Form of Receivables Purchase Agreement for Grantor Trusts

 Exhibit 10.4
                      Form of Receivables Purchase Agreement for Grantor Trusts

                                                                           
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                        RECEIVABLES PURCHASE AGREEMENT

                                   between

                   FIRST MERCHANTS ACCEPTANCE CORPORATION,

                                  as Seller,

                                     and

              FIRST MERCHANTS AUTO RECEIVABLES CORPORATION ( ),

                                 as Purchaser

                               Dated as of ( )

                                                                           
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                              TABLE OF CONTENTS

ARTICLE I Certain Definitions . . . . . . . . . . . . . . . . . . . . . .   4

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 Purchaser . . .   6
     Section 3.02.  Representations and Warranties of Seller  . . . . . .   7

ARTICLE IV     Conditions . . . . . . . . . . . . . . . . . . . . . . . .  10
     SECTION 4.01.  Conditions to Obligation of the Purchaser . . . . . .  11
     SECTION 4.02.  Conditions to Obligation of the Seller  . . . . . . .  11

ARTICLE V Covenants of the Seller . . . . . . . . . . . . . . . . . . . .  12
     SECTION 5.01.  Protection of Right, Title and Interest . . . . . . .  12
     SECTION 5.02.  Other Liens or Interests  . . . . . . . . . . . . . .  12
     SECTION 5.03.  Costs and Expenses  . . . . . . . . . . . . . . . . .  12
     SECTION 5.04.  Indemnification . . . . . . . . . . . . . . . . . . .  12

ARTICLE VI     Miscellaneous Provisions . . . . . . . . . . . . . . . . .  13
     SECTION 6.01.  Obligations of Seller . . . . . . . . . . . . . . . .  13
     SECTION 6.02.  Repurchase Events . . . . . . . . . . . . . . . . . .  13
     SECTION 6.03.  Purchaser Assignment of Repurchased Receivables . . .  13
     SECTION 6.04.  Transfer to the Trust . . . . . . . . . . . . . . . .  13
     SECTION 6.05.  Amendment . . . . . . . . . . . . . . . . . . . . . .  13
     SECTION 6.06.  Waivers . . . . . . . . . . . . . . . . . . . . . . .  14
     SECTION 6.07.  Notices . . . . . . . . . . . . . . . . . . . . . . .  14
     SECTION 6.08.  Costs and Expenses  . . . . . . . . . . . . . . . . .  14
     SECTION 6.09.  Representations of the Seller and the Purchaser . . .  14
     SECTION 6.10.  Confidential Information  . . . . . . . . . . . . . .  14
     SECTION 6.11.  Headings and Cross-References . . . . . . . . . . . .  14
     SECTION 6.12.  Governing Law . . . . . . . . . . . . . . . . . . . .  14
     SECTION 6.13.  Counterparts  . . . . . . . . . . . . . . . . . . . .  15

EXHIBIT A Form of Assignment  . . . . . . . . . . . . . . . . . . . . . . A-1

SCHEDULE I     Schedule of Receivables  . . . . . . . . . . . . . . . . . I-1
SCHEDULE II    Location of Receivable Files . . . . . . . . . . . . . .  II-1

     RECEIVABLES PURCHASE AGREEMENT dated as of ( ), between FIRST MERCHANTS
ACCEPTANCE CORPORATION, a Delaware corporation, as seller (the "Seller"), and
FIRST MERCHANTS AUTO RECEIVABLES CORPORATION ( ), a Delaware corporation, as
purchaser (the "Purchaser").

                                   RECITALS

     WHEREAS in the regular course of its business, the Seller has purchased
certain motor vehicle retail installment sale contracts secured by new and
used automobiles, light-duty trucks, vans and minivans from motor vehicle
dealers;

     WHEREAS the Seller and the Purchaser wish to set forth the terms
pursuant to which such contracts are to be sold by the Seller to the
Purchaser; and

     WHEREAS the Purchaser intends, concurrently with its purchase hereunder,
to convey all of its right, title and interest in and to such contracts to
First Merchants Auto Trust (199_-_) (the "Trust") pursuant to a Pooling
and Servicing Agreement dated as of ( ) (the "Pooling and Servicing
Agreement"), by and among First Merchant Auto Receivables Corporation ( ), as
depositor, First Merchants Acceptance Corporation, as servicer, and ( ), as
trustee and backup servicer;

     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 Pooling and Servicing Agreement.  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.

     "Assignment" shall mean the document of assignment substantially in the
      ----------
form attached to this Agreement as Exhibit A.

     "Pooling and Servicing Agreement" shall mean the Pooling and Servicing
      -------------------------------
Agreement dated as of ( ), among First Merchants Auto Receivables Corporation
( ), as Depositor, First Merchants Acceptance Corporation, as Servicer, and (
), as Trustee and Backup Servicer.

     "Purchaser" shall mean First Merchants Auto Receivables Corporation (
      ---------
), a Delaware corporation, its successors and assigns.

     "Receivable" shall mean any Contract listed on Schedule I hereto (which
      ----------
Schedule may be in the form of microfiche).

     "Repurchase Event" shall have the meaning specified in Section 6.02
      ----------------

     "Schedule of Receivables" shall mean the list of Receivables annexed
       -----------------------
hereto as Schedule I.

     "Seller" shall mean First Merchants Acceptance Corporation, a Delaware
      ------
corporation, its successors and assigns.

                                  ARTICLE II

                          Conveyance of Receivables
                         -------------------------

     SECTION 2.01.  Conveyance of Receivables.  In consideration of the
                    -------------------------
Purchaser's delivery to or upon the order of the Seller on the Closing Date
of $( ), the Seller does hereby sell, transfer, assign, set over and
otherwise convey to the Purchaser, without recourse (subject to the
obligations herein):

     (a)  all right, title and interest of the Seller in and to the
Receivables and all payments received with respect thereto on or after the
Cutoff Date;

     (b)  all right, title and interest of the Seller in and to the security
interests in the related Financed Vehicles and any accessions thereto granted
by Obligors pursuant to the Receivables and any other interest of the Seller
in such Financed Vehicles;

     (c)  all right, title and interest of the Seller in and to any Net
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;

     (d)  all right, title and interest of the Seller in and to any property
that shall have secured a Receivable and that shall have been acquired by or
on behalf of the Seller;

     (e)  all right, title and interest of the Seller in and to all documents
and other items contained in the Receivable Files; and

     (f)  the proceeds of any and all of the foregoing.

The Seller and the Purchaser intend that the transfer of assets by the Seller
to the Purchaser pursuant to this Agreement be a sale of the ownership
interest in such assets to the Purchaser, rather than the mere granting of a
security interest to secure a borrowing.  In the event, however, that such
transfer is deemed not to be a sale but to be of a mere security interest to
secure a borrowing, the Seller shall be deemed to have hereby granted to the
Purchaser a perfected first priority security interest in all such assets,
and this Agreement shall constitute a security agreement under applicable
law.  Pursuant to the Pooling and Servicing Agreement and Section 6.04
hereof, the Purchaser may sell, transfer and reassign to the Trust (i) all or
any portion of the assets assigned to the Purchaser hereunder, (ii) all or
any portion of the purchaser's rights against the Seller under this Agreement
and (iii) all proceeds thereof.  Such reassignment may be made by the
Purchaser with or without a reassignment by the Purchaser of its rights 
under this Agreement, and without further notice to or acknowledgement 
from the Seller.  The Seller waives, to the extent permitted under applicable 
law, all claims, causes of action and remedies, whether legal or equitable 
(including any right of setoff), against the Purchaser or any assignee of 
the Purchaser relating to such action by the Purchaser in connection with 
the transactions contemplated by the Pooling 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 Brown & Wood, One World Trade
Center, New York, New York 10048 on the Closing Date, simultaneously with the
closing under the Pooling and Servicing Agreement.

                                 ARTICLE III

                        Representations and Warranties
                       ------------------------------

     Section 3.01.  Representations and Warranties of the Purchaser.  The
                    -----------------------------------------------
Purchaser hereby represents and warrants to the Seller as of the date hereof
and as of the Closing Date:

     (a)  Organization and Good Standing.  The Purchaser has been duly
          ------------------------------
organized and is validly existing as a corporation in good standing under the
laws of the State of Delaware, with the power and authority to own its
properties and to conduct its business as such properties are currently owned
and such business is presently conducted.

     (b)  Due Qualification.  The Purchaser is duly qualified to do business
          -----------------
as a foreign corporation in good standing, and has obtained all necessary
licenses and approvals, in all jurisdictions in which the ownership or lease
of property or the conduct of its business shall require such qualifications.

     (c)  Power and Authority.  The Purchaser has the power and authority to
          -------------------
execute and deliver this Agreement and to carry out its terms; the Purchaser
had at all relevant times, and has, the power, authority and legal right to
acquire and own the Receivables; and the execution, delivery and performance
of this Agreement have been duly authorized by the Purchaser by all necessary
corporate action.

     (d)  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 articles of incorporation or bylaws of the Purchaser, or any indenture,
agreement or other instrument to which the Purchaser is a party or by which
it is bound, or result in the creation or imposition of any Lien upon any of
its properties pursuant to the terms of any such indenture, agreement or
other instrument (other than pursuant to the Basic Documents), or violate any
law or, to the best of the Purchaser's knowledge, any order, rule or
regulation applicable to the Purchaser of any court or of any federal or
state regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over the Purchaser or its properties.

     (e)  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, (ii) seeking to 
prevent the consummation of any of the transactions contemplated by this 
Agreement 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.

     Section 3.02.  Representations and Warranties of Seller.  (a)  The
                    ----------------------------------------
Seller hereby represents and warrants to the Purchaser as of the date hereof
and as of the Closing Date:

          (1)  Organization and Good Standing.  The Seller has been duly
               ------------------------------
organized and is validly existing as a corporation in good standing under the
laws of the State of Delaware, with the power and authority to own its
properties and to conduct its business as such properties are currently owned
and such business is presently conducted.

          (2)  Due Qualification.  The Seller is duly qualified to do
               -----------------
business as a foreign corporation in good standing, and has obtained all
necessary licenses and approvals, in all jurisdictions in which the ownership
or lease of property or the conduct of its business shall require such
qualifications.

          (3)  Power and Authority.  The Seller has the power and authority
               -------------------
to execute and deliver this Agreement and the other Basic Documents to which
it is a party and to carry out their respective terms; the Seller had at all
relevant times, and has, full power, authority and legal right to sell,
transfer and assign the property sold, transferred and assigned to the
Purchaser hereby and has duly authorized such sale, transfer and assignment
to the Purchaser by all necessary corporate action; and the execution,
delivery and performance of this Agreement and the other Basic Documents to
which the Seller is a party have been duly authorized by the Seller by all
necessary corporate action.

          (4)  No Violation.  The consummation of the transactions
               ------------
contemplated by this Agreement and the other Basic Documents to which the
Seller is a party and the fulfillment of their respective terms do not
conflict with, result in any breach of any of the terms and provisions of, or
constitute (with or without notice or lapse of time or both) a default under,
the articles of incorporation or bylaws of the Seller, or any indenture,
agreement or other instrument to which the Seller is a party or by which it
is bound, or result in the creation or imposition of any Lien upon any of its
properties pursuant to the terms of any such indenture, agreement or other
instrument (other than this Agreement), or violate any law or, to the best of
the Seller's knowledge, any order, rule or regulation applicable to the
Seller of any court or of any federal or state regulatory body,
administrative agency or other governmental instrumentality having
jurisdiction over the Seller or its properties.

          (5)  No Proceedings.   There are no proceedings or investigations
               --------------
pending or, to the Seller's knowledge, threatened against the Seller before
any court, regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over the Seller or its properties (i)
asserting the invalidity of this Agreement or any other Basic Document to
which the Seller is a party, (ii) seeking to prevent the consummation of any
of the transactions contemplated by this Agreement or any other Basic
Document to which the Seller is a party or (iii) seeking any determination or
ruling that might materially and adversely affect the performance by the
Seller of its obligations under, or the validity or enforceability of, this 
Agreement or any other Basic Document to which the Seller is a party.

          (6)  Valid Sale, Binding Obligations.  This Agreement and the other
               -------------------------------
Basic Documents to which the Seller is a party, when duly executed and
delivered by the other parties hereto and thereto, shall constitute legal,
valid and binding obligations of the Seller, enforceable against the Seller
in accordance with their respective terms, except as the enforceability
thereof may be limited by bankruptcy, insolvency, reorganization and similar
laws now or hereafter in effect relating to or affecting creditors' rights
generally and to general principles of equity (whether applied in a
proceeding at law or in equity).

          (7)  Chief Executive Office.  The chief executive office of the
               ----------------------
Seller is located at 570 Lake Cook Road, Suite 126, Deerfield, Illinois
60015.

          (8)  No Consents.  The Seller is not required to obtain the consent
               -----------
of any other party or any consent, license, approval, registration,
authorization, or declaration of or with any governmental authority, bureau
or agency in connection with the execution, delivery, performance, validity,
or enforceability of this Agreement or any other Basic Document to which it
is a party that has not already been obtained.

     (b)  The Seller makes the following representations and warranties with
respect to the Receivables, on which the Purchaser relies in accepting the
Receivables and in transferring the Receivables to the Trust.  Such
representations and warranties speak as of the execution and delivery of this
Agreement, but shall survive the sale, transfer and assignment of the
Receivables to the Purchaser and the subsequent sale, transfer and assignment
of the Receivables by the Purchaser to the Trust pursuant to the Pooling and
Servicing Agreement.

          (1)  Characteristics of Receivables.  Each Receivable (A) was
               ------------------------------
originated in the United States by a Dealer 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, was fully and properly executed by the parties
thereto, was purchased by the Seller from such Dealer under an existing
Dealer Agreement and was validly assigned by such Dealer to the Seller, (B)
has created or shall create a valid, subsisting and enforceable first
priority security interest in favor of the Seller in the Financed Vehicle,
which security interest is assignable by the Seller to the Purchaser, and by
the Purchaser to the Trust, (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 and (D)
provides for level monthly payments (provided that the payment in the first
and last month of the term of the Receivable may be different from the level
payments) that fully amortize the Amount Financed by maturity and yield
interest at the APR.

          (2)  Compliance with Law.  Each Receivable and the sale of the
               -------------------
related Financed Vehicle complied at the time it was originated or made, and
at the time of execution of this Agreement complies, in all material respects
with all requirements of applicable federal, state and local laws and
regulations thereunder, including usury laws, the Federal Truth-in-Lending
Act, the Equal Credit Opportunity Act, the Fair Credit Billing Act, the Fair
Credit Reporting Act, the Fair Debt Collection Practices Act, the Federal
Trade Commission Act, the Magnuson-Moss Warranty Act, the Federal Reserve
Board's Regulations "B" and "Z", the Soldiers' and Sailors' Civil Relief Act
of 1940, and state  adaptations of the National Consumer Act and of the 
Uniform Consumer Credit Code, and other consumer credit laws and equal 
credit opportunity and disclosure laws.

          (3)  Binding Obligation.  Each Receivable represents the genuine,
               ------------------
legal, valid and binding payment obligation of the Obligor thereon,
enforceable by the holder thereof in accordance with its terms, except (A) as
enforceability thereof may be limited by bankruptcy, insolvency,
reorganization or similar laws affecting the enforcement of creditors' rights
generally and by equitable limitations on the availability of specific
remedies, regardless of whether such enforceability is considered in a
proceeding in equity or at law and (B) as such Receivable may be modified by
the application after the Closing Date of the Soldiers' and Sailors' Civil
Relief Act of 1940, as amended.

          (4)  No Government Obligor.  No Receivable is due from the United
               ---------------------
States of America or any State or any agency, department, subdivision or
instrumentality thereof.

          (5)  Obligor Bankruptcy.  As of the Cutoff Date, no Obligor had
               ------------------
been identified on the records of the Seller as being the subject of a
current bankruptcy proceeding.

          (6)  Schedule of Receivables.  The information set forth in
               -----------------------
Schedule I to this Agreement is true and correct in all material respects as
of the close of business on the Cutoff Date.

          (7)  Marking Records.  By the Closing Date, the Seller will have
               ---------------
caused its records relating to each Receivable, including any computer
records, to be clearly and unambiguously marked to show that the Receivables
have been sold to the Purchaser by the Seller and transferred and assigned by
the Purchaser to the Trust in accordance with the terms of the Pooling and
Servicing Agreement.

          (8)  Computer Tape.  The computer tape regarding the Receivables
               -------------
made available by the Seller to the Purchaser is complete and accurate in all
respects as of the Cutoff Date.

          (9)  No Adverse Selection.  No selection procedures believed by the
               --------------------
Seller to be adverse to the Certificateholders were utilized in selecting the
Receivables.

          (10) Chattel Paper.  The Receivables constitute chattel paper
               -------------
within the meaning of the UCC as in effect in the State of Illinois.

          (11) One Original.  There is only one original executed copy of
               ------------
each Receivable.

          (12) Receivables in Force.  No Receivable has been satisfied,
               --------------------
subordinated or rescinded, nor has any Financed Vehicle been released from
the lien of the related Receivable in whole or in part.  None of the terms of
any Receivable has been waived, altered or modified in any respect since its
origination, except by instruments or documents identified in the related
Receivable File.  No Receivable has been modified as a result of the
application of the Soldiers' and Sailors' Civil Relief Act of 1940, as
amended.

          (13) Lawful Assignment.  No Receivable has been originated in, or
               -----------------
is subject to the laws of, any jurisdiction the laws of which would make
unlawful, void or voidable the sale, transfer and assignment of such 
Receivable under this Agreement or the Pooling and Servicing Agreement.

          (14) Title.  It is the intention of the Seller that the transfers
               -----
and assignments herein contemplated constitute sales of the Receivables from
the Seller to the Purchaser and that the beneficial interest in and title to
the Receivables not be part of the debtor's estate in the event of the filing
of a bankruptcy petition by or against the Seller under any bankruptcy law. 
No Receivable has been sold, transferred, assigned or pledged by the Seller
to any Person other than to the Purchaser or pursuant to this Agreement (or
by the Purchaser to the Trustee pursuant to the Pooling and Servicing
Agreement).  Immediately prior to the transfers and assignments herein
contemplated, the Seller has good and marketable title to each Receivable
free and clear of all Liens (other than the Lien of the Seller's senior
lenders identified in the (Consent to Fourth Amended and Restated Loan and
Security Agreement dated as of ( )), by and among the Seller and such secured
lenders), which Lien is being released simultaneously with the transfers and
assignments herein contemplated) and, immediately upon the transfer thereof,
the Purchaser shall have good and marketable title to each Receivable, free
and clear of all Liens.

          (15) Security Interest in Financed Vehicle.  Immediately prior to
               -------------------------------------
its sale, assignment and transfer to the Purchaser pursuant to this
Agreement, each Receivable shall be secured by a validly perfected first
priority security interest in the related Financed Vehicle in favor of the
Seller as secured party, or all necessary and appropriate actions have been
commenced that will result in the valid perfection of a first priority
security interest in such Financed Vehicle in favor of the Seller as secured
party.

          (16) All Filings Made.  All filings (including UCC filings)
               ----------------
required to be made in any jurisdiction to give the Purchaser a first
perfected ownership interest in the Receivables have been made.

          (17) No Defenses.  No Receivable is subject to any right of
               -----------
rescission, setoff, counterclaim or defense, and no such right has been
asserted or threatened with respect to any Receivable.

          (18) No Default.  There has been no default, breach, violation or
               ----------
event permitting acceleration under the terms of any Receivable (other than
payment delinquencies of not more than 31 days), and no condition exists or
event has occurred and is continuing that with notice, the lapse of time or
both would constitute a default, breach, violation or event permitting
acceleration under the terms of any Receivable, and there has been no waiver
of any of the foregoing.  As of the Cutoff Date, no Financed Vehicle has been
repossessed.

          (19) Insurance.  The Seller, in accordance with its customary
               ---------
procedures, has determined that the Obligor has obtained physical damage
insurance covering each Financed Vehicle and, under the terms of the related
Contract, the Obligor is required to maintain such insurance.

          (20) Final Scheduled Maturity Date.  No Receivable has a final
               -----------------------------
scheduled payment date after ( ).

          (21) Certain Characteristics of the Receivables.  As of the Cutoff
               ------------------------------------------
Date, (A) each Receivable had an original maturity of not more than 60
months; (B) no Receivable was more than 31 days past due; and (C) no funds
have been advanced by the Seller, any Dealer or anyone acting on behalf of
either of them in order to cause any Receivable to qualify under clause (B)
above.

                                  ARTICLE IV

                                  Conditions
                                 ----------

     SECTION 4.01.  Conditions to Obligation of the Purchaser.  The
                    -----------------------------------------
obligation of the Purchaser to purchase the Receivables is subject to the
satisfaction of the following conditions:

     (a)  Representations and Warranties True.  The representations and
          -----------------------------------
warranties of the Seller hereunder shall be true and correct on the Closing
Date with the same effect as if then made, and the Seller shall have
performed all obligations to be performed by it hereunder on or prior to the
Closing Date.

     (b)  Computer Files Marked.  The Seller shall, at its own expense, on
          ---------------------
or prior to the Closing Date, indicate in its computer files that receivables
created in connection with the Receivables have been sold to the Purchaser
pursuant to this Agreement and deliver to the Purchaser the Schedule of
Receivables, certified by the Seller's President, a Vice President or the
Treasurer to be true, correct and complete.

     (c)  Documents To Be Delivered by the Seller on the Closing Date.
          -----------------------------------------------------------

          (1)  The Assignment.  On the Closing Date, the Seller will execute
               --------------
and deliver an Assignment with respect to the Receivables, substantially in
the form of Exhibit A hereto.

          (2)  Evidence of UCC Filing.  On or prior to the Closing Date, the
               ----------------------
Seller shall record and file, at its own expense, a UCC-1 financing statement
in each jurisdiction in which required by applicable law, executed by the
Seller, as seller or debtor, and naming the Purchaser, as purchaser or
secured party, describing the Receivables and the other assets assigned to
the Purchaser pursuant to Section 2.01 hereof, meeting the requirements of
the laws of each such jurisdiction and in such manner as is necessary to
perfect the sale, transfer, assignment and conveyance of the Receivables and
such other assets to the Purchaser.  The Seller shall deliver to the
Purchaser a file-stamped copy or other evidence satisfactory to the Purchaser
of such filing on or prior to the Closing Date.

          (3)  Other Documents.  Such other documents as the Purchaser may
               ---------------
reasonably request.

     (d)  Other Transactions.  The transactions contemplated by the Pooling
          ------------------
and Servicing Agreement to be consummated on the Closing Date shall be
consummated on such date.

     SECTION 4.02.  Conditions to Obligation of the Seller.  The obligation
                    --------------------------------------
of the Seller to sell the Receivables to the Purchaser is subject to the
satisfaction of the following conditions:

     (a)  Representations and Warranties True.  The representations and
          -----------------------------------
warranties of the Purchaser hereunder shall be true and correct on the
Closing Date with the same effect as if then made, and the Seller shall have
performed all obligations to be performed by it hereunder on or prior to the
Closing Date.

     (b)  Receivables Purchase Price.  On the Closing Date, the Purchaser
          --------------------------
shall have delivered to the Seller the purchase price specified in Section
2.01.

                                  ARTICLE V

                           Covenants of the Seller
                          -----------------------

     The Seller agrees with the Purchaser as follows:

     SECTION 5.01.  Protection of Right, Title and Interest.  (a) Filings. 
                    ---------------------------------------       -------
The Seller shall cause all financing statements and continuation statements
and any other necessary documents covering the right, title and interest of
the Purchaser and the Trust in and to the Receivables and the other assets of
the Trust to be promptly filed and at all times to be kept recorded,
registered and filed, all in such manner and in such places as may be
required by law fully to preserve and protect the right, title and interest
of the Purchaser hereunder and of the Trust under the Pooling and Servicing
Agreement in and to the Receivables and the other property of the Trust.  The
Seller shall deliver to the Purchaser file stamped copies of, or filing
receipts for, any document recorded, registered or filed as provided above,
as soon as available following such recordation, registration or filing.  The
Purchaser shall cooperate fully with the Seller in connection with the
obligations set forth above and will execute any and all documents reasonably
required to fulfill the intent of this paragraph.

     (b)  Name Change.  If the Seller makes any change in its name, identity
          -----------
or corporate structure that would make any financing statement or
continuation statement filed in accordance with paragraph (a) above seriously
misleading within the applicable provisions of the UCC or any title statute,
the Seller shall give the Purchaser, the Trustee and the Security Insurer
written notice thereof at least 5 days prior to such change and shall
promptly file such financing statements or amendments as may be necessary to
continue the perfection of the Purchaser's and the Trust's interest in the
Receivables and in the other property of the Trust.

     SECTION 5.02.  Other Liens or Interests.  Except for the conveyances
                    ------------------------
hereunder and pursuant to the Basic Documents, the Seller shall not sell,
pledge, assign or transfer to any Person, or grant, create, incur, assume, or
suffer to exist any Lien on, or any interest in, to or under the Receivables,
and the Seller shall defend the right, title and interest of the Purchaser
in, to and under the Receivables against all claims of third parties claiming
through or under the Seller; provided, however, that the Seller's obligations
under this Section shall terminate upon the termination of the Trust pursuant
to the Pooling and Servicing Agreement.

     SECTION 5.03.  Costs and Expenses.  The Seller agrees to pay all
                    ------------------
reasonable costs and disbursements in connection with the perfection, as
against all third parties, of the Purchaser's and the Trust's right, title
and interest in and to the Receivables.

     SECTION 5.04.  Indemnification.  The Seller shall indemnify the
                    ---------------
Purchaser, the Trust and the Security Insurer for any liability resulting
from the failure of a Receivable to be originated in compliance with all 
requirements of law and for any breach of any of its representations and 
warranties contained herein.  These indemnity obligations shall be in 
addition to any obligation that the Seller may otherwise have.

                                  ARTICLE VI

                           Miscellaneous Provisions
                          ------------------------

     SECTION 6.01.  Obligations of Seller.  The obligations of the Seller
                    ---------------------
under this Agreement shall not be affected by reason of any invalidity,
illegality or irregularity of any Receivable.

     SECTION 6.02.  Repurchase Events.  The Seller hereby covenants and
                    -----------------
agrees with the Purchaser for the benefit of the Purchaser, the Trustee, the
Certificateholders, and the Security Insurer that the occurrence of a breach
of any of the Seller's representations and warranties contained in Section
3.02(b) shall constitute an event obligating the Seller to repurchase
Receivables hereunder ("Repurchase Events"), at the Purchase Amount, from the
Purchaser or from the Trust, as applicable.  The repurchase obligation of the
Seller shall constitute the sole remedy available to the Purchaser, the
Trustee, the Trust, or the Certificateholders against the Seller with respect
to any Repurchase Event.

     SECTION 6.03.  Purchaser Assignment of Repurchased Receivables.  With
                    -----------------------------------------------
respect to all Receivables repurchased by the Seller pursuant to this
Agreement, the Purchaser shall assign, without recourse, representation or
warranty, to the Seller all of the Purchaser's right, title and interest in
and to such Receivables and all security and documents relating thereto.

     SECTION 6.04.  Transfer to the Trust.  The Seller acknowledges and
                    ---------------------
agrees that (a) the Purchaser will, pursuant to the Pooling and Servicing
Agreement, transfer and assign the Receivables and assign its rights under
this Agreement to the Trust and (b) the representations and warranties
contained in this Agreement and the rights of the Purchaser under this
Agreement, including under Section 6.02, are intended to benefit the Trust,
the Certificateholders and the Security Insurer.  The Seller hereby consents
to such transfers and assignments.

     SECTION 6.05.  Amendment.  This Agreement may be amended from time to
                    ---------
time, with prior written notice to the Rating Agencies and, so long as the
Security Insurer is the Controlling Party under the Pooling and Servicing
Agreement, the prior written consent of the Security Insurer but without the
consent of the Certificateholders, by a written amendment duly executed and
delivered by the Seller and the Purchaser, for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions
of this Agreement or of modifying in any manner the rights of
Certificateholders; provided that such amendment shall not, as evidenced by
an Opinion of Counsel, materially and adversely affect the interest of any
Certificateholder.  This Agreement may also be amended by the Seller and the
Purchaser, with prior written notice to the Rating Agencies and the prior
written consent of Holders of Certificates evidencing at least a majority of
the Certificate Balance and, so long as the Security Insurer is the
Controlling Party under the Pooling and Servicing Agreement, the prior
written consent of the Security Insurer, for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions
of this Agreement or of modifying in any manner the rights of the
Certificateholders; provided, however, that no such 
amendment may (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 are required to be made for the benefit of
Certificateholders or (ii) reduce the aforesaid percentage of the
Certificates that is required to consent to any such amendment, without the
consent of the Holders of all the outstanding Certificates.

     SECTION 6.06.  Waivers.  No failure or delay on the part of the
                    -------
Purchaser in exercising any power, right or remedy under this Agreement or
the Assignment shall operate as a waiver thereof, nor shall any single or
partial exercise of any such power, right or remedy preclude any other or
further exercise thereof or the exercise of any other power, right or remedy.

     SECTION 6.07.  Notices.  All demands, notices and communications under
                    -------
this Agreement shall be in writing, personally delivered or mailed by
certified mail, return receipt requested, to:  (a) in the case of the Seller,
First Merchants Acceptance Corporation, 570 Lake Cook Road, Suite 126,
Deerfield, Illinois 60015, Attention: ( ); (b) in the case of the Purchaser,
First Merchants Auto Receivables Corporation ( ), 570 Lake Cook Road, Suite
126B, Deerfield, Illinois 60015, Attention: ( ); (c) in the case of Moody's,
Moody's Investors Service, Inc., ABS Monitoring Department, 99 Church Street,
New York, New York 10007; (d) in the case of Standard & Poor's, Standard &
Poor's Ratings Service, 26 Broadway (20th Floor), New York, New York 10004,
Attention: Asset Backed Surveillance Department; (e) in the case of the
Security Insurer, ( ); or as to each of the foregoing, at such other address
as shall be designated by written notice to the other parties.

     SECTION 6.08.  Costs and Expenses.  The Seller shall pay all expenses
                    ------------------
incident to the performance of its obligations under this Agreement and the
Seller agrees to pay all reasonable out-of-pocket costs and expenses of the
Purchaser, excluding fees and expenses of counsel, in connection with the
perfection as against third parties of the Purchaser's right, title and
interest in and to the Receivables and the enforcement of any obligation of
the Seller hereunder.

     SECTION 6.09.  Representations of the Seller and the Purchaser.  The
                    -----------------------------------------------
respective agreements, representations, warranties and other statements by
the Seller and the Purchaser set forth in or made pursuant to this Agreement
shall remain in full force and effect and will survive the closing under
Section 2.02 and the transfers and assignments referred to in Section 6.04.

     SECTION 6.10.  Confidential Information.  The Purchaser agrees that it
                    ------------------------
will neither use nor disclose to any Person the names and addresses of the
Obligors, except in connection with the enforcement of the Purchaser's rights
hereunder, under the Receivables, under the Pooling and Servicing Agreement
or any other Basic Document, or as required by any of the foregoing or by
law.

     SECTION 6.11.  Headings and Cross-References.  The various headings in
                    -----------------------------
this Agreement are included for convenience only and shall not affect the
meaning or interpretation of any provision of this Agreement.  References in
this Agreement to section names or numbers are to such Sections of this
Agreement.

     SECTION 6.12.  Governing Law.  This Agreement and the Assignment shall
                    -------------
be construed in accordance with the laws of the State of New York, without
reference to its conflict of law provisions, and the obligations, rights and 
remedies of the parties hereunder or thereunder shall be determined in 
accordance with such laws.

     SECTION 6.13.  Counterparts.  This Agreement may be executed in two or
                    ------------
more counterparts and by different parties on separate counterparts, each of
which shall be an original, but all of which together shall constitute one
and the same instrument.

     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective duly authorized officers as of the date and year
first above written.

                              FIRST MERCHANTS ACCEPTANCE CORPORATION

                              By:                                          
                                  -----------------------------------------
                                  Name: 
                                  Title: 

                              FIRST MERCHANTS AUTO
                               RECEIVABLES CORPORATION ( )

                              By:                                          
                                  -----------------------------------------
                                  Name: 
                                  Title: 

                                                                    EXHIBIT A
                                                           Form of Assignment

                                  ASSIGNMENT

     For value received, in accordance with the Receivables Purchase
Agreement dated as of ( ) (the "Receivables Purchase Agreement"), between the
undersigned and First Merchants Auto Receivables Corporation ( ) (the
"Purchaser"), the undersigned does hereby sell, assign, transfer and
otherwise convey unto the Purchaser, without recourse, all right, title and
interest of the undersigned in and to (i) the Receivables and all payments
received with respect thereto on or after the Cutoff Date; (ii) the security
interests in the Financed Vehicles and any accessions thereto granted by the
Obligors pursuant to the Receivables and any other interest of the Seller in
the Receivables; (iii) any Net Liquidation Proceeds and any other proceeds
from claims on any physical damage, credit life or disability insurance
policies covering the 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; (vi) all documents and other items
contained in the related Receivable Files; and (vii) the proceeds of any and
all of the foregoing.  The foregoing sale does not constitute and is not
intended to result in any assumption by the Purchaser of any obligation of
the undersigned to the Obligors, insurers or any other person in connection
with the Receivables, the Receivable Files, any insurance policies or any
agreement or instrument relating to any of them.

     This Assignment is made pursuant to and upon the representations,
warranties and agreements on the part of the undersigned contained in the
Receivables Purchase Agreement and is to be governed by the Receivables
Purchase Agreement.

     Capitalized terms used and not otherwise defined herein shall have the
meaning assigned to them in the Receivables Purchase Agreement.

     IN WITNESS WHEREOF, the undersigned has caused this Assignment to be
duly executed as of ( ).

                              FIRST MERCHANTS ACCEPTANCE CORPORATION,

                              By:                                    
                                  -----------------------------------
                                   Name: 
                                   Title: 

                                                                   SCHEDULE I

                           Schedule of Receivables
                          -----------------------

                                                                  SCHEDULE II

                         Location of Receivable Files
                        ---------------------------- 

Basic Info X:

Name: Form of Receivables Purchase Agreement for Grantor Trusts
Type: Purchase Agreement
Date: Sept. 10, 1996
Company: FIRST MERCHANTS ACCEPTANCE CORP
State: Delaware

Other info:

Date:

  • last month

Organization:

  • VI Miscellaneous Provisions
  • II Location of Receivable Files
  • First Merchants Auto Trust
  • First Merchant Auto Receivables Corporation
  • Trustee and Backup Servicer
  • Brown & Wood
  • Warranties of Seller
  • State of Delaware
  • Power and Authority
  • Chief Executive Office
  • Federal Trade Commission
  • Federal Reserve Board
  • Schedule of Receivables
  • State of Illinois
  • Final Scheduled Maturity Date
  • Computer Files Marked
  • Evidence of UCC
  • Title and Interest
  • Opinion of Counsel
  • First Merchants Acceptance Corporation
  • Moody 's Investors Service , Inc.
  • ABS Monitoring Department
  • Standard & Poor 's Ratings Service
  • First Merchants Auto Receivables Corporation

Location:

  • Delaware
  • United States
  • America
  • Lake Cook Road
  • Deerfield
  • Illinois
  • New York

Money:

  • $