DEALER AGREEMENT
THIS AGREEMENT, between Premier Auto Finance, L.P. ("Purchaser"), 000
Xxxx Xxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxx, 00000 and each of the motor
vehicle dealers listed below (individually and collectively referred to herein
as "Dealer"), sets forth the terms under which Purchaser may purchase Contracts
(as hereinafter defined) from Dealer and the rights and obligations between
Purchaser and Dealer with regard to such Contracts.
1. SALE AND PURCHASE OF CONTRACTS
a. CONTRACTS; PROGRAM REQUIREMENTS. Purchaser may, from time to
time, in its sole discretion purchase from Dealer such
Contracts (as hereinafter defined) offered by Dealer as shall
be written on forms satisfactory to Purchaser and otherwise
acceptable to Purchaser. For purposes of this Agreement, the
term "Contract" shall mean any retail installment contract,
conditional sales contract, security agreement or other
document providing for the payment by a Buyer of a motor
vehicle and secured by a first priority lien or purchase money
security interest in that motor vehicle. The term "Vehicle"
shall mean the motor vehicle purchased under and securing any
Contract, together with any related options and accessories.
The term "Buyer" shall mean any person (including an
individual or other legal entity) which purchases a motor
vehicle from Dealer, including any co-purchaser. Purchaser
will from time to time communicate to Dealer the criteria
which the Contracts, Vehicles and Buyers must meet in order to
make the Contract eligible for purchase by Purchaser. These
criteria may include rate information, insurance requirements,
Buyer credit qualifications, and so on. Purchaser may
communicate this information in the form of one or more
"Program Letters", Rate Sheets or otherwise. These
requirements are collectively referred to herein as the
"Program Requirements". All Contracts purchased by the
Purchaser must meet all Program Requirements; but Purchaser
retains the sole discretion to decide which Contracts to
purchase, even though the Contract may conform to the Program
Requirements.
b. EFFECTING A PURCHASE. Dealer shall communicate to Purchaser
credit information concerning a Buyer (and any other person
named by a Buyer in his credit application) as Dealer may have
or as may be requested by Purchaser. Purchaser will decide, in
its sole discretion, whether to purchase each Contract offered
to it by Dealer after documentation (including credit
information) satisfactory to Purchaser has been received and
reviewed. If Purchaser decides that it will purchase a
Contract, Dealer shall (i) execute an assignment of the
Contract to Purchaser, (ii) deliver the original executed
Contract (and all other original executed documents relating
thereto) to Purchaser, (iii) file and record all such
documents and take all such action, as may be necessary, under
the Uniform Commercial Code and other applicable law to convey
to Purchaser (and to record such conveyance of) the Contract,
to perfect a valid and enforceable first priority security
interest in favor of Purchaser in the motor vehicle to which
the Contract relates, and to comply with all related
provisions of applicable motor vehicle laws, including motor
vehicle and certificate of title laws, and (iv) if required by
applicable law, send to the Buyer a notice that such Dealer
has assigned the Contract to Purchaser.
1
c. PURCHASE PRICE. Purchaser shall only consider purchasing
Contracts which comply with the Program Requirements announced
from time to time by Purchaser. The price at which Purchaser
may purchase Contracts will be the "Amount Financed" shown on
the Contract. Such price shall be paid to Dealer upon
Purchaser's receipt and review of satisfactory documentation
unless other arrangements for payment have been made between
Purchaser and Dealer.
d. NATURE OF TRANSFER. Dealer and Purchaser intend that each
purchase of a Contract under this Agreement shall be a true
sale of all of Dealer's right, title and interest in, to and
under such Contract, providing Purchaser with the full
benefits of ownership of the same, and Dealer and Purchaser do
not intend the transaction evidenced hereby to be, or for any
purpose to be characterized as, a loan secured by such
Contract from Purchaser to Dealer. Without prejudice to the
foregoing intention of the parties, if a court characterizes
any purchase of a Contract hereunder as being a loan rather
than a true sale, then Dealer hereby pledges, grants a
security interest in and assigns to Purchaser all of its right
and title to and interest in the Contracts which the parties
hereto intend now or at any time in the future to be sold to
Purchaser as security for the payment and performance of all
obligations of Dealer hereunder.
e. RESERVES. For each Contract purchased by Purchaser from
Dealer, Purchaser will credit to a Dealer Reserve Account an
amount equal to all or part of the difference between a) the
finance charge disclosed on the Contract and b) a projected
finance charge on the same Contract calculated at Purchaser's
then applicable buy rates as announced from time to time by
Purchaser, as provided in the Dealer Reserve Schedule A
attached hereto and made a part hereof. The Dealer Reserve
Account shall be a non-interest earning account and will not
be a separately funded. Dealer acknowledges that the Dealer
Reserve Account shall be and remain the sole property of
Purchaser and Dealer shall have no vested interest therein
until such time as any amount becomes payable to it as
provided in the Dealer Reserve Schedule A. In the alternative,
in case any court holds or any third party asserts that the
Dealer Reserve Account is the property of the Dealer, the
Dealer hereby grants a security interest in favor of Purchaser
in all amounts credited to the Dealer Reserve Account to
secure all obligations of Dealer to Purchaser.
Dealer further acknowledges that Purchaser's right to charge
the Dealer Reserve Account is solely within Purchaser's
discretion reasonably exercised. All amounts held therein
shall from time to time be paid to Dealer in accordance with
the terms and conditions of this Agreement and the Dealer
Reserve Schedule A.
As provided in the Dealer Reserve Schedule A, if a Contract
prepays in whole or in part before its stated maturity date
Dealer shall be responsible for Dealer's proportionate share
of any unearned finance charges, insurance premiums and/or
charges for extended warranty, mechanical breakdown or
comparable programs, whether or not the amount of the Dealer
Reserve Account is sufficient to cover such liability and
whether or not this Agreement has theretofore been terminated.
2
By mutual agreement between Dealer and Premier, the Dealer
Reserve Schedule A may change from time to time, and the
Dealer Reserve Schedule A may vary from Dealer to Dealer.
2. INSURANCE. As provided in the Program Requirements, Dealer will provide
Purchaser or its agent with written evidence that there is insurance acceptable
to Purchaser covering each Vehicle against fire, theft and collision at the time
the Contract is purchased by Purchaser and that Purchaser is named as the loss
payee.
3. PAYMENT FROM BUYER. After purchase of a Contract by Purchaser, Dealer
shall promptly forward to Purchaser any payment on the Contract received by
Dealer and any payments so received shall be held in trust by Dealer for the
benefit of Purchaser. In the event such payment is made by check or other
instrument payable to Dealer, Dealer shall endorse such check or other
instrument to Purchaser and immediately remit such payment to Purchaser at the
following address: 000 Xxxx Xxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxx 00000.
Dealer shall not make any payment in respect of any Contract on behalf of any
Buyer without the prior written consent of Purchaser.
4. AMENDMENT OR MODIFICATION OF CONTRACTS. Upon or any time after
Purchaser's purchase of a Contract from Dealer, Purchaser may, in its sole
discretion, renew, extend, accelerate or otherwise modify or amend any of the
terms and conditions of such Contract including, without limitation, extending
or modifying the time for payment or extending additional credit thereunder. Any
such amendments, renewals, extensions or modifications shall be considered as
part of the Contract for all purposes hereunder. Purchaser shall not extend or
amend any undertaking, warranty or representation made by Dealer to Buyer in
connection with the sale of the Vehicle to Buyer.
5. DEALER'S REPRESENTATIONS AND WARRANTIES. As to each Contract sold by
Dealer to Purchaser, and in addition to any representations and warranties of
Dealer in the Contract or elsewhere in this Agreement, Dealer warrants and
represents to Purchaser, its successors and assigns that, as of the time of each
sale of a Contract to the Purchaser:
a. Dealer and its employees and agents and each Contract are in
compliance with all requirements of the Federal Truth in
Lending Act, the Federal Equal Credit Opportunity Act and all
other federal, state, local, and other laws, regulations or
rules including, but not limited to, consumer protection laws
and all regulations or rules applicable to the extension of
credit, the sale of the Vehicle and any accessories, services
or products sold in connection with the Vehicle, or otherwise
applicable to the Contract and the sale of the Vehicle;
b. Dealer will have the right and all required licenses to make
such sales;
3
c. Dealer will have received the down payment specified in the
Contract and will not have made a loan to the Buyer or
assisted the Buyer in obtaining a loan from any third party,
to be used as a part or all of such down payment or any other
payment on a Contract, except (in any such case) as may be
specifically indicated on the face of the Contract. If the
down payment is paid to the Dealer in the form of a check the
Dealer has verified that the check represents "good funds"
prior to submitting the Contract to Purchaser. Upon giving
effect to the sale of such Contract to Purchaser, Dealer shall
cease to have any claims against the applicable Buyer in
respect of payment of the purchase price for the applicable
Vehicle, any financing theretofore provided by Dealer to the
Buyer or otherwise;
d. if any part of the down payment is from a manufacturer,
distributor or Dealer rebate, the Dealer has disclosed this to
Purchaser at the time the credit application is presented to
Purchaser for approval and the rebate has been shown on the
applicable Contract as a rebate;
e. the Vehicle sold under the Contract will have been actually
delivered to the applicable Buyer or the parties agreeing to
the security interest in favor of Dealer or its assignee, the
Vehicle conforms to the description of the Vehicle provided to
Purchaser in the Contract or otherwise, and the Dealer shall
otherwise have fully performed and discharged all of its
obligations to Buyer and such parties arising in connection
with the sale of the Vehicle to the Buyer;
f. the Contract is a legal, valid and binding agreement,
enforceable against the persons shown as Buyers in the
Contract according to its terms and free from any defenses,
offsets and counterclaims and evidences the sale of the
Vehicle to the persons named as Buyers therein and the
incurrence of a debt obligation in connection therewith;
g. All registered owners of the Vehicle will have signed the
Contract either as Buyers or as parties agreeing to the
security interest in favor of Dealer or its assignee;
h. Dealer, its employees and agents have not recommended,
assisted, encouraged or suggested that Buyer provide any false
or misleading information, or that Buyer fail to provide
information needed to make the information complete and not
misleading in any credit application, contract, document or
other form of information submitted to the Purchaser, and
Dealer, its employees and agents have no knowledge that any
information provided to the Purchaser in any credit
application, contract, document or otherwise, is false or
misleading;
4
i. such Contract (i) fully complies with all Program Requirements
established by Purchaser from time to time regarding the
purchase of Contracts, (ii) does not require the obligor under
such Contract to consent to or receive notice of the transfer,
sale or assignment of the rights and duties of Dealer under
such Contract, (iii) constitutes "chattel paper" as such term
is defined in the Uniform Commercial Code in effect in the
jurisdiction in which the sale of the Vehicle giving rise to
such Contract shall have occurred and (iv) is comprised of but
one original, the ownership interest in which may be
transferred by delivery;
j. prior to the purchase of such Contract, (i) Dealer shall be
the owner of such Contract, free and clear of any lien, claim
or other encumbrance and (ii) the Vehicle related thereto
shall be free and clear of any lien, claim or other
encumbrance other than the lien granted therein in favor of
Dealer to secure the indebtedness of the applicable Buyer
existing under the Contract;
k. there is a valid, enforceable perfected first priority
security interest in the Vehicle and in any proceeds therefrom
in favor of Dealer as the secured party and that security
interest has been validly assigned by Dealer to Purchaser;
l. all sales taxes and other taxes payable in connection with the
sale of the applicable Vehicle to Buyer have been paid in
full; and
m. Dealer has full power and authority to enter into and perform
this Agreement, and this Agreement is the legal and valid
agreement of the Dealer enforceable against Dealer according
to its terms, complies with all laws applicable to Dealer, and
has been duly and validly authorized by all required action of
Dealer; and
n. at the time of a purchase of a Contract by Purchaser, the
related Vehicle is insured against fire, collision, theft and
damage, and Purchaser is named as a loss payee under such
policy, all in accordance with the Program Requirements.
6. DEALER'S COVENANTS. Dealer covenants and agrees as follows:
a. From and after the sale by Dealer of any Contract to Purchaser
hereunder, Dealer shall not (i) assert any right or claim in
or to such Contract or the Vehicle related thereto, (ii)
purport to grant any right or interest to any person or entity
other than Purchaser in or to such Contract or (iii) purport
to exercise any authority to modify, alter or amend such
Contract.
b. Dealer agrees that from time to time, at its expense, it will
promptly execute and deliver all further instruments and
documents, and take all further action that Purchaser may
reasonably request in order to perfect, protect or more fully
evidence Purchaser's ownership interest in the Contracts
purchased hereunder and Purchaser's security interest in each
Vehicle. Dealer will deliver to Purchaser the original copy of
each Contract purchased hereunder.
5
c. Dealer shall take all necessary action to record properly each
transfer of Contracts hereunder to Purchaser as a sale to
Purchaser and to reflect Purchaser's ownership of such
Contracts on its books and records.
7. DEALER LIABILITY.
a. If any representation, warranty, covenant or agreement made by
Dealer (or any of its agents or employees) hereunder (or in
any Contract) in connection with a Contract or this Agreement
is breached, untrue, misleading or incomplete, or if Dealer
fails to perform any obligation it may have under any Contract
or this Agreement or otherwise, or if the Buyer asserts any
claim arising out of or relating to, or in connection with,
the purchase of a Vehicle from Dealer under a Contract sold to
Purchaser, the Dealer shall promptly pay Purchaser any or all
of the following amounts at the sole election and demand of
Purchaser: (i) the unpaid balance, as determined by Purchaser,
of all Contracts affected by such breach, misrepresentation,
failure to perform or claim; (ii) Dealer's portion of any
unearned finance charges, insurance premiums, and/or charges
for extended warranty, mechanical breakdown or comparable
programs; (iii) all damages, costs, losses and expenses
(including, but not limited to, reasonable attorneys' fees and
costs) incurred by Purchaser as a result of such breach,
misrepresentation, failure to perform or claim. In addition,
Dealer shall indemnify and hold Purchaser, its partners, its
and their shareholders, affiliates, officers, directors,
employees and agents (each, an "Indemnified Party") harmless
for all losses or expenses, including reasonable attorneys'
fees and legal costs, suffered or incurred by any Indemnified
Party in any judicial, administrative, or any other proceeding
because of any claim or defense asserted against an
Indemnified Party as a result of any act or omission by Dealer
or its employees or agents including, at the election of
Purchaser, the unpaid balance of the affected Contract as
determined by Purchaser. Dealer agrees that Purchaser may
proceed against Dealer for any and all amounts due to any
Indemnified Party from Dealer under this Agreement or any
other party and without proceeding against or applying any
security which Purchaser may have or hold, Purchaser may, at
its option, debit the Dealer Reserve Account for any amounts
owing to Purchaser under this Agreement.
b. If Dealer:
(i) fails to disclose a pickup payment agreed to by
Dealer and Obligor, or other form of deferred down
payment, or balloon payment on the Contract, or
(ii) fails to collect an agreed upon pickup payment or
other form of deferred down payment, such failure
shall be considered a breach of a representation
under subparagraph 7a above and Dealer shall be
liable to Purchaser as specified in subparagraph 7a.
6
c. Anything herein to the contrary notwithstanding, (i) Dealer
shall remain liable under each Contract to perform all of its
continuing duties and obligations (if any) thereunder in
respect of warranties, servicing arrangements and similar
agreements (the "Ancillary Agreements") to the same extent as
if this Agreement had not been executed, and (ii) neither
Purchaser nor any of its assignees shall have any obligation
to perform or otherwise have any liability in respect of, the
Ancillary Agreements by reason of this Agreement.
8. LIABILITY FOR BUYER DEFAULT. Except as specifically provided herein or
as otherwise agreed, Dealer shall have no responsibility for any default by a
Buyer in respect of any Contract purchased by Purchaser hereunder.
9. BOOKS AND RECORDS. Dealer agrees to maintain complete and accurate
books and records in accordance with generally accepted accounting
principles concerning the sale of each Vehicle, including but not limited to
records of all other transactions affecting the Vehicle and the sale of each
Contract. Dealer will, upon request by Purchaser, promptly deliver any such
books and records or furnish copies thereof or abstracts therefrom to Purchaser
or its agent. Purchaser's representative may from time to time inspect Dealer's
books and records. Dealer shall furnish to Purchaser such information concerning
Dealer's financial and business affairs as Purchaser may reasonably request.
10. COMMUNICATIONS. Dealer agrees to promptly forward to Purchaser all
communication (including correspondence, inquiries, remittances or information),
oral or written, received by Dealer from any source with respect to any
Contract. Dealer agrees to reimburse Purchaser for all losses and expenses
Purchaser may suffer or incur due to Dealer's failure to comply with this
section.
11. COSTS AND EXPENSES. Except as provided herein, each party to this
Agreement shall fulfill its obligations hereunder at its own cost and expense;
provided, however, that Purchaser shall reimburse Dealer for filing fees or
other costs paid by Dealer to public officials to perfect Purchaser's security
interest in each Vehicle unless the fees and costs are otherwise legally
chargeable to the Buyer.
12. AGENCY. Neither this Agreement nor any action pursuant hereto shall
make Dealer the agent, representative or employee of Purchaser for any purpose.
Dealer is not granted any express or implied right to bind Purchaser for any
purpose. Wherever in this Agreement reference is made to any agent or
Purchaser, such reference is intended to mean any third party that Purchaser may
from time to time appoint to fulfill any of its obligations under this
Agreement.
13. FAILURE TO EXERCISE REMEDIES. The exercise of any right or remedy
available to Purchaser shall not operate as a waiver of any other right or
remedy. The failure of Purchaser to exercise or a delay by Purchaser in
exercising any right or remedy shall not operate as a waiver of such right or
any other right. All of the Purchaser's rights and remedies shall be cumulative
and may be exercised singularly or concurrently.
7
14. SUCCESSORS AND ASSIGNS. The Agreement shall be binding upon and
shall inure to the benefit of the parties to this Agreement and their
respective successors and assigns; provided, however, that Dealer may not
assign or otherwise transfer any of its rights, obligations, title or
interest in, to or under this Agreement without the prior written consent of
Purchaser and any purported assignment or transfer by Dealer without such
consent shall be void and without effect. Purchaser shall have the
unrestricted right to assign any and all of its rights, obligations, title
and interest hereunder, and Dealer expressly acknowledges that Purchaser has
transferred, or may in the future transfer, all or a portion of its right,
title and interest in and to the Contracts acquired in connection with such
purchase as well as all or a portion of its rights under this Agreement to
certain other persons and entities (each, a "Purchaser Assignee") and Dealer
agrees that each Purchaser Assignee, to the extent of such transfer, shall
succeed to Purchaser's rights hereunder. To the extent that notice of any
such assignment by Purchaser to any Purchaser Assignee shall be required to
be given to Dealer under applicable law to effect or more fully protect any
such assignment, the parties hereto agree that this paragraph 14 provides
such notice. Any obligation of Purchaser, or any function to be performed by
Purchaser under this Agreement, may at the sole option of Purchaser, be
delegated to, and performed by, an agent of Purchaser, which agent shall have
such power and authority as Purchaser shall delegate to it.
15. TERMINATION. Purchaser or Dealer may terminate this agreement upon 5
days written notice to the other party, such termination to be effective on the
date set out in such notice. The termination of the Agreement shall not release
Purchaser or Dealer from any obligations incurred with regard to any Contracts
purchased prior to the effective date of such notice, and all such obligations
shall remain in full force and effect, notwithstanding any sale of the
Contracts, until fully satisfied in accordance with the terms and conditions of
this Agreement.
16. VALIDITY, COMPLETE AGREEMENT, AMENDMENTS. Any invalidity, in whole
or in part, of any provision of this Agreement shall not affect the validity
of any other provision hereof. This Agreement and any representations,
warranties or agreements made by Dealer to Purchaser in any Contract
constitute the complete understanding between the parties and supersede all
prior oral, written or implied discussions or understandings with respect to
the subject matter hereof between the parties. No alteration, amendment or
modification of any other terms and provisions hereof shall be valid unless
made pursuant to an instrument in writing signed by both of said parties.
17. GOVERNING LAW. This Agreement shall be construed and enforced in
accordance with the laws of the state of Illinois.
18. ATTORNEYS' FEES. In the event that either party shall institute any
action or proceeding to resolve a dispute arising from the interpretation or
construction of or to enforce this Agreement, the successful party in such
action or proceeding shall be entitled to recover from the other party, in
addition to any other relief to which it may be entitled, reasonable attorneys'
fees and costs incurred in prosecuting or defending such action or proceeding.
8
19. NOTICE. Except as otherwise provided in this Agreement, all notices and
other communications hereunder shall be in writing and shall be deemed duly
given if and when personally delivered or mailed by registered or certified
mail, return receipt requested, postage prepaid, or by reliable overnight
delivery service or by facsimile machine with receipt confirmed, addressed as
follows: (a) if to Purchaser, to the address shown at the beginning of the
Agreement; (b) if to Dealer, to the address shown below. Either party may change
the address to which each such notice or communication shall be sent by giving
written notice of such address in the manner provided herein to the other party.
20. GENDER, NUMBER, PARAGRAPH HEADING. Unless the context of this Agreement
otherwise requires, the masculine, feminine or neuter gender each shall include
the other genders, and the singular shall include the plural. The paragraph
headings contained in this Agreement are for convenience of reference only and
shall not limit or define the text hereof.
IN WITNESS WHEREOF, Purchaser and each Dealer have caused this
Agreement to be signed by their duly authorized representatives as of the date
below.
PREMIER AUTO FINANCE, L.P.
[Purchaser]
BY:
-------------------------------------------------------------------
VICE PRESIDENT, THE AUTO CONDUIT CORPORATION,
ITS GENERAL PARTNER
By signing below, I am signing on behalf of each of the companies listed below
and each of them is bound by this Dealer Agreement and the Dealer Reserve
Schedule A. I represent and warrant that I am authorized to sign on behalf of
each of those companies.
BY:
-------------------------------------------------------------------
On behalf of each of the companies listed below.
Dated as of , 199
------------------- ---
--------------------------------------------------------------------------------
DEALER:
ADDRESS:
9
