PURCHASE AGREEMENT between UPFC AUTO RECEIVABLES CORP., as Transferor and ACE SECURITIES CORP., as Purchaser Dated October 31, 2005 TABLE OF CONTENTS
PURCHASE AGREEMENT
between
UPFC AUTO RECEIVABLES CORP.,
as Transferor
and
ACE SECURITIES CORP.,
as Purchaser
Dated October 31, 2005
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
1
SECTION 1.1.
DEFINITIONS.
1
SECTION 1.2.
OTHER INTERPRETIVE PROVISIONS.
2
ARTICLE II
PURCHASE AND SALE OF RECEIVABLES
2
SECTION 2.1.
PURCHASE AND SALE OF RECEIVABLES.
2
SECTION 2.2.
RECEIVABLES PURCHASE PRICE.
3
SECTION 2.3.
TRANSFEROR’S REPURCHASE RIGHT.
3
SECTION 2.4.
EXPENSES.
3
ARTICLE III
REPRESENTATIONS AND WARRANTIES
4
SECTION 3.1.
REPRESENTATIONS AND WARRANTIES OF PURCHASER.
4
SECTION 3.2.
REPRESENTATIONS AND WARRANTIES OF TRANSFEROR.
5
SECTION 3.3.
REPRESENTATIONS AND WARRANTIES AS TO EACH
RECEIVABLE.
7
SECTION 3.4.
REPURCHASE UPON BREACH.
12
SECTION 3.5.
REPRESENTATIONS AND WARRANTIES WITH RESPECT TO
REVISED ARTICLE 9 .
12
ARTICLE IV
CONDITIONS
13
SECTION 4.1.
Conditions to Obligation of the Purchaser.
13
SECTION 4.2.
Conditions to Obligation of the Transferor.
15
SECTION 4.3.
TERMINATION OF OBLIGATIONS.
15
ARTICLE V
COVENANTS OF TRANSFEROR
16
SECTION 5.1.
PROTECTION OF TITLE TO TRANSFEROR ASSETS.
16
SECTION 5.2.
OTHER LIENS OR INTERESTS.
19
SECTION 5.3.
INDEMNIFICATION.
19
SECTION 5.4.
NONPETITION COVENANT.
19
ARTICLE VI INDEMNIFICATION AND CONTRIBUTION
20
SECTION 6.1.
INDEMNIFICATION
20
SECTION 6.2.
CONTRIBUTION.
22
ARTICLE VII
MISCELLANEOUS PROVISIONS
23
SECTION 7.1.
OBLIGATIONS OF TRANSFEROR.
23
SECTION 7.2.
TRANSFEROR’S ASSIGNMENT OF PURCHASED
RECEIVABLES.
23
SECTION 7.3.
SUBSEQUENT TRANSFER TO ISSUER AND INDENTURE
TRUSTEE.
23
SECTION 7.4.
AMENDMENT.
24
SECTION 7.5.
WAIVERS.
25
SECTION 7.6.
NOTICES.
25
SECTION 7.7.
COSTS AND EXPENSES.
25
SECTION 7.8.
REPRESENTATIONS TO TRANSFEROR.
25
SECTION 7.9.
GOVERNING LAW.
25
SECTION 7.10.
COUNTERPARTS.
25
SECTION 7.11.
THIRD-PARTY BENEFICIARIES.
25
PURCHASE AGREEMENT
THIS PURCHASE AGREEMENT (as from time to time amended, supplemented or otherwise modified and in effect, this “Agreement”) is made as of this 31st day of October, 2005, by and between UPFC AUTO RECEIVABLES CORP., a California corporation (the “Transferor”), and ACE SECURITIES CORP., a Delaware corporation (the “Purchaser”).
WHEREAS, in the regular course of its business, Loans were originated by United Auto Credit Corporation. (“UACC”) either directly or through dealers;
WHEREAS, in the regular course of its business, Transferor acquired a portfolio of the Loans directly from UACC;
WHEREAS, Purchaser desires to purchase from Transferor such portfolio of Loans; and
WHEREAS, Transferor is willing to sell such portfolio of 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 used but not defined herein are used in this Agreement as defined in Article I of the Sale and Servicing Agreement among UPFC Auto Receivables Trust 2005-B, as Issuer, the Purchaser, as Seller, UACC, as Servicer, Deutsche Bank Trust Company Americas, as Trust Collateral Agent, Custodian and Backup Servicer, and CenterOne Financial Services LLC, as Designated Backup Subservicer as the same may be amended and supplemented from time to time. 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):
“BASE PROSPECTUS” means the base prospectus dated October 31, 2005, relating to the Notes.
“PROSPECTUS SUPPLEMENT” means the prospectus supplement dated November 1, 2005, relating to the Notes.
“REGISTRATION STATEMENT” means the registration statement on Form S-3 (File No. 333-126118) filed by the Seller with the Commission on June 24, 2005 and as amended by Amendment No. 1 to Form S-3 filed by the Seller with the Commission on July 1, 2005 pursuant to the Securities Act.
“UNDERWRITERS’ INFORMATION” means the information set forth in the table following the second paragraph of text and the third, fourth, fifth, sixth and seventh paragraphs of text under the caption “Underwriting” in the Prospectus Supplement.
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 GAAP; (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 paragra ph, 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, the Trust Agreement and the Insurance Agreement, Transferor does hereby sell, transfer, assign, set over and otherwise convey to Purchaser, without recourse (subject to the obligations herein), the following (the “Transferor Assets”):
(a)
all right, title and interest of Transferor in and to the Receivables, and all monies received thereon after the Cutoff Date;
(b)
all right, title and interest of Transferor in the security interests in the Financed Vehicles granted by Obligors pursuant to the Receivables and any other interest of Transferor in the Financed Vehicles and any other property that shall secure the Receivables;
(c)
the interest of Transferor in any proceeds with respect to the Receivables from claims on any Insurance Policies covering Financed Vehicles or the Obligors or from claims under any lender’s single interest insurance policy naming Transferor as an insured;
(d)
the interest of Transferor in any proceeds from (i) 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, (ii) a default by an Obligor resulting in the repossession of the Financed Vehicle under the applicable Receivable or (iii) any Dealer Recourse or other rights relating to the Receivables under Dealer Agreements;
(e)
all right, title and interest of Transferor in any instrument or document relating to the Receivables;
(f)
all rights but not the obligations of Transferor under the Sale Agreement; and
(g)
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 Transferor 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 Transferor and Purchaser that (a) the assignment and transfer herein contemplated constitute a sale of the Receivables and the other Transferor Assets described above, conveying good title thereto free and clear of any liens, encumbrances, security interests or rights of other Persons from Transferor to Purchaser and (b) the Receivables and the other Transferor Assets described above not be a part of Transferor’s estate in the event of a bankruptcy or insolvency of Transferor. If, notwithstanding the intention of Transferor and Purchaser, such conveyance is deemed to be a pledge in connection with a financing or is otherwise deemed not to be a sale, Transferor hereby grants, and the parties intend that Transferor shall have granted to the Purchaser, a first priority perfected security interest in all of Transferor’s right, title and interest in the items of the Tran sferor Assets and all proceeds of the foregoing, and that this Agreement shall constitute a security agreement under applicable law and the 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. Notwithstanding the foregoing the Transferor intends on treating the sale of the Transferor Assets to the Purchaser as a financing for accounting purposes.
SECTION 2.2.
RECEIVABLES PURCHASE PRICE. In consideration for the Transferor Assets, Purchaser shall, on the Closing Date, pay to Transferor the Receivables Purchase Price. The “Receivables Purchase Price” shall be $248,618,792.36, payable in a combination of cash and the Certificates.
SECTION 2.3.
TRANSFEROR’S REPURCHASE RIGHT. The Transferor shall have the right to repurchase, in the aggregate, Receivables that constitute up to 2.00%, by principal amount, of the Original Pool Balance, exercisable at any time as of the first day of a calendar month; provided, however, that the Receivables repurchased pursuant to this Section 2.3 shall not include any Receivables repurchased pursuant to Section 3.4.
SECTION 2.4.
EXPENSES. The Transferor shall pay (or shall reimburse the Purchaser or any other Person to the extent that the Purchaser or such other Person shall pay) for certain of the expenses of the Purchaser in connection with the issuance and sale of the Notes and any taxes payable in connection therewith, including: (i) expenses incident to the preparing, printing, reproducing and distributing of the Preliminary Prospectus and the Prospectus, (ii) the fees and expenses of qualifying the Notes under the securities laws of the several jurisdictions and of preparing, printing and distributing any blue sky survey (including related fees and expenses of counsel to the Underwriter), (iii) any fees charged by Moody’s and Standard & Poor’s in connection with the rating of the Notes, (iv) the fees of DTC in connection with the book-entry registration of the Notes, (v) the fees and disbur sements of the Indenture Trustee and the Owner Trustee and their respective counsels, (vi) the fees and disbursements of the accountants, (vii) the fees and disbursements of McKee Nelson LLP, counsel to the Purchaser and Underwriter, in connection with the purchase of the Receivables hereunder and the issuance and sale of the Notes and (viii) the filing fee charged by the SEC for registration of the Notes.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.1.
REPRESENTATIONS AND WARRANTIES OF PURCHASER. Purchaser hereby makes the following representations and warranties upon which Transferor 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, the transfer and assignment by the Purchaser to the Issuer and the pledge by the Issuer to the Indenture Trustee.
(a)
Organization and Good Standing. Purchaser has been duly organized and is validly existing as a corporation in good standing under the laws of the State of Delaware and has the power and authority to execute and deliver this Agreement and to perform the terms and provisions hereof.
(b)
Due Qualification. 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 where the failure to do so would materially and adversely affect Purchaser's ability to acquire the Transferor Assets, or the validity or enforceability of the Transferor Assets or to perform Purchaser's obligations hereunder and under the Transaction Documents.
(c)
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.
(d)
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.
(e)
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 Seller 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.
(f)
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 material 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 charter or bylaws 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, any court, administrative agency, or other governmental instrumentality having jurisdiction over Purchaser.
(g)
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 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 contemplated herein, or (iv) that may materially and adversely affect this Agreement or the transactions contemplated hereby.
SECTION 3.2.
REPRESENTATIONS AND WARRANTIES OF TRANSFEROR. Transferor hereby makes the following representations and warranties upon which Purchaser 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, the transfer and assignment by the Purchaser to the Issuer and the pledge by the Issuer to the Indenture Trustee.
(a)
Organization and Good Standing. Transferor has been duly organized and is validly existing as a corporation in good standing under the laws of the State of California and has the power and authority to execute and legal right to own its properties and conduct its motor vehicle retail installment sale contract business as such properties are at present owned and such business is at present conducted and had at all relevant times, and has, power, authority and legal right to acquire, own and sell the Transferor Assets pursuant to the terms of this Agreement.
(b)
Due Qualification. The Transferor is duly qualified to do business as a foreign corporation and is 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 and in which the failure to do so would materially and adversely affect the Purchaser’s performance of its obligations under, the validity or enforceability of, this Agreement or the Transferor Assets.
(c)
Power and Authority. Transferor 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 Transferor Assets; and the execution, delivery and performance of this Agreement has been duly authorized by Transferor by all necessary action.
(d)
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 of this Agreement or the consummation of the transactions contemplated hereby or thereby, other than the filing of UCC financing statements or otherwise has been made or obtained.
(e)
Valid Sale; Binding Obligation. Transferor intends this Agreement to effect a valid sale, transfer, and assignment of the Receivables and the other properties and rights included in the Transferor Assets conveyed by Transferor to Purchaser hereunder, enforceable against creditors of and purchasers from Transferor; and this Agreement constitutes a legal, valid and binding obligation of Transferor, enforceable against Transferor 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.
(f)
No Violation. The execution, delivery and performance by Transferor 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 Transferor, (ii) any material indenture, contract, lease, mortgage, deed of trust or other instrument or agreement to which Transferor is a party or by which Transferor is bound, or (iii) any law, order, rule or regulation applicable to Transferor of any federal or state regulatory body, any court, administrative agency, or other governmental instrumentality having jurisdiction over Transferor.
(g)
No Proceedings. There are no proceedings or investigations pending, or, to the knowledge of Transferor, threatened, before any court, regulatory body, administrative agency, or other tribunal or governmental instrumentality having jurisdiction over Transferor 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 by this Agreement, (iii) seeking any determination or ruling that might materially and adversely affect the performance by Transferor 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.
(h)
Compliance with Requirements of Law. The Transferor shall duly satisfy all obligations on its part to be fulfilled under or in connection with each Receivable, will maintain in effect all qualifications required under applicable law and will comply in all material respects with all other applicable law the failure to comply with which would have a material adverse effect on the Transferor’s performance of its obligations under this Agreement.
(i)
True Sale. The Receivables are being transferred with the intention of removing them from the Transferor's estate pursuant to Section 541 of the Bankruptcy Code.
(j)
Chief Executive Office. The chief executive office of Transferor is 3990 Westerley Place, Suite 200, Newport Beach, California 92660.
(k)
Official Record. This Agreement and all other documents related hereto to which Transferor is a party have been approved by Transferor’s board of managers, which approval is reflected in the minutes or unanimous written consent of such board, and shall continuously from time to time of each such document’s execution, be maintained as an official record of Transferor.
SECTION 3.3.
REPRESENTATIONS AND WARRANTIES AS TO EACH RECEIVABLE. Transferor hereby makes the following representations and warranties as to each Receivable conveyed by it to Purchaser hereunder on which Purchaser shall rely in acquiring the Receivables. Such representations and warranties shall survive the sale, transfer and assignment of the Receivables to Purchaser hereunder, the subsequent sale, transfer and assignment of the Receivables to Issuer under the Sale and Servicing Agreement, and the pledge thereof to Indenture Trustee pursuant to the Indenture. Such representations and warranties are made as of the Closing Date, unless otherwise noted below.
(a)
Good Title. It is the intention of Transferor that the transfer and assignment herein contemplated constitute a sale of the Receivables from Transferor to Purchaser and that the beneficial interest in and title to the Receivables not be part of Transferor’s estate in the event of the filing of a bankruptcy petition by or against Transferor under any bankruptcy law notwithstanding the Transferor will treat the transfer as a secured financing for accounting purposes. No Receivable has been sold, transferred, assigned, or pledged by Transferor to any Person other than Purchaser. Immediately prior to the transfer and assignment herein contemplated, Transferor was the sole owner of and had good and marketable title to the Receivable free and clear of any Lien and had full right and power to transfer and assign the Receivable to Purchaser and immediately upon the transfer and assignment of the R eceivable to Purchaser, Purchaser shall have good and marketable title to the Receivable, free and clear of any Lien, and Purchaser’s interest in the Receivable resulting from the transfer has been perfected under the UCC.
(b)
No Assignment. As of the Closing Date, Transferor shall not have taken any action to convey any right to any Person that would result in such Person having a right to payments received under the Insurance Policies or Dealer Agreements, or payments due under the Receivable.
(c)
Past Due. At the Cutoff Date, no Receivable was more than 30 days past due.
(d)
Characteristics of Receivables. Each Receivable (i) was originated by a Dealer in the ordinary course of such Dealer’s business and such Dealer had all necessary licenses and permits to originate Receivables in the state where such Dealer was located; (ii) was duly and properly executed by the parties thereto, was purchased by UACC from a Dealer under an agreement with a Dealer pursuant to which UACC acquired Receivables in the ordinary course of business and was validly assigned by such Dealer to UACC; (iii) contains customary and enforceable provisions such as to render the rights and remedies of the holder thereof adequate for realization against the collateral security; (iv) is fully amortizing and provides for level monthly payments (provided that the payment in the first monthly period and the final monthly period of the life of the Receivable may be minimally different from the level payment) which, if made when due shall fully amortize the amount financed over the original term and yield interest at the Contract Rate; (v) is a fixed rate, simple interest or add-on interest loan; (vi) shall provide for, in the event that such Receivable is prepaid, a prepayment that fully pays the principal balance and includes any accrued and unpaid interest due pursuant to the related contract through the date of prepayment in an amount at least equal to the Contract Rate, and (vii) has not been amended or collections with respect to which waived, other than as evidenced in the Receivable File related thereto.
(e)
Individual Characteristics. The Receivables have the following individual characteristics as of the Cutoff Date; (i) each Receivable has an APR of not less than 17.00% and not more than 30.00%, (ii) each Receivable had an original term to maturity of not more than 60 months and each Receivable has a remaining term to maturity, as of the Cutoff Date, of not less than 4 months; (iii) each Receivable has a Cutoff Date Principal Balance of not less than $544.21 and no more than $28,753.63, (iv) no Receivable has a scheduled maturity date later than November 13, 2010; (v) each Receivable was originated after November 16, 2001; and (vi) the Dealer of the Financed Vehicle has no participation in, or other right to receive, any proceeds of the Receivable.
(f)
No Fraud or Misrepresentation. Each Receivable was originated by the Dealer and sold by the Dealer to UACC without any fraud or misrepresentation on the part of such Dealer.
(g)
Compliance With Law. 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,” “M” and “Z,” state unfair and deceptive practices 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) in respect of all of the Receivables and the Financed Vehicles, have been complied with in all material respects, and each Receivable and the sale of the Financed Vehicle complied at the time it was originated or made and now com plies in all material respects with all applicable legal requirements.
(h)
Origination. Each Receivable was originated in the United States.
(i)
Binding Obligation. Each Receivable represents the genuine, legal, valid and binding payment obligation of the Obligor, enforceable by the holder thereof in accordance with its terms, except as enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or similar laws affecting the enforcement of creditors’ rights generally and by equitable limitations on the availability of specific remedies, regardless of whether such enforceability is considered in a proceeding in equity or at law; and all parties to each Receivable had full legal capacity to exercise and deliver such Receivable and all other documents related thereto and to grant the security interest purported to be granted thereby.
(j)
No Government Obligor. No Obligor is the United States of America or any State or any agency, department, subdivision or instrumentality thereof.
(k)
Obligor Bankruptcy. No Obligor is identified on the records of the Transferor or UACC as being the subject of a current bankruptcy proceeding.
(l)
Receivable Schedule. The information regarding the Receivables set forth in the Schedule of Receivables is true and correct in all material respects as of the close of business on the Cutoff Date.
(m)
Marking Records. By the Closing Date, the Transferor will have caused the portions of the electronic ledger relating to the Receivables to be clearly and unambiguously marked to show that the Receivables have been transferred to the Purchaser or as otherwise required by the Purchaser.
(n)
Adverse Selection. No selection procedures believed by the Transferor to be adverse to the Purchaser or the Noteholders were utilized in selecting the Receivables from those receivables owned by UACC or Transferor eligible for transfer to the Purchaser pursuant to this Agreement.
(o)
Obligations. The Transferor has duly fulfilled all material obligations on its part to be fulfilled under, or in connection with, the Receivable.
(p)
Chattel Paper. Each Receivable constitutes “tangible chattel paper” within the meaning of the relevant UCC.
(q)
One Original. There is only one original executed copy of each Receivable.
(r)
Receivable Files Complete. There exists a Receivable File pertaining to each Receivable and such Receivable File contains each of the documents referred to in Section 3.4 of the Sale and Servicing Agreement. Each of such documents which is required to be signed by the Obligor has been signed by the Obligor in the appropriate spaces. All applicable blanks on any form have been properly filled in and each form has otherwise been correctly prepared. The Receivable File for each Receivable currently is in the possession of the Custodian.
(s)
Receivables in Force. As of the Cutoff Date, no Receivable has been satisfied, subordinated or rescinded, and the Financed Vehicle securing each such Receivable has not been released from the lien of the related Receivable in whole or in part; no provisions of any Receivable have been waived, altered or modified in any respect since its origination, except by instruments or documents identified in the Receivable File; and no Receivable has been modified as a result of application of the Servicemembers Civil Relief Act.
(t)
Lawful Assignment. No Receivable was originated in, or is subject to the laws of, any jurisdiction the laws of which would make unlawful, void or voidable the sale, transfer and assignment of such Receivable under this Agreement or to be entered into by the Purchaser.
(u)
Composition of Receivable. No Receivable has a Principal Balance which includes capitalized interest, late charges or amounts attributable to the payment of the premium for any Physical Damage Insurance Policy.
(v)
Security Interest in Financed Vehicle. UACC has a first priority perfected security interest in all of the Financed Vehicles securing the Receivables originated by UACC, which security interest is assignable together with such Receivable, and has been so assigned to the Transferor. There are no Liens affecting a Financed Vehicle which are or may be Liens prior or equal to the lien of the Receivable.
(w)
Notations of Security Interest in Financed Vehicle. With respect to each Receivable, if the related Financed Vehicle is located in a state in which notation of a security interest on the title document is required or permitted to perfect such security interest, the title document shows, or if a new or replacement title document is being applied for with respect to such Financed Vehicle the title document will be received within 180 days of the Closing Date and will show UACC 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 such Receivable for which the title document has not yet been returned from the applicable registrar of titles, UACC has (i) received written evidence from the related Dealer that such title document showing UACC as first lienholder has been applied for or (ii) appl ied for such title document showing UACC as first lienholder. With respect to each Receivable, if the related Financed Vehicle is located in a state in which the filing of a financing statement under the Uniform Commercial Code is required or permitted to perfect such security interest, such filings have been duly made and show UACC named as the secured party.
(x)
All Filings Made. All filings (including, without limitation, UCC filings) required to be made by any Person and actions required to be taken or performed by any Person in any jurisdiction to give the Purchaser a first priority perfected lien on, or ownership interest in, the Receivables and the proceeds thereof have been made, taken or performed.
(y)
No Impairment. The Transferor has not done anything to convey any right to any Person that would result in such Person having a right to payments due under the Receivable or otherwise to impair the rights of the Purchaser in any Receivable or the proceeds thereof.
(z)
Receivable Not Assumable. No Receivable is assumable by another Person in a manner which would release the Obligor thereof from such Obligor’s obligations with respect to such Receivable.
(aa)
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.
(bb)
No Default. Except for payment defaults continuing for a period of no more than 30 days as of the Cutoff Date, there has been no default, breach, violation or event permitting acceleration under the terms of any Receivable, 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. No funds have been advanced by UACC, the Transferor or any Dealer or any person acting on the behalf of UACC, the Transferor or any Dealer for the purpose of enabling any Obligor to qualify under the preceding sentence.
(cc)
Insurance. Each Receivable requires the Obligor to maintain a comprehensive and collision insurance policy (i) in an amount at least equal to the lesser of (a) its maximum insurable value or (b) the principal balance due from the Obligor under the related Receivable, (ii) naming UACC as loss payee and (iii) insuring against loss and damage due to fire, theft, transportation, collision and other risks generally covered by comprehensive and collision coverage. Each Receivable requires the Obligor to maintain physical loss and damage insurance, naming UACC and its successors and assigns as additional insured parties and each Receivable permits, but does not require, the holder thereof to obtain physical loss and damage insurance at the expense of the Obligor if the Obligor fails to do so.
(dd)
Paid Ahead. As of the Cutoff Date, any amounts paid ahead on the Receivables have been applied to the unpaid principal balance of the Receivables, as reflected in the Schedule of Receivables.
(ee)
Interest Payable. With respect to each Receivable, interest will be charged and payable on the unpaid principal balance of the Receivable since the date of the last payment on the Receivable (and in all cases will be charged since the Cutoff Date).
(ff)
Underwriting Guidelines. Each Receivable has been originated in accordance with UACC’s underwriting guidelines.
(gg)
Bulk Transfer Laws. The transfer, assignment and conveyance of the Receivables and the related Receivable Files from the Transferor to the Purchaser are not subject to the bulk transfer or any similar statutory provisions in effect in any applicable jurisdiction.
(hh)
Geographic. No Receivable was originated by a Dealer located in Mississippi or Maine.
SECTION 3.4.
REPURCHASE UPON BREACH. The Transferor or the Purchaser, as the case may be, shall inform the other party to this Agreement promptly, in writing, upon the discovery of any breach or failure to be true of the representations or warranties made by the Transferor in Section 3.3; provided that the failure to give such notice shall not affect any obligation of the Transferor. If the breach or failure shall not have been cured by the last day of the Collection Period which includes the 60th day (or if the Transferor elects, an earlier day) after the date on which the Transferor becomes aware of, or receives written notice from the Purchaser or an assignee from the Purchaser or an assignee from of, such breach or failure, and such breach or failure materially and adversely affects the interests of the Issuer and the Holders in any Receivable, the Transferor shall repurchase each such Receivable from the Pu rchaser, or its successors or assigns, as of such last day of such Collection Period at a purchase price equal to the Purchase Amount for such Receivable as of such last day of such Collection Period, which amount shall be deposited in the Collection Account pursuant to the provisions of the Sale and Servicing Agreement. In consideration of the purchase of a Receivable hereunder, the Transferor shall (unless otherwise directed by the Purchaser, or its successors or assigns, in writing) deposit the Purchase Amount of such Receivable, no later than the close of business on the next Determination Date, in the manner specified in Section 5.6 of the Sale and Servicing Agreement. Upon the payment of such purchase price by the Transferor, the Purchaser or its assignee shall release and shall execute and deliver such instruments of release, transfer or assignment, in each case without recourse or representation as shall be necessary to vest in the Transferor or its designee any Receivable repurchased pur suant hereto. The sole remedy of the Purchaser and its successor or assigns with respect to a breach or failure to be true of the warranties made by the Transferor pursuant to Section 3.3, shall be to require the Transferor to repurchase Receivables pursuant to this Section 3.4. In addition to the foregoing and notwithstanding whether the related Receivable shall have been purchased by Transferor, Transferor shall indemnify the Issuer, the Trust Collateral Agent, the Trustee, the Backup Servicer, the Custodian, the Owner Trustee, the Insurer, the Noteholders and the Certificateholder from and against all costs, expenses, losses, damages, claims and liabilities, including reasonable fees and expenses of counsel, which may be asserted against or incurred by any of them as a result of third party claims arising out of the events or facts giving rise to such repurchase events
SECTION 3.5.
REPRESENTATIONS AND WARRANTIES WITH RESPECT TO REVISED ARTICLE 9 . The Transferor hereby makes the following representations and warranties:
(a)
To the extent that the transfer under this Agreement is deemed to be other than a sale, this Agreement, and all filings described under this Agreement, creates a valid and continuing security interest (as defined in the applicable UCC) in the Receivables in favor of the Purchaser, which security interest is prior to all other Liens and is enforceable as such as against creditors of and purchasers from the Transferor.
(b)
UACC has taken all steps necessary to perfect its security interest against each related Obligor in the Financed Vehicles securing the Receivables.
(c)
The Receivables constitute “tangible chattel paper” within the meaning of the applicable UCC.
(d)
The Transferor owns and has good and marketable title to the Receivables free and clear of any Lien, claim or encumbrance of any Person.
(e)
All original executed copies of each agreement that constitutes or evidences the Receivables have been delivered to the Custodian.
(f)
Other than the security interest granted to the Seller pursuant to this Agreement, the Transferor has not pledged, assigned, sold, granted a security interest in, or otherwise conveyed any of the Receivables. The Transferor has not authorized the filing of and is not aware of any financing statements against the Transferor that include a description of collateral covering the Receivables other than any financing statement relating to the security interest granted to the Purchaser hereunder or that has been terminated. The Transferor is not aware of any judgment or tax lien filings against the Transferor.
(g)
None of the agreements that constitute or evidence the Receivables has any marks or notations indicating that it has been pledged, assigned or otherwise conveyed to any Person other than the Purchaser.
(h)
The Receivables do not have any marks or notations indicating that they have been pledged by the Transferor to any person other than the Purchaser. All financing statements filed or to be filed against the Transferor in favor of the Purchaser in connection herewith describing the Receivables contain a statement to the following effect: "A purchase of or security interest in any collateral described in this financing statement will violate the rights of ACE Securities Corp. under the Purchase Agreement, unless authorized by ACE Securities Corp."
Such representations and warranties shall speak as of the Closing Date, but shall survive the transfer and assignment of the Receivables to Purchaser under this Agreement, the transfer and assignment of the Receivables to the Issuer under the Sale and Servicing Agreement and the pledge thereof to Indenture Trustee pursuant to the Indenture. These representations and warranties are not waivable.
ARTICLE IV
CONDITIONS
SECTION 4.1.
CONDITIONS TO OBLIGATION OF THE PURCHASER. The obligation of the Purchaser to purchase the Receivables from the Transferor on the Closing Date is subject to the satisfaction of the following conditions:
(a)
Representations and Warranties True. The representations and warranties of each of the Transferor and the Servicer contained herein and in the other Basic Documents shall be true and correct on the Closing Date with the same effect as if made on the Closing Date, and each of the Transferor and the Servicer shall have performed all obligations to be performed by it hereunder and under the other Basic Documents on or before the Closing Date.
(b)
Computer Files Marked. The Transferor shall, on or before the Closing Date, indicate in its computer files that the Receivables have been sold to the Purchaser pursuant to this Agreement, and UACC shall, on or before the Closing Date, indicate in its computer files that the Receivables have been sold to the Transferor.
(c)
Documents to be Delivered. The Purchaser shall have received the following, all of which shall be dated as of the Closing Date or such other date as specified:
(i)
the Schedule of Receivables;
(ii)
an Officer’s Certificate of each of the Transferor and Servicer, each in a form satisfactory to Purchaser;
(iii)
opinions of counsel for the Transferor and the Servicer addressed to the Purchaser, in a form satisfactory to Purchaser;
(iv)
copies of resolutions of the board of directors of each of the Transferor and the Servicer approving the execution, delivery and performance of the Basic Documents to which each of the Transferor and the Servicer is a party, and the performance of the transactions contemplated hereunder and thereunder, certified by the Secretary or an Assistant Secretary;
(v)
copies of the organizational documents of each of the Transferor and the Servicer, together with all amendments, revisions and supplements thereto, certified by the Secretary of State of the state of its organization as of a recent date, to the effect that the Transferor or the Servicer, as applicable, has been duly organized, is in good standing and has a legal corporate existence;
(vi)
UCC search reports from the appropriate offices in California as to UACC and the Transferor;
(vii)
a letter from Deloitte & Touche and a letter from Grobstein, Horwath & Company LLP as to certain financial and statistical information in the Prospectus Supplement, which letter shall be acceptable in form and substance to the Purchaser;
(viii)
UACC and the Transferor shall record and file, at its own expense, on or prior to the Closing Date, a financing statement in each jurisdiction in which such filing is required by applicable law, with UACC, as debtor, and naming the Transferor as purchaser or secured party and the Indenture Trustee as assignee, and with the Transferor, as Seller or debtor, and naming the Purchaser as purchaser or secured party, and the Indenture Trustee, as assignee, naming the Receivables and the related property described in Section 2.01 (a) as collateral, 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 to the Transferor or Purchaser, as applicable; and UACC and the Transferor shall deliver a file-stamped copy, or other evidence satisfactory to the Purchaser of such filings, to the Purchaser on the Closi ng Date;
(ix)
such other documents, certificates and opinions as may be requested by the Purchaser or its counsel.
(d)
Execution of Basic Documents. The Basic Documents shall have been executed and delivered by the parties thereto.
(e)
Rating of the Notes. Moody’s and Standard & Poor’s, respectively, shall have assigned ratings of (i) “P-1” and “A-1+” to the Class A-1 Notes and (ii) “Aaa” and “AAA” to the Class A-2 Notes, the Class A-3 Notes and the Class A-4 Notes.
(f)
Other Transactions. The transactions contemplated by the Basic Documents shall be consummated on the Closing Date.
SECTION 4.2.
CONDITIONS TO OBLIGATION OF THE TRANSFEROR. The obligation of the Transferor to sell the Receivables to the Purchaser on the Closing Date is subject to the satisfaction of the following conditions:
(a)
Representations and Warranties True. The representations and warranties of the Purchaser contained herein and in the other Basic Documents 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 and under the other Basic Documents on or before the Closing Date.
(b)
Payment of Receivables Purchase Price. In consideration of the sale of the Receivables from the Transferor to the Purchaser as provided in Section 2.01, on the Closing Date the Purchaser shall have paid the Transferor an amount equal to the Receivables Purchase Price.
SECTION 4.3.
TERMINATION OF OBLIGATIONS. The Purchaser may terminate its obligations hereunder by notice to the Transferor at any time before delivery of and payment of the purchase price for the Receivables and prior to the issuance of the Notes if: (i) any of the conditions set forth in Section 4.1 hereof are not satisfied when and as provided therein; (ii) there shall have been the entry of a decree or order by a court or agency or supervisory authority having jurisdiction in the premises for the appointment of a conservator, receiver or liquidator in any insolvency, readjustment of debt, marshaling of assets and liabilities or similar proceedings of or relating to the Transferor, or for the winding up or liquidation of the affairs of the Transferor; (iii) there shall have been the consent by the Transferor to the appointment of a conservator or receiver or liquidator in any insolvency, readjustment of debt, marshaling of assets and liabilities or similar proceedings of or relating to the Transferor or of or relating to substantially all of the Mortgaged Property of the Transferor; (iv) any purchase and assumption agreement with respect to the Transferor or substantially all of the assets and Transferor Assets of the Transferor shall have been entered into; or (v) a Termination Event shall have occurred. The termination of the Purchaser’s obligations hereunder shall not terminate the Purchaser’s rights hereunder or its right to exercise any remedy available to it at law or in equity. A “Termination Event” means the existence of any one or more of the following conditions:
(a)
a stop order suspending the effectiveness of the Registration Statement shall have been issued or a proceeding for that purpose shall have been initiated or threatened by the Commission;
(b)
subsequent to the execution and delivery of this Agreement, there shall have occurred an adverse change in the condition, financial or otherwise, in the earnings, affairs, regulatory situation or business prospects of the Transferor reasonably determined by the Purchaser to be material;
(c)
any downgrading in the rating of any debt securities of the Transferor or any of its Affiliates, if any, by any “nationally recognized statistical rating organization” (as defined for purposes of Rule 436(g) under the Act), or any public announcement that any such organization has under surveillance or review its rating of any such debt securities (other than an announcement with positive implications of a possible upgrading, and no implication of a possible downgrading, of such rating) shall have occurred; or
(d)
subsequent to the date of this Agreement there shall have occurred any of the following: (i) any suspension or limitation of trading in securities generally on the New York Stock Exchange or any setting of minimum prices for trading on such exchange, or any suspension of trading of any securities of the Transferor on any exchange or in the over-the-counter market or a suspension or material limitation in trading in securities substantially similar to the Notes; (ii) a material disruption has occurred in securities settlement or clearance services in the United States; (iii) a general moratorium on commercial banking activities in New York declared by either Federal or New York State authorities; or (iv) the engagement by the United States in hostilities, or the escalation of such hostilities, or any calamity or crisis, if the effect of any such event specified in this clause (iv) in the judgment of the Purc haser makes it impracticable or inadvisable to proceed with the public offering or the delivery of the Notes on the terms and in the manner contemplated in the Prospectus Supplement.
ARTICLE V
COVENANTS OF TRANSFEROR
SECTION 5.1.
PROTECTION OF TITLE TO TRANSFEROR ASSETS. Transferor covenants and agrees with Purchaser as follows:
(a)
Transferor shall authorize and file such UCC financing statements and cause to be authorized and filed such UCC 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. Transferor 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. In the event that Transferor fails to perform its obligations under this subsection, Purchaser, Issuer or the Trust Collateral Agent may do so, at the expense of such Transferor. In furtherance of the foregoing, the Transferor hereby authorizes the Purchaser, the Issuer or the Trust Collateral Agent to file a record or records (as defined in the applicable UCC) , including, without limitation, financing statements, in all jurisdictions and with all filing offices as each may determine, in its sole discretion, are necessary or advisable to perfect the security interest granted to the Purchaser pursuant to this Agreement. Such financing statements may describe the collateral in the same manner as described herein or may contain an indication or description of collateral that describes such property in any other manner as such party may determine, in its sole discretion, is necessary, advisable or prudent to ensure the perfection of the security interest in the collateral granted to the Purchaser herein.
(b)
Transferor shall not change its name, identity or corporate structure or jurisdiction of organization 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 the UCC, unless it shall have given Purchaser, Owner Trustee and Indenture Trustee at least 60 days’ prior written notice thereof and shall have promptly filed appropriate amendments to all previously filed financing statements or continuation statements.
(c)
Transferor shall give Purchaser, Owner Trustee and Indenture Trustee at least 60 days’ prior written notice of any relocation of its principal executive office or change in its jurisdiction or organization, 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)
Transferor 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, Transferor’s master computer records (including any backup archives) that refer to a Receivable shall indicate clearly the interest of Purchaser, Issuer and Indenture Trustee in such Receivable and that such Receivable has been sold to Purchaser and by Purchaser to Issuer and is owned by Issuer and has been pledged to Indenture Trustee pursuant to the Indenture. Indication of Purchaser’s, Issuer’s and Indenture Trustee’s interest in a Receivable shall be deleted from or modified on Seller’s computer systems when, and only when, the related Receivable shall have been paid in full, repurchased by Transferor, purchased by Servicer or sold pursuant to Section 4.3(c) of the Sale and Servicing Agreement.
(e)
If at any time Transferor shall propose to sell, grant a security interest in or otherwise transfer any interest in receivables to any prospective purchaser, lender or other transferee, Transferor shall give 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 Issuer and pledged to Indenture Trustee.
(f)
Transferor shall, upon receipt 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 Transferor’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 its duties under this Agreement, Transferor shall furnish to Purchaser, Owner Trustee and Indenture Trustee, within thirty (30) Business Days, a list of all Receivables (by contract number and name of Obligor) conveyed to Purchaser hereunder and then owned by Issuer, 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 Issuer.
(h)
Transferor shall deliver or cause to be delivered to Purchaser, Owner Trustee and Indenture Trustee:
(1)
promptly after the execution and delivery of this Agreement and of each amendment hereto, an Opinion of Counsel either (A) stating that, in the opinion of such counsel, all financing statements and continuation statements have been executed and filed that are necessary fully to preserve and protect the interest of Purchaser in the Receivables, and reciting the details of such filings or referring to prior Opinions of Counsel in which such details are given, or (B) stating that, in the opinion of such counsel, no such action shall be necessary to preserve and protect such interest; and
(2)
within 120 days after the beginning of each calendar year beginning with the first calendar year beginning more than four months after the Cutoff Date and until there are no Outstanding Notes, an Opinion of Counsel, dated as of a date during such 120-day period, either (A) stating that, in the opinion of such counsel, all financing statements and continuation statements have been executed and filed that are necessary fully to preserve and protect the interest of Purchaser in the Receivables, and reciting the details of such filings or referring to prior Opinions of Counsel in which such details are given, or (B) stating that, in the opinion of such counsel, no such action shall be necessary to preserve and protect such interest.
Each Opinion of Counsel referred to in clause (1) or (2) above shall specify any action necessary (as of the date of such opinion) to be taken in the following year to preserve and protect such interest.
SECTION 5.2.
OTHER LIENS OR INTERESTS. Except for the conveyances hereunder, Transferor will not sell, pledge, assign or transfer to any other Person, or grant, create, incur, assume or suffer to exist any Lien on the Transferor Assets or any interest therein, and Transferor shall defend the right, title, and interest of Purchaser and the Issuer in and to the Transferor Assets against all claims of third parties claiming through or under Transferor.
SECTION 5.3.
INDEMNIFICATION.
(a)
Transferor shall defend, indemnify and hold harmless Purchaser, the Issuer, the Trust Collateral Agent, the Trustee, the Backup Servicer, the Custodian, the Owner Trustee, the Insurer, the Noteholders and the Certificateholder from and against any and all costs, expenses, losses, damages, claims, and liabilities, arising out of or resulting from any breach of any of Transferor's representations and warranties contained herein.
(b)
Transferor shall defend, indemnify and hold harmless Purchaser, the Issuer, the Trust Collateral Agent, the Trustee, the Backup Servicer, the Custodian, the Owner Trustee, the Insurer, the Noteholders and the Certificateholder from and against any and all costs, expenses, losses, damages, claims and liabilities arising out of or resulting from any action taken, or failed to be taken, by it in respect of any portion of the Receivables other than in accordance with this Agreement or the Sale and Servicing Agreement.
(c)
Transferor shall indemnify, defend and hold harmless Purchaser, the Issuer, the Trust Collateral Agent, the Trustee, the Backup Servicer, the Custodian, the Owner Trustee, the Insurer, the Noteholders and the Certificateholder from and against any loss, liability or expense imposed upon, or incurred by, Purchaser, the Issuer, the Trust Collateral Agent, the Trustee, the Backup Servicer, the Custodian, the Owner Trustee, the Noteholders or the Certificateholder as result of the failure of any Receivable, or the sale of the related Financed Vehicle, to comply with all requirements of applicable law.
Indemnification under this Section 5.3 shall include reasonable fees and expenses of counsel and expenses of litigation and shall survive payment of the Notes and the Certificate. The indemnity obligations hereunder shall be in addition to any obligation that Transferor may otherwise have.
SECTION 5.4.
NONPETITION COVENANT. Notwithstanding any prior termination of this Agreement, the Transferor shall not, prior to the date which is one year and one day after the termination of this Agreement with respect to Issuer, acquiesce, petition or otherwise invoke or cause Issuer to invoke the process of any court or government authority for the purpose of commencing or sustaining a case against Issuer under any Federal or state bankruptcy, insolvency or similar law or appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator or other similar official of Issuer or any substantial part of its property, or ordering the winding up or liquidation of the affairs of Issuer. This Section 5.2 shall survive the termination of this Agreement.
ARTICLE VI
INDEMNIFICATION AND CONTRIBUTION
SECTION 6.1.
INDEMNIFICATION
(a)
Each of the Transferor and UACC agrees to indemnify and hold harmless the Purchaser, each of its directors, each of its officers and each person, if any, who controls the Purchaser within the meaning of Section 15 of the Securities Act (collectively referred to for the purposes of this Section 6.1 and 6.2 as the “Purchaser”) against any loss, claim, damage or liability, joint or several, to which the Purchaser may become subject, under the Securities Act or otherwise, insofar as such loss, claim, damage or liability (or any action in respect thereof) arises out of or is based upon (i) any untrue statement or alleged untrue statement of a material fact contained in any preliminary prospectus supplement, the Prospectus Supplement or the Base Prospectus (in the case of the Base Prospectus, to the extent it describes or purports to describe the Basic Documents) or in any amendment or supplement thereto or (ii) the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they are made, not misleading, and shall reimburse the Purchaser for any legal or other expenses reasonably incurred by the Purchaser directly in connection with investigating or preparing to defend or defending against or appearing as a third party witness in connection with any such loss, claim, damage or liability (or any action in respect thereof) as such expenses are incurred; provided, however, that neither UACC nor the Transferor shall be liable in any such case to the extent that any such loss, claim, damage or liability (or any action in respect thereof) arises out of or is based upon an untrue statement or alleged untrue statement in or omission or alleged omission in reliance upon and in conformity with the Underwriter’s Information or the information set forth under the captions "The Policy" or &q uot;The Insurer" (or incorporated therein); provided, further, that such indemnity with respect to any preliminary prospectus supplement or any amendment or supplement thereto shall not inure to the benefit of the Purchaser from whom the person asserting any such loss, claim, damage or liability purchased the Notes which are the subject thereof (or to the benefit of any person controlling the Purchaser) if at or prior to the written confirmation of the sale of such Notes a copy of the Prospectus (or the Prospectus as amended or supplemented) was not sent or delivered to such person and the untrue statement or omission of a material fact contained in such preliminary prospectus supplement was corrected in the Prospectus (or the Prospectus as amended or supplemented) provided that UACC furnished such Prospectus (as amended or supplemented) to the Purchaser reasonably prior to the delivery of such confirmation.
(b)
The Purchaser shall indemnify and hold harmless each of UACC and the Transferor, each of its directors, each person, if any, who controls UACC or the Transferor, as applicable, within the meaning of Section 15 of the Securities Act against any loss, claim, damage or liability, joint or several, to which they may become subject, under the Securities Act (collectively referred to solely for the purposes of this Section 6.1 and 6.2 as “UACC” or the “Transferor,” as applicable) or otherwise, insofar as such loss, claim, damage or liability (or any action in respect thereof) arises out of or is based upon (i) any untrue statement or alleged untrue statement of a material fact contained in any preliminary prospectus supplement or the Prospectus Supplement or in any amendment or supplement thereto but only to the extent that the untrue statement or alleged untrue statement was made in reliance upon and in conformity with the Underwriter’s Information, (ii) the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they are made, not misleading, but only to the extent that the omission or alleged omission was made in reliance upon and in conformity with the Underwriter’s Information, (iii) any untrue statement or alleged untrue statement of a material fact contained in the Base Prospectus (in the case of the Base Prospectus, to the extent it does not describe or purport to describe the Basic Documents) or in any amendment or supplement thereto or (iv) the omission or alleged omission to state in the Base Prospectus (in the case of the Base Prospectus, to the extent not describing the Basic Documents) a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they are made, not misleading.
(c)
Promptly after receipt by an indemnified party under this Section 6.1 of notice of any claim or the commencement of any action, the indemnified party shall, if a claim in respect thereof is to be made against the indemnifying party under this Section 6.1, notify the indemnifying party in writing of the claim or the commencement of that action; provided, however, that the failure to notify the indemnifying party shall not relieve it from any liability which it may have to an indemnified party otherwise than under this Section 6.1. If any such claim or action shall be brought against an indemnified party, and it shall notify the indemnifying party thereof, the indemnifying party shall be entitled to participate therein and, to the extent that it wishes, jointly with any other similarly notified indemnifying party, to assume the defense thereof with counsel reasonably satisfactory to the indemnified party. &n bsp;After notice from the indemnifying party to the indemnified party of its election to assume the defense of such claim or action, the indemnifying party shall not be liable to the indemnified party under this Section 6.1 for any legal or other expenses subsequently incurred by the indemnified party in connection with the defense thereof other than reasonable costs of investigation; provided, however, an indemnified party shall have the right to employ its own counsel in any such action, but the fees, expenses and other charges of such counsel for the indemnified party will be at the expense of such indemnified party unless (1) the employment of counsel by the indemnified party has been authorized in writing by the indemnifying party, (2) the indemnified party has reasonably concluded (based upon advice of counsel to the indemnified party) that there may be legal defenses available to it or other indemnified parties that are different from or in addition to those available to the indemnifying party, (3) a conflict or potential conflict exists (based upon advice of counsel to the indemnified party) between the indemnified party and the indemnifying party (in which case the indemnifying party will not have the right to direct the defense of such action on behalf of the indemnified party) or (4) the indemnifying party has not in fact employed counsel reasonably satisfactory to the indemnified party to assume the defense of such action within a reasonable time after receiving notice of the commencement of the action, in each of which cases the reasonable fees, disbursements and other charges of counsel will be at the expense of the indemnifying party or parties. It is understood that the indemnifying party or parties shall not, in connection with any proceeding or related proceedings in the same jurisdiction, be liable for the reasonable fees, disbursements and other charges of more than one separate firm of attorneys (in addition to any local counsel) at any one time for all such indemnified party or parti es. Each indemnified party, as a condition of the indemnity agreements contained in Sections 6.1(a) and 6.1(b), shall use all reasonable efforts to cooperate with the indemnifying party in the defense of any such action or claim. No indemnifying party shall be liable for any settlement of any such action effected without its written consent, but if settled with its written consent or if there be a final judgment of the plaintiff in any such action, the indemnifying party agrees to indemnify and hold harmless any indemnified party from and against any loss or liability by reason of such settlement or judgment. No indemnifying party shall, without the prior written consent of the indemnified party, effect any settlement of any pending or threatened action in respect of which any indemnified party is or could have been a party and indemnity could have been sought hereunder by such indemnified party unless such settlement (i) includes an unconditional release of such indemnified party from all liabil ity on any claims that are the subject of such action and (ii) does not include a statement as to, or an admission of, fault, culpability or failure to act by or on behalf of an indemnified party.
SECTION 6.2.
CONTRIBUTION. If the indemnification provided for in Section 6.1 is unavailable or insufficient to hold harmless an indemnified party under Section 6.1(a) or (b), then each indemnifying party shall, in lieu of indemnifying such indemnified party, contribute to the amount paid or payable by such indemnified party as a result of such loss, claim, damage or liability (i) in such proportion as shall be appropriate to reflect the relative benefits received by the Transferor on the one hand and the Purchaser on the other from the offering of the Notes or (ii) if the allocation provided by clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of UACC and the Transferor on the one hand and the Purchaser on the other with respect to the statements or omissions which resulted in such loss, claim, damage or liability, as well as any other relevant equitable considerations. The relative benefits received by UACC and the Transferor on the one hand and the Purchaser on the other with respect to such offering shall be deemed to be in the same proportion as the Receivables Purchase Price (before deducting expenses) received by UACC and the Transferor bear to the total underwriting discounts and commissions received by the Underwriter with respect to the Notes purchased by it. The relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by UACC and the Transferor on the one hand or the Purchaser on the other, the intent of the parties and their relative knowledge, access to information and opportunity to correct or prevent such untrue statement or omission.
Each of UACC and the Transferor and the Purchaser agree that it would not be just and equitable if contributions pursuant to this Section 6.2 were to be determined by pro rata allocation (even if the Purchaser were treated as one entity for such purpose) or by any other method of allocation which does not take into account the equitable considerations referred to herein. The amount paid or payable by an indemnified party as a result of the loss, claim, damage or liability referred to above in this Section 6.2 shall be deemed to include, subject to the limitations on the fees and expenses of separate counsel set forth in Section 6.1, for purposes of this Section 6.2, any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such claim or any action in respect thereof. Notwithstanding the provisions of this Section 6.2, the Purchaser sha ll not be required to contribute any amount in excess of the amount by which the total price at which the Notes underwritten by the Underwriters and distributed to the public were offered to the public less the amount of any damages which the Purchaser has otherwise paid or become liable to pay by reason of any untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation.
ARTICLE VII
MISCELLANEOUS PROVISIONS
SECTION 7.1.
OBLIGATIONS OF TRANSFEROR. The obligations of Transferor under this Agreement shall not be affected by reason of any invalidity, illegality or irregularity of any Receivable.
SECTION 7.2.
TRANSFEROR’S ASSIGNMENT OF PURCHASED RECEIVABLES. With respect to all Receivables repurchased by Transferor pursuant to this Agreement, Purchaser shall assign, without recourse, representation or warranty, to Transferor all Purchaser’s right, title and interest in and to such Receivables, and all security and documents relating thereto.
SECTION 7.3.
SUBSEQUENT TRANSFER TO ISSUER AND INDENTURE TRUSTEE. Transferor acknowledges that:
(a)
Purchaser will, pursuant to the Sale and Servicing Agreement, sell the Receivables to Issuer and assign its rights under this Agreement to the Issuer 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 Issuer, the Owner Trustee, the Noteholders and the Certificateholders. Transferor hereby consents to such sale and assignment.
(b)
Issuer will, pursuant to the Indenture, pledge the Receivables and its rights under this Agreement to the Indenture Trustee for the benefit of the Noteholders, and that the representations and warranties contained in this Agreement and the rights of Purchaser under this Agreement, including under Section 3.4 are intended to benefit the Indenture Trustee and the Noteholders. Transferor hereby consents to such pledge.
SECTION 7.4.
AMENDMENT.
(a)
This Agreement may be amended by Transferor and the Purchaser, with the consent of the Servicer, Owner Trustee and Indenture Trustee (which consent may not be unreasonably withheld), but without the consent of any of the Noteholders or the Certificateholders 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 is authorized and permitted by this Agreement and shall not, as evidenced by an Opinion of Counsel delivered to the Purchaser, the Owner Trustee and the Indenture Trustee or the satisfaction of the Rating Agency Condition, adversely affect in any material respect the interests of any Noteholder or Certificateholder.
(b)
This Agreement may also be amended from time to time by Transferor and Purchaser, with the consent of the 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 the Certificate Balance 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 Certificateholders or (ii) reduce the aforesaid percentage of the Outstanding Amount of the Notes and the Certificate Balance, 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 Certificates 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 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 Certificateholders 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, Purchaser, Owner Trustee and Indenture Trustee shall be entitled to receive and rely conclusively 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 and the Opinion of Counsel referred to in Section 5.1(h)(1) has been delivered. Purchaser, Owner Trustee and Indenture Trustee may, but shall not be obligated to, enter into any such amendment which affects Purchaser’s, Owner Trustee’s or Indenture Trustee’s, as applicable, own rights, duties or immunities under this Agreement or otherwise.
SECTION 7.5.
WAIVERS. No failure or delay on the part of Purchaser or the Trust Collateral Agent as assignee 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 7.6.
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 7.7.
COSTS AND EXPENSES. Transferor 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 Transferor Assets and Purchaser agrees to pay expenses incident to the performance of its obligations under this Agreement.
SECTION 7.8.
REPRESENTATIONS TO TRANSFEROR. The respective agreements, representations, warranties and other statements by Transferor 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 7.9.
GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, INCLUDING SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW, BUT OTHERWISE 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 7.10.
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 7.11.
THIRD-PARTY BENEFICIARIES. Each of the Issuer, Owner Trustee (individually and in its capacity as such), Indenture Trustee and the Insurer (individually and in its capacity as such) and the Underwriter is an intended third-party beneficiary of this Agreement.
It is acknowledged and agreed that the provisions of this Agreement may be enforced by or on behalf of such Persons to the same extent as if it were a party hereto.
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.
UPFC AUTO RECEIVABLES CORP.
By:
/s/ Garland W. Koch
Name: Garland W. Koch
Title: Chief Financial Officer
ACE SECURITIES CORP.
By:
/s/ Doris J. Hearn
Name: Doris J. Hearn
Title: Vice President
Acknowledged and agreed with
respect to Article VI of the Purchase Agreement:
UNITED AUTO CREDIT CORPORATION
By:
/s/ Mario Radrigan
Name: Mario Radrigan
Title: Senior Vice President
EXHIBIT A
United Auto Receivables Corp.
3990 Westerly Place, Suite 200
Newport Beach, California 92660
Attn: Garland Koch
Tel: ###-###-####
Fax: ###-###-####
ACE Securities Corp.
___________________________
New York, New York, _________
Attn: ______________________
Tel: _______________________
Fax: _______________________
