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EXHIBIT 10.44
RECEIVABLES FINANCING AGREEMENT
dated as of August 18, 2000
among
DRIVE BOS LP,
as Borrower
DRIVE FINANCIAL SERVICES LP,
individually and as Servicer,
THE LENDERS PARTIES HERETO,
IFA INCORPORATED,
as Agent and Collateral Agent,
and
▇▇▇▇▇ FARGO BANK MINNESOTA, NATIONAL ASSOCIATION
as Custodian
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Table of Contents
(continued)
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ARTICLE I. DEFINITIONS......................................................................1
SECTION 1.1. Defined Terms...............................................................1
SECTION 1.2. Other Definitional Provisions..............................................20
ARTICLE II. THE FACILITY, ADVANCE PROCEDURES AND NOTE......................................21
SECTION 2.1. Facility...................................................................21
SECTION 2.2. Advance Procedures.........................................................21
SECTION 2.3. Funding....................................................................21
SECTION 2.4. Representation and Warranty................................................22
SECTION 2.5. Voluntary Termination of Facility; Reduction of Facility Limit.............22
SECTION 2.6. Note.......................................................................22
ARTICLE III. YIELD, FEES, ETC..............................................................22
SECTION 3.1. Interest...................................................................22
SECTION 3.2. Interest Payment Dates.....................................................22
SECTION 3.3. Selection of Interest Periods, etc.........................................23
SECTION 3.4. Fees.......................................................................23
SECTION 3.5. Computation of Interest and Fees...........................................23
ARTICLE IV. REPAYMENTS AND PREPAYMENTS.....................................................23
SECTION 4.1. Repayments and Prepayments.................................................23
ARTICLE V. PAYMENTS; TAXES.................................................................24
SECTION 5.1. Making of Payments; Taxes..................................................24
SECTION 5.2. Application of Certain Payments............................................25
SECTION 5.3. Due Date Extension.........................................................25
ARTICLE VI. INCREASED COSTS, ETC...........................................................26
SECTION 6.1. Increased Costs............................................................26
SECTION 6.2. Additional Interest on Advances Bearing a Eurodollar Rate..................27
SECTION 6.3. Funding Losses.............................................................27
SECTION 6.4. Replacement of Affected Person.............................................27
ARTICLE VII. EFFECTIVENESS; CONDITIONS TO ADVANCES.........................................28
SECTION 7.1. Effectiveness..............................................................28
SECTION 7.2. Initial Advance............................................................28
SECTION 7.3. All Advances...............................................................29
ARTICLE VIII. ADMINISTRATION AND SERVICING OF RECEIVABLES..................................31
SECTION 8.1. Duties of the Servicer.....................................................31
SECTION 8.2. Collection of Receivable Payments; Modifications of Receivables; Lockbox...32
SECTION 8.3. Realization Upon Receivables...............................................33
SECTION 8.4. Insurance..................................................................34
SECTION 8.5. Maintenance of Security Interests in Vehicles..............................34
SECTION 8.6. Covenants, Representations and Warranties of Servicer......................35
SECTION 8.7. Purchase of Receivables Upon Breach of Covenant............................39
SECTION 8.8. Total Servicing Fee; Payment of Certain Expenses by Servicer...............39
SECTION 8.9. Servicer's Certificate.....................................................39
SECTION 8.10. Annual Statement as to Compliance; Notice of Servicer Termination Event....40
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Table of Contents
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SECTION 8.11. Annual Independent Accountants' Report...................................40
SECTION 8.12. Access to Certain Documentation and Information Regarding Receivables...41
SECTION 8.13. Monthly Tape............................................................41
SECTION 8.14. Insurance...............................................................41
SECTION 8.15. Compliance with Laws....................................................41
SECTION 8.16. Collecting Lien Certificate.............................................42
SECTION 8.17. Purchase of All Receivables.............................................42
SECTION 8.18. Weekly Borrowing Base Confirmation......................................42
SECTION 8.19. Repurchase upon Breach..................................................42
ARTICLE IX. ACCOUNTS; PAYMENTS...........................................................42
SECTION 9.1. Borrower Accounts........................................................42
SECTION 9.2. Servicer Reimbursements..................................................45
SECTION 9.3. Application of Collections...............................................45
SECTION 9.4. Additional Deposits......................................................45
ARTICLE X. REPRESENTATIONS AND WARRANTIES OF THE BORROWER................................46
SECTION 10.1. Organization and Good Standing..........................................46
SECTION 10.2. Due Qualification.......................................................46
SECTION 10.3. Power and Authority.....................................................46
SECTION 10.4. Security Interest; Binding Obligations..................................46
SECTION 10.5. No Violation............................................................47
SECTION 10.6. No Proceedings..........................................................47
SECTION 10.7. No Consents.............................................................47
SECTION 10.8. Chief Executive Office..................................................47
SECTION 10.9. Solvency................................................................47
SECTION 10.10. Tax Treatment..........................................................47
SECTION 10.11. Compliance With Laws...................................................48
SECTION 10.12. Taxes..................................................................48
SECTION 10.13. Certificates...........................................................48
SECTION 10.14. No Liens, Etc..........................................................48
SECTION 10.15. Purchase and Sale......................................................48
SECTION 10.16. Securities Act of 1933; Investment Company Act of 1940.................49
SECTION 10.17. Information True and Correct...........................................49
SECTION 10.18. ERISA Compliance.......................................................49
SECTION 10.19. Financial or Other Condition...........................................49
SECTION 10.20. Investment Company Status..............................................49
SECTION 10.21. Eligible Receivables...................................................49
SECTION 10.22. Use of Proceeds........................................................49
SECTION 10.23. Separate Existence.....................................................49
SECTION 10.24. Investments............................................................50
SECTION 10.25. Representation and Warranties True and Correct.........................50
SECTION 10.26. Transaction Documents..................................................50
SECTION 10.27. Ownership of the Borrower..............................................50
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Table of Contents
(continued)
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ARTICLE XI. COVENANTS OF THE BORROWER....................................................50
SECTION 11.1. Protection of Security Interest of the Secured Parties..................50
SECTION 11.2. Other Liens or Interests................................................51
SECTION 11.3. Costs and Expenses......................................................51
SECTION 11.4. Reporting Requirements..................................................52
SECTION 11.5. Separate Existence......................................................52
SECTION 11.7. Tangible Net Worth......................................................53
SECTION 11.8. Take-Out Securitization.................................................53
SECTION 11.9. Stock, Merger, Consolidation, Etc.......................................54
SECTION 11.10. Change in Name.........................................................54
SECTION 11.11. Indebtedness; Guarantees...............................................54
SECTION 11.12. Limitation on Transactions with Affiliates.............................54
SECTION 11.13. Documents..............................................................54
SECTION 11.14. Preservation of Existence..............................................54
SECTION 11.15. Keeping of Records and Books of Account................................54
SECTION 11.16. Accounting Treatment...................................................55
SECTION 11.17. Limitation on Investments..............................................55
SECTION 11.18. Distributions..........................................................55
ARTICLE XII. THE SERVICER................................................................55
SECTION 12.1. Liability of Servicer...................................................55
SECTION 12.2. Merger or Consolidation of, or Assumption of the Obligations of, the
Servicer...............................................................................55
SECTION 12.3. Limitation on Liability of Servicer and Others..........................56
SECTION 12.4. Delegation of Duties....................................................56
SECTION 12.5. Servicer Not to Resign..................................................57
ARTICLE XIII. SERVICER TERMINATION EVENTS................................................57
SECTION 13.1. Servicer Termination Event..............................................57
SECTION 13.2. Appointment of Successor Servicer.......................................59
SECTION 13.3. 59
ARTICLE XIV. FACILITY TERMINATION EVENTS; EVENTS.........................................60
SECTION 14.1. Facility Termination Events.............................................60
SECTION 14.2. Effect of Facility Termination Event....................................61
SECTION 14.3. Rights Upon Termination Event...........................................61
ARTICLE XV. THE AGENT....................................................................61
SECTION 15.1. Appointment.............................................................61
SECTION 15.2. Delegation of Duties....................................................62
SECTION 15.3. Exculpatory Provisions..................................................62
SECTION 15.4. Reliance by Agent.......................................................62
SECTION 15.5. Action Upon Certain Events; Reports and Notices.........................62
SECTION 15.6. Non-Reliance on Agent...................................................63
SECTION 15.7. Indemnification.........................................................63
SECTION 15.8. Successor Agent.........................................................63
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SECTION 15.9. Liability of the Agent..................................................64
SECTION 15.10. Agent and Affiliates...................................................65
SECTION 15.11. Agent..................................................................65
ARTICLE XVI. ASSIGNMENTS.................................................................65
SECTION 16.1. Restrictions on Assignments.............................................65
SECTION 16.2. Documentation...........................................................65
SECTION 16.3. Rights of Assignee......................................................65
SECTION 16.4. Notice of Assignment....................................................66
SECTION 16.5. Registration; Registration of Transfer and Exchange.....................66
SECTION 16.6. Mutilated, Destroyed, Lost and Stolen Notes.............................67
SECTION 16.7. Persons Deemed Owners...................................................67
SECTION 16.8. Cancellation............................................................67
SECTION 16.9. Participations; Pledge..................................................67
ARTICLE XVII. INDEMNIFICATION............................................................68
SECTION 17.1. General Indemnity.......................................................68
SECTION 17.2. Contribution............................................................70
ARTICLE XVIII. MISCELLANEOUS.............................................................70
SECTION 18.1. No Waiver; Remedies.....................................................70
SECTION 18.2. Amendments, Waivers.....................................................70
SECTION 18.3. Notices, Etc............................................................71
SECTION 18.4. Costs, Expenses and Taxes...............................................71
SECTION 18.5. Binding Effect; Survival................................................71
SECTION 18.6. Captions and Cross References...........................................72
SECTION 18.7. Severability............................................................72
SECTION 18.8. GOVERNING LAW...........................................................72
SECTION 18.9. Counterparts............................................................72
SECTION 18.10. Waiver of Jury Trial...................................................72
SECTION 18.11. No Proceedings.........................................................72
SECTION 18.12. Limited Recourse to the Lenders........................................73
SECTION 18.13. Collateral Agent.......................................................73
SECTION 18.14. Custodian..............................................................73
SECTION 18.15. Third Party Beneficiary................................................73
SECTION 18.16. Entire Agreement.......................................................74
SECTION 18.17. Confidentiality........................................................74
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RECEIVABLES FINANCING AGREEMENT
THIS RECEIVABLES FINANCING AGREEMENT is made and entered into as of
August 18, 2000, among DRIVE BOS LP, a Delaware limited partnership (the
"Borrower"), DRIVE FINANCIAL SERVICES LP, a Delaware limited partnership, in its
individual capacity ("Drive") and as Initial Servicer, each LENDER (as
hereinafter defined) FROM TIME TO TIME PARTY HERETO, IFA INCORPORATED ("IFA"),
as agent (in such capacity, the "Agent") for the Lenders (as hereinafter
defined) and as Collateral Agent (in such capacity, the "Collateral Agent"), and
▇▇▇▇▇ FARGO BANK MINNESOTA, NATIONAL ASSOCIATION, a national banking
association, as Custodian.
BACKGROUND
1. The Borrower desires that the Lenders extend financing to the
Borrower on the terms and conditions set forth herein.
2. The Lenders are willing to provide such financing on the
terms and conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein contained, the parties hereto agree as follows:
ARTICLE III.
DEFINITIONS
SECTION 3.1. Defined Terms. As used in this Agreement, the following
terms have the following meanings:
"Accountants' Report" has the meaning set forth in Section 8.11.
"Accounting Date" means (a) the last day of a Collection Period and (b)
with respect to a Distribution Date or Determination Date, the last day of the
Collection Period preceding such Distribution Date or Determination Date (such
date being referred to as the "related Accounting Date" with respect to such
Distribution Date or Determination Date).
"Advance" means any amount disbursed by any Lender to the Borrower under
this Agreement.
"Advance Date" means the date any Advance is made under Section 2.3.
"Advance Request" has the meaning set forth in Section 2.2.
"Adverse Claim" means any claim of ownership or any lien, security
interest, title retention, trust or other charge or encumbrance, or other type
of preferential arrangement having the effect or purpose of creating a lien or
security interest, other than the security interest created under the Security
Agreement.
"Affected Person" has the meaning set forth in Section 6.1(a).
"Affiliate" of any Person means any other Person that directly or
indirectly controls, is controlled by or is under common control with such
Person (excluding any trustee under, or any committee with responsibility for
administering, any employee benefit plan). A Person shall be deemed to be
"controlled by" any other Person if such other Person possesses, directly or
indirectly, power
(a) to vote 10% or more of the securities (on a fully diluted basis)
having ordinary voting power for the election of directors or managing partners;
or
(b) to direct or cause the direction of the management and policies of
such Person whether by contract or otherwise.
The word "Affiliated" has a correlative meaning.
"Agent" has the meaning set forth in the Preamble.
"Agent's Account" has the meaning set forth in Section 5.1(a).
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"Aggregate Outstanding Principal Balance" means, with respect to any
group of Receivables as of any date, the sum of the outstanding Principal
Balances of all such Receivables as at 11:59 p.m. on the immediately preceding
day.
"Agreement" shall mean this Receivables Financing Agreement, as it may
be amended, supplemented or otherwise modified from time to time.
"Alternate Base Rate" means a fluctuating rate per annum as shall be in
effect from time to time, which rate shall be at all times equal to the higher
of:
(d) 1.5% below the rate of interest announced publicly by Bank of
Scotland ("BOS") in New York, New York, from time to time as BOS's base, prime
or reference rate for U.S. domestic commercial loans in Dollars; and
(e)1/2 of one percent above the Federal Funds Rate.
"Amount Financed" means, with respect to a Receivable, the "amount
financed" within the meaning of the Federal Truth-in-Lending Act, which is the
aggregate amount of credit initially extended under such Receivable toward the
purchase price of the related Financed Vehicle and related costs, including
amounts of credit extended in respect of accessories, insurance premiums,
service and warranty policies or contracts and other items customarily financed
as part of motor vehicle retail installment contracts [excluding any amount
allocable to the premium of force-placed physical damage insurance covering the
Financed Vehicle.].
"Annual Percentage Rate" or "APR" means, with respect to a Receivable,
the rate per annum of finance charges stated in such Receivable as the "annual
percentage rate" (within the meaning of the Federal Truth-in-Lending Act). If,
after the Purchase Date for such Receivable, the rate per annum with respect to
a Receivable as of the Purchase Date is reduced as a result of (i) an insolvency
proceeding involving the relevant Obligor or (ii) pursuant to the Soldiers' and
Sailors' Civil Relief Act of 1940, the "Annual Percentage Rate" or "APR" shall
refer to such reduced rate.
"Article 8" means UCC, Revised Article 8, Investment Securities (with
conforming and miscellaneous amendments to Articles 1, 3, 4, 5, 9 and 10), 1994
Official Text, as adopted by the American Law Institute and the National
Conference of Commissioners on Uniform State Laws. Unless the context requires
otherwise, "Article 8" means such version in the form in which it is adopted in
the applicable jurisdiction.
"Average Servicing Portfolio" means as of any date, the average of the
Servicing Portfolio for the three preceding Collection Periods.
"Bank Rate" for any Advance means a rate per annum equal to 1% per annum
above the Eurodollar Rate for each Advance or portion thereof; provided,
however, that in the case of
(1) any Interest Period on or after the first day of
which a Lender shall have notified the Agent
that the introduction of or any change in or in
the interpretation of any law or regulation
makes it unlawful, or any central bank or other
governmental authority asserts that it is
unlawful, for such Lender to fund such Advance
at the Bank Rate set forth above (and such
Lender shall not have subsequently
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notified the Agent that such circumstances no
longer exist),
(2) any Interest Period of one to (and including) 29
days, in the event the Eurodollar Rate is not
reasonably available to the Agent for such a
Interest Period, or
(3) any Interest Period for an Advance the principal
amount of which is less than $1,000,000,
the "Bank Rate" shall be a rate per annum equal to the Alternate Base Rate from
time to time in effect during such Interest Period.
"Bankruptcy Code" means the Bankruptcy Code, 11 ▇.▇.▇.▇▇. 101, et seq.,
as amended.
"Basic Servicing Fee" means, with respect to any Distribution Date, the
fee payable to the Servicer for services rendered during the related Collection
Period, which shall be equal to one-twelfth of the Servicing Fee Rate multiplied
by the average Aggregate Outstanding Principal Balance of Transferred
Receivables for each day during the related Collection Period and, with respect
to any successor Servicer, the amounts specified in Section 13.3 to the extent
not paid by the original Servicer.
"Borrower" has the meaning set forth in the Preamble.
"Borrower Account Collateral" has the meaning set forth in Section 3(c)
of the Security Agreement.
"Borrower Assigned Agreements" has the meaning set forth in Section 3(b)
of the Security Agreement.
"Borrower Collateral" has the meaning set forth in Section 3 of the
Security Agreement.
"Borrowing Base" means, on any day, the excess of (a) an amount equal to
(i) the Eligible Receivables Balance as of the last Weekly Pool Report Date or,
if such day is a Weekly Pool Report Date, as of such day, plus (ii) an amount
equal to the Aggregate Outstanding Principal Balance of all Eligible Receivables
purchased or originated by Drive and transferred to the Borrower since the
Business Day preceding the last Weekly Pool Report Date, plus (iii) the amount
on deposit in the Collection Account which represents principal collections on
Transferred Receivables as of the last Weekly Pool Report Date or, if such day
is a Weekly Pool Report Date, as of such day, plus (iv) the amount on deposit in
the Collateral Account on such day or, if such day is a Weekly Pool Report Date,
the Business Day preceding such day; over (b) the Required Holdback as of such
date; provided, however, that for the period from the Closing date until the
earlier of (x) the 30th day after the Closing Date and (y) the date the Borrower
first acquires a Receivable, the Borrowing Base shall be $5,000,000.
"Borrowing Base Confirmation" has the meaning set forth in Section
7.3(g).
"Borrowing Base Deficiency" has the meaning set forth in Section
14.1(e).
"Business Day" shall mean any day on which (a) commercial banks in New
York City are not authorized or required to be closed, and (b) in the case of a
Business Day which relates to a Eurodollar Advance, dealings are carried on in
the London interbank Eurodollar market.
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"Certificated Security" has the meaning set forth in Section 8-102(a)(4)
of Article 8.
"Closing Date" means the Effective Date.
"Collateral Account" means the account designated as the Collateral
Account in, and which is established and maintained pursuant to, Section 9.1(a).
"Collateral Agent" means IFA Incorporated solely in its capacity as
Collateral Agent, together with its permitted successors and assigns in such
capacity.
"Collateral Receipt" means a Custodian's Acknowledgment in the form of
Exhibit 2 to the Custodian Agreement.
"Collection Account" means the account designated as the Collection
Account in, and which is established and maintained pursuant to, Section 9.1(a).
"Collection Period" means any calendar month and, with respect to a
Determination Date or a Distribution Date, the calendar month preceding the
month in which such Determination Date or Distribution Date occurs (such
calendar month being referred to as the "related" Collection Period with respect
to such Determination Date or Distribution Date) or, in the case of the initial
Distribution Date and Determination Date, the period commencing at the opening
of business on the Closing Date and ending at the end of the calendar month in
which the Closing Date occurs. Any amount stated "as of the close of business of
the last day of a Collection Period" shall give effect to the following
calculations as determined as of the end of the day on such last day: (i) all
applications of collections on the Transferred Receivables and Purchase Amounts,
and (ii) all distributions.
"Collection Records" means all manually prepared or computer generated
records relating to collection efforts or payment histories with respect to the
Transferred Receivables.
"Commitment" means, for any Lender, the maximum amount of such Lender's
commitment to fund Advances hereunder, as set forth on the signature pages
hereto or in the assignment documentation by which such Lender became a party to
this Agreement or assumed the Commitment (or a portion thereof) of another
Lender, as such amount may be adjusted from time to time pursuant to Section 2.5
or pursuant to assignment documentation executed by such Lender and its assignee
and delivered pursuant to Section 16.2 of this Agreement.
"Commitment Percentage" means, for a Lender, such Lender's Commitment as
a percentage of the aggregate Commitments of all Lenders.
"Commitment Termination Date" means August 17, 2001, as such date may be
extended from time to time as mutually agreed in writing between the Borrower,
the Servicer, the Agent and the Lenders.
"Computer Tape" means the computer tape or diskette generated on behalf
of the Borrower which provides information relating to the Transferred
Receivables and which was used by the Borrower and Drive in selecting the
Transferred Receivables conveyed to the Borrower under the Receivables Purchase
Agreement.
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"Contingent Liability" means any agreement, undertaking or arrangement
by which any Person guarantees, endorses or otherwise becomes or is contingently
liable upon (by direct or indirect agreement, contingent or otherwise, to
provide funds for payment, to supply funds to, or otherwise to invest in, a
debtor, or otherwise to assure a creditor against loss) the indebtedness,
obligation or any other liability of any other Person (other than by
endorsements of instruments in the course of collection), or guarantees the
payment of dividends or other distributions upon the shares of any other Person.
The amount of any Person's obligation under any Contingent Liability shall
(subject to any limitation set forth therein) be deemed to be the outstanding
principal amount (or maximum outstanding principal amount, if larger) of the
debt, obligation or other liability guaranteed thereby.
"Control": with respect to any Federal Book Entry Security, the
Collateral Agent shall have obtained control if:
(i) the Collateral Agent is a participant in the book entry
system maintained by the Federal Reserve Bank that is acting as fiscal
agent for the issuer of such Federal Book Entry Security, and such
Federal Reserve Bank has indicated by book entry that such Federal Book
Entry Security has been credited to the Collateral Agent's securities
account in such book entry system; or
(ii) (a) the Collateral Agent (1) is registered on the records
of a Securities Intermediary as the person having a Securities
Entitlement in respect of such Federal Book Entry Security against such
Securities Intermediary; or (2) has obtained the agreement, in writing,
of the Securities Intermediary for such Securities Entitlement that such
Securities Intermediary will comply with Entitlement Orders of the
Collateral Agent without further consent of any other Person; and (b)
the Securities Intermediary is a participant in the book entry system
maintained by the Federal Reserve Bank that is acting as fiscal agent
for the issuer of such Federal Book Entry Security; and (c) such
Federal Reserve Bank has indicated by book entry that such Federal Book
Entry Security has been credited to the Securities Intermediary's
securities account in such book entry system.
"Cram Down Loss" means, with respect to a Receivable, if a court of
appropriate jurisdiction in an insolvency proceeding shall have issued an order
reducing the amount owed on such Receivable or otherwise modifying or
restructuring the Scheduled Payments to be made on such Receivable, an amount
equal to the excess of the principal balance of such Receivable immediately
prior to such order, minus the principal balance of such Receivable as so
reduced. A "Cram Down Loss" shall be deemed to have occurred on the date of
issuance of such order.
"Custodian" means ▇▇▇▇▇ Fargo Bank Minnesota, National Association
solely in its capacity as Custodian, together with its permitted successors and
assigns in such capacity.
"Custodian Agreement" means the Custodian Agreement dated as of August
18, 2000 among the Custodian, the Collateral Agent, the Borrower and Drive,
individually and as Servicer, including all permitted amendments, modifications
and supplements thereto.
"Custodian Fee Letter" means (a) that certain schedule of fees of ▇▇▇▇▇
Fargo Bank Minnesota, National Association acknowledged by Drive and the
Borrower, and consented to by the Agent, as the same may be amended,
supplemented or otherwise modified by the parties thereto with the consent of
the Agent and (b) any letter agreement(s) or schedule of fees entered
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into by Drive and the Borrower, with the consent of the Agent, with a substitute
Custodian in replacement of the schedule of fees referred to in clause (a) above
relating to fees payable to such substitute Custodian.
"Cut-Off Date" means, with respect to a Receivable, the Initial Cut-Off
Date or the Subsequent Cut-Off Date applicable to such Receivable.
"Dealer" means a seller of new or used automobiles, light trucks or
sport utility vehicles that originated one or more of the Receivables and sold
the respective Receivable, directly or indirectly, to Drive under a Dealer
Agreement or Dealer Assignment.
"Dealer Agreement" means an agreement by and among Drive and a Dealer
relating to the sale of retail installment contracts to Drive and all documents
and instruments relating thereto.
"Dealer Assignment" means, with respect to a Receivable, the assignment
executed by a Dealer conveying such Receivable to Drive.
"Default Rate" means a rate per annum equal to the Alternate Base Rate
(but not less than the Interest (if any) in effect for the related monetary
obligation), plus a margin of 4%.
"Defaulted Receivable" means a Receivable with respect to which (i) 50%
or more of a Scheduled Payment is more than 60 days past due or (ii) the related
Financed Vehicle has been repossessed and the mandatory redemption period with
respect thereto has expired.
"Delinquent Receivable" means a Receivable with respect to which 50% or
more of a Scheduled Payment is more than 30 days past due and excluding
Defaulted Receivables.
"Delivery": when used with respect to Borrower Account Collateral,
"Delivery" means:
(i) with respect to Physical Property, transfer thereof to the
Collateral Agent or its nominee or custodian by physical delivery to the
Collateral Agent or its nominee or custodian endorsed to, or registered
in the name of, the Collateral Agent or its nominee or custodian or
endorsed in blank;
(ii) with respect to a Certificated Security, transfer of such
Certificated Security to the Collateral Agent or its nominee or
custodian by physical delivery to the Collateral Agent or its nominee or
custodian, endorsed to, or registered in the name of, the Collateral
Agent or its nominee or custodian or endorsed in blank; or
(iii) with respect to any such Borrower Account Collateral that
constitutes an Uncertificated Security (including any investments in
money market mutual funds, but excluding any Federal Book Entry
Security), (A) registration of the Collateral Agent as the registered
owner by the issuer, or (B) satisfaction of the requirements for
obtaining "control" pursuant to Section 8-106(c)(2) of Article 8.
"Determination Date" means, with respect to a Collection Period, the
12th day of the succeeding calendar month, or if such 12th day is not a Business
Day, the next preceding Business Day.
"Distribution Date" means the 15th day of each calendar month, or if
such 15th day is not a Business Day, the next succeeding Business Day,
commencing September 15, 2000.
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"Dollar(s)" and the sign "$" mean lawful money of the United States of
America.
"Drive" has the meaning set forth in the Preamble.
"Effective Date" has the meaning set forth in Section 7.1.
"Electronic Ledger" means the electronic master record of the retail
installment contracts of the Servicer.
"Eligible Account" means (i) a segregated trust account or (ii) a
segregated direct deposit account, in each case, maintained with a depository
institution or trust company organized under the laws of the United States of
America, or any of the States thereof, or the District of Columbia, having a
certificate of deposit, short term deposit or commercial paper rating of at
least A1 by Standard & Poor's and P1 by Moody's. In either case, such depository
institution or trust company shall have been approved by the Agent, acting in
its discretion, by written notice to the Servicer. IFA Incorporated and BOS are
each deemed to be an acceptable institution to the Agent.
"Eligible Assignee" has the meaning set forth in Section 16.1.
"Eligible Receivable" means a Receivable as to which the representations
and warranties set forth on Exhibit C are true and correct. For purposes of this
definition and the calculation of the Borrowing Base, the eligibility of
Receivables will be determined from time to time, such that a Receivable that
was an Eligible Receivable at one time but that subsequently fails to meet all
applicable eligibility requirements will no longer be an Eligible Receivable
(unless and until it again meets all applicable eligibility requirements).
"Eligible Receivables Balance" means, as of any date, the Aggregate
Outstanding Principal Balance of all Transferred Receivables which are Eligible
Receivables on such day of determination.
"Eligible Servicer" means Drive or another Person which at the time of
its appointment as Servicer (i) is servicing a portfolio of motor vehicle retail
installment contracts and/or motor vehicle installment loans, (ii) is legally
qualified and has the capacity to service the Transferred Receivables, (iii) has
demonstrated the ability to service a portfolio of motor vehicle retail
installment contracts and/or motor vehicle installment loans similar to the
Transferred Receivables with reasonable skill and care, (iv) is qualified and
entitled to use, pursuant to a license or other written agreement, and agrees to
maintain the confidentiality of, the software which the Servicer uses in
connection with performing its duties and responsibilities under this Agreement
or otherwise has available software which is adequate to perform its duties and
responsibilities under this Agreement, and (v) has been approved by the Required
Lenders.
"Entitlement Order" has the meaning set forth in Section 8-102(a)(8) of
Article 8.
"ERISA" means the U.S. Employee Retirement Income Security Act of 1974,
as amended from time to time.
"Eurocurrency Liabilities" has the meaning assigned to that term in
Regulation D of the Board of Governors of the Federal Reserve System, as in
effect from time to time.
"Eurodollar Advance" means any Advance (or portion thereof) that bears
Interest at the Eurodollar Rate.
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13
"Eurodollar Rate" means, for any Interest Period, [a rate per annum
equal to the rate for deposits in Dollars for a term equal to such Interest
Period (commencing on the first day of such Interest Period) which appears on
Telerate Page 3750 as of 11:00 A.M. (London time) on the second Business Day
prior to the commencement of such Interest Period. If such rate does not appear
on Telerate Page 3750, a rate per annum at which deposits in Dollars are offered
by the principal office of BOS in London, England to prime banks in the London
interbank market at 11:00 A.M. (London time) two Business Days before the first
day of such Interest Period in an amount substantially equal to the principal
amount of the Advance associated with such Interest Period on such first day and
for a period equal to such Interest Period.]
"Eurodollar Rate Reserve Percentage" of any Lender for any Interest
Period in respect of which Interest is computed by reference to the Eurodollar
Rate means the reserve percentage applicable two Business Days before the first
day of such Interest Period under regulations issued from time to time by the
Board of Governors of the Federal Reserve System (or any successor) (or if more
than one such percentage shall be applicable, the daily average of such
percentages for those days in such Interest Period during which any such
percentage shall be so applicable) for determining the maximum reserve
requirement (including, without limitation, any emergency, supplemental or other
marginal reserve requirement) for such Lender with respect to liabilities or
assets consisting of or including Eurocurrency Liabilities (or with respect to
any other category of liabilities that includes deposits by reference to which
the yield rate on Eurocurrency Liabilities is determined) having a term equal to
such Interest Period.
"Executive Officer" means, with respect to any corporation, the
President, Chief Financial Officer or any Vice President.
"Facility" has the meaning set forth in Section 2.1.
"Facility Limit" means, on any day, the lesser of (x) $100,000,000 and
(y) the Total Commitment in effect on such day, as such amount may be reduced
pursuant to Section 2.5. References to the unused portion of the Facility Limit
shall mean, at any time, the Facility Limit, as then increased or reduced
pursuant to Section 2.5, minus the sum of the then outstanding principal amount
of Advances under this Agreement.
"Facility Termination Date" means the earliest to occur of (i) the date
of any termination of the Facility, in whole, by the Borrower pursuant to
Section 2.5, (ii) the effective date on which the Facility is terminated
pursuant to Section 14.2, and (iii) the Commitment Termination Date.
"Facility Termination Event" means any of the events described in
Section 14.1.
"Federal Book Entry Security" means an obligation (i) issued by the U.S.
Treasury, the Federal Home Loan Mortgage Corporation or the Federal National
Mortgage Association, or any other direct obligation of, or obligation fully
guaranteed as to timely payment or principal and interest by, the United States
of America, that is a book-entry security held through the Federal Reserve
System pursuant to Federal book entry regulations, and (ii) the perfection of a
security interest in which is governed pursuant to federal regulations by
Article 8.
"Federal Funds Rate" means, for any period, a fluctuating rate per annum
equal for each day during such period to the weighted average of the rates on
overnight federal funds transactions with members of the Federal Reserve System
arranged by federal funds brokers, as published for such day (or, if such day is
not a Business Day, for the next preceding Business
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14
Day) by the Federal Reserve Bank of New York, or, if such rate is not so
published for any day which is a Business Day, the average of the quotations for
such day on such transactions received by the Agent from three federal funds
brokers of recognized standing selected by it.
"Final Scheduled Payment Date" means the Distribution Date occurring in
the 72nd month following the Facility Termination Date.
"Financed Vehicle" means any new or used automobile, light duty truck,
van, minivan or sport utility vehicle, together with all accessories, additions
and parts constituting a part thereof and all accessions thereto securing, or
purporting to secure, an Obligor's indebtedness under a Receivable.
"Financial Asset" has the meaning set forth in Section 8-102(a)(9) of
Article 8.
"GAAP" means generally accepted accounting principles in the United
States, which are applicable to the circumstances as of any date of
determination.
"IFA" has the meaning set forth in the Preamble.
"Indebtedness" of any Person means, without duplication:
(a) all obligations of such Person for borrowed money and all
obligations of such Person evidenced by bonds, debentures, notes or
other similar instruments;
(b) all obligations, contingent or otherwise, relative to the
face amount of all letters of credit, whether or not drawn, and banker's
acceptances issued for the account of such Person;
(c) all obligations of such Person as lessee under leases that
have been or should be, in accordance with GAAP, recorded as capitalized
lease liabilities;
(d) all other items that, in accordance with GAAP, would be
included as liabilities on the liability side of the balance sheet of
such Person as of the date at which Indebtedness is to be determined;
(e) whether or not so included as liabilities in accordance with
GAAP, all obligations of such Person to pay the deferred purchase price
of property or services, and indebtedness (excluding prepaid interest
thereon) secured by a lien on property owned or being purchased by such
Person (including indebtedness arising under conditional sales or other
title retention agreements), whether or not such indebtedness shall have
been assumed by such Person or is limited in recourse; and
(f) all Contingent Liabilities of such Person in respect of any
of the foregoing.
"Indemnified Amounts" has the meaning set forth in Section 17.1.
"Indemnified Party" has the meaning set forth in Section 17.1.
"Independent Accountants" has the meaning set forth in Section 8.11.
"Initial Advance Date" means the date the first Advance is made
hereunder.
"Initial Cutoff Date" means the close of business on any day at least
one Business Day but not more than thirty days before the Initial Advance Date.
"Initial Receivables" means the Receivables listed on the Schedule of
Receivables on the Initial Advance Date.
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15
"Insolvency Event" means, with respect to any Person, (a) the entry of a
decree or order for relief by a court having jurisdiction in the premises in
respect of such Person or any substantial part of its property in an involuntary
case under any applicable federal or state bankruptcy, insolvency or other
similar law now or hereafter in effect, or appointing a receiver, liquidator,
assignee, custodian, trustee, sequestrator or similar official for such Person
or for any substantial part of its property, or ordering the winding-up or
liquidation of such Person's affairs, or the commencement of an involuntary case
under the federal bankruptcy laws, as now or hereinafter in effect, or another
present or future federal or state bankruptcy, insolvency or similar law and
such case is not dismissed within 60 days; or (b) the commencement by such
Person of a voluntary case under any applicable federal or state bankruptcy,
insolvency or other similar law now or hereafter in effect, or the consent by
such Person to the entry of an order for relief in an involuntary case under any
such law, or the consent by such Person to the appointment of or taking
possession by a receiver, liquidator, assignee, custodian, trustee, sequestrator
or similar official for such Person or for any substantial part of its property,
or the making by such Person of any general assignment for the benefit of
creditors, or the failure by such Person generally to pay its debts as such
debts become due, or the taking of action by such Person in furtherance of any
of the foregoing.
"Instruments" has the meaning set forth in Section 9-105(l)(i) of
Article 8.
"Insurance Policy" means, with respect to a Receivable, any insurance
policy benefiting the holder of the Receivable and providing loss or physical
damage, credit life, accident and health, theft, mechanical breakdown or similar
coverage with respect to the Financed Vehicle or the related Obligor.
"Intercreditor Agreement" means the Intercreditor and Master Collection
Account Agreement by and among the Lockbox Processor, ▇▇▇▇▇ Fargo Bank
Minnesota, National Association, as Master Collection Account Agent, the
Servicer, the Collateral Agent, Bank of America, N.A., Chase Bank of Texas, and
certain other parties, as the same may from time to time amended, supplemented,
restated, replaced or otherwise modified.
"Interest Period" means with respect to any Advance (or portion
thereof):
(a) the period commencing on the date of the initial funding of
such Advance (or such portion) and one, two, three or six months
thereafter as the Borrower shall select in accordance with Section
3.3(b), after consultation with the Agent; and
(b) thereafter, each period commencing on the last day of the
immediately preceding Interest Period for such Advance (or such portion)
and ending one, two, three or six months thereafter as the Borrower
shall then select in accordance with Section 3.3(b), after consultation
with the Agent;
provided, however, that:
(i) the Borrower must deliver written notice to the Agent
not later than 12:00 noon (New York City time) on the second
Business Day preceding the first day of such Interest Period;
(ii) any such Interest Period that would otherwise end on a
day that is not a Business Day shall be extended to the next
succeeding Business Day (unless the succeeding Business Day is in
a different calendar month, in which case such Interest Period
shall instead be shortened to the next preceding Business Day);
and
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16
(iii) if any Interest Period for any Advance that
commences before the Facility Termination Date would otherwise
end on a date occurring after the Facility Termination Date, such
Interest Period shall end on the Facility Termination Date and
the duration of each such Interest Period that commences on or
after the Facility Termination Date, if any, shall be of such
duration as shall be selected by the Agent.
"Investment Property" has the meaning set forth in Section 9-115(1)(f)
of Article 8.
"Investor" means (i) all Lenders, (ii) all other owners by assignment or
participation of an Advance and, to the extent of the undivided interests so
purchased, all Participants (in accordance with Section 16.9), and (iii) the
Agent and any subsequent holder of any Note (in accordance with Section 16.5).
"Lender" means each financial institution party hereto, and any assignee
of such Lender pursuant to Article XVI to the extent such assignee has assumed a
portion of the Commitment of such Lender.
"Lien" means any security interest, lien, charge, pledge, preference,
equity or encumbrance of any kind, including tax liens, mechanics' liens and any
liens that attach by operation of law.
"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.
"Liquidated Receivable" means, with respect to any Collection Period, a
Receivable as to which the earliest of any of the following events has occurred
(i) the related Financed Vehicle has been repossessed and sold by the Servicer,
(ii) at least 50% of any Scheduled Payment has become 121 or more days
delinquent, or (iii) the Servicer has determined in good faith that all amounts
it expects to recover with respect thereto have been received. Any Receivable
that becomes a Purchased Receivable on or before the related Determination Date
shall not be a Liquidated Receivable.
"Liquidation Proceeds" means, with respect to a Liquidated Receivable,
all amounts realized with respect to such net of (i) reasonable expenses of the
Servicer incurred in connection with the collection of such Receivable and the
repossession and disposition of the related Financed Vehicle and (ii) amounts
that are required to be refunded to the Obligor on such Receivable; provided,
however, that the Liquidation Proceeds with respect to any Receivable shall in
no event be less than zero.
"Lockbox Processor" means Regulus West LLC or any other lockbox
processor named by the Servicer and acceptable to the Agent.
"Master Collection Account" has the meaning given such term in Section
8.2(d).
"Monthly Records" means all records and data maintained by the Servicer
with respect to the Transferred Receivables and the Obligors, including the
following with respect to each
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17
Transferred Receivable: the account number; the originating Dealer; Obligor
name; Obligor address; Obligor home phone number; Obligor business phone number
(if any); original Amount Financed or Principal Balance; original total of
payments; original term; Annual Percentage Rate; current Principal Balance;
current remaining term; contract origination date; first payment date; final
scheduled payment date; next payment due date; collateral description; days
currently delinquent; new/used classification; amount of Scheduled Payment; and
past due late charges, if any.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc., or any successor
thereto.
"Note" means a promissory grid note, in the form of Exhibit B.
"Note Register" has the meaning set forth in Section 16.5(a).
"Note Registrar" has the meaning set forth in Section 16.5(a).
"Obligations" means all obligations (monetary or otherwise) of the
Borrower to the Investors, the Collateral Agent, the Custodian, the Agent or any
other Affected Person arising under or in connection with this Agreement, any
Note and each other Transaction Document.
"Obligor" means a Person obligated to make payments with respect to a
Transferred Receivable.
"Officer's Certificate" means a certificate signed by an Executive
Officer.
"Official Body" means any government or political subdivision or any
agency, authority, regulatory body, bureau, central bank, commission, department
or instrumentality of any such government or political subdivision, or any
court, tribunal, grand jury or arbitrator, in each case whether foreign or
domestic.
"Opinion of Counsel" means a written opinion of independent counsel
reasonably acceptable in form and substance and from counsel acceptable to the
Agent and, if such opinion or a copy thereof is required to be delivered to the
Collateral Agent, reasonably acceptable (as to form and substance) to the
Collateral Agent.
"Parent Guarantee" means the Guarantee dated as of the date hereof made
by Drive in favor of the Agent, including all amendments, modifications and
supplements thereto.
"Parent Pledge Agreement" means the Pledge Agreement dated as of the
date hereof made by Drive in favor of the Agent, including all amendments,
modifications and supplements thereto.
"Parent Security Agreement" means the Security Agreement dated as of the
date hereof made by Drive in favor of the Agent, including all amendments,
modifications and supplements thereto.
"Participant" has the meaning set forth in Section 16.9.
"Permitted Investment" means, at any time:
(a) direct interest-bearing obligations of, and interest-bearing
obligations guaranteed as to timely payment of principal and interest
by, the United States or any
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18
agency or instrumentality of the United States, the obligations of which
are backed by the full faith and credit of the United States;
(b) demand or time deposits in, certificates of deposit of,
demand notes of, or bankers' acceptances issued by any depository
institution or trust company organized under the laws of the United
States or any State thereof (including any federal or state branch or
agency of a foreign depository institution or trust company) and subject
to supervision and examination by federal and/or state banking
authorities (including, if applicable, the Collateral Agent, the Agent
or any agent thereof acting in its commercial capacity); provided that
the short-term unsecured debt obligations of such depository institution
or trust company at the time of such investment, or contractual
commitment providing for such investment, are rated at least "A-1" by
Standard & Poor's and "P-1" by Moody's;
(c) repurchase obligations pursuant to a written agreement (i)
with respect to any obligation described in clause (a) above, where the
Collateral Agent has taken actual or constructive delivery of such
obligation in accordance with Article IX of this Agreement, and (ii)
entered into with (x) BOS or IFA or (y) the corporate trust department
of a depository institution or trust company organized under the laws of
the United States or any State thereof, the deposits of which are
insured by the Federal Deposit Insurance Corporation and the short-term
unsecured debt obligations of which are rated at least "A-1" by Standard
& Poor's and "P-1" by Moody's (including, if applicable, the Collateral
Agent, the Agent or any agent thereof acting in its commercial
capacity);
(d) securities bearing interest or sold at a discount issued by
any corporation incorporated under the laws of the United States or any
State whose long-term unsecured debt obligations are assigned one of the
two highest long-term ratings by each Rating Agency at the time of such
investment or contractual commitment providing for such investment;
provided, however, that securities issued by any particular corporation
will not be Permitted Investments to the extent that an investment
therein will cause the then outstanding principal amount of securities
issued by such corporation and held in the Collection Account and the
Collateral Account to exceed 10% of the value of Permitted Investments
held in such accounts (with Permitted Investments held in such accounts
valued at par);
(e) commercial paper that (i) is payable in United States
dollars and (ii) is rated at least "A-1" by Standard & Poor's and "P-1"
by Moody's;
(f) units of money market funds rated in the highest credit
rating category by each Rating Agency; or
(g) any other demand or time deposit, obligation, security or
investment (including, without limitation, a hedging arrangement) as may
be acceptable to the Agent and the Agent, as evidenced by a writing to
that effect.
Permitted Investments may be purchased by or through the Collateral Agent or any
of its Affiliates. All Permitted Investments shall be held in the name of the
Collateral Agent. No Permitted Investment shall have a "r" highlighter affixed
to its Standard & Poor's rating.
"Permitted Lien" means (i) the Lien in favor of the Collateral Agent for
the benefit of the Secured Parties and (ii) the restrictions on transferability
imposed by the Transaction Documents.
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"Person" means an individual, partnership, corporation (including a
business trust), joint stock company, limited liability company, trust,
unincorporated association, joint venture, government or any agency or political
subdivision thereof or any other entity.
"Physical Property" means personal property constituting Instruments,
including bankers' acceptances, commercial paper, negotiable certificates of
deposit and other obligations that are susceptible of physical delivery.
"Portfolio Net Losses" means with respect to any Collection Period, the
aggregate amount of gross charge-offs of Receivables in the Servicing Portfolio
during such Collection Period net of all Liquidation Proceeds with respect to
any such Receivables (including post- disposition amounts received on previously
charged-off Receivables).
"Portfolio Net Loss Ratio" means, as of any date, a fraction, expressed
as a percentage, the numerator of which equals the product of 4.0 times the sum
of the Portfolio Net Losses for the three (3) preceding Collection Periods and
the denominator of which equals the Average Servicing Portfolio as of such date.
The Portfolio Net Loss Ratio shall be determined on each Determination Date and
shall remain in effect until recalculated on the next succeeding Determination
Date.
"Pre-Computed Receivable" means any Receivable under which the portion
of a payment allocable to earned interest (which may be referred to in the
related Receivable as an add-on finance charge) and the portion allocable to the
Amount Financed is determined according to the sum of periodic balances or the
sum of monthly balances or any equivalent method or are monthly actuarial
receivables.
"Preference Amount" means any amounts previously distributed to an
Investor that are recoverable and sought to be recovered as a voidable
preference by a trustee in bankruptcy with respect to Drive or the Borrower
pursuant to the U.S. Bankruptcy Code (11 U.S.C.), as amended from time to time,
in accordance with a final nonappealable order of a court having competent
jurisdiction.
"Principal Balance" means, with respect to any Receivable, as of any
date, (i) in the case of a Pre-Computed Receivable, the payoff balance of such
Receivable computed as set forth in such Receivable minus any Cram Down Loss in
respect of such Receivable, and (ii) in the case of a Simple Interest
Receivable, the Amount Financed minus that portion of all payments (including
all Scheduled Payments and any prepayments in full or partial prepayment)
received on or prior to such date and allocable to principal in accordance with
the simple interest method minus any Cram Down Loss in respect of such
Receivable.
"Property" has the meaning set forth in the Receivables Purchase
Agreement.
"Purchase Amount" means, with respect to a Receivable, the Principal
Balance and all accrued and unpaid interest on such Receivable as of the date as
of which such Receivable is to be purchased.
"Purchase Date" means, with respect to a Receivable, the date on which
such Receivable is sold or contributed to the Borrower pursuant to the
Receivables Purchase Agreement.
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"Purchased Receivable" means, with respect to any Collection Period, any
Receivable as to which the Purchase Amount has been deposited in the Collection
Account by or on behalf of the Borrower or the Servicer, as applicable, on or
before the related Determination Date and any Receivable purchased by the
Servicer or Drive pursuant to Section 8.7, 8.17 or 8.19 as to which the Purchase
Amount has been deposited in the Collection Account by or on behalf of the
Servicer or Drive, as the case may be.
"Rating Agencies" means Standard & Poor's and ▇▇▇▇▇'▇.
"Receivable" means a retail installment contract or loan or any other
similar document acceptable to the Agent (and related security agreement) for a
new or used automobile, light truck or sports utility vehicle (and all
accessories thereto), and all rights and obligations under such a contract or
loan.
"Receivable Collateral" means the Transferred Receivables together with
the other Property.
"Receivable File" means, with respect to each Transferred Receivable:
(a) the fully executed original of such Receivable (together
with any agreements modifying such Receivable, including, without
limitation, any extension agreements provided that the Collateral Agent
shall not have to certify the receipt of any such agreements modifying
or extending the Receivable);
(b) the original credit application, or a copy thereof, of each
Obligor; and
(c) a copy of the original Lien Certificate (when received) and
a copy of any such other documents, if any, that Drive keeps on file in
accordance with its customary procedures indicating that the Financed
Vehicle is owned by the Obligor and subject to the interest of Drive as
first lienholder or secured party (including any Lien Certificate
received by Drive), or, if such original Lien Certificate has not yet
been received, a copy of the application therefor, if any, showing Drive
as secured party.
"Receivables Purchase Agreement" means the Master Purchase Agreement,
dated as of August 18, 2000, by and between the Borrower and Drive.
"Record Date" means, with respect to any Determination Date or
Distribution Date, the last day of the immediately preceding calendar month.
"Registrar of Titles" means, with respect to any state, the Official
Body responsible for the registration of, and the issuance of certificates of
title relating to, motor vehicles and liens thereon.
"Required Holdback" means, as of any date, the product of (1) the
Required Percentage and (2) the sum of (x) the Aggregate Outstanding Principal
Balance of Transferred Receivables which are Eligible Receivables on such date
plus (y) the amount on deposit in the Collection Account on such date.
"Required Lenders" means, at any time, Lenders having Commitments or, if
no Commitments are in effect, Advances, aggregating at least 51% of the Total
Commitment or Advances (as the case may be).
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21
"Required Percentage" means 10% or, upon written notice given by the
Borrower to the other parties under this Agreement, such other higher or lower
rate agreed to by the Borrower and the Agent from time to time.
"Responsible Officer" means, with respect to any Person that is not an
individual, the President, any Vice-President or Assistant Vice-President,
Corporate Trust Officer or the Controller of such Person, or any other officer
or employee having similar functions.
"Schedule of Receivables" means the schedule of all retail installment
contracts sold and transferred to the Borrower on the Initial Advance Date
attached to the Receivables Purchase Agreement as Schedule A, as supplemented by
each Schedule of Subsequent Receivables, as each may be amended from time to
time, including to remove Purchased Receivables.
"Schedule of Subsequent Receivables" means on any date, the schedule of
all retail installment contracts sold and transferred to the Borrower pursuant
to the Receivables Purchase Agreement on such date and shall supplement the
Schedule of Receivables.
"Scheduled Payment" means, with respect to any Collection Period for any
Receivable, the amount set forth in such Receivable as required to be paid by
the Obligor thereon in such Collection Period. If, after the applicable Purchase
Date, the Obligor's obligation under a Receivable with respect to a Collection
Period has been modified so as to differ from the amount specified in such
Receivable as a result of (i) the order of a court in an insolvency proceeding
involving the Obligor, (ii) the Soldiers' and Sailors' Civil Relief Act of 1940
or (iii) modifications or extensions of the Receivable permitted by Section
8.2(b) or 8.2(c), the Scheduled Payment with respect to such Collection Period
shall refer to the Obligor's payment obligation with respect to such Collection
Period as so modified.
"Secured Parties" means, collectively, the Agent, each Lender, the
Collateral Agent, each other Affected Person and their respective successors and
assigns.
"Securities Account" has the meaning set forth in Section 8-501(a) of
Article 8.
"Securities Entitlement" has the meaning set forth in Section
8-102(a)(17) of Article 8.
"Securities Intermediary" has the meaning set forth in Section
8-102(a)(14) of Article 8.
"Security Agreement" means the Security and Collateral Agent Agreement
dated as of the date hereof among the Agent, the Collateral Agent, Drive and the
Borrower, including all amendments, modifications and supplements thereto.
"Seller" means Drive in its capacity as the Seller under the Receivables
Purchase Agreement.
"Servicer" means Drive or, as applicable, any successor servicer
appointed pursuant to Section 13.3.
"Servicer Delinquency Ratio" means, as of the last day of a Collection
Period, the ratio, expressed as a percentage, computed by dividing (i) the
Aggregate Outstanding Principal Balance on such date of each Receivable in the
Servicing Portfolio which is a Delinquent Receivable by
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(ii) the Aggregate Outstanding Principal Balance of all Receivables in the
Servicing Portfolio on the last day of such Collection Period.
"Servicer Termination Event" has the meaning set forth in Section 13.1.
"Servicer's Certificate" means, with respect to each Determination Date,
a certificate, completed by and executed on behalf of the Servicer, in
accordance with Section 8.9, substantially in the form attached hereto as
Exhibit E.
"Servicing Fee Rate" means 3.0%, or, following a Servicer Termination
Event, such higher rate as may be payable at such time to a successor Servicer.
"Servicing Portfolio" means as of any date, the Aggregate Outstanding
Principal Balance of all Receivables (whether or not thereafter sold or disposed
of) which are serviced by the Servicer or any of its Affiliates at such time.
"Servicing Procedures Manual" means Drive's written credit, servicing
and collections procedures delivered to the Agent prior to the Closing Date, as
amended from time to time in accordance herewith.
"Settlement Date" means, with respect to any Advance, (x) each
Distribution Date, (y) at the option of the Agent or the Borrower, the last day
of the current Interest Period of such Advance or (z) the date on which the
Borrower shall prepay such Advance pursuant to Section 4.1 hereof.
"Simple Interest Receivable" means a Receivable under which principal
and interest is allocated according to the simple interest method.
"Standard & Poor's" means Standard & Poor's Ratings Services, a division
of The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc., or any successor thereto.
"Subsequent Cut-Off Date" means, with respect to any Subsequent
Receivable, the close of business on any day at least one Business Day but not
more than thirty days before the related Subsequent Purchase Date.
"Subsequent Purchase Date" has the meaning set forth in the Receivables
Purchase Agreement.
"Subsequent Receivable" means each of the Receivables sold to the
Borrower pursuant to Section 2.2 of the Receivables Purchase Agreement, which
shall be listed on a Schedule of Subsequent Receivables.
"Subsidiary" means, with respect to any Person, a corporation of which
such Person and/or its other Subsidiaries own, directly or indirectly, such
number of outstanding shares as have more than 50% of the ordinary voting power
for the election of directors.
"Supplemental Servicing Fee" means, with respect to any Collection
Period, all administrative fees, expenses and charges paid by or on behalf of
Obligors, including any late fees, non-sufficient fund or returned check fees
and liquidation fees collected on the Receivables
- 17 -
23
during such Collection Period and reimbursement of any personal property taxes
assessed on repossessed Financed Vehicles paid by the Servicer.
"Tangible Net Worth" means, with respect to any Person, the net worth of
such Person calculated in accordance with GAAP after subtracting therefrom the
aggregate amount of such Person's intangible assets, including, without
limitation, goodwill, franchises, licenses, patents, trademarks, tradenames,
copyrights and service marks.
"Take-Out Securitization" means (i) a financing transaction of any sort
undertaken by the Borrower or any Affiliate of Drive or the Borrower secured,
directly or indirectly, by any Receivable which was a Transferred Receivable
prior to such transaction or (ii) any Drive or other asset securitization,
secured loans, whole loan sale or similar transactions involving any Receivable
which was a Transferred Receivable prior to such transaction or any beneficial
interest therein.
"Taxes" has the meaning set forth in Section 5.1(b).
"Total Commitment" means the aggregate of the Commitments of all
Lenders.
"Total Servicing Fee" means the sum of the Basic Servicing Fee and the
Supplemental Servicing Fee.
"Transaction Documents" means this Agreement, the Notes, the Custodian
Agreement, the Receivables Purchase Agreement, the Security Agreement, the
Intercreditor Agreement, the Parent Guarantee, the Parent Pledge Agreement, the
Parent Security Agreement, and the other documents to be executed and delivered
in connection with this Agreement.
"Transferred Receivable" means each Receivable which appears on any
Schedule of Receivables at any time hereafter submitted to the Borrower pursuant
to the Receivables Purchase Agreement, whether purchased by the Borrower or
contributed to the capital of the Borrower. Once a Receivable appears on any
such Schedule of Receivables it shall remain a Transferred Receivable; provided,
however, that any Receivable that is released from the Lien granted to the
Collateral Agent for the benefit of the Secured Parties pursuant to Section 7 of
the Security Agreement shall not be a "Transferred Receivable" after such
Receivable is so released.
"Transfer Request" has the meaning set forth in Section 7(a) the
Security Agreement.
"UCC" means the Uniform Commercial Code as from time to time in effect
in the applicable jurisdiction or jurisdictions.
"Uncertificated Security" has the meaning set forth in Section
8-102(a)(18) of Article 8.
"Unmatured Facility Termination Event" means any event that, if it
continues uncured, will, with lapse of time or notice or lapse of time and
notice, constitute a Facility Termination Event.
"Weekly Pool Report Date" means the day of each calendar week selected
as such from time to time and notified in writing at least one month in advance
by the Borrower to the Agent, the Collateral Agent.
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24
"written" or "in writing" (and other variations thereof) means any form
of written communication or a communication by means of telex, telecopier
device, telegraph or cable.
"Year 2000 Compliant" means, with regard to any software, embedded
microchips or other processing capabilities utilized by any Person, that such
software, embedded microchips or other processing capabilities are able to
interpret and manipulate data involving all calendar dates correctly and without
causing any abnormal ending scenario, including dates in and after the year
2000.
a. Other Definitional Provisions. (a) Unless otherwise
specified therein, all terms defined in this Agreement
have the meanings as so defined herein when used in any
other Transaction Document, certificate, report or other
document made or delivered pursuant hereto.
(b) Each term defined in the singular form in Section 1.1 or
elsewhere in this Agreement shall mean the plural thereof when the plural form
of such term is used in this Agreement or any other Transaction Document,
certificate, report or other document made or delivered pursuant hereto, and
each term defined in the plural form in Section 1.1 shall mean the singular
thereof when the singular form of such term is used herein or therein.
(c) The words "hereof," "herein," "hereunder" and similar terms when
used in this Agreement shall refer to this agreement as a whole and not to any
particular provision of this Agreement, and article, section, subsection,
schedule and exhibit references herein are references to articles, sections,
subsections, schedules and exhibits to this Agreement unless otherwise
specified.
6.
THE FACILITY, ADVANCE PROCEDURES AND NOTES
a. Facility. On the terms and subject to the conditions set
forth in this Agreement, each Lender shall make Advances
(to the extent of its Commitment) to the Borrower on a
revolving basis from time to time during the period
commencing on the Effective Date and ending on the
Facility Termination Date, in each case in such amounts
as may be requested by the Borrower pursuant to Section
2.2. If on any day there shall be more than one Lender,
any Advance requested by the Borrower on such day shall
be allocated among the Lenders pro rata on the basis of
their respective Commitment Percentages. The lending
arrangement made available to the Borrower pursuant to
the preceding sentences of this Section 2.1 is herein
called the "Facility". The aggregate principal amount of
all Advances from time to time outstanding hereunder
shall not exceed the lesser of (a) the Facility Limit
and (b) the Borrowing Base. In addition, under no
circumstances shall any Lender make any Advance if after
giving effect thereto the aggregate outstanding
principal balance of all Advances owing to such Lender
would exceed its Commitment. Within the limits of the
Facility, the Borrower may borrow, prepay and reborrow
under this Section 2.1.
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25
b. Advance Procedures. The Borrower may request an Advance
hereunder by giving notice to the Agent and the
Collateral Agent of a proposed Advance not later than
1:00 P.M., New York time, three Business Days prior to
the proposed date of such Advance. Each such notice
(herein called an "Advance Request") shall be in the
form of Exhibit A-1 and shall include the date and
amount of such proposed Advance, the desired duration of
the Interest Period for such Advance, an estimate of the
amount of Receivables to be financed in the week
commencing on the date such Advance is requested to be
made and the Schedule of Receivables or Schedule of
Subsequent Receivables (as the case may be) setting
forth the information required therein with respect to
the Receivables, if any, to be acquired by the Borrower
on the date such Advance is requested to be made. No
more than two Advance Requests may be made in any
calendar week. Any Advance Request given by the Borrower
pursuant to this Section 2.2 shall be irrevocable and
binding on the Borrower.
c. Funding. Subject to the satisfaction of the conditions
precedent set forth in Article VII with respect to such
Advance and the limitations set forth in Section 2.1,
the Lenders shall make the proceeds of such requested
Advance available to the Borrower by deposit to such
account as may be designated by the Borrower in the
related Advance Request in same day funds no later than
3:00 p.m., New York City time, on the proposed date of
the Advance. Each Advance shall be on a Business Day and
shall be in an amount of at least $1,000,000 (or an
integral multiple of $50,000 in excess thereof).
c. Representation and Warranty. Each request for an Advance
pursuant to Section 2.2 shall automatically constitute a
representation and warranty by the Borrower to the Agent
and the Lenders that, on the requested date of such
Advance, (a) the representations and warranties
contained in Article X will be true and correct as of
such requested date as though made on such date, (b) no
Facility Termination Event or Unmatured Facility
Termination Event has occurred and is continuing or will
result from the making of such Advance, and (c) after
giving effect to such requested Advance, the aggregate
principal balance of the outstanding Advances hereunder
will not exceed the lesser of the Facility Limit or the
Borrowing Base.
e. Voluntary Termination of Facility; Reduction of Facility
Limit.
At any time the Borrower may, upon at least five Business Days' prior
written notice to the Agent terminate in whole or reduce the Total Commitment.
Each partial reduction shall be in an aggregate amount of $5,000,000 or integral
multiples of $1,000,000 in excess thereof. Partial reductions of the Total
Commitment pursuant to this Section 2.5(a) shall be allocated to the Commitment
of each Lender pro rata based on the Commitment Percentage represented by such
Commitment. Any termination or reduction of the Total Commitment shall require
(i) in the event of a partial reduction and after giving effect to any such
partial reduction and any prior partial reduction, that the remaining Facility
Limit be not less than $10,000,000, and (ii) in
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26
connection therewith that the Borrower comply with Section 3.2(b), Section
4.l(b) and Section 6.3. The Agent shall promptly provide copies of any such
notice of termination or reduction received by it to each Lender together with a
computation of the amount by which its Commitment (if any) has been reduced.
f. Notes. All Advances to a Lender shall be evidenced by a
Note, with appropriate insertions, payable to the order
of such Lender. The Borrower hereby irrevocably
authorizes each Lender to make (or cause to be made)
appropriate notations on the grid attached to its Note
(or on any continuation of such grid, or at such
Lender's option, in its records), which notations, if
made, shall evidence, inter alia, the date of, the
outstanding principal of, and the yield rate(s) and
Interest Period(s) applicable to the Advances evidenced
thereby. Such notations shall be rebuttably presumptive
evidence of the subject matter thereof absent manifest
error; provided, however, that the failure to make any
such notations shall not limit or otherwise affect any
of the Obligations.
7.
YIELD, FEES, ETC.
a. Interest. The Borrower hereby promises to pay interest
at the Bank Rate on the unpaid principal amount of each
Advance (or each portion thereof) for the period
commencing on the date of such Advance until such
Advance is paid in full. No provision of this Agreement
or the Note shall require the payment or permit the
collection of interest in excess of the maximum
permitted by applicable law.
b. Interest Payment Dates. Interest accrued on each Advance
shall be payable, without duplication:
i. on the Facility Termination Date;
ii. on the date of any payment or prepayment, in
whole or in part, of principal outstanding on
such Advance; and
iii. on each Distribution Date.
c. Selection of Interest Periods, etc.
i. The Borrower, after consultation with the Agent,
shall select the duration of the initial and
each subsequent Interest Period relating to each
Advance. Unless consented to or directed by the
Agent, the aggregate number of Interest Periods
for all Advances outstanding at any one time
hereunder shall not exceed 12.
d. Fee. The Borrower agrees to pay to the Agent on
September 15, 2000 a fee of $50,000.
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27
e. Computation of Interest. All Interest shall be computed
on the basis of the actual number of days (including the
first day but excluding the last day) occurring during
the period for which such Interest is payable over a
year comprised of 360 days (or, in the case of Interest
on an Advance bearing Interest at the Alternate Base
Rate, 365 days or, if appropriate, 366 days).
8.
REPAYMENTS AND PREPAYMENTS
a. Repayments and Prepayments. The Borrower shall repay in
full the unpaid principal amount of each Advance on the
Final Scheduled Payment Date. Prior thereto, the
Borrower:
i. may, from time to time on any Business Day, make
a prepayment, in whole or in part, of the
outstanding principal amount of any Advance;
provided, however, that
(1) all such voluntary prepayments shall
require at least two but no more than
five Business Days' prior written notice
to the Agent; and
(2) all such voluntary partial prepayments
shall be in a minimum amount of
$1,000,000 and an integral multiple of
$500,000;
ii. shall, on or prior to each date when any
reduction in the Facility Limit shall become
effective pursuant to Section 2.5, make a
prepayment of the Advances in an amount equal to
the excess, if any, of the aggregate outstanding
principal amount of the Advances over the
Facility Limit as so reduced;
iii. shall, on each date when the outstanding amount
of Advances exceeds the Borrowing Base, make a
prepayment of the Advances in an amount equal to
such excess;
iv. shall, immediately upon any acceleration of the
maturity date of any Advances pursuant to
Section 14.2, repay all Advances, unless,
pursuant to Section 14.2(a), only a portion of
all Advances is so accelerated, in which event
the Borrower shall repay the accelerated portion
of the Advances; and
v. shall, on the date the Borrower receives any net
proceeds from any TakeOut Securitization (after
deducting all costs and expenses of such TakeOut
Securitization), make a prepayment of the
Advances in an amount substantially equal to
such net proceeds or, if less, the total
outstanding amount of Advances.
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Each such prepayment shall be subject to the payment of any amounts
required by Section 6.3 resulting from a prepayment or payment of an Advance
prior to the end of the Interest Period with respect thereto.
9.
PAYMENTS; TAXES
a. Making of Payments; Taxes. (a) Subject to, and in
accordance with, the provisions of the Security
Agreement, all payments of principal of, or Interest on,
the Advances and of all fees and other amounts shall be
made by the Borrower no later than 2:00 p.m., New York
time, on the day when due in lawful money of the United
States of America in immediately available funds to the
Agent, at its account (account number - _________; and
account name - _________) maintained at the office of
_________ (ABA #________), reference: [Drive 2000
Warehouse], with telephone notice (including wire
number) to the Agent (telephone number _____________),
or such other account as the Agent shall designate in
writing to the Borrower and the Collateral Agent (the
"Agent's Account"). Payments received by the Agent after
2:00 p.m., New York time, on any day will be deemed to
have been received by the Agent on its next following
Business Day. The Agent shall, upon receipt of such
payments, promptly remit such payments (in the same type
of funds received by the Agent) to each Lender which has
an interest in such payments hereunder and pro rata
among the Lenders with such interests on the basis of
the respective amounts owing to such Lenders of the
Obligations to which such payments relate.
(b) All payments described in Section 5.1(a) and all other payments
made by or on behalf of the Borrower, the Seller, Drive or the Servicer to the
Agent for the benefit of itself or the Lenders or to any other Affected Person
under this Agreement and any other Transaction Document shall be made free and
clear of, and without deduction or withholding for or on account of, any present
or future income, stamp or other taxes, levies, imposts, duties, charges, fees,
deductions or withholdings, now or hereafter imposed, levied, collected,
withheld or assessed by any Official Body (excluding (i) taxes imposed on the
net income of the Agent or such other Affected Person, however denominated, and
(ii) franchise taxes imposed on the net income of the Agent or such other
Affected Person in each case imposed: (1) by the United States or any political
subdivision or taxing authority thereof or therein; (2) by any jurisdiction
under the laws of which the Agent or such Affected Person or its applicable
lending office is organized or located, managed or controlled or in which its
principal office is located or any political subdivision or taxing authority
thereof or therein; or (3) by reason of any connection between the jurisdiction
imposing such tax and the Agent, such Affected Person or such lending office
other than a connection arising solely from this Agreement or any other
Transaction Document or any transaction hereunder or thereunder) (all such
non-excluded taxes, levies, imposts, duties, charges, fees, deductions or
withholdings, collectively or individually, "Taxes"). If any such Taxes are
required to be withheld from any amounts payable to the Agent or any other
Affected Person hereunder or under any other Transaction Document, the amounts
so payable to the Agent or such Affected Person shall be increased to the extent
necessary to yield to the Agent or such Affected Person (after payment of all
Taxes) all amounts payable hereunder
- 23 -
29
or thereunder at the rates or in the amounts specified in this Agreement and the
other Transaction Documents. The Borrower (or the party required to "gross-up"
the applicable payment) and Drive, jointly and severally, shall indemnify the
Agent or any such Affected Person for the full amount of any such Taxes on the
Settlement Date occurring after the date of written demand therefor by the
Agent; provided that no Person shall be indemnified pursuant to this Section
5.1(b) to the extent the reason for such indemnification relates to, or arises
from, the failure by such Person to comply with the provisions of Section
5.1(c).
(c) Each Affected Person that is not incorporated under the laws of
the United States of America or a state thereof or the District of Columbia
shall:
(1) prior to becoming a party to, or
acquiring an interest in, any
Transaction Document (if not a party to
a Transaction Document), deliver to the
Borrower and the Agent (A) two duly
completed copies of IRS Form W-8BEN or
Form W-8ECI, or successor applicable
form, as the case may be, and (B) an IRS
Form W-8 or W-9, or successor applicable
form, as the case may be; and
(2) deliver to the Borrower and the Agent
two (2) further copies of any such form
or certification on or before the date
that any such form or certification
expires or becomes obsolete and after
the occurrence of any event requiring a
change in the most recent form
previously delivered by it to the
Borrower and the Agent;
unless, in any such case, an event (including, without limitation, any change in
treaty, law or regulation) has occurred after the Closing Date and prior to the
date on which any such delivery would otherwise be required which renders all
such forms inapplicable or which would prevent such Affected Person from duly
completing and delivering any such form with respect to it, and such Affected
Person so advises the Borrower and the Agent. Each such Affected Person so
organized shall certify (i) in the case of an IRS Form W-8BEN or IRS Form
W-8ECI, that it is entitled to receive payments under the this Agreement and the
other Transaction Documents without deduction or withholding of any United
States federal income taxes and (ii) in the case of an IRS Form W-8 or IRS Form
W-9, that it is entitled to an exemption from United States backup withholding
tax.
b. Application of Certain Payments. Each payment of
principal of the Advances shall be applied to such
Advances as the Borrower shall direct or, in the absence
of such notice or during the existence of a Facility
Termination Event or after the Facility Termination
Date, as the Agent shall determine, in its discretion.
c. Due Date Extension. If any payment of principal or
Interest with respect to any Advance falls due on a day
which is not a Business Day, then such due date shall be
extended to the next following Business Day, and
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additional Interest shall accrue and be payable for the
period of such extension at the rate applicable to such
Advance.
10.
INCREASED COSTS, ETC.
a. Increased Costs. (a) If due to the introduction of or
any change in or in the interpretation of any law or
regulation occurring or issued after the date hereof,
the Agent, any Lender or other Investor, or any of their
respective Affiliates (each an "Affected Person")
determines that compliance with any law or regulation or
any guideline or request from any central bank or other
Official Body (whether or not having the force of law)
affects or would affect the amount of capital required
or expected to be maintained by such Affected Person and
such Affected Person determines that the amount of such
capital is increased by or based upon the existence of
its obligations or commitments hereunder or with respect
hereto or to the funding thereof and other obligations
or commitments of the same type, then, upon demand by
such Affected Person (with a copy to the Agent) (which
demand shall be accompanied by a statement setting forth
the basis for the calculations of the amount being
claimed), the Borrower and Drive, jointly and severally,
agree to immediately pay to the Agent, for the account
of such Affected Person (as a third-party beneficiary),
from time to time as specified by such Affected Person,
additional amounts sufficient to compensate such
Affected Person in the light of such circumstances, to
the extent that such Affected Person reasonably
determines such increase in capital to be allocable to
the existence of any of such obligations, commitments or
fundings. Such written statement shall, in the absence
of manifest error, be rebuttably presumptive evidence of
the subject matter thereof. Any Affected Person claiming
any additional amounts payable pursuant to this Section
6.1(a) agrees to use reasonable efforts (consistent with
legal and regulatory restrictions) to designate a
different office or branch of such Affected Person as
its lending office or take such other actions if the
making of such a designation or taking of such other
actions would avoid the need for, or reduce the amount
of, any such additional amounts and would not, in the
reasonable judgment of such Affected Person, be
otherwise disadvantageous to such Affected Person.
(b) If, due to either (i) the introduction of or any change (other
than any change by way of imposition or increase of reserve requirements
referred to in Section 6.2) in or in the interpretation by an Official Body of
any law or regulation or (ii) compliance with any guideline or request from any
central bank or other Official Body (whether or not having the force of law)
issued after the date hereof, there shall be any increase in the cost to a
Lender of agreeing to make Advances in respect of which Interest is computed by
reference to the Eurodollar Rate, then, upon demand by such Lender (with a copy
to the Agent) (which demand shall be accompanied by a statement setting forth
the basis for the amount being claimed), the Borrower and Drive, jointly and
severally, agree to immediately pay to the Agent, for the account of such Lender
(as a third-party beneficiary), from time to time as specified by such Lender,
additional amounts sufficient to compensate such Lender for such increased
costs. Such written statement
- 25 -
31
shall, in the absence of manifest error, be rebuttably presumptive evidence of
the subject matter thereof. Any Affected Person claiming any additional amounts
payable pursuant to this Section 6.1(b) agrees to use reasonable efforts
(consistent with legal and regulatory restrictions) to designate a different
office or branch of such Affected Person as its lending office or to take such
other actions if the making of such a designation or taking of such other
actions would avoid the need for, or reduce the amount of, any such additional
amounts and would not, in the reasonable judgment of such Affected Person, be
otherwise disadvantageous to such Affected Person.
b. Additional Interest on Advances Bearing a Eurodollar
Rate. The Borrower and Drive, jointly and severally,
agree to pay to any Lender, so long as such Lender shall
be required under regulations of the Board of Governors
of the Federal Reserve System to maintain reserves with
respect to liabilities or assets consisting of or
including Eurocurrency Liabilities, additional Interest
on the unpaid Advances of such Lender during each
Interest Period in respect of which Interest is computed
by reference to the Eurodollar Rate, for such Interest
Period, at a rate per annum equal at all times during
such Interest Period to the remainder obtained by
subtracting (i) the Eurodollar Rate for such Interest
Period from (ii) the rate obtained by dividing such
Eurodollar Rate referred to in clause (i) above by that
percentage equal to 100% minus the Eurodollar Rate
Reserve Percentage of such Lender for such Interest
Period, payable on each date on which Interest is
payable on such Advances. Such additional Interest shall
be determined by such Lender and notice thereof
(accompanied by a statement setting forth the basis for
the amount being claimed) given to the Borrower through
the Agent within 30 days after any Interest payment is
made with respect to which such additional Interest is
requested. Such written statement shall, in the absence
of manifest error, be rebuttably presumptive evidence of
the subject matter thereof. Any Affected Person claiming
any additional amounts payable pursuant to this Section
6.2 agrees to use reasonable efforts (consistent with
legal and regulatory restrictions) to designate a
different office or branch of such Affected Person as
its lending office if the making of such a designation
would avoid the need for, or reduce the amount of, any
such additional amounts and would not, in the reasonable
judgment of such Affected Person, be otherwise
disadvantageous to such Affected Person.
c. Funding Losses. The Borrower and Drive, jointly and
severally, hereby agree that upon demand by any Affected
Person (which demand shall be accompanied by a statement
setting forth the basis for the calculations of the
amount being claimed) they will indemnify such Affected
Person against any net loss or expense which such
Affected Person may sustain or incur (including, without
limitation, any net loss or expense incurred by reason
of or resulting from interest to accrue on the related
commercial paper after the date of any failed borrowing,
payment or prepayment of an Advance or from the
liquidation or reemployment of deposits or other funds
acquired by such Affected Person to fund or maintain any
Advance to the Borrower), as reasonably determined by
such Affected Person, as a result of any failure by the
Borrower to borrow an Advance on the date
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32
specified therefor in an Advance Request (other than due
to a default by a Lender) or as a result of any payment
or prepayment (including any mandatory prepayment) of
any Advance on a date other than the last day of the
Interest Period for such Advance. Such written statement
shall, in the absence of manifest error, be rebuttably
presumptive evidence of the subject matter thereof.
d. Replacement of Affected Person. Upon the receipt by the
Borrower of a claim for reimbursement or compensation
under Section 6.1 or 6.2 hereof by an Affected Person,
if payment thereof shall not be waived by such Affected
Person, the Borrower may (a) request such Affected
Person or the Lender that has assigned an interest in
its Advances to such Affected Person to use reasonable
efforts to assist the Borrower in its attempt to obtain
a replacement bank or financial institution satisfactory
to the Borrower (in the case of a replacement Lender)
and the Agent (which consent shall not be unreasonably
withheld), to acquire and assume all or a ratable part
of such Affected Person's commitment to make Advances,
Advances, or interests therein (a "Replacement Person"),
or (b) request one or more of the other Lenders or
Investors to acquire and assume all or a part of such
Affected Person's commitment to make Advances, Advances
or interests therein. Upon notice from the Borrower,
such Affected Person shall, or the Lender that has
assigned an interest in its Advances to such Affected
Person shall cause such Affected Person to, assign,
without recourse, its commitment to make Advances,
Advances or interests therein and its other rights and
obligations (if any) hereunder, or a ratable share
thereof, to the Replacement Person or Replacement
Persons designated by the Borrower and consented to by
the Agent for a purchase price equal to the sum of the
principal amount of the Advances or interests therein so
assigned, all accrued and unpaid Interest thereon and
any other amounts (including any amounts owing under
this Article VI) to which such Affected Person is
entitled hereunder; provided, that the Borrower shall
provide such Affected Person with an Officer's
Certificate stating that such Replacement Person has
advised the Borrower that it is not subject to, or has
agreed not to seek, such increased amount.
11.
EFFECTIVENESS; CONDITIONS TO ADVANCES
a. Effectiveness. This Agreement shall become effective on
the first day (the "Effective Date") on which the Agent,
on behalf of the Lenders, shall have received the
following, each in form and substance satisfactory to
the Agent, provided that the Effective Date may not
occur later than August 18, 2000 without the prior
written consent of the Agent and the Lenders:
i. Agreement. This Agreement, executed by each
party thereto;
ii. Accounts. Evidence that the Collateral Account
and the Collection Account have been
established;
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33
iii. Transaction Documents. Executed counterparts of
each of the other Transaction Documents (other
than the Notes), and Custodian Fee Letter, duly
executed by each of the parties thereto; and
iv. Other. Such other approvals, documents,
opinions, certificates and reports as the Agent
may reasonably request.
b. Initial Advance. The making of the initial Advance is
subject to the condition that the Effective Date shall
have occurred, the conditions set forth in Section 7.3
have been satisfied, and the Agent on behalf of the
Lenders shall have received the following, each in form
and substance satisfactory to the Agent:
i. Note. A Note duly completed and executed by the
Borrower for each Lender;
ii. Resolutions. A copy of the resolutions of the
Board of Directors (or similar items) of the
general partner of each of the Borrower and
Drive approving the Transaction Documents to be
delivered by it hereunder and the transactions
contemplated hereby, certified by its Secretary
or Assistant Secretary;
iii. Charters. The certificates of formation of each
of the general partners of the Borrower and
Drive certified by the Secretary of State of its
jurisdiction of organization; certified copies
of the limited liability company agreements of
the general partners of the Borrower and Drive
certified by the secretary of each such general
partner; copies of the partnership agreements of
the Borrower and Drive certified by the general
partners thereof; and the certificates of
limited partnership each of the Borrower and
Drive certified by the Secretary of State of its
jurisdiction of organization;
iv. Good Standing Certificates. Good Standing
Certificates for each of the Borrower and Drive
issued by the applicable Official Body of its
jurisdiction of organization;
v. Incumbency. A certificate of the Secretary or
Assistant Secretary of each of the general
partners of the Borrower and Drive certifying
the names and true signatures of the officers
authorized on its behalf to sign this Agreement
and the other Transaction Documents to be
delivered by it (on which certificate the Agent
and the Lenders may conclusively rely until such
time as the Agent shall receive a revised
certificate meeting the requirements of this
subsection (e));
vi. Filings. Acknowledgment copies of proper UCC1
Financing Statements (executed by the Seller
and/or Borrower, as applicable),
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as may be necessary or, in the opinion of the
Agent, desirable under the UCC of all
appropriate jurisdictions or any comparable law
to perfect the security interest of the
Collateral Agent on behalf of the Secured
Parties in all Borrower Collateral in which an
interest may be pledged hereunder or under the
Security Agreement and of proper UCC1 Financing
Statements (executed by Drive), as may be
necessary or, in the opinion of the Agent,
desirable under the UCC of all appropriate
jurisdictions or any comparable law to perfect
the security interest of the Collateral Agent on
behalf of the Secured Parties in all collateral
subject to the Parent Security Agreement and the
Parent Pledge Agreement;
vii. Searches. Certified copies of Requests for
Information or Copies (Form UCC11) (or a similar
search report certified by a party acceptable to
the Agent), dated a date reasonably near to the
date of the initial Advance, listing all
effective financing statements which name the
Borrower or the Seller (under their respective
present names and any previous names) as debtor
and which are filed in the jurisdictions in
which filings were made pursuant to Section
7.2(f), together with copies of such financing
statements;
viii. Opinions. Legal opinion(s) of ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇,
P.C., special counsel for the Borrower and
Drive, and of in-house counsel for the
Custodian, each in form and substance
satisfactory to the Agent covering such matters
as the Agent may reasonably request;
ix. Opinions. Legal opinion of special counsel for
the Borrower and Drive in the state of Texas, in
form and substance satisfactory to the Agent
covering such matters as the Agent may
reasonably request;
x. Other. Such other approvals, documents,
opinions, certificates and reports as the Agent
may reasonably request;
c. All Advances. The making of each Advance (including the
initial Advance) is subject to the condition that the
Effective Date shall have occurred, the conditions set
forth in Section 7.2 shall have been satisfied, and to
the following further conditions precedent that:
i. No Facility Termination Event, etc. Each of the
Transaction Documents shall be in full force and
effect and (i) no Facility Termination Event or
Unmatured Facility Termination Event has
occurred and is continuing or will result from
the making of such Advance, (ii) the
representations and warranties of the Borrower
contained in Article X and the Servicer and the
Seller contained in Section 8.6(b) are true and
correct as of the date of such requested
Advance, with the same effect as though made on
the date of (and after giving effect to) such
Advance, and (iii) after giving effect to
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35
such Advance, the aggregate outstanding
principal balance of the Advances hereunder will
not exceed the lesser of the Facility Limit and
the Borrowing Base;
ii. Advance Request, etc. The Agent shall have
received the Advance Request for such Advance in
accordance with Section 2.2, together with all
items required to be delivered in connection
therewith;
iii. Facility Termination Date. The Facility
Termination Date shall not have occurred;
iv. Minimum Advance Amount. The amount of such
Advance is not less than $1,000,000;
v. Collateral Receipt. The Agent shall have
received a duly completed and executed
Collateral Receipt in respect of each Receivable
identified in the related Schedule of
Receivables or Schedule of Subsequent
Receivables, as the case may be, if any,
submitted with the Advance Request for such
Advance;
vi. Borrowing Base Confirmation. The Agent shall
have received a duly completed and executed
certificate regarding the Borrowing Base in the
form attached hereto as Exhibit D (a "Borrowing
Base Confirmation"), computed as of the date of
such Advance and after giving effect thereto and
to the purchase by the Borrower of any
Receivables to be purchased by it under the
Receivables Purchase Agreement on such date;
vii. Portfolio Compliance. The Transferred
Receivables, including the Subsequent
Receivables transferred on such date, shall meet
the following criteria: (A) based upon the
billing addresses of the Dealers, not more than
25% of the aggregate Principal Balances of the
Transferred Receivables, including such
Subsequent Receivables, are located in any one
state other than Texas or any other state with
respect to which the Agent have received an
opinion substantially in the form of the
opinions delivered pursuant to Section 7.2(i);
(B) Pre-Computed Receivables shall not exceed 2%
of the Transferred Receivables by Aggregate
Outstanding Principal Balance; (C) at least 95%
of the Receivables shall have outstanding
principal balances of less than $40,000; and
[(D) Receivables with an original term of more
than 60 months but less than or equal to 72
months shall not exceed [3]% of the Transferred
Receivables by Aggregate Outstanding Principal
Balance]; and
viii. Other. The Agent shall have received such other
approvals, documents, opinions, certificates and
reports as it may reasonably request.
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36
12.
ADMINISTRATION AND SERVICING OF RECEIVABLES
a. Duties of the Servicer. The Servicer is hereby
authorized to act as agent for the Borrower and the
Collateral Agent and in such capacity shall manage,
service, administer and make collections on the
Transferred Receivables and perform the other actions
required by the Servicer under this Agreement. The
Servicer agrees that its servicing of the Transferred
Receivables shall be carried out in accordance with
customary and usual procedures of institutions that
service motor vehicle retail installment contracts and,
to the extent more exacting, with the degree of skill
and attention that the Servicer exercises from time to
time with respect to comparable motor vehicle
receivables that it services for itself or others. In
performing such duties, it shall comply with its current
servicing policies and procedures, as such servicing
policies and procedures may be amended from time to
time, so long as such amendments shall not materially
and adversely affect the interests of the Secured
Parties. The Servicer's duties shall include collection
and posting of all payments, responding to inquiries of
Obligors on the Transferred Receivables, investigating
delinquencies, sending statements or payment coupons to
Obligors, monitoring the collateral, accounting for
collections and furnishing monthly and annual statements
to the Collateral Agent and the Agent with respect to
distributions and performing the other duties specified
herein. To the extent consistent with the standards,
policies and procedures otherwise required hereby, the
Servicer shall follow its customary standards, policies
and procedures and shall have full power and authority,
acting alone, to do any and all things in connection
with management, servicing, administration and
collection that it may deem necessary or desirable.
Without limiting the generality of the foregoing, the
Servicer is hereby authorized and empowered by the
Borrower and the Collateral Agent to execute and
deliver, on behalf of the Borrower and the Collateral
Agent, any and all instruments of satisfaction or
cancellation, or of partial or full release or
discharge, and all other comparable instruments, with
respect to the Transferred Receivables and the Financed
Vehicles to the extent permitted by the Transaction
Documents. The Servicer is authorized to release Liens
on Financed Vehicles granted by the Transferred
Receivables in order to collect insurance proceeds with
respect thereto and to liquidate such Financed Vehicles
in accordance with its customary standards, policies and
procedures. The Servicer is hereby authorized to
commence, in its own name or in the name of the Borrower
or the Collateral Agent (provided that, if the Servicer
is acting in the name of the Collateral Agent, it has
obtained the Collateral Agent's consent, which consent
shall not be unreasonably withheld), legal proceedings
to enforce Transferred Receivables or to commence or
participate in any other legal proceedings (including
bankruptcy proceedings) relating to or involving
Transferred Receivables, Obligors or Financed Vehicles.
If the Servicer commences or participates in such legal
proceedings in its own name, the Borrower shall
thereupon be deemed to have automatically
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37
assigned such Transferred Receivables to the Servicer
solely for purposes of commencing or participating in
any such proceedings as a party or claimant, and the
Servicer is authorized and empowered by the Borrower and
the Collateral Agent to execute and deliver in the
Servicer's name any notices, demands, claims,
complaints, responses, affidavits or other documents or
instruments in connection with any such proceedings. The
Collateral Agent (on behalf of the Secured Parties) and
the Borrower shall furnish the Servicer with any powers
of attorney and other documents that the Servicer may
reasonably request and that the Servicer deems necessary
or appropriate and take any other steps that the
Servicer may deem reasonably necessary or appropriate to
enable the Servicer to carry out its servicing and
administrative duties under this Agreement.
b. Collection of Receivable Payments; Modifications of
Receivables; Lockbox.
i. Consistent with the standards, policies and
procedures required by this Agreement, the
Servicer shall make reasonable efforts to
collect all payments called for under the terms
and provisions of the Transferred Receivables as
and when the same shall become due, and shall
follow such collection procedures as it follows
with respect to comparable motor vehicle
receivables that it services for itself or
others and otherwise act with respect to the
Transferred Receivables, the Dealer Agreements,
the Dealer Assignments, the Insurance Policies
and the other Borrower Collateral in such manner
as will, in the reasonable judgment of the
Servicer, maximize the amount to be received by
the Borrower and the Collateral Agent with
respect thereto. The Servicer is authorized in
its discretion to waive any prepayment charge,
late payment charge or any other similar fees
that may be collected in the ordinary course of
servicing any Transferred Receivable.
ii. The Servicer may not at any time agree to a
modification or amendment of a Transferred
Receivable without the consent of the Agent
(which consent shall not be unreasonably
withheld) unless such modification or amendment
shall (i) change the Obligor's regular due date
to another date within fifteen calendar days of
such due date, or (ii) re-amortize the Scheduled
Payments on the Transferred Receivable following
a partial prepayment of principal, or (iii) add
an additional Obligor to the Transferred
Receivable.
iii. The Servicer may grant payment extensions on, or
other modifications or amendments to, a
Transferred Receivable (in addition to those
modifications permitted by Section 3.2(b)) in
accordance with its customary procedures if the
Servicer believes in good faith that such
extension, modification or amendment is
necessary to avoid a default on such Transferred
Receivable, will maximize the amount to be
received by the Borrower and the
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38
Collateral Agent with respect to such
Transferred Receivable and is otherwise in the
best interests of the Investors and the Secured
Parties; provided, however, that, with respect
to any Transferred Receivable, the Servicer
shall not grant more than one extension per
year, shall not grant extensions for a
cumulative total of more than six months during
the life of the Transferred Receivable, and such
extension shall not extend beyond the Final
Scheduled Payment Date; and provided, further,
that the Servicer shall not grant modifications
that lower the interest rate on the Transferred
Receivables for more than 5% of the Aggregate
Outstanding Principal Balance of the Transferred
Receivables as of any date.
iv. Drive has entered into the Intercreditor
Agreement. The bank account established pursuant
to the Intercreditor Agreement (the "Master
Collection Account") shall be maintained at the
"Master Collection Account Agent", as set forth
therein. The Servicer shall direct funds in the
Master Collection Account relating to the
Transferred Receivables to be transferred on a
daily basis to the Collection Account. All
payments made by or on behalf of Obligors or
received by the Servicer with respect to the
Transferred Receivables and all Liquidation
Proceeds received by the Servicer with respect
to the Transferred Receivables shall be sent to
the Master Collection Account within one
Business Day after receipt. The Servicer shall
transfer such payments, and any payments made by
Obligors directly to the Master Collection
Account, to the Collection Account within two
Business Days after such funds are deposited
into the Master Collection Account; provided,
however, that if the Servicer is not able to
transfer any such payment within two Business
Days because the Obligor or Transferred
Receivable to which such payment relates is not
readily identifiable, the Servicer shall use its
best efforts to identify the related Obligor or
Transferred Receivable as soon as practicable
and shall transfer such payment within one
Business Day after identifying such related
Obligor or Transferred Receivable.
v. Notwithstanding any third-party processing
arrangement, or any of the provisions of this
Agreement relating to any third-party processing
arrangement, the Servicer shall remain obligated
and liable to the Borrower and the Investors for
servicing and administering the Transferred
Receivables and the other Borrower Collateral in
accordance with the provisions of this Agreement
without diminution of such obligation or
liability by virtue thereof.
vi. Within 60 days after the Closing Date, the
Servicer will cause the Intercreditor Agreement
to be amended and restated in a manner in form
and substance satisfactory to the Agent.
c. Realization Upon Receivables.
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39
i. Consistent with the standards, policies and
procedures required by this Agreement, the
Servicer shall use its best efforts to repossess
(or otherwise comparably convert the ownership
of) and liquidate any Financed Vehicle securing
a Transferred Receivable with respect to which
the Servicer has determined that payments
thereunder are not likely to be resumed, as soon
as practicable after default on such Transferred
Receivable but in no event later than the date
on which at least 50% of a Scheduled Payment has
become 90 days delinquent; provided, however,
that the Servicer may elect not to repossess a
Financed Vehicle within such time period if in
its good faith judgment it determines that the
proceeds ultimately recoverable with respect to
such Transferred Receivable would be increased
by forbearance; and provided, further, that the
Servicer shall not be required to repossess a
Financed Vehicle if prohibited by law. The
Servicer is authorized to follow such customary
practices and procedures as it shall deem
necessary or advisable, consistent with the
standard of care required by Section 8.1, which
practices and procedures may include reasonable
efforts to realize upon any recourse to Dealers,
the sale of the related Financed Vehicle at
public or private sale, the submission of claims
under an Insurance Policy and other actions by
the Servicer in order to realize upon a
Transferred Receivable. The foregoing is subject
to the provision that, in any case in which the
Financed Vehicle shall have suffered damage, the
Servicer shall not expend funds in connection
with any repair or towards the repossession of
such Financed Vehicle unless it shall determine
in its discretion that such repair or
repossession shall increase the proceeds of
liquidation of the related Transferred
Receivable by an amount greater than the amount
of such expenses. The Servicer shall be entitled
to recover all reasonable expenses incurred by
it in the course of repossessing and liquidating
a Financed Vehicle into cash proceeds. All
amounts received upon liquidation of a Financed
Vehicle (less reasonable expenses as described
in the preceding sentence) shall be remitted
directly by the Servicer as provided in Section
8.2(d).
ii. If the Servicer elects to commence a legal
proceeding to enforce a Dealer Agreement or
Dealer Assignment, the act of commencement shall
be deemed to be an automatic assignment from the
Borrower and the Collateral Agent (on behalf of
the Secured Parties) to the Servicer of the
rights under such agreements for purposes of
collection only. If, however, in any enforcement
suit or legal proceeding it is held that the
Servicer may not enforce any such agreement on
the grounds that it is not a real party in
interest or a Person entitled to enforce such
agreement, the Borrower or the Collateral Agent,
at the Servicer's expense, or the Seller, at the
Seller's expense, shall take such steps as the
Servicer deems reasonably necessary to enforce
such agreement,
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40
including bringing suit in its name or the name
of the Seller, the Borrower or the Collateral
Agent for the benefit of the Secured Parties.
All amounts recovered shall be remitted directly
by the Servicer as provided in Section 8.2(d).
d. Insurance. The Servicer may ▇▇▇ to enforce or collect
upon the Insurance Policies in its own name or as agent
of the Borrower and the Collateral Agent (on behalf of
the Secured Parties). If the Servicer elects to commence
a legal proceeding to enforce an Insurance Policy, the
act of commencement shall be deemed to be an automatic
assignment of the rights of the Borrower and the
Collateral Agent (on behalf of the Secured Parties)
under such Insurance Policy to the Servicer for purposes
of collection only. If, however, in any enforcement suit
or legal proceeding it is held that the Servicer may not
enforce an Insurance Policy on the grounds that it is
not a real party in interest or a holder entitled to
enforce the Insurance Policy, the Borrower or the
Collateral Agent, at the Servicer's expense, or the
Seller, at the Seller's expense, shall take such steps
as the Servicer deems reasonably necessary to enforce
such Insurance Policy, including bringing suit in its
name or the name of the Borrower and the Collateral
Agent for the benefit of the Secured Parties.
e. Maintenance of Security Interests in Vehicles. (a)
Consistent with the policies and procedures required by
this Agreement, the Servicer shall take such steps on
behalf of the Borrower as are necessary to maintain
perfection of the first priority security interest
created by each Transferred Receivable in the related
Financed Vehicle, including the recording, registering,
filing, re-recording, re-filing and re-registering of
all security agreements, financing statements and
continuation statements as are necessary to maintain the
security interest under the respective Transferred
Receivables. The Borrower and the Collateral Agent (on
behalf of the Secured Parties) each hereby authorize the
Servicer, and the Servicer agrees, to take any and all
steps necessary to re-perfect such security interest in
the name of Borrower or the Collateral Agent (on behalf
of the Secured Parties) as necessary because of the
relocation of a Financed Vehicle or for any other
reason. If the assignment of a Transferred Receivable to
the Borrower and the pledge of such Transferred
Receivables to the Collateral Agent (on behalf of the
Secured Parties) are insufficient without a notation on
the related Financed Vehicle's certificate of title or
without fulfilling any additional administrative
requirements under the laws of the state in which the
Financed Vehicle is located, to perfect a security
interest in the related Financed Vehicle in favor of the
Collateral Agent (on behalf of the Secured Parties), the
Servicer and Drive each hereby agrees that Drive's
designation as the secured party on the certificate of
title is in its capacity as agent of the Collateral
Agent (on behalf of the Secured Parties), solely for
purposes of providing perfection of the security
interest therein.
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41
(b) Upon the occurrence of a Facility Termination Event pursuant to
Section 14.1, the Agent may instruct the Collateral Agent and the Servicer to
take or cause to be taken such action as may, in the opinion of the Agent, be
necessary to perfect or re-perfect the security interests in the Financed
Vehicles securing the Transferred Receivables in the name of the Collateral
Agent (on behalf of the Secured Parties) by amending the title documents of such
Financed Vehicles or by such other reasonable means as may, in the opinion of
the Agent, be necessary or prudent. Drive hereby agrees to pay all expenses
related to such perfection or re-perfection and to take all action necessary
therefor. Each of Drive and the Borrower hereby appoints the Collateral Agent as
its attorney-in-fact to take any and all steps required to be performed by Drive
or the Borrower, as applicable, pursuant to this Section 8.5(b), including
execution of certificates of title or any other documents in the name and stead
of Drive or the Borrower, as applicable, and the Collateral Agent hereby accepts
such appointment. Notwithstanding the foregoing, although the Collateral Agent
shall be required to execute documentation relating to the foregoing, the
Collateral Agent shall not be required to prepare any such documentation.
f. Covenants, Representations and Warranties of Servicer.
By its execution and delivery of this Agreement, the
Servicer makes the following representations, warranties
and covenants. Unless otherwise specified, such
representations and warranties speak as of the Initial
Advance Date with respect to the Initial Receivables and
as of the related Subsequent Purchase Date with respect
to the Subsequent Receivables acquired by the Borrower
on such Subsequent Purchase Date, but shall survive the
sale, transfer and assignment of the Transferred
Receivables to the Borrower.
i. The Servicer covenants as follows:
(1) Liens in Force. The Financed Vehicle
securing each Transferred Receivable
shall not be released in whole or in
part from the security interest granted
by the Transferred Receivable, except
upon payment in full of the Transferred
Receivable or as otherwise contemplated
herein;
(2) No Impairment. The Servicer shall do
nothing to impair the rights of the
Borrower, the Collateral Agent or the
Secured Parties in the Transferred
Receivables or the other Borrower
Collateral. The Servicer shall take such
action as is necessary (including the
filing of appropriate UCC financing
statements and continuation statements)
to preserve the rights of the Borrower,
the Collateral Agent and the Secured
Parties in the Transferred Receivables
and the other Borrower Collateral;
(3) No Amendments. The Servicer shall not
extend or otherwise amend the terms of
any Transferred Receivable, except in
accordance with Section 8.2;
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42
(4) Restrictions on Liens. The Servicer
shall not (A) create, incur or suffer to
exist, or agree to create, incur or
suffer to exist, or consent to cause or
permit in the future (upon the happening
of a contingency or otherwise) the
creation, incurrence or existence of any
Lien on, or restriction on
transferability of, the Transferred
Receivables, except for Permitted Liens
or (B) sign or file under the UCC of any
jurisdiction any financing statement
that names the Servicer as debtor, or
sign any security agreement authorizing
any secured party thereunder to file
such financing statement, with respect
to the Transferred Receivables, except
in each case any such instrument solely
securing the rights and preserving the
Lien of the Collateral Agent for the
benefit of the Secured Parties or as
otherwise permitted under this Agreement
or the Transaction Documents;
(5) Servicing of Receivables. The Servicer
shall service the Transferred
Receivables as described in this
Agreement until such time as it has been
replaced by a successor Servicer. The
Servicer shall service the Transferred
Receivables as required by the terms of
this Agreement and in material
compliance with the current Servicing
Procedures Manual for servicing all its
other comparable motor vehicle
receivables and the Servicer shall not
change the Servicing Procedures Manual
or the manner in which it services the
Receivables in any way that can have a
material adverse effect on the
Transferred Receivables or the Secured
Parties without the consent of the Agent
(which shall not be unreasonably
withheld or delayed);
(6) Notice of Relocation. The Servicer shall
give the Agent at least 30 days prior
written notice of any relocation of its
principal executive office if, as a
result of such relocation, the
applicable provisions of the UCC would
require the filing of any amendment of
any previously filed financing or
continuation statement or of any new
financing statement. The Servicer shall
at all times maintain each office from
which it services the Collateral and its
principal executive office within the
United States of America;
(7) Maintenance of Computer Systems, etc.
The Servicer shall maintain its computer
systems so that,
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43
from and after the time of the Initial
Advance Date, the Servicer's master
computer records (including archives)
that shall refer to the Borrower
Collateral indicate clearly that such
Borrower Collateral is subject to first
priority security interest in favor of
the Collateral Agent for the benefit of
the Secured Parties. Indication of the
Collateral Agent's security interest
shall be deleted from or modified on the
Servicer's computer systems when, and
only when, the Borrower Collateral in
question shall have been paid in full or
sold by the Borrower and the lien of the
Collateral Agent is released in
accordance herewith and the Security
Agreement; and
(8) Other Sales, Grants or Transfers. If at
any time the Servicer shall propose to
sell, grant a security interest in, or
otherwise transfer any interest in motor
vehicle receivables to any prospective
purchaser, lender or other transferee,
the Servicer shall give to such
prospective purchaser, lender or other
transferee computer tapes, records or
printouts (including any restored from
archives) that, if they shall refer in
any manner whatsoever to any Borrower
Collateral, shall indicate clearly that
such Borrower Collateral is subject to a
first priority security interest in
favor of the Collateral Agent for the
benefit of the Secured Parties.
ii. The Servicer represents, warrants and covenants as of
the Closing Date and as of the date of each Advance as
to itself:
(1) Organization and Good Standing. It has
been duly organized and is validly
existing as a limited partnership in
good standing under the laws of its
jurisdiction of organization, with power
and authority to own its properties and
to conduct its business as such
properties are currently owned and such
business is currently conducted;
(2) Due Qualification. It is duly qualified
to do business as a foreign partnership
in good standing and has obtained all
necessary licenses and approvals in all
jurisdictions where the failure to do so
would have a material adverse effect on
its ability to perform its obligations
under its Transaction Documents and its
ability to enforce the
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44
Transferred Receivables and the other
Borrower Collateral;
(3) Power and Authority. It has the power
and authority to execute and deliver
this Agreement and the Transaction
Documents to which it is a party (in any
capacity) and to carry out its terms and
their terms, and, in the case of the
Seller, to sell the Receivables to the
Borrower; and the execution, delivery
and performance of this Agreement and
the Transaction Documents to which it is
a party (in any capacity) have been duly
authorized by the Servicer by all
necessary partnership and corporate
action;
(4) Binding Obligation. This Agreement and
the Transaction Documents to which it is
a party (in any capacity), when duly
executed and delivered, shall constitute
its legal, valid and binding obligations
enforceable in accordance with their
respective terms, except as
enforceability may be limited by
bankruptcy, insolvency, reorganization,
or other similar laws affecting the
enforcement of creditors' rights
generally and by equitable limitations
on the availability of specific
remedies, regardless of whether such
enforceability is considered in a
proceeding in equity or at law;
(5) No Violation. The execution, delivery
and performance of this Agreement and
the Transaction Documents to which it is
a party (in any capacity), the
consummation of the transactions
contemplated thereby and the fulfillment
of the terms thereof do not (A) conflict
with, result in any breach of any of the
terms and provisions of, or constitute
(with or without notice or lapse of
time) a default under, its partnership
agreement, or any indenture, agreement,
mortgage, deed of trust or other
instrument to which it is a party or by
which it or its properties are bound,
(B) result in the creation or imposition
of any Lien upon any of its properties
pursuant to the terms of any such
indenture, agreement, mortgage, deed of
trust or other instrument, or (c) to the
best of its knowledge, violate any law,
order, rule or regulation applicable to
it of any Official Body having
jurisdiction over it or any of its
properties;
(6) No Proceedings. There are no proceedings
or investigations pending or, to the
best of its
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45
knowledge, threatened against it, before
any Official Body having jurisdiction
over it or its properties (A) asserting
the invalidity of any of the Transaction
Documents, (B) seeking to prevent the
issuance of the Notes or the
consummation of any of the transactions
contemplated by the Transaction
Documents, (C) seeking any determination
or ruling that would have a material
adverse effect on the performance by it
of its obligations under, or the
validity or enforceability of, any of
the Transaction Documents or (D) seeking
to materially and adversely affect the
federal income tax or other federal,
state or local tax attributes of the
Notes or seeking to impose any excise,
franchise, transfer or similar tax upon
the Notes or the sale and assignment of
the Transferred Receivables hereunder;
(7) No Consents. No consent, license,
approval, authorization or order of, or
registration, declaration or filing
with, any Official Body or other Person
is required to be made in connection
with the execution, delivery or
performance of this Agreement and the
Transaction Documents to which it is a
party (in any capacity) or the
consummation of the transactions
contemplated thereby, except such as
have been duly made, effected or
obtained;
(8) Year 2000 Compliance. In letters
delivered to Drive, the vendors of
Drive's critical computer applications
software have certified that such
applications are Year 2000 Compliant to
the extent set forth in such letters.
Drive has assessed the potential impact
of the possibility that other Persons
with whom it has relationships will not
be Year 2000 Compliant and, subject to
Drive's ongoing review of vendors' Year
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ is not aware of
any Year 2000 Compliance issues that
would have a material adverse effect on
its financial position, cash flows or
results from operations;
(9) ERISA. Each benefit plan, if any, of
Drive that is a "defined benefit" plan
as defined in Section 3(35) of ERISA is
in compliance in all material respects
with ERISA and there is no Lien of the
Pension Benefit Guaranty Corporation on
any of the Transferred Receivables or
other Property;
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46
(10) Investment Company Status. It is not an
"investment company" within the meaning
of the Investment Company Act of 1940,
as amended, or is exempt from all
provisions of such Act;
(11) Chief Executive Office. Its chief
executive office is located at ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇-▇,
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇;
(12) Eligibility. Each Receivable set forth
in a Schedule of Receivables or Schedule
of Subsequent Receivables is, on its
Purchase Date, an Eligible Receivable,
and the representations and warranties
with respect thereto set forth on
Exhibit C are true and correct on such
date; and
(13) Other Documents. The representations and
warranties made by it (in any capacity)
in each of the other Transaction
Documents to which it is a party are
true and correct in all material
respects as of the date(s) made.
iii. The Servicer covenants and agrees:
(1) Agent Indemnification. The Servicer
shall defend, indemnify and hold the
Collateral Agent, the Custodian, the
Borrower, the Lenders and the Agent and
any officers, directors, employees or
agents of the Collateral Agent, the
Custodian, the Lenders and the Agent
harmless against any and all claims,
losses, penalties, fines, forfeitures,
legal fees and related costs, judgments
and any other costs, fees and expenses
that the Collateral Agent, the
Custodian, the Lenders and the Agent may
sustain in connection with claims
asserted at any time by third parties
against the Collateral Agent, the
Custodian, the Borrower, the Lenders or
the Agent that result from (A) any
willful or negligent act taken or
omission by the Servicer or (B) a
material breach of any representations
or covenants of the Servicer or, if
Drive is the Servicer, the Seller, in
this Section 8.6; and
(2) The Servicer shall make arrangements for
the prompt and safe transfer of, and the
Servicer shall provide to the Collateral
Agent, if requested, all necessary
servicing files and records, including
(as deemed necessary by the Collateral
Agent at such
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47
time): (A) account documentation, (B)
servicing system tapes (in a format
acceptable to the Collateral Agent), (C)
account payment history, (D) collections
history and (E) the trial balances, in
each case reflecting all applicable loan
information, as of the following dates:
(1) the close of business on the day
immediately preceding conversion to a
successor Servicer, (2) on an annual
basis commencing March 1, 2001, and (3)
following a Facility Termination Event
under section 14.1, monthly.
g. Purchase of Receivables Upon Breach of Covenant. Upon
discovery by the Servicer, the Custodian or the Agent of
(a) a breach of any of the covenants, representations or
warranties set forth in Sections 8.5 or 8.6(a) or (b)
that has a material adverse effect on the interests of
any Secured Party in any Transferred Receivable, or (b)
a failure to obtain a Lien Certificate within 180 days
as described in Section 8.16, the party discovering such
breach shall give prompt written notice to the others
and the Collateral Agent; provided, however, that the
failure to give any such notice shall not affect any
obligation of the Servicer under this Section 8.7. As of
the second Accounting Date (or, at the Servicer's
election, the first Accounting Date) following its
discovery or receipt of notice of any such breach, the
Servicer shall, unless such breach shall have been cured
in all material respects, purchase from the Borrower the
Transferred Receivables affected by such breach and, on
or before the Determination Date following such
Accounting Date, the Servicer shall pay the related
Purchase Amount to the Collateral Agent pursuant to
Section 9.4. The obligation of the Servicer to purchase
any Transferred Receivable with respect to which such a
breach has occurred and is continuing shall, if such
obligation is fulfilled, constitute the sole remedy
against the Servicer for such breach available to the
Borrower, the Investors, the Agent or the Collateral
Agent on behalf of the Secured Parties. The Agent shall
not be under any duty or obligation to investigate the
occurrence of a breach of a covenant in accordance with
this Section 8.7.
h. Total Servicing Fee; Payment of Certain Expenses by
Servicer. On each Distribution Date, the Servicer shall
be entitled to receive out of the Collection Account the
Total Servicing Fee for the related Collection Period
pursuant to Section 8 of the Security Agreement. The
Servicer shall be required to pay all expenses incurred
by it in connection with its activities under this
Agreement, including taxes imposed on the Servicer,
costs and expenses of independent accountants, expenses
incurred in connection with distributions and reports
made by the Servicer to the Agent or the Investors.
i. Servicer's Certificate. No later than 2:00 p.m., New
York City time, on each Determination Date, the Servicer
shall deliver to the Agent, the
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48
Collateral Agent, and the Custodian, a Servicer's
Certificate executed by a Responsible Officer of the
Servicer containing, among other things, (i) all
information necessary to enable the Collateral Agent to
make any withdrawal required by Section 11 of the
Security Agreement, to give any notice required by
Section 11 of the Security Agreement and to make the
distributions required by Section 8 of the Security
Agreement, (ii) a listing of all Transferred Receivables
purchased as of the related Determination Date with
respect to the related Collection Period, and (iii) all
information necessary to enable the Agent to reconcile
all deposits to, and withdrawals from, the Collection
Account for the related Collection Period and
Distribution Date, including the accounting required by
Section 9 of the Security Agreement. Transferred
Receivables purchased by the Servicer or repurchased by
Drive on or before the related Determination Date and
each Transferred Receivable that became a Liquidated
Receivable or that was paid in full during the related
Collection Period shall be identified by account number
(as set forth in the Schedule of Receivables). In
addition to the information set forth in the preceding
sentence, the Servicer's Certificate shall also contain
the following information: (a) whether any Facility
Termination Event has occurred as of such Determination
Date; and (b) the Borrowing Base and Required Holdback
for such Determination Date. The parties hereto
acknowledge that the basis for calculating Interest on
the Advances may change between the date the Servicer
delivers a Servicer's Certificate and the related
Distribution Date and that the amount the Servicer sets
forth in a Servicer's Certificate as Interest accrued on
the Advances as of the related Distribution Date is its
good faith estimate of such Interest; in the event of
any change in calculating Interest during such period of
time, the parties agree to use reasonable efforts to
revise the Servicer's Certificate on or prior to such
Distribution Date to reflect such changes, provided that
if such revisions are not made by such time, then
appropriate corrections shall be made on the next
Distribution Date.
j. Annual Statement as to Compliance; Notice of Servicer
Termination Event.
i. The Servicer shall deliver to the Agent, the
Collateral Agent, and the Custodian, on or
before June 30 of each year, beginning on June
30, 2001, an officer's certificate signed by any
Responsible Officer of the Servicer, dated as of
the preceding February 28 (or other applicable
date), stating that (i) a review of the
activities of the Servicer during the preceding
12- month period (or such other period as shall
have elapsed from the Closing Date to the date
of the first such certificate) and of its
performance under this Agreement has been made
under such officer's supervision, and (ii) to
such officer's knowledge, based on such review,
the Servicer has fulfilled all its obligations
under this Agreement throughout such period, or,
if there has been a default in the fulfillment
of any
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49
such obligation, specifying each such default
known to such officer and the nature and status
thereof.
ii. The Servicer shall deliver to the Agent, the
Collateral Agent, and the Custodian, promptly
after having obtained knowledge thereof, but in
no event later than two Business Days
thereafter, written notice in an Officers'
Certificate of any event that, with the giving
of notice or lapse of time, would become a
Servicer Termination Event under Section 13.1 or
a Facility Termination Event under Section 14.1.
k. Annual Independent Accountants' Report. The Servicer
shall cause KPMG or another firm of nationally
recognized independent certified public accountants
reasonably acceptable to the Agent (the "Independent
Accountants"), who may also render other services to the
Servicer, to deliver to the Servicer, on or before June
30 of each year, beginning on June 30, 2001, with
respect to the twelve months ended the immediately
preceding February 28 (or such other period as shall
have elapsed from the Closing Date to the date of such
certificate), a statement (the "Accountants' Report")
addressed to the Servicer, to the effect that such firm
has audited the books and records of the Servicer and
issued its report thereon and that: (1) such audit was
made in accordance with generally accepted auditing
standards, and accordingly included such tests of the
accounting records and such other auditing procedures as
such firm considered necessary in the circumstances; and
(2) the firm is independent of the Servicer within the
meaning of the Code of Professional Ethics of the
American Institute of Certified Public Accountants. The
Servicer shall also cause the Independent Accountants to
deliver to the Servicer on such dates a letter to the
effect that certain agreed upon procedures were
performed relating to three randomly selected Servicer's
Certificates, and, except as disclosed in such report,
no errors or exceptions were found in the Servicer's
Certificate(s) based on the performance of such agreed
upon procedures. The Servicer shall deliver a copy of
the Accountants' Report, within 15 days of receipt, to
the Borrower, the Collateral Agent, the Custodian, and
the Agent.
If such firm requires the Collateral Agent to agree to the procedures
performed by such firm, the Servicer shall direct the Collateral Agent in
writing to so agree; it being understood and agreed that the Collateral Agent
will deliver such letter of agreement in conclusive reliance upon the direction
of the Servicer, and the Collateral Agent shall not make any independent inquiry
or investigation as to, and shall have no obligation or liability in respect of,
the sufficiency, validity or correctness of such procedures. Delivery of such
reports, information and documents to the Agent and the Collateral Agent is for
informational purposes only, and the Agent's and the Collateral Agent's receipt
of such shall not constitute constructive notice of any information contained
therein or determinable from information contained therein, including the
Servicer's compliance with any of its covenants hereunder.
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50
l. Access to Certain Documentation and Information
Regarding Receivables. The Servicer shall provide to
representatives of the Agent, the Collateral Agent and
the Custodian reasonable access to the documentation
regarding the Transferred Receivables. In each case,
such access shall be afforded without charge but only
upon reasonable request and during normal business
hours. Nothing in this Section 8.12 shall derogate from
the obligation of the Servicer to observe any applicable
law prohibiting disclosure of information regarding the
Obligors, and the failure of the Servicer to provide
access as a result of such obligation shall not
constitute a breach of this Section 8.12.
m. Monthly Tape. If requested by the Collateral Agent, on
or before each Determination Date, the Servicer shall
deliver to the Collateral Agent a computer tape or a
diskette or any other electronic transmission in a
format acceptable to the Collateral Agent containing the
information with respect to the Transferred Receivables
as of the preceding Accounting Date necessary for
preparation of the Servicer's Certificate relating to
the next Determination Date.
n. Insurance. The Servicer shall maintain customary amounts
of insurance coverage, including errors and omissions
liability, fidelity bond, commercial general liability,
property, directors and officers liability and workers'
compensation coverage. The Servicer shall be entitled to
self-insure with respect to such insurance so long as
the long-term unsecured debt obligations of the Servicer
are rated in the second highest long-term debt category
by each Rating Agency.
o. Compliance with Laws. The Servicer shall comply with the
requirements of all applicable laws (including any
federal or state laws regulating the collection or
enforcement of consumer debts and/or the foreclosure
upon, and repossession of, vehicles) in the discharge of
its duties and obligations hereunder.
p. Collecting Lien Certificate. The Servicer shall use its
best efforts to collect each Lien Certificate from the
applicable Registrar of Titles as promptly as
practicable and, pending receipt of each Lien
Certificate from such Registrar of Titles, shall supply
written evidence that each such Lien Certificate has
been applied for. If a copy of a Lien Certificate with
respect to a Receivable showing Drive as first
lienholder is not received by the Custodian within [180]
days after the applicable Purchase Date, the Servicer
shall be obligated to purchase such Receivable under
Section 8.7.
q. Purchase of All Receivables. As an administrative
convenience, the Servicer shall have the option to
purchase the Transferred Receivables and the other
Property on any Distribution Date if, as of the related
Accounting Date, the aggregate outstanding principal
amount of Advances has declined to less than 10% of the
Aggregate Outstanding Principal
- 45 -
51
Balance on the Initial Advance Date plus the Aggregate
Outstanding Principal Balance of all Subsequent
Receivables as of their applicable Subsequent Cutoff
Dates. To exercise such option, the Servicer shall pay
the aggregate Purchase Amounts for the Receivables
(which amount shall in no event be less than the
aggregate outstanding principal amount of Advances plus
accrued and unpaid Interest thereon plus all Interest
which would accrue during any uncompleted Interest
Period) plus all amounts due to the Agent, the Lenders
and other Affected Persons hereunder and shall succeed
to all interests in and to the Transferred Receivables
and the other Property. Not later than 10 days prior to
any proposed exercise of such option, the Servicer shall
notify the Collateral Agent and the Agent of any
proposed exercise of such option. The purchase price
paid by the Servicer shall be deposited into the
Collection Account on or before such Distribution Date
and distributed pursuant to Section 8 of the Security
Agreement.
r. Weekly Borrowing Base Confirmation. The Servicer shall
deliver a Borrowing Base Confirmation to the Agent on
each Weekly Pool Report Date.
s. Repurchase upon Breach. The Borrower may require Drive
to repurchase a Transferred Receivable pursuant to
Section 6.11 of the Receivables Purchase Agreement upon
the occurrence and during the continuance of a Drive
Repurchase Event (as defined therein). The obligation of
Drive to repurchase any Transferred Receivable as to
which a Drive Repurchase Event has occurred and is
continuing shall, if such obligation is fulfilled,
constitute the sole remedy against Drive in connection
with such event available to the Borrower, the
Investors, the Agent and the Collateral Agent.
13.
ACCOUNTS; PAYMENTS
a. Borrower Accounts.
i. On or prior to the Closing Date, the Servicer
shall establish the Collection Account and the
Collateral Account each in the name of the
Collateral Agent for the benefit of the Secured
Parties. The Collection Account and the
Collateral Account shall each be an Eligible
Account which is a segregated trust account
initially established with the Collateral Agent.
If at any time the Collection Account or the
Collateral Account ceases to be an Eligible
Account, the Agent may direct the Collateral
Agent to transfer such account to another
institution such that such account shall meet
the requirements of an Eligible Account.
ii. All amounts held in the Collection Account and
the Collateral Account (collectively, the
"Borrower Accounts"), shall, to the extent
permitted by applicable laws, rules and
regulations, be
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52
invested by the Collateral Agent, as directed by
the Servicer in writing (or, if the Servicer
fails to provide such direction, amounts in the
Collection Account shall be invested in
investments described in clause (f) of the
definition of Permitted Investments), in
Permitted Investments that mature not later than
one Business Day prior to the Distribution Date
for the Collection Period to which such amounts
relate. All income or other gains from
investment of moneys on deposit in any such
account shall be deposited by the Collateral
Agent in the applicable account immediately upon
receipt. The taxpayer identification number
associated with each Borrower Account shall be
that of the Borrower and the Borrower shall
report for Federal, state and local income tax
purposes, the income, if any, represented by
each Borrower Account. If any amounts are needed
for disbursement from the Collection Account or
the Collateral Account and sufficient uninvested
funds are not available therein to make such
disbursement, the Collateral Agent shall cause
to be sold or otherwise converted to cash a
sufficient amount of the investments in such
account to make such disbursement upon the
direction of the Servicer or, if the Servicer
shall fail to give such direction, the Agent.
Any such written direction shall certify that
any such investment is authorized by this
Section 9.1. Investments in Permitted
Investments shall be made in the name of the
Collateral Agent on behalf of the Secured
Parties, and, except as specifically required
above, such investments shall not be sold or
disposed of prior to their maturity. Each and
every investment of funds in any of the Borrower
Accounts shall be made in Permitted Investments
held by a financial institution that is a
Securities Intermediary:
(1) in an account pursuant to an agreement
with such financial institution that
requires such financial institution to
(A) comply with Entitlement Orders
pertaining to such account originated by
the Collateral Agent without further
consent of the Borrower, (B) not enter
into any agreement which grants
"control" (as defined in Section 8-106
of Article 8) of such account (or any
interest or property therein) to any
Person other than the Collateral Agent,
(C) subordinate any security interest,
banker's lien, right of setoff or other
similar right which such financial
institution may have in such account to
the interest of the Collateral Agent and
(D) expressly treat each item of
property as a Financial Asset and such
account as a Securities Account; and
(2) with respect to which such institution
has noted the Collateral Agent's
interest therein by book entry or
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53
otherwise, and with respect to which a
confirmation of the Collateral Agent's
interest has been sent to the Collateral
Agent by such institution.
Subject to the other provisions hereof, the Collateral Agent shall have sole
control over each such investment and the income thereon, and any certificate or
other instrument evidencing any such investment, if any, shall be delivered
directly to the Collateral Agent or its agent, together with each document of
transfer, if any, necessary to transfer title to such investment to the
Collateral Agent in a manner that complies with this Section 9.1. All interest,
dividends, gains upon sale and other income from, or earnings on, investments of
funds in the Collection Account shall be deposited in the Collection Account and
distributed pursuant to Section 8 of the Security Agreement. All interest,
dividends, gains upon sale and other income from or earnings on, investments of
funds in the Collateral Account shall be deposited in the Collection Account and
distributed pursuant to Section 8 of the Security Agreement. If the Collateral
Agent is given instructions to invest funds in any of the Borrower Accounts in
investments other than investments of the type described in clause (f) of the
definition of "Permitted Investments", the Person giving such instructions
agrees to assist the Collateral Agent in complying with the requirements herein
with respect to such investments.
iii. With respect to the Borrower Account Collateral:
(1) any Borrower Account Collateral that is
held in deposit accounts shall be held
solely in the name of the Collateral
Agent in accounts which satisfy clause
(ii) of the definition of Eligible
Account; each such deposit account shall
be subject to the exclusive custody and
control of the Collateral Agent, and the
Collateral Agent shall have sole
signature authority with respect
thereto;
(2) any Borrower Account Collateral that
constitutes Physical Property shall be
delivered to the Collateral Agent in
accordance with paragraph (i) of the
definition of "Delivery" and shall be
held, pending maturity or disposition,
solely by the Collateral Agent;
(3) any Borrower Account Collateral that
constitutes a Certificated Security
shall be delivered to the Collateral
Agent in accordance with paragraph (ii)
of the definition of "Delivery" and
shall be held, pending maturity or
disposition, solely by the Collateral
Agent;
(4) any such Borrower Account Collateral
that constitutes an Uncertificated
Security (including any investments in
money market mutual funds, but excluding
any Federal Book Entry Security), shall
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54
be delivered to the Collateral Agent in
accordance with paragraph (iii) of the
definition of "Delivery" and shall be
maintained, pending maturity or
disposition, through continued
registration of the Collateral Agent's
(or its nominee's) ownership of such
security; and
(5) with respect to any Borrower Account
Collateral that constitutes a Federal
Book Entry Security, the Collateral
Agent shall maintain and obtain Control
over such property.
Effective upon Delivery of any Borrower Account Collateral in the form of
Physical Property, book-entry securities or uncertificated securities, the
Collateral Agent shall be deemed to have represented that it has purchased such
Borrower Account Collateral for value, in good faith and without notice of any
adverse claim thereto.
iv. On the Initial Advance Date, the Servicer shall deposit
in the Collection Account (i) all Scheduled Payments and
prepayments of Initial Receivables with respect to which
available funds have been received in the Master
Collection Account after the Initial Cutoff Date and
(ii) all Liquidation Proceeds and proceeds of Insurance
Policies realized in respect of Financed Vehicles
related to the Initial Receivables after the Initial
Cutoff Date.
v. On any day, the Borrower may deposit such amounts as it
may elect, in its sole discretion, in the Collateral
Account, provided that (i) the amount on deposit in the
Collateral Account may not at any time exceed the
greater of 5% of the Borrowing Base and $5,000,000 and
(ii) the amount on deposit in the Collateral Account
must be reduced to zero for a period of five consecutive
Business Days during every period of 30 days.
b. Servicer Reimbursements. The Servicer shall be entitled to be
reimbursed from amounts on deposit in, or to be deposited in,
the Collection Account with respect to a Collection Period for
amounts previously deposited in the Collection Account but later
determined by the Servicer to have resulted from mistaken
deposits or postings or checks returned for insufficient funds.
The amount to be reimbursed hereunder shall be paid to the
Servicer on the related Distribution Date pursuant to Section
8(a)(ii) or 8(b)(ii) of the Security Agreement. Upon the request
of the Collateral Agent or the Agent, the Servicer shall certify
any amount to be reimbursed hereunder and shall supply such
other information as may be necessary in the opinion of the
Collateral Agent and the Agent to verify the accuracy of such
certification. The Collateral Agent shall not be under any
obligation to make the request described in the immediately
preceding sentence.
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55
c. Application of Collections. For purposes of this
Agreement, all collections for a Collection Period shall
be applied by the Servicer as follows:
i. With respect to each Receivable, payments by or
on behalf of the Obligor (other than
Supplemental Servicing Fees with respect to such
Receivable, to the extent collected) shall be
applied to interest and principal thereof to
reduce the balance thereof in accordance with
the terms of such Receivable.
ii. With respect to each Receivable that has become
a Purchased Receivable, the Purchase Amount
shall be applied to interest and principal on
the Receivable in accordance with Section 9.3(a)
as if the Purchase Amount had been paid by the
Obligor. Nothing contained herein shall relieve
any Obligor of any obligation relating to any
Receivable.
iii. All amounts collected that are payable to the
Servicer as Supplemental Servicing Fees
hereunder shall be deposited in the Collection
Account and paid to the Servicer in accordance
with Section 8 of the Security Agreement.
iv. All payments by or on behalf of an Obligor
received with respect to any Purchased
Receivable after the Accounting Date preceding
the Determination Date on which the Purchase
Amount was paid by the Borrower or the Servicer
shall be paid to the Borrower or the Servicer,
respectively, and shall not be included in the
Amount Available under, and as defined in, the
Security Agreement.
d. Additional Deposits. On or before each Determination
Date, the Servicer or the Borrower shall deposit into
the Collection Account the aggregate Purchase Amounts
with respect to Purchased Receivables. All such deposits
of Purchase Amounts shall be made in immediately
available funds. On or before each Distribution Date,
the Collateral Agent shall remit to the Collection
Account any amounts to be transferred into the
Collection Account by the Collateral Agent from the
Collateral Account pursuant to Section 11 of the
Security Agreement.
14.
REPRESENTATIONS AND WARRANTIES OF THE BORROWER
In order to induce the other parties hereto to enter into this Agreement
and, in the case of the Lenders, to make Advances hereunder, the Borrower hereby
represents and warrants to the Agent and the Investors as to itself, as of the
Closing Date and the date of each Advance, as follows:
a. Organization and Good Standing. The Borrower has been
duly organized and is validly existing as a limited
partnership under the laws of the State
- 50 -
56
of Delaware, with power and authority to own its
properties and to conduct its business as such
properties are currently owned and such business is
currently conducted. The Borrower had at all relevant
times and now has, power, authority and legal right to
acquire and own the Transferred Receivables and the
other Property, and to grant to the Collateral Agent a
security interest in the Transferred Receivables, the
other Property and the other Borrower Collateral and to
enter into and perform its obligations under this
Agreement and the other Transaction Documents to which
it is a party.
b. Due Qualification. The Borrower is duly qualified to do
business and has obtained all necessary licenses and
approvals in all jurisdictions where the failure to do
so would have a material adverse effect on (i) the
Borrower's ability to perform its obligations under this
Agreement, (ii) the validity or enforceability of the
Receivables and the other Conveyed Property or (iii) the
Borrower's ability to perform its obligations hereunder
and under its Transaction Documents.
c. Power and Authority The Borrower has the power and
authority to execute and deliver this Agreement and the
other Transaction Documents to which it is a party and
to carry out its terms and their terms, respectively;
the Borrower has full power and authority to grant to
the Collateral Agent, for the benefit of the Secured
Parties, a perfected first priority security interest in
the Transferred Receivables and the other Borrower
Collateral and has duly authorized such grant by all
necessary partnership action; and the execution,
delivery and performance of this Agreement and the other
Transaction Documents to which it is a party have been
duly authorized by the Borrower by all necessary
partnership and corporate action.
d. Security Interest; Binding Obligations. This Agreement
and the Transaction Documents to which it is a party
have been duly executed and delivered and shall create a
valid first priority security interest (except, as to
priority, for any tax liens or mechanics liens that may
arise after the applicable Purchase Date) in the
Borrower Collateral in favor of the Collateral Agent,
for the benefit of the Secured Parties, enforceable
against the Borrower and creditors of and purchasers
from the Borrower and any Affiliate thereof (including
Drive); and this Agreement and the other Transaction
Documents to which it is a party shall constitute legal,
valid and binding obligations of the Borrower
enforceable in accordance with their respective terms,
except as enforceability may be limited by bankruptcy,
insolvency, reorganization or other similar laws
affecting the enforcement of creditors' rights generally
and by equitable limitations on the availability of
specific remedies, regardless of whether such
enforceability is considered in a proceeding in equity
or at law.
e. No Violation. The consummation of the transactions
contemplated by this Agreement and the other Transaction
Documents to which it is a party, and
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57
the fulfillment of the terms of this Agreement and the
other Transaction Documents to which it is a party,
shall not conflict with, result in any breach of any of
the terms and provisions of, or constitute (with or
without notice or lapse of time) a default under, the
partnership agreement of the Borrower, or any indenture,
agreement, mortgage, deed of trust or other instrument
to which the Borrower is a party or by which it is bound
or any of its properties are subject, or result in the
creation or imposition of any Lien (other than Permitted
Liens) upon any of its properties pursuant to the terms
of any such indenture, agreement, mortgage, deed of
trust or other instrument, other than this Agreement,
or, to Borrower's knowledge, violate any law, order,
rule or regulation applicable to the Borrower of any
Official Body having jurisdiction over the Borrower or
any of its properties, or in any way materially
adversely affect the Borrower's ability to perform its
obligations under this Agreement or the other
Transaction Documents to which it is a party.
f. No Proceedings. There are no proceedings or
investigations pending or, to the Borrower's knowledge,
threatened against the Borrower, before any court or
Official Body having jurisdiction over the Borrower or
its properties (A) asserting the invalidity of this
Agreement or any of the other Transaction Documents, (B)
seeking to prevent the consummation of any of the
transactions contemplated by this Agreement or any of
the other Transaction Documents, (C) seeking any
determination or ruling that might materially and
adversely affect the performance by the Borrower of its
obligations under, or the validity or enforceability of,
this Agreement or any of the other Transaction
Documents, (D) that could have a material adverse effect
on the Transferred Receivables or other Borrower
Collateral or (F) seeking to materially and adversely
affect the federal income tax or other federal, state or
local tax attributes of the Notes or seeking to impose
any excise, franchise, transfer or similar tax upon the
Notes or the sale and assignment of the Receivables and
the other Borrower Collateral hereunder.
g. No Consents. The Borrower is not required to obtain the
consent of any other party or any approval,
authorization, consent, license, approval or
authorization, or registration or declaration with, any
Official Body or other Person in connection with the
execution, delivery, performance, validity or
enforceability of this Agreement or the other
Transaction Documents to which it is a party, except
such as have been duly made, effected or obtained.
h. Chief Executive Office. The chief executive office of
the Borrower is located at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇-▇, ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇.
i. Solvency. The Borrower is solvent and will not become
insolvent after giving effect to the transactions
contemplated by this Agreement and the Transaction
Documents. The Borrower has no Indebtedness to any
Person
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58
other than pursuant to this Agreement and the other
Transaction Documents. The Borrower, after giving effect
to the transactions contemplated by this Agreement and
the other Transaction Documents, will have an adequate
amount of capital to conduct its business in the
foreseeable future.
j. Tax Treatment. For federal income tax purposes, the
Borrower will be treated as the owner of each
Transferred Receivable and other Property, the Borrower
will be treated as the borrower under this Receivables
Financing Agreement and the Advances made under this
Receivables Financing Agreement will be treated as the
indebtedness of the Borrower. For accounting purposes,
the Borrower will treat the purchase or absolute
assignment of each Transferred Receivable and other
Property pursuant to the Receivables Purchase Agreement
as a purchase or absolute assignment of Drive's full
right, title and ownership interest in such Transferred
Receivable and other Property (and those Transferred
Receivables and other Property contributed to the
Borrower by Drive pursuant to the Receivables Purchase
Agreement shall be accounted for as an increase in the
stated capital of the Borrower) and the Borrower has not
in any other manner accounted for or treated the
transfer to it of Transferred Receivables and other
Property.
k. Compliance With Laws. The Borrower has complied and will
comply in all material respects with all applicable
laws, rules, regulations, judgments, agreements, decrees
and orders with respect to its business and properties
and all Borrower Collateral.
l. Taxes. The Borrower has filed on a timely basis all tax
returns (including, without limitation, foreign,
federal, state, local and otherwise) required to be
filed, is not liable for taxes payable by any other
Person and has paid or made adequate provisions for the
payment of all taxes, assessments and other governmental
charges due from the Borrower. No tax lien or similar
adverse claim has been filed, and no claim is being
asserted, with respect to any such tax, assessment or
other governmental charge. Any taxes, fees and other
governmental charges payable by the Borrower in
connection with the execution and delivery of this
Agreement and the other Transaction Documents and the
transactions contemplated hereby or thereby including
the transfer of each Transferred Receivable and other
Property to the Borrower have been paid or shall have
been paid if and when due at or prior to the Initial
Advance Date and the relevant Purchase Date, as the case
may be.
m. Certificates. Each Servicer's Certificate and Borrowing
Base Confirmation is accurate in all material respects
as of the date thereof.
n. No Liens, Etc. The Borrower Collateral and each part
thereof is owned by the Borrower free and clear of any
Adverse Claim or restrictions on transferability and the
Borrower has the full right, power and lawful
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59
authority to assign, transfer and pledge the same and
interests therein, and upon the making of each Advance,
the Collateral Agent, for the benefit of the Secured
Parties, will have acquired a perfected, first priority
and valid security interest (except, as to priority, for
any tax lien or mechanics lien that may arise after the
applicable Purchase Date) in such Borrower Collateral,
free and clear of any Adverse Claim or restrictions on
transferability. No effective financing statement or
other instrument similar in effect covering all or any
part of the Borrower Collateral is on file in any
recording office, except such as will be released on the
Initial Advance Date or a Subsequent Advance Date or as
may have been filed in favor of the Collateral Agent as
"Secured Party" pursuant to the Security Agreement or,
with respect to the Transferred Receivables, in favor of
the Borrower pursuant to the Receivables Purchase
Agreement.
o. Purchase and Sale. Each Transferred Receivable and other
Property was purchased by or contributed to the Borrower
on the relevant Purchase Date pursuant to the
Receivables Purchase Agreement.
p. Securities Act of 1933; Investment Company Act of 1940.
Each purchase of Transferred Receivables and other
Property under the Receivables Purchase Agreement will
constitute a purchase or other acquisition of notes,
drafts, acceptances, open accounts receivable or other
obligations representing part or all of the sales price
of merchandise, insurance or services within the meaning
of Section 3(c)(5) of the Investment Company Act of
1940, as amended.
q. Information True and Correct. All information heretofore
or hereafter furnished by or on behalf of the Borrower
in writing to any Lender, the Agent or the Collateral
Agent in connection with this Agreement or any
transaction contemplated hereby is and will be true and
complete in all material respects and does not and will
not omit to state a material fact necessary to make the
statements contained therein not misleading.
r. ERISA Compliance. The Borrower has no benefit plans
subject to ERISA.
s. Financial or Other Condition. There has been no material
adverse change in the condition (financial or
otherwise), business, operations, results of operations,
or properties of the Borrower since the Closing Date.
t. Investment Company Status. The Borrower is not an
"investment company" or an "affiliated person" of, or
"promoter" or "principal underwriter" for, an
"investment company," as such terms are defined in the
Investment Company Act of 1940, as amended.
u. Eligible Receivables. All Receivables included in the
Borrowing Base as of the most recently delivered
Servicer's Certificate or Borrowing Base Confirmation
are Eligible Receivables.
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60
v. Use of Proceeds. Neither Borrower nor Drive is engaged
in the business of extending credit for the purpose of
purchasing or carrying margin stock (as defined in
Regulation U (12 CFR Part 221) of the Board of Governors
of the Federal Reserve System) and none of the proceeds
of the Advances will be used, directly or indirectly,
for a purpose that violates Regulation T, Regulation U,
Regulation X or any other regulation promulgated by the
Board of Governors of the Federal Reserve System from
time to time.
w. Separate Existence. The Borrower is operated as an
entity with assets and liabilities distinct from those
of Drive and any other Affiliates of the Borrower, and
the Borrower hereby acknowledges that the Agent and each
of the Lenders are entering into the transactions
contemplated by this Agreement in reliance upon the
Borrower's identity as a separate legal entity from
Drive and each such Affiliate. Since its formation, the
Borrower has been (and will be) operated in such a
manner as to comply with the covenants set forth in
Section 11.5.
There is not now, nor will there be at any time in the future,
any agreement or understanding between Drive and the Borrower (other than as
expressly set forth herein) providing for the allocation or sharing of
obligations to make payments or otherwise in respect of any taxes, fees,
assessments or other governmental charges.
x. Investments. The Borrower does not own or hold, directly
or indirectly, any capital stock or equity security of,
or any equity interest in, any Person, other than the
Permitted Investments in the Borrower Accounts.
y. Representation and Warranties True and Correct. Each of
the representations and warranties of the Borrower
contained in this Agreement and the other Transaction
Documents is true and correct in all material respects
and the Borrower hereby makes each such representation
and warranty to, and for the benefit of, the Agent and
the other Secured Parties as if the same were set forth
in full herein.
z. Transaction Documents. The Receivables Purchase
Agreement is the only agreement pursuant to which the
Borrower purchases and receives contributions of
Receivables, and the Transaction Documents delivered to
the Agent represent all material agreements between
Drive, on the one hand, and the Borrower, on the other.
The Borrower has furnished to the Agent true, correct
and complete copies of each Transaction Document to
which the Borrower is a party, each of which is in full
force and effect. Neither the Borrower nor any Affiliate
party thereto is in default of any of its obligations
thereunder in any material respect. Upon the purchase
and/or contribution of each Receivable pursuant to the
Receivables Purchase Agreement, the Borrower shall be
the lawful owner of, and have good title to, such
Receivable and all assets relating thereto, free and
clear of any Liens. All such assets are transferred to
the Borrower without recourse to the Seller except as
described in the Receivables Purchase Agreement. The
purchases of such assets by the ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇
- ▇▇ -
▇▇
and true sales for consideration (and not merely a
pledge of such assets for security purposes) and the
contributions of such assets received by the Borrower
constitute valid and true transfers for consideration,
each enforceable against creditors of the Seller, and no
such assets shall constitute property of the Seller.
aa. Ownership of the Borrower. One hundred percent (100%) of
the outstanding partnership interests in the Borrower is
and will be directly or indirectly owned by Drive.
15.
COVENANTS OF THE BORROWER
From the date hereof until the first day following the Facility
Termination Date, on which all Obligations shall have been finally and fully
paid and performed, the Borrower hereby covenants and agrees with the Investors,
the Collateral Agent, the Custodian and the Agent that it will:
a. Protection of Security Interest of the Secured Parties.
(a) At or prior to the Initial Advance Date, the
Borrower shall have filed or caused to be filed UCC1
financing statements, executed by the Borrower as
debtor, naming the Collateral Agent (for the benefit of
the Secured Parties) as secured party and describing the
Borrower Collateral, with the office of the Secretary of
State of the State of Texas and in such other locations
as the Agent shall have required. From time to time
thereafter, the Borrower shall execute and file such
financing statements and cause to be executed and filed
such continuation statements, all in such manner and in
such places as may be required by law fully to preserve,
maintain and protect the interest of the Secured Parties
under this Agreement and the Security Agreement in the
Borrower Collateral and in the proceeds thereof. The
Borrower shall deliver (or cause to be delivered) to the
Agent filestamped copies of, or filing receipts for, any
document filed as provided above, as soon as available
following such filing. In the event that the Borrower
fails to perform its obligations under this subsection,
the Agent, or the Collateral Agent at the direction of
the Agent or the Agent, may do so, in each case at the
expense of the Borrower.
(b) The Borrower shall not change its name, identity or structure in
any manner that would, make any financing statement or continuation statement
filed by the Borrower (or by the Agent or the Custodian on behalf of the
Borrower) in accordance with paragraph (a) above seriously misleading within the
meaning of ss. 9402(7) of the UCC, unless the Borrower shall have given the
Agent at least 30 days prior written notice thereof, and shall promptly file
appropriate amendments to all previously filed financing statements and
continuation statements.
(c) The Borrower shall give the Agent at least 30 days prior written
notice of any relocation of its principal executive office if, as a result of
such relocation, the applicable provisions of the UCC would require the filing
of any amendment of any previously filed
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62
financing or continuation statement or of any new financing statement. The
Borrower shall at all times maintain its principal executive office within the
United States of America.
(d) The Borrower shall maintain its computer systems, if any, so
that, from and after the time of the first Advance under this Agreement, the
Borrower's master computer records (including archives) that shall refer to the
Borrower Collateral indicate clearly that such Borrower Collateral is subject to
first priority security interest in favor of the Collateral Agent, for the
benefit of the Secured Parties. Indication of the Collateral Agent's (for the
benefit of the Secured Parties) security interest shall be deleted from or
modified on the Borrower's computer systems when, and only when, the Borrower
Collateral in question shall have been paid in full.
(e) Without limiting any of the other provisions hereof, if at any
time the Borrower shall propose to sell, grant a security interest in, or
otherwise transfer any interest in motor vehicle receivables to any prospective
purchaser, lender or other transferee, the Borrower shall give to such
prospective purchaser, lender, or other transferee computer tapes, records, or
printouts (including any restored from archives) that, if they shall refer in
any manner whatsoever to any Borrower Collateral shall indicate clearly that
such Borrower Collateral is subject to a first priority security interest in
favor of the Collateral Agent, for the benefit of the Secured Parties.
b. Other Liens or Interests. Except for the security
interest granted under the Security Agreement, the
Borrower will not sell, pledge, assign or transfer to
any other Person, or grant, create, incur, assume or
suffer to exist any Lien on the Borrower Collateral or
any interest therein, and the Borrower shall defend the
right, title, and interest of the Collateral Agent (for
the benefit of the Secured Parties), the Investors and
the Agent in and to the Borrower Collateral against all
claims of third parties claiming through or under the
Borrower.
c. Costs and Expenses. The Borrower shall pay all of its
reasonable costs and disbursements in connection with
the performance of its obligations hereunder and under
the Transaction Documents.
d. Reporting Requirements. The Borrower shall furnish, or
cause to be furnished, to the Agent and the Collateral
Agent:
i. as soon as available and in any event within 120
days (or next succeeding Business Day if the
last day of such period is not a Business Day)
after the end of each fiscal year, a copy of the
audited consolidated financial statements for
such year for Drive and its consolidated
Subsidiaries, certified, without qualification
by Independent Accountants acceptable to the
Agent and the Agent and each other report or
statement sent to shareholders or publicly filed
by Drive or the Borrower;
ii. as soon as available and in any event within 45
days (or next succeeding Business Day if the
last day of such period is not a Business Day)
after the end of each of the first three
quarters of each fiscal year of Drive, a
consolidated balance sheet of Drive and
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63
its consolidated Subsidiaries as of the end of
such quarter and including the prior comparable
period, and consolidated statements of income
and retained earnings, of Drive and its
consolidated Subsidiaries for such quarter and
for the period commencing at the end of the
previous fiscal year and ending with the end of
such quarter, certified by the chief financial
officer or chief accounting officer of Drive
identifying such documents as being the
documents described in this paragraph (b) and
stating that the information set forth therein
fairly presents the financial condition of Drive
and its consolidated Subsidiaries as of and for
the periods then ended, subject to yearend
adjustments and confirming that Drive is in
compliance with all financial covenants in the
Transaction Documents;
iii. as soon as possible and in any event within five
days after the occurrence of a Facility
Termination Event or Unmatured Facility
Termination Event, the statement of an Executive
Officer of the Borrower or Drive setting forth
complete details of such Facility Termination
Event or Unmatured Facility Termination Event
and the action which the Borrower has taken, is
taking and proposes to take with respect
thereto; and
iv. promptly, from time to time, such other
information, documents, records or reports
respecting the Transferred Receivables, the
other Property related thereto or the Financed
Vehicles related thereto, the other Borrower
Collateral or the condition or operations,
financial or otherwise, of the Borrower, or
Drive or any of its Subsidiaries, as the Agent
may, from time to time, reasonably request.
e. Separate Existence.
i. The Borrower shall conduct its business solely
in its own name through its duly authorized
officers or agents so as not to mislead others
as to the identity of the entity with which such
persons are concerned, and shall use its best
efforts to avoid the appearance that it is
conducting business on behalf of any Affiliate
thereof or that the assets of the Borrower are
available to pay the creditors of Drive or any
Affiliate thereof (other than as expressly
provided herein).
ii. The Borrower shall maintain records and books of
account separate from those of Drive and any
Affiliate thereof.
iii. The Borrower shall obtain proper authorization
for all action requiring such authorization.
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64
iv. The Borrower shall pay its own operating
expenses and liabilities from its own funds.
v. The annual financial statements of Drive shall
disclose the effects of the transactions
contemplated hereby in accordance with generally
accepted accounting principles.
vi. The resolutions, agreements and other
instruments of the Borrower underlying the
transactions described in the Transaction
Documents shall be continuously maintained by
the Borrower as official records of the
Borrower.
vii. The Borrower shall maintain an arm's-length
relationship with Drive and its Affiliates, and
shall not hold itself out as being liable for
the debts of Drive or any of its Affiliates.
viii. The Borrower shall keep its assets and
liabilities separate from those of all other
entities other than as permitted by the
Transaction Documents.
ix. The books and records of the Borrower shall be
maintained at the address designated herein for
receipt of notices, unless the Borrower shall
otherwise advise the parties hereto in writing.
x. The Borrower shall not maintain bank accounts or
other depository accounts to which any Affiliate
is an account party, into which any Affiliate
makes deposits or from which any Affiliate has
the power to make withdrawals, except as
otherwise permitted by the Transaction
Documents.
xi. The Borrower shall insure that any consolidated
financial statements of Drive has notes to the
effect that the Borrower is a separate entity
whose creditors have a claim on its assets prior
to those assets becoming available to its equity
holders.
xii. The Borrower shall not amend, supplement or
otherwise modify its partnership agreement,
except in accordance therewith and with the
prior written consent of the Agent (which
consent shall not be unreasonably withheld).
f. Tangible Net Worth. The Borrower shall maintain at all
times a positive Tangible Net Worth.
g. Take-Out Securitization. No more than twelve months
after the Closing Date and thereafter at least once
during each successive twelve month period, the Borrower
or an Affiliate shall effect a Take-Out Securitization
with respect to at least 90% of all Transferred
Receivables which are Eligible Receivables at the time
of the closing of such transaction.
- 59 -
65
h. Stock, Merger, Consolidation, Etc. The Borrower shall
not merge or consolidate with any other Person or permit
any other Person to become the successor to all or
substantially all of the Borrower's business or assets.
i. Change in Name. The Borrower shall not make any change
to its name or use any trade names, fictitious names,
assumed names or "doing business as" names.
j. Indebtedness; Guarantees. The Borrower shall not create,
incur, assume or suffer to exist any indebtedness other
than indebtedness permitted under the Transaction
Documents. The Borrower shall incur no additional
borrowed money indebtedness secured by the Borrower
Collateral other than the Advances. The Borrower shall
not assume, guarantee, endorse or otherwise be or become
directly or contingently liable for the obligations of
any Person by, among other things, agreeing to purchase
any obligation of another Person, agreeing to advance
funds to such Person or causing or assisting such Person
to maintain any amount of capital.
k. Limitation on Transactions with Affiliates. The Borrower
shall not enter into, or be a party to any transaction
with any Affiliate of the Borrower, except for (a) the
transactions contemplated by the Transaction Documents
and (b) to the extent not otherwise prohibited under
this Agreement, other transactions in the nature of
employment contracts and directors' fees, upon fair and
reasonable terms materially no less favorable to the
Borrower than would be obtained in a comparable
arm's-length transaction with a Person not an Affiliate.
l. Documents. The Borrower shall not cancel or terminate
any of the Transaction Documents to which it is party
(in any capacity), or consent to or accept any
cancellation or termination of any of such agreements,
or amend or otherwise modify any term or condition of
any of the Transaction Documents to which it is party
(in any capacity) or give any consent, waiver or
approval under any such agreement, or waive any default
under or breach of any of the Transaction Documents to
which it is party (in any capacity) or take any other
action under any such agreement not required by the
terms thereof, unless (in each case) the Agent shall
have consented thereto (which consent shall not
unreasonably be withheld to the extent set forth in such
Transaction Document).
m. Preservation of Existence. The Borrower shall observe
all procedures required by its organizational documents
and preserve and maintain its existence, rights,
franchises and privileges in the jurisdiction of its
formation and qualify and remain qualified in good
standing in each jurisdiction where the failure to
preserve and maintain such existence, rights,
franchises, privileges and qualifications would
materially adversely affect (1) the interests hereunder
of the Agent or any Secured Party, (2) the
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66
collectibility of any Receivable or (3) its ability to
perform its obligations hereunder or under any of the
other Transaction Documents.
n. Keeping of Records and Books of Account. The Borrower
shall maintain and implement (or cause the Servicer to
maintain and implement) administrative and operating
procedures (including, without limitation, an ability to
recreate records evidencing the Receivables in the event
of the destruction of the originals thereof) and keep
and maintain, all documents, books, records and other
information reasonably necessary or advisable for the
collection of all Transferred Receivables (including,
without limitation, records adequate to permit the daily
identification of all collections of and adjustments to
each Transferred Receivable).
o. Accounting Treatment. The Borrower shall not prepare any
financial statements or other statements (including any
tax filings which are not consolidated with those of
Drive) which shall account for the transactions
contemplated by the Receivables Purchase Agreement in
any manner other than as the sale of, or a capital
contribution of, the Transferred Receivables and the
related assets by the Seller to the Borrower.
p. Limitation on Investments. The Borrower shall not form,
or cause to be formed, any Subsidiaries; or make or
suffer to exist any loans or advances to, or extend any
credit to, or make any investments (by way of transfer
of property, contributions to capital, purchase of stock
or securities or evidences of indebtedness, acquisition
of the business or assets, or otherwise) in, any
Affiliate or any other Person except as otherwise
permitted herein and pursuant to the other Transaction
Documents.
q. Distributions. The Borrower shall not declare or make
(a) payment of any distribution on or in respect of any
shares of its capital stock, or (b) any payment on
account of the purchase, redemption, retirement or
acquisition of any option, warrant or other right to
acquire such shares unless (in each case) at the time of
such declaration or payment (and after giving effect
thereto) no Facility Termination Event under Section
14.1 or Unmatured Facility Termination Event under
Section 14.1 shall occur or be continuing and no amount
payable by the Borrower under any Transaction Document
is then due and owing but unpaid.
16.
THE SERVICER
a. Liability of Servicer. The Servicer (in its capacity as
such) shall be liable hereunder only to the extent of
the obligations in this Agreement and the other
Transaction Documents specifically undertaken by the
Servicer and the representations made by the Servicer.
b. Merger or Consolidation of, or Assumption of the
Obligations of, the Servicer. (a) The Servicer shall not
merge or consolidate with any other
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67
Person, convey, transfer or lease all or substantially
all its assets as an entirety to another Person, or
permit any other Person to become the successor to all
or substantially all of its business or assets, unless
after the merger, consolidation, conveyance, transfer,
lease or succession, the successor or surviving entity
shall be an Eligible Servicer and shall be capable of
fulfilling the duties of the Servicer contained in this
Agreement. Any Person (i) into which the Servicer may be
merged or consolidated, (ii) resulting from any merger
or consolidation to which the Servicer shall be a party,
(iii) which acquires by conveyance, transfer, or lease
substantially all of the assets of the Servicer, or (iv)
succeeding to the business of the Servicer, in any of
the foregoing cases shall execute an agreement of
assumption to perform every obligation of the Servicer
under this Agreement and the Security Agreement and,
whether or not such assumption agreement is executed,
shall be the successor to the Servicer under this
Agreement and the Security Agreement without the
execution or filing of any paper or any further act on
the part of any of the parties to this Agreement,
anything in this Agreement to the contrary
notwithstanding; provided, however, that nothing
contained herein shall be deemed to release the Servicer
from any obligation hereunder. The Servicer shall
provide notice of any merger, consolidation or
succession pursuant to this Section 12.2(a) to the Agent
and the Agent shall have consented thereto; provided,
however, that if the successor to the Servicer is rated
at least investment grade by the Rating Agencies and is
in the business of servicing assets similar to the
Receivables, the Agent's consent may not be unreasonably
withheld. Notwithstanding the foregoing, as a condition
to the consummation of the transactions referred to in
clauses (i), (ii), (iii) and (iv) above, (x) immediately
after giving effect to such transaction, no
representation or warranty made pursuant to Section 8.6
shall have been breached in any material respect (for
purposes hereof, such representations and warranties
shall speak as of the date of the consummation of such
transaction) and no event that after notice or lapse of
time would become a Facility Termination Event pursuant
to Section 14.1 shall have occurred and be continuing,
(y) the Servicer shall have delivered to the Agent an
Officer's Certificate and an Opinion of Counsel each
stating that such consolidation, merger or succession
and such agreement of assumption comply with this
Section 12.2(a), and (z) the Servicer shall have
delivered to the Agent an Opinion of Counsel, stating,
in the opinion of such counsel, either (A) all financing
statements and continuation statements and amendments
thereto have been executed and filed that are necessary
to preserve and protect the security interest of the
Collateral Agent (for the benefit of the Secured
Parties) in the Transferred Receivables and reciting the
details of the filings, if any, or (B) no such action
shall be necessary to preserve and protect such
interest.
(b) Limitation on Liability of Servicer and Others. (a) Neither the
Servicer nor any of the directors or officers or employees or agents of the
Servicer shall be under any liability to the Borrower, the Investors or the
Agent, except as provided in this Agreement, for any action taken or for
refraining from the taking of any action pursuant to this Agreement; provided,
however,
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68
that this provision shall not protect the Servicer or any such Person
against any liability that would otherwise be imposed by reason of a breach of
this Agreement or willful misfeasance, bad faith or negligence in the
performance of its duties. The Servicer and any director, officer, employee or
agent of the Servicer may rely in good faith on the written advice of counsel or
on any document of any kind prima facie properly executed and submitted by any
Person respecting any matters arising under this Agreement.
c. Delegation of Duties. So long as Drive is the Servicer,
the Servicer may delegate duties under this Agreement to
an Affiliate of Drive with the prior written consent of
the Agent (which consent shall not be unreasonably
withheld). The Servicer also may at any time perform the
specific duties of (i) repossession of Financed
Vehicles, and (ii) pursuing the collection of deficiency
balances on Liquidated Receivables, in each case through
sub- contractors who are in the business of servicing
automotive receivables, without the consent of the
Agent. The Servicer may also perform other specific
duties through such sub-contractors in accordance with
its customary servicing policies and procedures without
the prior consent of the Agent; provided, however, that
no such delegation or subcontracting of duties by the
Servicer shall relieve the Servicer of its
responsibility with respect to such duties. Neither
Drive nor any other party acting as Servicer hereunder
shall appoint any other subservicer hereunder without
the prior written consent of the Agent.
d. Servicer Not to Resign. Subject to the provisions of
Section 12.2, the Servicer shall not resign from the
obligations and duties imposed on it by this Agreement
as Servicer except upon a determination that by reason
of a change in legal requirements the performance of its
duties under this Agreement would cause it to be in
violation of such legal requirements and the Agent does
not elect to waive the obligations of the Servicer to
perform the duties which render it legally unable to act
or to delegate those duties to another Person. Any such
determination permitting the resignation of the Servicer
shall be evidenced by an Opinion of Counsel to such
effect delivered and acceptable to the Agent. No
resignation of the Servicer shall become effective until
an entity acceptable to the Agent shall have assumed the
responsibilities and obligations of the Servicer.
17.
SERVICER TERMINATION EVENTS
a. Servicer Termination Event. For purposes of this
Agreement, each of the following shall constitute a
"Servicer Termination Event":
i. Any failure by the Servicer or, so long as Drive
or an Affiliate of the Borrower is the Servicer,
the Borrower to deliver to the Collateral Agent
any proceeds or payment required to be so made
or delivered under the terms of this Agreement
or the Security Agreement (or, if Drive or an
Affiliate of the Borrower is the
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Servicer, under the Receivables Purchase
Agreement) that continues unremedied for a
period of two Business Days (or, with respect to
any Purchase Amounts, one Business Day) after
written notice is received by the Servicer from
the Agent or, without duplication, the Agent or
after discovery of such failure by a Responsible
Officer of the Servicer;
ii. Failure by the Servicer to deliver the
Servicer's Certificate required by Section 8.9
by 2:00 p.m. New York City time on each
Determination Date (or within two Business Days
thereafter, if such failure by the Servicer is
due to circumstances outside the Servicer's
control);
iii. Failure on the part of the Servicer to observe
in all material aspects its covenants and
agreements set forth in Section 12.2(a);
iv. Failure or failures on the part of the Servicer
or, so long as Drive or an Affiliate of the
Borrower is the Servicer, the Borrower, duly to
observe or perform in any material respect any
other covenants or agreements of the Servicer
or, so long as Drive is the Servicer, the
Borrower, as the case may be, set forth in this
Agreement or the Security Agreement (or, as to
Drive, if Drive is the Servicer, the Receivables
Purchase Agreement), which failure or failures,
individually or in the aggregate, (i) materially
and adversely affect the rights of the Investors
and (ii) to the extent capable of cure, continue
unremedied for a period of 30 days after the
earlier of knowledge thereof by a Responsible
Officer of the Servicer and the date on which
written notice of such failure, requiring the
same to be remedied, shall have been given to
the Servicer by the Agent;
v. The occurrence of an Insolvency Event with
respect to the Servicer;
vi. Any representation, warranty or statement of the
Servicer (or, if Drive or an Affiliate of the
Borrower is the Servicer, the Borrower) made in
this Agreement or the Security Agreement or any
certificate, report or other writing delivered
pursuant hereto or thereto shall prove to be
incorrect in any material respect as of the time
when the same shall have been made (excluding,
however, any representation or warranty set
forth in the definition of "Eligible
Receivable"), and the incorrectness of such
representation or warranty has a material
adverse effect on the Investors and, within 30
days after the earlier of knowledge thereof by a
Responsible Officer of the Servicer and the date
written notice thereof shall have been given to
the Servicer (or, if Drive or an Affiliate of
the Borrower is the Servicer, the Borrower) by
the Agent the circumstances or condition in
respect of which such
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representation, warranty or statement was
incorrect shall not have been eliminated or
otherwise cured;
vii. The average of the Servicer Delinquency Ratios
for the last day of each of the preceding three
Collection Periods equals or exceeds 12%;
viii. The Portfolio Net Loss Ratio exceeds 14%.
b. Consequences of a Servicer Termination Event. If a
Servicer Termination Event shall occur and be
continuing, the Agent, by written notice given to the
Servicer, may terminate all of the rights and
obligations of the Servicer under this Agreement. On or
after the receipt by the Servicer of such written
notice, all authority, power, obligations and
responsibilities of the Servicer under this Agreement,
whether with respect to the Notes, the Transferred
Receivables, the other Borrower Collateral or otherwise,
automatically shall pass to, be vested in and become
obligations and responsibilities of such successor
Servicer as may be appointed by the Agent; provided,
however, that the successor Servicer shall have no
liability with respect to (i) any obligation that was
required to be performed by the terminated Servicer
prior to the date that the successor Servicer becomes
the Servicer, (ii) any claim of a third party based on
any alleged action or inaction of the terminated
Servicer, (iii) any obligation of Drive, as Servicer
hereunder, to make any repurchase or make any advance,
(iv) any obligation to pay taxes required to be paid by
Drive, as Servicer hereunder, (v) any obligation of
Drive, as Servicer hereunder, to pay any fees and
expenses of any other party to the Transaction Documents
or (vi) any indemnification obligation of any prior
Servicer. The successor Servicer is authorized and
empowered by this Agreement to execute and deliver, on
behalf of the prior Servicer, as attorney-in-fact or
otherwise, any and all documents and other instruments
and to do or accomplish all other acts or things
necessary or appropriate to effect the purposes of such
notice of termination, whether to complete the transfer
and endorsement of the Transferred Receivables and
related documents to show the Collateral Agent (for the
benefit of the Secured Parties) as lienholder or secured
party, or otherwise. The prior Servicer agrees to
cooperate with the successor Servicer in effecting the
termination of the responsibilities and rights of the
prior Servicer under this Agreement, including, without
limitation and at the prior Servicer's expense, the
transfer to the successor Servicer for administration by
it of all cash amounts that shall at the time be held by
the prior Servicer for deposit, or have been deposited
by the prior Servicer, in the Collection Account or
thereafter received with respect to the Transferred
Receivables and the delivery to the successor Servicer
of all Receivable Files, Monthly Records and Collection
Records and a computer tape in readable form containing
all information necessary to enable the successor
Servicer to service the Transferred Receivables. In
addition, upon the occurrence of a Servicer Termination
Event, the Servicer shall, if so requested by the
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Agent, deliver to the Agent or successor Servicer its
Monthly Records within two days after demand therefor
and a computer tape or diskette (or any other means of
electronic transmission acceptable to such Person)
containing as of the close of business on the date of
demand all of the data maintained by the Servicer in
computer format in connection with servicing the
Transferred Receivables. If requested by the Agent or
successor Servicer shall terminate the Intercreditor
Agreement and direct the Obligors to make all payments
under the Transferred Receivables directly to the
successor Servicer (in which event the successor
Servicer shall process such payments in accordance with
Section 8.2(d)), or to a lockbox established by the
successor Servicer at the direction of the Agent, at the
prior Servicer's expense. The terminated Servicer shall
grant the Agent and any successor Servicer reasonable
access to the terminated Servicer's premises at the
terminated Servicer's expense.
c. Appointment of Successor Servicer. (a) On and after (i)
the time the Servicer receives a notice of termination
pursuant to Section 13.2 or (ii) upon the resignation of
the Servicer pursuant to Section 12.5, a successor
Servicer appointed by the Agent shall be the successor
in all respects to the Servicer in its capacity as
Servicer under this Agreement and the transactions set
forth or provided for in this Agreement and shall be
subject to all the rights, responsibilities,
restrictions, duties, liabilities and termination
provisions relating thereto placed on the Servicer by
the terms and provisions of this Agreement; provided,
however, that the successor Servicer shall not be liable
for any acts, omissions or obligations of the Servicer
prior to such succession or for any breach by the
Servicer of any of its representations and warranties
contained in this Agreement or in any related document.
The Servicer and such successor shall take such action,
consistent with this Agreement, as shall be necessary to
effectuate any such succession. If a successor Servicer
is acting as Servicer hereunder, it shall be subject to
termination under Section 13.2 upon the occurrence of
any Servicer Termination Event applicable to it as
Servicer. Any successor Servicer appointed pursuant to
this Section 13.3 shall be entitled to compensation
equal to the greater of (i) the Total Servicing Fee or
(ii) the then- current "market rate" fee for servicing
assets comparable to the Receivables, which rate shall
be determined by averaging three servicing fee bids
obtained by the Agent from third party servicers
selected by the Agent; provided, however, in no event
shall a successor Servicer be entitled to receive
compensation in excess of 3.0% of the Aggregate
Outstanding Principal Balance as of the first day of any
related Collection Period, unless the Collateral Agent
shall have obtained the prior written consent of the
Agent (which consent shall not be unreasonably
withheld); and provided, further, that any transition
fees payable in connection with the transfer of
servicing shall be paid by Drive, and to the extent not
paid by Drive, such fees shall be payable pursuant to
Section 8(a)(ii) or 8(b)(ii) of the Security Agreement;
provided; however, that in no event shall such
transition fees exceed $50,000, unless the Collateral
Agent shall have
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obtained the prior written consent of the Agent (which
consent shall not be unreasonably withheld).
(b) Waiver of Past Defaults. The Agent acting with the
consent of the Required Lenders, may waive any default by the Servicer
in the performance of its obligations hereunder and its consequences.
Upon any such waiver of a past default, such default shall cease to
exist, and any Servicer Termination Event arising therefrom shall be
deemed to have been remedied for every purpose of this Agreement. No
such waiver shall extend to any subsequent or other default or impair
any right consequent thereon. The waiving party shall provide prompt
written notice of any such waiver to the Collateral Agent. The
Collateral Agent shall provide the Agent with notice of any waiver of
any default by the Servicer hereunder.
18.
FACILITY TERMINATION EVENTS; EVENTS
OF DEFAULT; THEIR EFFECT
a. Facility Termination Events. Each of the following shall
constitute a Facility Termination Event under this
Agreement:
i. Default in the payment when due of any principal
of any Advance, which default shall continue
unremedied for one Business Day, or default in
the payment of any other amount payable by the
Borrower or Drive (in any capacity) hereunder,
including, without limitation, any Interest on
any Advance which default shall continue for one
Business Day;
ii. The Borrower or Drive (in any capacity) shall
fail to perform or observe any other term,
covenant or agreement contained in this
Agreement, or any other Transaction Document on
its part to be performed or observed and, except
in the case of the covenants and agreements
contained in Sections 11.7 and 11.8, as to each
of which no grace period shall apply, any such
failure shall remain unremedied for 30 days (two
days with respect to Section 11.6) after
knowledge thereof or after written notice
thereof shall have been given by the Agent to
the Borrower or Drive;
iii. Any representation or warranty of the Borrower
or Drive (in any capacity) made or deemed to
have been made hereunder or in any other
Transaction Document or any other writing or
certificate furnished by or on behalf of the
Borrower or Drive (in any capacity) to the Agent
for purposes of or in connection with this
Agreement or any other Transaction Document
(including any Servicer's Certificate or
Borrowing Base Confirmation) shall prove to have
been false or incorrect in any material respect
when made or deemed to have been made; provided
that no breach shall be deemed to occur
hereunder in respect of any representation or
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warranty relating to the "eligibility" of any
Receivable if such Receivable shall have been
purchased or repurchased by the Servicer or the
Seller;
iv. An Insolvency Event shall have occurred and be
continuing with respect to the Borrower or
Drive;
v. The aggregate principal amount of all Advances
outstanding hereunder exceeds the Borrowing Base
and such condition continues unremedied for one
Business Day (such excess referred to as the
"Borrowing Base Deficiency");
vi. The Internal Revenue Service shall file notice
of a lien pursuant to Section 6323 of the
Internal Revenue Code with regard to any of the
assets of the Borrower or any material portion
of the assets of Drive and such lien shall not
have been released within 5 Business Days, or
the Pension Benefit Guaranty Corporation shall
file notice of a lien pursuant to Section 4068
of ERISA with regard to any of the assets of the
Borrower or Drive and such lien shall not have
been released within 5 Business Days;
vii. (i) Any Transaction Document or any lien or
security interest granted thereunder by the
Borrower, shall (except in accordance with its
terms), in whole or in part, terminate, cease to
be effective or cease to be the legally valid,
binding and enforceable obligation of the
Borrower; or (ii) the Borrower or any other
party shall, directly or indirectly, contest in
any manner such effectiveness, validity, binding
nature or enforceability; or (iii) any security
interest securing any Obligation shall, in whole
or in part, cease to be a perfected first
priority security interest (except, as to
priority, for any tax liens or mechanics liens
that may arise after the applicable Purchase
Date) against the Borrower; or
viii. A Servicer Termination Event shall have occurred
and be continuing.
b. Effect of Facility Termination Event.
i. Optional Termination. Upon the occurrence of a
Facility Termination Event (other than a
Facility Termination Event described in Section
14.1(d)), the Agent may declare all or any
portion of the outstanding principal amount of
the Advances and other Obligations to be due and
payable and/or the Facility (if not theretofore
terminated) to be terminated, whereupon the full
unpaid amount of such Advances and other
Obligations which shall be so declared due and
payable shall be and become immediately due and
payable, without further notice, demand or
presentment, and/or, as the case may be, the
Facility shall terminate.
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ii. Automatic Termination. Upon the occurrence of a
Facility Termination Event described in Section
14.1(d) or a Servicer Termination Event
described in Section 13.1(e), the Facility
Termination Date shall be deemed to have
occurred automatically, and all outstanding
Advances under this Agreement and all other
Obligations under this Agreement shall become
immediately and automatically due and payable,
all without presentment, demand, protest or
notice of any kind.
c. Rights Upon Termination Event. (a) If a Facility
Termination Event shall have occurred and be continuing,
the Agent may direct the Collateral Agent to exercise
any of the remedies specified in the Security Agreement
in respect of the Borrower Collateral.
19.
THE AGENT
a. Appointment. Each Lender hereunder hereby irrevocably
designates and appoints IFA as Agent hereunder and under
the other Transaction Documents, and authorizes the
Agent to take such action on its behalf under the
provisions of this Agreement, the Security Agreement and
the other Transaction Documents and to exercise such
powers and perform such duties as are expressly
delegated to the Agent or, when the Agent is entitled so
to act, to the Agent by the terms of this Agreement, the
Security Agreement and the other Transaction Documents,
together with such other powers as are reasonably
incidental thereto. Notwithstanding any provision to the
contrary elsewhere in this Agreement, the Agent shall
not have any duties or responsibilities, except those
expressly set forth herein, or any fiduciary
relationship with any Lender, and no implied covenants,
functions, responsibilities, duties, obligations or
liabilities on the part of the Agent to any Lender shall
be read into this Agreement, the Security Agreement or
the other Transaction Documents or shall otherwise exist
against the Agent. In performing its functions and
duties hereunder, the Agent shall act solely as the
agent of the Lenders, and the Agent does not assume, nor
shall be deemed to have assumed, any obligation or
relationship of trust or agency with or for any such
Person.
b. Delegation of Duties. The Agent may execute any of its
duties under this Agreement, the Security Agreement and
the other Transaction Documents by or through its
subsidiaries, affiliates, agents or attorneys-in-fact
and shall be entitled to advice of counsel concerning
all matters pertaining to such duties. The Agent shall
not be responsible to any Lender for the negligence or
misconduct of any agents or attorneys-in-fact selected
by it with reasonable care.
c. Exculpatory Provisions. Neither the Agent (acting in
such capacity) nor any of its directors, officers,
agents or employees shall be (a) liable for any action
lawfully taken or omitted to be taken by it or them or
any Person
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described in Section 15.2 under or in connection with
this Agreement, the Security Agreement or the other
Transaction Documents (except for its, their or such
Person's own gross negligence or willful misconduct), or
(b) responsible in any manner to any Person for any
recitals, statements, representations or warranties of
any Person (other than itself) contained in the
Transaction Documents or in any certificate, report,
statement or other document referred to or provided for
in, or received under or in connection with, the
Transaction Documents or for the value, validity,
effectiveness, genuineness, enforceability or
sufficiency of the Transaction Documents or any other
document furnished in connection therewith or herewith,
or for any failure of any Person (other than itself or
its directors, officers, agents or employees) to perform
its obligations under any Transaction Document or for
the satisfaction of any condition specified in a
Transaction Document. Except as otherwise expressly
provided in this Agreement, the Agent shall not be under
any obligation to any Person to ascertain or to inquire
as to the observance or performance of any of the
agreements or covenants contained in, or conditions of,
the Transaction Documents, or to inspect the properties,
books or records of the Borrower, Drive or the Servicer.
d. Reliance by Agent. The Agent shall in all cases be
entitled to rely, and shall be fully protected in
relying, upon any note, writing, resolution, notice,
consent, certificate, affidavit, letter, cablegram,
telegram, telecopy, telex or teletype message,
statement, order or other document or conversation
believed by it to be genuine and correct and to have
been signed, sent or made by the proper Person or
Persons and upon advice and statements of legal counsel
(including, without limitation, counsel to each of the
Lenders), independent accountants and other experts
selected by the Agent. The Agent shall in all cases be
fully justified in failing or refusing to take any
action under this Agreement, the Security Agreement, any
other Transaction Document or any other document
furnished in connection herewith or therewith unless it
shall first receive such advice or concurrence of the
Lenders, as it deems appropriate, or it shall first be
indemnified to its satisfaction by the Lenders against
any and all liability, cost and expense which may be
incurred by it by reason of taking or continuing to take
any such action. The Agent shall in all cases be fully
protected in acting, or in refraining from acting, under
this Agreement, the Security Agreement, the other
Transaction Documents or any other document furnished in
connection herewith or therewith in accordance with a
request of the Required Lenders, and such request and
any action taken or failure to act pursuant thereto
shall be binding upon all the Lenders.
e. Action Upon Certain Events; Reports and Notices.
i. To the extent the Agent is entitled to consent
to or withhold its consent of any waiver or
amendment of this Agreement, the Security
Agreement or other Transaction Documents in
accordance
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with the terms hereof or thereof, or is notified
in writing by a party hereto of a Facility
Termination Event or Servicer Termination Event,
the Agent shall (i) give prompt notice to the
Lenders of any such waiver, amendment, Facility
Termination Event or Servicer Termination Event
of which it is aware, and (ii) take such action
with respect to such waiver, amendment, Facility
Termination Event or Servicer Termination Event
as shall be directed by the Required Lenders;
provided, however, that unless and until the
Agent shall have received such directions, the
Agent may (but shall not be obligated to) take
such action, or refrain from taking such action,
with respect to such waiver, amendment, Facility
Termination Event or Servicer Termination Event,
as applicable, as the Agent shall, in its sole
discretion, deem advisable and in the best
interests of the Lenders.
ii. The Agent shall upon request promptly provide
the Lenders with copies of reports and notices
received by it hereunder and under the Custodian
Agreement and the Security Agreement.
f. Non-Reliance on Agent. The Lenders expressly acknowledge
that neither the Agent, nor any of its officers,
directors, employees, agents, attorneys-in-fact or
affiliates has made any representations or warranties to
it and that no act by the Agent hereafter taken,
including, without limitation, any review of the affairs
of either the Borrower, the Seller, Drive, or the
Servicer, shall be deemed to constitute any
representation or warranty by the Agent to any Lender.
Except as expressly provided herein, the Agent shall not
have any duty or responsibility to provide any Lender
with any credit or other information concerning the
Borrower Collateral or the business, operations,
property, prospects, financial and other condition or
creditworthiness of the Borrower, Drive, the Seller, the
Servicer, or the Lenders which may come into the
possession of the Agent or any of its officers,
directors, employees, agents, attorneys-in-fact or
affiliates.
g. Indemnification. The Lenders agree to indemnify the
Agent and its officers, directors, employees,
representatives and agents (to the extent not reimbursed
by the Borrower, the Servicer or Drive under the
Transaction Documents, and without limiting the
obligation of such Persons to do so in accordance with
the terms of the Transaction Documents), ratably
according to their Commitment Percentages, from and
against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature
whatsoever (including, without limitation, the
reasonable fees and disbursements of counsel for the
Agent or the affected Person in connection with any
investigative, or judicial proceeding commenced or
threatened, whether or not the Agent or such affected
Person shall be designated a party thereto) that may at
any time be imposed on, incurred by or asserted against
the Agent or such affected Person as a result of, or
arising out of, or in any way related to or by reason
of, any of the transactions contemplated
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hereunder or under the Transaction Documents or any
other document furnished in connection herewith or
therewith (but excluding any such liabilities,
obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements
resulting solely from the gross negligence or willful
misconduct of the Agent or such affected Person).
h. Successor Agent. The Agent may, upon five (5) days'
notice to the Lenders (with a copy to the Borrower),
resign as Agent; provided, in either case, that a Lender
agrees to become the successor Agent hereunder in
accordance with the next sentence. If the Agent shall
resign as Agent under this Agreement, then the Required
Lenders during such period shall appoint from among the
Lenders a successor agent, whereupon such successor
agent shall succeed to the rights, powers and duties of
the Agent, and the term "Agent" shall mean such
successor agent, effective upon its acceptance of such
appointment, and the former Agent's rights, powers and
duties as Agent shall be terminated, without any other
or further act or deed on the part of such former Agent
or any of the parties to this Agreement. After the
retiring Agent's resignation hereunder as Agent, the
provisions of this Article XV shall inure to its benefit
as to any actions taken or omitted to be taken by it
while it was Agent under this Agreement. No resignation
of the Agent shall become effective until a successor
Agent shall have assumed the responsibilities and
obligations of the Agent; provided, however, that in the
event a successor Agent is not appointed within 60 days
after the Agent has given notice of its resignation as
permitted by this Section 15.8, the Agent may petition a
court for its removal.
i. Liability of the Agent. Notwithstanding any provision of
this Agreement, the Security Agreement or any other
Transaction Document: (i) the Agent shall not have any
obligations under this Agreement, the Security Agreement
or any other Transaction Document other than those
specifically set forth herein and therein, and no
implied obligations of the Agent shall be read into this
Agreement, the Security Agreement or any other
Transaction Document; and (ii) in no event shall the
Agent be liable under or in connection with this
Agreement, the Security Agreement or any other
Transaction Document for indirect, special, or
consequential losses or damages of any kind, including
lost profits, even if advised of the possibility thereof
and regardless of the form of action by which such
losses or damages may be claimed. Neither the Agent nor
any of its respective directors, officers, agents or
employees shall be liable for any action taken or
omitted to be taken in good faith by it or them under or
in connection with this Agreement, the Security
Agreement or any other Transaction Document, except for
its or their own gross negligence or willful misconduct.
Without limiting the foregoing, the Agent (a) may
consult with legal counsel (including counsel for the
Lenders, the Borrower or the Servicer), independent
public accountants and other experts selected by it and
shall not be liable for any action taken or omitted to
be taken in good faith by it in accordance with the
advice of such
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counsel, accountants or experts, (b) shall not be
responsible to the Lenders, the Borrower, Drive, the
Servicer, or the Seller for any statements, warranties
or representations (other than its own statements) made
in or in connection with this Agreement, the Security
Agreement or the other Transaction Documents, (c) shall
not be responsible to the Lenders, the Borrower, Drive,
the Servicer, or the Seller for the due execution,
legality, validity, enforceability, genuineness,
sufficiency or value of this Agreement, the Security
Agreement or the other Transaction Documents (other than
the legality, validity, enforceability or genuineness of
its own execution, authorization and performance hereof
and thereof), (d) shall incur no liability under or in
respect of any of the commercial paper or other
obligations of the Lenders under this Agreement, the
Security Agreement or the other Transaction Documents
and (e) shall incur no liability under or in respect of
this Agreement, the Security Agreement or the other
Transaction Documents by acting upon any notice
(including notice by telephone), consent, certificate or
other instrument or writing (which may be by facsimile)
believed by it to be genuine and signed or sent by the
proper party or parties. Notwithstanding anything else
herein or in the other Transaction Documents, it is
agreed that where the Agent may be required under this
Agreement, the Security Agreement or the other
Transaction Documents to give notice of any event or
condition or to take any action as a result of the
occurrence of any event or the existence of any
condition, the Agent agrees to give such notice or take
such action only to the extent that it has actual
knowledge of the occurrence of such event or the
existence of such condition, and shall incur no
liability for any failure to give such notice or take
such action in the absence of such knowledge.
j. Agent and Affiliates. The Agent and any of its
Affiliates may generally engage in any kind of business
with the Borrower, the Servicer, the Seller, Drive, any
Obligor, any of their respective Affiliates and any
Person who may do business with or own securities of the
Borrower, the Servicer, the Seller, Drive, any Obligor
or any of their respective Affiliates, all as if the
Agent were not the Agent hereunder and without any duty
to account therefor to any Lender.
k. Agent. All the provisions of this Article XV shall apply
to the Agent in its capacity as Agent.
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20.
ASSIGNMENTS
a. Restrictions on Assignments. Except as specifically
provided herein (with respect to the Servicer), neither
the Borrower, the Servicer, Drive, nor the Seller may
assign any of their respective rights or obligations
hereunder or any interest herein without the prior
written consent of the Agent and the Required Lenders.
No Lender may assign its rights or obligations
hereunder, any Advance or any Note (or any portion
thereof) to any Person without the prior written consent
of the Borrower and the Agent (as to the Borrower only,
such consent not to be unreasonably withheld or
delayed); provided, however, that any Lender may assign,
or grant a security interest in, all or any portion of
the Advances and the Note to (i) IFA or any of its
Affiliates or another Lender or (ii) any Person managed
by IFA or any of its Affiliates (each, an "Eligible
Assignee"), in each case under clauses (i), (ii) and
(iii) above, without the prior written consent of the
Borrower; provided, further, that after the occurrence
of the Facility Termination Date, any Lender may,
subject to the provisions of Section 16.5, assign all or
a portion of the Advance or Note held by it to a Person
other than those identified in clauses (i), (ii) and
(iii) above without the prior written consent of the
Borrower.
b. Documentation. Each Lender shall deliver to each
assignee an assignment, in such form as such Lender and
the related assignee may agree, duly executed by such
Lender assigning any such rights, obligations, Advance
or Note to the assignee; and such Lender shall promptly
execute and deliver all further instruments and
documents, and take all further action, that the
assignee may reasonably request, in order to perfect,
protect or more fully evidence the assignee's right,
title and interest in and to the items assigned, and to
enable the assignee to exercise or enforce any rights
hereunder or under the Note evidencing such Advance.
c. Rights of Assignee. Upon the foreclosure of any
assignment of any Advances made for security purposes,
or upon any other assignment of any Advance from any
Lender pursuant to this Article XVI, the respective
assignee receiving such assignment shall have all of the
rights of such Lender hereunder with respect to such
Advances and all references to the Lender or Investors
in Section 6.1 shall be deemed to apply to such
assignee.
d. Notice of Assignment. Each Lender shall provide notice
to the Borrower of any assignment hereunder by such
Lender to any assignee.
e. Registration; Registration of Transfer and Exchange.
i. The Agent shall keep a register (the "Note
Register") in which, subject to such reasonable
regulations as it may prescribe, the Agent shall
provide for the registration of the Notes and of
transfer
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of the Notes. The Agent is hereby appointed
"Note Registrar" for the purpose of registering
the Notes and transfers of the Notes as herein
provided.
ii. Each person who has or who acquired a Note shall
be deemed by such acquisition to have agreed to
be bound by the provisions of this Section 16.5.
The Agent shall not register (or cause to be
registered) the transfer of the Note, unless the
proposed transferee shall have delivered to the
Agent a properly executed Form W-9 and, in the
case of a transferee who is a foreign person
(within the meaning of Section 7701(a)(5) of the
Code), a properly executed Form W-8ECI or Form
W-8BEN.
iii. At the option of the holder thereof, a Note may
be exchanged for one or more new Notes of any
authorized denominations and of a like class and
aggregate principal amount at an office or
agency of the Borrower. Whenever any Note is so
surrendered for exchange, the Borrower shall
execute and deliver (through the Agent) the new
Note which the holder making the exchange is
entitled to receive.
iv. Upon surrender for registration of transfer of
any Note at an office or agency of the Borrower,
the Borrower shall execute and deliver (through
the Agent), in the name of the designated
transferee or transferees, one or more new Notes
of any authorized denominations and of a like
class and aggregate principal amount.
v. All Notes issued upon any registration of
transfer or exchange of any Note in accordance
with the provisions of this Agreement shall be
the valid obligations of the Borrower,
evidencing the same debt, and entitled to the
same benefits under this Agreement, as the
Note(s) surrendered upon such registration of
transfer or exchange.
vi. Every Note presented or surrendered for
registration of transfer or for exchange shall
(if so required by the Borrower or the Agent) be
fully endorsed, or be accompanied by a written
instrument of transfer in form satisfactory to
the Note Registrar, duly executed by the holder
thereof or his attorney duly authorized in
writing. Each such Note shall be accompanied by
a statement providing the name of the transferee
and indicating whether the transferee is subject
to income tax backup withholding requirements
and whether the transferee is the sole
beneficial owner of such Notes.
vii. No service charge shall be made for any
registration of transfer or exchange of a Note,
but the Borrower may require payment from the
transferee holder of a sum sufficient to cover
any tax or other governmental charge that may be
imposed in connection with any registration of
transfer of exchange of a Note, other than
exchanges pursuant to this Section 16.5.
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81
viii. The holders of the Notes shall be bound by the
terms and conditions of this Agreement.
f. Mutilated, Destroyed, Lost and Stolen Notes.
i. If any mutilated Note is surrendered to the
Agent, the Borrower shall execute and deliver
(through the Agent) in exchange therefor a new
Note of like class and tenor and principal
amount and bearing a number not
contemporaneously outstanding.
ii. If there shall be delivered to the Borrower and
the Agent prior to the payment of the Note (i)
evidence to their satisfaction of the
destruction, loss or theft of any Note and (ii)
such security or indemnity as may be required by
them to save each of them and any agent of
either of them harmless, then, in the absence of
notice to the Borrower or the Agent that such
Note has been acquired by a bona fide purchaser,
the Borrower shall execute and deliver (through
the Agent), in lieu of any such destroyed, lost
or stolen Note, a new Note of like class, tenor
and principal amount and bearing a number not
contemporaneously outstanding.
iii. Upon the issuance of any new Note under this
Section 16.6, the Borrower may require the
payment from the transferor holder of a sum
sufficient to cover any tax or other
governmental charge that may be imposed in
relation thereto and any other expenses
connected therewith.
iv. Every new Note issued pursuant to this Section
16.6 and in accordance with the provisions of
this Agreement, in lieu of any destroyed, lost
or stolen Note shall constitute an original
additional contractual obligation of the
Borrower, whether or not the destroyed, lost or
stolen Note shall be at any time enforceable by
anyone, and shall be entitled to all the
benefits of this Agreement equally and
proportionately with any and all other Notes
duly issued hereunder.
v. The provisions of this Section 16.6 are
exclusive and shall preclude (to the extent
lawful) all other rights and remedies with
respect to the replacement or payment of a
mutilated, destroyed, lost or stolen Note.
g. Persons Deemed Owners. The Borrower, the Servicer, the
Agent, the Collateral Agent and any agent for any of the
foregoing may treat the holder of any Note as the owner
of such Note for all purposes whatsoever, whether or not
such Note may be overdue, and none of the Borrower, the
Servicer, the Agent, the Collateral Agent and any such
agent shall be affected by notice to the contrary.
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h. Cancellation. All Notes surrendered for payment or
registration of transfer or exchange shall be promptly
canceled. The Borrower shall promptly cancel and deliver
to the Agent any Notes previously authenticated and
delivered hereunder which the Borrower may have acquired
in any manner whatsoever, and all Notes so delivered
shall be promptly canceled by the Borrower. No Notes
shall be authenticated in lieu of or in exchange for any
Notes canceled as provided in this Section 16.8, except
as expressly permitted by this Agreement.
i. Participations; Pledge.
i. At any time and from time to time, each Lender
may, in accordance with applicable law, at any
time grant participations in all or a portion of
its Commitment and/or its interest in the
Advances and other payments due to it under this
Agreement to any Person (each, a "Participant");
provided, however, that no participation shall
be granted to any Person unless and until the
Agent shall have consented thereto (which
consent shall not be unreasonably withheld or
delayed). Each Lender hereby acknowledges and
agrees that (A) any such participation will not
alter or affect such Lender's direct obligations
hereunder, and (B) neither the Borrower, the
Agent nor the Servicer shall have any obligation
to have any communication or relationship with
any Participant. Each Participant shall comply
with the provisions of Section 5.1(c) . No
Participant (i) which is other than an Eligible
Assignee shall be entitled to receive additional
amounts under Section 6.1 in excess of the
additional amounts its lead Lender would have
been entitled to receive had such participation
not been granted unless such Participant was
consented to by the Borrower or (ii) shall be
entitled to transfer all or any portion of its
participation without the prior written consent
of the Agent.
ii. Each Lender may pledge its interest in the
Advances and its Note to any Federal Reserve
Bank as collateral in accordance with applicable
law.
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83
21.
INDEMNIFICATION
a. General Indemnity. Without limiting any other rights
which any such Person may have hereunder or under
applicable law, the Borrower and Drive, jointly and
severally, hereby agree to indemnify the Agent, the
Investors, the Custodian, the Collateral Agent and each
Eligible Assignee and each of their Affiliates, and each
of their respective successors, transferees,
participants and assigns and all officers, directors,
shareholders, controlling persons, employees and agents
of any of the foregoing (each of the foregoing Persons
being individually called an "Indemnified Party"),
forthwith on demand, from and against any and all
damages, losses, claims, liabilities and related costs
and expenses, including reasonable attorneys' fees and
disbursements (all of the foregoing being collectively
called "Indemnified Amounts") awarded against or
incurred by any of them arising out of or relating to
any Transaction Document or the transactions
contemplated thereby or the use of proceeds therefrom by
the Borrower or Drive, including (without limitation) in
respect of the funding of any Advance or in respect of
any Transferred Receivable, excluding, however, (a)
Indemnified Amounts to the extent determined by a court
of competent jurisdiction to have resulted from gross
negligence or willful misconduct on the part of any
Indemnified Party or its agent or subcontractor, (b)
except as otherwise provided herein, nonpayment by any
Obligor of an amount due and payable with respect to a
Transferred Receivable, (c) any loss in value of any
Financed Vehicle or Permitted Investment due to changes
in market conditions or for other reasons beyond the
control of the Borrower or Drive or (d) any tax upon or
measured by net income on any Indemnified Party. Without
limiting the foregoing, but subject to the exclusions
(a) through (d) above, the Borrower and Drive agree to
indemnify each Indemnified Party for Indemnified Amounts
arising out of or relating to:
(1) the breach of any representation or
warranty made by the Borrower or Drive
(or any of their respective officers)
under or in connection with this
Agreement or the other Transaction
Documents, any Servicer's Certificate,
Borrowing Base Confirmation or any other
information, report or certificate
delivered by the Borrower or Servicer
pursuant hereto or thereto, which shall
have been false or incorrect in any
material respect when made or deemed
made, provided that a breach of a
representation or warranty with respect
to the eligibility of any Receivable
will not result in liability hereunder
once either (A) such Receivable is
repurchased by Drive pursuant to Section
8.19 or (B) such Receivable is no longer
included in the Borrowing Base and the
outstanding principal
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84
amount of Advances is less than or equal
to the Borrowing Base;
(2) the failure by the Borrower or Drive to
comply in any material way with any
applicable law, rule or regulation with
respect to any Transferred Receivable or
any Financed Vehicle, or the
nonconformity of any Transferred
Receivable with any such applicable law,
rule or regulation;
(3) any failure of Drive or an Affiliate of
the Borrower, as Servicer, to perform
its duties or obligations in accordance
with the provisions of Article VIII or
any provision contained in any
Transaction Document;
(4) any claim involving products liability
that arises out of or relates to
merchandise or services that are the
subject of any Transferred Receivable or
strict liability claim in connection
with any Financed Vehicle related to a
Transferred Receivable;
(5) any tax or governmental fee or charge
(but not including taxes upon or
measured by net income), all interest
and penalties thereon or with respect
thereto, and all outofpocket costs and
expenses, including the reasonable fees
and expenses of counsel in defending
against the same, which may arise by
reason of the making, maintenance or
funding, directly or indirectly, of any
Advance, or any other interest in the
Borrower Collateral;
(6) the offering or effectuation of any
Take-Out Securitization;
(7) the use, ownership or operation, if any,
by Drive or any Affiliate thereof of a
Financed Vehicle;
(8) negligence, misfeasance or bad faith of
Drive in the performance of its duties
under the Transaction Documents
(including any violation of law); or
(9) the commingling of the proceeds of
Borrower Collateral at any time with
other funds.
Indemnification under this Section 17.1 shall survive the termination of this
Agreement and shall include reasonable fees and expenses of counsel and expenses
of litigation. If Drive or the Borrower has made any indemnity payments pursuant
to this Section 17.1 and the recipient
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85
thereafter collects any of such amounts from others, the recipient shall
promptly repay such amounts collected to such Person, without interest.
Notwithstanding the indemnity provisions contained in clauses (i) through (vii)
of this Sections 17.1, neither Drive nor the Borrower shall be required to
indemnify any Indemnified Party against any costs, expenses, losses, damages,
claims or liabilities to the extent the same shall have been (i) caused by the
misfeasance, bad faith or gross negligence (or ordinary negligence in the
handling of funds) of such party, or (ii) suffered by reason of uncollectible or
uncollected Receivables not caused by Drive's or the Borrower's negligence,
misfeasance or bad faith.
b. Contribution. If for any reason (other than the
exclusions (a) through (d) set forth in the first
paragraph of Section 17.1) the indemnification provided
above in Section 17.1 is unavailable to an Indemnified
Party or is insufficient to hold an Indemnified Party
harmless, then the Borrower and Drive, jointly and
severally, agree to contribute to the amount paid or
payable by such Indemnified Party as a result of such
loss, claim, damage or liability in such proportion as
is appropriate to reflect not only the relative benefits
received by such Indemnified Party, on the one hand, and
Drive, the Borrower and its Affiliates, on the other
hand, but also the relative fault of such Indemnified
Party, on the one hand, and Drive, the Borrower and its
Affiliates, on the other hand, as well as any other
relevant equitable considerations.
22.
MISCELLANEOUS
a. No Waiver; Remedies. No failure on the part of any
Investor, the Agent, any Indemnified Party or any
Affected Person to exercise, and no delay in exercising,
any right, power or remedy hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise
by any of them of any right, power or remedy hereunder
preclude any other or further exercise thereof, or the
exercise of any other right, power or remedy. The
remedies herein provided are cumulative and not
exclusive of any remedies provided by law. Without
limiting the foregoing, each Investor and Participant is
hereby authorized by the Borrower and Drive at any time
and from time to time, to the fullest extent permitted
by law, to set off and apply any and all deposits
(general or special, time or demand, provisional or
final) at any time held and other indebtedness at any
time owing by it to or for the credit or the account of
the Borrower or Drive (as the case may be) to the
amounts owed by the Borrower or Drive, respectively,
under this Agreement, to the Agent, any Affected Person,
any Indemnified Party or any Investor or their
respective successors and assigns.
b. Amendments, Waivers. This Agreement may not be amended,
supplemented or modified nor may any provision hereof be
waived except in accordance with the provisions of this
Section 18.2. With the written consent of the Required
Lenders, the Agent, the Borrower, the Servicer,
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86
Drive, the Collateral Agent and the Custodian may, from
time to time, enter into written amendments,
supplements, waivers or modifications hereto for the
purpose of adding any provisions to this Agreement or
changing in any manner the rights of any party hereto or
waiving, on such terms and conditions as may be
specified in such instrument, any of the requirements of
this Agreement (which consent shall not be unreasonably
withheld if such amendment, supplement, waiver or
modification is accompanied by an Opinion of Counsel
that such amendment, supplement, waiver or modification
will not adversely affect in any material respect the
Required Lenders or the Agent); provided, however, that
no such amendment, supplement, waiver or modification
shall (i) reduce the amount of or extend the maturity of
any payment with respect to an Advance or reduce the
rate or extend the time of payment of Interest thereon,
or reduce or alter the timing of any other amount
payable to any Lender hereunder, in each case without
the consent of each Lender affected thereby or (ii)
amend, modify or waive any provision of this Section
18.2 or 18.12, or reduce the percentage specified in the
definition of Required Lenders, in each case without the
written consent of all Lenders. Any waiver of any
provision of this Agreement shall be limited to the
provisions specifically set forth therein for the period
of time set forth therein and shall not be construed to
be a waiver of any other provision of this Agreement.
c. Notices, Etc. All notices and other communications
provided for hereunder shall, unless otherwise stated
herein, be in writing (including facsimile
communication) and shall be personally delivered or sent
by certified mail, postage prepaid, or by facsimile, to
the intended party at the address or facsimile number of
such party set forth under its name on the signature
pages hereof or at such other address or facsimile
number as shall be designated by such party in a written
notice to the other parties hereto. All such notices and
communications shall be effective, (a) if personally
delivered, when received, (b) if sent by certified mail,
three Business Days after having been deposited in the
mail, postage prepaid, (c) if sent by overnight courier,
one Business Day after having been given to such
courier, and (d) if transmitted by facsimile, when sent,
receipt confirmed by telephone or electronic means,
except that notices and communications pursuant to
Section 2.2 shall not be effective until received.
d. Costs, Expenses and Taxes. (a) In addition to the rights
of indemnification granted under Section 17.1, the
Borrower or Drive on behalf of the Borrower agrees to
pay on demand all reasonable costs and expenses of the
Agent in connection with the preparation, execution,
delivery, syndication and administration of this
Agreement and the other documents and agreements to be
delivered hereunder or with respect hereto, and Drive
further agrees to pay all reasonable costs and expenses
of the Agent in connection with any amendments, waivers
or consents executed in connection with this Agreement,
including, without limitation,
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87
the reasonable fees and out-of-pocket expenses of
counsel for the Agent with respect thereto and with
respect to advising the Agent as to its rights and
remedies under this Agreement, and to pay all costs and
expenses, if any (including reasonable counsel fees and
expenses), of the Agent, the Lenders, the Investors, the
Collateral Agent and their respective Affiliates, in
connection with the enforcement against Drive or the
Borrower of this Agreement or any of the other
Transaction Documents and the other documents and
agreements to be delivered hereunder or with respect
hereto.
(b) In addition, Drive shall pay any and all stamp, personal
property, transfer and other taxes and fees payable in connection with the
execution, delivery, filing and recording of this Agreement, the Note,
applicable UCC financing statements or the other documents or agreements to be
delivered hereunder, and the pledge of the Borrower Collateral, and agrees to
save each Indemnified Party harmless from and against any liabilities with
respect to or resulting from any delay in paying or omission to pay such taxes
and fees.
e. Binding Effect; Survival. This Agreement shall be
binding upon and inure to the benefit of the Borrower,
the Investors, the Collateral Agent, the Custodian, the
Servicer, Drive, the Agent and their respective
successors and assigns, and the provisions of Section
5.1(b), Article VI, Section 12.1 and Article XVII shall
inure to the benefit of the Affected Persons and the
Indemnified Parties, respectively, and their respective
successors and assigns; provided, however, nothing in
the foregoing shall be deemed to authorize any
assignment not permitted by Article XVI. This Agreement
shall create and constitute the continuing obligations
of the parties hereto in accordance with its terms, and
shall remain in full force and effect until such time,
after the Facility Termination Date when all Obligations
have been finally and fully paid and performed. The
rights and remedies with respect to any breach of any
representation and warranty made by the Borrower
pursuant to Article X and the indemnification and
payment provisions of Article VI, Section 12.1 and
Article XVII and the provisions of Section 18.10,
Section 18.12 and Section 18.13 shall be continuing and
shall survive any termination of this Agreement and any
termination of Drive's rights to act as Servicer
hereunder or under any other Transaction Document.
f. Captions and Cross References. The various captions
(including, without limitation, the table of contents)
in this Agreement are provided solely for convenience of
reference and shall not affect the meaning or
interpretation of any provision of this Agreement.
Unless otherwise indicated, references in this Agreement
to any Section, Schedule or Exhibit are to such Section
of or Schedule or Exhibit to this Agreement, as the case
may be, and references in any Section, subsection, or
clause to any subsection, clause or subclause are to
such subsection, clause or subclause of such Section,
subsection or clause.
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88
g. Severability. Any provision of this Agreement which 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 of this Agreement
or affecting the validity or enforceability of such
provision in any other jurisdiction.
h. GOVERNING LAW. THIS AGREEMENT AND THE NOTE SHALL BE A
CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAW OF
THE STATE OF NEW YORK WITHOUT REGARD TO ANY OTHERWISE
APPLICABLE CONFLICT OF LAW PRINCIPLES (OTHER THAN
SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW).
i. Counterparts. This Agreement may be executed by the
parties hereto in several counterparts, each of which
shall be deemed to be an original but all of which shall
constitute together but one and the same agreement.
j. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY
RIGHTS IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY
LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN
CONNECTION WITH, THIS AGREEMENT OR ANY OTHER TRANSACTION
DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING,
STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF THE
BORROWER, THE AGENT, THE COLLATERAL AGENT, THE INVESTORS
OR ANY OTHER AFFECTED PERSON. EACH PARTY HERETO
ACKNOWLEDGES AND AGREES THAT IT HAS RECEIVED FULL AND
SUFFICIENT CONSIDERATION FOR THIS PROVISION (AND EACH
OTHER PROVISION OF EACH OTHER TRANSACTION DOCUMENT TO
WHICH IT IS A PARTY) AND THAT THIS PROVISION IS A
MATERIAL INDUCEMENT FOR ITS ENTERING INTO THIS AGREEMENT
AND EACH SUCH OTHER TRANSACTION DOCUMENT.
k. No Proceedings.
Each of IFA, Drive, the Custodian, the Servicer, the Collateral
Agent, each Investor and the Agent hereby agrees that it will not
institute against the Borrower, or join any other Person in instituting
against the Borrower, any insolvency proceeding (namely, any proceeding
of the type referred to in the definition of Insolvency Event) so long
as any Advances or other amounts due from the Borrower hereunder shall
be outstanding or there shall not have elapsed one year plus one day
since the last day on which any such Advances or other amounts shall be
outstanding. The foregoing shall not limit such Person's right to file
any claim in or otherwise take any action with respect to any insolvency
proceeding that was instituted by any Person other than such Person.
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89
l. Limited Recourse to the Lenders. No recourse under any
obligation, covenant or agreement of a Lender contained
in this Agreement shall be had against any incorporator,
stockholder, officer, director, member, manager,
employee or agent of any Lender or any of its Affiliates
(solely by virtue of such capacity) by the enforcement
of any assessment or by any legal or equitable
proceeding, by virtue of any statute or otherwise; it
being expressly agreed and understood that this
Agreement is solely a corporate obligation of each
Lender, and that no personal liability whatever shall
attach to or be incurred by any incorporator,
stockholder, officer, director, member, manager,
employee or agent of any Lender or any of their
Affiliates (solely by virtue of such capacity) or any of
them under or by reason of any of the obligations,
covenants or agreements of a Lender contained in this
Agreement, or implied therefrom, and that any and all
personal liability for breaches by a Lender of any of
such obligations, covenants or agreements, either at
common law or at equity, or by statute, rule or
regulation, of every such incorporator, stockholder,
officer, director, member, manager, employee or agent is
hereby expressly waived as a condition of and in
consideration for the execution of this Agreement;
provided that the foregoing shall not relieve any such
Person from any liability it might otherwise have as a
result of their willful misconduct, gross negligence or
of fraudulent actions taken or fraudulent omissions made
by them.
m. Collateral Agent. Each Lender and each Investor by its
acceptance of any interest in any Note or Advance or in
a Lender's obligation to make Advances hereunder and the
Agent designate and appoint IFA Incorporated, to act as
Collateral Agent hereunder and under the Security
Agreement. IFA Incorporated, by its execution hereof,
accepts and agrees to such designation and appointment
and agrees to perform its obligations hereunder and
under the Security Agreement in accordance with the
terms thereof and for the benefit of the Agent, the
Lenders and other Secured Parties. In furtherance of the
foregoing, each Lender authorizes the Agent to enter
into the Security Agreement and to appoint the
Collateral Agent to act on behalf of, and as agent for,
such Lender and the Agent hereunder and under the
Security Agreement and agrees to be bound by Section 8
of such agreement.
n. Custodian. ▇▇▇▇▇ Fargo Bank Minnesota, National
Association accepts and agrees to its designation and
appointment as Custodian under the Custodian Agreement
and agrees to perform its obligations under such
agreement in accordance with the terms thereof and for
the benefit of the Borrower and the Secured Parties.
o. Successors and Assigns. This Agreement shall inure to
the benefit of and be binding upon the parties hereto
and their respective successors and permitted assigns.
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90
p. ENTIRE AGREEMENT. THIS AGREEMENT AND THE OTHER
TRANSACTION DOCUMENTS EXECUTED AND DELIVERED HEREWITH
REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES HERETO
AND THERETO AND MAY NOT BE CONTRADICTED BY EVIDENCE OF
PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF
THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS
AMONG THE PARTIES.
q. Confidentiality. (a) The Borrower, the Servicer, and
Drive shall hold in confidence, and not disclose to any
Person, the identity of any Lender or the terms of any
fees payable in connection with this Agreement except
they may disclose such information (i) to their
officers, directors, employees, agents, counsel,
accountants, auditors, advisors or representatives, (ii)
with the consent of such Lender and Agent, or (iii) to
the extent the Borrower, Drive or the Servicer or any
Affiliate of any of them should be required by any law
or regulation applicable to it or requested by any
Official Body to disclose such information; provided,
that, in the case of clause (iii), the Borrower, Drive
or the Servicer, as the case may be, will use all
reasonable efforts to maintain confidentiality and will
(unless otherwise prohibited by law) notify the Agent of
its intention to make any such disclosure prior to
making such disclosure.
(b) The Agent and each Lender, severally and with respect to itself
only, covenants and agrees that any information obtained by the Agent or such
Lender pursuant to this Agreement shall be held in confidence (it being
understood that documents provided to the Agent hereunder may in all cases be
distributed by the Agent to the Lenders) except that the Agent or such Lender
may disclose such information (i) to its officers, directors, employees, agents,
counsel, accountants, auditors, advisors or representatives, (ii) to the extent
such information has become available to the public other than as a result of a
disclosure by or through the Agent or such Lender, (iii) to the extent such
information was available to the Agent or such Lender on a nonconfidential basis
prior to its disclosure to the Agent or such Lender hereunder, (iv) with the
consent of Drive, (v) to the extent permitted by Article XVI, or (vi) to the
extent the Agent or such Lender should be (A) required in connection with any
legal or regulatory proceeding or (B) requested by any Official Body to disclose
such information; provided, that, in the case of clause (vi) above, the Agent or
such Lender, as applicable, will use all reasonable efforts to maintain
confidentiality and, in the case of clause (vi)(A) above, will (unless otherwise
prohibited by law) notify Drive of its intention to make any such disclosure
prior to making any such disclosure.
[signature pages begin on next page]
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91
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their respective officers thereunto duly authorized as of the day
and year first above written.
DRIVE BOS LP
By: Drive BOS GP LLC, its general partner
By:
-----------------------------------------------
Name:
Title:
Attention: Vice President-Finance
Facsimile No.:
DRIVE FINANCIAL SERVICES LP
By: Drive GP LLC, its general partner
By:
-----------------------------------------------
Name:
Title:
Attention: Vice President-Finance
Facsimile No.:
IFA INCORPORATED, as Agent and Collateral
Agent
By:
-----------------------------------------------
Name:
Title:
By:
-----------------------------------------------
Name:
Title:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention:
Facsimile No.: ▇▇▇-▇▇▇-▇▇▇▇
- 1 -
92
▇▇▇▇▇ FARGO BANK MINNESOTA
NATIONAL ASSOCIATION,
as Custodian
By:
-----------------------------------------------
Name:
-------------------------------------------
Title:
------------------------------------------
[address]
Attention: Corporate Trust Services - Asset
Backed Administration
Facsimile No.:
- 2 -
93
EXHIBIT A
[SUBJECT TO SUBSTITUTION BY BORROWER]
IFA Incorporated,
as Agent
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention:
Fax #: ▇▇▇-▇▇▇-▇▇▇▇
Phone #: 212-450-____
[Name of Custodian]
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Attention: Corporate Trust Services -
Asset Backed Administration
Fax #:_________
Phone #: -
RE: Advance Request: $__________
[______________________ ]
Gentlemen and Ladies:
This Advance Request is delivered to you pursuant to Section 2.2 of the
Receivables Financing Agreement, dated as of August 18, 2000 (together with all
amendments, if any, from time to time made thereto, the "Receivables Financing
Agreement"), among Drive BOS LP (the "Borrower"), Drive Financial Services LP,
▇▇▇▇▇ Fargo Bank Minnesota, National Association, the Lenders parties thereto
and IFA Incorporated, as Agent (in such capacity, the "Agent") and as Collateral
Agent (in such capacity, the "Collateral Agent") and the other parties thereto.
Unless otherwise defined herein or the context otherwise requires, capitalized
terms used herein have the meanings provided in the Receivables Financing
Agreement.
The Borrower hereby requests that an Advance be made in the aggregate
principal amount of $_____ on ________, 20 [having a Interest Period _____days].
Please wire xxxxxxxxx to the Borrower at the Borrower's direction.
Wiring instructions are included at the end of this letter.
The Borrower hereby acknowledges that, pursuant to Section 2.4 of the
Receivables Financing Agreement, each of the delivery of this Advance Request
and the acceptance by the Borrower of the proceeds of the Advances requested
hereby constitutes a representation and warranty by the Borrower that, on the
date of such Advances, and before and after giving effect thereto and to the
application of the proceeds therefrom in accordance with the Transaction
Documents, all applicable statements set forth in Section 2.4 are true and
correct in all material respects and that all conditions precedent to the
Advance set forth in Section 7.3 of the Receivables Financing Agreement have
been satisfied.
The Borrower agrees that if prior to the time of the Advance requested
hereby any matter certified to herein by it will not be true and correct at such
time as if then made, it will immediately so notify the Agent. Except to the
extent, if any, that prior to the time of the
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Advance requested hereby the Agent shall receive written notice to the contrary
from the Borrower, each matter certified to herein shall be deemed once again to
be certified as true and correct at the date of such Advance as if then made.
The Borrower has caused this Advance Request to be executed and
delivered, and the certification and warranties contained herein to be made, by
its duly authorized officer this _____ day of ______, 20__.
DRIVE BOS LP
By: Drive BOS GP LLC, its general partner
By:
------------------------------
Name:
Title:
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Wire Instructions:
-----------------
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ABA ____________
Account Name:
Account Number:
For further credit to account
Ref:
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EXHIBIT B
NOTE
THIS NOTE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "ACT"), OR ANY STATE SECURITIES LAW, AND MAY NOT BE
DIRECTLY OR INDIRECTLY OFFERED OR SOLD OR OTHERWISE DISPOSED OF BY THE OWNER
HEREOF UNLESS SUCH TRANSACTION IS EXEMPT FROM REGISTRATION UNDER THE ACT AND
SUCH STATE LAWS, AND WILL NOT BE A "PROHIBITED TRANSACTION" UNDER THE EMPLOYEE
RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"). BY ACCEPTANCE OF
THIS NOTE, THE HOLDER AGREES TO BE BOUND BY ALL THE TERMS OF THE RECEIVABLES
FINANCING AGREEMENT.
$______________ _________ __, 2000
FOR VALUE RECEIVED, the undersigned, DRIVE BOS LP, a Delaware limited
partnership (the "Borrower"), promises to pay to the order of
_______________________________, on the Facility Termination Date the principal
sum of _________________________ _______ ($___________) or, if less, the
aggregate unpaid principal amount of all Advances shown on the schedule attached
hereto (and any continuation thereof) and/or in the records of Agent made by the
Investors pursuant to that certain Receivables Financing Agreement, dated as of
_________ __, 2000 (together with all amendments and other modifications, if
any, from time to time thereafter made thereto, the "Receivables Financing
Agreement"), among the Borrower, Drive Financial Services LP, ▇▇▇▇▇ Fargo Bank
Minnesota, National Association, the Lenders parties thereto and IFA
Incorporated, as Agent and Collateral Agent. Unless otherwise defined,
capitalized terms used herein have the meanings provided in the Receivables
Financing Agreement.
The Borrower also promises to pay Interest on the unpaid principal
amount hereof from time to time outstanding from the date hereof until maturity
(whether by acceleration or otherwise) and, after maturity, until paid, at the
rates per annum and on the dates specified in the Receivables Financing
Agreement.
Payments of both principal and Interest are to be made in lawful money
of the United States of America in same day or immediately available funds to
the account designated by the Agent pursuant to the Receivables Financing
Agreement.
This Note is the Note referred to in, and evidences indebtedness
incurred under, the Receivables Financing Agreement, and the holder hereof is
entitled to the benefits of the Receivables Financing Agreement, to which
reference is made for a description of the security for this Note and for a
statement of the terms and conditions on which the Borrower is permitted and
required to make prepayments and repayments of principal of the indebtedness
evidenced by this Note and on which such indebtedness may be declared to be
immediately due and payable.
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All parties hereto, whether as makers, endorsers, or otherwise,
severally waive presentment for payment, demand, protest and notice of dishonor.
As provided in the Receivables Financing Agreement and subject to
certain limitations therein set forth, the transfer of this Note is registrable
in the Note Register, upon surrender of this Note for registration of transfer
at the office or agency of the Agent in The City of New York, duly endorsed by,
or accompanied by a written instrument of transfer in the form satisfactory to
the Note Registrar duly executed by, the holder hereof or his attorney duly
authorized in writing, and thereupon one or more new Notes, of authorized
denominations and for the same aggregate principal amount, will be issued to the
designated transferee or transferees.
The Notes are issuable only in registered form without coupons in
minimum denominations of $100,000. As provided in the Agreement and subject to
certain limitations therein set forth, Notes are exchangeable for a like
aggregate principal amount of Notes of a different authorized denomination, as
requested by the holder surrendering the same.
No service charge shall be made for any such registration of transfer or
exchange, but the Borrower may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Borrower, and any agent of the Borrower, the Agent or the Collateral
Agent may treat the Person in whose name this Note is registered as the owner
hereof for all purposes, whether or not this Note may be overdue, and neither
the Borrower nor any such agent shall be affected by notice to the contrary.
The holder hereof hereby agrees, and any assignee of such holder, by
accepting such assignment, shall be deemed to have agreed, that it will not
institute against the Borrower, or join any other Person in instituting against
the Borrower, any insolvency proceeding (namely, any proceeding of the type
referred to in the definition of Insolvency Event) so long as any Advances or
other amounts due from the Borrower hereunder shall be outstanding or there
shall not have elapsed one year plus one day since the last day on which any
such Advances or other amounts shall be outstanding. The foregoing shall not
limit such Person's right to file any claim in or otherwise take any action with
respect to any insolvency proceeding that was instituted by any Person other
than such Person. The agreement set forth in this paragraph shall survive
payment of this Note.
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THIS NOTE SHALL BE DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED BY
THE INTERNAL LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO ANY OTHERWISE
APPLICABLE PRINCIPLES OF CONFLICTS OF LAWS.
DRIVE BOS LP
By: Drive BOS GP LLC, its general partner
By:
--------------------------------------
Name:
Title:
Personally appeared before me ________________________ [name of
notary], in _____________________[county], ____________________ [state], the
above-named _______________________ [name of person executing], known or proved
to me to be the same person who executed the foregoing instrument and to be the
_______________________ [title] of [ ] and acknowledged to me that he
executed the same as his free act and deed and the free act and deed of [ ].
Subscribed and sworn before me this ____ day of _________, 2000.
NOTARY PUBLIC
COUNTY OF __________________
STATE OF ___________________
My commission expires the ____ day of
____________, 2000.
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Form of Assignment Form
ASSIGNMENT FORM
If you the holder want to assign this Note, fill in the form below and
have your signature guaranteed:
I or we assign and transfer this Note to:
(Print or type name, address and zip code and
social security or tax ID number of assignee)
and irrevocably appoint ___________________________, agent to transfer this Note
on the books of the Borrower. The agent may substitute another to act for him.
Dated: Signed:
-------------------------- ----------------------------------
(sign exactly as the name appears on
the other side of this Note)
Signature Guarantee ____________________________________________________________
Important Notice: When you sign your name to this Assignment Form without
filling in the name of your "Assignee" or "Attorney", this Note becomes fully
negotiable, similar to a check endorsed in blank. Therefore, to safeguard a
signed Note, it is recommended that you fill in the name of the new owner in the
"Assignee" blank. Alternatively, instead of using this Assignment Form, you may
sign a separate "power of attorney" form and then mail the unsigned Note and the
signed "power of attorney" in separate envelopes. For added protection, use
certified or registered mail for a Note.
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Schedule attached to Note Dated _________ __, 2000 of [ ]
payable to the order of ______________________________________
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Date of Amount of Amount of
Advance Advance Repayment
------- ------- ---------
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Schedule attached to Note Dated _________ __, 2000 of [ ]
payable to the order of ______________________________________
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Date of Amount of Amount of
Advance Advance Repayment
------- ------- ---------
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EXHIBIT C
REPRESENTATIONS AND WARRANTIES OF SELLER
WITH RESPECT TO RECEIVABLES
1. Contract Origination Date. Each Receivable has a contract
origination date on or before the applicable Cutoff Date.
2. Term of Receivables. Each Receivable has an original term of
at least 18 months and not more than 72 months and had a
remaining term as of the Cutoff Date relating to such Receivable
of at least 12 months and not more than 72 months.
3. Characteristics of Receivables. (A) Each Receivable (1) is
denominated in U.S. dollars and has been originated in the
United States of America by Drive or by a Dealer for the retail
sale of a Financed Vehicle in the ordinary course of such
Dealer's business in each case in accordance in all material
respects with Drive's credit approval guidelines, and, to the
best knowledge of Borrower, such Dealer had all necessary
licenses and permits to originate Receivables in the state where
such Dealer was located, (2) was fully and properly executed by
the parties thereto, (3) if originated by a Dealer, was
purchased by Drive from such Dealer under an existing Dealer
Agreement and Dealer Assignment and was purchased by the
Borrower from Drive pursuant to the Receivables Purchase
Agreement, (4) contains customary and enforceable provisions
such that the rights and remedies of the holder or assignee
thereof shall be adequate for realization against the collateral
of the benefits of the security, (5) provides for level monthly
payments that fully amortize the Amount Financed over the
original term (except for the last payment, which may be greater
or smaller than the level payment),
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provided payments are made on the applicable due dates, (6) as
of the Cutoff Date with respect thereto, has an Annual
Percentage Rate of not less than 12.5%, (7) provides for, if
such contract is prepaid, a prepayment that fully pays the
Principal Balance and accrued interest at the Annual Percentage
Rate and (8) is a Simple Interest Receivable or a Pre-Computed
Receivable; and (B) as of the Cutoff Date with respect thereto,
no Receivable is a Liquidated Receivable or a Defaulted
Receivable.
4. Principal Balance; Scheduled Payments. Each Receivable has an
outstanding principal balance as of the applicable Cutoff Date,
of not less than $1,000 and not more than $40,000.
5. Characteristics of Obligors. No Obligor on any Receivable (A)
is the subject of any federal, state or other bankruptcy,
insolvency or similar proceeding pending on the date of
application that is not discharged, (B) is currently the subject
of a judgment in favor of Drive, and (C) has had its related
Financed Vehicle repossessed (or subject to repossession).
6. Location of Receivable Files. There exists a complete
Receivable File with respect to each Receivable that will have
been delivered to the Custodian on or prior to the Initial
Advance Date with respect to the Initial Receivables and on or
prior to the applicable Subsequent Purchase Date with respect to
Subsequent Receivables and any exceptions set forth in the
Custodian's certificate will be corrected within 30 days.
7. Schedule of Receivables. The information with respect to each
Receivable set forth in the Schedule of Receivables has been
produced from the Electronic Ledger and is true and correct in
all material respects as of the close of business on each Cutoff
Date.
8. Adverse Selection. No selection procedures having a material
adverse effect on any of the Secured Parties have been utilized
in selecting any Receivable from those receivables owned by
Drive that met the selection criteria contained in this
Agreement. No advances or extensions were made to qualify any
Receivable under the eligibility criteria set forth in this
Exhibit C.
9. Compliance with Law. No Receivable nor the sale of the
related Financed Vehicle, at the time the related Receivable was
originated or made, contravened in any material respect, and, at
the date of transfer thereof contravenes in any material
respect, any requirements of applicable federal, state and local
laws, and regulations thereunder including, without limitation,
usury laws, the Federal Truth-in-Lending Act, the Equal Credit
Opportunity Act, the Fair Credit 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, each applicable state Motor Vehicle Retail Installment
Sales Act, and state adaptations of the National Consumer Act
and of the
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Uniform Consumer Credit Code, and other consumer credit laws and
equal credit opportunity and disclosure laws.
10. No Government Obligor. None of the Receivables is due from
the United States of America or any state or from any other
Official Body.
11. Security Interest in Financed Vehicle. Each Receivable has
created, or will create when all required procedures are
completed by the Servicer, a valid, subsisting and enforceable
first priority perfected security interest in the related
Financed Vehicle in favor of Drive as secured party, and such
security interest is, or will be upon the completion of all
required procedures by the Servicer, prior to all other liens
upon and security interests in such Financed Vehicle that now
exist or may hereafter arise or be created (except, as to
priority, for any tax liens or mechanics' liens that may arise
after the applicable Purchase Date).
12. Binding Obligation; Receivables in Force. Each Receivable is
a binding obligation of its related Obligor and no Receivable
has been satisfied, subordinated or rescinded, nor has any
Financed Vehicle been released from the lien granted by the
related Receivable in whole or in part.
13. No Amendments. No Receivable has been amended, altered or
modified; no provision of any Receivable has been waived, other
than any provisions requiring vendor single interest insurance
or late payment fees and those waivers, alterations or
modifications specifically permitted pursuant to Section 8.2 of
this Agreement. No Receivable has been modified as a result of
application of the Soldiers' and Sailors' Civil Relief Act of
1940, as amended.
14. No Defenses. No right of rescission, setoff, counterclaim or
defense exists with respect to any Receivable. The operation of
the terms of any Receivable or the exercise of any right
thereunder will not render such Receivable unenforceable in
whole or in part or subject to any such right of rescission,
setoff, counterclaim or defense.
15. No Liens. There are no liens or claims existing or that have
been filed for work, labor, storage or materials relating to any
of the related Financed Vehicles that are liens prior to the
security interest in the related Financed Vehicles granted by
the related Receivables.
16. No Fraud or Misrepresentation. Each Receivable was
originated by a Dealer and was sold by the Dealer to Drive
without fraud or misrepresentation on the part of such Dealer in
either case.
17. No Default; Repossession. Except for payment delinquencies
continuing for a period of less than 31 days as of the
applicable Cutoff Date, no default, breach, violation or event
permitting acceleration under the terms of any Receivable has
occurred; no continuing condition that with notice or the lapse
of time would constitute a default, breach, violation, or event
permitting acceleration under the terms of any Receivable has
arisen; the Borrower shall not waive and has not waived any of
the foregoing; and no related Financed Vehicle has been
repossessed.
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18. Insurance; Other. Drive, in accordance with its customary
procedures, has determined (A) that each Obligor, at the time of
origination, had obtained or agreed to obtain insurance covering
the Financed Vehicle as of the execution of the Receivable
insuring against loss and damage due to fire, theft,
transportation, collision and other risks generally covered by
comprehensive and collision coverage (i) in an amount at least
equal to the lesser of (x) its maximum insurable value or (y)
the principal amount due from the Obligor under the related
Receivable and (ii) naming Drive as loss payee, (B) each
Receivable that finances the cost of premiums for credit life
and accident or health insurance is covered by an insurance
policy and certificate of insurance naming Drive as creditor
under each such insurance policy and certificate of insurance,
and (C) as to each Receivable that includes financing for the
cost of a service contract, the respective Financed Vehicle that
secures the Receivable is covered by a service contract. No
Receivable has force-placed insurance.
19. Title. No Receivable has been sold, transferred, assigned or
pledged by Drive to any Person other than the Borrower or any
such pledge that has been released on or prior to the Initial
Advance Date with respect to the Initial Receivables or the
applicable Subsequent Purchase Date with respect to the
Subsequent Receivables. The Borrower has good and marketable
title to each Receivable, and is the sole owner thereof, free
and clear of all Liens, and the transfer to the Borrower has
been perfected under the UCC. No Dealer has a participation in,
or other right to receive, proceeds of any Receivable. The
Borrower has not taken any action to convey any right to any
Person that would result in such Person having a right to
payments received under the related Insurance Policies or the
related Dealer Agreements or Dealer Assignments or to payments
due under such Receivables.
20. Marking of Receivables. On the Initial Advance Date and each
Subsequent Purchase Date, Drive or the Borrower will have caused
the portions of the Electronic Ledger relating to the
Receivables to be clearly and unambiguously marked to show that
the Receivables have been sold by Drive to the Borrower in
accordance with the terms of the Receivables Purchase Agreement
and pledged to the Collateral Agent under the Security
Agreement.
21. Computer Tape. The Computer Tape made available by the
Borrower to the Collateral Agent on the Initial Advance Date was
complete and accurate in all material respects as of the Initial
Cutoff Date and includes a description of the same Receivables
that are described in the Schedule of Receivables.
22. Lawful Assignment. No Receivable has been originated in, or
is subject to the laws of, any jurisdiction under which the
sale, contribution, transfer and assignment of such Receivable
under this Agreement shall be unlawful, void or voidable. The
Borrower has not entered into any agreement with any account
debtor that prohibits,
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restricts or conditions the assignment of any portion of the
Receivables.
23. All Filings Made. All filings (including, without
limitation, UCC filings) necessary in any jurisdiction to give
the Collateral Agent a first priority perfected ownership
interest in the Receivables have been made.
24. One Original. There is only one original executed copy of
each Receivable.
25. Valid and Binding Obligation of Obligor. Each Receivable is
the legal, valid and binding obligation of the Obligor
thereunder and is enforceable in accordance with its terms,
except only as such enforcement may be limited by bankruptcy,
insolvency or similar laws affecting the enforcement of
creditors' rights generally; all parties to such contract had
full legal capacity to execute and deliver such contract and all
other documents related thereto and to grant the security
interest purported to be granted thereby.
26. Title Documents. (A) If any Financed Vehicle was originated
in a state in which notation of security interest on the title
document is required or permitted to perfect such security
interest, the title document for such Financed Vehicle shows, or
if a new or replacement title document is being applied for with
respect to such Financed Vehicle, the title document will be
received within [180] days and will show, Drive named as the
original secured party under the related Receivables as the
Holder of a first priority security interest in such Financed
Vehicle, and (B) if any Financed Vehicle was originated in a
state in which the filing of a financing statement under the UCC
is required to perfect a security interest in motor vehicles,
such filings or recordings have been duly made and show Drive
named as the original secured party under the related
Receivable, and in either case, no further action is required
under the UCC or any titling statute or act to continue the
perfected status of the first priority security interest in the
Financed Vehicle against creditors of and transferees from the
original Obligor.
27. Chattel Paper. Each Receivable constitutes "chattel paper"
under the UCC.
28. Tax Liens. There is no Lien against the related Financed
Vehicles for delinquent taxes.
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EXHIBIT D
FORM OF BORROWING BASE CERTIFICATE
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EXHIBIT E
FORM OF SERVICER'S CERTIFICATE
[TO BE PROVIDED-- TO BE IN FORM AND SUBSTANCE SATISFACTORY TO THE AGENT AND
DRIVE]
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