RECEIVABLES PURCHASE AGREEMENT
Dated as of June 28, 1995
ATLANTIC AUTO FUNDING CORPORATION, a Delaware corporation (the
"Buyer"), and ATLANTIC AUTO FINANCE CORPORATION, a Delaware corporation (the
"Originator"), agree as follows:
PRELIMINARY STATEMENTS. (1) Certain terms which are capitalized and
used throughout this Agreement (in addition to those defined above) are defined
in Article I of this Agreement.
(2) The Originator in its ordinary course of business finances the
cost of new Automobiles purchased by Obligors;
(3) The Buyer is a special-purpose Subsidiary of the
Originator established to purchase or otherwise acquire Eligible
Receivables and Related Security;
(4) The Originator wishes from time to time to offer to sell to the
Buyer Eligible Receivables and Related Security; and
(5) The Buyer desires to purchase or otherwise procure such Eligible
Receivables and Related Security from the Originator;
NOW, THEREFORE, the parties agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. CERTAIN DEFINED TERMS. As used in this Agreement, the
following terms shall have the following meanings (such meanings to be equally
applicable to both the singular and plural forms of the terms defined):
"AFFILIATE" means, with respect to a Person, another Person that
directly or indirectly controls, is controlled by or is under common control
with such first Person. For purposes of this definition, "control" (including,
with correlative meanings, the terms "controlling", "controlled by" and "under
common control with"), as applied to any Person, means the possession, directly
or indirectly, of the power to vote ten percent (10%) or
more of the Securities having voting power for the election of directors of such
Person or otherwise to direct or cause the direction of the management and
policies of that Person, whether through the ownership of voting Securities or
by contract or otherwise.
"AGENT" means CNAI.
"AUTOMOBILE" means the new or used automobile or light-duty truck that
is purchased by the Obligor to which a particular Receivable relates.
"BANK" means Citibank, N.A., a national banking association.
"BANKRUPTCY CODE" means Title 11 of the United States Code (11 U.S.C.
Section 101 ET SEQ.), as amended from time to time, or any successor statute.
"BUSINESS DAY" means any day other than a Saturday, Sunday or public
holiday or the equivalent for banks in New York City.
"CNAI" means Citicorp North America, Inc., a Delaware corporation.
"COLLECTIONS" means with respect to each Purchased Receivable, without
limitation, all (i) payments received and collected on such Purchased
Receivable, (ii) net proceeds received by virtue of the liquidation of such
Purchased Receivable, (iii) retained proceeds received under any property
damage, casualty or other insurance policy with respect to such Purchased
Receivable, (iv) proceeds received under the VSI Policy, (v) interest of the
Buyer in any property damage, casualty or other insurance policies as the same
relate to the Automobile securing such Purchased Receivable and (vi) other
proceeds relating to such Purchased Receivable or its Contract File.
"COMMITTED RECEIVABLES PURCHASE AGREEMENT" means the receivables
purchase agreement or agreements between the Buyer and the Liquidity Banks.
"COMPANY DOCUMENTS" shall mean the Expense and Tax-Sharing Agreement.
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"CONTRACT" means, with respect to each Receivable, the note, retail
sales installment contract or other evidence of the Obligor's obligation to
repay Indebtedness to the Originator, executed by such Obligor in connection
with the purchase of an Automobile.
"CONTRACT FILE" means, with respect to each Receivable, the original
Contract, either a copy of the application to the appropriate state authorities
for a Title to the related Automobile or a standard assurance in the form
commonly used in the industry relating to the provision of Title and when issued
to the appropriate state authorites, the related Title (but only to the extent
that Title documents are required under applicable state law to be held by a
secured party in order to perfect such secured party's security interest in the
related Automobile), all original instruments modifying the terms and conditions
of the Receivable and the original endorsements or assignments of such Contract.
"CREDIT AND COLLECTION POLICY" means the Credit and Collection Policy
of the Originator for the Contracts and the Receivables as described in EXHIBIT
A, as modified in compliance with SECTION 5.02(c).
"CUSTODIAL AGREEMENT" means that certain custodial agreement dated the
date hereof by and among the Originator, the Buyer, the Agent and the Custodian.
"CUSTODIAN" means Safesite National Business Records Management, Inc.,
a Delaware corporation.
"CXC" means CXC Incorporated, a Delaware corporation.
"CXC RECEIVABLES PURCHASE AGREEMENT" means the receivables purchase
agreement or agreements between the Buyer and CXC.
"DEFAULTED RECEIVABLE" means a Receivable (i) with respect to which
any payment thereon has remained unpaid more than ninety (90) days past the due
date therefor or (ii) charged off as uncollectible by the Originator. A
Receivable shall be deemed to be a Defaulted Receivable upon the earlier to
occur of the events specified in clauses (i) and (ii) of the preceding sentence.
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"DELINQUENT RECEIVABLE" means a Receivable that is not a Defaulted
Receivable and (i) with respect to which any payment thereon has remained unpaid
more than 60 days past the due date therefor or (ii) which has been classified
as delinquent by the Originator.
"ELIGIBLE RECEIVABLE" means a Receivable:
(i) the Obligor of which is a U.S. resident;
(ii) which is not a Delinquent Receivable or a Defaulted
Receivable;
(iii) which is due and payable in full in 75 months or less;
(iv) which, together with the related Contract, constitutes
"chattel paper" within the meaning of Section 9-105 of the UCC;
(v) which is denominated in Dollars and payable in the United
States;
(vi) which, together with the related Contract, represents the
legal, valid and binding obligation of the related Obligor under such
Contract and is not subject to any dispute, offset, counterclaim or
defense, except as provided for under state or federal consumer
protection law;
(vii) which, together with the related Contract, does not
contravene applicable laws, rules or regulations concerning, without
limitation, such matters as usury, consumer protection, truth in lending,
fair credit billing and equal credit opportunity;
(viii) which arose under a Contract for the retail sale of an
Automobile where such Automobile has already been delivered and the Obligor
thereof is not in default under the terms of such Contract;
(ix) which satisfies all applicable requirements of the
Originator's Credit and Collection Policy;
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(x) with respect to which the related Obligor received a Fair Isaac
Score (as defined in the Credit and Collection Policy) of at least 160;
(xi) which, together with the related Contract, has not been
assigned or pledged by the Originator, except pursuant to the terms of this
Agreement, with respect to which the Originator has good and marketable
title, and with respect to which the Originator is the sole legal and
beneficial owner and has full right to transfer, sell and encumber the same
free and clear of any Lien except as created in favor of the Buyer pursuant
to the terms of this Agreement;
(xii) with respect to which there is no default, breach, violation or
event of acceleration existing under the related Contract, and there is no
event which, with the passage of time, or with notice and the expiration of
any grace or cure period, would constitute a default, breach, violation or
event of acceleration, and the Originator has not waived any default,
breach, violation or event of acceleration;
(xiii) with respect to which the related Contract contains
customary and enforceable provisions so as to render the rights and
remedies of the holder thereof against the property subject to such
Contract adequate for the realization of the benefits of the security
provided thereby, including all the rights of a secured party under the UCC
as in effect in the state in which the related Obligor resides or such
Contract was executed;
(xiv) with respect to which the related Contract is not secured by
any collateral, except the Lien with respect to the corresponding
Automobile as noted on the related Title;
(xv) with respect to which, at the time a Lien with respect to the
Automobile was granted by,the related Obligor, the Automobile was and is
free of material damage and is in good repair;
(xvi) with respect to which the Originator is the lienholder of
record on the related Title; and
(xvii) with respect to which the related Obligor maintains casualty
and liability insurance for the
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Automobile in accordance with the Credit and Collection Policy.
"EXPENSE AND TAX-SHARING AGREEMENT" means the Office Space,
Administrative and Office Support Services, and Tax Allocation Agreement dated
as of the date hereof between the Originator and the Buyer.
"FACILITY DOCUMENTS" shall mean collectively, this Agreement, the
Lock-Box Agreements, the Custodial Agreement, the Support Agreement, the Company
Documents and all other agreements, documents and instruments delivered pursuant
thereto or in connection therewith.
"INDEBTEDNESS" means (i) indebtedness for borrowed money, (ii)
obligations evidenced by bonds, debentures, notes or other similar instruments,
(iii) obligations to pay the deferred purchase price of property or services,
(iv) obligations as lessee under leases which shall have been or should be, in
accordance with generally accepted accounting principles, recorded as capital
leases, and (v) obligations under direct or indirect guaranties in respect of,
and obligations (contingent or otherwise) to purchase or otherwise acquire, or
otherwise to assure a creditor against loss in respect of, indebtedness or
obligations of others of the kinds referred to in clauses (i) through (iv)
above.
"INITIAL PURCHASE DATE" means the date the first Purchase is made
pursuant to this Agreement.
"LICENSE AGREEMENT" means the Remote Outsourcing Agreement dated as of
July 15, 1994 between Systematics Financial Services, Inc. and the Originator.
"LIEN" means any mortgage, deed of trust, pledge, hypothecation,
assignment, conditional sale agreement, deposit arrangement, security interest,
encumbrance, lien (statutory or other), preference, priority or other security
agreement or preferential arrangement of any kind or nature whatsoever in
respect of any property of a Person, whether granted voluntarily or imposed by
law, and includes the interest of a lessor under a capital lease or under any
financing lease having substantially the same economic effect as any of the
foregoing and the filing of any financing statement or similar notice (other
than a financing statement filed by a "true" lessor or consignor
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pursuant to Section 9-408 of the UCC), naming the owner of such property as
debtor, under the UCC or other comparable law of any jurisdiction.
"LIQUIDITY BANKS" means the banks identified as such in the Committed
Receivables Purchase Agreement.
"LOAN AGREEMENT" means the Loan Agreement dated as of the date hereof
among the Bank, the Buyer, in its capacity as Borrower thereunder, and the
Originator, in its capacity as Servicer thereunder.
"LOCK-BOX ACCOUNT" means an account maintained for the purpose of
receiving Collections.
"LOCK-BOX AGENT" means at any time CNAI or such other Person(s) then
authorized pursuant to the Loan Agreement and, upon its execution and delivery,
the Receivables Purchase Agreement to act as lock-box agent on behalf of the
Bank and the Purchasers, as applicable, and their respective assignees.
"LOCK-BOX AGREEMENT" means an agreement, in substantially the form of
EXHIBIT B, among the Originator, the Buyer and a Lock-Box Bank which agreement
sets forth the rights of the Lock-Box Agent, the Originator, the Buyer and the
Lock-Box Bank with respect to the disposition and application of the Collections
received into the applicable Lock-Box Account.
"LOCK-BOX BANK" means any of the banks holding one or more lock-box
accounts for receiving Collections.
"OBLIGOR" means the obligor and any co-obligor(s) under a Receivable.
"OUTSTANDING BALANCE" means, with respect to any date and any
Receivable, the then outstanding principal amount of such Receivable. For the
avoidance of doubt, it is understood that in no event shall the definition of
"Outstanding Balance" include any amount in respect of (i) finance charges and
income with respect to any such Receivable or (ii) prepaid dealer reserves or
other marketing expenses with respect to any such Receivable.
"PERMITTED SECURITIZATION TRANSACTION" means a transfer by the
Borrower of Receivables (i) pursuant to the Receivables Purchase Agreement and
(ii) by way of a term securitization
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transaction, provided that (x) upon the effectiveness of such transaction and
the application of the proceeds therefrom to prepay loans made under the Loan
Agreement secured immediately prior to the effectiveness of such transaction by
the Purchased Receivables subject to such transaction, no prepayment of loans is
required under Section 2.03(a) of the Loan Agreement and (y) the parties to such
transaction enter into intercreditor arrangements with the Agent, the Bank and
the Purchasers reasonably satisfactory to each of the Agent, the Bank and the
Purchasers.
"PERSON" means an individual, partnership, corporation (including a
business trust), joint stock company, trust, unincorporated association, joint
venture, government (or any agency or political subdivision thereof) or other
entity.
"PURCHASE" means a purchase of Purchased Receivables, Related Security
with respect to such Purchased Receivables and Collections with respect thereto
by the Buyer from the Originator pursuant to SECTIONS 2.01 and 2.02.
"PURCHASE DATE" means the Initial Purchase Date and thereafter, each
Business Day of each week.
"PURCHASE NOTICE" means a notice, in substantially the form of EXHIBIT
C, furnished by the Originator to the Buyer pursuant to SECTION 2.02.
"PURCHASE PERCENTAGE" shall mean initially 100%; PROVIDED, HOWEVER,
that the Purchase Percentage may change from time to time to reflect historic
loss experience of the Originator's Receivable portfolio, as agreed upon by the
Originator and the Buyer. The Buyer shall notify the Bank and the Agent of any
change in the Purchase Percentage.
"PURCHASED ASSETS" means, at any time, all then outstanding Purchased
Receivables, Related Security with respect to such Purchased Receivables and
Collections with respect to, and other proceeds of, such Purchased Receivables.
"PURCHASED RECEIVABLE" means any Receivable which appears on any list
of Receivables at any time hereafter submitted to and accepted by the Buyer
pursuant to SECTION 2.02, whether purchased by the Buyer or contributed to the
capital of the Buyer. Once a Receivable appears on any such list it shall
remain a Purchased Receivable; PROVIDED HOWEVER, that with
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respect to any Receivable that is repurchased by the Originator pursuant to
SECTION 7.02, following the Buyer's receipt of the repurchase price for such
Receivable, "PURCHASED RECEIVABLE" shall not include the Receivable so
repurchased.
"PURCHASER" means CXC or the Liquidity Banks, as applicable and their
respective successors and assigns.
"RECEIVABLES" means the indebtedness evidenced by the Contracts,
whether constituting accounts, general intangibles, contract rights, chattel
paper or instruments.
"RECEIVABLES PURCHASE AGREEMENT" means, collectively, (i) the CXC
Receivables Purchase Agreement and (ii) the Committed Receivables Purchase
Agreement.
"RECORDS" means, with respect to each Purchased Receivable, all
factory invoices and work orders describing the related Automobile, the bill of
sale and guaranty of title, insurance policies, tax receipts, property and
casualty insurance policies or binders naming the Servicer as loss payee or
additional named insured, as is appropriate, insurance premium receipts, ledger
sheets, payment records, insurance claim files and correspondence, all
documentation in connection with any modification, release, accommodation,
cosigning or guaranty of the Purchased Receivable and all other documents and
instruments, including all books, records, files, tapes, correspondence and
other information or materials (including, without limitation, computer
programs, tapes, discs, punch cards, data processing software and related
property and rights) relating to the Purchased Receivable, the Contract, the
Title and the Automobile relating to the Purchased Receivable and this
Agreement.
"RELATED SECURITY" means, with respect to any Receivable, (i) the
related Contract File, (ii) the related Automobile, (iii) all related Records
and (iv) all proceeds of the foregoing.
"SECURITIES" means any limited, general or other partnership interest,
or any stock, shares, voting trust certificates, bonds, debentures, notes or
other evidences of indebtedness, secured or unsecured, convertible, subordinated
or otherwise, or any certificates of interest, shares, or participations in
temporary or interim certificates for the purchase or acquisition of, or any
right to subscribe to, purchase or acquire any of the foregoing.
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"SERVICER" means at any time the Person(s) then authorized pursuant to
the Loan Agreement and, upon its execution and delivery, the Receivables
Purchase Agreement to act as servicer with respect to the Purchased Receivables.
"SUBSIDIARY" means any corporation or other entity of which Securities
or other ownership interests having ordinary voting power to elect a majority of
the board of directors or other Persons performing similar functions are at the
time directly or indirectly owned or controlled by such Person, one or more of
the other subsidiaries of such Person or any combination thereof.
"SUPPORT AGREEMENT" means the support agreement of UAG in favor of the
Buyer to be entered into concurrently with the Buyer's execution of this
Agreement.
"TERMINATION DATE" means the earlier of (i) that Business Day which
the Buyer designates as the Termination Date by notice to the Originator at
least five Business Days prior to such Business Day, (ii) the occurrence of a
Termination Event and (iii) June 28, 1999 (or such other date as the Originator
and the Buyer may agree in writing.
"TERMINATION EVENT" means the occurrence of any of the following
events:
(a) UAG's cumulative net losses, commencing with the fiscal quarter
beginning on January 1, 1995, as reflected in the consolidated statements of
income and retained earnings as of the end of each fiscal quarter of UAG shall
exceed $6,000,000, PROVIDED, that for the fiscal quarters ending on June 30,
1995 and September 30, 1995, cumulative net losses shall be measured for the
four fiscal quarters ended on the last day of each such quarter;
(b) UAG's net worth, as set forth in UAG's annual audited financial
statements, shall be less than $28,000,000;
(c) The net worth of the Originator and its consolidated subsidiaries,
as set forth in the Originator's annual audited financial statements, shall be
less than $2,400,000, PROVIDED, that, for purposes of the foregoing, net
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worth shall be computed excluding intercompany transactions, dealer reserves,
capitalized excess servicing fees and the effects of gains on sale for
securitization transactions;
(d) UAG shall fail to pay any principal of or premium or interest on
any indebtedness in a principal amount of at least $1,000,000 when the same
becomes due and payable (whether by scheduled maturity, required prepayment,
acceleration, demand or otherwise), and such failure shall continue after the
applicable grace period, if any, specified in the agreement or instrument
relating to such indebtedness, or any other event shall occur or condition shall
exist under any agreement or instrument relating to any such indebtedness and
shall continue after the applicable grace period, if any, specified in such
agreement or instrument, if the effect of such event or condition is to
accelerate, or to permit the acceleration of, the maturity of such indebtedness;
PROVIDED, that a Termination Event shall not occur hereunder unless UAG receives
written notice that any of the foregoing events shall have occurred and fails to
cure the foregoing within 15 days following receipt of such notice;
(e) There shall occur a "Change in Control" (as defined below) of
UAG; "Change of Control" shall mean (i) the sale of all or substantially all of
the assets of UAG to an entity not controlled by UAG, (ii) prior to UAG's
"Qualified Public Offering" (as defined below), a reduction in the ownership by
the shareholders of the voting stock of UAG as of the date hereof (the "Initial
Shareholder Group") to less than a majority of UAG's outstanding voting stock,
or (iii) after the Qualified Public Offering, the ownership of another Person or
group of Persons of a greater number of shares of UAG's voting stock than owned
by the Initial Shareholder Group; "Qualified Public Offering" shall mean a
public offering of UAG's capital stock pursuant to which UAG receives gross
proceeds of $30,000,000 or more (when aggregated with all prior public
offerings) and has a market valuation in excess of $100,000,000;
(f) Both of Richard Harrison and Harry Hardy shall cease to be
actively involved in the day-to-day management of the Originator, except as a
result of death or illness;
(g) There shall occur any event which may be reasonably expected to
have a material adverse effect on the Originator or UAG or may be reasonably
expected to cause a
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material adverse change in the condition or prospects, financial condition or
business of the Originator or UAG; or
(h) There shall occur a breach of the Support Agreement by UAG.
"TITLE" means, with respect to each Receivable, the original
certificate or other instrument or registration evidencing ownership of the
related Automobile, which certificate, other instrument or registration shall
have the Lien of the Originator noted thereon or a UCC financing statement
signed by the Obligor and filed in the appropriate jurisdiction evidencing the
perfection of the Lien granted by the Obligor to the Originator and assigned to
the Buyer or its designee as provided herein.
"UAG" means United Auto Group, Inc., a Delaware corporation.
"UCC" means the Uniform Commercial Code as from time to time in effect
in the specified jurisdiction.
"VSI POLICY" means the vendors single interest physical damage
insurance policy maintained with respect to the Receivables, a copy of which is
attached as EXHIBIT D.
SECTION 1.02. OTHER TERMS. All accounting terms not specifically
defined herein shall be construed in accordance with generally accepted
accounting principles. All terms used in Article 9 of the UCC in the State of
New York, and not specifically defined herein, are used herein as defined in
such Article 9.
SECTION 1.03. COMPUTATION OF TIME PERIODS. Unless otherwise stated
in this Agreement, in the computation of a period of time from a specified date
to a later specified date, the word "from" means "from and including" and the
words "to" and "until" each means "to but excluding."
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ARTICLE II
AMOUNTS AND TERMS OF THE PURCHASES
SECTION 2.01. GENERAL TERMS. (a) On the terms and conditions
hereinafter set forth, from the date the condition precedent to the initial
Purchase in SECTION 3.01 is satisfied to the Termination Date, the Originator
will offer to sell to the Buyer on each Purchase Date all right, title and
interest of the Originator in, to and under all Eligible Receivables then
existing, Related Security with respect to such Eligible Receivables and
Collections with respect thereto and the Buyer in its sole discretion may
purchase all or any portion of such Eligible Receivables, Related Security and
Collections from the Originator. Nothing in this Agreement shall be deemed to
be or construed as a commitment by the Buyer to purchase any Purchased Assets at
any time.
(b) It is the intention of the parties hereto that each Purchase of
Eligible Receivables, Related Security and Collections made hereunder shall
constitute a "sale of chattel paper," as such term is used in Article 9 of the
UCC, which sales are absolute, irrevocable and without recourse except as
specifically provided herein and provide the Buyer with the full benefits of
ownership of the Purchased Receivables and such related Purchased Assets.
Neither the Originator nor the Buyer intends the transactions contemplated
hereunder to be, or for any purpose to be characterized as, loans from the Buyer
to the Originator secured by such assets. If at any time a court characterizes
the Purchases hereunder as loans by the Buyer to the Originator, then the
Originator hereby pledges, grants a security interest in and assigns to the
Buyer, all of the Originator's right and title to and interest in the Purchased
Receivables, the Related Security and Collections related thereto as security
for such loans and for the payment and performance of all obligations of the
Originator hereunder. In view of the intention of the parties hereto that the
Purchases of Eligible Receivables, Related Security and Collections made
hereunder shall constitute sales of such Purchased Receivables, Related Security
and Collections rather than a loan secured by such Purchased Receivables,
Related Security and Collections, the Originator agrees to note on its financial
statements that such Purchased Receivables, Related Security and Collections
have been sold to the Buyer.
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SECTION 2.02. PURCHASES FROM THE ORIGINATOR. (a) Each Purchase shall
be made on a Purchase Date, provided, that a Purchase Notice requesting such
Purchase is received by the Buyer by the close of business on such Purchase
Date. Each such Purchase Notice shall list all Eligible Receivables of the
Originator and shall specify the Purchase Price therefor. The Buyer shall
promptly thereafter notify the Originator whether the Buyer has determined to
purchase all or any portion of such Eligible Receivables.
(b) The purchase price (the "PURCHASE PRICE") for the new Purchased
Receivables noted on a Purchase Notice (together with the related Purchased
Assets) payable with respect to any Purchase Date shall be an amount equal to
the product of the Outstanding Balance of such Purchased Receivables on the
Purchase Date and the Purchase Percentage on such date plus interest accrued on
such Purchased Receivables as of such date.
(c) Subject to paragraph (d) below, the Purchase Price for the
Purchased Assets sold by the Originator under this Agreement shall be payable in
full in cash by the Buyer, in each case on the Business Day following the date
of each such Purchase, except that the Buyer may, with respect to any Purchase,
offset against such Purchase Price any amounts owed by the Originator to the
Buyer hereunder and which remain unpaid. Subject to paragraph (d) below, on the
Business Day following the date of each such Purchase, the Buyer shall, upon
satisfaction of the applicable conditions set forth in Article III, make
available to the Originator the Purchase Price in same day funds.
(d) If, on the Business Day following the date of any Purchase, the
Buyer has insufficient funds to pay in full the Purchase Price owed on such day,
then the amount of the difference between the Purchase Price and such available
funds shall, at option of the Originator (as evidenced by written notice by the
Originator to the Buyer on such date (which notice may be a standing
instruction)) be deemed to be (i) a capital contribution from the Originator to
the Buyer, (ii) a loan by the Originator to the Buyer (a "SUBORDINATED LOAN"),
evidenced by the Subordinated Note of the Buyer substantially in the form
attached hereto as EXHIBIT E or (iii) any combination of capital contribution
and Subordinated Loan. Any Subordinated Loan hereunder shall be fully
subordinated to every other obligation of the Buyer.
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SECTION 2.03. COLLECTIONS; LOCK-BOX ACCOUNTS. In connection with the
Purchases of Purchased Receivables hereunder, the Originator hereby transfers
and assigns to the Buyer all the Originator's right, title to and interest in
each Lock-Box Account. In connection with such transfer and assignment, the
Originator hereby agrees to instruct each Obligor of a Purchased Receivable to
remit payment on the Purchased Receivables to the Lock-Box Accounts. The
Originator further agrees that it will not make any change in its instructions
to Obligors regarding payments to be made to any Lock-Box Account. The
Originator agrees that if it shall receive any Collections, the Originator shall
hold such Collections in trust for the benefit of the Buyer and remit such
Collections to the Buyer by depositing such Collections into the Lock-Box
Account within one Business Day following the Originator's receipt thereof.
Notwithstanding the foregoing, the Servicer shall be entitled to make
withdrawals from the Lock-Box Accounts in accordance with the Loan Agreement
and, upon its execution and delivery, the Receivables Purchase Agreement until
the Lock-Box Agent shall have instructed the Lock-Box Banks to the contrary in
accordance with the Lock-Box Agreements. The account numbers of all Lock-Box
Accounts, together with the names and addresses of all the Lock-Box Banks
maintaining such Lock-Box Accounts, are specified in EXHIBIT F.
SECTION 2.04. TRANSFER OF RECORDS TO THE BUYER. (a) In connection with
the Purchases of Purchased Receivables hereunder, the Originator hereby sells,
transfers, assigns and otherwise conveys to the Buyer all of the Originator's
right and title to and interest in the Records relating to all Purchased
Receivables, without the need for any further documentation in connection with
any Purchase. In connection with such transfer, the Originator, to the extent
permitted under the License Agreement, hereby grants to the Buyer and the
Servicer an irrevocable, non-exclusive license to use, without royalty or
payment of any kind, all software used by the Originator to account for the
Purchased Receivables, to the extent necessary to administer the Purchased
Receivables, whether such software is owned by the Originator or is owned by
others and used by the Originator under license agreements with respect thereto.
The license granted hereby shall be irrevocable, and shall terminate when all
Purchased Receivables have been collected or charged off as uncollectible.
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(b) The Originator shall take such action requested by the Buyer
and/or the Servicer, from time to time hereafter, that may be necessary or
appropriate to ensure that the Buyer has (i) an enforceable ownership interest
in the Records relating to the Purchased Receivables and (ii) an enforceable
right (whether by license or sublicense or otherwise) to use all of the computer
software used to account for the Purchased Receivables and/or to recreate such
Records.
SECTION 2.05. PERFECTION OF LIENS; FURTHER ASSURANCES. Upon the
request of the Buyer, the Originator shall, at its expense, promptly execute and
deliver all further instruments and documents, and take all further action
(including, without limitation, the execution and filing of such financing or
continuation statements, or amendments thereto or assignments thereof), that may
be necessary or desirable, or that the Buyer may request, in order to perfect
and protect any ownership or security interest granted or purported to be
granted to the Buyer hereunder or to enable the Buyer to exercise and enforce
its rights and remedies hereunder with respect to any Purchased Assets
(including, without limitation, the security interest of the Buyer in the
Automobiles securing the Purchased Receivables). The Originator hereby
authorizes the Buyer to file one or more financing or continuation statements,
and amendments thereto and assignments thereof, relative to all or any part of
the Purchased Assets now existing or hereafter arising without the signature of
the Originator where permitted by law. A carbon, photographic or other
reproduction of this Agreement or any financing statement covering the Purchased
Assets or any part thereof shall be sufficient as a financing statement. The
Originator will furnish to the Buyer from time to time statements and schedules
further identifying and describing the Purchased Assets and such other reports
in connection with the Purchased Assets as the Buyer may reasonably request, all
in reasonable detail.
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ARTICLE III
CONDITIONS OF PURCHASES
SECTION 3.01. CONDITIONS PRECEDENT TO INITIAL PURCHASE. The initial
Purchase shall be subject to the condition precedent that the Buyer shall have
received the following, each in form and substance satisfactory to the Buyer:
(a) The Company Documents executed by the Buyer and the Originator;
(b) Acknowledgment copies of proper UCC-1 Financing Statements
executed by the Originator, as may be necessary or, in the opinion of the Buyer,
desirable under the UCC of all appropriate jurisdictions or any comparable law
to perfect the Buyer's interests in all Purchased Receivables and Related
Security in which an interest may be assigned to it hereunder;
(c) Certified copies of Requests for Information or Copies (Form UCC-
11) (or a similar search report certified by a party acceptable to the Buyer),
dated a date reasonably near to the date hereof, listing all effective financing
statements which name the Originator (under its present name and any previous
names) as debtor and which are filed in the jurisdictions in which filings were
made pursuant to subsection (b) of this SECTION 3.01, together with copies of
such financing statements;
(d) A copy of the resolutions of the Board of Directors of the
Originator approving this Agreement, the Company Documents and the other
Facility Documents to be delivered by it hereunder and the transactions
contemplated hereby, certified by its Secretary or Assistant Secretary;
(e) The Certificate of Incorporation of the Originator certified by
the Secretary of State of Delaware;
(f) A certificate of the Secretary or Assistant Secretary of the
Originator certifying (i) the names and true signatures of the officers
authorized on its behalf to sign this Agreement, the Company Documents and the
other Facility Documents to be delivered by it hereunder (on which certificate
the Buyer may conclusively rely until such time as the Buyer shall receive from
the Originator a revised certificate meeting the requirements of this subsection
(f)) and (ii) a copy of the Originator's by-laws;
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(g) An opinion of Nixon, Hargrave, Devans & Doyle, special counsel
for the Originator, in form and substance satisfactory to the Buyer and the
Agent, as to such matters as the Buyer and the Agent may reasonably request;
(h) The Support Agreement shall have been duly executed and delivered
by each of UAG and the Originator and shall be in full force and effect; and
(i) The Custodial Agreement shall have been duly executed and
delivered by each of the Originator, the Buyer, the Custodian and the Agent and
shall be in full force and effect.
SECTION 3.02. CONDITIONS PRECEDENT TO ALL PURCHASES. Each Purchase
(including the initial Purchase) by the Buyer from the Originator shall be
subject to the further conditions precedent that (a) with respect to any such
Purchase, not later than the close of business on the date of such Purchase, the
Originator shall have delivered (i) to the Buyer, in form and substance
satisfactory to the Buyer, a completed Purchase Notice dated the date of such
Purchase and containing such additional information as may be reasonably
requested by the Buyer and (ii) to the Custodian the original copy of the
related Contract File and (b) on the date of such Purchase the representations
and warranties contained in SECTION 4.01 shall be correct on and as of such date
as though made on and as of such date (and the Originator by accepting the
Purchase Price for such Purchase shall be deemed to have certified to such
effect).
SECTION 3.03. EFFECT OF PAYMENT OF PURCHASE PRICE. Upon the payment
of the Purchase Price for any Purchase, (whether in cash, through a capital
contribution or a Subordinated Loan), title to the Purchased Receivables and the
other related Purchased Assets shall vest in the Buyer, whether or not the
conditions precedent to such Purchase were in fact satisfied; PROVIDED, HOWEVER,
that the Buyer shall not be deemed to have waived any claim it may have under
this Agreement for the failure by the Originator in fact to satisfy any such
condition precedent.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. REPRESENTATIONS AND WARRANTIES OF THE ORIGINATOR. The
Originator represents and warrants as follows:
(a) DUE INCORPORATION AND GOOD STANDING. The Originator is a
corporation duly incorporated, validly existing and in good standing under the
laws of the jurisdiction named at the beginning hereof and is duly qualified to
do business, and is in good standing, in every jurisdiction in which the nature
of its business requires it to be so qualified.
(b) DUE AUTHORIZATION AND NO CONFLICT. The execution, delivery and
performance by the Originator of this Agreement and all other agreements,
instruments and documents to be delivered hereunder, and the transactions
contemplated hereby and thereby, are within the Originator's corporate powers,
have been duly authorized by all necessary corporate action, do not contravene
(i) the Originator's charter or by-laws, (ii) any law, rule or regulation
applicable to the Originator, (iii) any contractual restriction contained in any
material indenture, loan or credit agreement, lease, mortgage, security
agreement, bond, note, or other agreement or instrument binding on or affecting
the Originator or its property or (iv) any order, writ, judgment, award,
injunction or decree binding on or affecting the Originator or its property, and
do not result in or require the creation of any Lien upon or with respect to any
of its properties (other than in favor of the Buyer as contemplated hereunder);
and no transaction contemplated hereby requires compliance with any bulk sales
act or similar law. This Agreement has been duly executed and delivered on
behalf of the Originator.
(c) GOVERNMENTAL CONSENT. No authorization or approval or other
action by, and no notice to or filing with, any governmental authority or
regulatory body is required for the due execution, delivery and performance by
the Originator of this Agreement or any other agreement, document or instrument
to be delivered hereunder.
(d) ENFORCEABILITY OF FACILITY DOCUMENTS. This Agreement and each
other Facility Document to be delivered by the
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Originator in connection herewith constitute the legal, valid and binding
obligation of the Originator enforceable against the Originator in accordance
with their respective terms.
(e) NO LITIGATION. There are no actions, suits or proceedings
pending, or to the knowledge of the Originator threatened, against or affecting
the Originator or any of its Subsidiaries, or the property of the Originator or
any of its Subsidiaries, in any court, or before any arbitrator of any kind, or
before or by any governmental body, which may materially adversely affect the
financial condition of the Originator or the Originator and its consolidated
Subsidiaries taken as a whole or (ii) the ability of the Originator to perform
its obligations under this Agreement or (iii) the collectibility of the
Purchased Receivables. Neither the Originator nor any of its Subsidiaries is in
default with respect to any order of any court, arbitrator or governmental body.
(f) USE OF PROCEEDS. No proceeds of any Purchase will be used by the
Originator to acquire any security in any transaction which is subject to
Section 13 or 14 of the Securities Exchange Act of 1934, as amended.
(g) ELIGIBILITY OF PURCHASED RECEIVABLES; PERFECTION OF INTEREST IN
PURCHASED RECEIVABLES. (i) As of the date of Purchase hereunder of each
Purchased Receivable, such Purchased Receivable will satisfy the conditions of
the definition of "Eligible Receivable."
(ii) Prior to the Buyer's Purchase of each Purchased Asset hereunder,
the Originator is or will be the lawful owner of, and have good title to, such
Purchased Asset free and clear of any Lien and upon each Purchase by the Buyer
of Purchased Assets hereunder, the Buyer shall acquire a valid and perfected
first priority ownership interest in each Purchased Receivable then existing or
thereafter arising and in the Related Security and Collections with respect
thereto, in each case free and clear of any Lien. All such Purchases of
Purchased Receivables and related Purchased Assets constitute true and valid
sales, and all such Purchases of Purchased Receivables and related Purchased
Assets constitute true and valid transfers and assignments of all of the
Originator's right, title and interest in, to and under such Purchased Assets
(and not merely a pledge of such Purchased Receivables and related Purchased
Assets for security purposes), enforceable against creditors of the Originator.
No such Purchased Assets shall constitute property of the Originator; and
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no effective financing statement or other instrument similar in effect covering
any Purchased Receivable, the Related Security, Collections or any other
Purchased Assets shall at any time be on file in any recording office except
such as may be filed in favor of the Buyer (or its assignees) in accordance with
this Agreement.
(h) ACCURACY OF INFORMATION. No Purchase Notice, information,
exhibit, financial statement, document, book, record or report furnished or to
be furnished by the Originator to the Buyer in connection with this Agreement is
or shall be inaccurate in any material respect as of the date it is or shall be
dated or (except as otherwise disclosed to the Buyer, as the case may be, at
such time) as of the date so furnished, or contains or shall contain any
material misstatement of fact or omits or shall omit to state a material fact or
any fact necessary to make the statements contained therein not misleading.
(i) LOCATION OF CHIEF EXECUTIVE OFFICE AND RECORDS. The chief place
of business and chief executive office of the Originator are located at the
address of the Originator referred to in SECTION 8.02 hereof and the locations
of the offices where the Originator keeps all the Records are listed on EXHIBIT
G (or at such other locations, notified to the Buyer in accordance with SECTION
5.01(e), in jurisdictions where all action required by SECTION 6.03 has been
taken and completed).
(j) SEPARATE CORPORATE EXISTENCE. The Originator is entering into
the transactions contemplated by this Agreement in reliance on the Buyer's
identity as a separate legal entity from the Originator and each of its
Affiliates, and acknowledges that the Buyer and the other parties to the
Facility Documents are similarly entering into the transactions contemplated
by the other Facility Documents in reliance on the Buyer's identity as a
separate legal entity from the Originator and each such other Affiliate.
(k) TAXES. The Originator has filed or caused to be filed all
federal, state and local tax returns which are required to be filed by it, and
has paid or caused to be paid all taxes shown to be due and payable on such
returns or on any assessments received by it, other than any taxes or
assessments, the validity of which are being contested in good faith by
appropriate proceedings and with respect to which the Originator has set aside
adequate reserves on its books in accordance with generally
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accepted accounting principles and which have not given rise to any Liens.
(l) SOLVENCY. The Originator: (i) is not "insolvent" (as such term
is defined in Section 101(32)(A) of the Bankruptcy Code, (ii) is able to pay its
debts as they mature; and (iii) does not have unreasonably small capital for the
business in which it is engaged or for any business or transaction in which it
is about to engage.
(m) NO FRAUDULENT CONVEYANCE. The transactions contemplated by this
Agreement and by each of the Facility Documents are being consummated by the
Originator in furtherance of the Originator's ordinary business, with no
contemplation of insolvency and with no intent to hinder, delay or defraud any
of its present or future creditors. By its receipt of the Purchase Prices
hereunder and its ownership of the capital stock of the Buyer, the Originator
shall have received reasonably equivalent value for the Purchased Receivables
sold or otherwise conveyed to the Buyer under this Agreement.
SECTION 4.02. REPRESENTATIONS AND WARRANTIES OF THE BUYER. The Buyer
represents and warrants as follows:
(a) DUE INCORPORATION AND GOOD STANDING. The Buyer is a corporation
duly incorporated, validly existing and in good standing under the laws of the
jurisdiction named at the beginning hereof and is duly qualified to do business,
and is in good standing, in every jurisdiction in which the nature of its
business requires it to be so qualified.
(b) DUE AUTHORIZATION AND NO CONFLICT. The execution, delivery and
performance by the Buyer of this Agreement and all other agreements, instruments
and documents to be delivered hereunder, and the transactions contemplated
hereby and thereby, are within the Buyer's corporate powers, have been duly
authorized by all necessary corporate action, do not contravene (i) the Buyer's
charter or by-laws, (ii) any law, rule or regulation applicable to the Buyer,
(iii) any contractual restriction contained in any material indenture, loan or
credit agreement, lease, mortgage, security agreement, bond, note, or other
agreement or instrument binding on or affecting the Buyer or its property or
(iv) any order, writ, judgment, award, injunction or decree binding on or
affecting the Buyer or its property, and do
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not result in or require the creation of any Lien upon or with respect to any of
its properties; and no transaction contemplated hereby requires compliance with
any bulk sales act or similar law. This Agreement has been duly executed and
delivered on behalf of the Buyer.
(c) GOVERNMENTAL CONSENT. No authorization or approval or other
action by, and no notice to or filing with, any governmental authority or
regulatory body is required for the due execution, delivery and performance by
the Buyer of this Agreement or any other agreement, document or instrument to be
delivered hereunder.
(d) ENFORCEABILITY OF FACILITY DOCUMENTS. This Agreement and each
other Facility Document to be delivered by the Buyer in connection herewith
constitute the legal, valid and binding obligation of the Buyer enforceable
against the Buyer in accordance with their respective terms.
ARTICLE V
GENERAL COVENANTS OF THE ORIGINATOR
SECTION 5.01. AFFIRMATIVE COVENANTS OF THE ORIGINATOR. The Originator
will, unless the Buyer shall otherwise consent in writing:
(a) COMPLIANCE WITH LAWS, ETC. Comply in all material respects with
all applicable laws, rules, regulations and orders with respect to it, its
business and properties and all Receivables and related Contracts.
(b) PRESERVATION OF CORPORATE EXISTENCE. Preserve and maintain its
corporate existence, rights, franchises and privileges in the jurisdiction of
its incorporation, and qualify and remain qualified in good standing as a
foreign corporation in each jurisdiction in which the nature of its business
requires it to be so qualified.
(c) AUDITS. At any time and from time to time upon prior written
notice to the Originator and during regular business hours, permit the Buyer, or
its agents or representatives, (i) to examine and make copies of and abstracts
from all Records, and (ii) to visit the offices and properties of the Originator
for the purpose of examining such Records, and to
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discuss matters relating to the Purchased Receivables or the Originator's
performance hereunder with any of the officers or employees of the Originator
having knowledge of such matters.
(d) KEEPING OF RECORDS AND BOOKS OF ACCOUNT. Maintain and implement
administrative and operating procedures (including, without limitation, an
ability to recreate records evidencing the Purchased Receivables in the event of
the destruction of the originals thereof) and keep and maintain, all documents,
books, records and other information reasonably necessary or advisable for the
collection of all Purchased Receivables (including, without limitation, records
adequate to permit the daily identification of all Collections of and
adjustments to each Purchased Receivable).
(e) LOCATION OF RECORDS. Keep its chief place of business and chief
executive office, and the offices where it keeps the Records, at the address(es)
of the Originator referred to in SECTION 4.01(i), or, in any such case, upon 30
days' prior written notice to the Buyer, at such other locations within the
United States where all action required by SECTION 6.03 shall have been taken
and completed.
(f) CREDIT AND COLLECTION POLICY. Comply in all material respects
with its Credit and Collection Policy in regard to each Purchased Receivable and
the related Contract.
(g) NATURE OF BUSINESS. Engage principally in, directly or
indirectly through the ownership of its Subsidiaries, the business of financing
the cost of new Automobiles purchased by Obligors.
(h) MAINTENANCE OF INSURANCE. (i) Maintain and keep in force
insurance in amounts and with companies as is customary for companies engaged in
the same business as that of the Originator.
(i) SEPARATE IDENTITY. Take all actions required to maintain the
Buyer's status as a separate legal entity, including, without limitation, (i)
not holding the Buyer out to third parties as other than an entity with assets
and liabilities distinct from the Originator and the Originator's other
Subsidiaries; (ii) not holding itself out to be responsible for the debts of the
Buyer or, other than by reason of owning capital
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stock of the Buyer, for any decisions or actions relating to the business and
affairs of the Buyer; (iii) cause any financial statements consolidated with
those of the Buyer to state that the Buyer is a separate corporate entity with
its own separate creditors who, in any liquidation of the Buyer, will be
entitled to be satisfied out of the Buyer's assets prior to any value in the
Buyer becoming available to the Buyer's equity holders; (iv) taking such other
actions as are necessary on its part to ensure that all corporate procedures
required by its and the Buyer's respective certificates of incorporation and by-
laws are duly and validly taken; (v) keeping correct and complete records and
books of account and corporate minutes; and (vi) not acting in any other manner
that could foreseeably mislead others with respect to the Buyer's separate
identity.
(j) SOFTWARE. Use its reasonable efforts to enable each of the Buyer
and the Servicer (whether by license, sublicense, assignment or otherwise) to
use all of the computer software used to account for the Purchased Receivables
to the extent necessary to administer the Purchased Receivables.
SECTION 5.02. NEGATIVE COVENANTS OF THE ORIGINATOR. The Originator
will not, without the written consent of the Buyer:
(a) SALES, LIENS, ETC. AGAINST RECEIVABLES AND RELATED ASSETS.
Except pursuant to the Loan Agreement and a Permitted Securitization Transaction
and as otherwise provided herein, sell, assign (by operation of law or
otherwise) or otherwise dispose of, or create or suffer to exist, any Lien upon
or with respect to, any Purchased Receivable, Related Security or Collections,
or upon or with respect to any Lock-Box Account to which any Collections of any
Purchased Receivable are sent, or assign any right to receive income in respect
thereof.
(b) EXTENSION OR AMENDMENT OF RECEIVABLES. Except to the extent
permitted in the Loan Agreement and, upon execution and delivery of the
Receivables Purchase Agreement, in the Receivables Purchase Agreement, in each
case in its capacity as Servicer thereunder, extend, amend or otherwise modify,
the terms of any Purchased Receivable, or amend, modify or waive, any term or
condition of any Contract related thereto.
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(c) CHANGE IN BUSINESS OR CREDIT AND COLLECTION POLICY. Make any
change in the character of its business or in the Credit and Collection Policy
without prior notice to and approval by the Buyer; PROVIDED, HOWEVER, that the
Buyer will be deemed to have approved any such change unless it shall have
disapproved of such change within ten (10) Business Days of its receipt of such
notice.
(d) CHANGE IN CORPORATE NAME. Make any change to its corporate name
or use any trade names, fictitious names, assumed names or "doing business as"
names unless, prior to the effective date of any such name change or use, the
Originator delivers to the Buyer such Financing Statements (Form UCC-1 and UCC-
3) executed by the Originator which the Buyer may reasonably request to reflect
such name change or use, together with such other documents and instruments that
the Buyer may request in connection therewith.
(e) ACCOUNTING TREATMENT. Prepare any financial statements or other
statements which shall account for the transactions contemplated by this
Agreement in any manner other than as the sale of the Purchased Assets by the
Originator to the Buyer.
(f) NONPETITION COVENANT. Notwithstanding any prior termination of
this Agreement, the Originator and the Buyer shall not, prior to the date which
is one year and one day after the termination of this Agreement, with respect to
the Buyer, acquiesce, petition or otherwise invoke or cause the Buyer to invoke
the process of any governmental authority for the purpose of commencing or
sustaining a case against the Buyer under any federal or state bankruptcy,
insolvency or similar law or appointing a receiver, liquidator, assignee,
trustee, custodian, sequestrator or other similar official of the Buyer or any
substantial part of its property or ordering the winding-up or liquidation of
the affairs of the Buyer.
(g) SUBORDINATED NOTE. The Originator shall not transfer the
Subordinated Note to any Person.
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ARTICLE VI
ADMINISTRATION AND COLLECTION
SECTION 6.01. DESIGNATION OF SERVICER. Pursuant to the Loan
Agreement, the Originator has been appointed as the Servicer thereunder and the
Originator has accepted such appointment thereunder. Upon the execution and
delivery of the Receivables Purchase Agreement, the Originator will be appointed
as Servicer thereunder and will accept such appointment thereunder. As part of
the consideration for the Purchases hereunder, the Originator hereby
acknowledges and consents to such appointments as Servicer and agrees to perform
each of the duties and obligations of the Servicer pursuant to the terms of the
Loan Agreement and the Receivables Purchase Agreement, as applicable. Subject
to the terms of the Loan Agreement and the Receivables Purchase Agreement, the
Buyer may at any time, upon ten Business Days' prior written notice, designate
as Servicer any Person to succeed the Originator or any successor Servicer.
SECTION 6.02. RIGHTS OF THE BUYER. At any time:
(a) The Buyer may notify the Obligors of Purchased Receivables, or
any of them, of the Buyer's ownership interest in Purchased Assets and direct
such Obligors, or any of them, that payment of all amounts payable under any
Purchased Receivable be made directly to the Buyer or its designee.
(b) The Originator shall, at the Servicer's or Buyer's request and at
the Originator's expense, give notice of the Buyer's interest in Purchased
Receivables to each Obligor and direct that payments be made directly to the
Buyer or its designee.
(c) The Originator shall, at the Buyer's request, assemble all
Records which the Buyer reasonably believes are necessary or appropriate for the
administration and enforcement of the Purchased Receivables, and shall make the
same available to the Buyer at a place selected by the Buyer or its designee.
(d) The Originator hereby authorizes the Buyer and the Servicer to
take any and all steps in the Originator's name and on behalf of the Originator
necessary or desirable, in the determination of the Buyer and/or the Servicer,
to collect all
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amounts due under any and all Purchased Receivables, including, without
limitation, endorsing the Originator's name on checks and other instruments
representing Collections and enforcing such Purchased Receivables and the
Related Security.
SECTION 6.03. FURTHER ACTION EVIDENCING TRANSFERS. The Originator
agrees that from time to time, at its expense, it will promptly execute and
deliver all further instruments and documents, and take all further action that
the Buyer may reasonably request in order to perfect, protect or more fully
evidence the Buyer's interest in the Purchased Assets (including, without
limitation, the security interest of the Buyer in the Automobiles securing the
Purchased Receivables), or to enable the Buyer to exercise or enforce any of its
rights hereunder. Without limiting the generality of the foregoing, the
Originator will mark its master data processing records evidencing such
Purchased Receivables and Related Security with a legend, acceptable to the
Buyer, evidencing that the Buyer has acquired an ownership interest therein as
provided in this Agreement and, upon the request of the Buyer, will execute and
file such financing or continuation statements, or amendments thereto or
assignments thereof, and such other instruments or notices, as may be necessary
or appropriate or as the Buyer may reasonably request. The Originator hereby
authorizes the Buyer to file one or more financing or continuation statements,
and amendments thereto and assignments thereof, relative to all or any of the
Purchased Receivables and the Purchased Assets now existing or hereafter arising
without the signature of the Originator where permitted by law. A carbon,
photographic or other reproduction of this Agreement or any financing statement
covering the Purchased Receivables and the other Purchased Assets, or any part
thereof, shall be sufficient as a financing statement. If the Originator fails
to perform any of its agreements or obligations under this Agreement, the Buyer
may (but shall not be required to) itself perform, or cause performance of, such
agreement or obligation, and the expenses of the Buyer incurred in connection
therewith shall be payable by the Originator upon the Buyer's demand therefor;
PROVIDED, HOWEVER, prior to taking any such action, the Buyer shall give notice
of such intention to the Originator and provide the Originator with a reasonable
opportunity to take such action itself.
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ARTICLE VII
INDEMNIFICATION; REPURCHASES
SECTION 7.01. INDEMNITIES BY THE ORIGINATOR. (a) Without limiting any
other rights which the Buyer may have hereunder or under applicable law, the
Originator hereby agrees to indemnify the Buyer, from and against any and all
damages, losses, claims, liabilities and related costs and expenses, including
reasonable attorneys' fees and disbursements (all of the foregoing being
collectively referred to as "Indemnified Amounts") awarded against or incurred
by the Buyer relating to or resulting from any of the following (excluding,
however, (i) Indemnified Amounts to the extent resulting from gross negligence
or willful misconduct on the part of the Buyer or (ii) recourse (except with
respect to payment and performance obligations provided for in this Agreement)
for uncollectible Purchased Receivables) :
(i) reliance on any representation or warranty made or deemed made by
the Originator (or any of its officers) under or in connection with this
Agreement, any Purchase Notice or any other information or report delivered
by the Originator pursuant hereto, which shall have been false or incorrect
in any material respect when made or deemed made or delivered;
(ii) the failure by the Originator to comply with any term, provision
or covenant contained in this Agreement, or any agreement executed in
connection with this Agreement or with any applicable law, rule or
regulation with respect to any Purchased Receivable, the Related Security
or the other Purchased Assets, or the nonconformity of any Purchased
Receivable, the Related Security or the other Purchased Assets with any
such applicable law, rule or regulation;
(iii) the failure to vest and maintain vested in the Buyer or to
transfer to the Buyer an interest in the Receivables which are, or are
purported to be, Purchased Receivables, together with all Collections,
Related Security and the other Purchased Assets, free and clear of any Lien
(except in favor of the Buyer or its assignees) whether existing at the
time of the Purchase of such Receivable or at any time thereafter;
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(iv) the failure to file, or any delay in filing (other than solely as
a result of the action or inaction of the Buyer), financing statements or
other similar instruments or documents under the UCC of any applicable
jurisdiction or other applicable laws against the Originator with respect
to any Receivables or Related Security which are, or are purported to be,
Purchased Assets, whether at the time of any Purchase or at any subsequent
time;
(v) any failure of the Originator, as Servicer or otherwise, to
perform its duties or obligations in accordance with the provisions of
Article VI; and
(vii) any products liability claim or personal injury or property
damage suit or other similar or related claim or action of whatever sort
arising out of or in connection with the Automobile that is the subject of
any Contract.
Any amounts subject to the indemnification provisions of this SECTION 7.01 shall
be paid by the Originator to the Buyer within two Business Days following
Buyer's demand therefor.
SECTION 7.02. REPURCHASE OF RECEIVABLES. (a) If, with respect to any
Purchased Receivable, (i) such Receivable did not constitute an Eligible
Receivable on the date such Receivable became a Purchased Receivable (or if,
within three Business Days of any Purchase, the Buyer notifies the Originator
that any Receivable which became a Purchased Receivable on the date of such
Purchase is not an Eligible Receivable) or the Originator shall have breached
any representation or warranty made hereunder with respect to such Receivable,
(ii) such Receivable, after the date such Receivable became a Purchased
Receivable, became subject to any dispute, claim, offset or defense (other than
discharge in bankruptcy of the Obligor) of the Obligor to the payment of such
Receivable (including without limitation, a defense based on such Receivable or
the related Contract not being a legal, valid and binding obligation of such
Obligor enforceable against it in accordance with its terms) or (iii) the
Originator shall at any time breach any covenant made herein with respect to any
such Receivable (a Purchased Receivable described in any of clauses (i), (ii) or
(iii) above being referred to as an "Ineligible Purchased Receivable"), then the
Originator shall on the next succeeding Purchase Date, upon the Buyer's demand,
repurchase such Ineligible Purchased Receivable for the
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repurchase price specified in the following sentence. Upon the Buyer's demand,
the Originator shall, on the Purchase Date coinciding with such repurchase, pay
to the Buyer an amount equal to the Outstanding Balance of such Purchased
Receivable plus accrued interest thereon as of such Purchase Date. The proceeds
of any such repurchase shall be paid to the Buyer by depositing such proceeds
into the Lock-Box Account. Any such repurchase shall be made without recourse
or warranty, express or implied, by the Buyer.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.01. AMENDMENTS, ETC. No amendment to or waiver of any
provision of this Agreement nor consent to any departure by the Originator,
shall in any event be effective unless the same shall be in writing and signed
by (i) the Originator and the Buyer (with respect to an amendment) or (ii) the
Buyer (with respect to a waiver or consent by it) or the Originator (with
respect to a waiver or consent by it), as the case may be, and then such waiver
or consent shall be effective only in the specific instance and for the specific
purpose for which given. This Agreement contains a final and complete
integration of all prior expressions by the parties hereto with respect to the
subject matter hereof and shall constitute the entire agreement (together with
the exhibits hereto) among the parties hereto with respect to the subject matter
hereof, superseding all prior oral or written understandings.
SECTION 8.02. NOTICES, ETC. All notices and other communications
provided for hereunder shall, unless otherwise stated herein, be in writing
(including telex communication and communication by facsimile copy) and mailed,
telexed, transmitted or delivered, as to each party hereto, at its address set
forth under its name on the signature pages hereof or at such other address as
shall be designated by such party in a written notice to the other parties
hereto. All such notices and communications shall be effective, upon receipt,
or in the case of delivery by mail, five days after being deposited in the
mails, or, in the case of notice by telex, when telexed against receipt of
answer back, or in the case of notice by facsimile copy, when verbal
communication of receipt is obtained, in each case addressed as
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aforesaid, except that notices and communications pursuant to Article II shall
not be effective until received.
SECTION 8.03. NO WAIVER; REMEDIES. No failure on the part of the
Buyer to exercise, and no delay in exercising, any right hereunder shall operate
as a waiver thereof; nor shall any single or partial exercise of any right
hereunder preclude any other or further exercise thereof or the exercise of any
other right. The remedies herein provided are cumulative and not exclusive of
any remedies provided by law.
SECTION 8.04. BINDING EFFECT; ASSIGNABILITY. This Agreement shall be
binding upon and inure to the benefit of the Originator, the Buyer and their
respective successors and permitted assigns (which successors of the Originator
shall include a trustee in bankruptcy). The Originator may not assign any of
its rights and obligations hereunder or any interest herein without the prior
written consent of the Buyer. The Buyer may assign at any time its rights and
obligations hereunder and interests herein to any other Person without the
consent of the Originator. The Originator agrees that any assignee of the Buyer
(to the extent of its interest so assigned) shall have the right to enforce this
Agreement and to exercise directly all of the Buyer's rights and remedies under
this Agreement, and the Originator agrees to cooperate fully with any such
assignee in the exercise of such rights and remedies. This Agreement shall
create and constitute the continuing obligations of the parties hereto in
accordance with its terms, and shall remain in full force and effect until such
time, after the Termination Date, as the Purchased Receivables shall have been
collected or charged off as uncollectible; PROVIDED, HOWEVER, that the rights
and remedies with respect to any breach of any representation and warranty made
by the Originator pursuant to Article IV and the indemnification and payment
provisions of Article VII and this Article VIII shall be continuing and shall
survive any termination of this Agreement.
SECTION 8.05. GOVERNING LAW; WAIVER OF JURY TRIAL. THIS AGREEMENT
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE
STATE OF NEW YORK, EXCEPT TO THE EXTENT THAT THE VALIDITY OR PERFECTION OF THE
INTERESTS OF THE BUYER IN THE PURCHASED ASSETS OR REMEDIES HEREUNDER OR
THEREUNDER, IN RESPECT THEREOF, ARE GOVERNED BY THE LAWS OF A JURISDICTION OTHER
THAN THE STATE OF NEW YORK. THE ORIGINATOR
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HEREBY AGREES TO THE JURISDICTION OF ANY FEDERAL COURT LOCATED WITHIN THE STATE
OF NEW YORK, AND WAIVES PERSONAL SERVICE OF ANY AND ALL PROCESS UPON IT AND
CONSENTS THAT ALL SUCH SERVICE OF PROCESS BE MADE BY REGISTERED MAIL DIRECTED TO
THE ORIGINATOR AT THE ADDRESS SET FORTH ON THE SIGNATURE PAGE HEREOF AND SERVICE
SO MADE SHALL BE DEEMED TO BE COMPLETED FIVE (5) DAYS AFTER THE SAME SHALL HAVE
BEEN DEPOSITED IN THE U.S. MAILS, POSTAGE PREPAID. THE ORIGINATOR HEREBY WAIVES
ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING
IN CONTRACT, TORT, OR OTHERWISE BETWEEN THE ORIGINATOR AND THE BUYER ARISING OUT
OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP BETWEEN THEM
IN CONNECTION WITH THIS AGREEMENT. INSTEAD, ANY DISPUTE RESOLVED IN COURT WILL
BE RESOLVED IN A BENCH TRIAL WITHOUT A JURY. WITH RESPECT TO THE FOREGOING
CONSENT TO JURISDICTION, THE ORIGINATOR HEREBY WAIVES ANY OBJECTION BASED ON
FORUM NON CONVENIENS, AND ANY OBJECTION TO VENUE OF ANY ACTION INSTITUTED
HEREUNDER AND CONSENTS TO THE GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS IS
DEEMED APPROPRIATE BY THE COURT. NOTHING IN THIS SECTION 8.05 SHALL AFFECT THE
RIGHT OF THE BUYER TO SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW
OR AFFECT THE RIGHT OF THE BUYER TO BRING ANY ACTION OR PROCEEDING AGAINST THE
ORIGINATOR OR ITS PROPERTY IN THE COURTS OF ANY OTHER JURISDICTION.
SECTION 8.06. COSTS, EXPENSES AND TAXES. (a) In addition to the rights
of indemnification under Article VII hereof, the Originator agrees to pay on
demand all reasonable costs and expenses in connection with the preparation,
execution, delivery and administration (including periodic auditing and any
requested amendments, waivers or consents) of this Agreement and the other
documents to be delivered hereunder, including, without limitation, the
reasonable fees and out-of-pocket expenses of counsel for the Buyer (and the
Bank and the Agent) with respect thereto and with respect to advising the Buyer
(and the Bank and the Agent) as to its rights and remedies under this Agreement,
and the other agreements executed pursuant hereto and all costs and expenses,
if any (including reasonable counsel fees and expenses), in connection with the
enforcement of this Agreement and the other agreements and documents to be
delivered hereunder.
(b) In addition, the Originator shall pay any and all stamp, sales,
excise and other taxes and fees payable or determined to be payable in
connection with the execution, delivery, filing and recording of this Agreement
or the other
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agreements and documents to be delivered hereunder, and agrees to indemnify the
Buyer and its assignees against any liabilities with respect to or resulting
from any delay in paying or omission to pay such taxes and fees.
SECTION 8.07. EXECUTION IN COUNTERPARTS; SEVERABILITY. This Agreement
may be executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which when taken together shall constitute one and the same
agreement. In case any provision in or obligation under this Agreement shall be
invalid, illegal or unenforceable in any jurisdiction, the validity, legality
and enforceability of the remaining provisions or obligations, or of such
provision or obligation in any other jurisdiction, shall not in any way be
affected or impaired thereby.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
BUYER: ATLANTIC AUTO FUNDING CORPORATION
By /s/ Suzanne A. O'Connor
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Name: Suzanne A. O'Connor
Title: Vice President
800 Perinton Hills Office Park
Fairport, New York 14450
Telecopy No.
ORIGINATOR: ATLANTIC AUTO FINANCE CORPORATION
By /s/ Richard J. Harrison
-------------------------------
Name: Richard J. Harrison
Title: President
800 Perinton Hills Office Park
Fairport, New York 14450
Telecopy No.