MASTER CONTRACT PURCHASE AGREEMENT
This Master Contract Purchase Agreement (this "Agreement") effective
as of January 31, 1998, is entered into by and between Sovereign Associates,
Inc, a Texas corporation ("Purchasing Agent"), and Sovereign Credit Finance
II, Inc., a Texas corporation ("Buyer").
BACKGROUND STATEMENT
This Agreement, under which from time to time Purchasing Agent will
purchase on behalf of Buyer, and Buyer will agree to buy, retail installment
contracts and other installment obligations issued for the purchase of used
motor vehicles and liens on such vehicles securing the obligations, shall
govern the purchase and transfer of the obligations for the benefit of Buyer
and the servicing and other incidents thereof, and each shall be subject to
the warranties, representations and agreements herein.
STATEMENT OF AGREEMENT
In consideration of the mutual covenants contained herein and for
other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, Buyer and Purchasing Agent agree as follows:
1. DEFINITIONS. Unless the contract requires otherwise, the following
terms shall for all purposes of this Agreement have the meanings hereinafter
specified:
(a) "Certificate of Title" shall mean a certificate of title under
the Certificate of Title Act, as amended (Article 6687-1, Vernon's Texas
Civil Statutes), or a certificate of title under a statute of another
jurisdiction under the law of which indication of a security interest on the
certificate is required as a condition of perfection.
(b) "Dealer" shall mean the Purchasing Agent-approved dealer who
sold a Financed Vehicle and who originated, sold and assigned the related
Contract to the Purchasing Agent or the Buyer.
(c) "Financed Vehicle" shall mean an automobile or light truck,
together with all accessories thereto, securing an Obligor's obligations
under the related Contract.
(d) "Contract" shall mean a valid and enforceable motor vehicle
retail installment contract or other evidence of an installment obligation of
an Obligor which is secured by a lien on a Financed Vehicle.
(e) "Obligor" shall mean the purchaser or co-purchasers of the
Financed Vehicle or any other person who owes payments under the Contract.
(f) "Purchased Contracts" shall mean all Qualified Contracts
purchased by Buyer from or through the Purchasing Agent in accordance with
the terms and conditions of this
Agreement, including those within a Purchased Contract Pool.
(g) "Purchased Contract Pool" shall mean all Qualified Contract
Pools which Buyer determines to purchase from Dealers through the Purchasing
Agent in accordance with the terms and conditions of this Agreement.
(h) "Contract Documents" shall mean all documents and proof of
delivery evidencing and relating to the Qualified Contracts as Buyer may
reasonably request.
(i) "Qualified Contract" and "Qualified Contract Pools" shall mean
Contracts that mean the purchasing criteria set forth on EXHIBIT A attached
hereto.
(j) "Servicing Agreement" shall mean the Servicing Agreement duly
executed by Purchasing Agent and Buyer and dated of even date herewith.
(k) "Sovereign" shall mean, collectively, Sovereign Credit
Holdings, Inc., a Texas corporation, and its wholly owned subsidiary,
Sovereign Credit Corporation, a Texas corporation, of which the Purchasing
Agent is a wholly-owned subsidiary.
(l) "Credit Enhancements" shall mean any arrangements that are
intended generally to improve the collection rates on the Purchased Contracts
including, without limitation, any vehicle value insurance or warranty repair
service contracts that may be purchased.
2. PROCEDURE FOR PURCHASE. At any time and from time to time until
the termination of this Agreement, the Buyer may request the Purchasing Agent
(i) to solicit from Dealers offers to sell to Buyer Qualified Contracts and
Qualified Contract Pools, or (ii) to offer to sell to Buyer Qualified
Contract and Qualified Contract Pools, from the portfolio of Contracts owned
by Purchasing Agent, which portfolio may include Contracts purchased by
Purchasing Agent from affiliates of Sovereign. Purchasing Agent shall be
obligated to use reasonable efforts to solicit from Dealers offers to sell to
Buyer Qualified Contracts and Qualified Contract Pools as soon as practicable
following any such request by the Company. In addition, in deciding whether
to offer to sell Qualified Contracts to the Buyer or any other purchaser who
is affiliated or not affiliated with the Purchasing Agent and for whom
Purchasing Agent is also purchasing Contracts, the Purchasing Agent shall
select such Contracts from the Qualified Contracts that are or become
available for purchase, such selection to be based upon the respective
periods of time the purchasing entities have been in existence, the cost of
the available Contracts, the amount of their unexpended funds and the need to
diversify their holdings; provided, however, that Purchasing Agent shall give
priority to purchases on behalf of the limited purpose, securitization
subsidiaries of Sovereign (whether of Sovereign Credit Corporation or its
parent, Sovereign Credit Holdings, Inc.), including Buyer, over purchases on
behalf of Sovereign or Purchasing Agent. Purchasing Agent reserves the right
to offer to sell Qualified Contract Pools to the parties for which it
purchases Contracts on any other basis that it deems to be equitable. The
Buyer shall be obligated to purchase from Dealers through the Purchasing
Agent or from the Purchasing Agent or Sovereign affiliates any Contracts
properly offered for sale to it, in accordance with the terms of this
Agreement, up to a maximum aggregate Purchase Price that may
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be specified by the Buyer in its request, if such Contracts constitute
Qualified Contracts and/or Qualified Contract Pools.
Payment of the purchase price by Buyer shall be made at the time of the
sale to Buyer from Purchasing Agent or Dealer or the purchase by Purchasing
Agent on Buyer's behalf of each Purchased Contract. At all times during the
term of this Agreement, Buyer shall retain the right to audit any or all
Purchased Contracts and/or Purchased Contract Pools for adherence to the
terms and conditions of this Agreement. Purchasing Agent shall cooperate in
all material respects with the audit of such Purchased Contracts and/or
Purchased Contract Pools. Buyer shall reimburse Purchasing Agent for all
third-party audit costs related hereto. Buyer shall at all times have the
right to sell to Purchasing Agent, and receive a repurchase price equal to
the product of remaining unpaid installments on the Contract, times the ratio
of the Buyer's original Purchase Price to the aggregate unpaid installments
on the date of Buyer's original purchase, any and all Purchased Contracts
that are sold to Buyer that do not meet the terms and conditions set forth in
this Agreement.
3. PURCHASE PRICE; COMPENSATION. (a) The Purchase Price (herein so
called) payable by the Buyer for each Purchased Contract and Purchased
Contract Pool shall never exceed that amount which a Dealer shall receive
from bank draft upon the delivery of all Contract Documents and the maximum
limits set by the purchasing criteria set forth in EXHIBIT A. With respect
to any Purchased Contract offered by Purchasing Agent from Purchasing Agent's
portfolio of Contracts, the Purchase Price for each Purchased Contract
payable by Buyer to Purchasing Agent shall be determined to provide Buyer a
rate of return on its investment in the Purchased Contract from the remaining
unpaid installments equal to the Purchasing Agent's (or the affiliates, in
the case of a Contract purchased by Purchasing Agent from an affiliate of
Sovereign) original rate of return on its investment in the Purchased
Contract, as of its purchase by Purchasing Agent (or the affiliate, as the
case may be) from the originating Dealer, assuming in both cases that the
Purchased Contract was paid in full in accordance with its scheduled
installments. In addition, no Purchased Contract from the Purchasing Agent's
portfolio may be in default at the time of purchase by Buyer or have violated
the purchasing criteria set forth in EXHIBIT A (with all references to Buyer
deemed to refer to the Servicer) at the time of its purchase by Purchasing
Agent (or affiliate, as the case may be).
As partial compensation and reimbursement for the costs of its services
provided hereunder, Buyer shall pay to Purchasing Agent a monthly fee,
payable on or before the 15th day of each month, of the lesser of $500, or 5%
of the total amount of installments due under the Contract as of the date of
purchase, for each Contract purchased by Buyer from or through Purchasing
Agent under this Agreement during the prior calendar month. Buyer shall also
reimburse Purchasing Agent for its out-of-pocket costs paid to effect any
Credit Enhancements with respect to the Purchased Contracts, although
Purchasing Agent shall not, by virtue of this Agreement, be required to
provide or effect Credit Enhancements.
Purchasing Agent will charge a processing fee to the various dealers
from which it purchases Contracts on behalf of the Buyer, which fee is
currently $275 per Contract purchased. Purchasing Agent may pay a portion of
such fee, in the amount of $50 per Contract purchased, to one or more third
parties as a finder's fee in connection with the purchase of each Contract.
Purchasing Agent
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reserves the right to increase the amount of the processing fee which it
charges from time to time, and to increase or decrease the amount of the
finder's fee.
4. TERM. This Agreement shall commence as of the date first written
above and shall continue until terminated upon 30 days written notice from
either party to the other.
5. OTHER DOCUMENTS. Purchasing Agent or Buyer shall execute and
deliver any and all other documents, opinions, certificates, and evidence of
the Purchased Contracts as may be reasonably requested by Buyer in connection
with the transactions contemplated by this Agreement.
6. REPRESENTATIONS AND WARRANTIES OF THE PURCHASING AGENT. The
Purchasing Agent represents and warrants to Buyer as follows:
(a) ORGANIZATION AND GOOD STANDING. Purchasing Agent is a
corporation duly organized, validly existing and in good standing under the
laws of Texas, and has full corporate power, authority and legal right to own
its properties and conduct its business as such properties are presently
owned and such business is presently contemplated, and to execute, deliver
and perform its obligations under this Agreement.
(b) DUE QUALIFICATION. The Purchasing Agent is duly qualified and
has registered as a foreign corporation in each state where such
qualification is required in order to perform its obligations pursuant to
this Agreement and has obtained all necessary licenses, approvals or consents
as are required under applicable law to perform its duties hereunder.
(c) DUE AUTHORIZATION. The execution, delivery and
performance of this Agreement has been duly authorized by the Purchasing
Agent by all necessary corporate action on the part of the Purchasing Agent.
(d) BINDING OBLIGATION. This Agreement constitutes a legal, valid
and binding obligation of the Purchasing Agent, enforceable in accordance
with its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws now
or hereinafter in effect which affect the enforcement of creditors' rights in
general, and except as such enforceability may be limited by general
principles of equity (whether considered in a proceeding at law or in
equity).
(e) NO VIOLATION. The execution and delivery of this Agreement by
the Purchasing Agent, and the performance of the transactions contemplated by
this Agreement and the fulfillment of the terms hereof applicable to the
Purchasing Agent, will not conflict with, violate, result in any breach of
any of the material terms and provisions of, or constitute (with or without
notice or lapse of time or both) a default under, any requirement of law
applicable to the Purchasing Agent or any indenture, contract, agreement,
mortgage, deed of trust or other installment to which the Purchasing Agent is
a party or by which it is bound.
7. REPRESENTATIONS, WARRANTIES AND COVENANTS OF PURCHASING AGENT
REGARDING
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CONTRACTS. The Purchasing Agent further represents and warrants to, and
covenants with Buyer as follows:
(a) Each Qualified Contract will conform with, and in acting with
respect to the Qualified Contract, Purchasing Agent will have complied in all
material respects with, all applicable federal, state and local laws,
regulations and official rulings.
(b) Each Qualified Contract (i) shall have been 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, shall have been
fully and properly executed by the parties thereto and shall have been
validly assigned by such Dealer to Purchasing Agent, a Sovereign affiliate,
or to Buyer in accordance with its terms, (ii) shall have created or shall
create a valid, subsisting, and enforceable first priority security interest
in the Financed Vehicle in favor of the owner of the Qualified Contract,
(iii) shall contain customary and enforceable provisions such that the rights
and remedies of the holder thereof shall be adequate for realization against
the collateral and of the benefits of the security, (iv) shall provide for,
in the event that such Qualified Contract is prepaid, a prepayment that fully
pays the principal balance, (v) shall meet at the time of its purchase from
the originating Dealer in all material respects all purchasing criteria set
forth on EXHIBIT A attached hereto, and (vi) shall have been validly assigned
by Purchasing Agent or Sovereign affiliate to Buyer if the Qualified Contract
was assigned by the Dealer to the Purchasing Agent or Sovereign affiliate and
has been purchased by Buyer.
(c) Purchasing Agent shall require each Dealer from which a
Qualified Contract is purchased to represent and warrant that such Qualified
Contract and the sale of the related Financed Vehicle complied, at the time
the Contract was originated or made, in all material respects with all
requirements of applicable federal, state and local laws, and regulations
thereunder, including, without limitation, usury laws, the Federal
Truth-In-Lending Act, the Equal Credit Opportunity Act, the Fair Credit
Reporting Act, the Fair Debt Collection Practices Act, the Federal Trade
Commission Act, the Federal Reserve Board's Regulations B and Z, state
adaptations of the National Consumer Act and of the Uniform Consumer Credit
code, and other consumer laws and equal credit opportunity and disclosure
laws.
(d) Each Qualified Contract shall represent the genuine, legal,
valid and binding payment obligation in writing 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.
(e) (i) The Certificate of Title for such Financed Vehicle shows
(or if a new or replacement Certificate of Title is applied for with respect
to such Financed Vehicle, the official receipt from the responsible state or
local governmental authority shall indicate that an application has been made
and that the Certificate of Title, when issued, will show within 120 days)
the Purchasing Agent or the Buyer as the holder of a first priority security
interest in such Financed Vehicle, (ii) within 120 days after the Purchase
Date for the Contract relating to the Financed Vehicle, the Certificate of
Title for such Financed Vehicle will show the Buyer as the holder of a first
priority security interest in such Financed Vehicle, and (iii) the Buyer,
upon delivery of the
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transfer to it, will have a valid and enforceable security interest in the
Financed Vehicle to the same extent as the security interest of the person or
entity named as the original secured party under the related Contract.
(f) To the knowledge of Purchasing Agent, at the time of its
purchase for the Buyer, no provision of a Qualified Contract shall have been
waived, without the express written consent of the Buyer.
(g) To the knowledge of Purchasing Agent, at the time of its
purchase by the Buyer, no right of rescission, setoff, counterclaim, or
defense shall have been asserted or threatened with respect to any Qualified
Contract.
(h) It is the intention of the Purchasing Agent that the transfer
and assignment herein contemplated constitute a sale of the Purchased
Contract or Purchased Contract Pool to Buyer and that the beneficial interest
in and title to the Purchased Contracts and Purchased Contract Pools not be
part of Purchasing Agent's estate in the event of the filing of a bankruptcy
petition by or against Purchasing Agent under applicable bankruptcy law.
Immediately prior to the transfer and assignment to Buyer herein
contemplated, Dealer or Purchasing Agent had good and marketable title to
each Qualified Contract free and clear of all liens, encumbrances, security
interests, and rights of others and, immediately upon the transfer thereof,
Buyer shall have good and marketable title to each Qualified Contract, free
and clear of all liens, encumbrances, security interests, and rights of
others.
8. REPRESENTATIONS AND WARRANTIES OF THE BUYER. The Buyer represents
and warrants to Purchasing Agent as follows:
(a) ORGANIZATION AND GOOD STANDING. Buyer is a corporation duly
organized, validly existing and in good standing under the laws of Texas, and
has full corporate power, authority and legal right to own its properties and
conduct its business as such properties are presently owned and such business
is presently contemplated, and to execute, deliver and perform its
obligations under this Agreement.
(b) DUE QUALIFICATION. The Buyer is duly qualified and has
registered as a foreign corporation in each state where such qualification is
required in order to perform its obligations pursuant to this Agreement and
has obtained all necessary licenses, approvals or consents as are required
under applicable law to perform its duties hereunder.
(c) DUE AUTHORIZATION. The execution, delivery and
performance of this Agreement has been duly authorized by the Buyer by all
necessary corporate action on the part of the Buyer.
(d) BINDING OBLIGATION. This Agreement constitutes a legal, valid
and binding obligation of the Buyer, enforceable in accordance with its
terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or
hereinafter in effect which affect the enforcement of creditors' rights in
general, and except as such
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enforceability may be limited by general principles of equity (whether
considered in a proceeding at law or in equity).
(e) NO VIOLATION. The execution and delivery of this Agreement by
the Buyer, and the performance of the transactions contemplated by this
Agreement and the fulfillment of the terms hereof applicable to the Buyer,
will not conflict with, violate, result in any breach of any of the material
terms and provisions of, or constitute (with or without notice or lapse of
time or both) a default under, any requirement of law applicable to the Buyer
or any indenture, contract, agreement, mortgage, deed of trust or other
installment to which the Buyer is a party or by which it is bound.
9. SERVICING AGREEMENT; COLLECTION OF PURCHASED RECEIVABLES.
Concurrently with the execution of this Agreement, Purchasing Agent and Buyer
shall enter into the Servicing Agreement whereby Purchasing Agent, as an
independent contractor, will collect, in accordance with the terms and
conditions set forth therein, for the account of Buyer, payments under all
Purchased Contract and Purchased Contract Pools.
10. NO ASSUMPTION. The Purchasing Agent does not, and shall not be
deemed to, assume any obligations of the Buyer relating to the transactions
contemplated herein. Buyer does not, and shall not be deemed to assume any
obligations of Purchasing Agent relating to the Purchased Contracts or the
transactions giving rise to the Purchased Contracts. To the extent that
Purchasing Agent has not completed performance of any Contract pursuant to
which a Purchased Contract was generated, Purchasing Agent hereby covenants
and agrees to complete such Contract in order that the Obligor will continue
not to have any rights to setoff, counterclaim or dispute. Accordingly,
Purchasing Agent hereby indemnifies and holds harmless Buyer, its successors
and assigns, and their respective officers, directors, agents and attorneys
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, claims, costs, expenses and disbursements of any
kind or nature whatsoever which may be imposed on, incurred by or asserted
against Buyer, its successors and assigns, or their respective officers,
directors, agents and attorneys due to (i) any breach by Purchasing Agent of
its representations, warranties or covenants provided for in this Agreement
or in the Servicing Agreement, or (ii) any action or inaction of Purchasing
Agent in any way relating to, or arising out of this Agreement or any of the
transactions contemplated herein or the creation or collection or enforcement
of any of the Purchased Contracts. Purchasing Agent, however, does not assume
the risk of uncollectibility and does not indemnify Buyer, its successors and
assigns, or their respective officers, directors, agents and attorneys,
against, the uncollectibility of all or any part of the Purchased Contracts
as against the Obligor thereof, except for uncollectibility resulting from a
breach by Purchasing Agent of any warranty, representation, or covenant
contained herein. The indemnities contained in this Section shall survive
any termination of this Agreement.
11. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors
and assigns. Purchasing Agent may contract with others for the performance
of any or all of its obligations hereunder. Any such contract, however,
shall not relieve Purchasing Agent from liability for its obligations
hereunder.
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12. MODIFICATIONS AND WAIVERS. No delay on the part of any party in
exercising any right, power or privilege hereunder shall operate as a waiver
thereof, nor shall any waiver of any right, power or privilege hereunder
operate as a waiver of any other right, power or privilege hereunder, nor
shall any single or partial exercise of any right, power or privilege
hereunder preclude any other or further exercise thereof, or the exercise of
any other right, power or privilege hereunder. All rights and remedies
herein provided are cumulative and are not exclusive of any rights or
remedies which the parties hereto may otherwise have at law or in equity. No
waiver shall be valid in the absence of the written and signed consent of the
party against which enforcement of such is sought.
13. NOTICE. Except as otherwise specifically provided herein, any
notice hereunder shall be in writing (including telecopy communication) and,
if mailed, shall be deemed to be given when sent by registered or certified
mail, postage prepaid, or if telecopied when transmitted, or otherwise when
delivered in person to the addressee and a receipt given therefor, in all
such instances addressed to the respective parties as follows:
To Purchasing Agent: Sovereign Associates, Inc.
0000 Xxxxxxxx Xxxx
Xxxxxxxx X
Xxxxxx, Xxxxx 00000
Attn: X. Xxxxxx Xxxxxx, III, President
To Buyer: Sovereign Credit Finance II, Inc.
0000 Xxxxxxxx Xxxx
Xxxxxxxx X
Xxxxxx, Xxxxx 00000
Attn: X. Xxxxxx Xxxxxx, III, President
or at such other address as the addressee may, by written notice received by
the other party hereto, designate as the appropriate address for purposes of
notice hereunder.
14. AMENDMENT. This Agreement may be amended, supplemented or modified
only with the written consent of each of the parties hereto.
15. CHOICE OF LAW. THIS AGREEMENT AND THE VALIDITY AND ENFORCEMENT
HEREOF SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE SUBSTANTIVE
LAWS OF THE STATE OF TEXAS.
16. SEVERABILITY. If any provision of this Agreement is held to be
illegal, invalid or unenforceable under present or future laws effective
during the term of this Agreement, the legality, validity and enforceability
of the remaining provisions of this Agreement shall not be affected thereby,
and in lieu of each such illegal, invalid or unenforceable provision there
shall be added automatically as a part of this Agreement a provision as
similar in terms to such illegal, invalid or unenforceable provision as may
be possible and be legal, valid and enforceable.
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17. ENTIRE AGREEMENT. This instrument embodies the entire agreement
between the patties relating to the subject matter hereof and supersedes all
prior agreements and understandings, if any, relating to the subject matter
hereof.
18. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which for all purposes is to be deemed an original.
19. SURVIVAL. All covenants, agreements, undertakings, indemnities,
representations and warranties made herein shall survive both the execution
and the termination hereof and shall not be affected by any investigation
made by any party.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first hereinabove written.
PURCHASING AGENT:
SOVEREIGN ASSOCIATES, INC.
By:
--------------------------------
X. Xxxxxx Xxxxxx, III, President
BUYER:
SOVEREIGN CREDIT FINANCE II, Inc.
By:
--------------------------------
X. Xxxxxx Xxxxxx, III, President
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MASTER CONTRACT PURCHASE AGREEMENT
EXHIBIT A
QUALIFIED CONTRACT CRITERIA
The following purchasing criteria shall govern all purchases of
Contracts by Buyer and no Contract shall be purchased that does not meet the
following criteria without specific written permission of Purchasing Agent
and Buyer.
I. PURCHASE PRICE AND COLLATERAL RATIOS
A. The purchase price for a Contract must involve an initial payment
to the Dealer which does not exceed the average retail value of a Financed
Vehicle plus tax, title, license and warranty. Average retail value shall be
measured by the MANNHEIM GOLD BOOK, NATIONAL AUTO RESEARCH BLACK BOOK or the
NATIONAL AUTOMOBILE DEALERS USED CAR GUIDE used car market guides, or other
nationally published used car market guides. If measured by the MANNHEIM
GOLD BOOK, the retail value of a Financed Vehicle shall be adjusted upward to
reflect the generally lower values provided by this publication when compared
to other publications.
B. The purchase price for a Contract must involve an initial payment
to the Dealer of no more than 90% of principal plus accrued interest (pay-off
balance) of such Contract.
C. The age of each Financed Vehicle must be 7 years or less for
automobiles or 8 years or less for trucks.
D. Miles may not exceed 110,000 for automobiles or 135,000 for trucks,
unless the Dealer guarantees payments under the applicable Contract.
II. DOWN PAYMENT RATIO
A. Obligors on all Contracts must be required to have made a down
payment (cash plus net trade-in allowance) of at least 10% of the Dealer's
cost (excluding sale preparation expenses) in the Financed Vehicle.
III. CONTRACT TERMS
A. All Contracts must have an original term of 44 months or less
although 54 month terms will be permitted where the Financed Vehicle is a
1991 or later model, or where lower depreciation or stronger credit history
justifies a 54 month term.
B. No Contract may violate any applicable usury laws of any state or
of the United States.
A-1
C. Each Contract shall be in the form of industry-standard consumer
automobile retail installment contracts or notes issued by the Texas
Independent Automobile Dealers Association if the Contract originated in
Texas or by any similar association of dealers in any other state in which
the Contract originated.
IV. CREDIT CRITERIA
Obligors on all Contracts purchased by Buyer must have supplied the
following credit information and meet the following requirements, and
Purchasing Agent shall perform verification procedures in an
industry-standard manner observing due care and procedure:
A. Personal reference with address and telephone number.
B. Copy of credit application executed by Obligor which contains the
necessary information to verify by telephone or otherwise the Obligor's
address, employment and personal references and to obtain a credit report
from a credit reporting agency.
C. Obligor must have a valid driver's license.
D. No cosigners, except immediate family members.
E. Obligor must be at least 18 years old.
To the extent that, in the Purchasing Agent's good faith judgement,
Contracts which do not satisfy the criteria specified in I(A) through III(A)
above may be purchased for a purchase price which would be beneficial to the
Buyer, Purchasing Agent may purchase such Contracts.
A-2
