EXHIBIT 10.4
RECEIVABLES PURCHASE AGREEMENT
between
BMW FINANCIAL SERVICES NA, LLC,
as Seller,
and
BMW FS SECURITIES LLC,
as Depositor
Dated as of September 1, 2006
<PAGE>
TABLE OF CONTENTS
PAGE
ARTICLE I
CERTAIN DEFINITIONS..........................................3
ARTICLE II
CONVEYANCE OF RECEIVABLES....................................5
SECTION 2.01 Conveyance
of Receivables............................5
SECTION 2.02 The
Closing..........................................6
ARTICLE III
REPRESENTATIONS AND WARRANTIES...............................6
SECTION 3.01
Representations and Warranties of the Depositor......6
SECTION 3.02
Representations and Warranties of the Seller.........8
ARTICLE IV
CONDITIONS..................................................20
SECTION 4.01 Conditions
to Obligation of the Depositor...........20
SECTION 4.02 Conditions
to Obligation of the Seller..............21
ARTICLE V
COVENANTS OF THE SELLER AND THE DEPOSITOR...................22
SECTION 5.01 Protection
of Right, Title and Interest.............22
SECTION 5.02 Other
Liens or Interests............................23
SECTION 5.03 Costs and
Expenses..................................23
SECTION 5.04 Hold
Harmless.......................................23
ARTICLE VI
MISCELLANEOUS PROVISIONS....................................24
SECTION 6.01
Obligations of Seller...............................24
SECTION 6.02 Repurchase
Events...................................24
SECTION 6.03 Depositor
Assignment of Repurchased Receivables.....24
SECTION 6.04 Transfer
to the Issuer..............................24
SECTION 6.05
Amendment...........................................24
SECTION 6.06
Waivers.............................................25
SECTION 6.07
Notices.............................................25
SECTION 6.08 Costs and
Expenses..................................26
SECTION 6.09
Representations of the Seller and the Depositor.....26
SECTION 6.10
Confidential Information............................26
SECTION 6.11 Headings
and Cross-References.......................26
SECTION 6.12 Governing
Law.......................................26
SECTION 6.13
Counterparts........................................26
i
<PAGE>
TABLE OF CONTENTS
(CONTINUED)
PAGE
SECTION 6.14 Third
Party Beneficiary.............................26
SECTION 6.15 No
Proceedings......................................26
ii
<PAGE>
EXHIBITS
EXHIBIT A
Matters Addressed in Opinion of Seller's Counsel
EXHIBIT B
Prospectus Supplement
SCHEDULE I
Schedule of Receivables
SCHEDULE II
Location of Receivable Files
SCHEDULE III
Receivable File Schedule
<PAGE>
THIS RECEIVABLES PURCHASE AGREEMENT dated as of September 1,
2006, is between BMW FINANCIAL SERVICES NA, LLC, a Delaware limited
liability
company ("BMW FS"), as the seller (the "Seller") and BMW FS
SECURITIES LLC, a
Delaware limited liability company, as depositor (the
"Depositor").
RECITALS
WHEREAS, in the regular course of its business, BMW FS has
purchased certain motor vehicle retail installment sale contracts
and promissory
notes secured by new and used automobiles, light trucks and
motorcycles from
certain motor vehicle dealers directly or indirectly through BMW
Bank of North
America;
WHEREAS, the Seller and the Depositor wish to set forth the
terms
pursuant to which such contracts are to be sold by the Seller to
the Depositor;
and
WHEREAS, the Depositor intends, concurrently with its purchase
hereunder, to convey all of its right, title and interest in and to
all of such
contracts to BMW Vehicle Owner Trust 2006-A (the "Issuer") pursuant
to a Sale
and Servicing Agreement dated as of September 1, 2006 (the "Sale
and Servicing
Agreement"), by and among the Issuer, the Depositor, the Seller,
Servicer,
Administrator and Custodian, and Deutsche Bank Trust Company
Americas, as
Indenture Trustee, and the Issuer intends to pledge all of its
right, title and
interest in and to such contracts to the Indenture Trustee pursuant
to the
Indenture dated as of September 1, 2006 (the "Indenture"), by and
between the
Issuer and the Indenture Trustee.
NOW, THEREFORE, in consideration of the foregoing, other good
and
valuable consideration and the mutual terms and covenants contained
herein, the
parties hereto agree as follows:
ARTICLE I
CERTAIN DEFINITIONS
Terms not defined in this Agreement shall have the meanings
assigned thereto in the Sale and Servicing Agreement, the
Underwriting Agreement
or the Indenture, as the case may be. As used in this Agreement,
the following
terms shall, unless the context otherwise requires, have the
following meanings
(such meanings to be equally applicable to the singular and plural
forms of the
terms defined):
"Agreement" shall mean this Receivables Purchase Agreement, as
the same may be amended and supplemented from time to time.
"BMW Bank" shall mean BMW Bank of North America.
"BMW FS" shall mean BMW Financial Services NA, LLC.
"Conveyed Assets" shall have the meaning set forth in Section
2.01.
<PAGE>
"Depositor" shall mean BMW FS Securities LLC, a Delaware
limited
liability company, and its successors and assigns.
"Indenture" shall have the meaning set forth in the recitals.
"Lien Certificate" means with respect to a Financed Vehicle, an
original certificate of title, certificate of lien or other
notification issued
by the Registrar of Titles of the applicable State to a secured
party which
indicates that the lien of the secured party on such Financed
Vehicle is
recorded on the original certificate of title. In any jurisdiction
in which the
original certificate of title is required to be given to the
Obligor, the term
"Lien Certificate" shall mean only a certificate or notification
issued to a
secured party.
"Prospectus" shall have the meaning set forth in the
Underwriting
Agreement.
"Prospectus Supplement" means the Prospectus Supplement dated
September 13, 2006, relating to the BMW Vehicle Owner Trust 2006-A
in the form
attached hereto as Exhibit B.
"Receivable" shall mean any Contract listed on Schedule I
hereto
(which Schedule may be in the form of microfiche).
"Registrar of Titles" means with respect to any State, the
governmental agency or body responsible for the registration of,
and the
issuance of certificates of title relating to, motor vehicles and
liens thereon.
"Registration Statement" means Registration Statement No.
333-133845 filed by the Depositor with the Securities and Exchange
Commission in
the form in which it became effective on August 11, 2006.
"Repurchase Event" shall have the meaning specified in Section
6.02.
"Sale and Servicing Agreement" shall have the meaning set forth
in the recitals.
"Schedule of Receivables" shall mean the list of Receivables
annexed hereto as Schedule I (which Schedule may be in the form of
microfiche).
"Seller" shall mean BMW FS, and its successor and assigns.
"Transfer Date" shall mean the Closing Date.
"Underwriters" means each of Barclays Capital Inc., Banc of
America Securities LLC, Credit Suisse Securities (USA) LLC, Merrill
Lynch,
Pierce, Fenner & Smith Incorporated and Greenwich Capital
Markets, Inc.
3
<PAGE>
"Underwriting Agreement" means the Underwriting Agreement dated
September 13, 2006, relating to BMW Vehicle Owner Trust 2006-A
among BMW FS, the
Depositor and Barclays Capital Inc., as representative of the
Underwriters.
ARTICLE II
CONVEYANCE OF RECEIVABLES
SECTION 2.01 Conveyance of Receivables.
(a) In consideration
of the Depositor's delivery to or upon the
order of the Seller on the Closing Date of $1,153,770,268.17 (the
"Purchase
Price"), the Seller does hereby sell, transfer, assign, set over
and otherwise
convey to the Depositor, without recourse (subject to the
obligations of the
Seller herein) all right, title, and interest of the Seller in and
to:
(i) the Receivables and all moneys received thereon after
the close of business on August 31, 2006;
(ii) the security interests in the Financed Vehicles and any
accessions thereto granted by Obligors pursuant to the
Receivables and any other interest of the Seller in such
Financed
Vehicles;
(iii) any Liquidation Proceeds and any other proceeds with
respect to the Receivables from claims on any physical damage,
credit life or disability insurance policies covering Financed
Vehicles or Obligors, including any vendor's single interest or
other collateral protection insurance policy;
(iv) any property that shall have secured a Receivable and
that shall have been acquired by or on behalf of the Seller;
(v) all documents and other items contained in the
Receivable Files;
(vi) all proceeds from any Receivable repurchased by a
Dealer pursuant to a Dealer Agreement and all rights against
BMW
Bank pursuant to one or more Bills of Sale pursuant to which
the
Seller acquired the Receivables; and
(vii) the proceeds of any and all of the foregoing
(collectively, with the assets listed in clauses (i) through
(vi)
above, the "Conveyed Assets").
(b) For all non-tax
purposes, the Seller and the Depositor
intend that the transfer of assets by the Seller to the Depositor
pursuant to
this Agreement be a sale of the ownership interest in such assets
to the
Depositor, rather than the mere granting of a security interest to
secure a
4
<PAGE>
borrowing. In the event, however, that such transfer is deemed not
to be a sale
but to be of a mere security interest to secure a borrowing, the
Seller shall be
deemed to have hereby granted, and does hereby grant, to the
Depositor a first
priority security interest in all right, title and interest of the
Seller in and
to the Conveyed Assets and all accounts, money, chattel paper,
securities,
instruments, documents, deposit accounts, certificates of deposit,
letters of
credit, advices of credit, banker's acceptances, uncertificated
securities,
general intangibles, contract rights, goods and other property
consisting of,
arising from or relating to such Conveyed Assets, which security
interest shall
be perfected, and this Agreement shall constitute a security
agreement under
applicable law. Pursuant to the Sale and Servicing Agreement and
Section 6.04
hereof, the Depositor may sell, transfer and assign to the Issuer
(i) all or any
portion of the assets assigned to the Depositor hereunder, (ii) all
or any
portion of the Depositor's rights against the Seller under this
Agreement and
(iii) all proceeds thereof. Such assignment may be made by the
Depositor with or
without an assignment by the Depositor of its rights under this
Agreement, and
without further notice to or acknowledgement from the Seller. The
Seller waives,
to the extent permitted under applicable law, all claims, causes of
action and
remedies, whether legal or equitable (including any right of
setoff), against
the Depositor or any assignee of the Depositor relating to such
action by the
Depositor in connection with the transactions contemplated by the
Sale and
Servicing Agreement.
SECTION 2.02 The Closing. The sale and purchase of the
Receivables shall take place at a closing at the offices of Weil,
Gotshal &
Manges LLP, 767 Fifth Avenue, New York, New York 10153 on the
Closing Date,
simultaneously with the closing under (a) the Sale and Servicing
Agreement, (b)
the Indenture and (c) the Trust Agreement.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.01 Representations and Warranties of the Depositor.
The
Depositor hereby represents and warrants as follows to the Seller
and the
Indenture Trustee as of the date hereof and the Transfer Date:
(a) Organization and
Good Standing. The Depositor is duly
organized and validly existing as a limited liability company in
good standing
under the laws of the State of Delaware, with the power and
authority to own its
properties and to conduct its business as such properties are
currently owned
and such business is currently conducted.
(b) Due Qualification.
The Depositor is duly qualified to do
business as a foreign limited liability company in good standing,
and has
obtained all necessary licenses and approvals in all jurisdictions,
including a
license pursuant to the Pennsylvania Motor Vehicle Sales Finance
Act and the
Maryland Sales Finance Act, where the failure to do so would
materially and
adversely affect the Depositor's ability to acquire the Receivables
or the
validity or enforceability of the Receivables.
5
<PAGE>
(c) Power and
Authority. The Depositor has the corporate power
and authority to execute and deliver this Agreement and the other
Basic
Documents to which it is a party and to carry out their respective
terms; the
Depositor has full power and authority to sell and assign the
property to be
sold and assigned to and deposited with the Issuer, and the
Depositor shall have
duly authorized such sale and assignment to the Issuer by all
necessary
corporate action; and the execution, delivery and performance of
this Agreement
and the other Basic Documents to which the Depositor is a party
have been duly
authorized by the Depositor by all necessary corporate action.
(d) Binding
Obligation. This Agreement and the other Basic
Documents to which the Depositor is a party, when duly executed and
delivered by
the other parties hereto and thereto shall constitute legal, valid
and binding
obligations of the Depositor, enforceable against the Depositor in
accordance
with their respective terms, except as the enforceability thereof
may be limited
by bankruptcy, insolvency, reorganization or similar laws now or
hereafter in
effect relating to or affecting creditors' rights generally and to
general
principals or equity (whether applied in a proceeding at law or in
equity).
(e) No Violation. The
consummation of the transactions
contemplated by this Agreement and the fulfillment of the terms
hereof do not
conflict with, result in any breach of any of the terms and
provisions of, or
constitute (with or without notice or lapse of time or both) a
default under,
the limited liability company agreement of the Depositor, or any
indenture,
agreement or other instrument to which the Depositor is a party or
by which it
is bound, or violate any law, rules or regulation applicable to the
Depositor of
any court or federal or state regulatory body, administrative
agency or other
governmental instrumentality having jurisdiction over the
Depositor.
(f) No Proceedings.
There are no proceedings or investigations
pending or, to the Depositor's knowledge, threatened against the
Depositor
before any court, regulatory body, administrative agency or other
governmental
instrumentality having jurisdiction over the Depositor or its
properties (i)
asserting the invalidity of this Agreement or any other Basic
Document to which
the Depositor is a party, (ii) seeking to prevent the consummation
of any of the
transactions contemplated by this Agreement or any other Basic
Document to which
the Depositor is a party or (iii) seeking any determination or
ruling that might
materially and adversely affect the performance by the Depositor of
its
obligations under, or the validity or enforceability of, this
Agreement or any
other Basic Document to which the Depositor is a party.
(g) No Consents. The
Depositor is not required to obtain the
consent of any other party or any consent, license, approval,
registration,
authorization, or declaration of or with any governmental
authority, bureau or
agency in connection with the execution, delivery, performance,
validity, or
enforceability of this Agreement or any other Basic Document to
which it is a
party that has not already been obtained.
(h) The Depositor, and
the Securities being offered in this
Transaction, meets the requirements for use of Form S-3 under the
Securities Act
6
<PAGE>
of 1933, as amended (the "Act"), and has filed with the Securities
and Exchange
Commission (the "Commission") the Registration Statement on such
Form, including
a related base prospectus and a preliminary prospectus supplement,
for the
registration under the Act of the offering and sale of the
Securities.
(i) On the date of
this Agreement, the Registration Statement
will comply in all material respects with the applicable
requirements of the
Act, and the respective rules and regulations of the Commission
thereunder (the
"Rules and Regulations").
(j) On the date of
this Agreement, the Depositor is not aware of
the issuance by the Commission of any stop order suspending the
effectiveness of
the Registration Statement or the institution or threat of any
proceeding for
that purpose.
SECTION 3.02 Representations and Warranties of the Seller.
(a) The Seller hereby
represents and warrants as follows to the
Depositor and the Indenture Trustee as of the date hereof and as of
the Transfer
Date:
(i) Organization and Good Standing. The Seller has been duly
organized and is validly existing as a limited liability
company
under the
laws of the State of Delaware, with the power and
authority to own its properties and to conduct its business as
such properties are currently owned and such business is
currently conducted.
(ii) Due Qualification. The Seller is duly authorized to
transact business as a foreign limited liability company 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 be so authorized would have a
material adverse effect on the business, properties, assets, or
condition (financial or other) of the Seller and its
subsidiaries, considered as one enterprise.
(iii) Power and Authority; Binding Obligation. The Seller
has the power and authority to make, execute, deliver and
perform
this Agreement and all of the transactions contemplated under
this Agreement and the other Basic Documents to which the
Seller
is a party, and has taken all necessary action to authorize the
execution, delivery and performance of this Agreement and the
other Basic Documents to which the Seller is a party. When
executed and delivered, this Agreement and the other Basic
Documents to which the Seller is a party will constitute legal,
valid and binding obligations of the Seller enforceable in
accordance with their respective terms, except as enforcement
of
such terms
may be limited by bankruptcy, insolvency or similar
laws affecting the enforcement of creditors' rights generally
and
by the availability of equitable remedies and except as
7
<PAGE>
enforcement of such terms may be limited by receivership,
conservatorship and supervisory powers of bank regulatory
agencies generally.
(iv) No Violation. The execution, delivery and performance
by the Seller of this Agreement and the other Basic Documents
to
which the Seller is a party will not violate any provision of
any
existing state, federal or, to the best knowledge of the
Seller,
local law or regulation or any order or decree of any court
applicable to the Seller or any provision of the limited
liability company agreement of the Seller, or constitute a
breach
of any mortgage, indenture, contract or other agreement to
which
the Seller is a party or by which the Seller may be bound or
result in the creation or imposition of any lien upon any of
the
Seller's properties pursuant to any such mortgage, indenture,
contract or other agreement (other than this Agreement).
(v) No Proceedings. There are no proceedings or
investigations pending or, to the Seller's knowledge,
threatened
against the Seller before any court, regulatory body,
administrative agency or other governmental instrumentality
having jurisdiction over the Seller or its properties (i)
asserting the invalidity of this Agreement or any other Basic
Document to which the Seller is a party, (ii) seeking to
prevent
the consummation of any of the transactions contemplated by
this
Agreement or any other Basic Document to which the Seller is a
party or (iii) seeking any determination or ruling that might
materially and adversely affect the performance by the Seller
of
its obligations under, or the validity or enforceability of,
this
Agreement or any other Basic Document to which the Seller is a
party.
(vi) Chief Executive Office and Principal Place of Business.
The chief executive office and the principal place of business
of
the Seller for the previous five years is 300 Chestnut Ridge
Road, Woodcliff Lake, New Jersey 07677.
(vii) No Consents. The Seller is not required to obtain the
consent of any other party or any consent, license, approval,
registration, authorization, or declaration of or with any
governmental authority, bureau or agency in connection with the
execution, delivery, performance, validity, or enforceability
of
this Agreement or any other Basic Document to which it is a
party
that has not already been obtained.
(viii) No Notice. The Seller represents and warrants that it
acquired title to the Receivables in good faith, without notice
of any adverse claim.
(ix) Bulk Transfer. The Seller represents and warrants that
the transfer, assignment and conveyance of the Receivables by
the
Seller pursuant to this Agreement is not subject to the bulk
8
<PAGE>
transfer laws or any similar statutory provisions in effect in
any applicable jurisdiction.
(x) Seller Information. No certificate of an officer,
statement or document furnished in writing or report delivered
pursuant to the terms hereof by the Seller contains any untrue
statement of a material fact or omits to state any material
fact
necessary to make the certificate, statement, document or
report
not misleading.
(xi) Ordinary Course. The transactions contemplated by this
Agreement and the
other Basic Documents to which the Seller is a
party are in the ordinary course of the Seller's business.
(xii) Solvency. The Seller is not insolvent, nor will the
Seller be made insolvent by the transfer of the Receivables,
nor
does the Seller anticipate any pending insolvency.
(xiii) Legal Compliance. The Seller is not in violation of,
and the execution and delivery of this Agreement and the other
Basic Documents to which the Seller is a party by it and its
performance and compliance with the terms of this Agreement and
the other Basic Documents to which the Seller is a party will
not
constitute a violation with respect to, any order or decree of
any court or any order or regulation of any federal, state,
municipal or governmental agency having jurisdiction, which
violation would materially and adversely affect the Seller's
condition (financial or otherwise) or operations or any of the
Seller's properties or materially and adversely affect the
performance of any of its duties under the Basic Documents.
(xiv) Creditors. The Seller is not selling the Receivables
to the Depositor with any intent to hinder, delay or defraud
any
of its creditors.
(b) The Seller makes
the following representations and
warranties with respect to the Receivables, on which the Depositor
relies in
accepting the Receivables and in transferring the Receivables to
the Issuer
under the Sale and Servicing Agreement, and on which the Issuer
relies in
pledging the same to the Indenture Trustee. Such representations
and warranties
speak as of the execution and delivery of this Agreement and as of
the Transfer
Date, but shall survive the sale, transfer and assignment of the
Receivables to
the Depositor, the subsequent sale, transfer and assignment of the
Receivables
by the Depositor to the Issuer pursuant to the Sale and Servicing
Agreement and
the pledge of the Receivables by the Issuer to the Indenture
Trustee pursuant to
the Indenture and with respect to the representations and
warranties set forth
in paragraphs (lii) through (lviii) below, shall be
non-waivable.
(i) Characteristics of Receivables. Each Receivable (A) was
originated in the United States of America by a Dealer located
in
9
<PAGE>
the United States of America for the retail sale of a Financed
Vehicle in the ordinary course of such Dealer's business in
accordance with the Seller's credit policies as of the date of
origination or acquisition of the related Receivable, is
payable
in United States dollars, has been fully and properly executed
by
the parties thereto, has been purchased by the Seller from such
Dealer under an existing Dealer Agreement and has been validly
assigned by such Dealer to the Seller or by such Dealer to BMW
Bank, which has validly assigned the same to the Seller, except
that certain Receivables originated through the "Lease to Loan"
program were not originated by Dealers, but directly by the
Seller or BMW Bank, (B) has created or shall create a valid,
subsisting and enforceable first priority perfected security
interest in favor of the Seller in the Financed Vehicle, which
security interest is assignable by the Seller to the Depositor,
and by the Depositor to the Issuer, (C) contains customary and
enforceable provisions such that the rights and remedies of the
holder thereof are adequate for realization against the
collateral of the benefits of the security, (D) provides for
fixed level monthly payments (provided that the payment in the
last month of the term of the Receivable may be different from
the level scheduled payments) that fully amortize the Amount
Financed by maturity and yield interest at the APR and (E)
amortizes using the Simple Interest Method.
(ii) Compliance with Law. Each Receivable and the sale of
the related Financed Vehicle complied at the time it was
originated or made, and at the time of execution of this
Agreement complies, in all material respects with all
requirements of applicable federal, state and, to the best
knowledge of the Seller, local laws, rulings and regulations
thereunder, including usury laws, the Federal Truth-in-Lending
Act, the Equal Credit Opportunity Act, the Fair Credit Billing
Act, the Fair Credit Reporting Act, the Fair Debt Collection
Practices Act, the Federal Trade Commission Act, the
Magnuson-Moss Warranty Act, the Federal Reserve Board's
Regulations "B" and "Z," the Servicemembers Civil Relief Act,
as
amended (the "Relief Act"), the Military Reservist Relief Act
of
1991 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 applicable to
such Receivable.
(iii) Binding Obligation. Each Receivable represents the
genuine, legal, valid and binding payment obligation of the
Obligor thereon, enforceable by the holder thereof in
accordance
with its terms, except (A) as enforceability thereof may be
limited by bankruptcy, insolvency, reorganization or similar
laws
affecting the enforcement of creditors' rights generally and by
equitable limitations on the availability of specific remedies,
regardless of whether such enforceability is considered in a
proceeding in equity or at law and (B) as such Receivable may
be
10
<PAGE>
modified by the application after the Transfer Date of the
Relief
Act or the Military Reservist Relief Act of 1991.
(iv) No Government Obligor. No Receivable is due from the
United States of America or any State or any agency,
department,
subdivision or instrumentality thereof.
(v) Obligor Bankruptcy. To the best of the Seller's
knowledge, as of the Cutoff Date with respect to the
Receivables,
no Obligor is or has been, since the origination of the related
Receivable, the subject of a bankruptcy proceeding.
(vi) Schedule of Receivables. The information set forth in
Schedule I to this Agreement is true and correct in all
material
respects as of the close of business on the Cutoff Date.
(vii) Marking Records. By the Transfer Date, the Seller will
have caused its computer and accounting records relating to
each
Receivable to be marked to show that such Receivables have been
sold to the De
