RECEIVABLES PURCHASE AGREEMENT between MERRILL LYNCH BANK USA, as Seller and ML ASSET BACKED CORPORATION, as Purchaser Dated as of June 30, 2008
EXHIBIT 99.2
EXECUTION
COPY
between
▇▇▇▇▇▇▇
▇▇▇▇▇ BANK USA,
as
Seller
and
ML ASSET
BACKED CORPORATION,
as
Purchaser
Dated as
of June 30, 2008
TABLE OF
CONTENTS
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1. DEFINITIONS.
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1
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2. CONVEYANCE
OF THE RECEIVABLES.
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3
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3. REPRESENTATIONS
AND WARRANTIES OF THE PURCHASER.
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4
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4. REPRESENTATIONS
AND WARRANTIES OF THE SELLER.
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5
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5. CONDITIONS
TO OBLIGATION OF THE PURCHASER.
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6. CONDITIONS
TO OBLIGATION OF THE SELLER.
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7. COVENANTS
OF THE SELLER.
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8. INDEMNIFICATION.
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12
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9. CONTRIBUTION.
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10. TRANSFER
TO THE ISSUER.
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11. SURVIVAL
OF REPRESENTATIONS AND OBLIGATIONS.
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12. AMENDMENT.
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13. NOTICES.
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14. SUCCESSORS
AND ASSIGNS.
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15. COUNTERPARTS.
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16. APPLICABLE
LAW.
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17. SEVERABILITY
OF PROVISIONS.
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EXHIBIT
A
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A-1
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i
This
RECEIVABLES PURCHASE AGREEMENT (this “Agreement”), dated as of June 30, 2008,
between ▇▇▇▇▇▇▇ ▇▇▇▇▇ BANK USA, a Utah industrial bank, (the “Seller”), and ML
ASSET BACKED CORPORATION, a Delaware corporation (the “Purchaser”).
PRELIMINARY
STATEMENT
Subject
to the terms and conditions of this Agreement, the Seller is selling those
Receivables identified on Exhibit A to the
Purchaser.
The
Purchaser will transfer the Receivables to ▇▇▇▇▇▇▇ Auto Trust Securitization
2008-1, a Delaware statutory trust (the “Issuer”) pursuant to a sale and
servicing agreement dated as of June 30, 2008 (the “Sale and Servicing
Agreement”), among the Issuer, the Purchaser, as Depositor, and U.S. Bank
National Association, as master servicer (in such capacity, the “Master
Servicer”).
For good
and valuable consideration, the receipt of which is hereby acknowledged, the
parties hereto agree as follows:
1. Definitions.
For all
purposes of this Agreement, the following terms shall have the meanings set
forth below:
“Cut-off
Date” means the close of business on June 30, 2008.
“Dealer”
means the dealer who sold a Financed Vehicle and who originated and assigned the
respective Receivable prior to its assignment to the Seller.
“Dealer
Recourse” means, with respect to a Receivable, any and all recourse rights
relating to misrepresentation or fraud against the Dealer that originated such
Receivable and any successor Dealer.
“Final
Prospectus” means the prospectus supplement, dated July 22, 2008, and
prospectus, dated July 22, 2008, of the Purchaser.
“Financed
Vehicle” means a new or used automobile, light-duty truck or sport utility
vehicle with all accessions thereto, securing an Obligor’s indebtedness under
the respective Receivable.
“Liquidated
Receivable” means (i) any Receivable that, by its terms, is in default and as to
which the Receivables Servicer has determined, in accordance with its customary
servicing procedures, that eventual payment in full is unlikely or has
repossessed and disposed of the Financed Vehicle, and (ii) any Receivable with
respect to which the related Obligor has become a debtor in a bankruptcy
proceeding.
“Liquidation
Proceeds” means, with respect to any Receivable (a) insurance proceeds received
by the Receivables Servicer and (b) monies collected by the Receivables Servicer
from whatever source, including but not limited to proceeds of Financed Vehicles
after repossession,
on the Receivable, net of the costs of liquidation and any
payments required by law to be remitted to the Obligor.
“Obligor”
means the purchaser or co-purchasers of the Financed Vehicle or any other Person
who owes payments under a Receivable (not including any Dealer in respect of
Dealer Recourse).
“Origination
Date” means, with respect to any Receivable, the date such Receivable is
dated.
“Person”
means any individual, corporation, estate, partnership, joint venture, limited
liability company, association, joint stock company, trust, unincorporated
organization, or government or any agency or political subdivision
thereof.
“Preliminary
Prospectus” means the preliminary prospectus supplement, dated July 22, 2008,
and prospectus, dated July 22, 2008, of the Purchaser.
“Purchase
Price” has the meaning set forth in Section 2 hereof.
“Purchased
Property” has the meaning set forth in Section 2 hereof.
“Receivable”
means a receivable listed on the Schedule of Receivables and any amendments,
modifications or supplements to such retail installment sale
contract. The term “Receivable” does not include any Repurchased
Receivable.
“Registration
Statement” means Registration Statement No. 333-139130 filed by the Purchaser
with the Securities and Exchange Commission in the form in which it became
effective on May 2, 2007.
“Repurchase
Event” has the meaning set forth in Section 7(f) hereof.
“Schedule
of Receivables” means the schedule of the Receivables attached as Exhibit A
hereto.
“Seller
Information” has the meaning set forth in Section 8(a) hereof.
“Simple
Interest Method” means the method of allocating a fixed level payment to
principal and interest, pursuant to which the portion of such payment that is
allocated to interest is equal to the amount accrued from the date of the
preceding payment to the date of the current payment.
“Simple
Interest Receivable” means a Receivable under which the portion of a payment
allocable to interest and the portion allocable to principal is determined in
accordance with the Simple Interest Method.
“Title
Document” means, with respect to any Financed Vehicle, the certificate of title
for, or other evidence of ownership of, such Financed Vehicle issued by the
registrar of titles in the jurisdiction in which such Financed Vehicle is
registered.
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“UCC”
means the Uniform Commercial Code as in effect in any relevant
state.
Capitalized
terms used and not otherwise defined herein (including the Preliminary
Statement) shall have the meanings assigned thereto in Appendix A to the Sale
and Servicing Agreement.
2. Conveyance of the Receivables.
In
consideration of the Purchaser’s payment to the Seller of $391,005,553 (the
“Purchase Price”), the Seller does hereby irrevocably sell, transfer, assign and
otherwise convey to the Purchaser, without recourse (subject to the obligations
herein) all of the Seller’s right, title and interest in, to and under the
following property whether now owned or existing or hereafter acquired or
arising (collectively, the “Purchased
Property”):
(i)
the Receivables;
(ii)
monies received thereunder on or after the Cut-off Date;
(iii) the
security interests in the Financed Vehicles granted by Obligors pursuant to the
Receivables and any other interest of the Seller in the Financed
Vehicles;
(iv)
rights to receive proceeds with respect to the Receivables from claims on any
insurance policies covering the Financed Vehicles or Obligors or from rebates of
premiums and other amounts relating to insurance policies and other items
financed under the Receivables;
(v)
Dealer Recourse, if any;
(vi)
the Receivables Files;
(vii)
all Liquidation Proceeds collected from whatever source on a Liquidated
Receivable; and
(viii)
all proceeds of any and every kind delivered with respect to, or derived from
the foregoing and any and all other forms of obligations and receivables,
instruments and other property that at any time constitute all or part of or are
included in the proceeds of any of the foregoing and all rights to enforce the
foregoing.
The sale,
transfer, assignment and conveyance made hereunder shall not constitute and is
not intended to result in an assumption by the Purchaser of any obligation of
the Seller to the Obligors or any other Person in connection with the Purchased
Property or any agreement, document or instrument related
thereto. The Seller and the Purchaser intend that the sale, transfer,
assignment and conveyance of the Purchased Property and other rights and
property pursuant to this Section 2 shall be a sale and not a secured
borrowing. However, in the event that such transfer is deemed to be a
transfer for security, the Seller hereby grants to the Purchaser a first
priority security interest in all of the Seller’s right, title and interest in,
to and under the Purchased Property whether now owned or existing or hereafter
acquired or arising and all proceeds thereof (including, without limitation,
“proceeds” as defined in the UCC as in effect from time to time in the State of
New York) and all other rights and property transferred
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hereunder to secure a loan in an amount equal to the Purchase
Price, and in such event, this Agreement shall constitute a security agreement
under applicable law. The Seller hereby authorizes the Purchaser or
its agents to file such financing statements and continuation statements as the
Purchaser may deem advisable in connection with the security interest granted by
the Seller pursuant to the preceding sentence.
3. Representations and Warranties of the
Purchaser.
The
Purchaser hereby represents and warrants as follows to the Seller as of the date
hereof and the Closing Date:
(a) Organization and Good
Standing. The Purchaser is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware,
with all requisite power and authority to own its properties and to conduct its
business as such properties are currently owned and such business is currently
conducted.
(b) Due
Qualification. The Purchaser is duly qualified to do business
as a foreign corporation in good standing, and has obtained all necessary
licenses and approvals in all jurisdictions where the failure to do so would
materially and adversely affect the Purchaser’s ability to acquire the
Receivables or the other Purchased Property or the validity or enforceability of
the Receivables or the other Purchased Property.
(c) Power and
Authority. The Purchaser has all corporate power and authority
to execute, deliver and perform this Agreement and the other Basic Documents to
which it is a party and to carry out their respective terms.
(d) Binding
Obligation. This Agreement and the other Basic Documents to
which the Purchaser is a party, when duly executed and delivered by the other
parties hereto and thereto, shall constitute legal, valid and binding
obligations of the Purchaser, enforceable against the Purchaser in accordance
with their respective terms, except as the enforceability thereof may be limited
by bankruptcy, insolvency, reorganization or similar laws now or hereafter in
effect relating to or affecting creditors’ rights generally and to general
principles of equity (whether applied in a proceeding at law or in
equity).
(e) No
Violation. The consummation of the transactions contemplated
by this Agreement and the fulfillment of the terms hereof do not conflict with,
result in any breach of any of the terms and provisions of, or constitute (with
or without notice or lapse of time or both) a default under, the certificate of
incorporation or the by-laws of the Purchaser, or any indenture, agreement or
other instrument to which the Purchaser is a party or by which it is bound, or
violate any law, rules or regulation applicable to the Purchaser of any court or
federal or state regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over the Purchaser.
(f) No
Proceedings. There are no proceedings or investigations
pending or, to the Purchaser’s knowledge, threatened against the Purchaser
before any court, regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over the Purchaser or its properties (i)
asserting the invalidity of this Agreement or any other Basic Document to which
the Purchaser is a party, (ii) seeking to prevent the consummation of any of
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the transactions contemplated by this Agreement or any other Basic
Document to which the Purchaser is a party or (iii) seeking any determination or
ruling that might materially and adversely affect the performance by the
Purchaser of its obligations under, or the validity or enforceability of, this
Agreement or any other Basic Document to which the Purchaser is a party.
(g) No
Consents. The Purchaser is not required to obtain the consent
of any other party or any consent, approval, registration, authorization, or
declaration of or with any governmental authority, bureau or agency in
connection with the execution, delivery, performance, validity, or
enforceability of this Agreement or any other Basic Document to which it is a
party that has not already been obtained.
4.
Representations and
Warranties of the Seller.
(a)
The
Seller hereby represents and warrants as follows to the Purchaser as of the date
hereof and as of the Closing Date:
(i) Organization and Good
Standing. The Seller is an industrial bank duly organized and
validly existing under the laws of the State of Utah and continues to hold a
valid certificate to do business as such, and has the power to own its assets
and to transact the business in which it is currently engaged. The
Seller is duly authorized to transact business and has obtained all necessary
licenses and approvals, and is in good standing in each jurisdiction in which
the character of the business transacted by it or any properties owned or leased
by it requires such authorization.
(ii) Power and
Authority. The Seller has the power and authority to make,
execute, deliver and perform this Agreement and all of the transactions
contemplated under this Agreement and the other Basic Documents to which the
Seller is a party, and has taken all necessary action to authorize the
execution, delivery and performance of this Agreement and the other Basic
Documents to which the Seller is a party. When executed and
delivered, this Agreement and the other Basic Documents to which the Seller is a
party will constitute legal, valid and binding obligations of the Seller
enforceable in accordance with their respective terms, except as enforcement of
such terms may be limited by bankruptcy, insolvency or similar laws affecting
the enforcement of creditors’ rights generally and by the availability of
equitable remedies.
(iii) No
Violation. The execution, delivery and performance by the
Seller of this Agreement and the other Basic Documents to which the Seller is a
party will not violate any provision of any existing state, federal or, to the
best knowledge of the Seller, local law or regulation or any order or decree of
any court applicable to the Seller or any provision of the articles of
association or incorporation or the bylaws of the Seller, or constitute a breach
of any mortgage, indenture, contract or other agreement to which the Seller is a
party or by which the Seller may be bound or result in the creation or
imposition of any lien upon any of the Seller’s properties pursuant to any such
mortgage, indenture, contract or other agreement (other than this
Agreement).
(iv) No
Proceedings. There are no proceedings or investigations
pending or, to the Seller’s knowledge, threatened against the Seller before any
court,
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regulatory
body, administrative agency or other governmental instrumentality having
jurisdiction over the Seller or its properties (i) asserting the invalidity of
this Agreement or any other Basic Document to which the Seller is a party, (ii)
seeking to prevent the consummation of any of the transactions contemplated by
this Agreement or any other Basic Document to which the Seller is a party or
(iii) seeking any determination or ruling that might materially and adversely
affect the performance by the Seller of its obligations under, or the validity
or enforceability of, this Agreement or any other Basic Document to which the
Seller is a party.
(v) No
Consents. The Seller is not required to obtain the consent of
any other party or any consent, license, approval, registration, authorization,
or declaration of or with any governmental authority, bureau or agency in
connection with the execution, delivery, performance, validity, or
enforceability of this Agreement or any other Basic Document to which it is a
party that has not already been obtained.
(vi) No
Notice. The Seller represents and warrants that it acquired
title to the Receivables and the other Purchased Property in good faith, without
notice of any adverse claim.
(vii) Bulk
Transfer. The Seller represents and warrants that the
transfer, assignment and conveyance of the Receivables and the other Purchased
Property by the Seller pursuant to this Agreement are not subject to the bulk
transfer laws or any similar statutory provisions in effect in any applicable
jurisdiction.
(viii) Seller
Information. No certificate of an officer, statement or
document furnished in writing or report delivered pursuant to the terms hereof
by the Seller contains any untrue statement of a material fact or omits to state
any material fact necessary to make the certificate, statement, document or
report not misleading.
(ix) Ordinary
Course. The transactions contemplated by this Agreement and
the other Basic Documents to which the Seller is a party are in the ordinary
course of the Seller’s business.
(x) Solvency. The
Seller is not insolvent, nor will the Seller be made insolvent by the transfer
of the Purchased Property, nor does the Seller anticipate any pending
insolvency.
(xi) Legal
Compliance. The Seller is not in violation of, and the
execution and delivery by the Seller of this Agreement and the other Basic
Documents to which the Seller is a party and its performance and compliance with
the terms of this Agreement and the other Basic Documents to which the Seller is
a party will not constitute a violation with respect to, any order or decree of
any court or any order or regulation of any federal, state, municipal or
governmental agency having jurisdiction, which violation would materially and
adversely affect the Seller’s condition (financial or otherwise) or operations
or any of the Seller’s properties or materially and adversely affect the
performance of any of its duties under the Basic Documents.
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(xii) Creditors. The
Seller did not sell the Receivables or the other Purchased Property to the
Purchaser with any intent to hinder, delay or defraud any of its
creditors.
(b) The
Seller makes the following representations and warranties with respect to the
Receivables, on which the Purchaser relies in accepting the Receivables and in
transferring the Receivables to the Issuer under the Sale and Servicing
Agreement, and on which the Issuer relies in pledging the same to the Indenture
Trustee. Such representations and warranties speak, except as
otherwise expressly stated, as of the execution and delivery of this Agreement
and as of the Closing Date, but shall survive the sale, transfer and assignment
of the Receivables to the Purchaser, the concurrent sale, transfer and
assignment of the Receivables by the Purchaser to the Issuer pursuant to the
Sale and Servicing Agreement and the pledge of the Receivables by the Issuer to
the Indenture Trustee pursuant to the Indenture.
(i) Fraud. In
connection with each Receivable, there has been no fraud committed by the Dealer
that sold the related Financed Vehicle and such Dealer has not made any
misrepresentation and has not taken (or failed to take) any action which could
render such Receivable void or otherwise unenforceable.
(ii) Origination of
Receivables. Each Receivable was originated in the
United States of America by a Dealer for the retail sale of a Financed Vehicle
in the ordinary course of such Dealer’s business, was fully and properly
executed by the parties thereto, was validly assigned to the Seller and is
payable in U.S. dollars.
(iii) Schedule of
Receivables. The information set forth in the Schedule of Receivables is
true and correct in all material respects as of the close of business on the
Cutoff Date, and no selection procedures believed by the Seller to be adverse to
the Noteholders were utilized in selecting the Receivables.
(iv) Customary
Provisions. Each Receivable contains customary and enforceable
provisions such that the rights and remedies of the holder thereof are adequate
for the practical realization against the collateral of the benefits of the
security.
(v) Level Monthly
Payments. Each Receivable provides for level monthly payments
(provided, that
the last payment may be different but in no event more than twice the amount of
the level payment assuming payments are made as scheduled) that fully amortize
the amount financed by maturity and yield interest at the applicable annual
percentage rate.
(vi) Compliance with Law – The
Receivables; Etc. To the Seller’s knowledge, each Receivable
complied as of the applicable Origination Date, and immediately prior to the
sale hereunder complies, in all material respects with all requirements of
applicable federal, State and local laws, and regulations thereunder
(collectively, “Applicable Laws”),
including:
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(a)
usury
laws;
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(b)
the
Federal Truth in Lending Act;
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(c)
the
Equal Credit Opportunity Act;
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(d)
The
Fair Credit Report Act;
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| (e) the Federal Trade Commission Act; | |
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(f)
the
▇▇▇▇▇▇▇▇ ▇▇▇▇ Warranty Act;
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| (g) the Federal Reserve Board’s Regulations B and Z; | |
| (h) State adaptations of the National Consumer Act and of the Uniform Consumer Credit Code; and | |
| (i) other applicable consumer credit laws and equal credit opportunity and disclosure laws. |
(vii) Binding
Obligation. Each Receivable represents the genuine, legal,
valid and binding payment obligation of the Obligor, enforceable by the holder
thereof in accordance with its terms subject to the effect of bankruptcy,
insolvency, reorganization or other similar laws affecting the enforcement of
creditors’ rights generally.
(viii) Simple Interest
Receivable. Each Receivable is a Simple Interest
Receivable.
(ix) Valid
Assignment. No Receivable has been originated in, or is
subject to the laws of, any jurisdiction under which the sale, transfer and
assignment of such Receivable to the Seller was, or to the Purchaser under this
Agreement is, unlawful, void or voidable.
(x) Security Interest in
Financed Vehicle. Immediately prior to the sale, assignment
and transfer thereof to the Purchaser, each Receivable is secured by a first
priority, validly perfected security interest in the Financed Vehicle in favor
of the Seller or all necessary and appropriate actions have been commenced that
would result in a first priority, validly perfected security interest in the
Financed Vehicle in favor of the Seller, which security interest is assignable
by the Seller to the Purchaser and will not be rendered unenforceable solely by
reason of the sale thereof to the Purchaser. Without limiting the
generality of the foregoing, if the related Financed Vehicle was originated in a
state in which (A) notation of a 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 185 days of the Origination Date and (B) the filing of a
financing statement under the UCC is required to perfect a security interest in
motor vehicles, such filings or recording have been duly made; in either case,
the Seller has and, immediately upon the transfer thereof hereunder, the
Purchaser shall have, the same rights as the secured party named in such Title
Document or such UCC financing statement has or would have (if such secured
party
8
were still the owner of the Receivable) against all parties
claiming an interest in such Financed Vehicle.
(xi) Title. Immediately
prior to the sale and transfer herein contemplated, the Seller has good and
marketable title to each Receivable free and clear of all Liens, encumbrances,
security interests, participations and rights of others (all of which have been
(or will be) terminated or released on or prior to the sale and transfer herein
contemplated) and, immediately upon the transfer thereof hereunder, the
Purchaser shall have good and marketable title to each Receivable, free and
clear of all Liens, encumbrances, security interests, participations and rights
of others; and the transfer has been perfected under the UCC.
(xii) All Filings
Made. All UCC filings necessary in any jurisdiction to give
the Issuer a first priority, validly perfected ownership interest in the
Receivables have been made.
(xiii) One
Original. There is only one original executed copy of each
Receivable.
(xiv) Insurance. To
the knowledge of the Seller, in accordance with its customary procedures, at the
origination of each Receivable, the Obligor had obtained or agreed to obtain
insurance covering the Financed Vehicle against fire, theft and
collision.
(xv) No Default. No
Receivable has a payment that is more than 60 days overdue as of the Cutoff
Date, and, except as permitted in this paragraph, to the best of the Seller’s
knowledge, no default, breach, violation or event permitting acceleration under
the terms of any Receivable has occurred and 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.
(xvi) Maturity of
Receivables. Each Receivable has a final maturity date not
later than April 15, 2015.
(xvii) Outstanding Principal
Balance. As of the Cutoff Date, each Receivable has an
outstanding principal balance of at least $100.00.
(xviii) No Notice of
Bankruptcies. As of the Cutoff Date, to the Seller’s
knowledge, no Obligor on any Receivable is a debtor in a bankruptcy
proceeding.
(xix) Chattel Paper. Each
Receivable constitutes “tangible chattel paper” as defined in the
UCC.
5.
Conditions to Obligation of the
Purchaser.
The
obligation of the Purchaser to purchase the Receivables is subject to the
satisfaction of the following conditions:
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(a) Representations and
Warranties True. The representations and warranties of the
Seller hereunder shall be true and correct in all material respects on the
Closing Date with the same effect as if then made, and the Seller shall have
performed all obligations to be performed by it hereunder on or prior to the
Closing Date.
(b) Computer Files
Marked. The Seller shall, at its own expense, on or prior to
the Closing Date, indicate in its computer files that the Receivables have been
sold to the Purchaser pursuant to this Agreement and deliver to the Purchaser
the Schedule of Receivables, certified by the Seller’s President, Vice President
or Treasurer to be true, correct and complete.
(c) Documents to be Delivered by
the Seller on the Closing Date:
(i) Evidence of UCC
Filing. On or prior to the Closing Date, the Seller shall
record and file, at its own expense, a UCC-1 financing statement in the State of
Utah naming the Seller, as seller/debtor, and naming the Purchaser, as
buyer/secured party, describing the Receivables and the other assets assigned to
the Purchaser pursuant to Section 2, meeting the requirements of the laws of
such jurisdiction and in such manner as is necessary to perfect the sale,
transfer, assignment and conveyance of the Receivables and such other assets to
the Purchaser. The Seller shall deliver to the Purchaser a
file-stamped copy or other evidence satisfactory to the Purchaser of such filing
on or prior to the Closing Date. In the event that the Seller fails
to perform its obligations under this clause (i), the Purchaser may perform, or
cause to be performed, such obligations, at the Seller’s expense.
(ii) Opinions of Seller’s
Counsel. On or prior to the Closing Date, the Purchaser shall
have received the opinions of counsel to the Seller, in form and substance
satisfactory to the Purchaser, as to the matters the Purchaser has heretofore
requested or may reasonably request.
(iii) Other
Documents. Such other documents as the Purchaser may
reasonably request.
(d) Other
Transactions. The transactions contemplated by the Sale and
Servicing Agreement, the Indenture and the Trust Agreement to be consummated on
the Closing Date shall be consummated on such date.
6.
Conditions to Obligation of the
Seller.
The
obligation of the Seller to sell the Receivables to the Purchaser is subject to
the satisfaction of the following conditions:
(a) Representations and
Warranties True. The representations and warranties of the
Purchaser hereunder shall be true and correct on the Closing Date with the same
effect as if then made, and the Purchaser shall have performed all obligations
to be performed by it hereunder on or prior to the Closing Date.
(b) Receivables Purchase
Price. On the Closing Date, the Purchaser shall have delivered
to the Seller the Purchase Price specified in Section 2 hereof.
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7.
Covenants of the
Seller.
The
Seller agrees with the Purchaser as follows:
(a) Filings. The
Seller shall cause at its own expense all financing statements and continuation
statements and any other necessary documents covering the right, title and
interest of the Seller, the Purchaser, the Trust and the Indenture Trustee,
respectively, in and to the Receivables and the other property included in the
Trust Estate to be promptly filed and at all times to be kept recorded,
registered and filed, all in such manner and in such places as may be required
by law fully to preserve and protect the right, title and interest of the
Purchaser hereunder, the Trust under the Sale and Servicing Agreement and the
Indenture Trustee under the Indenture in and to the Receivables and the other
property included in the Trust Estate. The Seller shall deliver to
the Purchaser and the Indenture Trustee file stamped copies of, or filing
receipts for, any document recorded, registered or filed as provided above, as
soon as available following such recordation, registration or
filing. The Purchaser shall cooperate fully with the Seller in
connection with the obligations set forth above and will execute any and all
documents reasonably required to fulfill the intent of this
paragraph.
(b) Name
Change. If the Seller makes any change in its name, identity
or corporate structure that would make any financing statement or continuation
statement filed in accordance with paragraph (a) above seriously misleading
within the applicable provisions of the UCC or any title statute or if the
Seller changes the jurisdiction under whose laws it is formed, the Seller shall
give the Purchaser, the Indenture Trustee and the Owner Trustee written notice
thereof at least 45 days prior to such change and shall promptly file such
financing statements or amendments as may be necessary to continue the
perfection of the Purchaser’s interest in the property conveyed pursuant to
Section 2. In the event that the Seller fails to perform its
obligations under this subsection (b), the Purchaser may perform, or cause to be
performed, such obligations, at the Seller’s expense.
(c) Other Liens or
Interests. Except for the conveyances hereunder and pursuant
to the Basic Documents, the Seller shall not sell, pledge, assign or transfer to
any Person, or grant, create, incur, assume, or suffer to exist any Lien on, or
any interest in, to or under the Receivables, and the Seller shall defend the
right, title and interest of the Purchaser, the Trust and the Indenture Trustee
in, to and under the Receivables against all claims of third parties claiming
through or under the Seller.
(d) Costs and
Expenses. The Seller agrees to pay all reasonable costs and
disbursements in connection with the perfection, as against all third parties
claiming through or under the Seller, of the Purchaser’s, the Issuer’s and the
Indenture Trustee’s right, title and interest in and to the Receivables and the
other property included in the Trust Estate.
(e) Hold
Harmless. The Seller shall protect, defend, indemnify and hold
the Purchaser, the Issuer and their respective assigns and their employees,
officers, directors and agents harmless from and against all losses,
liabilities, claims and damages of every kind and character, including any legal
or other expenses reasonably incurred, as incurred, resulting from or relating
to or arising out of (i) the inaccuracy, nonfulfillment or breach of any
representation, warranty, covenant or agreement made by the Seller in this
Agreement, (ii) any legal action,
11
including, without limitation, any counterclaim, that has either
been settled by the litigants or has proceeded to judgment by a court of
competent jurisdiction, in either case to the extent it is based upon alleged
facts that, if true, would constitute a breach of any representation, warranty,
covenant or agreement made by the Seller in this Agreement, (iii) any actions or
omissions of the Seller occurring prior to the Closing Date with respect to any
of the Receivables or Financed Vehicles or (iv) any failure of a Receivable to
be originated in compliance with all applicable requirements of
law. These indemnity obligations shall be in addition to any
obligation that the Seller may otherwise have.
(f) Repurchase
Events. The Seller hereby covenants and agrees with the
Purchaser for the benefit of the Purchaser, the Indenture Trustee, the Issuer,
the Owner Trustee, the Certificateholders and the Noteholders that the
occurrence of a breach of any of the Seller’s representations and warranties
contained in Section 4(b) that materially and adversely affects the interests of
the Issuer, the Indenture Trustee, the Owner Trustee, the Certificateholders or
the Noteholders in any Receivable, without regard to any limitation set forth in
such representation or warranty concerning the knowledge of the Seller as to the
facts stated therein, shall constitute an event obligating the Seller to
repurchase the Receivable to which such failure or breach is applicable (each, a
“Repurchase
Event”), at the Purchase Amount, from the Purchaser, unless any such
breach shall have been cured by the last day of the Collection Period which
includes the 60th day
after the date of discovery or notice thereof by or to the Seller.
8.
Indemnification.
(a) The
Seller agrees to indemnify and hold harmless the Purchaser, each of its
respective directors, each officer of the Purchaser who signed the Registration
Statement, and each person or entity who controls the Purchaser or any such
person, within the meaning of Section 15 of the Securities Act, against any and
all losses, claims, damages or liabilities, joint and several, to which the
Purchaser, or any such person or entity may become subject, under the Securities
Act or otherwise, and will reimburse the Purchaser, and each such controlling
person for any legal or other expenses reasonably incurred by the Purchaser or
such controlling person in connection with investigating or defending any such
loss, claims, damages or liabilities insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact made by the
Seller contained in the Preliminary Prospectus or the Final Prospectus or any
amendment or supplement to the Preliminary Prospectus or the Final Prospectus or
the omission or the alleged omission to state therein a material fact necessary
in order to make the statements in the Preliminary Prospectus or the Final
Prospectus, as applicable, or any amendment or supplement to the Preliminary
Prospectus or the Final Prospectus, in the light of the circumstance under which
they were made, not misleading, but, in each case, only to the extent that such
untrue statement or alleged untrue statement or omission or alleged omission
relates to the information contained in the Preliminary Prospectus or the Final
Prospectus under the captions: “The Sponsor” and “The Receivables
Pool” (such information, the “Seller
Information”). This indemnity agreement will be in addition to
any liability which the Seller may otherwise have to the Purchaser or any
affiliate thereof pursuant to this Agreement or otherwise.
(b) The
Purchaser agrees to indemnify and hold harmless the Seller and each Person who
controls the Seller within the meaning of Section 15 of the Securities Act
against any
12
and all losses, claims, damages or liabilities, joint and several,
to which the Seller, or any such person or entity may become subject, under the
Securities Act or otherwise, and will reimburse the Seller and each such
controlling Person for any legal or other expenses reasonably incurred by the
Seller or such controlling Person in connection with investigating or defending
any such losses, claims, damages or liabilities insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon (i) any untrue statement or alleged untrue statement of material fact
contained in the Registration Statement or any amendment or supplement thereto
or the omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not misleading or
(ii) any untrue statement or alleged untrue statement of any material fact
contained in the Preliminary Prospectus or the Final Prospectus or any amendment
or supplement to the Preliminary Prospectus or the Final Prospectus or the
omission or the alleged omission to state therein a material fact necessary in
order to make the statements in the Preliminary Prospectus or the Final
Prospectus, as applicable, or any amendment or supplement to the Preliminary
Prospectus or the Final Prospectus, in the light of the circumstances under
which they were made, not misleading, but only to the extent that such untrue
statement or alleged untrue statement or omission or alleged omission relates to
the information contained in the Preliminary Prospectus or the Final Prospectus
other than the Seller Information. This indemnity agreement will be
in addition to any liability which the Purchaser may otherwise have.
(c) Promptly
after receipt by any indemnified party under this Section 8 of notice of any
claim or the commencement of any action, such indemnified party shall, if a
claim in respect thereof is to be made against any indemnifying party under this
Section 8, notify the indemnifying party in writing of the claim or the
commencement of that action; provided, however, that the
failure to notify an indemnifying party shall not relieve it from any liability
which it may have under this Section 8 except to the extent it has been
materially prejudiced by such failure; provided, further, that the
failure to notify any indemnifying party shall not relieve it from any liability
which it may have to any indemnified party otherwise than under this Section
8.
If any
such claim or action shall be brought against an indemnified party, and it shall
notify the indemnifying party thereof, the indemnifying party shall be entitled
to participate therein and, to the extent that it wishes, jointly with any other
similarly notified indemnifying party, to assume the defense thereof with
counsel reasonably satisfactory to the indemnified party. After
notice from the indemnifying party to the indemnified party of its election to
assume the defense of such claim or action, the indemnifying party shall not be
liable to the indemnified party under this Section 8 for any legal or other
expenses subsequently incurred by the indemnified party in connection with the
defense thereof other than reasonable costs of investigation.
Any
indemnified party shall have the right to employ separate counsel in any such
action and to participate in the defense thereof, but the fees and expenses of
such counsel shall be at the expense of such indemnified party unless: (i) the
employment thereof has been specifically authorized by the indemnifying party in
writing; (ii) such indemnified party shall have been advised by such counsel
that there may be one or more legal defenses available to it which are different
from or additional to those available to the indemnifying party and in the
reasonable judgment of such counsel it is appropriate for such indemnified party
to employ separate
13
counsel; or (iii) the indemnifying party has failed to assume the
defense of such action and employ counsel reasonably satisfactory to the
indemnified party, in which case, if such indemnified party notifies the
indemnifying party in writing that it elects to employ separate counsel at the
expense of the indemnifying party, the indemnifying party shall not have the
right to assume the defense of such action on behalf of such indemnified party,
it being understood, however, the indemnifying party shall not, in connection
with any one such action or separate but substantially similar or related
actions in the same jurisdiction arising out of the same general allegations or
circumstances, be liable for the reasonable fees and expenses of more than one
separate firm of attorneys (in addition to local counsel) at any time for all
such indemnified parties, which firm shall be designated in writing by the
Purchaser, if the indemnified parties under this Section 8 consist of the
Purchaser, or by the Seller, if the indemnified parties under this Section 8
consist of the Seller.
Each
indemnified party, as a condition of the indemnity agreements contained in
Section 8(a) and (b), shall use its commercially reasonable efforts to cooperate
with the indemnifying party in the defense of any such action or
claim. An indemnifying party will not, without the prior written
consent of the indemnified parties, settle or compromise or consent to the entry
of any judgment with respect to any pending or threatened claim, action, suit or
proceeding in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified parties are actual or potential
parties to such claim or action) unless such settlement, compromise or consent
includes an unconditional release of each indemnified party from all liability
arising out of such claim, action, suit or proceeding.
9.
Contribution.
In order
to provide for just and equitable contribution in circumstances in which the
indemnity agreement provided for in Section 8 is for any reason held to be
unenforceable although applicable in accordance with its terms, the Seller, on
the one hand, and the Purchaser, on the other, shall contribute to the aggregate
losses, liabilities, claims, damages and expenses of the nature contemplated by
said indemnity agreement incurred by the Seller and the Purchaser (i) in such
proportions as shall be appropriate to reflect the relative benefits received by
the Seller on the one hand and the Purchaser on the other from the sale of the
Receivables or (ii) if the allocation provided by clause (i) is not permitted by
applicable law, in such proportions as shall be appropriate to reflect the
relative fault on the part of the Seller on the one hand and the Purchaser on
the other; provided, however, that no
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any Person
who was not guilty of such fraudulent misrepresentation. For purposes
of this Section 9, each Person, if any, who controls the Purchaser within the
meaning of Section 15 of the Securities Act shall have the same rights to
contribution as the Purchaser and each Person, if any, who controls the Seller
within the meaning of Section 15 of the Securities Act shall have the same
rights to contribution as the Seller.
10.
Transfer to the
Issuer.
The
Seller acknowledges and agrees that (1) the Depositor will,
pursuant to the Sale and Servicing Agreement, transfer and assign the
Receivables and assign its rights under this Agreement with respect thereto
(other than its rights under Sections 8 and 9 of this Agreement)
14
to the Issuer and, pursuant to the Indenture, the Issuer will
pledge the Receivables to the Indenture Trustee, and (2) the representations
and warranties contained in this Agreement and the rights of the Depositor under
this Agreement, including under Section 7(f) (other than its rights under
Sections 8 and 9 of this Agreement), are intended to benefit the Issuer, the
Indenture Trustee, the Noteholders and the Certificateholders. The
Seller hereby consents to such transfers and assignments and agrees that
enforcement of a right or remedy hereunder by the Indenture Trustee, the Owner
Trustee or the Issuer shall have the same force and effect as if the right or
remedy had been enforced or executed by the Depositor.
11.
Survival of Representations and
Obligations.
The
respective agreements, representations, warranties and other statements of the
Seller and the Purchaser set forth in or made pursuant to this Agreement or
contained in certificates of the Seller submitted pursuant hereto shall remain
operative and in full force and effect, regardless of any investigation or
statement as to the results thereof made by or on behalf of the Purchaser or the
Seller or any of their respective representatives, officers or directors or any
controlling person, and will survive delivery of and payment for the Purchased
Property.
12.
Amendment.
This
Agreement may be amended from time to time, with prior written notice to the
Rating Agencies, but without the consent of the Noteholders or the
Certificateholders, by a written amendment duly executed and delivered by the
Seller and the Depositor, for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of this Agreement or
of modifying in any manner the rights of Noteholders or Certificateholders;
provided that
such amendment shall not, as evidenced by an Opinion of Counsel, materially and
adversely affect the interest of any Noteholder or Certificateholder; provided, further, that such
action shall be deemed not to adversely affect in any material respect the
interests of any Noteholder or Certificateholder and no Opinion of Counsel to
that effect shall be required if the person requesting the amendment obtains a
letter from the Rating Agencies stating that the amendment would not result in
the downgrading or withdrawal of the ratings of then assigned to the Notes and
the Certificates. This Agreement may also be amended by the Seller
and the Depositor, with prior written notice to the Rating Agencies and the
prior written consent of Holders of Notes evidencing at least a majority of the
Outstanding Amount of the Notes and Holders of the Certificates evidencing at
least a majority of the Certificate Balance (excluding, for purposes of this
Section 12, Certificates held by the Seller or any of its affiliates), for the
purpose of adding any provisions to or changing in any manner or eliminating any
of the provisions of this Agreement or of modifying in any manner the rights of
the Noteholders or the Certificateholders; provided, however, that no such
amendment may (i) increase or reduce in any manner the amount of, or accelerate
or delay the timing of, collections of payments on Receivables or distributions
that are required to be made for the benefit of Noteholders or
Certificateholders or (ii) reduce the aforesaid percentage of the Notes or the
Certificates that is required to consent to any such amendment, without the
consent of the Holders of all the outstanding Notes and
Certificates.
15
13.
Notices.
All
communications hereunder will be in writing and, if sent to the Purchaser, will
be mailed, delivered or telegraphed and confirmed to ML Asset Backed
Corporation, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ – ▇▇▇▇ ▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇, Attention: Asset
Lending Operations; and if sent to the Seller, will be mailed, delivered or
telegraphed, and confirmed to it at ▇▇▇▇▇▇▇ ▇▇▇▇▇ Bank USA, c/o Merrill Lynch,
Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated, 4 World Financial ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, facsimile: (▇▇▇) ▇▇▇-▇▇▇▇, Attention:
▇▇▇▇▇▇ ▇▇▇▇▇▇. Any such notice will take effect at the time of
receipt.
14.
Successors and
Assigns.
This
Agreement will inure to the benefit of and be binding upon the parties hereto
and their respective successors and assigns and their officers and directors and
controlling persons, and no other person will have any right or obligations
hereunder.
15.
Counterparts.
This
Agreement may be executed in any number of counterparts, each of which shall be
deemed to be an original, but all such counterparts shall together constitute
one and the same Agreement.
16.
Applicable
Law.
THIS
AGREEMENT WILL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF NEW YORK, WITHOUT REGARD TO CONFLICT OF LAWS PROVISIONS THAT WOULD
APPLY THE LAW OF A JURISDICTION OTHER THAN THE STATE OF NEW YORK, AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS.
17.
Severability of
Provisions.
If any
one or more of the covenants, agreements, provisions, or terms of this Agreement
shall be for any reason whatsoever held invalid, then such covenants,
agreements, provisions, or terms shall be deemed severable from the remaining
covenants, agreements, provisions, or terms of this Agreement and shall in no
way affect the validity or enforceability of the other provisions of this
Agreement or the rights of the parties hereto or their permitted
assigns.
16
IN
WITNESS WHEREOF, the parties have caused this Agreement to be duly executed and
delivered as of the day and year first above written.
| ▇▇▇▇▇▇▇ ▇▇▇▇▇ BANK USA, as Seller | |||
|
|
By:
|
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇ | |
| Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇ | |||
| Title: Director | |||
| ML ASSET BACKED CORPORATION, as Purchaser | |||
|
|
By:
|
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ | |
| Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ | |||
| Title: Secretary | |||
EXHIBIT
A
SCHEDULE
OF RECEIVABLES
Information
as to the Receivables as of June 30, 2008.
[On file
with the Master Servicer]