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EXHIBIT 99.2
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EXECUTION COPY
RECEIVABLES PURCHASE AGREEMENT
between
MERRILL LYNCH BANK USA,
as Seller
and
ML ASSET BACKED CORPORATION,
as Purchaser
Dated as of May 31, 2007
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TABLE OF CONTENTS
Page
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1.
DEFINITIONS................................................................1
2. CONVEYANCE OF THE
RECEIVABLES..............................................3
3. REPRESENTATIONS AND WARRANTIES OF THE
PURCHASER............................4
4. REPRESENTATIONS AND WARRANTIES OF THE
SELLER...............................5
5. CONDITIONS TO OBLIGATION OF THE
PURCHASER..................................9
6. CONDITIONS TO OBLIGATION OF THE
SELLER....................................10
7. COVENANTS OF THE
SELLER...................................................11
8.
INDEMNIFICATION...........................................................12
9.
CONTRIBUTION..............................................................14
10. TRANSFER TO THE
ISSUER...................................................14
11. SURVIVAL OF REPRESENTATIONS AND
OBLIGATIONS..............................15
12.
AMENDMENT................................................................15
13.
NOTICES..................................................................16
14. SUCCESSORS AND
ASSIGNS...................................................16
15.
COUNTERPARTS.............................................................16
16. APPLICABLE
LAW...........................................................16
17. SEVERABILITY OF
PROVISIONS...............................................16
EXHIBIT
A...........................................................A-1
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This RECEIVABLES PURCHASE AGREEMENT (this "Agreement"), dated as
of May 31,
2007, between MERRILL LYNCH BANK USA, a Utah industrial bank,
(the "Seller"),
and ML ASSET BACKED CORPORATION, a Delaware corporation (the
"Purchaser").
PRELIMINARY STATEMENT
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Subject to the terms and conditions of this Agreement, the
Seller is
selling those Receivables identified on Exhibit A to the
Purchaser.
The Purchaser will transfer the Receivables to Merrill Auto
Trust
Securitization 2007-1, a Delaware statutory trust (the "Issuer")
pursuant to a
sale and servicing agreement dated as of May 31, 2007 (the "Sale
and Servicing
Agreement"), among the Issuer, the Purchaser, as Depositor, and
U.S. Bank
National Association, as master servicer (in such capacity, the
"Master
Servicer").
For good and valuable consideration, the receipt of which is
hereby
acknowledged, the parties hereto agree as follows:
1. Definitions.
For all purposes of this Agreement, the following terms shall
have the
meanings set forth below:
"Cut-off Date" means the close of business on May 31, 2007.
"Dealer" means the dealer who sold a Financed Vehicle and who
originated
and assigned the respective Receivable prior to its assignment
to the Seller.
"Dealer Recourse" means, with respect to a Receivable, any and
all recourse
rights relating to misrepresentation or fraud against the Dealer
that originated
such Receivable and any successor Dealer.
"Final Prospectus" means the prospectus supplement, dated June
8, 2007, and
prospectus, dated May 2, 2007, of the Purchaser.
"Financed Vehicle" means a new or used automobile, light-duty
truck or
sport utility vehicle with all accessions thereto, securing an
Obligor's
indebtedness under the respective Receivable.
"Liquidated Receivable" means (i) any Receivable that, by its
terms, is in
default and as to which the Receivables Servicer has determined,
in accordance
with its customary servicing procedures, that eventual payment
in full is
unlikely or has repossessed and disposed of the Financed
Vehicle, and (ii) any
Receivable with respect to which the related Obligor has become
a debtor in a
bankruptcy proceeding.
"Liquidation Proceeds" means, with respect to any Receivable (a)
insurance
proceeds received by the Receivables Servicer and (b) monies
collected by the
Receivables Servicer from whatever source, including but not
limited to proceeds
of Financed Vehicles after repossession,
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on the Receivable, net of the costs of liquidation and any
payments required by
law to be remitted to the Obligor.
"Obligor" means the purchaser or co-purchasers of the Financed
Vehicle or
any other Person who owes payments under a Receivable (not
including any Dealer
in respect of Dealer Recourse).
"Origination Date" means, with respect to any Receivable, the
date such
Receivable is dated.
"Person" means any individual, corporation, estate, partnership,
joint
venture, limited liability company, association, joint stock
company, trust,
unincorporated organization, or government or any agency or
political
subdivision thereof.
"Preliminary Prospectus" means the preliminary prospectus
supplement, dated
June 2, 2007, and prospectus, dated May 2, 2007, of the
Purchaser.
"Purchase Price" has the meaning set forth in Section 2
hereof.
"Purchased Property" has the meaning set forth in Section 2
hereof.
"Receivable" means a receivable listed on the Schedule of
Receivables and
any amendments, modifications or supplements to such retail
installment sale
contract. The term "Receivable" does not include any Repurchased
Receivable.
"Registration Statement" means Registration Statement No.
333-139130 filed
by the Purchaser with the Securities and Exchange Commission in
the form in
which it became effective on May 2, 2007.
"Repurchase Event" has the meaning set forth in Section 7(f)
hereof.
"Schedule of Receivables" means the schedule of the Receivables
attached as
Exhibit A hereto.
"Seller Information" has the meaning set forth in Section 8(a)
hereof.
"Simple Interest Method" means the method of allocating a fixed
level
payment to principal and interest, pursuant to which the portion
of such payment
that is allocated to interest is equal to the amount accrued
from the date of
the preceding payment to the date of the current payment.
"Simple Interest Receivable" means a Receivable under which the
portion of
a payment allocable to interest and the portion allocable to
principal is
determined in accordance with the Simple Interest Method.
"Title Document" means, with respect to any Financed Vehicle,
the
certificate of title for, or other evidence of ownership of,
such Financed
Vehicle issued by the registrar of titles in the jurisdiction in
which such
Financed Vehicle is registered.
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"UCC" means the Uniform Commercial Code as in effect in any
relevant state.
Capitalized terms used and not otherwise defined herein
(including the
Preliminary Statement) shall have the meanings assigned thereto
in Appendix A to
the Sale and Servicing Agreement.
2. Conveyance of the Receivables.
In consideration of the Purchaser's payment to the Seller of
$800,049,820.04 (the "Purchase Price"), the Seller does hereby
irrevocably sell,
transfer, assign and otherwise convey to the Purchaser, without
recourse
(subject to the obligations herein) all of the Seller's right,
title and
interest in, to and under the following property whether now
owned or existing
or hereafter acquired or arising (collectively, the "Purchased
Property"):
(i) the Receivables;
(ii) monies received thereunder on or after the Cut-off
Date;
(iii) the security interests in the Financed Vehicles granted
by
Obligors pursuant to the Receivables and any other interest of
the Seller in the
Financed Vehicles;
(iv) rights to receive proceeds with respect to the Receivables
from
claims on any insurance policies covering the Financed Vehicles
or Obligors or
from rebates of premiums and other amounts relating to insurance
policies and
other items financed under the Receivables;
(v) Dealer Recourse, if any;
(vi) the Receivables Files;
(vii) all Liquidation Proceeds collected from whatever source on
a
Liquidated Receivable; and
(viii) all proceeds of any and every kind delivered with respect
to,
or derived from the foregoing and any and all other forms of
obligations and
receivables, instruments and other property that at any time
constitute all or
part of or are included in the proceeds of any of the foregoing
and all rights
to enforce the foregoing.
The sale, transfer, assignment and conveyance made hereunder
shall not
constitute and is not intended to result in an assumption by the
Purchaser of
any obligation of the Seller to the Obligors or any other Person
in connection
with the Purchased Property or any agreement, document or
instrument related
thereto. The Seller and the Purchaser intend that the sale,
transfer, assignment
and conveyance of the Purchased Property and other rights and
property pursuant
to this Section 2 shall be a sale and not a secured borrowing.
However, in the
event that such transfer is deemed to be a transfer for
security, the Seller
hereby grants to the Purchaser a first priority security
interest in all of the
Seller's right, title and interest in, to and under the
Purchased Property
whether now owned or existing or hereafter acquired or arising
and all proceeds
thereof (including, without limitation, "proceeds" as defined in
the UCC as in
effect from time to time in the State of New York) and all other
rights and
property transferred
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hereunder to secure a loan in an amount equal to the Purchase
Price, and in such
event, this Agreement shall constitute a security agreement
under applicable
law. The Seller hereby authorizes the Purchaser or its agents to
file such
financing statements and continuation statements as the
Purchaser may deem
advisable in connection with the security interest granted by
the Seller
pursuant to the preceding sentence.
3. Representations and Warranties of the Purchaser.
The Purchaser hereby represents and warrants as follows to the
Seller as of
the date hereof and the Closing Date:
(a) Organization and Good Standing. The Purchaser is a
corporation
duly organized, validly existing and in good standing under the
laws of the
State of Delaware, with all requisite 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 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 the Purchaser's ability to
acquire the
Receivables or the other Purchased Property or the validity or
enforceability of
the Receivables or the other Purchased Property.
(c) Power and Authority. The Purchaser has all corporate power
and
authority to execute, deliver and perform this Agreement and the
other Basic
Documents to which it is a party and to carry out their
respective terms.
(d) Binding Obligation. This Agreement and the other Basic
Documents
to which the Purchaser is a party, when duly executed and
delivered by the other
parties hereto and thereto, shall constitute legal, valid and
binding
obligations of the Purchaser, enforceable against the Purchaser
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
principles of 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
certificate of
incorporation or the by-laws of the Purchaser, or any indenture,
agreement or
other instrument to which the Purchaser is a party or by which
it is bound, or
violate any law, rules or regulation applicable to the Purchaser
of any court or
federal or state regulatory body, administrative agency or other
governmental
instrumentality having jurisdiction over the Purchaser.
(f) No Proceedings. There are no proceedings or investigations
pending
or, to the Purchaser's knowledge, threatened against the
Purchaser before any
court, regulatory body, administrative agency or other
governmental
instrumentality having jurisdiction over the Purchaser or its
properties (i)
asserting the invalidity of this Agreement or any other Basic
Document to which
the Purchaser is a party, (ii) seeking to prevent the
consummation of any of
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the transactions contemplated by this Agreement or any other
Basic Document to
which the Purchaser is a party or (iii) seeking any
determination or ruling that
might materially and adversely affect the performance by the
Purchaser of its
obligations under, or the validity or enforceability of, this
Agreement or any
other Basic Document to which the Purchaser is a party.
(g) No Consents. The Purchaser is not required to obtain the
consent
of any other party or any consent, 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.
4. Representations and Warranties of the Seller.
(a) The Seller hereby represents and warrants as follows to
the
Purchaser as of the date hereof and as of the Closing Date:
(i) Organization and Good Standing. The Seller is an
industrial
bank duly organized and validly existing under the laws of the
State of
Utah and continues to hold a valid certificate to do business as
such, and
has the power to own its assets and to transact the business in
which it is
currently engaged. The Seller is duly authorized to transact
business and
has obtained all necessary licenses and approvals, and is in
good standing
in each jurisdiction in which the character of the business
transacted by
it or any properties owned or leased by it requires such
authorization.
(ii) Power and Authority. 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.
(iii) 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 articles of association or incorporation or the bylaws 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).
(iv) No Proceedings. There are no proceedings or
investigations
pending or, to the Seller's knowledge, threatened against the
Seller before
any court,
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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.
(v) 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.
(vi) No Notice. The Seller represents and warrants that it
acquired title to the Receivables and the other Purchased
Property in good
faith, without notice of any adverse claim.
(vii) Bulk Transfer. The Seller represents and warrants that
the
transfer, assignment and conveyance of the Receivables and the
other
Purchased Property by the Seller pursuant to this Agreement are
not subject
to the bulk transfer laws or any similar statutory provisions in
effect in
any applicable jurisdiction.
(viii) 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.
(ix) 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.
(x) Solvency. The Seller is not insolvent, nor will the Seller
be
made insolvent by the transfer of the Purchased Property, nor
does the
Seller anticipate any pending insolvency.
(xi) Legal Compliance. The Seller is not in violation of, and
the
execution and delivery by the Seller of this Agreement and the
other Basic
Documents to which the Seller is a party 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.
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(xii) Creditors. The Seller did not sell the Receivables or
the
other Purchased Property to the Purchaser 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 Purchaser 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,
except as
otherwise expressly stated, as of the execution and delivery of
this Agreement
and as of the Closing Date, but shall survive the sale, transfer
and assignment
of the Receivables to the Purchaser, the concurrent sale,
transfer and
assignment of the Receivables by the Purchaser 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.
(i) Fraud. In connection with each Receivable, there has been
no
fraud committed by the Dealer that sold the related Financed
Vehicle and
such Dealer has not made any misrepresentation and has not taken
(or failed
to take) any action which could render such Receivable void or
otherwise
unenforceable.
(ii) Origination of Receivables. Each Receivable was
originated
in the United States of America by a Dealer for the retail sale
of a
Financed Vehicle in the ordinary course of such Dealer's
business, was
ful
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