PURCHASE AND SERVICING AGREEMENT Between WELUND FUND, INC. Purchaser and VILLAGE AUTO, LLC Seller Dated as of March 30, 2005
Exhibit
1(10)
Between
WELUND
FUND, INC.
Purchaser
and
VILLAGE
AUTO, LLC
Seller
Dated
as of ▇▇▇▇▇ ▇▇, ▇▇▇▇
▇▇▇▇▇▇▇▇
and Servicing Agreement
Page
0
THIS PURCHASE
AND SERVICING AGREEMENT,
dated as of March 30, 2005, executed by WELUND
FUND, INC., a
Delaware corporation, as purchaser (“Purchaser”) and VILLAGE
AUTO, LLC,
a California corporation, as Seller (“Seller”).
W
I T N E S S E T H:
WHEREAS,
Purchaser has agreed to purchase from the Seller, and the Seller, pursuant to
this Agreement, is transferring to Purchaser the Receivables and Other Conveyed
Property.
WHEREAS,
Purchaser has agreed to retain Seller to service and administer the collection
of the monthly payments on the Receivables.
NOW,
THEREFORE,
in consideration of the premises and the mutual agreements hereinafter
contained, and for other good and valuable consideration, the receipt of which
is acknowledged, Purchaser and the Seller, intending to be legally bound, hereby
agree as follows:
ARTICLE
I
DEFINITIONS
SECTION
1.1 General.
The specific terms defined in this Article include the plural as well as the
singular. The words “herein,” “hereof” and “hereunder” and other words of
similar import refer to this Agreement as a whole and not to any particular
Article, Section or other subdivision, and Article, Section, Schedule and
Exhibit references, unless otherwise specified, refer to Articles and Sections
of and Schedules and Exhibits to this Agreement.
SECTION
1.2 Specific Terms.
Whenever used in this Agreement, the following words and phrases, unless the
context otherwise requires, shall have the following meanings:
“Agreement”
shall mean this Purchase and Servicing Agreement and all amendments hereof and
supplements hereto.
“Amount
Financed” means, with respect to a Receivable, the aggregate amount advanced
under such Receivable toward the purchase price of the Financed Vehicle and any
related costs, including amounts advanced in respect of accessories, insurance
premiums, service and warranty contracts, other items customarily financed as
part of retail automobile installment sale contracts or promissory notes, and
related costs.
“Auto
Loan Purchase and Sale Agreement” means any agreement between a Third-Party
Lender and Seller relating to the acquisition of Receivables from a Third Party
Lender by Seller.
“Available
Funds” means, with respect to any Distribution Date, the sum of (i) the
Collected Funds for the related Collection Period and (ii) all Purchase
Amounts deposited in the Collection Account during the related Collection
Period, plus Investment Earnings with respect to the Collection Account for the
related Collection Period.
“Base
Servicing Fee” means, with respect to any Collection Period, the fee payable to
the Servicer for services rendered during such Collection Period, which shall be
equal to the product of the Servicing Fee Rate times the sum of (A) the
product of (i) the aggregate Principal Balance of the Receivables as of the
opening of business on the first day of such Collection Period multiplied by
(ii) one twelfth.
“Business
Day” means any day other than (a) a Saturday or a Sunday, or (b) a day
on which banking institutions in Salt Lake City, Utah are authorized or
obligated by law or executive order to be closed.
“Closing
Date” means March 30, 2005.
“Collected
Funds” means, with respect to any Collection Period, the amount of funds in the
Collection Account representing collections on the Receivables during such
Collection Period, including all net liquidation proceeds collected during such
Collection Period and any Purchase Amounts.
“Collection
Account” means the account designated as such, established and maintained
pursuant to Section 6.9.
“Collection
Period” means, with respect to the first Distribution Date, the period beginning
on the close of business on February 28, 2005 and ending on the close of
business on March 31, 2005. With respect to each subsequent Distribution Date,
“Collection Period” means the period beginning on the close of business on the
last day of the second preceding calendar month and ending on the close of
business on the last day of the immediately preceding calendar month. Any amount
stated “as of the close of business of the last day of a Collection Period”
shall give effect to the following calculations as determined as of the end of
the day on such last day: (i) all applications of collections and
(ii) all distributions.
“Cut-off
Date” means March 1, 2005.
“Dealer”
means a dealer who sold a Financed Vehicle and who originated and assigned the
respective Receivable to Seller under a Dealer Agreement or pursuant to a Dealer
Assignment.
“Dealer
Agreement” means any agreement between a Dealer and Seller relating to the
acquisition of Receivables from a Dealer by Seller.
“Dealer
Assignment” means, with respect to a Receivable, the executed assignment
executed by a Dealer conveying such Receivable to Seller.
“Distribution
Date” means, with respect to each Collection Period, the 15th
day of the following calendar month, or, if such day is not a Business Day, the
immediately following Business Day, commencing on April 15, 2005.
“Electronic
Ledger” means the electronic master record of the retail installment sales
contracts or installment loans of the Seller.
“Financed
Vehicle” means an automobile or light-duty-truck, van or minivan, together with
all accessories thereto, securing an Obligor’s indebtedness under the respective
Receivable.
“Force-Placed
Insurance” has the meaning ascribed thereto in Section 6.3
hereof.
“Insurance
Policy” means, with respect to a Receivable, any insurance policy benefiting the
holder of the Receivable providing loss or physical damage, credit life, credit
disability, theft, mechanical breakdown or similar coverage with respect to the
Financed Vehicle or the Obligor.
“Lien”
means a security interest, lien, charge, pledge, equity, or encumbrance of any
kind, other than tax liens, mechanics’ liens and any liens that attach to the
respective Receivable by operation of law as a result of any act or omission by
the related Obligor.
“Lien
Certificate” means, with respect to a Financed Vehicle, an original certificate
of title, certificate of lien or other notification issued by the Registrar of
Titles of the applicable state to a secured party which indicates that the lien
of the secured party on the Financed Vehicle is recorded on the original
certificate of title. In any jurisdiction in which the original certificate of
title is required to be given to the Obligor, the term “Lien Certificate” shall
mean only a certificate or notification issued to a secured party.
“Non-performing
Receivable” means a Receivable that becomes 90 days past due.
“Obligor”
on a Receivable means the purchaser or co-purchasers of the Financed Vehicle and
any other Person who owes payments under the Receivable.
“Other
Conveyed Property” means all property conveyed by the Seller to the Purchaser
pursuant to this Agreement other than the Receivables.
“Person”
means any individual, corporation, estate, partnership, joint venture,
association, joint stock company, trust (including any beneficiary thereof),
unincorporated organization or government or any agency or political subdivision
thereof.
“Principal
Balance” means, with respect to any Receivable, as of any date, the sum of
(x) the Amount Financed minus that portion of all amounts received on or
prior to such date and allocable to principal in accordance with the terms of
the Receivable plus (y) the accrued and unpaid interest on such
Receivable.
“Purchase
Amount” means, with respect to a Purchased Receivable, the Principal Balance and
all accrued and unpaid interest on the Purchased Receivable, after giving effect
to the receipt of any moneys collected (from whatever source) on such Purchased
Receivable, if any.
“Purchased
Receivable” means a Receivable repurchased by the Seller.
“Receivables”
means the motor vehicle receivables listed on the Schedule of Receivables
attached hereto.
“Repurchase
Event” means the occurrence of a breach of any of the Seller’s representations
and warranties hereunder, a Receivable becoming a Non-performing Receivable or
any other event which requires the repurchase of a Receivable by the Seller
under the Agreement.
“Schedule
of Receivables” means the schedule of Receivables sold and transferred pursuant
to this Agreement which is attached hereto as Schedule A.
“Scheduled
Receivables Payment” means, with respect to any Collection Period for any
Receivable, the amount set forth in such Receivable as required to be paid by
the Obligor in such Collection Period. If after the Closing Date, the Obligor’s
obligation under a Receivable with respect to a Collection Period has been
modified so as to differ from the amount specified in such Receivable as a
result of (i) the order of a court in an insolvency proceeding involving
the Obligor, or (ii) pursuant to the Servicemembers Civil Relief the
Scheduled Receivables Payment with respect to such Collection Period shall refer
to the Obligor’s payment obligation with respect to such Collection Period as so
modified.
“Servicing
Fee Rate” means 6% per annum.
“Substituted
Receivable” means a Receivable substituted by the Seller for a Non-performing
Receivable.
“Supplemental
Servicing Fee” means, with respect to any Collection Period, all administrative
fees, expenses and charges paid by or on behalf of Obligors, including late
fees, prepayment fees and liquidation fees collected on the Receivables during
such Collection Period but excluding any fees or expenses related to
extensions.
“Third-Party
Lender” means an entity that originated a loan to a consumer for the purchase of
a motor vehicle and sold the loan to Seller pursuant to an Auto Loan Purchase
and Sale Agreement.
“Third-Party
Lender Assignment” means, with respect to a Receivable, the executed assignment
executed by a Third-Party Lender conveying such Receivable to Seller.
SECTION
1.3 Usage of Terms.
With respect to all terms used in this Agreement, the singular includes the
plural and the plural the singular; words importing any gender include the other
gender; references to “writing” include printing, typing, lithography, and other
means of reproducing words in a visible form; references to agreements and other
contractual instruments include all subsequent amendments thereto or changes
therein entered into in accordance with their respective terms and not
prohibited by this Agreement; references to Persons include their permitted
successors and assigns; and the terms “include” or “including” mean “include
without limitation” or “including without limitation.”
SECTION
1.4 No Recourse.
Without limiting the obligations of Seller hereunder, no recourse may be taken,
directly or indirectly, under this Agreement or any certificate or other writing
delivered in connection herewith or therewith, against any stockholder, officer
or director, as such, of Seller, or of any predecessor or successor of
Seller.
ARTICLE
II
CONVEYANCE
OF THE RECEIVABLES
AND
THE OTHER CONVEYED PROPERTY
SECTION
2.1 Conveyance of the Receivables and the Other Conveyed Property.
|
a. |
Subject
to the terms and conditions of this Agreement, Seller hereby sells,
transfers, assigns, and otherwise conveys to Purchaser without recourse
(but without limitation of its obligations in this Agreement), and
Purchaser hereby purchases, all right, title and interest of Seller in and
to the Receivables and the Other Conveyed Property. It is the intention of
Seller and Purchaser that the transfer and assignment contemplated by this
Agreement shall constitute a sale of the Receivables and the Other
Conveyed Property from Seller to Purchaser, conveying good title thereto
free and clear of any Liens, and the beneficial interest in and title to
the Receivables and the Other Conveyed Property shall not be part of
Seller’s estate in the event of the filing of a bankruptcy petition by or
against Seller under any bankruptcy or similar law.
|
|
b. |
Simultaneously
with the conveyance of the Receivables and the Other Conveyed Property to
Purchaser, Purchaser has paid or caused to be paid to or upon the order of
Seller $107,356.70 for an amount equal to 85% of the aggregate payoff
balance of the Receivables of $126,302 sold by Seller, as set forth on the
books and records of Seller, by wire transfer of immediately available
funds. |
ARTICLE
III
REPRESENTATIONS
AND WARRANTIES
SECTION
3.1 Representations and Warranties of Seller Relating to
Seller.
Seller makes the following representations and warranties as of the date hereof
on which Purchaser relies in purchasing the Receivables and the Other Conveyed
Property.
|
a. |
Organization
and Good Standing.
Seller has been duly organized and is validly existing as a corporation in
good standing under the laws of the State of Utah, with power and
authority to own its properties and to conduct its business as such
properties are currently owned and such business is currently conducted,
and had at all relevant times, and now has, power, authority and legal
right to acquire, own and sell the Receivables and the Other Conveyed
Property to be transferred to Purchaser. |
|
b. |
Due
Qualification.
Seller is duly qualified to do business as a foreign corporation in good
standing, and has obtained all necessary licenses and approvals in all
jurisdictions in which the ownership or lease of its property or the
conduct of its business requires such qualification.
|
|
c. |
Power
and Authority.
Seller has the power and authority to execute and deliver this Agreement
and to carry out its terms and their terms, respectively; Seller has full
power and authority to sell and assign the Receivables and the Other
Conveyed Property to be sold and assigned to and deposited with Purchaser
hereunder and has duly authorized such sale and assignment to Purchaser by
all necessary corporate action; and the execution, delivery and
performance of this Agreement has been duly authorized by Seller by all
necessary corporate action. |
|
d. |
Valid
Sale; Binding Obligations.
This Agreement has been duly executed and delivered, shall effect a valid
sale, transfer and assignment of the Receivables and the Other Conveyed
Property to the Purchaser, enforceable against Seller and creditors of and
purchasers from Seller; and this Agreement constitutes legal, valid and
binding obligations of Seller enforceable in accordance with their
respective terms, except as enforceability may be limited by bankruptcy,
insolvency, reorganization or other similar laws affecting the enforcement
of creditors’ rights generally and by equitable limitations on the
availability of specific remedies, regardless of whether such
enforceability is considered in a proceeding in equity or at law.
|
|
e. |
No
Violation.
The consummation of the transactions contemplated by this Agreement and
the fulfillment of the terms of this Agreement shall not conflict with,
result in any breach of any of the terms and provisions of, or constitute
(with or without notice, lapse of time or both) a default under, the
articles of incorporation or bylaws of Seller, or any indenture,
agreement, mortgage, deed of trust or other instrument to which Seller is
a party or by which it is bound, or result in the creation or imposition
of any Lien upon any of its properties pursuant to the terms of any such
indenture, agreement, mortgage, deed of trust or other instrument, other
than this Agreement or violate any law, order, rule or regulation
applicable to Seller of any court or of any federal or state regulatory
body, administrative agency or other governmental instrumentality having
jurisdiction over Seller or any of its
properties. |
|
f. |
No
Proceedings.
There are no proceedings or investigations pending or, to Seller’s
knowledge, threatened against Seller, before any court, regulatory body,
administrative agency or other tribunal or governmental instrumentality
having jurisdiction over Seller or its properties (i) asserting the
invalidity of this Agreement, (ii) seeking any determination or
ruling that might materially and adversely affect the performance by
Seller of its obligations under, or the validity or enforceability of,
this Agreement or (iii) seeking to affect adversely the federal income tax
or other federal, state or local tax attributes of, or seeking to impose
any excise, franchise, transfer or similar tax upon, the transfer and
acquisition of the Receivables and the Other Conveyed Property hereunder.
|
|
g. |
True
Sale.
The Receivables are being transferred with the intention of removing them
from Seller’s estate pursuant to Section 541 of the Bankruptcy Code,
as the same may be amended from time to
time. |
|
h. |
Chief
Executive Office.
The chief executive office of Seller is located at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇ ▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇. |
SECTION
3.2 Representations and Warranties of Seller Relating to the Receivables and
Other Conveyed Property.
Seller makes the following representations and warranties as of the date hereof
on which Purchaser relies in purchasing the Receivables and the Other Conveyed
Property.
|
a. |
Characteristics
of Receivables.
Each Receivable (A) was originated (i) by Seller, (ii) by a
Dealer and purchased by Seller from such Dealer under an existing Dealer
Agreement or pursuant to a Dealer Assignment with Seller and was validly
assigned by such Dealer to Seller pursuant to a Dealer Assignment or
(iii) by a Third-Party Lender and purchased by Seller from such
Third-Party Lender under an existing Auto Loan Purchase and Sale Agreement
or pursuant to a Third-Party Lender Assignment with Seller and was validly
assigned by such Third-Party Lender to Seller pursuant to a Third-Party
Lender Assignment (B) was originated by Seller, such Dealer or such
Third-Party Lender for the retail sale of a Financed Vehicle in the
ordinary course of Seller’s, the Dealer’s or the Third-Party Lender’s
business, in each case was originated in accordance with Seller’s credit
policies and was fully and properly executed by the parties thereto, and
Seller, each Dealer and each Third-Party Lender had all necessary licenses
and permits to originate Receivables in the state where Seller, each such
Dealer or each such Third-Party Lender was located, (C) contains customary
and enforceable provisions such as to render the rights and remedies of
the holder thereof adequate for realization against the collateral
security, (D) is a Receivable which provides for level monthly
payments (provided that the period in the first Collection Period and the
payment in the final Collection Period of the Receivable may be minimally
different from the normal period and level payment) which, if made when
due, shall fully amortize the Amount Financed over the original term and
(E) has not been amended or collections with respect to which waived,
other than as evidenced in the Receivable File relating
thereto. |
|
b. |
No
Fraud or Misrepresentation.
Each Receivable was originated (i) by Seller, (ii) by a Dealer
and was sold by the Dealer to Seller, or (iii) by a Third-Party
Lender and was sold by the Third-Party Lender to Seller, and was sold by
Seller to Purchaser without any fraud or misrepresentation on the part of
such Dealer or Third-Party Lender in any case.
|
|
c. |
Compliance
with Law.
All requirements of applicable federal, state and local laws, and
regulations thereunder (including, without limitation, usury laws, the
Federal Truth-in-Lending Act, the Equal Credit Opportunity Act, the Fair
Credit Billing Act, the Fair Credit Reporting Act, the Fair Debt
Collection Practices Act, the Federal Trade Commission Act, the
▇▇▇▇-▇▇▇▇▇▇▇▇ Warranty Act, the Federal Reserve Board’s Regulations “B”
and “Z” (including amendments to the Federal Reserve’s Official Staff
Commentary to Regulation Z, effective October 1, 1998,
concerning negative equity loans), the Servicemembers Civil Relief Act,
each applicable state Motor Vehicle Retail Installment Sales Act, and
state adaptations of the National Consumer Act and of the Uniform Consumer
Credit Code and other consumer credit laws and equal credit opportunity
and disclosure laws) in respect of the Receivables and the Financed
Vehicles, have been complied with in all material respects, and each
Receivable and the sale of the Financed Vehicle evidenced by each
Receivable complied at the time it was originated or made and now complies
in all material respects with all applicable legal requirements.
|
|
d. |
Binding
Obligation.
Each Receivable represents the genuine, legal, valid and binding payment
obligation of the Obligor thereon, enforceable by the holder thereof in
accordance with its terms, except (A) as enforceability may be
limited by bankruptcy, insolvency, reorganization or similar laws
affecting the enforcement of creditors’ rights generally and by equitable
limitations on the availability of specific remedies, regardless of
whether such enforceability is considered in a proceeding in equity or at
law and (B) as such Receivable may be modified by the application
after the Cutoff Date of the Servicemembers Civil Relief Act, as amended;
and all parties to each Receivable had full legal capacity to execute and
deliver such Receivable and all other documents related thereto and to
grant the security interest purported to be granted thereby.
|
Purchase
and Servicing Agreement
Page
7
|
e. |
Schedules
of Receivables.
The information set forth in the Schedules of Receivables has been
produced from the Electronic Ledger and was true and correct in all
material respects as of the close of business on the Cutoff Date.
|
|
f. |
Chattel
Paper.
The Receivables constitute chattel paper within the meaning of the UCC as
in effect in the States of Utah and Nevada. |
|
g. |
Receivables
in Force.
No Receivable has been satisfied, subordinated or rescinded, and the
Financed Vehicle securing each such Receivable has not been released from
the lien of the related Receivable in whole or in part. No terms of any
Receivable have been waived, altered or modified in any respect since its
origination, except by instruments or documents identified in the
Receivable File. |
|
h. |
Lawful
Assignment.
No Receivable was originated in, or is subject to the laws of, any
jurisdiction the laws of which would make unlawful, void or voidable the
sale, transfer and assignment of such Receivable under this Agreement.
|
|
i. |
Good
Title.
Immediately prior to the conveyance of the Receivables to Purchaser
pursuant to this Agreement, Seller was the sole owner thereof and had good
and indefeasible title thereto, free of any Lien and, upon execution and
delivery of this Agreement by Seller, Purchaser shall have good and
indefeasible title to and will be the sole owner of such Receivables, free
of any Lien. No Dealer or Third-Party Lender has a participation in, or
other right to receive, proceeds of any Receivable. Seller has not taken
any action to convey any right to any Person that would result in such
Person having a right to payments received under the related Insurance
Policies or the related Dealer Agreements, Auto Loan Purchase and Sale
Agreements, Dealer Assignments or Third-Party Lender Assignments or to
payments due under such Receivables. |
|
j. |
Security
Interest in Financed Vehicle.
Each Receivable created or shall create a valid, binding and enforceable
first priority security interest in favor of Seller in the Financed
Vehicle. 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 the Lien Certificate will be received within
180 days of the Closing Date and will show, Seller 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, Seller has applied for or received written
evidence from the related Dealer or Third-Party Lender that such Lien
Certificate showing Seller as first lienholder has been applied for and
Seller’s security interest has been validly assigned by Seller to
Purchaser pursuant to this Agreement. This Agreement creates a valid and
continuing security interest (as defined in the UCC) in the Receivables in
favor of the Purchaser, which security interest is prior to all other
Liens, and is enforceable as such as against creditors of and purchasers
from the Seller. Immediately after the sale, transfer and assignment
thereof by Seller to Purchaser, each Receivable will be secured by an
enforceable and perfected first priority security interest in the Financed
Vehicle in favor of Purchaser as secured party, which security interest is
prior to all other Liens upon and security interests in such Financed
Vehicle which now exist or may hereafter arise or be created (except, as
to priority, for any lien for taxes, labor or materials affecting a
Financed Vehicle). As of the Cutoff Date, there were no Liens or claims
for taxes, work, labor or materials affecting a Financed Vehicle which are
or may be Liens prior or equal to the Liens of the related Receivable.
|
Purchase
and Servicing Agreement
Page
8
|
k. |
All
Filings Made.
All filings (including, without limitation, UCC filings (including,
without limitation, the filing by the Seller of all appropriate financing
statements in the proper filing office in the State of Utah under
applicable law in order to perfect the security interest in the
Receivables granted to the Purchaser hereunder)) required to be made by
any Person and actions required to be taken or performed by any Person in
any jurisdiction to give the Purchaser a first priority perfected lien on,
or ownership interest in, the Receivables and the proceeds thereof and the
Other Conveyed Property have been made, taken or performed.
|
|
l. |
No
Defenses.
No Receivable is subject to any right of rescission, setoff, counterclaim
or defense and no such right has been asserted or threatened with respect
to any Receivable. |
|
m. |
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), 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. As of the Cutoff Date, no Financed Vehicle
had been repossessed. |
|
n. |
Insurance.
At the time of an origination of a Receivable by Seller or a purchase of a
Receivable by Seller from a Dealer or Third-Party Lender, each Financed
Vehicle is required to be covered by a comprehensive and collision
insurance policy (i) in an amount at least equal to the lesser of
(a) its maximum insurable value or (b) the principal amount due
from the Obligor under the related Receivable, (ii) naming Seller as
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. Each Receivable requires the Obligor
to maintain physical loss and damage insurance, naming Seller and its
successors and assigns as additional insured parties, and each Receivable
permits the holder thereof to obtain physical loss and damage insurance at
the expense of the Obligor if the Obligor fails to do so. No Financed
Vehicle is insured under a policy of Force-Placed Insurance on the Cutoff
Date. |
Purchase
and Servicing Agreement
Page
9
|
o. |
Past
Due.
At the Cutoff Date no Receivable was more than 30 days past due.
|
|
p. |
Remaining
Principal Balance.
At the Cutoff Date, the Principal Balance of each Receivable set forth in
the Schedule of Receivables is true and accurate in all material respects.
|
SECTION
3.3 Representations and Warranties of Purchaser.
Purchaser makes the following representations and warranties, on which Seller
relies in selling, assigning, transferring and conveying the Receivables and the
Other Conveyed Property to Purchaser hereunder. Such representations are made as
of the execution and delivery of this Agreement
|
a. |
Organization
and Good Standing.
Purchaser has been duly organized and is validly existing and in good
standing as a corporation under the laws of the State of Nevada, with the
power and authority to own its properties and to conduct its business as
such properties are currently owned and such business is currently
conducted, and had at all relevant times, and has, full power, authority
and legal right to acquire and own the Receivables and the Other Conveyed
Property. |
|
b. |
Due
Qualification.
Purchaser is duly qualified to do business as a foreign corporation in
good standing, and has obtained all necessary licenses and approvals in
all jurisdictions where the failure to do so would materially and
adversely affect the validity or enforceability of the Receivables and the
Other Conveyed Property, or Purchaser’s ability to acquire the Receivables
or the Other Conveyed Property or to perform its obligations hereunder.
|
|
c. |
Power
and Authority.
Purchaser has the power, authority and legal right to execute and deliver
this Agreement and to carry out the terms hereof and to acquire the
Receivables and the Other Conveyed Property hereunder; and the execution,
delivery and performance of this Agreement and all of the documents
required pursuant hereto have been duly authorized by Purchaser by all
necessary corporate action. |
|
d. |
No
Consent Required.
Purchaser is not required to obtain the consent of any other Person, or
any consent, license, approval or authorization or registration or
declaration with, any governmental authority, bureau or agency in
connection with the execution, delivery or performance of this Agreement,
except for such as have been obtained, effected or made.
|
Purchase
and Servicing Agreement
Page
10
|
e. |
Binding
Obligation.
This Agreement constitutes a legal, valid and binding obligation of
Purchaser, enforceable against Purchaser in accordance with its terms,
subject, as to enforceability, to applicable bankruptcy, insolvency,
reorganization, conservatorship, receivership, liquidation and other
similar laws and to general equitable principles.
|
|
f. |
No
Violation.
The execution, delivery and performance by Purchaser of this Agreement,
the consummation of the transactions contemplated by this Agreement and
the fulfillment of the terms of this Agreement do not and will not
conflict with, result in any breach of any of the terms and provisions of,
or constitute (with or without notice or lapse of time) a default under,
the certificate of incorporation or by-laws of Purchaser, or conflict with
or breach any of the terms or provisions of, or constitute (with or
without notice or lapse of time) a default under, any indenture,
agreement, mortgage, deed of trust or other instrument to which Purchaser
is a party or by which Purchaser is bound or to which any of its
properties are subject, or result in the creation or imposition of any
lien upon any of its properties pursuant to the terms of any such
indenture, agreement, mortgage, deed of trust or other instrument, or
violate any law, order, rule or regulation, applicable to Purchaser or its
properties, of any federal or state regulatory body, any court,
administrative agency, or other governmental instrumentality having
jurisdiction over Purchaser or any of its properties.
|
|
g. |
No
Proceedings.
There are no proceedings or investigations pending, or, to the knowledge
of Purchaser, threatened against Purchaser, before any court, regulatory
body, administrative agency, or other tribunal or governmental
instrumentality having jurisdiction over Purchaser or its properties:
(i) asserting the invalidity of this Agreement, (ii) seeking to
prevent the consummation of any of the transactions contemplated by this
Agreement, (iii) seeking any determination or ruling that might
materially and adversely affect the performance by Purchaser of its
obligations under, or the validity or enforceability of, this Agreement or
(iv) that may adversely affect the federal or state income tax
attributes of, or seeking to impose any excise, franchise, transfer or
similar tax upon, the transfer and acquisition of the Receivables and the
Other Conveyed Property hereunder. |
ARTICLE
IV
COVENANTS
OF SELLER
SECTION
4.1 Protection of Title of Purchaser.
|
a. |
At
or prior to the Closing Date, Seller shall have filed or caused to be
filed a UCC-1 financing statement, naming Seller as seller or debtor,
naming Purchaser as purchaser or secured party and describing the
Receivables and the Other Conveyed Property being sold by it to Purchaser
as collateral, with the office of the State of Utah, Department of
Commerce and in such other locations as Purchaser shall have required.
From time to time thereafter, Seller shall execute and file such financing
statements and cause to be executed and filed such continuation
statements, all in such manner and in such places as may be required by
law fully to preserve, maintain and protect the interest of Purchaser
under this Agreement. |
Purchase
and Servicing Agreement
Page
11
|
b. |
Prior
to the Closing Date, Seller has maintained accounts and records as to each
Receivable accurately and in sufficient detail to permit (i) the
reader thereof to know at any time as of or prior to the Closing Date, the
status of such Receivable, including payments and recoveries made and
payments owing (and the nature of each) and (ii) reconciliation between
payments or recoveries on (or with respect to) each Receivable and the
Principal Balance as of the Closing Date. Seller shall maintain its
computer systems so that, from and after the time of sale under this
Agreement of the Receivables to Purchaser, Seller’s master computer
records (including archives) that shall refer to a Receivable indicate
clearly that such Receivable has been sold to Purchaser. Indication of the
Purchaser’s ownership of a Receivable shall be deleted from or modified on
Seller’s computer systems when, and only when, the Receivable shall become
a Purchased Receivable or shall have been paid in full.
|
|
c. |
If
at any ▇▇▇▇ ▇▇▇▇▇▇ shall propose to sell, grant a security interest in, or
otherwise transfer any interest in any motor vehicle receivables to any
prospective purchaser, lender or other transferee, Seller shall give to
such prospective purchaser, lender, or other transferee computer tapes,
records, or print-outs (including any restored from archives) that, if
they shall refer in any manner whatsoever to any Receivable (other than a
Purchased Receivable), shall indicate clearly that such Receivable has
been sold to Purchaser and is owned by Purchaser.
|
SECTION
4.2 Other Liens or Interests.
Except for the conveyances hereunder, Seller will not sell, pledge, assign or
transfer to any other Person, or grant, create, incur, assume or suffer to exist
any Lien on the Receivables or the Other Conveyed Property or any interest
therein, and Seller shall defend the right, title, and interest of Purchaser in
and to the Receivables and the Other Conveyed Property against all claims of
third parties claiming through or under Seller.
SECTION
4.3 Costs and Expenses.
Seller shall pay all reasonable costs and disbursements in connection with the
performance of its obligations hereunder.
SECTION
4.4 Indemnification.
|
a. |
Seller
shall defend, indemnify and hold harmless Purchaser from and against any
and all costs, expenses, losses, damages, claims, and liabilities, arising
out of or resulting from any breach of any of Seller’s representations and
warranties contained herein. |
|
b. |
Seller
shall defend, indemnify and hold harmless Purchaser from and against any
and all costs, expenses, losses, damages, claims, and liabilities, arising
out of or resulting from the use, ownership or operation by Seller or any
affiliate thereof of a Financed Vehicle. |
|
c. |
Seller
shall defend, indemnify and hold harmless Purchaser from and against any
and all costs, expenses, losses, damages, claims and liabilities arising
out of or resulting from any action taken, or failed to be taken, by it in
respect of any portion of the Receivables other than in accordance with
this Agreement. |
Purchase
and Servicing Agreement
Page
12
|
d. |
Seller
agrees to pay, and shall defend, indemnify and hold harmless Purchaser
from and against any taxes that may at any time be asserted against
Purchaser with respect to the transactions contemplated in this Agreement,
including, without limitation, any sales, gross receipts, general
corporation, tangible or intangible personal property, privilege, or
license taxes. |
|
e. |
Seller
shall defend, indemnify, and hold harmless Purchaser from and against any
and all costs, expenses, losses, claims, damages, and liabilities to the
extent that such cost, expense, loss, claim, damage, or liability arose
out of, or was imposed upon Purchaser through the negligence, willful
misfeasance, or bad faith of Seller in the performance of its duties under
this Agreement or by reason of reckless disregard of Seller’s obligations
and duties under this Agreement. |
|
f. |
Seller
shall indemnify, defend and hold harmless Purchaser from and against any
loss, liability or expense imposed upon, or incurred by, Purchaser as
result of the failure of any Receivable, or the sale of the related
Financed Vehicle, to comply with all requirements of applicable law.
|
|
g. |
Seller
shall defend, indemnify, and hold harmless Purchaser from and against all
costs, expenses, losses, claims, damages, and liabilities arising out of
or incurred in connection with the acceptance or performance of Seller’s
trusts and duties as Seller under this Agreement, except to the extent
that such cost, expense, loss, claim, damage, or liability shall be due to
the willful misfeasance, bad faith, or negligence of Purchaser.
|
Indemnification
under this Section 4.4 shall include reasonable fees and expenses of
counsel and expenses of litigation. The indemnity obligations hereunder shall be
in addition to any obligation that Seller may otherwise have.
Purchase
and Servicing Agreement
Page
13
ARTICLE
V
REPURCHASES
SECTION
5.1 Repurchase of Receivables Upon Breach of Warranty.
Upon the occurrence of a Repurchase Event, Seller shall, unless the breach which
is the subject of such Repurchase Event shall have been cured in all material
respects, repurchase the Receivable relating thereto from the Purchaser and,
simultaneously with the repurchase of the Receivable, Seller shall remit the
Purchase Amount in full, without deduction or offset, to the Purchaser. It is
understood and agreed that, except as set forth in Section 7.1 hereof, the
obligation of Seller to repurchase any Receivable, as to which a breach occurred
and is continuing, shall, if such obligation is fulfilled, constitute the sole
remedy against Seller for such breach available to Purchaser. Any such
repurchase shall take place in the manner specified in Sections 5.2 and 5.3
hereof. It is further understood and agreed that in the case of Repurchase Event
resulting solely from a Receivable becoming a Non-performing Receivable, the
Seller shall have the right to substitute a Substituted Receivable for the
Non-performing Receivable in accordance with the terms of Section 5.4 hereof in
lieu of repurchasing the Non-performing Receivable.
SECTION
5.2 Repurchase upon Breach. The
Seller or the Purchaser, as the case may be, shall inform the other party to
this Agreement promptly, by notice in writing, upon the discovery of any breach
of the Seller’s representations and warranties made pursuant to
Sections 3.1 and 3.2. As of the last day of the second (or, if the Seller
so elects, the first) month following the discovery by the Seller or receipt by
the Seller of notice of such breach, unless such breach is cured by such date,
the Seller shall have an obligation to repurchase any Receivable in which the
interests of the Purchaser is materially and adversely affected by any such
breach as of such date. The “second month” shall mean the month following the
month in which discovery occurs or notice is given, and the “first month” shall
mean the month in which discovery occurs or notice is given. In consideration of
and simultaneously with the repurchase of the Receivable, the Seller shall
remit, the Purchase Amount to the Purchaser and the Purchaser shall execute such
assignments and other documents reasonably requested by the Seller in order to
affect such repurchase. The sole remedy of the Purchaser with respect to a
breach of representations and warranties pursuant to Sections 3.1 and 3.2 and
the agreement contained in this Section shall be the repurchase of Receivables
pursuant to this Section, subject to the conditions contained herein.
SECTION
5.3 Reassignment of Purchased Receivables.
Upon remittance of the Purchase Amount of any Receivable repurchased by Seller
to Purchaser, Purchaser shall take such steps as may be reasonably requested by
Seller in order to assign to Seller all of Purchaser’s right, title and interest
in and to such Receivable and all security and documents and all Other Conveyed
Property conveyed to Purchaser, without recourse, representation or warranty,
except as to the absence of Liens created by or arising as a result of actions
of Purchaser. Such assignment shall be a sale and assignment outright, and not
for security. If, following the reassignment of a Purchased Receivable, in any
enforcement suit or legal proceeding, it is held that Seller may not enforce any
such Receivable on the ground that it shall not be a real party in interest or a
holder entitled to enforce the Receivable, Purchaser shall, at the expense of
Seller, take such steps as Seller deems reasonably necessary to enforce the
Receivable, including bringing suit in Purchaser’s name.
Purchase
and Servicing Agreement
Page
14
SECTION
5.4 Substitution of Non-performing Receivable.
Upon a Receivable becoming a Non-performing Receivable, the Seller shall either
repurchase the Non-performing Receivable as set forth herein or substitute the
Non-performing Receivable with a Substituted Receivable that is not more than 30
days past due and has the same loan characteristics as the Non-performing
Receivable. A Substituted Receivable shall have a principal balance, coupon and
remaining term to maturity equal to or greater than the Non-performing
Receivable for which it is being substituted. Any substitution shall take place
in the manner specified in Sections 5.2 and 5.3 hereof.
SECTION
5.5 Waivers.
No failure or delay on the part of Purchaser in exercising any power, right or
remedy under this Agreement shall operate as a waiver thereof, nor shall any
single or partial exercise of any such power, right or remedy preclude any other
or future exercise thereof or the exercise of any other power, right or remedy.
ARTICLE
VI
SERVICING
AND ADMINISTRATION OF RECEIVABLES
SECTION
6.1 Servicing Duties of the Seller.
The
Seller is hereby authorized to act as agent for the Purchaser and in such
capacity shall manage, service, administer and make collections on the
Receivables, and perform the other actions required by the Seller under this
Agreement. The Seller agrees that its servicing of the Receivables shall be
carried out in accordance with customary and usual procedures of institutions
which service motor vehicle retail installment sales contracts and, to the
extent more exacting, the degree of skill and attention that the Seller
exercises from time to time with respect to all comparable motor vehicle
receivables that it services for itself or others. The Seller’s duties shall
include, without limitation, collection and posting of all payments, responding
to inquiries of Obligors on the Receivables, investigating delinquencies,
sending payment coupons to Obligors, reporting any required tax information to
Obligors, monitoring the collateral, accounting for collections and furnishing
monthly and annual statements to the Purchaser monitoring the status of
Insurance Policies with respect to the Financed Vehicles and performing the
other duties specified herein.
The
Seller shall follow its customary standards, policies, and procedures and shall
have full power and authority, acting alone, to do any and all things in
connection with such managing, servicing, administration and collection that it
may deem necessary or desirable. Without limiting the generality of the
foregoing, the Seller is hereby authorized and empowered by the Purchaser to
execute and deliver, on behalf of the Purchaser, any and all instruments of
satisfaction or cancellation, or of partial or full release or discharge, and
all other comparable instruments, with respect to the Receivables and with
respect to the Financed Vehicles; provided, however, that notwithstanding the
foregoing, the Seller shall not, except pursuant to an order from a court of
competent jurisdiction, release an Obligor from payment of any unpaid amount
under any Receivable or waive the right to collect the unpaid balance of any
Receivable from the Obligor except in accordance with the Seller’s customary
practices.
Purchase
and Servicing Agreement
Page
15
The
Seller is hereby authorized to commence, in its own name or in the name of the
Purchaser, a legal proceeding to enforce a Receivable pursuant to
Section 6.3 or to commence or participate in any other legal proceeding
(including, without limitation, a bankruptcy proceeding) relating to or
involving a Receivable, an Obligor or a Financed Vehicle. If the Seller
commences or participates in such a legal proceeding in its own name, the
Purchaser shall thereupon be deemed to have automatically assigned such
Receivable to the Seller solely for purposes of commencing or participating in
any such proceeding as a party or claimant, and the Seller is authorized and
empowered by the Purchaser to execute and deliver in the Seller’s name any
notices, demands, claims, complaints, responses, affidavits or other documents
or instruments in connection with any such proceeding. The Purchaser shall
furnish the Seller with any limited powers of attorney and other documents which
the Seller may reasonably request and which the Seller deems necessary or
appropriate and take any other steps which the Seller may deem necessary or
appropriate to enable the Seller to carry out its servicing and administrative
duties under this Agreement.
SECTION 6.2 Collection
of Receivable Payments. Consistent
with its customary policies and procedures, the Seller shall make reasonable
efforts to collect all payments called for under the terms and provisions of the
Receivables as and when the same shall become due, and shall follow such
collection procedures as it follows with respect to all comparable automobile
receivables that it services for itself or others and otherwise act with respect
to the Receivables, the Insurance Policies and the Other Conveyed Property in
such manner as will, in the reasonable judgment of the Seller, maximize the
amount to be received by the Purchaser with respect thereto. The Seller is
authorized in its discretion to waive any prepayment charge, late payment charge
or any other similar fee that may be collected in the ordinary course of
servicing any Receivable.
SECTION
6.3 Realization upon Receivables.
Consistent with the standards, policies and procedures required by this
Agreement, the Seller shall use its best efforts to repossess (or otherwise
comparably convert the ownership of) and liquidate any Financed Vehicle securing
a Receivable with respect to which the Seller has determined that payments
thereunder are not likely to be resumed, as soon as is practicable after default
on such Receivable but in no event later than the date on which all or any
portion of a Scheduled Receivables Payment has become 91 days delinquent;
provided, however, that the Seller may elect not to repossess a Financed Vehicle
within such time period if in its good faith judgment it determines that the
proceeds ultimately recoverable with respect to such Receivable would be
increased by forbearance or if it is required to repurchase the Receivable in
accordance with the terms of this Agreement. The Seller is authorized to follow
such customary practices and procedures as it shall deem necessary or advisable,
consistent with the standard of care required by Section 6.1, which
practices and procedures may include reasonable efforts to realize upon any
recourse to Dealers and Third-Party Lenders, the sale of the related Financed
Vehicle at public or private sale, the submission of claims under an Insurance
Policy and other actions by the Seller in order to realize upon such a
Receivable. The foregoing is subject to the provision that, in any case in which
the Financed Vehicle shall have suffered damage, the Seller shall not expend
funds in connection with any repair or towards the repossession of such Financed
Vehicle unless it shall determine in its discretion that such repair and/or
repossession shall increase the proceeds of liquidation of the related
Receivable by an amount greater than the amount of such expenses. All amounts
received upon liquidation of a Financed Vehicle shall be remitted directly by
the Seller to the Collection Account without deposit into any intervening
account as soon as practicable, but in no event later than the Business Day
after receipt thereof. The Seller shall be entitled to recover all reasonable
expenses incurred by it in the course of repossessing and liquidating a Financed
Vehicle into cash proceeds, but only out of the cash proceeds of such Financed
Vehicle, any deficiency obtained from the Obligor or any amounts received from
the related Dealer or Third-Party Lender, which amounts in reimbursement may be
retained by the Seller to the extent of such expenses. The Seller shall pay on
behalf of the Purchaser any personal property taxes assessed on repossessed
Financed Vehicles. The Seller shall be entitled to reimbursement of any such tax
from Net Liquidation Proceeds with respect to such Receivable.
Purchase
and Servicing Agreement
Page
16
SECTION
6.4 Insurance.
|
a. |
The
Seller shall require, in accordance with its customary servicing policies
and procedures, that each Financed Vehicle be insured by the related
Obligor under the Insurance Policies referred to in Section 3.2 (n) hereof
and shall monitor the status of such physical loss and damage insurance
coverage thereafter, in accordance with its customary servicing
procedures. |
|
b. |
The
Seller may, if an Obligor fails to obtain or maintain a physical loss and
damage Insurance Policy, obtain insurance with respect to the related
Financed Vehicle and advance on behalf of such Obligor, as required under
the terms of the insurance policy, the premiums for such insurance (such
insurance being referred to herein as “Force-Placed Insurance”). All
policies of Force-Placed Insurance shall be endorsed with clauses
providing for loss payable to the Seller. Any cost incurred by the Seller
in maintaining such Force-Placed Insurance shall only be recoverable out
of premiums paid by the Obligors or Net Liquidation Proceeds with respect
to the Receivable, as provided in Section 6.3(c).
|
|
c. |
In
connection with any Force-Placed Insurance obtained hereunder, the Seller
may, in the manner and to the extent permitted by applicable law, require
the Obligors to repay the entire premium to the Seller. In no event shall
the Seller include the amount of the premium in the Amount Financed under
the Receivable. For all purposes of this Agreement, the premium charged to
the Obligor with respect to any Receivable having Force-Placed Insurance
will be treated as a separate obligation of the Obligor and will not be
added to the Principal Balance of such Receivable, and amounts allocable
thereto will not be available for distribution to the Purchaser. The
Seller shall retain and separately administer the right to receive
payments from Obligors with respect to rebates of Forced-Placed Insurance
premiums. |
|
d. |
The
Seller may ▇▇▇ to enforce or collect upon the Insurance Policies, in its
own name, if possible, or as agent of the Purchaser. If the Seller elects
to commence a legal proceeding to enforce an Insurance Policy, the act of
commencement shall be deemed to be an automatic assignment of the rights
of the Purchaser under such Insurance Policy to the Seller for purposes of
collection only. If, however, in any enforcement suit or legal proceeding
it is held that the Seller may not enforce an Insurance Policy on the
grounds that it is not a real party in interest or a holder entitled to
enforce the Insurance Policy, the Purchaser, at the Seller’s expense, or
the Seller, at the Seller’s expense, shall take such steps as the Seller
deems necessary to enforce such Insurance Policy, including bringing suit
in its name or the name of the Purchaser. |
Purchase
and Servicing Agreement
Page
17
|
e. |
The
Seller will cause itself and may cause the Purchaser to be named as named
insured under all policies of Collateral Insurance.
|
SECTION
6.5 Maintenance of Security Interests in Vehicles.
Consistent with its policies and procedures, the Seller shall take such steps on
behalf of the Purchaser as are necessary to maintain perfection of the security
interest created by each Receivable in the related Financed Vehicle, including,
but not limited to, obtaining the execution by the Obligors and the recording,
registering, filing, re-recording, re-filing, and re-registering of all security
agreements, financing statements and continuation statements as are necessary to
maintain the security interest granted by the Obligors under the respective
Receivables. The Purchaser hereby authorizes the Seller, and the Seller agrees
to take any and all steps necessary to re-perfect such security interest on
behalf of the Purchaser as necessary because of the relocation of a Financed
Vehicle or for any other reason. In the event that the assignment of a
Receivable to the Purchaser is insufficient, without a notation on the related
Financed Vehicle’s certificate of title, or without fulfilling any additional
administrative requirements under the laws of the state in which the Financed
Vehicle is located, to perfect a security interest in the related Financed
Vehicle in favor of the Purchaser, the Seller hereby agrees that Seller’s
designation as the secured party on the Lien Certificate is in its capacity as
servicing agent of the Purchaser.
SECTION
6.6 Total Servicing Fee; Payment of Certain Expenses by
Seller.
On each Distribution Day, the Seller shall be entitled to receive out of the
Collection Account the Base Servicing Fee and any Supplemental Servicing Fee for
the related Collection Period (together, the “Servicing Fee”) pursuant to
Section 6.9 (d). The Seller shall be required to pay all expenses incurred
by it in connection with its activities under this Agreement.
SECTION
6.7 Financial Information on the Receivables.
The Seller shall deliver to Purchaser and its independent certified public
accountants (the “Independent Accountants”) all records and detailed financial
information relating to the Receivable and the collection activity on the
Receivables as may be reasonable required by the Independent Accountants for the
preparation of audited financial statements on behalf of the Purchaser in
accordance with the auditing requirements set forth in the Securities Act of
1933 and the Securities Exchange Act of 1934.
SECTION
6.8 Access to Certain Documentation and Information Regarding
Receivables.
The Seller shall provide to representatives of the Purchaser reasonable access
to the documentation regarding the Receivables. In each case, such access shall
be afforded without charge but only upon reasonable request and during normal
business hours. Nothing in this Section shall affect the obligation of the
Seller to observe any applicable law prohibiting disclosure of information
regarding the Obligors, and the failure of the Seller to provide access as
provided in this Section as a result of such obligation shall not constitute a
breach of this Section.
SECTION
6.9 Collection Account; Distributions.
|
a. |
The
Collection Account. |
|
1. |
The
Seller, on behalf of the Purchaser shall establish and maintain in its own
name a segregated, interest bearing trust account with the corporate trust
department of a depository institution acceptable to the Purchaser
organized under the laws of the United States of America or any one of its
states having corporate trust powers and acting as trustee for funds
deposited in such account (the “Collections Account”). The Collection
Account shall bear a designation clearly indicating that the funds
deposited therein are held for the benefit of the Purchaser. Purchaser
shall possess all right, title and interest in all funds on deposit from
time to time in the Collection Account and in all proceeds
thereof. |
Purchase
and Servicing Agreement
Page
18
|
2. |
The
Seller shall have the power, revocable by the Purchaser, to make
withdrawals and payments from the Collection Account for the purposes of
permitting the Seller to carry out its duties
hereunder. |
|
b. |
Certain
Reimbursements to the Seller.
The
Seller will be entitled to be reimbursed from amounts on deposit in the
Collection Account with respect to a Collection Period for amounts
previously deposited in the Collection Account but later determined by the
Seller to have resulted from mistaken deposits or postings or checks
returned for insufficient funds. |
|
c. |
Application
of Collections. All
collections for the Collection Period shall be applied by the Seller as
follows: (i) With respect to each Receivable, payments by or on behalf of
the Obligor, (other than Supplemental Servicing Fees with respect to such
Receivable, to the extent collected) shall be applied to interest and
principal in accordance with the simple interest method. (ii) All amounts
collected that are payable to the Seller as Supplemental Servicing Fees
hereunder shall be deposited in the Collection Account and paid to the
Seller in accordance with Section 6.9
(d). |
|
d. |
Distributions. On
each Distribution Date, the Seller shall distribute the following amounts
for the Collection Account to the extent funds are available therefore,
and in the following order of priority: (i) from Available Funds, to the
Seller, the Base Servicing Fee for the related Collection Period, any
Supplemental Servicing Fees for the related Collection Period, and any
amounts specified in Section 6.9 (b) to the extent not retained by Seller,
and (ii) from Available Funds, all remaining Available Funds to the
Purchaser. |
ARTICLE
VII
MISCELLANEOUS
SECTION
7.1 Liability of Seller. Seller
shall be liable in accordance herewith only to the extent of the obligations in
this Agreement specifically undertaken by Seller and the representations and
warranties of Seller.
SECTION
7.2 Limitation on Liability of Seller and Others.
Seller and any director, officer, employee or agent thereof may rely in good
faith on the advice of counsel or on any document of any kind prima facie
properly executed and submitted by any Person respecting any matters arising
under this Agreement. Seller shall not be under any obligation to appear in,
prosecute or defend any legal action that is not incidental to its obligations
under this Agreement and that in its opinion may involve it in any expense or
liability.
Purchase
and Servicing Agreement
Page
19
SECTION
7.3 Amendment. This
Agreement may be amended from time to time by the parties only by written
agreement signed by the Seller and the Purchaser.
SECTION
7.4 Notices.
All demands, notices and communications to Seller or Purchaser hereunder shall
be in writing, personally delivered, or sent by telecopier (subsequently
confirmed in writing), reputable overnight courier or mailed by certified mail,
return receipt requested, and shall be deemed to have been given upon receipt
(a) in the case of Seller, to ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇, ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, or (b) in the case of Purchaser, to ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇ ▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, or such other address as shall be
designated by a party in a written notice delivered to the other
party.
SECTION
7.5 Merger and Integration.
Except as specifically stated otherwise herein, this Agreement sets forth the
entire understanding of the parties relating to the subject matter hereof, and
all prior understandings, written or oral, are superseded by this Agreement.
This Agreement may not be modified, amended, waived or supplemented except as
provided herein.
SECTION
7.6 Severability of Provisions.
If any one or more of the covenants, provisions or terms of this Agreement shall
be for any reason whatsoever held invalid, then such covenants, provisions or
terms shall be deemed severable from the remaining covenants, provisions or
terms of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement.
SECTION
7.7 Intention of the Parties.
|
a. |
The
execution and delivery of this Agreement shall constitute an
acknowledgment by Seller and Purchaser that they intend that the
assignment and transfer herein contemplated constitute a sale and
assignment outright, and not for security, of the Receivables and the
Other Conveyed Property, conveying good title thereto free and clear of
any Liens, from Seller to Purchaser, and that the Receivables and the
Other Conveyed Property shall not be a part of Seller’s estates in the
event of the bankruptcy, reorganization, arrangement, insolvency or
liquidation proceeding, or other proceeding under any federal or state
bankruptcy or similar law, or the occurrence of another similar event, of,
or with respect to Seller. In the event that such conveyance is determined
to be made as security for a loan made by Purchaser or Seller, the parties
intend that Seller shall have granted to Purchaser a security interest in
all of Seller’s right, title and interest in and to (collectively, the
“Collateral”): |
|
1. |
the
Receivables and all moneys received thereon after the Cutoff Date, as
applicable, |
|
2. |
the
Other Conveyed Property conveyed to Purchaser by Seller pursuant to this
Agreement including (a) an assignment of the security interests in
the Financed Vehicles granted by Obligors pursuant to the Receivables and
any other interest of the Seller in such Financed Vehicles, (b) any
proceeds and the right to receive any proceeds with respect to the
Receivables from claims on any physical damage, credit life or disability
insurance policies covering Financed Vehicles or Obligors and any proceeds
from the liquidation of the l Receivables, net of reasonable liquidation
expense, (c) the related Receivables Files and (d) the proceeds
of any and all of the foregoing, |
Purchase
and Servicing Agreement
Page
20
|
3. |
all
of the Seller’s (a) Accounts, (b) Chattel Paper, (c) Documents,
(d) Instruments, and (e) General Intangibles (as such terms are
defined in the applicable UCC) relating to the property described in items
(1) and (2), and |
|
4. |
all
proceeds and investments with respect to items (1), (2), and
(3) above. |
|
b. |
This
Agreement shall constitute a security agreement under applicable law.
|
SECTION
7.8 Governing Law.
This Agreement shall be construed in accordance with, and this Agreement and all
matters arising out of or relating in any way to the Agreement shall be governed
by, the law of the State of Utah.
SECTION
7.9 Counterparts.
For the purpose of facilitating the execution of this Agreement and for other
purposes, this Agreement may be executed simultaneously in any number of
counterparts, each of which counterparts shall be deemed to be an original, and
all of which counterparts shall constitute but one and the same instrument.
IN
WITNESS WHEREOF, the parties have caused this Purchase and Servicing Agreement
to be duly executed by their respective officers as of the day and year first
above written.
|
WELUND
FUND, INC. as Purchaser | |
|
By |
/s/
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ |
|
Name:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ | |
|
Title:
President | |
|
VILLAGE
AUTO, LLC as Seller | |
|
By |
/s/
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ |
|
Name:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ | |
|
Title:
Managing Partner | |
Purchase
and Servicing Agreement
Page
21
SCHEDULE
A
SCHEDULE
OF RECEIVABLES
|
Stock
# |
Contract
Date |
Total
of Pmts. |
Balance
2/28/05 |
Payoff
2/28/05 |
APR% |
Matures |
Payment
Amount |
Status |
Pay
Habits |
|
330 |
3/15/2004 |
12,383.52 |
8,755.54 |
6,157.82 |
18.00% |
3/14/2008 |
257.99 |
Good |
Early |
|
1032 |
7/23/2004 |
4,931.82 |
3,009.83 |
2,720.92 |
24.00% |
1/22/2006 |
273.99 |
Good |
On
time |
|
1102 |
5/15/2004 |
15,108.60 |
12,670.54 |
7,801.81 |
21.00% |
5/14/2009 |
251.81 |
Good |
On
time |
|
1091 |
5/26/2004 |
6,931.50 |
4,852.05 |
3,948.48 |
24.00% |
11/25/2006 |
231.05 |
Good |
On
time |
|
1155 |
6/7/2004 |
5,320.80 |
3,799.17 |
3,242.51 |
24.00% |
6/20/2006 |
221.70 |
Good |
Slow |
|
1019 |
2/1/2004 |
42,584.40 |
24,702.25 |
22,144.50 |
16.00% |
2/2/2006 |
1,774.35 |
Good |
Slow |
|
1040 |
2/15/2004 |
8,704.80 |
5,791.20 |
4,864.26 |
17.99% |
2/16/2007 |
241.80 |
Good |
Slow |
|
1072 |
6/7/2004 |
3,734.28 |
1,666.86 |
1,405.50 |
24.00% |
12/7/2005 |
207.46 |
Good |
On
time |
|
1185 |
7/22/2004 |
3,999.24 |
2,389.24 |
2,168.76 |
24.00% |
1/11/2006 |
222.18 |
Good |
Slow |
|
1129 |
9/21/2004 |
6,982.56 |
5,874.75 |
4,851.11 |
24.00% |
9/21/2006 |
290.94 |
Past
due |
Slow |
|
100 |
12/8/2003 |
3,650.16 |
1,566.97 |
1,498.25 |
20.24% |
12/7/2005 |
152.09 |
Good |
Slow |
|
03BHPH634 |
12/12/2003 |
21,626.40 |
16,961.25 |
13,434.96 |
19.00% |
12/11/2007 |
450.55 |
Past
due |
Slow |
|
1039 |
5/1/2004 |
2,064.24 |
1,190.15 |
1,045.37 |
21.00% |
5/1/2006 |
86.01 |
Good |
Early |
|
1057 |
3/2/2004 |
3,079.44 |
1,129.44 |
1,015.81 |
21.00% |
12/1/2005 |
146.64 |
Good |
Early |
|
1187 |
7/16/2004 |
3,432.00 |
2,435.06 |
2,064.25 |
24.00% |
7/15/2006 |
143.00 |
Good |
Slow |
|
1145 |
8/30/2004 |
7,273.44 |
5,151.75 |
4,292.64 |
24.00% |
8/28/2006 |
303.06 |
Good |
Slow |
|
1051 |
2/27/2004 |
4,010.94 |
1,085.94 |
996.01 |
21.00% |
8/28/2005 |
222.83 |
Good |
On
time |
|
1148 |
5/6/2004 |
7,602.90 |
5,269.93 |
4,300.00 |
21.00% |
11/25/2006 |
253.43 |
Good |
On
time |
|
1093 |
3/31/2004 |
6,384.60 |
4,428.15 |
3,587.90 |
21.00% |
4/1/2007 |
177.35 |
Good |
On
time |
|
1111 |
3/27/2004 |
5,900.76 |
4,289.63 |
3,850.04 |
16.99% |
3/26/2007 |
163.91 |
Past
due |
Slow |
|
580 |
2/17/2004 |
5,826.48 |
3,126.44 |
2,843.71 |
18.00% |
2/18/2006 |
242.77 |
Good |
Slow |
|
1209 |
12/17/2004 |
16,002.36 |
15,929.70 |
12,560.26 |
16.95% |
11/16/2007 |
444.51 |
Good |
No
history |
|
514 |
1/13/2004 |
16,887.63 |
4,894.73 |
5,082.71 |
16.00% |
6/12/2005 |
993.39 |
Good |
Slow |
|
1125 |
5/7/2004 |
4,952.40 |
3,466.67 |
2,913.08 |
21.00% |
11/15/2006 |
165.08 |
Good |
On
time |
|
1003 |
1/27/2004 |
6,054.00 |
3,769.38 |
3,634.24 |
18.00% |
5/26/2007 |
151.35 |
Good |
On
time |
|
1171 |
5/28/2004 |
6,433.20 |
4,765.52 |
3,877.11 |
24.00% |
11/27/2006 |
214.44 |
Good |
On
time |
Purchase
and Servicing Agreement
Page
22