EXHIBIT 10.33
LOAN SALE AND CONTRIBUTION AGREEMENT
Dated as of September 1, 1996
by and between
EAGLE FINANCE CORP.
and
EAGLE AUTO FUNDING CORP.
LOAN SALE AND CONTRIBUTION AGREEMENT (the "Sale Agreement"), dated as
of September 1, 1996 by and between EAGLE FINANCE CORP. (the "Originator"), a
Delaware corporation, its successors and permitted assigns and EAGLE AUTO
FUNDING CORP., a Delaware corporation (the "Funding Company").
W I T N E S S E T H:
WHEREAS, the Originator purchases consumer automobile loans originated
by car dealers to finance the purchase of new and used automobiles and light
trucks;
WHEREAS, the Funding Company has been formed for the purpose of
purchasing and simultaneously selling such types of auto loans to a
securitization trust, the Eagle Auto Trust Series 1996-A (the "Trust"); and
WHEREAS, the Originator intends to sell and the Funding Company
intends to purchase, certain of such automobile loans for simultaneous transfer
to the Trust, together with all of its rights hereunder, as described herein;
NOW, THEREFORE, the parties agree as follows:
Section 1. DEFINITIONS.
"AMOUNT FINANCED" has, with respect to any Auto Loan, the meaning
ascribed thereto in the applicable Truth-in-Lending disclosure documents given
to the Obligor of such Auto Loan pursuant to the Federal Truth-in-Lending Act.
"FUNDING COMPANY" means Eagle Auto Funding Corp., a Delaware
corporation, and any successor thereto.
"INDEMNIFIED AMOUNTS" means any and all amounts necessary to indemnify
such Indemnified Party from and against any and all claims, losses and
liabilities and related costs and expenses, including reasonable attorneys' fees
and disbursements.
"INDEMNIFIED PARTY" means the Funding Company or any employee, officer
or agent thereof.
"LOAN PORTFOLIO ACQUISITION PRICE" means with respect to any Auto
Loan, the amount received by Eagle Finance from the Funding Company for all of
Eagle Finance's rights, title and interest in such Auto Loan.
"ORIGINATOR" means Eagle Finance Corp., a Delaware corporation, and
any successor thereto.
"POOLING AND SERVICING AGREEMENT" means the Pooling and Servicing
Agreement dated as of September 1, 1996 by and among the Originator,
individually and as Servicer, the Funding Company, as Seller and ▇▇▇▇▇▇ Bank and
Trust Company, as Trustee, Custodian and Back-Up Servicer.
"SALE" means the sale of an Auto Loan from the Originator to the
Funding Company pursuant to this Sale Agreement.
"SALES FINANCE COMPANY LICENSE" means a current license issued to the
Originator authorizing it to make, purchase and sell consumer Auto Loans in each
state in which such license is required.
"SERVICER" means Eagle Finance Corp., a Delaware corporation, its
successors and permitted assigns.
All other capitalized terms used herein and not otherwise defined
herein shall have the meanings ascribed to such terms in the Pooling and
Servicing Agreement.
Section 2. SALE OF AUTO LOANS. (a) The Originator hereby sells or
contributes to the Funding Company, subject to the terms and conditions of this
Sale Agreement, the Auto Loans listed on Schedule 1 hereof. Subject to the
terms and conditions of this Sale Agreement, Funding Company agrees to purchase
or accept the foregoing from Originator. To the extent that the Loan Portfolio
Acquisition Price paid to Originator for the Auto Loans is less than the fair
market value of such Auto Loans, the difference between such fair market value
and the Loan Portfolio Acquisition Price shall be deemed to be a capital
contribution made by Originator to Funding Company on the Closing Date.
(b) At the request of the Funding Company, the Originator hereby
undertakes to deliver to the Custodian on or before the Closing Date a complete
Collateral File in respect of each Auto Loan hereunder. Upon receipt of the
complete Collateral Files by the Custodian the Funding Company shall
simultaneously on the Closing Date pay the Loan Portfolio Acquisition Price with
respect to such Auto Loans.
(c) Following payment of the Loan Portfolio Acquisition Price, the
ownership of each Auto Loan listed on Schedule 1 hereof shall be vested in the
Funding Company, and, immediately upon its transfer thereto, the Originator
shall not take any action inconsistent with such ownership and shall not claim
any ownership interest in any such Auto Loan. All references herein to rights
of the Funding
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Company include its assignee, the Trustee on the behalf of the Trust.
(d) The Originator shall indicate in its records that ownership of
each Auto Loan is held by the Funding Company or its assignee. In addition, the
Originator shall respond to any inquiries with respect to ownership of an Auto
Loan by stating that it is no longer the owner of such Auto Loan and that
ownership of such Auto Loan is held by the Trustee on behalf of the Trust. The
Originator at any time and from time to time shall afford the Funding Company
and its authorized agents and representatives reasonable access during regular
business hours to the Originator's records relating to the Originator's
performance under this Sale Agreement and will cause its personnel to assist in
any examination of such records to enable such parties to determine the
Originator's compliance with the terms of this Sale Agreement. The examination
referred to in the immediately preceding sentence will be conducted in a manner
that does not unreasonably interfere with the Originator's normal operations or
customer or employee relations.
(e) The Originator agrees that, from time to time, at its expense, it
will promptly execute and deliver all further instruments, notices and
documents, and take all further action, that may be necessary or appropriate, or
that the Funding Company requests, in order to perfect, protect or more fully
evidence the transfer of ownership of the Auto Loans or to enable the Funding
Company to exercise or enforce any of its rights hereunder. Without limiting
the generality of the foregoing, the Originator will promptly, upon the request
of the Funding Company, (i) execute and file or cause to be filed such financing
or continuation statements, certificates of title or other title documentation
in support of the lien of the Funding Company's assignee in the related
Automobile, or amendments thereto or assignments thereof and (ii) upon the
request of the Funding Company to facilitate timely collection thereof, assist
in collecting from the Dealer on a timely basis upon notification from the
Funding Company refundable insurance and warranty premiums. The Originator
hereby authorizes the Funding Company to file one or more financing or
continuation statements, and amendments thereto and assignments thereof,
relating to all or any of the Auto Loans and proceeds thereof without the
signature of the Originator.
Section 3. INTENDED CHARACTERIZATION; GRANT OF
SECURITY INTEREST. It is the intention of the parties hereto that the transfer
of Auto Loans to be made hereunder shall constitute a purchase and sale, or a
capital contribution, and not a loan. In the event, however, that a court of
competent jurisdiction were to hold that the
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transaction evidenced hereby constitutes a loan and not a purchase and sale or
capital contribution, it is the intention of the parties hereto that this Sale
Agreement shall constitute a security agreement under applicable law and that
the Originator shall be deemed to have granted to the Funding Company as of the
date hereof a first priority security interest in all of the Originator's right,
title and interest in, to and under each Auto Loan, and all proceeds thereof.
In the event of the characterization of any such transfer as a loan, the amount
of interest payable or paid with respect to such loan under the terms of this
Agreement shall be limited to an amount which shall not exceed the maximum
nonusurious rate of interest allowed by the applicable state law or any
applicable law of the United States permitting a higher maximum nonusurious rate
that preempts such applicable state law, which could lawfully be contracted for,
charged or received (the "Highest Lawful Rate"). In the event any payment of
interest on any such loan exceeds the Highest Lawful Rate, the parties hereto
stipulate that (a) to the extent possible given the term of such loan, such
excess amount previously paid or to be paid with respect to such loan be applied
to reduce the principal balance of such loan, and the provisions thereof
immediately be deemed reformed and the amounts thereafter collectible thereunder
reduced, without the necessity of the execution of any new document, so as to
comply with the then applicable law, but so as to permit the recovery of the
fullest amount otherwise called for thereunder and (b) to the extent that the
reduction of the principal balance of, and the amounts collectible under, such
loan and the reformation of the provisions thereof described in the immediately
preceding clause (a) is not possible given the term of such loan, such excess
amount will be deemed to have been paid with respect to such loan as a result of
an error and upon discovery of such error or upon notice thereof by any party
hereto such amount shall be refunded by the recipient thereof.
Section 4. REPRESENTATIONS AND WARRANTIES OF THE ORIGINATOR. The
Originator represents and warrants to the Funding Company, as of the Closing
Date, as follows:
(a) With respect to the Originator:
(i) the Originator is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware and is
duly qualified to do business, and is in good standing in each jurisdiction in
which the nature of its business requires it to be so qualified the failure of
which to so qualify would have a material adverse effect on the Originator's
ability to acquire the Auto Loans and perform its other obligations hereunder,
and it is or will be in compliance with the laws
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of each state to the extent necessary to ensure the enforceability of each Auto
Loan and it has obtained all necessary licenses with respect to it required by
law to enable it to perform its duties herein;
(ii) the Originator has the power and authority to own and convey
all of its properties and assets and to execute and deliver this Sale Agreement,
and all Related Documents and to perform the transactions contemplated hereby
and thereby;
(iii) the execution, delivery and performance by the Originator of
this Sale Agreement and the Related Documents and the transactions contemplated
hereby and thereby, (A) have been duly authorized by all necessary corporate or
other action on the part of the Originator, (B) do not contravene or cause the
Originator to be in default under (1) the Originator's certificate of
incorporation and by-laws, (2) any contractual restriction with respect to any
Debt of the Originator or contained in any indenture, loan or credit agreement,
lease, mortgage, security agreement, bond, note, or other agreement or
instrument binding on or affecting the Originator or its property or (3) any
law, rule, regulation, order, writ, judgment, award, injunction or decree
applicable to, binding on or affecting the Originator or its property and (C) do
not result in or require the creation of any Adverse Claim;
(iv) this Sale Agreement has been duly executed and delivered on
behalf of the Originator;
(v) no consent of, or other action by, and no notice to or
filing with, any Governmental Authority or any other party, is required for the
due execution, delivery and performance by the Originator of this Sale Agreement
or for the perfection of or the exercise by the Funding Company of any of its
rights or remedies hereunder;
(vi) this Sale Agreement delivered by the Originator is the
legal, valid and binding obligation of the Originator enforceable against the
Originator in accordance with its terms;
(vii) there is no pending or threatened action, suit or
proceeding, nor any injunction, writ, restraining order or other order of any
nature against or affecting the Originator, its Affiliates, its officers or
directors, or the property of the Originator, in any court or tribunal, or
before any arbitrator of any kind or before or by any Governmental Authority (A)
asserting the invalidity of this Sale Agreement, (B) seeking to prevent the sale
and assignment of any Auto Loan or the consummation of any of the transactions
contemplated thereby, (C) seeking any
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determination or ruling that might materially and adversely affect (1) the
performance by the Originator of this Sale Agreement, (2) the validity or
enforceability of this Sale Agreement, (3) any Auto Loan or (4) the federal
income tax attributes of the Sales, or (D) except as previously disclosed in the
Private Placement Memorandum, asserting a claim for payment of money in excess
of $100,000 (other than such judgments or orders in respect of which adequate
insurance is maintained by the Originator for the payment thereof);
(viii) no injunction, writ, restraining order or other order of any
material nature adverse to the Originator or the conduct of its business or
which is inconsistent with the due consummation of the transactions contemplated
by this Sale Agreement has been issued by a Governmental Authority;
(ix) no defaulted Debt exists under any instrument or agreement
evidencing, securing or providing for the issuance of Debt of the Originator;
(x) the principal place of business and chief executive office
of the Originator are located at the address of the Originator set forth in the
designated space beneath its signature line in this Sale Agreement, and there
are now no, and during the past four months there have not been, any other
locations where the Originator is located (as that term is used in the UCC in
the state of such location), and, except as set forth in the designated space
beneath its signature line in this Sale Agreement, there are no other locations
where records in regard to the Auto Loans are maintained, except, that, with
respect to such changes occurring after the date of this Sale Agreement, as
shall have been specifically disclosed to the Funding Company in writing;
(xi) the legal name of the Originator is as set forth at the
beginning of this Sale Agreement and except as set forth in the designated space
beneath its signature line in this Sale Agreement the Originator has not changed
its name in the last two years, and during such period, the Originator did not
use, nor does the Originator now use any tradenames, fictitious names, assumed
names or "doing business as" names except that, with respect to such changes
occurring after the date of this Sale Agreement, as shall have been specifically
disclosed to the Funding Company in writing;
(xii) the Originator is solvent and will not become insolvent
after giving effect to the transactions contemplated by this Sale Agreement; the
Originator is paying its debts as they mature; the Originator has not sold
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any Auto Loan to the Funding Company with intent to hinder, delay or defraud any
entity to which the Originator was, or became, after the date that such transfer
was made, indebted; the Originator's sales of the Auto Loan to the Funding
Company have been and will be made for reasonably equivalent value and fair
consideration; the Originator has not incurred debts beyond its ability to pay
as they mature; and the Originator, after giving effect to the transactions
contemplated by this Sale Agreement, will have an adequate amount of capital to
conduct its business in the foreseeable future;
(xiii) for federal income tax, reporting and accounting purposes,
the Originator will treat the sale of each Auto Loan sold pursuant to this Sale
Agreement as a sale, or absolute assignment, of its full right, title and
ownership interest in such Auto Loan to the Funding Company and the Originator
has not and will not in any other respect accounted for or treated the
transactions contemplated by this Sale Agreement;
(xiv) the Originator has and maintains all permits, licenses,
authorizations, registrations, approvals and consents of governmental
authorities (including, without limitation, any Sales Finance Company License)
necessary for (A) the activities and business of the Originator as currently
conducted and as proposed to be conducted, (B) the origination of the Auto Loans
(as of the date each was originated) and (C) the performance by the Originator
of this Sale Agreement;
(xv) the Originator has filed on a timely basis all tax returns
(federal, state and local) required to be filed and has paid or made adequate
provisions for the payment of all taxes, assessments and other governmental
charges due from the Originator;
(xvi) each pension plan or profit sharing plan to which the
Originator is a party has been fully funded in accordance with the obligations
of the Originator set forth in such plan;
(xvii) with respect to the Originator, there has occurred no event
which has or is reasonably likely to have a material adverse effect on its
ability to perform its obligations under this Sale Agreement;
(xviii) the consolidated balance sheets of the Originator and its
consolidated Subsidiaries as of the date of its most recently completed fiscal
year and the related statements of income and shareholders' equity of the
Originator and its consolidated Subsidiaries for the fiscal year then ended,
certified by its independent certified
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public accountants, together with all quarterly reports with respect to
completed fiscal quarters occurring after such fiscal year until the date of
this representation and warranty, copies of which have been furnished to the
Funding Company, fairly present the consolidated financial condition, business
and operations of the Originator and its consolidated subsidiaries as at such
date and the consolidated results of the operations of the Originator and its
consolidated subsidiaries for the period ended on such date, all in accordance
with generally accepted accounting principles consistently applied, and since
such date there has been no material adverse change in any such condition,
business or operations;
(xix) the Originator has valid business reasons for selling its
interests in the Auto Loans rather than obtaining a loan with the Auto Loans as
collateral;
(xx) all information heretofore or hereafter furnished with
respect to the Originator to the Funding Company in connection with any
transaction contemplated by this Sale Agreement 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.
(b) With respect to each Auto Loan sold pursuant to this Sale
Agreement on the Closing Date (unless otherwise noted):
(i) With respect to the Obligors, at the time the Auto Loan was
entered into (A) his or her monthly income was no less than $1,200 for
individual Obligors, $1,800 for joint Obligors of an Auto Loan originated
in Eagle Finance's Florida regional centers, and $2,000 for joint Obligors
of other Auto Loans; (B) the Obligor was employed in his or her current
job, and had resided in his or her current residence, for at least one year
and (C) the percentage of an Obligor's gross income that the monthly
payment on the Auto Loan represents is less than 25%; PROVIDED, HOWEVER,
that such representations and warranties in each case shall not be deemed
to be breached unless more than the following percentages of Auto Loans (by
number of Auto Loans as of the Closing Date) do not meet the foregoing
criteria: in respect of clause (A), 4.16% (for individual Obligors with
respect to the $1,200); clause (B), 2.11%; and clause (C), 6.60%;
(ii) The (A) the name of the Obligor, (B) the Principal Balance,
(C) the maturity date, (D) the APR and (E) the state of residence of the
Obligor in respect of such Auto Loan on the List of Auto Loans
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attached hereto as Schedule 1 is true and correct in all material respects
as of the date of delivery thereof, and no selection procedures adverse to
the Funding Company have been utilized in selecting the Auto Loan;
(iii) such Auto Loan (A) provides for level monthly payments
(provided that the payment in the first or last months in the life of the
Auto Loan may be different from the level payment if such Auto Loan is a
Simple Interest Auto Loan) that fully amortize the Amount Financed over an
original term of no greater than 60 months (prior to any extensions being
granted), and (B) is subject to an insurance requirement against the risks
of fire, theft and collision with a loss payable endorsement in favor of
Eagle Finance and had such insurance at origination, which security
interest and insurance are assignable and have been so assigned to the
Trust, and an agreement to provide accidental physical damage insurance
which identifies the vehicle insured, insurance agent, insurance company
and contains a Dealer confirmation executed by the Dealer and contains an
acknowledgement that such Obligor's installment contract requires that the
Automobile be continuously covered with insurance;
(iv) such Auto Loan has not been satisfied, subordinated or
rescinded; and no provision of the Auto Loan has been waived, altered or
modified in any respect, except by instruments or documents identified in
the Collateral File;
(v) such Auto Loan is not and will not be subject to any right
of rescission, set-off, recoupment, counterclaim or defense, whether
arising out of transactions concerning the Auto Loan or otherwise and no
such right has been asserted with respect thereto;
(vi) No Auto Loan has been sold, transferred, assigned or pledged
by the Originator to any Person other than the Funding Company.
Immediately prior to the transfer and assignment herein contemplated, the
Originator had good and marketable title to each Auto Loan free and clear
of all Adverse Claims and rights of others and, immediately upon the
transfer thereof, the Funding Company will have good and marketable title
to each Auto Loan, free and clear of all Adverse Claims and rights of
others, including liens or claims filed for work, labor or materials
relating to an Automobile that are prior to or equal with the security
interest in such Automobile granted by the related Obligors; and
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the transfer from the Originator to the Funding Company has been validly
perfected under the UCC;
(vii) except for payment delinquencies continuing for a period of
not more than 30 days as of the Cut-Off Date, there is no default, breach,
violation or event permitting acceleration under the Auto Loan, and no
event has occurred which, with notice and the expiration of any grace or
cure period or both, would constitute a default, breach, violation or event
permitting acceleration under such Auto Loan and the Originator has not
waived any of the foregoing;
(viii) such Auto Loan constitutes the legal, valid and binding
obligation of the Obligor thereunder enforceable against the Obligor in
accordance with its terms (except as may be limited by laws affecting
creditors' rights in similar transactions generally) and the documents
evidencing each Auto Loan contain enforceable provisions such as to render
the rights and remedies of the holder thereof adequate for the realization
against the collateral for the benefit of the security afforded thereby;
(ix) the Originator has conducted each of the procedures and
received the documents set forth in the Operations Manual to evaluate the
Obligor's application in accordance with the Operations Manual and
applicable law and, to the extent consistent with such terms, in the same
manner and with the same care, skill, prudence and diligence with which it
conducts such investigations with respect to similar auto loans and
obligors for other portfolios or its own account, giving due consideration
to customary and usual standards of prudent auto loan originators;
(x) the contractual documents provided to the Custodian
constitute the only originals of the entire agreement with respect to such
Auto Loan between the Obligor and the related Dealer;
(xi) to the best of the Originator's knowledge, the down payment
described in the Originator's credit files was paid to the related Dealer
in the manner stated in such files;
(xii) to the best of the Originator's knowledge, the Automobile
purchased by the Obligor pursuant to each Auto Loan has been delivered to
and accepted by the Obligor;
(xiii) each Auto Loan is denominated in and payable in Dollars;
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(xiv) all parties to each Auto Loan had the capacity to execute
such Auto Loan and legally bind the named Obligors and all signatures
thereon are authentic;
(xv) each Auto Loan was originated by the related Dealer in the
ordinary course of its business pursuant to standard terms of loan
documentation provided by the Originator or otherwise acceptable to the
Originator;
(xvi) other than with respect to 2.8% of the Auto Loans, there is
a Dealer Agreement in place between the Originator and the Dealer selling
the Automobile purchased pursuant to the Auto Loan whereby the Dealer
warrants title to the Automobile and indemnifies the Originator against the
unenforceability of the Auto Loan, and the Originator's rights thereunder,
with regard to the Auto Loan sold hereunder, have been validly assigned to
and are enforceable against the Dealer by the Funding Company and then to
the Trust, along with any other rights of recourse which the Originator has
against the Dealer, without prejudice to any rights the Funding Company and
the Trustee on behalf of the Trust may have against the Originator;
(xvii) the Automobile was purchased from a duly licensed Dealer as
to which the Originator has performed an investigation in accordance with
the Operations Manual and with the same care, skill, prudence and diligence
with which it conducts such investigations with respect to Dealers
originating similar auto loans with similar obligors for its own account;
(xviii) the Auto Loan was sold to the Originator and by the
Originator to the Funding Company without any conduct constituting fraud or
misrepresentation on the part of the Originator, and the Originator has no
knowledge of any fact which should have led it to expect at the time of
sale of such Auto Loan that the Auto Loan would not be paid in full when
due;
(xix) the Auto Loan was not originated in and is not subject to
the laws of any jurisdiction, the laws of which would make the transfer of
the Auto Loan to the Funding Company or the Trustee unlawful or voidable;
(xx) this Sale Agreement constitutes a valid transfer,
assignment, set-over and conveyance to the Funding Company of all right,
title and interest of the Originator in and to the Auto Loan sold
thereunder;
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(xxi) such Auto Loan and the sale of each Automobile (A) complied
at the time it was originated or made, and complies at the Closing Date, as
the case may be, in all material respects with all requirements of
applicable federal, State and local laws and regulations thereunder,
including, without limitation, usury laws, licensing 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, State adaptations of the National Consumer Act and of
the Uniform Consumer Credit Code, and other consumer credit laws and equal
credit opportunity and disclosure laws and (B) does not contravene any
applicable contracts to which the Originator is a party and no party to
such contract is in violation of any applicable law, rule or regulation
which is material to such Auto Loan or sale of the Automobile and (C) does
not impose any liability or obligation of the Dealer or the Originator on
the Funding Company or on the Trust with respect to such Auto Loan;
(xxii) as of the Cut-Off Date, the Originator has no knowledge of
any specific facts regarding any particular Auto Loan indicating that such
Auto Loan would not be paid in full. To the best of Originator's
knowledge, as of the Cut-Off Date, based upon the procedures performed in
the Operations Manual and reasonable inquiry, there are no proceedings or
investigations pending or threatened before any Governmental Authority
(1) asserting the invalidity of any Auto Loan, (2) asserting the bankruptcy
or insolvency of the related Obligor, (3) seeking the payment of such Auto
Loan or (4) except as specifically disclosed in the Private Placement
Memorandum, seeking any determination or ruling that might materially and
adversely affect the validity or enforceability of such Auto Loan;
(xxiii) none of the Obligors on the Auto Loans is the United States
of America or any State or local government or any agency, department or
instrumentality of the United States of America or any State or local
governments;
(xxiv) each Auto Loan (A) is secured by a valid perfected first
priority perfected security interest in the related Automobile; (B)
immediately prior to the assignment and transfer thereof, the Originator
held such security interest in the Automobile; (C) the
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Originator has caused each certificate of title (or copy of an application
for title), or such other document delivered by the state title
registration agency evidencing the security interest in each Automobile, to
be delivered to the Custodian pursuant to Section 2.02 of the Pooling and
Servicing Agreement, and (D) upon the transfer of the Auto Loans to each of
them, the Funding Company and thereafter the Trust is the holder of such
first priority perfected security interest;
(xxv) the Originator has duly fulfilled all obligations on its
part to be fulfilled under or in connection with each Auto Loan and has
done nothing to impair the rights of the Funding Company in such Auto Loan
or the proceeds with respect thereto, including, without limitation, paid
in full all taxes and other charges payable in connection with such Auto
Loan and the transfer of such Auto Loan to the Funding Company, which could
impair or become a lien prior to, Funding Company's interest in such Auto
Loan;
(xxvi) there is only one original executed copy of each Auto Loan;
(xxvii) each Auto Loan constitutes "chattel paper" under the UCC;
(xxviii) as of the Cut-Off Date, Obligors on the Auto Loans reside in
one of the following 38 states: Alabama, Arizona, Arkansas, California,
Colorado, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas,
Kentucky, Louisiana, Maryland, Massachusetts, Michigan, Minnesota,
Mississippi, Missouri, Nevada, New Jersey, New Mexico, New York, North
Carolina, Ohio, Oregon, Pennsylvania, South Carolina, South Dakota,
Tennessee, Utah, Vermont, Virginia, West Virginia, Wisconsin and Wyoming,
of which Illinois accounted for approximately 31.0%, Georgia accounted for
approximately 22.4%, Florida accounted for approximately 20.0% and South
Carolina accounted for approximately 12.6% by aggregate Principal Balances
of the Auto Loans;
(xxix) the full principal amount of each Auto Loan has been
advanced to each Obligor or advanced in accordance with the directions of
each such Obligor, and there is no requirement for future advances
thereunder. The Obligor with respect to each Auto Loan does not have any
options under such Auto Loan to borrow from any person additional funds
secured by the Automobile;
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(xxx) to the best of the Originator's knowledge, each Automobile
is in good repair and working order;
(xxxi) no Auto Loan has a Principal Balance which includes
capitalized interest, physical damage insurance (forced placed or
otherwise) or late charges;
(xxxii) for each Auto Loan certain underwriting criteria were
observed, subject to specified exceptions, with respect to the Auto Loans,
and each Auto Loan is either eligible under the Operations Manual or an
exception to the guidelines of the Operations Manual has been granted by
the Originator; PROVIDED, HOWEVER, that in the event an Obligor defaults in
making its first payment such representation will conclusively be deemed to
have been breached;
(xxxiii) each Dealer has complied with the terms of the Auto Loans
and the representations and warranties set forth therein are accurate; and
(xxxiv) Auto Loan contracts originated in the states of Florida,
Georgia, Illinois and South Carolina are substantially in the form of the
Auto Loan contracts for each state attached to the Officer's Certificate of
the Funding Company dated as of the Closing Date.
(c) It is understood and agreed that the representations and
warranties set forth in this Section 4 shall survive the sale of the Auto Loans
to the Funding Company and any assignment of the Auto Loan by the Funding
Company to any subsequent assignee and shall continue so long as any Auto Loan
shall remain outstanding. The Originator acknowledges that the Funding Company
may assign all of its right, title and interest in and to the Auto Loans and its
right to exercise the remedies created by this Section 4 hereof to a subsequent
assignee. The Originator agrees that, upon such assignment, any subsequent
assignee may enforce directly, without joinder of the Funding Company, the
repurchase obligations of the Originator set forth in Section 4(d) with respect
to breaches of the representations and warranties set forth in Section 4(a) and
Section 4(b) hereof.
(d) Upon discovery by the Originator, the Funding Company, the
Trustee or the Servicer or any subsequent assignee of a breach of any of the
representations and warranties in Section 4(a) or Section 4(b) hereof which
materially and adversely affects the value of an Auto Loan or the interests of
the Funding Company or a subsequent assignee therein, the party discovering such
breach shall
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give prompt written notice to the other parties. Thereafter, if requested by
notice from the Funding Company or any subsequent assignee, the Originator shall
immediately repurchase such Auto Loan by remitting the Repurchase Price in the
manner specified in such notice. Any such repurchase shall be made without
recourse against, or warranty, express or implied, of such party.
(e) Upon such repurchase and the payment of the Repurchase Price, the
Funding Company or any subsequent assignee shall execute and deliver an
assignment substantially in the form of Exhibit B hereto and the Funding Company
or any subsequent assignee shall assign to the entity effecting such repurchase,
all of the Funding Company's or any subsequent assignee's right, title and
interest in such repurchased Auto Loan, without recourse, representation or
warranty, except as to the absence of liens, charges or encumbrances created by
or arising as a result of actions of the Funding Company or any subsequent
assignee other than liens, charges or encumbrances created or arising out of
this Sale Agreement. The Funding Company and any subsequent assignee agree that
it will promptly execute and deliver and take all further action, that may be
necessary or appropriate, or that the Originator may reasonably request, in
order to perfect, protect or more fully evidence the transfer of ownership of
such Auto Loan to the entity effecting such repurchase pursuant to Section 4
(d). It is understood and agreed that the obligation of the Originator to
repurchase any Auto Loan pursuant to Section 4 (d) shall constitute the sole
remedy for the breach of any representation or warranty under Section 4 (b);
provided, that the foregoing limitation shall not be construed to limit in any
manner the Funding Company's rights to indemnification to the extent available
under Section 6.
Section 5. ADDITIONAL COVENANTS OF THE ORIGINATOR. The Originator
shall, unless the Funding Company and the Trustee shall otherwise consent in
writing:
(a) Promptly after the occurrence thereof, notice of any pending or
threatened action, suit or proceeding of a type described in Section 4(a)(vii);
(b) Operate in such a manner that the Funding Company would not be
substantively consolidated in the bankruptcy estate of the Originator or any
Affiliate, such that the separate existence of the Funding Company and the
Originator or any Affiliate would be disregarded, and to such end, ensure that:
(i) the Originator and any Affiliate thereof maintain separate
records, books of account and
15
financial statements from those of the Funding Company;
(ii) Neither the Originator nor any Affiliate commingles any of
its assets or funds with those of the Funding Company;
(iii) Originator shall cause the Funding Company at all times to
maintain a separate board of directors with at least one independent
director and observe all separate corporate formalities, and that all
decisions with respect to the Funding Company's business and daily
operations have been and shall be independently made by the officers of the
Funding Company pursuant to resolutions of its board of directors;
(iv) other than contributions of capital, payment of dividends
and return of capital, no transactions have been entered into between the
Funding Company and Originator or between the Funding Company and any of
the other Affiliates of Originator except a lease and expense allocation
agreement and a tax sharing agreement and such transactions as are
contemplated by this Agreement, the Pooling and Servicing Agreement and the
other Related Documents;
(v) except for such administration and collection and functions
as Originator may perform on behalf of the Funding Company and the Trust
pursuant to the Pooling and Servicing Agreement and the Related Documents,
cause the Funding Company to act solely in its own name and through its own
authorized officers and agents and at no time permit Funding Company to act
as agent of Originator or any other Person in any capacity;
(vi) except for any funds contributed by Originator as a capital
contribution, the Originator shall not supply funds to, or guarantee any
obligation of, the Funding Company;
(vii) Originator shall not permit the Funding Company to
guarantee, or otherwise become liable with respect to, any obligation of
Originator or any of the other Affiliates of Originator; and
(viii) the Originator and each of its Affiliates shall at all times
hold itself out to the public under its own name as a legal entity separate
and distinct from the Funding Company.
Section 6. INDEMNIFICATION. Without limiting any other rights that
an Indemnified Party may have hereunder or
16
under applicable law, the Originator hereby agrees to pay on demand to each
Indemnified Party Indemnified Amounts which may be imposed on, incurred by or
asserted against an Indemnified Party in any way arising out of or resulting
from this Sale Agreement including without limitation:
(a) use by the Originator of proceeds of any Sale or in respect
of any Auto Loan;
(b) reliance on (a) any representation or warranty made or
deemed made by the Originator (or any of its officers) under or in
connection with this Sale Agreement (other than in respect of a breach of
representation and warranty in respect of an Auto Loan, as to which the
Funding Company's remedies are set forth in Section 4(d); PROVIDED,
HOWEVER, that with respect to any representation and warranty arising under
Section 4(b)(xxvi)(A) and (C) in respect of losses to or damages imposed on
the Funding Company or its assignee in excess of the Repurchase Price of
the Auto Loan the limitation on remedies in Section 4(d) shall not apply)
and (b) any report or any other information delivered by the Originator
pursuant hereto, which shall have been incorrect in any material respect
when made or deemed made or delivered;
(c) the failure by the Originator to comply with any term,
provision or covenant contained in this Sale Agreement, or any agreement
executed in connection with this Sale Agreement; or
(d) the failure to vest and maintain vested in the Funding
Company, or to transfer to the Funding Company, legal and equitable title
to and ownership of the Auto Loans which are, or are purported to be, the
Auto Loans, together with all proceeds in respect thereof, free and clear
of any Adverse Claim (except as permitted hereunder) whether existing at
the time of the proposed sale of such Auto Loan or at any time thereafter
and without limitation to the remedies set forth in Section 4;
excluding, however, (a) recourse for any uncollectible Auto Loan (provided that
the foregoing shall not be deemed to limit the Funding Company's rights under
Sections 4(d) and 6(b) to the extent available otherwise than for such
uncollectibility) and (b) Indemnified Amounts to the extent resulting from the
negligence or willful misconduct on the part of such Indemnified Party. The
Originator acknowledges that the Funding Company may assign its rights of
indemnity granted hereunder to an assignee and upon such assignment, such
assignee shall have all rights of the Funding Company hereunder. The Originator
agrees that, upon such
17
assignment, such assignee may enforce directly, without joinder of the Funding
Company, the indemnities set forth in this Section.
Section 7. NO PROCEEDINGS. The Originator hereby agrees that it will
not, directly or indirectly, institute, or cause to be instituted, against the
Funding Company any bankruptcy, insolvency, reorganization, liquidation or other
similar proceeding relating to state or federal debtors relief laws, so long as
there shall not have elapsed one year plus one day since the latest maturing
securities issued by the Trust have been paid in full in cash.
Section 8. NOTICES, ETC. All notices and other communications
provided for hereunder shall, unless otherwise stated herein, be in writing and
mailed or telecommunicated, or delivered as to each party hereto, at its address
set forth under its name on the signature page hereof or at such other address
as shall be designated by such party in a written notice to the other parties
hereto. All such notices and communications shall not be effective until
received by the party to whom such notice or communication is addressed.
Section 9. NO WAIVER; REMEDIES. No failure on the part of the
Originator or the Funding Company to exercise, and no delay in exercising, any
right hereunder shall operate as a waiver thereof; nor shall any single or
partial exercise of any right hereunder preclude any other or further exercise
thereof or the exercise of any other right. The remedies herein provided are
cumulative and not exclusive of any other remedies provided by law.
Section 10. BINDING EFFECT; ASSIGNABILITY. This Sale Agreement shall
be binding upon and inure to the benefit of the Originator and the Funding
Company, and their respective successors and permitted assigns. The Originator
may not assign any of its rights and obligations hereunder or any interest
herein without the prior written consent of the Funding Company. The Funding
Company may, and intends to, assign all of its rights hereunder to the Trust.
This Sale 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 its termination; provided, that the rights and remedies with
respect to any breach of any representation and warranty made by the Originator
pursuant to Section 4 and the indemnification and payment provisions of Section
6 shall be continuing and shall survive any termination of this Sale Agreement.
Section 11. AMENDMENTS; CONSENTS AND WAIVERS; ENTIRE AGREEMENT. No
modification, amendment or waiver of,
18
or with respect to, any provision of this Sale Agreement, and all other
agreements, instruments and documents delivered thereto, nor consent to any
departure by the Originator from any of the terms or conditions thereof shall be
effective unless it shall be in writing and signed by each of the parties
hereto. Any waiver or consent shall be effective only in the specific instance
and for the purpose for which given. No consent to or demand by the Originator
in any case shall, in itself, entitle it to any other consent or further notice
or demand in similar or other circumstances. This Sale Agreement and the
documents referred to herein embody the entire agreement of the Originator and
the Funding Company with respect to the Auto Loans and supersede all prior
agreements and understandings relating to the subject hereof.
Section 12. SEVERABILITY. In case any provision in or obligation
under this Sale Agreement shall be invalid, illegal or unenforceable in any
jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation, shall not in any
way be affected or impaired thereby in any other jurisdiction. Without limiting
the generality of the foregoing, in the event that a Governmental Authority
determines that the Funding Company may not purchase or acquire Auto Loans, the
transactions evidenced hereby shall constitute a loan and not a purchase and
sale, notwithstanding the otherwise applicable intent of the parties hereto, and
this Sale Agreement shall constitute a security agreement under applicable law,
and the Originator shall be deemed to have granted to the Funding Company as of
the date hereof a first priority perfected security interest in all of the
Originator's right, title and interest in, to and under the Auto Loans, and all
proceeds thereof.
Section 13. GOVERNING LAW; CONSENT TO JURISDICTION; WAIVER OF JURY
TRIAL. (a) THIS SALE AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE INTERNAL LAWS (AS OPPOSED TO CONFLICT OF LAWS PROVISIONS)
OF THE STATE OF NEW YORK.
(b) THE ORIGINATOR AND THE FUNDING COMPANY HEREBY SUBMIT TO THE
NON-EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK AND THE UNITED
STATES DISTRICT COURT LOCATED IN THE BOROUGH OF MANHATTAN IN NEW YORK CITY, AND
EACH WAIVES PERSONAL SERVICE OF ANY AND ALL PROCESS UPON IT AND CONSENTS THAT
ALL SUCH SERVICE OF PROCESS BE MADE BY REGISTERED MAIL DIRECTED TO THE ADDRESS
SET FORTH ON THE SIGNATURE PAGE HEREOF AND SERVICE SO MADE SHALL BE DEEMED TO BE
COMPLETED FIVE DAYS AFTER THE SAME SHALL HAVE BEEN DEPOSITED IN THE U.S. MAILS,
POSTAGE PREPAID. THE ORIGINATOR AND THE FUNDING COMPANY EACH HEREBY WAIVE ANY
OBJECTION BASED ON FORUM NON CONVENIENS, AND ANY OBJECTION
19
TO VENUE OF ANY ACTION INSTITUTED HEREUNDER AND CONSENTS TO THE GRANTING OF SUCH
LEGAL OR EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY THE COURT. NOTHING IN
THIS SECTION SHALL AFFECT THE RIGHT OF THE ORIGINATOR OR THE FUNDING COMPANY TO
SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR AFFECT EITHER'S
RIGHT TO BRING ANY ACTION OR PROCEEDING IN THE COURTS OF ANY OTHER JURISDICTION.
(c) THE ORIGINATOR AND THE FUNDING COMPANY EACH HEREBY WAIVES ANY
RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN
CONTRACT, TORT, OR OTHERWISE ARISING OUT OF, CONNECTED WITH, RELATED TO, OR IN
CONNECTION WITH THIS SALE AGREEMENT. INSTEAD, ANY DISPUTE RESOLVED IN COURT
WILL BE RESOLVED IN A BENCH TRIAL WITHOUT A JURY.
Section 14. EXECUTION IN COUNTERPARTS. This Sale Agreement may be
executed by the parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and both of which when taken together
shall constitute one and the same agreement.
20
IN WITNESS WHEREOF, the parties have caused this Sale Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
EAGLE FINANCE CORP.
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President & Treasurer
Address of Principal Place of Business and
Chief Executive Office:
▇▇▇▇ ▇▇▇-▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Servicer - Eagle Auto Trust
1996-A
Telephone number: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier number: (▇▇▇) ▇▇▇-▇▇▇▇
Additional locations where records are kept:
Tampa, Florida
Orlando, Florida
Additional names under which, and locations
at which, Eagle Finance Corp. does business:
None
EAGLE AUTO FUNDING CORP.
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
Address: ▇▇▇▇ ▇▇▇-▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Treasurer
Telephone number: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier number: (▇▇▇) ▇▇▇-▇▇▇▇
EXHIBIT A
TO
LOAN SALE AND CONTRIBUTION AGREEMENT
DATED AS OF SEPTEMBER 1, 1996
BY AND BETWEEN
EAGLE FINANCE CORP.
AND
EAGLE AUTO FUNDING CORP.
[FORM OF OFFICER'S CERTIFICATE
FOR ORIGINATOR]
I hereby certify that I am a duly elected Officer of EAGLE FINANCE
CORP. (the "Originator") with all requisite knowledge of the matters set forth
below and further certify as follows:
1. No proceedings looking toward merger, liquidation, dissolution or
bankruptcy of the Originator are pending or contemplated.
2. Except as previously disclosed in the Private Placement
Memorandum, there is no litigation pending, or to my knowledge, threatened,
which, if determined adversely to the Originator, would adversely affect the
execution, delivery or enforceability of the Loan Sale and Contribution
Agreement, dated as of September 1, 1996 (the "Sale Agreement"), by and between
the Originator and Eagle Auto Funding Corp. or the sale or servicing of the Auto
Loans as provided therein.
3. With respect to the Sale Agreement, the Originator has complied
with all the agreements by which it is bound and has satisfied all the
conditions on its part to be performed or satisfied prior to the Closing Date.
4. The Originator is not a party to, or governed by, any contract,
indenture, mortgage, loan agreement, note, lease, deed of trust or other
instrument which restricts the Originator's ability to sell or service Auto
Loans or consummate any of the transactions contemplated by the Sale Agreement.
Independent certified public accountants for the Originator will treat
the transfer to the Funding Company of the Originator's interests in the Auto
Loans as a sale, pursuant to generally accepted accounting principles.
For tax and reporting purposes, the Originator will treat the transfer
to the Funding Company of the Originator's interests in the Auto Loans as a
sale.
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The transfer to the Funding Company of the Originator's interests in
the Auto Loan will be made (a) in good faith and without intent to hinder,
delay, or defraud present or future creditors, and (b) in exchange for
reasonably equivalent value and fair consideration.
On the date hereof, the Originator (a) was solvent, and as a result of
the transfer to the Funding Company of the Originator's interests in the Auto
Loans will not become insolvent; (b) was paying its debts as they matured; (c)
neither intended to incur, nor believed that it would incur, debts beyond its
ability to pay as they mature; and (d) after giving effect to the transfer to
the Originator of the Originator's interests in the Auto Loans, will have an
adequate amount of capital to conduct its business and anticipates no difficulty
in continuing to do so for the foreseeable future.
The Originator has and maintains all material permits, licenses,
authorizations, registrations, approvals and consents of Governmental
Authorities necessary for (a) the activities and business of the Originator as
currently conducted, (b) the ownership, use, operation and maintenance of its
properties, facilities and assets, and (c) the performance by the Originator of
the Sale Agreement or other duties as specified in the Pooling and Servicing
Agreement.
All capitalized terms used herein that are not otherwise defined shall
have the respective meanings ascribed thereto in the Sale Agreement.
23
IN WITNESS WHEREOF, I have hereunto signed my name and affixed the
seal of the Originator as of this __ day of _______, ____.
By
---------------------------------
Name:
Title:
24
EXHIBIT B
TO
LOAN SALE AND CONTRIBUTION AGREEMENT
DATED AS OF SEPTEMBER 1, 1996
BY AND BETWEEN
EAGLE FINANCE CORP.
AND
EAGLE AUTO FUNDING CORP.
[FORM OF REPURCHASE ASSIGNMENT]
PURCHASE ASSIGNMENT, dated as of ____________, 199_ between EAGLE
FINANCE CORP. (the "Originator"), EAGLE AUTO FUNDING CORP. (the "Funding
Company"), and Subsequent Assignee (the "Trust").
We refer to the Loan Sale and Contribution Agreement (the "Sale
Agreement"), dated as of September 1, 1996, by and between the Originator and
the Funding Company. All provisions of such Sale Agreement are incorporated by
reference. All capitalized terms shall have the meanings set forth in the Sale
Agreement.
Pursuant to Section 4(d) of the Sale Agreement, the Funding Company
does hereby sell, transfer, assign, set over and convey to the Originator,
without recourse or warranty, express or implied, all right, title and interest
of the Funding Company in and to the Auto Loans listed on Schedule 1 hereto
(each, a "Repurchased Auto Loan") and the Originator does hereby purchase each
such Auto Loan.
The aggregate Repurchase Price for the Repurchased Auto Loans is
$___________________.
25
IN WITNESS WHEREOF, the parties have caused this Repurchase Assignment
to be executed by their respective officers thereunto duly authorized, as of the
date first above written.
EAGLE FINANCE CORP. EAGLE AUTO TRUST 1996-A
By ▇▇▇▇▇▇ Bank and Trust Company
By By
--------------------------------- ---------------------------------
Name: Name:
Title: Title
EAGLE AUTO FUNDING CORP.
By
---------------------------------
Name:
Title:
26