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EXHIBIT 10.21
SECOND AMENDED AND RESTATED
MASTER REPURCHASE AGREEMENT
DATED AS OF MARCH 15, 2000
AMONG
▇▇▇▇▇▇ COMMERCIAL PAPER INC.,
AS BUYER
AND
BLOOMFIELD ACCEPTANCE COMPANY, L.L.C.,
AS SELLER
AND
MHFC, INC.
AS SELLER
AND DYNEX FINANCIAL, INC.
AS SELLER
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TABLE OF CONTENTS
Page
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1. APPLICABILITY.................................................................................................1
2. DEFINITIONS...................................................................................................1
3. CONDITIONS PRECEDENT; INITIATION; CONFIRMATION; TERMINATION; MAXIMUM TRANSACTION AMOUNTS; FEES...............25
4. COLLATERAL MAINTENANCE AMOUNT................................................................................32
5. INCOME PAYMENTS..............................................................................................33
6. SECURITY INTEREST............................................................................................34
7. PAYMENT, TRANSFER AND CUSTODY................................................................................35
8. REHYPOTHECATION OR PLEDGE OF PURCHASED LOANS.................................................................36
9. SUBSTITUTION.................................................................................................37
10. REPRESENTATIONS AND WARRANTIES..............................................................................37
11. NEGATIVE COVENANTS OF THE SELLERS...........................................................................47
12. AFFIRMATIVE COVENANTS OF THE SELLERS........................................................................48
13. EVENTS OF DEFAULT...........................................................................................53
14. REMEDIES....................................................................................................55
15. DUE DILIGENCE...............................................................................................59
16. SINGLE AGREEMENT............................................................................................59
17. NOTICES AND OTHER COMMUNICATIONS............................................................................60
18. ENTIRE AGREEMENT; SEVERABILITY..............................................................................60
19. NON-ASSIGNABILITY...........................................................................................60
20. TERMINABILITY...............................................................................................61
21. GOVERNING LAW...............................................................................................61
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22. CONSENT TO JURISDICTION.....................................................................................61
23. NO WAIVERS, ETC.............................................................................................61
24. INTENT......................................................................................................61
25. SERVICING...................................................................................................62
26. DISCLOSURE RELATING TO CERTAIN FEDERAL PROTECTIONS..........................................................63
27. NETTING.....................................................................................................63
28. INDEMNIFICATION.............................................................................................64
29. ESTABLISHMENT OF COLLECTION ACCOUNT.........................................................................64
30. CONFIDENTIALITY OF AGREEMENT................................................................................67
31. MISCELLANEOUS...............................................................................................67
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EXHIBITS
EXHIBIT I Specific Loan Program Terms and Provisions
Part 1 Fees Payable by Sellers
Part 2 Applicable Purchase Price Percentages, Applicable Collateral
Maintenance Percentages and Pricing Spreads
Part 3 Limitations by Loan Type
Part 4 Allowable Extra Costs
EXHIBIT II Specific Representations and Warranties by Loan Type
Part 1 Representations and Warranties Regarding Mortgage Loans
Part 2 Representations and Warranties Regarding Credit Leases
Part 3 Representations and Warranties Regarding MH Loans
Part 4 Representations and Warranties Regarding Floorplan Loans
EXHIBIT III Seller's Underwriting Guidelines
Part 1 Mortgage Loans
Part 2 MH Loans
Part 3 Floorplan Loans
EXHIBIT IV Loan Eligibility Requirements
Part 1 Conduit Mortgage Loans and Credit Lease Mortgage Loans
Part 2 Interim Mortgage Loans
Part 3 Bridge Mortgage Loans
Part 4 MH Loans
Part 5 Floorplan Loans
EXHIBIT V List of Sellers' Loan Documents
Part 1 Mortgage Loans
Part 2 MH Loans
Part 3 Floorplan Loans
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SECOND AMENDED AND RESTATED MASTER REPURCHASE AGREEMENT
This is a SECOND AMENDED AND RESTATED MASTER REPURCHASE
AGREEMENT dated as of March 15, 2000, between ▇▇▇▇▇▇ COMMERCIAL PAPER INC. (the
"Buyer"); BLOOMFIELD ACCEPTANCE COMPANY, L.L.C. ("BAC"); DYNEX FINANCIAL, INC.
("Dynex") and MHFC, Inc. ("MHFC", collectively, with Dynex and BAC, "Sellers",
and each individually a "Seller"), amending and restating the Amended and
Restated Master Repurchase Agreement Governing Purchases and Sales of Mortgage
Loans, dated as of September 30, 1998, between Buyer, MHFC and BAC (the
"Original Agreement").
Whereas, the Buyer, MHFC and BAC desire to amend and restate
the Original Agreement, to add Dynex as an additional Seller and to amend
certain other provisions;
NOW, THEREFORE, for good and valuable consideration the
receipt and sufficiency of which is hereby acknowledged, the Original Agreement
is hereby amended and restated in its entirety to read as follows, adding Dynex
as party hereto:
1. APPLICABILITY
From time to time, until the Final Repurchase Date applicable
to each type of Loan (as hereinafter defined), the Buyer agrees, subject to the
terms and conditions hereof, to enter into transactions upon the request of a
Seller in which such Seller agrees to transfer to Buyer certain Loans against
the transfer of funds by Buyer, with a simultaneous agreement by Buyer to
transfer to such Seller such Loans at a date specified in the Confirmation,
against the transfer of funds by Buyer. Each such transaction shall be referred
to herein as a "Transaction" and shall be governed by this Agreement and the
related Confirmation, unless otherwise agreed in writing. Buyer shall have the
option, upon the completion of a Transaction and receipt of a Request for
Purchase, to enter into additional Transactions with respect to the related
Loans provided that the maximum aggregate term of any Loan subject to
Transactions shall not exceed the respective Maximum Aggregate Term applicable
to those Loans. Notwithstanding anything in this Agreement to the contrary,
Buyer shall have no obligation to enter into any Transaction hereunder if there
shall have occurred any material adverse change, as determined by Buyer in its
reasonable good faith judgment, in the financial condition of either Seller, the
financial markets generally or the secondary market for Loans. Buyer shall
promptly notify Sellers of any determination by Buyer that any of the foregoing
has occurred. All obligations of either Seller under all Transactions shall be
full recourse to both Sellers.
2. DEFINITIONS
When used in this Agreement, the following capitalized terms have the
meanings given to them in this Section.
"Accepted Servicing Practices" means with respect to any Loan,
those loan servicing practices of prudent lending institutions which service
loans of the same type as such
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Loan in the jurisdiction where the related Underlying Asset is located with a
view to the maximization of timely recovery of principal and interest on such
Loan, but without regard to: (1) any relationship that a Servicer or any
Affiliate of a Servicer has with a Seller or an Affiliate of a Seller; (2) a
Servicer's or any subservicer's obligation to advance expenses with respect to
the Loan; (3) a Servicer's or subservicer's right to receive compensation for
its services; or (4) the ownership, management or servicing for others by a
Servicer or subservicer of any other loans or property.
"Act of Insolvency" means, with respect to any party and its
Affiliates, (i) the filing of a petition, commencing, or authorizing the
commencement of any case or proceeding under any bankruptcy, insolvency,
reorganization, liquidation, dissolution or similar law relating to the
protection of creditors of such party or its Affiliates, or suffering any such
petition or proceeding to be commenced by another which is consented to, not
timely contested or results in entry of an order for relief; (ii) the seeking
the appointment of a receiver, trustee, custodian or similar official for such
party or an Affiliate or any substantial part of the property of either, (iii)
the involuntary appointment of a receiver, conservator, or manager for such
party or an Affiliate by any governmental agency or authority having the
jurisdiction to do so, and that appointment shall not have been dismissed or
stayed within 30 days after its occurrence; (iv) the making or offering by such
party or an Affiliate of a composition with its creditors or a general
assignment for the benefit of creditors, (v) the admission by such party or an
Affiliate of such party of its inability to pay its debts or discharge its
obligations as they become due or mature; or (vi) that any governmental
authority or agency or any person, agency or entity acting or purporting to act
under governmental authority shall have taken any action to condemn, seize or
appropriate, or to assume custody or control of, all or any substantial part of
the property of such party or of any of its Affiliates, or shall have taken any
action to displace the management of such party or of any of its Affiliates or
to curtail its authority in the conduct of the business of such party or of any
of its Affiliates, and that action shall not have been dismissed or stayed
within 30 days after its initiation.
"Additional Costs" has the meaning specified in Section 3(h)
hereof.
"Additional Loans" means Eligible Loans or cash provided by a
Seller to Buyer or its designee pursuant to Section 4(a) hereof.
"Add-ons" means, (A) with respect to new Manufactured Homes,
Dealer-installed equipment, attachments, improvements and related out-buildings
or (B) with respect to Pre-owned Manufactured Homes, existing Dealer-installed
equipment, in each case not to exceed the lesser of (i) actual cost or (ii) 25%
of the lesser of NADA Retail Value or the retail sales price of the Manufactured
Home (provided that, with respect to Pre-owned Manufactured Homes, not in excess
of 2% of the MH Loans subject to Transaction hereunder, Dynex may waive the 25%
limitation), the aggregate value of which is consolidated into the principal
outstanding balance of the MH Paper in accordance with the Underwriting
Guidelines.
"Administration Fee" means a fee on certain types of Loans,
payable by a Seller on or before the initial Purchase Date for such Loan as set
forth in Exhibit I, Part 1 to this Agreement, as may be amended from time to
time upon agreement of the parties hereto.
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"Adverse Claim" means any claim of ownership or any lien, or
any rights that under the law could give rise to such liens (including mechanics
or similar liens or claims which have been filed for work, labor or materials
affecting the Manufactured Home securing the MH Loan), security interest, title
retention, trust or other charge or encumbrance, equity, loan, pledge, claim, or
other type of preferential arrangement having the effect or purpose of creating
a lien or security interest, other than the security interest created under this
Agreement.
"Affiliate" means, with respect to any Person, another Person
that directly or indirectly controls, or is under common control with, or is
controlled by, such Person. As used in this definition, "control" (including,
with its correlative meanings, "controlled by" and "under common control with")
means possession, directly or indirectly, of power to direct or cause the
direction of management or policies (whether through ownership of securities or
partnership or other ownership interests, by contract or otherwise).
"Agreement" means this Second Amended and Restated Master
Repurchase Agreement among Buyer and Sellers, as amended from time to time.
"ALTA" means the American Land Title Association.
"Applicable Collateral Maintenance Percentage" means the
fraction, expressed as a percentage, the numerator of which is 1, and the
denominator of which is the Applicable Purchase Price Percentage for a given
Loan as set forth in Exhibit I, Part 2 to this Agreement, as may be amended from
time to time upon agreement of the parties hereto. The Applicable Collateral
Maintenance Percentage is multiplied by the Repurchase Price to determine the
minimum Collateral Maintenance Amount, for purposes of determining if a
Collateral Deficit exists for any Transaction.
"Applicable Purchase Price Percentage" has the meaning set
forth in Exhibit I, Part 2 to this Agreement, as may be amended from time to
time upon agreement of the parties hereto.
"Appraised Value" means, (A) with respect to a Mortgage Loan,
the reconciled value of the Mortgaged Property as set forth in the appraisal
prepared in accordance with the Underwriting Guidelines made in connection with
the origination of the related Mortgage Loan; (B) with respect to an MH Loan
secured by a Manufactured Home (i) that was not a Pre-owned Manufactured Home at
the time that the MH Loan was originated, the retail purchase price of the
Manufactured Home, including any Add-ons, (plus, with respect to a Land-and-Home
Loan, the Appraised Value of the Mortgaged Property as determined in accordance
with (A) hereof), or (ii) that was a Pre-owned Manufactured Home at the time the
related MH Loan was originated, the lesser of (i) the total delivered sales
price of the Manufactured Home (except for refinancings), (ii) the acceptable
appraised value determined by an appraisal prepared in accordance with the
Underwriting Guidelines or (iii) the estimate of value determined in accordance
with the NADA Retail Value (plus, with respect to a Land-and-Home Loan, the
Appraised Value of the Mortgaged Property as determined in accordance with (A)
hereof); and (C) with respect to a Floorplan Loan secured by a Manufactured Home
(i) that was not a Pre-owned Manufactured Home at the time the related Floorplan
Loan was originated (or subject to a subsequent Transaction), the manufacturer's
invoice (to the Dealer
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from the manufacturer) or (ii) that was a Pre-owned Manufactured Home at the
time the related Floorplan Loan was originated (or subject to a subsequent
Transaction), the lesser of the NADA Wholesale Value or the price paid by the
Dealer for such Manufactured Home (including, in both cases, Add-ons added by
Dealer subsequent to Dealer's acquisition of the Manufactured Home).
"APR" or "Annual Percentage Rate" means the interest cost of
the loan, i.e. the finance charge, expressed as a percentage rate, which rate is
obtained from computations required by Regulation Z.
"Asset Value Net Worth" means (x) the aggregate sum of the
products of the Book Values for each of the following asset types multiplied by
(y) the percentages indicated below with respect to each asset type:
Asset Type % of Book Value
---------- ---------------
Conduit Mortgage Loans - Performing 10.0%
Credit Lease Mortgage Loans - Performing 10.0%
Interim Mortgage Loans - Performing 20.0%
Bridge Mortgage Loans - Performing 35.0%
MH Loans - Performing 15.0%
Floorplan Loans - Performing 20.0%
Residential Mortgage Loans - Performing 8.0%
Mortgage Loans - Non-Performing 50.0%
Residential Mortgage Loans - Non-Performing 50.0%
MH Paper - Non-Performing 50.0%
Cash and Cash Equivalents (as defined herein) 0.0%
Property and Equipment 50.0%
Accounts Receivable - Net 15.0%
Retained Interests in Securitizations-Commercial 25.0%
Retained Interests in Securitizations-Residential and MH Paper 25.0%
Corporate Loans 50.0%
Investments in Marketable Securities (as defined herein) 50.0%
All Other Assets 100.0%
"Assignment and Conveyance" means an assignment of right,
title and interest in either a Mortgage Loan, a Floorplan Loan, or a pool of MH
Loans, substantially in the form of Exhibit 13 to the Custodial Agreement.
"Assignment of Consignment Agreement" means an assignment from
Seller to Buyer of a Consignment Agreement, in form and substance acceptable to
Buyer.
"Assignment of Mortgage" means, with respect to any Mortgage,
an assignment of the mortgage, notice of transfer or equivalent instrument in
recordable form, sufficient under the laws of the jurisdiction wherein the
related property is located to reflect the assignment and pledge of the
Mortgage.
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"Back-up Servicer" means ▇▇▇▇▇▇▇▇ Philips Inc. or such other
entity designated by Buyer from time to time.
"Back-up Servicing Agreement" means back-up servicing
agreements, in form and substance satisfactory to Buyer, executed by the Back-up
Servicer, the Buyer and each Seller, as such agreements may be amended,
supplemented or otherwise modified from time to time, providing for the
assumption of servicing by the Back-up Servicer upon the Buyer's request.
"Blanket Fidelity Bond and Errors and Omissions Insurance"
means blanket fidelity bond and errors and omissions insurance, both with broad
coverage with insurance companies acceptable to the Buyer, on all officers,
employees or other persons acting in any capacity with regard to the Loans to
handle funds, money, documents and papers or provide professional services
relating to the Loans. Blanket Fidelity Bond and Errors and Omissions Insurance
coverage shall protect and insure the Sellers and all Servicers against losses,
including forgery, theft, embezzlement, fraud, errors and omissions and
negligent acts of such persons, and coverage shall be in an amount that is
customary for servicers that service a portfolio of comparable Loans and that
are generally acceptable as servicers to institutional investors, but the scope
of coverage, amounts and terms shall be at least equal to the FNMA Guidelines
for multifamily mortgage loans, as amended from time to time.
"Blocked Account" has the meaning specified in Section 29
hereof.
"Blocked Account Agreement" means (i) that certain Amended and
Restated Blocked Account Agreement, dated as of September 30, 1998, among Buyer,
NBD Bank (now known as Bank One) and its successors and assigns as Lockbox Bank,
BAC and Bloomfield Servicing, as Servicer, as the same may be amended,
supplemented or otherwise modified from time to time, (ii) that certain Blocked
Account Agreement, dated as of March 15, 2000, among Buyer, NBD Bank and its
successors and assigns as Lockbox Bank, MHFC and Bloomfield Servicing as
Servicer, as the same may be amended, supplemented or otherwise modified from
time to time, (iii) that certain Blocked Account Agreement, dated as of March
15, 2000, among Buyer, Bank One and its successors and assigns as Lockbox Bank
and Dynex, or such other Blocked Account Agreements that may be entered from
time to time, in which the respective Lockbox Bank acknowledges the Buyer's lien
on the Blocked Account, and agrees that the Lockbox Bank shall only withdraw and
allow withdrawal of funds from the Blocked Accounts on instruction from the
Buyer.
"Bloomfield Blocked Account" has the meaning specified in
Section 29(a).
"Bloomfield Servicing" means Bloomfield Servicing Company,
L.L.C.
"Book Value" means the net value of the related balance sheet
accounts in accordance with GAAP.
"Breach" as that term relates to any representation, warranty
or covenant in this Agreement, means that such representation or warranty was
incorrect or untrue in any material respect when made or repeated or deemed to
have been made or repeated, or either Seller has
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failed to comply with a covenant, and which condition (i.e., untruth or
incorrectness or failure to comply) has a Material Adverse Effect.
"Breakage Costs" has the meaning specified in Section 3(j)(3)
hereof.
"Bridge Mortgage Loan" means a Mortgage Loan which satisfies
the Loan Eligibility Requirements for Bridge Mortgage Loans set forth in Exhibit
IV, Part 3 to this Agreement, as may be amended from time to time upon agreement
of the parties hereto.
"Business Day" means a day other than (i) a Saturday or
Sunday, or (ii) a day in which the Buyer or the New York Stock Exchange is
authorized or obligated by law or executive order to be closed.
"Buyer" means ▇▇▇▇▇▇ Commercial Paper Inc. and its successors
and assigns.
"Buyer's LTV" means the effective loan-to-value to Buyer
(expressed as a percentage) attributable to the Purchase Price for a Bridge
Mortgage Loan (calculated as the Purchase Price for the related Bridge Mortgage
Loan divided by the market value of the related Mortgaged Property, as
determined in good faith by Buyer in its sole discretion, based upon its due
diligence review), which shall equal one of the Pricing Rate selections
reflected for Bridge Mortgage Loans in Exhibit I, Part 2 to this Agreement, as
may be amended from time to time upon agreement of the parties hereto, and which
shall be chosen by Seller in connection with the fixing of the Pricing Spread.
"Buyer's Underwriter" means ▇▇▇▇▇▇▇▇ Philips Inc. or such
other entity designated by Buyer from time to time.
"Capital Lease Obligations" means, for any Person, all
obligations of such Person to pay rent or other amounts under a lease of (or
other agreement conveying the right to use) Property to the extent such
obligations are required to be classified and accounted for as a capital lease
on a balance sheet of such Person under GAAP, and, for purposes of this
Agreement, the amount of such obligations shall be the capitalized amount
thereof, determined in accordance with GAAP.
"Cash Equivalents" means (i) direct obligations of, and
obligations fully guaranteed as to the full and timely payment of principal and
interest by, the U.S. government or any agency or instrumentality thereof, (ii)
demand deposits, time deposits, bankers' acceptances, repurchase agreements, or
certificates of deposit of depository institutions or trust companies
incorporated under the laws of the U.S. or any state of the U.S. and insured by
the FDIC and which have the highest rating from Standard & Poor's and/or
Moody's, (iii) commercial paper which has an A-1+ or P-1+ rating and (iv) money
market funds or money market savings accounts, which have the highest rating
from Standard & Poor's and Moody's.
"CERCLA" means the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended.
"Code" means the Internal Revenue Code of 1986, as amended
from time to time.
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"Collateral" has the meaning specified in Section 6 hereof.
"Collateral Deficit" means either a Market Value Collateral
Deficit or a Securitization Value Collateral Deficit.
"Collateral Information" means, with respect to each Loan,
that information set forth in Exhibits 6-1, 6-2 and 6-3 of the Custodial
Agreement, or as otherwise approved by Buyer, which information is set forth on
a Loan Schedule provided by Seller to Buyer in paper and electronic form.
"Collateral Maintenance Amount" means, with respect to any
Transaction, the amount obtained by multiplying (i) the Applicable Collateral
Maintenance Percentage, as set forth in Exhibit I, Part 2 to this Agreement, as
may be amended from time to time upon agreement of the parties hereto, by (ii)
the related Repurchase Price for such Transaction.
"Collections" means, with respect to any Loan, all cash
collections and other Proceeds of such Loan (including late charges, fees and
interest arising thereon and all recoveries with respect to Loans that have been
written off as uncollectible.
"Commitment Fee" means the fee or fees by type of Loan, paid
or to be paid, as provided in Exhibit I, Part 1 to this Agreement, as may be
amended from time to time upon agreement of the parties hereto.
"Commonly Controlled Entity" means an entity, whether or not
incorporated, which is under common control with a Seller within the meaning of
Section 4001 of ERISA or is part of a group which includes a Seller and which is
treated as a single employer under Section 414 of the Code.
"Conduit Mortgage Loan" means a Mortgage Loan which satisfies
the Loan Eligibility Requirements set forth in Exhibit IV, Part 1 to this
Agreement, as may be amended from time to time upon agreement of the parties
hereto, but which is not backed by a Credit Lease.
"Confirmation" has the meaning specified in Section 3(e)
hereof.
"Consignment Agreement" means the consignment agreement
between a Dealer and a consignee in which Dealer consigns Manufactured Home
inventory to the consignee, which agreement is in form and substance acceptable
to Buyer, in its sole discretion.
"Credit Lease" means a bond type triple net lease to a Credit
Tenant which occupies 100% of the related Mortgaged Property.
"Credit Lease Mortgage Loan" means a Mortgage Loan secured by
a Mortgage backed by a Credit Lease, which satisfies the Loan Eligibility
Requirements set forth in Exhibit IV, Part 1 to this Agreement, as may be
amended from time to time upon agreement of the parties hereto.
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"Credit Tenant" means a tenant rated at least Baa3 by Moody's
and BBB- by Standard & Poor's, approved by Buyer, under a Credit Lease.
"Curtailment" means the required periodic repayment, of a
portion of the outstanding principal balance on the loan amount advanced to a
Dealer by a Seller with respect to each Manufactured Home securing each
Floorplan Loan subject to a Transaction as of that date.
"Custodial Agreement" means the Second Amended and Restated
Custodial Agreement, dated as of the date hereof, by and among Buyer, Sellers
and the Custodian, as amended from time to time.
"Custodial Delivery" means the form, executed by a Seller and
delivered with the Loan Schedule and the Loan File to Buyer or its designee
(including the Custodian) pursuant to Section 7 hereof, in the form of Exhibit
7-1 to the Custodial Agreement for BAC, Exhibit 7-2 to the Custodial Agreement
for MHFC, and Exhibit 7-3 to the Custodial Agreement for Dynex, as such forms
may be amended from time to time.
"Custodian" means the custodian under the Custodial Agreement.
The initial custodian is LaSalle National Bank.
"Dealer" means a dealer in Manufactured Homes held for sale to
third-parties, which Dealer is the Obligor on a Dealer Note secured by such
Manufactured Homes.
"Dealer Financing Agreement" means the agreement between
Seller and a Dealer that provides for the financing of a Floorplan Loan.
"Dealer Note" means, with respect to a Floorplan Loan, the
note executed by the Dealer evidencing indebtedness in connection with the
purchase of Manufactured Homes for inventory pursuant to a Dealer Financing
Agreement. There shall be one Dealer Note for each Floorplan Loan, regardless of
the number of Manufactured Homes financed.
"Default" means an event that with notice or lapse of time or
both would become an Event of Default.
"Delinquent" means, with respect to any Eligible Loan, the
period of time from the date on which an Obligor fails to pay an obligation
under the terms of such Eligible Loan (without regard to any applicable grace
periods) to the date on which such payment is made.
"Delinquent MH Loan" means an MH Loan that is more than 29
days Delinquent but less than 60 days Delinquent.
"Designated Fax Distributor" means the Person designated to
receive and distribute faxes from the Settlement Agent, which shall initially be
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, a professional corporation of attorneys, located at ▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇.
"Distribution Worksheet" means the monthly worksheet prepared
by a Seller or a Servicer of the Loans and delivered to Buyer which sets forth
the servicing activities for the
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prior calendar month and the resulting deposits in, and requested distributions
from, a Blocked Account related thereto, in form and substance satisfactory to
Buyer.
"DSCR" shall mean the quotient obtained by dividing (x)
Obligor's consolidated after-tax net operating income, exclusive of
extraordinary gains and losses, interest expense, depreciation and amortization
to the extent included in the calculation of net operating income by (y) debt
service (i.e., payments of interest and principal scheduled and required under
borrowing facilities) on Indebtedness (excluding balloon loan maturity
payments).
"Due Date" means the day of the month on which the Monthly
Payment is due on a Loan, exclusive of any days of grace.
"Dynex" mean Dynex Financial, Inc.
"Dynex Blocked Account" has the meaning specified in Section
29(a).
"Dynex Servicing Agreement" shall mean the Servicing Agreement
between Bloomfield Servicing (as Servicer) and MHFC, the Servicer's interest in
which has been or will be assigned to Dynex, as it may be amended from time to
time with Buyer's approval, and (ii) with respect to MH Loans sold by Dynex, the
Servicing Agreement between Dynex and Dynex Services (an operating division of
Dynex), as it may be amended from time to time with Buyer's approval.
"Eligible Floorplan Loan" means a Floorplan Loan which
conforms to the Floorplan Loan Eligibility Requirements individually and which,
when added to the aggregate Eligible Floorplan Loans purchased hereunder does
not cause such Eligible Floorplan Loans, as a whole, to fail to conform to the
Floorplan Loan Eligibility Requirements.
"Eligible Loans" means, Eligible Mortgage Loans, Eligible MH
Loans, Eligible Floorplan Loans and any other type of Loans that may be
subsequently added to this Agreement by the mutual written agreement of Buyer
and the applicable Seller.
"Eligible MH Loan" means an MH Loan which conforms to the MH
Loan Eligibility Requirements individually and which, when added to the
aggregate Eligible MH Loans purchased hereunder does not cause such Eligible MH
Loans, as a whole, to fail to conform to the MH Loan Eligibility Requirements.
"Eligible Mortgage Loan" means a Mortgage Loan which conforms
to the Loan Eligibility Requirements for Mortgage Loans, individually, and
which, when added to the aggregate Eligible Mortgage Loans purchased hereunder
does not cause such Eligible Mortgage Loans, as a whole, to fail to conform to
the Loan Eligibility Requirements for Mortgage Loans.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time.
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"Escrow Account" means an account established for receipt of
Escrow Payments, which account is subject to a Blocked Account Agreement.
"Escrow Instructions" means the escrow instructions approved
by Buyer.
"Escrow Payments" means with respect to any Loan, the amounts
constituting ground rents, taxes, assessments, water rates, sewer rents,
municipal charges, mortgage insurance premiums, fire and hazard insurance
premiums, condominium charges, and any other payments required to be escrowed by
the Obligor with the obligee pursuant to a Mortgage or any other document.
"Event of Default" has the meaning specified in Section 13
hereof.
"Executive Bonus Plan" has the meaning set forth in the
definition of Restricted Payment.
"Exit Fee" has the meaning provided in Section 3(j)(4) hereof
and Exhibit I, Part I hereto.
"Extra Costs" means the set-up costs, delivery and freight
costs, title fees, appraisal fees, flood hazard determination fees, Seller,
broker, and/or Dealer closing fees, insurance costs, taxes, and licensing fees,
the aggregate value of which is consolidated into the principal outstanding
balance of the MH Paper in accordance with the Underwriting Guidelines.
"Facility Documents" has the meaning specified in Section 3(a)
hereof.
"FCCR" means, for any calendar quarter, the quotient obtained
by dividing (x) Guarantor's consolidated pre-tax net operating income, exclusive
of extraordinary gains and losses, interest expense, depreciation and
amortization to the extent included in the calculation of net operating income
by (y) debt service (i.e., payments of principal and interest scheduled and
required under borrowing facilities, excluding payments due to Buyer solely as a
result of pass-throughs of scheduled amortization, Curtailments and prepayments
on the Loans) on Guarantor's consolidated Indebtedness (excluding balloon loan
maturity payments) plus preferred stock dividends of the Sellers and Guarantor.
"FICO Violation MH Loans" shall mean MH Loans for which a FICO
score has not been obtained in connection with the origination of such MH Loans
that in the aggregate exceed 10% of the aggregate outstanding principal amount
of MH Loans subject to Transactions hereunder.
"Final Repurchase Date" has the meaning set forth in Exhibit
I, Part 3 to this Agreement, as may be amended from time to time upon agreement
of the parties hereto or such earlier date to which it may be accelerated
pursuant to Section 8 of this Agreement.
"Floorplan Loan" means MH Paper which satisfies the Floorplan
Loan Eligibility Requirements. A Floorplan Loan is made to finance a Dealer's
inventory of Manufactured Homes, in whole or in part.
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"Floorplan Loan Eligibility Requirements" means the Loan
Eligibility Requirements with respect to Floorplan Loans as set forth on Exhibit
IV, Part 5 to this Agreement, as may be amended from time to time upon agreement
of the parties hereto.
"GAAP" means generally accepted accounting principles as in
effect from time to time in the United States.
"Governmental Authority" shall mean any nation or government,
any state or other political subdivision thereof, any entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government and any court or arbitrator having jurisdiction over
the Sellers, any of its Affiliates or any of its properties.
"Grandfathered Loans" means the Transactions consisting of the
purchase of Loans on the following Properties: (i) ▇▇▇▇▇▇ ▇▇▇▇▇▇ Hotel in Port
Huron, Michigan and (ii) A-Secured Self & Vehicle Storage II in Maricopa County,
Arizona.
"Gross Margin" means with respect to each adjustable rate
Loan, the fixed percentage amount that is added to the Index, as set forth in
the related Note.
"Ground Lease" means a lease for all or any portion of the
real property comprising the Mortgaged Property, the lessee's interest in which
is held by the Mortgagor of the related Mortgage Loan.
"Guarantee" means, as to any Person, any obligation of such
Person directly or indirectly guaranteeing any Indebtedness of any other Person
or in any manner providing for the payment of any Indebtedness of any other
Person or otherwise protecting the holder of such Indebtedness against loss
(whether by virtue of partnership arrangements, by agreement to keep-well, to
purchase assets, goods, securities or services, or to take-or-pay or otherwise);
provided that the term "Guarantee" shall not include (i) endorsements for
collection or deposit in the ordinary course of business, or (ii) obligations to
make servicing advances for delinquent taxes and insurance or other obligations
in respect of a Mortgaged Property, to the extent required by Buyer. The amount
of any Guarantee of a Person shall be deemed to be an amount equal to the stated
or determinable amount of the primary obligation in respect of which such
Guarantee is made or, if not stated or determinable, the maximum reasonably
anticipated liability in respect thereof as determined in accordance with GAAP.
The terms "Guarantee" and "Guaranteed" used as verbs shall have correlative
meanings.
"Guarantor" means ▇▇▇▇▇▇▇ Financial Services Corporation, the
sole parent of Sellers.
"Guaranty" means that certain Second Amended and Restated
Affiliate Guaranty dated as of the date hereof.
"Hedge" means, with respect to any or all of the Purchased
Loans, any interest rate swap, cap or collar agreement or similar arrangements
providing for protection against fluctuations in interest rates or the exchange
of nominal interest obligations, either generally or under specific
contingencies, entered into by Sellers with Buyer or its Affiliates, and
reasonably acceptable to the Buyer.
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"Index" means with respect to each adjustable rate Loan, the
index set forth in the related Note for the purpose of calculating the interest
rate thereon.
"Income" means, with respect to any Purchased Loan at any
time, any principal thereof then payable and all interest, dividends or other
distributions payable thereon less any related servicing fee(s) charged by a
subservicer as approved by Buyer.
"Indebtedness" means, for any Person: (a) obligations created,
issued or incurred by such Person for borrowed money (whether by loan, the
issuance and sale of debt securities or the sale of Property to another Person
subject to an understanding or agreement, contingent or otherwise, to repurchase
such Property from such Person); (b) obligations of such Person to pay the
deferred purchase or acquisition price of Property or services, other than trade
accounts payable (other than for borrowed money) arising, and accrued expenses
incurred, in the ordinary course of business so long as such trade accounts
payable are payable in accordance with their terms within 60 days of the date
the respective goods are delivered or the respective services are rendered; (c)
Indebtedness of others secured by a Lien on the Property of such Person, whether
or not the respective Indebtedness so secured has been assumed by such Person;
(d) obligations (contingent or otherwise) of such Person in respect of letters
of credit or similar instruments issued or accepted by banks and other financial
institutions for account of such Person; (e) Capital Lease Obligations of such
Person; (f) obligations of such Person under repurchase agreements or like
arrangements; (g) Indebtedness of others Guaranteed by such Person; (h) all
obligations of such Person incurred in connection with the acquisition or
carrying of fixed assets by such Person; and (i) Indebtedness of general
partnerships of which such Person is a general partner.
"Initial Table Funded Loan Documents" means (a) the Mortgage
Note, (b) the Escrow Instructions, (c) the Settlement Agent Trust Receipt (d)
the Insured Closing Letter and (e) the Custodial Delivery.
"Insured Closing Letter" means a letter addressed to BAC and
Buyer from the title insurance underwriter for which the Settlement Agent is
serving as an agent for Table Funded Mortgage Loans, which letter shall be in
form and substance reasonably acceptable to BAC and Buyer.
"Intercreditor Agreement" means an agreement between Seller
and other creditors of any Dealer, providing, among other things, for the
subordination of such creditor's security interests to Seller's security
interests and/or the distinguishing between or among security interests so that
such creditor does not claim a security interest in the Property or interests
that are subject to Seller's security interests.
"Interest Period" means, with respect to any Transaction, (i)
initially, the period commencing on the Purchase Date and ending on the day
immediately preceding the next Payment Date (the "Interest Reset Date"), and
(ii) thereafter, each period from and including the day following the
immediately preceding Interest Reset Date up to and including the succeeding
Interest Reset Date or such shorter period as agreed among Buyer and a Seller
when the current LIBOR period expires. Notwithstanding the foregoing, each
Interest Period that commences on the last Business Day of a calendar month (or
on any day for which there is no numerically corresponding day in the
appropriate calendar month when the Interest
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Period expires) shall end on the last Business Day of the appropriate calendar
month. Notwithstanding the foregoing: (i) no Interest Period may begin before
and end after the Final Repurchase Date; and (ii) each Interest Period that
would otherwise end on a day that is not a Business Day shall end on the next
succeeding Business Day (or, if such next succeeding Business Day falls in the
next succeeding calendar month, on the next preceding Business Day).
"Interest Reset Date" has the meaning set forth in the
definition of Interest Period.
"Interim Mortgage Loan" means a Mortgage Loan which satisfies
the Loan Eligibility Requirements set forth in Exhibit IV, Part 2 to this
Agreement, as may be amended from time to time upon agreement of the parties
hereto.
"Land-and-Home Loan" means an MH Loan secured by a Mortgage on
the Obligor's fee simple or leasehold interest in the underlying real property
and the Manufactured Home permanently affixed to it.
"LIBOR" means the rate per annum calculated with respect to
each Transaction as set forth below:
(i) Two (2) Business Days prior to each Interest Reset Date,
LIBOR shall be determined by Buyer on the basis of the offered rate for one
month deposits of not less than U.S. $1,000,000, which appears on the date of
determination on Telerate Page 3750 as of 11:00 a.m., London time (or such other
page as may replace the Telerate Page on that service for the purposes of
displaying London interbank offered rates of major banks). If no such offered
rate appears, LIBOR with respect to the relevant Interest Period shall be
determined as described in (ii) below.
(ii) With respect to an Interest Reset Date on which no such
offered rate appears two (2) Business Days prior to each Interest Reset Date on
Telerate Page 3750 as described in (i) above (or the Wall Street Journal, if the
Telerate Page is no longer used for the purposes of displaying London interbank
offered rates of major banks), LIBOR shall be the arithmetic mean, expressed as
a percentage, of the offered rates for one month deposits in U.S. dollars that
appears on the Reuters Screen LIBOR Page as of 11:00 a.m., London time, on the
date of determination. If, in turn, such rate is not displayed on the Reuters
Screen LIBOR Page at such time, then LIBOR for such date shall be reasonably
determined by Buyer to be the arithmetic mean of the offered quotations to
first-class banks in the Interbank LIBOR Market.
All percentages resulting from any calculations of LIBOR
referred to in this Agreement shall be rounded up to the nearest multiple of
1/100 of 1% and all U.S. dollar amounts used in or resulting from such
calculations shall be rounded to the next higher cent.
"Lien" means any mortgage, lien, pledge, charge, security
interest or similar encumbrance.
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"Lien Certificate" shall mean, with respect to any
Manufactured Home, if applicable, 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 the Manufactured Home is recorded on the original certificate of title.
"Loan" means a Mortgage Loan, a Floorplan Loan, or an MH Loan.
"Loan Agreement" means a Dealer Financing Agreement or an MH
Contract.
"Loan Documents" means, with respect to a Loan, the documents
comprising the Loan File for that Loan.
"Loan Eligibility Requirements" means the eligibility
requirements with respect to the particular type of Loan as set forth on Exhibit
IV, Parts 1 through 5 to this Agreement and such other additions to Exhibit IV
that may be added from time to time for other Loan types, and any amendments
thereto.
"Loan File" means the required documents for each Loan type
set forth in Annex A to the Custodial Agreement (and set forth in table form in
Annex B to the Custodial Agreement), together with any additional documents and
information required to be delivered to Buyer or its designee (including the
Custodian).
"Loan Interest Rate" means the annual rate of interest borne
on a Note, which shall be adjusted from time to time with respect to adjustable
rate Loans.
"Loan Interest Rate Adjustment Date" means with respect to
each adjustable rate Loan, the date, specified in the related Note and Loan
Schedule, on which the Loan Interest Rate is adjusted.
"Loan Interest Rate Cap" means with respect to an adjustable
rate Loan, the limit on each Interest Rate adjustment as set forth in the
related Note.
"Loan Limitations" means the aggregate, type and individual
sublimits and other constraints with respect to Loans, as set forth in Exhibit
I, Part 3 to this Agreement, as may be amended from time to time upon agreement
of the parties hereto.
"Loan Representations" means those representations and
warranties set forth in Exhibit II and in Section 10(c) hereof.
"Loan Schedule" means a schedule of Loans attached to each
Trust Receipt and Custodial Delivery, and also delivered to Buyer monthly and at
other times, from time to time, containing Collateral Information with respect
to each Loan.
"Loan-to-Value Ratio" or "LTV" means with respect to any
Mortgage Loan, as of any date, the fraction, expressed as a percentage, the
numerator of which is the principal balance of such Loan at the date of
determination and the denominator of which is the Appraised Value.
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"Loan Transfer Agreements" means the repurchase or loan
agreements or other transactions under which a Qualified Originator transfers
Eligible Loans to a Seller.
"Lockbox Bank" means, with respect to the Blocked Accounts
under which Bloomfield Servicing and Dynex act as Servicers, Bank One (formerly
NBD Bank) and with respect to other Blocked Accounts, the bank designated as
such upon mutual agreement of Buyer and Seller.
"Manufactured Home" means a unit of new, pre-owned, or used
manufactured housing consisting of a pre-fabricated manufactured unit affixed to
a permanent foundation, or a mobile home (including all Add-ons, attachments,
improvements and accessions) which meets the requirements of Section 25(e)(10)
of the Internal Revenue Code of 1986, 26 U.S.C. 25(e)(10) as amended, securing
the indebtedness of the Obligor under the related MH Loan.
"Manufacturer's Floorplan Agreement" means an agreement
between a Seller and a Manufactured Home manufacturer that specifies, among
other things, that such manufacturer will repurchase, at the price and terms
described in that agreement, Manufactured Homes sold to a Dealer by that
manufacturer and financed by a Seller, in the event that the Seller acquires
possession of those Manufactured Homes through repossession, voluntary surrender
or otherwise.
"Market Value" means as of any date with respect to any Loan,
the price at which such Loan could readily be sold, as determined in good faith
by Buyer in its sole discretion, provided that, the Market Value shall be deemed
to be zero with respect to each Loan (i) which has been subject to Transactions
for more than the Maximum Aggregate Term; (ii) other than an MH Loan, which is
more than 29 days Delinquent; (iii) which fails to meet the Loan Eligibility
Requirements for that Loan type; (iv) with respect to which there is a Breach
(other than a Breach of a Loan Representations) that has not been cured; (v)
which violates the Loan Limitations established for the applicable Loan type
under Exhibit I, Part 3 to this Agreement; and (vi) which is a Table Funded
Mortgage Loan for which the Custodian has failed to receive the related Loan
Documents on the third Business Day following the applicable Purchase Date. The
Market Value of a Loan as to which there has been a Breach of a Loan
Representation that has not been cured, shall be reduced to a value determined
by Buyer in its sole good faith discretion, which value may be zero. The
determination of Market Value will be determined by Buyer based upon its due
diligence review and will include the benefit of ▇▇▇▇▇▇ provided directly by
Buyer or its Affiliate, and in each case pledged as additional collateral to the
Buyer. The Market Value of Purchased Loans shall be determined by the Buyer no
less frequently than monthly. Market Value adjustments as a result of interest
rate movements can be performed daily by the Buyer. Sellers hereby acknowledge
that Market Value will be negatively impacted by the lack of current due
diligence information.
"Market Value Collateral Deficit" has the meaning specified in
Section 4(a) hereof.
"Marketable Securities" means securities which have an
investment grade rating from a national rating agency, which are registered with
and actively traded on a nationally recognized exchange, and for which a quoted
market price is readily available.
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"Material Adverse Effect" means a material adverse effect, as
determined by Buyer in its sole discretion, upon (i) the business operations,
properties, assets, condition (financial or otherwise) or prospects of either
Seller or Guarantor taken as a whole, (ii) the ability of any Seller to perform
its obligations, or of Buyer to enforce any of its rights or remedies, under
this Agreement or any of documents to be executed and/or delivered hereunder,
(iii) the individual or aggregate Market Value or the Securitization Value of
any or all of the Purchased Loans (or other Collateral) or (iv) the ability of
Guarantor to perform its obligations under the Guaranty. Any negative impact on
the value of a Loan, however small such impact may be, shall be considered a
Material Adverse Effect on such Loan, as to which Buyer may adjust the Market
Value and/or Securitization Value.
"Maximum Aggregate Term" means the maximum term during which a
Loan can be subject to one or more Transactions hereunder, as specified in
Exhibit I, Part 3 to this Agreement, as may be amended from time to time upon
agreement of the parties hereto.
"Maximum Committed Amount" means the total amount which the
Buyer has committed to make subject to Transactions hereunder at any one time,
for each Loan type, or group of Loan types, as set forth in Exhibit I, Part 3 to
this Agreement, as may be amended from time to time upon agreement of the
parties hereto.
"Maximum Leverage Ratio" means, for any calendar quarter, the
quotient obtained by dividing (x) Guarantor's consolidated Indebtedness by (y)
Guarantor's consolidated Tangible Net Worth.
"Maximum Single Park Exposure" means the value of MH Loans
that may be originated in a single Manufactured Home park, as set forth in
Exhibit I, Part 3 to this Agreement, as may be amended from time to time upon
agreement of the parties hereto.
"Maximum Single State Exposure" means the value of MH Loans
that may be originated in a single state, as set forth in Exhibit I, Part 3 to
this Agreement, as may be amended from time to time upon agreement of the
parties hereto.
"MH Contract" means the installment loan agreement or retail
installment sales contract executed by an Obligor evidencing indebtedness in
connection with the financing of a Manufactured Home.
"MHFC Blocked Account" has the meaning specified in Section
29(a).
"MH Insurance" means property, casualty, credit life and/or
warranty insurance purchased by an Obligor in connection with the financing of
an MH Loan.
"MH Loan" means MH Paper which satisfies the MH Loan
Eligibility Requirements. The term MH Loan includes Land-and-Home Loans. MH
Loans are made under MH Contracts or MH Notes.
"MH Loan Eligibility Requirements" means the eligibility
requirements with respect to MH Loans as set forth on Exhibit IV, Part 4 to this
Agreement, as may be amended from time to time upon agreement of the parties
hereto.
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"MH Loan to Value Ratio or MH LTV": With respect to:
(a) Retail Transactions, the ratio of (i) the principal
balance of such Loan (the amount set forth on the Loan Documents as "Amount
Financed", not including any prepaid finance charges) (the "Principal Balance")
to (ii) the Principal Balance of such Loan plus the total down payment made by
the Obligor (including the value of any trade-in home);
(b) Refinance private sale transactions, the ratio of (i) the
Principal Balance of such Loan to the appraised value of the related
Manufactured Home as determined by and independent appraiser, or through an
internal appraisal by the Seller performed in accordance with a written
procedure approved by the Buyer; or
(c) Land-and-Home Loans, the ratio of (i) the Principal
Balance of such Loan to (ii) the sum of (x) the Principal Balance of such Loan
plus (y) the total down payment made by the Obligor (including the value of any
trade-in home) plus (z) the appraised value of the land securing the MH Contract
or MH Note.
"MH Note" means a note or other evidence of indebtedness of an
Obligor (other than a Dealer) secured by a Manufactured Home, and, if a
Land-and-Home Loan, secured by the related Mortgaged Property.
"MH Paper" means a non-securitized whole loan, which shall be
a loan secured by a perfected first priority Lien on a Manufactured Home, and,
in the case of Land-and-Home Loans, secured also by a perfected first priority
Lien on the related Mortgaged Property and the Manufactured Home permanently
affixed to it. The term MH Paper consists of MH Loans and Floorplan Loans.
"MH Servicer" means Dynex Financial Inc. with respect to the
MH Loans sold by Dynex, and with respect to all other MH Loans, either
Bloomfield Servicing or Dynex, or any successor Servicer approved by Buyer.
"MH Servicing Agreement" means the Dynex Servicing Agreement
or the Servicing Agreement between MHFC and the MH Servicer, as may hereafter be
amended by the parties thereto with Buyer's consent.
"MHFC" means MHFC, Inc., a Michigan corporation.
"Monthly Payment" means the scheduled Monthly Payment of
principal and/or interest on a Loan, including adjustments made in accordance
with changes in the Loan Interest Rate pursuant to the provisions of the Note
for an adjustable rate Loan.
"Moody's" means ▇▇▇▇▇'▇ Investor Service, Inc.
"Mortgage" means a mortgage, deed of trust, deed to secure
debt or other instrument, creating a valid and enforceable first lien on or a
first priority ownership interest in an estate in fee simple in real property
and the improvements thereon, securing a Mortgage Note or similar evidence of
indebtedness.
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"Mortgage Loan" means a non-securitized whole loan, which shall be a
mortgage loan secured by a perfected first priority lien on commercial real
estate assets. The term Mortgage Loan includes Conduit Mortgage Loans, Credit
Lease Mortgage Loans, Bridge Mortgage Loans and Interim Mortgage Loans, any of
which may be Table Funded Mortgage Loans.
"Mortgage Loan Servicer" means Bloomfield Servicing or any successor
Servicer approved by Buyer.
"Mortgage Loan Servicing Agreement" means the Servicing Agreement
between BAC and Bloomfield Servicing, as it may hereafter be amended by the
parties thereto with Buyer's consent.
"Mortgage Note" means a note or other evidence of indebtedness of a
Mortgagor secured by a Mortgage.
"Mortgaged Property" means the real property securing repayment of the
debt evidenced by a Mortgage Note (or securing an MH Note, in the case of
Land-and-Home Loans).
"Mortgagee" means the record holder of a Mortgage Note secured by a
Mortgage.
"Mortgagor" means the obligor on a Mortgage Note and the grantor of
the related Mortgage.
"Multiemployer Plan" means a Plan which is a multiemployer plan as
defined in Section 4001(a)(3) of ERISA.
"NADA Retail Value" and "NADA Wholesale Value" means the
retail and wholesale value, respectively, of a Manufactured Home as stated in
the then current N.A.D.A. Manufactured Housing Appraisal Guide published by
National Appraisal Guides, Inc., or any successor publication similarly
recognized by the trade and approved by Buyer.
"Non-Use Fee" means the fee for not using this facility, payable on
certain types of Loans, by a Seller to Buyer as set forth in Exhibit I, Part 1
to this Agreement, as may be amended from time to time upon agreement of the
parties hereto.
"Note" means a Mortgage Note, MH Note or Dealer Note.
"Obligor" means, the Dealer on a Dealer Note, the obligor on a MH
Note, or a Mortgagor on a Mortgage Note.
"Officer's Certificate" means, with respect to any Person, a
certificate of the chief executive officer, chief operating officer or vice
president or, with respect to financial matters, a certificate of the chief
financial officer or treasurer of such Person.
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"Original Agreement" means that certain Amended and Restated Master
Repurchase Agreement Governing Purchases and Sales of Mortgage Loans between
Buyer and BAC, dated as of September 30, 1998.
"Payment Date" means (i) with respect to all Loans other than MH
Loans, the first (1st) calendar day of the month, and (ii) with respect to MH
Loans, the tenth (10th) calendar day of the month, provided in both cases that
if any such calendar day is not a Business Day, the succeeding Business Day.
"Payoff Letter" means a letter from a Prior Lender, that details the
amount necessary to extinguish indebtedness owed by Dealer to such Prior Lender,
which indebtedness is secured by Manufactured Homes and/or other Property that
will secure a Floorplan Loan, and which provides an automatic release and/or
subordination in favor of Seller (and its successors and/or assigns) of its
security interest in all such Property upon receipt of payment of such amount.
"PBGC" means the Pension Benefit Guaranty Corporation established
pursuant to subtitle A of Title IV of ERISA.
"Perfection Requirements Memorandum" has the meaning specified in
Section 12(r).
"Periodic Payment" has the meaning specified in Section 5(d) hereof.
"Permitted Delinquencies" means the sublimit allowed for Delinquent MH
Loans, set forth in Exhibit I, Part 3 to this Agreement, as may be amended from
time to time upon agreement of the parties hereto.
"Person" means an individual, partnership, corporation, limited
liability company, joint stock company, trust or unincorporated organization or
a governmental agency or political subdivision thereof.
"Pipeline Report" means the report, in that form agreed upon
by the parties as amended from time-to-time, provided by a Seller with respect
to all Mortgage Loans being actively processed by that Seller for intended
inclusion in Transactions under this Agreement.
"Plan" means at a particular time, any employee benefit plan which is
covered by ERISA and in respect of which Sellers or a Commonly Controlled Entity
is (or, if such plan were terminated at such time, would under Section 4069 of
ERISA be deemed to be) an "employer" as defined in Section 3(5) of ERISA.
"PMI Policy" or "Primary Mortgage Insurance Policy" means a policy of
primary mortgage guaranty insurance issued by a Qualified Insurer.
"Pre-owned Manufactured Home" means a Manufactured Home that was
previously sold to or leased by a third-party for residential purposes.
"Price Differential" means, with respect to any Transaction hereunder
as of any date, the aggregate amount obtained by daily application of the
Pricing Rate for such
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Transaction to the Purchase Price for such Transaction on a 360 day per
year basis for the actual number of days during the period commencing on (and
including) the Purchase Date for such Transaction and ending on (but excluding)
the Repurchase Date (reduced by any amount of such Price Differential previously
paid by a Seller to Buyer with respect to such Transaction).
"Pricing Rate" means the per annum percentage rate specified in the
Confirmation for determination of the Price Differential which shall not exceed
LIBOR plus the applicable Pricing Spread; provided, that with respect to
Floorplan Loans, the Pricing Rate shall be equal to the Prime Rate minus 0.25%.
"Pricing Spread" has the meaning set forth in Exhibit I, Part 2 to
this Agreement, as may be amended from time to time upon agreement of the
parties hereto.
"Prime Rate" shall mean the prime rate announced to be in effect from
time to time, as published as the average rate in The Wall Street Journal.
"Prior Lender" means a previous lender to a Dealer, which lender has
financed Manufactured Homes which will secure a Floorplan Loan.
"Proceeds" means, with respect to any Collateral, whatever is
receivable or received when such Collateral is sold, collected, exchanged or
otherwise disposed of, whether such disposition is voluntary or involuntary, and
includes all rights to payment, including returned premiums, with respect to any
insurance relating to such Collateral.
"Property" means any right or interest in or to property of any kind
whatsoever, whether real, personal or mixed and whether tangible or intangible.
"Purchase Date" means the date on which Purchased Loans are
transferred by a Seller to Buyer or its designee (including the Custodian) as
specified in the Confirmation.
"Purchase Price" means on each Purchase Date, the price at which
Purchased Loans are sold or transferred by a Seller to Buyer or its designee
(including the Custodian), which, with respect to:
(i) Conduit Mortgage Loans, Credit Lease Mortgage Loans, Interim
Mortgage Loans, MH Loans and Floorplan Loans, is equal to the
Applicable Purchase Price Percentage multiplied by the lowest of
(x) the Market Value of such Purchased Loans, (y) the
Securitization Value of such Purchased Loans, or (z) the
outstanding principal amount of such Purchased Loans on the
Purchase Date.
(ii) Bridge Mortgage Loans, is the Buyer's LTV multiplied by the
market value of the Mortgaged Property, as determined in good
faith by the Buyer in its sole discretion, based upon its due
diligence review.
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"Purchased Loans" means the Loans sold by a Seller to the Buyer in a
Transaction, any Additional Loans and any Substituted Loans, whether or not such
Loans were in fact Eligible Loans at the time of purchase, or thereafter.
"Qualified Insurer" means an insurance company duly qualified as such
under the laws of the states in which the Underlying Asset is located, duly
authorized and licensed in such states to transact the applicable insurance
business and to write the insurance provided and whose claims paying ability at
the time of determination is (i) with respect to any Mortgage Loan or Floorplan
Loan, rated not less than A3 by ▇▇▇▇▇'▇ or A- or better by Standard & Poor's or
(ii) if such insurance company is not rated by either ▇▇▇▇▇'▇ or Standard &
Poor's, rated A:VII or better by Best's Insurance Reports, or (ii) with respect
to any MH Loan, rated B+ or better by Best's Insurance Reports (the "Minimum
Standards"). Seller may from time-to-time in connection with Mortgage Loans, (A)
agree that a Qualified Insurer may be rated not less than the Minimum Standards
or, subject to the provisions of the last sentence of this paragraph (B) accept
property insurance from insurance companies who are rated no lower than BBB by
Standard & Poor's and/or A:VII by Best's (such an insurer described in this
clause (B) being referred to as a "Lower Rated Insurer"). A Lower Rated Insurer
shall be used only when it is reasonable and prudent under the circumstances and
in all events disclosed to Buyer in each related Request for Purchase.
"Qualified Originator" means either Seller or another originator of
Loans approved by Buyer in writing.
"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, Manufactured
Homes and liens thereon.
"Reorganization" means, with respect to any Multiemployer Plan, the
condition that such Plan is in reorganization within the meaning of Section 4241
of ERISA.
"Replacement Loans" has the meaning specified in Section 14(b)(ii)
hereof.
"Reportable Event" means any of the events set forth in Section
4043(b) of ERISA, other than those events as to which the thirty day notice
period is waived under Sections .13, .14, .16, .18, .19 or .20 of PBGC Reg. ss.
4043.
"Repurchase Date" means the date on which a Seller is to repurchase
Purchased Loans from Buyer, including any date determined by application of the
provisions of Sections 3 or 14 hereof, as specified in the Confirmation;
provided that in no event shall such date be (i) more than 30 days after the
Purchase Date or (ii) after the expiration of the Maximum Aggregate Term.
"Repurchase Price" means the price at which Purchased Loans are to be
transferred from Buyer or its designee (including the Custodian) to a Seller
upon termination of a Transaction, which will be determined in each case as the
sum of the Purchase Price and the Price Differential as of the date of such
determination decreased by all cash, Income (including Curtailments and
prepayments) and Periodic Payments actually received by Buyer.
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"Request for Purchase" means written notice of a Seller's request to
enter into a Transaction, in a form acceptable to the applicable Seller and
Buyer. Such Request for Purchase shall (i) specify the requested Purchase Date
and Repurchase Date, (ii) include the Loan Schedule containing Collateral
Information with respect to the Loan or Loans that the Seller proposes to sell
to Buyer in connection with such Transaction, and (iii) be for at least the
minimum amount set forth in Exhibit I, Part 3 to this Agreement, as may be
amended from time to time upon agreement of the parties hereto. A Request for
Purchase covering a Floorplan Loan as to which Buyer has already disbursed funds
shall clearly specify this, and shall include BAC's Loan Number and the Dealer
name on the Floorplan Loan as to which an additional purchase is requested.
"Restricted Payments" means any of the following actions: (i)
declaring or paying any dividend (other than dividends payable solely in common
stock of either Seller or Guarantor) on, or making any payment on account of, or
setting apart assets for a sinking or other analogous fund for, the purchase,
redemption, defeasance, retirement or other acquisition of, any shares of any
class of capital stock of the Guarantor or any warrants or options to purchase
any such stock, whether now or hereafter outstanding, or making any other
distribution in respect thereof, either directly or indirectly, whether in cash
or property or in obligations of the Sellers, Guarantor or any Subsidiary, or
(ii) making any payments in excess of the amounts set forth in (A) Sellers'
executive bonus plans (each an "Executive Bonus Plan"), and (B) the employment
agreements as entered into between Guarantor and each of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ and
▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, as in effect as of the date hereof.
"Restrictions on Transferability" means any material condition to, or
restriction on, the ability of the holder or an assignee of the holder of any
right, title or interest to sell, assign, transfer or otherwise liquidate such
right, title or interest in a commercially reasonable time and manner or which
would otherwise materially deprive the holder or any assignee of the holder of
the benefits thereof.
"Retail Transaction" means a Transaction in connection with which the
Obligor under an MH Loan purchases from a Dealer a new Manufactured Home.
"Securitization Value" means as of any date with respect to any Loan,
the price at which such Loan could readily be securitized or sold in a
securitization, as determined in good faith by Buyer in its sole discretion,
provided that, the Securitization Value shall be deemed to be zero with respect
to each Loan (i) which has been subject to Transactions for more than the
Maximum Aggregate Term; (ii) other than an MH Loan, which is more than 29 days
Delinquent; (iii) which fails to meet the Loan Eligibility Requirements for that
Loan type; (iv) with respect to which there is a Breach (other than a Breach of
a Loan Representations) that has not been cured; (v) which violates the Loan
Limitations established for the applicable Loan type under Exhibit I, Part 3 to
this Agreement; and (vi) which is a Table Funded Mortgage Loan for which the
Custodian has failed to receive the related Mortgage Loan Documents on the third
Business Day following the applicable Purchase Date. The Securitization Value of
a Loan as to which there has been a Breach of a Loan Representation that has not
been cured, shall be reduced to a value determined by Buyer in its sole good
faith discretion, which value may be zero. The determination of Securitization
Value will be determined by Buyer based upon its due diligence review and will
include the benefit of
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▇▇▇▇▇▇ provided directly by Buyer or its Affiliate, and in each case pledged as
additional collateral to the Buyer. Sellers hereby acknowledge that
Securitization Value will be negatively impacted by the lack of current due
diligence information.
"Securitization Value Collateral Deficit" has the meaning specified in
Section 4(a) hereof.
"Seller" means BAC with respect to Mortgage Loans, BAC and Dynex, with
respect to Floorplan Loans, and MHFC and Dynex with respect to MH Loans.
"Seller's Loan Documents" means the documents identified for each Loan
type as set forth in Exhibit V, Parts 1, 2 and 3 to this Agreement as approved
by Buyer as may be amended from time to time with Buyer's written consent.
"Servicer" means the Mortgage Loan Servicer and the MH Servicer.
"Servicing Agreement" has the meaning specified in Section 25 hereof.
"Servicing File" means with respect to each Loan, the file retained by
a Seller or Servicer consisting of originals of all documents related to a Loan
which are not delivered to a Buyer or its designee and copies of the Loan
Documents.
"Servicing Letter" has the meaning specified in Section 25.
"Servicing Records" has the meaning specified in Section 25 hereof.
"Settlement Agent" shall mean, with respect to any Transaction, an
entity satisfactory to the Buyer in its sole discretion (which may be a title
company, escrow company or attorney in accordance with local law and practice in
the jurisdiction where the related Table Funded Mortgage Loan is being
originated), to which the proceeds of such Transaction are to be wired by Buyer.
"Settlement Agent Trust Receipt" means a trust receipt issued by the
Settlement Agent evidencing the Purchased Loans it holds, in the form of Exhibit
1-6 to the Custodial Agreement, and delivered to the Buyer and the Custodian by
the Designated Fax Distributor.
"Side Letter" means that certain letter agreement, the subject of
which is, dated March 15, 2000, between Buyer, BAC, MHFC and Dynex as may be
hereafter amended by the parties thereto.
"Significant Modification" means any modification that would be a
"significant modification" as such term is defined in U.S. Department of the
Treasury Regulations Section 1.1001-3(e) which includes a modification that,
based upon on all the facts and circumstances, is economically significant to
the Purchased Loan in the sole discretion of the Buyer, including, but not
limited to any changes in the interest rate, payment schedule, maturity date,
Obligor, guarantor or Underlying Asset.
"Single Employer Plan" means any Plan which is covered by Title IV of
ERISA, but which is not a Multiemployer Plan.
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"Standard & Poor's" means Standard & Poor's Rating Services, a
division of the McGraw Hill Companies, Inc.
"Subordination Letter" means that certain letter agreement
dated as of the date hereof, among Buyer, Sellers and Sun Communities, Inc.
"Subsidiary" means, with respect to any Person, any corporation,
partnership or other entity of which at least a majority of the securities or
other ownership interests having by the terms thereof ordinary voting power to
elect a majority of the board of directors or other persons performing similar
functions of such corporation, partnership or other entity (irrespective of
whether or not at the time securities or other ownership interests of any other
class or classes of such corporation, partnership or other entity shall have or
might have voting power by reason of the happening of any contingency) is at the
time directly or indirectly owned or controlled by such Person or one or more
Subsidiaries of such Person or by such Person and one or more Subsidiaries of
such Person.
"Substituted Loans" means any Eligible Loans substituted for
Purchased Loans in accordance with Section 9 hereof.
"Sun Side Letter" shall mean that certain letter agreements, dated as
of the date hereof, by and between the Sellers, the Buyer, the Guarantor and Sun
Communities, Inc.
"Table Funded Mortgage Loan" shall mean a Mortgage Loan which is sold
to the Buyer simultaneously with the origination thereof by the Seller, which
origination is financed in part or in whole with proceeds of Transactions
advanced directly to the Settlement Agent. A Mortgage Loan shall cease to be a
Table Funded Mortgage Loan after the Custodian has delivered a Trust Receipt to
Buyer certifying its receipt of the corresponding Loan File.
"Table Funded Trust Receipt" has the meaning specified in the
Custodial Agreement.
"Tangible Net Worth" means the consolidated Total Assets of
Guarantor minus an amount equal to the sum of (x) consolidated Indebtedness of
Guarantor and (y) consolidated intangible assets (including, without limitation,
goodwill) as set forth in the consolidated financial statement of Guarantor.
"Title Policy" has the meaning specified in Paragraph 2 of Exhibit II,
Part 1.
"Total Assets" of any Person shall mean, at any date, the Book Value
of all its properties and assets, whether real, personal or mixed; provided that
Buyer and the respective Seller shall mutually agree upon the assumptions to be
used to evaluate the Book Value of any residual interest or interest-only
securities owned by that Seller or its Affiliates prior to its inclusion in the
calculation of Book Value.
"Total Committed Amount" means the total amount which the Buyer has
committed to make subject to Transactions hereunder at any one time, as set
forth in Exhibit I, Part 3 to this Agreement, as may be amended from time to
time upon agreement of the parties hereto.
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"Transaction" has the meaning specified in Section 1 hereof.
"Trust Receipt" means a trust receipt issued by Custodian to Buyer
confirming the Custodian's possession of certain Loan Files which are the
property of and held by Custodian for the benefit of the Buyer or the registered
holder of such trust receipt.
"Underlying Asset" means the Mortgaged Property with respect to a
Mortgage Loan and Land-and-Home Loan, and a Manufactured Home (including
Add-ons) with respect to an MH Loan and Floorplan Loan.
"Underwriting Guidelines" means the underwriting guidelines for
Mortgage Loans, MH Loans, and Floorplan Loans, substantially in the form of
Exhibit III, Parts 1, 2 and 3, to this Agreement as may be amended from time to
time.
"Uniform Commercial Code" or "UCC" means the Uniform Commercial Code
as in effect on the date hereof in the State of New York; provided that if by
reason of mandatory provisions of law, the perfection or the effect of
perfection or non-perfection of the security interest in any Collateral is
governed by the Uniform Commercial Code as in effect in a jurisdiction other
than New York, "Uniform Commercial Code" shall mean the Uniform Commercial Code
as in effect in such other jurisdiction for purposes of the provisions hereof
relating to such perfection or effect of perfection or non-perfection.
"Used Manufactured Home" means a Manufactured Home that is (a) older
than the 1998 model year or (b) Pre-Owned Manufactured Home.
3. CONDITIONS PRECEDENT; INITIATION; CONFIRMATION; TERMINATION; MAXIMUM
TRANSACTION AMOUNTS; FEES
(a) Conditions Precedent to Initial Transaction. Buyer's obligation to
enter into the initial Transaction hereunder is subject to the satisfaction,
immediately prior to or concurrently with the making of such Transaction, of the
condition precedent that Buyer shall have received the Commitment Fee from
Sellers and any other fees and expenses payable hereunder, and all of the
following documents with respect to each Loan type that is eligible for
purchase, each of which shall be satisfactory to Buyer and its counsel in form
and substance (together with the Confirmation, collectively, the "Facility
Documents"):
(1) Agreement. This Agreement, duly completed, and executed and
delivered by Sellers;
(2) Second Amended and Restated Custodial Agreement. Second Amended
and Restated Custodial Agreement, duly executed and delivered by
Sellers and the Custodian;
(3) Uniform Commercial Code Filings. Any filings requested by Buyer
or required under the Uniform Commercial Code duly completed and
executed and such other actions as Buyer shall have requested in order
to perfect the security interests created pursuant to this Agreement;
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(4) Blocked Account Agreements. The Blocked Account Agreements,
duly executed and delivered, respectively, by (i) BAC, Bloomfield
Servicing and Bank One, (ii) MHFC, Bloomfield Servicing and Bank One;
and (iii) Dynex and Bank One;
(5) Opinions of Counsel. An opinion or opinions of counsel to the
Sellers and to the Guarantor regarding corporate authority and
perfection of security interests in Loans, in form and substance
acceptable to the Buyer, including affirmations of the current validity
of previously delivered documents; an opinion or opinions of counsel to
MHFC and Dynex regarding perfection of security interests in MH Paper,
in all states in which MH Paper will be originated, and a written
analysis, satisfactory to Buyer in its sole discretion, from outside
counsel to MHFC and Dynex regarding the effect on the validity and
enforceability of Buyer's interests in MH Loans and the related
Manufactured Homes in those states in which MHFC or Dynex has not yet
obtained licensing.
(6) Guaranty. The Guaranty, duly executed and delivered by
Guarantor;
(7) Side Letter. The Side Letter, duly executed and delivered by
BAC, MHFC and Dynex;
(9) Subordination Letter. The Subordination Letter, duly executed
and delivered by all the parties thereto;
(10) Mortgage Loan Servicing Agreement. The Servicing Agreement,
duly executed and delivered by BAC and Mortgage Loan Servicer;
(11) MH Servicing Agreement. The MH Servicing Agreement, duly
executed and delivered by MHFC and MH Servicer;
(12) Dynex Servicing Agreement. The Dynex Servicing Agreement, duly
executed and delivered by Dynex and Dynex Services.
(13) Servicing Letter - Mortgage Loan Servicer. A Servicing Letter,
as required under Section 25(d), duly executed and delivered by the
Mortgage Loan Servicer.
(14) Servicing Letter - MH Servicer. Servicing Letters, as required
under Section 25(d), duly executed and delivered by the MH Servicer.
(15) Sun Side Letter. The Sun Side Letter, duly executed and
delivered by the Sellers, the Guarantor and Sun Communities, Inc.
(16) Organizational Documents. For each of BAC, MHFC, Dynex and the
Guarantor, Buyer shall have received a certificate of good standing and
a certificate of the Secretary or Assistant Secretary of each entity
certifying: (i) a copy of its articles of incorporation, (ii) a copy of
its by-laws; (iii) the names and signatures
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of the officers authorized on its behalf to execute, deliver and
perform under the Facility Documents, and any other documents to be
delivered by it from time to time in connection therewith (on which the
Buyer conclusively rely until such time as the Buyer shall receive from
the Sellers or the Guarantor, respectively, a revised certificate); and
(iv) resolutions of the Board of Directors of each entity authorizing
that entity to execute, perform under, and deliver the Facility
Documents;
(17) Officer's Certificates. An Officer's Certificate of each
Seller, regarding representations and warranties;
(18) Power of Attorney. An omnibus power of attorney in form and
substance satisfactory to Buyer, duly executed and delivered by each
Seller with respect to all of the Loans delivered or to be delivered by
that Seller to Buyer or its designee (including the Custodian),
irrevocably appointing Buyer its attorney-in-fact with full power to
complete, record and/or file the Assignments of Mortgages and other
assignments, complete the endorsement of the Notes and/or MH Contracts
and take such other steps as may be necessary or desirable to enforce
Buyer's rights against such Loans, the related Loan Files and the
Servicing Records;
(19) Underwriting Guidelines. A copy of Sellers' current
Underwriting Guidelines for MH Loans and a copy of any material changes
to BAC's Underwriting Guidelines made since the Underwriting Guidelines
for Conduit Mortgage Loans and Credit Lease Mortgage Loans were last
delivered to Buyer;
(20) Sellers' Loan Documents. Seller's Loan Documents for MH Loans,
as identified in Exhibit V attached hereto, and confirmation that the
previously delivered Seller's Loan Documents for Conduit and Credit
Lease Mortgage Loans remain the complete and true copies of those used
by BAC for such Loans.
(21) Financial Statements. Audited (for the period ended December
31, 1999) financial statements for Sellers and Guarantor;
(22) Insurance Policies. Insurance policies required by Section
12(o) hereof;
(23) Designated Fax Distributor Letter. Letter from the Designated
Fax Distributor in which the Designated Fax Distributor agrees to act
as Designated Fax Distributor.
(24) Other Documents. Such other documents as Buyer may reasonably
request.
(b) Conditions Precedent to all Transactions. Buyer's obligation to
enter into each Transaction (including the initial Transaction) is subject to
the satisfaction of the following further conditions precedent, both immediately
prior to entering into such Transaction and also after giving effect thereto to
the intended use thereof:
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(1) Underwriting Summary and Draft Loan Schedule. At least one (1)
week prior to the Purchase Date, Buyer and Buyer's Underwriter shall have
received a materially completed underwriting summary (which may be updated prior
to the Purchase Date) and a draft Loan Schedule for all Loans in the form
mutually agreed to by Buyer and the applicable Seller with respect to each
Mortgage Loan to be purchased on such Purchase Date;
(2) Completion of Due Diligence. Buyer shall have completed its due
diligence to its satisfaction with respect to each Eligible Loan to be purchased
on such Purchase Date;
(3) Requests for Purchase. With respect to each Loan other than a
Table Funded Mortgage Loan, no later than 12:00 noon (New York time) three
Business Days prior to the specified Purchase Date and promptly upon
rate-locking with respect to any Table Funded Mortgage Loan, Buyer, and
Custodian, shall have received an executed final Request for Purchase containing
an Officer's Certificate of a Seller certifying that such Seller is in
compliance with all covenants, representations and warranties in the Agreement,
including without limitation, the Loan Representations, and a final Loan
Schedule, via facsimile and in electronic form, with respect to each Loan to be
purchased on the Purchase Date;
(4) Trust Receipts. For each Loan other than a Table Funded Mortgage
Loan, a Trust Receipt and a Loan Schedule, with such exceptions as are
acceptable to Buyer in its sole discretion in respect of Eligible Loans to be
sold hereunder on such Purchase Date, in each case dated such Purchase Date and
duly completed. For each Table Funded Mortgage Loan, a Table Funded Trust
Receipt and a Loan Schedule, in each case dated such Purchase Date and duly
completed;
(5) Documents. For each Loan other than a Table Funded Mortgage Loan,
the documentation set forth in Annex A and Annex B of the Custodial Agreement.
For each Table Funded Mortgage Loan, Buyer and Custodian shall have received a
fax of the Initial Table Funded Loan Documents;
(6) No Seller Default. No Event of Default or material Default shall
have occurred and be continuing;
(7) Underwriting Guidelines. The applicable Seller shall have provided
Buyer with any changes to that Seller's Underwriting Guidelines prior to the
effectiveness of any such change;
(8) Payment of Administration Fees. Buyer shall have received the
Administration Fee for each Loan that will be purchased in such Transaction, as
to which an Administration Fee is payable, or the Buyer may deduct such
Administration Fees from the Purchase Price disbursed on such Purchase Date; and
(9) Loan Transfer Agreements. Any Loan Transfer Agreements applicable
to Loans to be purchased by Buyer hereunder.
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(c) Conditions Precedent to Bridge Mortgage Loan and Interim Mortgage
Loan Transactions. Buyer's obligation to enter into each Transaction that
includes Bridge Mortgage Loans or Interim Mortgage Loans (other than the
Grandfathered Loans) is subject to satisfaction of the conditions precedent set
forth in Section 3(b) hereof, as they relate to Bridge Mortgage Loans and
Interim Mortgage Loans. BAC shall not be assessed a Commitment Fee or Non-Use
Fee on Bridge Mortgage Loans or Interim Mortgage Loans until such time as a
Bridge Mortgage Loan or Interim Mortgage Loan (other than the Grandfathered
Loans) becomes subject to a Transaction, and, at such time, the fees payable
with respect to Bridge Mortgage Loans and Interim Mortgage Loans, respectively,
shall be those set forth in Exhibit I, Part I of this Agreement, as may be
amended from time to time by the parties hereto.
(d) Conditions Precedent to Floorplan Loan Transactions. Buyer's
obligation to enter into each Transaction that includes Floorplan Loans is
subject to the satisfaction of the conditions precedent set forth in Section
3(b) hereof as they relate to Floorplan Loans, delivery of executed Consignment
Agreements and Assignments of Consignment Agreements with respect to each
consignee of Manufactured Homes, and delivery of opinions and other documents
requested by Buyer to assure that its interests in Floorplan Loans will be
protected.
(e) Initiation and Confirmation. An agreement to enter into a
Transaction shall be initiated by a Seller's delivery of a Request for Purchase
to Buyer. Buyer shall confirm the terms of each Transaction by issuing a written
confirmation (a "Confirmation") to such Seller promptly after the Buyer's
receipt of the Request for Purchase. Such Confirmation shall describe the
Purchased Loans, identify Buyer and Seller and set forth (i) the Purchase Date,
(ii) the Purchase Price, (iii) the Repurchase Date, (iv) the Pricing Rate
applicable to the Transaction and the Buyer's LTV in the case of Bridge Mortgage
Loans, (v) the Applicable Collateral Maintenance Percentages and (vi) additional
terms or conditions not inconsistent with this Agreement. After receipt of the
Confirmation, the Seller shall sign the Confirmation and promptly return it to
Buyer.
Any Confirmation by Buyer shall be deemed to have been received by the
Seller on the date actually received by the Seller. Each Confirmation, together
with this Agreement, shall be conclusive evidence of the terms of the
Transaction(s) covered thereby unless objected to in writing by the Seller no
more than three (3) Business Days after the date the Confirmation was received
by the Seller or unless a corrected Confirmation is sent by Buyer. An objection
sent by a Seller must specifically state the objection, must specify the
provision(s) being objected to by the Seller, must set forth such provision(s)
in the manner that the Seller believes they should be stated, and must be
received by Buyer no more than three (3) Business Days after the Confirmation
was received by the Seller.
(f) Funding of Transactions. Buyer will only provide funds for
purchase of Table Funded Mortgage Loans to and through the Settlement Agent as
provided in the Request for Purchase approved by Buyer. All other Transactions
will be funded in accordance with the Seller's written instructions in the
Request for Purchase approved by Buyer. All such fundings will be in immediately
available funds in U.S. dollars and effected through wire transfer arrangements
acceptable to both Seller and Buyer.
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(g) Minimum and Maximum Transaction Amounts. With respect to all
Transactions hereunder, the aggregate Purchase Price for all Purchased Loans at
any one time subject to then outstanding Transactions under this Agreement shall
not exceed the Total Committed Amount. Further, the aggregate Purchase Price of
all Eligible Loans for which a Request for Purchase is submitted by a Seller
pursuant to this Agreement, and the aggregate outstanding principal balance of
all Purchased Loans at any one time subject to then outstanding Transactions
under this Agreement, shall conform to the amounts and limitations set forth in
Exhibit I, Part 3. Buyer shall have no obligation to enter any Transaction if at
such time a Default or Event of Default shall have occurred and be continuing.
(h) Additional Costs. The Sellers shall pay directly to Buyer from
time to time such amounts as Buyer may determine to be necessary to compensate
Buyer for any costs that Buyer determines are attributable to its using a
LIBOR-based Pricing Rate or its obligation to use a LIBOR-based Pricing Rate
hereunder, or any reduction in any amount receivable by Buyer hereunder in
respect of the Pricing Rate (such increases in costs and reductions in amounts
receivable being herein called "Additional Costs"), resulting from any change
that:
(1) shall subject Buyer to any tax, duty or other charge in
respect of such LIBOR-based Pricing Rate or changes the basis of taxation
of any amounts payable to such Buyer under this Agreement in respect of any
of such LIBOR-based Pricing Rate (excluding changes in the rate of tax on
the overall net income of such Buyer by the jurisdiction in which Buyer has
its principal office); or
(2) imposes or modifies any reserve, special deposit or similar
requirements relating to any LIBOR-based Pricing Rate; or
(3) imposes any other condition affecting this Agreement or the
transactions contemplated hereby or thereby.
Buyer shall deliver to the Sellers a statement setting forth the
amount and basis of determination of any Additional Costs in such detail as
determined in good faith by Buyer to be adequate, it being agreed that such
statement and the method of its calculation shall be adequate and shall be
conclusive and binding upon the Sellers, absent manifest error.
(i) Limitation on Pricing Rate Used; Illegality. Anything herein to
the contrary notwithstanding, if, on or prior to the determination of the
Pricing Rate:
(1) the Buyer determines, which determination shall be conclusive,
that quotations of interest rates for the relevant deposits referred to in
the definition of "LIBOR" in Section 2 hereof are not being provided in the
relevant amounts or for the relevant maturities for purposes of determining
the Pricing Rates as provided herein; or
(2) the Buyer determines, which determination shall be conclusive,
that the relevant rate of interest referred to in the definition of
"Pricing Rate" in Section 2 hereof upon the basis of which the Pricing Rate
is to be determined is not likely adequately to cover the cost to the Buyer
of purchasing the Purchased Loans using such Pricing Rate; or
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(3) it becomes unlawful for the Buyer to honor its obligation to
purchase Loans hereunder using a Pricing Rate based upon LIBOR;
then the Buyer shall give the Sellers prompt notice thereof and, so long as
such condition remains in effect, the Buyer shall be under no obligation to
enter into additional Transactions, and the Sellers shall, either repurchase all
Purchased Loans then subject to a Transaction or the new Pricing Rate shall be
determined based upon the rate selected by the Buyer in a manner that is
reasonably satisfactory to Buyer so as to adequately reflect the cost to Buyer
of purchasing the Purchased Loans using such substituted Pricing Rate (in which
case Buyer shall continue to be obligated to enter into additional Transactions
using that substituted Pricing Rate).
(j) Termination and Repurchase; Exit Fee.
(1) Notice of Repurchase. A Seller may at any time and from time
to time repurchase the Purchased Loans subject to a Transaction, in whole
or in part, upon at least one (1) Business Day's irrevocable notice to
Buyer, specifying the Repurchase Date of such repurchase and the Repurchase
Price. If any such notice is given, the Repurchase Price specified in such
notice shall be due and payable on the Repurchase Date specified therein,
together with any amounts payable pursuant to subsection 3(j)(3) hereof.
Notice of repurchase pursuant to this subsection 3(j)(1) shall be made by a
Seller by telephone or otherwise, no later than 1:00 p.m. (New York Time)
on the Business Day prior to the day on which such repurchase will be
effected.
(2) Transfer of Purchased Loans. On the Repurchase Date,
termination of the Transaction will be effected by transfer to a Seller or
its designee of the Purchased Loans (and any Income in respect thereof
received by Buyer not previously credited or transferred to, or applied to
the obligations of, the Seller pursuant to Section 5 hereof) against the
simultaneous transfer of the Repurchase Price plus any Breakage Costs, as
defined below, payable by the Seller to Buyer pursuant to the succeeding
paragraph to an account of Buyer. The Seller is obligated to obtain the
Loan Files from Buyer or its designee at Seller's expense on the Repurchase
Date.
(3) Breakage Costs. If a Seller repurchases the Purchased Loans on
any day which is not a Repurchase Date for such Loans, such Seller shall
indemnify Buyer and hold Buyer harmless from any loss or expense which
Buyer may sustain or incur arising from the reemployment of funds obtained
by Buyer hereunder or from fees payable to terminate the deposits from
which such funds were obtained, but not including loss of profit ("Breakage
Costs"). Buyer shall deliver to the Seller a statement setting forth the
amount and basis of determination of any Breakage Costs in such detail as
determined in good faith by Buyer to be adequate, it being agreed that such
statement and the method of its calculation shall be adequate and shall be
conclusive and binding upon the Seller, absent manifest error. This Section
shall survive termination of this Agreement and repurchase of all Purchased
Loans subject to Transactions hereunder.
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(4) Exit Fee. In the event that a Seller repurchases any Purchased
Loans subject to a Transaction whether on the Repurchase Date or otherwise,
that Seller agrees to pay Buyer an exit fee (the "Exit Fee"), if such
Purchased Loan is subject to an Exit Fee pursuant to Exhibit I, Part 1
hereof, each such payment to be made in U.S. dollars, in immediately
available funds, without deduction, set-off or counterclaim, to Buyer at
the account designated by Buyer. Without limiting the generality of the
foregoing, any Exit Fee shall accrue and be payable as a condition to
delivery by Buyer of the related Purchased Loans that are subject to this
Agreement at the time of any repurchase or termination of this Agreement.
(k) Non-Use Fee. The Seller agrees to pay to the Buyer a Non-Use Fee
from and including the Effective Date to the Termination Date, computed at the
rate set forth in Exhibit I, Part 1 to this Agreement on the average daily
amount of the unutilized portion of the Maximum Committed Amount during the
period for which payment is made, in each case payable quarterly in arrears on
the first Business Day of the following quarter and on the Final Repurchase
Date, such payment to be made in dollars, in immediately available funds,
without deduction, set-off or counterclaim, to the Buyer.
4. COLLATERAL MAINTENANCE AMOUNT
(a) Collateral Deficit; Additional Loans. If at any time (i) the
aggregate Market Value of all Purchased Loans subject to then outstanding
Transactions is less than the aggregate Collateral Maintenance Amount for all
such Transactions (a "Market Value Collateral Deficit"), or (ii) the aggregate
Securitization Value of all Purchased Loans subject to then outstanding
Transactions is less than the aggregate Collateral Maintenance Amount for all
such Transactions (a "Securitization Value Collateral Deficit"), then Buyer may
by notice to the Seller require the Seller to transfer to Buyer or its designee
(including the Custodian) additional Eligible Loans ("Additional Loans") or
cash, so that the cash and aggregate Market Value and aggregate Securitization
Value of the Purchased Loans, including any such Additional Loans, will
thereupon equal or exceed the aggregate Collateral Maintenance Amount. Any cash
remitted by a Seller to Buyer pursuant to this Section 4(a) shall be deemed a
payment of all or part of the Repurchase Price and such Seller shall be liable
for and shall pay promptly to Buyer any Breakage Cost as a result therefrom.
(b) Notice of Deficit and Required Payment or Delivery. Notice
required pursuant to subsection (a) above may be given by means of telecopier or
telegraphic transmission. A notice for the payment or delivery in respect of a
Collateral Deficit received before noon on a Business Day, local time of the
party receiving the notice, must be met not later than 5:00 p.m. (New York time)
on the Business Day following the day upon which the notice was given, local
time of the party receiving the notice. Any notice given on a Business Day after
noon, local time of the party receiving the notice, shall be met not later than
2:00 p.m. (New York time) on the second succeeding Business Day. The failure of
Buyer, on any one or more occasions, to exercise its rights under subsection (a)
of this Section 4 shall not change or alter the terms and conditions to which
this Agreement is subject or limit the right of the Buyer to do so at a later
date. Buyer and Sellers agree that a failure or delay to exercise its rights
under subsection (a) of this Section 4 shall not limit Buyer's rights under this
Agreement or otherwise existing by law or in any way create additional rights
for Sellers.
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(c) No Further Transactions Until Deficit Remedied. In the event that
either of the Sellers fail to comply with the provisions of this Section 4,
Buyer shall not be obligated to enter into any additional Transactions under
this Agreement after the date of such failure.
5. INCOME PAYMENTS
(a) Sellers' Limited Right to Income Payments. All Income with respect
to Purchased Loans subject to Transactions shall be held in a segregated Blocked
Account established with respect to that Seller at the Lockbox Bank for the
benefit of Buyer (pursuant to Section 29 of this Agreement) and distributed
under the relevant Blocked Account Agreement. Where a particular Transaction's
term extends over an Income payment date on the Purchased Loans subject to that
Transaction such Income shall be the property of Buyer. Notwithstanding the
foregoing, so long as no Event of Default shall have occurred and be continuing,
each Seller shall be entitled to all Income with respect to that Seller's
respective Purchased Loans subject to Transactions. An Event of Default by
either Seller is considered an Event of Default by both Sellers.
(b) Payments by Obligors. The parties understand and agree that all
payments with respect to the Purchased Loans must be deposited into a Blocked
Account established at the Lockbox Bank in the name of a Seller subject to the
lien of Buyer, as more particularly addressed in Section 29 of this Agreement.
(c) Curtailments, Principal Payments and Prepayments. BAC and Dynex
must instruct Dealers to make Curtailment payments, and BAC shall instruct all
Obligors on all Purchased Mortgage Loans to make all payments, including
prepayment payments, directly to the appropriate Blocked Account for
distribution to the Buyer on the Payment Date following receipt thereof. In
addition, BAC, MHFC and Dynex must instruct the respective MH Servicer to
deposit all collections received in respect of Purchased Loans which are MH
Loans (including all principal prepayments, Curtailments, or any other payment
received into the appropriate Blocked Account within two Business Days of
receipt (such payments may be deposited by the MH Servicer in a lockbox clearing
account approved by the Buyer prior to transfer to the appropriate Blocked
Account), in each case for distribution to the Buyer on the Payment Date
following receipt thereof. Whenever a Curtailment payment or prepayment on any
Loan is made to the Buyer, the Repurchase Price of the corresponding Loan shall
be reduced by the amount of such payment, or, at Seller's option, and subject to
a notice of repurchase given pursuant to Section 3(j)(1) hereof, the Loans may
be repurchased pursuant to Section 3(j)(2) hereof, subject to any Breakage Cost
due pursuant to Section 3(j)(3) hereof.
(d) Required Periodic Payments to Buyer. Notwithstanding that Buyer
and Sellers intend that the Transactions hereunder be sales to Buyer of the
Purchased Loans, Sellers shall pay by wire transfer to Buyer the accreted value
of the Price Differential (less any amount of such Price Differential previously
paid by Sellers to Buyer) (each such payment, a "Periodic Payment") on each
Payment Date.
(e) Payments on Payment Date. All payments received from Obligors in
respect of Purchased Loans shall be remitted to Buyer on the Payment Date in
accordance with Section 29 to this Agreement. Each Seller shall deliver or cause
to be delivered to Buyer on
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the second Business Day immediately preceding the Payment Date (i) a
Distribution Worksheet and (ii) the updated Collateral Information with respect
to all of that Seller's Loans then subject to Transactions.
(f) Deduction from Repurchase Price. Buyer shall deduct from the
Repurchase Price of each such Transaction all Income payments, including
Curtailment payments, and all Periodic Payments related thereto, actually
received by Buyer pursuant to Sections 5(a) through (d) hereof.
6. SECURITY INTEREST
(a) Grant of Security Interest and Cross-Collateralization. Buyer and
the Sellers intend that the Transactions hereunder be sales to Buyer of the
Purchased Loans and not loans from Buyer to Sellers secured by the Purchased
Loans. However, in order to preserve Buyer's rights under this Agreement in the
event that a court or other forum recharacterizes the Transactions hereunder as
loans and as security for the performance by Sellers of all of Sellers'
obligations to Buyer under this Agreement and the Transactions entered into
pursuant to this Agreement, both Sellers grant Buyer, on a cross-collateralized
basis with all outstanding Transactions, a first priority security interest in
the Purchased Loans, including the indebtedness of Obligors and the Underlying
Assets, including all Manufactured Homes now owned or hereafter acquired, as
collateral for Floorplan Loans and MH Loans, and all other collateral provided
as security for the Purchased Loans; Servicing Agreements, Back-up Servicing
Agreements, Servicing Records, insurance, guarantees, indemnities and warranties
and proceeds thereof, financing statements and other agreements or arrangements
of whatever character from time relating to the Purchased Loans, Income, any and
all ▇▇▇▇▇▇, all Insured Closing Letters and the Escrow Instructions covering any
or all of the Loans, all Collections and the Blocked Accounts and all amounts on
deposit therein, any and all collection accounts and escrow accounts relating to
the Purchased Loans, all MH Contracts, Dealer Financing Agreements, and other
Loan Agreements, the Loan Documents, all Consignment Agreements, sale contracts,
security agreements, the right to payment of interest or finance charges and
collateral securing such obligations, and any other contract rights, and other
assets relating to the Purchased Loans or any interest in the Purchased Loans,
whether constituting real or personal property, accounts, chattel paper,
equipment, goods, instruments, general intangibles, inventory or proceeds, or
securities backed by or representing an interest in such Loans, and any and all
replacements, substitutions, distributions on or Proceeds of any and all of the
foregoing (collectively, the "Collateral").
(b) Payment of Costs of Perfection. Sellers shall pay all fees and
expenses associated with perfecting Buyer's security interest in the Collateral,
including, without limitation, the cost of filing financing statements under the
Uniform Commercial Code and recording Assignments of Mortgages and other
assignments, as and when required by Buyer in its sole discretion.
(c) Additional Actions. Sellers covenant to take such further actions
as are necessary in order to perfect Buyer's first priority security interest in
the ▇▇▇▇▇▇ or in any other Collateral.
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(d) Joint and Several Liability. Each Seller hereby acknowledges and
agrees that such Seller shall be jointly and severally liable for all
representations, warranties, covenants, obligations and indemnities of the
Sellers hereunder.
7. PAYMENT, TRANSFER AND CUSTODY
(a) Payments by Sellers. Unless otherwise mutually agreed in writing,
all transfers of funds by Sellers hereunder shall be made in immediately
available funds in U.S. dollars, without deduction, set-off or counterclaim, to
Buyer at the account designated by Buyer.
(b) Custodial Delivery. On or before each Purchase Date, the
respective Seller shall deliver or cause to be delivered to Buyer or its
designee the Custodial Delivery in the form of Exhibit 7-1 and Exhibit 7-2 of
the Custodial Agreement. With respect to each Table Funded Mortgage Loan, BAC
shall cause the Settlement Agent or Designated Fax Distributor to deliver to the
Custodian by facsimile the Initial Table Funded Loan Documents. A Designated Fax
Distributor acts as fiduciary on behalf of Buyer in performing its
responsibilities hereunder.
(c) Transfer of Ownership. On the Purchase Date for each Transaction,
ownership of the Purchased Loans shall be transferred to the Buyer or its
designee (including the Custodian) against the simultaneous transfer of the
Purchase Price to an account of the respective Seller specified in the
Confirmation. The Seller, simultaneously with the delivery to Buyer or its
designee (including the Custodian) of the Purchased Loans relating to each
Transaction hereby sells, transfers, conveys and assigns to Buyer or its
designee (including the Custodian) without recourse, but subject to the terms of
this Agreement, all the right, title and interest of the Seller in and to the
Purchased Loans together with all right, title and interest in and to the
proceeds of any related insurance policies.
(d) Delivery of Loan File. In connection with each sale, transfer,
conveyance and assignment, or pledge, (i) three (3) Business Days prior to each
Purchase Date with respect to each Loan other than a Table Funded Mortgage Loan,
and (ii) by no later than 12:00 noon (New York time) on the third Business Day
following the applicable Purchase Date with respect to each Table Funded
Mortgage Loan, the Sellers shall deliver or cause to be delivered and released
to the Custodian the original documents pertaining to each Purchased Loan set
forth in Annex A and Annex B of the Custodial Agreement. The Loan Files shall be
maintained in accordance with the Custodial Agreement.
(e) Buyer shall deposit the Loan Files representing the Purchased
Loans, or direct that the Loan Files be deposited directly, with the Custodian.
The Loan Files shall be maintained in accordance with the Custodial Agreement.
(f) Any documents related to a Loan which have not been delivered to
Buyer or its designee (including the Custodian) are and shall be held in trust
by the applicable Seller or its designees for the benefit of Buyer as the owner
thereof. The Seller or its designees shall maintain the related Servicing File
consisting of a copy of the Loan File and the originals of other documents
related to the Loans not delivered to Buyer or its designee. The possession of
the Servicing Files by Sellers or their designees is at the will of the Buyer
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for the sole purpose of servicing the related Purchased Loan(s),
and such retention and possession by the Sellers or their designees is in a
custodial capacity only. In addition to copies of the Loan Documents, the
Servicing File shall include, without limitation, (i) the original or copy
certified by an employee of the Seller of the credit application signed by the
Obligor and the Obligor credit bureau report(s) obtained by the Seller during
the underwriting of the Obligor's credit application, (ii) the Seller's credit
worksheet together with the credit score of the Obligor (which may be maintained
by the Seller in its computer database), (iii) in the case of a new Manufactured
Home, the manufacturer's invoice in respect of such Manufactured Home, and in
the case of Mortgage Loans, Pre-owned Manufactured Homes and Land-and-Home
Loans, an appraisal or other acceptable documentation as permitted pursuant to
the terms and conditions of the Underwriting Guidelines, corroborating the
indicated value thereof, (iv) proof of all insurance coverage required
hereunder, including without limitation, hazard insurance or blanket hazard
insurance, (v) copies of the letter or other written instruction delivered to
each Obligor directing that payments be made to the relevant Lockbox Account,
(vi) all documents evidencing origination in accordance with the Underwriting
Guidelines and (vii) copies of all material correspondence. The books and
records (including, without limitation, any computer records or tapes) of each
Seller or their designees shall be marked appropriately to reflect clearly the
sale of the related Purchased Loan to Buyer. Sellers and their designees
(including the Custodian) shall release their custody of Servicing Files only in
accordance with written instructions from Buyer, unless such release is in
connection with a repurchase of any Purchased Loan by a Seller.
8. REHYPOTHECATION OR PLEDGE OF PURCHASED LOANS
Title to all Purchased Loans shall pass to Buyer and Buyer shall have
free and unrestricted use of all Purchased Loans. Nothing in this Agreement
shall preclude Buyer from engaging in repurchase transactions with the Purchased
Loans or otherwise pledging, repledging, hypothecating, or rehypothecating the
Purchased Loans, but no such transaction shall relieve Buyer of its obligations
to transfer Purchased Loans to Sellers pursuant to Section 3 hereof. Nothing
contained in this Agreement shall obligate Buyer to segregate any Purchased
Loans delivered to Buyer by Sellers; provided that Buyer acknowledges that the
Custodian is contractually obligated to segregate the Loan Files pursuant to the
Custodial Agreement. In the event that there is a material adverse change or
other development in the repurchase markets which result in the Buyer being
unable to finance its position through the repurchase market with its
traditional repurchase counterparties, Buyer may accelerate the Final Repurchase
Date of one or more, or all, of any Loan or Loans and/or types of Purchased
Loans to the date of such occurrence.
9. SUBSTITUTION
(a) Sellers' Right to Substitute Eligible Loans. Subject to Section
9(b) below, Sellers may, upon one (1) Business Days' written notice to Buyer,
with a copy to Custodian, substitute other Eligible Loans for any Purchased
Loans. Such substitution shall be made by transfer to Buyer or its designee
(including the Custodian) of the Loan Files of such other Eligible Mortgage
Loans together with a Custodial Delivery and transfer to the Seller or its
designee of the Purchased Loans requested for release. After substitution, the
substituted
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Eligible Loans shall be deemed to be Purchased Loans subject to the
same Transaction as the released Mortgage Loans.
(b) Limitation on Substitution. Notwithstanding anything to the
contrary in this Agreement, Sellers may not substitute other Eligible Loans for
any Purchased Loans (i) if after taking into account such substitution, a
Collateral Deficit would occur, (ii) such substitution would cause a breach of
any provision of this Agreement or (iii) a Default shall have occurred and be
continuing.
10. REPRESENTATIONS AND WARRANTIES
(a) Mutual Representations and Warranties. Each of Buyer and each
Seller (for itself, not jointly, but severally) represents and warrants to the
other that (i) it is duly authorized to execute and deliver this Agreement, to
enter into the Transactions contemplated hereunder and to perform its
obligations hereunder and has taken all necessary action to authorize such
execution, delivery and performance; (ii) it will engage in such Transactions as
principal; (iii) the person signing this Agreement on its behalf is duly
authorized to do so on its behalf; (iv) this Agreement is legal, valid and
binding obligation of it, enforceable against it in accordance with its terms,
subject to applicable bankruptcy, insolvency, or similar debtor/creditor laws
and general principles of equity and public policy, (v) no approval, consent or
authorization of any Transaction contemplated by this Agreement from any
federal, state, or local regulatory authority having jurisdiction over it is
required or, if required, such approval, consent or authorization has been or
will, prior to the Purchase Date for such Transaction, be obtained; (vi) the
execution, delivery, and performance of this Agreement and the Transactions
hereunder will not violate any law, regulation, order, judgment, decree,
ordinance, charter, by-law, or rule applicable to it or its property or
constitute a default (or an event which, with notice or lapse of time, or both
would constitute a default) under or result in a breach of any material
agreement or other material instrument by which it is bound or by which any of
its assets are affected; (vii) it has received approval and authorization to
enter into this Agreement and each and every Transaction actually entered into
hereunder pursuant to its internal policies and procedures; and (viii) neither
this Agreement nor any Transaction pursuant hereto are entered into in
contemplation of insolvency or with intent to hinder, delay or defraud any
creditor.
(b) Representations and Warranties for Individual Transactions. BAC,
Dynex and MHFC each represents and warrants to Buyer, with respect to itself,
that as of the Purchase Date for the purchase of any Purchased Loans by Buyer
and as of the date of this Agreement and any Transaction hereunder and at all
times while this Agreement and any Transaction hereunder is in full force and
effect:
(1) Confirmation. All of the representations and warranties in
this Agreement, including the Loan Representations, are true with respect
to, and all other conditions precedent to the effectiveness of this
Agreement and to each Transaction have been and continue to be met and
satisfied.
(2) Organization. Seller is duly organized, validly existing and
in good standing under the laws and regulations of the state of Michigan
(as to BAC and MHFC) and Virginia (as to Dynex) and is duly licensed,
qualified, and in good
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standing in every state where Seller transacts business and at all times
when it held the Loan in any state where any Underlying Asset is located if
the laws of such state require licensing or qualification in order to
conduct business of the type conducted by Seller therein except where the
failure to be so qualified, licensed or in good standing in such other
jurisdiction could not, individually or in the aggregate, have a Material
Adverse Effect;
(3) No Litigation. There is no action, suit, proceeding,
arbitration or investigation pending or threatened against Seller which,
either in any one instance or in the aggregate, (within the meaning of
Statement of Financial Accounting Standards No. 5), which if adversely
determined would individually or in the aggregate result in any material
adverse change in the business, operations, financial condition, properties
or assets of Seller, or in any material impairment of the right or ability
of Seller to carry on its business substantially as now conducted, or in
any material liability on the part of Seller, or would affect the validity
of this Agreement or any of the Purchased Loans or of any action taken or
to be taken in connection with the obligations of Seller contemplated
herein, or which would be likely to impair materially the ability of Seller
to perform under the terms of this Agreement;
(4) No Broker. Seller has not dealt with any broker, investment
banker, agent, or other person, except for Buyer, who may be entitled to
any commission or compensation in connection with the sale of Purchased
Loans to Buyer pursuant to this Agreement;
(5) Selection Process. The Purchased Loans were selected from
among the Loans in Seller's portfolio as to which the representations and
warranties set forth in this Agreement could be made and such selection was
not made in a manner so as to result in a Material Adverse Effect upon
Buyer;
(6) Taxes. Seller has filed all Federal income tax returns and
all other material tax returns that are required to be filed by Seller and
have paid all taxes due pursuant to such returns or pursuant to any
assessment received by Seller, except for any such taxes as are being
appropriately contested in good faith by appropriate proceedings diligently
conducted and with respect to which adequate reserves in accordance with
GAAP have been provided. The charges, accruals and reserves on Seller's
books in respect of taxes and other governmental charges are, in Seller's
opinion, adequate;
(7) No Untrue Statements. To the best of Seller's knowledge,
neither this Agreement nor any written statement made, including without
limitation all financial statements of the Seller or its Affiliates
delivered to Buyer, or any report or other document issued or delivered or
to be issued or delivered by Seller pursuant to this Agreement, or in
connection with, the transactions contemplated hereby contains any untrue
statement of a material fact or omits to state a material fact necessary to
make the statements contained herein or therein not misleading;
(8) Servicing Practices. The servicing and collection practices
used by Seller, and the origination practices of the related Qualified
Originator, have been in
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all material respects legal, proper and prudent and have meet customary
industry standards applicable to similar loans.
(9) Performance of Agreement. Seller does not believe, nor does
it have any reason or cause to believe, that it cannot perform each and
every covenant contained in this Agreement on its part to be performed;
(10) Seller Not Insolvent. Seller is not, and with the passage of
time does not expect to become, insolvent;
(11) No Event of Default. No Event of Default has occurred and is
continuing under this Agreement;
(12) ERISA. Each Plan to which Seller or its Subsidiaries make
direct contributions, and, to the knowledge of Seller, each other Plan and
each Multiemployer Plan, is in compliance in all material respects with,
and has been administered in all material respects in compliance with, the
applicable provisions of ERISA, the Code and any other federal or state
law;
(13) Requirements for Perfection. The Perfection Requirements
Memorandum required under Section 12(r) is a true, complete, current and
accurate explanation of document and filing requirements necessary to
effect perfection of Buyer's interests Manufactured Homes and the related
MH contracts.
(14) Lending facilities. No Seller has a line of credit or other
lending arrangement with any Person other than (a) Sun Communities, Inc.
and/or Guarantor, (b) with respect to BAC only, Residential Funding
Corporation (a $50 million GSE and bridge loan mortgage warehouse
facility), (c) with respect to BAC only, a working capital servicing
advance facility yet to be established and (d) a stage-funded MH Loans
warehouse facility, yet to be established.
(15) Computer Systems The computer systems utilized by each
Seller and Servicer (other than the Mortgage Servicer) in the performance
of their servicing activities under this Agreement and any Servicing
Agreement is capable of properly performing any calculations and
recordkeeping functions with respect to the Loans on and after January 1,
2000.
(c) Individual Loans. Each Seller makes the following representations
and warranties with respect to each individual Loan it sells in a Transaction
hereunder, as of the related Purchase Date and as of each day such Transaction
is in effect, except as shall be specifically disclosed in the schedule attached
to the related Request for Purchase.
(1) Good Title; No Adverse Claims. Seller is the sole owner and
holder of the Loan and has good, valid, indefeasible, marketable title
thereto, and full right, power and authority to sell, transfer and assign
such Loan to Buyer, free and clear of any Adverse Claim (including, with
respect to Mortgage Loans, mechanics', materialman's or other similar liens
or claims which have been filed for work, labor or materials affecting
Mortgaged Property which are or may be liens prior to, or equal or
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coordinate with, the lien of the Mortgage, unless such lien is insured against
under a Title Policy) or Restrictions on Transferability. The Loan, if purchased
or otherwise acquired by Seller, was acquired by Seller for fair value and in
the ordinary and regular course of its business, and Seller took possession
thereof without knowledge that the Loan was subject to a security interest. The
Qualified Originator, if any, has not sold, assigned or pledged the Loan to any
Person other than Seller and, prior to the transfer of the Loan by Qualified
Originator to Seller, Qualified Originator had good and indefeasible title
thereto free and clear of any Adverse Claim or Restrictions on Transferability
and was the sole owner and holder thereof with full right to sell, assign and
transfer the Loan to Seller free and clear of any Adverse Claim, and upon such
sale, Seller acquired a valid ownership interest in such Loan, free and clear of
any Adverse Claim and any other Restriction on Transferability. Neither Seller
or any other party has sold, assigned or pledged the Loan to any Person other
than Buyer (unless a collateral assignment that has been fully terminated prior
to the assignment of that Loan by Seller to Buyer under this Agreement).
Following the purchase by Buyer of each Loan, the Buyer will hold such Loan free
and clear of any Adverse Claim or Restrictions on Transferability.
(2) Security Interest in the Loan. Although intended as a sale to
Buyer, in the event of recharacterization of the sale of any Loan to Buyer as a
financing, Buyer has a valid, binding, enforceable first priority perfected
security interest therein. The Loan is not and has not been secured by any
collateral except the lien of the corresponding Underlying Asset.
(3) Origination Practices. The Loan was originated by a Qualified
Originator in the regular course of its business, and, if purchased by Seller,
was purchased in the regular course of its business. The origination practices
used by Seller or by any Affiliate of Seller with respect to each Purchased Loan
(as well as all parties which have had any interest in the creditor/lender's
interest in each such Loan, during the period in which they held and disposed of
such interest) (i) have been and are in all respects legal and proper in the
mortgage origination business and in compliance with the requirements of federal
and state laws, rules and regulations applicable to each Loan, including without
limitation, truth-in-lending, real estate settlement procedures, consumer credit
protection, equal credit opportunity and disclosure laws and (ii) are in
accordance with the Underwriting Guidelines attached hereto as Exhibit III and
the documentation is consistent in form and substance with the Seller's Loan
Documents approved by Buyer for use under this Agreement, and each material
deviation therefrom appears on a schedule attached to the Request for Purchase
and no such deviation (regardless of whether or not considered material by
Seller) would be deemed to be imprudent by a prudent lender experienced in
originating Loans of that nature, and in no event will have a Material Adverse
Effect. All Loan Documents included in the Loan File have been duly executed as
required by their provisions and the provisions of applicable law and are in a
form generally acceptable to prudent institutional lenders that regularly
originate and purchase Loans of the type subject to each Loan Transaction.
(4) Loan Eligibility Requirements. Each of the Purchased Loans and
each Eligible Loan delivered hereunder as Additional Loans or Substituted Loans
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conforms to the Loan Eligibility Requirements in all material respects and has a
stated maturity and is denominated in United States Dollars. It is understood
and agreed that the Loan Representations shall survive delivery of the
respective Loan File to Buyer or its designee (including the Custodian).
(5) Conformance with Representations and Warranties. Each Loan sold
hereunder and each pool of Purchased Loans sold by a Seller in a Transaction
hereunder conforms to the applicable representations and warranties in Exhibit
II of this Agreement in all material respects and each Eligible Loan delivered
hereunder as an Additional Loan or Substituted Loan conforms to those
representations and warranties in all material respects.
(6) Correct Collateral Information. As of the date of its delivery,
the Collateral Information with respect to the Loan in the Request for Purchase
and the Loan Schedule is complete, true and correct in all material respects.
(7) Enforceability of Loan Documents. (A) The Loan Documents have been
duly and properly executed, and (B) the Loan Documents are legal, valid and
binding obligations of the Obligor, and their terms are enforceable against the
Obligor or other Obligor thereunder, subject only to bankruptcy, insolvency,
moratorium, fraudulent transfer, fraudulent conveyance and similar laws
affecting rights of creditors generally and to the application of general
principles of equity (regardless of whether such enforcement is considered in a
proceeding at law or in equity). Subject to (B), above, the Loan Documents
contain customary and enforceable provisions such as to render the rights and
remedies of the holder thereof adequate for the realization against each related
Underlying Asset of the material benefits of the security, including realization
by judicial or, if applicable, non-judicial foreclosure, and there is no
homestead of other exemption under applicable state or federal law that is
available to the Obligor which would materially interfere with such right to
foreclosure. Upon default by an Obligor on a Loan and foreclosure on, or
trustee's sale of, the Underlying Asset pursuant to the proper procedures, the
holder of the Loan will be able to deliver good and merchantable or marketable
title to the Underlying Asset. Any interest required to be paid by Seller
pursuant to state, Federal and local law has been properly paid and credited.
(8) Legal Capacity. To the best of Seller's knowledge, all parties to
the Note and the related Loan Documents delivered in connection with the Loan,
including individual persons, had the legal capacity to enter into such
documents.
(9) No Limitation Upon Assignment. In connection with the assignment,
transfer or conveyance of any individual Loan or MH Contract, the Note and other
Loan Documents do not contain any provision limiting the right or ability of the
applicable Qualified Originator to assign, transfer and convey the to any other
person or entity. The Loan was not originated in and is not subject to the laws
of any jurisdiction whose laws would make the transfer of the Loan pursuant to
any applicable Loan Transfer Agreement or this Agreement unlawful or render the
Loan unenforceable.
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(10) No Usury. The Purchased Loan does not violate or
is exempt from applicable usury laws. All Loan Interest Rate
adjustments have been made in strict compliance with state and Federal
law and the terms of the related Loan.
(11) No Waiver or Modification of Loan Terms. Since
the date of origination of the Loan, the terms of the Loan have not
been impaired, waived, altered, released, rescinded, satisfied,
canceled, extended, subordinated or modified in any respect (except by
a written instrument which has been recorded, if necessary, to protect
the interests of the Buyer, and which has been delivered to the Buyer
or its designee (including the Custodian) for inclusion in the Loan
File, and with respect to which the economic terms of which are
reflected in the Loan Schedule and the Collateral Information), and no
portion of the collateral for the Loan has been released in any manner
from the lien of the encumbrance or security interest created upon the
closing of that Loan in favor of Seller (except if specifically called
for under and pursuant to the Loan Documents and in compliance with the
applicable Underwriting Guidelines, and summarized in the underwriting
summary or other document delivered to Buyer at the time of, or in
connection with, the related Request for Purchase). The substance of
any such waiver, alteration or modification has been approved by the
issuer of any related insurance policy, to the extent required by such
policy.
(12) Full Disbursement; No Additional Services.
Except if specifically permitted under the applicable Loan Eligibility
Requirements and contemplated by the Loan Documents, and the proceeds
of the Loan have been fully disbursed and there is no requirement for
future advances thereunder and Seller covenants that it will not make
any future advances under the Loan to the Obligor. All costs, fees and
expenses incurred by Seller (or which are otherwise payable by the
Obligor under the Loan Documents) in making or closing the Loan and the
recording of the Loan were paid, and the Obligor is not entitled to any
refund of any amounts paid or due under the Loan. Except if
specifically called for under and pursuant to the Loan Documents and in
compliance with the applicable Underwriting Guidelines, and summarized
in the underwriting summary or other document delivered to Buyer at the
time of, or in connection with, the related Request for Purchase, the
Loan is not subject to the performance of additional services by any
Person.
(13) Completion of Improvements. Except for the
escrows and disbursements therefrom, or if specifically permitted under
the applicable Loan Eligibility Requirements, and in each case as
contemplated by the Loan Documents, any Obligor requirements for on or
off-site improvements as to disbursement of any escrow funds therefor
have been complied with.
(14) Commencement of Payments by Obligor. Except for
interest-only Loans (if permitted under the applicable Loan Eligibility
Requirements and Underwriting Guidelines, and including interest-only
Bridge and Interim Mortgage Loans and MH Loans originated by Dynex and
in connection with which no payments are due for up to 90 days, in
accordance with the applicable program parameters and the Underwriting
Guidelines), principal payments on the Loan commenced, or under
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the terms of the Loan Documents are to commence, no more than 60 days
after funds were disbursed in connection with the Loan.
(15) No Lender Participation. The Loan does not have
a shared appreciation feature or provide for contingent or additional
interest in the form of participation in cash flow, or (except in
connection with Mortgage Loan hyperamortization terms approved by
Buyer) negative amortization. Except in connection with Interim
Mortgage Loans and Bridge Mortgage Loans including "preferred equity"
features consistent with the applicable Underwriting Guidelines
approved by Buyer, the indebtedness evidenced by the Loan is not
convertible to an ownership interest in the Underlying Asset or the
Obligor and Seller has not financed nor does it own directly or
indirectly, any equity of any form in the Underlying Asset or the
Obligor, unless otherwise approved in writing by Buyer.
(16) Whole Loan. The Loan is a whole loan and
contains no equity participation by the lender.
(17) No Fraud. No fraudulent acts were committed by
Seller or its affiliates in connection with the origination process of
the Loan.
(18) No Default. To the best knowledge of Seller, and
other than with respect to Permitted Delinquencies in connection with
MH Loans, there is no material default, breach, violation or event of
acceleration existing under any of the Loan Documents and Seller has
not received actual notice of any event (other than payments due but
not yet delinquent) which, with the passage of time or with notice and
the expiration of any grace or cure period, would and does constitute a
default, breach, violation or event of acceleration; no waiver by
Seller of the foregoing exists and no person other than the holder of
the Note may declare any of the foregoing. The first Monthly Payment
shall be made, or shall have been made, with respect to the Loan on its
Due Date or within its grace period, all in accordance with the terms
of the related Loan Documents.
(19) No Breach of Obligor's Representations. Seller
has not taken any action, nor has knowledge that the Obligor has taken
any action, that would cause the representations and warranties made by
the Obligor in the Loan Documents not to be true in any material
respect.
(20) No Defenses. The Loan is not subject to (and the
assignment thereof to the Buyer pursuant to this Agreement will not
subject the Loan to) any right of rescission, setoff, counterclaim or
defense, including the defense of usury, nor will the operation of any
of the terms of the Loan or the exercise of any right thereunder will
not render the Loan unenforceable in whole or in material part or
subject to any right of rescission, setoff, counterclaim or defense,
including the defense of usury, and to Seller's knowledge, no such
right of rescission, setoff, counterclaim or defense has been asserted
with respect thereto.
(21) No Pending Proceedings. To the best of Seller's
knowledge, there are no proceedings or investigations pending or
threatened before any
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Governmental Authority (A) asserting the invalidity of the Loan, (B)
asserting the bankruptcy or insolvency of the related Obligor, (C)
seeking the payment of the Loan or payment and performance of the Loan
(other than with respect to Permitted Delinquencies, if applicable), or
(D) seeking any determination or ruling that might materially and
adversely affect the validity or enforceability of the Loan, and no
other material action, suit, proceeding, arbitration or investigation
with respect to any of the Underlying Asset is pending (or to Seller's
knowledge) threatened against Seller.
(22) Funded Escrows. Any escrow accounts for taxes or
other reserves required to be funded on the date of origination of the
Loan pursuant to the Loan documents have been funded and all such
escrow accounts required to have been funded as of the Purchase Date
(taking into account any applicable notice and grace period) have been
funded in accordance with the applicable Underwriting Guidelines. All
Escrow Payments have been collected in full compliance with state and
Federal law. All escrow deposits and Escrow Payments required as of the
Purchase Date are in the possession of, or under the control of, Seller
and there exist no deficiencies in connection therewith for which
customary arrangements for repayment thereof have not been made. No
escrow deposits, Escrow Payments or other charges or payments (other
than Extra Costs) due to either Seller have been capitalized under the
Loans.
(23) No Violation of Environmental Laws. Neither
Seller nor any of its Affiliates has received any notice of violation,
alleged violation, non-compliance, liability or potential liability
regarding environmental matters or compliance with any environmental
laws with regard to any of the Underlying Assets, nor does Seller have
knowledge or reason to believe that any such notice will be received or
is being threatened. Seller has not taken any actions which would cause
any Underlying Asset not to be in compliance with all applicable
federal, state and local laws pertaining to environmental hazards.
(24) Delivery of Loan File. The Loan Documents have
been delivered to the Custodian (or with respect to Table Funded
Mortgage Loans, will be delivered to the Custodian within the time
period required under Section 7 of this Agreement), and (ii) Seller has
delivered to Buyer or its designee all documents required to be
delivered pursuant to this Agreement. Seller or its designee is in
possession of a complete, true and accurate Loan File with respect to
each Purchased Loan, except for such documents the originals of which
have been delivered to the Custodian. All documentation required to be
delivered to the applicable Servicer has been received by that
Servicer.
(25) No Advance of Funds by Seller or Third Party for
Debt Service. Except insofar as the proceeds of the Loan are to be
applied in satisfaction of payments due under the terms of the Loan, as
provided in the Loan Documents, Seller has not advanced funds, or
knowingly received any advance of funds from a party other than the
Obligor subject to the related Loan, directly or indirectly, for the
payment of any amount required by the Loan, and no provision exists in
the Loan Documents anticipating payments by anyone on behalf of the
Obligor by any source other than the Obligor, except under guarantees
that are in the related Loan File.
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(26) Recording and Filing Fees. All applicable
recording taxes and other filing fees have been paid in full or
deposited with the Settlement Agent (or the issuer of the Title Policy
issued in connection with a Mortgage Loan or Land and Home Loan) for
payment upon recordation and/or filing of the relevant documents.
(27) Collateral Undamaged. To the best of Seller's
knowledge, (i) there is no proceeding pending or threatened for the
total or partial condemnation of the Underlying Asset, if any; (ii) the
Underlying Asset is undamaged by waste, fire, earthquake or earth
movement, windstorm, flood, tornado, explosion, accident, riot, war, or
act of God or the public enemy or other casualty so as to materially
and adversely affect the value of the Underlying Asset as security for
the Loan or the use for which the premises (if applicable) were
intended and each Underlying Asset is in good condition and repair and,
except as disclosed in the engineering report and summarized in the
underwriting summary or other document delivered to the Buyer at the
of, or in connection with, the related Request for Purchase, no
material deferred maintenance exists; and (iii) no Underlying Asset has
suffered damage that is not covered by a Hazard Insurance Policy (if
that insurance coverage is required under this Agreement for that
Underlying Asset).
(28) Due on Sale or Transfer Provisions. The Loan
Documents contain provisions for the acceleration of the payment of the
unpaid principal balance of the Loan if (A) the Obligor voluntarily
transfers or encumbers all or any portion of any related Mortgaged
Property, or (B) any direct or indirect interest in Obligor is
voluntarily transferred or assigned, other than, in each case, as
permitted under the terms and conditions of the Loan Documents.
(29) Acceptable Investment. Sellers have no knowledge
of any circumstances or conditions with respect to the Loan or the
Underlying Asset, the Obligor or the Obligor's credit standing that can
reasonably be expected to cause private institutional investors to
regard the Loan as an unacceptable investment, cause the Loan to become
delinquent, or materially and adversely affect the value or
marketability of the Loan.
(30) Payment Instructions. Each Obligor has been
directed, and is required to, remit or wire all payments, including
prepayment payments and Curtailment payments, with respect to each Loan
for deposit directly to the appropriate Blocked Account.
(31) Outstanding Charges. All taxes, governmental
assessments, insurance premiums, water, sewer, park and municipal
charges, leasehold payments or ground rents which previously became due
and owing have been paid, or an escrow of funds has been established in
an amount sufficient to pay for every such item which remains unpaid
and which has been assessed but not yet due and payable.
(32) Loan Eligibility Requirements. The Loan meets
all of the Loan Eligibility Requirements set forth herein for that Loan
type.
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(33) Knowledge of Defects. The applicable Seller has
no knowledge of any fact which would lead a reasonably prudent lender
to expect at the time of origination of such Loan that any scheduled
payment on such Loan would not be paid in full when due or to expect
any other material adverse effect on (A) the performance by such Seller
of its obligations under the Facility Documents or Loan Documents (B)
the validity or enforceability of any of the Facility Documents or Loan
Documents to which it is a party, (C) the Loans or the interests of
such Seller or Dealer therein or (D) the federal income tax attributes
of the sale or pledge of the Loans.
(34) Necessary Documentation. The applicable Seller
has submitted to the Obligor all necessary documentation (including an
invoice for Floorplan Loans, and for MH Loans, as applicable) for
payment of such Loan and has fulfilled all its other obligations in
respect thereof. The Obligor has submitted to Seller all documentation
necessary for disbursement of such Loan and has fulfilled all its other
obligations in respect thereof.
(d) For the purposes of this Agreement (including the Loan
Representations): (i) the term "to Seller's knowledge," means that the
applicable Seller reasonably believes such representation or warranty to be
true, and has no actual knowledge or notice that such representation or warranty
is inaccurate or incomplete, but that such Seller, consistent with the standard
of care exercised by prudent lending institutions originating Loans of the type
to which that representation or warranty applies, has no knowledge of any facts
or circumstances that would render reliance thereon unjustified without further
inquiry; (ii) the term "to the best of Seller's knowledge," means that to such
Seller's knowledge, the representation or warranty is not incomplete or
inaccurate, and such Seller has conducted a reasonable inquiry (consistent with
the standard of care exercised by prudent lending institutions originating Loans
of the type to which that representation or warranty applies) to assure the
accuracy and completeness of the applicable statement; and (iii) the term "in
reliance on" or "based on," means that such Seller has examined and relied in
whole or in part upon the certificate, report, opinion or other referenced
document, that the information contained in such document is sufficient to
support accurately and in all material respects the substance of the applicable
representation or warranty, that such Seller's reliance on such document is
reasonable, prudent and consistent with the standard of care exercised by
prudent lending institutions originating Loans of the type to which that
representation or warranty applies, and although the Seller is under no
obligation to independently verify the information contained in such document,
the Seller believes the information contained therein to be true and accurate in
all material respects and has no knowledge of any facts or circumstances that
would render reliance thereon unjustified without further inquiry. With respect
to any representations and warranties made by each Seller, in the event that it
is discovered that the circumstances with respect to the related Loan are not
accurately reflected in such representation and warranty notwithstanding the
actual knowledge or lack of knowledge of a Seller, then, notwithstanding that
such representation and warranty is made "to the best of the Seller's
knowledge," or "to Seller's knowledge," or in reliance on or based on other
information, the Market Value and/or Securitization Value of such Loans may, in
the Buyer's sole good faith discretion, be reduced to zero based on such Breach.
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11. NEGATIVE COVENANTS OF THE SELLERS
On and as of the date of this Agreement and each Purchase Date
and until this Agreement is no longer in force with respect to any Transaction,
each Seller covenants for itself that:
(a) Impair Value of Loans. It will not take any action which
would directly or indirectly impair or adversely affect Buyer's title and right
to the Market Value or Securitization Value of the Purchased Loans;
(b) Further Liens. It will not pledge, assign, convey, grant,
bargain, sell, set over, deliver or otherwise transfer any interest in the
Purchased Loans or other Collateral to any person not a party to this Agreement
nor will either Seller create, incur or permit to exist any Lien in or on the
Purchased Loans or other Collateral except as described in Section 6 hereof
without the prior express written consent of Buyer;
(c) Merger or Dissolution. It will not enter into any
transaction of merger or consolidation or amalgamation, or liquidate, wind up or
dissolve itself (or suffer any liquidation or dissolution), sell all or
substantially all of its assets or change its name, identity or corporate
structure, provided that the Seller may merge and consolidate with any Person if
the Seller is the surviving corporation, or the entity into which it merges has
equity and a market value of at least that of the Seller immediately prior to
such merger and such entity expressly assumes the obligations of the Seller at
the time of such merger and, after giving effect thereto, no Default or Event of
Default would exist hereunder;
(d) Engage in Other Lines of Business. It will not engage, to
any substantial extent, in any line or lines of business activity other than the
businesses now generally carried on by it;
(e) Restrictions Upon Other Transactions. It will not enter
into any transaction, including, without limitation, any purchase, sale, lease
or exchange of property or the rendering of any service, with any Affiliate
unless such transaction is (a) otherwise permitted under this Agreement, (b) in
the ordinary course of Seller's business and (c) upon fair and reasonable terms
no less favorable to Seller than it would obtain in a comparable arm's length
transaction with a Person which is not an Affiliate, or make a payment to any
Affiliate that is not otherwise permitted by this Agreement;
(f) Loans and Advances. It will not make any advance (other
than advances made as required in connection with servicing Loans in the
ordinary course as to which it owns the servicing rights), loan, extension of
credit or capital contribution to, or purchase any stock, bonds, notes,
debentures or other securities of or any assets constituting a business unit of,
or make any other investment in, any Person;
(g) No Change in Fiscal Year. The fiscal year for the
consolidated financial reporting for Guarantor and its subsidiaries is currently
September 30 but is being changed (effective as of December 31, 1999) to a
calendar year basis. After that change is effected, none of Sellers nor
Guarantor will make any changes to its fiscal year;
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(h) No Adverse Action. It will not take any action which would
result in a Material Adverse Effect upon its business operations and/or
financial condition;
(i) Relocate Offices. It will not move its chief executive
office from its address as of the date hereof unless it shall have provided
Buyer fifteen (15) days' prior written notice of such change; or
(j) Restrictions On Distributions. It will not, after the
occurrence and during the continuation of any Default of which it has notice or
knowledge, or an Event of Default, make any distribution, payment on account of,
or set apart assets for, a sinking or other analogous fund for the purchase,
redemption, defeasance, retirement or other acquisition of any equity or
partnership interest of Seller, whether now or hereafter outstanding, or make
any other distribution in respect thereof, either directly or indirectly,
whether in cash or property or in obligations of Seller.
12. AFFIRMATIVE COVENANTS OF THE SELLERS
For so long as this Agreement is in effect:
(a) Notification of Material Adverse Changes. Each Seller
covenants that it will promptly notify Buyer of any material adverse change in
its business operations and/or financial condition;
(b) Confirming Documents Regarding Representations and
Warranties. Each Seller shall provide Buyer with copies of such documentation as
Buyer may reasonably request evidencing the truthfulness of the representations
set forth in Section 10 hereof, including but not limited to resolutions
evidencing the approval of this Agreement by Seller's board of directors or loan
committee, copies of the minutes of the meetings of Seller's board of directors
or loan committee at which this Agreement and the Transactions contemplated by
this Agreement were approved;
(c) Maintenance of First Lien Position. Each Seller shall, at
Buyer's request, take all action necessary to ensure that Buyer will have a
first priority security interest in the related Collateral, including, among
other things, filing such Uniform Commercial Code financing statements as Buyer
may reasonably request;
(d) Notice of Defaults. Each Seller shall notify Buyer, no
later than one (1) Business Day after obtaining actual knowledge thereof, if any
event has occurred that constitutes a Breach, a Default, or an Event of Default
with respect to either Seller;
(e) Changes to Underwriting Guidelines and Loan Documents.
Each Seller covenants to provide Buyer with a copy of any material changes to
that Seller's Underwriting Guidelines or Seller's Loan Documents prior to the
effectiveness of any such change. Buyer shall use reasonable efforts to review
and approve or disapprove such changes within five (5) Business Days or
otherwise within a reasonable amount of time following receipt thereof. In the
event that Buyer does not approve such change in writing, Buyer shall not be
obligated to enter into any Transactions with respect to Eligible Loans
underwritten to such changed Underwriting Guidelines or relating to such changed
Seller's Loan Documents. Each Seller
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shall notify Buyer prior to entering into any Significant Modification or
assumption agreements with any Obligor and shall deliver such documents to the
Custodian for inclusion in the related Loan Files. However, MHFC and Dynex may
act in the ordinary course of business as prudent lenders in connection with MH
Loans in making modifications other than Significant Modifications (which must
have prior approval from Buyer), prior to notifying Buyer, if any only if, such
action will not impair Buyer's interest therein and MHFC or Dynex, as the case
may be, notifies Buyer promptly upon making any such change. Any modification or
assumption agreements shall conform with the Seller's Underwriting Guidelines.
If a change in circumstances results in impairment of the marketability of Loans
that are underwritten pursuant to previously approved Underwriting Guidelines,
Buyer may notify Seller that it objects to continued use of such Underwriting
Guidelines, and Buyer shall thereafter be under no obligation to enter into any
Transactions with respect to Loans underwritten in accordance therewith (other
than Transactions for which Seller has issued a commitment letter, as to which
Buyer shall use good faith efforts to effect the purchase, but the Market Value
and/or Securitization Values given the Loans subject thereto may be re-adjusted
by Buyer, in Buyer's sole discretion, to reflect the impairment of
marketability).
(f) Hedging. BAC, and to the extent required by the Buyer,
each other Seller, shall at all times maintain ▇▇▇▇▇▇, having a notional amount
not less than the aggregate outstanding balance of all fixed rate Purchased
Loans with Buyer or an Affiliate thereof, having terms with respect to
protection against fluctuations in interest rates reasonably acceptable to
Buyer. Buyer acknowledges that Seller's purchases of short sales on U.S.
Treasury Securities of equal duration to the Purchased Loans shall be an
acceptable interest rate protection strategy and Hedge program and Buyer shall
make available to Seller a knowledgeable individual for discussion purposes;
(g) Provision of Collateral Information for Each Loan. Each
Seller covenants to provide or cause to be provided to Buyer, by no later than
12:00 noon (New York time), two Business Days immediately preceding each Payment
Date, either by direct modem electronic transmission or via a computer diskette,
the Collateral Information in computer readable format with respect to all
Purchased Loans then subject to Transactions and covenants to provide Buyer with
access to operating statements, the occupancy status and other property level
information, with respect to the properties, plus any such additional reports as
Buyer may reasonably request with respect to pending originations of mortgage
loans;
(h) BAC's Provision of Pipeline Report. BAC covenants to
provide, or cause to be provided to Buyer, the Pipeline Report by no later than
12:00 noon (New York time) two (2) Business Days immediately preceding each
Payment Date, either by direct modem electronic transmission or via computer
diskette;
(i) Seller Financial Reporting. Each Seller covenants to
provide Buyer with the following financial and reporting information with
respect to that Seller:
(i) Annual Statements. Within 90 days after the last
day of its fiscal year, Seller's audited consolidated statements of
income and statements of changes in cash flow for such year and balance
sheets as of the end of such year in each case presented fairly in
accordance with GAAP, and accompanied, in all cases, by an
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unqualified report of a nationally recognized independent certified
public accounting firm consented to by Buyer (which consent shall not
be unreasonably withheld);
(ii) Quarterly Statements. Within 45 days after the
last day of the first three fiscal quarters in any fiscal year,
Seller's consolidated statements of income and statements of changes in
cash flow for such quarter and balance sheets as of the end of such
quarter presented fairly in accordance with GAAP and certified by an
Officer's Certificate as being complete and correct and fairly
presenting the results of operations, assets and liabilities and
financial condition of that Seller;
(iii) Compliance Certificates. Upon request and in any
event not more frequently than quarterly, an Officer's Certificate from
a senior officer of each Seller addressed to Buyer certifying that, as
of such calendar month, (x) that Seller is in compliance with all of
the terms, conditions and requirements of this Agreement, and (y) no
Event of Default exists; and
(iv) Consolidated Statements. Buyer acknowledges that
each Seller is a wholly-owned subsidiary of Guarantor and that its
financial statements are prepared in connection with the preparation of
audited statements for Guarantor. For the purposes of satisfying the
foregoing reporting requirements, Sellers shall provide Buyer with
copies of Guarantor's corresponding consolidated statements with
consolidating information specifically applicable to each Seller and
Bloomfield Servicing;
(j) Servicer Financial Reporting. Each Seller covenants for
itself to cause any Servicer or subservicer of its respective Purchased Loans to
provide Buyer with the following financial and reporting information with
respect to that party:
(i) Annual Statements. Within 90 days after the last
day of its fiscal year, the Servicer's or subservicer's audited
consolidated statements of income and statements of changes in cash
flow for such year and balance sheets as of the end of such year in
each case presented fairly in accordance with GAAP, and accompanied, in
all cases, by an unqualified report of a nationally recognized
independent certified public accounting firm (or other independent
certified public accounting firm for the MH Servicer's annual
statements for the 1998 fiscal year only) consented to by Buyer (which
consent shall not be unreasonably withheld);
(ii) Quarterly Statements. Within 45 days after the
last day of the first three (3) fiscal quarters in any fiscal year, the
Servicer's or subservicer's consolidated statements of income and
statements of changes in cash flow for such quarter and balance sheets
as of the end of such quarter presented fairly in accordance with GAAP;
(iii) Compliance Certificates. Within 90 days after
the last day of its fiscal year, an Officer's Certificate of the
Servicer or subservicer addressed to Buyer certifying that, as of such
calendar month, the Servicer or subservicer is in compliance with all
of the terms, conditions and requirements of the Servicing Agreement
and no default exists thereunder; and
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(iv) Consolidated Statements. Buyer acknowledges that
Bloomfield Servicing is a wholly-owned subsidiary of Guarantor, and
that its financial statements are prepared in connection with the
preparation of audited statements for Guarantor. For the purposes of
satisfying the foregoing reporting requirements with respect to
Bloomfield Servicing, Sellers shall provide Buyer with copies of
Guarantor's corresponding consolidated statements with consolidating
information specifically applicable to each Seller and Bloomfield
Servicing;
(k) Evidence of Compliance with Legal Requirements. For at
least the term of this Agreement, each Seller shall maintain in its possession,
available for Buyer's inspection, and shall deliver to Buyer promptly upon
written request, evidence of compliance with all legal and organizational
requirements applicable to its existence and the origination, servicing and
collection of all Purchased Loans subject to Transactions at any time;
(l) Accepted Servicing Practices. Each Seller shall cause the
servicing of the Purchased Loans to conform to Accepted Servicing Practices;
(m) Compliance with Representations, Warranties and
Eligibility Requirements. Each Seller shall continue to comply with the
representations and warranties as provided in this Agreement and with the Loan
Eligibility Requirements in all material respects and shall promptly notify
Buyer upon obtaining notice or knowledge of any Breach;
(n) Notice of Benefit Plan Events. Each Seller shall promptly
give notice to Buyer of the following events, as soon as possible and in any
event within 30 days after Seller knows or has reason to know thereof: (i) the
occurrence or expected occurrence of any Reportable Event with respect to any
Plan, a failure to make any required contribution to a Plan, the creation of any
Lien in favor of the PBGC or a Plan or any withdrawal from, or the termination,
Reorganization or Act of Insolvency of, any Multiemployer Plan or (ii) the
institution of proceedings or the taking of any other action by the PBGC or
Seller or any Commonly Controlled Entity or any Multiemployer Plan with respect
to the withdrawal from, or the terminating, Reorganization or Act of Insolvency
of, any Plan;
(o) Maintenance of Insurance. Each Seller covenants to
maintain with financially sound and reputable insurance companies insurance as
set forth below in at least such amounts and against at least such risks as are
usually insured against in the same general area by companies engaged in the
same or a similar business, which insurance shall name the Buyer as an
additional loss payee, in the case of property or casualty insurance, and shall
furnish to Buyer, a certified true copy of such bond and insurance policies,
including policies for Blanket Fidelity Bond and Errors and Omissions Insurance
and key-man life insurance for ▇▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ in the amount of
at least $1,000,000 each, and upon Buyer's request, shall furnish a statement
from the surety and the insurer that such fidelity bond or insurance policy
shall in no event be terminated or materially modified without 30 days' prior
written notice to the Buyer, and such other information with respect thereto as
Buyer may reasonably request;
(p) GAAP. Each Seller covenants that, unless otherwise
expressly stated to the contrary, all financial representations, warranties,
covenants and calculations shall be made in accordance with GAAP;
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(q) Transfer of Servicing Upon Default. Each Seller will, upon
the occurrence of a Default, at the Buyer's instruction, transfer servicing to
the Back-up Servicer in a prudent and prompt manner, safeguarding the Buyer's
interest therein;
(r) Perfection Requirements Memorandum. Sellers shall provide
Buyer and Custodian with a memorandum (the "Perfection Requirements Memorandum"
of the state requirements for perfection of security interests in MH Paper and
the Underlying Assets, indicating which documents must be delivered to Custodian
in order to evidence perfection of Buyer's interest in the collateral covered
thereby and shall keep that list current to reflect any material changes in
those requirements. MHFC and Dynex shall not propose any MH Loan for purchase
and BAC and Dynex shall not propose any Floorplan Loan for purchase if the
Perfection Requirements Memorandum not been delivered to Buyer and Custodian;
(s) Executive Bonus Plans. Each Seller shall provide Buyer
with a copy of any Executive Bonus Plans to be adopted by that Seller, as and
when finalized;
(t) Monthly Inspections. BAC or Dynex will conduct, or cause
to be conducted by a qualified third party under contract to such Seller or the
applicable Servicer, monthly inspections of each Dealer's Property to verify the
existence and condition of the Manufactured Homes securing all Floorplan Loans
and shall provide copies of the results of such inspection to Buyer after
completion;
(u) UCC filing for Change of Address. Promptly upon each
Seller's change of address, such Seller shall file a change of address amendment
to the UCC-1 filing previously made in favor of Buyer, in the appropriate filing
office, and shall send an acknowledgment thereof to Buyer;
(v) Provision of Forms for Effecting Assignment of Security
Interest in Manufactured Homes. MHFC or Dynex will obtain all applications,
documents and forms that would be required by state recording officers to record
Buyer's interest in the Manufactured Homes that secure MH Loans subject to
Transactions, and will forward such forms to Custodian, as and when received;
and
(w) Computer Systems The computer systems utilized by the
Mortgage Servicer and MH Servicer in the performance of their respective
servicing activities under this Agreement and its Servicing Agreement were and
will continue to be capable of properly performing any calculations and
recordkeeping functions with respect to the Loans on and after January 1, 2000.
13. EVENTS OF DEFAULT
(a) If any of the following events (each an "Event of
Default") occur, Sellers and Buyer shall have the rights set forth in Section 14
hereof, as applicable:
(i) Any Seller, Buyer, or Guarantor fails to satisfy
or perform either:
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(A) Any payment or purchase obligation under
this Agreement including without limitation, the payment of
the Repurchase Price when due; or
(B) Any other material obligation or
covenant under this Agreement, other than an Event of Default
specifically included in any of the other subsections of this
Section 13(a) within five (5) Business Days after notice of
such Breach;
(ii) An Act of Insolvency occurs with respect to any
Seller or Buyer or Guarantor;
(iii) There shall occur a Breach of any
representation or warranty made by any Seller or Guarantor that is not
corrected or cured of its inaccuracy within five (5) Business Days of
the earlier of notice or knowledge of such Breach (other than a Breach
of a Loan Representation, which shall not be considered as a Default or
an Event of Default, and instead shall be considered solely for the
purpose of determining the Market Value and Securitization Value of the
Loans, unless a Seller has made any such representation or warranty
with knowledge that it was materially false or misleading at the time
made, in which case it shall constitute an Event of Default);
(iv) Any Seller or Buyer shall admit its inability
to, or its intention not to, perform any of its obligations hereunder,
Guarantor shall admit is inability to perform under the Guaranty;
(v) Any governmental, regulatory, or self-regulatory
authority, including, but not limited to, the Agencies, takes any
action that removes, limits, restricts, suspends or terminates the
rights, privileges, or operations of any Seller or any of their
respective Affiliates, including suspension as an issuer, lender or
seller/servicer of mortgage loans, which suspension has a Material
Adverse Effect and which continues for more than 24 hours;
(vi) Any Seller or Guarantor dissolves, merges or
consolidates with another entity (unless (A) it is the surviving party
or (B) the entity into which it merges has equity and a market value of
at least that of such Seller or Guarantor, as the case may be,
immediately prior to such merger and such entity expressly assumes the
obligations of such Seller or Guarantor at the time of such merger), or
sells, transfers, or otherwise disposes of a material portion of its
business or assets without Buyer's prior written consent;
(vii) Buyer, in its good faith judgment, believes
that there has been a material adverse change in the business,
operations, corporate structure or financial condition of any Seller or
the Guarantor or that any Seller or the Guarantor will not meet any of
its obligations under any Transaction pursuant to the Facility
Documents, this Agreement, servicing requirements, the Guaranty or any
other agreement between the parties;
(viii) A final nonappealable judgment by any
competent court in the United States of America for the payment of
money in an amount of at least $250,000
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is rendered against any Seller or the Guarantor, and the same remains
undischarged, unbonded or unpaid for a period of sixty (60) days during
which execution of such judgment is not effectively stayed;
(ix) This Agreement and the related Facility
Documents shall for any reason cease to create a valid, first priority
security interest in any of the Purchased Loans purported to be covered
hereby;
(x) A Market Value Collateral Deficit or
Securitization Value Collateral Deficit occurs with respect to any
Seller, as applicable, and is not eliminated within the time period
specified in Section 4(b) hereof;
(xi) An "event of default" or other material breach
has occurred pursuant to (A) a Hedge entered into upon request of Buyer
pursuant to Section 12(f) hereof, (B) the Custodial Agreement, (C) any
Blocked Account Agreement, (D) the Side Letter, (E) the Second
Subordination Letter, (F) the Guaranty, or (G) the Sun Side Letter;
(xii) Any Seller, the Guarantor or any of their
respective Affiliates shall be in default under any note, indenture,
loan agreement, guaranty, swap agreement or any other material contract
to which it is a party, which default (i) involves the failure to pay a
matured obligation, or (ii) permits the acceleration of the maturity of
obligations by any other party to or beneficiary;
(xiii) Guarantor's Maximum Leverage Ratio shall
exceed 9:1 at any time;
(xiv) Guarantor's Tangible Net Worth shall at any
time be less than the greater of (a) Guarantor's Asset Value Net Worth
minus unsecured subordinated debt of the Guarantor which is subject to
a subordinated agreement acceptable to Buyer and (b) the sum of (x)
$20,000,000 as of December 31, 1999, (y) 85% of equity contributions to
Guarantor received since December 31, 1999 and (z) 75% of cumulative
positive net income of Sellers and other Subsidiaries of Guarantor from
December 31, 1999;
(xv) Guarantor's FCCR for any calendar quarter shall
be less than 1.25x at any time;
(xvi) Guarantor shall have made a Restricted Payment;
(xvii) Guarantor shall have entered into a line of
business other than the lines of business expressly contemplated in
that certain prospectus, dated November 13, 1997, for 1,200,000 shares
of common stock of Guarantor; or
(xviii) Either Seller shall fail to fully transfer
servicing to the Back-up Servicer within five (5) Business Days of Buyer's
request.
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(b) In making a determination as to whether an Event of
Default has occurred, and where more specific information is not reasonably
available to the party making the determination, the parties hereto shall be
entitled to rely on reports published or broadcast by media sources believed by
such party to be generally reliable and on information provided to it by any
other sources believed by it to be generally reliable, provided that such party
in good faith believes such information to be accurate and has taken such steps
as may be reasonable in the circumstances to attempt to verify such information,
provided however, without impairing the ability of any party to rely on the
above-listed information, the party against which such information is used shall
have the right to establish any disputed facts or conclusions with evidence from
more reliable sources.
14. REMEDIES
(a) Buyer's Remedies. If an Event of Default occurs with
respect to either Seller or Guarantor, the following rights and remedies are
available to Buyer:
(i) Acceleration of Repurchase Date. At the option
of Buyer, exercised by written notice to the Sellers (which option
shall be deemed to have been exercised, even if no notice is given,
immediately upon the occurrence of an Act of Insolvency), the
Repurchase Date for each Transaction hereunder shall be deemed
immediately to occur.
(ii) Sellers' Repurchase Obligations. If Buyer
exercises or is deemed to have exercised the option referred to in
subsection (a)(i) of this Section,
(A) Sellers' obligations hereunder to
repurchase all Purchased Loans in such Transactions shall
thereupon become immediately due and payable,
(B) to the extent permitted by applicable
law, the Repurchase Price with respect to each such
Transaction shall be increased by the aggregate amount
obtained by daily application of, on a 360 day per year basis
for the actual number of days during the period from and
including the date of the exercise or deemed exercise of such
option to but excluding the date of payment of the Repurchase
Price as so increased, (x) the Pricing Rate for each such
Transaction plus 4.0% to (y) the Repurchase Price for such
Transaction as of the Repurchase Date as determined pursuant
to subsection (a)(i) of this Section (decreased as of any day
by (I) any amounts actually in the possession of Buyer
pursuant to clause (C) of this subsection, (II) any proceeds
from the sale of Purchased Loans applied to the Repurchase
Price pursuant to subsection (a)(xii) of this Section, and
(III) any amounts applied to the Repurchase Price pursuant to
subsection (a)(iii) of this Section), and
(C) all Income actually received by the
Buyer or its designee (including the Custodian) pursuant to
Section 5 shall be applied to the aggregate unpaid Repurchase
Price owed by Sellers.
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(iii) Sale or Other Disposition of Loans by Buyer.
After one (1) Business Day's notice to the Sellers (which notice need
not be given if an Act of Insolvency shall have occurred, and which may
be the notice given under subsection (a)(i) of this Section 14), Buyer
may (A) immediately sell, without notice or demand of any kind, at a
public or private sale and at such price or prices Buyer may reasonably
deem satisfactory any or all Purchased Loans subject to a Transaction
hereunder or (B) in its sole discretion elect, in lieu of selling all
or a portion of such Purchased Loans, to give Sellers credit for such
Purchased Loans in an amount equal to the Market Value of the Purchased
Loans against the aggregate unpaid Repurchase Price and any other
amounts owing by Sellers hereunder. The proceeds of any disposition of
Purchased Loans shall be applied first to the costs and expenses
incurred by Buyer in connection with the Event of Default; second to
the actual costs of cover and/or related hedging transactions; third to
the Repurchase Price; and fourth to any other outstanding obligation of
Sellers to Buyer or its Affiliates.
(iv) Buyer's Discretion in Connection with
Liquidation of Loans. The parties recognize that it may not be possible
to purchase or sell all of the Purchased Loans on a particular Business
Day, or in a transaction with the same purchaser, or in the same manner
because the market for such Purchased Loans may not be liquid. In view
of the nature of the Purchased Loans, the parties agree that
liquidation of a Transaction or the underlying Purchased Loans does not
require a public purchase or sale and that a good faith private
purchase or sale shall be deemed to have been made in a commercially
reasonable manner. Accordingly, Buyer may elect, in its sole
discretion, the time and manner of liquidating any Purchased Loan and
nothing contained herein shall (A) obligate Buyer to liquidate any
Purchased Loan on the occurrence of an Event of Default or to liquidate
all Purchased Loans in the same manner or on the same Business Day or
(B) constitute a waiver of any right or remedy of Buyer. However, in
recognition of the parties' agreement that the Transactions hereunder
have been entered into in consideration of and in reliance upon the
fact that all Transactions hereunder constitute a single business and
contractual relationship and that each Transaction has been entered
into in consideration of the other Transactions, the parties further
agree that Buyer shall use its best efforts to liquidate all
Transactions hereunder upon the occurrence of an Event of Default as
quickly as is prudently possible in the reasonable judgment of Buyer.
(v) Appointment of a Receiver for Collateral. Buyer
shall, without regard to the adequacy of the security for the Sellers'
obligations under this Agreement, be entitled to the appointment of a
receiver by any court having jurisdiction, without notice, to take
possession of and protect, collect, manage, liquidate, and sell the
Collateral or any portion thereof, and collect the payments due with
respect to the Collateral or any portion thereof. Sellers shall pay all
costs and expenses incurred by Buyer in connection with the appointment
and activities of such receiver, including, without limitation, legal
fees.
(vi) Injunction. Sellers agree that Buyer may obtain
an injunction or an order of specific performance to compel Sellers to
fulfill their obligations as set
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forth in Section 25 hereof, if Sellers fail or refuse to perform their
obligations as set forth therein.
(vii) Joint and Several Obligation. Sellers shall be
jointly and severally liable to Buyer for the amount of all expenses,
reasonably incurred by Buyer in connection with or as a consequence of
an Event of Default, including, without limitation, reasonable legal
fees and expenses and reasonable costs incurred in connection with
hedging or covering transactions.
(viii) Remedies Not Exclusive. Buyer shall have all the
rights and remedies provided herein, provided by applicable federal,
state, foreign, and local laws (including, without limitation, the
rights and remedies of a secured party under the Uniform Commercial
Code of the State of New York, to the extent that the Uniform
Commercial Code is applicable, and the right to offset any mutual debt
and claim), in equity, and under any other agreement between Buyer and
either or both Sellers.
(ix) Concurrent Remedies. Buyer may exercise one or
more of the remedies available to Buyer immediately upon the occurrence
of an Event of Default and, except to the extent provided in
subsections (a)(i) and (iii) of this Section, at any time thereafter
without notice to Sellers. All rights and remedies arising under this
Agreement as amended from time-to-time hereunder are cumulative and not
exclusive of any other rights or remedies which Buyer may have.
(x) Recourse to Other Assets of Sellers. In addition
to its rights hereunder, Buyer shall have the right to proceed against
any assets of Sellers which may be in the possession of Buyer or its
designee (including the Custodian) including the right to liquidate
such assets and to set off the proceeds against monies owed by Sellers
to Buyer pursuant to this Agreement. Buyer may set off cash, the
proceeds of the liquidation of the Purchased Loans, any Collateral or
its proceeds, and all other sums or obligations owed by Buyer or its
affiliates to Sellers against all of Sellers' obligations to Buyer,
whether under this Agreement, under a Transaction, or under any other
agreement between the parties, or otherwise, whether or not such
obligations are then due, without prejudice to Buyer's right to recover
any deficiency. Any cash, proceeds, or property in excess of any
amounts due, or which Buyer reasonably believes may become due, to it
from Sellers shall be returned to Sellers after satisfaction of all
obligations of Sellers to Buyer.
(xi) Nonjudicial Processes. Buyer may enforce its
rights and remedies hereunder without prior judicial process or
hearing, and Sellers hereby expressly waive any defenses Sellers might
otherwise have to require Buyer to enforce its rights by judicial
process. Sellers also waive any defense Sellers might otherwise have
arising from the use of nonjudicial process, enforcement and sale of
all or any portion of the Collateral, or from any other election of
remedies. Sellers recognizes that nonjudicial remedies are consistent
with the usages of the trade, are responsive to commercial necessity
and are the result of a bargain at arm's length.
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(xii) Sales Pursuant to Securities Offerings. Buyer
and Sellers hereby agree that sales of the Purchased Loans shall be
deemed to include and permit the sales of Purchased Loans pursuant to a
securities offering.
(b) Sellers' Remedies. If an Event of Default occurs with
respect to Buyer, the following rights and remedies are available to Sellers:
(i) Repurchase of All Purchased Loans. Upon tender
by Sellers of payment of the aggregate Repurchase Price for all such
Transactions, Buyer's right, title and interest in all Purchased Loans
subject to such Transactions shall be deemed transferred to the
respective Seller, and Buyer shall deliver or cause to be transferred
all such Purchased Loans to Sellers or their designees at Buyer's
expense.
(ii) Replacement Loans. If Sellers exercise the
option referred to in subsection (b)(i) of this Section and Buyer fails
to deliver or cause to be delivered the Purchased Loans to the
respective Seller or its designee, after one Business Day's notice to
Buyer, such Seller may (A) purchase Loans ("Replacement Loans") that
are as similar as is reasonably practicable in characteristics,
outstanding principal amounts (as a pool) and interest rate to any
Purchased Loans that are not delivered by Buyer to Sellers or its
designees as required hereunder or (B) in its sole discretion elect, in
lieu of purchasing Replacement Loans, to be deemed to have purchased
Replacement Loans at a price therefor on such date, equal to the Market
Value of the Purchased Loans.
(iii) Buyer's Liability. Buyer shall be liable to the
Sellers, and Buyer shall pay to the Sellers on demand, (A) with respect
to Purchased Loans (other than Additional Loans), for any excess of the
price paid (or deemed paid) by Sellers for Replacement Loans therefor
over the Repurchase Price for such Purchased Loans and (B) with respect
to Additional Loans, for the price paid (or deemed paid) by Sellers for
the Replacement Loans therefor. In addition, Buyer shall be liable to
Sellers for interest on such remaining liability with respect to each
such purchase (or deemed purchase) of Replacement Loans calculated on a
360-day year basis for the actual number of days during the period from
and including the date of such purchase (or deemed purchase) until paid
in full by Buyer. Such interest shall be at the greater of the Pricing
Rate or the Prime Rate.
(iv) Sellers' Expenses. Buyer shall be liable to
Sellers for the amount of all expenses reasonably incurred by Sellers
in connection with or as a consequence of an Event of Default,
including, without limitation, reasonable legal expenses and reasonable
expenses incurred in connection with covering existing hedging
transactions with respect to the Purchased Loans.
(v) Remedies Not Exclusive. Sellers shall have all
the rights and remedies provided herein, provided by applicable
federal, state, foreign, and local laws, in equity, and under any other
agreement between Buyer and Sellers, including, without limitation, the
right to offset any debt or claim.
(vi) Concurrent Remedies. Sellers may exercise one or
more of the remedies available to Sellers immediately upon the
occurrence of an Event of Default
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and at any time thereafter without notice to Buyer. All rights and
remedies arising under this Agreement as amended from time-to-time
hereunder are cumulative and not exclusive of any other rights or
remedies which Sellers may have.
15. DUE DILIGENCE
Sellers acknowledge that Buyer has the right to perform
continuing due diligence reviews with respect to the Loans, for purposes of
verifying compliance with the representations, warranties and specifications
made hereunder, or otherwise, and Sellers agree that upon reasonable prior
notice to Sellers, provided that, in the event that a Default shall have
occurred, then without notice, Buyer or its authorized representatives will be
permitted during normal business hours to examine, inspect, and make copies and
extracts of, the Loan Files, Servicing Records and any and all documents,
records, agreements, instruments or information relating to such Loans in the
possession or under the control of Sellers, any Servicer or subservicer and/or
the Custodian. Sellers also shall make available to Buyer a knowledgeable
financial or accounting officer for the purpose of answering questions
respecting the Loan Files and the Loans. Without limiting the generality of the
foregoing, Sellers acknowledge that Buyer may enter into Transactions with the
Sellers based solely upon the Collateral Information provided by each respective
Seller to Buyer and the representations, warranties and covenants contained
herein, and that Buyer, at its option, has the right at any time to conduct a
partial or complete due diligence review on some or all of the Loans. Buyer may
underwrite such Loans itself or engage a mutually agreed upon third party
underwriter to perform such underwriting. Sellers agree to cooperate with Buyer
and any third party underwriter in connection with such underwriting, including,
but not limited to, providing Buyer and any third party underwriter with access
to any and all documents, records, agreements, instruments or information
relating to such Loans in the possession, or under the control, of Sellers.
Sellers further agree that Sellers shall reimburse Buyer for any and all
out-of-pocket costs and expenses reasonably incurred by Buyer in connection with
Buyer's activities pursuant to this Section 15 hereof.
16. SINGLE AGREEMENT
Buyer and Sellers acknowledge that, and have entered hereunto
and will enter into each Transaction hereunder in consideration of and in
reliance upon the fact that, all Transactions hereunder constitute a single
business and contractual relationship and that each has been entered into in
consideration of the other Transactions. Accordingly, each of Buyer and Sellers
agree (i) to perform all of their respective obligations in respect of each
Transaction hereunder, and that a default in the performance of any such
obligations shall constitute a default in respect of all Transactions hereunder,
(ii) that each of them shall be entitled to set off claims and apply property
held by them in respect of any Transaction against obligations owing to them in
respect of any other Transactions hereunder and (iii) that payments, deliveries,
and other transfers made by either of them in respect of any Transaction shall
be deemed to have been made in consideration of payments, deliveries, and other
transfers in respect of any other Transactions hereunder, and the obligations to
make any such payments, deliveries, and other transfers may be applied against
each other and netted; provided, however, that the parties hereto acknowledge
and agree that each Purchased Loan is
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identified and unique and nothing in this Agreement should limit or reduce
Buyer's obligation to deliver the Purchased Loans to Sellers as and when
provided herein.
17. NOTICES AND OTHER COMMUNICATIONS
Unless another address is specified in writing by the
respective party to whom any written notice or other communication is to be
given hereunder, all such notices or communications shall be in writing or
confirmed in writing (including without limitation by telex or telecopy) and
delivered to the intended recipient at the "Address for Notices" specified below
its name on the signature page hereof), or, as to any party, at such other
address as shall be designated by such party in a written notice to each other
party. All notices to Buyer's Underwriter shall be made in writing to ▇▇▇▇▇▇▇▇
Philips, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: P. ▇▇▇▇▇▇ ▇▇▇▇▇▇ (phone: (▇▇▇) ▇▇▇-▇▇▇▇ and fax: (404)
▇▇▇-▇▇▇▇).
18. ENTIRE AGREEMENT; SEVERABILITY
This Agreement together with the applicable Facility Documents
and Confirmations constitute the entire understanding between Buyer and Sellers
with respect to the subject matter it covers and shall supersede any existing
agreements between the parties containing general terms and conditions for
repurchase transactions involving Purchased Loans. By acceptance of this
Agreement, Buyer and Sellers acknowledge that they have not made, and are not
relying upon, any statements, representations, promises or undertakings not
contained in this Agreement. Each provision and agreement herein shall be
treated as separate and independent from any other provision or agreement herein
and shall be enforceable notwithstanding the unenforceability of any such other
provision or agreement.
19. NON-ASSIGNABILITY
The rights and obligations of the parties under this Agreement
and under any Transaction shall not be assigned by Sellers without the prior
written consent of Buyer. Subject to the foregoing, this Agreement and any
Transactions shall be binding upon and shall inure to the benefit of the parties
and their respective successors and assigns. Nothing in this Agreement express
or implied, shall give to any person, other than the parties to this Agreement
and their successors hereunder, any benefit or any legal or equitable right,
power, remedy or claim under this Agreement.
20. TERMINABILITY
This Agreement shall terminate upon the earlier of (i) the
Final Repurchase Date and (ii) written notice from either Seller to Buyer to
such effect, except that this Agreement shall, notwithstanding the above clause,
remain applicable to any Transaction then outstanding and provided however, that
as a condition precedent to any termination by any Seller, the Exit Fee required
pursuant to Section 3(j)(4) hereof shall be paid by such Seller to Buyer.
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Notwithstanding any such termination or the occurrence of an
Event of Default, all of the representations, warranties and indemnities
hereunder (including the Loan Representations) shall continue and survive.
21. GOVERNING LAW
THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK WITHOUT GIVING
EFFECT TO THE CONFLICT OF LAW PRINCIPLES THEREOF.
22. CONSENT TO JURISDICTION
The parties irrevocably agree to submit to the personal
jurisdiction of the United States District Court for the Southern District of
New York, the parties irrevocably waiving any objection thereto. If, for any
reason, federal jurisdiction is not available, and only if federal jurisdiction
is not available, the parties irrevocably agree to submit to the personal
jurisdiction of the Supreme Court of the State of New York, the parties
irrevocably waiving any objection thereto.
23. NO WAIVERS, ETC.
No express or implied waiver of any Event of Default by any
party shall constitute a waiver of any other Event of Default and no exercise of
any remedy hereunder by any party shall constitute a waiver of its right to
exercise any other remedy hereunder. No modification or waiver of any provision
of this Agreement and no consent by any party to a departure herefrom shall be
effective unless and until such shall be in writing and duly executed by both of
the parties hereto. Any such waiver or modification shall be effective only in
the specific instance and for the specific purpose for which it was given.
24. INTENT
The parties understand and intend that this Agreement and each
Transaction hereunder constitute a "repurchase agreement" and a "securities
contract" as those terms are defined under the relevant provisions of Title 11
of the United States Code, as amended.
25. SERVICING
(a) Servicing for Buyer using Accepted Servicing Practices.
Notwithstanding the purchase and sale of the Purchased Loans hereby, the
respective Seller and, pursuant to their respective Servicing Agreement, the MH
Servicer and the Mortgage Loan Servicer, as applicable, shall continue to
service the respective Purchased Loans for the benefit of Buyer and, if Buyer
shall exercise its rights to pledge or hypothecate the Purchased Loan prior to
the related Repurchase Date pursuant to Section 8 hereof, Buyer's assigns;
provided, however, that the obligations of a Seller to service Purchased Loans
shall cease, at that Seller's option, upon the payment by Seller to Buyer of the
Repurchase Price therefor. The respective Seller shall service or cause the
respective Servicer to service the Purchased Loans in accordance with Accepted
Servicing Practices approved by Buyer and maintained by
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other prudent mortgage lenders with respect to mortgage loans similar to those
Purchased Loans.
(b) Servicing Agreements and Servicing Records. Each Seller
agrees that Buyer is the owner of all servicing records, including but not
limited to any and all servicing agreements (the "Servicing Agreements"), files,
documents, books, records, data bases, computer tapes, disks, copies of computer
tapes, Seller's rights in any data processing software, computer programs and
related property and rights, proof of insurance coverage, insurance policies,
appraisals, other closing documentation, payment history records, and any other
records relating to or evidencing the servicing of Purchased Loans (the
"Servicing Records") so long as the Purchased Loans are subject to this
Agreement. Each Seller grants Buyer a security interest in all the respective
servicing fees and rights relating to the Purchased Loans and all Servicing
Records to secure the obligation of both Sellers or their designees to service
in conformity with this Section and any other obligation of the respective
Seller to Buyer. Sellers covenant to safeguard their respective Servicing
Records and to deliver them promptly to Buyer or its designee (including the
Custodian) at Buyer's request.
(c) Buyer's Options Upon Default by Servicers. Upon the
occurrence and continuance of a Default (including upon the failure of a Seller,
Servicer or any subservicer to meet Accepted Servicing Practices after notice of
default and failure by the Servicer to cure any such default within 15 days
thereafter), Buyer may, in its sole discretion, (i) sell its right to the
Purchased Loans on a servicing released basis or (ii) terminate the Sellers,
Servicer or any subservicer as servicer of the Purchased Loans with or without
cause, in each case without payment of any termination fee, in which case
Sellers will promptly, within five (5) Business Days, transfer servicing, or
cause servicing to be transferred, to the Back-up Servicer. Buyer agrees that if
Buyer has caused the transfer of servicing to the Back-up Servicer pursuant to a
Default, and such Default does not become an Event of Default within sixty (60)
days, Buyer shall transfer servicing back to the Servicer, at Buyer's expense.
(d) Each Seller shall provide to the Buyer a letter from its
Servicer (the "Servicing Letter") (i) acknowledging Buyer's security interest in
the Loans, (ii) granting Buyer a security interest in all servicing fees and
rights relating to Loans and all Servicing Records related thereto to secure the
obligation of Servicer to service in conformity with this Agreement, (iii)
acknowledging that Buyer is the collateral assignee of all Servicing Records,
(iv) acknowledging that upon a Default, the Seller may terminate any Servicing
Agreement upon request of the Buyer, and Servicer shall transfer servicing to
Buyer's designee, at no cost or expense to the Buyer, it being agreed that the
Seller will pay any and all fees required to terminate the Servicing Agreement
and to effectuate the transfer of servicing to the designee of the Buyer, and
(v) agreeing to allow Buyer to inspect the Servicer's servicing facilities, for
the purpose of satisfying the Buyer that the Servicer has the ability to service
the Loans as provided herein.
(e) No Subservicers Without Buyer Consent. Sellers shall not
employ subservicers to service the Purchased Loans without the prior written
approval of Buyer, which approval shall not be unreasonably withheld. If the
Purchased Loans are serviced by a subservicer, Sellers irrevocably assign all of
their rights, title and interest in any such subservicing agreement, with
respect to the Purchased Loans, to Buyer. The applicable Seller
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shall cause any subservicers engaged by or for the benefit of that Seller to
execute a letter agreement with Buyer acknowledging Buyer's security interest
and agreeing that, upon notice from Buyer (or the Custodian on its behalf) that
an Event of Default has occurred and is continuing hereunder, it shall deposit
all Income with respect to the Purchased Loans in the account specified in the
third sentence of Section 5(a) hereof.
(f) Subordination of Servicing Fees. The payment of servicing
fees shall be subordinate to payment of amounts outstanding under any
Transaction and this Agreement.
26. DISCLOSURE RELATING TO CERTAIN FEDERAL PROTECTIONS
The parties acknowledge that they have been advised that in
the case of Transactions in which one of the parties is an "insured depository
institution" as that term is defined in Section 1831(a) of Title 12 of the
United States Code, as amended, funds held by the financial institution pursuant
to a Transaction hereunder are not a deposit and therefore are not insured by
the Federal Deposit Insurance Corporation, the Savings Association Insurance
Fund or the Bank Insurance Fund, as applicable.
27. NETTING
If Buyer and Sellers are "financial institutions" as now or
hereinafter defined in Section 4402 of Title 12 of the United States Code
("Section 4402") and any rules or regulations promulgated thereunder:
(a) All amounts to be paid or advanced by any one party to or
on behalf of the other under this Agreement or any Transaction hereunder shall
be deemed to be "payment obligations" and all amounts to be received by or on
behalf of one party from the other under this Agreement or any Transaction
hereunder shall be deemed to be "payment entitlements" within the meaning of
Section 4402, and this Agreement shall be deemed to be a "netting contract" as
defined in Section 4402.
(b) The payment obligations and the payment entitlements of
the parties hereto pursuant to this Agreement and any Transaction hereunder
shall be netted as follows. In the event that either party (the "Defaulting
Party") shall fail to honor any payment obligation under this Agreement or any
Transaction hereunder, the other party (the "Nondefaulting Party") shall be
entitled to reduce the amount of any payment to be made by the Nondefaulting
Party to the Defaulting Party by the amount of the payment obligation that the
Defaulting Party failed to honor.
28. INDEMNIFICATION
Each Seller agrees to jointly and severally hold Buyer
harmless from and indemnify Buyer against all liabilities, losses, damages,
judgments, reasonably incurred costs and expenses of any kind which may be
imposed on, incurred by or asserted against Buyer (collectively, the "Costs")
relating to or arising out of the Transactions or this Agreement, including
reasonable legal costs and settlement costs, except if such losses, liabilities,
claims, damages or expenses result from Buyer's gross negligence or willful
misconduct. Without limiting the generality of the foregoing, each Seller agrees
to jointly and severally hold Buyer
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harmless from and indemnify Buyer against all Costs with respect to all Loans
relating to or arising out of any violation or alleged violation of any
environmental law, rule or regulation or any consumer credit laws, including
without limitation ERISA, the Truth in Lending Act and/or the Real Estate
Settlement Procedures Act, that, in each case, results from anything other than
Buyer's gross negligence or willful misconduct. In any suit, proceeding or
action brought by Buyer in connection with any Loan for any sum owing
thereunder, or to enforce any provisions of any Loan, each Seller will jointly
and severally save, indemnify and hold Buyer harmless from and against all
expense, loss or damage suffered by reason of any defense, set-off,
counterclaim, recoupment or reduction or liability whatsoever of the account
debtor or obligor thereunder, arising out of a breach by either Seller of any
obligation thereunder or arising out of any other agreement, indebtedness or
liability at any time owing to or in favor of such account debtor or obligor or
its successors from Sellers. Each Seller also agrees to reimburse Buyer as and
when billed by Buyer for all Buyer's costs and expenses incurred in connection
with the enforcement or the preservation of Buyer's rights under this Agreement
or any Transaction contemplated hereby, amendments and waivers, including
without limitation the reasonable fees and disbursements of its counsel. Each
Seller hereby acknowledges that, the obligations of both Sellers hereunder are
recourse obligations of each Seller.
29. ESTABLISHMENT OF COLLECTION ACCOUNT
(a) Each Seller shall, or shall cause each Servicer to,
establish and maintain one or more collection accounts for the Buyer's benefit,
which may be interest-bearing, entitled, as applicable: (i) "Bloomfield
Servicing Company, L.L.C. in trust for Bloomfield Acceptance Company, L.L.C."
(the "Bloomfield Blocked Account"), (ii) "Bloomfield Servicing Company, L.L.C.
in trust for MHFC, Inc." (the "MHFC Blocked Account") or (iii) "Dynex Financial
Inc." in trust for MHFC, Inc." (the "Dynex Blocked Account") (together, the
"Blocked Accounts"). The Blocked Accounts shall be governed by the terms in this
Section 29 and the Blocked Account Agreements. The provisions of this Section 29
apply separately to each Blocked Account and to BAC with respect to the
Bloomfield Blocked Account, MHFC with respect to the MHFC Blocked Account, Dynex
with respect to the Dynex Blocked Account, and to BAC's, MHFC's and Dynex's
respective Servicers.
(b) Sellers shall, or shall cause the Servicers to, deposit
into the respective Blocked Accounts all payments received with respect to all
MH Loans subject to Transactions hereunder and all proceeds received from sales
of any Loans, within two (2) Business Days following receipt thereof. BAC and
Dynex must instruct all Obligors on Mortgage Loans and Floorplan Loans to remit
all payments directly to the Bloomfield Blocked Account.
(c) Permitted Withdrawals
(A) Distributions. Subject to the provisions
hereof, and to the extent available for distribution, all
funds held in the Blocked Accounts, or received by the
applicable Seller or Servicer as of one calendar day prior to
two Business Days immediately preceding each Payment Date
during the period in which there is no Default, shall be
distributed on each Payment Date (subject to
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any restrictions contained herein or in the Facility
Documents) in the following order of priority:
FIRST: To Escrow Accounts for amounts
representing Escrow Payments as per the Loan Documents;
SECOND: To the Buyer in accordance with the
Buyer's wire transfer instructions as provided herein or as
amended from time to time, in an amount sufficient to pay:
(i) any Periodic Payment due and owing;
(ii) the amount of any Collateral Deficit;
and
(iii) the amount of any fees or expenses or
other amounts due and owing to the Buyer hereunder or in the
Facility Documents;
THIRD: To payment to Buyer of Curtailment
and other prepayments received on any Loans;
FOURTH: To the Servicer for any reasonable
servicing fees due and owing;
FIFTH: To the respective Seller in
accordance with its wire transfer instructions, an amount
equal to any proceeds indicated on that Seller's most recent
Distribution Worksheet for such Payment Date as are remaining
in the Blocked Account and available for distribution to that
Seller on such Payment Date.
The relevant Seller or the Servicer, as the
case may be, shall be entitled to transfer funds on deposit in
a Blocked Account to one or more Escrow Accounts for the
purpose of holding funds attributable to Escrow Payments;
provided that any Escrow Account is identified and is subject
to a Blocked Account Agreement.
(B) Distribution in the Event of Default. To
the extent available for distribution to Sellers on each
Payment Date, all funds held in the Blocked Account or
received by either Seller or Servicer during a period in which
there is a Default which has occurred and is known to the
Sellers or as to which Buyer has notified Sellers, and which
is continuing, shall be distributed on each Payment Date in
the following order of priority:
FIRST: To payment to the Buyer of amounts as
set forth in the subheadings entitled "SECOND AND THIRD" in
Subsection (A) above;
SECOND: To payment of the Repurchase Price
for any then outstanding Transactions;
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70
THIRD: To any additional amounts owing to
the Buyer hereunder; and
FOURTH: Any surplus then remaining shall be
paid to the respective Sellers or their successors or assigns
or to whomsoever may be lawfully entitled to receive the same
or as a court of competent jurisdiction may direct.
(d) The distributions set forth in subsection (c) of this
Section shall be determined pursuant to the Distribution Worksheet for each
respective Seller. Each Seller shall or shall cause its Servicer to deliver its
respective Distribution Worksheet to that Seller and Buyer by facsimile by no
later than 12:00 noon (New York time) on the second preceding Business Day prior
to each Payment Date. Prior to remitting any distributions pursuant to this
Section, the respective Seller and its Servicers shall have received by
facsimile, the written consent of Buyer to the information set forth on a
Distribution Worksheet. In the event that Buyer shall have failed to consent to
a Distribution Worksheet by 5:00 p.m. (New York time) on the Business Day prior
to each Payment Date, the affected Seller or its Servicer shall promptly contact
Buyer and shall use its best efforts to obtain such written consent. In the
event that Buyer disputes any calculation set forth on a Distribution Worksheet,
the affected Servicer shall promptly contact Buyer and the respective Seller,
and all parties shall use their best efforts to resolve such dispute; provided
that, Buyer's good faith determination that accrued interest is due and owing or
that a Collateral Deficit exists under this Agreement shall be conclusive absent
manifest error.
(e) Reliance on Distribution Worksheets. The Lockbox Bank and
the Servicers may rely upon any Distribution Worksheet which has been consented
to by Buyer, and neither the Lockbox Bank nor the Servicers shall have any
liability to Buyer for actions taken in reliance on such Distribution Worksheet.
All distributions made by a Servicer pursuant to this Section shall be (subject
to any decree of any court of competent jurisdiction) final, and that Servicer
shall have no duty to inquire as to the application by Buyer of any amounts
distributed to it.
(f) Appointment of Third Party Upon Default. In the event a
Default shall occur and be continuing, Buyer may select a third party to prepare
and distribute the Distribution Worksheets to all of the parties.
(g) Accrued Interest and Sellers' Separate Funds. Unless an
Event of Default has occurred and is continuing, all interest accrued on Blocked
Account(s) shall be allocated to the applicable Seller and shall constitute part
of the funds available for distribution to Sellers in accordance with the
foregoing procedure. Any of a Seller's separate funds used to establish any
Blocked Account may be distributed to the relevant Seller at any time prior to
an Event of Default in accordance with the Distribution Worksheet.
30. CONFIDENTIALITY OF AGREEMENT
Sellers and Buyer agree to maintain the confidentiality of
this Agreement and its terms and agree not to disclose this Agreement or its
terms to any other party except as required for the enforcement of its terms, or
as required by law, regulatory requirements or
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71
court order or discovery, or to Affiliates of Sellers or Guarantor or to their
respective accountants, attorneys and similar Persons who provide professional
or advisory services to them. Nonetheless, each Person given confidential
information relating to this Agreement shall be informed by the giver of the
confidential nature of this Agreement, and shall agree to maintain its
confidentiality. Sellers shall be responsible for any breach of this agreement
by their Affiliates and any other Persons to whom this Agreement or information
about this Agreement is given. In the event Sellers determine, in consultation
with legal counsel experienced in securities regulation, that the Agreement must
be filed with the Securities and Exchange Commission pursuant to applicable law,
such filing may only be made after consultation with Buyer and agreement upon
redaction of certain terms of the Agreement (including, without limitation, the
Pricing Spread and Commitment Fee).
31. MISCELLANEOUS
(a) Time is of the essence under this Agreement and all
Transactions and all references to a time shall mean New York time in effect on
the date of the action unless otherwise expressly stated in this Agreement.
(b) Buyer shall be authorized to accept orders and take any
other action affecting any accounts of the respective Seller in response to
instructions given in writing or orally by telephone or otherwise by any person
with apparent authority to act on behalf of that Seller, and the relevant Seller
shall indemnify Buyer, defend, and hold Buyer harmless from and against any and
all liabilities, losses, damages, costs, and expenses of any nature arising out
of, or in connection with, any action taken by Buyer in response to such
instructions received or reasonably believed to have been received from such
Seller.
(c) If there is any conflict between the terms of this
Agreement or any Transaction entered into hereunder and the Custodial Agreement
or any other Facility Document, this Agreement shall prevail.
(d) If there is any conflict between the terms of a
Confirmation or a corrected Confirmation issued by the Buyer and this Agreement,
the Confirmation and/or corrected Confirmation shall prevail.
(e) This Agreement may be executed in counterparts, each of
which so executed shall be deemed to be an original, but all of such
counterparts shall together constitute but one and the same instrument.
(f) Sellers agree to reimburse Buyer for all reasonable costs
and expenses of Buyer in connection with this Agreement, and the Sellers agree
to reimburse Buyer for all reasonable costs and expenses of Buyer in connections
with any Transactions hereunder including, respectively but without limitation,
(i) the fees, expenses and disbursement of outside counsel to Buyer, (ii) due
diligence expenses, (iii) on-going auditing fees, (iv) custodial fees, (v)
Lockbox Bank fees and (vi) the fees, expenses and disbursements of the Back-up
Servicer, if servicing has been transferred to the Back-up Servicer pursuant to
Section 12(q) hereof.
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(g) The headings in this Agreement are for convenience of
reference only and shall not affect the interpretation or construction of this
Agreement.
[SIGNATURE PAGE FOLLOWS.]
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IN WITNESS WHEREOF, THE PARTIES HAVE ENTERED INTO THIS
AGREEMENT AS OF THE DATE SET FORTH ABOVE.
▇▇▇▇▇▇ COMMERCIAL PAPER INC.,
Buyer
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------
Title: Authorized Signatory
------------------------------
Date:
-------------------------------
Address for Notices:
-------------------
▇▇▇▇▇▇ Commercial Paper Inc.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇
Phone (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇ Commercial Paper Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇▇
Phone (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
BLOOMFIELD ACCEPTANCE MHFC, INC.,
COMPANY, L.L.C.,
Seller
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
----------------------------------- ---------------------------------
Title: President Title: President
-------------------------------- ------------------------------
Date: Date:
--------------------------------- -------------------------------
Address for Notices: Address for Notices:
-------------------- --------------------
Bloomfield Acceptance Company, L.L.C. MHFC, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, President Attention: ▇▇▇▇▇▇ ▇▇▇▇▇, President
Phone: (▇▇▇) ▇▇▇-▇▇▇▇ Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇ Fax: (▇▇▇) ▇▇▇-▇▇▇▇
74
DYNEX FINANCIAL, INC.,
Buyer
By: /s/ J. ▇▇▇▇▇ ▇▇▇▇▇▇▇
---------------------------------
Title: President
------------------------------
Date:
-------------------------------
Address for Notices:
--------------------
Dynex Financial, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Phone (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
75
EXHIBIT I
PART 1
FEES PAYABLE BY SELLERS
------------------------------------------------------------------------------------------------------------------------------------
Loan Type Administration Non-Use Fee Exit Fee(1)
Fee
------------------------------------------------------------------------------------------------------------------------------------
Conduit Mortgage Loans None 0.25%, pro-rata based 0.25% of the
and Credit Lease Mortgage on quarter end use, Repurchase Price for
Loans payable quarterly such Conduit and
Credit Lease Mortgage
Loans.
------------------------------------------------------------------------------------------------------------------------------------
Interim and Bridge $2,500 each 0.25%, pro-rata based The greater of (i) 50%
Mortgage Loans on quarter end use, of the prepayment
payable quarterly penalty due from the
Mortgagor on each such
Interim and Bridge
Mortgage Loan and
actually paid to
Seller, or (ii) 0.50%
times the Repurchase
Price of each such
Interim and Bridge
Mortgage Loan.
------------------------------------------------------------------------------------------------------------------------------------
MH Loans None 0.25%, pro-rata based None
on quarter end use,
payable quarterly
------------------------------------------------------------------------------------------------------------------------------------
Grandfathered Loans: The greater of (i) 50%
of the prepayment
▇▇▇▇▇▇ ▇▇▇▇▇▇ Hotel None 0.25%, pro-rata based penalty due from the
on quarter end use, Mortgagor on each such
payable quarterly Grandfathered Loan and
actually paid to
A-Secured Self & None 0.25%, pro-rata based Seller, or (ii) 0.50%
Vehicle Storage II on quarter end use, times the Repurchase
payable quarterly Price of each such
Grandfathered Loan.
------------------------------------------------------------------------------------------------------------------------------------
The Sellers shall pay to the Buyer a Commitment Fee equal to $1,237,500 payable
in four equal installments of $309,375 on the following dates: the Effective
Date of this Agreement, March 1, 2000, June 1, 2000 and September 1, 2000. With
respect to the Interim and Bridge Mortgage Loan portion of the line, an
additional Commitment Fee in an amount to be determined by the Sellers and the
Buyer shall be payable prior to the Buyer entering into any Transactions with
respect to Interim Mortgage Loans or Bridge Mortgage Loans.
(1) No Exit Fee shall be payable if the Seller refinances the Purchased Loan
due for repurchase and simultaneously subjects such refinanced Mortgage
Loan to a Transaction. However, an Exit Fee shall be payable on such
refinanced Mortgage Loan at the earlier of (i) the time of its repurchase
or (ii) termination of this Agreement, at the rates set forth in this
Exhibit I, depending on the classification of such Mortgage Loan (as Credit
Lease, Conduit, Bridge, or Interim) on the date of repurchase or
termination of the Agreement.
I-1
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EXHIBIT I
PART 2
APPLICABLE PURCHASE PRICE PERCENTAGES, APPLICABLE COLLATERAL MAINTENANCE
PERCENTAGES AND PRICING SPREADS
------------------------------------------------------------------------------------------------------------------------------------
Loan Type Applicable Purchase Price Applicable Collateral Pricing Spread
Percentage Maintenance Percentage
------------------------------------------------------------------------------------------------------------------------------------
Conduit Mortgage Loan and 85% 117.6471% 1.375%
Credit Lease Mortgage Loan
------------------------------------------------------------------------------------------------------------------------------------
Interim Mortgage Loan 85% 117.6471% 1.375%
------------------------------------------------------------------------------------------------------------------------------------
MH Loan (originated by Dynex) 85% 117.6471% 1.375%
------------------------------------------------------------------------------------------------------------------------------------
MH Loan (not originated by 82.5% 121.2121% 1.375%
Dynex)
------------------------------------------------------------------------------------------------------------------------------------
Floorplan Loan 65% 150% See Pricing Spread
definition for calculation
of Price Differential
------------------------------------------------------------------------------------------------------------------------------------
FICO Violation MH Loans 75% 133.3333% 1.375%
------------------------------------------------------------------------------------------------------------------------------------
I-2
77
------------------------------------------------------------------------------------------------------------------------------------
Loan Type Applicable Purchase Price Applicable Collateral Pricing Spread
Percentage Maintenance Percentage
------------------------------------------------------------------------------------------------------------------------------------
Bridge Mortgage Loan The fraction, expressed as a The fraction, The market rate as of the
percentage, the numerator of expressed as a Purchase Date as determined
which is the Buyer's LTV percentage, the by the Buyer in its sole
multiplied by the market numerator of which is discretion.
value of the related 1, and the denominator
Mortgaged Property, as of which is the
determined in good faith by Applicable Purchase
the Buyer in its sole Price Percentage for a
discretion, based upon its given Loan.
due diligence review, and the
denominator of which is the
outstanding principal amount
of the related Mortgage Loan
on the Purchase Date.
------------------------------------------------------------------------------------------------------------------------------------
Grandfathered Loans:
▇▇▇▇▇▇ ▇▇▇▇▇▇ Hotel 85% 117.6471% 1.150%
A-Secured Self &
Vehicle Storage II 85% 117.6471% 1.375%
------------------------------------------------------------------------------------------------------------------------------------
I-3
78
EXHIBIT I
PART 3
LIMITATIONS BY LOAN TYPE
------------------------------------------------------------------------------------------------------------------------------------
Loan Type Final Maximum Maximum Minimum Sublimits
Repurchase Aggregate Committed Amount Transaction (applicable to each Loan when added to the Loans
Date Term Amount then
subject to Transactions)
------------------------------------------------------------------------------------------------------------------------------------
Conduit Mortgage November The earlier $50,000,000 $750,000 (1) The aggregate outstanding principal amount of
Loans and Credit 30, 2000 of nine (9) when combined Conduit and Credit Lease Mortgage Loans subject
Lease Mortgage months or with all to then outstanding Transactions secured by
Loans the Final other Mortgaged Properties located in any one state is
Repurchase Transactions not more than $12,500,000.
Date. on the same
Purchase
Date
(2) The aggregate outstanding principal amount of
Conduit and Credit Lease Mortgage Loans subject
to then outstanding Transactions secured by
real property consisting of the same property
type is not greater than $25,000,000.
(3) The aggregate outstanding principal amount
all Conduit and Credit Lease Mortgage Loans
subject to then outstanding Transactions with
initially adjustable rates (i.e., floating
rates) that include options to fix the interest
rates (in accordance with approved Underwriting
Guidelines), does not exceed $7,500,000.
(4) No single Mortgagor or group of affiliated
Mortgagors is the Obligor under Conduit and
Credit Lease Mortgage Loans subject to then
outstanding Transactions with an aggregate
outstanding principal balance in excess of
$10,000,000.
(5) The aggregate principal amount of the Credit
Lease Mortgage Loans subject to then
outstanding Transactions does not exceed
$5,000,000.
------------------------------------------------------------------------------------------------------------------------------------
I-7
79
------------------------------------------------------------------------------------------------------------------------------------
Loan Type Final Maximum Maximum Minimum Loan Sublimits Applicable to Each Loan
Repurchase Aggregate Committed Amount Amount When Added to the Loans then
Date Term Subject to Transactions
------------------------------------------------------------------------------------------------------------------------------------
Bridge and November To be [$50,000,000] $750,000 To be determined at time of first purchase of
Interim Loans 30, 2000 determined when combined Bridge and Interim Loans
at time of with all
first other
purchase of Transactions
Bridge and on the same
Interim Purchase Date
Loans
------------------------------------------------------------------------------------------------------------------------------------
I-3
80
------------------------------------------------------------------------------------------------------------------------------------
MH Loans November The earlier $200,000,000 $750,000 (1) MH Loans originated in the same state do not
30, 2000 of 90 days less the when equal or exceed the greater of (A) 15% of the
or the principal combined Purchase Price for all outstanding MH Loans
Final amount with all subject to Transactions or (B) $30,000,000 (the
Repurchase outstanding on other "Maximum Single State Exposure").
Date or Floorplan Loans. Transactions
such other on the same (2) MH Loans secured by Manufactured Homes located
date as the Purchase Date in a park do not cause the total of such Loans
Maximum in that park to equal or exceed the greater of
Aggregate $2,500,000 (the "Maximum Single Park Exposure").
Terms may
be extended (3) MH Loans secured by Used Manufactured Homes do
by the not equal or exceed the greater of (A) 25% of
Buyer in the aggregate outstanding principal amount of MH
its sole Loans subject to Transactions or (B)$30,000,000.
discretion
(except up (4) Delinquent MH Loans, do not equal or exceed 3%
to 25% may of the aggregate outstanding principal amount
have a of MH Loans subject to Transactions.
maximum
aggregate (5) MH Loans with an LTV >90% do not equal or exceed
term of 180 50% of the aggregate outstanding principal
days) amount of MH Loans subject to Transactions.
No MH Loan has an LTV greater than 95%. The
weighted average LTV of MH Loans shall not be
greater than 88%.
(6) The weighted average FICO score of MH Loans
subject to Transactions for which a FICO score
was obtained at origination shall be not less
than 630. No MH Loan shall have a FICO score
less than 500. MH Loans without a FICO score
shall not exceed 15% of the aggregate principal
amount of MH Loans subject to Transactions.
(7) The aggregate outstanding principal balance of
adjustable rate MH Loans subject to Transactions
does not exceed $2,000,000.
(8) No Land-and-Home Loans shall exceed $300,000 in
principal amount.
(9) No MH Loan which is not a Land-and-Home Loan
(a "Non L-H Loan") shall exceed $90,000 in
principal amount; provided that up to 5% of Non
L-H Loans may have a principal amount greater
than $90,000 but less than or equal to $150,000.
------------------------------------------------------------------------------------------------------------------------------------
I-3
81
------------------------------------------------------------------------------------------------------------------------------------
Loan Type Final Maximum Maximum Minimum Loan Sublimits Applicable to Each Loan
Repurchase Aggregate Committed Amount Amount When Added to the Loans then
Date Term Subject to Transactions
------------------------------------------------------------------------------------------------------------------------------------
Floorplan Loans November The earlier See Sublimit $750,000 (1) The aggregate outstanding principal balance of
30, 2000 of ninety when Floorplan Loans subject to Transactions does
days or the combined not exceed $5,000,000.
Final with all
Repurchase other (2) No single dealer or any affiliate (except with
Date Transactions respect to Transactions outstanding on the
(except up on the same date hereof with respect to Sav-Mor Homes of
to 25% may Purchase ▇▇▇▇▇▇ d/b/a Countryside Homes) may be the
have a Date obligor on Dealer Notes representing an
maximum aggregate principal balance in excess of
aggregate $1,000,000.
term of 120
days) (3) No advances under any Floorplan Loan subject
to a Transaction may be used to finance and be
secured by Used Manufactured Homes.
------------------------------------------------------------------------------------------------------------------------------------
Table Funded See 3 Business See Sublimit $750,000 Does not exceed the greater of (A) $10,000,000 or
Mortgage Loans Mortgage Days from when (B) 10% of the Mortgage Loans subject to
Loan dates Purchase combined Transactions.
Date with all
other
Transactions
on the same
Purchase
Date
------------------------------------------------------------------------------------------------------------------------------------
I-3
82
------------------------------------------------------------------------------------------------------------------------------------
Grandfathered
Loans:
▇▇▇▇▇▇ ▇▇▇▇▇▇ September Until the $6,800,000
▇▇▇▇▇ ▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇
Date
A-Secured Self & Until the $3,485,000
Vehicle Storage II June 3, 2000 Final
Repurchase
Date
------------------------------------------------------------------------------------------------------------------------------------
Total Committed $250,000,000
Amount (All Loans)
------------------------------------------------------------------------------------------------------------------------------------
I-4
83
EXHIBIT II
PART 1. REPRESENTATIONS AND WARRANTIES
REGARDING MORTGAGE LOANS
BAC shall be deemed to make the following representations and
warranties to the Buyer with respect to each Purchased Loan which is a Mortgage
Loan sold in a Transaction hereunder, as of the related Purchase Date and as of
each day such Transaction is in effect and except as shall be specifically
disclosed in the schedule attached to the Request for Purchase. With respect to
any representations and warranties made to the best of BAC's knowledge, to BAC's
knowledge or in reliance on or based on information, in the event that it is
discovered that the circumstances with respect to the related Mortgage Loan are
not accurately reflected in such representation and warranty notwithstanding the
actual knowledge or lack of knowledge of BAC, then, notwithstanding that such
representation and warranty is made to the best of BAC's knowledge, to BAC's
knowledge or in reliance on or based on information, the Market Value of such
Mortgage Loans may, in the Buyer's sole good faith discretion, be reduced to
zero.
1. No Default. With respect to the payment of any obligation to pay
principal and interest, taxes, insurance premiums and required
reserves: (A) the Mortgage Loan has not been since the date of
origination by the applicable Qualified Originator, and currently is
not, 30 or more days delinquent, and (B) the Mortgagor is not in
default thereunder beyond any applicable grace period.
2. Title Policy. The lien of each Mortgage is insured by an ALTA lender's
title insurance policy or its equivalent as adopted in the applicable
jurisdiction issued by one or more nationally recognized title
insurance companies (the "Title Policy"), insuring the Qualified
Originator, its successors and assigns, as to the first priority lien
of the Mortgage in the original principal amount of the Mortgage Loan
after all advances of principal, subject only to (a) the lien of
current real property taxes, ground rents, water charges, sewer rents
and assessments not yet due and payable, (b) covenants, conditions and
restrictions, rights of way, easements and other matters of public
record, none of which, individually or in the aggregate, in the
reasonable judgment of BAC, materially interferes with the current use
of the related Mortgaged Property or the security intended to be
provided by such Mortgage or with the Mortgagor's ability to pay its
obligations when they become due or the value of the related Mortgaged
Property, (c) the exceptions (general and specific) set forth in such
policy, none of which, individually or in the aggregate, in the
reasonable judgment of BAC, materially interferes with the current use
of the related Mortgaged Property or security intended to be provided
by such Mortgage, with the Mortgagor's ability to pay its obligations
when they become due or the value of the related Mortgaged Property (or
if a title insurance policy has not yet been issued in respect of the
Mortgage Loan, a policy meeting the foregoing description is evidenced
by a commitment for title insurance "marked-up" at the closing of the
Mortgage Loan) and (d) other matters to which like properties are
commonly subject which do not, individually or in the aggregate,
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materially interfere with the benefits of the security intended to be
provided by such Mortgage. The Title Policy does not contain any
special exceptions (other than the standard exclusions) for zoning and
uses and has been marked to delete the standard survey exception or to
replace the standard survey exception with a specific survey reading.
To the actual knowledge of BAC, no material claims have been made under
such title policy and no claims have been made thereunder.
3. Required Insurance In Force. (A) Each building or other improvement
located on any Mortgaged Property was insured by a fire and extended
perils insurance policy, issued by a Qualified Insurer, in an amount
not less than the replacement cost of the Mortgaged Property; each
Mortgaged Property was also covered by one-year business interruption
insurance and comprehensive general liability insurance in amounts
generally required by institutional lenders for similar properties; all
premiums on such insurance policies required to be paid as of the date
hereof have been paid; such insurance policies require prior notice to
the insured of termination or cancellation, and no such notice has been
received by BAC or (to BAC's actual knowledge) by the Mortgagor; and
(B) the Mortgage Loan Documents obligate the Mortgagor to maintain all
such insurance and, at the Mortgagor's failure to do so, authorize the
mortgagee to maintain such insurance at the Mortgagor's cost and
expense and to seek reimbursement therefor from such Mortgagor.
4. Condition of Property. As of the most recent date of inspection of each
Mortgaged Property by BAC, in reliance solely on site inspections
conducted in accordance with procedures of a prudent lender and BAC's
review of the report prepared by the engineer who inspected the
structure, exterior walls, roofing, interior construction, mechanical
and electrical systems and general conditions of the site, buildings
and other improvements with respect to the Mortgage Loan (which report
indicated, if applicable, a variety of recommended capital improvements
with respect to such Mortgaged Property, as well as the estimated cost
of such improvements and the most recent visual inspection (as
described in paragraph 9 below) of the Mortgaged Property).
5. No Encroachments. To the best of BAC's knowledge, after review of and
in reliance on compliance confirmations from applicable municipalities,
surveys and/or endorsements to the Title Policy, none of the
improvements included for the purpose of determining the Appraised
Value of each Mortgaged Property at the time of the origination of the
Mortgage Loan lies outside of the boundaries and building restriction
lines of the Mortgaged Property, and no improvements on adjoining
properties materially encroach upon the Mortgaged Property except those
which are insured against by the title insurance policy (including
endorsements thereto) issued in connection with the Mortgage Loan.
6. Compliance of Improvements. To the best of BAC's knowledge, after
review of and in reliance on compliance confirmations from applicable
municipalities, surveys, the zoning endorsement to the Title Policy (if
applicable), the appraisal, engineering and
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environmental reports in the Loan File, and (where applicable) the
opinion of the Mortgagor's counsel, all improvements on the Mortgaged
Property comply with the applicable zoning laws and/or set-back
ordinances in force when improvements were added.
7. Assignment of Leases. Each assignment of leases and rents, if any,
creates a valid assignment of, or a valid security interest in, certain
rights under the related leases (to the extent permitted by the
applicable law of the jurisdiction in which the Mortgaged Property is
situated), subject only to a license granted to the relevant mortgagor
to exercise certain rights and to perform certain obligations of the
lessor under such leases, including the right to operate the related
Mortgaged Property, or if no such license is granted, then subject to
the interruption or loss of those rights upon the exercise by the
Mortgagee of its rights under the applicable laws relating to that
assignment of leases and rents, and in each case subject only to those
exceptions described in subsection 10(c)(7) of the Agreement and
Paragraph 2 above. To BAC's knowledge in reliance on the Title Policy
and the opinion of Mortgagor's counsel (if addressed therein) and
otherwise to BAC's actual knowledge, no person other than the relevant
Mortgagor owns any interest in any payments due under such leases that
is superior to or of equal priority with the mortgagee's interest
therein, subject only to those exceptions described in paragraph (2)
above.
8. First Mortgage Lien. Each Mortgage, upon due recordation, is a valid
and enforceable first lien on the related Mortgaged Property, subject
only to those exceptions described in Paragraph 2 above and, with
respect to Mortgages on Ground Leases, to those exceptions described in
Paragraph 17 below.
9. Recent Property Inspection. BAC has inspected or caused to be inspected
each Mortgaged Property within the past twelve months preceding the
date hereof.
10. Payment or Escrow for Taxes and Assessments. In reliance upon the
applicable Title Policy, all taxes and governmental assessments that
prior to the date of origination of the Mortgage Loan became due and
owing in respect of each Mortgaged Property have been paid, or an
escrow of funds in an amount sufficient to cover such payments has been
established or are insured against by the Title Policy issued in
connection with the origination of the Mortgage Loan.
11. Environmental Report. With respect to each Mortgaged Property, a Phase
I environmental report and, in certain cases, a Phase II environmental
report or an update to such Phase I report was conducted by a licensed
qualified engineer. BAC has reviewed each such report and update and
summarized such report in an underwriting summary delivered to Buyer at
the time funding is sought. BAC, having made no independent inquiry
other than reviewing the environmental reports and updates referenced
herein, has no knowledge of any material and adverse environmental
condition or circumstance affecting any Mortgaged Property that was not
disclosed in the related report and/or update. BAC has not received any
actual notice of a material
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violation of CERCLA or any applicable federal, state or local
environmental law with respect to any Mortgaged Property that was not
disclosed in the related report and/or update.
12. Litigation Searches. To BAC's knowledge in reliance on the litigation
searches in the Loan File and the warranties and representations of the
Mortgagor in the Mortgage Loan Documents (including, if addressed
therein, the opinion of Mortgagor's counsel), and without other
affirmative investigation or inquiry, there is no pending action, suit
or proceeding, arbitration or governmental investigation against the
Mortgagor or any Mortgaged Property an adverse outcome of which could
materially affect the Mortgagor's performance of its obligations under
the Mortgage Loan Documents.
13. Leases. If any Mortgaged Property is subject to any leases (other than
any Ground Lease referred to in Paragraph 18 below): (A) to the best of
BAC's knowledge (in reliance on the Title Policy and the Mortgagor's
representations and warranties in the Mortgage Loan Documents), the
Mortgagor is the owner and holder of the landlord's interest under any
leases, and (B) the related Mortgage and assignment of leases, rents
and profits, if any, provides for the appointment of a receiver for
rents or allows the mortgagee to enter into possession to collect rent
or provide for rents to be paid directly to mortgagee in the event of a
default, subject to the exceptions described in the Agreement and
Paragraph 2 above.
14. Deeds of Trust. If a Mortgage is a deed of trust, a trustee, duly
qualified under applicable law to serve as such, has been properly
designated and currently so serves and is named in the deed of trust,
and no fees or expenses are or will become payable to the trustee under
the deed of trust, except in connection with the sale or release of the
Mortgaged Property following default or payment of the loan.
15. Application of Insurance Proceeds. The Mortgage Loan Documents provide
that any insurance proceeds in respect of a casualty loss or taking
will be applied either to the repair or restoration of all or part of
the related Mortgaged Property, with the mortgagee or a trustee
appointed by it having the right to hold and disburse such proceeds
(provided that such proceeds exceed the threshold amount described in
the Loan Documents) as the repair or restoration progresses, or to the
payment of the outstanding principal balance of the Mortgage Loan
together with any accrued interest thereon, except to the extent of any
excess proceeds after restoration.
16. Flood Zone. In reliance upon the survey and the engineering and/or
environmental reports in the Loan File, no improvements comprising any
Mortgaged Property are located in a special flood hazard area as
defined by the Federal Insurance Administration (unless that fact has
been specifically disclosed to the Buyer in the Request for Purchase)
and the applicable flood insurance has been obtained and is in force
with respect thereto as required under the applicable Underwriting
Guidelines.
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17. Ground Leases. With respect to any Mortgage which is secured in whole
or in part by the interest of a borrower as a lessee under a Ground
Lease and in reliance upon the terms of the Ground Lease or an estoppel
letter (or another writing contained in the Loan File) from the ground
lessor, the following apply to such Ground Lease:
A. In reliance on the Title Policy, the Ground Lease or a memorandum
thereof has been duly recorded.
B. The Ground Lease does not prohibit the interest of the lessee
thereunder to be encumbered by the related Mortgage, does not
restrict the use of the Mortgaged Property by the lessee or its
successors and assigns in a manner that would materially adversely
affect the security provided by the related Mortgage, and (in
reliance on the representations of the Mortgagor in the Mortgage
Loan Documents and the Title Policy) there has not been a material
change in the terms of the Ground Lease since its recordation,
with the exception of written instruments which are part of the
related Mortgage Loan Documents delivered to the Custodian.
C. In reliance on the Title Policy, the Ground Lease is not subject
to any liens or encumbrances superior to, or of equal priority
with, the related Mortgage, other than the related ground lessor's
related fee interest (if that ground lessor's interest is not
subordinated to the related Mortgage).
D. BAC's interest in the Ground Lease is assignable to the holder of
the Mortgage upon notice to, but without the consent of, the
lessor thereunder and, in the event that it is so assigned, it is
further assignable by such holder and its successors and assigns
upon notice to, but without a need to obtain the consent of, such
lessor.
E. To the best of BAC's knowledge in reliance on the representations
and warranties in the Mortgage Loan Documents and estoppels, as of
the origination date of the Mortgage Loan, the Ground Lease was in
full force and effect and no material default had occurred under
the Ground Lease and there was no existing condition which, but
for the passage of time or the giving of notice, would result in a
default under the terms of the Ground Lease. No notice of default
under the Ground Lease has been received by BAC.
F. The Ground Lease requires the lessor thereunder to give notice of
any default by the lessee to the holder of the Mortgage and the
Ground Lease, or an estoppel letter (or similar writing) received
by BAC from the lessor, further provides that notice of
termination given under the Ground Lease is not effective against
the Mortgagee unless a copy of the notice has been delivered to
the Mortgagee in the manner described in such Ground Lease or
estoppel letter or similar writing.
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G. The Mortgagee is permitted a reasonable opportunity (including,
where necessary, reasonable time to gain possession of the
interest of the lessee under the Ground Lease) to cure any default
under the Ground Lease which is curable after the receipt of
notice of any default, before the lessor thereunder may terminate
the Ground Lease.
H. The Ground Lease either (i) has a term which extends not less than
10 years beyond the maturity date of the related Mortgage Loan or
(ii) grants the Lessee the option to extend the term of the lease
for a period (in the aggregate) which exceeds 10 years beyond the
maturity date of the related Mortgage Loan, or (with respect to
non-amortizing Mortgage Loans only) 35 years beyond the maturity
date of such non-amortizing Mortgage Loan.
I. In the case of any default that is not curable by the Mortgagee,
or in the event of bankruptcy or insolvency of the lessees under
the Ground Lease, the Mortgagee has the right to enter into a new
Ground Lease (upon identical financial terms and substantially
equivalent other terms) with the lessor upon termination of the
Ground Lease or rejection of the Ground Lease in a bankruptcy or
similar proceeding, provided the Mortgagee cures the lessee's
defaults to the extent they are curable.
J. Under the terms of the Ground Lease and the related Mortgage,
taken together, any related insurance proceeds (other than in
connection with a total or substantially total loss or taking)
will be applied first either to the repair or restoration of all
or part of the related Mortgaged Property, with the mortgagee or a
trustee appointed by it having the right to hold and disburse the
proceeds (provided that such proceeds exceed the threshold amount
described in the Loan Documents) as the repair or restoration
progresses (except in cases where a provision entitling another
party to hold and disburse those proceeds would not be viewed as
commercially unreasonable by an institutional investor), with any
balance of such insurance proceeds payable to Mortgagor or the
lessor, or to the payment of the outstanding principal balance of
the Mortgage Loan together with any accrued interest thereon.
K. Under the terms of the Ground Lease and the related Mortgage,
taken together, any related insurance proceeds in connection with
a total or substantially total loss or taking will be applied
first to the payment of the outstanding principal balance of the
Mortgage Loan together with any accrued interest thereon (except
in cases where a different allocation would not be viewed as
commercially unreasonable by an institutional investor, taking
into account the relative duration of the Ground Lease and the
related Mortgage and the ratio of the market value of the related
Mortgaged Property to the outstanding principal balance of the
Mortgage Loan, and except in cases described in clause (J) above);
and until such principal balance and accrued interest are paid in
full, neither the lessee nor the lessor under the Ground Lease
will have the right to
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terminate or modify the Ground Lease without the prior written
consent of the Mortgagee as a result of any such casualty or
condemnation, except to provide for an abatement of the rent.
L. Such Ground Lease does not impose any material restrictions on
subletting by the lessee for the use for which the Loan has been
underwritten.
M. Either the Ground Lease or the related Mortgage contains a
covenant that such Ground Lease shall not be amended in any manner
that would be materially adverse to the Mortgagee, or canceled or
terminated, without the prior written consent of the Mortgagee.
N. The lessor under the Ground Lease is not permitted in the absence
of an uncured default under the Ground Lease, to disturb the
possession, interest or quiet enjoyment of any lessee in the
relevant portion of the Mortgaged Property subject to such Ground
Lease for any reason, or in any manner, which would materially
adversely affect the security provided by the related Mortgage.
18. Commercial Property/Minimum Fair Market Value. (A) The Mortgage Loan is
directly secured by a Mortgage on a commercial real property, and (B)
the fair market value of such real property, as evidenced by an
appraisal conducted within 12 months of the origination of the Mortgage
Loan pursuant to its Underwriting Guidelines, was at least equal to the
lesser of the Loan-to-Value specified in the Underwriting Guidelines or
a Loan-to-Value of 80% (90% with respect to Bridge Mortgage Loans only)
(I) at origination (or if the Mortgage Loan has been modified in a
manner that constituted a deemed exchange under Section 1001 of the
Code at a time when the Mortgage Loan was not in default or default
with respect thereto was not reasonably foreseeable, the date of the
last such modification) or (II) at the related funding date; provided
that the fair market value of the real property interest must first be
reduced by (1) the amount of any lien on the real property interest
that is senior to the Mortgage Loan (unless such senior lien also
secures a Mortgage Loan, in which event the computation described in
(I) and (II) shall be made on an aggregated basis) and (2) a
proportionate amount of any lien that is in parity with the Mortgage
Loan (unless such other lien secures a Mortgage Loan that is
cross-collateralized with such Mortgage Loan, in which event the
computation described in (I) and (II) shall be made on an aggregate
basis).
19. Lawful Occupancy. To the best of BAC's knowledge in reliance upon the
engineering, appraisal and engineering reports in the Loan File as well
as written advice from applicable governmental authorities have
jurisdiction over the Mortgaged Property, certificates of occupancy and
building permits, as applicable, have been issued with respect to the
Mortgaged Property (except where the issuance or existence of those
certificates and/or permits cannot be confirmed by those local
authorities as a result of the age of the improvements and the
incomplete status of official records, but in that event those
authorities have not advised BAC that the absence of those certificates
or
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permits poses an impediment to the use or occupancy thereof as
underwritten or causes the Mortgaged Property to be in violation of the
current requirements of applicable laws and ordinances).
20. Assignments of Mortgage and Assignment of Rents. The related Assignment
of Mortgage constitutes a legal, valid and binding assignment of such
Mortgage to Buyer, and the related Reassignment of assignment of
leases, rents and profits, if any, constitutes a legal, valid and
binding assignment thereof to Buyer.
21. Sole Security and Absence of Cross-Collateralization. The related
Mortgage Note is not, and has not been since the date of origination of
the Mortgage Loan, secured by any collateral except the lien of the
related Mortgage, any related assignment of leases, rents and profits
and any related security agreement and escrow agreement; the security
for the Mortgage Loan consists only of the related Mortgaged Property
or Properties, any leases (including without limitation any credit
leases) thereof, and any appurtenances, fixtures and other property
located thereon; and such Mortgaged Property or Properties do not
secure any mortgage loan other than the Mortgage Loan being transferred
and assigned to Buyer hereunder (except for Mortgage Loans, if any,
which are cross-collateralized with other Mortgage Loans being conveyed
to Buyer or subsequent transferee hereunder and identified on the Loan
Schedule).
22. Licenses, Permits and Franchises. To BAC's knowledge, in reliance on
due diligence that it customarily performs in the origination of
comparable mortgage loans, as of the date of origination of each
Mortgage Loan, the related Mortgagor was in possession of all material
licenses, permits and franchises required by applicable law for the
ownership and operation of the related Mortgaged Property as it was
then operated.
23. SMMEA. In reliance on the Title Policy, the Mortgage Loan is directly
secured by a first lien on one or more parcels of real estate upon
which is located one or more commercial structures; and, to the extent
required by the applicable provisions of law, all Mortgage Loans
originated after September 2, 1998 were originated by a savings and
loan association, savings bank, commercial bank, credit union,
insurance company, or similar institution which is supervised and
examined by a Federal or State authority, or by a mortgagee approved by
the Secretary of Housing and Urban Development pursuant to Sections 203
and 211 of the National Housing Act.
24. Single Purpose Entities and Bankruptcy Remote Requirements. Unless
otherwise disclosed to and approved in writing by Buyer on a
case-by-case basis, each applicable Mortgagor is an entity whose
organizational documents provide that it is, and at least so long as
the Mortgage Loan is outstanding will continue to be, a single-purpose
entity. (For this purpose, "single-purpose entity" shall mean a person,
other than an individual, which is formed or organized solely for the
purpose of owning and operating a single property, does not engage in
any business unrelated to such property and its financing, does not
have any assets other than those related to its interest in the
property or its financing, or any indebtedness other than as permitted
by the related
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Mortgage or the other Mortgage Loan Documents, has its own books and
records and accounts separate and apart from any other person, and
holds itself out as being a legal entity, separate and apart from any
other person).
A. Non-Consolidation Opinion. A non-consolidation opinion was
obtained for each Mortgagor or affiliated group of
Mortgagors with respect to Mortgage Loans (or affiliated
groups of Mortgage Loans) with an aggregate original
principal balance in excess of $25,000,000.
B. Independent Director. The general partners or managing
members of each Mortgagor or affiliated group of Mortgagors
with respect to Mortgage Loans (or affiliated groups of
Mortgage Loans) having an aggregate original principal
balance in excess of $25,000,000 have an independent
director.
25. No Construction or Land Loans. The Mortgage Loan is not a construction loan
or a land loan.
26. Adjustable Rate Loans. Each adjustable rate Mortgage Loan contains a
provision requiring conversion to a fixed interest rate Mortgage Loan and
all rate adjustments have been performed in accordance with the terms of the
related Mortgage Note.
27. Securitization Standards. The Mortgage Loan conforms to current standards
for securitization.
28. No Other Collateral. The Mortgage Note is not and has not been secured by
any collateral except the lien of the corresponding Mortgage and the
security interest of any applicable security agreement, guaranty, or chattel
mortgage delivered to the Custodian for the benefit of Buyer.
29. No Subordinate Financing. There is no subordinate financing on the Mortgaged
Property.
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PART 2. REPRESENTATIONS AND WARRANTIES
REGARDING CREDIT LEASES.
BAC shall be deemed to make the following additional
representations and warranties to the Buyer with respect to each Mortgage Loan
sold in a Transaction hereunder as to which there is a Credit Lease, as of the
related Purchase Date and as of each day such Transaction is in effect and
except as shall be specifically disclosed in the schedule attached to the
Confirmation. With respect to any representations and warranties made to the
best of BAC's knowledge, to BAC's knowledge or in reliance on or based on
information, in the event that it is discovered that the circumstances with
respect to the related Mortgage Loan are not accurately reflected in such
representation and warranty notwithstanding the actual knowledge or lack of
knowledge of BAC, then, notwithstanding that such representation and warranty is
made to the best of BAC's knowledge, to BAC's knowledge or in reliance on or
based on information, the Market Value of such Mortgage Loans may, in the
Buyer's sole good faith discretion, be reduced to zero.
1. Insurance and Obligation to Restore. The Credit Tenants under the
applicable Credit Leases are obligated to restore the Mortgaged
Property or purchase the Mortgaged Property in an amount sufficient to
prepay the Mortgage Note in full in the event of major casualty and
such Credit Tenants have complied in with the self insurance provisions
contained in the applicable Credit Leases or the Mortgaged Property is
insured by a fire and extended perils insurance policy, issued by a
Qualified Insurer consistent with the Loan Eligibility Requirements,
including against earthquake risks, in an amount equal to not less than
the greatest of (i) 100% of the replacement cost of all improvements to
the Mortgaged Property, or (ii) the amount necessary to avoid the
operation of any co-insurance provisions with respect to the Mortgaged
Property, and consistent with the amount that would have been required
as of the date of origination in accordance with the Loan Eligibility
Requirements. If any portion of the Mortgaged Property is in an area
identified by any federal Governmental Authority as having special
flood hazards, and flood insurance is available, a flood insurance
policy in an amount representing coverage not less than the least of
(1) the full insurable value of the Mortgaged Property, and (2) the
maximum amount of insurance available under the Flood Disaster
Protection Act of 1973, as amended. All such insurance policies
(collectively, the "hazard insurance policy") contain a standard
mortgagee clause naming BAC, its successors and assigns (including
without limitation, subsequent owners of the Mortgage Loan), as
mortgagee, and may not be reduced, terminated or canceled without 30
days' prior written notice to the mortgagee. No such notice has been
received by BAC. All premiums due on such insurance policy have been
paid. The related Credit Lease obligates the Credit Tenant to maintain
such insurance or permits the Credit Tenant to self insure subject to
standard conditions for Credit Leases. The related Mortgage obligates
the Mortgagor to maintain all such insurance and, at such Mortgagor's
failure to do so, authorizes the mortgagee to maintain such insurance
at the Mortgagor's cost and expense and to seek reimbursement therefor
from such Mortgagor. Where required by state law or regulation, the
Mortgagor has been
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given an opportunity to choose the carrier of the required hazard
insurance. To the best of BAC's knowledge, the hazard insurance policy
is the valid and binding obligation of the insurer and is in full force
and effect. BAC has not engaged in, and has no knowledge of the
Mortgagor's or the Credit Tenant's having engaged in, any act or
omission which would impair the coverage of any such policy, the
benefits of the endorsement provided for herein, or the validity and
binding effect of either including, without limitation, to the best of
BAC's knowledge, no unlawful fee, commission, kickback or other
unlawful compensation or value of any kind has been or will be
received, retained or realized by any attorney, firm or other Person,
and to the best of BAC's knowledge, no such unlawful items have been
received, retained or realized by BAC.
2. Single Parcel and Use by Tenant. Except as disclosed by BAC to the
Buyer, the Mortgaged Property consists of a single parcel of real
property upon which is located one or more commercial structures. The
Mortgaged Property is being or will be used by the Credit Tenant for
the purpose set forth in the related Credit Lease.
3. Permitted and Prohibited Uses. The Credit Lease permits the Credit
Tenant to use the Mortgaged Property for any lawful purpose. Pursuant
to the Credit Lease, the Credit Tenant is prohibited from using the
Mortgaged Property in a manner which would (i) violate any certificate
of occupancy or equivalent certificate affecting any of the Mortgaged
Property, (ii) make void or voidable any insurance then in effect with
respect to any of the Mortgaged Property, (iii) materially and
adversely affect in any manner the ability of Credit Tenant to obtain
fire and other insurance which Credit Tenant is required to furnish
under the Credit Lease, (iv) cause any injury or damage to the
improvements thereon, or (v) constitute a public or private nuisance or
waste.
4. Mortgagor as Owner. The related Mortgagor is the owner and holder of
the landlord's interest under any lease for use and occupancy of all or
any portion of the related Mortgaged Property including without
limitation the related Credit Lease. The Mortgagor has not made any
assignments of the landlord's interest in any such lease or any portion
of the rents, additional rents, charges, issues or profits due and
payable or to become due and payable under any such lease, which
assignments are presently outstanding other than the assignment of
leases from the Mortgagor to BAC. The assignment of leases and/or rents
establishes and creates a valid and enforceable first priority security
interest on the leases affecting the Mortgaged Property including
without limitation the related Credit Lease except as enforceability
may be limited by bankruptcy or other laws affecting creditor's rights
generally or by the application of the rules of equity.
5. Credit Lease Terms. As to each Mortgage Loan secured by Mortgaged
Property which is leased to a Credit Tenant: (1) Each such Mortgaged
Property is leased to a Credit Tenant pursuant to a Credit Lease.
Mortgagee and Credit Tenant have agreed in writing that all payments of
rent due under the related Credit Lease shall be made directly to BAC
or BAC's designee. The base rent payable by the Credit Tenant under
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the Credit Lease is sufficient to pay all interest payable under the
related Mortgage Loan and to fully amortize all principal payable under
the related Mortgage Loan. The maturity date of the related Mortgage
Loan occurs simultaneously with or before the expiration date of the
related Credit Lease. Under the terms of the Credit Lease, the Credit
Tenant is obligated to (i) pay all real estate taxes, (ii) maintain
casualty insurance policies or qualify for self-insurance and (iii)
maintain and repair the Mortgaged Property. (2) The Mortgaged Property
is not subject to any leases other than the Credit Lease. No Person has
any possessory interest in the Mortgaged Property or right to occupy
the same except under and pursuant to the provisions of the Credit
Lease. (3) With respect to any Credit Lease having the benefit of a
non-disturbance or similar recognition agreement, there are no
circumstances or conditions with respect to the Mortgage, the Mortgaged
Property, and Mortgagor, any Credit Tenant (alone or considered with
other tenants) of the Mortgaged Property, or the Mortgagor's or any
Credit Tenant's credit standing that would cause prudent mortgage
lenders making loans similar to the Mortgage Loan in the area in which
the Mortgaged Property is located to refuse to grant such
non-disturbance or similar recognition agreement. (4) There are no
recorded assignments of the Credit Leases or of any portion of the
rents, additional rents, charges, issues or profits due and payable or
to become due and payable thereunder (hereinafter collectively referred
to as the "Rents") which are now outstanding (other than the assignment
to BAC of record or to be recorded in connection with the Mortgage
Loan). (5) Except under circumstances where the Credit Tenant is
obligated to pay an amount not less than the outstanding principal
balance of the applicable Mortgage Loan, no Credit Lease contains any
option to purchase, any right of first refusal to lease or purchase,
any express right to terminate the Credit Lease or vacate the premises
prior to expiration of the lease term, or any express right to ▇▇▇▇▇ or
defer rent or any other similar provisions which adversely affect the
Mortgaged Property or which might adversely affect the rights of any
holder of the Mortgage Loan. All of the Credit Leases are in full force
and effect and have not been modified or amended other than by
documents contained in the Loan File, and the Loan File contains true
and complete copies of the Credit Leases. (6) The Credit Leases do not
require the landlord or the holder of the landlord's interest to
rebuild, construct or repair any damages or destruction to the leased
premises or to compensate for a condemnation of part or all of the
leased premises but do provide that the Mortgagor will make proceeds
and awards available to the Credit Tenant for such purposes under
certain circumstances. (7) The Mortgagor has certified that neither the
Mortgagor (landlord) nor to its knowledge any Credit Tenant under the
Credit Leases is in default under any of the terms, covenants or
provisions of the Credit Leases and BAC knows of no event which, but
for the passage of time or the giving of notice or both, would
constitute an event of default under any of the Credit Leases.
6. No Material Contracts. To the best of BAC's knowledge, there are no
material contracts (other than management contracts, the Credit Lease
and recorded exceptions to title) affecting the Mortgaged Property that
are not terminable on one month's notice or less without cause and
without penalty or premium.
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7. Subordination of Credit Lease and/or Subleases. The Credit Lease is
either subordinate in right to the related Mortgage, subject to a
non-disturbance and attornment provision, or is senior in right to the
Mortgage; any subleases entered into by the Credit Tenant will be
subject and subordinate to the Credit Lease and will not relieve the
Credit Tenant of its obligations under the Credit Lease; in the event
that the Buyer acquires title to a Mortgaged Property by foreclosure or
otherwise, the lessor's interest under the related Credit Lease is
freely assignable by the Buyer and its successors and assigns to any
person without the consent of the Credit Tenant, and, in the event the
lessor's interest is so assigned, the Credit Tenant will be obligated
to recognize the assignee as lessor under such Credit Lease.
8. Notification by Credit Tenant to Mortgagee. Each Credit Tenant has
agreed to notify the related mortgagee of any default under the related
Credit Lease.
9. Sole Collateral. The Mortgage Note is not and has not been secured by
any collateral except the lien of the corresponding Mortgage and the
assignment of the Credit Lease, as applicable and such other Collateral
as is disclosed as part of the Loan File.
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PART 3. REPRESENTATIONS AND WARRANTIES
REGARDING MH LOANS.
The applicable Seller (either MHFC or Dynex) shall be deemed to
make the following representations and warranties to the Buyer with respect to
each MH Loan sold in a Transaction hereunder, as of the related Purchase Date
and as of each day such Transaction is in effect and except as shall be
specifically disclosed in the schedule attached to the Request for Purchase.
With respect to any representations and warranties made to the best of the
applicable Seller's knowledge, to the applicable Seller's knowledge or in
reliance on or based on information, in the event that it is discovered that the
circumstances with respect to the related Mortgage Loan are not accurately
reflected in such representation and warranty notwithstanding the actual
knowledge or lack of knowledge of the applicable Seller, then, notwithstanding
that such representation and warranty is made to the best of the applicable
Seller's knowledge, to the applicable Seller's knowledge or in reliance on or
based on information, the Market Value of such Mortgage Loans may, in the
Buyer's sole good faith discretion, be reduced to zero.
1. Fixed and Adjustable Rate MH Loans. For MH Loans that have a fixed APR,
the finance charge was computed using a fixed rate. Adjustable rate MH
Loans are not convertible to fixed interest rate MH Loans.
2. Payment Terms. The MH Loan is not a graduated payment Loan. With
respect to fixed rate MH Loans, the MH Loan provides for equal Monthly
Payments of principal and interest that fully amortize the loan over
its term. With respect to adjustable rate MH Loans, the Loan Interest
Rate is adjusted, on each Loan Interest Rate Adjustment Date to equal
the Index plus the Gross Margin, subject to the Loan Interest Rate Cap,
with interest calculated and payable in arrears, sufficient to amortize
the MH Loan fully by the stated maturity date, over an original term of
not exceeding the approved term of the Loan under the applicable
Underwriting Guidelines. Notwithstanding the foregoing, MH Loans may
provide for regularly scheduled payments twice a month, determined and
established in the same manner as Monthly Payments (except for the
frequency of installments, with respect to such twice monthly
payments).
3. Required Hazard Insurance Policies. The Manufactured Home is insured by
a fire and extended perils insurance policy, issued by a company
authorized to issue such policies in the state in which the related
Manufactured Home is located, and is also insured against losses from
theft, collision, water and weather damage and such other hazards as
are customary in the area where the Manufactured Home is located, and,
to the extent required by the applicable Seller as of the date of
origination consistent with the Underwriting Guidelines, against
earthquake and other risks insured against by Persons operating like
properties in the locality of the Manufactured Home, issued by a
company authorized to issue such policies in the state in which the
Manufactured Home is located, and in an amount which is equal to the
replacement cost of the Manufactured Home plus Add-ons, provided that
such insurance policy may provide for customary
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deductible amounts, and further provided that the amount of coverage
provided by each such policy shall be sufficient to avoid the
application of any co-insurance clause contained therein. If any
portion of the Manufactured Home is located within a federally
designated special flood hazard area, the applicable Seller shall also
cause flood insurance which meets the current federal guidelines to be
maintained with a generally accepted insurance carrier, in an amount
representing not less than the least of (1) the outstanding principal
balance of the Loan, (2) the full insurable value of the Manufactured
Home, and (3) the maximum amount of insurance available under the Flood
Disaster Protection Act of 1973, as amended. All such insurance
policies (each a "Hazard Insurance Policy") contain a standard loss
payee clause naming the applicable Seller, its successors and assigns
(including without limitation, subsequent owners of the MH Loan, as
loss payee, and may not be reduced, terminated, or canceled without 30
days prior written notice to the loss payee. No such notice has been
received by the applicable Seller. The Hazard Insurance Policy is the
valid and binding obligation of the insurer and is in full force and
effect. The applicable Seller has not engaged in, and has no knowledge
that the Obligor has engaged in, any act or omission which would impair
the coverage of any such policy, the benefits of the endorsement
provided for herein, or the validity and binding effect of either,
including without limitation, no unlawful fee, commission, kickback, or
other unlawful compensation or value of any kind has been or will be
received, retained or realized by any attorney, firm or other Person,
and no such unlawful items have been received, retained, or realized by
the applicable Seller. Where required by state law or regulation, the
Obligor has been given an opportunity to choose the carrier of the
required Hazard Insurance Policy.
4. Insurance Premiums Paid. All premiums due on all Hazard Insurance
Policies have been paid in full. If any Obligor is in default in the
payment of premiums on its Hazard Insurance Policy or Policies, and if
the applicable Seller elects to have the MH Loan continue to be a
Purchased Loan and does not substitute that Purchased Loan with another
Eligible Loan, the applicable Seller shall pay such premiums on that
policy or a replacement policy out of its own funds, and may add
separately such premium to the Obligor's obligation as provided by the
MH Loan, but may not add such premium to the remaining principal
balance of the MH Loan for purposes of this Agreement. If the Obligor
does not reimburse the applicable Seller for payment of such premiums
and the related MH Loan is liquidated after a default, the applicable
Seller shall be reimbursed for its payment of such premiums out of the
related liquidation proceeds. The applicable Seller may, in lieu of
causing individual Hazard Insurance Policies to be maintained with
respect to each Manufactured Home, and shall, to the extent that the
related MH Loan does not require the Obligor to maintain a Hazard
Insurance Policy with respect to the related Manufactured Home,
maintain one or more blanket insurance policies covering losses as
required under Section 3 above, resulting from the absence or
insufficiency of individual Hazard Insurance Policies. Any such blanket
policy shall be substantially in the form that is customary for blanket
insurance policies issued to cover Manufactured Homes and in the amount
sufficient to cover all losses on the MH Loans. The applicable Seller
shall pay, out of its own funds, the premium for such policy on the
basis described therein and shall deposit in the designated Blocked
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Account on the Business Day next preceding the Payment Date following
the Monthly Period in which the insurance proceeds from claims in
respect of any MH Loans under such blanket policy are or should have
been received, the deductible amount with respect to such claims. The
applicable Seller shall not, however, be required to deposit any
deductible amount with respect to claims under individual Hazard
Insurance Policies. If the applicable Seller shall have repossessed a
Manufactured Home on behalf of the Buyer, the applicable Seller shall
either (x) maintain at its expense a Hazard Insurance Policy with
respect to such Manufactured Home, except that the applicable Seller
shall be responsible for depositing any deductible amount with respect
to all claims under such individual Hazard Insurance Policies (at the
time when the proceeds under any such policy are received), or (y)
indemnify the Buyer against any damage to such Manufactured Home prior
to resale or other disposition that would have been covered by such
Hazard Insurance Policy. Any cost incurred by the applicable Seller in
maintaining any of the foregoing insurance may be added to the amount
owing under the MH Loan under this Agreement. However, such costs
(other than the cost of the blanket policy) shall only be recovered out
of later payments by the Obligor for such premiums or, if the related
contract is liquidated after a default, out of the related liquidation
proceeds.
5. No Defense to Insurance Coverage. No action has been taken or failed to
be taken, no event has occurred and no state of facts exists or has
existed on or prior to the Purchase Date (whether or not known to the
applicable Seller on or prior to such date) which has resulted or will
result in an exclusion from, denial of, or defense to coverage under
any insurance policy (including, without limitation, any exclusions,
denials or defenses which would limit or reduce the availability of the
timely payment of the full amount of the loss otherwise due thereunder
to the insured) whether arising out of actions, representations,
errors, omissions, negligence, or fraud of the applicable Seller, or to
the best of the applicable Seller's knowledge the related Obligor or
any party involved in the application for such coverage, including the
appraisal, plans and specifications and other exhibits or documents
submitted therewith to the insurer under such insurance policy, or for
any other reason under such coverage, but not including the failure of
such insurer to pay by reason of such insurer's breach of such
insurance policy or such insurer's financial inability to pay. Except
as shall otherwise be disclosed to and approved by Buyer (in connection
with the lawful sale or placement of insurance by an Affiliate of the
applicable Seller), in connection with the placement of any insurance,
no commission, fee, or other compensation has been or will be received
by the applicable Seller or by any officer, director or employee of the
applicable Seller or any designee of the applicable Seller or any
corporation in which the applicable Seller or any officer, director, or
employee had a financial interest at the time of placement of such
insurance. The applicable Seller shall disclose any waiver, alteration
or modification of any terms of the MH Loan to the issuer of any
related insurance policy, to the extent required by such policy.
6. Occupancy of the Manufactured Home. As of the related Purchase Date the
Manufactured Home is situated on land that permits its lawful
occupation for residential
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purposes, and the applicable Seller has no knowledge of any unlawful
occupation thereof. All inspections, licenses and certificates required
to be made or issued with respect to all occupied portions of the
Manufactured Home and with respect to the use and occupancy of the
same, including but not limited to certificates of occupancy and fire
underwriting certificates, have been made or obtained from the
appropriate authorities. All approvals for placing the Manufactured
Home on the site it occupies have been obtained. The applicable Seller
has not received notification from any governmental authority that the
Manufactured Home is in material non-compliance with such laws or
regulations, is being used, operated or occupied unlawfully or has
failed to have or obtain such inspection, licenses or certificates, as
the case may be. The applicable Seller has not received notice of any
violation or failure to conform with any such law, ordinance,
regulation, standard, license or certificate. Except with respect to
Manufactured Homes that represent 5% of the Purchase Price of all
Manufactured Homes subject to Transactions at any given time, the
Obligor represented at the time of origination of the MH Loan that the
Obligor would occupy the Manufactured Home as the Obligor's primary
residence.
7. MH Loan not Assumable. The MH Loan is not assumable by another Person
in a manner that would release the Obligor thereof from such Obligor's
obligations with respect to such MH Loan.
8. No Excluded Obligors. No Obligor is (a) an Affiliate of the applicable
Seller, (b) a Governmental Authority, or (c) not a resident of the
United States.
9. Valid First Lien on Manufactured Home. Each MH Loan, and any security
agreement, chattel paper or equivalent document related thereto and
delivered in connection with the Manufactured Home, creates a valid and
binding, subsisting, enforceable, perfected first priority security
interest and lien on the Manufactured Home described therein, including
all Add-ons, in favor of the applicable Seller and the applicable
Seller has full right to pledge and assign the same to Buyer. In the
case of a Land-and-Home Contract, the MH Loan creates a valid and
binding, subsisting, enforceable, first mortgage lien on the related
Mortgaged Property.
10. Chattel Paper. Each MH Loan (other than Mortgaged Property securing a
Land-and-Home Loan) constitutes chattel paper under the applicable
UCC.
11. Notation of Security Interest/Assignment of Land-and-Home Loans. If the
related Manufactured Home is located in a state in which notation of a
security interest on the Lien Certificate is required or permitted to
perfect such security interest, the Lien Certificate shows, or if a new
or replacement Lien Certificate with respect to such Manufactured Home
is being applied for, such Lien Certificate will be issued within 180
days of the date of the origination of the related MH Loan and will
show the applicable Seller as the holder of a first priority security
interest in such Manufactured Home. With respect to a MH Loan for which
the Lien Certificate has not yet been returned from the Registrar of
Titles, the Buyer has received written evidence satisfactory to the
Buyer that
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such Lien Certificate showing the applicable Seller as first lienholder
has been applied for. If the related Manufactured Home is located in a
state in which the filing of a financing statement under the UCC is
required to perfect a security interest in a Manufactured Home, such
filings or recordings have been duly made and show the applicable
Seller as secured party. If the related Manufactured Home secures a
Land-and-Home Loan and is located in a state that does not permit
separate evidence of a Lien on the Manufactured Home and the property
on which it is located, such Manufactured Home and the related land
securing the Land-and-Home Loan are subject to a Mortgage properly
filed or to be filed within 10 days in the appropriate public recording
office and naming the applicable Seller as original mortgagee, and the
applicable Seller has delivered to Buyer an Assignment of Mortgage with
respect thereto. In either case, the Buyer has the same rights as the
secured party of record would have (if such secured party were still
owner of the MH Loan) against all Persons (including the applicable
Seller and any trustee in bankruptcy of the applicable Seller) claiming
any interest in such Manufactured Home. Immediately after the
assignment of the security interest in the Manufactured Home and/or
Mortgage on the related Mortgaged Property, as the case may be, to the
Buyer, such MH Loan will be secured by an enforceable and (subject to
the last sentence of this paragraph) perfected first priority security
interest in the Manufactured Home and/or first mortgage lien on the
Mortgaged Property, as the case may be, in favor of the Buyer, as
secured party or mortgagee, which security interest or Mortgage is
prior to all Liens upon such Underlying Asset which now exist or may
hereafter arise or be created (except as to priority, for any Lien for
taxes, labor or materials affecting a Manufactured Home, and, in the
case of the Mortgage, for (A) the Lien of current real property taxes
and assessments, if any, and (B) covenants, conditions and
restrictions, rights of way, easements and other matters of public
record as of the date of origination, such exceptions appearing on
record being acceptable to mortgage lending institutions generally in
the area where the property subject to Mortgage is located or
specifically reflected in the appraisal obtained in connection with the
origination of the related Land-and-Home Loan, and (C) other matters to
which like Properties are commonly subject which do not materially
interfere with the benefits of the security interest intended to be
provided by such Mortgage). Where, in accordance with prevailing custom
in a state and the manufactured home financing industry, Buyer does not
complete all filings and/or recordings necessary to finally and
unconditionally perfect of record its Lien on the Manufactured Home
and/or MH Contract, the Facility Documents unconditionally delivered by
the applicable Seller to Buyer or the Custodian are legally sufficient,
and empower and authorize Buyer, to complete all such actions, steps
and procedures to fully perfect that security interest and/or transfer
at any time, or from time-to-time, without further notice to, consent
by or participation of the applicable Seller, and the applicable Seller
is bound by the Agreement to take all actions required by Buyer, and to
pay for all costs and expenses incurred by Buyer, in connection
therewith.
12. Consolidation of Future Advances. Any future advances made to the
Obligor prior to the Purchase Date have been consolidated with the
outstanding principal amount secured by the Underlying Asset, and the
secured principal amount, as consolidated,
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bears a single interest rate and single repayment term. The lien of the
Mortgage, if any, securing the consolidated principal amount is
expressly insured as having first lien priority by a title insurance
policy or an endorsement to the policy insuring the mortgagee's
consolidated interest. The consolidated principal amount does not
exceed the original principal amount of the MH Loan.
13. Costs and Expenses Paid; Rebates; No Additional Services. All costs,
fees, and expenses incurred by the Qualified Originator in making or
closing the MH Loan and the recording of the MH Loan were paid, and the
Obligor is not entitled to any refund of any amounts paid or due under
the MH Loan (other than lawful customary dealer or MHFC rebates
conforming to the MH Underwriting Guidelines). The MH Loan is not
subject to the performance of additional services by any Person, except
with respect to MH Loans that represent not more than 1% of the
aggregate Purchase Price of outstanding Transactions, and not more than
10% of the Market Value of such MH Loan, which amount shall be
deposited in the designated Blocked Account, to be disbursed within
sixty (60) days of the initial Purchase Date for such MH Loan pursuant
to the Distribution Worksheet.
14. One Original. Except with respect to the State of Colorado, or as
otherwise notified to Buyer in writing, there is only one original
executed Dealer Financing Agreement or MH Contract, which original
Dealer Financing Agreement or MH Contract (or copy thereof accompanied
by a lost Dealer Financing Agreement or MH Contract affidavit) has been
delivered to the Custodian as part of the Loan File for such MH Loan on
or before the Purchase Date. In the State of Colorado, there are two
originals, the second of which is attached to the title transfer
documents. The MH Loan has an assignment in blank attached to it that
has been delivered to the Custodian, and which may be completed by
Buyer (or its agents or designees at Buyer's direction).
15. Not Real Estate. Except in connection with qualified Land-and-Home MH
Loans, the related Manufactured Home (i) is personal property and is
not considered or classified as part of the real estate on which it is
located under the laws of the jurisdiction in which it is located and
(ii) was personal property and was not considered or classified as part
of the real estate on which it was located under the laws of the
jurisdiction in which it was located at the time the related MH Loan
was executed by the parties thereto.
16. Appraisal. In connection with MH Loans secured by Pre-owned
Manufactured Homes, the Loan File contains either (i) an appraisal of
the related Manufactured Home signed prior to the approval of the MH
Loan application by a qualified appraiser, duly appointed by the
applicable Seller or Qualified Originator of the MH Loan, who had no
interest, direct or indirect in the Underlying Asset or in any loan
made on the security thereof, other than as an employee of the
applicable Seller, and whose compensation is not affected by the
approval or disapproval of the MH Loan, and the appraisal and appraiser
both satisfy the requirements of Title XI of the Federal Institutions
Reform, Recovery, and Enforcement Act of 1989 and the regulations
promulgated thereunder, all as in effect on the date the MH Loan was
originated or (ii) a conforming ▇▇▇▇
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102
Retail Value appraisal by an employee of the applicable Seller in
conformance with the applicable Underwriting Guidelines.
17. REMIC. Each MH Loan is secured by "manufactured housing" within the
meaning of ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ Code, Section 25(e)(10) and, except for the
fact that it is not real property, is otherwise a "qualified mortgage"
within the meaning of ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ Code, Section 860G(a)(3), if
made subject to a purchase and sale transaction therein.
18. SMMEA. The related Manufactured Home is a "manufactured home" within
the meaning of ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ Code, Section 5402(6). For MH Loans
originated by Dynex, or MH Loans originated by MHFC on or after March
31, 2000, the MH Loan was originated by a savings and loan association,
savings bank, commercial bank, credit union, insurance company, or
similar institution which is supervised and examined by a Federal or
State authority, or by a mortgagee approved by the Secretary of Housing
and Urban Development pursuant to Sections 203 and 211 of the National
Housing Act.
19. Purchase of MH Loans. Each acquisition of MH Loans under a Loan
Transfer Agreement or this Agreement will constitute (A) a "current
transaction" within the meaning of Section 3(a)(3) of the Securities
Act of 1933, as amended, and (B) a purchase or other acquisition of
notes, drafts, acceptances, open accounts receivable or other
obligations representing part or all of the sales price of merchandise,
insurance or services within the meaning of Section 3(c)(5) of the
Investment Company Act of 1940, as amended.
20. Manufactured Home on Permanent Site. The MH Loan provides that the
Obligor shall not move the Manufactured Home from the site described in
the MH Loan without the applicable Seller prior consent.
21. Loan Transfer Agreement. The applicable Seller hereby certifies that
(A) the benefits of the representations and warranties of any Qualified
Originator (if not the applicable Seller) under a Loan Transfer
Agreement, and of the Obligor under the Dealer Financing Agreement or
MH Contract have been assigned to the Buyer; (B) the rights of the
applicable Seller under the Loan Transfer Agreement and under the
Dealer Financing Agreement or MH Contract are enforceable by the Buyer,
subject to the exceptions described in Section 10(c)(7) of the
Agreement; and (C) the Loan Transfer Agreement and the Dealer Financing
Agreement or MH Contract provide that the representations, warranties
and covenants described therein shall survive the sale of the MH Loans
and the termination of the Loan Transfer Agreement and this Agreement.
22. Location and Type of Manufactured Home. The Manufactured Loan is
located in a state acceptable to the Buyer as identified in the Loan
Schedule. No portion of the Manufactured Home is used for commercial
purposes.
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23. Federal Safety Standards. The Manufactured Home is built to federal
safety standards applicable thereto at the date of its manufacture.
24. Refinanced MH Loans. At the time of originations, the principal balance
of each MH Loan which was refinanced by the applicable Seller did not
exceed the then outstanding principal balance of such MH Loan together
with all insurance premiums and refinancing costs, other than cash-out
refinancings that are permitted under the Underwriting Guidelines.
25. Soldiers' and Sailors' Civil Relief Act. The Obligor has not notified
the applicable Seller, and the applicable Seller has no knowledge, of
any relief requested or allowed to the Obligor under the Soldiers' and
Sailors' Civil Relief Act of 1940.
26. Disclosure Materials. The Obligor has executed a statement to the
effect that the Obligor has received all disclosure materials required
by applicable law with respect to the making of the Loan, and the
applicable Seller maintains such statement in the Loan File.
27. Hazardous Sites. To Seller's knowledge, no Underlying Asset was, as of
the Purchase Date or, with respect to Additional Loans or Substituted
Loans, as of the related date of addition or substitution, located
within a one-mile radius of any site listed in the National Priorities
List as defined under CERCLA, or on any similar state list of hazardous
waste sites which are known to contain any hazardous substance or
hazardous waste.
Land-and-Home Loans Only. In addition to meeting the above representation, as to
each MH Loan which is a Land-and-Home Loan:
A. Real Property. The Manufactured Home is considered real
property.
B. PMI. All provision of the PMI policy have been and are being
complied with, such policy is in full force and effect, and
all premiums due thereunder have been paid. Any Land-and-Home
Loan subject to a PMI Policy obligates the Mortgagor
thereunder to maintain the PMI Policy with a Qualified
Insurer and to pay all premiums and charges in connection
therewith.
C. Title insurance policy. Each related Mortgage is covered by a
generally acceptable title insurance policy issued by and
constituting a valid and binding obligation of a generally
acceptable title insurance company qualified to do business
in the jurisdiction where the Underlying Asset is located and
generally acceptable to prudent lenders that regularly
originate or purchase loans comparable to the Land-and-Home
Loans for sale to prudent investors in the secondary market
that invest in loans such as the Land-and-Home Loans,
insuring (subject only to (A) the Lien of current real
property taxes and assessments not yet due and payable, (B)
covenants, conditions and restrictions, rights of way,
easements and other matters of public record as of the
Purchase Date, such exceptions appearing of
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record being acceptable to mortgage lending institutions
generally in the area wherein the property subject to the
Mortgage is located or specifically reflected in the
appraisal obtained by the Mortgagor in connection with the
origination of the related Land-and-Home Loan and (C) other
matters to which like properties are commonly subject which
do not materially interfere with the benefits of the security
intended to be provided by such Mortgage) the applicable
Seller, its successors and assigns as to the first priority
lien of the Mortgage in the original principal amount of the
MH Loan. The applicable Seller and its successors and assigns
are the sole insureds of such title insurance policy, the
assignment to Buyer or Custodian as assignee or Buyer of the
applicable Seller's interest in such title insurance policy
does not require the consent of or notification to the
insurer or the same has been obtained and such title
insurance policy is in full force and effect, and will be in
full force and effect and inure to the benefit of the Buyer
upon the consummation of the purchase of the related Mortgage
by Buyer in accordance herewith. No claims have been made
under such title insurance policy, and no prior holder of the
related Mortgage, including the applicable Seller, has done,
by act or omission, anything which would impair the coverage
of such title insurance policy. If the required title
insurance policy has not yet been issued, a policy meeting
the foregoing requirements is evidenced by a commitment for
title insurance "marked up" at the closing of that Loan.
D. Location of Improvements; No Encroachments. With the
exception of incidental encroachments that do not have a
Material Adverse Effect on the Market Value or Securitization
Value of the Loan, all improvements which were considered in
determining the value of the related Underlying Asset lay
wholly within the boundaries and building restriction lines
of the Underlying Asset, and no improvements on adjoining
properties encroach upon the Underlying Asset. No improvement
located on or forming part of the related Underlying Asset is
in violation of any applicable zoning and subdivision laws
and ordinances.
E. Deeds of Trust. In the event the Mortgage, if any,
constitutes a deed of trust, a trustee, authorized and duly
qualified under applicable law to serve as such, has been
properly designated and currently so serves and is named in
the Mortgage, and no fees or expenses are or will become
payable by the Buyer or its designee or the Buyer to the
trustee under the deed of trust, except in connection with a
trustee's sale after default by the Obligor.
F. Assignment of Mortgage. The Assignment of Mortgage, if any,
is in recordable form and is acceptable for recording under
the laws of the jurisdiction in which the Underlying Asset is
located.
G. Affixed to Foundation. The Manufactured Home is permanently
affixed to a foundation and its wheels and axles have been
removed.
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PART 4. REPRESENTATIONS AND WARRANTIES
REGARDING FLOORPLAN LOANS.
The applicable Seller (BAC or Dynex, as applicable) shall be deemed to
make the following representations and warranties to the Buyer with respect to
each Floorplan Loan sold in a Transaction hereunder, as of the related Purchase
Date and as of each day such Transaction is in effect and except as shall be
specifically disclosed in the schedule attached to the Request for Purchase.
With respect to any representations and warranties made to the best of the
applicable Seller's knowledge, to the applicable Seller's knowledge or in
reliance on or based on information, in the event that it is discovered that the
circumstances with respect to the related Floorplan Loan are not accurately
reflected in such representation and warranty notwithstanding the actual
knowledge or lack of knowledge of the applicable Seller, then, notwithstanding
that such representation and warranty is made to the best of the applicable
Seller's knowledge, to the applicable Seller's knowledge or in reliance on or
based on information, the Market Value of such Floorplan Loans may, in the
Buyer's sole good faith discretion, be reduced to zero.
1. Adjustable APR. The Floorplan Loan has an adjustable APR and the APR
is greater than the Prime Rate.
2. Payment Terms. The Floorplan Loan is not a graduated payment Loan.
With respect to adjustable rate Floorplan Loans, the Loan Interest
Rate is adjusted, on each Loan Interest Rate Adjustment Date to equal
the Index plus the Gross Margin, subject to any Loan Interest Rate
Cap, with interest calculated and payable in arrears, sufficient to
amortize the Floorplan Loan fully by the stated maturity date, over an
original term of not exceeding the approved term of the Loan under the
applicable Underwriting Guidelines..
3. Loan Programs. The Floorplan Loan arises under a transaction
originated under a Dealer Financing Agreement that complies with all
requirements of law, with an approved Dealer under an Floorplan Loan
program approved by Buyer, with full recourse to such Dealer,
supported by guarantees from one or more principals of such Dealer.
4. Required Hazard Insurance Policies. Each Manufactured Home securing a
Floorplan Loan is insured by a fire and extended perils insurance
policy, issued by a company authorized to issue such policies in the
state in which the related Underlying Asset is located, and is also
insured against losses from theft, collision, water and weather damage
and such other hazards as are customary in the area where the
Manufactured Home is located, and, to the extent required by the
applicable Seller as of the date of origination consistent with the
Underwriting Guidelines, against earthquake and other risks insured
against by Persons operating like properties in the locality of the
Manufactured Homes, issued by a company authorized to issue such
policies in the state in which the Manufactured Homes are located, and
in an amount which is equal to the replacement cost of
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such Manufactured Home plus Add-ons, provided that such insurance
policy may provide for customary deductible amounts, and further
provided that the amount of coverage provided by each such policy
shall be sufficient to avoid the application of any co-insurance
clause contained therein. If any portion of any Manufactured Home is
located within a federally designated special flood hazard area, the
applicable Seller shall also cause flood insurance which meets the
current federal guidelines to be maintained with a generally accepted
insurance carrier, in an amount representing not less than the least
of (1) the outstanding principal balance of the Floorplan Loan, (2)
the full insurable value of the Manufactured Homes securing the
Floorplan Loan, and (3) the maximum amount of insurance available
under the Flood Disaster Protection Act of 1973, as amended. All such
insurance policies (each a "Hazard Insurance Policy") contain a
standard loss payee clause naming the applicable Seller, its
successors and assigns (including without limitation, subsequent
owners of the Floorplan Loan, as loss payee, and may not be reduced,
terminated, or canceled without 30 days prior written notice to the
loss payee. No such notice has been received by the applicable Seller.
The Hazard Insurance Policy is the valid and binding obligation of the
insurer and is in full force and effect. The applicable Seller has not
engaged in, and has no knowledge that the Dealer has engaged in, any
act or omission which would impair the coverage of any such policy,
the benefits of the endorsement provided for herein, or the validity
and binding effect of either, including without limitation, no
unlawful fee, commission, kickback, or other unlawful compensation or
value of any kind has been or will be received, retained or realized
by any attorney, firm or other Person, and no such unlawful items have
been received, retained, or realized by the applicable Seller. Where
required by state law or regulation, the Dealer has been given an
opportunity to choose the carrier of the required Hazard Insurance
Policy.
5. Insurance Premiums Paid All premiums due on all Hazard Insurance
Policies have been paid in full. If any Dealer is in default in the
payment of premiums on its Hazard Insurance Policy or Policies, and if
the applicable Seller elects to have the Floorplan Loan continue to be
a Purchased Loan and does not substitute that Purchased Loan with
another Eligible Loan, the applicable Seller shall pay such premiums
on that policy or a replacement policy out of its own funds, and may
add separately such premium to the Dealer's obligation as provided by
the Floorplan Loan, but may not add such premium to the remaining
principal balance of the Floorplan Loan for purposes of this
Agreement. If the Dealer does not reimburse the applicable Seller for
payment of such premiums and the related Floorplan Loan is liquidated
after a default, the applicable Seller shall be reimbursed for its
payment of such premiums out of the related liquidation proceeds. The
applicable Seller may, in lieu of causing individual Hazard Insurance
Policies to be maintained with respect to each Manufactured Home, and
shall, to the extent that the related Floorplan Loan does not require
the Dealer to maintain a Hazard Insurance Policy with respect to the
related Manufactured Home, maintain one or more blanket insurance
policies covering losses as provided in Section (k) above resulting
from the absence or insufficiency of
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individual Hazard Insurance Policies. Any such blanket policy shall be
substantially in the form that is the customary for blanket insurance
policies issued to cover Manufactured Homes and in the amount
sufficient to cover all losses on the Floorplan Loans. The applicable
Seller shall pay, out of its own, funds, the premium for such policy
on the basis described therein and shall deposit in the designated
Blocked Account on the Business Day next preceding the Payment Date
following the Monthly Period in which the insurance proceeds from
claims in respect of any Floorplan Loans under such blanket policy are
or should have been received, the deductible amount with respect to
such claims. The applicable Seller shall not, however, be required to
deposit any deductible amount with respect to claims under individual
Hazard Insurance Policies. If the applicable Seller shall have
repossessed any of the Manufactured Homes on behalf of the Buyer, the
applicable Seller shall either (x) maintain at its expense a Hazard
Insurance Policy with respect to such Manufactured Home, except that
the applicable Seller shall be responsible for depositing any
deductible amount with respect to all claims under such individual
Hazard Insurance Policies (at the time when the proceeds under any
such policy are received), or (y) indemnify the Buyer against any
damage to such Manufactured Home prior to resale or other disposition
that would have been covered by such Hazard Insurance Policy. Any cost
incurred by the applicable Seller in maintaining any of the foregoing
insurance shall not be added to the amount owing under the Floorplan
Loan under this Agreement, notwithstanding that the terms of the
Floorplan Loan so permit. The applicable Seller shall not be entitled
to reimbursement from the Buyer for such costs. Such costs (other than
the cost of the blanket policy) shall only be recovered out of later
payments by the Dealer for such premiums or, if the related contract
is liquidated after a default, out of the related liquidation
proceeds.
6. No Defense to Insurance Coverage. No action has been taken or failed
to be taken, no event has occurred and no state of facts exists or has
existed on or prior to the Purchase Date (whether or not known to the
applicable Seller on or prior to such date) which has resulted or will
result in an exclusion from, denial of, or defense to coverage under
any insurance policy (including, without limitation, any exclusions,
denials or defenses which would limit or reduce the availability of
the timely payment of the full amount of the loss otherwise due
thereunder to the insured) whether arising out of actions,
representations, errors, omissions, negligence, or fraud of the
applicable Seller, the related Dealer or any party involved in the
application for such coverage, including the appraisal, plans and
specifications and other exhibits or documents submitted therewith to
the insurer under such insurance policy, or for any other reason under
such coverage, but not including the failure of such insurer to pay by
reason of such insurer's breach of such insurance policy or such
insurer's financial inability to pay. In connection with the placement
of any insurance, no commission, fee, or other compensation has been
or will be received by the applicable Seller or by any officer,
director or employee of the applicable Seller or any designee of the
applicable Seller or any
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corporation in which the applicable Seller or any officer, director,
or employee had a financial interest at the time of placement of such
insurance.
7. Fitness of the Manufactured Homes. The applicable Seller, and Dealer
have not received notification from any governmental authority that
any Manufactured Home securing a Floorplan Loan is in material
non-compliance with any law, regulations, ordinance, standard, license
or certificate.
8. Floorplan Loan not Assumable. The Floorplan Loan is not assumable by
another Person in a manner which would release the Dealer thereof from
such Dealer's obligations with respect to such Floorplan Loan.
9. No Excluded Dealers. No Dealer is (a) an Affiliate of the applicable
Seller, (b) a Governmental Authority or (c) not located in the United
States.
10. Security Interest in the Manufactured Home. Each Floorplan Loan, and
any security agreement, chattel paper or equivalent document related
thereto and delivered in connection with the Manufactured Homes
securing such Floorplan Loan, creates a valid and binding, subsisting,
enforceable, perfected first priority security interest and lien on
the Manufactured Homes described therein, including all Add-ons, in
favor of the applicable Seller, and the applicable Seller, has full
right to pledge and assign the same to Buyer.
11. Prior Lenders. All Prior Lenders, if any, have released all of its
right, title and interest in all Manufactured Homes securing the
Floorplan Loan, to the applicable Seller, and have duly executed and
delivered a Payoff Letter to the applicable Seller.
12. Intercreditor Agreement. If the Dealer receives financing from another
lender, such lender has provided the applicable Seller with an
Intercreditor Agreement which provides that (i) the applicable Seller
will have a superior security interest in the Manufactured Homes
securing the Floorplan Loans, including related accounts receivable,
regardless of the relative sequences of UCC filings; (ii) if either
creditor comes into possession of the other's collateral (or proceeds)
it will hold them in trust for the other; (iii) neither creditor will
exercise its remedies as a secured party against the other's first
position collateral while the Intercreditor Agreement is in effect
(i.e., until terminated by either party, but remaining in effect with
respect to collateral existing up to that time; and (v) each party can
amend or assign its financing arrangement without the other's
approval.
13. Purchase Money Security Interest in Inventory. Each Floorplan Loan
constitutes a purchase money security interest in inventory under the
applicable UCC.
14. Notation of Security Interest. If the related Manufactured Home is
located in a state in which notation of a security interest on the
Lien Certificate is required or permitted to perfect such security
interest, the Lien Certificate shows, or if a new or
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replacement Lien Certificate with respect to such Manufactured Home is
being applied for, such Lien Certificate will be issued within 180
days of the date of the origination of the related Floorplan Loan and
will show Seller as the holder of a first priority security interest
in such Manufactured Home. With respect to a Floorplan Loan for which
the Lien Certificate has not yet been returned from the Registrar of
Titles, the applicable Seller has received written evidence
satisfactory to the Buyer that such Lien Certificate showing the
applicable Seller as first lienholder has been applied for. If the
related Manufactured Home is located in a state in which the filing of
a financing statement under the UCC is required to perfect a security
interest in a Manufactured Home, such filings or recordings have been
duly made and show the applicable Seller as secured party. Immediately
after the assignment of the security interest in the Manufactured Home
to the Buyer, such Floorplan Loan will be secured by an enforceable
and (subject to the last sentence of this paragraph) perfected first
priority security interest in the Manufactured Home, in favor of the
Buyer, as secured party, which security interest is prior to all Liens
upon such Manufactured Home which now exist or may hereafter arise or
be created (except as to priority, for any Lien for taxes, labor or
materials affecting a Manufactured Home). Where, in accordance with
prevailing custom in a state and the manufactured home financing
industry, Buyer does not complete all filings and/or recordings
necessary to finally and unconditionally perfect of record its Lien on
the Manufactured Home and/or Floorplan Loan, the Facility Documents
unconditionally delivered by the applicable Seller to Buyer or the
Custodian are legally sufficient, and empower and authorize Buyer, to
complete all such actions, steps and procedures to fully perfect that
security interest and/or transfer at any time, or from time-to-time,
without further notice to, consent by or participation of the
applicable Seller, and the applicable Seller is bound by the Agreement
to take all actions required by Buyer, and to pay for all costs and
expenses incurred by Buyer, in connection therewith.
15. Consolidation of Future Advances. Any future advances made to the
Dealer prior to the Purchase Date have been consolidated with the
outstanding principal amount secured by the Manufactured Home, and the
secured principal amount, as consolidated, bears a single interest
rate and single repayment term.
16. No Delinquency. No payment required under the Floorplan Loan,
including Curtailment, is Delinquent nor has any payment under the
Floorplan Loan been Delinquent at any time since the origination of
the Floorplan Loan.
17. Not Real Estate. All Manufactured Homes securing Floorplan Loans (i)
are personal property and are not considered or classified as part of
the real estate on which they are located under the laws of the
jurisdiction in which they are located and (ii) were personal property
and were not considered or classified as part of the real estate on
which they were located under the laws of the jurisdiction in which
they were located at the time the related Floorplan Loan was executed
by the parties thereto.
▇▇-▇▇
▇▇▇
▇▇. Appraisal. For Pre-owned Manufactured Homes, the Loan File contains an
appraisal of the related Underlying Asset(s) signed prior to the
approval of the Floorplan Loan application by a qualified appraiser
who had no interest, direct or indirect in the Manufactured Home or in
any loan made on the security thereof, other than as an employee of
the Qualified Originator, and whose compensation is not affected by
the approval or disapproval of the Floorplan Loan,
19. REMIC. Each Floorplan Loan is secured by "manufactured housing" within
the meaning of ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ Code, Section 25(e)(10).
20. SMMEA. The related Manufactured Home is a "manufactured home" within
the meaning of ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ Code, Section 5402(6).
21. Purchase of Floorplan Loans. Each acquisition of a Floorplan Loan
under a Loan Transfer Agreement or this Agreement will constitute (A)
a "current transaction" within the meaning of Section 3(a)(3) of the
Securities Act of 1933, as amended, and (B) a purchase or other
acquisition of notes, drafts, acceptances, open accounts receivable or
other obligations representing part or all of the sales price of
merchandise, insurance or services within the meaning of Section
3(c)(5) of the Investment Company Act of 1940, as amended.
22. Seller Invoice. The applicable Seller will provide Buyer with an
invoice from a MH Manufacturer, in the case of a new Manufactured Home
subject to a Floorplan Loan, which includes the price, date delivered
and serial number, which will be included in the Loan Schedule, and,
with respect to a Pre-owned Manufactured Home, the applicable Seller
will provide Buyer with Dealer's purchase documentation. The documents
required under this paragraph 22 shall either be part of the Loan File
or part of the Servicing File, and shall be provided to Buyer, upon
Buyer's request.
23. Loan Transfer Agreement. The applicable Seller hereby certifies that
(A) the benefits of the representations and warranties of any
Qualified Originator under a Loan Transfer Agreement, and of the
Dealer under the Dealer Financing Agreement have been assigned to the
Buyer; (B) the rights of the applicable Seller under the Loan Transfer
Agreement and under the Dealer Financing Agreement are enforceable by
the Buyer (subject to the exceptions described in Section 10(c)(7) of
the Agreement; and (C) the Loan Transfer Agreement and the Dealer
Financing Agreement provide that the representations, warranties and
covenants described therein shall survive the sale of the Floorplan
Loans and the termination of the Loan Transfer Agreement and this
Agreement.
24. Curtailment Payments A Curtailment payment schedule has been
established for each Floorplan Loan that requires payments from the
Dealer for Manufactured Homes. Curtailments must be in accordance with
the applicable Seller's standard Floorplan Loan requirements (which
require monthly principal payments of at least 3% of the outstanding
balance or quarterly principal payments of 10% of the
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outstanding balance, beginning four months after the date of the
corresponding advance with respect to each Manufactured Home securing
each Floorplan Loan subject to a Transaction; provided, however, that
with respect to Floorplan Loans purchased by the Buyer from the Seller
prior to the date hereof, the applicable Seller's standard Floorplan
Loan requirements may require monthly principal payments or quarterly
principal payments of 2 - 10% of the outstanding balance, beginning no
later than six months after the date of the corresponding advance with
respect to each Manufactured Home securing each Floorplan Loan subject
to a Transaction).
25. Dealer Requirements. The Dealer (a) is duly organized, validly
existing and in good standing under the laws of the jurisdiction of
its organization, (b) has all the requisite corporate or other power
necessary to execute and perform the transactions contemplated
hereunder, (c) has all governmental licenses, authorizations, consents
and approvals necessary to own its assets and carry on its business as
now being or as proposed to be conducted, and to enter the
transactions contemplated herein, and (d) is qualified to do business
and in good standing in all other jurisdictions in which the nature of
the business conducted by it makes such qualification necessary. On
the Purchase Date of the Floorplan Loan (a) is not on cash-on-delivery
terms by any Manufactured Home manufacturer, or (b) is not past due
over thirty days under the Loan Agreement.
26. Dealer Financing Agreement Provisions. The Dealer Financing Agreement
provides that (i) the original principal balance of the Floorplan Loan
will not exceed the LTV Ratios set forth in Exhibit VII Part 5 of the
Agreement, (ii) the maximum period any Manufactured Home may secure a
Floorplan Loan is the earlier of (A) the date such Manufactured Home
is sold or (B) one year from the date that the Manufactured Home is
first included as security for such Floorplan Loan, and (iii) the
Manufactured Home securing the Floorplan Loan will not be released
from the lien of the Floorplan Loan in whole or in part unless full
payment of the Floorplan Loan applicable to that Manufactured Home is
remitted to the Bloomfield or Dynex Blocked Account.
27. Manufactured Home. Each Manufactured Home that is the subject of a
Floorplan Loan will be sold by the Manufactured Home manufacturer to
the Dealer in the ordinary course of business and will, at all times
that it is the subject of a Floorplan Loan, be held for resale to
third-parties.
28. Inspections. The Manufactured Home was inspected by the applicable
Seller before the creation of the Floorplan Loan and will be inspected
monthly thereafter.
29. Manufacturer Floorplan Agreement. The applicable Seller has assigned
to Buyer any agreement with a manufacturer of Manufactured Homes that
obligates the manufacturer to repurchase the products securing the
Floorplan Loans upon the applicable Seller's repossession thereof upon
the Dealer's default.
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30. Loan Agreement Acceleration. The Dealer Financing Agreements contain
provisions that provide for the termination of the Dealer Financing
Agreement and acceleration of the principal payments of the Floorplan
Loan thereunder upon the Dealer's violation of any material term of
that Agreement.
31. No Leased or Consigned Manufactured Homes. No Manufactured Home that
is the subject of a Floorplan Loan is leased, or is the subject of a
consignment arrangement by the Dealer, other than consignments under a
Consignment Agreement.
33. Hazardous Sites. To the applicable Seller's knowledge, no Underlying
Asset was, as of the Purchase Date or, with respect to Additional
Loans or Substituted Loans, as of the related date of addition or
substitution, located within a one-mile radius of any site listed in
the National Priorities List as defined under CERCLA, or on any
similar state list of hazardous waste sites which are known to contain
any hazardous substance or hazardous waste.
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PART 2
SELLER'S UNDERWRITING GUIDELINES FOR MH LOANS
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PART 3
SELLER'S UNDERWRITING GUIDELINES FOR FLOORPLAN LOANS
These underwriting guidelines have not yet been completed, and are subject to
review and approval by Buyer prior to Seller's Request for Purchase for any
proposed Floorplan Loan.
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EXHIBIT IV
PART 1
LOAN ELIGIBILITY REQUIREMENTS
CONDUIT MORTGAGE LOANS AND CREDIT LEASE MORTGAGE LOANS
(a) The Mortgage Loan is not a zero coupon or cash flow mortgage.
(b) The Mortgage Loan does not provide for a hyper-amortization
feature at less than 500 basis points over the original interest rate,
(c) Each Credit Lease Mortgage Loan is backed by a Credit Tenant.
(d) No Credit Lease Mortgage Loan has an aggregate LTV in excess of
100%.
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EXHIBIT IV
PART 2
LOAN ELIGIBILITY REQUIREMENTS
INTERIM MORTGAGE LOANS
(a) The Mortgage Loan is not a zero coupon or cash flow mortgage.
(b) The Mortgage Loan is not a Credit Lease Mortgage Loan.
(c) Each Interim Mortgage Loan conforms to current standards for
securitization except as noted in (g) below and shall be underwritten and
documented in accordance with the Underwriting Guidelines and Seller's Loan
Documents delivered by Seller and approved by Buyer.
(d) The minimum initial principal amount on each Interim Mortgage Loan
is $1,000,000.
(e) The maximum initial principal amount on each Interim Mortgage Loan
is $15,000,000.
(f) Each Interim Mortgage Loan is a floating rate loan with an
interest rate of not less than LIBOR+200 b.p.
(g) The Mortgage Loan shall meet both of the following ("DSCR") tests:
i) it provides a DSCR of at least 1.20:1,based on the actual
loan constant, and
ii) it provide a DSCR of at least 1.0:1, based on the following
assumed loan constants:
a) All multifamily loans and all manufactured housing
community loans; and all self-storage and congregate care
loans with floating terms of twelve months or less 10.5%
b) Anchored retail, office, and light industrial with
floating rate terms of twelve months or less 11.0%
c) All other property types 11.5%
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In calculating the DSCR, net operating income will be calculated in
accordance with approved Underwriting Guidelines, including, without limitation,
a calculation of income using an amount not greater than the lesser of the
actual current income per rent roll and actual income adjusted to reflect a 5%
vacancy, in each case, net of (1) a management fee of 3-5% and (2) actual
stabilized expenses, as well as provision for replacement reserves and rollover
costs (where applicable under the Underwriting Guidelines).
(h) Each Interim Mortgage Loan has a maximum loan term of 2 years must
provide for conversion within 2 years to standard Conduit Mortgage Loan
Underwriting Guidelines.
(i) The maximum LTV for each Interim Mortgage Loan is 80% for
multifamily and manufactured home communities; and 75% for all other property
types.
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EXHIBIT IV
PART 3
LOAN ELIGIBILITY REQUIREMENTS
BRIDGE MORTGAGE LOANS
(a) The Mortgage Loan is not a zero coupon or cash flow mortgage.
(b) The Mortgage Loan is not a Credit Lease Mortgage Loan.
(c) Each Bridge Mortgage Loan conforms to current standards for
securitization (with the exception of debt service coverage on a trailing basis
(see item (g) below) and "as is" loan-to-value (see item (i) below), provided
that debt service and loan-to-value shall be within conduit guideline parameters
within 24 months on a proforma basis) and shall be underwritten and documented
in accordance with the Underwriting Guidelines and Seller's Loan Documents
delivered by Seller and approved by Buyer.
(d) The minimum initial principal amount on each Bridge Mortgage Loan
is $1,000,000.
(e) The maximum initial principal amount on each Bridge Mortgage Loan
is $15,000,000.
(f) Each Bridge Mortgage Loan is a floating rate loan and provides
for a yield of not less than 13.5%.
(g) The Mortgage Loan shall meet both of the following ("DSCR")
tests:
i) provide DSCR, based on the actual loan constant of a least
1.20:1
ii) provide DSCR of at least 1.0:1 based on the following
assumed loan constants:
a) All multifamily loans and all manufactured housing
community loans; and all self-storage and congregate
care loans with floating terms of twelve months or
less 10.5%
b) Anchored retail, office, and light industrial with
floating rate terms of twelve months or less 11.0%
c) All other property types and terms 11.5%
In calculating the DSCR, net operating income will be calculated in
accordance with approved Underwriting Guidelines utilizing a stabilized
proforma.
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(h) Each Bridge Mortgage Loan has a maximum loan term of 2 years and
must provide for conversion within 2 years to standard Conduit Mortgage Loan
Underwriting Guidelines.
(i) The maximum LTV for each Bridge Mortgage Loan is 90% for all
property types.
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EXHIBIT IV
PART 4
LOAN ELIGIBILITY REQUIREMENTS
MH LOANS
Each MH Loan shall conform to the Underwriting Guidelines attached hereto as
Exhibit III, part 3.
IV-6
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EXHIBIT IV
PART 5
LOAN ELIGIBILITY REQUIREMENTS
FLOORPLAN LOANS
Each Floorplan Loan shall conform to the Underwriting Guidelines attached
hereto as Exhibit III, part 3.
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EXHIBIT V
PART 1
SELLER'S LOAN DOCUMENTS FOR MORTGAGE LOANS
The Seller uses the following forms:
*****************************************************************************
For all Mortgage Loans (Conduit Mortgage Loans, Credit Lease Mortgage Loans,
Bridge Mortgage Loans and Interim Mortgage Loans):
1. Environmental Indemnity
2. Guaranty
*****************************************************************************
For all Conduit Mortgage Loans and Credit Lease Mortgage Loans:
1. Mortgage Note for Conduit Mortgage Loans and Credit Lease Mortgage Loans
2. Mortgage for Conduit Mortgage Loans and Credit Lease Mortgage Loans
3. Underlying Loan Agreement for Conduit Mortgage Loans and Credit Lease
Mortgage Loans for certain types of loans, to be approved by Buyer, if used
(not included in the enclosed loan documents)
******************************************************************************
For all Bridge Mortgage Loans:
1. Underlying Loan Agreement for Bridge Mortgage Loans
2. Mortgage Note for Bridge Mortgage Loans
3. Mortgage for Bridge Mortgage Loans
*****************************************************************************
For all Interim Mortgage Loans:
1. Underlying Loan Agreement for Interim Mortgage Loans
2. Mortgage Note for Interim Mortgage Loans
3. Mortgage for Interim Mortgage Loans
*****************************************************************************
PART 2
SELLER'S LOAN DOCUMENTS FOR MH LOANS
MHFC Loan Documents
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1. Installment Loan Contract / Security Agreement (Direct Only)
2. Retail Installment Contract / Purchase Money Security Agreement
(Indirect Only)
3. Buyer's Power of Attorney
4. Seller's Power of Attorney
Seller's Loan Documents for MH Loans that have been agreed upon are those
contained in the binder dated August 28, 1998.
Dynex Loan Documents:
1. Installment Loan Contract / Security Agreement (Direct Only)
2. Retail Installment Contract / Purchase Money Security Agreement (Indirect
Only)
3. Land-and-Home Loans: A.Note B. Security Agreement C. Mortgage or Deed of
Trust
4. Borrower's Power of Attorney
Dynex's Loan Documents for MH Loans that have been agreed upon are those
contained in the binder dated January __, 2000.
*****************************************************************************
PART 3
SELLER'S LOAN DOCUMENTS FOR FLOORPLAN LOANS
▇.▇▇▇▇ Agreement
2.Note
3. Security Agreement
4. Guaranty (where applicable)
5. Park Owner Agreement (where applicable)
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IV-3