EXHIBIT 10.4
------------
RECEIVABLES PURCHASE AGREEMENT
between
BMW FINANCIAL SERVICES NA, LLC,
as Seller,
and
BMW FS SECURITIES LLC,
as Depositor
Dated as of April [ ], 2001
TABLE OF CONTENTS
Page
Article I CERTAIN DEFINITIONS...............................................................1
Article II CONVEYANCE OF RECEIVALBES.........................................................3
SECTION 2.01. Conveyance of Initial Receivables......................................3
SECTION 2.02. The Closing............................................................4
SECTION 2.03. Conveyance of the Subsequent Receivables...............................4
Article III REPRESENTATIONS AND WARRANTIES....................................................7
SECTION 3.01. Representations and Warranties of the Depositor........................7
SECTION 3.02. Representations and Warranties of the Seller...........................8
Article IV CONDITIONS.......................................................................20
SECTION 4.01. Conditions to Obligation of the Depositor.............................20
SECTION 4.02. Conditions to Obligation of the Seller................................21
Article V COVENANTS OF THE SELLER..........................................................22
SECTION 5.01. Protection of Right, Title and Interest...............................22
SECTION 5.02. Other Liens or Interests..............................................23
SECTION 5.03. Costs and Expenses....................................................23
SECTION 5.04. Hold Harmless.........................................................23
Article VI MISCELLANEOUS PROVISIONS.........................................................24
SECTION 6.01. Obligations of Seller.................................................24
SECTION 6.02. Repurchase Events.....................................................24
SECTION 6.03. Depositor Assignment of Repurchased Receivables.......................24
SECTION 6.04. Transfer to the Issuer................................................24
SECTION 6.05. Amendment.............................................................24
SECTION 6.06. Waivers...............................................................25
SECTION 6.07. Notices...............................................................25
SECTION 6.08. Costs and Expenses....................................................25
SECTION 6.09. Representations of the Seller and the Depositor.......................26
SECTION 6.10. Confidential Information..............................................26
SECTION 6.11. Headings and Cross-References.........................................26
SECTION 6.12. GOVERNING LAW.........................................................26
SECTION 6.13. Counterparts..........................................................26
SECTION 6.14. Third Party Beneficiary...............................................26
SECTION 6.15. No Proceedings........................................................26
Exhibits
Exhibit A Matters Addressed in Opinion of Seller's Counsel
Exhibit B Subsequent Purchase Agreement
Schedule I Schedule of Receivables
Schedule II Location of Receivable Files
Schedule III Receivable File Schedule
i
RECEIVABLES PURCHASE AGREEMENT dated as of April [ ], 2001, between BMW
FINANCIAL SERVICES NA. LLC, a Delaware limited liability company (the "Seller")
and BMW FS SECURITIES LLC, a Delaware limited liability company, as depositor
(the "Depositor").
RECITALS
WHEREAS, in the regular course of its business, BMW FS has purchased
certain motor vehicle retail installment sale contracts secured by new and used
automobiles, sport utility vehicles and motorcycles from certain motor vehicle
dealers;
WHEREAS, the Seller and the Depositor wish to set forth the terms
pursuant to which such contracts are to be sold by the Seller to the Depositor;
and
WHEREAS, the Depositor intends, concurrently with its purchase
hereunder, to convey all of its right, title and interest in and to all of such
contracts to BMW Vehicle Owner Trust 2001-A (the "Issuer") pursuant to a Sale
and Servicing Agreement dated as of April [ ], 2001 (the "Sale and Servicing
Agreement"), by and among the Issuer, the Depositor, the Seller, Servicer,
Administrator and Custodian, and The Chase Manhattan Bank, as Indenture Trustee,
and the Issuer intends to pledge all of its right, title and interest in and to
such contracts to the Indenture Trustee pursuant to the Indenture dated as of
April [ ], 2001 (the "Indenture"), by and between the Issuer and the Indenture
Trustee.
NOW, THEREFORE, in consideration of the foregoing, other good and
valuable consideration and the mutual terms and covenants contained herein, the
parties hereto agree as follows:
ARTICLE I
CERTAIN DEFINITIONS
Terms not defined in this Agreement shall have the meanings assigned
thereto in the Sale and Servicing Agreement or the Indenture. As used in this
Agreement, the following terms shall, unless the context otherwise requires,
have the following meanings (such meanings to be equally applicable to the
singular and plural forms of the terms defined):
"Agreement" shall mean this Receivables Purchase Agreement, as the same
may be amended and supplemented from time to time.
"BMW FS" shall mean BMW Financial Services NA, LLC.
"Conveyed Assets" shall have the meaning set forth in Section 2.01.
"Depositor" shall mean BMW FS Securities LLC, a Delaware limited
liability company, its successors and assigns.
"Indenture" shall have the meaning set forth in the recitals.
"Initial Receivable" shall mean any Contract listed on Schedule I
hereto (which Schedule may be in the form of microfiche).
"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.
"Prospectus" shall have the meaning set forth in the Underwriting
Agreement.
"Prospectus Supplement" means the Prospectus Supplement dated April [
], 2001 relating to the BMW Vehicle Owner Trust 2001-A in the form attached
hereto as Exhibit C.
"Receivable" shall mean the Initial Receivables and the Subsequent
Receivables.
"Registrar of Titles" means with respect to any State, the governmental
agency or body responsible for the registration of, and the issuance of
certificates of title relating to, motor vehicles and liens thereon.
"Registration Statement" means Registration Statement No. 333-56802
filed by the Depositor with the Securities and Exchange Commission in the form
in which it became effective on April [ ], 2001.
"Repurchase Event" shall have the meaning specified in Section 6.02.
"Sale and Servicing Agreement" shall have the meaning set forth in the
recitals.
"Schedule of Receivables" shall mean the list of Receivables annexed
hereto as Schedule I (which Schedule may be in the form of microfiche).
"Seller" shall mean BMW FS, and its successor and assigns.
"Subsequent Purchase Agreement" shall mean a duly executed written
purchase agreement entered into during the Funding Period, substantially in the
form of Exhibit B hereto.
"Subsequent Receivable" shall mean any of the Contracts sold to the
Depositor during the Funding Period, listed on Schedule A to the related
Subsequent Purchase Agreement.
"Subsequent Transfer Date" shall mean the date designated by the Seller
during the Funding Period on which Subsequent Receivables are to be transferred
2
to the Depositor in accordance with Section 2.03 hereof and pursuant to the
Subsequent Purchase Agreement.
"Transfer Date" shall mean the Closing Date, in the case of the Initial
Receivables, and the Subsequent Transfer Date, in the case of the Subsequent
Receivables.
"Underwriters" means each of JPMorgan, [ ] and [ ].
"Underwriting Agreement" means the Underwriting Agreement dated April
[ ], 2001 relating to BMW Vehicle Owner Trust 2001-A among BMW FS, the Depositor
and JPMorgan, as representative of the Underwriters.
ARTICLE II
CONVEYANCE OF RECEIVALBES
SECTION 2.01. Conveyance of Initial Receivables.
---------------------------------
(a) In consideration of the Depositor's delivery to or upon
the order of the Seller on the Closing Date of $[ ] (the "Purchase Price"), the
Seller does hereby sell, transfer, assign, set over and otherwise convey to the
Depositor, without recourse (subject to the obligations of the Seller herein)
all right, title, and interest of the Seller in and to:
(i) the Initial Receivables and all moneys received thereon
after [ ], 2001;
(ii) the security interests in the Financed Vehicles and any
accessions thereto granted by Obligors pursuant to the Initial
Receivables and any other interest of the Seller in such Financed
Vehicles;
(iii) any Liquidation Proceeds and any other proceeds with
respect to the Initial Receivables from claims on any physical damage,
credit life or disability insurance policies covering Financed Vehicles
or Obligors, including any vendor's single interest or other collateral
protection insurance policy;
(iv) any property that shall have secured an Initial
Receivable and that shall have been acquired by or on behalf of the
Seller;
(v) all documents and other items contained in the Receivable
Files;
(vi) all proceeds from any Initial Receivable repurchased by a
Dealer pursuant to a Dealer Agreement; and
3
(vii) the proceeds of any and all of the foregoing
(collectively, with the assets listed in clauses (i) through (vi)
above, the "Conveyed Assets").
(b) The Seller and the Depositor intend that the transfer of
assets by the Seller to the Depositor pursuant to this Agreement be a sale of
the ownership interest in such assets to the Depositor, rather than the mere
granting of a security interest to secure a borrowing. In the event, however,
that such transfer is deemed not to be a sale but to be of a mere security
interest to secure a borrowing, the Seller shall be deemed to have hereby
granted to the Depositor a security interest in all accounts, money, chattel
paper, securities, instruments, documents, deposit accounts, certificates of
deposit, letters of credit, advices of credit, banker's acceptances,
uncertificated securities, general intangibles, contract rights, goods and other
property consisting of, arising from or relating to such Conveyed Assets, which
security interest shall be perfected and of first priority, and this Agreement
shall constitute a security agreement under applicable law. Pursuant to the Sale
and Servicing Agreement and Section 6.04 hereof, the Depositor may sell,
transfer and assign to the Issuer (i) all or any portion of the assets assigned
to the Depositor hereunder, (ii) all or any portion of the Depositor's rights
against the Seller under this Agreement and (iii) all proceeds thereof. Such
assignment may be made by the Depositor with or without an assignment by the
Depositor of its rights under this Agreement, and without further notice to or
acknowledgement from the Seller. The Seller waives, to the extent permitted
under applicable law, all claims, causes of action and remedies, whether legal
or equitable (including any right of setoff), against the Depositor or any
assignee of the Depositor relating to such action by the Depositor in connection
with the transactions contemplated by the Sale and Servicing Agreement.
SECTION 2.02. The Closing. The sale and purchase of the Initial
Receivables shall take place at a closing at the offices of Weil, Gotshal &
▇▇▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ on the Closing Date,
simultaneously with the closing under (a) the Sale and Servicing Agreement, (b)
the Indenture and (c) the Trust Agreement.
SECTION 2.03. Conveyance of the Subsequent Receivables.
----------------------------------------
(a) Subject to and upon the terms and conditions set forth in
paragraph (b) below and in the Subsequent Purchase Agreement, BMW FS hereby
agrees to sell, transfer, assign, set over and otherwise convey to Depositor,
without recourse, (subject to the obligations of BMW FS set forth herein) in
consideration of Depositor's payment on the Subsequent Transfer Date of the
purchase price therefor (as set forth in the Subsequent Purchase Agreement), and
Depositor hereby agrees to purchase, all right, title and interest of BMW FS in
and to (i) the related Subsequent Receivables set forth on Schedule A to the
Subsequent Purchase Agreement and all monies due thereon on or after the
Subsequent Cutoff Date; (ii) the security interests in the Financed Vehicles and
any accessions thereto granted by Obligors pursuant to the Subsequent
Receivables and any other interest of BMW FS in such Financed Vehicles; (iii)
any Liquidation Proceeds and any other proceeds with respect to the Subsequent
Receivables from claims on any physical damage, credit life or disability
insurance policies covering Financed Vehicles or Obligors, including any
4
vendor's single interest or other collateral protection insurance policy; (iv)
any property that shall have secured a Subsequent Receivable and shall have been
acquired by or on behalf of BMW FS; (v) all documents and other items contained
in the Receivables Files; (vi) all proceeds from any Subsequent Receivable
repurchased by a Dealer pursuant to a Dealer Agreement; and (vii) the proceeds
of any and all of the foregoing. BMW FS agrees, subject to the terms and
conditions herein applicable to transfers of Subsequent Receivables, and subject
to the execution of the Subsequent Purchase Agreement by the parties thereto,
sell to the Depositor during the Funding Period Subsequent Receivables having an
aggregate principal balance approximately equal to the Pre-Funded Amount.
(b) BMW FS shall transfer to Depositor, and the Depositor
shall purchase, the related Subsequent Receivables and related assets on any
Subsequent Transfer Date only if each of the following conditions precedent are
satisfied on or prior to the Subsequent Transfer Date:
(i) BMW FS shall have provided the Depositor, the Indenture
Trustee, the Owner Trustee and the Rating Agencies with an Addition
Notice not later than 5 Business Days prior to the Subsequent Transfer
Date and shall have provided any information reasonably requested by
any of the foregoing with respect to the related Subsequent
Receivables;
(ii) BMW FS shall have delivered to the Depositor, the Owner
Trustee and the Indenture Trustee a Subsequent Purchase Agreement,
which shall include supplements to Schedule I hereto listing the
Subsequent Receivables;
(iii) BMW FS shall have provided to the Depositor for deposit
into the Collection Account on or prior to the Subsequent Transfer
Date, with respect to each related Subsequent Receivable, the
collections with respect thereto received on or after the Subsequent
Cutoff Date unless BMW FS is the Servicer and meets the requirements
for monthly deposits of Section 5.02 of the Sale and Servicing
Agreement, in which case such collections shall be deposited in
accordance with such Section;
(iv) on the Subsequent Transfer Date, (A) BMW FS was not
insolvent and will not become insolvent as a result of the transfer of
the related Subsequent Receivables on the Subsequent Transfer Date, (B)
BMW FS did not intend to incur or believe that it would incur debts
that would be beyond such Seller's ability to pay as such debts
matured, (C) such transfer was not made with actual intent to hinder,
delay or defraud any Person and (D) the assets of such Seller did not
constitute unreasonably small capital to carry out its business as
conducted;
(v) the Funding Period shall not have terminated;
5
(vi) each of the representations and warranties made by BMW FS
pursuant to Section 3.02(b) and (c) with respect to the related
Subsequent Receivables shall be true and correct as of the Subsequent
Transfer Date, and BMW FS shall have performed all obligations to be
performed by it hereunder on or prior to the Subsequent Transfer Date;
(vii) each Subsequent Receivable shall have a Scheduled
Payment due during the Collection Period for the month immediately
following the month in which the Subsequent Transfer Date occurs,
provided, however, that with respect to Subsequent Receivables relating
to motorcycles those Subsequent Receivables shall have a Scheduled
Payment due during one of the first 3 Collection Periods after the
Subsequent Transfer Date occurs;
(viii) the addition of any of the related Subsequent
Receivables will not result in a material adverse tax consequence to
the Trust, the Noteholders or the Certificateholders;
(ix) BMW FS shall have delivered to the Indenture Trustee, the
Owner Trustee and each Rating Agency a statement listing the aggregate
Principal Balance of the related Subsequent Receivables to be
transferred and any other information reasonably requested by any of
the foregoing with respect to such Subsequent Receivables;
(x) BMW FS shall have delivered to (A) the Trust, each Rating
Agency, the Depositor and the Indenture Trustee, an Opinion of Counsel
with respect to the transfer of the related Subsequent Receivables
substantially in the form of, or confirming, the Opinion of Counsel
delivered to each Rating Agency and the Depositor on the Closing Date
and any other opinions reasonably required by the Depositor or the
Rating Agencies and (B) the Owner Trustee, the Depositor and the
Indenture Trustee, the Opinion of Counsel required by Section
10.02(i)(A) of the Sale and Servicing Agreement;
(xi) the Rating Agency Condition shall be satisfied with
respect to the transfer of the Subsequent Receivables to the Trust; and
(xii) BMW FS shall have delivered to the Indenture Trustee,
the Depositor and the Owner Trustee an Officers' Certificate confirming
the satisfaction of each condition precedent specified in this
paragraph.
BMW FS covenants that in the event that any of the foregoing conditions shall
not have been satisfied with respect to any related Subsequent Receivable as of
the date required as specified above, BMW FS will immediately repurchase or
cause to be repurchased the related Subsequent Receivable at a price equal to
the Purchase Amount thereof, in the manner specified in Section 6.02.
6
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.01. Representations and Warranties of the Depositor. The
Depositor hereby represents and warrants as follows to the Seller and the
Indenture Trustee as of the date hereof and the Transfer Date:
(a) Organization and Good Standing. The Depositor is duly
organized and validly existing as a limited liability company in good standing
under the laws of the State of Delaware, with the corporate power and authority
to own its properties and to conduct its business as such properties are
currently owned and such business is currently conducted.
(b) Due Qualification. The Depositor is duly qualified to do
business as a foreign corporation in good standing, and has obtained all
necessary licenses and approvals in all jurisdictions, including a license
pursuant to the Pennsylvania Motor Vehicle Sales Finance Act [applied for],
where the failure to do so would materially and adversely affect the Depositor's
ability to acquire the Receivables or the validity or enforceability of the
Receivables.
(c) Power and Authority. The Depositor has the corporate power
and authority to execute and deliver this Agreement and the other Basic
Documents to which it is a party and to carry out their respective terms; the
Depositor has full power and authority to sell and assign the property to be
sold and assigned to and deposited with the Issuer, and the Depositor shall have
duly authorized such sale and assignment to the Issuer by all necessary
corporate action; and the execution, delivery and performance of this Agreement
and the other Basic Documents to which the Depositor is a party have been duly
authorized by the Depositor by all necessary corporate action.
(d) Binding Obligation. This Agreement and the other Basic
Documents to which the Depositor is a party, when duly executed and delivered by
the other parties hereto and thereto shall constitute legal, valid and binding
obligations of the Depositor, enforceable against the Depositor in accordance
with their respective terms, except as the enforceability thereof may be limited
by bankruptcy, insolvency, reorganization or similar laws now or hereafter in
effect relating to or affecting creditors' rights generally and to general
principals or equity (whether applied in a proceeding at law or in equity).
(e) No Violation. The consummation of the transactions
contemplated by this Agreement and the fulfillment of the terms hereof do not
conflict with, result in any breach of any of the terms and provisions of, or
constitute (with or without notice or lapse of time or both) a default under,
the limited liability company agreement of the Depositor, or any indenture,
agreement or other instrument to which the Depositor is a party or by which it
is bound, or violate any law, rules or regulation applicable to the Depositor of
7
any court or federal or state regulatory body, administrative agency or other
governmental instrumentality having jurisdiction over the Depositor.
(f) No Proceedings. There are no proceedings or investigations
pending or, to the Depositor's knowledge, threatened against the Depositor
before any court, regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over the Depositor or its properties (i)
asserting the invalidity of this Agreement or any other Basic Document to which
the Depositor is a party, (ii) seeking to prevent the consummation of any of the
transactions contemplated by this Agreement or any other Basic Document to which
the Depositor is a party or (iii) seeking any determination or ruling that might
materially and adversely affect the performance by the Depositor of its
obligations under, or the validity or enforceability of, this Agreement or any
other Basic Document to which the Depositor is a party.
(g) No Consents. The Depositor is not required to obtain the
consent of any other party or any consent, license, approval, registration,
authorization, or declaration of or with any governmental authority, bureau or
agency in connection with the execution, delivery, performance, validity, or
enforceability of this Agreement or any other Basic Document to which it is a
party that has not already been obtained.
(h) The Depositor meets the requirements for use of Form S-3
under the Securities Act of 1933, as amended (the "Act"), and has filed with the
Securities and Exchange Commission (the "Commission") the Registration Statement
on such Form, including a related preliminary base prospectus and a preliminary
prospectus supplement, for the registration under the Act of the offering and
sale of the Securities.
(i) On the date of this Agreement, the Registration Statement
will comply in all material respects with the applicable requirements of the
Act, and the respective rules and regulations of the Commission thereunder (the
"Rules and Regulations").
(j) On the date of this Agreement, the Depositor is not aware
of the issuance by the Commission of any stop order suspending the effectiveness
of the Registration Statement or the institution or threat of any proceeding for
that purpose.
SECTION 3.02. Representations and Warranties of the Seller.
--------------------------------------------
(a) The Seller hereby represents and warrants as follows to
the Depositor and the Indenture Trustee as of the date hereof and as of the
Transfer Date:
(i) Organization and Good Standing. The Seller has been duly
organized and is validly existing as a limited liability company under
the laws of the State of Delaware, with the corporate power and
authority to own its properties and to conduct its business as such
properties are currently owned and such business is currently
conducted.
8
(ii) Due Qualification. The Seller is duly authorized to
transact 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 property or the conduct of its business
shall require such qualifications and in which the failure to be so
authorized would have a material adverse effect on the business,
properties, assets, or condition (financial or other) of the Seller and
its subsidiaries, considered as one enterprise.
(iii) Power and Authority. The Seller has the power and
authority to make, execute, deliver and perform this Agreement and all
of the transactions contemplated under this Agreement and the other
Basic Documents to which the Seller is a party, and has taken all
necessary action to authorize the execution, delivery and performance
of this Agreement and the other Basic Documents to which the Seller is
a party. When executed and delivered, this Agreement and the other
Basic Documents to which the Seller is a party will constitute legal,
valid and binding obligations of the Seller enforceable in accordance
with their respective terms, except as enforcement of such terms may be
limited by bankruptcy, insolvency or similar laws affecting the
enforcement of creditors' rights generally and by the availability of
equitable remedies and except as enforcement of such terms may be
limited by receivership, conservatorship and supervisory powers of bank
regulatory agencies generally.
(iv) No Violation. The execution, delivery and performance by
the Seller of this Agreement and the other Basic Documents to which the
Seller is a party will not violate any provision of any existing state,
federal or, to the best knowledge of the Seller, local law or
regulation or any order or decree of any court applicable to the Seller
or any provision of the limited liability company agreement of the
Seller, or constitute a breach of any mortgage, indenture, contract or
other agreement to which the Seller is a party or by which the Seller
may be bound or result in the creation or imposition of any lien upon
any of the Seller's properties pursuant to any such mortgage,
indenture, contract or other agreement (other than this Agreement).
(v) No Proceedings. There are no proceedings or investigations
pending or, to the Seller's knowledge, threatened against the Seller
before any court, regulatory body, administrative agency or other
governmental instrumentality having jurisdiction over the Seller or its
properties (i) asserting the invalidity of this Agreement or any other
Basic Document to which the Seller is a party, (ii) seeking to prevent
the consummation of any of the transactions contemplated by this
Agreement or any other Basic Document to which the Seller is a party or
(iii) seeking any determination or ruling that might materially and
adversely affect the performance by the Seller of its obligations
under, or the validity or enforceability of, this Agreement or any
other Basic Document to which the Seller is a party.
9
(vi) Chief Executive Office. The chief executive office of the
Seller is ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇.
(vii) No Consents. The Seller is not required to obtain the
consent of any other party or any consent, license, approval,
registration, authorization, or declaration of or with any governmental
authority, bureau or agency in connection with the execution, delivery,
performance, validity, or enforceability of this Agreement or any other
Basic Document to which it is a party that has not already been
obtained.
(viii) No Notice. The Seller represents and warrants that it
acquired title to the Receivables in good faith, without notice of any
adverse claim.
(ix) Bulk Transfer. The Seller represents and warrants that
the transfer, assignment and conveyance of the Receivables by the
Seller pursuant to this Agreement is not subject to the bulk transfer
laws or any similar statutory provisions in effect in any applicable
jurisdiction.
(x) Seller Information. No certificate of an officer,
statement or document furnished in writing or report delivered pursuant
to the terms hereof by the Seller contains any untrue statement of a
material fact or omits to state any material fact necessary to make the
certificate, statement, document or report not misleading.
(xi) Ordinary Course. The transactions contemplated by this
Agreement and the other Basic Documents to which the Seller is a party
are in the ordinary course of the Seller's business.
(xii) Solvency. The Seller is not insolvent, nor will the
Seller be made insolvent by the transfer of the Receivables, nor does
the Seller anticipate any pending insolvency.
(xiii) Legal Compliance. The Seller is not in violation of,
and the execution and delivery of this Agreement and the other Basic
Documents to which the Seller is a party by it and its performance and
compliance with the terms of this Agreement and the other Basic
Documents to which the Seller is a party will not constitute a
violation with respect to, any order or decree of any court or any
order or regulation of any federal, state, municipal or governmental
agency having jurisdiction, which violation would materially and
adversely affect the Seller's condition (financial or otherwise) or
operations or any of the Seller's properties or materially and
adversely affect the performance of any of its duties under the Basic
Documents.
(xiv) Creditors. The Seller did not sell the Receivables to
the Depositor with any intent to hinder, delay or defraud any of their
creditors.
10
(b) The Seller makes the following representations and
warranties with respect to the Receivables, on which the Depositor relies in
accepting the Receivables and in transferring the Receivables to the Issuer
under the Sale and Servicing Agreement, and on which the Issuer relies in
pledging the same to the Indenture Trustee. Such representations and warranties
speak as of the execution and delivery of this Agreement and as of the Transfer
Date, but shall survive the sale, transfer and assignment of the Receivables to
the Depositor, the subsequent sale, transfer and assignment of the Receivables
by the Depositor to the Issuer pursuant to the Sale and Servicing Agreement and
the pledge of the Receivables by the Issuer to the Indenture Trustee pursuant to
the Indenture.
(i) Characteristics of Receivables. Each Receivable (A) was
originated in the United States of America by a Dealer located in the
United States of America for the retail sale of a Financed Vehicle in
the ordinary course of such Dealer's business in accordance with the
Seller's credit policies as of the date of origination or acquisition
of the related Receivable, is payable in United States dollars, has
been fully and properly executed by the parties thereto, has been
purchased by the Seller from such Dealer under an existing Dealer
Agreement and has been validly assigned by such Dealer to the Seller,
(B) has created or shall create a valid, subsisting and enforceable
first priority perfected security interest in favor of the Seller in
the Financed Vehicle, which security interest is assignable by the
Seller to the Depositor, and by the Depositor to the Issuer, (C)
contains customary and enforceable provisions such that the rights and
remedies of the holder thereof are adequate for realization against the
collateral of the benefits of the security, (D) provides for fixed
level monthly payments (provided that the payment in the last month of
the term of the Receivable may be different from the level scheduled
payments) that fully amortize the Amount Financed by maturity and yield
interest at the APR and (E) amortizes using the simple interest method.
(ii) Compliance with Law. Each Receivable and the sale of the
related Financed Vehicle complied at the time it was originated or
made, and at the time of execution of this Agreement complies, in all
material respects with all requirements of applicable federal, state
and, to the best knowledge of the Seller, local laws, rulings and
regulations thereunder, including usury laws, the Federal
Truth-in-Lending Act, the Equal Credit Opportunity Act, the Fair Credit
Billing Act, the Fair Credit Reporting Act, the Fair Debt Collection
Practices Act, the Federal Trade Commission Act, the ▇▇▇▇▇▇▇▇-▇▇▇▇
Warranty Act, the Federal Reserve Board's Regulations "B" and "Z," the
Soldiers' and Sailors' Civil Relief Act of 1940, and state adaptations
of the National Consumer Act and of the Uniform Consumer Credit Code,
and other consumer credit laws and equal credit opportunity and
disclosure laws applicable to such Receivable.
(iii) Binding Obligation. Each Receivable represents the
genuine, legal, valid and binding payment obligation of the Obligor
thereon, enforceable by the holder thereof in accordance with its
terms, except (A) as enforceability thereof may be limited by
11
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
Transfer Date of the Soldiers' and Sailors' Civil Relief Act of 1940,
as amended.
(iv) No Government Obligor. No Receivable is due from the
United States of America or any State or any agency, department,
subdivision or instrumentality thereof.
(v) Obligor Bankruptcy. To the best of the Seller's knowledge,
at the Cutoff Date with respect to the Initial Receivables and at the
Subsequent Cutoff Date with respect to the Subsequent Receivables, no
Obligor is or has been, since the origination of the related
Receivable, the subject of a bankruptcy proceeding.
(vi) Schedule of Receivables. With respect to the Initial
Receivables, the information set forth in Schedule I to this Agreement
is true and correct in all material respects as of the close of
business on the Initial Cutoff Date and with respect to the Subsequent
Receivables, the information set forth in Schedule A to the Subsequent
Purchase Agreement is true and correct in all material respects as of
the close of business on the Subsequent Cutoff Date.
(vii) Marking Records. By the applicable Transfer Date, the
Seller will have caused its computer and accounting records relating to
each Receivable to be marked to show that the Receivables have been
sold to the Depositor by the Seller and transferred and assigned by the
Depositor to the Issuer in accordance with the terms of the Sale and
Servicing Agreement and the Subsequent Transfer Agreement and pledged
by the Issuer to the Indenture Trustee in accordance with the terms of
the Indenture.
(viii) Computer Tape. The computer tape regarding the Initial
Receivables made available by the Seller to the Depositor is complete
and accurate in all material respects as of the Cutoff Date and the
computer tape regarding the Subsequent Receivables to be made available
by the Seller to the Depositor is complete and accurate in all material
respects as of the related Subsequent Transfer Date.
(ix) No Adverse Selection. No selection procedures (other than
those specified herein) believed by the Seller to be adverse to the
Noteholders or the Certificateholders were utilized in selecting the
Receivables.
(x) Chattel Paper. Each Receivable constitutes chattel paper
within the meaning of the UCC as in effect in the State of origination.
12
(xi) One Original. There is only one original executed copy of
each Receivable.
(xii) Receivables in Force. No Receivable has been satisfied,
subordinated or rescinded, nor has any Financed Vehicle been released
from the Lien of the related Receivable in whole or in part. None of
the terms of any Receivable has been waived, altered or modified in any
respect since its origination, except by instruments or documents
identified in the related Receivable File. No Receivable has been
modified as a result of the application of the Soldiers' and Sailors'
Civil Relief Act of 1940, as amended.
(xiii) Lawful Assignment. No Receivable has been originated
in, or is subject to the laws of, any jurisdiction the laws of which
would make unlawful, void or voidable the sale, transfer and assignment
of such Receivable under this Agreement, the Subsequent Purchase
Agreement, the Subsequent Transfer Agreement or the Sale and Servicing
Agreement, as applicable, or the pledge of such Receivable under the
Indenture.
(xiv) Title. It is the intention of the Seller that the
transfers and assignments herein contemplated constitute sales of the
Receivables from the Seller to the Depositor and that the beneficial
interest in and title to the Receivables not be part of the debtor's
estate in the event of the appointment of a receiver or conservator for
a Seller under any receivership, bankruptcy law, insolvency or banking
law. Immediately prior to the Closing Date, no Receivable has been
sold, transferred, assigned or pledged by the Seller to any Person
other than to the Depositor or pursuant to this Agreement (or the
Subsequent Purchase Agreement or by the Depositor to any other Person
other than to the Issuer pursuant to the Sale and Servicing Agreement
or the Subsequent Transfer Agreement). Immediately prior to the
transfers and assignments herein contemplated, the Seller has good and
marketable title to each Receivable free and clear of all Liens, and,
immediately upon the transfer thereof, the Depositor shall have good
and marketable title to each Receivable, free and clear of all Liens
and, immediately upon the transfer thereof from the Depositor to the
Issuer pursuant to the Sale and Servicing Agreement, the Issuer shall
have good and marketable title to each Receivable, free and clear of
all Liens and, immediately upon the pledge thereof from the Issuer to
the Indenture Trustee pursuant to the Indenture, the Indenture Trustee
shall have a first priority perfected security interest in each
Receivable.
(xv) Security Interest in Financed Vehicle. Immediately prior
to its sale, assignment and transfer to the Depositor pursuant to this
Agreement or the Subsequent Purchase Agreement, each Receivable is
secured by a first priority perfected security interest in the related
Financed Vehicle in favor of BMW FS as secured party, or all necessary
and appropriate actions have been commenced that will result in the
valid perfection of a first priority security interest in such Financed
Vehicle in favor of the BMW FS as secured party. The Lien Certificate
13
for each Financed Vehicle shows, or if a new or replacement Lien
Certificate is being applied for with respect to such Financed Vehicle
such Lien Certificate shall be received within 120 days of the Closing
Date and shall show, BMW FS or its predecessor in interest named as the
original secured party under each Receivable as the holder of a first
priority security interest in such Financed Vehicle. With respect to
each Receivable for which the Lien Certificate has not yet been
returned from the Registrar of Titles, BMW FS has received written
evidence that such Lien Certificate showing BMW FS as first lienholder
has been applied for. Each Dealer's security interest in any Receivable
originated by such Dealer has been validly assigned by the Dealer to
BMW FS. BMW FS' security interest has been validly assigned to the
Depositor pursuant to this Agreement or the Subsequent Purchase
Agreement. BMW FS has the legal right to repossess or recover by legal
process the Financed Vehicle in its name.
(xvi) All Filings Made. All filings (including UCC filings)
required to be made in any jurisdiction to give the Issuer a first
perfected ownership interest in the Receivables and the Indenture
Trustee a first priority perfected security interest in the Receivables
have been made or will be made on the Closing Date.
(xvii) No Defenses. No Receivable is subject to any right of
rescission, setoff, counterclaim, dispute or defense, including the
defense of usury, whether arising out of transactions concerning the
Receivable or otherwise, and the operation of any terms of the
Receivable or the exercise by the Seller or the Obligor of any right
under the Receivable will not render the Receivable unenforceable in
whole or in part, and no such right of rescission, setoff,
counterclaim, dispute or defense, including the defense of usury, has
been asserted with respect thereto.
(xviii) No Default. There has been no default, breach,
violation or event permitting acceleration under the terms of any
Receivable (other than payment delinquencies of not more than 30 days)
as of the Cutoff Date, and no condition exists or event has occurred
and is continuing that with notice, the lapse of time or both would
constitute a default, breach, violation or event permitting
acceleration under the terms of any Receivable, and there has been no
waiver of any of the foregoing. On or prior to the applicable Transfer
Date, no Financed Vehicle has been repossessed.
(xix) Insurance. The Seller, in accordance with its customary
procedures, has determined that the Obligor has obtained physical
damage insurance covering each Financed Vehicle and, under the terms of
the related Receivable, the Obligor is required to maintain such
insurance.
(xx) Final Scheduled Maturity Date. No Receivable has a final
scheduled payment date later than six months prior to the Class B Final
Scheduled Payment Date.
14
(xxi) Certain Characteristics of the Receivables. As of the
applicable Cutoff Date, (A) each Receivable had an original maturity of
not less than [ ] or more than [ ] months and (B) no Receivable was
more than 30 days past due.
(xxii) No Foreign Obligor. All of the Receivables are due from
Obligors with billing addresses within the United States of America,
its territories and possessions.
(xxiii) No Extensions. The number or timing of scheduled
payments has not been changed on any Receivable on or before the
Closing Date or the Subsequent Transfer Date, as applicable, except as
reflected on the computer tape delivered in connection with the sale of
the Receivables.
(xxiv) Scheduled Payments. Each Initial Receivable had a first
scheduled payment due on or prior to 45 calendar days after the
origination date thereof, provided, however, that with respect to
Subsequent Receivables relating to motorcycles the first Scheduled
Payment shall have been due on or prior to 90 calendar days after the
origination date thereof. Each Obligor has been instructed to make all
scheduled payments to BMW FS. To the best knowledge of the Seller, each
Obligor has paid the entire down payment called for by the contract.
(xxv) Reserved.
(xxvi) Receivable Files Complete. There exists a Receivable
File pertaining to each Receivable and such Receivable File contains,
without limitation, (A) a fully executed original of the Receivable,
(B) the original Lien Certificate or application therefor together with
such other documents that the Seller shall keep on file in accordance
with its customary procedures evidencing the security interest of the
Seller in the related Financed Vehicle, and (C) any and all other
documents that the Servicer shall have kept on file in accordance with
its customary procedures relating to a Receivable, an Obligor or a
Financed Vehicle. Each of such documents that is required to be signed
by the Obligor has been signed by the Obligor in the appropriate
spaces. All blanks on any form described in clauses (A), (B) and (C)
above have been properly filled in and each form has otherwise been
correctly prepared in all material respects. Notwithstanding the above,
the complete Receivable File for each Receivable, (x) shall fulfill the
documentation requirements of the Seller's credit policies as in effect
on the date of origination of such Receivable and (y) is in possession
of the Servicer and Custodian, as applicable, on the Transfer Date. The
blanket power of attorney granted to the Indenture Trustee and the
original Lien Certificate are the only documents necessary to permit
the Indenture Trustee to submit the Lien Certificate for each Financed
Vehicle for retitling in the name of the Indenture Trustee as secured
party in the event such retitling were required or otherwise permitted
under the Basic Documents.
15
(xxvii) Receivables Not Assumable. No Receivable is assumable
by another person in a manner which would release the Obligor thereof
from such Obligor's obligations to the Seller with respect to such
Receivable.
(xxviii) Tax Liens. To the best of the Seller's knowledge,
there is no Lien against any Financed Vehicle for delinquent taxes.
(xxix) No Impairment. The Seller has not done anything to
convey any right to any person that would result in such person having
a right to payments due under a Receivable or otherwise to impair the
rights of the Depositor in any Receivable or the proceeds thereof.
(xxx) Servicing. Each Receivable has been serviced in
conformity with all applicable laws, rules and regulation and in
conformity with the Seller's policies and procedures which are
consistent with customary, prudent industry standards.
(xxxi) No Corporate Obligor. Other than with respect to no
more than [2.5%] of the Initial Receivables, all of the Receivables are
due from Obligors who are natural persons.
(xxxii) No Liens. No Liens or claims have been filed for work,
labor, or materials relating to a Financed Vehicle that are prior to,
or equal or coordinate with, the security interest in the Financed
Vehicle granted by the related Receivable.
(xxxiii) APR. No Initial Receivable has an APR of less than 0%
and the weighted average coupon on the pool of Initial Receivables is
at least [ ]%.
(xxxiv) Remaining Term. Each Receivable has a remaining term
of at least one month and no more than [ ] months.
(xxxv) Seasoning. The weighted average number of months since
the initial installment due date for the Initial Receivables is at
least [ ] months.
(xxxvi) Remaining Balance. Each Initial Receivable has a
remaining balance of at least $[ ] and not greater than $[ ].
(xxxvii) New Vehicles. At least [ ]% of the aggregate
principal balance of the Initial Receivables is secured by Financed
Vehicles which were new at the date of origination.
(xxxviii) No Repossessions. No Financed Vehicle has been
repossessed prior to the applicable Transfer Date.
16
(xxxix) Initial Payment. The Obligor with respect to each
Receivable has made at least one scheduled payment.
(xl) No Proceedings. As of the Cutoff Date, there are no
proceedings pending, or to the best of the Seller's knowledge,
threatened, wherein the Obligor or any governmental agency has alleged
that any Receivable is illegal or unenforceable.
(xli) Each Dealer from whom the Seller purchases Receivables
directly has entered into a Dealer Agreement with the Seller providing
for the sale of Receivables from time to time by such Dealer to the
Seller. Each Dealer Agreement is substantially in the form attached to
the Sale and Servicing Agreement as Exhibit D, except for immaterial
modifications or deviations from the Dealer Agreement. Such
modifications and deviations from the Dealer Agreement will not have a
material adverse effect on the Noteholders.
(xlii) BMW FS has duly fulfilled all obligations to be
fulfilled on its part under or in connection with the origination,
acquisition and assignment of the Receivables.
(xliii) No Consent. To the best of the Seller's knowledge, no
notice to or consent from any Obligor is necessary to effect the
acquisition of the Receivables by the Depositor or the Trust or the
pledge of the Receivables by the Trust to the Indenture Trustee.
(xliv) No Transfer Taxes. The sale, transfer, assignment and
conveyance of the Receivables by the Seller pursuant to this Agreement
and the Subsequent Purchase Agreement is not subject to and will not
result in any tax, fee or governmental charge payable by the Seller,
the Issuer or the Indenture Trustee to any federal, state or local
government ("Transfer Taxes") other than Transfer Taxes which have or
will be paid by the Seller as due. In the event the Issuer or the
Indenture Trustee receives actual notice of any Transfer Taxes arising
out of the transfer, assignment and conveyance of the Receivables, on
written demand by the Issuer or the Indenture Trustee, or upon the
Seller's otherwise being given notice thereof by the Issuer or the
Indenture Trustee, the Seller shall pay, and otherwise indemnify and
hold the Issuer and the Indenture Trustee harmless, on an after-tax
basis, from and against any and all such Transfer Taxes (it being
understood that the Noteholders, the Indenture Trustee and the Issuer
shall have no obligation to pay such Transfer Taxes).
(xlv) Reserved.
(xlvi) Aggregate Balance. The aggregate principal balance of
the Initial Receivables as of the Initial Cutoff Date is equal to
$[ ].
17
(xlvii) Geographic Distribution. No more than [ ]% of the
aggregate principal balance of the Receivables as of the Cutoff Date is
attributable to Receivables with Obligors having a billing address in
any single State other than [ ], [ ], [ ] and [ ], which represent no
more than [ ]%, [ ]%, [ ]% and [ ]%, respectively.
(xlviii) No Advances. No advances have been made to Obligors
in order to meet any representation and warranties herein set forth;
provided, however, that Receivables may have had up to four extensions
prior to the Cutoff Date, subject to the following: (A) each such
extension was made in conformity with the Extension Policy and (B) each
extended Receivable satisfies in all material respects all applicable
requirements under BMW FS' credit and collection policies as of the
date of its origination.
(xlix) Amount Financed. At the time each Receivable was
acquired from the Dealer, the Amount Financed was fully disbursed.
There is no requirement for future advances of principal thereunder,
and all fees and expenses in connection with the origination of such
Receivable have been paid.
(l) The computer tape from which the selection of the Initial
Receivables being acquired on the Closing Date was made available to
the accountants that are providing a comfort letter to the Depositor,
the Underwriters and the Noteholders in connection with the numerical
information regarding the Receivables and the Notes contained in the
Prospectus Supplement and such information in the Prospectus Supplement
with respect to the Receivables and the Notes was complete and accurate
as of its date and includes a description of the same Receivables that
are described in Schedule I to this Agreement.
(li) Reserved.
(lii) In connection with the purchase of each Receivable, the
Seller required the related Dealer to furnish evidence that the related
Financed Vehicle was covered by a physical damage insurance policy (i)
in an amount at least equal to the lesser of (a) the actual cash value
of the related Financed Vehicle or (b) the unpaid principal balance
owing on such Receivable, (ii) naming the Seller as a loss payee and
(iii) insuring against loss and damage due to fire, theft,
transportation, collision and other risks generally covered by
comprehensive and collision coverage.
(liii) The Dealer that sold each Receivable to BMW FS has
entered into the Dealer Agreement and such Dealer Agreement, together
with the assignment and related documentation signed by the Dealer,
constitutes the entire agreement between BMW FS and the related Dealer
with respect to the sale of such Receivable to BMW FS. Each such Dealer
Agreement is in full force and effect and is the legal, valid and
binding obligation of such Dealer, there have been no material defaults
by BMW FS under such Dealer Agreement; BMW FS has fully performed all
18
of its obligations under such Dealer Agreement; BMW FS has not made any
statements or representations to such Dealer (whether written or oral)
inconsistent with any term of such Dealer Agreement; the purchase price
(as specified in the applicable Dealer Agreement) for such Receivable
has been paid in full, other than any dealer reserve, by BMW FS; and
any payment owed to such Dealer by BMW FS is a corporate obligation of
BMW FS.
(liv) Each Receivable requires the Obligor to maintain the
related Financed Vehicle in good and workable order and to obtain and
maintain physical damage insurance on the related Financed Vehicle
subject thereto and to name the Seller as a loss payee.
(lv) No Receivable constitutes a "consumer lease" under either
(a) the UCC as in effect in the jurisdiction whose law governs the
Receivable or (b) the Consumer Leasing Act, 15 USC 1667.
(c) BMW FS makes the following additional representations and
warranties with respect to the Subsequent Receivables and the pool of
Receivables as of the Subsequent Transfer Date, on which the Depositor relies in
accepting such Receivables and in transferring such Receivables to the Issuer
under the Sale and Servicing Agreement, and on which the Issuer relies in
pledging the same to the Indenture Trustee. Such representations and warranties
shall survive the sale, transfer and assignment of the Subsequent Receivables to
the Depositor, the subsequent sale, transfer and assignment of the Subsequent
Receivables by the Depositor to the Issuer pursuant to the Sale and Servicing
Agreement and the pledge of the Subsequent Receivables by the Issuer to the
Indenture Trustee pursuant to the Indenture.
(i) Seasoning. After the inclusion of the Subsequent
Receivables, the weighted average number of months since the initial
installment due date for the Receivables is at least [ ] months;
(ii) APR. The minimum APR for the Subsequent Receivables is [
]%.
(iii) New Vehicles. After the inclusion of the Subsequent
Receivables, at least [ ]% of the aggregate principal balance of the
Receivables is secured by Financed Vehicles which were new at the date
of origination.
ARTICLE IV
CONDITIONS
SECTION 4.01. Conditions to Obligation of the Depositor. The obligation
of the Depositor to purchase the Receivables is subject to the satisfaction of
the following conditions:
19
(a) Representations and Warranties True. The representations
and warranties of the Seller hereunder shall be true and correct on the Transfer
Date with the same effect as if then made, and the Seller shall have performed
all obligations to be performed by it hereunder on or prior to the Transfer
Date.
(b) Computer Files Marked. The Seller shall, at its own
expense, on or prior to the Transfer Date, indicate in its computer files that
the Receivables have been sold to the Depositor pursuant to this Agreement and
deliver to the Depositor the Schedule of Receivables, certified by the Seller's
President, Vice President or Treasurer to be true, correct and complete.
(c) Documents To Be Delivered by the Seller on the Transfer
Date:
(i) Reserved.
(ii) Evidence of UCC Filing. On or prior to the Closing Date,
the Seller shall record and file, at its own expense, a UCC-1 financing
statement in New Jersey in which required by applicable law, executed
by the Seller, as seller or debtor, and naming the Depositor, as
secured party, describing the Receivables and the other assets assigned
to the Depositor pursuant to Section 2.01 or 2.03 hereof, as
applicable, meeting the requirements of the laws of each such
jurisdiction and in such manner as is necessary to perfect the sale,
transfer, assignment and conveyance of the Receivables and such other
assets to the Depositor. The Seller shall deliver to the Depositor a
file-stamped copy or other evidence satisfactory to the Depositor of
such filing on or prior to the Transfer Date.
(iii) Opinions of Seller's Counsel. On or prior to the Closing
Date, the Depositor shall have received the opinions of counsel to the
Seller, in form and substance satisfactory to the Depositor, as to the
matters set forth in Exhibit A hereto and such other matters as the
Depositor has heretofore requested or may reasonably request.
(iv) Other Documents. Such other documents as the Depositor
may reasonably request.
(d) Other Transactions. The transactions contemplated by the
Sale and Servicing Agreement, the Indenture and the Trust Agreement to be
consummated on the Transfer Date shall be consummated on such date.
SECTION 4.02. Conditions to Obligation of the Seller. The obligation of
the Seller to sell the Receivables to the Depositor is subject to the
satisfaction of the following conditions:
(a) Representations and Warranties True. The representations
and warranties of the Depositor hereunder shall be true and correct on the
Transfer Date with the same effect as if then made, and the Depositor shall have
20
performed all obligations to be performed by it hereunder on or prior to the
Transfer Date.
(b) Receivables Purchase Price. On the Transfer Date, the
Depositor shall have delivered to the Seller the purchase price specified in
Section 2.01 hereof in the case of the Initial Receivables, or specified in the
Subsequent Purchase Agreement in the case of the Subsequent Receivables.
(c) Opinion of Counsel. The Depositor shall have furnished to
the Seller an Opinion of Counsel, dated the Closing Date, to the effect that:
(i) the Depositor has been duly incorporated and is validly
existing as a limited liability company in good standing under the laws
of the State of Delaware, with full corporate power and authority to
own its properties and conduct its business as described in the
Prospectus;
(ii) each of this Agreement, the Sale and Servicing Agreement
and the Trust Agreement has been duly authorized, executed and
delivered by the Depositor and constitutes a legal, valid and binding
obligation of the Depositor, enforceable against the Depositor in
accordance with its terms except as limited by bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance, receivership,
conservatorship or similar laws relating to or affecting creditors'
rights generally or the rights of creditors, or of the FDIC as insurer,
regulator, conservator or receiver, of banks the accounts of which are
insured by the FDIC in particular and except that such counsel need
express no opinion as to the availability of equitable remedies or the
enforceability of rights of indemnification for violations of federal
securities laws;
(iii) no consent, approval, authorization or order of, or
filing with, any court or governmental agency or body is required for
the consummation by the Depositor of the transactions contemplated
herein or in this Agreement, the Sale and Servicing Agreement, the
Trust Agreement or the Indenture (collectively, the "Basic Documents"),
except such as may be required under the blue sky or securities laws of
any jurisdiction in connection with the purchase and sale of the Notes
by the Underwriters, the filing of the UCC-1 financing statements
relating to the conveyance of the Receivables and the other Trust
Property by the Seller to the Depositor and of the Receivables and the
other Trust Property by the Depositor to the Trust and by the Trust to
the Indenture Trustee for the benefit of the Noteholders and the filing
of the UCC-1 financing statements relating to the security interests in
the Eligible Investments included in the Reserve Account, and such
other approvals (which shall be specified in such opinion) as have been
obtained and such filings as have been made or are in the process of
being made;
(iv) none of the issue and sale of the Notes and Certificates,
the execution and delivery of this Agreement, the Sale and Servicing
Agreement or the Trust Agreement, the consummation of any other of the
21
transactions herein or therein contemplated or the fulfillment of the
terms hereof or thereof will conflict with, result in a breach or
violation of, or constitute a default under, the limited liability
company agreement of the Depositor or the terms of any indenture or
other agreement or instrument known to such counsel and to which the
Depositor is a party or by which it is bound, or any judgment, order or
decree known to such counsel to be applicable to the Depositor of any
court, regulatory body, administrative agency, governmental body, or
arbitrator having jurisdiction over the Depositor; and
(v) the Registration Statement, and each amendment thereto, as
of its effective date (other than any financial, numerical or
statistical information contained or incorporated by reference therein,
as to which such counsel need express no opinion) complied as to form
in all material respects with the requirements of the Act and the Rules
and Regulations.
(d) Other Transactions. The transactions contemplated by the
Sale and Servicing Agreement, the Indenture and the Trust Agreement to be
consummated on the Transfer Date shall be consummated on such date.
ARTICLE V
COVENANTS OF THE SELLER
The Seller agrees with the Depositor and the Indenture Trustee as
follows:
SECTION 5.01. Protection of Right, Title and Interest.
---------------------------------------
(a) Filings. The Seller shall cause at its own expense all
financing statements and continuation statements and any other necessary
documents covering the right, title and interest of the Seller, the Depositor,
the Trust and the Indenture Trustee, respectively, in and to the Receivables and
the other property included in the Trust Estate to be promptly filed and at all
times to be kept recorded, registered and filed, all in such manner and in such
places as may be required by law fully to preserve and protect the right, title
and interest of the Depositor hereunder, the Trust under the Sale and Servicing
Agreement and the Indenture Trustee under the Indenture in and to the
Receivables and the other property included in the Trust Estate. The Seller
shall deliver to the Depositor and the Indenture Trustee file stamped copies of,
or filing receipts for, any document recorded, registered or filed as provided
above, as soon as available following such recordation, registration or filing.
The Depositor shall cooperate fully with the Seller in connection with the
obligations set forth above and will execute any and all documents reasonably
required to fulfill the intent of this paragraph.
(b) Name Change. If the Seller makes any change in its name,
identity or corporate structure that would make any financing statement or
continuation statement filed in accordance with paragraph (a) above seriously
misleading within the applicable provisions of the UCC or any title statute, the
22
Seller shall give the Depositor, the Indenture Trustee and the Owner Trustee
written notice thereof at least 45 days prior to such change and shall promptly
file such financing statements or amendments as may be necessary to continue the
perfection of the Depositor's interest in the property conveyed pursuant to
Section 2.01.
SECTION 5.02. Other Liens or Interests. Except for the conveyances
hereunder and pursuant to the Basic Documents, the Seller shall not sell,
pledge, assign or transfer to any Person, or grant, create, incur, assume, or
suffer to exist any Lien on, or any interest in, to or under the Receivables,
and the Seller shall defend the right, title and interest of the Depositor, the
Trust and the Indenture Trustee in, to and under the Receivables against all
claims of third parties claiming through or under the Seller.
SECTION 5.03. Costs and Expenses. BMW FS agrees to pay all reasonable
costs and disbursements in connection with the perfection, as against all third
parties, of the Depositor's, the Issuer's and the Indenture Trustee's right,
title and interest in and to the Receivables and the other property included in
the Trust Estate.
SECTION 5.04. Hold Harmless. BMW FS shall protect, defend, indemnify
and hold the Depositor, the Issuer, the Underwriters and their respective
assigns and their employees, officers and directors harmless from and against
all losses, liabilities, claims and damages of every kind and character,
including any legal or other expenses reasonably incurred, as incurred,
resulting from or relating to or arising out of (i) the inaccuracy,
nonfulfillment or breach of any representation, warranty, covenant or agreement
made by the Seller in this Agreement, (ii) any legal action, including, without
limitation, any counterclaim, that has either been settled by the litigants or
has proceeded to judgment by a court of competent jurisdiction, in either case
to the extent it is based upon alleged facts that, if true, would constitute a
breach of any representation, warranty, covenant or agreement made by the Seller
in this Agreement, or (iii) any failure of a Receivable to be originated in
compliance with all applicable requirements of law. These indemnity obligations
shall be in addition to any obligation that the Seller may otherwise have.
ARTICLE VI
MISCELLANEOUS PROVISIONS
SECTION 6.01. Obligations of Seller. The obligations of the Seller
under this Agreement shall not be affected by reason of any invalidity,
illegality or irregularity of any Receivable.
SECTION 6.02. Repurchase Events. The Seller hereby covenants and agrees
with the Depositor for the benefit of the Depositor, the Indenture Trustee, the
Issuer, the Owner Trustee, the Certificateholders and the Noteholders that the
occurrence of a breach of any of the Seller's representations and warranties
contained in Section 3.02(b) that materially and adversely affects the interests
of the Issuer, the Indenture Trustee, the Owner Trustee, the Certificateholders
23
or the Noteholders in any Receivable, without regard to any limitation set forth
in such representation or warranty concerning the knowledge of the Seller as to
the facts stated therein, shall constitute an event obligating the Seller to
repurchase the Receivables to which such failure or breach is applicable (each,
a "Repurchase Event"), at the Purchase Amount, from the Depositor or from the
Issuer, as applicable, unless any such failure or breach shall have been cured
by the last day of the first Collection Period following the discovery or notice
thereof by or to the Seller or the Servicer.
SECTION 6.03. Depositor Assignment of Repurchased Receivables. With
respect to all Receivables repurchased by the Seller pursuant to this Agreement,
the Depositor shall assign, without recourse, representation or warranty, to the
repurchasing Seller all of the Depositor's right, title and interest in and to
such Receivables and all security and documents relating thereto.
SECTION 6.04. Transfer to the Issuer. The Seller acknowledges and
agrees that (1) the Depositor will, pursuant to the Sale and Servicing
Agreement, transfer and assign the Receivables and assign its rights under this
Agreement with respect thereto to the Issuer and, pursuant to the Indenture, the
Issuer will pledge the Receivables to the Indenture Trustee, and (2) the
representations and warranties contained in this Agreement and the rights of the
Depositor under this Agreement, including under Section 6.02, are intended to
benefit the Issuer and the Noteholders. The Seller hereby consents to such
transfers and assignments and agrees that enforcement of a right or remedy
hereunder by the Indenture Trustee, the Owner Trustee or the Issuer shall have
the same force and effect as if the right or remedy had been enforced or
executed by the Depositor.
SECTION 6.05. Amendment. This Agreement may be amended from time to
time, with prior written notice to the Rating Agencies, but without the consent
of the Noteholders or the Certificateholders, by a written amendment duly
executed and delivered by the Seller and the Depositor, for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions of this Agreement or of modifying in any manner the rights of
Noteholders or Certificateholders; provided that such amendment shall not, as
evidenced by an Opinion of Counsel, materially and adversely affect the interest
of any Noteholder or Certificateholder; provided further, that such action shall
not be deemed to adversely affect in any material respect the interests of any
Noteholder or Certificateholder and no Opinion of Counsel to that effect shall
be required if the person requesting the amendment obtains a letter from the
Rating Agencies stating that the amendment would not result in the downgrading
or withdrawal of the ratings of then assigned to the Notes. This Agreement may
also be amended by the Seller and the Depositor, with prior written notice to
the Rating Agencies and the prior written consent of Holders of Notes evidencing
at least a majority of the Outstanding Amount of the Controlling Class of Notes
and the Holders (as defined in the Trust Agreement) of outstanding Certificates
evidencing not less than a majority of the outstanding Certificate Percentage
Interests, for the purpose of adding any provisions to or changing in any manner
or eliminating any of the provisions of this Agreement or of modifying in any
manner the rights of the Noteholders or the Certificateholders; provided,
24
however, that no such amendment may (i) increase or reduce in any manner the
amount of, or accelerate or delay the timing of, collections of payments on
Receivables or distributions that are required to be made for the benefit of
Noteholders or Certificateholders or (ii) reduce the aforesaid percentage of the
Notes or the Certificates that is required to consent to any such amendment,
without the consent of the Holders of all the outstanding Notes and
Certificates.
SECTION 6.06. Waivers. No failure or delay on the part of the
Depositor, the Issuer or the Indenture Trustee in exercising any power, right or
remedy under this Agreement or the ▇▇▇▇ of Sale shall operate as a waiver
thereof, nor shall any single or partial exercise of any such power, right or
remedy preclude any other or further exercise thereof or the exercise of any
other power, right or remedy.
SECTION 6.07. Notices. All demands, notices and communications under
this Agreement shall be in writing, personally delivered, faxed and followed by
first class mail, or mailed by certified mail, return receipt requested, and
shall be deemed to have been duly given upon receipt (a) in the case of the
Depositor, to ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇,
Attention: Vice President of Finance and Risk; (b) in the case of the Servicer,
Administrator and Custodian, to ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Vice President of Finance and Risk, (c) in the case of
the Seller, ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇,
Attention: Vice President of Finance and Risk; (d) in the case of the Issuer or
the Owner Trustee, at the Corporate Trust Administration Department (as defined
in the Trust Agreement); (e) in the case of ▇▇▇▇▇'▇, to ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: ABS Monitoring Department, and (g) in the case
of Standard & Poor's, to ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ (▇▇▇▇ ▇▇▇▇▇), ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
Attention: Asset Backed Surveillance Department; or, as to each of the
foregoing, at such other address as shall be designated by written notice to the
other parties.
SECTION 6.08. Costs and Expenses. The Seller shall pay all expenses
incident to the performance of their obligations under this Agreement and the
Seller agrees to pay all reasonable out-of-pocket costs and expenses of the
Depositor, in connection with the perfection as against third parties of the
Depositor's, the Issuer's and the Indenture Trustee's right, title and interest
in and to the Receivables and the enforcement of any obligation of the Seller
hereunder.
SECTION 6.09. Representations of the Seller and the Depositor. The
respective agreements, representations, warranties and other statements by the
Seller and the Depositor set forth in or made pursuant to this Agreement shall
remain in full force and effect and will survive the closing under Section 2.02
and the transfers and assignments referred to in Section 6.04.
SECTION 6.10. Confidential Information. The Depositor agrees that it
will neither use nor disclose to any person the names and addresses of the
Obligors, except in connection with the enforcement of the Depositor's rights
hereunder, under the Receivables, under the Sale and Servicing Agreement or any
25
other Basic Document, or as required by any of the foregoing or by law.
SECTION 6.11. Headings and Cross-References. The various headings in
this Agreement are included for convenience only and shall not affect the
meaning or interpretation of any provision of this Agreement. References in this
Agreement to section names or numbers are to such Sections of this Agreement.
SECTION 6.12. GOVERNING LAW. THIS AGREEMENT AND THE ASSIGNMENT SHALL BE
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER OR THEREUNDER SHALL BE
DETERMINED IN ACCORDANCE WITH SUCH LAWS.
SECTION 6.13. Counterparts. This Agreement may be executed in
counter-parts, each of which shall be an original, but all of which together
shall constitute one and the same instrument.
SECTION 6.14. Third Party Beneficiary. The Indenture Trustee is an
express third party beneficiary of this Agreement and shall be entitled to
enforce the provisions of this Agreement as if it were a party hereto.
SECTION 6.15. No Proceedings. So long as this Agreement is in effect,
and for one year plus one day following its termination, each of the Seller and
the Depositor agree that it will not file any involuntary petition or otherwise
institute any bankruptcy, reorganization arrangement, insolvency or liquidation
proceeding or other proceedings under any federal or state bankruptcy law or
similar law against the Trust.
26
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective duly authorized officers as of the date and year
first above written.
BMW FINANCIAL SERVICES NA, LLC
By:_________________________________
Name:
Title:
By:_________________________________
Name:
Title:
BMW FS SECURITIES LLC
By:_________________________________
Name:
Title:
By:_________________________________
Name:
Title:
27
EXHIBIT A
MATTERS ADDRESSED IN OPINION OF SELLER'S COUNSEL
28
EXHIBIT B
SUBSEQUENT PURCHASE AGREEMENT
SUBSEQUENT PURCHASE AGREEMENT (the "Agreement") dated as of _________,
between BMW FS Securities LLC, a Delaware limited liability company (the
"Depositor") and BMW Financial Services NA, LLC ("BMW FS").
Reference is hereby made to the Receivables Purchase Agreement (the
"Purchase Agreement") dated as of April [ ], 2001, between BMW FS and the
Depositor.
WHEREAS, BMW FS wishes to sell the Contracts listed on Schedule A
hereto having, as of ________ (the "Subsequent Cutoff Date"), an aggregate
outstanding principal balance of $___________ (the "Subsequent Receivables") to
the Depositor, and the Depositor wishes to purchase such Subsequent Receivables
for the purchase price of $____________;
NOW, THEREFORE, BMW FS and THE DEPOSITOR hereby agree as follows:
Section 1.01. Definitions. Capitalized terms used herein and not
otherwise defined herein shall the meanings ascribed to them in the Purchase
Agreement.
Section 1.02. Subsequent Receivables. Schedule A attached hereto
constitutes the Subsequent Receivables to be sold to the Depositor.
Section 1.03. Transfer of Subsequent Contracts to the Depositor.
Pursuant to and upon the representations, warranties and agreements on the part
of BMW FS in the Purchase Agreement and herein and in consideration of payment
of the purchase price above stated, BMW FS does hereby sell, assign, transfer
and otherwise convey unto the Depositor, without recourse (except as expressly
provided in the Purchase Agreement), all of its right, title and interest in and
to (1) the Subsequent Receivables and all monies received thereon on or after
the Subsequent Cutoff Date; (2) the security interests in the Financed Vehicles
and any accessions thereto granted by Obligors pursuant to the Subsequent
Receivables and any of its other interest in such Financed Vehicles; (3) any
Liquidation Proceeds and any other proceeds with respect to the Subsequent
Receivables from claims on any physical damage, credit life or disability
insurance policies covering Financed Vehicles or Obligors, including any
vendor's single interest or other collateral protection insurance policy; (4)
any property that shall have secured a Subsequent Receivable and shall have been
acquired by or on behalf of BMW FS; (5) all documents and other items contained
in the Receivables Files; (6) all proceeds from any Subsequent Receivable
repurchased by a Dealer pursuant to a Dealer Agreement; and (7) the proceeds of
any and all of the foregoing. The foregoing sale does not constitute and is not
intended to result in any assumption by the Depositor of any obligation of BMW
FS to the Obligors, insurers or any other person in connection with the
Subsequent Receivables, Receivable Files, any insurance policies or any
agreement or instrument relating to any of them. It is the intention of BMW FS
and the Depositor that the transfer contemplated by this Agreement shall
29
constitute a sale of the Subsequent Receivables from BMW FS to the Depositor,
conveying good title thereto free and clear of any Liens, and that the
Subsequent Receivables shall not be a part of BMW FS' estate in the event of the
filing of a bankruptcy petition by or against BMW FS under any bankruptcy or
similar law.
Section 1.04. Representations of BMW FS. BMW FS hereby represents and
warrants to the Depositor and the Indenture Trustee that its representations and
warranties set forth in Section 3.02 of the Purchase Agreement with respect to
itself and the Subsequent Receivables, are true and correct as of the date of
this Agreement and that all conditions precedent set forth in Section 2.03(b) of
the Purchase Agreement have been satisfied.
Section 1.05. Severability. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
Section 1.06. Counterparts. This Agreement may be executed in
counterparts, each of which shall be an original, but all of which together
shall constitute one and the same instrument.
Section 1.07. Headings. The headings of the various Sections herein are
for convenience of reference only and shall not define or limit any of the terms
or provisions hereof.
Section 1.08. GOVERNING LAW. THIS AGREEMENT SHALL BE CON-STRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AND THE OBLIGATIONS, RIGHTS
AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH
SUCH LAWS.
Section 1.09. Third Party Beneficiaries. The Indenture Trustee is an
express third party beneficiary of this Agreement and shall be entitled to
enforce the provisions of this Agreement as if each were a party hereto.
Section 1.10. Ratification of Agreement. As supplemented by this
Agreement, the Purchase Agreement is in all respects ratified and confirmed and
the Purchase Agreement as so supplemented by this Agreement shall be read, taken
and construed as one and the same instrument.
30
IN WITNESS WHEREOF, the undersigned have caused this Subsequent
Purchase Agreement to be duly executed as of the date first above written.
BMW FS SECURITIES LLC
By:_________________________________
Name:
Title:
By:________________________________
Name:
Title:
BMW FINANCIAL SERVICES NA, LLC
By:________________________________
Name:
Title:
By:________________________________
Name:
Title:
31
SCHEDULE A TO
SUBSEQUENT PURCHASE AGREEMENT
Schedule of Subsequent Receivables
----------------------------------
32
EXHIBIT C
PROSPECTUS SUPPLEMENT
33
SCHEDULE I
Schedule of Receivables
-----------------------
[To be delivered to the Indenture Trustee at Closing]
34
SCHEDULE II
Location of Receivable Files
----------------------------
BMW Financial Services NA, LLC
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
35
SCHEDULE III
Receivable File Schedule
------------------------
1. All documents obtained or created in connection with the credit
investigation.
2. All Obligor records including without limitation (i) file copy of
Receivable; (ii) copy Dealer assignment (if applicable) and any
intervening assignments; (iii) warranty copy (if applicable); (iv)
credit life insurance policy (if applicable); (v) proof of auto
insurance or obligor agreement to provide such insurance; (vi) title
application; (vii) contract verification sheet; and (viii) original
application or electronic copy thereof.
3. Original document envelope together with all documents maintained
therein.
4. Any and all other documents that the Servicer shall keep on file in
accordance with its customary procedures relating to a Receivable, an
Obligor or a Financed Vehicle.
36