Purchase Agreement between M&I Marshall & Ilsley Bank, Preferred Receivables Funding Corporation, and Bond Securitization, L.L.C. (August 30, 2001)

Contract Categories: Business Finance › Purchase Agreements
Summary

This agreement, dated August 30, 2001, is between M&I Marshall & Ilsley Bank, Preferred Receivables Funding Corporation (the Sellers), and Bond Securitization, L.L.C. (the Purchaser). The Sellers agree to sell and transfer a portfolio of motor vehicle loan receivables and related rights to the Purchaser. The agreement outlines the purchase price, representations and warranties, and the obligations of each party. It also includes provisions for the protection of the Purchaser’s title to the assets and indemnification by the Sellers. The contract is governed by Delaware law and includes standard terms for amendments and notices.

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EX-10.1 7 dex101.txt PURCHASE AGREEMENT DATED AUGUST 30, 2001 Exhibit 10.1 EXECUTION COPY ================================================================================ PURCHASE AGREEMENT between M&I MARSHALL & ILSLEY BANK and PREFERRED RECEIVABLES FUNDING CORPORATION as Sellers and BOND SECURITIZATION, L.L.C. as Purchaser Dated as of August 30, 2001 ================================================================================ TABLE OF CONTENTS
ARTICLE I DEFINITIONS................................................................................... 3 SECTION 1.1. Definitions............................................................................. 3 SECTION 1.2. Other Interpretive Provisions........................................................... 3 ARTICLE II PURCHASE AND SALE OF RECEIVABLES.............................................................. 4 SECTION 2.1. Purchase and Sale of Receivables........................................................ 4 SECTION 2.2. Receivables Purchase Price.............................................................. 5 ARTICLE III REPRESENTATIONS AND WARRANTIES................................................................ 5 SECTION 3.1. Representations and Warranties of Purchaser............................................. 5 SECTION 3.3. [Reserved].............................................................................. 8 SECTION 3.4. Representations and Warranties of PREFCO................................................ 8 ARTICLE IV COVENANTS OF SELLERS.......................................................................... 10 SECTION 4.1. Protection of Title to Purchased Assets................................................. 10 SECTION 4.2. Liability of M&I Bank; Indemnities...................................................... 11 ARTICLE V MISCELLANEOUS PROVISIONS...................................................................... 12 SECTION 5.1. Obligations of Sellers.................................................................. 12 SECTION 5.2. [Reserved].............................................................................. 13 SECTION 5.3. Subsequent Transfer to Owner Trustee and Indenture Trustee.............................. 13 SECTION 5.4. Amendment............................................................................... 13 SECTION 5.5. Waivers................................................................................. 14 SECTION 5.6. Notices................................................................................. 15 SECTION 5.7. Costs and Expenses...................................................................... 15 SECTION 5.8. Representations to Survive.............................................................. 15 SECTION 5.9. Governing Law........................................................................... 15 SECTION 5.10. Counterparts............................................................................ 15 SECTION 5.11. Third Party Beneficiaries............................................................... 15
EXHIBIT A Location of Parties SCHEDULE A Perfection Representations, Warranties and Covenants PURCHASE AGREEMENT This PURCHASE AGREEMENT (as from time to time amended, supplemented or otherwise modified and in effect, this "Agreement") dated as of August 30, 2001by and between M&I MARSHALL & ILSLEY BANK, a Wisconsin banking corporation ("M&I Bank"), PREFERRED RECEIVABLES FUNDING CORPORATION, a Delaware corporation ("PREFCO"; and together with M&I Bank, the "Sellers") and BOND SECURITIZATION, L.L.C., a Delaware limited liability company (the "Purchaser"). WHEREAS, in the regular course of its business, M&I Bank or its Affiliates purchases Motor Vehicle Loans secured by new and used automobiles and light trucks from motor vehicle dealers; and WHEREAS, M&I Bank has transferred certain interests in such Motor Vehicle Loans to PREFCO pursuant to a financing arrangement; and WHEREAS, Purchaser desires to purchase from M&I Bank and PREFCO a portfolio of Motor Vehicle Loans arising in connection with Motor Vehicle Loans purchased by M&I Bank from Dealers and financed by PREFCO; and WHEREAS, M&I Bank or its Affiliates and PREFCO are willing to transfer their interests in such Motor Vehicle Loans to Purchaser. NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained, the parties hereto agree as follows: ARTICLE I DEFINITIONS SECTION 1.1. Definitions. Capitalized terms are used in this Agreement as defined in Appendix X to the Sale and Servicing Agreement among Bankers Trust (Delaware), not in its individual capacity but solely as owner trustee of M&I Auto Loan Trust 2001-1 (the "Owner Trustee"), Purchaser, as depositor, M&I Bank, as servicer, and Bank One, National Association, as indenture trustee. SECTION 1.2. Other Interpretive Provisions. For purposes of this Agreement, unless the context otherwise requires: (a) accounting terms not otherwise defined in this Agreement, and accounting terms partly defined in this Agreement to the extent not defined, shall have the respective meanings given to them under generally accepted accounting principles; (b) terms defined in Article 9 of the UCC and not otherwise defined in this Agreement are used as defined in that Article; (c) the words "hereof," "herein" and "hereunder" and words of similar import refer to this Agreement as a whole and not to any particular provision of this Agreement; (d) references to any Article, Section, Schedule or Exhibit are references to Articles, Sections, Schedules and Exhibits in or to this Agreement and references to any paragraph, subsection, clause or other subdivision within any Section or definition refer to such paragraph, subsection, clause or other subdivision of such Section or definition; (e) the term "including" means "including without limitation"; (f) except as otherwise expressly provided herein, references to any law or regulation refer to that law or regulation as amended from time to time and include any successor law or regulation; (g) references to any Person include that Person's successors and assigns; and (h) headings are for purposes of reference only and shall not otherwise affect the meaning or interpretation of any provision hereof. ARTICLE II PURCHASE AND SALE OF RECEIVABLES SECTION 2.1. Purchase and Sale of Receivables. Effective as of the Closing Date and immediately prior to the transactions pursuant to the Indenture, the Sale and Servicing Agreement and the Trust Agreement, each of M&I Bank and PREFCO do hereby sell, transfer, assign, set over and otherwise convey to Purchaser, without recourse each of their respective (subject to the obligations herein) (the "Purchased Assets"): (i) right, title and interest in and to the Receivables, and all moneys received thereon after the Cutoff Date; (ii) right, title and interest in the security interests in the Financed Vehicles granted by Obligors pursuant to the Receivables and any other interest in the Financed Vehicles and any other property that shall secure the Receivables; (iii) interest in any proceeds with respect to the Receivables from claims on any Insurance Policies covering Financed Vehicles or the obligors; (iv) rebates of premiums relating to Insurance Policies and rebates of other items such as extended warranties financed under the Receivables, in each case, to the extent Servicer would, in accordance with its customary practices, apply such amounts to the Principal Balance of the related Receivable; (v) interest in any proceeds from (A) any Receivable repurchased by a Dealer, pursuant to a Dealer Agreement, as a result of a breach of representation or warranty in the related Dealer Agreement, (B) a default by an Obligor resulting in the repossession of the Financed Vehicle under the applicable Motor Vehicle Loan or (C) any Dealer Recourse or other rights relating to the Receivables under Dealer Agreements; 2 (vi) right, title and interest in any instrument or document relating to the Receivables; and (vii) the proceeds of any and all of the foregoing. The sale, transfer, assignment, setting over and conveyance made hereunder shall not constitute and is not intended to result in an assumption by Purchaser of any obligation of M&I Bank or its Affiliates or PREFCO to the Obligors, the Dealers or any other Person in connection with the Receivables and the other assets and properties conveyed hereunder or any agreement, document or instrument related thereto. It is the express intention of M&I Bank, PREFCO and Purchaser that (i) the assignment and transfer herein contemplated constitute a sale of the Receivables and the other Purchased Assets described above, conveying good title thereto free an clear of any Liens, encumbrances, security interests or rights of other Persons, from M&I Bank or PREFCO to Purchaser and (ii) the Receivables and the other Purchased Assets described above not be a part of M&I Bank's estate or PREFCO's estate in the event of a bankruptcy or insolvency of M&I Bank or PREFCO, respectively. If, notwithstanding the intention of M&I Bank, PREFCO and Purchaser, such conveyance is deemed to be a pledge in connection with a financing or is otherwise deemed not to be a sale, M&I Bank and PREFCO hereby grant, and the parties intend that M&I Bank and PREFCO shall have granted, to Purchaser a first priority perfected security interest in all of M&I Bank's and PREFCO's right, title and interest in the items of the Purchased Assets and all proceeds of the foregoing, and that this Agreement shall constitute a security agreement under applicable law and Purchaser shall have all of the rights and remedies of a secured party and creditor under the UCC as in force in the relevant jurisdictions. SECTION 2.2. Receivables Purchase Price. In consideration for the Purchased Assets, Purchaser shall, on the Closing Date, pay to: (a) to PREFCO, $347,000,000 in cash; and (b) to M&I Bank, the Certificate. ARTICLE III REPRESENTATIONS AND WARRANTIES SECTION 3.1. Representations and Warranties of Purchaser. Purchaser hereby makes the following representations and warranties upon which M&I Bank or its Affiliates and PREFCO may rely. Such representations are made as of the execution and delivery of this Agreement, but shall survive the sale, transfer and assignment of the Receivables to Purchaser. 3 (a) Organization and Good Standing. Purchaser has been duly organized and is validly existing as a limited liability company in good standing under the laws of the State of Delaware, and has full power and authority to execute and deliver this Agreement and to perform the terms and provisions hereof. (b) Power and Authority. Purchaser has full power, authority and legal right to execute, deliver, and perform this Agreement and has taken all necessary action to authorize the execution, delivery, and performance by it of this Agreement. (c) No Consent Required. No approval, authorization, consent, license or other order or action of, or filing or registration with, any governmental authority, bureau or agency is required in connection with the execution, delivery or performance by Purchaser of this Agreement or the consummation of the transactions contemplated hereby. (d) Binding Obligation. This Agreement has been duly executed and delivered by Purchaser and this Agreement constitutes a legal, valid and binding obligation of Purchaser, enforceable against Purchaser in accordance with its terms, subject, as to enforceability, to applicable bankruptcy, insolvency, reorganization, conservatorship, receivership, liquidation and other similar laws affecting the enforcement of the rights of creditors generally and to equitable limitations on the availability of specific remedies. (e) No Violation. The execution, delivery and performance by Purchaser of this Agreement and the consummation of the transactions contemplated hereby will not conflict with, result in any breach of the terms and provisions of, constitute (with or without notice or lapse of time) a material default under, or result in the creation or imposition of any Lien under any of its material properties pursuant to the terms of, (i) the limited liability company agreement of Purchaser, (ii) any material indenture, contract, lease, mortgage, deed of trust or other instrument or agreement to which Purchaser is a party or by which Purchaser is bound or to which any of its properties are subject, or (iii) any law, order, rule or regulation applicable to Purchaser of any federal or state regulatory body or any court, administrative agency or other governmental instrumentality having jurisdiction over Purchaser. (f) No Proceedings. There are no proceedings or investigations pending, or, to the knowledge of Purchaser, threatened, before any court, regulatory body, administrative agency, or other tribunal or governmental instrumentality having jurisdiction over Purchaser or its properties: (i) asserting the invalidity of this Agreement or the transactions contemplated herein, (ii) seeking to prevent the consummation of any of the transactions contemplated by this Agreement, (iii) seeking any determination or ruling that might materially and adversely affect the performance by Purchaser of its obligations under, or the validity or enforceability of, this Agreement or the transactions 4 contemplated herein, or (iv) that may materially and adversely affect this Agreement or the transactions contemplated hereby. SECTION 3.2. Representations and Warranties of M&I Bank. M&I Bank hereby makes the following representations and warranties upon which Purchaser and PREFCO may rely. Such representations are made as of the execution and delivery of this Agreement, but shall survive the sale, transfer and assignment of its interest in the Purchased Assets to Purchaser. (a) Organization and Good Standing. M&I Bank has been duly organized and is validly existing as a state banking corporation in good standing under the laws of the State of Wisconsin, with the power and authority to own its properties and to conduct its business as such properties are presently owned and such business is presently conducted and had at all relevant times, and has, power, authority and legal right to acquire, own and sell the Purchased Assets pursuant to Article II. (b) Power and Authority. M&I Bank has the power, authority and legal right to execute and deliver this Agreement and to carry out its terms and to sell and assign the Purchased Assets; and the execution, delivery and performance of this Agreement has been duly authorized by M&I Bank by all necessary corporate action. (c) No Consent Required. No approval, authorization, consent, license or other order or action of, or filing or registration with, any governmental authority, bureau or agency is required in connection with the execution, delivery or performance by M&I of this Agreement or the consummation of the transactions contemplated hereby, other than the filing of UCC financing statements. (d) Valid Sale; Binding Obligation. M&I Bank intends this Agreement to effect a valid sale, transfer, and assignment of the Receivables and the other properties and rights included in the Purchased Assets conveyed by M&I Bank to Purchaser hereunder, enforceable against creditors of and purchasers from M&I Bank; and this Agreement constitutes a legal, valid and binding obligation of M&I Bank, enforceable against M&I Bank in accordance with its terms, subject, as to enforceability, to applicable bankruptcy, insolvency, reorganization, conservatorship, receivership, liquidation and other similar laws affecting enforcement of the rights of creditors generally and to equitable limitations on the availability of specific remedies. (e) No Violation. The execution, delivery and performance by M&I Bank of this Agreement and the consummation of the transactions contemplated hereby will not conflict with, result in any material breach of any of the terms and provisions of, constitute (with or without notice or lapse of time) a material default under or result in the creation or imposition of any Lien upon any of its material properties pursuant to the terms of, (i) the articles of incorporation or bylaws of M&I Bank, (ii) any material 5 indenture, contract, lease, mortgage, deed of trust or other instrument or agreement to which M&I Bank is a party or by which M&I Bank is bound, or (iii) any law, order, rule or regulation applicable to M&I Bank of any federal or state regulatory body or any court, administrative agency, or other governmental instrumentality having jurisdiction over M&I Bank. (f) No Proceedings. There are no proceedings or investigations pending, or, to the knowledge of M&I Bank, threatened, before any court, regulatory body, administrative agency, or other tribunal or governmental instrumentality having jurisdiction over M&I Bank or its properties: (i) asserting the invalidity of this Agreement or the transactions contemplated herein, (ii) seeking to prevent the consummation of any of the transactions contemplated by this Agreement, (iii) seeking any determination or ruling that might materially and adversely affect the performance by M&I Bank of its obligations under, or the validity or enforceability of, this Agreement or the transactions contemplated herein, or (iv) that may materially and adversely affect this Agreement or the transactions contemplated hereby. (g) Chief Executive Office. The chief executive office of M&I Bank is set forth in Exhibit A attached hereto. (h) Official Record. This Agreement and all other documents related hereto to which M&I Bank is a party have been approved by M&I Bank's or its Affiliates board of directors, loan committee or executive committee, which approval is reflected in the minutes of such board or committee and shall continuously from time to time of each such document's execution, be maintained as an official record of M&I Bank. (i) Perfection Representations. The Perfection Representations shall be a part of this Agreement. SECTION 3.3. [Reserved]. SECTION 3.4. Representations and Warranties of PREFCO. PREFCO hereby makes the following representations and warranties upon which Purchaser and M&I Bank may rely. Such representations are made as of the execution and delivery of this Agreement, but shall survive the sale, transfer and assignment of its interest in the Purchased Assets to Purchaser. (a) Organization and Good Standing. PREFCO has been duly organized and is validly existing as a corporation in good standing under the laws of Delaware, with the power and authority to own its properties and to conduct its business as such properties are presently owned and such business is presently conducted and had at all relevant times, and has, power, authority and legal right to acquire, own and sell the Purchased Assets pursuant to Article II. 6 (b) Power and Authority. PREFCO has the power, authority and legal right to execute and deliver this Agreement and to carry out its terms and to sell and assign the Purchased Assets; and the execution, delivery and performance of this Agreement has been duly authorized by PREFCO by all necessary corporate action. (c) No Consent Required. No approval, authorization, consent, license or other order or action of, or filing or registration with, any governmental authority, bureau or agency is required in connection with the execution, delivery or performance by PREFCO of this Agreement or the consummation of the transactions contemplated hereby, other than the filing of UCC financing statements. (d) Valid Sale; Binding Obligation. PREFCO intends this Agreement to effect a valid sale, transfer, and assignment of the Receivables and the other properties and rights included in the Purchased Assets conveyed by PREFCO to Purchaser hereunder, enforceable against creditors of and purchasers from PREFCO; and this Agreement constitutes a legal, valid and binding obligation of PREFCO, enforceable against PREFCO in accordance with its terms, subject, as to enforceability, to applicable bankruptcy, insolvency, reorganization, conservatorship, receivership, liquidation and other similar laws affecting enforcement of the rights of creditors generally and to equitable limitations on the availability of specific remedies. (e) No Violation. The execution, delivery and performance by PREFCO of this Agreement and the consummation of the transactions contemplated hereby will not conflict with, result in any material breach of any of the terms and provisions of, constitute (with or without notice or lapse of time) a material default under or result in the creation or imposition of any Lien upon any of its material properties pursuant to the terms of, (i) the certificate of incorporation or bylaws of PREFCO, (ii) any material indenture, contract, lease, mortgage, deed of trust or other instrument or agreement to which PREFCO is a party or by which PREFCO is bound, or (iii) any law, order, rule or regulation applicable to PREFCO of any federal or state regulatory body or any court, administrative agency, or other governmental instrumentality having jurisdiction over PREFCO. (f) No Proceedings. There are no proceedings or investigations pending, or, to the knowledge of PREFCO, threatened, before any court, regulatory body, administrative agency, or other tribunal or governmental instrumentality having jurisdiction over PREFCO or its properties: (i) asserting the invalidity of this Agreement or the transactions contemplated herein, (ii) seeking to prevent the consummation of any of the transactions contemplated by this Agreement, (iii) seeking any determination or ruling that might materially and adversely affect the performance by PREFCO of its obligations under, or the validity or enforceability of, this Agreement or the transactions contemplated herein, or (iv) that may materially and adversely affect this Agreement or the transactions contemplated hereby. 7 (g) Chief Executive Office. The chief executive office of PREFCO is set forth in Exhibit A attached hereto. ARTICLE IV COVENANTS OF SELLERS The M&I Bank and PREFCO covenant and agree with Purchaser as follows: SECTION 4.1. Protection of Title to Purchased Assets. M&I Bank shall execute and file such financing statements and cause to be executed and filed such continuation statements, all in such manner and in such places as may be required by law fully to preserve, maintain and protect the interest of Purchaser, Owner Trustee and Indenture Trustee in the Receivables and the proceeds thereof. M&I Bank shall deliver (or cause to be delivered) to Purchaser file-stamped copies of, or filing receipts for, any document filed as provided above, as soon as available following such filing. (b) Neither M&I Bank nor PREFCO shall change its name, identity or corporate structure in any manner that would, could or might make any financing statement or continuation statement filed in accordance with paragraph (a) above seriously misleading within the meaning of (S) 9-507 of the UCC, unless it shall have given Purchaser, Owner Trustee and Indenture Trustee at least 30 days' prior written notice thereof and shall have promptly filed appropriate amendments to all previously filed financing statements or continuation statements. (c) Sellers shall give Purchaser, Owner Trustee and Indenture Trustee at least 60 days' prior written notice of any relocation of its principal executive office if, as a result of such relocation, the applicable provisions of the UCC would require the filing of any amendment of any previously filed financing or continuation statement or of any new financing statement and shall promptly file any such amendment or new financing statement. (d) M&I Bank or its Affiliates shall maintain its computer systems relating to installment loan recordkeeping so that, from and after the time of sale under this Agreement of its Receivables, M&I Bank's or its Affiliate's master computer records (including any backup archives) that refer to a Receivable shall indicate clearly the interest of Purchaser, Owner Trustee and Indenture Trustee in such Receivable and that such Receivable has been sold to Purchaser and by Purchaser to Owner Trustee and is owned by Owner Trustee and has been pledged to Indenture Trustee pursuant to the Indenture. Indication of Purchaser's, Owner Trustee's and Indenture Trustee's interest in a Receivable shall be deleted from or modified on M&I Bank's or its Affiliate's computer systems when, and only when, the related Receivable shall have been paid in full or purchased by Servicer. (e) If at any time M&I Bank or its Affiliates shall propose to sell, grant a security interest in or otherwise transfer any interest in automotive receivables to any prospective 8 purchaser, lender or other transferee, M&I Bank or its Affiliates shall give or cause to be given to such prospective purchaser, lender or other transferee computer tapes, records or printouts (including any restored from backup archives) that, if they shall refer in any manner whatsoever to any Receivable, shall indicate clearly that such Receivable has been sold to Purchaser and then sold by Purchaser to Owner Trustee and pledged to Indenture Trustee. (f) M&I Bank shall, upon receipt by M&I Bank of reasonable prior notice, permit Purchaser, Owner Trustee and Indenture Trustee, and their respective agents at any time during normal business hours to inspect, audit and make copies of and abstracts from M&I Bank's or its Affiliate's records regarding any Receivable. (g) Upon request at any time, Purchaser, Owner Trustee or Indenture Trustee shall have reasonable grounds to believe that such request is necessary in connection with the performance of their duties under this Agreement, M&I Bank or its Affiliates shall furnish or cause to be furnished to Purchaser, Owner Trustee and Indenture Trustee within 30 Business Days, a list of all Receivables (by contract number and name of Obligor) conveyed to Purchaser hereunder and then owned by Owner Trustee and pledged to Indenture Trustee, together with a reconciliation of such list to the Schedule of Receivables and to each of Servicer's Reports furnished before such request indicating removal of Receivables from Owner Trustee. SECTION 4.2. Liability of M&I Bank; Indemnities. M&I Bank shall be liable in accordance herewith only to the extent of the obligations specifically undertaken by M&I Bank or its Affiliates under this Agreement. (a) M&I Bank shall indemnify, defend and hold harmless Purchaser, Owner Trustee (individually and in its capacity as such) and Indenture Trustee (individually and in its capacity as such) and their respective officers, directors, employees and agents from and against any taxes that may at any time be asserted against any such Person with respect to, and on the date of, the sale of the Receivables to Purchaser, including any sales, gross receipts, general corporation, tangible personal property, privilege or license taxes (but, not including any taxes asserted with respect to Federal or other income taxes arising out of this Agreement and the other Basic Documents) and costs and expenses in defending against the same. (b) M&I Bank shall indemnify, defend and hold harmless Purchaser, Owner Trustee (individually and in its capacity as such), Indenture Trustee (individually and in its capacity as such), the Certificateholders, the Noteholders and the officers, directors, employees and agents of Purchaser, Owner Trustee and Indenture Trustee from and against any and all costs, expenses, losses, claims, damages and liabilities to the extent arising out of, or imposed upon such Person through or as a result of (i) M&I Bank's or its Affiliates willful misfeasance, bad faith or gross negligence in the performance of its duties under this Agreement or any other Basic Document, (ii) the failure of any Receivable conveyed by M&I Bank to Purchaser hereunder, or the sale of the related Financed Vehicle, to comply with all requirements of applicable law, (iii) any breach of 9 any of M&I Bank's representations, warranties or covenants contained herein or in any other Basic Document; provided, however, any indemnification amounts owed pursuant to this Section 4.2 with respect of a Receivable shall give effect to and not be duplicative of the Purchase Amounts paid by M&I Bank pursuant to Section 3.2 of the Sale and Servicing Agreement, and (iv) the use, ownership or operation by M&I Bank or any of its Affiliates of a Financed Vehicle prior to the Cutoff Date. Indemnification under this Section shall survive the termination of this Agreement or any other Basic Document and the resignation or removal of Owner Trustee or Indenture Trustee and shall include reasonable fees and expenses of counsel and other expenses of litigation. If any suit, action, proceeding (including any governmental or regulatory investigation), claim or demand shall be brought or asserted against any Person in respect of which indemnity may be sought pursuant to this Section, such Person (the "Indemnified Person") shall promptly notify M&I Bank in writing, and M&I Bank, upon request of the Indemnified Person, shall retain counsel reasonably satisfactory to the Indemnified Person to represent the Indemnified Person and any others M&I Bank designates in such proceeding and shall pay the reasonable fees and expenses of such counsel related to such proceeding. M&I Bank shall not be liable for any settlement of any claim or proceeding effected without its written consent, but if settled with such consent or if there be a final judgment for the plaintiff, M&I Bank agrees to indemnify any Indemnified Person from and against any loss or liability by reason of such settlement or judgment. M&I Bank shall not, without the prior written consent of the Indemnified Person, effect any settlement of any pending or threatened proceeding in respect of which any Indemnified Person is or could have been a party and indemnity could have been sought hereunder by such Indemnified Person, unless such settlement includes an unconditional release of such Indemnified Person from all liability on claims that are the subject matter of such proceeding. If M&I Bank shall have made any indemnity payments pursuant to this Section and the Person to or on behalf of whom such payments are made thereafter shall collect any of such amounts from others, such Person shall promptly repay such amounts to M&I Bank, without interest. ARTICLE V MISCELLANEOUS PROVISIONS SECTION 5.1. Obligations of Sellers. The obligations of Sellers under this Agreement shall not be affected by reason of any invalidity, illegality or irregularity of any Receivable. SECTION 5.2. [Reserved]. SECTION 5.3. Subsequent Transfer to Owner Trustee and Indenture Trustee. Sellers acknowledge that: (a) Purchaser will, pursuant to the Sale and Servicing Agreement, sell the Receivables to Owner Trustee and assign its rights under this Agreement to Owner 10 Trustee for the benefit of the Noteholders and the Certificateholders, and that the representations and warranties contained in this Agreement and the rights of Purchaser under [Section 3.4] hereof are intended to benefit Owner Trustee, the Noteholders and the Certificateholders. Sellers hereby consent to such sale and assignment. (b) Owner Trustee will, pursuant to the Indenture, pledge the Receivables and its rights under this Agreement to Indenture Trustee for the benefit of the Noteholders, and the representations and warranties contained in this Agreement and the rights of Purchaser under this Agreement are intended to benefit Indenture Trustee and the Noteholders. The Sellers hereby consent to such pledge. SECTION 5.4. Amendment. (a) This Agreement may be amended by M&I Bank, PREFCO and Purchaser, with the consent of Owner Trustee and Indenture Trustee (which consent may not be unreasonably withheld), but without the consent of any of the Noteholders or the Certificateholders: (i) to cure any ambiguity or defect, to correct or supplement any provisions in this Agreement or for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions in this Agreement; provided that such action shall not adversely affect in any material respect the interests of any Noteholder or Certificateholder; (ii) (A) to add, modify or eliminate such provisions as may be necessary or advisable in order to enable all or a portion of M&I Auto Loan Trust 2001-1 to qualify as, and to permit an election to be made to cause all or a portion of M&I Auto Loan Trust 2001-1 to be treated as, a "financial asset securitization investment trust" under the Code, and (B) in connection with any such election, to modify or eliminate existing provisions set forth in this Agreement relating to the intended federal income tax treatment of the Notes or Certificates and the Trust in the absence of the election; it being a condition to any such amendment that the Rating Agency Condition shall have been met; and (iii) to add, modify or eliminate such provisions as may be necessary or advisable in order to enable (a) the transfer to Owner Trustee of all or any portion of the Receivables to be recognized as a sale under GAAP by Purchaser to the Trust, (b) the Trust to avoid becoming a member of Purchaser's consolidated group under GAAP or (c) M&I Bank or Purchaser, or any of their Affiliates, to otherwise comply with or obtain more favorable treatment under any law or regulation or any accounting rule or principle; it being a condition to any such amendment that the Rating Agency condition shall have been met. (b) This Agreement may also be amended from time to time by M&I Bank, PREFCO and Purchaser, with the consent of Servicer, Owner Trustee and Indenture Trustee, the consent of the Holders of Notes evidencing not less than a majority of the Outstanding Amount of the Notes and the consent of the Holders of Certificates evidencing not less than a majority of 11 the Certificate Percentage Interests for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Agreement; provided that no such amendment shall (i) increase or reduce in any manner the amount of, or accelerate or delay the timing of, collections of payments on Receivables or distributions that shall be required to be made for the benefit of the Noteholders or the Certificateholder or (ii) reduce the aforesaid percentage of the Outstanding Amount of the Notes and the Certificate Percentage Interests, the Holders of which are required to consent to any such amendment, without the consent of the Holders of all the outstanding Notes and the Holders of all the outstanding Certificate of each class affected thereby. (c) Prior to the execution of any such amendment or consent, Purchaser shall furnish written notification of the substance of such amendment or consent to each Rating Agency, Owner Trustee, and Indenture Trustee. Promptly after the execution of any such amendment or consent, Purchaser shall furnish written notification of the substance of such amendment or consent to each Noteholder, Certificateholder, Owner Trustee and Indenture Trustee. (d) It shall not be necessary for the consent of Certificateholder or Noteholders pursuant to this Section to approve the particular form of any proposed amendment or consent, but it shall be sufficient if such consent shall approve the substance thereof. (e) Prior to the execution of any amendment to this Agreement, Owner Trustee and Indenture Trustee shall be entitled to receive and conclusively rely upon an Opinion of Counsel stating that the execution of such amendment is authorized or permitted by this Agreement and that all conditions precedent to the execution and delivery of such amendment have been satisfied. Owner Trustee and Indenture Trustee may, but shall not be obligated to, enter into any such amendment which affects Owner Trustee's or Indenture Trustee's, as applicable, own rights, duties or immunities under this Agreement or otherwise. SECTION 5.5. Waivers. No failure or delay on the part of Purchaser in exercising any power, right or remedy under this Agreement 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 5.6. Notices. All demands, notices and communications pursuant to this Agreement to either party shall be in writing, personally delivered, or sent by telecopier, overnight mail or mailed by certified mail, return receipt requested, and shall be deemed to have been duly given upon receipt at the address set forth in Exhibit A attached hereto or at such other address as may be designated by it by notice to the other party. SECTION 5.7 Costs and Expenses. M&I Bank will pay all expenses incident to the performance of its obligations under this Agreement and all expenses in connection with the perfection as against third parties of Purchaser's right, title and interest in and to the Receivables 12 and Purchaser agrees to pay expenses incident to the performance of its obligations under this Agreement. SECTION 5.8. Representations to Survive. The respective agreements, representations, warranties and other statements by M&I Bank, PREFCO and Purchaser set forth in or made pursuant to this Agreement shall remain in full force and effect and will survive the Closing Date and any sale, transfer or assignment of the Receivables by Purchaser. SECTION 5.9. Governing Law. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS. SECTION 5.10. 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. SECTION 5.11. Third Party Beneficiaries. Each of Owner Trustee (individually and in its capacity as such), Indenture Trustee (individually and in its capacity as such) and the other Persons referred to in Section 4.2 is an intended third party beneficiary of the indemnities of M&I Bank set forth in Section 4.2 and the other provisions of this Agreement in favor of such Persons. It is acknowledged and agreed that such indemnities and other provisions may be enforced by or on behalf of such Persons against M&I Bank to the same extent as if it were a party hereto. [SIGNATURE PAGES FOLLOW] 13 IN WITNESS WHEREOF, the parties hereby have caused this Purchase Agreement to be executed by their respective officers thereunto duly authorized as of the date and year first above written. M&I MARSHALL & ILSLEY BANK, as Seller By: /s/ Donald H. Wilson ---------------------------------- Name: Donald H. Wilson Title: Senior Vice President 14 PREFERRED RECEIVABLES FUNDING CORPORATION, as Seller By: /s/ Mary L. Brady ---------------------------- Name: Mary L. Brady Title: Vice President 15 BOND SECURITIZATION, L.L.C., as Purchaser By: /s/ James R. Pomposelli -------------------------------------- Name: James R. Pomposelli Title: President 16 EXHIBIT A LOCATION OF PARTIES M&I MARSHALL & ILSLEY BANK Address for Notice: 770 North Water Street NW5 Milwaukee, Wisconsin 53202 Attention: Doug Howe PREFERRED RECEIVABLES FUNDING CORPORATION Address for Notice: 1 Bank One Plaza Chicago, Illinois 60670 BOND SECURITIZATION, L.L.C. Address for Notice: 1 Bank One Plaza Chicago, Illinois 60670 SCHEDULE A PERFECTION REPRESENTATIONS, WARRANTIES AND COVENANTS In addition to the representations, warranties and covenants contained in the Purchase Agreement, M&I Bank hereby represents, warrants, and covenants to Purchaser as to itself as follows on the Closing Date and on each Payment Date thereafter: 1. The Purchase Agreement creates a valid and continuing security interest (as defined in UCC Section 9-102) in the Receivables in favor of Depositor, which security interest is prior to all other Liens, and is enforceable as such as against creditors of and purchasers from M&I Bank and PREFCO . 2. The Receivables constitute "tangible chattel paper" within the meaning of UCC Section 9-102. 3. M&I Bank has taken all steps necessary to perfect its security interest against the Obligors in the property securing the Receivables that constitute chattel paper. 4. M&I Bank owns and has good and marketable title to the Receivables free and clear of any Lien, claim or encumbrance of any Person, excepting only Liens for taxes, assessments or similar governmental charges or levies incurred in the ordinary course of business that are not yet due and payable or as to which any applicable grace period shall not have expired, or that are being contested in good faith by proper proceedings and for which adequate reserves have been established, but only so long as foreclosure with respect to such a Lien is not imminent and the use and value of the property to which the Lien attaches is not impaired during the pendency of such proceeding. 5. Servicer has caused or will have caused, within ten days after the effective date of the Indenture, the filing of all appropriate financing statements in the proper filing office in the appropriate jurisdictions under applicable law in order to perfect the sale of the Receivables from M&I Bank and PREFCO to Purchaser, the transfer and sale of the Receivables from Purchaser to Owner Trustee, and the security interest in the Receivables granted to Indenture Trustee under the Indenture. 6. With respect to Receivables that constitute tangible chattel paper, such tangible chattel paper is in the possession of the Custodian and Indenture Trustee has received a written acknowledgment from the Custodian that the Custodian is holding such tangible chattel paper solely on behalf and for the benefit of Indenture Trustee. 7. Servicer has not authorized the filing of, or is aware of, any financing statements against either PREFCO, M&I Bank, Purchaser or Servicer that include a description of collateral covering the Receivables, the Purchased Assets and proceeds related thereto other than any financing statement (i) relating to the sale of Receivables by M&I Bank or its Affiliates and PREFCO to Purchaser under the Purchase Agreement, (ii) relating to the sale of Receivables by Purchaser to Owner Trustee under the Sale and Servicing Agreement, (iii) relating to the security interest granted to Indenture Trustee under the Indenture, or (iv) that has been terminated. 8. Servicer is not aware of any judgment, ERISA or tax Lien filings against either PREFCO, M&I Bank, Purchaser or Servicer. 9. None of the tangible chattel paper that constitute or evidence the Receivables has any marks or notations indicating that they have been pledged, assigned or otherwise conveyed to any Person other than Indenture Trustee. 10. Survival of Perfection Representations. Notwithstanding any other -------------------------------------- provision of the Purchase Agreement, the Sale and Servicing Agreement, the Indenture or any other Basic Document, the Perfection Representations contained in this Schedule shall be continuing, and remain in full force and effect (notwithstanding any replacement of Servicer or termination of Servicer's rights to act as such), until such time as all obligations under the Purchase Agreement, the Sale and Servicing Agreement and the Indenture have been finally and fully paid and performed. 11. No Waiver. The parties hereto: (i) shall not, without obtaining a --------- confirmation of the then-current rating of the Notes, waive any of the Perfection Representations; (ii) shall provide the Ratings Agencies with prompt written notice of any breach of the Perfection Representations; and (iii) shall not, without obtaining a confirmation of the then-current rating of the Notes (as determined after any adjustment or withdrawal of the ratings following notice of such breach), waive a breach of any of the Perfection Representations.