SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15 (d) of
the Securities and Exchange Act of 1934
May 8, 1997
Date of Report (Date of earliest event reported)
First Merchants Acceptance Corporation
(Exact name of registrant a specified in its charter)
Delaware 0-24686 36-3759045
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
570 Lake Cook Road, Suite 126, Deerfield, Illinois 60015
(Address of principal executive offices) (Zip Code)
847-948-9300
(Registrant's telephone number)
<PAGE>
Item 2. Acquisition or Disposition of Assets.
On May 8, 1997 and on May 12, 1997 First Merchants Acceptance Corporation
(the "Registrant") sold approximately $ 29.0 million and $21.0 million
principal balance, respectively, of its motor vehicle installment contract
receivables together with servicing rights thereto (the "Receivables") to
Greenwich Capital Financial Products, Inc. ("Greenwich") for an aggregate
purchase price of $43.0 million, pursuant to Receivables Purchase Agreements
dated as of May 5, 1997 and May 12, 1997. The purchase price for the
Receivables was determined by arms length negotiation.
The Registrant used the estimated net proceeds from the sales of the
Receivables to Greenwich to pay down its syndicated senior bank line of
credit.
<PAGE>
Item 5. Other Events.
On May 8, 1997 LaSalle National Bank, as Agent, and the other Lenders who
are parties to a Fourth Amended and Restated Loan and Security Agreement
dated as of February 28, 1996 with Registrant (the "Loan Agreement"), entered
into a forbearance agreement with Registrant pursuant to which Agent and
Lenders agreed to forebear in the exercise of their rights and remedies under
the Loan Agreement, but without waiving any existing Events of Default, and
to continue to make limited extensions of credit to Registrant. The
forbearance extends up to and including June 30, 1997 with a maximum amount
of obligations outstanding of $100 million.
<PAGE>
Item 7. Financial Statements and Exhibits.
(c) Exhibits.
2.1
Receivables Purchase Agreement, dated as of May 8, 1997 between First
Merchants Acceptance Corporation, as Seller and Greenwich Capital
Financial Products, Inc., as Purchaser.
2.2
Receivables Purchase Agreement, dated as of May 12, 1997 between First
Merchants Acceptance Corporation, as Seller and Greenwich Capital
Financial Products, Inc., as Purchaser.
99.1
Letter Agreement, dated May 8, 1997 between LaSalle National Bank, as
Agent, NBD Bank, Firstar Bank Milwaukee, N.A., Harris Trust and Savings
Bank, First Bank, National Association, The Boatman's National Bank of
St. Louis, Fleet Bank, National Association, Corestates Bank, N.A.,
Mellon Bank, N.A. and First Merchants Acceptance Corporation.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
FIRST MERCHANTS ACCEPTANCE
CORPORATION
/s/ Norman Smagley
Norman Smagley
Senior Vice President and Chief Financial Officer
Dated: May 8, 1997
<PAGE>
EXHIBIT INDEX
Sequentially-
Exhibit Numbered
No. Description Page
2.1 Receivables Purchase Agreement, dated as of May 8, 1997 between
First Merchants Acceptance Corporation, as Seller and Greenwich
Capital Financial Products, Inc., as Purchaser.
2.2 Receivables Purchase Agreement, dated as of May 12, 1997 between
First Merchants Acceptance Corporation, as Seller and Greenwich
Capital Financial Products, Inc., as Purchaser.
99.1 Letter Agreement, dated May 8, 1997 between LaSalle National
Bank, as Agent, NBD Bank, Firstar Bank Milwaukee, N.A., Harris Trust and
Savings Bank, First Bank, National Association, The Boatman's National
Bank of St. Louis, Fleet Bank, National Association, Corestates Bank,
N.A., Mellon Bank, N.A. and First Merchants Acceptance Corporation.
<PAGE>
EXECUTION COPY
RECEIVABLES PURCHASE AGREEMENT
between
FIRST MERCHANTS ACCEPTANCE CORPORATION,
as Seller,
and
GREENWICH CAPITAL FINANCIAL PRODUCTS, INC.,
as Purchaser
Dated as of May 8, 1997
TABLE OF CONTENTS
ARTICLE I
Certain Definitions. . . . . . . . . . . . . . . 1
ARTICLE II
Conveyance of Receivables. . . . . . . . . . . . 3
SECTION 2.01.
Conveyance of Receivables. . . . . . . . . . . . 3
SECTION 2.02.
The Closing. . . . . . . . . . . . . . . . . . . 4
ARTICLE III
Representations and Warranties . . . . . . 4
SECTION 3.01.
Representations and Warranties of the Purchaser. 4
SECTION 3.02.
Representations and Warranties of Seller . . . . 4
ARTICLE IV
Conditions . . . . . . . . . . . 9
SECTION 4.01.
Conditions to Obligation of the Purchaser. . . . 9
SECTION 4.02.
Conditions to Obligation of the Seller . . . . . 10
ARTICLE V
Covenants of the Seller . . . . . . . . 11
SECTION 5.01.
Protection of Right, Title and Interest. . . . . 11
SECTION 5.02.
Other Liens or Interests . . . . . . . . . . . . 11
SECTION 5.03.
Costs and Expenses . . . . . . . . . . . . . . . 11
SECTION 5.04.
Indemnification. . . . . . . . . . . . . . . . . 11
ARTICLE VI
Miscellaneous Provisions. . . . . . . . 12
SECTION 6.01.
Obligations of Seller. . . . . . . . . . . . . . 12
SECTION 6.02.
Repurchase Events. . . . . . . . . . . . . . . . 12
SECTION 6.03.
Purchaser Assignment of Repurchased Receivables. 12
SECTION 6.04.
Assignment . . . . . . . . . . . . . . . . . . . 12
SECTION 6.05.
Amendment. . . . . . . . . . . . . . . . . . . . 12
SECTION 6.06.
Waivers. . . . . . . . . . . . . . . . . . . . . 12
SECTION 6.07.
Notices. . . . . . . . . . . . . . . . . . . . . 13
SECTION 6.08.
Costs and Expenses . . . . . . . . . . . . . . . 13
SECTION 6.09.
Representations of the Seller and the Purchaser. 13
SECTION 6.10.
Headings and Cross-References. . . . . . . . . . 13
SECTION 6.11.
Governing Law. . . . . . . . . . . . . . . . . . 13
SECTION 6.12.
Counterparts . . . . . . . . . . . . . . . . . . 13
EXHIBIT A
A-1
SCHEDULE I
Schedule of Receivables . . . . . . . . I-1
SCHEDULE II
Location of Receivable Files. . . . . . .II-1
RECEIVABLES PURCHASE AGREEMENT dated as of May 8, 1997, between FIRST
MERCHANTS ACCEPTANCE CORPORATION, a Delaware corporation, as seller (the
"Seller"), and GREENWICH CAPITAL FINANCIAL PRODUCTS, INC., 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; and
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 on a
servicing released basis.
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
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.
"Amount Financed" means with respect to a Receivable, the amount advanced
under the Receivable toward the purchase price of the Financed Vehicle
and any related costs, exclusive of any amount allocable to the premium
of force-placed physical damage insurance covering the Financed Vehicle.
"Annual Percentage Rate" or "APR" of a Receivable means the annual rate of
finance charges stated in the related Receivable.
"Assignment" shall mean the document of bill of sale and assignment
substantially in the form attached to this Agreement as Exhibit A.
"Basic Documents" means this Agreement, the Assignment and any other
agreements, documents and certificates delivered in connection herewith
or therewith.
"Contract" means a motor vehicle retail installment sale contract between a
Dealer and one or more Obligors named in the list of Receivables on
Schedule I hereto, together with all accounts, general intangibles,
chattel paper, documents and instruments (as those terms are defined in
the Uniform Commercial Code as enacted in the State of Illinois) and any
contract rights related thereto.
"Cutoff Date" means May 1, 1997.
"Dealer" means the dealer who sold a Financed Vehicle and who originated
the related Receivable and assigned it to First Merchants or Magna pursuant
to a Dealer Agreement.
"Dealer Agreement" means (a) an agreement between the Seller and a Dealer
pursuant to which such Dealer sells Contracts to the Seller or (b)
collectively, (i) an agreement between Magna and a Dealer pursuant to
which such Dealer sells Contracts to Magna and (ii) an agreement between
Magna and the Seller pursuant to which Magna sells Contracts to the
Seller (or otherwise assigns Contracts to the Seller's designee).
"Dealer Underwriting Guide" means the underwriting manual used by the
Seller in the purchase of Receivables, as amended from time to time.
"Defaulted Receivable" means a Receivable with respect to which any of the
following shall have occurred: (i) a payment under the related
Receivable is 120 or more days delinquent (and the related Obligor has
not cured any delinquency with respect to such Receivable during the
calendar month in which such Receivable became 120 days delinquent), (ii)
the related Financed Vehicle has been repossessed or (iii) the servicer
has determined in good faith that payments under the related Receivable
are not likely to be resumed.
"Financed Vehicle" means an automobile, light-duty truck, van or minivan,
together with all accessions thereto, securing an Obligor's indebtedness
under the respective Receivable.
"Lien" means a security interest, lien, charge, pledge, equity or
encumbrance of any kind, other than tax liens, mechanics' liens and any
liens that attach to the respective Receivable by operation of law or
otherwise (including, without limitation, as a result of any act or
omission by the related Obligor).
"Lien Certificate" means with respect to a Financed Vehicle, an original
certificate of title, certificate of lien or other notification issued by
the Registrar of Titles of the applicable state to a secured party which
indicates that the lien of the secured party on the Financed Vehicle is
recorded on the original certificate of title. In any jurisdiction in
which the original certificate of title is required to be given to the
Obligor, the term "Lien Certificate" shall mean only a certificate or
notification issued to a secured party.
"Liquidated Receivable" means any Receivable with respect to which the
following shall have occurred: (i) the related Financed Vehicle has been
repossessed for 90 days or more, (ii) such Receivable is a Defaulted
Receivable with respect to which the servicer thereof has determined in
good faith that all amounts it expects to recover have been received or
(iii) a payment under the related Receivable is 150 or more days
delinquent.
"Liquidation Proceeds" means, with respect to any Liquidated Receivable,
monies collected in respect thereof, from whatever source, including,
without limitation, rebates of service contracts, proceeds of dealer
recourse and all available rebates of state sales taxes, following the
date on which such Receivable became a Liquidated Receivable, net of the
sum of any amounts expended by the servicer in connection with such
liquidation and any amounts required by law to be remitted to the
Obligor.
"Magna" means Magna Bank of St. Louis, a Missouri banking corporation, and
its successors and assigns.
"Obligor" on a Receivable means the purchaser or co-purchasers of the
Financed Vehicle and any other Person who owes payments under such
Receivable.
"Person" means any individual, corporation, estate, partnership, joint
venture, association, joint stock company, trust (including, without
limitation, any beneficiary thereof), unincorporated organization or
government or agency or political subdivision thereof.
"Purchaser" shall mean Greenwich Capital Financial Products, Inc., a
Delaware corporation, its successors and assigns.
"Purchase Amount" means, with respect to any Receivable purchased
hereunder, the unpaid principal balance owed by the Obligor thereon plus
interest on such amount at the applicable APR to the last day of the month of
repurchase.
"Receivable" shall mean any Contract listed on Schedule I hereto (which
Schedule may be in the form of microfiche).
"Receivable Files" means the following documents or instruments:
(a)
the fully executed original of each Receivable (together with any
agreements modifying such Receivable, including, without limitation, any
extension agreement);
(b)
the original credit application, or a copy thereof, fully executed by
each Obligor thereon;
(c)
the original certificate of title or such other documents that a
custodian or servicer or the Seller shall keep on file in accordance with
its customary procedures evidencing the security interest of the Seller
in the Financed Vehicle; and
(d)
any and all other documents that are set forth on Schedule III hereto.
"Registrar of Titles" means with respect to any state, the governmental
agency or body responsible for the registration of, and the issuance of
certificates of title relating to, motor vehicles and liens thereon.
"Repurchase Event" shall have the meaning specified in Section 6.02.
"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 Transferee" shall have the meaning specified in Section 6.04.
"UCC" means the Uniform Commercial Code as in effect in the relevant
jurisdiction.
ARTICLE II
Conveyance of Receivables
SECTION 2.01.
Conveyance of Receivables. Subject to the terms and conditions and in
reliance upon the representations and warranties herein set forth, the
Purchaser hereby agrees to pay to or upon the order of the Seller the
purchase price heretofore agreed to by the Seller and the Purchaser, in
the manner and at the time heretofore agreed to, and the Seller does
hereby sell, transfer, assign, set over and otherwise convey to the
Purchaser, with all servicing rights released to Purchaser and without
recourse (subject to the obligations herein) all right, title, and
interest of the Seller in and to:
(a)
the Receivables and all monies received thereon on or after the Cutoff
Date;
(b)
the security interests in the Financed Vehicles and any accessions
thereto granted by Obligors pursuant to the Receivables and any other
interest of the Seller in such Financed Vehicles;
(c)
any Liquidation Proceeds and any other proceeds with respect to the
Receivables from any source, including, without limitation, claims on any
physical damage, credit life or disability insurance policies covering
Financed Vehicles or Obligors, including, without limitation, any
vendor's single interest or other collateral protection insurance policy;
(d)
all rights of the Seller against Dealers and Magna with respect to the
Receivables under the Dealer Agreements and Dealer assignments;
(e)
any property that shall have secured a Receivable and that shall have
been acquired by or on behalf of the Seller;
(f)
all documents and other items contained in the Receivable Files; and
(g)
the proceeds of any and all of the foregoing.
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 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 Section 6.04
hereof, the Purchaser may sell, transfer and reassign to a Subsequent
Transferee (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, without limitation, 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 this Agreement.
SECTION 2.02.
The Closing. The sale and purchase of the Receivables shall take place
at the closing on May 8, 1997 (the "Closing Date").
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 as of the Closing 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.
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 Closing 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 to carry out its 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 have been duly
authorized by the Seller by all necessary corporate action.
(4)
No Violation. Upon giving effect to the release of the Lien described in
Section 3.02(b)(14), 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 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 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.
(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 other 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 570 Lake Cook Road, Suite 126, Deerfield, Illinois 60015.
(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, on which the Purchaser relies in accepting
the Receivables and may rely in transferring the Receivables. Such
representations and warranties speak as of the execution and delivery of
this Agreement and as of the Closing Date, but shall survive the sale,
transfer and assignment of the Receivables to the Purchaser and the
subsequent sale, transfer and assignment of the Receivables by the
Purchaser.
(1)
Characteristics of Receivables. Each Receivable (A) was originated in
the United States of America by a Dealer for the retail sale of a
Financed Vehicle in the ordinary course of such Dealer's business, is
payable in United States dollars, has been fully and duly executed by the
parties thereto, has been validly purchased by the Seller from a Dealer
or Magna, as applicable, under an existing Dealer Agreement (and each
Dealer had all necessary licenses and permits to originate such
Receivable), (B) provides for level monthly payments (provided that the
payment in the first or last month in the life of the Receivable may be
minimally different from the level payment) that fully amortize the
Amount Financed by maturity date and yield interest at the APR,
(C) permits partial prepayment, full prepayment, or both partial and full
prepayment of such Receivable; (D) 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 has been validly assigned by the
Seller to the Purchaser and (E) 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.
(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, without limitation, 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 Magnuson-
Moss 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 other
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 Closing 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. The information set forth in Schedule I 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 Closing Date, the Seller shall have caused its
records relating to each Receivable, including, without limitation, any
computer records, to be clearly and unambiguously marked to show that the
Receivables have been sold to the Purchaser by the Seller.
(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 Cutoff Date.
(9)
No Adverse Selection. No selection procedures believed by the Seller to
be adverse to the Purchaser were utilized in selecting the Receivables.
(10)
Chattel Paper. Each Receivable constitutes chattel paper within the
meaning of the UCC as in effect in the State of origination.
(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 to
the Purchaser under this Agreement or the pledge of such Receivable by
the Purchaser.
(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. 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 May 8,
1997 under the Fourth Amended and Restated Loan and Security Agreement
dated as of February 28, 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 and, upon the sale thereof to the Purchaser on the
Closing Date, the Purchaser has a valid and effective assignment of such
security interest. The Lien Certificate for each Financed Vehicle shows,
or if a new or replacement Lien Certificate is being applied for with
respect to such Financed Vehicle such Lien Certificate shall be received
within 120 days of the Closing Date and shall show, the Seller named as
the original secured party under each Receivable as the holder of a first
priority security interest in such Financed Vehicle. With respect to
each Receivable for which the Lien Certificate has not yet been returned
from the Registrar of Titles, the Seller has received written evidence
that such Lien Certificate showing the Seller as first lienholder has
been applied for. Each Dealer's security interest in any Receivable
originated by such Dealer has been validly assigned by the Dealer (or
Magna, as applicable) to the Seller. The Seller's security interest has
been validly assigned to the Purchaser pursuant to this Agreement.
(16)
All Filings Made. All filings (including, without limitation, UCC
filings) required to be made in any jurisdiction to give the Purchaser a
first priority 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 30 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)
Final Scheduled Maturity Date. No Receivable has a final scheduled
payment date after May 31, 2002.
(20)
Certain Characteristics of the Receivables. As of the Cutoff 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.
(21)
No Foreign Obligor. All of the Contracts are due from Obligors who are
citizens, or legal resident aliens, of the United States of America.
(22)
Insurance. The Seller has determined that the Obligor, at the time of
origination of its Receivable, obtained physical damage insurance
covering the Financed Vehicle and with appropriate deductibles in
accordance with Seller's underwriting guidelines and that such physical
damage insurance was in full force and effect as of its origination date.
(23)
No Extensions. The number or timing of scheduled payments has not been
changed on any Receivable on or before the Closing Date, except as
reflected on the computer tape delivered in connection with the sale of
the Receivables.
(24)
Scheduled Payments. Each Contract has a first scheduled payment due on
or prior to 45 calendar days after the origination date thereof. Each
Obligor has been instructed to make all scheduled payments to a lockbox
at LaSalle National Bank.
(25)
Dealer Agreements. The representations and warranties of the Dealer in
the Dealer Agreement with respect to each Receivable purchased by the
Seller pursuant to such Dealer Agreement were true and correct in all
material respects as of the date the Seller (or Magna, as the case may
be) acquired such Receivable from that Dealer.
(26)
No Fleet Sales. No Receivable has been included in a "fleet" sale (i.e.,
a sale to any single Obligor of more than five Financed Vehicles).
(27)
Receivable Files Complete. There exists a Receivable File pertaining to
each Receivable and such Receivable File contains, without limitation,
(A) a fully executed original of the Receivable, (B) a certificate of
insurance, application form for insurance signed by the Obligor, or a
signed representation letter from the Obligor named in the Receivable
pursuant to which the Obligor has agreed to obtain physical damage
insurance for the related Financed Vehicle, (C) the original Lien
Certificate or application therefor together with an assignment of the
Lien Certificate executed by the Seller to the Purchaser or, with respect
to any Receivable originated by a Dealer, an assignment of the Lien
Certificate executed by such Dealer to the Seller (or Magna, as the case
may be) and by the Seller to the Purchaser (or, in the case of
Receivables sold by Dealers to Magna, from Magna to the Seller and from
the Seller to the Purchaser), (D) an original credit application signed
by the Obligor and (E) the other documents that are set forth on Schedule
III hereto. Each of such documents which is required to be signed by the
Obligor has been signed by the Obligor in the appropriate spaces. All
blanks on any form described in clauses (A), (B), (C) (D), and (E) above
have been properly filled in and each form has otherwise been correctly
prepared. Notwithstanding the above, the complete Receivable File for
each Receivable, shall (x) fulfill the documentation requirements of the
Dealer Underwriting Guide as in effect on the Closing Date and (y) be in
possession of the servicer and/or custodian, as applicable, on such date.
(28)
No Fraud or Misrepresentation. Each Receivable was originated by a
Dealer and was sold by the Dealer to the Seller, to the best of the
Seller's knowledge, without fraud or misrepresentation on the part of
such Dealer in either case.
(29)
Receivables Not Assumable. No Receivable is assumable by another Person
in a manner which would release the Obligor thereof from such Obligor's
obligations to the Seller with respect to such Receivable.
(30)
No Impairment. The Seller has not done anything to convey any right to
any Person that would result in such Person having a right to payments
due under a Receivable or otherwise to impair the rights of the Purchaser
in any Receivable or the proceeds thereof.
(31)
Tax Liens. There is no Lien against any Financed Vehicle for delinquent
taxes.
(32)
No Corporate Obligor. All of the Purchased Contracts are due from
Obligors who are natural persons.
(33)
No Liens. No Liens or claims have been filed for work, labor, or
materials relating to a Financed Vehicle that are prior to, or equal or
coordinate with, the security interest in the Financed Vehicle granted by
the related Receivable.
(34)
Servicing. Each Receivable has been serviced in conformity with all
applicable laws, rules and regulation and in conformity with the Seller's
policies and procedures which are consistent with customary, prudent
industry standards.
(35)
No Omissions. There have been no material omissions or misstatements in
any document provided or statement made to the Purchaser in writing
concerning the Seller or the Receivables by or on behalf of the Seller in
connection with the transactions contemplated by this Agreement.
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 Closing Date
with the same effect as if then made, and the Seller shall have performed
all obligations to be performed by it hereunder on or prior to the
Closing Date.
(b)
Computer Files Marked. The Seller shall, at its own expense, on or prior
to the Closing Date, indicate in its computer files that the Receivables
have been sold to the Purchaser pursuant to this Agreement and deliver to
the Purchaser the Schedule of Receivables, certified by the Seller's
President, a Vice President or the Treasurer to be true, correct and
complete.
(c)
Delivery of Receivables to Custodian. The Seller shall deliver the
original Receivables and assignments thereof to the custodian on or prior
to the Closing Date.
(d)
Release of Lenders. The Seller shall obtain the executed consent and
release of the secured lenders as described in Section 3.02(b)(14) and
the related UCC-3, in each case in form and substance satisfactory to the
Purchaser, at or prior to the time of closing.
(e)
Documents To Be Delivered on the Closing Date:
(1)
The Bill of Sale. On the Closing Date, the Seller shall execute and
deliver a Bill of Sale and Assignment of Receivables with respect to the
Receivables, substantially in the form of Exhibit A hereto.
(2)
Evidence of UCC Filing. On or prior to the Closing Date, the Seller
shall record and file, at its own expense, a UCC-1 financing statement in
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 sold,
transferred and 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 Closing Date.
(3)
Certificate of Custodian. On or prior to the Closing Date, the Purchaser
shall receive a certificate of the custodian in form and substance
satisfactory to the Purchaser.
(4)
Paying Agent. On or prior to the Closing Date, arrangements with a paying
agent satisfactory to the Purchaser shall be consummated.
(5)
Opinions of Seller's Counsel. On or prior to the Closing Date, the
Purchaser shall have received the opinions of counsel to Seller, in form
and substance satisfactory to the Purchaser, as to the matters set forth
in Exhibit B hereto and such other matters as the Purchaser has
heretofore requested or may reasonably request.
(6)
Power of Attorney. Seller shall have executed and delivered to Purchaser
a Limited Power of Attorney, substantially in the form of Exhibit C
hereto, on or prior to the Closing Date.
(7)
Other Documents. Such other documents as the Purchaser may reasonably
request.
(f)
Other Transactions. Arrangements with respect to the custody and
servicing of the Receivables, satisfactory to the Purchaser, shall be
consummated on the Closing 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 Closing Date
with the same effect as if then made, and the Purchaser shall have
performed all obligations to be performed by it hereunder on or prior to
the Closing Date.
(b)
Receivables Purchase Price. On the Closing Date, the Purchaser shall
have delivered to the Seller the purchase price for the 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 related
property conveyed pursuant to Section 2.01 hereof to be promptly 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 related property. 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 shall 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 written notice thereof
at least 60 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 Receivables and the related
property.
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.
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 right, title and interest in and to the
Receivables and the related property.
SECTION 5.04.
Indemnification. Seller shall protect, defend, indemnify and hold
Purchaser and its assigns and their attorneys, accountants, employees,
officers and directors harmless from and against all losses, liabilities,
claims, damages and expenses of every kind and character, as incurred,
resulting from or relating to or arising out of (i) the inaccuracy,
nonfulfillment or breach of any representation, warranty, covenant or
agreement made by Seller in this Agreement, (ii) any legal action,
including, without limitation, any counterclaim, that has either been
settled by the litigants (which settlement, if Seller is not a party
thereto shall be with the consent of Seller) or has proceeded to judgment
by a court of competent jurisdiction, in either case to the extent it is
based upon alleged facts that, if true, would constitute a breach of any
representation, warranty, covenant or agreement made by Seller in this
Agreement (iii) any actions or omissions of Seller or any employee or
agent of Seller (including, without limitation, any Dealer) occurring
prior to the Closing Date with respect to any of the Receivables or
Financed Vehicles or (iv) any failure of a Receivable to be originated in
compliance with all requirements of law. 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 that the occurrence of a
breach of any of the Seller's representations and warranties contained in
Section 3.02(b) in any material respect shall constitute an event
obligating the Seller to repurchase the Receivables to which the breach
is applicable ("Repurchase Events"), at the unpaid principal balance of
the repurchased receivable plus accrued interest at the APR to the date
of repurchase, from the Purchaser unless any such breach shall have been
cured by the last day of the calendar month following the discovery or
notice thereof by or to the Seller. The repurchase amount shall be paid
by Seller within five business days after the end of any such calendar
month. Subject to Section 5.04, the repurchase obligation of the Seller
shall constitute the sole remedy available to the Purchaser 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.
Assignment. The Purchaser shall not sell, transfer or assign any of its
obligations under this Agreement to any other Person. Seller
acknowledges that Purchaser may, in its sole discretion, sell, transfer
and assign to a third party all or any portion of the assets sold,
transferred and assigned to the Purchaser hereunder and, in connection
therewith may also assign all or any portion of the Purchaser's rights
against the Seller under this Agreement. Seller also acknowledges that
any sale, transfer or assignment described in this Section may be made
without the consent or approval of Seller and without limiting the
obligations of Seller hereunder (including, without limitation, the
covenant of Seller under Section 6.02 hereof) to the Purchaser. The
Seller waives, to the extent permitted under applicable law, all claims,
causes of action and remedies, whether legal or equitable (including,
without limitation, any right of setoff), against the Purchaser and any
party to whom Purchaser sells, transfers or assigns its rights hereunder
relating to such action by the Purchaser. In particular, without
limiting the generality of the foregoing, (i) the representations and
warranties of the Seller set forth in Section 3.02(b) speak solely as of
the date of execution and delivery of this Agreement and as of the
Closing Date, but shall survive the subsequent sale, transfer or
assignment of the assets transferred to Purchaser hereunder, and any
party to whom such assets are subsequently transferred (a "Subsequent
Transferee") shall be entitled to rely thereon; and (ii) following notice
to the Seller (in accordance with Section 6.07 hereof), of a sale,
transfer or assignment to a Subsequent Transferee, the Seller will be
obligated to make all deliveries of documents, certificates and notices
which Seller is required to make to the Purchaser by the terms of this
Agreement to the Subsequent Transferee.
Any Subsequent Transferee will, following the sale, transfer or assignment
of assets to it, have the same rights to sell, transfer or assign the
assets so transferred as the Purchaser does hereunder.
SECTION 6.05.
Amendment. This Agreement may only be amended by a written amendment
duly executed and delivered by the Seller and the Purchaser.
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, 570 Lake Cook Road, Suite 126,
Deerfield, Illinois 60015, Attention: Norman Smagley; (b) in the case of
the Purchaser, Greenwich Capital Financial Products, Inc., 600 Steamboat
Road, Greenwich, Connecticut 06830, Attention: Bruce Katz with a copy to
the attention of the General Counsel;
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 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 shall survive the closing under
Section 2.02 and the transfers and assignments referred to in Section
6.04.
SECTION 6.10.
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 6.11.
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 6.12.
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: /s/ Norman Smagley
Name: Norman Smagley
Title: Senior Vice President and Chief Financial Officer
GREENWICH CAPITAL FINANCIAL
PRODUCTS, INC.
By: /s/ Craig S Eckes
Name: Craig S Eckes
Title:Vice President
EXHIBIT A
BILL OF SALE AND ASSIGNMENT OF RECEIVABLES
For value received, in accordance with the Receivables Purchase Agreement
dated as of May 8, 1997 (the "Receivables Purchase Agreement"), between
the undersigned and Greenwich Capital Financial Products, Inc. (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 all
monies received thereon on or after May 1, 1997; (ii) the security
interests in the Financed Vehicles and any accessions thereto granted by
Obligors pursuant to the 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 from claims on any physical
damage, credit life or disability insurance policies covering Financed
Vehicles or Obligors, including, without limitation, any vendor's single
interest or other collateral protection insurance policy; (iv) all rights
of the Seller against Dealers with respect to the Receivables under the
Dealer Agreements and Dealer assignments executed in connection with the
Receivables and the Dealer Agreements; (v) any property that shall have
secured a Receivable and that shall have been acquired by or on behalf of
the Seller; (vi) all documents and other items contained in the
Receivable Files; and (vii) 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 the Purchaser of any obligation of the undersigned to
the Obligors, insurers or any other person in connection with the
Receivables, the Receivable Files, any insurance policies or any
agreement or instrument relating to any of them.
This Bill of Sale and Assignments of Receivables 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 Bill of Sale and
Assignment of Receivables to be duly executed as of May 8, 1997.
FIRST MERCHANTS ACCEPTANCE CORPORATION,
By:
Name:
Title:
EXHIBIT B
Opinions of Counsel
A.
The Seller shall have furnished to the Purchaser the opinion of
Sonnenschein Nath & Rosenthal, counsel for the Seller, dated the Closing
Date and satisfactory in form and substance to the Purchaser,
substantially to the effect that:
(1)
the Seller has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Delaware,
with full corporate power and authority to own its properties and conduct
its business as presently owned and conducted, and is duly qualified to
do business as a foreign corporation and is in good standing under the
laws of the State of Illinois;
(2)
the Receivables Purchase Agreement and each other Basic Document to which
the Seller is a party has been duly authorized, executed and delivered by
the Seller and constitutes a legal, valid and binding obligation of the
Seller, enforceable against the Seller in accordance with its terms
(subject, as to the enforcement of remedies, to applicable bankruptcy,
reorganization, insolvency, moratorium or other laws affecting creditors'
rights generally from time to time in effect);
(3)
no consent, approval, authorization or order of, or filing with, any
court or governmental agency or body is required for the consummation of
the transactions contemplated or in the Receivables Purchase Agreement,
except such other approvals (which shall be specified in such opinion) as
have been obtained and such filings as have been made or are in the
process of being made;
(4)
none of the sale of the Receivables by the Seller to the Purchaser
pursuant to the Receivables Purchase Agreement, the consummation of any
other of the transactions therein contemplated or the fulfillment of the
terms thereof shall conflict with, result in a breach or violation of, or
constitute a default under, any law binding on the Seller or the charter,
resolutions or bylaws of the Seller or the terms of any indenture or
other agreement or instrument known to such counsel and to which the
Seller is a party or by which it is bound, or any judgment, order or
decree known to such counsel to be applicable to the Seller of any court,
regulatory body, administrative agency, governmental body, or arbitrator
having jurisdiction over the Seller;
(5)
there are no actions, proceedings or investigations pending or, to the
best of such counsel's knowledge after due inquiry, threatened before any
court, administrative agency or other tribunal (1) asserting the
invalidity of the Receivables Purchase Agreement, (2) seeking to prevent
the consummation of any of the transactions contemplated by the
Receivables Purchase Agreement or the execution and delivery thereof or
(3) that might materially and adversely affect the performance by the
Seller of its obligations under, or the validity or enforceability of,
the Receivables Purchase Agreement;
(6)
the provisions of the Receivables Purchase Agreement are effective to
transfer to the Purchaser all right, title and interest of the Seller in
and to the Receivables and other assets and property described in clauses
(a) through (g) of Section 2.01 of the Receivables Purchase Agreement
("Other Transferred Property"), and upon filing of the UCC-3 partial
release statements with respect to the interests of the Sellers' secured
lenders in the Receivables (which shall be specified in such opinion),
the Receivables shall be owned by the Purchaser free and clear of any
Lien;
(7)
the provisions of the Receivables Purchase Agreement are effective to
create, in favor of the Purchaser, a valid security interest in the
Receivables and the Other Transferred Property that is subject to Article
9 of the New York Uniform Commercial Code (the "UCC Collateral");
(8)
the UCC-1 financing statements naming the Seller as seller and the
Purchaser as purchaser are in appropriate form for filing with the
Secretary of State of the State of Illinois and the County Clerk of Lake
County, Illinois; the interest of the Purchaser in the Receivables and
the proceeds thereof, and, to the extent that the filing of a financing
statement is effective to perfect an interest in the Other Transferred
Property under Article 9 of the Illinois Uniform Commercial Code, the
Other Transferred Property, shall be perfected upon the filing of such
financing statements in such filing offices; and upon the filing of the
UCC-3 partial release statements with respect to the interests of the
Sellers' secured lenders in such filing offices, no other interest of any
other purchaser from or creditor of the Seller is equal or prior to the
interest of the Trustee in the Receivables and such other Trust Property;
(9)
the Contracts included in the Receivables are "chattel paper" under
Article 9 of the Illinois Uniform Commercial Code; and
(10)
to the best knowledge of such counsel, the Seller has obtained all
material licenses, permits and other governmental authorizations that are
necessary to the conduct of its business; such licenses, permits and
other governmental authorizations are in full force and effect, and the
Seller is in all material respects complying therewith; and the Seller is
otherwise in compliance with all laws, rules, regulations and statutes of
any jurisdiction to which it is subject, except where non-compliance
would not have a material adverse effect on the Seller.
B.
The Seller shall have furnished to the Purchaser the opinion of Richard
P. Vogelman, Esquire, General Counsel of the Seller, dated the Closing
Date and satisfactory in form and substance to the Purchaser, to the
effect that:
(1)
the Seller and all of its subsidiaries are duly qualified to do business
as foreign corporations and are in good standing under the laws of each
jurisdiction wherein each of them owns or leases material properties or
conducts material business and which requires such qualification;
(2)
the Seller has no subsidiaries in any form, whether wholly owned or other
than wholly owned, direct or indirect, other than First Merchants Auto
Receivables Corporation and First Merchants Auto Receivables Corporation
II, both Delaware corporations and wholly owned subsidiaries of the
Seller;
(3)
the Seller has obtained all material licenses, permits and other
governmental authorizations that are necessary to the conduct of its
business; such licenses, permits and other governmental authorizations
are in full force and effect, and the Seller is in all material respects
complying therewith; and the Seller is otherwise in compliance with all
laws, rules, regulations and statutes of any jurisdiction to which it is
subject, except where non-compliance would not have a material adverse
effect on the Seller; and
(4)
none of the execution and delivery of the Receivables Purchase Agreement
or the consummation of any of the transactions therein contemplated or
the fulfillment of the terms thereof shall conflict with, result in a
breach or violation of, or constitute a default under, any law or the
charter, resolutions or bylaws of the Seller or the terms of any
indenture or other agreement or instrument known to such counsel and to
which or the Seller is a party or by which it is bound or any judgment,
order or decree known to such counsel to be applicable to the Seller of
any court, regulatory body, administrative agency, governmental body, or
arbitrator having jurisdiction over the Seller.
Exhibit C
LIMITED POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, pursuant to section 4.01(e)(6) of a certain
Receivables Purchase Agreement dated May 8, 1997, between FIRST MERCHANTS
ACCEPTANCE CORPORATION, a Delaware corporation herein termed the
"Seller", and GREENWICH CAPITAL FINANCIAL PRODUCTS, INC., a Delaware
corporation herein termed the "Attorney", the undersigned Seller does
hereby constitute and appoint the Attorney, its successors and assigns,
as the true and lawful attorney-in-fact of the Seller and with full power
by an instrument in writing to appoint a substitute or substitutes, to
demand, reduce to possession, collect, receive, receipt for, endorse,
compromise, settle or assign without recourse any and all indebtedness,
notes, commercial paper, promises to pay, retail installment sale
contracts, chattel paper, instruments, choses in action and other
obligations described in Exhibit "A" to that certain Bill of Sale and
Assignment of Receivables dated May 8, 1997, from the Seller to the
Attorney, herein termed the "Receivables", together with all monies due
or to become due under said Receivables, and any and all claims, choses
in action, and rights and causes of action relating thereto, including,
without limitation, any and all real estate and personal property,
security instruments and insurance policies held as security for said
Receivables, and all other property of every kind identified in said
Exhibit "A"; to cancel or release the Receivables and release any
security, in whole or in part and in connection therewith to execute,
acknowledge or handle proper discharges, releases, satisfactions,
certificates of title, other lien certificates or other instruments in
writing which may become necessary in order to carry the foregoing powers
into effect, the Seller hereby ratifying and confirming all acts and
things lawfully and reasonably done by the Attorney or its substitute or
substitutes in pursuance of the authority herein granted.
IN WITNESS WHEREOF, the Seller has executed this instrument 8th day of May,
1997.
Attest:
FIRST MERCHANTS ACCEPTANCE CORPORATION
By:
Its: Secretary
Its: President
SCHEDULE I
Schedule of Receivables
SCHEDULE II
Location of Receivable Files
SCHEDULE III
Receivable File Schedule
1.
All documents obtained or created in connection with the credit
investigation.
2.
All evidence of borrower verification of the Receivable.
3.
All Obligor records including without limitation (i) file copy of
Receivable; (ii) copy Dealer assignment (if applicable); (iii) warranty
copy; (iv) credit life insurance policy; (v) proof of auto insurance;
(vi) bill of sale; (vii) buyer's guide (as is form); (viii) odometer
statement; (ix) title application; (x) contract verification sheet;
(xi) participation worksheet; (xii) checklist; (xiii) underwriting
worksheet; (xiv) approval; (xv) purchase trans printout; (xvi) original
application; (xvii) credit investigation; (xviii) credit bureau reports;
(xix) check stubs; and (xx) copies of drivers license reference sheets.
4.
Original document envelope together with all documents maintained
therein.
5.
All insurance verification forms and documents relating to insurance
follow-ups and all mail received from insurance.
6.
Any and all other documents that the Servicer shall keep on file in
accordance with its customary procedures relating to a Receivable, an
Obligor or a Financed Vehicle.
<PAGE>
EXECUTION COPY
RECEIVABLES PURCHASE AGREEMENT
between
FIRST MERCHANTS ACCEPTANCE CORPORATION,
as Seller,
and
GREENWICH CAPITAL FINANCIAL PRODUCTS, INC.,
as Purchaser
Dated as of May 12, 1997
TABLE OF CONTENTS
ARTICLE I
Certain Definitions . . . . . . . . . 1
ARTICLE II
Conveyance of Receivables. . . . . . . . 3
SECTION 2.01.
Conveyance of Receivables. . . . . . . . . . . . 3
SECTION 2.02.
The Closing. . . . . . . . . . . . . . . . . . . 4
ARTICLE III
Representations and Warranties . . . . . . 4
SECTION 3.01.
Representations and Warranties of the Purchaser. 4
SECTION 3.02.
Representations and Warranties of Seller . . . . 4
ARTICLE IV
Conditions . . . . . . . . . . . 9
SECTION 4.01.
Conditions to Obligation of the Purchaser. . . . 9
SECTION 4.02.
Conditions to Obligation of the Seller . . . . . 10
ARTICLE V
Covenants of the Seller . . . . . . . . 11
SECTION 5.01.
Protection of Right, Title and Interest. . . . . 11
SECTION 5.02.
Other Liens or Interests . . . . . . . . . . . . 11
SECTION 5.03.
Costs and Expenses . . . . . . . . . . . . . . . 11
SECTION 5.04.
Indemnification. . . . . . . . . . . . . . . . . 11
ARTICLE VI
Miscellaneous Provisions. . . . . . . . 12
SECTION 6.01.
Obligations of Seller. . . . . . . . . . . . . . 12
SECTION 6.02.
Repurchase Events. . . . . . . . . . . . . . . . 12
SECTION 6.03.
Purchaser Assignment of Repurchased Receivables. 12
SECTION 6.04.
Assignment . . . . . . . . . . . . . . . . . . . 12
SECTION 6.05.
Amendment. . . . . . . . . . . . . . . . . . . . 12
SECTION 6.06.
Waivers. . . . . . . . . . . . . . . . . . . . . 12
SECTION 6.07.
Notices. . . . . . . . . . . . . . . . . . . . . 13
SECTION 6.08.
Costs and Expenses . . . . . . . . . . . . . . . 13
SECTION 6.09.
Representations of the Seller and the Purchaser. 13
SECTION 6.10.
Headings and Cross-References. . . . . . . . . . 13
SECTION 6.11.
Governing Law. . . . . . . . . . . . . . . . . . 13
SECTION 6.12.
Counterparts . . . . . . . . . . . . . . . . . . 13
EXHIBIT A
A-1
SCHEDULE I
Schedule of Receivables . . . . . . . . I-1
SCHEDULE II
Location of Receivable Files. . . . . . .II-1
RECEIVABLES PURCHASE AGREEMENT dated as of May 12, 1997, between FIRST
MERCHANTS ACCEPTANCE CORPORATION, a Delaware corporation, as seller (the
"Seller"), and GREENWICH CAPITAL FINANCIAL PRODUCTS, INC., 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 and/or Magna; and
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 on a
servicing released basis.
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
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.
"Amount Financed" means with respect to a Receivable, the amount advanced
under the Receivable toward the purchase price of the Financed Vehicle
and any related costs, exclusive of any amount allocable to the premium
of force-placed physical damage insurance covering the Financed Vehicle.
"Annual Percentage Rate" or "APR" of a Receivable means the annual rate of
finance charges stated in the related Receivable.
"Assignment" shall mean the document of bill of sale and assignment
substantially in the form attached to this Agreement as Exhibit A.
"Basic Documents" means this Agreement, the Assignment and any other
agreements, documents and certificates delivered in connection herewith
or therewith.
"Contract" means a motor vehicle retail installment sale contract between a
Dealer and one or more Obligors named in the list of Receivables on
Schedule I hereto, together with all accounts, general intangibles,
chattel paper, documents and instruments (as those terms are defined in
the Uniform Commercial Code as enacted in the State of Illinois) and any
contract rights related thereto.
"Cutoff Date" means May 1, 1997.
"Dealer" means the dealer who sold a Financed Vehicle and who originated
the related Receivable and assigned it to First Merchants or Magna pursuant
to a Dealer Agreement.
"Dealer Agreement" means (a) an agreement between the Seller and a Dealer
pursuant to which such Dealer sells Contracts to the Seller or (b)
collectively, (i) an agreement between Magna and a Dealer pursuant to
which such Dealer sells Contracts to Magna and (ii) an agreement between
Magna and the Seller pursuant to which Magna sells Contracts to the
Seller (or otherwise assigns Contracts to the Seller's designee).
"Dealer Underwriting Guide" means the underwriting manual used by the
Seller in the purchase of Receivables, as amended from time to time.
"Defaulted Receivable" means a Receivable with respect to which any of the
following shall have occurred: (i) a payment under the related
Receivable is 120 or more days delinquent (and the related Obligor has
not cured any delinquency with respect to such Receivable during the
calendar month in which such Receivable became 120 days delinquent), (ii)
the related Financed Vehicle has been repossessed or (iii) the servicer
has determined in good faith that payments under the related Receivable
are not likely to be resumed.
"Financed Vehicle" means an automobile, light-duty truck, van or minivan,
together with all accessions thereto, securing an Obligor's indebtedness
under the respective Receivable.
"Lien" means a security interest, lien, charge, pledge, equity or
encumbrance of any kind, other than tax liens, mechanics' liens and any
liens that attach to the respective Receivable by operation of law or
otherwise (including, without limitation, as a result of any act or
omission by the related Obligor).
"Lien Certificate" means with respect to a Financed Vehicle, an original
certificate of title, certificate of lien or other notification issued by
the Registrar of Titles of the applicable state to a secured party which
indicates that the lien of the secured party on the Financed Vehicle is
recorded on the original certificate of title. In any jurisdiction in
which the original certificate of title is required to be given to the
Obligor, the term "Lien Certificate" shall mean only a certificate or
notification issued to a secured party.
"Liquidated Receivable" means any Receivable with respect to which the
following shall have occurred: (i) the related Financed Vehicle has been
repossessed for 90 days or more, (ii) such Receivable is a Defaulted
Receivable with respect to which the servicer thereof has determined in
good faith that all amounts it expects to recover have been received or
(iii) a payment under the related Receivable is 150 or more days
delinquent.
"Liquidation Proceeds" means, with respect to any Liquidated Receivable,
monies collected in respect thereof, from whatever source, including,
without limitation, rebates of service contracts, proceeds of dealer
recourse and all available rebates of state sales taxes, following the
date on which such Receivable became a Liquidated Receivable, net of the
sum of any amounts expended by the servicer in connection with such
liquidation and any amounts required by law to be remitted to the
Obligor.
"Magna" means Magna Bank of St. Louis, a Missouri banking corporation, and
its successors and assigns.
"Obligor" on a Receivable means the purchaser or co-purchasers of the
Financed Vehicle and any other Person who owes payments under such
Receivable.
"Person" means any individual, corporation, estate, partnership, joint
venture, association, joint stock company, trust (including, without
limitation, any beneficiary thereof), unincorporated organization or
government or agency or political subdivision thereof.
"Purchaser" shall mean Greenwich Capital Financial Products, Inc., a
Delaware corporation, its successors and assigns.
"Purchase Amount" means, with respect to any Receivable purchased
hereunder, the unpaid principal balance owed by the Obligor thereon plus
interest on such amount at the applicable APR to the last day of the month of
repurchase.
"Receivable" shall mean any Contract listed on Schedule I hereto (which
Schedule may be in the form of microfiche).
"Receivable Files" means the following documents or instruments:
(a)
the fully executed original of each Receivable (together with any
agreements modifying such Receivable, including, without limitation, any
extension agreement);
(b)
the original credit application, or a copy thereof, fully executed by
each Obligor thereon;
(c)
the original certificate of title or such other documents that a
custodian or servicer or the Seller shall keep on file in accordance with
its customary procedures evidencing the security interest of the Seller
in the Financed Vehicle; and
(d)
any and all other documents that are set forth on Schedule III hereto.
"Registrar of Titles" means with respect to any state, the governmental
agency or body responsible for the registration of, and the issuance of
certificates of title relating to, motor vehicles and liens thereon.
"Repurchase Event" shall have the meaning specified in Section 6.02.
"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 Transferee" shall have the meaning specified in Section 6.04.
"UCC" means the Uniform Commercial Code as in effect in the relevant
jurisdiction.
ARTICLE II
Conveyance of Receivables
SECTION 2.01.
Conveyance of Receivables. Subject to the terms and conditions and in
reliance upon the representations and warranties herein set forth, the
Purchaser hereby agrees to pay to or upon the order of the Seller the
purchase price heretofore agreed to by the Seller and the Purchaser, in
the manner and at the time heretofore agreed to, and the Seller does
hereby sell, transfer, assign, set over and otherwise convey to the
Purchaser, with all servicing rights released to Purchaser and without
recourse (subject to the obligations herein) all right, title, and
interest of the Seller in and to:
(a)
the Receivables and all monies received thereon on or after the Cutoff
Date;
(b)
the security interests in the Financed Vehicles and any accessions
thereto granted by Obligors pursuant to the Receivables and any other
interest of the Seller in such Financed Vehicles;
(c)
any Liquidation Proceeds and any other proceeds with respect to the
Receivables from any source, including, without limitation, claims on any
physical damage, credit life or disability insurance policies covering
Financed Vehicles or Obligors, including, without limitation, any
vendor's single interest or other collateral protection insurance policy;
(d)
all rights of the Seller against Dealers and Magna with respect to the
Receivables under the Dealer Agreements and Dealer assignments;
(e)
any property that shall have secured a Receivable and that shall have
been acquired by or on behalf of the Seller;
(f)
all documents and other items contained in the Receivable Files; and
(g)
the proceeds of any and all of the foregoing.
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 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 Section 6.04
hereof, the Purchaser may sell, transfer and reassign to a Subsequent
Transferee (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, without limitation, 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 this Agreement.
SECTION 2.02.
The Closing. The sale and purchase of the Receivables shall take place
at the closing on May 12, 1997 (the "Closing Date").
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 as of the Closing 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.
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 Closing 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 to carry out its 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 have been duly
authorized by the Seller by all necessary corporate action.
(4)
No Violation. Upon giving effect to the release of the Lien described in
Section 3.02(b)(14), 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 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 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.
(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 other 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 570 Lake Cook Road, Suite 126, Deerfield, Illinois 60015.
(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, on which the Purchaser relies in accepting
the Receivables and may rely in transferring the Receivables. Such
representations and warranties speak as of the execution and delivery of
this Agreement and as of the Closing Date, but shall survive the sale,
transfer and assignment of the Receivables to the Purchaser and the
subsequent sale, transfer and assignment of the Receivables by the
Purchaser.
(1)
Characteristics of Receivables. Each Receivable (A) was originated in
the United States of America by a Dealer for the retail sale of a
Financed Vehicle in the ordinary course of such Dealer's business, is
payable in United States dollars, has been fully and duly executed by the
parties thereto, has been validly purchased by the Seller from a Dealer
or Magna, as applicable, under an existing Dealer Agreement (and each
Dealer had all necessary licenses and permits to originate such
Receivable), (B) provides for level monthly payments (provided that the
payment in the first or last month in the life of the Receivable may be
minimally different from the level payment) that fully amortize the
Amount Financed by maturity date and yield interest at the APR,
(C) permits partial prepayment, full prepayment, or both partial and full
prepayment of such Receivable; (D) 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 has been validly assigned by the
Seller to the Purchaser and (E) 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.
(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, without limitation, 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 Magnuson-
Moss 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 other
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 Closing 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. The information set forth in Schedule I 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 Closing Date, the Seller shall have caused its
records relating to each Receivable, including, without limitation, any
computer records, to be clearly and unambiguously marked to show that the
Receivables have been sold to the Purchaser by the Seller.
(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 Cutoff Date.
(9)
No Adverse Selection. No selection procedures believed by the Seller to
be adverse to the Purchaser were utilized in selecting the Receivables.
(10)
Chattel Paper. Each Receivable constitutes chattel paper within the
meaning of the UCC as in effect in the State of origination.
(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 to
the Purchaser under this Agreement or the pledge of such Receivable by
the Purchaser.
(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. 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 May 12,
1997 under the Fourth Amended and Restated Loan and Security Agreement
dated as of February 28, 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 and, upon the sale thereof to the Purchaser on the
Closing Date, the Purchaser has a valid and effective assignment of such
security interest. The Lien Certificate for each Financed Vehicle shows,
or if a new or replacement Lien Certificate is being applied for with
respect to such Financed Vehicle such Lien Certificate shall be received
within 120 days of the Closing Date and shall show, the Seller named as
the original secured party under each Receivable as the holder of a first
priority security interest in such Financed Vehicle. With respect to
each Receivable for which the Lien Certificate has not yet been returned
from the Registrar of Titles, the Seller has received written evidence
that such Lien Certificate showing the Seller as first lienholder has
been applied for. Each Dealer's security interest in any Receivable
originated by such Dealer has been validly assigned by the Dealer (or
Magna, as applicable) to the Seller. The Seller's security interest has
been validly assigned to the Purchaser pursuant to this Agreement.
(16)
All Filings Made. All filings (including, without limitation, UCC
filings) required to be made in any jurisdiction to give the Purchaser a
first priority 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 30 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)
Final Scheduled Maturity Date. No Receivable has a final scheduled
payment date after May 31, 2002.
(20)
Certain Characteristics of the Receivables. As of the Cutoff 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.
(21)
No Foreign Obligor. All of the Contracts are due from Obligors who are
citizens, or legal resident aliens, of the United States of America.
(22)
Insurance. The Seller has determined that the Obligor, at the time of
origination of its Receivable, obtained physical damage insurance
covering the Financed Vehicle and with appropriate deductibles in
accordance with Seller's underwriting guidelines and that such physical
damage insurance was in full force and effect as of its origination date.
(23)
No Extensions. The number or timing of scheduled payments has not been
changed on any Receivable on or before the Closing Date, except as
reflected on the computer tape delivered in connection with the sale of
the Receivables.
(24)
Scheduled Payments. Each Contract has a first scheduled payment due on
or prior to 45 calendar days after the origination date thereof. Each
Obligor has been instructed to make all scheduled payments to a lockbox
at LaSalle National Bank.
(25)
Dealer Agreements. The representations and warranties of the Dealer in
the Dealer Agreement with respect to each Receivable purchased by the
Seller pursuant to such Dealer Agreement were true and correct in all
material respects as of the date the Seller (or Magna, as the case may
be) acquired such Receivable from that Dealer.
(26)
No Fleet Sales. No Receivable has been included in a "fleet" sale (i.e.,
a sale to any single Obligor of more than five Financed Vehicles).
(27)
Receivable Files Complete. There exists a Receivable File pertaining to
each Receivable and such Receivable File contains, without limitation,
(A) a fully executed original of the Receivable, (B) a certificate of
insurance, application form for insurance signed by the Obligor, or a
signed representation letter from the Obligor named in the Receivable
pursuant to which the Obligor has agreed to obtain physical damage
insurance for the related Financed Vehicle, (C) the original Lien
Certificate or application therefor together with an assignment of the
Lien Certificate executed by the Seller to the Purchaser or, with respect
to any Receivable originated by a Dealer, an assignment of the Lien
Certificate executed by such Dealer to the Seller (or Magna, as the case
may be) and by the Seller to the Purchaser (or, in the case of
Recievables sold by Dealers to Magna, from Magna to the Seller and from
the Seller to the Purchaser), (D) an original credit application signed
by the Obligor and (E) the other documents that are set forth on Schedule
III hereto. Each of such documents which is required to be signed by the
Obligor has been signed by the Obligor in the appropriate spaces. All
blanks on any form described in clauses (A), (B), (C) (D), and (E) above
have been properly filled in and each form has otherwise been correctly
prepared. Notwithstanding the above, the complete Receivable File for
each Receivable, shall (x) fulfill the documentation requirements of the
Dealer Underwriting Guide as in effect on the Closing Date and (y) be in
possession of the servicer and/or custodian, as applicable, on such date.
(28)
No Fraud or Misrepresentation. Each Receivable was originated by a
Dealer and was sold by the Dealer to the Seller (or Magna, as the case
may be), to the best of the Seller's knowledge, without fraud or
misrepresentation on the part of such Dealer in either case.
(29)
Receivables Not Assumable. No Receivable is assumable by another Person
in a manner which would release the Obligor thereof from such Obligor's
obligations to the Seller with respect to such Receivable.
(30)
No Impairment. The Seller has not done anything to convey any right to
any Person that would result in such Person having a right to payments
due under a Receivable or otherwise to impair the rights of the Purchaser
in any Receivable or the proceeds thereof.
(31)
Tax Liens. There is no Lien against any Financed Vehicle for delinquent
taxes.
(32)
No Corporate Obligor. All of the Purchased Contracts are due from
Obligors who are natural persons.
(33)
No Liens. No Liens or claims have been filed for work, labor, or
materials relating to a Financed Vehicle that are prior to, or equal or
coordinate with, the security interest in the Financed Vehicle granted by
the related Receivable.
(34)
Servicing. Each Receivable has been serviced in conformity with all
applicable laws, rules and regulation and in conformity with the Seller's
policies and procedures which are consistent with customary, prudent
industry standards.
(35)
No Omissions. There have been no material omissions or misstatements in
any document provided or statement made to the Purchaser in writing
concerning the Seller or the Receivables by or on behalf of the Seller in
connection with the transactions contemplated by this Agreement.
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 Closing Date
with the same effect as if then made, and the Seller shall have performed
all obligations to be performed by it hereunder on or prior to the
Closing Date.
(b)
Computer Files Marked. The Seller shall, at its own expense, on or prior
to the Closing Date, indicate in its computer files that the Receivables
have been sold to the Purchaser pursuant to this Agreement and deliver to
the Purchaser the Schedule of Receivables, certified by the Seller's
President, a Vice President or the Treasurer to be true, correct and
complete.
(c)
Delivery of Receivables to Custodian. The Seller shall deliver the
original Receivables and assignments thereof to the custodian on or prior
to the Closing Date.
(d)
Release of Lenders. The Seller shall obtain the executed consent and
release of the secured lenders as described in Section 3.02(b)(14) and
the related UCC-3, in each case in form and substance satisfactory to the
Purchaser, at or prior to the time of closing.
(e)
Documents To Be Delivered on the Closing Date:
(1)
The Bill of Sale. On the Closing Date, the Seller shall execute and
deliver a Bill of Sale and Assignment of Receivables with respect to the
Receivables, substantially in the form of Exhibit A hereto.
(2)
Evidence of UCC Filing. On or prior to the Closing Date, the Seller
shall record and file, at its own expense, a UCC-1 financing statement in
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 sold,
transferred and 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 Closing Date.
(3)
Certificate of Custodian. On or prior to the Closing Date, the Purchaser
shall receive a certificate of the custodian in form and substance
satisfactory to the Purchaser.
(4)
Paying Agent. On or prior to the Closing Date, arrangements with a paying
agent satisfactory to the Purchaser shall be consummated.
(5)
Opinions of Seller's Counsel. On or prior to the Closing Date, the
Purchaser shall have received the opinions of counsel to Seller, in form
and substance satisfactory to the Purchaser, as to the matters set forth
in Exhibit B hereto and such other matters as the Purchaser has
heretofore requested or may reasonably request.
(6)
Power of Attorney. Seller shall have executed and delivered to Purchaser
a Limited Power of Attorney, substantially in the form of Exhibit C
hereto, on or prior to the Closing Date.
(7)
Other Documents. Such other documents as the Purchaser may reasonably
request.
(f)
Other Transactions. Arrangements with respect to the custody and
servicing of the Receivables, satisfactory to the Purchaser, shall be
consummated on the Closing 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 Closing Date
with the same effect as if then made, and the Purchaser shall have
performed all obligations to be performed by it hereunder on or prior to
the Closing Date.
(b)
Receivables Purchase Price. On the Closing Date, the Purchaser shall
have delivered to the Seller the purchase price for the 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 related
property conveyed pursuant to Section 2.01 hereof to be promptly 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 related property. 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 shall 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 written notice thereof
at least 60 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 Receivables and the related
property.
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.
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 right, title and interest in and to the
Receivables and the related property.
SECTION 5.04.
Indemnification. Seller shall protect, defend, indemnify and hold
Purchaser and its assigns and their attorneys, accountants, employees,
officers and directors harmless from and against all losses, liabilities,
claims, damages and expenses of every kind and character, as incurred,
resulting from or relating to or arising out of (i) the inaccuracy,
nonfulfillment or breach of any representation, warranty, covenant or
agreement made by Seller in this Agreement, (ii) any legal action,
including, without limitation, any counterclaim, that has either been
settled by the litigants (which settlement, if Seller is not a party
thereto shall be with the consent of Seller) or has proceeded to judgment
by a court of competent jurisdiction, in either case to the extent it is
based upon alleged facts that, if true, would constitute a breach of any
representation, warranty, covenant or agreement made by Seller in this
Agreement (iii) any actions or omissions of Seller or any employee or
agent of Seller (including, without limitation, any Dealer) occurring
prior to the Closing Date with respect to any of the Receivables or
Financed Vehicles or (iv) any failure of a Receivable to be originated in
compliance with all requirements of law. 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 that the occurrence of a
breach of any of the Seller's representations and warranties contained in
Section 3.02(b) in any material respect shall constitute an event
obligating the Seller to repurchase the Receivables to which the breach
is applicable ("Repurchase Events"), at the unpaid principal balance of
the repurchased receivable plus accrued interest at the APR to the date
of repurchase, from the Purchaser unless any such breach shall have been
cured by the last day of the calendar month following the discovery or
notice thereof by or to the Seller. The repurchase amount shall be paid
by Seller within five business days after the end of any such calendar
month. Subject to Section 5.04, the repurchase obligation of the Seller
shall constitute the sole remedy available to the Purchaser 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.
Assignment. The Purchaser shall not sell, transfer or assign any of its
obligations under this Agreement to any other Person. Seller
acknowledges that Purchaser may, in its sole discretion, sell, transfer
and assign to a third party all or any portion of the assets sold,
transferred and assigned to the Purchaser hereunder and, in connection
therewith may also assign all or any portion of the Purchaser's rights
against the Seller under this Agreement. Seller also acknowledges that
any sale, transfer or assignment described in this Section may be made
without the consent or approval of Seller and without limiting the
obligations of Seller hereunder (including, without limitation, the
covenant of Seller under Section 6.02 hereof) to the Purchaser. The
Seller waives, to the extent permitted under applicable law, all claims,
causes of action and remedies, whether legal or equitable (including,
without limitation, any right of setoff), against the Purchaser and any
party to whom Purchaser sells, transfers or assigns its rights hereunder
relating to such action by the Purchaser. In particular, without
limiting the generality of the foregoing, (i) the representations and
warranties of the Seller set forth in Section 3.02(b) speak solely as of
the date of execution and delivery of this Agreement and as of the
Closing Date, but shall survive the subsequent sale, transfer or
assignment of the assets transferred to Purchaser hereunder, and any
party to whom such assets are subsequently transferred (a "Subsequent
Transferee") shall be entitled to rely thereon; and (ii) following notice
to the Seller (in accordance with Section 6.07 hereof), of a sale,
transfer or assignment to a Subsequent Transferee, the Seller will be
obligated to make all deliveries of documents, certificates and notices
which Seller is required to make to the Purchaser by the terms of this
Agreement to the Subsequent Transferee.
Any Subsequent Transferee will, following the sale, transfer or assignment
of assets to it, have the same rights to sell, transfer or assign the
assets so transferred as the Purchaser does hereunder.
SECTION 6.05.
Amendment. This Agreement may only be amended by a written amendment
duly executed and delivered by the Seller and the Purchaser.
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, 570 Lake Cook Road, Suite 126,
Deerfield, Illinois 60015, Attention: Norman Smagley; (b) in the case of
the Purchaser, Greenwich Capital Financial Products, Inc., 600 Steamboat
Road, Greenwich, Connecticut 06830, Attention: Bruce Katz with a copy to
the attention of the General Counsel;
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 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 shall survive the closing under
Section 2.02 and the transfers and assignments referred to in Section
6.04.
SECTION 6.10.
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 6.11.
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 6.12.
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: /s/ Norman Smagley
Name: Norman Smagley
Title: Senior Vice President and Chief Financial Officer
GREENWICH CAPITAL FINANCIAL
PRODUCTS, INC.
By: /s/ Craig S Eckes
Name: Craig S Eckes
Title: Vice President
BILL OF SALE AND ASSIGNMENT OF RECEIVABLES
For value received, in accordance with the Receivables Purchase Agreement
dated as of May 12, 1997 (the "Receivables Purchase Agreement"), between
the undersigned and Greenwich Capital Financial Products, Inc. (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 all
monies received thereon on or after May 1, 1997; (ii) the security
interests in the Financed Vehicles and any accessions thereto granted by
Obligors pursuant to the 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 from claims on any physical
damage, credit life or disability insurance policies covering Financed
Vehicles or Obligors, including, without limitation, any vendor's single
interest or other collateral protection insurance policy; (iv) all rights
of the Seller against Dealers with respect to the Receivables under the
Dealer Agreements and Dealer assignments executed in connection with the
Receivables and the Dealer Agreements; (v) any property that shall have
secured a Receivable and that shall have been acquired by or on behalf of
the Seller; (vi) all documents and other items contained in the
Receivable Files; and (vii) 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 the Purchaser of any obligation of the undersigned to
the Obligors, insurers or any other person in connection with the
Receivables, the Receivable Files, any insurance policies or any
agreement or instrument relating to any of them.
This Bill of Sale and Assignments of Receivables 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 Bill of Sale and
Assignment of Receivables to be duly executed as of May 12, 1997.
FIRST MERCHANTS ACCEPTANCE CORPORATION,
By:
Name:
Title:
EXHIBIT B
Opinions of Counsel
A.
The Seller shall have furnished to the Purchaser the opinion of
Sonnenschein Nath & Rosenthal, counsel for the Seller, dated the Closing
Date and satisfactory in form and substance to the Purchaser,
substantially to the effect that:
(1)
the Seller has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Delaware,
with full corporate power and authority to own its properties and conduct
its business as presently owned and conducted, and is duly qualified to
do business as a foreign corporation and is in good standing under the
laws of the State of Illinois;
(2)
the Receivables Purchase Agreement and each other Basic Document to which
the Seller is a party has been duly authorized, executed and delivered by
the Seller and constitutes a legal, valid and binding obligation of the
Seller, enforceable against the Seller in accordance with its terms
(subject, as to the enforcement of remedies, to applicable bankruptcy,
reorganization, insolvency, moratorium or other laws affecting creditors'
rights generally from time to time in effect);
(3)
no consent, approval, authorization or order of, or filing with, any
court or governmental agency or body is required for the consummation of
the transactions contemplated or in the Receivables Purchase Agreement,
except such other approvals (which shall be specified in such opinion) as
have been obtained and such filings as have been made or are in the
process of being made;
(4)
none of the sale of the Receivables by the Seller to the Purchaser
pursuant to the Receivables Purchase Agreement, the consummation of any
other of the transactions therein contemplated or the fulfillment of the
terms thereof shall conflict with, result in a breach or violation of, or
constitute a default under, any law binding on the Seller or the charter,
resolutions or bylaws of the Seller or the terms of any indenture or
other agreement or instrument known to such counsel and to which the
Seller is a party or by which it is bound, or any judgment, order or
decree known to such counsel to be applicable to the Seller of any court,
regulatory body, administrative agency, governmental body, or arbitrator
having jurisdiction over the Seller;
(5)
there are no actions, proceedings or investigations pending or, to the
best of such counsel's knowledge after due inquiry, threatened before any
court, administrative agency or other tribunal (1) asserting the
invalidity of the Receivables Purchase Agreement, (2) seeking to prevent
the consummation of any of the transactions contemplated by the
Receivables Purchase Agreement or the execution and delivery thereof or
(3) that might materially and adversely affect the performance by the
Seller of its obligations under, or the validity or enforceability of,
the Receivables Purchase Agreement;
(6)
the provisions of the Receivables Purchase Agreement are effective to
transfer to the Purchaser all right, title and interest of the Seller in
and to the Receivables and other assets and property described in clauses
(a) through (g) of Section 2.01 of the Receivables Purchase Agreement
("Other Transferred Property"), and upon filing of the UCC-3 partial
release statements with respect to the interests of the Sellers' secured
lenders in the Receivables (which shall be specified in such opinion),
the Receivables shall be owned by the Purchaser free and clear of any
Lien;
(7)
the provisions of the Receivables Purchase Agreement are effective to
create, in favor of the Purchaser, a valid security interest in the
Receivables and the Other Transferred Property that is subject to Article
9 of the New York Uniform Commercial Code (the "UCC Collateral");
(8)
the UCC-1 financing statements naming the Seller as seller and the
Purchaser as purchaser are in appropriate form for filing with the
Secretary of State of the State of Illinois and the County Clerk of Lake
County, Illinois; the interest of the Purchaser in the Receivables and
the proceeds thereof, and, to the extent that the filing of a financing
statement is effective to perfect an interest in the Other Transferred
Property under Article 9 of the Illinois Uniform Commercial Code, the
Other Transferred Property, shall be perfected upon the filing of such
financing statements in such filing offices; and upon the filing of the
UCC-3 partial release statements with respect to the interests of the
Sellers' secured lenders in such filing offices, no other interest of any
other purchaser from or creditor of the Seller is equal or prior to the
interest of the Trustee in the Receivables and such other Trust Property;
(9)
the Contracts included in the Receivables are "chattel paper" under
Article 9 of the Illinois Uniform Commercial Code; and
(10)
to the best knowledge of such counsel, the Seller has obtained all
material licenses, permits and other governmental authorizations that are
necessary to the conduct of its business; such licenses, permits and
other governmental authorizations are in full force and effect, and the
Seller is in all material respects complying therewith; and the Seller is
otherwise in compliance with all laws, rules, regulations and statutes of
any jurisdiction to which it is subject, except where non-compliance
would not have a material adverse effect on the Seller.
B.
The Seller shall have furnished to the Purchaser the opinion of Richard
P. Vogelman, Esquire, General Counsel of the Seller, dated the Closing
Date and satisfactory in form and substance to the Purchaser, to the
effect that:
(1)
the Seller and all of its subsidiaries are duly qualified to do business
as foreign corporations and are in good standing under the laws of each
jurisdiction wherein each of them owns or leases material properties or
conducts material business and which requires such qualification;
(2)
the Seller has no subsidiaries in any form, whether wholly owned or other
than wholly owned, direct or indirect, other than First Merchants Auto
Receivables Corporation and First Merchants Auto Receivables Corporation
II, both Delaware corporations and wholly owned subsidiaries of the
Seller;
(3)
the Seller has obtained all material licenses, permits and other
governmental authorizations that are necessary to the conduct of its
business; such licenses, permits and other governmental authorizations
are in full force and effect, and the Seller is in all material respects
complying therewith; and the Seller is otherwise in compliance with all
laws, rules, regulations and statutes of any jurisdiction to which it is
subject, except where non-compliance would not have a material adverse
effect on the Seller; and
(4)
none of the execution and delivery of the Receivables Purchase Agreement
or the consummation of any of the transactions therein contemplated or
the fulfillment of the terms thereof shall conflict with, result in a
breach or violation of, or constitute a default under, any law or the
charter, resolutions or bylaws of the Seller or the terms of any
indenture or other agreement or instrument known to such counsel and to
which or the Seller is a party or by which it is bound or any judgment,
order or decree known to such counsel to be applicable to the Seller of
any court, regulatory body, administrative agency, governmental body, or
arbitrator having jurisdiction over the Seller.
Exhibit C
LIMITED POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENT, pursuant to section 4.01(e)(6) of a certain
Receivables Purchase Agreement dated May 12, 1997, between FIRST
MERCHANTS ACCEPTANCE CORPORATION, a Delaware corporation herein termed
the "Seller", and GREENWICH CAPITAL FINANCIAL PRODUCTS, INC., a Delaware
corporation herein termed the "Attorney", the undersigned Seller does
hereby constitute and appoint the Attorney, its successors and assigns,
as the true and lawful attorney-in-fact of the Seller and with full power
by an instrument in writing to appoint a substitute or substitutes, to
demand, reduce to possession, collect, receive, receipt for, endorse,
compromise, settle or assign without recourse any and all indebtedness,
notes, commercial paper, promises to pay, retail installment sale
contracts, chattel paper, instruments, choses in action and other
obligations described that certain Bill of Sale and Assignment of
Receivables dated May 12, 1997, from the Seller to the Attorney, herein
termed the "Receivables", together with all monies due or to become due
under said Receivables, and any and all claims, choses in action, and
rights and causes of action relating thereto, including, without
limitation, any and all real estate and personal property, security
instruments and insurance policies held as security for said Receivables,
and all other property of every kind identified in said Bill of Sale; to
cancel or release the Receivables and release any security, in whole or
in part and in connection therewith to execute, acknowledge or handle
proper discharges, releases, satisfactions, certificates of title, other
lien certificates or other instruments in writing which may become
necessary in order to carry the foregoing powers into effect, the Seller
hereby ratifying and confirming all acts and things lawfully and
reasonably done by the Attorney or its substitute or substitutes in
pursuance of the authority herein granted.
IN WITNESS WHEREOF, the Seller has executed this instrument 12th day of
May, 1997.
Attest:
FIRST MERCHANTS ACCEPTANCE CORPORATION
By:
Its: Secretary
Its: President
SCHEDULE I
Schedule of Receivables
SCHEDULE II
Location of Receivable Files
SCHEDULE III
Receivable File Schedule
1.
All documents obtained or created in connection with the credit
investigation.
2.
All evidence of borrower verification of the Receivable.
3.
All Obligor records including without limitation (i) file copy of
Receivable; (ii) copy Dealer assignment (if applicable); (iii) warranty
copy; (iv) credit life insurance policy; (v) proof of auto insurance;
(vi) bill of sale; (vii) buyer's guide (as is form); (viii) odometer
statement; (ix) title application; (x) contract verification sheet;
(xi) participation worksheet; (xii) checklist; (xiii) underwriting
worksheet; (xiv) approval; (xv) purchase trans printout; (xvi) original
application; (xvii) credit investigation; (xviii) credit bureau reports;
(xix) check stubs; and (xx) copies of drivers license reference sheets.
4.
Original document envelope together with all documents maintained
therein.
5.
All insurance verification forms and documents relating to insurance
follow-ups and all mail received from insurance.
6.
Any and all other documents that the Servicer shall keep on file in
accordance with its customary procedures relating to a Receivable, an
Obligor or a Financed Vehicle.
<PAGE>
May 8, 1997
First Merchants Acceptance Corporation
570 Lake Cook Road, Suite 126
Deerfield, IL 60015
Attention: Norman Smagley
Re:
LaSalle National Bank - First Merchants Acceptance Corporation
Dear Mr. Smagley:
Reference is hereby made to that certain Fourth Amended and Restated Loan
and Security Agreement dated as of February 28, 1996, among First Merchants
Acceptance Corporation ("Borrower"), LaSalle National Bank as Agent
("Agent"), and the other Lenders who are parties thereto (as heretofore and
from time to time hereafter amended or supplemented, the "Loan Agreement"),
and all documents, instruments and agreements executed and delivered
thereunder or in connection therewith (hereinafter, together with the Loan
Agreement, referred to collectively as the "Credit Agreements"). Initial
capitalized terms used herein which are not otherwise defined herein, shall
have the meanings provided therefor in the Credit Agreements.
Agent, on behalf of the Lenders, has previously advised Borrower and
Borrower has acknowledged that it is in default of various terms and conditions
of the Loan Agreement. Representatives of Borrower have requested that Agent
and Lenders grant Borrower time in which to effect replacement financing and
that Agent and Lenders continue to extend credit to Borrower and forbear in
the enforcement of their rights and remedies as a result of such Events of
Default.
Agent and Lenders have agreed to forbear in the exercise of their rights
and remedies, but without waiving any existing Events of Default, and to
continue to make limited extensions of credit to Borrower, all to the extent
and subject to the conditions and provisions stated in this letter agreement
("Forbearance Agreement").
To continue to assist Borrower in obtaining replacement financing
arrangements, and notwithstanding the occurrence of Events of Default under the
Credit Agreements, Agent and Lenders agree that, absent any further Events of
Default by Borrower under the Credit Agreement, as modified by this
Forbearance Agreement, Agent and Lenders will forbear from taking action to
recover full payment of Borrower's Obligations to and including June 30,
1997 (the "Forbearance Expiry Date"), and Agent and Lenders will continue
to make Revolving Loans to Borrower, pursuant to the terms of the Loan
Agreement as modified by this Forbearance Agreement up to a maximum amount
of Obligations outstanding of One Hundred Million Dollars ($100,000,000.00)
(the "Cap") subject to and on the following terms and conditions:
Effective April 16, 1997, the interest rate on all outstanding Obligations,
regardless of whether such Obligations consist of Eurodollar Loans or bear
interest based upon the Prime Rate, shall be increased by two percent (2%)
per annum, which interest shall be payable to Agent on behalf of Lenders,
monthly, on the first day of each month. From and after April 16, 1997,
Borrower shall not be entitled to request Eurodollar Loans and all
Revolving Loans made on or after such date shall bear interest at the rate
of two percent (2%) per annum in excess of the Prime Rate.
Borrower shall pay to Agent, for the pro rata benefit of the Lenders, on
the date of this Forbearance Agreement, a forbearance fee in the sum of
Fifty Thousand Dollars ($50,000.00).
Borrower shall reimburse Agent and each Lender for any and all reasonable
out-of-pocket costs, fees, and expenses incurred by any of them as a result
of the occurrence of the various Events of Default under the Loan
Agreement, the exercise by Agent and Lenders of their rights and remedies
subsequent to such Events of Default, the negotiation, documentation and
enforcement of the forbearance arrangements evidenced by this Forbearance
Agreement and the continued extension of credit pursuant to the terms of
this Forbearance Agreement. Such out-of-pocket costs, fees and expenses
shall include, without limitation, attorneys' fees and expenses of outside
counsel to Agent and Lenders, fees and expenses of accountants and other
professionals retained by Agent and Lenders to perform collateral and
financial audits and other business analyses, and all travel, food and
lodging expenses of Agent and Lenders.
Borrower shall continue to cooperate fully with Agent and Lenders, their
attorneys and their attorneys' outside accountants, Grant Thornton & Co.,
in conducting an ongoing examination of Borrower's financial records and
the Collateral, and shall reimburse Agent for all costs and expenses of
each such audit or business analysis.
Borrower shall provide evidence to Agent and Lenders that not less than
eighty percent (80%) of the proceeds of all Revolving Loans made by Lenders
to Borrower from and after April 16, 1997 (exclusive of proceeds of
Revolving Loans used for payroll expenses) shall be for the purchase of
Eligible Contracts.
Borrower shall update Agent and Lenders, on a weekly basis, of the status
of Borrower's efforts towards obtaining replacement financing
accommodations and shall provide Agent and Lenders copies of all proposals
and commitments received by Borrower.
Borrower may, with the prior written consent of Agent and Lenders, which
consent will not be unreasonably withheld, conduct bulk sales of
Contracts. Any such sales shall be on terms and conditions deemed
reasonably acceptable to Agent and Lenders including, without limitation,
selection criteria of Contracts for sale in a manner similar to prior asset
securitizations, and which would not affect the Collateral which would
remain subsequent to such sale more adversely than prior asset
securitizations. Borrower shall provide Agent and Lenders with a
proforma Borrowing Base Certificate giving effect to any such Sale, at
the time of its request for Lender's consent. Any proceeds of approved
sales of assets by Borrower shall be applied to the outstanding
Obligations and shall be a permanent reduction of the Cap by an
amount equal to sixteen percent (16%) of the aggregate outstanding face
amount of all Contracts which are sold.
Borrower shall provide to Agent and Lenders Borrower Base Certificates (i)
on a weekly basis and (ii) on the date of each request for a Revolving
Loan, together with other evidence of Borrower's compliance with the
Borrowing Base, as well as such other reports and financial data as the
Agent and Lenders may reasonably request.
Borrower shall demonstrate to Agent and Lenders, together with each request
for a Revolving Loan, that Borrower is compliance with the Borrowing Base,
as modified by this Forbearance Agreement, including without limitation,
the imposition of the Cap, as such Cap may be reduced from time to time by
asset sales.
Any Lender may, without the consent of the Borrower, but with the consent
of Agent, which consent will not be unreasonably withheld, assign its
rights or obligations under this Forbearance Agreement and the Credit
Agreements.
Borrower further agrees, that in order to induce Agent and Lenders to
forbear from enforcing their rights and to continue to provide Revolving
Loans to Borrower as provided hereunder, to release and Borrower hereby
releases and discharges Agent and Lenders, their officers, agents,
shareholders, directors, and employees from any and all liabilities,
actions, omissions, claims, demands and damages, or any basis for
instituting suit for legal or equitable relief, in whatever nature and
form, which may exist, or which may be alleged to have existed on or prior
to the date hereof, arising under or in connection with the Credit
Agreements, or any prior business relationship between the parties thereto.
Further, Borrower indemnifies Agent and Lenders and their officers, agents,
shareholders, directors and employees from any and all liabilities,
actions, costs, claims, and attorneys' fees relating to any present or
future claim or action against Borrower arising out of or related to the
Credit Agreements, including without limitation, claims by any agency or
department of the United States government, or any state government, any
officer, director, or employee, present or future, of Borrower, or any
present or former shareholders. This release and indemnity shall survive
the termination of the forbearance hereunder.
On or prior to June 30, 1997, Borrower shall repay in full the Obligations
and Agent and Lenders obligations to make additional Loans under the Credit
Agreements and this Forbearance Agreement, shall terminate.
Borrower shall continue to act as servicer of all Contracts sold pursuant
to a Permitted Securitization Transaction or approved bulk sale of
Contracts.
Borrower shall cause all proceeds of Contracts to be paid to the lock box
established with Agent or to bank accounts which are automatically swept
into an account under Agent's sole dominion and control.
Except as expressly provided herein, this Forbearance Agreement will not
constitute a waiver or modification of any provision of the Credit
Agreements or any Events of Default by Borrower thereunder or subsequent
Events of Default, whether of a different or like nature, or constitute a
course of conduct or dealing with respect to any Events of Default or
additional extensions of credit. This Forbearance Agreement shall not
constitute a waiver of any rights, powers or remedies of Agent or Lenders
under the Credit Agreements, all of which are hereby expressly reserved.
A breach of any term or condition of this Forbearance Agreement or any
other or additional breach of any provision of the Credit Agreements shall
constitute an additional Event of Default under the Credit Agreements
without notice to Borrower or the passage of time, and Agent and Lenders may
terminate their forbearance hereunder, cease making Revolving Loans and
exercise all of their rights and remedies under the Credit Agreements.
As between Borrower and Agent, and Borrower and Lenders, in the event of
any conflict between the terms and provisions of the Credit Agreements and this
Forbearance Agreement, the terms and provisions of this Forbearance
Agreement shall prevail.
This Forbearance Agreement shall be construed and enforced in accordance
with the laws of the State of Illinois.
In order to acknowledge the understanding and agreement by Borrower, Agent
and Lenders to the terms of Agent's and Lenders' forbearance and the continued
extensions of credit to Borrower hereunder, please have a duly authorized
officer of Borrower execute the enclosed duplicate original of this
Forbearance Agreement and return it to the undersigned prior to 5:00 P.M.,
May 9, 1997. The agreement of Agent and Lenders to forbear and to continue
making loans on the terms and conditions provided in the Credit Agreements
and hereunder is conditional upon and subject to Agent's receipt of the
executed counterpart original of this Forbearance Agreement, duly executed
by Borrower, before 5:00 P.M., Thursday, May 8, 1997.
Very truly yours,
LASALLE NATIONAL BANK, as Agent for the Lenders
By: /s/ Terry Keating
_______________________________
Title: Vice President
_______________________________
Acknowledged and agreed to this ____ day of May, 1997:
FIRST MERCHANTS ACCEPTANCE CORPORATION
By: /s/ Norman Smagley
_______________________________
Title: Senior Vice President and Chief Financial
Officer
------------------------------
The undersigned hereby acknowledge and consent to the above Forbearance
Agreement and agree that notwithstanding the Forbearance Agreement, their
Commitments shall remain unchanged, but subject to the Cap on outstanding
Obligations provided under the Forbearance Agreement:
LASALLE NATIONAL BANK
By:
_______________________________
Title:
_______________________________
NBD BANK
By:
_______________________________
Title:
_______________________________
FIRSTAR BANK MILWAUKEE, N.A.
By:
_______________________________
Title:
_______________________________
HARRIS TRUST AND SAVINGS BANK
By:
_______________________________
Title:
_______________________________
FIRST BANK, NATIONAL ASSOCIATION
By:
_______________________________
Title:
_______________________________
THE BOATMEN'S NATIONAL BANK OF ST. LOUIS
By:
_______________________________
Title:
_______________________________
FLEET BANK, NATIONAL ASSOCIATION
By:
_______________________________
Title:
_______________________________
CORESTATES BANK, N.A.
By:
_______________________________
Title:
_______________________________
MELLON BANK, N.A.
By:
_______________________________
Title:
_______________________________
