RECEIVABLES PURCHASE AGREEMENT
between
FIRST MERCHANTS ACCEPTANCE CORPORATION,
as Seller,
and
FIRST MERCHANTS AUTO RECEIVABLES CORPORATION II,
as Purchaser
Dated as of December 1, 1996
TABLE OF CONTENTS
ARTICLE I
Certain Definitions 1
ARTICLE II
SECTION 2.01. Conveyance of Receivables and Eligible Investment
Receivables 2
SECTION 2.02. The Closing 3
SECTION 2.03. Subsequent Receivables 3
ARTICLE III
SECTION 3.01. Representations and Warranties of the Purchaser 4
SECTION 3.02. Representations and Warranties of Seller 4
ARTICLE IV
SECTION 4.01. Conditions to Obligation of the Purchaser 8
SECTION 4.02. Conditions to Obligation of the Seller 9
ARTICLE V
SECTION 5.01. Protection of Right, Title and Interest 9
SECTION 5.02. Other Liens or Interests 9
SECTION 5.03. Costs and Expenses 10
SECTION 5.04. Indemnification 10
ARTICLE VI
SECTION 6.01. Obligations of Seller 10
SECTION 6.02. Repurchase Events 10
SECTION 6.03. Purchaser Assignment of Repurchased Receivables 10
SECTION 6.04. Transfer to the Issuer 10
SECTION 6.05. Amendment 10
SECTION 6.06. Waivers 11
SECTION 6.07. Notices 11
SECTION 6.08. Costs and Expenses 11
SECTION 6.09. Representations of the Seller and the Purchaser 11
SECTION 6.10. Confidential Information 11
SECTION 6.11. Headings and Cross-References 12
SECTION 6.12. Governing Law 12
SECTION 6.13. Counterparts 12
EXHIBIT A Form of AssignmentA-1
EXHIBIT B Form of Subsequent Purchase AgreementB-1
SCHEDULE I Schedule of ReceivablesI-1
SCHEDULE II Schedule of Eligible Investment ReceivablesII-1
SCHEDULE III Location of Receivable FilesII-1 RECEIVABLES
PURCHASE AGREEMENT dated as of December 1, 1996, between
FIRST MERCHANTS ACCEPTANCE CORPORATION, a Delaware corporation, as seller
(the "Seller"), and FIRST MERCHANTS AUTO RECEIVABLES CORPORATION II, a Delaware
corporation, as purchaser (the "Purchaser").
RECITALS
WHEREAS in the regular course of its business, the Seller has purchased
certain motor vehicle retail installment sale contracts secured by new and
used automobiles, light-duty trucks, vans and minivans from motor vehicle
dealers;
WHEREAS the Seller and the Purchaser wish to set forth the terms
pursuant
to which such contracts are to be sold by the Seller to the Purchaser; and
WHEREAS the Purchaser intends, concurrently with its purchases from time
to time hereunder, to convey all of its right, title and interest in and to
$144,673,000 of such contracts to First Merchants Auto Trust 1996-C (the
"Issuer") pursuant to a Sale and Servicing Agreement dated as of December 1,
1996 (the "Sale and Servicing Agreement"), by and among First Merchants Auto
Trust 1996-C, as Issuer, First Merchant Auto Receivables Corporation II, as
Seller, First Merchants Acceptance Corporation, as Servicer, and ▇▇▇▇▇▇ Trust
and Savings Bank, as Indenture Trustee, Collateral Agent and Backup Servicer.
NOW, THEREFORE, in consideration of the foregoing, other good and
valuable consideration and the mutual terms and covenants contained herein,
the parties hereto agree as follows:
ARTICLE I
Certain Definitions
Terms not defined in this Agreement shall have the meanings assigned
thereto in the Sale and Servicing Agreement. As used in this Agreement, the
following terms shall, unless the context otherwise requires, have the
following meanings (such meanings to be equally applicable to the singular
and plural forms of the terms defined):
"Agreement" shall mean this Receivables Purchase Agreement, as the same
may be amended and supplemented from time to time.
"Assignment" shall mean the document of assignment substantially in the
form attached to this Agreement as Exhibit A.
"Conveyance Date" shall mean the Cutoff Date in the case of the Initial
Receivables and the Subsequent Cutoff Date in the case of each transfer of
the Subsequent Receivables.
"Eligible Investment Receivables" shall mean the Initial Eligible
Investment Receivables and the Subsequent Eligible Investment Receivables.
"Initial Eligible Investment Receivable" shall mean any Contract listed
on Schedule II hereto (which Schedule may be in the form of microfiche).
"Initial Receivable" shall mean any Contract listed on Schedule I hereto
(which Schedule may be in the form of microfiche).
"Purchaser" shall mean First Merchants Auto Receivables Corporation II,
a Delaware corporation, its successors and assigns.
"Receivables" shall mean the Initial Receivables and the Subsequent
Receivables. An Eligible Investment Receivable is not a "Receivable".
"Repurchase Event" shall have the meaning specified in Section 6.02.
"Sale and Servicing Agreement" shall have the meaning set forth in the
recitals.
"Schedule of Eligible Investment Receivables" shall mean the list of
Eligible Investment Receivables annexed hereto as Schedule II.
"Schedule of Receivables" shall mean the list of Receivables annexed
hereto as Schedule I.
"Seller" shall mean First Merchants Acceptance Corporation, a Delaware
corporation, its successors and assigns.
"Subsequent Eligible Investment Receivable" shall mean any Contract sold
to the Purchaser during the Funding Period, listed on Schedule B to the
applicable Subsequent Purchase Agreement.
"Subsequent Purchase Agreement" a duly executed written purchase
agreement entered into during the Funding Period, substantially in the form
of Exhibit A attached hereto.
"Subsequent Receivable" shall mean any of the Contracts sold to the
Purchaser during the Funding Period, listed on Schedule A to the applicable
Subsequent Purchase Agreement.
"Subsequent Transfer Date" shall mean each date designated by the Seller
during the Funding Period on which Subsequent Receivables are to be
transferred to the Purchaser in accordance with Section 2.03 pursuant to a
Subsequent Purchase Agreement.
"Transfer Date" shall mean the Closing Date in the case of the Initial
Receivables and the applicable Subsequent Transfer Date in the case of the
Subsequent Receivables.
ARTICLE II
Conveyance of Receivables and Eligible Investment Receivables
SECTION 2.01. Conveyance of Initial Receivables. (a) In
consideration of the Purchaser's delivery to or upon the order of the Seller
on the Closing Date of $137,583,736, the Seller does hereby sell, transfer,
assign, set over and otherwise convey to the Purchaser, without recourse
(subject to the obligations herein) all right, title, and interest of the
Seller in and to:
(i) the Initial Receivables and the Initial Eligible Investment
Receivables and, in each case, all moneys received thereon on or after
November 14, 1996;
(ii) the security interests in the Financed Vehicles and any
accessions thereto granted by Obligors pursuant to the Initial Receivables
and the Initial Eligible Investment Receivables and any other interest of the
Seller in such Financed Vehicles;
(iii) any Liquidation Proceeds and any other proceeds with respect
to the Initial Receivables and the Initial Eligible Investment Receivables from
claims on any physical damage, credit life or disability insurance policies
covering Financed Vehicles or Obligors, including any vendor's single
interest or other collateral protection insurance policy;
(iv) any property that shall have secured an Initial Receivable or
an Initial Eligible Investment Receivable and that shall have been acquired by
or on behalf of the Seller;
(v) all documents and other items contained in the Receivable Files;
and
(vi) the proceeds of any and all of the foregoing.
(b) Except as otherwise provided herein, all of the provisions of
this Agreement (i) applicable to Initial Receivables shall also apply to each
Initial Eligible Investment Receivable and (ii) applicable to Subsequent
Receivables shall also apply to each Subsequent Eligible Investment
Receivable, except that, unless otherwise directed by the Collateral Agent,
the Seller shall deposit into the Spread Account all Purchase Amounts, if
any, to be paid by it in respect of Eligible Investment Receivables repurchased
pursuant to Section 6.04 and any Recoveries, net of liquidation expenses,
allocated to Eligible Investment Receivables.
(c) The Seller and the Purchaser intend that the transfer of assets
by the Seller to the Purchaser pursuant to this Agreement be a sale of the
ownership interest in such assets to the Purchaser, rather than the mere
granting of a security interest to secure a borrowing. In the event,
however, that such transfer is deemed not to be a sale but to be of a mere
security interest to secure a borrowing, the Seller shall be deemed to have
hereby granted to the Purchaser a perfected first priority security interest in
all such assets, and this Agreement shall constitute a security agreement under
applicable law. Pursuant to the Sale and Servicing Agreement and Section
6.04 hereof, the Purchaser may sell, transfer and reassign to the Issuer (i)
all or any portion of the assets assigned to the Purchaser hereunder, (ii) all
or any portion of the Purchaser's rights against the Seller under this Agreement
and (iii) all proceeds thereof. Such reassignment may be made by the Purchaser
with or without a reassignment by the Purchaser of its rights under this
Agreement, and without further notice to or acknowledgement from the Seller.
The Seller waives, to the extent permitted under applicable law, all claims,
causes of action and remedies, whether legal or equitable (including any
right of setoff), against the Purchaser or any assignee of the Purchaser
relating to such action by the Purchaser in connection with the transactions
contemplated by the Sale and Servicing Agreement.
SECTION 2.02. The Closing. The sale and purchase of the Initial
Receivables shall take place at a closing at the offices of ▇▇▇▇▇ & Wood LLP,
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ on the Closing Date,
simultaneously with the closing under (a) the Sale and Servicing Agreement
and (b) the Indenture.
SECTION 2.03. Conveyance of Subsequent Receivables. (a) Subject to
and upon the terms and conditions set forth in paragraph (b) below and in the
applicable Subsequent Purchase Agreement, Seller hereby agrees to sell,
transfer, assign, set over and otherwise convey to Purchaser, in
consideration of Purchaser's payment on the related Subsequent Transfer Date of
the purchase price therefor (as set forth in the related Subsequent Purchase
Agreement), and Purchaser hereby agrees to purchase, all right, title and
interest of the Seller in and to (1) the Subsequent Receivables and Subsequent
Eligible Investment Receivables set forth on Schedule A and Schedule B,
respectively, to the applicable Subsequent Purchase Agreement and all monies
due thereon on or after the related Subsequent Cutoff Date; (2) the security
interests in the Financed Vehicles and any accessions thereto granted by
Obligors pursuant to the Subsequent Receivables and any other interest of the
Seller in such Financed Vehicles; (3) any Liquidation Proceeds and any other
proceeds with respect to the Subsequent Receivables from claims on any physical
damage, credit life or disability insurance policies covering Financed Vehicles
or Obligors, including any vendor's single interest or other collateral
protection insurance policy; (4) any property that shall have secured a
Subsequent Receivable and shall have been acquired by or on behalf of the
Seller; (5) all documents and other items contained in the Receivables Files;
and (6) the proceeds of any and all of the foregoing. Seller agrees, subject
to the terms and conditions herein applicable to transfers of Subsequent
Receivables, and subject to the execution of a Subsequent Purchase Agreement
by the parties hereto, to sell to the Purchaser during the Funding Period
Subsequent Receivables having an aggregate principal balance equal to the
Pre-Funded Amount.
(b) Seller shall transfer to Purchaser, and the Purchaser shall
purchase, the Subsequent Receivables and Subsequent Eligible Investment
Receivables and related assets on any Subsequent Transfer Date only if such
Subsequent Receivables and Subsequent Eligible Investment Receivables satisfy
the conditions set forth in Section 2.01(c) of the Sale and Servicing
Agreement.
ARTICLE III
Representations and Warranties
SECTION 3.01. Representations and Warranties of the Purchaser. The
Purchaser hereby represents and warrants as follows to the Seller as of the
date hereof and the Transfer Date:
(a) Organization and Good Standing. The Purchaser has been duly
organized and is validly existing as a corporation in good standing under the
laws of the State of Delaware, with the power and authority to own its
properties and to conduct its business as such properties are currently owned
and such business is presently 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 in which the ownership
or lease of property or the conduct of its business shall require such
qualifications.
(c) Power and Authority. The Purchaser has the power and authority
to execute and deliver this Agreement and to carry out its terms; the
Purchaser had at all relevant times, and has, the power, authority and legal
right to acquire and own the Receivables; and the execution, delivery and
performance of this Agreement have been duly authorized by the Purchaser by
all necessary corporate action.
(d) 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 articles of incorporation or bylaws of the Purchaser, or any indenture,
agreement or other instrument to which the Purchaser is a party or by which
it is bound, or result in the creation or imposition of any Lien upon any of
its properties pursuant to the terms of any such indenture, agreement or other
instrument (other than pursuant to the Basic Documents), or violate any law
or, to the best of the Purchaser's knowledge, any order, rule or regulation
applicable to the Purchaser of any court or of any federal or state
regulatory body, administrative agency or other governmental instrumentality
having jurisdiction over the Purchaser or its properties.
(e) 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, (ii) seeking to
prevent the consummation of any of the transactions contemplated by this
Agreement 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.
SECTION 3.02. Representations and Warranties of Seller. (a) The
Seller hereby represents and warrants as follows to the Purchaser as of the
date hereof and as of the Transfer Date:
(1) Organization and Good Standing. The Seller has been duly
organized and is validly existing as a corporation in good standing under the
laws of the State of Delaware, with the power and authority to own its
properties and to conduct its business as such properties are currently owned
and such business is presently conducted.
(2) Due Qualification. The Seller is duly qualified to do business
as a foreign corporation in good standing, and has obtained all necessary
licenses and approvals, in all jurisdictions in which the ownership or lease
of property or the conduct of its business shall require such qualifications.
(3) Power and Authority. The Seller has the power and authority to
execute and deliver this Agreement and the other Basic Documents to which it
is a party and to carry out their respective terms; the Seller had at all
relevant times, and has, full power, authority and legal right to sell,
transfer and assign the property sold, transferred and assigned to the
Purchaser hereby and has duly authorized such sale, transfer and assignment
to the Purchaser by all necessary corporate action; and the execution, delivery
and performance of this Agreement and the other Basic Documents to which the
Seller is a party have been duly authorized by the Seller by all necessary
corporate action.
(4) No Violation. Upon giving effect to the consent described in
Section 3.02(b)(14), the consummation of the transactions contemplated by
this Agreement and the other Basic Documents to which the Seller is a party and
the fulfillment of their respective terms 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 articles of
incorporation or bylaws of the Seller, or any indenture, agreement or other
instrument to which the Seller is a party or by which it is bound, or result
in the creation or imposition of any Lien upon any of its properties pursuant
to the terms of any such indenture, agreement or other instrument (other than
this Agreement), or violate any law or, to the best of the Seller's
knowledge, any order, rule or regulation applicable to the Seller of any court
or of any federal or state regulatory body, administrative agency or other
governmental instrumentality having jurisdiction over the Seller or its
properties.
(5) No Proceedings. There are no proceedings or investigations
pending or, to the Seller's knowledge, threatened against the Seller before
any court, regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over the Seller or its properties (i)
asserting the invalidity of this Agreement or any other Basic Document to
which the Seller is a party, (ii) seeking to prevent the consummation of any
of the transactions contemplated by this Agreement or any other Basic
Document to which the Seller is a party or (iii) seeking any determination or
ruling that might materially and adversely affect the performance by the Seller
of its obligations under, or the validity or enforceability of, this Agreement
or any other Basic Document to which the Seller is a party.
(6) Valid Sale, Binding Obligations. This Agreement and the other
Basic Documents to which the Seller is a party, when duly executed and
delivered by the other parties hereto and thereto, shall constitute legal,
valid and binding obligations of the Seller, enforceable against the Seller
in accordance with their respective terms, except as the enforceability thereof
may be limited by bankruptcy, insolvency, reorganization and 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).
(7) Chief Executive Office. The chief executive office of the
Seller is located at ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
(8) 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.
(b) The Seller makes the following representations and warranties
with respect to the Receivables and the Eligible Investment Receivables, on
which the Purchaser relies in accepting the Receivables and the Eligible
Investment 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. As to the Initial Receivables and
to the Initial Eligible Investment Receivables, such representations and
warranties speak as of the execution and delivery of this Agreement and as of
the Closing Date, and as to the Subsequent Receivables and the Subsequent
Eligible Investment Receivables, such representations and warranties speak as of
the applicable Subsequent Transfer Date, but shall survive the sale, transfer
and assignment of the Receivables and the Eligible Investment Receivables to
the Purchaser, the subsequent sale, transfer and assignment of the Receivables
by the Purchaser to the Issuer pursuant to the Sale and Servicing Agreement and
the Grant thereof, pursuant to the Indenture and the conveyance of a lien on
and a security interest in the Eligible Investment Receivables to the
Collateral Agent.
(1) Characteristics of Receivables. Each Receivable (A) was
originated in the United States by a Dealer for the retail sale of a Financed
Vehicle in the ordinary course of such Dealer's business in accordance with
the Seller's credit policies, was fully and properly executed by the parties
thereto, was purchased by the Seller from such Dealer under an existing
Dealer Agreement and was validly assigned by such Dealer to the Seller, (B) has
created or shall create a valid, subsisting and enforceable first priority
security interest in favor of the Seller in the Financed Vehicle, which
security interest is assignable by the Seller to the Purchaser, and by the
Purchaser to the Issuer, (C) contains customary and enforceable provisions
such that the rights and remedies of the holder thereof are adequate for
realization against the collateral of the benefits of the security and (D)
provides for level monthly payments (provided that the payment in the last
month of the term of the Receivable may be different from the level payments)
that fully amortize the Amount Financed by maturity and yield interest at the
APR.
(2) Compliance with Law. Each Receivable and the sale of the
related Financed Vehicle complied at the time it was originated or made, and at
the time of execution of this Agreement complies, in all material respects with
all requirements of applicable federal, state and local laws and regulations
thereunder, including usury laws, the Federal Truth-in-Lending Act, the Equal
Credit Opportunity Act, the Fair Credit Billing Act, the Fair Credit
Reporting Act, the Fair Debt Collection Practices Act, the Federal Trade
Commission Act, the ▇▇▇▇▇▇▇▇-▇▇▇▇ Warranty Act, the Federal Reserve Board's
Regulations "B" and "Z", the Soldiers' and Sailors' Civil Relief Act of 1940,
and state adaptations of the National Consumer Act and of the Uniform Consumer
Credit Code, and other consumer credit laws and equal credit opportunity and
disclosure laws.
(3) Binding Obligation. Each Receivable represents the genuine,
legal, valid and binding payment obligation of the Obligor thereon,
enforceable by the holder thereof in accordance with its terms, except (A) as
enforceability thereof may be limited by bankruptcy, insolvency,
reorganization or similar laws affecting the enforcement of creditors' rights
generally and by equitable limitations on the availability of specific
remedies, regardless of whether such enforceability is considered in a
proceeding in equity or at law and (B) as such Receivable may be modified by
the application after the Transfer Date of the Soldiers' and Sailors' Civil
Relief Act of 1940, as amended.
(4) No Government Obligor. No Receivable is due from the United
States of America or any State or any agency, department, subdivision or
instrumentality thereof.
(5) Obligor Bankruptcy. No Obligor had been identified on the
records of the Seller as being the subject of a current bankruptcy proceeding.
(6) Schedule of Receivables and Schedule of Eligible Investment
Receivables. The information set forth in Schedule I and Schedule II to this
Agreement is true and correct in all material respects as of the close of
business on the Cutoff Date.
(7) Marking Records. By the Transfer Date, the Seller will have
caused its records relating to each Receivable, including any computer
records, to be clearly and unambiguously marked to show that the Receivables
have been sold to the Purchaser by the Seller and transferred and assigned by
the Purchaser to the Issuer in accordance with the terms of the Sale and
Servicing Agreement and pledged by the Issuer to the Indenture Trustee in
accordance with the terms of the Indenture.
(8) Computer Tape. The computer tape regarding the Receivables made
available by the Seller to the Purchaser is complete and accurate in all
respects as of the Conveyance Date.
(9) No Adverse Selection. No selection procedures believed by the
Seller to be adverse to the Noteholders or Certificateholders were utilized
in selecting the Receivables.
(10) Chattel Paper. The Receivables constitute chattel paper within
the meaning of the UCC as in effect in the State of Illinois.
(11) One Original. There is only one original executed copy of each
Receivable.
(12) Receivables in Force. No Receivable has been satisfied,
subordinated or rescinded, nor has any Financed Vehicle been released from
the lien of the related Receivable in whole or in part. None of the terms of
any Receivable has been waived, altered or modified in any respect since its
origination, except by instruments or documents identified in the related
Receivable File. No Receivable has been modified as a result of the
application of the Soldiers' and Sailors' Civil Relief Act of 1940, as
amended.
(13) Lawful Assignment. No Receivable has been originated in, or is
subject to the laws of, any jurisdiction the laws of which would make
unlawful, void or voidable the sale, transfer and assignment of such
Receivable under this Agreement or the Sale and Servicing Agreement or the
pledge of such Receivable under the Indenture.
(14) Title. It is the intention of the Seller that the transfers
and assignments herein contemplated constitute sales of the Receivables from
the Seller to the Purchaser and that the beneficial interest in and title to
the Receivables not be part of the debtor's estate in the event of the filing of
a bankruptcy petition by or against the Seller under any bankruptcy law. No
Receivable has been sold, transferred, assigned or pledged by the Seller to
any Person other than to the Purchaser or pursuant to this Agreement (or by
the Purchaser to the Issuer pursuant to the Sale and Servicing Agreement).
Immediately prior to the transfers and assignments herein contemplated, the
Seller has good and marketable title to each Receivable free and clear of all
Liens (other than the Lien of the Seller's senior lenders identified in the
Consent dated as of December 18, 1996 under the Fourth Amended and Restated
Loan and Security Agreement dated as of February 29, 1996, by and among the
Seller and such secured lenders), which Lien is being released simultaneously
with the transfers and assignments herein contemplated) and, immediately upon
the transfer thereof, the Purchaser shall have good and marketable title to
each Receivable, free and clear of all Liens.
(15) Security Interest in Financed Vehicle. Immediately prior to its
sale, assignment and transfer to the Purchaser pursuant to this Agreement,
each Receivable shall be secured by a validly perfected first priority
security interest in the related Financed Vehicle in favor of the Seller as
secured party, or all necessary and appropriate actions have been commenced
that will result in the valid perfection of a first priority security
interest in such Financed Vehicle in favor of the Seller as secured party.
(16) All Filings Made. All filings (including UCC filings) required
to be made in any jurisdiction to give the Purchaser a first perfected
ownership interest in the Receivables have been made.
(17) No Defenses. No Receivable is subject to any right of
rescission, setoff, counterclaim or defense, and no such right has been
asserted or threatened with respect to any Receivable.
(18) No Default. There has been no default, breach, violation or
event permitting acceleration under the terms of any Receivable (other than
payment delinquencies of not more than 31 days), and no condition exists or
event has occurred and is continuing that with notice, the lapse of time or
both would constitute a default, breach, violation or event permitting
acceleration under the terms of any Receivable, and there has been no waiver
of any of the foregoing. As of the Cutoff Date, no Financed Vehicle has been
repossessed.
(19) Insurance. The Seller, in accordance with its customary
procedures, has determined that the Obligor has obtained physical damage
insurance covering each Financed Vehicle and, under the terms of the related
Contract, the Obligor is required to maintain such insurance.
(20) Final Scheduled Maturity Date. No Receivable has a final
scheduled payment date after May 24, 2002.
(21) Certain Characteristics of the Receivables. As of the
Conveyance Date, (A) each Receivable had an original maturity of not more
than 66 months; (B) no Receivable was more than 30 days past due; and (C) no
funds have been advanced by the Seller, any Dealer or anyone acting on behalf of
either of them in order to cause any Receivable to qualify under clause (B)
above.
ARTICLE IV
Conditions
SECTION 4.01. Conditions to Obligation of the Purchaser. The
obligation of the Purchaser to purchase the Receivables is subject to the
satisfaction of the following conditions:
(a) Representations and Warranties True. The representations and
warranties of the Seller hereunder shall be true and correct on the Transfer
Date with the same effect as if then made, and the Seller shall have
performed
all obligations to be performed by it hereunder on or prior to the Transfer
Date.
(b) Computer Files Marked. The Seller shall, at its own expense, on
or prior to the Transfer Date, indicate in its computer files that the
Receivables have been sold to the Purchaser pursuant to this Agreement and
deliver to the Purchaser the Schedule of Receivables and the Schedule of
Eligible Investment Receivables, certified by the Seller's President, a Vice
President or the Treasurer to be true, correct and complete.
(c) Documents To Be Delivered by the Seller on the Transfer Date.
(1) The Assignment. On the Transfer Date, the Seller will execute
and deliver an Assignment with respect to the Receivables, substantially in
the form of Exhibit A hereto.
(2) Evidence of UCC Filing. On or prior to the Transfer Date, the
Seller shall record and file, at its own expense, a UCC-1 financing statement
in each jurisdiction in which required by applicable law, executed by the
Seller, as seller or debtor, and naming the Purchaser, as purchaser or
secured party, describing the Receivables and the other assets assigned to the
Purchaser pursuant to Section 2.01 hereof, meeting the requirements of the
laws of each such jurisdiction and in such manner as is necessary to perfect
the sale, transfer, assignment and conveyance of the Receivables and such
other assets to the 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 Transfer Date.
(3) 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 Transfer Date shall be consummated on such date.
SECTION 4.02. Conditions to Obligation of the Seller. The
obligation of the Seller to sell the Receivables to the 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
Transfer Date with the same effect as if then made, and the Seller shall have
performed all obligations to be performed by it hereunder on or prior to the
Transfer Date.
(b) Receivables Purchase Price. On the Transfer Date, the Purchaser
shall have delivered to the Seller the purchase price specified in Section
2.01 in the case of the Initial Receivables, or specified in the Subsequent
Purchase Agreement in the case of the Subsequent Receivables.
ARTICLE V
Covenants of the Seller
The Seller agrees with the Purchaser as follows:
SECTION 5.01. Protection of Right, Title and Interest. (a)
Filings. The Seller shall cause all financing statements and continuation
statements and any other necessary documents covering the right, title and
interest of the Seller and the Purchaser, respectively, in and to the
Receivables and the other property included in the Owner 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 in and to
the Receivables and the other property included in the Owner Trust Estate.
The Seller shall deliver to the Purchaser 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,
the Seller shall give the Purchaser, the Indenture Trustee, the Owner Trustee
and the Security Insurer written notice thereof at least 5 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 included in the Owner Trust Estate.
SECTION 5.02. Other Liens or Interests. Except for the conveyances
hereunder and pursuant to the Basic Documents, the Seller shall not sell,
pledge, assign or transfer to any Person, or grant, create, incur, assume, or
suffer to exist any Lien on, or any interest in, to or under the Receivables,
and the Seller shall defend the right, title and interest of the Purchaser
in, to and under the Receivables against all claims of third parties claiming
through or under the Seller; provided, however, that the Seller's obligations
under this Section shall terminate upon the termination of the Issuer
pursuant to the Trust Agreement.
SECTION 5.03. Costs and Expenses. The Seller agrees to pay all
reasonable costs and disbursements in connection with the perfection, as
against all third parties, of the Purchaser's and the Issuer's right, title
and interest in and to the Receivables.
SECTION 5.04. Indemnification. The Seller shall indemnify the
Purchaser, the Issuer and the Security Insurer for any liability resulting
from the failure of a Receivable to be originated in compliance with all
requirements of law and for any breach of any of its representations and
warranties contained herein. These indemnity obligations shall be in
addition to any obligation that the Seller may otherwise have.
ARTICLE VI
Miscellaneous Provisions
SECTION 6.01. Obligations of Seller. The obligations of the Seller
under this Agreement shall not be affected by reason of any invalidity,
illegality or irregularity of any Receivable.
SECTION 6.02. Repurchase Events. The Seller hereby covenants and
agrees with the Purchaser for the benefit of the Purchaser, the Indenture
Trustee, the Owner Trustee, the Certificateholders, the Noteholders and the
Security Insurer that the occurrence of a breach of any of the Seller's
representations and warranties contained in Section 3.02(b) shall constitute
an event obligating the Seller to repurchase the Receivables and Eligible
Investment Receivables to which the breach is applicable ("Repurchase
Events"), at the Purchase Amount, from the Purchaser or from the Issuer, as
applicable, unless any such breach shall have been cured by the last day of
the first Collection Period following the discovery or notice thereof by or
to the Seller or the Servicer. The repurchase obligation of the Seller shall
constitute the sole remedy available to the Purchaser, the Indenture Trustee,
the Owner Trustee, the Issuer, the Noteholders or the Certificateholders
against the Seller with respect to any Repurchase Event.
SECTION 6.03. Purchaser Assignment of Repurchased Receivables. With
respect to all Receivables repurchased by the Seller pursuant to this
Agreement, the Purchaser shall assign, without recourse, representation or
warranty, to the Seller all of the Purchaser's right, title and interest in
and to such Receivables and all security and documents relating thereto.
SECTION 6.04. Transfer to the Issuer. The Seller acknowledges and
agrees that (a) the Purchaser will, pursuant to the Sale and Servicing
Agreement, transfer and assign the Receivables and assign its rights under
this Agreement with respect thereto to the Issuer and the Issuer will pledge
the Receivables to the Indenture Trustee and (b) the Purchaser will pledge
the Eligible Investment Receivables and assign its rights under this Agreement
with respect thereto to the Collateral Agent and (c) the representations and
warranties contained in this Agreement and the rights of the Purchaser under
this Agreement, including under Section 6.02, are intended to benefit the
Issuer, the Noteholders, the Certificateholders and the Security Insurer.
The Seller hereby consents to such transfers and assignments.
SECTION 6.05. Amendment. This Agreement may be amended from time to
time, with prior written notice to the Rating Agencies and, so long as the
Security Insurer is the Controlling Party under the Sale and Servicing
Agreement, the prior written consent of the Security Insurer but without the
consent of the Noteholders or the Certificateholders, by a written amendment
duly executed and delivered by the Seller and the Purchaser, 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. This Agreement may also be
amended by the Seller and the Purchaser, 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
Certificates evidencing at least a majority of the Certificate Balance
(excluding, for purposes of this Section 6.05, Certificates held by the
Seller or any of its affiliates) and, so long as the Security Insurer is the
Controlling Party under the Sale and Servicing Agreement, the prior written
consent of the Security Insurer, for the purpose of adding any provisions to
or changing in any manner or eliminating any of the provisions of this
Agreement or of modifying in any manner the rights of the Noteholders or
Certificateholders; provided, however, that no such amendment may (i)
increase or reduce in any manner the amount of, or accelerate or delay the
timing of, collections of payments on Receivables or distributions that are
required to be made for the benefit of Noteholders or Certificateholders or
(ii) reduce the aforesaid percentage of the Notes or the Certificates that is
required to consent to any such amendment, without the consent of the Holders of
all the outstanding Notes and Certificates.
SECTION 6.06. Waivers. No failure or delay on the part of the
Purchaser in exercising any power, right or remedy under this Agreement or
the Assignment shall operate as a waiver thereof, nor shall any single or
partial exercise of any such power, right or remedy preclude any other or
further exercise thereof or the exercise of any other power, right or remedy.
SECTION 6.07. Notices. All demands, notices and communications
under this Agreement shall be in writing, personally delivered or mailed by
certified mail, return receipt requested, to: (a) in the case of the Seller,
First Merchants Acceptance Corporation, ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇,
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Vice President; (b)
in the case of the Purchaser, First Merchants Auto Receivables Corporation II,
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇
▇. ▇▇▇▇▇▇, Vice President; (c) in the case of Moody's, ▇▇▇▇▇'▇ Investors
Service, Inc., ABS Monitoring Department, ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇; (d) in the case of Standard & Poor's, Standard & Poor's Ratings
Service, ▇▇ ▇▇▇▇▇▇▇▇ (▇▇▇▇ ▇▇▇▇▇), ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Asset
Backed Surveillance Department; (e) in the case of the Security Insurer,
Financial Security Assurance Inc., ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
Attention: Surveillance Department; or as to each of the foregoing, at such
other address as shall be designated by written notice to the other parties.
SECTION 6.08. Costs and Expenses. The Seller shall pay all expenses
incident to the performance of its obligations under this Agreement and the
Seller agrees to pay all reasonable out-of-pocket costs and expenses of the
Purchaser, excluding fees and expenses of counsel, in connection with the
perfection as against third parties of the Purchaser's right, title and
interest in and to the Receivables and the enforcement of any obligation of
the Seller hereunder.
SECTION 6.09. Representations of the Seller and the Purchaser. The
respective agreements, representations, warranties and other statements by
the Seller and the Purchaser set forth in or made pursuant to this Agreement
shall remain in full force and effect and will survive the closing under
Section 2.02 and the transfers and assignments referred to in Section 6.04.
SECTION 6.10. Confidential Information. The Purchaser agrees that
it will neither use nor disclose to any Person the names and addresses of the
Obligors, except in connection with the enforcement of the Purchaser's rights
hereunder, under the Receivables, under the Sale and Servicing Agreement or
any other Basic Document, or as required by any of the foregoing or by law.
SECTION 6.11. Headings and Cross-References. The various headings
in this Agreement are included for convenience only and shall not affect the
meaning or interpretation of any provision of this Agreement. References in
this Agreement to section names or numbers are to such Sections of this
Agreement.
SECTION 6.12. Governing Law. This Agreement and the Assignment
shall be construed in accordance with the laws of the State of New York,
without reference to its conflict of law provisions, and the obligations, rights
and remedies of the parties hereunder or thereunder shall be determined in
accordance with such laws.
SECTION 6.13. Counterparts. This Agreement may be executed in two
or more counterparts and by different parties on separate counterparts, each of
which shall be an original, but all of which together shall constitute one
and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective duly authorized officers as of the date and year
first above written.
FIRST MERCHANTS ACCEPTANCE CORPORATION
By:
Name:
Title:
FIRST MERCHANTS AUTO
RECEIVABLES CORPORATION II
By:
Name:
Title:
EXHIBIT A
Form of Assignment
ASSIGNMENT
For value received, in accordance with the Receivables Purchase
Agreement
dated as of December 1, 1996 (the "Receivables Purchase Agreement"), between
the undersigned and First Merchants Auto Receivables Corporation II (the
"Purchaser"), the undersigned does hereby sell, assign, transfer and
otherwise
convey unto the Purchaser, without recourse, all right, title and interest of
the undersigned in and to (i) the Receivables and the Eligible Investment
Receivables and, in each case, all moneys received thereon on or after
November 14, 1996; (ii) the security interests in the Financed Vehicles and
any accessions thereto granted by Obligors pursuant to the Receivables and
the Eligible Investment Receivables and any other interest of the Seller in
such Financed Vehicles; (iii) any Liquidation Proceeds and any other proceeds
with respect to the Receivables and the Eligible Investment Receivables from
claims on any physical damage, credit life or disability insurance policies
covering Financed Vehicles or Obligors, including any vendor's single interest
or other collateral protection insurance policy; (iv) any property that shall
have secured a Receivable or an Eligible Investment Receivable and that shall
have been acquired by or on behalf of the Seller; (v) all documents and other
items contained in the Receivable Files; and (vi) proceeds of any and all of
the foregoing. The foregoing sale does not constitute and is not intended to
result in any assumption by the Purchaser of any obligation of the
undersigned to the Obligors, insurers or any other person in connection with
the Receivables, the Eligible Investment Receivables, the Receivable Files, any
insurance policies or any agreement or instrument relating to any of them.
This Assignment is made pursuant to and upon the representations,
warranties and agreements on the part of the undersigned contained in the
Receivables Purchase Agreement and is to be governed by the Receivables
Purchase Agreement.
Capitalized terms used and not otherwise defined herein shall have the
meaning assigned to them in the Receivables Purchase Agreement.
IN WITNESS WHEREOF, the undersigned has caused this Assignment to be
duly executed as of December 18, 1996.
FIRST MERCHANTS ACCEPTANCE CORPORATION,
By:
Name:
Title:
EXHIBIT B
Form of Subsequent Purchase Agreement
SUBSEQUENT PURCHASE AGREEMENT
SUBSEQUENT PURCHASE AGREEMENT (the "Agreement") dated as of [ ],
between First Merchants Auto Receivables Corporation II, a Delaware
corporation ("FMARC II") and First Merchants Acceptance Corporation, a
Delaware corporation ("First Merchants").
Reference is hereby made to the Sale and Servicing Agreement (the "Sale
and Servicing Agreement") dated as of December 1, 1996, among FMARC II, First
Merchants Auto Trust 1996-C (the "Trust"), First Merchants and ▇▇▇▇▇▇ Trust
and Savings Bank, and the Receivables Purchase Agreement (the "Purchase
Agreement") dated as of December 1, 1996, between First Merchants and FMARC
II.
WHEREAS, First Merchants wishes to sell the Contracts listed on Schedule
A hereto having an aggregate outstanding principal balance of $[ ] (the
"Subsequent Receivables") to FMARC II, and FMARC II wishes to purchase such
Subsequent Receivables for the purchase price of $[ ]; and
WHEREAS, First Merchants wishes to sell the Contracts listed on Schedule
B hereto having an aggregate outstanding principal balance of $[ ] (the
"Subsequent Eligible Investment Receivables") to FMARC II, and FMARC II
wishes
to purchase such Subsequent Eligible Investment Receivables for the purchase
price of $[ ];
NOW, THEREFORE, First Merchants and FMARC II hereby agree as follows:
Section 1. Definitions. Capitalized terms used herein and not
otherwise
defined herein shall the meanings ascribed to them in the Purchase Agreement.
Section 2. Subsequent Receivables and Subsequent Eligible Investment
Receivables. Schedule A and Schedule B attached hereto constitute the
Subsequent Receivables and the Subsequent Eligible Investment Receivables to
be sold to FMARC II, respectively.
Section 3. Transfer of Subsequent Contracts and Subsequent Eligible
Investment Receivables to FMARC II. Pursuant to and upon the
representations,
warranties and agreements on the part of First Merchants in the Purchase
Agreement and herein and in consideration of payment of the purchase price
above stated, First Merchants does hereby sell, assign, transfer and
otherwise convey unto FMARC II, without recourse (except as expressly provided
in the Purchase Agreement), all right, title and interest of First Merchants
in and to (1) the Subsequent Receivables and Subsequent Eligible Investment
Receivables and all monies due thereon on or after the Subsequent Cutoff
Date; (2) the security interests in the Financed Vehicles and any accessions
thereto granted by Obligors pursuant to the Subsequent Receivables and
Subsequent Eligible Investment Receivables and any other interest of First
Merchants in such Financed Vehicles; (3) any Liquidation Proceeds and any other
proceeds with respect to the Subsequent Receivables and Subsequent Eligible
Investment Receivables from claims on any physical damage, credit life or
disability insurance policies covering Financed Vehicles or Obligors, including
any vendor's single interest or other collateral protection insurance policy;
(4) any property that shall have secured a Subsequent Receivable or Subsequent
Eligible Investment Receivable and shall have been acquired by or on behalf
of First Merchants; (5) all documents and other items contained in the
Receivables Files; and (6) the proceeds of any and all of the foregoing. The
foregoing sale does not constitute and is not intended to result in any
assumption by FMARC II of any obligation of First Merchants to the Obligors,
insurers or any other person in connection with the Subsequent Receivables,
Subsequent Eligible Investment Receivables, Receivable Files, any insurance
policies or any agreement or instrument relating to any of them. It is the
intention of First Merchants and FMARC II that the transfer contemplated by
this Agreement shall constitute a sale of the Subsequent Receivables and
Subsequent Eligible Investment Receivables from First Merchants to FMARC II,
conveying good title thereto free and clear of any Liens, and that the
Subsequent Receivables and Subsequent Eligible Investment Receivables shall
not be a part of First Merchants' estate in the event of the filing of a
bankruptcy petition by or against First Merchants under any bankruptcy or
similar law.
Section 4. Representations of First Merchants. First Merchants hereby
represents and warrants to FMARC II that the representations and warranties
of First Merchants in the Purchase Agreement with respect to the Subsequent
Receivables and the Subsequent Eligible Investment Receivables, and the
representations and warranties of First Merchants stated in Section 3.02 of
the Purchase Agreement are true and correct as of the date of this Agreement.
Section 5. Severability. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and
any such prohibition or unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in any other jurisdiction.
Section 6. Separate Counterparts. This Agreement may be executed by
the parties hereto in separate counterparts, each of which when so executed and
delivered shall be an original, but all such counterparts shall together
constitute but one and the same instrument.
Section 7. Headings. The headings of the various Sections herein are
for convenience of reference only and shall not define or limit any of the
terms or provisions hereof.
Section 8. Governing Law. This Agreement shall be construed in
accordance with the laws of the State of New York, without reference to its
conflict of law provisions, and the obligations, rights and remedies of the
parties hereunder shall be determined in accordance with such laws.
IN WITNESS WHEREOF, the undersigned have caused this Subsequent Purchase
Agreement to be duly executed as of the date first above written.
FIRST MERCHANTS AUTO RECEIVABLES
CORPORATION II
By:
Name:
Title:
FIRST MERCHANTS ACCEPTANCE CORPORATION
By:
Name:
Title:
SCHEDULE A TO
SUBSEQUENT PURCHASE AGREEMENT NO. ___
Schedule of Subsequent Receivables
SCHEDULE B TO
SUBSEQUENT PURCHASE AGREEMENT NO. ___
Schedule of Subsequent Eligible Investment Receivables
SCHEDULE I
Schedule of Receivables
SCHEDULE II
Schedule of Eligible Investment Receivables
SCHEDULE III
Location of Receivable Files
