TRANSFER AND SALE AGREEMENT
by and between
PREMIER AUTO FINANCE, L.P.,
as Seller
and
DEALER AUTO RECEIVABLES CORP.,
as Purchaser
Dated as of August 24, 2000
TABLE OF CONTENTS
PAGE
ARTICLE I DEFINITIONS.............................................................................1
SECTION 1.01. GENERAL............................................................................1
ARTICLE II TRANSFER OF CONTRACTS; ASSIGNMENT OF AGREEMENT...........................................1
SECTION 2.01. CLOSING............................................................................1
SECTION 2.02. CONDITIONS TO THE CLOSING..........................................................2
SECTION 2.03. ASSIGNMENT OF AGREEMENT............................................................3
ARTICLE III REPRESENTATIONS AND WARRANTIES..........................................................3
SECTION 3.01. REPRESENTATIONS AND WARRANTIES REGARDING THE SELLER................................4
SECTION 3.02. REPRESENTATIONS AND WARRANTIES REGARDING EACH CONTRACT.............................5
SECTION 3.03. REPRESENTATIONS AND WARRANTIES REGARDING THE CONTRACTS IN THE AGGREGATE............8
SECTION 3.04. REPRESENTATIONS AND WARRANTIES REGARDING THE CONTRACT FILES........................9
ARTICLE IV PERFECTION OF TRANSFER AND PROTECTION OF
SECURITY INTERESTS.......................................................................9
SECTION 4.01. CUSTODY OF CONTRACTS...............................................................9
SECTION 4.02. FILING.............................................................................9
SECTION 4.03. NAME CHANGE OR RELOCATION.........................................................10
SECTION 4.04. CHIEF EXECUTIVE OFFICE............................................................10
SECTION 4.05. COSTS AND EXPENSES................................................................10
SECTION 4.06. SALE TREATMENT....................................................................10
SECTION 4.07. SEPARATENESS FROM DEPOSITOR.......................................................10
ARTICLE V REMEDIES UPON MISREPRESENTATION.........................................................11
SECTION 5.01. REPURCHASES OF CONTRACTS FOR BREACH OF REPRESENTATIONS AND WARRANTIES.............11
SECTION 5.02. SELLER'S REPURCHASE OPTION........................................................11
ARTICLE VI INDEMNITIES.............................................................................11
SECTION 6.01. SELLER INDEMNIFICATION............................................................11
SECTION 6.02. LIABILITIES TO OBLIGORS...........................................................12
SECTION 6.03. TAX INDEMNIFICATION...............................................................12
SECTION 6.04. OPERATION OF INDEMNITIES..........................................................12
ARTICLE VII MISCELLANEOUS..........................................................................12
SECTION 7.01. PROHIBITED TRANSACTIONS WITH RESPECT TO THE ISSUER................................12
SECTION 7.02. MERGER OR CONSOLIDATION...........................................................12
SECTION 7.03. TERMINATION.......................................................................13
SECTION 7.04. ASSIGNMENT OR DELEGATION BY THE SELLER............................................13
SECTION 7.05. AMENDMENT.........................................................................13
SECTION 7.06. NOTICES...........................................................................14
SECTION 7.07. MERGER AND INTEGRATION............................................................15
SECTION 7.08. HEADINGS..........................................................................15
SECTION 7.09. GOVERNING LAW.....................................................................16
SECTION 7.10. NO BANKRUPTCY PETITION............................................................16
EXHIBITS
Exhibit A Form of Assignment
Exhibit B Form of Officer's Certificate
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THIS AGREEMENT, dated as of August 24, 2000, is made by and between
Premier Auto Finance, L.P., an Illinois limited partnership, as seller hereunder
(together with its successors and assigns the "SELLER"), and Dealer Auto
Receivables Corp., a Delaware corporation and wholly-owned subsidiary of the
Seller (together with its successors and assigns, the "DEPOSITOR"), as purchaser
hereunder.
WHEREAS, in the regular course of its business, the Seller purchases
motor vehicle installment sale contracts from retailers of new and used
automobiles and light-duty trucks, each of which contracts provides for
installment payment obligations by or on behalf of the retailer's
customer/purchaser and grants a security interest in a new or used automobile or
light-duty truck in order to secure such obligations;
WHEREAS, the Seller and the Depositor wish to set forth the terms and
conditions pursuant to which the Depositor will acquire the "CONTRACT ASSETS,"
as hereinafter defined; and
WHEREAS, the Depositor intends concurrently with its purchases of
Contract Assets hereunder to convey all right, title and interest in such
Contract Assets to Dealer Auto Receivables Trust 2000-1 (the "TRUST") pursuant
to the Sale and Servicing Agreement dated as of August 24, 2000 by and among the
Depositor, Premier Auto Finance, Inc., as Servicer, the Trust, as issuer (the
"ISSUER") and The Bank of New York, as indenture trustee. (as amended,
supplemented or otherwise modified from time to time, the "SALE AND SERVICING
AGREEMENT"), executed concurrently herewith;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements hereinafter set forth, the Seller and the Depositor agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. GENERAL. Unless otherwise defined in this Agreement,
capitalized terms used herein (including in the preamble above) shall have the
meanings assigned to them in the Sale and Servicing Agreement.
ARTICLE II
TRANSFER OF CONTRACTS; ASSIGNMENT OF AGREEMENT
SECTION 2.01. CLOSING. Subject to and upon the terms and conditions set
forth in this Agreement, the Seller hereby sells, transfers, assigns, sets over
and otherwise conveys to the Depositor, in consideration of the Depositor's
payment of $752,896,591.56 in cash as the Purchase Price therefor, (i) all the
right, title and interest of the Seller in and to the Contracts listed on the
List of Contracts in effect on the Closing Date (including, without limitation,
all security interests and all rights to receive scheduled payments and
prepayments which are collected pursuant thereto on or after the Cutoff Date,
including any liquidation proceeds therefrom, but excluding any rights to
receive scheduled payments due on or after, but received prior to, the Cutoff
Date), (ii) all security interests in each Financed Vehicle, (iii) all rights of
the Seller to proceeds from any claims on theft, physical damage, credit life or
disability insurance
or other individual insurance policy relating to any such Contract, an
Obligor or a Financed Vehicle securing such Contract, (iv) all documents
contained in the related Contract Files, (v) all rights (but not the
obligations) of the Seller against any originating dealer or other third
party (i.e. the originators of the Contracts) under any agreements between
the Seller and such originating dealers or third party, (vi) all rights of
the Seller in the Lockbox, the Lockbox Account, related Lockbox Agreement,
the Concentration Account and related Concentration Account Agreement to the
extent they relate to such Contracts, (vii) any rebates of premiums and other
amounts relating to insurance policies, extended service contracts, other
repair agreements or any other items financed under such Contract and (viii)
all proceeds and products of the foregoing (items (i) - (viii) being
collectively referred to herein as the "Contract Assets"). The difference
between (i) the Principal Balance of the Contracts and accrued interest
thereon and the Purchase Price shall be deemed a capital contribution from
PAFLP to DARC. Although the Seller and the Depositor agree that any such
transfer is intended to be a sale of ownership in the Contract Assets, rather
than the mere granting of a security interest to secure a borrowing, in the
event such transfer is deemed to be of a mere security interest to secure
indebtedness, the Seller shall be deemed to have granted the Depositor a
first priority security interest in such Contract Assets and this Agreement
shall constitute a security agreement under applicable law. If such transfer
is deemed to be the mere granting of a security interest to secure a borrowing,
the Depositor may, to secure the Depositor's own borrowing under the Sale and
Servicing Agreement (to the extent that the transfer of the Contract Assets
thereunder is deemed to be a mere granting of a security interest to secure a
borrowing) repledge and reassign (i) all or a portion of the Contract Assets
pledged to the Depositor and not released from the security interest of this
Agreement at the time of such pledge and assignment, and (ii) all proceeds
thereof. Such repledge and reassignment may be made by the Depositor with or
without a repledge and reassignment by the Depositor of its rights under this
Agreement, and without further notice to or acknowledgment from the Seller.
The Seller waives, to the extent permitted by 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. CONDITIONS TO THE CLOSING. On or before the Closing Date,
the Seller shall deliver or cause to be delivered to the Depositor each of the
documents, certificates and other items as follows:
(a) The List of Contracts, certified by the President or any
Vice President or other authorized officer of the general partner of
the Seller together with an Assignment substantially in the form
attached as EXHIBIT A hereto.
(b) A certificate of an officer of the general partner of the
Seller substantially in the form of EXHIBIT B hereto.
(c) An opinion of counsel for the Seller substantially in the
form of EXHIBIT D to the Sale and Servicing Agreement.
(d) A letter or letters from Ernst & Young LLP, or another
nationally recognized accounting firm, addressed to the Depositor and
the Issuer and the Trustees
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and stating that such firm has reviewed a sample of the Contracts and
performed specific procedures for such sample with respect to certain
contract terms and identifying those Contracts which do not so conform.
(e) Copies of resolutions of the general partner of the Seller
approving the execution, delivery and performance of this Agreement and
the transactions contemplated hereunder, certified in each case by the
Secretary or an Assistant Secretary of general partner of the Seller.
(f) Officially certified recent evidence of formation and good
standing of the Seller under the laws of Illinois.
(g) Evidence of proper filing with the appropriate offices in
Illinois of UCC financing statements executed by the Seller as
debtor/seller, naming the Depositor as secured party/purchaser and the
Issuer as assignee, and listing the Contract Assets as collateral as
well as evidence of proper filing with the appropriate offices in
Delaware of UCC Financing statements executed by the Issuer as debtor,
naming the Indenture Trustee, as assignee, and listing the Contract
Assets as collateral.
(h) The documents, certificates and other items described in
SECTION 2.02 of the Sale and Servicing Agreement, to the extent not
already described above.
SECTION 2.03. ASSIGNMENT OF AGREEMENT. The Depositor has the right to
assign its interest under this Agreement to the Issuer without further notice
to, or consent of, the Seller, and the Issuer shall succeed to the rights of the
Depositor hereunder. The Seller acknowledges that, pursuant to the Sale and
Servicing Agreement, the Depositor will assign all of its right, title and
interest in and to the Contract Assets and all of its rights hereunder to the
Issuer and that the Issuer will pledge the Contract Assets and all of the
Depositor's rights hereunder to the Indenture Trustee for the benefit of the
Noteholders and Certificateholders. The Seller agrees that, upon such assignment
to the Issuer and the Indenture Trustee, such rights will run to and be for the
benefit of the Issuer and the Indenture Trustee and the Issuer and the Indenture
Trustee may enforce directly without joinder of the Depositor, the obligations
of the Seller set forth herein.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
The Seller makes the following representations and warranties, on which
the Depositor will rely in purchasing the Contract Assets on the Closing Date
and concurrently reconveying the same to the Issuer, and on which the Issuer,
the Noteholders and Certificateholders will rely under the Sale and Servicing
Agreement. Such representations speak as of the execution and delivery of this
Agreement and as of the Closing Date, but shall survive the sale, transfer and
assignment of the Contracts to the Issuer and the pledge of the Contracts to the
Indenture Trustee. The repurchase obligation of the Seller set forth in SECTION
5.01 below and in SECTION 7.07 of the Sale and Servicing Agreement constitutes
the sole remedy available for a breach of a representation or warranty of the
Seller set forth in SECTION 3.02, 3.03 or 3.04 of this Agreement.
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SECTION 3.01. REPRESENTATIONS AND WARRANTIES REGARDING THE SELLER. The
Seller represents and warrants, as of the execution and delivery of this
Agreement and as of the Closing Date that:
(a) ORGANIZATION AND GOOD STANDING. The Seller is a limited
partnership duly organized, validly existing and in good standing under
the laws of the jurisdiction of its organization and has the requisite
power to own its assets and to transact the business in which it is
currently engaged. The Seller is duly qualified to do business and is
in good standing in each jurisdiction in which the character of the
business transacted by it or properties owned or leased by it requires
such qualification and in which the failure so to qualify would have a
material adverse effect on the business, properties, assets, or
condition (financial or otherwise) of the Seller or the Depositor.
(b) AUTHORIZATION; BINDING OBLIGATION. The Seller has the
power and authority to make, execute, deliver and perform this
Agreement and the other Transaction Documents to which the Seller is a
party and all of the transactions contemplated under this Agreement and
the other Transaction 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 Transaction Documents to
which the Seller is a party. This Agreement and the other Transaction
Documents to which the Seller is a party constitute the legal, valid
and binding obligation of the Seller enforceable in accordance with
their 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.
(c) NO CONSENT REQUIRED. The Seller is not required to obtain
the consent of any other party or any consent, license, approval or
authorization from, or registration or declaration with, any
governmental authority, bureau or agency in connection with the
execution, delivery, performance, validity or enforceability of this
Agreement and the other Transaction Documents to which the Seller is a
party.
(d) NO VIOLATIONS. The Seller's execution, delivery and
performance of this Agreement and the other Transaction Documents to
which the Seller is a party will not violate any provision of any
existing law or regulation or any order or decree of any court or of
any Federal or state regulatory body or administrative agency having
jurisdiction over the Seller or any of its properties or the
Certificate of Limited Partnership or Partnership Agreement of the
Seller, or constitute a material breach of any mortgage, indenture,
contract or other agreement to which the Seller is a party or by which
the Seller or any of the Seller's properties may be bound or result in
the creation of or imposition of any security interest, lien, pledge,
preference, equity or encumbrance of any kind upon any of its
properties pursuant to the terms of any such mortgage, indenture,
contract or other agreement other than this Agreement.
(e) LITIGATION. No litigation or administrative proceeding of
or before any court, tribunal or governmental body is currently
pending, or to the knowledge of the Seller threatened, against the
Seller or any of its properties or with respect to this Agreement or
any other Transaction Document to which the Seller is a party which, if
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adversely determined, would in the opinion of the Seller have a
material adverse effect on the business, properties, assets or
condition (financial or other) of the Seller or the transactions
contemplated by this Agreement or any other Transaction Document to
which the Seller is a party.
(f) PLACE OF BUSINESS; NO CHANGES. The Seller's sole place of
business (within the meaning of Article 9 of the UCC) is as set forth
in SECTION 7.06 below. The Seller has not changed its name whether by
amendment of its Certificate of Limited Partnership, by reorganization
or otherwise, and has not changed the location of its place of
business, within the four months preceding the Closing Date.
(g) SOLVENCY. The Seller, on the date hereof and after giving
effect to the conveyances made by it hereunder, is Solvent.
SECTION 3.02. REPRESENTATIONS AND WARRANTIES REGARDING EACH CONTRACT.
The Seller represents and warrants as to each Contract as of the execution and
delivery of this Agreement and as of the Closing Date that:
(a) LIST OF CONTRACTS. The information set forth in the List
of Contracts is true, complete and correct in all material respects as
of the Cutoff Date.
(b) PAYMENTS. As of the Cutoff Date, the most recent scheduled
payment with respect to any Contract either had been made or was not
delinquent for more than 30 days. To the best of the Seller's
knowledge, all payments made on each Contract were made by or on behalf
of the respective Obligor.
(c) NO WAIVERS. As of the Closing Date, the terms of the
Contracts have not been waived, altered or modified in any respect,
except by instruments or documents included in the related Contract
File.
(d) BINDING OBLIGATION. Each Contract is a valid and binding
payment obligation of the Obligor thereunder and is enforceable in
accordance with its terms, except as such enforceability may be limited
by insolvency, bankruptcy, moratorium, reorganization, or other similar
laws affecting the enforcement of creditors' rights generally.
(e) NO DEFENSES. No Contract is subject to any right of
rescission, setoff, counterclaim or defense, including the defense of
usury, and the operation of any of the terms of such Contract or the
exercise of any right thereunder will not render the Contract
unenforceable in whole or in part or subject to any right of
rescission, setoff, counterclaim or defense, including the defense of
usury, and no such right of rescission, setoff, counterclaim or defense
has been asserted or threatened with respect thereto.
(f) INSURANCE. Each Contract requires the related Obligor to
maintain physical damage insurance (i) in an amount not less than the
value of the Financed Vehicle at the time of origination of the
Contract, (ii) naming the Seller as a loss payee and (iii) insuring
against loss and damage due to fire, theft, transportation, collision
and
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other risks covered by comprehensive coverage, and all premiums due
on such insurance have been paid in full from the date of the
Contract's origination.
(g) ORIGINATION. Each Contract was originated by a retailer of
new or used automobiles or other third party that finances the sale of
new or used motor vehicles in the ordinary course of its business which
dealer or third party had all necessary licenses and permits to
originate the Contracts in the state where such dealer or third party
was located, was fully and properly executed by the parties thereto,
and has been purchased by the Seller in the regular course of its
business or directly originated by the Seller in the ordinary course of
its business. To the best of the Seller's knowledge, each Contract was
sold by such dealer or other third party to the Seller without any
fraud on the part of such dealer or third party.
(h) LAWFUL ASSIGNMENT. No Contract was originated in or is
subject to the laws of any jurisdiction whose laws would make the sale,
transfer and assignment of the Contract under this Agreement or under
the Sale and Servicing Agreement or the pledge of the Contract under
the Indenture unlawful, void or voidable.
(i) COMPLIANCE WITH LAW. None of the Contracts, the
origination of the Contracts by the dealers or other third parties, the
purchase of the Contracts by the Seller, the sale of the Contracts by
the Seller to the Depositor or by the Depositor to the Issuer, or any
combination of the foregoing, violated at the time of origination or as
of the Closing Date any requirement of any federal, state or local law
and regulations thereunder, including, without limitation, usury, truth
in lending, motor vehicle installment loan and equal credit opportunity
laws, applicable to the Contracts and the sale of the Financed
Vehicles. The Seller shall, for at least the period of this Agreement,
maintain in its possession, available for the Depositor's and the
Trustees' inspection, and shall deliver to the Depositor or the Trustee
upon demand, evidence of compliance with all such requirements.
(j) CONTRACT IN FORCE. As of the Closing Date, no Contract has
been satisfied or subordinated in whole or in part or rescinded, and
the related Financed Vehicle securing any Contract has not been
released from the lien of the Contract in whole or in part.
(k) VALID SECURITY INTEREST. Each Contract creates a valid,
subsisting and enforceable first priority perfected security interest
in favor of the Seller in the Financed Vehicle covered thereby, and
such security interest has been assigned by the Seller to the
Depositor. The original certificate of title, certificate of lien or
other notification (the "LIEN CERTIFICATE") issued by the body
responsible for the registration of, and the issuance of certificates
of title relating to, motor vehicles and liens thereon (the "REGISTRAR
OF TITLES") of the applicable state to a secured party which indicates
the lien of the secured party on the Financed Vehicle is recorded on
the original certificate of title, and the original certificate of
title for each Financed Vehicle, show, 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, the Seller as original secured party under each
Contract as the holder of a first priority security
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interest in such Financed Vehicle. With respect to each Contract for
which the Lien Certificate has not yet been returned from the Registrar
of Titles, the Seller has received written evidence from the related
dealer or other third party that such Lien Certificate showing the
Seller as lienholder has been applied for.
(l) CAPACITY OF PARTIES. All parties to any Contract had
capacity to execute such Contract and all other documents related
thereto and to grant the security interest purported to be granted
thereby.
(m) GOOD TITLE. Each Contract was originated by the Seller or
purchased by the Seller for value and taken into possession prior to
the Cutoff Date in the ordinary course of its business, without
knowledge that the Contract was subject to a security interest. No
Contract has been sold, assigned or pledged to any person other than
the Depositor and the Issuer as the transferee of the Depositor, and
prior to the transfer of the Contract to the Depositor, the Seller had
good and marketable title to each Contract free and clear of any
encumbrance, equity, loan, pledge, charge, claim or security interest
and was the sole owner thereof and had full right to transfer the
Contract to the Depositor and to permit the Depositor to transfer the
same to the Issuer, and, as of the Closing Date, the Issuer will have a
first priority perfected security interest therein.
(n) NO DEFAULTS. As of the Cutoff Date, no default, breach,
violation or event permitting acceleration existed with respect to any
Contract and no event had occurred which, with notice and the
expiration of any grace or cure period, would constitute such a
default, breach, violation or event permitting acceleration under such
Contract. The Seller has not waived any such default, breach, violation
or event permitting acceleration. As of the Cutoff Date, no Financed
Vehicle had been repossessed.
(o) NO LIENS. As of the Closing Date there are no liens or
claims which have been filed for work, labor, materials or unpaid taxes
affecting the Financed Vehicle securing any Contract which are or may
be liens prior to, or equal with, the lien of such Contract.
(p) ENFORCEABILITY. Each Contract contains customary and
enforceable provisions such as to render the rights and remedies of the
holder thereof adequate for the realization against the Financed
Vehicle of the benefits of the security.
(q) ONE ORIGINAL. Each Contract is evidenced by only one
original executed Contract, which original is being held by the
Servicer as custodian.
(r) NO GOVERNMENT CONTRACTS. No Obligor is the United States
government or any State or an agency, authority, instrumentality or
other political subdivision of the United States government or any
state government or municipality.
(s) OBLIGOR BANKRUPTCY. At the Cutoff Date, no Obligor was
subject to a bankruptcy proceeding or other insolvency proceeding.
(t) CHATTEL PAPER. The Contracts constitute chattel paper
within the meaning of the UCC as in effect in the State of Illinois.
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(u) NO IMPAIRMENT. Neither the Seller nor the Depositor has
done anything to convey any right to any Person that would result in
such Person having a right to payments due under the Contract or
otherwise to impair the rights of the Issuer in any Contract or the
proceeds thereof.
(v) CONTRACT NOT ASSUMABLE. No Contract is assumable by
another Person in a manner which would release the Obligor thereof from
such Obligor's obligations to the Depositor with respect to such
Contract.
(w) OBLIGOR LOCATION. Each Contract is a U.S.
dollar-denominated obligation and each Obligor's billing address is
located in one of the states of the United States, the District of
Columbia or Puerto Rico.
(x) LOCKBOX BANK. The Lockbox Bank is the only institution
holding any Lockbox Account for receipt of payments from Obligors, and
all Obligors, and only such Obligors, have been instructed to make
payments to the Lockbox Account, and no person claiming through or
under Seller has any claim or interest in the Lockbox or the Lockbox
Account other than the Lockbox Bank; PROVIDED, HOWEVER, The Chase
Manhattan Bank, N.A. shall have an interest in certain other
collections therein not related to the Contracts.
(y) CONCENTRATION ACCOUNT. No person claiming through or under
Seller has any claim or interest in the Concentration Account;
PROVIDED, HOWEVER, The Chase Manhattan Bank, N.A. shall have an
interest in certain other collections therein not related to the
Contracts.
SECTION 3.03. REPRESENTATIONS AND WARRANTIES REGARDING THE CONTRACTS IN
THE AGGREGATE. The Seller represents and warrants, as of the execution and
delivery of this Agreement and as of the Closing Date that:
(a) AMOUNTS. The sum of the aggregate Principal Balances
payable by Obligors under the Contracts as of the Cutoff Date equals
the sum of the principal balance of the Class A-1 Notes, the Class A-2
Notes, the Class A-3 Notes, the Class A-4 Notes, the Class B Notes and
the Certificates on the Closing Date.
(b) CHARACTERISTICS. The Contracts have the following
characteristics: (i) all the Contracts are secured by Financed
Vehicles; (ii) no Contract has a remaining maturity of less than 7
months or more than 72 months; (iii) no Contract had an original term
to maturity of less than 12 months or more than 72 months; (iv) the
final scheduled payment on the Contract with the latest maturity is due
no later than June 30, 2006; (v) each Contract is a fully-amortizing
fixed rate Simple Interest Contract; and (vi) each Contract had a
remaining Principal Balance of no less than $598.11 and no more than
$60,181.84. Approximately 42.00% of the Principal Balance of the
Contracts as of the Cutoff Date is attributable to loans for purchases
of new Financed Vehicles and approximately 58.00% is attributable to
loans for purchases of used Financed Vehicles. No Contract has a
Contract Rate of less than 1.900%. No Contract was originated after the
Cutoff Date. The first scheduled Distribution Date of the Contracts is
due no later than September 15, 2000.
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(c) MARKING RECORDS. As of the Closing Date, the Seller has
caused the Computer Disk relating to the Contracts sold hereunder and
concurrently reconveyed by the Depositor to the Issuer and pledged by
the Issuer to the Indenture Trustee to be clearly and unambiguously
marked to indicate that such Contracts constitute part of the Trust
Corpus, are owned by the Issuer and constitute security for the Notes.
(d) NO ADVERSE SELECTION. No selection procedures adverse to
Noteholders and Certificateholders have been employed in selecting the
Contracts.
(e) TRUE SALE. The transaction contemplated by this Agreement
constitutes a valid sale, transfer and assignment from the Seller to
the Depositor and from the Depositor to the Issuer of all of the
Seller's right, title and interest in the Contract Assets as of the
Closing Date or creates a first priority security interest for the
benefit of the Issuer in the Contract Assets as of the Closing Date.
(f) ALL FILINGS MADE. All filings (including, without
limitation, UCC filings) required to be made by any Person and actions
required to be taken or performed by any Person in any jurisdiction to
give the Trustees a first priority perfected lien on, or ownership
interest in, the Contracts and the proceeds thereof have been made,
taken or performed.
SECTION 3.04. REPRESENTATIONS AND WARRANTIES REGARDING THE CONTRACT
FILES. The Seller represents and warrants as of the execution and delivery of
this Agreement and as of the Closing Date that:
(a) POSSESSION. Immediately prior to the Closing Date, the
Servicer will have possession of each original Contract and the related
complete Contract File, and there are and there will be no custodial
agreements relating to the same in effect. Each of such documents which
is required to be signed by the Obligor has been signed by the Obligor
in the appropriate spaces. All blanks on any form have been properly
filled in and each form has otherwise been correctly prepared. The
complete Contract File for each Contract currently is in the possession
of the Servicer.
(b) BULK TRANSFER LAWS. The transfer, assignment and
conveyance of the Contracts and the Contract Files by the Seller
pursuant to this Agreement and by the Depositor pursuant to the Sale
and Servicing Agreement is not subject to the bulk transfer or any
similar statutory provisions in effect in any applicable jurisdiction.
ARTICLE IV
PERFECTION OF TRANSFER AND PROTECTION OF SECURITY INTERESTS
SECTION 4.01. CUSTODY OF CONTRACTS. The contents of each Contract File
shall be held in the custody of the Servicer for the benefit of the Issuer as
the owner thereof in accordance with the Sale and Servicing Agreement.
SECTION 4.02. FILING. On or prior to the Closing Date, the Seller shall
cause the UCC financing statement(s) referred to in SECTION 2.02(g) hereof and
in SECTION 2.02(g) of the Sale and
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Servicing Agreement to be filed and from time to time the Seller shall take
and cause to be taken such actions and execute such documents as are
necessary or desirable or as the Depositor or the Issuer may reasonably
request to perfect and protect the Depositor's and the Issuer's ownership
interest in the Contract Assets against all other persons, including, without
limitation, the filing of financing statements, amendments thereto and
continuation statements, the execution of transfer instruments and the making
of notations on or taking possession of all records or documents of title.
SECTION 4.03. NAME CHANGE OR RELOCATION. (a) During the term of this
Agreement, the Seller shall not change its name, identity or structure or
relocate its chief executive office without first giving at least thirty (30)
days' prior written notice to the Depositor and to the Trustees.
(b) If any change in the Seller's name, identity or structure or other
action would make any financing or continuation statement or notice of ownership
interest or lien filed under this Agreement seriously misleading within the
meaning of applicable provisions of the UCC or any title statute, the Seller, no
later than five (5) days after the effective date of such change, shall file
such amendments as may be required to preserve and protect the Depositor's and
the Issuer's interests in the Contract Assets and proceeds thereof. In addition,
the Seller shall not change its place of business or its chief executive office
(within the meaning of Article 9 of the UCC) from the location specified in
SECTION 7.06 below unless it has first taken such action as is advisable or
necessary to preserve and protect the Depositor's and Issuer's interest in the
Contract Assets. Promptly after taking any of the foregoing actions, the Seller
shall deliver to the Depositor and the Trustees an opinion of counsel stating
that, in the opinion of such counsel, all financing statements or amendments
necessary to preserve and protect the interests of the Depositor in the Contract
Assets have been filed, and reciting the details of such filing.
SECTION 4.04. CHIEF EXECUTIVE OFFICE. During the term of this
Agreement, the Seller will maintain its chief executive office in one of the
States of the United States, except Louisiana, Tennessee, Colorado, Kansas, New
Mexico, Oklahoma, Utah or Wyoming.
SECTION 4.05. COSTS AND EXPENSES. The Seller agrees to pay all
reasonable costs and disbursements in connection with the perfection and the
maintenance of perfection, as against all third parties, of (i) the Depositor's
and the Issuer's right, title and interest in and to the Contract Assets
(including, without limitation, the security interest in the Financed Vehicles
related thereto) and (ii) the security interests provided for in the Indenture.
SECTION 4.06. SALE TREATMENT. Each of the Seller and the Depositor
shall treat the transfer of Contract Assets made hereunder for all purposes
(including tax and financial accounting purposes) as a sale and purchase on all
of its relevant books, records, financial statements and other applicable
documents.
SECTION 4.07. SEPARATENESS FROM DEPOSITOR. The Seller agrees to take or
refrain from taking or engaging in with respect to the Depositor each of the
actions or activities specified in the "nonsubstantive consolidation" opinion of
Winston & ▇▇▇▇▇▇ (or in any related certificate of the Seller) delivered on the
Closing Date, upon which the conclusions expressed therein are based.
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ARTICLE V
REMEDIES UPON MISREPRESENTATION
SECTION 5.01. REPURCHASES OF CONTRACTS FOR BREACH OF REPRESENTATIONS
AND WARRANTIES. The Seller hereby agrees, for the benefit of the Issuer and the
Depositor, that it shall repurchase a Contract (together with all related
Contract Assets), at its Repurchase Price, as of the end of the second Due
Period after the Seller becomes aware, or should have become aware, or receives
written notice from the Depositor, either of the Trustees or the Servicer of any
breach of a representation or warranty of the Seller set forth in ARTICLE III of
this Agreement that materially adversely affects the Depositor's or the Issuer's
interest in such Contract or collectibility of the Contract (without regard to
the benefits of the Reserve Fund) and which breach has not been cured by
depositing such Repurchase Price in the Collection Account on the related
Distribution Date unless the breach shall have been cured by the last day of the
Due Period following the Due Period in which the Depositor becomes aware, or
should have become aware, or receives written notice from a Trustee or the
Servicer of such breach.
SECTION 5.02. SELLER'S REPURCHASE OPTION. On written notice to the
Owner Trustee and the Indenture Trustee at least twenty (20) days prior to a
Distribution Date, provided the sum of (i) the aggregate unpaid principal
balances of the Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes, the
Class A-4 Notes and the Class B Notes and (ii) the Certificate Balance on such
Distribution Date is less than 10% of the Aggregate Principal Balance as of the
Cutoff Date, the Seller may (but is not required to) repurchase from the Issuer
on that Distribution Date all outstanding Contracts (and related Contract
Assets) at a price equal to the sum of (i) the aggregate unpaid principal
balances of the Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes, the
Class A-4 Notes and the Class B Notes and (ii) the Certificate Balance as of
that Distribution Date plus the aggregate of the Note Interest Distributable
Amount and the Certificate Interest Distributable Amount for the current
Distribution Date as well as any unreimbursed Servicer Advances and the accrued
and unpaid Monthly Servicing Fee and Indenture Trustee Fees to the date of such
repurchase. Such price will be deposited in the Collection Account not later
than one (1) Business Day before such Distribution Date, against the Trustees'
release of the Contracts and Contract Files as described in SECTION 7.08 of the
Sale and Servicing Agreement.
ARTICLE VI
INDEMNITIES
SECTION 6.01. SELLER INDEMNIFICATION. The Seller will defend and
indemnify the Depositor, the Issuer, the Trustees, any agents of the Trustees
and the Certificateholders and Noteholders against any and all costs, expenses,
losses, damages, claims and liabilities, joint or several, including reasonable
fees and expenses of counsel and expenses of litigation arising out of or
resulting from (i) this Agreement or the use, ownership or operation of any
Financed Vehicle by the Seller or the Servicer or any Affiliate of either and
(ii) any representation or warranty or covenant made by the Seller in this
Agreement being untrue or incorrect (subject to the second sentence of the
preamble to ARTICLE III of this Agreement above). Notwithstanding
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any other provision of this Agreement, the obligation of the Seller under
this SECTION 6.01 shall survive any termination of this Agreement.
SECTION 6.02. LIABILITIES TO OBLIGORS. No obligation or liability to
any Obligor under any of the Contracts is intended to be assumed by the
Trustees, the Trust, the Noteholders or the Certificateholders under or as a
result of this Agreement and the transactions contemplated hereby.
SECTION 6.03. TAX INDEMNIFICATION. The Seller agrees to pay, and to
indemnify, defend and hold harmless the Depositor, the Trust, the Trustees, the
Noteholders or the Certificateholders from, any taxes which may at any time be
asserted with respect to, and as of the date of, the transfer of the Contracts
to the Depositor hereunder and the concurrent reconveyance to the Issuer and the
further pledge by the Issuer to the Indenture Trustee, including, without
limitation, any sales, gross receipts, general corporation, personal property,
privilege or license taxes (but not including any federal, state or other taxes
arising out of the creation of the Issuer and the issuance of the Notes and
Certificates) and costs, expenses and reasonable counsel fees in defending
against the same, whether arising by reason of the acts to be performed by the
Seller under this Agreement or the Servicer under the Sale and Servicing
Agreement or imposed against the Issuer, a Noteholder, a Certificateholder or
otherwise. Notwithstanding any other provision of this Agreement, the obligation
of the Seller under this SECTION 6.03 shall survive any termination of this
Agreement.
SECTION 6.04. OPERATION OF INDEMNITIES. Indemnification under this
ARTICLE VI shall include, without limitation, reasonable fees and expenses of
counsel and expenses of litigation. If the Seller has made any indemnity
payments to the Depositor or the Trustees pursuant to this ARTICLE VI and the
Depositor or the Trustees thereafter collects any of such amounts from others,
the Depositor or the Trustees will repay such amounts collected to the Seller,
except that any payments received by the Depositor or the Trustees from an
insurance provider as a result of the events under which the Seller's indemnity
payments arose shall be repaid prior to any repayment of the Seller's indemnity
payment.
ARTICLE VII
MISCELLANEOUS
SECTION 7.01. PROHIBITED TRANSACTIONS WITH RESPECT TO THE ISSUER. The
Seller shall not:
(a) Provide credit to any Noteholder or Certificateholder for
the purpose of enabling such Noteholder or Certificateholder to
purchase Notes or Certificates, respectively;
(b) Purchase any Notes or Certificates in an agency or trustee
capacity; or
(c) Lend any money to the Issuer.
SECTION 7.02. MERGER OR CONSOLIDATION. (a) Except as otherwise provided
in this SECTION 7.02, the Seller will keep in full force and effect its
existence, rights and franchises as an Illinois limited partnership, and will
obtain and preserve its qualification to do business as a
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foreign limited partnership in each jurisdiction in which such qualification
is or shall be necessary to protect the validity and enforceability of this
Agreement and of any of the Contracts and to perform its duties under this
Agreement.
(b) Any person into which the Seller may be merged or consolidated, or
any corporation or other entity resulting from such merger or consolidation to
which the Seller is a party, or any person succeeding to the business of the
Seller, shall be the successor to the Seller hereunder, without the execution or
filing of any paper or any further act on the part of any of the parties hereto,
anything herein to the contrary notwithstanding.
(c) Upon the merger or consolidation of the Seller as described in this
SECTION 7.02, the Seller shall provide Standard & Poor's and Moody's notice of
such merger or consolidation within thirty (30) days after completion of the
same.
SECTION 7.03. TERMINATION. This Agreement shall terminate (after
distribution of any Note Distributable Amount and Certificate Distributable
Amount due pursuant to SECTION 7.03 of the Sale and Servicing Agreement) on the
Payment Date on which the principal balance of the Class A-1 Notes, Class A-2
Notes, Class A-3 Notes, Class A-4 Notes and Class B Notes and the Certificate
Balance is reduced to zero; PROVIDED, that the Seller's representations and
warranties and indemnities by the Seller shall survive termination.
SECTION 7.04. ASSIGNMENT OR DELEGATION BY THE SELLER. Except as
specifically authorized hereunder, the Seller may not convey and assign or
delegate any of its rights or obligations hereunder absent the prior written
consent of the Depositor and the Trustees, and any attempt to do so without such
consent shall be void.
SECTION 7.05. AMENDMENT. (a) This Agreement may be amended from time to
time by the Seller and the Depositor, with notice to the Rating Agencies, but
without the consent of the Trustees or any of the Securityholders, to correct
manifest error, to cure any ambiguity, to correct or supplement any provisions
herein which may be ambiguous or inconsistent with any other provisions herein
or in any other Transaction Document, as the case may be, or to add any other
provisions with respect to matters or questions arising under this Agreement
that shall not be inconsistent with the provisions of this Agreement; PROVIDED,
HOWEVER, that such action shall not, as evidenced by an Opinion of Counsel,
materially and adversely affect the interests of any Securityholder.
(b) This Agreement may also be amended from time to time by the Seller
and the Depositor, with the consent of Noteholders of more than 50% of the
aggregate principal amount of the Class A-1 Notes, Class A-2 Notes, Class A-3
Notes and Class A-4 Notes, or if there are no Class A-1 Notes, Class A-2 Notes,
Class A-3 Notes or Class A-4 Notes outstanding, with the consent of Noteholders
of more than 50% of the aggregate principal amount of the Class B Notes or, if
there are no Notes outstanding, the consent of Certificateholders of more than
50% of the Certificate Balance, 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 Certificateholders;
PROVIDED, HOWEVER, that no such amendment or waiver shall (x) reduce in any
manner the amount of, or accelerate or delay the timing of, collections of
payments on the Contracts or distributions which are required to be made on any
Note or
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Certificate, (y) change the interest rate on any Notes or Certificates which
such change adversely affects the priority of payment of principal or
interest made to the Noteholders or Certificateholders or (z) increase or
reduce the aforesaid percentage required to consent to any such amendment,
without the consent of the Noteholders and Certificateholders then
outstanding; and PROVIDED, FURTHER, that no such amendment or consent shall
be effective unless each Rating Agency delivers written confirmation that
such amendment or consent will not cause its then-current rating on any Class
of Notes or the Certificates to be qualified, reduced or withdrawn.
(c) Promptly after the execution of any amendment or consent pursuant
to this SECTION 7.05, the Depositor shall furnish written notification of the
substance of such amendment or consent together with a copy thereof to each
Trustee and each Rating Agency.
(d) It shall not be necessary for the consent of Noteholders or
Certificateholders under this SECTION 7.05 to approve the particular form of any
proposed amendment, but it shall be sufficient if such consent shall approve the
substance thereof. The manner of obtaining such consents and of evidencing the
authorization of the execution thereof by Noteholders and Certificateholders
shall be subject to such reasonable requirements as the Trustees may prescribe.
(e) Upon the execution of any amendment or consent pursuant to this
SECTION 7.05, this Agreement shall be modified in accordance therewith, and such
amendment or consent shall form a part of this Agreement for all purposes, and
every holder of Notes and Certificates theretofore or thereafter issued
hereunder shall be bound thereby.
SECTION 7.06. NOTICES. All notices, demands, certificates, requests and
communications hereunder ("notices") shall be in writing and shall be effective
(a) upon receipt when sent through the U.S. mails, registered or certified mail,
return receipt requested, postage prepaid, with such receipt to be effective the
date of delivery indicated on the return receipt, or (b) one (1) Business Day
after delivery to an overnight courier, or (c) on the date personally delivered
to an Authorized Officer of the party to which sent, or (d) on the date
transmitted by legible telecopier transmission with a confirmation of receipt,
in all cases addressed to the recipient as follows:
(i) If to the Seller:
Premier Auto Finance, L.P.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopier No.: 312/456-1068
(ii) If to the Depositor:
Dealer Auto Receivables Corp.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopier No.: 312/456-1068
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(iii) If to the Indenture Trustee:
The Bank of New York
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇-▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
Attention: ABS Department
Telecopier No.: 212/815-5544
(iv) If to the Owner Trustee:
Chase Manhattan Bank USA, N.A.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust Administration
Department
Telecopier No.: 302/984-4903
(v) If to Moody's:
▇▇▇▇▇'▇ Investors Service, Inc.
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ABS Monitoring Department
Telecopier No.: 212/553-1350
(vi) If to Standard & Poor's:
Standard & Poor's Ratings Services, a
division of The McGraw Hill Companies
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telecopier No.: 212/438-2657
Each party hereto may, by notice given in accordance herewith to each of the
other parties hereto, designate any further or different address to which
subsequent notices shall be sent.
All communications and notices pursuant hereto to a Noteholders or
Certificateholder shall be in writing and delivered or mailed at the address
shown in the Note Register or Certificate Register, respectively.
SECTION 7.07. 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 7.08. HEADINGS. The headings herein are for purposes of
reference only and shall not otherwise affect the meaning or interpretation of
any provision hereof.
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SECTION 7.09. GOVERNING LAW. This Agreement shall be governed by, and
construed and enforced in accordance with, the internal laws of the State of New
York.
SECTION 7.10. NO BANKRUPTCY PETITION. The Seller covenants and agrees
that, prior to the date that is one year and one day after the payment in full
of all amounts owing in respect of all outstanding Securities, as well as any
other amounts distributable or payable from the Trust Corpus, together with any
other amounts owing in respect of obligations of the Depositor, it will not
institute against, or solicit or join in or cooperate with or encourage any
Person to institute against, the Depositor or the Trust, any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings or other
similar proceedings under the laws of the United States or any state of the
United States. This SECTION 7.10 shall survive termination of this Agreement.
[signature page follows]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized as of the date
first written above.
DEALER AUTO RECEIVABLES CORP.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
-----------------------------------------
Printed Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
-------------------------------
Title: EVP & CFO
--------------------------------------
PREMIER AUTO FINANCE, L.P.
By: Premier Auto Finance, Inc.,
Its General Partner
By: /s/ ▇▇▇▇▇▇▇ ▇. Van Over
-----------------------------------------
Printed Name: ▇▇▇▇▇▇▇ ▇. Van Over
--------------------------------
Title: EVP & COO
---------------------------------------
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Exhibit A
Transfer and Sale
Agreement
FORM OF ASSIGNMENT
In accordance with the Transfer and Sale Agreement (the "AGREEMENT")
dated as of August 24, 2000 made by and between the undersigned, as seller
thereunder (the "SELLER"), and Dealer Auto Receivables Corp., a Delaware
corporation and wholly-owned subsidiary of Premier Auto Finance, Inc. (the
"DEPOSITOR"), as purchaser thereunder, the undersigned does hereby sell,
transfer, convey and assign, set over and otherwise convey to the Depositor
(i) all the right, title and interest of the Seller in and to the Contracts
listed on the List of Contracts in effect on the Closing Date (including,
without limitation, all security interests and all rights to receive
scheduled payments and prepayments which are collected pursuant thereto on or
after the Initial Cutoff Date, including any liquidation proceeds therefrom,
but excluding any rights to receive scheduled payments due on or after, but
received prior to, the Cutoff Date), (ii) all security interests in each
Financed Vehicle, (iii) all rights of the Seller to proceeds from any claims
on theft, physical damage, credit life or disability insurance or other
individual insurance policy relating to any such Contract, an Obligor or a
Financed Vehicle securing such Contract, (iv) all documents contained in the
related Contract Files, (v) all rights (but not the obligations) of the
Seller against any originating dealer or third party (i.e. the originators of
the Contracts) under any agreements between the Seller and such originating
dealers or other third party, (vi) all rights of the Seller in the Lockbox,
the Lockbox Account, related Lockbox Agreement, the Concentration Account and
related Concentration Account Agreement to the extent they relate to such
Contracts, (vii) any rebates of premiums and other amounts relating to
insurance policies, extended service contracts, other repair agreements or
any other items financed under such Contract and (viii) all proceeds and
products of the foregoing.
This Assignment is made pursuant to and in reliance upon the
representation and warranties on the part of the undersigned contained in
ARTICLE III of the Agreement and no others.
Capitalized terms used herein but not otherwise defined shall have
the meanings assigned to such terms in the Sale and Servicing Agreement dated
as of August 24, 2000 by and among the Depositor, Premier Auto Finance, Inc.,
as Servicer, and the Trust, as issuer and The Bank of New York as indenture
trustee.
IN WITNESS WHEREOF, the undersigned has caused this Assignment to be
duly executed this 24th day of August, 2000.
PREMIER AUTO FINANCE, L.P.
By: The Auto Conduit Corporation
Its General Partner
By:___________________________
Printed Name:
Title:
Exhibit B
Transfer and Sale
Agreement
FORM OF OFFICER'S CERTIFICATE
(See Exhibit C-2 to the Sale and Servicing Agreement)