc., as representative of the Underwriters.
ARTICLE II
CONVEYANCE OF RECEIVABLES
SECTION 2.01 Conveyance of Receivables.
(a) In consideration of the Depositor's delivery to or upon the
order of the Seller on the Closing Date of $1,153,770,268.17 (the "Purchase
Price"), the Seller does hereby sell, transfer, assign, set over and otherwise
convey to the Depositor, without recourse (subject to the obligations of the
Seller herein) all right, title, and interest of the Seller in and to:
(i) the Receivables and all moneys received thereon after
the close of business on August 31, 2006;
(ii) the security interests in the Financed Vehicles and any
accessions thereto granted by Obligors pursuant to the
Receivables and any other interest of the Seller in such Financed
Vehicles;
(iii) any Liquidation Proceeds and any other proceeds with
respect to the Receivables from claims on any physical damage,
credit life or disability insurance policies covering Financed
Vehicles or Obligors, including any vendor's single interest or
other collateral protection insurance policy;
(iv) any property that shall have secured a Receivable and
that shall have been acquired by or on behalf of the Seller;
(v) all documents and other items contained in the
Receivable Files;
(vi) all proceeds from any Receivable repurchased by a
Dealer pursuant to a Dealer Agreement and all rights against BMW
Bank pursuant to one or more Bills of Sale pursuant to which the
Seller acquired the Receivables; and
(vii) the proceeds of any and all of the foregoing
(collectively, with the assets listed in clauses (i) through (vi)
above, the "Conveyed Assets").
(b) For all non-tax purposes, the Seller and the Depositor
intend that the transfer of assets by the Seller to the Depositor pursuant to
this Agreement be a sale of the ownership interest in such assets to the
Depositor, rather than the mere granting of a security interest to secure a
4
borrowing. In the event, however, that such transfer is deemed not to be a sale
but to be of a mere security interest to secure a borrowing, the Seller shall be
deemed to have hereby granted, and does hereby grant, to the Depositor a first
priority security interest in all right, title and interest of the Seller in and
to the Conveyed Assets and all accounts, money, chattel paper, securities,
instruments, documents, deposit accounts, certificates of deposit, letters of
credit, advices of credit, banker's acceptances, uncertificated securities,
general intangibles, contract rights, goods and other property consisting of,
arising from or relating to such Conveyed Assets, which security interest shall
be perfected, and this Agreement shall constitute a security agreement under
applicable law. Pursuant to the Sale and Servicing Agreement and Section 6.04
hereof, the Depositor may sell, transfer and assign to the Issuer (i) all or any
portion of the assets assigned to the Depositor hereunder, (ii) all or any
portion of the Depositor's rights against the Seller under this Agreement and
(iii) all proceeds thereof. Such assignment may be made by the Depositor with or
without an assignment by the Depositor of its rights under this Agreement, and
without further notice to or acknowledgement from the Seller. The Seller waives,
to the extent permitted under applicable law, all claims, causes of action and
remedies, whether legal or equitable (including any right of setoff), against
the Depositor or any assignee of the Depositor relating to such action by the
Depositor in connection with the transactions contemplated by the Sale and
Servicing Agreement.
SECTION 2.02 The Closing. The sale and purchase of the
Receivables shall take place at a closing at the offices of Weil, Gotshal &
Manges LLP, 767 Fifth Avenue, New York, New York 10153 on the Closing Date,
simultaneously with the closing under (a) the Sale and Servicing Agreement, (b)
the Indenture and (c) the Trust Agreement.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.01 Representations and Warranties of the Depositor. The
Depositor hereby represents and warrants as follows to the Seller and the
Indenture Trustee as of the date hereof and the Transfer Date:
(a) Organization and Good Standing. The Depositor is duly
organized and validly existing as a limited liability company in good standing
under the laws of the State of Delaware, with the power and authority to own its
properties and to conduct its business as such properties are currently owned
and such business is currently conducted.
(b) Due Qualification. The Depositor is duly qualified to do
business as a foreign limited liability company in good standing, and has
obtained all necessary licenses and approvals in all jurisdictions, including a
license pursuant to the Pennsylvania Motor Vehicle Sales Finance Act and the
Maryland Sales Finance Act, where the failure to do so would materially and
adversely affect the Depositor's ability to acquire the Receivables or the
validity or enforceability of the Receivables.
5
(c) Power and Authority. The Depositor has the corporate power
and authority to execute and deliver this Agreement and the other Basic
Documents to which it is a party and to carry out their respective terms; the
Depositor has full power and authority to sell and assign the property to be
sold and assigned to and deposited with the Issuer, and the Depositor shall have
duly authorized such sale and assignment to the Issuer by all necessary
corporate action; and the execution, delivery and performance of this Agreement
and the other Basic Documents to which the Depositor is a party have been duly
authorized by the Depositor by all necessary corporate action.
(d) Binding Obligation. This Agreement and the other Basic
Documents to which the Depositor is a party, when duly executed and delivered by
the other parties hereto and thereto shall constitute legal, valid and binding
obligations of the Depositor, enforceable against the Depositor in accordance
with their respective terms, except as the enforceability thereof may be limited
by bankruptcy, insolvency, reorganization or similar laws now or hereafter in
effect relating to or affecting creditors' rights generally and to general
principals or equity (whether applied in a proceeding at law or in equity).
(e) No Violation. The consummation of the transactions
contemplated by this Agreement and the fulfillment of the terms hereof do not
conflict with, result in any breach of any of the terms and provisions of, or
constitute (with or without notice or lapse of time or both) a default under,
the limited liability company agreement of the Depositor, or any indenture,
agreement or other instrument to which the Depositor is a party or by which it
is bound, or violate any law, rules or regulation applicable to the Depositor of
any court or federal or state regulatory body, administrative agency or other
governmental instrumentality having jurisdiction over the Depositor.
(f) No Proceedings. There are no proceedings or investigations
pending or, to the Depositor's knowledge, threatened against the Depositor
before any court, regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over the Depositor or its properties (i)
asserting the invalidity of this Agreement or any other Basic Document to which
the Depositor is a party, (ii) seeking to prevent the consummation of any of the
transactions contemplated by this Agreement or any other Basic Document to which
the Depositor is a party or (iii) seeking any determination or ruling that might
materially and adversely affect the performance by the Depositor of its
obligations under, or the validity or enforceability of, this Agreement or any
other Basic Document to which the Depositor is a party.
(g) No Consents. The Depositor is not required to obtain the
consent of any other party or any consent, license, approval, registration,
authorization, or declaration of or with any governmental authority, bureau or
agency in connection with the execution, delivery, performance, validity, or
enforceability of this Agreement or any other Basic Document to which it is a
party that has not already been obtained.
(h) The Depositor, and the Securities being offered in this
Transaction, meets the requirements for use of Form S-3 under the Securities Act
6
of 1933, as amended (the "Act"), and has filed with the Securities and Exchange
Commission (the "Commission") the Registration Statement on such Form, including
a related base prospectus and a preliminary prospectus supplement, for the
registration under the Act of the offering and sale of the Securities.
(i) On the date of this Agreement, the Registration Statement
will comply in all material respects with the applicable requirements of the
Act, and the respective rules and regulations of the Commission thereunder (the
"Rules and Regulations").
(j) On the date of this Agreement, the Depositor is not aware of
the issuance by the Commission of any stop order suspending the effectiveness of
the Registration Statement or the institution or threat of any proceeding for
that purpose.
SECTION 3.02 Representations and Warranties of the Seller.
(a) The Seller hereby represents and warrants as follows to the
Depositor and the Indenture Trustee as of the date hereof and as of the Transfer
Date:
(i) Organization and Good Standing. The Seller has been duly
organized and is validly existing as a limited liability company
under the laws of the State of Delaware, with the power and
authority to own its properties and to conduct its business as
such properties are currently owned and such business is
currently conducted.
(ii) Due Qualification. The Seller is duly authorized to
transact business as a foreign limited liability company in good
standing, and has obtained all necessary licenses and approvals,
in all jurisdictions in which the ownership or lease of property
or the conduct of its business shall require such qualifications
and in which the failure to be so authorized would have a
material adverse effect on the business, properties, assets, or
condition (financial or other) of the Seller and its
subsidiaries, considered as one enterprise.
(iii) Power and Authority; Binding Obligation. The Seller
has the power and authority to make, execute, deliver and perform
this Agreement and all of the transactions contemplated under
this Agreement and the other Basic Documents to which the Seller
is a party, and has taken all necessary action to authorize the
execution, delivery and performance of this Agreement and the
other Basic Documents to which the Seller is a party. When
executed and delivered, this Agreement and the other Basic
Documents to which the Seller is a party will constitute legal,
valid and binding obligations of the Seller enforceable in
accordance with their respective terms, except as enforcement of
such terms may be limited by bankruptcy, insolvency or similar
laws affecting the enforcement of creditors' rights generally and
by the availability of equitable remedies and except as
7
enforcement of such terms may be limited by receivership,
conservatorship and supervisory powers of bank regulatory
agencies generally.
(iv) No Violation. The execution, delivery and performance
by the Seller of this Agreement and the other Basic Documents to
which the Seller is a party will not violate any provision of any
existing state, federal or, to the best knowledge of the Seller,
local law or regulation or any order or decree of any court
applicable to the Seller or any provision of the limited
liability company agreement of the Seller, or constitute a breach
of any mortgage, indenture, contract or other agreement to which
the Seller is a party or by which the Seller may be bound or
result in the creation or imposition of any lien upon any of the
Seller's properties pursuant to any such mortgage, indenture,
contract or other agreement (other than this Agreement).
(v) No Proceedings. 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 governmental instrumentality
having jurisdiction over the Seller or its properties (i)
asserting the invalidity of this Agreement or any other Basic
Document to which the Seller is a party, (ii) seeking to prevent
the consummation of any of the transactions contemplated by this
Agreement or any other Basic Document to which the Seller is a
party or (iii) seeking any determination or ruling that might
materially and adversely affect the performance by the Seller of
its obligations under, or the validity or enforceability of, this
Agreement or any other Basic Document to which the Seller is a
party.
(vi) Chief Executive Office and Principal Place of Business.
The chief executive office and the principal place of business of
the Seller for the previous five years is 300 Chestnut Ridge
Road, Woodcliff Lake, New Jersey 07677.
(vii) No Consents. The Seller is not required to obtain the
consent of any other party or any consent, license, approval,
registration, authorization, or declaration of or with any
governmental authority, bureau or agency in connection with the
execution, delivery, performance, validity, or enforceability of
this Agreement or any other Basic Document to which it is a party
that has not already been obtained.
(viii) No Notice. The Seller represents and warrants that it
acquired title to the Receivables in good faith, without notice
of any adverse claim.
(ix) Bulk Transfer. The Seller represents and warrants that
the transfer, assignment and conveyance of the Receivables by the
Seller pursuant to this Agreement is not subject to the bulk
8
transfer laws or any similar statutory provisions in effect in
any applicable jurisdiction.
(x) Seller Information. No certificate of an officer,
statement or document furnished in writing or report delivered
pursuant to the terms hereof by the Seller contains any untrue
statement of a material fact or omits to state any material fact
necessary to make the certificate, statement, document or report
not misleading.
(xi) Ordinary Course. The transactions contemplated by this
Agreement and the other Basic Documents to which the Seller is a
party are in the ordinary course of the Seller's business.
(xii) Solvency. The Seller is not insolvent, nor will the
Seller be made insolvent by the transfer of the Receivables, nor
does the Seller anticipate any pending insolvency.
(xiii) Legal Compliance. The Seller is not in violation of,
and the execution and delivery of this Agreement and the other
Basic Documents to which the Seller is a party by it and its
performance and compliance with the terms of this Agreement and
the other Basic Documents to which the Seller is a party will not
constitute a violation with respect to, any order or decree of
any court or any order or regulation of any federal, state,
municipal or governmental agency having jurisdiction, which
violation would materially and adversely affect the Seller's
condition (financial or otherwise) or operations or any of the
Seller's properties or materially and adversely affect the
performance of any of its duties under the Basic Documents.
(xiv) Creditors. The Seller is not selling the Receivables
to the Depositor with any intent to hinder, delay or defraud any
of its creditors.
(b) The Seller makes the following representations and
warranties with respect to the Receivables, on which the Depositor relies in
accepting the Receivables and in transferring the Receivables to the Issuer
under the Sale and Servicing Agreement, and on which the Issuer relies in
pledging the same to the Indenture Trustee. Such representations and warranties
speak as of the execution and delivery of this Agreement and as of the Transfer
Date, but shall survive the sale, transfer and assignment of the Receivables to
the Depositor, the subsequent sale, transfer and assignment of the Receivables
by the Depositor to the Issuer pursuant to the Sale and Servicing Agreement and
the pledge of the Receivables by the Issuer to the Indenture Trustee pursuant to
the Indenture and with respect to the representations and warranties set forth
in paragraphs (lii) through (lviii) below, shall be non-waivable.
(i) Characteristics of Receivables. Each Receivable (A) was
originated in the United States of America by a Dealer located in
9
the United States of America for the retail sale of a Financed
Vehicle in the ordinary course of such Dealer's business in
accordance with the Seller's credit policies as of the date of
origination or acquisition of the related Receivable, is payable
in United States dollars, has been fully and properly executed by
the parties thereto, has been purchased by the Seller from such
Dealer under an existing Dealer Agreement and has been validly
assigned by such Dealer to the Seller or by such Dealer to BMW
Bank, which has validly assigned the same to the Seller, except
that certain Receivables originated through the "Lease to Loan"
program were not originated by Dealers, but directly by the
Seller or BMW Bank, (B) has created or shall create a valid,
subsisting and enforceable first priority perfected security
interest in favor of the Seller in the Financed Vehicle, which
security interest is assignable by the Seller to the Depositor,
and by the Depositor to the Issuer, (C) contains customary and
enforceable provisions such that the rights and remedies of the
holder thereof are adequate for realization against the
collateral of the benefits of the security, (D) provides for
fixed level monthly payments (provided that the payment in the
last month of the term of the Receivable may be different from
the level scheduled payments) that fully amortize the Amount
Financed by maturity and yield interest at the APR and (E)
amortizes using the Simple Interest Method.
(ii) Compliance with Law. Each Receivable and the sale of
the related Financed Vehicle complied at the time it was
originated or made, and at the time of execution of this
Agreement complies, in all material respects with all
requirements of applicable federal, state and, to the best
knowledge of the Seller, local laws, rulings and regulations
thereunder, including usury laws, the Federal Truth-in-Lending
Act, the Equal Credit Opportunity Act, the Fair Credit Billing
Act, the Fair Credit Reporting Act, the Fair Debt Collection
Practices Act, the Federal Trade Commission Act, the
Magnuson-Moss Warranty Act, the Federal Reserve Board's
Regulations "B" and "Z," the Servicemembers Civil Relief Act, as
amended (the "Relief Act"), the Military Reservist Relief Act of
1991 and state adaptations of the National Consumer Act and of
the Uniform Consumer Credit Code, and other consumer credit laws
and equal credit opportunity and disclosure laws applicable to
such Receivable.
(iii) Binding Obligation. Each Receivable represents the
genuine, legal, valid and binding payment obligation of the
Obligor thereon, enforceable by the holder thereof in accordance
with its terms, except (A) as enforceability thereof may be
limited by bankruptcy, insolvency, reorganization or similar laws
affecting the enforcement of creditors' rights generally and by
equitable limitations on the availability of specific remedies,
regardless of whether such enforceability is considered in a
proceeding in equity or at law and (B) as such Receivable may be
10
modified by the application after the Transfer Date of the Relief
Act or the Military Reservist Relief Act of 1991.
(iv) No Government Obligor. No Receivable is due from the
United States of America or any State or any agency, department,
subdivision or instrumentality thereof.
(v) Obligor Bankruptcy. To the best of the Seller's
knowledge, as of the Cutoff Date with respect to the Receivables,
no Obligor is or has been, since the origination of the related
Receivable, the subject of a bankruptcy proceeding.
(vi) Schedule of Receivables. The information set forth in
Schedule I to this Agreement is true and correct in all material
respects as of the close of business on the Cutoff Date.
(vii) Marking Records. By the Transfer Date, the Seller will
have caused its computer and accounting records relating to each
Receivable to be marked to show that such Receivables have been
sold to the Depositor by the Seller and transferred and assigned
by the Depositor to the Issuer in accordance with the terms of
the Sale and Servicing Agreement and pledged by the Issuer to the
Indenture Trustee in accordance with the terms of the Indenture.
(viii) Computer Tape. The computer tape regarding the
Receivables made available by the Seller to the Depositor is
complete and accurate in all material respects as of the Cutoff
Date.
(ix) No Adverse Selection. No selection procedures (other
than those specified herein) believed by the Seller to be adverse
to the Noteholders or the Certificateholders were utilized in
selecting the Receivables.
(x) [Reserved].
(xi) One Original. There is only one original executed copy
of each Receivable.
(xii) Receivables in Force. No Receivable has been
satisfied, subordinated or rescinded, nor has any Financed
Vehicle been released from the Lien of the related Receivable in
whole or in part. None of the terms of any Receivable has been
waived, altered or modified in any respect since its origination,
except by instruments or documents identified in the related
Receivable File. No Receivable has been modified as a result of
the application of the Relief Act or the Military Reservist
Relief Act of 1991, as amended.
11
(xiii) Lawful Assignment. No Receivable has been originated
in, or is subject to the laws of, any jurisdiction the laws of
which would make unlawful, void or voidable the sale, transfer
and assignment of such Receivable under this Agreement or the
pledge of such Receivable under the Indenture.
(xiv) Title. It is the intention of the Seller that the
transfers and assignments herein contemplated constitute sales of
the Receivables from the Seller to the Depositor and that the
beneficial interest in and title to the Receivables not be part
of the debtor's estate in the event of the appointment of a
receiver or conservator for the Seller under any receivership,
bankruptcy law, insolvency or banking law. Immediately prior to
the Closing Date, no Receivable has been sold, transferred,
assigned or pledged by the Seller to any Person other than to the
Depositor or pursuant to this Agreement (or by the Depositor to
any other Person other than to the Issuer pursuant to the Sale
and Servicing Agreement). Immediately prior to the transfers and
assignments herein contemplated, the Seller has good and
marketable title to each Receivable free and clear of all Liens,
and, immediately upon the transfer thereof, the Depositor shall
have good and marketable title to each Receivable, free and clear
of all Liens and, immediately upon the transfer thereof from the
Depositor to the Issuer pursuant to the Sale and Servicing
Agreement, the Issuer shall have good and marketable title to
each Receivable, free and clear of all Liens and, immediately
upon the pledge thereof from the Issuer to the Indenture Trustee
pursuant to the Indenture, the Indenture Trustee shall have a
first priority perfected security interest in each Receivable.
(xv) Security Interest in Financed Vehicle. Immediately
prior to its sale, assignment and transfer to the Depositor
pursuant to this Agreement, each Receivable is secured by a first
priority perfected security interest in the related Financed
Vehicle in favor of BMW FS as secured party, or all necessary and
appropriate actions have been commenced that will result in the
valid perfection of a first priority security interest in such
Financed Vehicle in favor of the BMW FS as secured party. The
Lien Certificate for each Financed Vehicle shows, or if a new or
replacement Lien Certificate is being applied for with respect to
such Financed Vehicle such Lien Certificate shall be received
within 120 days of the Closing Date and shall show, BMW FS or a
predecessor in interest named as the original secured party under
each Receivable as the holder of a first priority security
interest in such Financed Vehicle. With respect to each
Receivable for which the Lien Certificate has not yet been
returned from the Registrar of Titles, BMW FS has received
written evidence that such Lien Certificate showing BMW FS or BMW
Bank as first lienholder has been applied for. Each Dealer's
security interest in any Receivable originated by such Dealer has
12
been validly assigned by the Dealer to BMW FS or to BMW Bank,
which has validly assigned it to BMW FS. BMW FS' security
interest has been validly assigned to the Depositor pursuant to
this Agreement. BMW FS has the legal right to repossess or
recover by legal process the Financed Vehicle in its name.
(xvi) All Filings Made. All filings (including UCC filings)
required to be made in any jurisdiction to give the Issuer a
first perfected ownership interest in the Receivables and the
Indenture Trustee a first priority perfected security interest in
the Receivables have been made or will be made on the Closing
Date.
(xvii) No Defenses. No Receivable is subject to any right of
rescission, setoff, counterclaim, dispute or defense, including
the defense of usury, whether arising out of transactions
concerning the Receivable or otherwise, and the operation of any
terms of the Receivable or the exercise by the Seller or the
Obligor of any right under the Receivable will not render the
Receivable unenforceable in whole or in part, and no such right
of rescission, setoff, counterclaim, dispute or defense,
including the defense of usury, has been asserted with respect
thereto.
(xviii) No Default. There has been no default, breach,
violation or event permitting acceleration under the terms of any
Receivable (other than payment delinquencies of not more than 30
days) as of the Cutoff Date, and no condition exists or event has
occurred and is continuing that with notice, the lapse of time or
both would constitute a default, breach, violation or event
permitting acceleration under the terms of any Receivable, and
there has been no waiver of any of the foregoing. On or prior to
the Transfer Date, no Financed Vehicle has been repossessed.
(xix) Insurance. The Seller, in accordance with its
customary procedures, has determined that the Obligor has
obtained physical damage insurance covering each Financed Vehicle
and, under the terms of the related Receivable, the Obligor is
required to maintain such insurance.
(xx) Final Scheduled Maturity Date. No Receivable has a
final scheduled payment date later than six months prior to the
Class B Final Scheduled Payment Date.
(xxi) Certain Characteristics of the Receivables. As of the
Cutoff Date, (A) each Receivable had an original maturity of not
less than 11 or more than 68 months and (B) no Receivable was
more than 30 days past due.
(xxii) No Foreign Obligor. All of the Receivables are due
from Obligors with billing addresses within the United States of
America, its territories and possessions.
13
(xxiii) No Extensions. The number or timing of scheduled
payments has not been changed on any Receivable on or before the
Closing Date, except as reflected on the computer tape delivered
in connection with the sale of the Receivables.
(xxiv) Scheduled Payments. Each Receivable had a first
scheduled payment due on or prior to 45 calendar days after the
origination date thereof. Each Obligor has been instructed to
make all scheduled payments to BMW FS. To the best knowledge of
the Seller, each Obligor has paid the entire down payment called
for by the Contract.
(xxv) Receivable Files Complete. There exists a Receivable
File pertaining to each Receivable and such Receivable File
contains, without limitation, (A) a fully executed original of
the Receivable, (B) the original Lien Certificate or application
therefor together with such other documents that the Seller shall
keep on file in accordance with its customary procedures
evidencing the security interest of the Seller in the related
Financed Vehicle, and (C) any and all other documents that the
Servicer shall have kept on file in accordance with its customary
procedures relating to a Receivable, an Obligor or a Financed
Vehicle. Each of such documents that is required to be signed by
the Obligor has been signed by the Obligor in the appropriate
spaces. All blanks on any form described in clauses (A), (B) and
(C) of this paragraph have been properly filled in and each form
has otherwise been correctly prepared in all material respects.
Notwithstanding the above, the complete Receivable File for each
Receivable, (x) shall fulfill the documentation requirements of
the Seller's credit policies as in effect on the date of
origination of such Receivable and (y) is in possession of the
Servicer and/or Custodian, as applicable, on the Transfer Date.
The blanket power of attorney granted to the Indenture Trustee
and the original Lien Certificate are the only documents
necessary to permit the Indenture Trustee to submit the Lien
Certificate for each Financed Vehicle for retitling in the name
of the Indenture Trustee as secured party in the event such
retitling were required or otherwise permitted under the Basic
Documents.
(xxvi) Receivables Not Assumable. No Receivable is assumable
by another person in a manner which would release the Obligor
thereof from such Obligor's obligations to the Seller with
respect to such Receivable.
(xxvii) Tax Liens. To the best of the Seller's knowledge,
there is no Lien against any Financed Vehicle for delinquent
taxes.
(xxviii) No Impairment. The Seller has not done anything to
convey any right to any person that would result in such person
having a right to payments due under a Receivable or otherwise to
14
impair the rights of the Depositor in any Receivable or the
proceeds thereof.
(xxix) Servicing. Each Receivable has been serviced in
conformity with all applicable laws, rules and regulation and in
conformity with the Seller's policies and procedures which are
consistent with customary, prudent industry standards.
(xxx) No Liens. No Liens or claims have been filed for work,
labor, or materials relating to a Financed Vehicle that are prior
to, or equal or coordinate with, the security interest in the
Financed Vehicle granted by the related Receivable.
(xxxi) APR. No Receivable has an APR of less than 0% and the
weighted average coupon on the pool of Receivables is at least
5.561%.
(xxxii) Remaining Term. Each Receivable has a remaining term
of at least 3 months and no more than 72 months.
(xxxiii) Seasoning. The weighted average number of months
since the initial installment due date for the Receivables is at
least 0 months.
(xxxiv) Remaining Balance. Each Receivable has a remaining
balance of at least $1,000.39.
(xxxv) New Vehicles. At least 29.13% of the aggregate
principal balance of the Receivables is secured by Financed
Vehicles which were new at the date of origination.
(xxxvi) No Repossessions. No Financed Vehicle has been
repossessed prior to the Transfer Date.
(xxxvii) Initial Payment. The Obligor with respect to each
Receivable has made at least one scheduled payment.
(xxxviii) No Proceedings. As of the Cutoff Date, there are
no proceedings pending, or to the best of the Seller's knowledge,
threatened, wherein the Obligor or any governmental agency has
alleged that any Receivable is illegal or unenforceable.
(xxxix) Dealer Agreement. Each Dealer from whom the Seller
(or BMW Bank) purchases Receivables directly has entered into a
Dealer Agreement with the Seller (or BMW Bank) providing for the
sale of Receivables from time to time by such Dealer to the
Seller (or BMW Bank). Each Dealer Agreement is substantially in
the form attached to the Sale and Servicing Agreement as Exhibit
15
D, except for immaterial modifications or deviations from the
Dealer Agreement. Such modifications and deviations from the
Dealer Agreement will not have a material adverse effect on the
Noteholders.
(xl) Obligations Fulfilled. To the best of its knowledge,
BMW FS has duly fulfilled all obligations to be fulfilled on its
part under or in connection with the origination, acquisition and
assignment of the Receivables.
(xli) No Consent. To the best of the Seller's knowledge, no
notice to or consent from any Obligor is necessary to effect the
acquisition of the Receivables by the Depositor or the Trust or
the pledge of the Receivables by the Trust to the Indenture
Trustee.
(xlii) No Transfer Taxes. The sale, transfer, assignment and
conveyance of the Receivables by the Seller pursuant to this
Agreement is not subject to and will not result in any tax, fee
or governmental charge payable by the Depositor, the Seller, the
Issuer or the Indenture Trustee to any federal, state or local
government ("Transfer Taxes") other than Transfer Taxes which
have or will be paid by the Seller as due. In the event the
Depositor, the Issuer or the Indenture Trustee receives actual
notice of any Transfer Taxes arising out of the transfer,
assignment and conveyance of the Receivables, on written demand
by the Depositor, the Issuer or the Indenture Trustee, or upon
the Seller's otherwise being given notice thereof by the
Depositor, the Issuer or the Indenture Trustee, the Seller shall
pay, and otherwise indemnify and hold the Depositor, the Issuer
and the Indenture Trustee harmless, on an after-tax basis, from
and against any and all such Transfer Taxes (it being understood
that the Depositor, the Noteholders, the Indenture Trustee and
the Issuer shall have no obligation to pay such Transfer Taxes).
(xliii) Aggregate Balance. The aggregate principal balance
of the Receivables as of the Cutoff Date is equal to
$1,153,770,268.17.
(xliv) Geographic Distribution. No more than 5.00% of the
aggregate principal balance of the Receivables as of the Cutoff
Date is attributable to Receivables with Obligors having a
billing address in any single State other than California, Texas,
Florida, New York and New Jersey which represent no more than
21.90%, 10.16%, 8.42%, 5.80% and 5.22%, respectively.
(xlv) No Advances. No advances have been made to Obligors in
order to meet any representation and warranties herein set forth;
provided, however, that Receivables may have had up to four
extensions prior to the Cutoff Date, subject to the following:
(A) each such extension was made in conformity with the Seller's
"Extension Policy" and (B) each extended Receivable satisfies in
16
all material respects all applicable requirements under BMW FS'
credit and collection policies as of the date of its origination.
(xlvi) Amount Financed. At the time each Receivable was
acquired from the Dealer, the Amount Financed was fully
disbursed. There is no requirement for future advances of
principal thereunder, and all fees and expenses in connection
with the origination of such Receivable have been paid.
(xlvii) Tape. The computer tape from which the selection of
the Receivables being acquired on the Closing Date was made
available to the accountants that are providing a comfort letter
to the Depositor, the Underwriters and the Noteholders in
connection with the numerical information regarding the
Receivables and the Notes contained in the Prospectus Supplement
and such information in the Prospectus Supplement with respect to
the Receivables and the Notes was complete and accurate as of its
date and includes a description of the same Receivables that are
described in Schedule I to this Agreement.
(xlviii) Insurance. In connection with the purchase of each
Receivable, the Seller (or BMW Bank) required the related Dealer
to furnish evidence that the related Financed Vehicle was covered
by a physical damage insurance policy (i) in an amount at least
equal to the lesser of (a) the actual cash value of the related
Financed Vehicle or (b) the unpaid principal balance owing on
such Receivable, (ii) naming the Seller (or BMW Bank) as a loss
payee and (iii) insuring against loss and damage due to fire,
theft, transportation, collision and other risks generally
covered by comprehensive and collision coverage.
(xlix) Dealer Agreement Binding. Each Dealer that sold a
Receivable to BMW FS (or BMW Bank) has entered into the Dealer
Agreement and such Dealer Agreement, together with the assignment
and related documentation signed by the Dealer, constitutes the
entire agreement between BMW FS (or BMW Bank) and the related
Dealer with respect to the sale of such Receivable to BMW FS (or
BMW Bank). Each such Dealer Agreement is in full force and effect
and is the legal, valid and binding obligation of such Dealer,
there have been no material defaults by BMW FS (or BMW Bank)
under such Dealer Agreement; BMW FS (or BMW Bank) has fully
17
performed all of its obligations under such Dealer Agreement; BMW
FS (or BMW Bank) has not made any statements or representations
to such Dealer (whether written or oral) inconsistent with any
term of such Dealer Agreement; the purchase price (as specified
in the applicable Dealer Agreement) for such Receivable has been
paid in full, other than any dealer reserve, by BMW FS (or BMW
Bank); and any payment owed to such Dealer by BMW FS (or BMW
Bank) is a corporate obligation of BMW FS (or BMW Bank).
(l) Good Working Order. Each Receivable requires the Obligor
to maintain the related Financed Vehicle in good and workable
order and to obtain and maintain physical damage insurance on the
related Financed Vehicle subject thereto and to name the Seller
as a loss payee.
(li) No Consumer Lease. No Receivable constitutes a
"consumer lease" under either (a) the UCC as in effect in the
jurisdiction whose law governs the Receivable or (b) the Consumer
Leasing Act, 15 USC 1667.
(lii) Valid Security Interest. This Agreement creates a
valid and continuing security interest (as defined in the
applicable UCC) in the Receivables in favor of the Depositor,
which security interest is prior to all other Liens, and is
enforceable as such as against creditors of and purchasers from
the Seller.
(liii) Perfection. The Seller has taken all steps necessary
to perfect its security interest against the Obligors in the
property securing the Receivables.
(liv) Tangible Chattel Paper. Each Receivable constitutes
"tangible chattel paper" within the meaning of the applicable
UCC.
(lv) Good and Marketable Title. The Seller owns and has good
and marketable title to the Receivables free and clear of any
Lien, claim or encumbrance of any Person.
(lvi) Filing of Financing Statements. The Seller has caused
or will have caused, within ten days, the filing of all
appropriate financing statements in the proper filing office in
the appropriate jurisdictions under applicable law in order to
perfect the security interest in the Receivables granted to the
Depositor hereunder.
(lvii) Other Financing Statements. Other than the security
interest granted to the Depositor pursuant to this Agreement, the
Seller has not pledged, assigned, sold, granted a security
interest in, or otherwise conveyed any of the Receivables. The
Seller has not authorized the filing of and is not aware of any
financing statements against the Seller that include a
description of collateral covering the Receivables other than any
financing statement relating to the security interest granted to
the Depositor hereunder or that has been terminated. The Seller
is not aware of any judgment or tax lien filings against the
Seller.
18
(lviii) Original Contracts. The Seller has in its possession
all original copies of the Contracts that constitute or evidence
the Receivables. The Contracts that constitute or evidence the
Receivables do not have any marks or notations indicating that
they have been pledged, assigned or otherwise conveyed to any
Person other than the Depositor. All financing statements filed
or to be filed against the Seller in favor of the Depositor in
connection herewith describing the Receivables contain a
statement to the following effect: "A purchase of or security
interest in any collateral described in this financing statement
will violate the rights of the Depositor."
ARTICLE IV
CONDITIONS
SECTION 4.01 Conditions to Obligation of the Depositor. The
obligation of the Depositor to purchase the Receivables is subject to the
satisfaction of the following conditions:
(a) Representations and Warranties True. The representations and
warranties of the Seller hereunder shall be true and correct on the Transfer
Date with the same effect as if then made, and the Seller shall have performed
all obligations to be performed by it hereunder on or prior to the Transfer
Date.
(b) Computer Files Marked. The Seller shall, at its own expense,
on or prior to the Transfer Date, indicate in its computer files that the
Receivables have been sold to the Depositor pursuant to this Agreement and
deliver to the Depositor the Schedule of Receivables, certified by the Seller's
President, Vice President or Treasurer to be true, correct and complete.
(c) Documents To Be Delivered by the Seller on the Transfer
Date:
(i) Evidence of UCC Filing. On or prior to the Closing Date,
the Seller shall record and file, at its own expense, a UCC-1
financing statement in the State of Delaware and the State of
Ohio and in each other jurisdiction required by applicable law,
executed by the Seller, as seller or debtor, and naming the
Depositor, as secured party, describing the Receivables and the
other assets assigned to the Depositor pursuant to Section 2.01
hereof meeting the requirements of the laws of each such
jurisdiction and in such manner as is necessary to perfect the
sale, transfer, assignment and conveyance of the Receivables and
such other assets to the Depositor. The Seller shall deliver to
the Depositor a file-stamped copy or other evidence satisfactory
to the Depositor of such filing on or prior to the Transfer Date.
19
(ii) Opinions of Seller's Counsel. On or prior to the
Closing Date, the Depositor shall have received the opinions of
counsel to the Seller, in form and substance satisfactory to the
Depositor, as to the matters set forth in Exhibit A hereto and
such other matters as the Depositor has heretofore requested or
may reasonably request.
(iii) Other Documents. Such other documents as the Depositor
may reasonably request.
(d) Other Transactions. The transactions contemplated by the
Sale and Servicing Agreement, the Indenture and the Trust Agreement to be
consummated on the Transfer Date shall be consummated on such date.
SECTION 4.02 Conditions to Obligation of the Seller. The
obligation of the Seller to sell the Receivables to the Depositor is subject to
the satisfaction of the following conditions:
(a) Representations and Warranties True. The representations and
warranties of the Depositor hereunder shall be true and correct on the Transfer
Date with the same effect as if then made, and the Depositor shall have
performed all obligations to be performed by it hereunder on or prior to the
Transfer Date.
(b) Receivables Purchase Price. On the Transfer Date, the
Depositor shall have delivered to the Seller the Purchase Price.
(c) Opinion of Counsel. The Depositor shall have furnished to
the Seller an Opinion of Counsel, dated the Closing Date, to the effect that:
(i) the Depositor has been duly formed and is validly
existing as a limited liability company in good standing under
the laws of the State of Delaware, with full power and authority
to own its properties and conduct its business as described in
the Prospectus;
(ii) each of this Agreement, the Sale and Servicing
Agreement and the Trust Agreement has been duly authorized,
executed and delivered by the Depositor and constitutes a legal,
valid and binding obligation of the Depositor, enforceable
against the Depositor in accordance with its terms except as
limited by bankruptcy, insolvency, reorganization, moratorium,
fraudulent conveyance, receivership, conservatorship or similar
laws relating to or affecting creditors' rights generally or the
rights of creditors, and except that such counsel need express no
opinion as to the availability of equitable remedies or the
enforceability of rights of indemnification for violations of
federal securities laws;
(iii) no consent, approval, authorization or order of, or
filing with, any court or governmental agency or body is required
20
for the consummation by the Depositor of the transactions
contemplated herein or in this Agreement, the Sale and Servicing
Agreement, the Trust Agreement or the Indenture, except such as
may be required under the blue sky or securities laws of any
jurisdiction in connection with the purchase and sale of the
Notes by the Underwriters, the filing of the UCC-1 financing
statements relating to the conveyance of the Receivables and the
other Trust Property by the Seller to the Depositor and of the
Receivables and the other Trust Property by the Depositor to the
Trust and by the Trust to the Indenture Trustee for the benefit
of the Noteholders and the filing of the UCC-1 financing
statement relating to the security interests in the Eligible
Investments included in the Reserve Account, and such other
approvals (which shall be specified in such opinion) as have been
obtained and such filings as have been made or are in the process
of being made;
(iv) none of the issue and sale of the Notes and
Certificates, the execution and delivery of this Agreement, the
Sale and Servicing Agreement or the Trust Agreement, the
consummation of any other of the transactions herein or therein
contemplated or the fulfillment of the terms hereof or thereof
will conflict with, result in a breach or violation of, or
constitute a default under, the limited liability company
agreement of the Depositor or the terms of any indenture or other
agreement or instrument known to such counsel and to which the
Depositor is a party or by which it is bound, or any judgment,
order or decree known to such counsel to be applicable to the
Depositor of any court, regulatory body, administrative agency,
governmental body, or arbitrator having jurisdiction over the
Depositor; and
(v) the Registration Statement, and each amendment thereto,
as of its effective date (other than any financial, numerical or
statistical information contained or incorporated by reference
therein, as to which such counsel need express no opinion)
complied as to form in all material respects with the
requirements of the Act and the Rules and Regulations.
(d) Other Transactions. The transactions contemplated by the
Sale and Servicing Agreement, the Indenture and the Trust Agreement to be
consummated on the Transfer Date shall be consummated on such date.
ARTICLE V
COVENANTS OF THE SELLER AND THE DEPOSITOR
The Seller and the Depositor agree with each other, respectively,
and the Indenture Trustee as follows:
SECTION 5.01 Protection of Right, Title and Interest.
21
(a) Filings. The Seller shall cause at its own expense all
financing statements and continuation statements and any other necessary
documents covering the right, title and interest of the Seller, the Depositor,
the Trust and the Indenture Trustee, respectively, in and to the Receivables and
the other property included in the Trust Estate to be promptly filed and at all
times to be kept recorded, registered and filed, all in such manner and in such
places as may be required by law fully to preserve and protect the right, title
and interest of the Depositor hereunder, the Trust under the Sale and Servicing
Agreement and the Indenture Trustee under the Indenture in and to the
Receivables and the other property included in the Trust Estate. The Seller
shall deliver to the Depositor and the Indenture Trustee file stamped copies of,
or filing receipts for, any document recorded, registered or filed as provided
above, as soon as available following such recordation, registration or filing.
The Depositor shall cooperate fully with the Seller in connection with the
obligations set forth above and will execute any and all documents reasonably
required to fulfill the intent of this paragraph.
(b) Name Change. If the Seller makes any change in its
jurisdiction of organization (within the meaning of the applicable UCC), name or
corporate structure that would make any financing statement or continuation
statement filed in accordance with paragraph (a) above seriously misleading
within the applicable provisions of the UCC or any title statute, the Seller
shall give the Depositor, the Indenture Trustee and the Owner Trustee written
notice thereof at least 45 days prior to such change and shall promptly file
such financing statements or amendments as may be necessary to continue the
perfection of the Depositor's interest in the Conveyed Assets.
SECTION 5.02 Other Liens or Interests. Except for the conveyances
hereunder and pursuant to the Basic Documents, the Seller shall not sell,
pledge, assign or transfer to any Person, or grant, create, incur, assume, or
suffer to exist any Lien on, or any interest in, to or under the Receivables,
and the Seller shall defend the right, title and interest of the Depositor, the
Trust and the Indenture Trustee in, to and under the Receivables against all
claims of third parties claiming through or under the Seller.
SECTION 5.03 Costs and Expenses. BMW FS agrees to pay all
reasonable costs and disbursements in connection with the perfection, as against
all third parties, of the Depositor's, the Issuer's and the Indenture Trustee's
right, title and interest in and to the Receivables and the other property
included in the Trust Estate.
SECTION 5.04 Hold Harmless. BMW FS shall protect, defend,
indemnify and hold the Depositor, the Issuer, the Underwriters and their
respective assigns and their employees, officers and directors harmless from and
against all losses, liabilities, claims and damages of every kind and character,
including any legal or other expenses reasonably incurred, as incurred,
resulting from or relating to or arising out of (i) the inaccuracy,
nonfulfillment or breach of any representation, warranty, covenant or agreement
made by the Seller in this Agreement, (ii) any legal action, including, without
limitation, any counterclaim, that has either been settled by the litigants or
has proceeded to judgment by a court of competent jurisdiction, in either case
to the extent it is based upon alleged facts that, if true, would constitute a
22
breach of any representation, warranty, covenant or agreement made by the Seller
in this Agreement, or (iii) any failure of a Receivable to be originated in
compliance with all applicable requirements of law. These indemnity obligations
shall be in addition to any obligation that the Seller may otherwise have.
ARTICLE VI
MISCELLANEOUS PROVISIONS
SECTION 6.01 Obligations of Seller. The obligations of the Seller
under this Agreement shall not be affected by reason of any invalidity,
illegality or irregularity of any Receivable.
SECTION 6.02 Repurchase Events. The Seller hereby covenants and
agrees with the Depositor for the benefit of the Depositor, the Indenture
Trustee, the Issuer, the Owner Trustee, the Certificateholders and the
Noteholders that the occurrence of a breach of any of the Seller's
representations and warranties contained in Section 3.02(a)(ii) and 3.02(b) that
materially and adversely affects the interests of the Issuer, the Indenture
Trustee, the Owner Trustee, the Certificateholders or the Noteholders in any
Receivable, without regard to any limitation set forth in such representation or
warranty concerning the knowledge of the Seller as to the facts stated therein,
shall constitute an event obligating the Seller to repurchase the Receivables to
which such failure or breach is applicable (each, a "Repurchase Event"), at the
Purchase Amount, from the Depositor or from the Issuer, as applicable, unless
any such failure or breach shall have been cured by the last day of the first
Collection Period following the discovery or notice thereof by or to the Seller
or the Servicer.
SECTION 6.03 Depositor Assignment of Repurchased Receivables.
With respect to all Receivables repurchased by the Seller pursuant to this
Agreement, the Depositor shall assign, without recourse, representation or
warranty, to the repurchasing Seller all of the Depositor's right, title and
interest in and to such Receivables and all security and documents relating
thereto.
SECTION 6.04 Transfer to the Issuer. The Seller acknowledges and
agrees that (1) the Depositor will, pursuant to the Sale and Servicing
Agreement, transfer and assign the Receivables and assign its rights under this
Agreement with respect thereto to the Issuer and, pursuant to the Indenture, the
Issuer will pledge the Receivables to the Indenture Trustee, and (2) the
representations and warranties contained in this Agreement and the rights of the
Depositor under this Agreement, including under Section 6.02, are intended to
benefit the Issuer and the Noteholders. The Seller hereby consents to such
transfers and assignments and agrees that enforcement of a right or remedy
hereunder by the Indenture Trustee, the Owner Trustee or the Issuer shall have
the same force and effect as if the right or remedy had been enforced or
executed by the Depositor.
SECTION 6.05 Amendment. This Agreement may be amended from time
to time, with prior written notice to the Rating Agencies, but without the
23
consent of the Noteholders or the Certificateholders, by a written amendment
duly executed and delivered by the Seller and the Depositor, for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions of this Agreement or of modifying in any manner the rights of
Noteholders or Certificateholders; provided that such amendment shall not, as
evidenced by an Opinion of Counsel, materially and adversely affect the interest
of any Noteholder or Certificateholder; provided further, that such action shall
not be deemed to adversely affect in any material respect the interests of any
Noteholder or Certificateholder and no Opinion of Counsel to that effect shall
be required if the person requesting the amendment obtains a letter from the
Rating Agencies stating that the amendment would not result in the downgrading
or withdrawal of the ratings of then assigned to the Notes or the Certificates.
This Agreement may also be amended by the Seller and the Depositor, with prior
written notice to the Rating Agencies and the prior written consent of Holders
of Notes evidencing at least a majority of the Outstanding Amount of the
Controlling Class of Notes and the Holders (as defined in the Trust Agreement)
of outstanding Certificates evidencing not less than a majority of the
outstanding aggregate Certificate Percentage Interest (as defined in the Trust
Agreement), for the purpose of adding any provisions to or changing in any
manner or eliminating any of the provisions of this Agreement or of modifying in
any manner the rights of the Noteholders or the Certificateholders; provided,
however, that no such amendment may (i) increase or reduce in any manner the
amount of, or accelerate or delay the timing of, collections of payments on
Receivables or distributions that are required to be made for the benefit of
Noteholders or Certificateholders or (ii) reduce the aforesaid percentage of the
Notes or the Certificates that is required to consent to any such amendment,
without the consent of the Holders of all the outstanding Notes and
Certificates.
SECTION 6.06 Waivers. No failure or delay on the part of the
Depositor, the Issuer or the Indenture Trustee in exercising any power, right or
remedy under this Agreement or the Bill of Sale shall operate as a waiver
thereof, nor shall any single or partial exercise of any such power, right or
remedy preclude any other or further exercise thereof or the exercise of any
other power, right or remedy.
SECTION 6.07 Notices. All demands, notices and communications
under this Agreement shall be in writing, personally delivered, faxed and
followed by first class mail, or mailed by certified mail, return receipt
requested, and shall be deemed to have been duly given upon receipt (a) in the
case of the Depositor, to 300 Chestnut Ridge Road, Woodcliff Lake, New Jersey
07677, Attention: Vice President of Finance and Risk; (b) in the case of the
Servicer, Administrator and Custodian, to 300 Chestnut Ridge Road, Woodcliff
Lake, New Jersey 07677, Attention: Vice President of Finance and Risk; (c) in
the case of the Seller, 300 Chestnut Ridge Road, Woodcliff Lake, New Jersey
07677, Attention: Vice President of Finance and Risk; (d) in the case of the
Issuer or the Owner Trustee, at the Corporate Trust Office (as defined in the
Trust Agreement); (e) in the case of Moody's, to 99 Church Street, New York, New
York 10007, Attention: ABS Monitoring Department; and (f) in the case of
Standard & Poor's, to 55 Water Street (40th Floor), New York, New York 10041,
Attention: Asset Backed Surveillance Department; or, as to each of the
24
foregoing, at such other address as shall be designated by written notice to the
other parties.
SECTION 6.08 Costs and Expenses. The Seller shall pay all
expenses incident to the performance of its obligations under this Agreement and
the Seller agrees to pay all reasonable out-of-pocket costs and expenses of the
Depositor, in connection with the perfection as against third parties of the
Depositor's, the Issuer's and the Indenture Trustee's right, title and interest
in and to the Receivables and the enforcement of any obligation of the Seller
hereunder.
SECTION 6.09 Representations of the Seller and the Depositor. The
respective agreements, representations, warranties and other statements by the
Seller and the Depositor set forth in or made pursuant to this Agreement shall
remain in full force and effect and will survive the closing under Section 2.02
and the transfers and assignments referred to in Section 6.04.
SECTION 6.10 Confidential Information. The Depositor agrees that
it will neither use nor disclose to any person the names and addresses of the
Obligors, except in connection with the enforcement of the Depositor's rights
hereunder, under the Receivables, under the Sale and Servicing Agreement or any
other Basic Document, or as required by any of the foregoing or by law.
SECTION 6.11 Headings and Cross-References. The various headings
in this Agreement are included for convenience only and shall not affect the
meaning or interpretation of any provision of this Agreement. References in this
Agreement to section names or numbers are to such Sections of this Agreement.
SECTION 6.12 Governing Law. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS (OTHER THAN SECTION 5-1401 OF THE GENERAL OBLIGATIONS
LAW), AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE
DETERMINED IN ACCORDANCE WITH SUCH LAWS.
SECTION 6.13 Counterparts. This Agreement may be executed in
counter-parts, each of which shall be an original, but all of which together
shall constitute one and the same instrument.
SECTION 6.14 Third Party Beneficiary. The Indenture Trustee is an
express third party beneficiary of this Agreement and shall be entitled to
enforce the provisions of this Agreement as if it were a party hereto.
SECTION 6.15 No Proceedings. So long as this Agreement is in
effect, and for one year plus one day following its termination, each of the
Seller and the Depositor agree that it will not file any involuntary petition or
otherwise institute any bankruptcy, reorganization arrangement, insolvency or
liquidation proceeding or other proceedings under any federal or state
bankruptcy law or similar law against the Trust.
25
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed by their respective duly authorized officers as of the date and
year first above written.
BMW FINANCIAL SERVICES NA, LLC
By: /s/ Joachim Herr
-------------------------------
Name: Joachim Herr
Title: Treasurer
By: /s/ Robert E. Devine
-------------------------------
Name: Robert E. Devine
Title: President
BMW FS SECURITIES LLC
By: /s/ Joachim Herr
-------------------------------
Name: Joachim Herr
Title: Treasurer
By: /s/ Robert E. Devine
-------------------------------
Name: Robert E. Devine
Title: Vice President
EXHIBIT A
MATTERS ADDRESSED IN OPINION OF SELLER'S COUNSEL
EXHIBIT B
PROSPECTUS SUPPLEMENT
SCHEDULE I
Schedule of Receivables
[To be delivered to the Indenture Trustee at Closing]
SCHEDULE II
Location of Receivable Files
BMW Financial Services NA, LLC
5550 Britton Parkway
Hilliard, Ohio 43026
SCHEDULE III
Receivable File Schedule
1 All documents obtained or created in connection with the credit
investigation.
2 All Obligor records including without limitation (i) file copy of such
Receivable; (ii) copy Dealer assignment (if applicable) and any intervening
assignments; (iii) warranty copy (if applicable); (iv) credit life
insurance policy (if applicable); (v) proof of auto insurance or obligor
agreement to provide such insurance; (vi) title application; (vii) contract
verification sheet and (viii) original application or electronic copy
thereof.
3 Original document envelope together with all documents maintained therein.
4 Any and all other documents that the Servicer shall keep on file in
accordance with its customary procedures relating to a Receivable, an
Obligor or a Financed Vehicle.