EXHIBIT 10.1
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RECEIVABLES PURCHASE AGREEMENT
dated as of April 18, 2002
among
GSS HOMEPRIDE CORP.,
as Seller,
HOMEPRIDE FINANCE CORP.,
as Servicer,
THE CIT GROUP/SALES FINANCING, INC.,
as Sub-Servicer,
GREENWICH FUNDING CORP,
as an Investor,
THE FINANCIAL INSTITUTIONS NAMED HEREIN,
as Banks,
and
CREDIT SUISSE FIRST BOSTON, NEW YORK BRANCH,
as Agent
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TABLE OF CONTENTS
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ARTICLE I DEFINITIONS.................................................................................1
SECTION 1.01. Certain Defined Terms....................................................1
SECTION 1.02. Other Terms.............................................................45
ARTICLE II AMOUNTS AND TERMS OF THE PURCHASES.........................................................45
SECTION 2.01. Purchase Facility.......................................................45
SECTION 2.02. Making Purchases........................................................45
SECTION 2.03. Receivable Interest Calculation.........................................46
SECTION 2.04. Take-Outs...............................................................47
SECTION 2.05. Servicer Take-Outs......................................................47
SECTION 2.06 Optional Reductions.....................................................48
ARTICLE III YIELD, FEES, ETC...........................................................................48
SECTION 3.01. Yield Payment Dates.....................................................48
SECTION 3.02. Fees....................................................................48
SECTION 3.03. Computation of Yield and Fees...........................................48
ARTICLE IV CAPITAL INVESTMENT REPAYMENTS..............................................................48
SECTION 4.01. Repayments of Capital Investment........................................48
ARTICLE V PAYMENTS...................................................................................49
SECTION 5.01. Making of Payments......................................................49
SECTION 5.02. Distributions...........................................................49
ARTICLE VI INCREASED COSTS; TAXES.....................................................................53
SECTION 6.01. Increased Costs.........................................................53
SECTION 6.02. Additional Yield on Receivable Interests Bearing a Eurodollar
Rate....................................................................54
SECTION 6.03. Taxes...................................................................54
ARTICLE VII CONDITIONS OF PURCHASES....................................................................55
SECTION 7.01. Conditions Precedent to Initial Purchase................................55
SECTION 7.02. Conditions Precedent to All Purchases...................................59
ARTICLE VIII REPRESENTATIONS AND WARRANTIES.............................................................61
SECTION 8.01. Representations and Warranties of the Seller............................61
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ARTICLE IX COVENANTS..................................................................................65
SECTION 9.01. Records.................................................................65
SECTION 9.02. Other Liens or Interests................................................65
SECTION 9.03. Costs and Expenses......................................................66
SECTION 9.04. Compliance with Laws, Etc...............................................66
SECTION 9.05. Offices, Records, Name and Organization.................................66
SECTION 9.06. Performance and Compliance with Contracts and Credit and
Collection Policy.......................................................66
SECTION 9.07. Change in Business or Credit and Collection Policy......................66
SECTION 9.08. Extension or Amendment of Receivables...................................66
SECTION 9.09. Marking of Records......................................................67
SECTION 9.10. Further Assurances......................................................67
SECTION 9.11. Reporting Requirements..................................................67
SECTION 9.12. Corporate Separateness..................................................70
SECTION 9.13. Purchase and Contribution Agreement; Purchase and Sale
Agreement; Custodial Agreement; Global Servicing
Agreement...............................................................73
SECTION 9.14. Nature of Business......................................................73
SECTION 9.15. Mergers, Etc............................................................73
SECTION 9.16. Distributions, Etc......................................................73
SECTION 9.17. Debt....................................................................73
SECTION 9.18. Certificate of Incorporation and By-Laws................................73
SECTION 9.19. Inspections.............................................................74
SECTION 9.20. Take-Out Securitization.................................................74
SECTION 9.21. Shadow Rating...........................................................75
SECTION 9.22. Intentionally Omitted...................................................75
SECTION 9.23. Changes in Payment Instructions to Obligors.............................75
SECTION 9.24. Deposits to Specified Accounts..........................................75
SECTION 9.25. Lock-Box Accounts; Lock-Box Banks.......................................75
ARTICLE X GRANT OF SECURITY INTEREST.................................................................76
SECTION 10.01. Seller's Grant of Security Interest; Assignment of Purchase
and Sale Agreement......................................................76
SECTION 10.02. Characterization of Transaction. ......................................77
SECTION 10.03. Seller Remains Liable...................................................77
ARTICLE XI ADMINISTRATION AND SERVICING OF RECEIVABLES................................................78
SECTION 11.01. Designation of Servicer Parties.........................................78
SECTION 11.02. Duties of the Servicer Parties..........................................79
SECTION 11.03. Collection of Receivable Payments; Modification and
Amendment of Receivables................................................81
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SECTION 11.04. Realization Upon Receivables............................................83
SECTION 11.05. Insurance and Dealer Recourse...........................................84
SECTION 11.06. Covenants, Representations and Warranties of Servicer
Parties.................................................................86
SECTION 11.07. Servicing and Sub-Servicing Fee; Payment of Certain
Expenses by Servicer and Sub-Servicer...................................91
SECTION 11.08. Servicer's Certificate..................................................92
SECTION 11.09. Annual Statement as to Compliance; Notice of Servicer
Termination Event.......................................................92
SECTION 11.10. Annual Independent Accountant's Report..................................92
SECTION 11.11. Access to Certain Documentation and Information Regarding
Receivables.............................................................93
SECTION 11.12. Fidelity Bond...........................................................93
SECTION 11.13. Insurance...............................................................93
SECTION 11.14. Accounts................................................................93
ARTICLE XII THE SERVICER...............................................................................95
SECTION 12.01. Liability of Servicer Parties; Indemnities..............................95
SECTION 12.02. Consolidations, Mergers and Sales of Assets.............................96
SECTION 12.03. Limitation on Liability of Servicer Parties and Others..................97
SECTION 12.04. Delegation of Duties....................................................97
SECTION 12.05. Servicer Parties Not to Resign..........................................97
ARTICLE XIII SERVICER TERMINATION EVENTS................................................................98
SECTION 13.01. Servicer Termination Event..............................................98
SECTION 13.02. Consequences of a Servicer Termination Event............................99
SECTION 13.03. Appointment of Successor Servicer......................................102
SECTION 13.04. Certain Rights of the Agent............................................103
ARTICLE XIV TERMINATION EVENTS........................................................................104
SECTION 14.01. Termination Events.....................................................104
SECTION 14.02. Effect of Termination Event............................................105
SECTION 14.03. Events of Default......................................................106
ARTICLE XV THE AGENT.................................................................................109
SECTION 15.01. Authorization and Action...............................................109
SECTION 15.02. Exculpation............................................................109
SECTION 15.03. CSFB and Affiliates....................................................110
SECTION 15.04. Bank's Purchase Decision...............................................110
SECTION 15.05. Notice by Agent........................................................110
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ARTICLE XVI INDEMNIFICATION...........................................................................110
SECTION 16.01. Indemnities by the Seller..............................................110
ARTICLE XVII MISCELLANEOUS.............................................................................113
SECTION 17.01. No Waiver; Remedies....................................................113
SECTION 17.02. Amendments.............................................................113
SECTION 17.03. Notices, Etc...........................................................113
SECTION 17.04. Assignability..........................................................113
SECTION 17.05. Costs, Expenses and Taxes..............................................114
SECTION 17.06. No Proceedings.........................................................115
SECTION 17.07. Confidentiality........................................................115
SECTION 17.08. Captions and Cross References..........................................115
SECTION 17.09. Severability...........................................................116
SECTION 17.10. GOVERNING LAW..........................................................116
SECTION 17.11. Execution in Counterparts..............................................116
SECTION 17.12. WAIVER OF JURY TRIAL...................................................116
SECTION 17.13. Survival of Termination................................................116
SECTION 17.14. ENTIRE AGREEMENT.......................................................117
SECTION 17.15. Consent to Jurisdiction................................................117
SECTION 17.16. Lienholder Nominee.....................................................117
SCHEDULE I - Agent's Account
SCHEDULE II - Credit and Collection Policy
SCHEDULE III - Non-Permitted Assignees
ANNEXES
ANNEX A - Form of Assignment and Acceptance Agreement
ANNEX B - Form of Control Agreement
ANNEX C - Form of Purchase Request
ANNEX D - Form of Transfer Certificate
ANNEX E - Intentionally Omitted
ANNEX F - Intentionally Omitted
ANNEX G - Intentionally Omitted
ANNEX H - Form of Funds Transfer Letter
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RECEIVABLES PURCHASE AGREEMENT
THIS RECEIVABLES PURCHASE AGREEMENT (this "Agreement") is made and
entered into as of April 18, 2002, among GSS HOMEPRIDE CORP., a Delaware
corporation (the "Seller"), HOMEPRIDE FINANCE CORP., a Michigan corporation
("HomePride"), as servicer (the "Servicer"), THE CIT GROUP/SALES FINANCING,
INC., a Delaware corporation (the "Sub-Servicer"), GREENWICH FUNDING CORP, a
Delaware corporation ("Conduit"), THE FINANCIAL INSTITUTIONS SET FORTH ON THE
SIGNATURE PAGES HERETO and their permitted assigns, as banks (the "Banks") and
CREDIT SUISSE FIRST BOSTON, NEW YORK BRANCH ("CSFB"), as agent (in such capacity
the "Agent") for the Investors (as hereinafter defined) and the Banks.
PRELIMINARY STATEMENT. The Seller may acquire, from time to time,
Receivables from HomePride Funding Corp., a Delaware corporation ("HomePride
SPV"), by purchasing such Receivables, as determined, from time to time, by the
Seller and HomePride SPV. The Seller is prepared to sell undivided fractional
ownership interests (referred to herein as "Receivable Interests") in the
Receivables. Conduit may, in its sole discretion, purchase such Receivable
Interests, and the Banks are prepared to purchase such Receivable Interests, in
each case on the terms set forth herein. Accordingly, the parties agree as
follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Certain Defined Terms. As used in this
Agreement, the following terms shall have the following meanings (such meanings
to be equally applicable to both the singular and plural forms of the terms
defined):
"Accountant's Report" has the meaning set forth in Section
11.10(a).
"Acquired Property" means property acquired by either Servicer
Party or Seller by foreclosure, repossession, replevin, deed in lieu of
foreclosure, or otherwise in respect of a Receivable.
"Acquired Property Mortgage" means, with respect to any
Acquired Property, any mortgage, deed of trust or similar security instrument
from the holder of title of such Acquired Property to the custodian which (i)
encumbers such Acquired Property and (ii) secures all amounts which were due on
the related contract up to the date of acquisition of such Acquired Property.
"Adjusted Consolidated Tangible Net Worth" means, as of any
date, the sum of (i) the Consolidated Tangible Net Worth as of such date, (ii)
the outstanding amount of any Preferred Stock as of such date and (iii) the
outstanding amount of any Term Debt as of such date.
"Advance Rate" means on the Closing Date, a percentage equal
to 85% and thereafter as adjusted, in the discretion of the Agent, on any
Take-Out Date and any day on which there is an increase in Capital Investment;
provided, that, at all times after the Shadow Rating has been obtained the
Advance Rate shall be such percentage as shall be determined by the Agent to be
consistent with the criteria deemed by the Rating Agencies to be necessary for
the provision of the Shadow Rating so obtained.
"Affected Person" has the meaning set forth in Section
6.01(a).
"Affiliate" means, as to any Person, any other Person that,
directly or indirectly, is in control of, is controlled by or is under common
control with such Person or is a director or officer of such Person.
"Agent" has the meaning set forth in the Preamble.
"Agent's Account" means the account of the Agent set forth on
Schedule I hereto or such other account as the Agent shall designate in writing
to the Seller, the Servicer and the Custodian.
"Aggregate Outstanding Balance" means, with respect to any
group of Receivables as of any date, the sum of the Outstanding Balances of all
such Receivables as of the opening of business on such date.
"Aggregate Required Reserve Account Amount" means, with
respect to any date of determination, (a) the sum of the Required Reserve
Account Amounts for all Purchases made on or prior to such date minus (b) the
sum of the Required Reserve Account Amounts for all Receivables which are or
have been the subject of a Take-Out on or prior to such date.
"Alternate Base Rate" means a fluctuating rate per annum as
shall be in effect from time to time, which rate shall be at all times equal to
the highest of:
(a) the rate of interest announced publicly by CSFB
in New York, New York, from time to time as CSFB's base
commercial lending rate;
(b) 1/2 of one percent above the latest three-week
moving average of secondary market morning offering rates in
the United States for three-month certificates of deposit of
major United States money market banks, such three-week
moving average being determined weekly on each Monday (or, if
such day is not a Business Day, on the next succeeding
Business Day) for the three-week period ending on the previous
Friday by CSFB on the basis of such rates reported by
certificate of deposit dealers to and published by the Federal
Reserve Bank of New York or, if such publication shall be
suspended or terminated, on the basis of quotations for such
rates received by CSFB from three New York, New York
certificate of deposit dealers of
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recognized standing selected by CSFB, in either case adjusted
to the nearest 1/4 of one percent or, if there is no nearest
1/4 of one percent, to the next higher 1/4 of one percent; and
(c) the Federal Funds Rate.
"Amount Financed" means, with respect to a Receivable, the
aggregate amount initially extended under the related Contract toward the
purchase price of the related Manufactured Home and/or Mortgaged Property and
related costs.
"Applicable Spread" shall have the meaning ascribed thereto in
the Fee Letter.
"Appraised Value" means the market value of any Manufactured
Home and/or Mortgaged Property as set forth in the appraisal made for the
originator of the related Contract by a licensed independent professional
appraiser at the time of the origination of the related Contract.
"Asset Purchase Agreement" means (a) in the case of any Bank
other than CSFB, the asset purchase agreement entered into by such Bank
concurrently with the Assignment and Acceptance pursuant to which it became
party to this Agreement and (b) in the case of CSFB, the secondary market
agreement, asset purchase agreement or other similar liquidity agreement entered
into by CSFB for the benefit of Conduit, to the extent relating to the sale or
transfer of interests in Receivable Interests.
"Assignee Rate" for any Fixed Period for any Receivable
Interest funded by a Bank or an Investor that is not funding such Receivable
Interest through the issuance of commercial paper or other promissory notes,
means an interest rate per annum equal to the Eurodollar Rate for such Fixed
Period plus the Applicable Spread; provided, however, that in case of:
(i) any Fixed Period on or prior to the first day of which a
Bank or Investor shall have notified the Agent that (A) the introduction of or
any change in or in the interpretation of any law or regulation makes it
unlawful, or any central bank or other governmental authority asserts that it is
unlawful, for such Bank or Investor to fund such Receivable Interest at the
Assignee Rate set forth above or (B) it is unable to obtain U.S. Dollars in the
London interbank market to fund or maintain any Receivable Interest (and such
Bank or Investor shall not have subsequently notified the Agent that such
circumstances no longer exist), or
(ii) any Fixed Period for a Receivable Interest, the Capital
Investment of which allocated to such Investor or Bank is less than $500,000,
the "Assignee Rate" for such Fixed Period shall be an interest rate per annum
equal to the Alternate Base Rate in effect from time to time during such Fixed
Period; provided further that the Agent and the Seller may agree in writing from
time to time upon a different "Assignee Rate."
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"Assignment and Acceptance" means an assignment and acceptance
agreement entered into by a Bank, an assignee of such Bank and the Agent,
pursuant to which such assignee may become a party to this Agreement, in
substantially the form of Annex A hereto.
"Bank Account" means any of the Collection Account, the Excess
Collections Account or the Reserve Account.
"Bank Commitment" of any Bank means, (a) with respect to CSFB,
$150,000,000; or (b) with respect to a Bank that has entered into an Assignment
and Acceptance, the amount set forth therein as such Bank's Bank Commitment, in
each case as such amount may be reduced by an Assignment and Acceptance entered
into between such Bank and its assignee, and as may be further reduced (or
terminated) pursuant to the next sentence. Any termination of the Purchase Limit
pursuant to the terms of this Agreement shall terminate the Bank Commitment of
each Bank.
"Banks" has the meaning set forth in the Preamble.
"Bi-Weekly Contract" means any Contract pursuant to which the
scheduled level payment of interest and principal is due every 14 days.
"Business Day" shall mean any day on which (a) commercial
banks in New York City are not authorized or required to be closed, and (b) in
the case of a Business Day which relates to calculation of a Eurodollar Rate,
dealings are carried on in the London interbank Eurodollar market.
"Buy-For Contract" means a Contract under which the related
Obligor is not a resident of the related Manufactured Home and such Manufactured
Home was purchased primarily for use by some party other than the Obligor.
"California Weighted Average FICO Score" means, as of any date
of determination, the weighted average (weighted solely based upon the
Outstanding Balances of the Eligible Receivables owed by the applicable Obligors
as of such date of determination) of the FICO Scores of the Obligors related to
all Eligible Receivables originated in California as of such date of
determination.
"Capital Deficiency" means, with respect to any time of
determination, the amount, if any, by which aggregate Capital Investment at such
time plus all accrued and unpaid Yield and Fees at such time shall exceed the
product of (x) the then Advance Rate and (y) the Net Receivables Pool Balance at
such time.
"Capital Investment" of any Receivable Interest means the
original amount paid to the Seller for such Receivable Interest at the time of
its purchase by an Investor or a Bank pursuant to this Agreement or such amount
divided or combined in accordance with Section 2.03, in each case reduced from
time to time by Collections distributed on account of such Capital Investment
pursuant to Section 5.02 ; provided that if such Capital Investment shall have
been reduced by any payment and
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thereafter all or a portion of such distribution is rescinded or must otherwise
be returned for any reason, such Capital Investment shall be increased by the
amount of such rescinded or returned payment, as though it had not been made.
"Capital Stock" means any and all shares, interests,
participations or other equivalents (however designated) of capital stock of a
corporation, any and all equivalent ownership interests in a Person (other than
a corporation) and any and all warrants or options to purchase any of the
foregoing.
"Change of Control" means (i) (a) the Parent shall cease to
own, directly or indirectly, 100% of the outstanding Capital Stock of HomePride;
(b) HomePride shall cease to own 100% of the Capital Stock of HomePride SPV; or
(c) any "person" or "group" (as such terms are used in Sections 13(d) and 14(d)
of the Securities Exchange Act of 1934, as amended), shall become, or obtain
rights (whether by means of warrants, options or otherwise, to become, the
"beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the Exchange Act),
directly or indirectly, of more than 50% of the outstanding Capital Stock of the
Parent, (ii) a "Change of Control" as defined in the 1999 Indenture shall have
occurred or (iii) a "Change of Control" as defined in the 2002 Indenture shall
have occurred.
"CIT" means CIT Group Inc., a Nevada corporation, or any
successor thereto.
"CIT Group/Sales" means The CIT Group/Sales Financing, Inc., a
Delaware corporation, or any successor thereto.
"CIT Group/Sales Termination Date" has the meaning set forth
in Section 11.01(c).
"CIT Guaranty" means the Guaranty, dated as of the Closing
Date, executed by CIT in favor of the Agent in respect of the obligations of CIT
Group/Sales, in its capacity as Sub-Servicer under this Agreement, as such
Guaranty may be amended, supplemented or otherwise modified from time to time.
"Closing Date" means April 18, 2002.
"Code" means the Internal Revenue Code of 1986, as amended.
"Collection Account" has the meaning set forth in Section
11.03.
"Collection Account Bank" has the meaning set forth in Section
11.03.
"Collection Period" means, with respect to a Distribution
Date, the calendar month immediately preceding such Distribution Date (or
portion thereof following the Closing Date or the most recent Take-Out Date).
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"Collections" means, with respect to any Receivable, all cash
collections and other cash proceeds of such Receivable, including, without
limitation, all cash proceeds of Related Security with respect to such
Receivable received in respect of such Receivable after the related Cut-Off Date
(but excluding any fees occasioned by the making of expedited payments by the
related Obligor by means of telephonic communication) and all amounts paid under
or in connection with any Interest Rate Hedge purchased in accordance with the
provisions of this Agreement.
"Commonly Controlled Entity" means an entity, whether or not
incorporated, which is under common control with the Parent within the meaning
of Section 4001 of ERISA or is part of a group which includes the Parent and
which is treated as a single employer under Section 414 of the Code.
"Computer Tape" means, with respect to Pool Receivables, a
computer tape or other electronic medium in a format reasonably acceptable to
the Agent containing data specifications approved by the Agent on or prior to
the date of the initial Purchase hereunder.
"Conduit" has the meaning set forth in the Preamble.
"Consolidated EBIT" shall mean for any date of determination
hereunder, an amount equal to (A) the sum of Consolidated Net Income (Loss) as
calculated for the most recently concluded fiscal quarter plus, (B) to the
extent deducted in determining Consolidated Net Income (Loss) for such period,
(i) provisions for taxes based on income and state single business taxes and
(ii) Consolidated Interest Expense.
"Consolidated Interest Expense" means, for any date of
determination hereunder, total interest expense (including without limitation,
interest expense attributable to capital leases in accordance with GAAP) of the
Parent and its Subsidiaries on a consolidated basis as calculated for the most
recently concluded fiscal quarter.
"Consolidated Net Income (Loss)" means, for any fiscal period
of the Parent and its consolidated Subsidiaries, the net income (or loss) of the
Parent and such Subsidiaries on a consolidated basis for such period (taken as a
single accounting period) determined in conformity with GAAP; provided, however,
that there shall be excluded therefrom the income (or loss) of any Person
accrued prior to the date such Person becomes such a consolidated Subsidiary of
the Parent or is merged into or consolidated with the Parent or such a
consolidated Subsidiary of the Parent, or such Person's assets are acquired by
the Parent or one of such consolidated Subsidiaries.
"Consolidated Tangible Net Worth" means, at any date, all
amount calculated in accordance with GAAP as to (i) the consolidated net worth
of the Parent and its consolidated Subsidiaries minus (ii) the consolidated
intangibles of the Parent and such consolidated Subsidiaries, including, without
limitation, goodwill, trademarks, tradenames, copyrights, patents, patent
applications,
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licenses and rights in any of the foregoing and other items treated as
intangibles in accordance with GAAP.
"Contract" means a Manufactured Housing Contract, a Land and
Home Contract or a Mortgage Loan.
"Control Agreement" means a control agreement, in the form of
Annex B hereto, among the Collection Account Bank, the Agent, the Servicer and
the Seller, dated as of the Closing Date, with respect to each of the Bank
Accounts, as the same may be amended, modified, restated or supplemented from
time to time in accordance with its terms.
"Coupon Rate" means, with respect to any Receivable, the per
annum rate of interest for such Receivable set forth in the related Contract.
"Credit and Collection Policy" means (i) those manufactured
housing loan credit policies and practices of the Servicer and (ii) those
manufactured housing loan servicing policies and practices of the Sub-Servicer,
as such manufactured loan servicing policies and practices shall have been
adopted by the Servicer, all as in effect on the date of this Agreement as set
forth in Schedule II attached hereto, as modified from time to time in
compliance with this Agreement.
"CSFB" has the meaning set forth in the Preamble.
"Custodial Agreement" means the Custodial Agreement, dated as
of the Closing Date, among the Custodian, the Agent, the Seller, the Servicer
and the Sub-Servicer, including all amendments, modifications and supplements
thereto.
"Custodial Fees" means the fees and expenses owed to the
Custodian under the Custodial Agreement.
"Custodian" means JPMorgan Chase Bank, as custodian under the
Custodial Agreement and any successor appointed pursuant to the terms thereof.
"Cut-Off Date" means, with respect to any Pool Receivable, the
date specified as such in the Purchase Request for such Receivables and as
approved by the Agent.
"Dealer" means a dealer who sold a Manufactured Home to an
Obligor and who originated and assigned the Contract relating to such
Manufactured Home to HomePride under a Dealer Agreement, and any successor to
such Dealer.
"Dealer Agreement" means any agreement between HomePride and a
Dealer with respect to the origination and assignment of Contracts,
substantially in the form previously delivered to and approved by the Agent, and
as such may be amended, modified and supplemented from time to
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time with the consent of the Agent (in the case of amendments, modifications and
supplements other than those of an inconsequential nature), such consent not to
be unreasonably withheld.
"Dealer Recourse" means, with respect to a Contract, all of
HomePride's rights arising under the related Dealer Agreement or otherwise
against the Dealer which originated such Contract.
"Debt" means, without duplication, (a) indebtedness for
borrowed money, whether evidenced by bonds, debentures, notes or other similar
instruments, (b) obligations to pay the deferred purchase price of property or
services, (c) obligations as lessee under leases which shall have been or should
be, in accordance with GAAP, recorded as capital leases, (d) obligations under
direct or indirect guaranties in respect of, and obligations (contingent or
otherwise) to purchase or otherwise acquire, or otherwise to assure a creditor
against loss in respect of, indebtedness or obligations of others of the kinds
referred to in clauses (a) through (c) above and (e) Restricted Contingent
Liabilities.
"Deemed AAA Advance Percentage" means as of any date of
determination, an advance percentage determined by the Agent to be consistent
with the criteria deemed by the Rating Agencies to be necessary for the facility
contemplated by this Agreement to receive a Shadow Rating of "AAA" from S&P and
"Aaa" from Moody's; it being understood that such determination shall be made by
the Agent without actually obtaining such a Shadow Rating from S&P and Moody's.
"Deemed AAA Capital Investment Amount" means as of any date of
determination, the product of (i) the Net Receivables Pool Balance and (ii) the
Deemed AAA Advance Percentage as of such date.
"Deemed AAA Credit Enhancement Amount" means as of any date of
determination, an amount equal to the excess, if any, of (i) the Capital
Investment as of such date of determination over (ii) the Deemed AAA Capital
Investment Amount as of such date of determination.
"Defaulted Receivable" means a Receivable with respect to
which:
(a) the related Manufactured Home or Mortgaged
Property has been repossessed or foreclosed upon;
(b) all or any portion greater than $65 of any
Scheduled Payment is 90 days or more past due;
(c) such Receivable has been partially or wholly
charged-off for any reason because the Servicer or
Sub-Servicer has made a good faith determination that payments
under the related Contract are not likely to be resumed;
(d) the related Obligor is involved in an Event of
Bankruptcy; or
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(e) consistent with the Credit and Collection Policy,
such Receivable has been or should be written off as
uncollectible.
"Deferred Payment Receivable" means a Receivable with respect
to which the related Contract provides that the first Scheduled Payment thereon
is due on a date later than 60 days from the date of the origination of such
Contract.
"Delinquency/Repossession Ratio" means, as of any date of
determination, with respect to any group of Receivables, the ratio (expressed as
a percentage) computed by dividing:
(a) the sum, without duplication, of (i) the
Aggregate Outstanding Balance of such Receivables which were
Tier 2 Delinquent Receivables as of the last day of the
immediately preceding Collection Period and (ii) the Aggregate
Outstanding Balance of such Receivables which became
Repossessed Receivables during the immediately preceding
Collection Period;
by
(b) the Aggregate Outstanding Balance of all such
Receivables as of the last day of the immediately preceding
Collection Period.
"Delinquent Receivable" means a Receivable as to which any
Scheduled Payment, or part thereof greater than $65.00, remains unpaid for 30
days or more from the original due date for such Scheduled Payment.
"Determination Date" means, with respect to each Distribution
Date, that day which shall be two (2) Business Days prior to such Distribution
Date.
"Distribution Date" means, the 13th day of each calendar
month, or if such day is not a Business Day, the next succeeding Business Day.
"Dollars" and the sign "$" mean lawful money of the United
States of America.
"Eligible Account" means (a) a segregated, non-interest
bearing trust or custodial account or (b) a segregated direct deposit account,
in each case, maintained with a depository institution or trust company
organized under the laws of the United States of America, or any of the States
thereof, or the District of Columbia, having a certificate of deposit, short
term deposit or commercial paper rating of at least A-1+ by Standard & Poor's
and P-1 by Moody's.
"Eligible Assignee" means CSFB, any of its Affiliates, any
Person managed by CSFB or any of its Affiliates or any other financial or other
institution acceptable to the Agent other than the
9
financial or other institutions set forth on Schedule III hereto as amended from
time to time with the written consent of the Agent.
"Eligible Counterparty" means (A) CSFB or any of its
Affiliates, (B) any other nationally recognized financial institution that is in
the business of entering into interest rate hedging arrangements (i) the
long-term senior unsecured debt obligations of which are rated "AA" or better by
Standard & Poor's and "Aa2" or better by Moody's and (ii) which is otherwise
acceptable to the Agent or (C) any other financial institution that has been
approved in writing by the Agent.
"Eligible Receivable" means, at any time, a Receivable:
(a) the Obligor of which is a United States resident,
is not an Affiliate of any of the parties hereto, and is not a
government or a governmental subdivision or agency;
(b) is not a Defaulted Receivable or Delinquent
Receivable;
(c) which, according to the Contract related thereto,
is required to be paid in full within 360 months of the
original billing date therefor;
(d) which is an "eligible asset" as defined in Rule
3a-7 under the Investment Company Act of 1940, as amended;
(e) which is, and for which the related Contract and
Mortgage Note, if any, is, an "account," "instrument,"
"chattel paper," "general intangible" or "payment intangible"
within the meaning of Article 9 of the UCC of all applicable
jurisdictions;
(f) which is denominated and payable only in Dollars
in the United States;
(g) which arises under a Contract which, together
with such Receivable, is in full force and effect and
constitutes the legal, valid and binding obligation of the
Obligor of such Receivable and is not subject to any
litigation or any right of rescission, dispute, offset,
counterclaim or other defense of such Obligor;
(h) which, together with the related Contract, does
not contravene in any material respect any laws, rules or
regulations applicable thereto (including, without limitation,
laws, rules and regulations relating to usury, consumer
protection, truth in lending, fair credit billing, fair credit
reporting, equal credit opportunity, lender licensing, fair
debt collection practices and privacy) and with respect to
which no part of such Contract or none of the Seller,
HomePride, Servicer, Sub-Servicer or the Obligor is in
violation of any such law, rule or regulation in any material
respect;
10
(i) which arises under a Contract which (i) does not
require the Obligor thereunder to consent to the transfer,
sale or assignment of the rights and duties of the Seller,
HomePride, HomePride SPV or the Dealer thereunder, (ii) does
not contain a confidentiality provision that purports to
restrict the ability of the Investors, Banks or the Agent to
exercise their rights under this Agreement, including, without
limitation, their right to review the related Contract, and
(iii) does not require notice to the Obligor thereunder of any
transfer, sale or assignment of the rights and duties of the
Seller, HomePride, HomePride SPV or the Dealer thereunder;
(j) which (i) satisfies in all respects, other than
in an inconsequential respect, all applicable requirements of
the Credit and Collection Policy and (ii) was originated or
acquired by HomePride in the ordinary course of its business
and in accordance with HomePride's customary acquisition or
underwriting and originating policies and procedures;
(k) for which the related Manufactured Home is a
"single family residence" within the meaning of Section
25(e)(10) of the Code;
(l) which provides for level monthly, semi-monthly or
bi-weekly payments to the stated maturity thereof, and permits
either partial or full prepayment without penalty; and with
respect to which the interest thereon is calculated in
accordance with one of the methods commonly referred to as the
"Simple Interest Method", "Actuarial Method" or the "Rule of
78's Method" (with payments received applied first to interest
accrued);
(m) which, if the related Contract was not originated
by HomePride, was originated by a Dealer and such Dealer is
subject to a Dealer Agreement which is in full force and
effect;
(n) which arises under a Contract which shall
represent a first priority perfected security interest in the
related Manufactured Home and/or Mortgaged Property;
(o) which is serviced by the Servicer or the
Sub-Servicer, and with respect to which the related Contract
has not been compromised, adjusted or modified (including by
the extension of time for payment or the granting of any
discounts, allowances or credits) other than in a manner that
was, in the reasonable judgment of the Servicer, Sub-Servicer
or any prior servicer or holder of the related Contract,
necessary to maximize the amount to be received thereunder;
(p) with respect to which at all times since the
origination of the related Contract the related Manufactured
Home and Mortgaged Property, if any, is covered
11
by appropriate physical damage insurance or property insurance
(including for each Manufactured Home located in an area
identified in the Federal Register by the Federal Emergency
Management Agency as having special flood hazards, a flood
insurance policy meeting the requirements of the guidelines of
the Flood Insurance Administration as of the date of
origination), in each case in an amount at least equal to the
lesser of the maximum insurable value of the Manufactured Home
and the Amount Financed and otherwise satisfying the
provisions of Section 11.05;
(q) which the Seller acquired in good faith, for
value and without notice of any Lien and with respect to which
the Seller has good and marketable title, free and clear of
all Liens;
(r) which shall not have been originated in a
jurisdiction under which the assignment or sale of such
Receivable would be invalid or unlawful;
(s) with respect to which all information in the
Computer Tape and otherwise provided by HomePride, either
Servicer Party or the Seller to the Agent hereunder shall be
true and correct as of the date of the Purchase of a
Receivable Interest therein;
(t) with respect to which no adverse selection
process was used for selecting such Receivable for sale by
HomePride to HomePride SPV or by HomePride SPV to the Seller
and which has not been selected for inclusion in Receivables
Pool under this Agreement in a manner that is adverse to the
interests of the Investors or the Banks;
(u) with respect to which the Servicer or
Sub-Servicer has performed all acts required to preserve the
rights of the Agent, the Investors and the Banks in any
Insurance Policies in respect of such Receivable;
(v) with respect to which no error, omission,
misrepresentation, negligence or fraud in any respect, other
than in an inconsequential respect, occurred in connection
with the origination of such Receivable and the related
Contract;
(w) with respect to which the related Manufactured
Home and Mortgaged Property is free of damage and in good
repair;
(x) with respect to which there has been no fraud,
dishonesty, material misrepresentation or negligence on the
part of HomePride in connection with the origination or
acquisition of such Receivable;
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(y) if such Receivable arises under a Land and Home
Contract or a Mortgage Loan, with respect to which the related
Mortgage constitutes a valid first priority lien upon and
security title to the related Mortgaged Property described
therein;
(z) if such Receivable arises under a Land and Home
Contract or a Mortgage Loan, with respect to which no part of
the Mortgaged Property purporting to secure the related
Contract has been, or shall have been, released from the lien
or security title of the Mortgage securing the related
Contract;
(aa) if such Receivable arises under a Land and Home
Contract or a Mortgage Loan, if the related Mortgage
constitutes a deed of trust, a trustee, duly qualified under
applicable law to act as such, is properly designated, serving
and named in such Mortgage;
(bb) if such Receivable arises under a Land and Home
Contract or a Mortgage Loan, with respect to which the related
Mortgaged Property is located in the United States;
(cc) if such Receivable arises under a Land and Home
Contract or a Mortgage Loan, with respect to which there is no
delinquent tax or assessment lien on the related Mortgaged
Property;
(dd) if such Receivable arises under a Land and Home
Contract or a Mortgage Loan, with respect to which no
improvement located on or being part of the related Mortgaged
Property is in violation of any applicable zoning law or
regulation in any material respect; and all material
inspections, licenses and certificates required to be made or
issued with respect to all occupied portions of such Mortgaged
Property 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, and such Mortgaged Property
is lawfully occupied under the applicable law;
(ee) if such Receivable arises under a Land and Home
Contract or a Mortgage Loan, no hazardous substances,
hazardous wastes or solid wastes, as such terms are defined in
the Comprehensive Environmental Response Compensation and
Liability Act, the Resource Conservation and Recovery Act of
1976, or other federal, state or local environmental
legislation exist on, or affect, the related Mortgaged
Property;
(ff) if such Receivable arises under a Mortgage Loan
secured by real estate, such Mortgage Loan is evidenced by one
original promissory note which is secured by a valid and
perfected first lien on the related Mortgaged Property;
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(gg) which arises under a Contract which contains
customary and enforceable provisions adequate for realization
of the benefits of the Related Security for such Contract;
(hh) which arises under a Contract which (together
with the Collections and Related Security related thereto) has
been the subject of either a valid transfer and assignment
from HomePride to HomePride SPV, and from HomePride SPV to the
Seller, of all of HomePride's and HomePride SPV's,
respectively, right, title and interest therein or the grant
of a first priority perfected security interest therein (and
in the Collections and Related Security related thereto);
(ii) which arises under a Contract with respect to
which each of HomePride, HomePride SPV and Seller has
performed all obligations required to be performed by it
thereunder;
(jj) which, together with the related Contract and
all agreements with respect thereto, was (i) prior to the sale
thereof to HomePride SPV pursuant to the Purchase and
Contribution Agreement, owned by HomePride free and clear of
any lien or other right that may impair the interest of the
Investors or the Banks or the Servicer's rights under this
Agreement and (ii) prior to the sale thereof to the Seller
pursuant to the Purchase and Sale Agreement, owned by
HomePride SPV free and clear of any lien or other right that
may impair the interest of the Investors or the Banks or the
Servicer's rights under this Agreement;
(kk) in which HomePride SPV, after the transfer from
HomePride pursuant to the Purchase and Contribution Agreement
(in the event the intent of the parties thereto that such
transfer constitutes a true sale is disregarded), shall have
acquired a valid and perfected first priority security
interest, along with the related Collections, following the
respective purchase date with respect thereto, free and clear
of any lien or other right that may impair the interest of the
Seller, the Investors, the Banks or the Servicer under this
Agreement;
(ll) in which the Seller, after transfer from
HomePride SPV pursuant to the Purchase and Sale Agreement (in
the event the intent of the parties thereto that such transfer
constitutes a true sale is disregarded), shall have acquired a
valid and perfected first priority security interest, along
with the related Collections, following the respective
purchase date with respect thereto, free and clear of any lien
or any other right that may impair the interest of the Seller,
Investors, Banks or Servicer under this Agreement;
(mm) as to which no effective financing statement or
other instrument similar in effect covering such Receivable,
the related Contract, any interest therein, or
14
Collections with respect thereto is on file in any recording
office except such as may be filed in favor of HomePride under
any Dealer Agreement, HomePride SPV under the Purchase and
Contribution Agreement, the Seller under the Purchase and Sale
Agreement or the Agent under this Agreement;
(nn) which arises under a Contract with respect to
which all costs, fees, intangible, documentary and recording
taxes and expenses incurred in making, closing and recording
such Contract have been paid;
(oo) if such Receivable arises under a Manufactured
Housing Contract, the related Manufactured Home is personal
property, was personal property at the time of the execution
and delivery of such Contract by the parties thereto, and is
not and was not, at such time, 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;
(pp) the Obligor of which, if a natural person, is
living, is not a minor under the laws of his/her state of
residence, is competent to enter into a contract and incur
debt;
(qq) with respect to which all material consents,
licenses or authorizations of, or registrations with, any
governmental authority required to be obtained or given in
connection with the origination of such Receivable, the
execution and delivery of the related Contract, and the sale,
assignment and transfer of the related Contract to HomePride
SPV and the Seller, and the servicing of the related Contract
by the Servicer and Sub-Servicer have been duly obtained or
given and are in full force and effect;
(rr) which arises under a Contract which has a fixed
annual percentage rate and provides for level monthly,
bi-weekly or semi-monthly payments of principal and interest
and which fully amortize such Contract over its term and the
portion of any scheduled payment allocable to interest is
calculated on the basis that each monthly payment is applied
on its due date, regardless of when it is actually made;
(ss) which has a Loan-to-Value Ratio not exceeding
100%;
(tt) with respect to which, (i) if the related
Manufactured Home is located in a state in which notation of a
security interest on the Title related to such Manufactured
Home is required or permitted to perfect (a) security interest
in such Manufactured Home, such Title shows HomePride, or if a
new or replacement Title with respect to such Manufactured
Home is being applied for, such Title will be issued within
180 days and will show, HomePride, as the holder of a first
priority security interest in such Manufactured Home; (ii) if
the related Manufactured Home is located in
15
a state in which the filing of a financing statement or the
making of a fixture filing under the UCC is required to
perfect a security interest in manufactured housing, such
filings or recordings have been duly made and show HomePride
as secured party; (iii) if the related Manufactured Home
secures a Land and Home Contract, the related land securing
such Land and Home Contract is subject to a Mortgage properly
filed in the appropriate public recording office which itself,
or with an assignment of mortgage properly filed in such
office, names HomePride as mortgagee; provided, further that
in each such case, the Seller has the same rights as the
secured party of record would have (if such secured party were
still the owner of the Contract) against all Persons claiming
an interest in such Manufactured Home;
(uu) such Receivable is not a Deferred Payment
Receivable;
(vv) which is of a type which the Agent has not
provided notice to the Seller that such type of Receivable is
not permitted to be included in a pool of manufactured housing
loans which secures or is represented by interests in rated
securities by any of the Rating Agencies;
(ww) the Obligor of which has been directed to make
payments to the Specified Account (or to a Lock-Box Account as
and when required under this Agreement);
(xx) the Outstanding Balance of such Receivable at
the time of Purchase of a Receivable Interest therein does not
exceed $200,000;
(yy) such Receivable was originated by HomePride or a
Person (including, without limitation, an Affiliate of
HomePride, but excluding the Parent) which sold such
Receivable to HomePride and said Receivable which was
purchased by HomePride was, prior to the time of its purchase,
re-underwritten in accordance with the standards and criteria
set forth in the Credit and Collection Policy;
(zz) which is evidenced by one original executed
Contract;
(aaa) the originally executed Contract related to
such Receivable and related Receivable File is in the
possession of the Custodian;
(bbb) with respect to which the documents contained
in the related Receivable File are not defective in any
material respect;
(ccc) if such Receivable arises under a Land and Home
Contract or is a Mortgage Loan, such Land and Home Contract or
the related Mortgage Note, as applicable, is endorsed to
HomePride in blank;
16
(ddd) if such Receivable arises under a Land and Home
Contract or is a Mortgage Loan, the original related Land and
Home Contract or Mortgage Note, as applicable, is in the
possession of the Custodian;
(eee) if such Receivable arises under a Land and Home
Contract or is a Mortgage Loan, with respect to which the
related Mortgage has been properly recorded as required by
law;
(fff) if such Receivable arises under a Manufactured
Housing Contract, the original Title is in the possession of
the Custodian;
(ggg) the related Contract, and the loan created
thereunder, does not constitute a Section 32 Loan;
(hhh) with respect to which, the representations and
warranties of the Dealer involved in the origination of such
Receivable were true and correct as of the date that the
Receivable was acquired from such Dealer;
(iii) which, if originated by a Dealer, was
originated by such Dealer in the regular course of its
business;
(jjj) the inclusion at any time (whether on the date
a Receivable Interest in such Receivable is first Purchased or
at any time thereafter) of such Receivable in the Receivables
Pool as an Eligible Receivable shall not cause the Weighted
Average Loan-to-Value to be greater than 90%;
(kkk) the inclusion at any time (whether on the date
a Receivable Interest in such Receivable is first Purchased or
at any time thereafter) of such Receivable in the Receivables
Pool as an Eligible Receivable shall not cause the Weighted
Average FICO Score to be less than 670;
(lll) the inclusion at any time (whether on the date
a Receivable Interest in such Receivable is first Purchased or
at any time thereafter) of such Receivable in the Receivables
Pool as an Eligible Receivable shall not cause the Weighted
Average Manufactured Housing Contract Remaining Term to be
greater than 300 months;
(mmm) the inclusion (whether on the date a Receivable
Interest in such Receivable is first Purchased or at any time
thereafter) of such Receivable in the Receivables Pool as an
Eligible Receivable shall not cause the California Weighted
Average FICO Score to be less than 700 at any time that the
amount by which the Aggregate Outstanding Balance of all
Eligible Receivables in the Receivables Pool
17
originated in the State of California exceeds 20% of the
Aggregate Outstanding Balance of all Eligible Receivables in
the Receivables Pool;
(nnn) until such time as HomePride, HomePride SPV and
the Seller shall have obtained duly issued licenses, permits
and/or approvals which authorize them to originate and hold
Contracts under the applicable statutes, rules, regulations,
case law and administrative decisions of the State of Maryland
and its courts and administrative bodies, (i) the Obligor
under the Contract related to such Receivable shall not be a
resident of the State of Maryland, (ii) the related
Manufactured Home shall not be located in the State of
Maryland and (iii) the Title for such Manufactured Home shall
not be, and shall not be required to be, issued by the State
of Maryland or any subdivision, agency, bureau or court
thereof;
(ooo) until such time as HomePride, HomePride SPV and
the Seller shall have obtained duly issued licenses, permits
and/or approvals which authorize them to originate and hold
Contracts under the applicable statutes, rules, regulations,
case law and administrative decisions of the State of
Louisiana and its courts and administrative bodies, (i) the
Obligor under the Contract related to such Receivable shall
not be a resident of the State of Louisiana, (ii) the related
Manufactured Home shall not be located in the State of
Louisiana and (iii) the Title for such Manufactured Home shall
not be, and shall not be required to be, issued by the State
of Louisiana or any subdivision, agency, bureau or court
thereof; and
(ppp) until such time as HomePride, HomePride SPV and
the Seller shall have obtained duly issued licenses, permits
and/or approvals which authorize them to originate and hold
Contracts under the applicable statutes, rules, regulations,
case law and administrative decisions of the Commonwealth of
Pennsylvania and its courts and administrative bodies, (i) the
Obligor under the Contract related to such Receivable shall
not be a resident of the Commonwealth of Pennsylvania, (ii)
the related Manufactured Home shall not be located in the
Commonwealth of Pennsylvania and (iii) the Title for such
Manufactured Home shall not be, and shall not be required to
be, issued by the Commonwealth of Pennsylvania or any
subdivision, agency, bureau or court thereof;
(qqq) with respect to which the Amount Financed under
the related Contract did not exceed the dealer invoice price
with respect to the related Manufactured Home by more than
135%; and
(rrr) which arises under a Contract which is not a
Buy-For Contract, other than a Parent/Child Buy-For Contract.
18
"Eligible Servicer" means HomePride or a Person, acceptable to
the Agent, which at the time it succeeds the then existing Servicer as Servicer,
(a) is servicing a portfolio of manufactured housing loans, (b) is legally
qualified and has the capacity to service the Receivables in the Receivables
Pool, (c) has demonstrated the ability, professionally and competently, to
service a portfolio of manufactured housing loans similar to the Receivables in
the Receivables Pool with reasonable skill and care, and (d) is qualified and
entitled to use, pursuant to a license or other written agreement, and agrees to
maintain the confidentiality of, the software which the Servicer and
Sub-Servicer use in connection with performing its duties and responsibilities
under this Agreement or otherwise has available software which is adequate to
perform its duties and responsibilities under this Agreement.
"Eligible Sub-Servicer" means CIT Group Sales or a Person,
acceptable to the Agent, which at the time it succeeds the then existing
Sub-Servicer as Sub-Servicer, (a) is servicing a portfolio of manufactured
housing loans, (b) is legally qualified and has the capacity to service the
Receivables in the Receivables Pool, (c) has demonstrated the ability,
professionally and competently, to service a portfolio of manufactured housing
loans similar to the Receivables in the Receivables Pool with reasonable skill
and care, and (d) is qualified and entitled to use, pursuant to a license or
other written agreement, and agrees to maintain the confidentiality of, the
software which the Sub-Servicer uses in connection with performing its duties
and responsibilities under this Agreement or otherwise has available software
which is adequate to perform its duties and responsibilities under this
Agreement.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and the regulations promulgated and rulings
issued thereunder.
"ERISA Affiliate" means, with respect to the Parent or any of
its Subsidiaries, any trade or business (whether or not incorporated) that is a
member of a group of which the Parent or any of its Subsidiaries is a member and
which is treated as a single employer under Section 414(b) or (c) of the Code
or, solely for purposes of Section 302 of ERISA and Section 412 of the Code, is
treated as a single employer under Section 414 of the Code.
"ERISA Event" means for any Person, (a) any "reportable
event," as defined in Section 4043 of ERISA or the regulations issued thereunder
with respect to a Plan (other than an event for which the 30 day notice period
is waived); (b) the existence with respect to any Plan of an "accumulated
funding deficiency" (as defined in Section 412 of the Code or Section 302 of
ERISA), whether or not waived; (c) the filing pursuant to Section 412(d) of the
Code or Section 303(d) of ERISA of an application for a waiver of the minimum
funding standard with respect to any Plan; (d) the incurrence by such Person or
any of its ERISA Affiliates of any liability under Title IV of ERISA with
respect to the termination of any Plan; (e) the receipt by such Person or any
ERISA Affiliate from the PBGC or a plan administrator of any notice relating to
an intention to terminate any Plan or Plans or to appoint a trustee to
administer any Plan; (f) the incurrence by such Person or any of its ERISA
Affiliates of any liability with respect to the withdrawal or partial withdrawal
from any Plan or Multiemployer Plan; or (g) the receipt by such Person or any
ERISA Affiliate of any notice, or the receipt by any Multiemployer Plan from
such Person or any ERISA Affiliate of any notice, concerning the imposition
19
of Withdrawal Liability or a determination that a Multiemployer Plan is, or is
expected to be, insolvent or in reorganization, within the meaning of Title IV
of ERISA.
"Eurocurrency Liabilities" has the meaning assigned to such
term in Regulation D of the Board of Governors of the Federal Reserve System, as
in effect from time to time.
"Eurodollar Rate" means, for any Fixed Period, an interest
rate per annum equal to the rate per annum (rounded upward, if necessary, to the
nearest 1/16 of 1%) as determined on the basis of the offered rates for deposits
in U.S. Dollars, for a period of 30 days which appears at Telerate Page 3750 as
of 11:00 A.M. (London time) (i) in the case of any Fixed Period in respect of
which Yield is computed by reference to the Assignee Rate, two (2) Business Days
before the first day of such Fixed Period or (ii) in the case of any Fixed
Period in respect of which Yield is computed by reference to the Investor Rate,
on the first day of such Fixed Period; provided that if the rate described above
does not appear on Telerate Page 3750 on any applicable interest determination
date, the Eurodollar Rate shall be the rate (rounded upward as described above,
if necessary) for deposits in Dollars for a period of 30 days on the Reuters
Screen LIBO Page, as of 11:00 A.M. (London time) (i) in the case of any Fixed
Period in respect of which Yield is computed by reference to the Assignee Rate,
two (2) Business Days before the first day of such Fixed Period or (ii) in the
case of any Fixed Period in respect of which Yield is computed by reference to
the Investor Rate, on the first day of such Fixed Period. If the Agent is unable
to determine the Eurodollar Rate for any Fixed Period by reference to either the
Telerate Page 3750 or the Reuters Screen LIBO Page, then the Eurodollar Rate for
that Fixed Period will be the rate per annum of the offered rate for deposits in
U.S. Dollars for a period of 30 days which is offered by CSFB in the London
interbank market at approximately 11:00 A.M. (London time) two (2) Business Days
before the first day of such Fixed Period. Each determination by the Agent
pursuant to this definition shall be conclusive absent manifest error.
"Eurodollar Rate Reserve Percentage" of any Investor or Bank
for any Fixed Period in respect of which Yield is computed by reference to the
Eurodollar Rate means the reserve percentage applicable two Business Days before
the first day of such Fixed Period under regulations issued from time to time by
the Board of Governors of the Federal Reserve System (or any successor) (or if
more than one such percentage shall be applicable, the daily average of such
percentages for those days in such Fixed Period during which any such percentage
shall be so applicable) for determining the maximum reserve requirement
(including, without limitation, any emergency, supplemental or other marginal
reserve requirement) for such Investor or Bank with respect to liabilities or
assets consisting of or including Eurocurrency Liabilities (or with respect to
any other category of liabilities that includes deposits by reference to which
the interest rate on Eurocurrency Liabilities is determined) having a term equal
to such Fixed Period.
20
"Event of Bankruptcy" shall be deemed to have occurred with
respect to a Person if either:
(a) a case or other proceeding shall be commenced,
without the application or consent of such Person, in any
court, seeking the liquidation, reorganization, debt
arrangement, dissolution, winding up, or composition or
readjustment of debts of such Person, the appointment of a
trustee, receiver, custodian, liquidator, assignee,
sequestrator or the like for such Person or all or
substantially all of its assets, or any similar action with
respect to such Person under any law relating to bankruptcy,
insolvency, reorganization, winding up or composition or
adjustment of debts, and, with respect to any such case or
proceeding brought against, or in respect of, any Person other
than Seller or HomePride SPV, such case or proceeding shall
continue undismissed, or unstayed and in effect, for a period
of 60 consecutive days; or an order for relief in respect of
such Person shall be entered in an involuntary case under the
federal bankruptcy laws or other similar laws now or hereafter
in effect; or
(b) such Person shall commence a voluntary case or
other proceeding under any applicable bankruptcy, insolvency,
reorganization, debt arrangement, dissolution or other similar
law now or hereafter in effect, or shall consent to the
appointment of or taking possession by a receiver, liquidator,
assignee, trustee, custodian, sequestrator (or other similar
official) for such Person or for any substantial part of its
property, or shall make any general assignment for the benefit
of creditors, or shall fail to, or admit in writing its
inability to, pay its debts generally as they become due, or,
if a corporation or similar entity, its board of directors
shall vote to implement any of the foregoing.
"Excess Collections" means, with respect to any Distribution
Date, the amount equal to (A) the Interest Collections, with respect to the
immediately preceding Collection Period minus (B) the sum of (i) an amount equal
to all accrued Yield, Fees and Other Amounts to be paid on such Distribution
Date, (ii) an amount equal to the accrued fees and expenses to be paid to the
Custodian on such Distribution Date, (iii) the amount to be deposited in the
Reserve Account on such Distribution Date and (iv) an amount equal to the
accrued Servicing Fees to be paid on such Distribution Date.
"Excess Collections Account" means the account designated as
the Excess Collections Account in, and which is established and maintained with
the Collection Account Bank pursuant to Section 11.14(d).
"Excess Collections Percentage" means, with respect to any
date of determination, the average of Spread Percentages for the three
consecutive Collection Periods (or such lesser number of Collection Periods as
shall have elapsed after the Closing Date) that are immediately preceding such
date.
21
"Excess Concentration Amount" means, at any time, an amount
equal to the sum, without duplication, of the following:
(a) the amount by which the Aggregate Outstanding
Balance of Eligible Receivables in the Receivables Pool for
which the number of Scheduled Payments has been increased
subsequent to the origination thereof exceeds 2% of the
Aggregate Outstanding Balance of all Eligible Receivables in
the Receivables Pool;
(b) the amount by which the Aggregate Outstanding
Balance of Eligible Receivables in the Receivables Pool which
were not originated by HomePride or an Affiliate of HomePride
and were acquired by HomePride as part of an acquisition of a
portfolio of Contracts, exceeds 5% of the Aggregate
Outstanding Balance of all Eligible Receivables in the
Receivables Pool;
(c) the amount by which the Aggregate Outstanding
Balance of all Eligible Receivables in the Receivables Pool
that are secured by manufactured homes which were
previously-owned manufactured homes at the time such Contracts
were originated exceeds 25% of the Aggregate Outstanding
Balance of all Eligible Receivables in the Receivables Pool;
(d) the amount by which the Aggregate Outstanding
Balance of all Eligible Receivables in the Receivables Pool
originated in the State of California exceeds 30% of the
Aggregate Outstanding Balance of all Eligible Receivables;
(e) the amount by which the Aggregate Outstanding
Balance of all Eligible Receivables in the Receivables Pool
originated in any one State, other than the State of
California, exceeds 20% of the Aggregate Outstanding Balance
of all Eligible Receivables in the Receivables Pool;
(f) the amount by which the Aggregate Outstanding
Balance of all Eligible Receivables in the Receivables Pool
originated in the Three Highest States exceeds 60% of the
Aggregate Outstanding Balance of all Eligible Receivables in
the Receivables Pool;
(g) the amount by which the Aggregate Outstanding
Balance of all Eligible Receivables in the Receivables Pool
for which the related land was pledged in lieu of a down
payment at the time of purchase by the Obligor exceeds 3% of
the Aggregate Outstanding Balance of all Eligible Receivables
in the Receivables Pool;
(h) the amount by which the Aggregate Outstanding
Balance of all Eligible Receivables in the Receivables Pool
secured by single-wide Manufactured Homes
22
exceeds 40% of the Aggregate Outstanding Balance of all
Eligible Receivables in the Receivables Pool;
(i) the amount by which the Aggregate Outstanding
Balance of all Eligible Receivables in the Receivables Pool
attributable to loans for the purchase of Manufactured Homes
which were previously repossessed exceeds 5% of the Aggregate
Outstanding Balance of all Eligible Receivables in the
Receivables Pool;
(j) the amount by which the Aggregate Outstanding
Balance of all Eligible Receivables in the Receivables Pool
with respect to which the related Manufactured Home is located
in a mobile home park exceeds 60% of the Aggregate Outstanding
Balance of all Eligible Receivables in the Receivables Pool;
(k) the amount by which the Aggregate Outstanding
Balance of all Eligible Receivables in the Receivables Pool
for which an exception to the Credit and Collection Policy was
made exceeds 10% of the Aggregate Outstanding Balance of all
Eligible Receivables in the Receivables Pool that were
originated by HomePride;
(l) the amount by which the aggregate Financed Points
related to all Eligible Receivables in the Receivables Pool
exceeds 4% of the Aggregate Outstanding Balance of all
Eligible Receivables in the Receivables Pool;
(m) the amount by which the Aggregate Outstanding
Balance of all Eligible Receivables in the Receivables Pool
with respect to which the related Obligor has a FICO Score of
600 or less or as to which a FICO Score is not available
exceeds 5% of the Aggregate Outstanding Balance of all
Eligible Receivables in the Receivables Pool;
(n) the amount by which the Aggregate Outstanding
Balance of all Eligible Receivables in the Receivables Pool
with respect to which the Outstanding Balance thereof is
greater than $150,000 but less than or equal to $200,000
exceeds 10% of the Aggregate Outstanding Balance of all
Eligible Receivables in the Receivables Pool;
(o) the amount by which the Aggregate Outstanding
Balance of all Eligible Receivables in the Receivables Pool
for which the down payment at the time of purchase by the
related Obligor was less than 8% of the Amount Financed in
respect of the related Manufactured Home and/or Mortgaged
Property exceeds 35% of the Aggregate Outstanding Balance of
all Eligible Receivables in the Receivables Pool;
(p) the amount by which the Aggregate Outstanding
Balance of all Eligible Receivables in the Receivables Pool as
to which the related Manufactured Homes and/or Mortgaged
Properties securing the related Contracts did not constitute
the
23
primary residence of the related Obligors at the time of
origination of such Contracts exceeds 5% of the Aggregate
Outstanding Balance of all Eligible Receivables in the
Receivables Pool; and
(q) the amount by which the Aggregate Outstanding
Balance of all Eligible Receivables in the Receivables Pool
with respect to which the related Contract is a Parent/Child
Buy-For Contract exceeds 5% of the Aggregate Outstanding
Balance of all Eligible Receivables in the Receivables Pool.
"Exit Fee Rate" shall have the meaning ascribed thereto in the
Fee Letter.
"Facility Termination Date" means the earliest of (a) April
17, 2003, unless, prior to such date (or the date so extended pursuant to this
clause), upon the Seller's request, made not more than 90 nor less than 45 days
prior to the then Facility Termination Date, the Conduit and one or more Banks
having commitments equal to 100% of the Purchase Limit shall in their sole
discretion consent, which consent shall be given not more than 30 days prior to
the then Facility Termination Date, to the extension of the Facility Termination
Date to the date occurring 364 days after the then Facility Termination Date;
provided, however, that any failure of the Conduit or any Bank to respond to the
Seller's request for such extension shall be deemed a denial of such request by
the Conduit or such Bank, (b) the date determined pursuant to Section 14.01, and
(c) the date on which the Purchase Limit has been reduced to zero.
"Fair Market Value" means, with respect to any Contract or any
group of Contracts as of any date of determination, the market value of such
Contract or group of Contracts as determined by the Agent and the Servicer.
"Federal Funds Rate" means, for any period, a fluctuating
interest rate per annum equal for each day during such period to the weighted
average of the rates on overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers, as published for such
day (or, if such day is not a Business Day, for the next preceding Business Day)
by the Federal Reserve Bank of New York, or, if such rate is not so published
for any day which is a Business Day, the average of the quotations for such day
on such transactions received by the Agent from three Federal funds brokers of
recognized standing selected by it.
"Fee Letter" means the letter agreement, dated as of the
Closing Date, among the Agent, HomePride and the Seller, as such letter
agreement may be amended, supplemented or otherwise modified from time to time.
"Fees" means all fees and other amounts payable by HomePride
or the Seller to the Agent, the Investors or the Banks pursuant to the Fee
Letter or Section 2.05 or Section 2.06 hereof.
24
"FICO Score" means the statistical credit bureau scores
obtained by lenders in connection with the loan application to help assess a
borrower's credit worthiness.
"Financed Points" means, with respect to any Receivable, the
aggregate Dollar amount of any related points due at the time of origination of
the related Contract which were financed by the loan made to the Obligor under
the related Contract.
"Fixed Period" means, with respect to any Receivable Interest,
the period commencing on the date such Receivable Interest is purchased
hereunder and ending on the next Distribution Date and each successive period
commencing on the first day after the previous Distribution Date and ending on
the immediately subsequent Distribution Date.
"Funds Transfer Letter" means a letter in substantially the
form of Annex H hereto executed and delivered by Seller to the Agent.
"GAAP" means generally accepted United States accounting
principles.
"Global Servicing Agreement" means that Servicing Agreement
entered into as of April 18, 2002 between HomePride and CIT Group/Sales, as
amended, supplemented or otherwise modified from time to time in accordance with
the terms thereof and hereof.
"GSS" means Global Securitization Services, Inc., a Delaware
corporation.
"HomePride" has the meaning set forth in the Preamble.
"HomePride SPV" means HomePride Funding Corp., a Delaware
corporation, and any successor thereto or assign thereof acceptable to the
Agent.
"HomePride Account" means account number 1851358596 maintained
by HomePride at Comerica Bank of Detroit.
"Incipient Termination Event" means an event that but for
notice or lapse of time or both would constitute a Termination Event.
"Indemnified Amounts" has the meaning set forth in Section
16.01.
"Indemnified Party" has the meaning set forth in Section
16.01.
"1999 Indenture" means the Indenture, dated as May 3, 1999
among the Parent, as the issuer, the Subsidiary Guarantors named therein and The
First National Bank of Chicago, as trustee, as amended, supplemented or
otherwise modified from time to time.
25
"2002 Indenture" means the Indenture, dated as of April 22,
2002, among Champion Home Builders, Co., as the issuer, the Parent, as parent
guarantor, the Subsidiary Guarantors named therein and Bank One Trust Company,
N.A., as trustee, as amended, supplemented or otherwise modified from time to
time.
"Independent Accountants" has the meaning set forth in Section
11.10(a).
"Independent Director" has the meaning set forth in Section
9.12(a).
"Insurance Policies" means, with respect to a Receivable, any
insurance policy (including the insurance policies described in clause (p) of
the definition of "Eligible Receivable") required in accordance with the Credit
and Collection Policy benefitting the holder of the Receivable providing loss or
physical damage, extended warranty, credit life, credit disability, or similar
coverage with respect to the related Manufactured Home, Mortgaged Property or
Obligor.
"Insurance Proceeds" means proceeds of any Insurance Policies
to the extent not expended by the Servicer for the restoration or repair of any
Manufactured Home or Mortgaged Property.
"Interest Collections" means, with respect to a Distribution
Date, the sum of (a) the amount deposited in the Collection Account during the
preceding Collection Period attributable to interest payments on the Receivables
in the Receivables Pool pursuant to the related Contracts (including Paid Ahead
Interest Payments); (b) the portion of any Liquidation Proceeds, Other Proceeds
or Take-Out Proceeds received during such Collection Period allocable to
interest due on such Receivables; and (c) the amount of any investment income
earned on amounts on deposit in the Bank Accounts since the preceding
Distribution Date (or the Closing Date in the case of the first Distribution
Date) and deposited in the Collection Account pursuant to Section 5.02.
"Interest Coverage Ratio" means, as the end of any fiscal
quarter of the Parent, the ratio of (a) Consolidated EBIT to (b) Consolidated
Interest Expense.
"Interest Rate Hedge" means, with respect to all or any
Receivables in the Receivables Pool, an interest rate cap agreement which:
(a) is entered into by the Agent, on behalf of the
Seller, with an Eligible Counterparty;
(b) is evidenced by a standard ISDA Agreement and
confirmation thereto;
(c) has been assigned to the Agent, for the benefit of
the Investors and the Banks, and provides for all payments
thereunder to be deposited directly into the Collection
Account;
26
(d) provides for the Eligible Counterparty thereunder
to make monthly payments thereunder to the Seller in an amount
equal to (I) the notional amount thereof times (II) the excess
of (x) Eurodollar Rate, determined monthly during the term
thereof, over (y) an amount equal to (A) the Weighted Average
Coupon Rate of the Receivables in respect of which such
Interest Rate Hedge is being purchased minus (B) the sum of
(i) all Yield (without giving effect to the Eurodollar Rate)
and Fees payable hereunder in respect of the Receivable Pool
during the applicable monthly period (such Yield and Fees to
be expressed as an annual percentage rate), (ii) the Servicing
Fee payable in respect of the Receivable Pool for such monthly
period (to be expressed as an annual percentage rate), (iii)
all fees and expenses payable to the Custodian in respect of
the Receivable Pool for such monthly period (to be expressed
as an annual percentage rate), (iv) all Other Amounts payable
in respect of the Receivable Pool for such monthly period (to
be expressed as an annual percentage rate) and (v) 4.00%;
(e) shall have a notional balance which shall be
acceptable to the Agent, but in no event greater than the
Aggregate Outstanding Balance of all Receivables which shall
then be in the Receivables Pool;
(f) provides for payments thereunder to be calculated
on an actual/360 basis;
(g) includes provisions requiring the Eligible
Counterparty thereunder to post short-term marketable
collateral in an amount acceptable to the Agent within 30 days
of the rating of the long-term unsecured senior indebtedness
of the Eligible Counterparty being downgraded to or below (i)
"A2" by Moody's (or such rating having been withdrawn or
canceled) or (ii) "A" by S&P (or such rating having been
withdrawn or canceled) (and such provisions have been complied
with in full);
(h) includes provisions requiring the Eligible
Counterparty to be replaced within 30 days of (a) the rating
of its long-term unsecured senior indebtedness being
downgraded to or below (i) "A2" by Moody's or (ii) "A" by S&P,
or (b) the Eligible Counterparty's failure to perform in any
material respect any of its obligations under such interest
rate cap agreement (and such provisions have been complied
with in full); and
(i) shall otherwise be on such terms and conditions and
pursuant to such documentation as shall be acceptable to the
Agent.
"Investor" means Conduit and all other owners by assignment or
otherwise of a Receivable Interest originally purchased by Conduit and, to the
extent of the undivided interests so purchased, shall include any participants.
27
"Investor Rate" for any Fixed Period for any Receivable
Interest means, to the extent that the Investor funds such Receivable Interest
by issuing commercial paper or other promissory notes, an interest rate per
annum equal to the Eurodollar Rate; for such Fixed Period plus the Applicable
Spread; provided, however, that in case of:
(i) any Fixed Period on or prior to the first day of which an
Investor shall have notified the Agent that (A) the introduction of or any
change in or in the interpretation of any law or regulation makes it unlawful,
or any central bank or other governmental authority asserts that it is unlawful,
for such Investor to fund such Receivable Interest at the Investor Rate set
forth above or (B) it is unable to obtain U.S. Dollars in the London interbank
market to fund or maintain any Receivable Interest (and such Investor shall not
have subsequently notified the Agent that such circumstances no longer exist),
or
(ii) any Fixed Period for a Receivable Interest the Capital
Investment of which allocated to the Investors is less than $500,000,
the "Investor Rate" for such Fixed Period shall be an interest rate per annum
equal to the Alternate Base Rate in effect from time to time during such Fixed
Period; provided further that the Agent and the Seller may agree in writing from
time to time upon a different "Investor Rate."
"Land and Home Contract" means a manufactured housing fixed
rate retail installment sale contract, installment loan agreement or promissory
note that is secured in part, or intended to be secured in part, by the lien of
a Mortgage on real estate on which the related Manufactured Home is situated,
and which Manufactured Home is considered or classified as part of the real
estate under the laws of the jurisdiction in which it is located.
"Land and Home Contract File" means with respect to each
Receivable arising under a Land and Home Contract, (a) the original of such Land
and Home Contract and the original related Mortgage Note, if any; (b) the
original related Mortgage with evidence of recording thereon and any Title for
the related Manufactured Home; (c) the duly executed original assignment of the
Land and Home Contract from the originator thereof to HomePride; (d) all
original extension, modification or waiver agreement(s) relating to such
Contract; (e) the duly executed original Mortgage Note, endorsed by HomePride in
blank, without recourse and in a form satisfactory to the Agent, showing a
complete chain of endorsement from the originator thereof to HomePride; (f) all
original interim recorded assignments of such Mortgage, if any, showing a
complete chain of title from the originator thereof to HomePride in recordable
form and sufficient to effect the assignment of and transfer to the assignee
thereof under the Mortgage to which the assignment relates; provided that, if
the related Mortgage has not been returned from the applicable public recording
office, such assignment of the Mortgage may exclude the recording information;
(g) an assignment of such Mortgage by HomePride in blank and in recordable form;
(h) the original of each assumption, written assurance or substitution
agreement, if any; and (i) the original or duplicate original lender's title
policy with respect to such Land and Home Contract.
28
"Lien" means any security interest, lien, charge, pledge,
preference, equity or encumbrance of any kind, including tax liens, mechanics'
liens and any liens that attach by operation of law.
"Limited Recourse Guaranty" means the Limited Recourse
Guaranty, dated as of the Closing Date, executed by the Parent in favor of the
Agent in respect of certain payment obligations of the Seller under this
Agreement, as amended, supplemented or otherwise modified from time to time.
"Limited Servicer Termination Event" has the meaning set forth
in Section 13.02(a).
"Liquidated Receivable" means, with respect to any Collection
Period, a Receivable as to which the applicable servicer has determined in good
faith that all amounts it expects to recover with respect to such Receivable
have been received.
"Liquidation Proceeds" means, with respect to a Liquidated
Receivable, all amounts realized with respect to such Liquidated Receivable
(including insurance proceeds) net of (a) expenses of the Servicer incurred in
connection with the collection, repossession, repair and disposition of the
related Manufactured Home (and Mortgaged Property, if any), (b) any expenses
incurred by the Sub-Servicer in foreclosing upon a Pool Receivable which shall
have been reimbursed to the Sub-Servicer by Servicer pursuant to Section
11.04(a), and (c) amounts that are required to be refunded to the related
Obligor; provided, however, that the Liquidation Proceeds with respect to any
Receivable shall in no event be less than zero.
"Loan-to-Value Ratio" means, with respect to a Receivable, the
ratio of the original outstanding principal amount of the related Contract,
including prepaid finance charges to (i) with respect to any Receivable that is
not located in California and does not arise in connection with a Land Home
Contract, the cash selling price of the related Manufactured Home plus the sum
of the related (a) sales tax, (b) freight, (c) prepaid finance charges, (d)
closing fees to third parties and (e) insurance or (ii) with respect to any
contract located in California or that arises in connection with a Land Home
Contract, the sum of the Appraised Value of the related Manufactured Home plus
the sum of the related (a) sales tax, (b) freight, (c) prepaid finance charges,
(d) closing fees to third parties and (e) insurance.
"Lock-Box Account" means a post office box administered by a
Lock-Box Bank or an account maintained at a Lock-Box Bank, in each case for the
purpose of receiving Collections.
"Lock-Box Agreement" means an agreement providing for the
establishment and maintenance of a Lock-Box Account, which agreement shall be in
form and substance satisfactory to the Agent.
"Lock-Box Bank" means any of the banks holding one or more
Lock-Box Accounts which is subject to a Lock-Box Agreement.
29
"Management Agreement" means the Management Agreement, dated
as of the Closing Date, between the Seller and GSS as amended, supplemented or
otherwise modified from time to time with the prior written consent of the
Agent.
"Management Fees" means the fees and expenses owed to GSS
under the Management Agreement.
"Manufactured Home" means (i) a structure, transportable in
one or more sections, built to National Manufactured Home Construction and
Safety Standards, on a permanent chassis and designed to be used as a single
family dwelling with or without a permanent foundation when connected to the
required utilities including any plumbing, heating, air conditioning and
electrical systems present and installed in the Manufactured Home, securing the
indebtedness of the Obligor under the related Contract, (ii) modular housing
complying with all applicable state and local building codes or (iii) a
manufactured home, including all accessions thereto, that is legally classified
as real property under applicable state law, securing the indebtedness of the
Obligor under the related Contract.
"Manufactured Housing Contract" means an agreement which
evidences both (i) the obligation of the related Obligor to repay the related
Contract evidenced thereby and (ii) the grant of a first priority security
interest in the related Manufactured Home.
(j) "Manufactured Housing Contract File" means, with
respect to a Receivable, other than a Receivable arising under
a Land and Home Contract or a Mortgage Loan, (a) the original
of the Contract and endorsements or assignments (which may be
blanket assignments) from Dealers or other sellers showing a
complete chain of title to HomePride; (b) the original Title
for the related Manufactured Home of the type issued in the
name of HomePride unless the laws of the jurisdiction in which
the related Manufactured Home is located do not provide for
the issuance of a Title for such Manufactured Home; provided,
however, that at any time following the occurrence of a
Termination Event (to the extent there is any Capital
Investment which remains outstanding) the Agent may request
and require that the Seller cause the party in whose name the
lien is noted to transfer such lien to the Seller; (c)
evidence of one or more of the following types of perfection
of the security interest in the related Manufactured Home
granted by such Contract, as required under applicable law:
(1) notation of such security interest on the related Title,
(2) a financing statement meeting the requirements of the UCC,
with evidence of recording in the appropriate offices
indicated thereon, or (3) such other evidence of perfection of
a security interest in a manufactured housing unit as is
customary in such jurisdiction; (d) any extension,
modification or waiver agreement(s) relating to such Contract;
and (e) an original or copy of the credit application of the
Obligor.
"Material Adverse Effect" means, with respect to each Servicer
Party, a material adverse effect on (i) its financial condition or operations or
those of any of its Subsidiaries or (ii) its
30
ability to perform its obligations under this Agreement or the legality,
validity or enforceability of this Agreement or (iii) the collectibility of, or
its ability to collect, any Pool Receivable.
"Minimum Purchase Price" means, with respect to a Take-Out,
the sum of (a) all outstanding Capital Investment in respect of the Receivable
Interests whose related Contracts are subject of such Take-Out together with all
unpaid Yield on such Capital Investment which has accrued or will accrue through
the related Take-Out Date; (b) all accrued and unpaid Fees through such Take-Out
Date; (c) all accrued and unpaid fees and expenses of the Custodian through such
Take-Out Date; and (d) any Other Amounts owed to the Agent, the Investors or the
Banks hereunder.
"Minimum Shadow Rating" has the meaning set forth in Section
9.21.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc. and any
successor thereto.
"Mortgage" means, with respect to a Land and Home Contract or
Mortgage Loan, the original mortgage, deed of trust or other security
instrument, if any, executed by an Obligor which creates a first lien on an
estate in fee simple interest in the real property securing such Contract.
"Mortgage Loan File" means with respect to each Mortgage Loan,
(a) the original related Mortgage, with evidence of recording indicated thereon,
(b) the duly executed assignments of the Mortgage from the originator hereof to
HomePride with evidence of recording thereon, (c) the duly executed original
Mortgage Note, if any, endorsed by HomePride in blank, without recourse and in a
form satisfactory to the Agent, showing a complete chain of endorsement from the
originator thereof to HomePride; (d) the original assignment and any intervening
assignments of the related Mortgage, with evidence of recording thereon, showing
a complete chain of assignments of such Mortgage Loan from origination of such
Mortgage Loan to HomePride; (e) all original extension, modification or waiver
agreement(s), if any, for such Mortgage Loan; (f) the originals of each
assumption, written assurance or substitution agreement, if any; (g) an
assignment of such Mortgage by HomePride in blank and in recordable form; and
(h) the original or duplicate original lender's title policy with respect to
such Mortgage Loan.
"Mortgage Loans" means the mortgage loans or deeds of trust
loans secured by a Mortgage on single-family residential properties, described
in the related Purchase Request, and which include, without limitation, all
related security interest and any and all rights to receive payments which are
due pursuant thereto from and after the date, but shall exclude rights to
receive payments which are due pursuant thereto prior to the applicable Purchase
Date or after the completion of any Take-Out for such Mortgage Loan.
"Mortgage Note" means the note or other evidence of
indebtedness secured by a Mortgage purporting to create a first lien or similar
interest in real estate or improvements thereon.
31
"Mortgaged Property" means as to any Land and Home Contract or
Mortgage Loan, the underlying property, including real property and improvements
thereon securing the related Contract.
"Multiemployer Plan" means, with respect to any Person, a
multiemployer plan as defined in Section 4001(a)(3) of ERISA.
"Net Receivables Pool Balance" means, at any time, the
Outstanding Balance of Eligible Receivables then in the Receivables Pool minus
the Excess Concentration Amount, reduced by the sum of the aggregate amount of
Collections on hand at such time for payment on account of any Eligible
Receivables, the Obligor of which has not been identified.
"Obligor" means a Person obligated to make payments pursuant
to a Contract or who has acquired a Manufactured Home subject to a Contract.
"Officer's Certificate" means, with respect to any Person, a
certificate from a Responsible Officer of such Person with respect to the
representations, warranties and notices required to be submitted on behalf of
such Person pursuant to Section 11.09.
"Opinion of Counsel" means a written opinion of counsel
reasonably acceptable to the Agent.
"Original Value" means, (a) with respect to any Manufactured
Home that was new at the time the related Contract was originated, the sum of
the down payment (including the value allocated to any trade-in unit or land
pledged as additional security or in lieu of the down payment), the Amount
Financed on the related Contract, which may include sales and other taxes and
premiums for related insurance, and in the case of a Land and Home Contract, the
value of the land securing such Contracts as determined by an independent
appraiser, and (b) with respect to any Manufactured Home that was used at the
time the related Contract was originated, the total delivered sales price of
such Manufactured Home (including for this purpose, any Mortgaged Property not
constituting a part of the Manufactured Home), plus sales and other taxes and,
to the extent financed under such Contract, premiums for related insurance;
provided, however, that in the case of a refinanced Contract, the Original Value
shall equal the appraised value of the Manufactured Home (including for this
purpose, any Mortgaged Property not constituting a part of the Manufactured
Home) at the time such Contract was refinanced as determined by an independent
appraiser.
"Other Amounts" means collectively, all amounts (not
constituting repayment of Capital Investment or Yield) owed by the Seller to the
Investors, the Banks and the Agent, including, without limitation, amounts
arising under Article VI.
"Other Costs" has the meaning set forth in Section 17.05(b).
32
"Other Proceeds" means all proceeds deposited in the
Collection Account which were realized in connection with, or arose from, the
occurrence of any of the events, circumstances or results, or the exercise or
performance of any rights or obligations, described or set forth in Section 2.05
hereof, Section 2.04 or Section 8.01 of the Purchase and Contribution Agreement
or Section 2.04 or 8.01 of the Purchase and Sale Agreement.
"Other Sellers" has the meaning set forth in Section 17.05(b).
"Other Taxes" has the meaning set forth in Section 6.03(b).
"Outstanding Balance" means, with respect to any Receivable,
as of any date, the Amount Financed minus that portion of all amounts received
with respect to such Receivable on or prior to such date and allocable to
principal in accordance with the related Contract (including any Paid Ahead
Principal Payments and principal prepayments).
"Paid Ahead Interest Payments" means the portion of any
Scheduled Payments made by an Obligor prior to the related due date therefor and
allocable to interest payments on the related Receivable in accordance with the
related Contract (but excluding any such payments applied as prepayments).
"Paid Ahead Principal Payments" means the portion of any
Scheduled Payments made by an Obligor prior to the related due date therefor and
allocable to principal payments on the related Receivable in accordance with the
related Contract (but excluding any such payments applied as prepayments).
"Parent" means Champion Enterprises, Inc., a Michigan
corporation, and its permitted successors and assigns.
"Parent/Child Buy-For Contract" means a Contract under which
(i) at least one parent of one or more children of such parent is the Obligor
under such Contract and the related Manufactured Home was purchased primarily
for use by such child(ren) or (ii) at least one child of one or both parents of
such child is the Obligor under such Contract and the related Manufactured Home
was purchased primarily for use by such parent(s).
"Parent Guaranty" means the Guaranty, dated as of the Closing
Date, executed by the Parent in favor of the Seller in respect of the
obligations of HomePride under the Purchase and Contribution Agreement, as
amended, supplemented or otherwise modified from time to time.
"PBGC" means the Pension Benefit Guaranty Corporation,
referred to and defined in ERISA, and any successor entity performing similar
functions.
33
"Percentage" of any Bank means, (a) with respect to CSFB, the
percentage set forth on the signature page to this Agreement, or such amount as
reduced by any Assignment and Acceptance entered into with an Eligible Assignee,
or (b) with respect to a Bank that has entered into an Assignment and
Acceptance, the amount set forth therein as such Bank's Percentage, or such
amount as reduced by an Assignment and Acceptance entered into between such Bank
and an Eligible Assignee.
"Permitted Investment" means, at any time:
(k) any evidence of indebtedness issued or guaranteed
by the United States government or any agency thereof;
(l) commercial paper, in each case issued by a
corporation (other than the Seller or any Affiliate of the
Seller) organized under the laws of any state of the United
States or of the District of Columbia and rated at least A-1
by Standard & Poor's or P-1 by Moody's;
(m) any certificate of deposit (or time deposits
represented by such certificates of deposit) or bankers
acceptance or overnight federal funds transactions that are
issued or sold by a commercial banking institution that is a
member of the Federal Reserve System and has a combined
capital and surplus and undivided profits of not less than
$500,000,000; and/or
(n) money market mutual funds registered under the
Investment Company Act of 1940, as amended, having a rating,
at the time of such investment, from each of Standard & Poor's
and Moody's in the highest investment category granted
thereby.
Any Permitted Investments may be purchased by or through the Agent or any of its
Affiliates and may include investments for which the Collection Account Bank or
any of its affiliates is an investment manager or adviser.
"Person" means an individual, partnership, corporation
(including a business trust), joint stock company, trust, unincorporated
association, joint venture or other entity, or a government or any political
subdivision or agency thereof.
"Plan" means, at any particular time, any employee benefit
plan which is covered by ERISA and in respect of which the Parent 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.
"Pool Receivable" means a Receivable in the Receivables Pool.
34
"Preferred Stock" means, as of any date, any capital stock of
the Parent or any consolidated Subsidiary of the Parent (which shall not include
the Seller) which (i) has priority, both with respect to the payment of
dividends and distributions upon liquidation, over the common stock of the
Parent, or, as the case may be, such consolidated Subsidiary of the Parent, (ii)
has been issued in a specific Dollar amount, (iii) has a specific maturity date
which is no earlier than (I) the second anniversary date of the Closing Date or
(II) if the facility provided hereunder shall have been extended one or more
times, the second anniversary date of the effective date of the most recent
extension of the facility provided hereunder, (iv) entitles the holder thereof
to receive a fixed rate of return from the date of issuance thereof to the date
of maturity thereof and (v) has not been held, since its date of issuance, by a
Person which is the Parent, any Subsidiary of the Parent, or any Affiliate of
the Parent or any such Subsidiary.
"Purchase" has the meaning set forth in Section 2.01; the term
"Purchased" shall have a correlative meaning.
"Purchase and Contribution Agreement" means the Purchase and
Contribution Agreement, dated as of the Closing Date, by and between HomePride,
as seller, and HomePride SPV, as buyer, as amended, restated or otherwise
modified from time to time with the prior written consent of the Agent.
"Purchase and Sale Agreement" means the Purchase and Sale
Agreement, dated as of the Closing Date, by and between HomePride SPV, as
seller, and Seller, as buyer, as amended, restated or otherwise modified from
time to time with the prior written consent of the Agent.
"Purchase Date" has the meaning set forth in Section 2.02(b).
"Purchase Limit" means $150,000,000, or such other amount as
the Seller and the Agent shall agree from time to time with the consent of all
Investors and all Banks. References to the unused portion of the Purchase Limit
shall mean, at any time, the Purchase Limit minus the then outstanding Capital
Investment.
"Purchase Price" means, with respect to each Purchase, an
amount equal to the product of the then Advance Rate multiplied by, with respect
to the Eligible Receivable related to the Receivables Interests purchased in
connection with such Purchase, the Net Receivables Pool Balance with respect to
such Eligible Receivable as of the date of such purchase.
"Purchase Request" means a request for the purchase of
Receivables in the form of Annex C.
"Rating Agencies" means Standard & Poor's and Moody's if and
so long as they have rated and are continuing to rate commercial paper notes of
the Conduit, or such other nationally
35
recognized statistical rating organizations as may be designated by the Agent,
together with their permitted successors and assigns.
"Rating Agency Submission" means, at any time, the submission
to one or more of the Rating Agencies of the facility hereunder.
"Receivable" means all rights to payment from an Obligor under
a Contract including the right to payment of any finance charges, interest or
fees with respect thereto.
"Receivable File" means a Manufactured Housing Contract File,
a Land and Home Contract File and/or a Mortgage Loan File.
"Receivable Interest" means, at any time, an undivided
percentage ownership interest in (i) all then outstanding Pool Receivables
arising prior to the time of the most recent computation or recomputation of
such undivided percentage interest pursuant to Section 2.03, (ii) all Related
Security with respect to such Pool Receivables, and (iii) all Collections with
respect to, and other proceeds of, such Pool Receivables. Such undivided
percentage interest shall be computed as:
CI + AU
--------
NRPB
where:
CI = the Capital Investment of such Receivable
Interest at the time of computation.
AU = the aggregate accrued and unpaid Yield,
Fees and Other Amounts related to such
Receivable Interest at the time of
computation.
NRPB = the Net Receivables Pool Balance at the
time of computation.
Each Receivable Interest shall be determined from time to time pursuant to the
provisions of Section 2.03.
"Receivables Pool" means, at any time, the aggregation of each
then outstanding Receivable sold to the Seller pursuant to the Purchase and Sale
Agreement and which comprise and underlie the Receivable Interest (as recomputed
in accordance with Section 2.03) then outstanding.
"Records" means, with respect to any Contract, all documents,
books, records and other information (including, without limitation, computer
programs, tapes, discs, punch cards, data processing software and related
property and rights) relating to such Contract.
36
"Related Security" means with respect to any Receivable, (a)
the Seller's security interest in the related Manufactured Homes and Mortgaged
Property, (b) the Seller's rights, remedies, powers and privileges under the
related Contracts, including any personal guaranty thereof, (c) the Seller's
rights, remedies, powers and privileges under the Transaction Documents, (d) the
Receivables Files for such Receivables, (e) the Seller's rights, remedies,
powers and privileges under the Dealer Agreements, including but not limited to
Dealer Recourse and any holdback amounts, (f) with respect to any related Land
and Home Contracts, the Seller's rights, remedies, powers and privileges under
the related Mortgage, (g) the Seller's rights, remedies, powers and privileges
under the related Insurance Policies, (h) all security agreements, mortgages,
deeds of trust or other agreements that relate to such Receivable, (i) all other
security interests or liens and property subject thereto from time to time, if
any, purporting to secure payment of such Receivable, whether pursuant to the
Contract related to such Receivable or otherwise, together with all financing
statements signed by the related Obligor (or otherwise filed against the related
Obligor) describing any collateral securing such Receivable, (j) the assignment
to the Seller of all financing statements concerning any collateral securing
payment of such Receivable, (k) all guaranties, insurance and other agreements
or arrangements of whatever character from time to time supporting or securing
payment of such Receivable whether pursuant to the Contract related to such
Receivable or otherwise, (l) the Contract, all Records with respect thereto and
all other books, records and other information (including, without limitation,
computer programs, tapes, discs, punch cards, data processing software and
related property and rights) relating to such Receivable and the related
Obligor, (m) any certificate of title related to such Receivable, (n) each
Interest Rate Hedge purchased in accordance with the provisions of this
Agreement and all transactions consummated thereunder, (o) the Bank Accounts and
all cash proceeds and investments therein, and (p) all proceeds of the
foregoing.
"Repossessed Receivable" means a Receivable (other than a
Liquidated Receivable) as to which the Servicer or Sub-Servicer has repossessed
the related Manufactured Home.
"Repurchase Price" has the meaning specified in Section 2.05.
"Required Interest Coverage Ratio" means, as of the end of any
fiscal quarter of the Parent listed below, the ratio listed below beside such
fiscal quarter.
Fiscal Quarter Ratio
-------------- -----
March 31st - June 29th 1.0 to 1.0
June 30th - September 28th 1.5 to 1.0
September 29th - December 28th 0.5 to 1.0
December 29th - March 29th 0.1 to 1.0
"Required Reserve Account Amount" means, with respect to any
Purchase, the product of (a) the Required Reserve Account Percentage for such
Purchase and (b) the Aggregate Outstanding Balance of the Receivables which are
related to such Purchase.
37
"Required Reserve Account Percentage" means, initially, 2.00%,
as such percentage may be (a) decreased by Agent, in it sole discretion, to take
into account Interest Rate ▇▇▇▇▇▇ purchased pursuant to the terms hereof or (b)
increased by the Agent, in it sole discretion, (i) to permit the facility
hereunder to receive a rating of "A" from Standard & Poor's or "A2" by Moody's
in connection with any Rating Agency Submission or (ii) to reflect a level of
reserves for the facility hereunder which is consistent with the level of
reserves which was required for a rating of "A" from Standard & Poor's or "A2"
by Moody's in connection with the most recent Term Securitization for which the
Servicer was the sponsor.
"Reserve Account" means the account designated as such in, and
which is established and maintained with the Collection Bank pursuant to Section
11.14(c).
"Responsible Officer" means, with respect to any Person that
is not an individual, the President, any Vice-President, Corporate Trust Officer
or the Controller of such Person, or any other officer or employee having
similar functions to whom a matter arising under this Agreement may be referred.
"Restricted Contingent Liabilities" means, with respect to any
Person, all Debt (without duplication) for (i) the undrawn amount of letters of
credit for which such Person or any of its consolidated Subsidiaries, has a
reimbursement or other guaranty obligation and (ii) guaranties of such Person or
any of its consolidated Subsidiaries relating to subordinate tranches or classes
of securities or certificates issued in connection with, or other obligations
arising under, any Term Securitization program of such Person or any of its
consolidated Subsidiaries.
"Scheduled Payment" means, with respect to any Receivable, the
periodic payment set forth in the related Contract (excluding, however, any
portion of such payment that represents late payment charges and payments in
respect of taxes, licenses or similar items).
"Section 32 Loan" means a Contract classified as (a) a "high
cost" loan under the Home Ownership and Equity Protection Act of 1994 or (b) a
"high cost," "threshold," or "predatory" loan under any other applicable state,
federal or local law.
"Seller" has the meaning set forth in the Preamble.
"Seller's Parent" means GSS Holdings, Inc., a Delaware
corporation, and any successor thereto, or assign thereof, reasonably
satisfactory to the Agent.
"Semi-Monthly Contract" means a Contract pursuant to which the
scheduled level of payment of interest and principal is due twice each month.
"Servicer" means HomePride Finance Corp., in its capacity as
such under this Agreement, or, as applicable, any successor servicer appointed
pursuant to this Agreement.
38
"Servicer Parties" means, collectively, the Servicer and
Sub-Servicer and, individually, the Servicer or Sub-Servicer.
"Servicer Take-Out" has the meaning set forth in Section
2.05(a).
"Servicer Termination Event" has the meaning set forth in
Section 13.01.
"Servicer's Certificate" means, with respect to each
Determination Date, a certificate, completed by and executed on behalf of the
Servicer by a Responsible Officer, in accordance with Section 11.08, in a form
reasonably acceptable to the Agent.
"Servicing Fee" has the meaning set forth in Section 11.07(a).
"Shadow Rating" means collectively, a "shadow" rating for the
financing facility provided under this Agreement by Moody's and a credit
assessment letter from S&P stating that the credit performance of the financing
facility provided hereunder is consistent with a certain rating.
"Significant Subsidiary" means any Subsidiary of a Person
which fits the definition of Significant Subsidiary contained in Rule 1-02 of
Regulation S-X promulgated by the Securities and Exchange Commission, other than
a Subsidiary that is a special purpose entity formed for the purpose of
securitizing, selling for securitization or otherwise facilitating the
securitization of assets of such Person or any other Subsidiary.
"Special Indemnified Amounts" has the meaning specified in
Section 12.01.
"Special Indemnified Party" has the meaning specified in
Section 12.01.
"Specified Account" means the account numbered 010212725
maintained at Bank One, Oklahoma, N.A. in Oklahoma City, Oklahoma in the name of
The CIT Group/Sales Financing, Inc., and any replacements therefor or additions
thereto which are acceptable to the Agent.
"Specified Account Bank" means Bank One, Oklahoma, N.A., and
any replacements therefor or additions thereto agreed to in writing by the
Agent.
"Spread Percentage" means, on any date of determination and
with respect to the Collection Period immediately preceding a Distribution Date,
the percentage equivalent of a fraction (a) the numerator of which shall be the
product of (x) Excess Collections for such Collection Period and (y) a fraction,
the numerator of which shall be the number of days in the year in which such
Collection Period shall occur and the denominator of which shall be the number
of days in such Collection Period, and (b) the denominator of which shall be the
weighted average Aggregate Outstanding Balance of the Pool Receivables during
such Collection Period.
39
"Standard & Poor's" means Standard & Poor's Ratings Service, a
division of The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc. and any successor thereto.
"Subject Manufactured Home" has the meaning set forth in
Section 17.16.
"Sub-Servicer" means CIT Group/Sales, in its capacity as such
under this Agreement, or any successor sub-servicer appointed pursuant to this
Agreement.
"Sub-Servicer Replacement Event" has the meaning set forth in
Section 13.02(a).
"Sub-Servicing Fee" has the meaning set forth in Section
11.07(b).
"Subsidiary" means any corporation of which securities having
ordinary voting power to elect a majority of the board of directors or other
persons performing similar functions are at the time directly or indirectly
owned by the Seller or the Parent, as the case may be, or one or more
Subsidiaries, or by the Seller or the Parent, as the case may be, and one or
more Subsidiaries.
"Successor Servicer" has the meaning set forth in Section
13.03(a).
"Successor Sub-Servicer" has the meaning set forth in Section
13.02(a).
"Take-Out" means a Take-Out Securitization or Servicer
Take-Out.
"Take-Out Date" means the date on which a Take-Out
Securitization occurs.
"Take-Out Proceeds" means all proceeds deposited in the
Collection Account as a result of any of the actions taken pursuant to Section
2.04.
"Take-Out Securitization" means (i) a financing transaction of
any sort undertaken by the Seller or any Affiliate of the Seller secured,
directly or indirectly, by any Contracts subject hereto or (ii) any other asset
securitization, secured loans or similar transactions involving any Contracts
subject hereto or any beneficial interest therein, including any Term
Securitization.
"Tangible Net Worth" means with respect to the Seller, the net
worth of the Seller calculated in accordance with GAAP after subtracting
therefrom the aggregate amount of the Seller's intangible assets, including,
without limitation, goodwill, franchises, licenses, patents, trademarks,
tradenames, copyrights and service marks.
"Taxes" has the meaning set forth in Section 6.03(a).
"Term Debt" means, as of any date, any indebtedness of the
Parent or any consolidated Subsidiary of the Parent (which shall not include the
Seller) for borrowed money which is evidenced by
40
bonds, debentures, notes or other similar instruments and (i) the proceeds of
the borrowings thereunder have been fully advanced on the date of issuance of
such bonds, debentures, notes or other similar instruments, (ii) does not
entitle the holder thereof to receive any stock of the Parent or any such
consolidated Subsidiary of the Parent, or any warrants or options in respect of
any such stock, as consideration (in whole or in part) for the money lent
thereunder to the Parent or such consolidated Subsidiary of the Parent, as the
case may be, (iii) has been issued in a specific Dollar amount, (iv) provides
for the payment of interest to the holder thereof at a stated interest rate, (v)
has a specific maturity date which is not earlier than (I) the second
anniversary date of the Closing Date or (II) if the facility provided hereunder
shall have been extended one or more times, the second anniversary date of the
effective date of the most recent extension of the facility provided hereunder
and (vi) has not been held, since its date of issuance, by the Parent, any
Subsidiary of the Parent, or any Affiliate of the Parent or any such Subsidiary.
"Term Securitization" means an asset securitization or a
financing undertaken by the Servicer, or any Affiliate thereof, in each case
involving the direct or indirect sale or other conveyance of Contracts to a
Person that shall privately or publicly sell securities, notes or certificates
backed by such Contracts.
"Termination Event" has the meaning set forth in Section
14.01.
"Three Highest States" means, on any date of determination,
those three States or Commonwealths in the United States of America in which
Eligible Receivables with the three largest (determined on a per
State/Commonwealth basis) Aggregate Outstanding Balances (determined on such
date of determination) were originated.
"Tier 1 Delinquency Ratio" means, as of any date of
determination, with respect to any group of Receivables, the ratio (expressed as
a percentage) computed by dividing:
(i) the Aggregate Outstanding Balance of such Receivables
which were Tier 1 Delinquent Receivables as of the last
day of the immediately preceding Collection Period;
by
(ii) the Aggregate Outstanding Balance of all such
Receivables as of the last day of the immediately
preceding Collection Period.
"Tier 2 Delinquency Ratio" means, as of any date of
determination, with respect to any group of Receivables, the ratio (expressed as
a percentage) computed by dividing:
41
(i) the Aggregate Outstanding Balance of such Receivables
which were Tier 2 Delinquent Receivables as of the last
day of the immediately preceding Collection Period;
by
(ii) the Aggregate Outstanding Balance of all such
Receivables as of the last day of the immediately
preceding Collection Period.
"Tier 1 Delinquent Receivable" means a Receivable as to which
any Scheduled Payment, or part thereof, remains unpaid for 30 or more days but
less than 60 days from the original due date for such Scheduled Payment.
"Tier 2 Delinquent Receivable" means a Receivable as to which
any Scheduled Payment, or part thereof, remains unpaid for 60 days or more from
the original due date for such Scheduled Payment.
"Title" means any certificate of title or other similar form
of title issued with respect to a Manufactured Home by any governmental agency
or body responsible for the registration of, and the issuance of certificates of
title relating to, Manufactured Homes and liens thereon.
"Total Liabilities" means, as of any date of determination,
all Debt of the Parent and its Subsidiaries on a consolidated basis outstanding
at such time which matures more than one year after the date of calculation, and
any such Debt maturing within one year from such date of calculation which is
renewable or extendable at the option of the obligor to a date more than one
year from such date.
"Transaction Documents" means this Agreement, the Fee Letter,
the Custodial Agreement, the Purchase and Sale Agreement, the Purchase and
Contribution Agreement, the Funds Transfer Letter, the Lock-Box Agreements, the
Parent Guaranty, the Control Agreement, the Limited Recourse Guaranty, the
Global Servicing Agreement, the CIT Guaranty and the Interest Rate ▇▇▇▇▇▇, the
confirmations related thereto and the other documents to be executed and
delivered in connection with this Agreement.
"Transfer Certificate" means a transfer certificate evidencing
the sale of a Receivable Interest hereunder in the form of Annex D hereto.
"Trust Receipt" shall mean the confirmation statement issued
by the Custodian that evidences receipt and confirms ownership of Contracts and
other documents indicated thereon, as provided for in Section 6 of the Custodial
Agreement with respect to the Custodian.
"UCC" means the Uniform Commercial Code as from time to time
in effect in the specified jurisdiction.
42
"USAP" has the meaning set forth in Section 11.10(a).
"Weighted Average Coupon Rate" means, as of any date of
determination and with respect to any group of Receivables, the weighted average
(based upon the Outstanding Balances of such Receivables) of the Coupon Rates of
such Receivables.
"Weighted Average FICO Score" means, as of any date of
determination, the weighted average (weighted solely based upon the Outstanding
Balances of the Eligible Receivables owed by the applicable Obligors as of such
date of determination) of the FICO Scores of the Obligors related to all
Eligible Receivables as of such date of determination.
"Weighted Average Loan-to-Value Ratio" means, as of any date
of determination, the weighted average (weighted solely based upon the
Outstanding Balances of the Eligible Receivables as of such date of
determination) of the Loan-to-Value Ratios of the Eligible Receivables as of
such date of determination.
"Weighted Average Manufactured Housing Contract Remaining
Term" means, as of any date of determination, the weighted average (weighted
solely based upon the Outstanding Balances, as of such date of determination, of
the Eligible Receivables originated under Manufactured Housing Contracts) of the
then unexpired terms to stated maturity under the Manufactured Housing Contracts
related to the Eligible Receivables.
"Weighted Average Remaining Term" means, as of any date of
determination, the weighted average (weighted solely based upon the Outstanding
Balances of the Eligible Receivables as of such date of determination) of the
then unexpired terms to stated maturity under the Contracts related to the
Eligible Receivables.
"Withdrawal Liability" means liability to a Multiemployer Plan
as a result of a complete or partial withdrawal from such Multiemployer Plan, as
such terms are defined in Part I of Subtitle E of Title IV of ERISA.
"Yield" means:
(i) for each Receivable Interest for any Fixed Period to the
extent the Conduit will be funding such Receivable Interest through the issuance
of commercial paper or other promissory notes,
IR x CI x ED
----
360
43
(ii) for each Receivable Interest for any Fixed Period to the
extent (x) the Investors will not be funding such Receivable Interest through
the issuance of commercial paper or other promissory notes, or (y) the Banks
will be funding such Receivable Interest,
AR x CI x ED
----
360
where:
AR = the Assignee Rate for such Fixed Period
CI = the average daily balance of the Capital
Investment during such Fixed Period
IR = the Investor Rate for such Fixed Period
ED = the actual number of days elapsed during such
Fixed Period
provided that no provision of this Agreement shall require the payment or permit
the collection of Yield in excess of the maximum permitted by applicable law;
provided further, that to the extent that any Receivable Interest remains
outstanding on or after the Facility Termination Date, Yield for such Receivable
Interest shall be equal to Alternative Base Rate from time to time in effect
plus 2.00% per annum; and provided even further that Yield for any Receivable
Interest shall not be considered paid by any distribution to the extent that at
any time all or a portion of such distribution is rescinded or must otherwise be
returned for any reason.
SECTION 1.02. Other Terms. All accounting terms not
specifically defined herein shall be construed in accordance with GAAP. All
terms used in Article 9 of the UCC in the State of New York, and not
specifically defined herein, are used herein as defined in such Article 9.
ARTICLE II
AMOUNTS AND TERMS OF THE PURCHASES
SECTION 2.01. Purchase Facility. On the terms and conditions
hereinafter set forth, Conduit may, in its sole discretion, and the Banks shall,
ratably in accordance with their respective Bank Commitments, purchase
Receivable Interests ("Purchase") from the Seller from time to time during the
period from the Closing Date to the Facility Termination Date. Under no
circumstances shall Conduit make any such purchase, or the Banks be obligated to
make any such purchase, if after giving effect to such purchase (i) the
aggregate outstanding Capital Investment of Receivable Interests would exceed
the Purchase Limit or (ii) a Capital Deficiency shall exist.
44
SECTION 2.02. Making Purchases. (a) Each Purchase by Conduit
or the Banks shall be made following delivery by the Servicer, on behalf of the
Seller, to the Agent of a Purchase Request by no later than Noon (New York City
time) at least two Business Days prior to the proposed date of Purchase (or by
no later than Noon (New York City time) one Business Day in the case of the
initial Purchase hereunder). Each such Purchase Request shall specify (i) the
Purchase Price requested to be paid to the Seller (such amount, which shall not
be less than $1,000,000, being referred to herein as the "Capital Investment" of
the Receivable Interests then being Purchased), (ii) the date of such Purchase
(which shall be a Business Day) and (iii) be accompanied by Computer Tape
describing the Receivables that are the subject of the requested Purchase. The
Servicer, on behalf of the Seller, shall submit no more than one (1) Purchase
Request per calendar week and no more than four (4) Purchase Requests in any
calendar month. The Agent shall promptly thereafter notify the Seller whether
Conduit has determined to make a Purchase and, if so, whether all of the terms
specified by the Seller are acceptable to Conduit.
If Conduit has determined not to make a proposed purchase, the
Agent shall promptly send notice of the proposed purchase to all of the Banks
concurrently by telecopier, telex or cable specifying the date of such purchase.
Such notice shall also set forth (i) the Purchase Price to be paid by each such
Bank, which shall be equal to each Bank's Percentage multiplied by the aggregate
amount of Capital Investment of the Receivable Interest being purchased and (ii)
whether the Yield for such Receivable Interest is to be computed based on the
Eurodollar Rate or on the Alternate Base Rate; provided, however, that the
Eurodollar Rate may be used only if the related Purchase Notice is given at
least two Business Days prior to the proposed Purchase Date.
(b) On the date of each such Purchase (a "Purchase Date"),
Conduit or the Banks, as the case may be, shall, upon satisfaction of the
applicable conditions set forth in Article VII, in payment of the Purchase Price
in respect of such Purchase, (i) deposit a portion of the Purchase Price for
such Purchase equal to the Required Reserve Account Amount for such Purchase
into the Reserve Account and (ii) make available to the Seller by deposit into
an account specified by the Seller in same day funds of an amount equal to the
remaining amount of the Purchase Price.
(c) Effective on the date of each Purchase pursuant to this
Section 2.02, the Seller hereby sells and assigns to the Agent, for the benefit
of the parties making such Purchase, an undivided percentage ownership interest,
to the extent of the Receivable Interest then being Purchased, in each Pool
Receivable then existing and in the Related Security and Collections with
respect thereto.
(d) Notwithstanding the foregoing, a Bank shall not be
obligated to make purchases under this Section 2.02 at any time in an amount
which would exceed the Bank Commitment of such Bank less the sum of (i) the
aggregate outstanding and unpaid amount of any purchases made by such Bank under
the Asset Purchase Agreement plus (ii) such Bank's ratable share of the
aggregate outstanding Capital Investment held by Conduit. Each Bank's obligation
shall be several, such that the failure of any Bank to make available to the
Seller any funds in connection with any Purchase shall not relieve any other
Bank of its obligation, if any, hereunder to make funds available on the date of
such
45
Purchase, but no Bank shall be responsible for the failure of any other Bank to
make funds available in connection with any Purchase.
SECTION 2.03. Receivable Interest Calculation. Each Receivable
Interest shall be initially computed on its date of Purchase. Thereafter until
the Facility Termination Date, such Receivable Interest shall be automatically
recomputed (or deemed to be recomputed) on each day. Any Receivable Interest, as
computed (or deemed recomputed) as of the day immediately preceding the Facility
Termination Date for such Receivable Interest, shall there after remain
constant; provided, however, that from and after the date on which the Facility
Termination Date shall have occurred for all Receivable Interests and until each
Receivable Interest becomes zero in accordance with the next sentence, each
Receivable Interest shall be calculated as the percentage equivalent of a
fraction the numerator of which is the percentage representing such Receivable
Interest immediately prior to such date and the denominator of which is the sum
of the percentages representing all Receivable Interests which were outstanding
immediately prior to such date. Each Receivable Interest shall become zero when
Capital Investment thereof and Yield thereon shall have been paid in full, and
all Fees and other amounts owed by the Seller hereunder to the Investors, the
Banks or the Agent are paid and the Servicer shall have received the accrued
Servicing Fee thereon.
SECTION 2.04. Take-Outs. (a) On any Take-Out Date, the Agent,
with the consent of the Servicer, may direct the Servicer (on behalf of the
Seller and the Agent) to sell the Contracts (or a portion thereof equal to at
least the amount necessary to permit the Servicer to exercise its purchase
rights pursuant to Section 2.05) to the Person designated by the Agent, with the
consent of the Servicer, for the Fair Market Value thereof in connection with a
Take-Out Securitization. All Take-Out Proceeds received from such a Take-Out
Securitization shall be immediately deposited in the Collection Account for
distribution pursuant to Section 5.02(d). In the event that the Fair Market
Value of the Contracts subject to any such Take-Out Securitization would be less
than the Minimum Purchase Price on the proposed Take-Out Date, the Agent shall
have the right to (i) purchase the Contracts subject to the Take-Out
Securitization for the Fair Market Value thereof or (ii) notify the Seller that
the Investors and the Banks will not purchase any additional Receivable
Interests hereunder. In the event that (A) the Agent exercises its option
pursuant to clause (i) of the immediately preceding sentence, (x) the Agent
shall deposit into the Collection Account an amount equal to the Fair Market
Value of the Contracts (for distribution in accordance with the provisions of
Section 5.02(d)) and (y) the Seller's interest in such Contracts and in the
related Receivables shall be deemed canceled without requirement for any future
actions or (B) the Agent exercises its option pursuant to clause (ii) of the
immediately preceding sentence, the Seller shall retain title to the Contracts
subject to the Take-Out Securitization (subject to the Banks and the Investors
Receivable Interests in the related Receivables), and all amounts in the
Collection Account to be distributed on succeeding Distribution Dates shall be
distributed in accordance with Section 5.02(c).
(b) The Seller and each Servicer Party agree to take any and
all actions reasonably required by the Agent to effectuate any sale of Contracts
described in this Section 2.04. Any Contracts subject to a Take-Out shall be
released by the Agent (on behalf of the Investors and Banks)
46
from the Receivables Interests of the Banks and Investors therein upon
completion of such Take-Out and the deposit of the applicable proceeds in the
Collection Account.
SECTION 2.05. Servicer Take-Outs. (a) Upon five Business Day's
notice to the Agent and so long as no event has occurred and is continuing which
constitutes a Termination Event or an Incipient Termination Event, the Servicer
may direct the Seller to sell Contracts to the Person designated by the Servicer
for the Fair Market Value thereof (a "Servicer Take-Out"); provided, that (i)
all proceeds received from such a sale shall be immediately deposited in the
Collection Account for distribution pursuant to Section 5.02, (ii) the Seller
shall have paid to the Agent a fee (the amount of which shall be paid from funds
on account in the Collection Account) with respect to the Receivables related to
such Contracts equal to the Aggregate Outstanding Balance of such Receivables
multiplied by the Exit Fee Rate and (iii) after giving effect to any such sale,
the deposit of the proceeds thereof in the Collection Account and the payment of
the fee referred to in the immediately preceding clause (ii), no Termination
Event or Incipient Termination Event shall occur.
(b) Any Contracts subject to a sale referred to in Section 2.05(a)
shall be released by the Agent (on behalf of the Investors and Banks) from the
Receivables Interests of the Banks and Investors therein upon completion of such
sale in full compliance with Section 2.05(a).
SECTION 2.06. Optional Reductions. (a) The Seller may, at any
time and from time to time with the consent or at the direction of the Servicer,
repay all or a portion of the Capital Investment by written notice delivered to
the Agent no later than the fifth (5th) Business Day prior to the Business Day
of the desired reduction; provided that (i) each such repayment of the Capital
Investment shall be in an amount that is an integral multiple of $5,000,000 and
not less than $10,000,000 in the aggregate (unless the amount of the Capital
Investment is less than $10,000,000 at such time, in which case such repayment
shall be in an amount equal to the total amount of the Capital Investment such
time), (ii) all accrued Yield with respect to the Capital Investment being
repaid shall be paid concurrently with the repayment of such Capital Investment
and (iii) after giving effect to any such repayment, no Termination Event or
Incipient Termination Event shall occur. Such reductions shall occur no more
frequently than once per calendar month.
(b) The Seller may, at any time and from time to time with the
consent or at the direction of the Servicer, upon at least three (3) Business
Days' written notice to the Agent, terminate in whole or reduce in part the
unused portion of the Purchase Limit; provided that (i) each such reduction of
the Purchase Limit shall be in an amount that is an integral multiple of
$5,000,000 and (ii) after giving effect to such reduction, no Termination Event
or Incipient Termination Event shall occur. Upon any such permanent reduction of
the Purchase Limit, each Bank Commitment shall be reduced ratably in accordance
with the amount of such reduction. Such reductions shall occur not more
frequently than once per calendar month.
(c) Upon the request of the Seller, with the consent or at the
direction of the Servicer, the Agent (on behalf of itself, the Investor and the
Banks), agrees to take any and all actions reasonably requested by the Seller to
release any Lien in favor of the Agent, the Investor and the Banks on any
47
Receivables subject to a reduction described in Sections 2.06(a) and (b) above;
provided, that, the Seller shall have paid to the Agent a fee (the amount of
which shall be paid from funds on account in the Collection Account) with
respect to such Receivables equal to the Aggregate Outstanding Balance of such
Receivables on the date of such release multiplied by the Exit Fee Rate.
ARTICLE III
YIELD, FEES, ETC.
SECTION 3.01. Yield Payment Dates. Yield accrued on each
Purchase shall be payable, without duplication: (a) on the date of any payment
or prepayment, in whole or in part, of Capital Investment and (b) on each
Distribution Date.
SECTION 3.02. Fees. The Seller agrees that CSFB, as agent for
the Banks, shall be entitled to receive on each Distribution Date the Fees in
the amounts set forth in the Fee Letter.
SECTION 3.03. Computation of Yield and Fees. All Yield and
Fees shall be computed on the basis of the actual number of days (including the
first day but excluding the last day) occurring during the period for which such
Yield or Fee is payable over a year comprised of 360 days.
ARTICLE IV
CAPITAL INVESTMENT REPAYMENTS
SECTION 4.01. Repayments of Capital Investment. Capital
Investment shall be due and payable in accordance with the provisions of Article
V.
ARTICLE V
PAYMENTS
SECTION 5.01. Making of Payments. (a) All amounts to be paid
or deposited by the Seller or either Servicer Party hereunder shall be paid or
deposited no later than 12:00 P.M. (New York City time) on the day when due in
same day funds to the Agent, at the Agent's Account.
(b) The Seller and each Servicer Party shall, to the extent
permitted by law, pay interest on any amount not paid or deposited by it when
due hereunder, at an interest rate per annum equal to Alternate Base Rate then
in effect plus 2% per annum, payable on demand.
(c) All computations of interest under subsection (b) above
and all computations of Yield, Fees, and other amounts hereunder shall be made
on the basis of a year of 360 days for the actual
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number of days (including the first but excluding the last day) elapsed.
Whenever any payment or deposit to be made hereunder shall be due on a day other
than a Business Day, such payment or deposit shall be made on the next
succeeding Business Day and such extension of time shall be included in the
computation of such payment or deposit.
SECTION 5.02. Distributions. (a) Collection of the Pool
Receivables shall be administered by the Servicer Parties in accordance with the
terms of Article XI of this Agreement. All Collections received by the
Sub-Servicer shall be deposited in the Collection Account by 4:00 p.m. (New York
time) on the second Business Day following the receipt thereof in the Specified
Account. All Collections received by the Servicer shall be deposited in the
Collection Account by 11:00 a.m. (New York time) on the Business Day following
the receipt thereof in the Lock-Box Account.
(b) On each Distribution Date prior to the Facility
Termination Date (other than on a Distribution Date next following the
occurrence of a Take-Out), the Agent shall distribute amounts on deposit in the
Collection Account as follows:
FIRST, to the Servicer and Sub-Servicer in respect of
Servicing Fees and Sub-Servicing Fees due for the immediately-preceding
Collection Period, to be paid, pro rata, based upon the respective amounts of
such Servicing Fees and Sub-Servicing Fees due to the Servicer and Sub-Servicer,
respectively;
SECOND, pro rata, to (i) the Custodian, in payment of any
Custodial Fees due for the immediately-preceding Collection Period and (ii) the
Collection Account Bank in payment of any fees or expenses due under the Control
Agreement for the immediately-preceding Collection Period;
THIRD, to the Agent's Account, an amount equal to any accrued
and unpaid Yield and Fees in respect of all preceding Fixed Periods, and Other
Amounts, owing to the Agent, the Banks and the Investors;
FOURTH, to GSS, in respect of any Management Fees due for the
immediately- preceding Collection Period;
FIFTH, to the Reserve Account, until the amount on deposit
therein is equal to the Aggregate Required Reserve Account Amount at such time;
SIXTH, to the Agent's Account, in an amount equal to any
Capital Deficiency;
SEVENTH, if the senior unsecured long-term debt rating of the
Parent is downgraded below B- by S&P (or if the Parent is put on negative credit
watch by S&P at any time that such rating is at B-) or below B3 by ▇▇▇▇▇'▇ (or
if the Parent is put on negative credit watch by ▇▇▇▇▇'▇ at any time that such
rating is at B3)(or if such rating is withdrawn or cancelled by S&P or ▇▇▇▇▇'▇),
to the Agent's Account in payment of the Capital Investment until such time as
the Deemed AAA Credit Enhancement Amount shall have been paid in full;
49
EIGHTH, to any Successor Servicer, in payment of any unpaid
transition costs approved by the Agent pursuant to Section 13.03; and
NINTH, any remaining amounts, to the Excess Collections
Account; provided, however, that, prior to the Facility Termination Date, if
HomePride has repurchased, on or before the immediately-preceding Determination
Date, all Delinquent Receivables as of the end of the immediately-preceding
Collection Period in accordance with Section 2.04(c) of the Purchase and
Contribution Agreement, then if no Termination Event or Incipient Termination
Event shall have occurred, all such remaining amounts, plus all other amounts on
deposit in the Excess Collections Account, shall be remitted to the Seller for
its own account.
(c) On each Distribution Date following the occurrence of the
Facility Termination Date, the Agent shall distribute amounts on deposit in the
Collection Account as follows:
FIRST, to the Servicer and Sub-Servicer in respect of
Servicing Fees and Sub-Servicing Fees due for the immediately-preceding
Collection Period, to be paid, pro rata, based upon the respective amounts of
such Servicing Fees and Sub-Servicing Fees due to the Servicer and Sub-Servicer,
respectively;
SECOND, pro rata, to (i) the Custodian, in payment of any
Custodial Fees due for the immediately-preceding Collection Period and (ii) the
Collection Account Bank in payment of any fees or expenses due under the Control
Agreement for the immediately-preceding Collection Period;
THIRD, to the Agent's Account, an amount equal to all accrued
and unpaid Yield and Fees in respect of all preceding Fixed Periods, and Other
Amounts, owing to the Agent, the Banks and the Investors;
FOURTH, to GSS, in respect of any Management Fees due for the
immediately- preceding Collection Period;
FIFTH, to any Successor Servicer, in payment of any unpaid
transition costs approved by the Agent pursuant to Section 13.03; and
SIXTH, to the Investors and/or Banks in reduction to zero of
all Capital Investment.
After all Capital Investment, Yield, Fees, Servicing Fees,
fees owed to the Custodian, and Other Amounts have been paid in full, all
additional amounts on deposit in the Collection Account, the Reserve Account and
the Excess Collections Account shall be released and remitted to the Seller for
its own account.
50
(d) On each Distribution Date following the occurrence of a
Take-Out, the Agent shall distribute all Take-Out Proceeds on deposit in the
Collection Account (whether such amounts are paid by the Seller, either Servicer
Party, the Agent or a third-party purchaser) as follows:
FIRST, to the Servicer and Sub-Servicer in respect of
Servicing Fees and Sub-Servicing Fees due for the immediately-preceding
Collection Period, to be paid, pro rata, based upon the respective amounts of
such Servicing Fees and Sub-Servicing Fees due to the Servicer and Sub-Servicer,
respectively;
SECOND, pro rata, to (i) the Custodian, in payment of any
Custodial Fees due for the immediately-preceding Collection Period and (ii) the
Collection Account Bank in payment of any fees or expenses due under the Control
Agreement for the immediately-preceding Collection Period;
THIRD, to the Agent's Account, an amount equal to any accrued
and unpaid Yield and Fees in respect of all preceding Fixed Periods, and Other
Amounts, owing to the Agent, the Banks and the Investors;
FOURTH, to GSS, in respect of any Management Fees due for the
immediately- preceding Collection Period;
FIFTH, to the Agent's Account, in an amount equal to any
Capital Deficiency;
SIXTH, to the Reserve Account, until the amount on deposit
therein is equal to the Aggregate Required Reserve Account Amount at such time;
SEVENTH, if the senior unsecured long-term debt rating of the
Parent is downgraded below B- by S&P (or if the Parent is put on negative credit
watch by S&P at any time that such rating is at B-) or below B3 by ▇▇▇▇▇'▇ (or
if the Parent is put on negative credit watch by ▇▇▇▇▇'▇ at any time that such
rating is at B3) (or if such rating is withdrawn or cancelled by S&P or
▇▇▇▇▇'▇), to the Agent's Account in payment of the Capital Investment until such
time as the Deemed AAA Credit Enhancement Amount shall have been paid in full;
EIGHTH, to any Successor Servicer, in payment of any unpaid
transition costs approved by Agent pursuant to Section 13.03; and
NINTH, any remaining amounts shall be released and remitted to
the Seller for its own account.
(e) The Agent shall have the right to purchase Interest Rate
▇▇▇▇▇▇ with respect to all or any portion of the Receivables Pool for the
benefit of the Seller at such times as the Agent may elect. Any Interest Rate
Hedge purchased pursuant to the previous sentence shall be purchased only after
the Agent shall have requested and received price quotes for such an Interest
Rate Hedge from three Eligible
51
Counterparties and such Interest Rate Hedge shall be purchased only from the
Eligible Counterparty that provided the lowest such price quote, unless the
Agent shall have determined in its reasonable discretion that purchasing such
Interest Rate Hedge from one of the remaining two such Eligible Counterparties
would better serve the interests of the Investors (in which case such Interest
Rate Hedge shall be purchased from one of such remaining Eligible
Counterparties). In connection with any such purchase of an Interest Rate Hedge,
the Agent may, in its sole discretion, direct the Collection Account Bank in
writing, and the Collection Account Bank shall, upon such direction, withdraw
such amounts on deposit in the Reserve Account (and if the Reserve Account is
depleted, then the Excess Collections Account) as the Agent shall designate (in
its sole discretion) for payment of any fees and/or costs which may be owed to
the Eligible Counterparty providing such Interest Rate Hedge. On each
Distribution Date prior to the Facility Termination Date and on the Termination
Date or any date subsequent thereto, the Agent may, in its sole discretion,
direct the Collection Account Bank in writing, and the Collection Account Bank
shall, upon such direction, withdraw such amounts on deposit in the Reserve
Account and/or Excess Collections Account as the Agent shall designate (in its
sole discretion) for payment of any and all amounts set forth in Subsections
(a), (c) or (d) of this Section 5.02 as the Agent shall designate (in its sole
discretion) which shall remain unpaid after the application of Collections
required to be made on such date.
(f) For purposes of this Section 5.02:
(i) if on any day any of the representations or warranties
contained in Section 8.01(g) is no longer true with respect to any Pool
Receivable, the Seller shall be deemed to have received on such day a Collection
of such Pool Receivable in full; and
(ii) if and to the extent the Agent, the Investors or the
Banks shall be required for any reason to pay over to an Obligor any amount
received on its behalf hereunder, such amount shall be deemed not to have been
so received but rather to have been retained by the Seller and, accordingly, the
Agent, the Investors or the Banks, as the case may be, shall have a claim
against the Seller for such amount, payable when and to the extent that any
distribution from or on behalf of such Obligor is made in respect thereof;
provided, however, that it is expressly agreed and understood by the parties
hereto (i) that the foregoing is not intended to, and shall not, constitute a
guarantee of the collectibility or payment of the Pool Receivables and (ii) that
nothing in this Section 5.02(f) shall require the Seller to indemnify any Person
for Receivables which are not collected, not paid or uncollectible on account of
the insolvency, bankruptcy, or financial inability to pay of the applicable
Obligor.
ARTICLE VI
INCREASED COSTS; TAXES
SECTION 6.01. Increased Costs. (a) If CSFB, any Investor, any
Bank, any entity which enters into a commitment to purchase Receivable
Interests, or any of their respective Affiliates (each an "Affected Person")
determines that compliance with any law or regulation or any guideline or
request from any central bank or other governmental authority (whether or not
having the force of law) affects or
52
would affect the amount of the capital required or expected to be maintained by
such Affected Person and such Affected Person determines that the amount of such
capital is increased by or based upon the existence of any commitment to make
purchases of or otherwise to maintain the investment in Pool Receivables or
interests therein related to this Agreement or to the funding thereof and other
commitments of the same type, then, after demand by such Affected Person (with a
copy to the Agent), the Seller shall be given written notice and the Agent shall
be entitled to receive, from Collections or amounts on deposit in the Excess
Collections Account or Reserve Account in accordance with Section 5.02, for the
account of such Affected Person (as a third-party beneficiary), from time to
time as specified by such Affected Person, additional amounts sufficient to
compensate such Affected Person in the light of such circumstances, to the
extent that such Affected Person determines such increase in capital to be
allocable to the existence of any of such commitments. A certificate as to such
amounts submitted to the Seller and the Agent by such Affected Person shall set
forth such amounts in reasonable detail and shall be conclusive and binding for
all purposes, absent manifest error.
(b) If, due to either (i) the introduction of or any change
(other than any change by way of imposition or increase of reserve requirements
referred to in Section 6.02) in or in the interpretation of any law or
regulation or (ii) compliance with any guideline or request from any central
bank or other governmental authority (whether or not having the force of law),
there shall be any increase in the cost to any Investor or Bank of agreeing to
purchase or purchasing, or maintaining the ownership of Receivable Interests in
respect of which Yield is computed by reference to the Eurodollar Rate, then,
the Seller shall be given written notice and after demand by such Investor or
Bank (with a copy to the Agent), the Agent shall be entitled to receive, from
Collections and amounts on deposit in the Excess Collections Account and the
Reserve Account in accordance with Section 5.02, for the account of such
Investor or Bank (as a third-party beneficiary), from time to time as specified
by such Investor or Bank, additional amounts sufficient to compensate such
Investor or Bank for such increased costs. A certificate as to such amounts
submitted to the Seller and the Agent by such Investor or Bank shall set forth
such amounts in reasonable detail and shall be conclusive and binding for all
purposes, absent manifest error.
SECTION 6.02. Additional Yield on Receivable Interests Bearing
a Eurodollar Rate. Each Investor and Bank shall be entitled to receive, from
Collections in accordance with Section 5.02 and amounts on deposit in the Excess
Collections Account and the Reserve Account, so long as such Investor or Bank
shall be required under regulations of the Board of Governors of the Federal
Reserve System to maintain reserves with respect to liabilities or assets
consisting of or including Eurocurrency Liabilities, additional Yield on the
unpaid Capital Investment of each Receivable Interest of such Investor or Bank
during each Fixed Period in respect of which Yield is computed by reference to
the Eurodollar Rate, for such Fixed Period, at a rate per annum equal at all
times during such Fixed Period to the remainder obtained by subtracting (i) the
Eurodollar Rate for such Fixed Period from (ii) the rate obtained by dividing
such Eurodollar Rate referred to in clause (i) above by that percentage equal to
100% minus the Eurodollar Rate Reserve Percentage of such Investor or Bank for
such Fixed Period, payable on each date on which Yield is payable on such
Receivable Interest. Such additional Yield shall be determined by such Investor
or Bank and notice thereof given to the Seller through the Agent within 30 days
after any Yield payment is made with respect to which such additional Yield is
requested. A certificate as to such additional Yield
53
submitted to the Seller and the Agent by such Investor or Bank shall set forth
such amounts in reasonable detail and shall be conclusive and binding for all
purposes, absent manifest error.
SECTION 6.03. Taxes. (a) Any and all payments and deposits
required to be made hereunder or under any other Transaction Document by the
Servicer, HomePride or the Seller shall be made free and clear of and without
deduction for any and all present or future taxes, levies, imposts, deductions,
charges or withholdings, and all liabilities with respect thereto, excluding net
income taxes or taxes of a similar nature (however characterized by the
applicable jurisdiction) that are imposed by the United States and franchise
taxes and net income taxes that are imposed on an Affected Person by any state
or foreign jurisdiction or other locality (all such non-excluded taxes, levies,
imposts, deductions, charges, withholdings and liabilities being hereinafter
referred to as "Taxes"). If the Seller or the Servicer shall be required by law
to deduct any Taxes from or in respect of any sum payable hereunder to any
Affected Person, (i) the Seller shall make an additional payment to such
Affected Person, in an amount sufficient so that, after making all required
deductions (including deductions applicable to additional sums payable under
this Section 6.03), such Affected Person receives an amount equal to the sum it
would have received had no such deductions been made, (ii) the Seller, HomePride
or the Servicer, as the case may be, shall make such deductions and (iii) the
Seller, HomePride or the Servicer, as the case may be, shall pay the full amount
deducted to the relevant taxation authority or other authority in accordance
with applicable law.
(b) In addition, the Seller agrees to pay, in accordance with
the terms and order of priority set forth in Section 5.02 hereof, any present or
future stamp or other documentary taxes or any other excise or property taxes,
charges or similar levies which arise from any payment made hereunder or under
any other Transaction Document or from the execution, delivery or registration
of, or otherwise with respect to, this Agreement or any other Transaction
Document (hereinafter referred to as "Other Taxes").
(c) The Seller will indemnify each Affected Person for the
full amount of Taxes or Other Taxes (including, without limitation, any Taxes or
Other Taxes imposed by any jurisdiction on amounts payable under this Section
6.03) paid by such Affected Person and any liability (including penalties,
interest and expenses) arising therefrom or with respect thereto whether or not
such Taxes or Other Taxes were correctly or legally asserted. This
indemnification shall be made, in accordance with the terms and order of
priority set forth in Section 5.02 hereof, on the Distribution Date immediately
following the date on which the Affected Person makes written demand therefor
(and a copy of such demand shall be delivered to the Agent). A certificate as to
the amount of such indemnification submitted to the Seller and the Agent by such
Affected Person, setting forth, in reasonable detail, the basis for and the
calculation thereof, shall be conclusive and binding for all purposes absent
manifest error.
54
ARTICLE VII
CONDITIONS OF PURCHASES
SECTION 7.01. Conditions Precedent to Initial Purchase. The
initial Purchase of a Receivable Interest under this Agreement is subject to the
conditions precedent that the Agent shall have received on or before the date of
such purchase the following, each (unless otherwise indicated) dated such date
and in form and substance satisfactory to the Agent:
(a) Certified copies of the resolutions of the Board of
Directors of each of the Seller, the Servicer and the Sub-Servicer approving
this Agreement, the Purchase and Sale Agreement, if applicable, the other
Transaction Documents to which each of them is a party and any other documents
contemplated thereby and certified copies of all documents evidencing other
necessary corporate action and governmental approvals, if any, with respect to
this Agreement, the Purchase and Sale Agreement, the other Transaction Documents
and any other documents contemplated thereby;
(b) A certificate of the Secretary or Assistant Secretary of
each of the Seller, the Servicer and the Sub-Servicer certifying the names and
true signatures of the officers of the Seller and the Servicer authorized to
sign the Purchase and Sale Agreement, if applicable, this Agreement and the
other Transaction Documents to be delivered by it in connection herewith and
therewith;
(c) Proper financing statements under the UCC of all
jurisdictions that the Agent may deem necessary or desirable in order to perfect
the ownership and security interests contemplated by this Agreement, the
Purchase and Sale Agreement and the Purchase and Contribution Agreement;
(d) Acknowledgment copies of proper financing statements, if
any, necessary to release all security interests and other rights of any Person
in the Pool Receivables, any Contracts related thereto or any Related Security
related thereto previously granted by the Seller, HomePride SPV or HomePride;
(e) Completed requests for information, dated on or before the
date of such initial Purchase, with respect to each jurisdiction referred to in
subsection (c) above that name the Seller, HomePride SPV or HomePride as debtor,
together with copies of such other financing statements (none of which shall
cover any Pool Receivables, any Contracts related thereto or any Related
Security related thereto or any collateral referred to in Section 10.01);
(f) Favorable Opinions of Counsel in form and substance
satisfactory to the Agent, with respect to, among other things, the due
authorization, execution and delivery of, and enforceability of this Agreement
and the other Transaction Documents;
(g) A favorable Opinion of Counsel, in form and substance
satisfactory to the Agent, to the effect that (i) the Receivables to be conveyed
to HomePride SPV under the Purchase and Contribution Agreement will be conveyed
to HomePride SPV in a "true sale" and would not be considered part of
55
HomePride's bankruptcy estate in the event of its insolvency and (ii) HomePride
SPV would not be substantially consolidated with HomePride for purposes of the
Federal Bankruptcy Code in such event;
(h) A favorable Opinion of Counsel, in form and substance
satisfactory to the Agent, to the effect that the Seller would not be
substantially consolidated with Seller's Parent for purposes of the Federal
Bankruptcy Code in such event;
(i) A favorable Opinion of Counsel, in form and substance
satisfactory to the Agent with respect to, among other things, there being no
material conflicts between the Transaction Documents and the 1999 Indenture or
the ▇▇▇▇ ▇▇▇▇▇▇▇▇▇;
(j) Favorable Opinions of Counsel, in form and substance
satisfactory to the Agent, with respect to the creation, perfection and priority
of ownership interests and, in the alternative, security interests in the
Transferred Receivables, Related Security and Collections under the Purchase and
Sale Agreement (as such terms are defined in the Purchase and Sale Agreement),
the Transferred Receivables, Related Security and Collections under the Purchase
and Contribution Agreement (as such terms are defined in the Purchase and Sale
Agreement) and the Pool Receivables, Related Security and Collections under this
Agreement;
(k) A favorable Opinion of Counsel from special counsel for
the Seller, with respect to the first priority perfected security interest of
the Agent in the Collection Account, the Excess Collections Account and the
Reserve Account;
(l) A favorable Opinion of Counsel, in form and substance
satisfactory to the Agent, which shall address (i) certain regulatory and
licensing issues related to the (a) ownership of the Receivables and Related
Security by HomePride, HomePride SPV and the Seller and (b) the servicing of the
Receivables by the Servicer and (ii) the exemption of the Agent, Investors and
Banks from federal, state and local licensing requirements with respect to the
transactions contemplated by the Transaction Documents;
(m) A favorable Opinion of Counsel from special Texas counsel
for the Seller satisfactory to the Agent, in form and substance satisfactory to
the Agent, with respect to the first priority, perfected, possessory security
interest in the Contracts;
(n) A copy of the by-laws of the Seller, the Servicer and the
Sub-Servicer certified by the Secretary or Assistant Secretary of the Seller,
the Servicer or the Sub-Servicer, as applicable;
(o) A copy of the certificate or articles of incorporation of
the Seller, the Servicer and the Sub-Servicer, certified as of a recent date by
the Secretary of State or other appropriate official of the state of its
organization, and a certificate as to the good standing of the Seller, the
Servicer and the Sub-Servicer from such Secretary of State or other official,
dated as of a recent date;
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(p) The Agent (or its counsel) shall have received from each
party to the Fee Letter either (i) an original counterpart of the Fee Letter
signed on behalf of such party or (ii) written evidence satisfactory to the
Agent (which may include telecopy transmission of a signed signature page of the
Fee Letter) that such party has signed a counterpart of the Fee Letter;
(q) The Agent (or its counsel) shall have received from each
party to the Purchase and Sale Agreement either (i) an original counterpart of
the Purchase and Sale Agreement signed on behalf of such party or (ii) written
evidence satisfactory to the Agent (which may include telecopy transmission of a
signed signature page of the Purchase and Sale Agreement) that such party has
signed a counterpart of the Purchase and Sale Agreement;
(r) The Agent (or its counsel) shall have received from each
party to the Purchase and Contribution Agreement either (i) an original
counterpart of the Purchase and Contribution Agreement signed on behalf of such
party or (ii) written evidence satisfactory to the Agent (which may include
telecopy transmission of a signed signature page of the Purchase and
Contribution Agreement) that such party has signed a counterpart of the Purchase
and Contribution Agreement;
(s) The Agent (or its counsel) shall have received from each
party to the Custodial Agreement either (i) an original counterpart of the
Custodial Agreement signed on behalf of such party or (ii) written evidence
satisfactory to the Agent (which may include telecopy transmission of a signed
signature page of the Custodial Agreement) that such party has signed a
counterpart of the Custodial Agreement;
(t) The Agent (or its counsel) shall have received from the
Parent (i) an original counterpart of the Parent Guaranty signed on behalf of
the Parent or (ii) written evidence satisfactory to the Agent (which may include
telecopy transmission of a signed signature page of the Parent Guaranty) that
the Parent has signed a counterpart of the Parent Guaranty;
(u) The Agent (or its counsel) shall have received from the
Parent (i) an original counterpart of the Limited Recourse Guaranty signed on
behalf of the Parent or (ii) written evidence satisfactory to the Agent (which
may include telecopy transmission of a signed signature page of the Limited
Recourse Guaranty) that the Parent has signed a counterpart of the Limited
Recourse Guaranty;
(v) The Agent (or its counsel) shall have received from CIT
(i) an original counterpart of the CIT Guaranty signed on behalf of CIT or (ii)
written evidence satisfactory to the Agent (which may include telecopy
transmission of a signed signature page of the CIT Guaranty) that CIT has signed
a counterpart of the CIT Guaranty;
(w) The Agent (or its counsel) shall have received the Global
Servicing Agreement in form and substance satisfactory to the Agent and from
each party thereto either (i) an original counterpart of the Global Servicing
Agreement signed on behalf of such party or (ii) written evidence satisfactory
to the Agent (which may include telecopy transmission of a signed signature page
of the Global Servicing Agreement) that such party has signed a counterpart of
the Global Servicing Agreement;
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(x) The Agent (or its counsel) shall have received the Control
Agreement in form and substance satisfactory to the Agent and from each party
thereto either (i) an original counterpart of the Control Agreement signed on
behalf of such party or (ii) written evidence satisfactory to the Agent (which
may include telecopy transmission of a signed signature page of the Control
Agreement) that such party has signed a counterpart of the Control Agreement;
(y) The Agent (or its counsel) shall have received from the
Seller (i) an original counterpart of the Funds Transfer Letter signed on behalf
of the Seller or (ii) written evidence satisfactory to the Agent (which may
include telecopy transmission of a signed signature page of the Funds Transfer
Letter) that the Seller has signed a counterpart of the Funds Transfer Letter;
(z) The Agent (or its counsel) shall have received this
Agreement and all other Transaction Documents required to be delivered on the
date hereof, in each case, in form and substance satisfactory to the Agent and
from each party thereto either (i) an original counterpart thereof signed on
behalf of such party or (ii) written evidence satisfactory to the Agent (which
may include telecopy transmission of a signed signature page thereof that such
party has signed a counterpart thereof.
(aa) A Responsible Officer of the Seller shall have certified
that all conditions to the obligations of HomePride and the Seller under the
Purchase and Sale Agreement shall have been satisfied in all respects and a copy
of all documents delivered thereunder shall be delivered to the Agent and shall
be reasonably satisfactory to the Agent;
(bb) A Responsible Officer of HomePride shall have certified
that all conditions to the obligations of HomePride and HomePride SPV under the
Purchase and Contribution Agreement shall have been satisfied in all respects
and a copy of all documents delivered thereunder shall be delivered to the Agent
and shall be reasonably satisfactory to the Agent;
(cc) A Responsible Officer of HomePride shall have certified
that all conditions to the obligations of HomePride and CIT Group/Sales under
the Global Servicing Agreement shall have been satisfied in all respects and a
copy of all documents delivered thereunder shall be delivered to the Agent and
shall be reasonably satisfactory to the Agent;
(dd) A copy of the Credit and Collection Policy, certified by
a Responsible Officer of the Seller;
(ee) A review of the computer programs, material tapes, data
and back-up plans of Sub-Servicer, HomePride, HomePride SPV and the Seller
required for the collection of Receivables and the Agent shall be satisfied that
the foregoing, including the procedures of Sub-Servicer, HomePride, HomePride
SPV and the Seller for the preparation, storage and retrieval thereof, are
sufficient upon the termination of the Servicer or the Sub-Servicer to permit
(i) the Seller or the Agent to collect the Receivables with or without the
participation of HomePride, HomePride SPV or the Sub-Servicer and the
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Seller or the Servicer and (ii) a third-party servicer to collect the
Receivables with or without the participation of HomePride, HomePride SPV, the
Servicer, the Sub-Servicer or the Seller; and
(ff) Such other documents, instruments, certificates and
opinions as the Agent may reasonably request.
SECTION 7.02. Conditions Precedent to All Purchases. Each
Purchase (including the initial Purchase) shall be subject to the further
conditions precedent that:
(a) If requested by the Agent in connection with such
Purchase, the Seller shall have entered into an Interest Rate Hedge with respect
to the Receivables which are the subject of such Purchase;
(b) The representations and warranties contained in Section
8.01 shall be correct on and as of the date of such Purchase as though made on
and as of such date (other than the representations and warranties stated to be
correct on or as of a date certain, which shall have been correct on such date
certain);
(c) No event has occurred and is continuing, or would result
from such purchase, that constitutes a Termination Event or an Incipient
Termination Event;
(d) The Agent shall have received the Purchase Request for
such Purchase in accordance with Section 2.02, together with all items required
to be delivered in connection therewith;
(e) The Facility Termination Date shall not have occurred;
(f) The Agent shall have received a Trust Receipt, in form and
substance satisfactory to the Agent, in respect of each Receivable File related
to such Purchase;
(g) The amount on deposit in the Reserve Account shall be
equal to the Aggregate Required Reserve Amount (after giving effect to such
Purchase);
(h) The Seller's Tangible Net Worth shall not be less than
$50,000;
(i) The Agent shall have received a duly executed Transfer
Certificate, in form and substance satisfactory to the Agent, with respect to
the Receivable Interests to be Purchased on the requested Purchase Date; and
(j) The Agent shall have received such other approvals,
opinions or documents as it may request.
Acceptance of the proceeds of each Purchase shall be deemed a representation and
warranty that the conditions set forth in this Section 7.02 have been fulfilled.
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ARTICLE VIII
REPRESENTATIONS AND WARRANTIES
SECTION 8.01. Representations and Warranties of the Seller.
The Seller hereby represents and warrants as of the Closing Date and as of the
date of each Purchase as follows; provided, however, that each representation
and warranty of the Seller with respect to the Lock-Box Accounts or Lock-Box
Banks shall not be deemed to be made by the Seller until the date when one or
more Lock-Box Accounts are required to be established pursuant to the terms of
this Agreement:
(a) The Seller is a corporation duly organized, validly
existing and in good standing under the laws of Delaware, and is duly qualified
to do business, and is in good standing, in every jurisdiction where the nature
of its business requires it to be so qualified. The Seller has full corporate
power and authority to execute and deliver this Agreement and the other
Transaction Documents to which it is a party and to carry out its terms and
their terms, respectively.
(b) The execution, delivery and performance by the Seller of
this Agreement and the Transaction Documents to which it is a party and the
other documents to be delivered by it hereunder, including the Seller's use of
the proceeds of Purchases, (i) have been duly authorized by all necessary
corporate action, (ii) do not contravene (1) the Seller's certificate of
incorporation or by-laws, (2) any law, rule or regulation applicable to the
Seller, (3) any contractual restriction binding on or affecting the Seller or
its property or (4) any order, writ, judgment, award, injunction or decree
binding on or affecting the Seller or its property, and (iii) do not result in
or require the creation of any Lien upon or with respect to any of its
properties (except for the interests created pursuant to the Transaction
Documents). Each of the Transaction Documents to which it is a party has been
duly executed and delivered by the Seller.
(c) No authorization or approval or other action by, and no
notice to or filing with, any governmental authority or regulatory body (which
has not been obtained) is required for the due execution, delivery and
performance by the Seller of the Transaction Documents to which it is a party or
any other document to be delivered thereunder, except for the filing of UCC
financing statements which are referred to herein and therein.
(d) Each of the Transaction Documents to which it is a party
constitutes the legal, valid and binding obligation of the Seller enforceable
against the Seller in accordance with its terms, except as enforceability may be
limited by bankruptcy, insolvency, reorganization or other similar laws
affecting the enforcement of creditors' rights generally and by equitable
limitations on the availability of specific remedies, regardless of whether such
enforceability is considered in a proceeding in equity or at law.
(e) The balance sheets of the Parent and its Subsidiaries as
at December 29, 2001, and the related statements of operations of the Parent and
its Subsidiaries for the fiscal year ended
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December 29, 2001, copies of which have been furnished to the Agent, fairly
present the financial condition of the Parent and its Subsidiaries as at such
date and the results of the operations of the Parent and its Subsidiaries for
the period ended on such date, all in accordance with GAAP consistently applied,
and since December 29, 2001 there has been no material adverse change in the
business, operations, property or financial or other condition of the Parent.
(f) There is no pending or, to the Seller's knowledge,
threatened action or proceeding affecting the Seller or the Parent or any of its
Subsidiaries before any court, governmental agency or arbitrator which, if
adversely determined, would materially adversely affect the financial condition
or operations of the Seller or of the Parent and Subsidiaries taken as a whole
or the ability of the Seller or the Servicer to perform their respective
obligations under the Transaction Documents, or which purports to affect the
legality, validity or enforceability of the Transaction Documents; none of the
Seller, the Parent or any Subsidiary of the Parent is in default with respect to
any order of any court, arbitration or governmental body except for defaults
with respect to orders of governmental agencies which defaults are not material
to the business or operations of the Seller, the Parent or the Parent's
Subsidiaries.
(g) Immediately prior to the Purchase by the Investors or the
Banks, as the case may be, the Seller is the legal and beneficial owner of the
Pool Receivables and Related Security free and clear of any Lien; upon each
Purchase, the Investors or the Banks, as the case may be, shall acquire a valid
and perfected first priority undivided percentage ownership interest to the
extent of the pertinent Receivable Interest in each Pool Receivable then
existing or thereafter arising and in the Related Security and Collections with
respect thereto. No effective financing statement or other instrument similar in
effect covering any Contract or Pool Receivable or the Related Security or
Collections with respect thereto is on file in any recording office, except
those filed in favor of the Agent relating to this Agreement, those filed by the
Seller pursuant to the Purchase and Sale Agreement, those filed by HomePride SPV
pursuant to the Purchase and Contribution Agreement and those filed by HomePride
pursuant to any Dealer Agreements.
(h) Each Servicer Certificate (if prepared by the Seller or
one of its Affiliates, or to the extent that information contained therein is
supplied by the Seller or an Affiliate), information, exhibit, financial
statement, document, book, record or report furnished or to be furnished at any
time by or on behalf of the Seller to the Agent or the Investors in connection
with this Agreement is or will be accurate in all material respects as of its
date or (except as otherwise disclosed to the Agent or the Investors, as the
case may be, at such time) as of the date so furnished, and no such document (in
each case as of such date) (x) contains or will contain any untrue statement of
a material fact or (y) omits or will omit to state a material fact necessary in
order to make the statements contained therein, in the light of the
circumstances under which they were made, not misleading.
(i) The principal place of business and chief executive office
of the Seller and the office where the Seller keeps its records concerning the
Pool Receivables are located at the address or addresses referred to in Section
17.03 (other than records held by a Custodian).
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(j) The Seller is not known by and does not use any tradename
or doing-business-as name.
(k) The Seller was organized on April 17, 2002, and the Seller
did not engage in any business activities prior to the date of this Agreement.
The Seller has no Subsidiaries.
(l) With respect to each Pool Receivable, the Seller shall
have purchased such Pool Receivable from HomePride SPV in exchange for payment
(made by the Seller to HomePride SPV in accordance with the provisions of the
Purchase and Sale Agreement) of cash and/or subordinated debt in an amount which
constitutes fair consideration and reasonably equivalent value. Each such sale
referred to in the preceding sentence shall not have been made for or on account
of an antecedent debt owed by HomePride SPV to the Seller and no such sale is
intended to be voidable or subject to avoidance under any section of the
Bankruptcy Code.
(m) The Seller will treat the purchase of each Receivable and
Related Security pursuant to the Purchase and Sale Agreement as a purchase of
HomePride SPV's full right, title and ownership interest in such Receivable and
Related Security.
(n) The Seller has complied with all applicable laws, rules,
regulations, judgments, agreements, decrees and orders with respect to its
business and properties and all Pool Receivables and Related Security.
(o) The Seller has filed on a timely basis all material tax
returns (including, without limitation, foreign, federal, state, local and
otherwise) required to be filed, is not liable for taxes payable by any other
Person and has paid or made adequate provisions for the payment of all material
taxes, assessments and other governmental charges due from the Seller. No tax
lien or similar adverse claim has been filed, and no claim is being asserted,
with respect to any such tax, assessment or other governmental charge. Any
taxes, fees and other governmental charges payable by the Seller in connection
with the execution and delivery of this Agreement and the other Transaction
Documents to which it is a party and the transactions contemplated hereby or
thereby including the transfer of each Pool Receivable and Related Security to
the Seller have been paid or shall have been paid if and when due at or prior to
the Closing Date and the relevant Purchase Date, as the case may be.
(p) The Seller is in compliance with ERISA and has not
incurred and does not expect to incur any liabilities (except for premium
payments arising in the ordinary course of business) to the PBGC under ERISA.
(q) (i) The Seller is not a party to any indenture, loan or
credit agreement or any lease or other agreement or instrument or subject to any
restriction that could have, and no provision of applicable law or governmental
regulation is reasonably likely to have, a material adverse effect on the
condition (financial or otherwise), business, operations, results of operations
or properties of the Seller, or could have such a material adverse effect on the
ability of the Seller to carry out its obligations under this
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Agreement and the other Transaction Documents to which it is a party and (ii)
the Seller is not in default under or with respect to any contract, agreement,
lease or other instrument to which the Seller is a party and which would have a
material adverse effect on the Seller's condition (financial or otherwise),
business, operations or properties, and the Seller has not delivered or received
any notice of default thereunder.
(r) The Seller is not an "investment company" as such term is
defined in the Investment Company Act of 1940, as amended. The making of the
Purchases by the Investors, the application of the proceeds and repayment
thereof by the Seller and the consummation of the transactions contemplated by
this Agreement and the other Transaction Documents to which the Seller is a
party will not cause the Seller to violate any provision of such Act or any
rule, regulation or order issued by the Securities and Exchange Commission
thereunder.
(s) No proceeds of any Purchase will be used to acquire any
equity security of a class which is registered pursuant to Section 12 of the
Securities Exchange Act of 1934, as amended.
(t) No transaction contemplated hereby or by the Purchase and
Sale Agreement requires compliance with any bulk sales act or similar law.
(u) (i) The fair value of the property of the Seller is
greater than the total amount of liabilities, including contingent liabilities,
of the Seller, (ii) the present fair salable value of the assets of the Seller
is not less than the amount that will be required to pay all probable
liabilities of the Seller on its debts as they become absolute and matured,
(iii) the Seller does not intend to, and does not believe that it will, incur
debts or liabilities beyond the Seller's abilities to pay such debts and
liabilities as they mature and (iv) the Seller is not engaged in a business or a
transaction, and is not about to engage in a business or a transaction, for
which the Seller's property would constitute unreasonably small capital.
(v) Each Contract has been originated or re-underwritten by
HomePride consistent with the eligibility criteria required for a public
securitization of manufactured housing contracts, land-and-home contracts and
mortgage loans similar to the Contracts, and, as of the related Purchase Date,
there are no additional criteria which would exclude such Contracts from future
securitizations at such Purchase Date.
(w) Intentionally Omitted.
(x) Each of the Lock-Box Accounts, the Collection Account, the
Reserve Account and the Excess Collections Account is free and clear of any Lien
and not subject to any right of set- off other than any banker's lien or right
of set-off in favor of the banks holding such accounts that are obtained by
operation of law or contract, to the extent such liens or rights of set-off were
granted solely with respect to customary fees and expenses for the routine
maintenance of such accounts or the amounts of any checks which have been
credited to such accounts but are subsequently returned unpaid because of
uncollected or insufficient funds.
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ARTICLE IX
COVENANTS
Until the later of (x) the Facility Termination Date and (y)
the date on which no Capital Investment of or Yield on any Receivable Interest
shall be outstanding or the date all Other Amounts owed hereunder to the
Investors, the Banks or the Agent are paid in full:
SECTION 9.01. Records. The Seller and each Servicer Party
shall, at their own cost and expense, maintain satisfactory and complete records
of the Pool Receivables, including a record of all payments received and all
credits granted with respect to the Pool Receivables and all other dealings with
the Pool Receivables. Upon 72 hours notice at any time after the occurrence and
during the continuation of a Termination Event, the Seller and each Servicer
Party shall deliver and turn over to the Agent or to its representatives, or at
the option of the Agent, shall provide the Agent or its representatives with
access to, during ordinary business hours, on demand of the Agent, all of the
Seller's and such Servicer Party's facilities, personnel, books and records
pertaining to the Pool Receivables, including all Records. If a Termination
Event shall have occurred and be continuing, promptly upon request therefor, the
Seller or such Servicer Party shall deliver to the Agent records reflecting
payment activity relating to the Pool Receivables through the close of business
on the immediately preceding Business Day.
SECTION 9.02. Other Liens or Interests. The Seller will not
sell, pledge, assign (by operation of law or otherwise), transfer to any other
Person, otherwise dispose of, or grant, create, incur, assume or suffer to exist
any Lien upon or with respect to, the Seller's undivided interest in any Pool
Receivable, Related Security, related Contract or Collections, or upon or with
respect to any account to which any Collections of any Pool Receivable are sent,
or assign any right to receive income in respect thereof, and the Seller and
Servicer shall defend the right, title, and interest of the Investors, the Banks
and the Agent in and to the Pool Receivables, related Contracts and Related
Security against all claims of third parties claiming through or under the
Seller other than (i) for the ownership and security interests created by this
Agreement in favor of the Agent or (ii) in connection with any Take-Out, but
only to the extent that the Minimum Purchase Price for all related Receivable
Interests shall have been paid in full in connection therewith. The Seller and
each Servicer Party shall advise the Agent promptly, in reasonable detail of the
occurrence of any event which would have a material adverse effect on the
aggregate value of the Pool Receivables, related Contracts and Related Security
or on the assignments and security interests granted by the Seller in this
Agreement.
SECTION 9.03. Costs and Expenses. The Seller shall pay all of
its reasonable costs and disbursements in connection with the performance of its
obligations hereunder and under the Transaction Documents.
SECTION 9.04. Compliance with Laws, Etc. The Seller will
comply with all applicable laws, rules, regulations and orders and preserve and
maintain its corporate existence, rights, franchises, qualifications, and
privileges.
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SECTION 9.05. Offices, Records, Name and Organization. The
Seller will keep its principal place of business and chief executive office and
the office where it keeps its records concerning the Pool Receivables at the
address of the Seller set forth under its name on the signature pages to this
Agreement or, upon 30 days' prior written notice to the Agent, at any other
locations within the United States. The Seller will not change its name or its
state of organization, unless (i) the Seller shall have provided the Agent with
at least 30 days' prior written notice thereof and (ii) no later than the
effective date of such change, all actions requested by the Agent to protect and
perfect the interest in the Pool Receivables have been taken and completed. The
Seller also will maintain and implement administrative and operating procedures
(including, without limitation, an ability to recreate records evidencing Pool
Receivables and related Contracts in the event of the destruction of the
originals thereof), and keep and maintain all documents, books, records and
other information reasonably necessary or advisable for the collection of all
Pool Receivables (including, without limitation, records adequate to permit the
daily identification of each Pool Receivable and all Collections of and
adjustments to each existing Pool Receivable). The Seller will give the Agent
notice of any material change in the administrative and operating procedures of
the Seller referred to in the previous sentence.
SECTION 9.06. Performance and Compliance with Contracts and
Credit and Collection Policy. The Seller will, at its expense, timely and fully
perform and comply with all provisions, covenants and other promises required to
be observed by it under the Contracts related to the Pool Receivables, and
timely and fully comply in all respects (other than an in inconsequential
respect) with the Credit and Collection Policy in regard to each Pool Receivable
and the related Contract.
SECTION 9.07. Change in Business or Credit and Collection
Policy. The Seller will not make any change in its business or in the Credit and
Collection Policy (other than, with respect to the Credit and Collection Policy,
an inconsequential change thereto) that would adversely affect the
collectibility of the Pool Receivables or the ability of the Seller or either
Servicer Party to perform its obligations under this Agreement.
SECTION 9.08. Extension or Amendment of Receivables. Except as
provided in Section 11.03, the Seller will not extend, amend or otherwise modify
the terms of any Pool Receivable, or amend, modify or waive any term or
condition of any Contract related thereto.
SECTION 9.09. Marking of Records. At its expense, the Seller
will ▇▇▇▇ its master data processing records evidencing Pool Receivables with a
legend evidencing that Receivable Interests related to such Pool Receivables
have been sold in accordance with this Agreement.
SECTION 9.10. Further Assurances. (a) The Seller and Servicer
agree from time to time, at its own expense, promptly to execute and deliver all
further instruments and documents, and to take all further actions, that may be
necessary or desirable, or that the Agent may reasonably request, to perfect,
protect or more fully evidence the Purchases, to perfect the security interests
granted under this Agreement or to enable the Investors, the Banks or the Agent
to exercise and enforce their respective rights
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and remedies under this Agreement. Without limiting the foregoing, the Seller
and Servicer will, upon the request of the Agent, execute and file such
financing or continuation statements, or amendments thereto, and such other
instruments and documents, that may be necessary or desirable, or that the Agent
may request, to perfect, protect or evidence such Purchases.
(b) The Seller authorizes the Agent to file financing or
continuation statements, and amendments thereto and assignments thereof,
relating to the Pool Receivables and the Related Security and the Collections
with respect thereto without the signature of the Seller where permitted by law
in order to enable the Investors, the Banks or the Agent to exercise their
respective rights and remedies under this Agreement. A photocopy or other
reproduction of this Agreement shall be sufficient as a financing statement
where permitted by law.
(c) The Seller and Servicer shall furnish to the Agent from
time to time such statements and schedules further identifying and describing
the Pool Receivables and Related Security and such other reports in connection
with the Pool Receivables and Related Security as the Agent may request, all in
reasonable detail.
SECTION 9.11. Reporting Requirements. The Seller and Servicer
will maintain a system of accounting established and administered in accordance
with GAAP and will provide to the Agent (in multiple copies, if requested by the
Agent) the following:
(a) as soon as available and in any event within 90 days after
the end of each fiscal year of the Parent, a copy of the audited consolidated
financial statements for such year of the Parent and its consolidated
Subsidiaries, certified by independent accountants of nationally recognized
standing, together with calculations, certified by the chief financial officer
or chief accounting officer of the Parent, of the Adjusted Consolidated Tangible
Net Worth as of the end of such fiscal year and the Interest Coverage Ratio as
of the end of the fiscal quarter ending on the last day of such fiscal year;
(b) as soon as available and in any event within 45 days after
the end of each of the first three quarters of each fiscal year of the Parent, a
consolidated balance sheet of the Parent and its consolidated Subsidiaries as of
the end of such quarter and including the prior comparable period, and
consolidated statements of operations of the Parent and its consolidated
Subsidiaries for such quarter and for the period commencing at the end of the
previous fiscal year and ending with the end of such quarter prepared in
accordance with GAAP, together with calculations of the Adjusted Consolidated
Tangible Net Worth and Interest Coverage Ratio as of the end of such fiscal
quarter, such balance sheet, statements of operations, and calculations to be
certified by the chief financial officer or chief accounting officer of the
Parent identifying such balance sheets or statements as being the balance sheets
or statements described in this paragraph (b) and stating that the information
set forth therein fairly presents the financial condition of the Parent and its
consolidated Subsidiaries as of and for the periods then ended, subject to
year-end adjustments consisting only of normal, recurring accruals and subject
to the auditors' year end report and confirming that the Parent is in compliance
with all financial conditions in this Agreement;
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(c) as soon as available and in any event within 90 days after
the end of each fiscal year of the Seller, a copy of the audited financial
statements for such year of the Seller, certified by independent accountants of
nationally recognized standing; and
(d) as soon as available and in any event within 45 days after
the end of each of the first three quarters of each fiscal year of the Seller, a
balance sheet of the Seller as of the end of such quarter and including the
prior comparable period, and consolidated statements of income of the Seller for
such quarter and for the period commencing at the end of the previous fiscal
year and ending with the end of such quarter prepared in accordance with GAAP,
certified by the officer of the Seller responsible for its financial affairs
identifying such balance sheets or statements as being the balance sheets or
statements described in this paragraph (d) and stating that the information set
forth therein fairly presents the financial condition of the Seller as of and
for the periods then ended, subject to year-end adjustments consisting only of
normal, recurring accruals and subject to the auditors' year end report and
confirming that the Seller is in compliance with all financial covenants in this
Agreement.
(e) as soon as available and in any event within 90 days after
the end of each fiscal year of the Servicer, a balance sheet of the Servicer as
of the end of such fiscal year, and a statement of operations of the Servicer
for such fiscal year prepared in accordance with GAAP, such balance sheet and
statements of operations to be certified by the chief financial officer or chief
accounting officer of the Servicer identifying such balance sheets or statements
as being the balance sheets or statements described in this paragraph and
stating that the information set forth therein fairly presents the financial
condition of the Servicer as of and for the fiscal year then ended;
(f) as soon as available and in any event within 45 days after
the end of each of the first three quarters of each fiscal year of the Servicer,
a balance sheet of the Servicer as of the end of such quarter and including the
prior comparable period, and a statement of operations of the Servicer for such
quarter and for the period commencing at the end of the previous fiscal year and
ending with the end of such quarter prepared in accordance with GAAP, such
balance sheet and statement of operations to be certified by the chief financial
officer or chief accounting officer of the Servicer identifying such balance
sheets or statements as being the balance sheets or statements described in this
paragraph and stating that the information set forth therein fairly presents the
financial condition of the Servicer as of and for the periods then ended,
subject to year-end adjustments consisting only of normal, recurring accruals;
(g) as soon as available and in any event within 90 days after
the end of each fiscal year of the HomePride SPV, a balance sheet of HomePride
SPV as of the end of such fiscal year, and a statement of operations of
HomePride SPV for such fiscal year prepared in accordance with GAAP, such
balance sheet and statements of operations to be certified by the chief
financial officer or chief accounting officer of HomePride SPV identifying such
balance sheets or statements as being the balance sheets or statements described
in this paragraph and stating that the information set forth therein fairly
presents the financial condition of HomePride SPV as of and for the fiscal year
then ended;
(h) as soon as available and in any event within 45 days after
the end of each of the first
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three quarters of each fiscal year of HomePride SPV, a balance sheet of
HomePride SPV as of the end of such quarter and including the prior comparable
period, and a statement of operations of HomePride SPV for such quarter and for
the period commencing at the end of the previous fiscal year and ending with the
end of such quarter prepared in accordance with GAAP, such balance sheet and
statement of operations to be certified by the chief financial officer or chief
accounting officer of HomePride SPV identifying such balance sheets or
statements as being the balance sheets or statements described in this paragraph
and stating that the information set forth therein fairly presents the financial
condition of HomePride SPV as of and for the periods then ended, subject to
year-end adjustments consisting only of normal, recurring accruals;
(i) concurrently with the delivery of the financial statements
referred to in Section 9.11, a certificate of a Responsible Officer of the
Seller stating that, to the best of such Responsible Officer's knowledge, the
Seller during such period has observed or performed all of its covenants and
other agreements, and satisfied every condition, contained in the Transaction
Documents to which it is a party to be observed, performed or satisfied by it,
and that such Responsible Officer has obtained no knowledge of any Termination
Event or Incipient Termination Event, except as specified in such certificate;
(j) as soon as possible and in any event within one day after
the occurrence of each Termination Event or Incipient Termination Event, a
statement of the principal financial officer of the Seller setting forth details
of such Termination Event or Incipient Termination Event and the action that the
Seller has taken and proposes to take with respect thereto;
(k) promptly upon the furnishing thereof to the shareholders
of the Parent or the Servicer, copies of all financial statements, reports and
proxy statements so furnished;
(l) promptly after sending or filing thereof and upon request
by the Agent therefor, copies of all registration statements and annual,
quarterly, monthly or other regular reports which the Parent or any of its
Subsidiaries files with the Securities and Exchange Commission;
(m) promptly after the filing or receiving thereof, copies of
all reports and notices that the Parent or any Affiliate thereof files under
ERISA with the Internal Revenue Service or the PBGC or the U.S. Department of
Labor or that the Parent or any Affiliate thereof receives from any of the
foregoing or from any multiemployer plan (within the meaning of Section
4001(a)(3) of ERISA) to which the Parent or any Affiliate thereof is or was,
within the preceding five years, a contributing employer;
(n) at least 30 days prior to any change in the name of either
Servicer Party or the Seller, a notice setting forth the new name and the
effective date thereof;
(o) promptly after the Seller or Servicer obtains knowledge
thereof, notice of any "Event of Termination" or "Facility Termination Date"
under the Purchase and Sale Agreement;
(p) so long as any Capital Investment shall be outstanding, as
soon as possible and in any
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event no later than the day of occurrence thereof, notice that HomePride SPV has
stopped selling Receivables to the Seller pursuant to the Purchase and Sale
Agreement;
(q) promptly after receipt thereof, copies of all notices
received by the Seller from HomePride SPV under the Purchase and Sale Agreement;
and
(r) promptly, such additional financial and other information
with respect to the Parent, HomePride, HomePride SPV, either Servicer Party and
the Seller and their business and properties (including, without limitation, the
Pool Receivables and the Related Security) as any Agent may from time to time
reasonably request by written notice to the Seller or the Servicer.
SECTION 9.12. Corporate Separateness. (a) The Seller shall at
all times maintain at least one independent director (an "Independent Director")
who (i) is in fact independent, (ii) does not have any direct financial interest
or any material indirect financial interest in the Seller, or in any Affiliate
of the Seller, (iii) is not, and has not been, connected with the Seller or any
Affiliate of the Seller as an officer, employee, promoter, underwriter, trustee,
partner or person performing similar functions and is not a member of the
immediate family of any such officer or employee and (iv) is not, and has not
been, a director (other than as an independent director for an Affiliate which
is a limited special purpose corporation) or stockholder of any Affiliate of the
Seller and is not a member of the immediate family of any such director or
stockholder.
(b) The Seller shall not direct or participate in the
management of any other Person's operations, and no other Person shall be
permitted to direct or participate in the management of the Seller.
(c) The Seller shall maintain a principal executive and
administrative office through which its business in conducted separate from
those of any other Person, and, to the extent that the Seller and any other
Persons have offices in contiguous space, there shall be fair and appropriate
allocation of overhead costs among them, and each such entity shall bear its
fair share of such expenses.
(d) The Seller shall engage only in those transactions
described in Section 3 of its certificate of incorporation and matters
necessarily incident thereto.
(e) The Seller shall have stationery and other business forms
separate from that of any other Person.
(f) The Seller shall ensure that, to the extent that it
jointly contracts with any of its stockholders or Affiliates to do business with
vendors or service providers or to share overhead expenses, the costs incurred
in so doing shall be allocated fairly among such entities and that each such
entity shall bear its fair share of such costs and shall ensure that, to the
extent that the Seller contracts or does business with vendors or service
providers where the goods and services provided are partially for the benefit of
any other Person, the costs incurred in so doing shall be fairly allocated to or
among such entities for whose benefit the goods and services are provided and
that each such entity shall bear its fair share of such costs.
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(g) The Seller shall at all times be adequately capitalized in
light of its contemplated business.
(h) The Seller shall at all times provide for its own
operating expenses and liabilities from its own funds, shall not allow its funds
to be diverted to any other Person or for other than the corporate use of the
Seller, and shall not, except as may be expressly permitted by agreements of the
Seller, allow its funds to be commingled with those of any Affiliate of the
Seller.
(i) The Seller shall maintain its assets and transactions
separately from those of any other Person, reflect such assets and transactions
in financial statements separate and distinct from those of any other Person and
evidence such assets and transactions by appropriate entries in books and
records separate and distinct from those of any other Person.
(j) The Seller shall ensure that all material transactions
between the Seller and any of its Affiliates shall be only on an arm's-length
basis and shall receive the approval of its board of directors, including at
least one Independent Director.
(k) The Seller shall hold itself out to the public under its
own name as a legal entity separate and distinct from any other Person, shall
act solely in its own corporate name and through its own authorized officers and
agents, and no Affiliate of the Seller shall be appointed to act as agent by the
Seller, except as may be expressly permitted by any agreements of the Seller.
(l) The Seller shall not hold itself out as having agreed to
pay, or as being liable, primarily or secondarily, for any obligations of any
other Person, except as may be expressly permitted in any agreements of the
Seller.
(m) The Seller shall not maintain any joint account with any
other Person or become liable as a guarantor or otherwise with respect to any
debt or contractual obligation of any other Person.
(n) The Seller shall not make any payment or distribution of
assets with respect to any obligation of any other Person or grant any lien,
security interest or encumbrance on any of its assets to secure any obligation
of any other Person.
(o) The Seller shall not make loans, advances or otherwise
extend credit to any other Person, except on an arm's-length basis, and shall
not permit any Affiliate of the Seller to advance funds to the Seller or
otherwise supply funds to, or guaranty debts of, the Seller.
(p) The Seller shall hold regular duly noticed meetings of its
sole member and board of directors, no less than once annually, and make and
retain minutes of such meetings.
(q) The Seller shall ensure that decisions with respect to its
business and daily operations
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shall be independently made by the Seller (although the officer making any
particular decision may also be an officer or director of any Affiliate of the
Seller) and shall not be dictated by an Affiliate of the Seller.
(r) The Seller shall have bills of sale (or other similar
instruments of assignment) and, if appropriate, UCC-1 financing statements, with
respect to all assets purchased from any other Person.
(s) The Seller shall ensure that any financial reports
required of the Seller shall comply with GAAP and shall be issued separately
from, but may be consolidated with, any reports prepared for any of its
Affiliates and the Seller shall comply with the filing requirements under
applicable tax laws.
(t) The Seller shall not fail to maintain its assets in such a
manner that it will not be costly or difficult to segregate, ascertain or
identify its individual assets from those of any other Person.
(u) The Seller shall comply with all provisions of its
articles of organization and operating agreement and shall observe all
necessary, appropriate and customary corporate formalities.
SECTION 9.13. Purchase and Contribution Agreement; Purchase
and Sale Agreement; Custodial Agreement; Global Servicing Agreement. The Seller
will not amend, waive or modify any provision of the Purchase and Contribution
Agreement, Purchase and Sale Agreement or the Custodial Agreement or Section
2.13 of the Global Servicing Agreement in any respect or waive the occurrence of
any default under any such agreement, without in each case the prior written
consent of the Agent. The Seller will perform all of its obligations under the
Purchase and Sale Agreement and the Custodial Agreement in all respects and will
enforce the Purchase and Sale Agreement and the Custodial Agreement in
accordance with its terms in all respects.
SECTION 9.14. Nature of Business. The Seller will not engage
in any business other than as permitted under its articles of organization. The
Seller will not create or form any Subsidiary.
SECTION 9.15. Mergers, Etc. The Seller will not merge with or
into or consolidate with or into, or convey, transfer, lease or otherwise
dispose of (whether in one transaction or in a series of transactions), all or
substantially all of its assets (whether now owned or hereafter acquired) to, or
acquire all or substantially all of the assets or capital stock or other
ownership interest of, or enter into any joint venture or partnership agreement
with, any Person, other than as contemplated by this Agreement and the Purchase
and Sale Agreement.
SECTION 9.16. Distributions, Etc. The Seller will not declare
or make any dividend payment or other distribution of assets, properties, cash,
rights, obligations or securities on account of equity interests of the Seller,
or return any equity to its shareholders as such, or purchase, retire, defease,
redeem or otherwise acquire for value or make any payment in respect of any
equity interests of the Seller or any warrants, rights or options to acquire any
such equity interests, now or hereafter outstanding.
SECTION 9.17. Debt. The Seller will not incur any Debt, other
than any Debt incurred pursuant to this Agreement and the other Transaction
Documents.
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SECTION 9.18. Certificate of Incorporation and By-Laws. The
Seller will not Receivables Purchase Agreement amend or delete its Certificate
of Incorporation or its By-Laws without the prior written consent of the Agent
except to correct clerical errors.
SECTION 9.19. Inspections. (a) The Seller and each Servicer
Party will, at their respective expenses, during regular business hours as
requested by the Agent, upon reasonable prior notice to the Seller or such
Servicer Party, permit the Agent or its agents or representatives (including
independent public accountants, which may be the Seller's or such Servicer
Party's independent public accountants), (i) to conduct annual audits of the
Receivables, the Related Security and the related books and records and
collections systems of such Servicer Party or the Seller, (ii) to examine and
make copies of and abstracts from all books, records and documents (including,
without limitation, computer tapes and disks) in the possession or under the
control of the Seller or such Servicer Party relating to Pool Receivables and
the Related Security, including, without limitation, the Contracts, and (iii) to
visit the offices and properties of the Parent, such Servicer Party or the
Seller for the purpose of examining such materials described in clause (ii)
above, and to discuss matters relating to Pool Receivables and the Related
Security or the Seller's or such Servicer Party's performance under the
Transaction Documents or under the Contracts with any of the officers or
employees of such Servicer Party or the Seller having knowledge of such matters;
provided, however, that, prior to occurrence of a Termination Event or Event of
Default, the Agent shall not exercise its rights in clauses (i) through (iii) of
this sentence more than once per each calendar quarter. The Agent or its agents
or representatives shall at the expense of the Seller or the Servicer and as
frequently as the Agent may desire, has the right under this Agreement after the
occurrence and during the continuance of a Termination Event, or an Event of
Default, upon reasonable prior notice to the Seller or either Servicer Party, to
examine and audit, during business hours or at such other times as might be
reasonable under applicable circumstances, any and all of the books, records, or
other information of such Servicer Party or the Seller, or held by another for
such Servicer Party or the Seller or on its behalf, concerning this Agreement
and to conduct any other activities described in clauses (ii) and (iii) above.
The Agent shall make commercially reasonable efforts to schedule the audits,
examinations and visits provided for under this Section 9.19(a) so that they
occur, to the degree reasonably feasible, concurrently with similar audits,
examinations and visits to be conducted by HomePride in connection with the
Global Servicing Agreement.
(b) Upon the Agent's request, the Seller will, at its expense,
utilize the Agent's representatives or auditors, to prepare and deliver to the
Agent a written report with respect to the Pool Receivables and the Credit and
Collection Policy (including, in each case, the systems, procedures and records
relating thereto) on a scope and in a form requested by the Agent.
SECTION 9.20. Take-Out Securitization. (a) Upon the request of
the Agent, each of the Seller and the Servicer agrees that it shall amend this
Agreement to be consistent with any documents executed by the Seller or any
Affiliate of the Seller in connection with a Take-Out Securitization or Term
Securitization to the extent any provisions included therein for the benefit of
any holders of asset backed
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securities issued in connection therewith are more favorable to the terms
provided to the Investors and the Banks herein.
(b) The Seller shall give the Agent not less than 30 days
prior written notice of any proposed Take-Out Securitization (which notice shall
set forth the proposed date of such Take-Out Securitization); provided, that the
Seller shall promptly update any such notice if the proposed date of any
Take-Out Securitization is changed.
SECTION 9.21. Shadow Rating. Each of the Seller and the
Servicer shall take such actions as reasonably requested by the Agent and as
otherwise are necessary to obtain a "shadow" rating for the financing facility
provided hereunder of at least "A2" by ▇▇▇▇▇'▇ and a credit assessment letter
from S&P stating that the credit performance of the financing facility provided
hereunder is consistent with that of at least a "A" rated obligation
(collectively, the "Minimum Shadow Rating") within 60 days after the Closing
Date (including, without limitation, modifying the calculation of Advance Rate
and Excess Concentration Amount and agreeing to amendments to the Transaction
Documents (including, without limitation, amendments of provisions with respect
to Eligible Receivables criteria) to the extent necessary to obtain such a
Minimum Shadow Rating).
SECTION 9.22. Intentionally Omitted.
SECTION 9.23. Changes in Payment Instructions to Obligors. The
Seller and Servicer Parties will not terminate the Specified Account Bank or
make any change in its instructions to Obligors regarding payments to be made to
the Seller or payments to be made to the Specified Account, unless CIT
Group/Sales is no longer the Sub-Servicer hereunder and such termination or
change has been consented to in writing by the Agent or such termination or
change is otherwise required by this Agreement.
SECTION 9.24. Deposits to Specified Accounts. Subject to
Section 9.23 hereof, the Seller and Servicer Parties will instruct all Obligors
to remit all their payments in respect of Receivables to the Specified Account.
If the Seller or either Servicer Party shall receive any Collections directly
from an Obligor, it shall deposit the same into the Specified Account or, if
applicable, a Lock-Box Account within one (1) Business Day of receipt. The
Seller will not deposit or otherwise credit, or cause or permit to be so
deposited or credited, to the Specified Account cash or cash proceeds other than
Collections of Receivables.
SECTION 9.25. Lock-Box Accounts; Lock-Box Banks. As and when
required pursuant to Section 11.03(c) hereof, the Seller and the Servicer
Parties will instruct all Obligors to remit all their payments in respect of
Receivables to one or more Lock-Box Accounts. In such case, the Seller and the
Servicer Parties (i) will not add or terminate any bank as a Lock-Box Bank or
make any change in its instructions to Obligors regarding payments to be made to
the Seller or payments to be made to any Lock-Box Account, unless the Agent
shall have approved in writing such addition, termination or change, (ii) will
not deposit or otherwise credit, or cause or permit to be so deposited or
credited, to any Lock-Box Account cash or cash proceeds other than Collections
of Receivables and (iii) shall cause any Collections
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received from an Obligor to be deposited immediately (and in any event within
one Business Day) to a Lock-Box Account.
ARTICLE X
GRANT OF SECURITY INTEREST
SECTION 10.01. Seller's Grant of Security Interest; Assignment
of Purchase and Sale Agreement. (a) As collateral security for the performance
by the Seller of all the terms, covenants and agreements on the part of the
Seller (whether as Seller or otherwise) to be performed under this Agreement or
any document delivered in connection with this Agreement in accordance with the
terms thereof, the Seller hereby assigns to the Agent for its benefit and the
ratable benefit of the Investors and the Banks and hereby grants a security
interest to the Agent for its benefit and the ratable benefit of the Investors
and the Banks in all of the Seller's right, title and interest in, to and under
(i) the Purchase and Sale Agreement, the Purchase and Contribution Agreement
(which right, title and interest in and to the Purchase and Contribution
Agreement shall be assigned to the Seller under the Purchase and Sale Agreement)
and the Global Servicing Agreement (which right, title and interest shall be
assigned to the Seller under the Purchase and Sale Agreement), including,
without limitation, (A) all property and rights assigned or pledged thereunder
and all rights of the Seller to receive monies due or to become due under or
pursuant to such agreements, whether payable as fees, costs, expenses or
otherwise, (B) all security interests and property subject thereto from time to
time purporting to secure payment of monies due or to become due under or
pursuant to such agreements, (C) all rights of the Seller to receive proceeds of
any insurance, indemnity, warranty or guaranty with respect to such agreements,
including, without limitation, the Parent Guaranty, (D) claims of the Seller for
damages arising out of or for breach of or default under such agreements
(including any breach of any representation or warranty thereunder), (E) the
rights of the Seller to amend, waive or terminate such agreements, to perform
thereunder and to compel performance and otherwise exercise all remedies
thereunder (which rights shall be exerciseable by the Agent upon the occurrence
of a Termination Event), (F) all other rights, remedies, powers, privileges and
claims of the Seller under or in connection with such agreements (whether
arising pursuant to such agreements or otherwise available to the Seller at law
or in equity), including the rights of the Seller to enforce such agreements and
to give or withhold any and all consents, requests, notices, directions,
approvals, extensions or waivers under or in connection therewith, including,
without limitation, the right of the Seller to compel performance and otherwise
exercise all remedies thereunder (all of which shall be exerciseable by the
Agent upon the occurrence of a Termination Event), and (G) all monies due or to
become due and all amounts received with respect to the items listed in clauses
(A) through (F) and all proceeds (including, without limitation, whatever is
received upon the sale, exchange, collection or other disposition of the
foregoing and all "proceeds" as defined in Section 9-102 of the UCC as in effect
in the State of New York) thereof, including all Recoveries relating thereto
(collectively, the "Transferred Agreements"), (ii) all Receivables, whether now
owned and existing or hereafter acquired or arising, the Related Security with
respect thereto and the Collections and all other assets, including, without
limitation, accounts, chattel paper, instruments, payment intangibles and
general intangibles (as those terms are defined in the UCC), including undivided
interests in any of the foregoing, owned by the Seller and not otherwise
purchased under this Agreement,
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(iii) all existing and hereafter acquired or hereafter arising Pool Receivables,
together with all Related Security, Collections and proceeds with respect
thereto, (iv) each Bank Account and all cash, securities entitlements and other
financial assets as shall be deposited therein from time to time, (v) the
Interest Rate ▇▇▇▇▇▇ and (vi) to the extent not included in the foregoing, all
proceeds of any and all of the foregoing.
(b) As collateral security for the performance by the Seller
of all the terms, covenants and agreements on the part of the Seller (whether as
Seller or otherwise) to be performed under this Agreement or any document
delivered in connection with this Agreement in accordance with the terms hereof,
the Seller hereby grants to the Agent for its benefit and the ratable benefit of
the Investors and the Banks, a first priority perfected and continuing security
interest in each Bank Account and in all cash, securities entitlements and other
financial assets as shall be deposited therein from time to time.
SECTION 10.02. Characterization of Transaction. It is the
intention of the parties that the transactions contemplated hereby constitute
sales of Receivable Interests to the Agent, on behalf of the Banks and
Investors, as applicable, pursuant to the terms of this Agreement. Each of the
parties hereto will treat the transactions contemplated by this Agreement in a
manner consistent with the sale of such Receivable Interests in the Pool
Receivables, together with Related Security, Collections and proceeds with
respect thereto, by the Seller to the Agent on behalf of the Banks and
Investors, as applicable. Subject to the terms of this Agreement, the Seller
shall hold legal title to the Pool Receivables, together with Related Security,
Collections and proceeds with respect thereto, on behalf of and for the benefit
of the Agent (on behalf of the Investors and the Banks). Each of the parties
hereto hereby agrees to treat each purchase of interests in Receivables
hereunder (and the payment of the related Purchase Prices) as debt for income
tax purposes under the tax laws currently in effect, and as sales of such
interests for all other purposes.
SECTION 10.03. Seller Remains Liable. (a) Notwithstanding
anything in this Agreement, (i) the Seller shall remain liable under the Pool
Receivables, all Related Security, the Transferred Agreements and any Interest
Rate ▇▇▇▇▇▇ and to perform all of its duties and obligations thereunder to the
same extent as if this Agreement had not been executed, (ii) the exercise by the
Agent, an Investor or a Bank of any of its rights under this Agreement shall not
release the Seller or the Servicer from any of their respective duties or
obligations under the Pool Receivables, all Related Security, the Transferred
Agreements or any Interest Rate ▇▇▇▇▇▇, (iii) the Agent, the Investors, the
Banks, and the Custodian shall not have any obligation or liability under the
Pool Receivables, the Related Security, the Transferred Agreements or any
Interest Rate ▇▇▇▇▇▇ by reason of this Agreement, and (iv) neither the Agent,
the Custodian, the Investors or Banks shall be obligated to perform any of the
obligations or duties of the Seller or the Servicer under the Pool Receivables,
the Related Security, the Transferred Agreements or any Interest Rate ▇▇▇▇▇▇ or
to take any action to collect or enforce any claim for payment assigned under
this Agreement.
(b) The Seller shall not change its name, identity, or
corporate structure in any manner that would, could or might make any financing
statement or continuation statement filed by the Seller (or by the Agent on
behalf of the Seller) in accordance with the terms hereof seriously misleading
within the
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meaning of the UCC, unless the Seller shall have given the Agent at least 60
days prior written notice thereof, and shall promptly file appropriate
amendments to all previously filed financing statements and continuation
statements. The Seller shall give the Agent at least 30 days prior written
notice of any relocation of its principal executive office if, as a result of
such relocation, the applicable provisions of the UCC would require the filing
of any amendment of any previously filed financing or continuation statement or
of any new financing statement. The Seller shall at all times maintain its
principal executive office within the United States of America.
ARTICLE XI
ADMINISTRATION AND SERVICING OF RECEIVABLES
SECTION 11.01. Designation of Servicer Parties. (a) The
servicing, administration and collection of Pool Receivables shall be conducted
by the Servicer Parties so designated hereunder from time to time.
(b) Until the Agent gives notice to the Seller of the
designation of a Successor Servicer pursuant to the provisions of Section 13.03,
HomePride is hereby designated as, and hereby agrees to perform the duties and
obligations of, the Servicer pursuant to the terms hereof. Notwithstanding the
appointment of the Sub-Servicer pursuant to Section 11.01(c), the Servicer shall
be liable and responsible for all covenants, obligations, duties, liabilities,
responsibilities, representations and warranties of the Sub-Servicer under this
Agreement.
(c) The Servicer hereby appoints CIT Group/Sales as
Sub-Servicer under this Agreement and agrees that CIT Group/Sales shall perform
the covenants, obligations and duties of Sub-Servicer under this Agreement. CIT
Group/Sales hereby accepts its appointment as Sub-Servicer under this Agreement
and hereby agrees and covenants to perform all covenants, obligations and
duties, and be responsible for all liabilities, representations and warranties,
of Sub-Servicer under this Agreement. The Servicer shall have the right to
terminate the appointment of CIT Group/Sales as Sub-Servicer hereunder solely in
accordance with the terms and provisions of the Global Servicing Agreement and
with the prior written consent of the Agent, and the Agent shall have the right
to terminate the appointment of CIT Group/Sales as Sub-Servicer hereunder in
accordance with the terms and provisions of the CIT Guaranty. Upon any
termination by the Servicer of the appointment of CIT Group/Sales as
Sub-Servicer hereunder in accordance with the terms and provisions of the Global
Servicing Agreement and this Agreement, or any termination by the Agent of the
appointment of CIT Group/Sales as Sub-Servicer hereunder in accordance with the
terms and provisions of the CIT Guaranty, the Servicer may, with the prior
written consent of the Agent, (i) appoint an Eligible Sub-Servicer as
Sub-Servicer hereunder and, in such case, such Eligible Sub-Servicer so
appointed shall be responsible for all covenants, obligations, duties,
liabilities, representations and warranties, and be entitled to all rights,
benefits and privileges, of the Sub-Servicer hereunder on and after the date of
such appointment or (ii) designate that there shall no longer be a Sub-Servicer
under this Agreement and, in such case, all covenants, obligations, duties,
liabilities, representations and warranties which were theretofore covenants,
obligations, duties, liabilities, representations and warranties of the
Sub-
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Servicer hereunder shall, upon such designation, become covenants, obligations,
duties, liabilities, representations and warranties of the Servicer, and all
rights, benefits and privileges which were theretofore rights, benefits and
privileges of the Sub-Servicer hereunder shall, upon such designation, become
rights, benefits and privileges of the Servicer.
The Agent shall have the right to terminate the appointment of
CIT Group/Sales as Sub-Servicer hereunder in connection with its designation of
a Successor Servicer pursuant to Section 13.03.
CIT Group/Sales hereby agrees to perform, and be responsible
for, all of its covenants, obligations, duties, liabilities, representations and
warranties hereunder in its capacity as Sub-Servicer until the effective date of
(w) the appointment of an Eligible Sub-Servicer as Sub-Servicer hereunder
pursuant to this Section 11.01(c), (x) the designation by the Servicer, pursuant
to this Section 11.01(c), that there shall no longer be a Sub-Servicer
hereunder, (y) the termination by the Agent of CIT Group/Sales appointment as
Sub-Servicer hereunder pursuant to this Section 11.01(c) and Section 13.03 and
(z) the appointment of an Eligible Sub-Servicer as Sub-Servicer hereunder
following CIT Group/Sales' resignation as Sub-Servicer pursuant to Section 12.05
hereof or Section 2.13 of the Global Servicing Agreement (the date upon which
any of the events described in the immediately-preceding clauses (w), (x), (y)
and (z) shall occur is herein referred to as "CIT Group/Sales Termination
Date"). Notwithstanding the occurrence of a CIT Group/Sales Termination Date,
CIT Group/Sales shall be responsible for all covenants, obligations, duties,
liabilities, representations and warranties made by it in its capacity as
Sub-Servicer, to be performed, or arising, made or accruing, prior to the CIT
Group/Sales Termination Date and shall be entitled to all Sub-Servicing Fees and
expense reimbursements owed to it as Sub-Servicer which shall have accrued prior
to the CIT Group/Sales Termination Date.
SECTION 11.02. Duties of the Servicer Parties. (a) The
Servicer is hereby authorized to act for the Seller and in such capacity shall
perform the duties of managing, servicing, administering and making collections
on the Pool Receivables, and perform the other actions required of the Servicer
under this Agreement for the benefit of the Investors and the Banks and,
pursuant to its appointment pursuant to Section 11.01(c), the Sub-Servicer is
authorized to perform certain of such duties and actions, all as set forth in
this Agreement. Each of the Servicer Parties agrees that its servicing of the
Pool Receivables shall be carried out in accordance with customary and usual
procedures of prudent institutions which service manufactured housing loans
similar to the Receivables and, to the extent more exacting, the degree of skill
and attention that such Servicer Party exercises from time to time with respect
to all comparable manufactured housing loans that it services for itself or
others in accordance with the Credit and Collection Policy and Global Servicing
Agreement as in effect from time to time; provided, however, to the extent that
the terms and provisions of this Agreement shall be in conflict with the terms
and provisions of the Credit and Collection Policy or the Global Servicing
Agreement, the terms and provisions of this Agreement shall control. The duties
of the Servicer Parties shall include, without limitation, collection and
posting of all payments, responding to inquiries of Obligors on the Pool
Receivables, investigating delinquencies, sending payment statements to
Obligors, reporting any required tax information to Obligors, monitoring the
collateral, accounting for collections and furnishing monthly servicing reports
to the Agent with respect to distributions, monitoring the status of Insurance
Policies and
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performing the other duties specified herein, in each case in accordance with
the Credit and Collection Policy as in effect from time to time. The Servicer
Parties shall also administer and enforce in accordance with the Credit and
Collection Policy as in effect from time to time all rights and responsibilities
of the holder of the Pool Receivables provided for in the Insurance Policies, to
the extent that such Insurance Policies relate to the Pool Receivables, the
Manufactured Homes, the Mortgaged Properties or the Obligors. The Sub-Servicer
shall be responsible for solely those covenants, obligations, duties,
liabilities, representations and warranties in respect of the servicing and
administration of the Receivables and Related Security which, according to the
terms of this Agreement, the Sub-Servicer is responsible to perform or
undertake. However, the Servicer shall be responsible for the performance of all
covenants, obligations, duties, liabilities, representations and warranties in
respect of the servicing and administration of the Receivables and Related
Security set forth in this Agreement, notwithstanding the fact that the
Sub-Servicer shall be responsible for, and/or performing, certain of such
covenants, obligations, duties, liabilities, representations and warranties.
(b) To the extent consistent with the standards, policies and
procedures otherwise required hereby, each of the Servicer Parties shall follow
its customary standards, policies and procedures and shall have full power and
authority, acting alone, to do any and all things in connection with such
managing, servicing, administration and collection that it may deem necessary or
desirable. Without limiting the generality of the foregoing, each of the
Servicer Parties is hereby authorized and empowered by the Seller to execute and
deliver, on behalf of the Seller, the Investors, the Banks or any of them, any
and all instruments of satisfaction or cancellation, or of partial or full
release or discharge, and all other comparable instruments, with respect to the
Pool Receivables; provided, however, that notwithstanding the foregoing, such
Servicer Party shall not, except pursuant to an order from a court of competent
jurisdiction, release an Obligor from payment of any unpaid amount under any
Pool Receivable or waive the right to collect the unpaid balance of any Pool
Receivable from the Obligor (other than as permitted by the Agent and the
Seller), except that such Servicer Party may forego collection efforts if the
amount subject to collection is deminimis and if it would forego collection in
accordance with its customary procedures. Each of the Servicer Parties is hereby
authorized to commence, in its own name or in the name of the Seller, the
Investors and the Banks, a legal proceeding to enforce a Pool Receivable
pursuant to Section 11.03 or to commence or participate in any other legal
proceeding (including, without limitation, a bankruptcy proceeding) relating to
or involving a Pool Receivable or an Obligor. If such Servicer Party commences
or participates in such a legal proceeding in its own name, the Seller, the
Banks or the Investors, as the case may be, shall thereupon be deemed to have
automatically assigned such Pool Receivable to such Servicer Party solely for
purposes of commencing or participating in any such proceeding as a party or
claimant, and such Servicer Party is authorized and empowered by the Seller, the
Banks or the Investors, as the case may be, to execute and deliver in its name
any notices, demands, claims, complaints, responses, affidavits or other
documents or instruments in connection with any such proceeding. The Seller, the
Banks or the Investors, as the case may be, shall furnish each Servicer Party
with any powers of attorney and other documents which each Servicer Party may
reasonably request in writing and which such Servicer Party deems necessary or
appropriate and take any other steps which the Servicer may deem necessary or
appropriate to enable it to carry out its servicing and administrative duties
under this Agreement. The Servicer Parties shall not make the Agent, any Bank or
any Investor a party to any litigation described in this Section 11.02(b)
without the prior written consent of such Person.
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(c) Notwithstanding any provision contained herein or in the
Global Servicing Agreement or Credit and Collection Policy to the contrary, if
the terms and provisions of the Global Servicing Agreement or the Credit and
Collection Policy shall be in conflict with the terms and provisions of this
Agreement then, to the extent of such conflict, the terms and provisions of this
Agreement shall control.
SECTION 11.03. Collection of Receivable Payments; Modification
and Amendment of Receivables. (a) Consistent with the standards, policies and
procedures required by this Agreement, the Sub-Servicer shall make reasonable
efforts to collect all payments called for under the terms and provisions of the
Pool Receivables as and when the same shall become due, and shall follow such
collection procedures which are comparable to those which it follows with
respect to all comparable manufactured housing loans that it services for itself
or institutional investors and otherwise act with respect to the Pool
Receivables and the Insurance Policies as required of it hereunder and in such
manner as will, in the reasonable judgment of the Sub-Servicer, maximize the
amount to be received by the Seller and the Investors with respect thereto. In
connection therewith, the Sub-Servicer shall use commercially reasonable efforts
to diligently pursue, foreclose upon, or otherwise comparably convert the
ownership of Manufactured Homes and Mortgaged Properties securing a Pool
Receivable that continues in default (including default in payment of taxes and
insurance), unless the Sub-Servicer, in its commercially reasonable judgment,
believes that such Receivable can be returned to current status within a
reasonable period of time or, solely with respect to defaults due solely to
default in payment of taxes, insurance or other amounts, unless the
Sub-Servicer, in its commercially reasonable judgment, believes it is most
appropriate, under the circumstances, and not as a general matter, not to pursue
outstanding taxes, insurance or other amounts. The Sub-Servicer is authorized,
in its sole discretion, to waive any prepayment charge, late payment charge or
any other similar fees that may be collected in the ordinary course of servicing
any Pool Receivable.
(b) So long as no Termination Event shall have occurred and be
continuing, the Sub-Servicer may grant payment extensions on, or other
modifications or amendments to, a Pool Receivable (including those modifications
permitted by Section 11.02) in accordance with the Credit and Collection Policy
and its customary procedures if the Sub-Servicer believes in good faith that
such extension, modification or amendment is necessary to avoid a default on
such Pool Receivable, will maximize the amount to be received by the Seller, the
Investors and the Banks with respect to such Pool Receivable, and is otherwise
in the best interests of the Seller, the Investors and the Banks; provided,
however, that the Sub-Servicer shall not amend or modify a Pool Receivable
(except as provided in Section 11.02 and this Section 11.03(b)) without the
written consent of the Agent and Servicer.
(c) For so long as CIT Group/Sales shall be the Sub-Servicer
hereunder, the Servicer and Sub-Servicer shall (i) instruct all Obligors to make
all payments in respect of the Receivables to the Specified Account and (ii)
deposit all Liquidation Proceeds and Insurance Proceeds in respect of the
Receivables and Related Security into the Specified Account within one (1)
Business Day of receipt thereof by the Servicer or Sub-Servicer, as the case may
be. The Sub-Servicer shall cause, by direction to the
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Specified Account Bank, all Collections deposited into the Specified Account to
be transferred to account number 161907.1 (the "Collection Account"), in the
name of Seller, at ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ Bank (the "Collection Account Bank"), within
two (2) Business Days of the date upon which such Collections shall be so
deposited into the Specified Account. At such time as the senior unsecured
long-term debt rating of CIT shall be first downgraded to B or lower from S&P or
B2 or lower from ▇▇▇▇▇'▇ (or if such rating is withdrawn or cancelled by S&P or
▇▇▇▇▇'▇), the Servicer and Sub-Servicer shall (I) within thirty (30) days
thereof, take all such actions as shall be necessary (i) for the Seller to enter
into one or more Lock-Box Agreements and establish one or more Lock-Box Accounts
and (ii) to instruct all Obligors to make all payments in respect of the
Receivables directly to such Lock-Box Accounts and (II) deposit all Liquidation
Proceeds and Insurance Proceeds directly into the Collection Account within one
(1) Business Day of receipt thereof by the Servicer or Sub-Servicer, as the case
may be. If CIT Group/Sales shall no longer be the Sub-Servicer hereunder, then
the Servicer shall immediately (i) take all such actions as shall be necessary
for the Seller to enter into one or more Lock-Box Agreements and establish one
or more Lock-Box Accounts, (ii) instruct all Obligors to make all payments in
respect of the Receivables directly to such Lock-Box Accounts and (iii) deposit,
and shall cause any Successor Sub-Servicer to deposit, all Liquidation Proceeds
and Insurance Proceeds directly into the Collection Account within one (1)
Business Day of receipt thereof by the Servicer or Successor Sub-Servicer, as
the case may be.
(d) If the Servicer has reason to believe that any
Manufactured Home or Mortgaged Property has been abandoned or that the value
thereof has been significantly impaired, then the Servicer shall use its
customary and reasonable efforts to physically inspect or visit such
Manufactured Home or Mortgaged Property. The Servicer shall use its customary
and reasonable efforts to physically inspect or visit each Manufactured Home and
Mortgaged Property which shall have become an Acquired Property.
(e) The Sub-Servicer shall, with respect to Manufactured Homes
and Mortgage Properties which are known by the Sub-Servicer to be abandoned or
in foreclosure, and the Servicer shall, with respect to Manufactured Homes and
Mortgaged Properties which have become Acquired Properties, take such action as
it deems necessary in its commercially reasonable judgment and not in violation
of law to protect such Manufactured Homes and Mortgaged Properties from
vandalism or damage by the elements.
(f) In connection with each Purchase hereunder, the Servicer
shall take all such actions as shall be necessary to (i) deliver the Receivable
Files related to such Purchase to the Custodian as required under the Custodial
Agreement and (ii) to cause the Custodian to deliver to the Agent a Trust
Receipt with respect to such Receivable Files.
SECTION 11.04. Realization Upon Receivables. (a) The
Sub-Servicer shall be entitled to be reimbursed by the Servicer for all
reasonable expenses incurred by the Sub-Servicer in the course of foreclosing
upon a Pool Receivable (including repossession, replevin or other related
realization upon a defaulted Contract). The Servicer shall reimburse the
Sub-Servicer for any such expenses within 30 days of receipt of a written demand
for reimbursement of such expenses or, if sooner, the date upon which the
Liquidation Proceeds in respect of such foreclosure of such Pool Receivable
shall be made
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available to the Servicer. The Servicer shall be entitled to be reimbursed out
of the Liquidation Proceeds of, or any deficiency judgment in respect of, any
Pool Receivable for (i) any reasonable expenses as to which it provided
reimbursement to the Servicer pursuant to this Section 11.04(a) with respect to
such Pool Receivable and (ii) any reasonable expenses incurred by the Servicer
in connection with the remarketing and sale of any Manufactured Home or
Mortgaged Property which became an Acquired Property.
(b) The deed to any Acquired Property delivered as a result of
any foreclosure or similar proceeding or deed in lieu thereof shall name the
Servicer as grantee unless the Servicer deems it necessary to foreclose or
otherwise comparably convert title to any Mortgaged Property in the name of a
party other than the Servicer, in which case, the Servicer may designate such a
party to hold title to the Acquired Property. The party designated to hold such
title shall sign a written acknowledgment that it is holding title on behalf of
the Investors and the Banks and any such acknowledgment shall be delivered to
the Custodian together with the deed to such Acquired Property.
(c) Upon acquisition of an Acquired Property by the Seller,
the Servicer shall prepare an Acquired Property Mortgage in form appropriate to
the state in which such Acquired Property is located and furnish such Acquired
Property Mortgage to the Custodian within ten Business Days of acquiring a deed
in respect of such Acquired Property for execution by the Seller and
recordation. The Servicer, in order to facilitate the sale of the Acquired
Property, at its option, may execute and record as agent and attorney-in-fact
for the Seller a deed granting to the Servicer a 10% interest in the Acquired
Property as a tenant-in-common, which interest shall be subject to the Acquired
Property Mortgage. As consideration for that interest, the Servicer shall convey
and hereby agrees to convey to the Seller all of its share of the proceeds of
disposition of any such Acquired Property. No other consideration shall be
payable by the Servicer to the Seller for that interest.
(d) Upon the acquisition of an Acquired Property, the Servicer
shall (i) deliver the deed or certificate of sale to the Custodian, (ii) advance
all taxes and standard hazard insurance premiums relating to the Acquired
Property, (iii) process any claims for redemption and otherwise comply with any
redemption procedures required by law, (iv) use its reasonable best efforts to
promptly sell or otherwise dispose of such Acquired Property at a price which in
its best judgment represents reasonable value and remit the proceeds to the
Specified Account or, as may be required hereunder, to the Collection Account
within one Business Day of receipt thereof, and (v) if, in order to sell the
property at what it reasonably determines to be the best price available, the
Servicer deems it reasonably necessary for the Servicer to provide mortgage
financing to the prospective buyer, the Servicer shall undertake, as agent for
the Seller, to apply substantially the same underwriting standards as the
Servicer applies to similar transactions originated by it for its own account.
The Servicer shall be under no obligation to provide such mortgage financing.
In connection with the sale of an Acquired Property, any
contract of sale or deed shall be executed by the Servicer in its individual
capacity and as agent and attorney-in-fact for the Seller. The Servicer shall
request release of the Acquired Property Mortgage by the Custodian. Immediately
upon consummation of the sale, the Servicer shall assign all of its right,
title, and interest in the new Receivable
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to the Seller and the Seller shall assign all of its right, title, and interest
in the new Receivable to the Agent. The Servicer shall record the release, the
deed, the Mortgage, the assignment of the Servicer's interest to the Seller and
an assignment of the Mortgage by the Seller to the Agent immediately.
(e) The Servicer shall deposit all funds collected and
received in connection with the rental or sale of any Acquired Property in the
Collection Account as soon as practicable but in any event within two Business
Days of receipt thereof.
SECTION 11.05. Insurance and Dealer Recourse. (a) The Servicer
Parties shall monitor the status of the Insurance Policies in accordance with
their customary servicing procedures and in accordance with the terms and
provisions of this Agreement.
(b) (i) Except as otherwise proved in subsection (ii) of this
Section 11.05, the Sub-Servicer shall cause to be maintained with respect to
each Contract one or more Insurance Policies which provide, at a minimum, the
same coverage as a standard form fire and extended coverage insurance policy
that is customary for manufactured housing, 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 not less than the maximum insurable value of such
Manufactured Home or the principal balance due from the Obligor on the related
Contract, whichever is less; provided, however, that such Insurance Policies may
provide for customary deductible amounts, and, provided, further, that the
amount of coverage provided by each Insurance Policy shall be sufficient to
avoid the application of any co-insurance clause contained therein. If a
Manufactured Home is located within a federally designated special flood hazard
area, the Servicer shall also cause such flood insurance to be maintained, which
coverage shall be at least equal to the minimum amount specified in the
preceding sentence or such lesser amount as may be available under the federal
flood insurance program. Each Insurance Policy caused to be maintained by either
Servicer Party shall contain a standard loss payee clause in favor of such
Servicer Party and its successors and assigns. If any Obligor is in default in
the payment of premiums on its Insurance Policy or Policies, the Servicer shall
pay such premiums out of its own funds, and may add separately such premium to
the Obligor's obligation as provided by the Contract, but may not add such
premium to the remaining principal balance of the Contract for purposes of this
Agreement. If the Obligor does not reimburse the Servicer for payment of such
premiums and the related Contract is liquidated after a default, the Servicer
shall be reimbursed for its payment of such premiums out of the related
Liquidation Proceeds.
(ii) The applicable Servicer Party may, in lieu of causing
individual Insurance Policies to be maintained with respect to each Manufactured
Home pursuant to subsection (i) of this Section 11.05, and the Servicer shall,
to the extent that the related Contract does not require the Obligor to maintain
a Insurance Policy with respect to the related Manufactured Home, maintain one
or more blanket insurance policies covering losses as provided in subsection (i)
of this Section 11.05 resulting from the absence or insufficiency of individual
Insurance Policies. Any such blanket policy shall be substantially in the form
that is the industry standard for blanket insurance policies issued to cover
Manufactured Homes and in the amount sufficient to cover all losses on the
Contracts. The Servicer shall pay, out of its own funds, the premium for such
policy on the basis described therein and shall deposit in the Collection
Account, on the
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Business Day next preceding the Determination Date following the Collection
Period in which the Insurance Proceeds from claims in respect to any Contracts
under such blanket policy are or would have been received, the deductible amount
with respect to such claims. The Servicer shall not, however, be required to
deposit any deductible amount with respect to claims under individual Insurance
Policies maintained pursuant to subsection (i) of this Section 11.05(b).
(iii) If the Servicer shall have repossessed a Manufactured
Home on behalf of the Agent, the Investors and the Banks, or foreclosed upon or
otherwise acquired any Mortgaged Property, the Servicer shall either (x)
maintain at its expense a Insurance Policy with respect to such Manufactured
Home or Mortgaged Property meeting the requirements of subsections (i) or (ii)
above, except that the Servicer shall be responsible for depositing any
deductible above amount with respect to all claims under individual Insurance
Policies, or (y) indemnify the Agent, the Investors and the Banks against any
damage to such Manufactured Home prior to resale or other disposition.
Any cost incurred by the Servicer in maintaining any of the foregoing insurance,
for the purposes of calculating monthly distributions to the Investors and the
Banks, shall be not added to the amount owing under the Contract,
notwithstanding that the terms of the Contract so permit.
(c) The applicable Servicer Party may ▇▇▇ to enforce or
collect upon the Insurance Policies, in its own name, if possible, or as agent
of the Seller, the Investors and the Banks. If the applicable Servicer Party
elects to commence a legal proceeding to enforce an Insurance Policy, such
Servicer Party shall provide notice thereof and the act of commencement shall be
deemed to be an automatic assignment of the rights of the Seller, the Agent, the
Investors and the Banks under such Insurance Policy to such Servicer Party for
purposes of collection only. If, however, in any enforcement suit or legal
proceeding it is held that such Servicer Party may not enforce an Insurance
Policy on the grounds that it is not a real party in interest or a holder
entitled to enforce the Insurance Policy, the Seller shall take such steps as
such Servicer Party deems necessary to enforce such Insurance Policy, including
bringing suit in its name. The Servicer shall deposit into the Collection
Account or, as may be required hereunder, into the Collection Account, as soon
as practicable, but in no event later than one Business Days after receipt
thereof, all Insurance Proceeds received by it.
(d) The Servicer shall perform all administrative
responsibilities relating to Dealers in respect of the Contracts. The Servicer
shall use diligent efforts to pursue any claims with respect to Dealer Recourse.
SECTION 11.06. Covenants, Representations and Warranties of
Servicer Parties. Unless otherwise indicated in this Section 11.06, each of the
Servicer Parties hereby makes the following representations, warranties and
covenants, in respect of itself, to the other parties hereto and the Investors
and the Banks shall rely in making the Purchases:
(a) Until the later of (x) the Facility Termination Date and
(y) the date on which no Capital Investment or Yield on any Receivable Interest
shall be outstanding or the date all Other Amounts owed hereunder to the
Investors, the Bank, or the Agent are paid in full:
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(i) The collateral securing each Pool Receivable shall not be
released in whole or in part from the security interest granted by the related
Contract, except upon payment in full of such Pool Receivable or as otherwise
contemplated herein;
(ii) Such Servicer Party shall do nothing to impair the rights
of the Seller, the Investors or the Banks in the Pool Receivables or the
Insurance Policies;
(iii) Such Servicer Party shall not extend or otherwise amend
the terms of any Pool Receivable, except to the extent permitted by the Agent or
otherwise in accordance with Article XI;
(iv) Such Servicer Party shall service the Pool Receivables as
required by the terms of this Agreement and in compliance with the current
Credit and Collection Policy and such Servicer Party shall not change the manner
in which it services the Pool Receivables in any way that can have an adverse
effect on the Pool Receivables;
(v) Such Servicer Party shall comply with the laws of each
state in which a Pool Receivable is located, including, without limitation, all
federal and state laws regarding the collection and enforcement of consumer
debt;
(vi) Such Servicer Party shall give the Agent at least 30 days
prior written notice of any relocation of its principal executive office if, as
a result of such relocation, the applicable provisions of the UCC would require
the filing of any amendment of any previously filed financing or continuation
statement or of any new financing statement. Such Servicer Party shall at all
times maintain each office from which it services the Pool Receivables and its
principal executive office within the United States of America;
(vii) Such Servicer Party shall maintain its computer systems
so that, from and after the time of the first Purchase under this Agreement,
such Servicer Party's master computer records (including archives) that shall
refer to the Pool Receivables indicate clearly that Receivable Interests in such
Pool Receivables have been conveyed to, and are owned by, the Investors and the
Banks;
(viii) The Servicer shall take such steps as are necessary to
maintain perfection of the Seller's security interest created by each Contract
in the related Manufactured Home and any related Mortgage or Mortgaged Property.
The Servicer is hereby authorized to take such steps as are necessary to
re-perfect such security interest in the event of the relocation of a
Manufactured Home or for any other reason. Servicer shall, at the request of the
Agent, deliver to the Custodian a power of attorney authorizing the Custodian
to, among other things, record, at the expense of Seller, assignments of
Mortgages securing Land and Home Contracts, if directed to do so by the Agent
after the failure of the Servicer to take such action. The representations,
warranties and covenants set forth in this clause (viii) are made solely by the
Servicer;
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(ix) If an Incipient Termination Event or Termination Event
has occurred, such Servicer Party shall, immediately upon the written direction
of the Agent, (i) direct all Obligors to make payments to such account as
directed by the Agent and (ii) take all actions necessary to name the Agent or
such other Person designated by the Agent as the loss payee under the Insurance
Policies relating to the Pool Receivables;
(x) Such Servicer Party will not make any change in the Credit
and Collection Policy that would impair the collectibility of any portion of the
Pool Receivables, other than an inconsequential portion thereof, or the ability
of such Servicer Party to perform its obligations under this Agreement. In the
event that such Servicer Party makes any change to the Credit and Collection
Policy, other than a change that would impair the collectibility of only an
inconsequential portion of the Pool Receivables it shall, contemporaneously with
such change, provide the Agent with an updated Credit and Collection Policy and
a summary of all changes;
(xi) The Sub-Servicer shall furnish, or cause to be furnished,
to the Agent:
(1) as soon as available and in any event
within 120 days after the end of each fiscal year of
CIT, a copy of the audited consolidated financial
statements for such year of CIT and its consolidated
Subsidiaries, certified by independent accountants of
nationally recognized standing; and
(2) as soon as available and in any event
within 60 days after the end of each of the first three
quarters of each fiscal year of the CIT, a consolidated
balance sheet of CIT and its consolidated Subsidiaries
as of the end of such quarter and including the prior
comparable period, and consolidated statements of
income of CIT and its consolidated Subsidiaries for
such quarter and for the period commencing at the end
of the previous fiscal year and ending with the end of
such quarter prepared in accordance with GAAP, such
balance sheet and statements of income to be certified
by the chief financial officer or chief accounting
officer of CIT identifying such balance sheets or
statements as being the balance sheets or statements
described in this paragraph (2) and stating that the
information set forth therein fairly presents the
financial condition of CIT and its consolidated
Subsidiaries as of and for the periods then ended,
subject to year-end adjustments consisting only of
normal, recurring accruals and subject to the auditors'
year end report.
The requirements of clauses (1) and (2) of this Section
11.06(a)(xi) may be satisfied by delivery, within the time
periods required by such clauses, of the Form 10-K and Form
10-Q filed by CIT with the Securities and Exchange Commission
and containing the applicable financial statements.
(xii) Such Servicer Party hereby agrees that the Agent shall
be a third-party beneficiary of the terms and provisions of Section 2.13 of the
Global Servicing Agreement and hereby agrees that the
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Agent shall have the right to enforce the terms and provisions of such Section
2.13 as if it were a party to the Global Servicing Agreement. Such Servicer
Party will not amend, supplement or terminate Section 2.13 of the Global
Servicing Agreement (as in effect on the date hereof) without the prior written
consent of the Agent; and
(xiii) Such Servicer Party will provide the Agent with a copy
of any notice, demand or request it shall provide or make pursuant to Section
2.13 of the Global Servicing Agreement (as in effect on the date hereof).
(b) Unless otherwise indicated below, each of the Servicer
Parties represents and warrants, in respect of itself, to the Seller, the Agent,
the Investors and the Banks that:
(i) Such Servicer Party is a corporation duly organized,
validly existing and in good standing under the laws of the state of its
incorporation, and is duly qualified to do business, and is in good standing, in
every jurisdiction where the nature of its business requires it to be so
qualified. Such Servicer Party has full corporate power and authority to execute
and deliver this Agreement and the Transaction Documents to which it is a party
and to carry out its terms and their terms, respectively;
(ii) The execution, delivery and performance by such Servicer
Party of the Transaction Documents to which it is a party and the other
documents to be delivered by it hereunder, (i) have been duly authorized by all
necessary corporate action, (ii) do not contravene (1) such Servicer Party's
charter or by-laws, (2) any law, rule or regulation applicable to such Servicer
Party, (3) any contractual restriction binding on or affecting such Servicer
Party or its property or (4) any order, writ, judgment, award, injunction or
decree binding on or affecting such Servicer Party or its property, and (iii) do
not result in or require the creation of any lien, security interest or other
charge or encumbrance upon or with respect to any of its properties (except for
the interest created pursuant to this Agreement). Each of the Transaction
Documents as to which such Servicer Party is a party has been duly executed and
delivered by such Servicer Party;
(iii) No authorization or approval or other action by, and no
notice to or filing with, any governmental authority or regulatory body is
required for the due execution, delivery and performance by such Servicer Party
of the Transaction Documents or any other document to be delivered by it
thereunder;
(iv) This Agreement and the Transaction Documents to which it
is a party shall constitute legal, valid and binding obligations of such
Servicer Party enforceable against such Servicer Party in accordance with their
respective terms, except as enforceability may be limited by bankruptcy,
insolvency, reorganization or other similar laws affecting the enforcement of
creditors' rights generally and by equitable limitations on the availability of
specific remedies, regardless of whether such enforceability is considered in a
proceeding in equity or at law;
(v) There are no pending or, to such Servicer Party's
knowledge, threatened action or proceeding against such Servicer Party, before
any court, governmental agency or arbitrator (A) asserting
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the invalidity of this Agreement or any of the Transaction Documents, (B)
seeking to prevent the consummation of any of the transactions contemplated by
this Agreement or any of the Transaction Documents, (C) seeking any
determination or ruling that might adversely affect the performance by such
Servicer Party of its obligations under, or the validity or enforceability of,
this Agreement or any of the Transaction Documents, or (D) that would have a
material adverse effect on the Pool Receivables;
(vi) The balance sheets of the Parent and its Subsidiaries as
at December 29, 2001, and the related statements of income of the Parent and its
Subsidiaries for the fiscal year ended December 29, 2001, copies of which have
been furnished to the Agent, fairly present the financial condition of the
Parent and its Subsidiaries as at such date and the results of the operations of
the Parent and its Subsidiaries for the period ended on such date, all in
accordance with GAAP consistently applied, and since December 29, 2001 there has
been no material adverse change in the business, operations, property or
financial or other condition of the Parent. The representations and warranties
set forth in this clause (vi) are made solely by the Servicer; and
(vii) There is no pending or threatened action or proceeding
affecting the Parent or any of its Subsidiaries before any court, governmental
agency or arbitrator which, if adversely determined, would adversely affect the
financial condition or operations of the Parent and Subsidiaries taken as a
whole or the ability of the Parent, the Servicer or the Seller to perform their
respective obligations under the Transaction Documents, or which purports to
affect the legality, validity or enforceability of the Transaction Documents;
neither the Parent nor any Subsidiary is in default with respect to any order of
any court, arbitration or governmental body except for defaults with respect to
orders of governmental agencies which defaults are not material to the business
or operations of the Parent and its Subsidiaries, taken as a whole. The
representations and warranties set forth in this clause (vii) are made solely by
the Servicer.
Notwithstanding anything to the contrary contained in this
Section 11.06, all representations, warranties and covenants made by
Sub-Servicer in subsections (a) and (b) of this Section 11.06 in respect of
itself shall also be deemed to be made by Servicer, and Servicer shall be
responsible and liable, in accordance with the terms and provisions of this
Agreement and applicable law, for any breach of any of such representations,
warranties and covenants by Sub-Servicer. The Sub-Servicer shall not be
responsible or liable for any representations, warranties or covenants made in
this Agreement by any party to this Agreement, except for those representations,
warranties and covenants made in this Agreement by the Sub-Servicer.
SECTION 11.07. Servicing and Sub-Servicing Fee; Payment of
Certain Expenses by Servicer and Sub-Servicer. (a) Subject to, and in accordance
with, Section 5.02, on each Distribution Date, the Servicer shall be entitled to
receive out of the Collection Account a fee (the "Servicing Fee"), in respect of
the immediately-preceding Collection Period, equal to the product of (A)
one-twelfth (1/12) of 0.10 % per annum and (B) the average daily Aggregate
Outstanding Balance of All Receivables in the Receivables Pool during such
Collection Period. The Servicing Fee shall be due from the date of purchase of
any Receivable Interest hereunder until the later of the Termination Date for
such Receivable Interest or the date on which the Capital Investment is reduced
to zero. Upon receipt of the prior written consent to
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the Agent, the Servicer (if not HomePride, the Seller or its designee or an
Affiliate of HomePride or the Seller) may elect to be paid, a Servicing Fee
calculated at a different percentage per annum on the average daily Aggregate
Outstanding Balance of All Receivables in the Receivables Pool, but in no event
in excess of 110% of the reasonable costs and expenses of the Servicer in
performing its duties and obligations hereunder with respect to the
administration and collection of the Receivables in the Receivables Pool. The
Servicing Fee shall be payable only from Collections pursuant to, and subject to
the priority of payments set forth in, Section 5.02. So long as HomePride is
acting as the Servicer hereunder, amounts paid as the Servicing Fee pursuant to
this Section 11.07(a) shall reduce, on a dollar-for-dollar basis, the
obligation of HomePride SPV to pay the "Servicing Fee" pursuant to Section 6.03
of the Purchase and Contribution Agreement, provided that such obligation of
HomePride SPV shall in no event be reduced below zero.
(b) Subject to, and in accordance with, Section 5.02, on each
Distribution Date, the Sub-Servicer shall be entitled to receive out of the
Collection Account a fee (the "Sub-Servicing Fee"), in respect of the
immediately preceding Collection Period, equal to the product of (A) one twelfth
(1/12) of 1.00% per annum and (B) the average daily Aggregate Outstanding
Balance of All Receivables in the Receivables Pool during such Collection
Period. The Sub-Servicing Fee shall be due from the date of purchase of any
Receivable Interest hereunder until the later of the Termination Date for such
Receivable Interest or the date on which the Capital Investment is reduced to
zero. Upon receipt of the prior written consent of the Agent, the Sub-Servicer
(if not CIT Group/Sales, an Affiliate of CIT Group/Sales, the Seller, or a
designee or Affiliate of the Seller, or an Affiliate of HomePride) may elect to
be paid, a Sub-Servicing Fee calculated at a different percentage per annum as
the daily average Aggregate Outstanding Balance of all Receivables in the
Receivables Pool, but in no event in excess of 110% of the reasonable costs and
expenses of Sub-Servicer in performing its duties and obligations hereunder
with respect to the administration and collection of the Receivables in the
Receivable Pool. The Sub-Servicing Fee shall be payable only from Collections
pursuant to, and subject to the priority of payments set forth in, Section 5.02.
(c) Except as otherwise provided herein, each Servicer Party
shall be required to pay all expenses incurred by it in connection with its
servicing and custodial activities under this Agreement (including taxes imposed
on such Servicer Party). Each Servicer Party shall be liable for the fees and
expenses of the Independent Accountants retained by it pursuant to Section
11.10.
SECTION 11.08. Servicer's Certificate. (a) On each
Determination Date, the Servicer shall deliver to the Seller and the Agent a
Servicer's Certificate executed by a Responsible Officer of the Servicer. Pool
Receivables purchased by the Servicer and each Pool Receivable which became a
Liquidated Receivable or which was paid in full during the related Collection
Period shall be identified by account number (as set forth in the Schedule of
Receivables attached thereto).
(b) In addition to the information required by Section 11.09,
the Servicer shall include in the copy of the Servicer's Certificate delivered
to the Seller and the Agent a certification as to (i) whether any Termination
Event or Incipient Termination Event has occurred as of such Determination Date
and (ii) whether any Termination Event or Incipient Termination Event that may
have occurred as of a prior Determination Date is deemed cured as of such
Determination Date.
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SECTION 11.09. Annual Statement as to Compliance; Notice of
Servicer Termination Event. (a) Each Servicer Party shall deliver to the Seller
and the Agent, on or before March 31st of each calendar year, beginning on the
first March 31st next following the Closing Date, an Officer's Certificate for
such Servicer Party, dated as of March 31st of such year, stating that (i) a
review of the activities of such Servicer Party during the preceding calendar
year (or such portion thereof as shall have elapsed from the Closing Date to the
end of such calendar year) and of its performance under this Agreement has been
made under such officer's supervision, and (ii) to such officer's knowledge,
based on such review, such Servicer Party has fulfilled in all material respects
all its obligations under this Agreement throughout such period, or, if there
has been a material default in the fulfillment of any such obligation,
specifying each such default known to such officer and the nature and status
thereof.
(b) Each Servicer Party shall deliver to the Seller and the
Agent, promptly after having obtained knowledge thereof, but in no event later
than two Business Days thereafter, written notice in an Officer's Certificate of
such Servicer Party of any event which with the giving of notice or lapse of
time, or both, would become a Servicer Termination Event under Section 13.01.
SECTION 11.10. Annual Independent Accountant's Report. (a)
Each Servicer Party shall, at its expense, cause a firm of nationally recognized
independent certified public accountants acceptable to the Agent (the
"Independent Accountants"), who may also render other services to such Servicer
Party or to the Seller, to deliver to the Seller and the Agent, on or before
March 31st of each calendar year, beginning on the first March 31st (or other
applicable date) after the Closing Date, with respect to the preceding calendar
year (or such other period as shall have elapsed from the Closing Date to the
end of such calendar year), a statement (the "Accountant's Report") to the Agent
to the effect that (i) such firm has audited the financial statements of such
Servicer Party for such Servicer Party's most recently ended calendar year and
issued its report thereon; (ii) such audit included tests of the records and
documents relating to the manufactured housing installment sale contracts and
mortgage loans serviced by such Servicer Party for others in accordance with the
requirements of the Uniform Single Attestation Program for Mortgage Bankers, or
any successor program promulgated by the accounting profession ("USAP"); and
(iii) such other statements as are contemplated under USAP, including, if called
for under USAP, a statement as to whether such Servicer Party's management's
written assertion to such firm (which shall be attached to the statement of such
firm) that its servicing during such calendar year substantially complied with
USAP's minimum servicing standards (except in a manner as such firm believes to
be immaterial and for other exceptions that, in the opinion of such firm, GAAP
standards require it to report).
(b) The Accountants' Report shall indicate that the firm
preparing such Report is independent of such Servicer Party and the Seller
within the meaning of the Code of Professional Ethics of the American Institute
of Certified Public Accountants.
SECTION 11.11. Access to Certain Documentation and Information
Regarding Receivables. Each Servicer Party shall provide to representatives of
the Seller and the Agent reasonable access to the documentation regarding the
Pool Receivables. Nothing in this Section 11.11 shall derogate
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from the obligation of such Servicer Party to observe any applicable law
prohibiting disclosure of information regarding the Obligors or any other
matters, and the failure of such Servicer Party to provide access as provided in
this Section 11.11, as a result of such obligation, shall not constitute a
breach of this Section 11.11.
SECTION 11.12. Fidelity Bond. The Servicer shall maintain a
fidelity bond (or other comparable coverage) insuring against wrongful actions
of employees involved in servicing the Pool Receivables in an amount not less
than $5,000,000 and an "errors and omissions" insurance policy in an amount of
not less than $5,000,000.
SECTION 11.13. Insurance. The Servicer shall maintain
customary amounts and types of insurance coverage for a corporation engaged in
similar business and having a similar net worth.
SECTION 11.14. Accounts. (a) As and when required under the
terms of this Agreement, the Servicer Parties shall establish the Lock-Box
Account in the name of the Seller for the benefit of the Agent for the purpose
of receiving Collections and other amounts to be paid hereunder. The Lock-Box
Account shall be an Eligible Account and shall be a segregated trust or
custodial account established and maintained with the Lock-Box Bank.
(b) The Servicer shall establish the Collection Account in the
name of the Seller for the benefit of the Agent for the purpose of receiving
Collections from the Specified Amount and Lock-Box Account. The Collection
Account shall be an Eligible Account and initially shall be a segregated
non-interest bearing trust or custodial account established and maintained with
the Collection Account Bank.
(c) The Servicer shall establish the Reserve Account in the
name of the Seller for the benefit of the Agent for the purpose of holding the
Required Reserve Account Amount. The Reserve Account shall be an Eligible
Account and initially shall be a segregated non-interest bearing trust or
custodial account established and maintained with the Collection Account Bank.
(d) The Servicer shall establish the Excess Collections
Account in the name of the Seller for the benefit of the Agent. The Excess
Collections Account shall be an Eligible Account and initially shall be a
segregated non-interest bearing trust or custodial account established and
maintained with the Collection Account Bank.
(e) All or a portion of the amounts on deposit in the
Collection Account, the Reserve Account, the Lock-Box Accounts and the Excess
Collections Account shall be invested and reinvested by the Agent by written
direction to the Collection Account Bank or the Lock-Box Bank, as the case may
be, in one or more Permitted Investments bearing interest or sold at discount.
No such investment shall mature later than One Business Day prior to the next
Distribution Date. All income or other gains from investment of moneys deposited
in the Collection Account, the Reserve Account, the Lock-Box Account and the
Excess Collections Account shall be deposited by the Agent in the Collection
Account immediately upon receipt, and any loss resulting from such investment
shall be deducted from the amount on deposit
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in the applicable account. If any amounts are needed for disbursement from the
Collection Account, the Excess Collections Account, the Lock-Box Accounts or the
Reserve Account and sufficient uninvested funds are not available therein to
make such disbursement, the Agent shall cause to be sold or otherwise converted
to cash a sufficient amount of the investments in such Account to make such
disbursement. The Collection Account Bank shall have no obligation to invest and
reinvest any cash held in the absence of timely and specific written investment
direction from the Agent (including any written standing investment direction).
In no event shall the Collection Account Bank be liable for the Agent's
selection of investments or for investment losses incurred thereon. The
Collection Account Bank shall have no liability in respect of losses incurred as
a result of the liquidation of any investment prior to its stated maturity or
the failure of the Agent to provide timely written investment direction.
(f) If at any time the Collection Account, the Excess
Collections Account, the Lock-Box Accounts or the Reserve Account ceases to be
an Eligible Account, the Agent shall transfer such account to another
institution such that such account shall meet the requirements of an Eligible
Account.
(g) None of the Seller, Servicer or Sub-Servicer shall create,
incur, assume or suffer to exist any Lien (other than a Lien contemplated under
this Agreement) upon the Lock-Box Account, Collection Account, Reserve Account
or Excess Collections Account; provided, that, with the written consent of the
Agent, a Lien may be placed upon the Lock-Box Account so long as the Agent is
also granted a Lien thereon pursuant to an intercreditor arrangement
satisfactory to the Agent. Any breach of this Section 11.14(g) shall constitute
an immediate Event of Default hereunder.
ARTICLE XII
THE SERVICER
SECTION 12.01. Liability of Servicer Parties; Indemnities. (a)
Without limiting any other rights that the Agent, the Collection Account Bank,
any Investor, any Bank or any of their respective Affiliates (each, a "Special
Indemnified Party") may have hereunder or under applicable law, and in
consideration of its appointment as a Servicer Party hereunder, such Servicer
Party, except to the extent otherwise indicated below, hereby agrees to
indemnify each Special Indemnified Party from and against any and all claims,
losses and liabilities (including reasonable attorneys' fees) (all of the
foregoing being collectively referred to as "Special Indemnified Amounts")
arising out of, or resulting from, any of the following (excluding, however, (a)
Special Indemnified Amounts to the extent found in a final non-appealable
judgment of a court of competent jurisdiction to have resulted from gross
negligence or willful misconduct on the part of such Special Indemnified Party,
(b) recourse for uncollectible Receivables or (c) any income taxes or any other
tax or fee measured by income incurred by such Special Indemnified Party arising
out of or as a result of this Agreement or the ownership of Receivable Interests
or in respect of any Receivable or any Contract):
(i) any representation made or deemed made by such Servicer
Party under or in connection with this Agreement which shall have been incorrect
in any material respect when made;
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(ii) the failure by such Servicer Party to comply with any
applicable law, rule or regulation with respect to any Pool Receivable or
Contract;
(iii) the failure to have filed, or any delay in filing,
financing statements or other similar instruments or documents under the UCC of
any applicable jurisdiction or other applicable laws with respect to any
Receivables in, or purporting to be in, the Receivables Pool, the Contracts and
the Related Security and Collections in respect thereof, whether at the time of
any purchase or reinvestment or at any subsequent time; or the failure of any
Pool Receivable or Contract to conform to any applicable law, rule or regulation
with respect to such Pool Receivable or Contract; provided, however, that solely
the Servicer shall be required to indemnify each Special Indemnified Party from
and against Special Indemnified Amounts arising out of, or resulting from, any
failure described in this clause (iii);
(iv) any failure of such Servicer Party to perform its duties
or obligations in accordance with the provisions of this Agreement;
(v) the commingling of Collections of Pool Receivables at any
time by such Servicer Party with other funds;
(vi) any action or omission by such Servicer Party reducing or
impairing the rights of the Investors or the Banks with respect to any Pool
Receivable or the value of any Pool Receivable;
(vii) with respect to the Servicer only, any Servicing Fees,
or other costs and expenses, payable to any replacement or Substitute Servicer
in excess of the Servicing Fee payable to the Servicer, but only in the event
that the Servicer is terminated pursuant to Article VIII hereof or resigned in
violation of Section 12.05 hereof; or
(viii) with respect to the Sub-Servicer only, any
Sub-Servicing Fees, or other costs and expenses, payable to any replacement or
Substitute Sub-Servicer in excess of the Sub-Servicing Fee payable to the
Sub-Servicer, but only in the event that the Sub-Servicer is terminated pursuant
to Article VIII hereof or resigns in violation of Section 12.05 hereof; or
(ix) any claim brought by any Person other than a Special
Indemnified Party arising from any activity by such Servicer Party or its
Affiliates in servicing, administering or collecting any Receivable.
Notwithstanding anything to the contrary contained in this
Section 12.01, the Servicer shall be liable and responsible for all Special
Indemnified Amounts which shall be owed by the Sub-Servicer to any Special
Indemnified Party pursuant to the terms and provisions of this Section 12.01.
SECTION 12.02. Consolidations, Mergers and Sales of Assets.
Each Servicer Party shall not merge or consolidate with any other corporation or
accept a merger of any other corporation into such Servicer Party or permit the
Servicer Party to be merged into any other corporation, or sell its
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properties and assets as, or substantially as, an entirety; provided, however,
that nothing contained in this Agreement shall be deemed to prevent (i) the
merger into a Servicer Party of another corporation, (ii) the consolidation of a
Servicer Party and another corporation, (iii) the merger a Servicer Party into
another corporation, (iv) the sale of the property or assets of a Servicer Party
to another corporation, so long as (a) no Termination Event, Incipient
Termination Event or Event of Default shall have occurred and be continuing, (b)
any such action shall be with a corporation engaged solely in the same line of
business as such Servicer Party, or in a reasonably related business, (c) after
the merger, consolidation, conveyance, transfer, lease or succession, the
successor or surviving entity shall be an Eligible Servicer or Eligible
Sub-Servicer, as applicable, and shall be capable of fulfilling the duties of
such Servicer Party contained in this Agreement, (d) with respect to clauses
(ii), (iii) and (iv) above, the surviving corporation of the merger or the
purchaser of the assets of such Servicer Party as the case may be, shall
expressly assume the obligations of such Servicer Party under this Agreement and
the other relevant Transaction Documents and expressly agree to be bound by all
other provisions applicable to such Servicer Party under this Agreement or such
other relevant Transaction Document and (e) in the case of any such transaction
proposed by the Servicer (except to the extent CIT Group/Sales shall be the
Servicer hereunder), the Servicer shall have received the prior written consent
of the Agent thereof.
SECTION 12.03. Limitation on Liability of Servicer Parties and
Others. Each Servicer Party and its respective directors, officers, employees
and agents of the Servicer shall not be under any liability to the Seller, the
Investors, the Banks, the Agent or the Custodian, except as provided in this
Agreement, for any action taken or for refraining from the taking of any action
pursuant to this Agreement; provided, however, that this provision shall not
protect such Servicer Party or any such person against any liability that would
otherwise be imposed by reason of a breach of this Agreement or willful
misfeasance, bad faith or negligence in the performance of its duties. Each
Servicer Party and any director, officer, employee or agent of such Servicer
Party may rely in good faith on the written advice of counsel or on any document
of any kind prima facie properly executed and submitted by any Person respecting
any matters arising under this Agreement.
SECTION 12.04. Delegation of Duties. (a) So long as HomePride
is the Servicer, the Servicer may delegate duties under this Agreement to an
Affiliate of HomePride without the prior written consent of the Agent or perform
other specific duties through such sub- contractors in accordance with its
customary servicing policies and procedures without the prior consent of the
Agent; provided, however, that no such delegation or subcontracting of duties by
the Servicer shall relieve the Servicer of its responsibility with respect to
such duties. Notwithstanding the foregoing, neither HomePride nor any other
party acting as Servicer hereunder shall delegate all or substantially all of
its duties hereunder without the prior written consent of the Agent.
(b) So long as CIT Group/Sales is the Sub-Servicer, the
Sub-Servicer may delegate duties under this Agreement to CIT or to an Affiliate
of CIT without the prior written consent of the Agent or perform other specific
duties through such sub-contractors in accordance with its customary servicing
policies and procedures without the prior consent of the Agent; provided,
however, that no such delegation or subcontracting of duties by the Sub-Servicer
shall relieve the Sub-Servicer of its responsibility with
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respect to such duties. Notwithstanding the foregoing, neither CIT Group/Sales
nor any other party acting as Sub-Servicer hereunder shall delegate all or
substantially all of its duties hereunder without the prior written consent of
the Agent.
SECTION 12.05. Servicer Parties Not to Resign. Subject to the
provisions of Section 12.02, neither Servicer Party shall resign from the
obligations and duties imposed on it by this Agreement as Servicer or
Sub-Servicer, as the case may be, except upon a determination that by reason of
a change in legal requirements the performance of its duties under this
Agreement would cause it to be in violation of such legal requirements in a
manner which would result in a material adverse effect on such Servicer Party,
and the Agent does not elect to waive the obligations of such Servicer Party to
perform the duties which render it legally unable to act or to delegate those
duties to another Person. Any such determination permitting the resignation of
such Servicer Party shall be evidenced by an Opinion of Counsel to such effect
delivered to the Agent. No resignation of such Servicer Party shall become
effective until an entity acceptable to the Agent shall have assumed the
responsibilities and obligations of such Servicer Party; provided, however, that
in the event a successor is not appointed within 60 days after such Servicer
Party has given notice of its resignation as permitted by this Section 12.05,
such Servicer Party may petition a court for its removal.
ARTICLE XIII
SERVICER TERMINATION EVENTS
SECTION 13.01. Servicer Termination Event. For purposes of
this Agreement, each of the following shall constitute a "Servicer Termination
Event":
(a) Any failure by either Servicer Party or, so long as
HomePride or an Affiliate of HomePride is the Servicer, the Seller to make when
due any payment or deposit to be made by it under this Agreement, and such
failure shall remain unremedied for two (2) Business Days;
(b) Failure by the Servicer to deliver the Servicer's
Certificate required on each Determination Date, and such failure shall remain
unremedied for two (2) Business Days;
(c) Default on the part of either Servicer Party duly to
observe or perform any other term, covenant or agreement of such Servicer Party
set forth in this Agreement (and, as to HomePride, if HomePride is the Servicer,
the Purchase and Contribution Agreement or the Purchase and Sale Agreement), and
such default shall result in a Material Adverse Effect in respect of such
Servicer Party and shall remain unremedied for a fifteen (15)-day period
following notice thereof by the Agent or the other Servicer Party; provided,
however, that if such default is of a nature such that it cannot be remedied
within such fifteen (15)-day period and such Servicer Party is making diligent
efforts to remedy such default, then such default shall not constitute a
Servicer Termination Event unless it shall remain unremedied for a thirty
(30)-day period following such notice thereof; provided further, however, that
no such notice shall be required if the applicable Servicer Party shall have
knowledge (or should have knowledge, as a prudent
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servicer) of such default and such time periods shall be determined without
regard to the giving of such notice.
(d) The occurrence of an Event of Bankruptcy with respect to
either Servicer Party;
(e) Any representation, warranty or statement of either
Servicer Party made in this Agreement or any certificate, report or other
writing delivered by it pursuant hereto (or any of its officers) shall prove to
be incorrect or untrue as of the time when the same shall have been made or
deemed to have been made or delivered and, as a result thereof, a Material
Adverse Effect shall occur with respect to such Servicer Party;
(f) Failure by the Parent or any of its Subsidiaries to pay
when due amounts due under any agreement to which any such Person is a party and
under which any Debt greater than $5,000,000 is governed; or the default by the
Parent or any of its Subsidiaries in the performance of any term, provision or
condition contained in any agreement or instrument under which any Debt greater
than $5,000,000 was created or is governed; or any Debt of the Parent or any of
its Subsidiaries greater than $5,000,000 shall be declared to be due and payable
or required to be prepaid (other than by a regularly scheduled payment),
redeemed, purchased or defeased or an offer to repay, redeem, purchase or
defease such Debt shall be required to be made, in each case, prior to the date
of maturity thereof;
(g) HomePride shall have been replaced as "servicer" in
connection with any Term Securitization undertaken by HomePride;
(h) There shall have occurred any material adverse change in
the operations of either Servicer Party since the end of the last fiscal year of
such Servicer Party ending prior to the date of its appointment as a Servicer
Party hereunder or any other event shall have occurred which materially and
adversely affects such Servicer Party's ability to either collect the
Receivables or to perform under this Agreement;
(i) The occurrence of a Termination Event described under
Section 14.01(k) or 14.01(l);
(j) A default shall occur under the, Parent Guaranty, CIT
Guaranty or Section 2.13 of the Global Servicing Agreement or the Parent
Guaranty, CIT Guaranty or Section 2.13 of the Global Servicing Agreement, or any
material portion of any of the foregoing, shall not be in full force and effect
or enforceable in accordance with its respective terms; or
(k) The occurrence of an Event of Default.
SECTION 13.02. Consequences of a Servicer Termination Event.
(a) If a Servicer Termination Event shall occur and be continuing, the Agent, by
written notice given to the Servicer Parties, may terminate all of the rights
and obligations of the Servicer Parties under this Agreement; provided,
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however, that notwithstanding such termination, the Servicer and Sub-Servicer
shall be entitled to receive all accrued (through the occurrence of the Servicer
Termination Event) and unpaid Servicing Fees and Sub-Servicing Fees,
respectively, and all expense reimbursements owed to the Servicer and
Sub-Servicer, respectively, pursuant to the terms of this Agreement. On or after
the receipt by the Servicer Parties of such written notice, all authority,
power, obligations and responsibilities of the Servicer Parties under this
Agreement automatically shall pass to, be vested in and become obligations and
responsibilities of the Person appointed as Successor Servicer pursuant to
Section 13.03.
Notwithstanding any provision of this Agreement to the
contrary, if a Servicer Termination Event shall occur solely due to a failure,
breach, action, inaction, event or circumstance by, or related to, the
Sub-Servicer (a "Limited Servicer Termination Event"), then the Servicer shall
have (i) a period of thirty (30) days from the occurrence of such Limited
Servicer Termination Event to identify a replacement for such Sub-Servicer,
which replacement shall be an Eligible Sub-Servicer (a "Successor Sub-Servicer")
and (ii) an additional period of time, commencing on the date of the date of the
identification of such Successor Sub-Servicer and ending on the sixtieth (60th)
day following the occurrence of such Limited Servicer Termination Event, to
cause such Successor Sub-Servicer to assume all obligations, duties and
liabilities of the Sub-Servicer hereunder. If the Servicer shall so identify a
Successor Sub-Servicer and cause such Successor Sub-Servicer to assume all
obligations, duties and liabilities of the Sub-Servicer hereunder in the time
periods set forth in the immediately-preceding sentence (a "Sub-Servicer
Replacement Event"), then such Limited Servicer Termination Event shall not
constitute a Servicer Termination Event hereunder. The Sub-Servicer agrees that
it shall continue to perform, in all material respects, all of the obligations
and duties of Sub-Servicer hereunder during the period commencing on the date of
occurrence of such Limited Servicer Termination Event and ending on the date of
occurrence of such Sub-Servicer Replacement Event.
Any Successor Sub-Servicer shall be entitled to such
compensation (whether payable out of the Collection Account or otherwise) as the
Sub-Servicer would have been entitled to under this Agreement if the
Sub-Servicer had not resigned or been terminated hereunder. If any Successor
Sub-Servicer is appointed for any reason, additional compensation may be paid to
such Successor Sub-Servicer as approved by the Agent. The Successor Sub-Servicer
appointed hereunder is authorized and empowered by this Agreement to execute and
deliver, on behalf of the prior Sub-Servicer, as attorney-in-fact or otherwise,
any and all documents and other instruments and to do or accomplish all other
acts or things necessary or appropriate to effect its succession as Successor
Sub-Servicer hereunder, including, without limitation, completing the transfer
and endorsement of the Pool Receivables in accordance with the terms hereof or
otherwise. The prior Sub-Servicer agrees to continue to perform the obligations
and duties of Sub-Servicer hereunder until the Successor Sub-Servicer shall
have assumed such obligations and duties, and also agrees to cooperate with the
Successor Sub-Servicer in effecting the termination of the responsibilities and
rights of the prior Sub-Servicer under this Agreement, including, without
limitation and at the prior Sub-Servicer's expense, the transfer to the
Successor Sub-Servicer, for administration by it, of all cash amounts that shall
at the time be held by the prior Sub-Servicer for deposit, or have been
deposited by the prior Sub-Servicer, in the Collection Account or thereafter
received with respect to the Pool Receivables and the delivery to the Custodian
or Successor Sub-Servicer, as designated by the
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Servicer or Agent, of all Receivable Files, and all files and records relating
to the Pool Receivables and a Computer Tape containing all information necessary
to enable the Successor Sub-Servicer to service the Pool Receivables. The
terminated Sub-Servicer shall grant the Agent and any Successor Sub-Servicer
access to the terminated Sub-Servicer's premises at the terminated
Sub-Servicer's expense.
(b) Upon the occurrence of a Servicer Termination Event, each
Servicer Party shall, if so requested by the Agent, deliver to any Successor
Servicer all files and records relating to the Pool Receivables in its
possession within five (5) Business Days after demand therefor and a Computer
Tape or diskette containing as of the close of business on the date of demand
all of the data maintained by such prior Servicer Party in computer format in
connection with servicing the Pool Receivables.
(c) Within two Business Days of written demand by the Agent
following the occurrence of a Servicer Termination Event or a Termination Event,
the Servicer shall cause, or shall cause the Seller to cause delivery to the
Agent of (x) as to each Contract, other than a Land and Home Contract, the
assignment of the Contract (which may be in a blanket form that also covers
other Contracts or contracts) from HomePride to HomePride SPV and, in turn, from
HomePride SPV to Seller and, further in turn, from Seller to the Agent and (y)
as to each Land and Home Contract and Mortgage Loan, an original assignment of
the related Mortgage, in recordable form, showing an assignment from HomePride
to HomePride SPV and, in turn, from HomePride SPV to Seller and, further in
turn, from Seller to the Agent.
(d) Upon written demand of the Agent following the occurrence
of a Servicer Termination Event or a Termination Event, the Servicer shall
ensure that:
(i) for each Contract where the related Manufactured Home is
located in a jurisdiction in which notation of the Seller's security interest in
such Manufactured Home on the related Title is required or permitted to perfect
such security interest, the Title shall show, or if a new or replacement Title
with respect to such Manufactured Home is being applied for such Title will be
issued within 180 days of such written demand and will show, the Seller as the
holder of a first priority security interest in such Manufactured Home;
(ii) for each Contract where the related Manufactured Home is
located in a jurisdiction in which the filing of a financing statement or the
making of a fixture filing under the UCC is required to perfect the Seller's or
the Agent's security interest in manufactured housing, such filings or
recordings shall be duly made within ten (10) Business Days of such written
demand and show the Seller and/or the Agent as the secured party; and
(iii) for each Contract where the related Manufactured Home
secures a Land and Home Contract, the related land securing such Land and Home
Contract shall be subject to a Mortgage properly filed in the appropriate public
recording office showing the assignment from HomePride to HomePride SPV and, in
turn, from HomePride SPV to the Seller and, further in turn, from the Seller to
the Agent, as mortgagee under such Mortgage within 10 Business Days of such
written demand.
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SECTION 13.03. Appointment of Successor Servicer. (a) On and
after (i) the delivery of a notice of termination to the Servicer Parties
pursuant to Section 13.02 or (ii) the resignation of the Servicer pursuant to
Section 12.05, the Agent may exercise at any time its right to appoint, as
successor to the Servicer, a Person other than the Person serving as Servicer at
the time, if such Person shall consent and agree to the terms hereby (a
"Successor Servicer"). Upon the occurrence of either of the events described in
clauses (i) and (ii) of the immediately-preceding sentence, the Agent shall have
the option to appoint CIT Group/Sales as Successor Servicer hereunder, and CIT
Group/Sales agrees to accept such appointment if so made by the Agent. If either
of the events described in clauses (i) and (ii) of the second
immediately-preceding sentence shall occur and the Agent shall not exercise its
option described in the immediately-preceding sentence, then, provided that, at
such time (x) CIT Group/Sales shall not be in default of its obligations and
duties contained herein, (y) no Limited Servicer Termination Event shall have
occurred and (z) CIT Group/Sales shall be an Eligible Sub-Servicer, the Agent
shall be required to negotiate with CIT Group/Sales, on an exclusive basis, for
a period of 10 days in an effort to reach an agreement whereby CIT Group/Sales
shall become the Successor Servicer hereunder. If CIT Group/Sales shall become
the Successor Servicer hereunder, then (A) CIT Group/Sales shall perform, and be
responsible for, all covenants, obligations, duties, liabilities,
representations and warranties of Servicer hereunder and (B) there shall no
longer be a Sub-Servicer under this Agreement and, in such case, all covenants,
obligations, duties, liabilities, representations and warranties which were
theretofore covenants, obligations, duties, liabilities, representations and
warranties of the Sub-Servicer hereunder shall become covenants, obligations,
duties, liabilities, representations and warranties of CIT Group/Sales, in its
capacity as Successor Servicer hereunder, and all rights, benefits and
privileges which were theretofore rights, benefits and privileges of the
Sub-Servicer hereunder shall become rights, benefits and privileges of CIT
Group/Sales, in its capacity as Successor Servicer hereunder.
(b) Any Successor Servicer shall be entitled to such
compensation (whether payable out of the Collection Account or otherwise) as the
Servicer would have been entitled to under this Agreement if the Servicer had
not resigned or been terminated hereunder. If any Successor Servicer is
appointed for any reason, additional compensation may be paid to such Successor
Servicer as approved by the Agent. In addition, any Successor Servicer shall be
entitled to reasonable transition expenses incurred in acting as Successor
Servicer which will be payable pursuant to Section 5.02.
(c) The Successor Servicer appointed hereunder is authorized
and empowered by this Agreement to execute and deliver, on behalf of the prior
Servicer, as attorney-in-fact or otherwise, any and all documents and other
instruments and to do or accomplish all other acts or things necessary or
appropriate to effect its succession as Successor Servicer hereunder, including,
without limitation, completing the transfer and endorsement of the Pool
Receivables in accordance with the terms hereof or otherwise. The prior Servicer
agrees to continue to perform the obligations and duties of Servicer hereunder
until the Successor Servicer shall have assumed such obligations and duties, and
also agrees to cooperate with the Successor Servicer in effecting the
termination of the responsibilities and rights of the prior Servicer under this
Agreement, including, without limitation and at the prior Servicer's expense,
the transfer to the Successor Servicer, for administration by it, of all cash
amounts that shall at the time be held by the prior Servicer for deposit, or
have been deposited by the prior Servicer, in the Collection Account
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or thereafter received with respect to the Pool Receivables and the delivery to
the Custodian or Successor Servicer, as designated by the Successor Servicer or
Agent, of all Receivable Files, and all files and records relating to the Pool
Receivables and a Computer Tape containing all information necessary to enable
the Successor Servicer to service the Pool Receivables.
(d) The terminated Servicer shall grant the Agent and any
Successor Servicer access to the terminated Servicer's premises at the
terminated Servicer's expense.
SECTION 13.04. Certain Rights of the Agent. The Seller hereby
transfers to the Agent, the exclusive ownership and control of the Lock-Box
Accounts to which the Obligors of Pool Receivables shall make payments at the
times set forth in this Agreement. At any time following the designation of a
Successor Servicer (other than the Seller, HomePride or any Affiliate of the
Seller or HomePride) pursuant to Section 13.03 hereof or after the occurrence
and during the occurrence of a Servicer Termination Event or a Termination
Event:
(i) The Agent may direct that payment of all amounts payable
under any Contract be made directly to the Agent or its designee in accordance
with the terms hereof.
(ii) The Seller shall, at the Agent's request and at the
Seller's expense, notify each Obligor of Pool Receivables of the ownership of
Receivable Interests under this Agreement and direct that payments be made
directly to the Agent or its designee in accordance with the terms hereof.
(iii) The Seller shall, at the request of the Agent, (A)
assemble all of the Records, and shall make the same available to the Agent or
its designee at a place selected by the Agent or its designee, and (B) segregate
all cash, checks and other instruments received by it from time to time
constituting Collections of Pool Receivables in a manner acceptable to the Agent
and shall, promptly upon receipt, remit all such cash, checks and instruments,
duly endorsed or with duly executed instruments of transfer, to the Agent or its
designee in accordance with the terms hereof.
(iv) Each of the Seller, HomePride and CIT Group/Sales hereby
authorizes the Agent to take any and all steps in its name and on its behalf
necessary or desirable, in the determination of the Agent, to collect all
amounts due under any and all Pool Receivables, including, without limitation,
endorsing, placing and/or signing its name on checks, documents and instruments
representing Pool Receivables and/or Collections thereon and enforcing the Pool
Receivables, the Related Security and the related Contracts.
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ARTICLE XIV
TERMINATION EVENTS
SECTION 14.01. Termination Events. Each of the following shall
constitute a "Termination Event" under this Agreement:
(a) One or more final, non-appealable judgments or decrees for
the payment of money in an aggregate amount in excess of $5,000,000 (net of
insurance proceeds received in respect of any such judgment or decree) shall be
entered against the Parent and/or its Subsidiaries and remain outstanding; or
(b) An Event of Default shall have occurred and be continuing;
or
(c) The amount on deposit in the Reserve Account at any time
shall be less than the Required Reserve Account Amount at such time; or
(d) The Internal Revenue Service shall file notice of a lien
against the Seller pursuant to Section 6323 of the Internal Revenue Code with
regard to any of the assets of the Seller;
(e) A Servicer Termination Event shall have occurred and be
continuing; or
(f) The failure of the Parent, HomePride or any Subsidiary of
the Parent or HomePride to pay when due any amounts due under any agreement to
which any such Person is a party and under which Debt greater than $5,000,000 is
governed; or the default by the Parent, HomePride or any Subsidiary of the
Parent in the performance of any term, provision or condition contained in any
agreement or instrument to which any such Person is a party and under which any
Debt owing by the Parent, HomePride or any Subsidiary of the Parent greater than
$5,000,000 was created or is governed, regardless of whether such event is an
"event of default" or "default" under any such agreement; or any Debt owing by
the Parent, HomePride or any Subsidiary of the Parent greater than $5,000,000
shall be declared to be due and payable or required to be prepaid (other than by
a regularly scheduled payment), redeemed, purchased or defeased, or an offer to
repay, redeem, purchase or defease such Debt shall be required to be made, in
each case prior to the date of maturity thereof; or
(g) An "Event of Termination" or "Facility Termination Date"
shall occur under the Purchase and Contribution Agreement; or
(h) An "Event of Termination" or "Facility Termination Date"
shall occur under the Purchase and Sale Agreement; or
(i) The Facility Termination Date shall have occurred
hereunder;
(j) The Parent's long term public senior unsecured debt
securities shall (i) be rated less
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than B- by S&P or B3 by ▇▇▇▇▇'▇ or (ii) no longer be rated by both S&P and
▇▇▇▇▇'▇; or
(k) (i) an ERISA Event shall have occurred; or (ii) a notice
of Lien shall have been filed by the PBGC against the Parent or any of its
Subsidiaries under Section 412(n) of the Code or Section 302(f) of ERISA for a
failure to make a required installment or other payment to a plan to which
Section 412(n) of the Code or Section 302(f) of ERISA applies unless there shall
have been delivered to the Administrative Agent proof of release of such Lien;
or
(l) As of any date of determination, the Tier 1 Delinquency
Ratio for all Pool Receivables averaged over the three Collection Periods
preceding such date of determination (or such lesser number of Collection
Periods that shall have elapsed since the Closing Date) exceeds 2 1/2%; or
(m) As of any date of determination, the
Delinquency/Repossession Ratio for all Pool Receivables for the Collection
Period immediately preceding such date of determination exceeds 3%;
(n) As of any date of determination, the Excess Collections
Percentage averaged over the three Collection Periods preceding such date of
determination (or such lesser number of Collection Periods which shall have
elapsed since the Closing Date) shall be less than 4.0%; or
(o) The Seller's Parent shall cease to own 100% of the Capital
Stock of the Seller; or
(p) The Agent shall not have obtained the Minimum Shadow
Rating for the financing facility provided hereunder on or prior to the sixtieth
(60th) day following the Closing Date.
SECTION 14.02. Effect of Termination Event. Upon the
occurrence of a Termination Event (and, in the case of a Termination Event under
paragraph (i) above, the passage of 30 days without the Capital Investment, plus
all Yield, Fees and Other Amounts having been paid in full pursuant to the terms
hereof), any or all of the following actions may be taken by notice to the
Seller: (i) the Agent may declare the Facility Termination Date to have occurred
(in which case the Facility Termination Date shall be deemed to have occurred),
(ii) without limiting any right under this Agreement to replace the Servicer
Parties, the Agent may designate another Person to succeed HomePride as the
Servicer and/or CIT Group/Sales as the Sub-Servicer; provided, that,
automatically upon the occurrence of any event (without any requirement for the
passage of time or the giving of notice) described in paragraph (a) of Section
14.03, the Facility Termination Date shall occur, HomePride (if it is then
serving as the Servicer) shall cease to be the Servicer and CIT Group/Sales
shall cease to be the Sub-Servicer, and the Agent or its designee shall become
the Servicer and (iii) at the option of the Agent in its sole discretion, the
Agent may instruct the Servicer to take all additional steps, if any, as are
necessary or desirable, in the determination of the Agent, to create and/or
maintain perfection of the security interest in the Mortgaged Property or
Manufactured Home related to each Pool Receivable (and the proceeds thereon) on
behalf of the Seller and to create and/or maintain perfection of the security
interest in the security interest of the Seller in the Mortgaged Property or
Manufactured Home related to each Pool Receivable (and the proceeds thereon) on
behalf of the Agent (for the benefit of the Investors and the Banks), including,
without limitation, having a notation
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of the Seller's and/or the Agent's security interest recorded on the relevant
Title or other applicable records of title, endorsing any Mortgage Note to the
Seller or the Agent (as the Agent may request) and preparing and recording
assignments to the Seller or the Agent (as the Agent may request) of any
Mortgages (or completing any existing assignments of Mortgages previously
delivered in blank in the name of the Seller and/or Agent, as assignee(s), and
recording any of such assignments, all as directed by the Agent), and if the
Servicer fails to take all such steps, the Agent may take such steps at the sole
expense of the Seller, and each of the Seller and the Servicer hereby grants to
the Agent an irrevocable power of attorney and license to take any and all such
steps in the Seller's or the Servicer's name, as applicable, and on behalf of
the Seller or the Servicer, as are necessary or desirable, in the determination
of the Agent to create and/or maintain perfection of such security interests of
the Seller and the Agent (for the benefit of the Investors and the Banks).
SECTION 14.03. Events of Default. Each of the following shall
constitute an "Event of Default" under this Agreement:
(a) An Event of Bankruptcy shall have occurred with respect to
the Seller, the Seller's Parent, either Servicer Party, the Parent or any
Significant Subsidiary of any of the foregoing; or
(b) There shall have occurred a Change of Control; or
(c) A material adverse change shall have occurred in (i) (A)
the business, financial condition, results of operations or properties of the
Parent and its Subsidiaries, taken as a whole, or (B) the ability of the
Servicer or the Parent to perform its obligations under any of the Transaction
Documents to which it is a party; (ii) the value, collectibility or
enforceability of the Pool Receivables, taken as a whole; (iii) the practical
realization by the Investors or the Banks of the benefits or security afforded
under any of the Transaction Documents; (iv) the ability of the Servicer to
execute a Take-Out Securitization involving the Pool Receivables; or (v) the
first priority perfected ownership interest to the extent of the pertinent
Receivable Interest in each applicable Pool Receivable and the Related Security
and Collections with respect thereto; or
(d) HomePride, or an Affiliate of HomePride acceptable to the
Agent, shall resign as, or otherwise cease to act as, Servicer hereunder, or CIT
Group/Sales shall resign as, or otherwise cease to act as, Sub-Servicer
hereunder, in each case in violation of the terms of this Agreement (any such
resignation to constitute an Event of Default hereunder upon the effective date
of such resignation); or
(e) The Seller shall default under or fail to maintain in
effect any Interest Rate ▇▇▇▇▇▇ assigned to the Agent or the Seller shall fail
to purchase any Interest Rate Hedge when the Agent requests that such Interest
Rate Hedge be purchased in accordance with the terms hereof (whether or not
there exists sufficient funds in the Reserve Account to purchase such Interest
Rate Hedge); or
(f) A default in the payment when due of any Yield, any Fees,
Other Amounts or any Capital Investment or any other payment or deposit to be
made hereunder and such failure shall remain
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unremedied for one (1) Business Day, or a Capital Deficiency shall exist and
shall not be cured within two (2) Business Days of the date of calculation of
such Capital Deficiency by the Agent; or
(g) (i) Any Transaction Document shall (except in accordance
with its terms), in whole or in part, terminate, cease to be effective or cease
to be the legally valid, binding and enforceable obligation of the Seller or
either Servicer Party; or (ii) the Seller or either Servicer Party or any other
party shall, directly or indirectly, contest in any manner such effectiveness,
validity, binding nature or enforceability; or (iii) any Purchase pursuant to
this Agreement shall for any reason (other than pursuant to the terms hereof)
cease to create, or any Receivable Interest shall for any reason cease to be, a
valid and perfected first priority undivided percentage ownership or security
interest to the extent of the pertinent Receivable Interest in each applicable
Pool Receivable and the Related Security and Collections with respect thereto;
or (iv) the security interest created pursuant to Section 10.01 shall for any
reason cease to be a valid and perfected first priority security interest in the
collateral security referred to in that section; or
(h) Any representation or warranty of the Parent, the Seller
or either Servicer Party (or any of their respective officers) made or deemed to
have been made hereunder or in any other Transaction Document or any other
writing or certificate furnished by or on behalf of the Parent, Seller or either
Servicer Party to the Agent for purposes of or in connection with this Agreement
or any other Transaction Document (including any Servicer's Certificate
delivered pursuant to Section 11.08) shall prove to have been incorrect or
untrue in any material respect when made or deemed made or delivered; or
(i) One or more judgments for the payment of money in an
aggregate amount in excess of $10,000 shall be entered against the Seller; or
(j) The Adjusted Consolidated Tangible Net Worth shall, at any
time, be less than $305,000,000; or
(k) The Interest Coverage Ratio as of the end of any fiscal
quarter of the Parent shall be less than the Required Interest Coverage Ratio
for such fiscal quarter; or
(l) (i) Any Interest Rate Hedge purchased in connection
herewith shall cease to be in full force and effect, (ii) the Eligible
Counterparty shall default in the observance or performance of any of the terms
and provisions of any Interest Rate Hedge purchased in connection herewith or
(iii) any interest rate hedge agreement purchased in connection herewith shall
fail to, or cease to, satisfy the definition of "Interest Rate Hedge"; or
(m) The transactions contemplated under the 2002 Indenture
have not closed within two (2) Business Days from the Closing Date; or
(n) The occurrence of any event described in Section 11.14(g)
as constituting an Event of Default; or
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(o) Any default shall occur under the Parent Guaranty, or the
Parent Guaranty or any material portion thereof, shall not be in full force and
effect or enforceable in accordance with its terms; or
(p) Any default shall occur under the Limited Recourse
Guaranty, or the Limited Recourse Guaranty or any material portion thereof,
shall not be in full force and effect or enforceable in accordance with its
terms; or
(q) Any default shall occur under the CIT Guaranty, or the CIT
Guaranty or any material portion thereof, shall not be in full force and effect
or enforceable in accordance with its terms; or
(r) Any default shall occur under the Management Agreement, or
the Management Agreement or any material portion thereof, shall not be in full
force and effect or enforceable in accordance with its terms; or
(s) Any default shall occur under Section 2.13 of the Global
Servicing Agreement, or Section 2.13 of the Global Servicing Agreement or any
material portion thereof, shall not be in full force and effect and enforceable
in accordance with its terms;
(t) The Seller or either Servicer Party shall fail to perform
or observe in any material respect any covenant of agreement contained in this
Agreement, or any other Transaction Document, on its part to be performed or
observed which is not referred to, or described, above in this Section 14.03,
and such failure shall remain unremedied for thirty (30) days; and
(u) if the Capital Investment, plus all Yield, Fees and Other
Amounts have not been paid in full pursuant to the terms hereof by the 30th day
following the Facility Termination Date.
Upon the occurrence of an Event of Default, (i) the Agent,
Banks and Investors shall have the same rights and remedies afforded to them
under Section 14.02 upon the occurrence of a Termination Event and (ii) the then
outstanding Yield, any Fees, Other Amounts or any Capital Investment shall be
due and payable and the Administrative Agent may proceed to sell, dispose of, or
otherwise liquidate the Receivables and the Related Property in a commercially
reasonable manner and on commercially reasonable terms, which shall include the
solicitation of competitive bids and the Agent shall proceed to consummate the
sale, liquidation or disposition of the Receivables and the Related Property as
provided above with the highest bidder for the Receivables and the Related
Property. The Seller or any of its Affiliates shall be permitted to bid for the
Receivables and the Related Property. All reasonable costs and expenses incurred
by the Agent in such sale shall be reimbursed to the Agent as provided herein.
The proceeds from the sale, disposition or liquidation of the Receivables shall
be treated as Collections on the Receivables and such proceeds shall be applied
in accordance with Section 5.02(c).
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ARTICLE XV
THE AGENT
SECTION 15.01. Authorization and Action. Each Investor and
each Bank hereby appoints and authorizes the Agent to take such action as agent
on its behalf and to exercise such powers under this Agreement as are delegated
to the Agent by the terms hereof, together with such powers as are reasonably
incidental thereto.
SECTION 15.02. Exculpation. Neither the Agent nor any of its
directors, officers, agents or employees shall be liable for any action taken or
omitted to be taken by it or them as Agent under or in connection with this
Agreement (including, without limitation, the Agent's servicing, administering
of Pool Receivables as Servicer), except for its or their own gross negligence
or willful misconduct. Without limiting the generality of the foregoing, the
Agent: (a) may at its own expense consult with legal counsel (including counsel
for the Seller and the Servicer), independent certified public accountants and
other experts selected by it and shall not be liable for any action taken or
omitted to be taken in good faith by it in accordance with the advice of such
counsel, accountants or experts; (b) makes no warranty or representation to any
Investor or Bank (whether written or oral) and shall not be responsible to any
Investor or Bank for any statements, warranties or representations (whether
written or oral) made in or in connection with this Agreement; (c) shall not
have any duty to ascertain or to inquire as to the performance or observance of
any of the terms, covenants or conditions of this Agreement on the part of the
Seller, the Servicer or any Custodian or to inspect the property (including the
books and records) of the Seller, the Servicer or any Custodian; (d) shall not
be responsible to any Investor or Bank for the due execution, legality,
validity, enforceability, genuineness, sufficiency or value of this Agreement or
any other instrument or document furnished pursuant hereto; and (e) shall incur
no liability under or in respect of this Agreement by acting upon any notice
(including notice by telephone), consent, certificate or other instrument or
writing (which may be by telecopier or telex) believed by it to be genuine and
signed or sent by the proper party or parties.
SECTION 15.03. CSFB and Affiliates. The obligation of CSFB to
purchase Receivable Interests under this Agreement may be satisfied by CSFB or
any of its Affiliates. With respect to any Receivable Interest or interest
therein owned by it, CSFB shall have the same rights and powers under this
agreement as any Bank and may exercise the same as though it were not the Agent.
CSFB and any of its Affiliates may generally engage in any kind of business with
the Seller, the Servicer, any Custodian or any Obligor, any of their respective
Affiliates and any Person who may do business with or own securities of the
Seller, the Servicer, any Custodian or any Obligor or any of their respective
Affiliates, all as if CSFB were not the Agent and without any duty to account
therefor to the Investors.
SECTION 15.04. Bank's Purchase Decision. Each Bank
acknowledges that it has, independently and without reliance upon the Agent, any
of its Affiliates or any other Bank and based on such documents and information
as it has deemed appropriate, made its own evaluation and decision to enter into
this Agreement. Each Bank also acknowledges that it will, independently and
without reliance
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upon the Agent, any of its Affiliates or any other Bank and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own decisions in taking or not taking action under this Agreement.
SECTION 15.05. Notice by Agent. The Agent shall notify the
Servicer of any purchase by CSFB of any Receivable Interest under any Asset
Purchase Agreement entered into by the Conduit and CSFB.
ARTICLE XVI
INDEMNIFICATION
SECTION 16.01. Indemnities by the Seller. Without limiting any
other rights that the Agent, the Investors, the Collection Account Bank, the
Banks or any of their respective Affiliates (each, an "Indemnified Party") may
have hereunder or under applicable law, the Seller hereby agrees to indemnify
each Indemnified Party from and against any and all claims, losses and
liabilities (including reasonable attorneys' fees) (all of the foregoing being
collectively referred to as "Indemnified Amounts") arising out of or resulting
from this Agreement or the other Transaction Documents or the use of proceeds of
purchases or reinvestments or the ownership of Receivable Interests or in
respect of any Receivable or any Contract, excluding, however, (a) Indemnified
Amounts to the extent found in a final non-appealable judgment of a court of
competent jurisdiction to have resulted from gross negligence or willful
misconduct on the part of such Indemnified Party, (b) recourse (except as
otherwise specifically provided in this Agreement) for uncollectible Receivables
or (c) any income taxes incurred by such Indemnified Party arising out of or as
a result of this Agreement or the ownership of Receivable Interests or in
respect of any Receivable or any Contract. Without limiting or being limited by
the foregoing, the Seller shall, after written demand (which written demand
shall set forth reasonable evidence of any such Indemnified Amounts), pay, from
Collections and amounts on deposit in the Excess Collections Account and Reserve
Account in accordance with Section 5.02, to each Indemnified Party any and all
amounts necessary to indemnify such Indemnified Party from and against any and
all Indemnified Amounts relating to or resulting from any of the following:
(i) the characterization in any Servicer's Certificate or
other written statement made by or on behalf of the Seller of any Receivable as
an Eligible Receivable or as included in the Net Receivables Pool Balance which,
as of the date of such Servicer's Certificate or other statement, is not an
Eligible Receivable or should not be included in the Net Receivables Pool
Balance;
(ii) any representation or warranty or statement made or
deemed made by the Seller (or any of its officers) under or in connection with
this Agreement or any of the other Transaction Documents which shall have been
incorrect in any material respect when made;
(iii) the failure by the Seller or HomePride to comply with
any applicable law, rule or regulation with respect to any Pool Receivable or
the related Contract; or the failure of any Pool Receivable
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or the related Contract to conform to any such applicable law, rule or
regulation;
(iv) the failure to vest in the Investors or the Banks, as the
case may be, (a) a perfected undivided percentage ownership or security
interest, to the extent of each Receivable Interest, in the Receivables in, or
purporting to be in, the Receivables Pool and the Related Security and
Collections in respect thereof, or (b) a perfected security interest as provided
in Section 10.01, in each case free and clear of any Lien;
(v) the failure to have filed, or any delay in filing,
financing statements or other similar instruments or documents under the UCC of
any applicable jurisdiction or other applicable laws with respect to any
Receivables in, or purporting to be in, the Receivables Pool and the Related
Security and Collections in respect thereof, whether at the time of any purchase
or reinvestment or at any subsequent time;
(vi) any dispute, claim, offset or defense (other than
discharge in bankruptcy of the Obligor) of the Obligor to the payment of any
Receivable in, or purporting to be in, the Receivables Pool (including, without
limitation, a defense based on such Receivable or the related Contract not being
a legal, valid and binding obligation of such Obligor enforceable against it in
accordance with its terms), any claim resulting from the sale, or purported
sale, of a Receivable Interest in a Receivable in the Receivables Pool
notwithstanding any provision in the related Contract that requires the consent
of the applicable Obligor to the transfer, sale or assignment of the rights and
duties of the Seller, the Dealer or HomePride thereunder, or any other claim
resulting from the sale of the services related to such Receivable or the
furnishing or failure to furnish such services or relating to collection
activities with respect to such Receivable (if such collection activities were
performed by the Seller or any of its Affiliates acting as Servicer);
(vii) any failure of the Seller to perform its duties or
obligations in accordance with the provisions hereof or to perform its duties or
obligations under the Contracts;
(viii) any products liability or other claim arising out of or
in connection with services which are the subject of any Contract;
(ix) the commingling of Collections of Pool Receivables at any
time with other funds;
(x) any investigation, litigation or proceeding related to
this Agreement or the use of proceeds of purchases or reinvestments or the
ownership of Receivable Interests or in respect of any Receivable or Related
Security or Contract;
(xi) any failure of the Seller to comply with its covenants
contained in this Agreement or any other Transaction Document;
(xii) any claim brought by any Person other than an
Indemnified Party arising from any activity by the Seller or any Affiliate of
the Seller in servicing, administering or collecting any Receivable;
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or
(xiii) the failure of the Seller or HomePride to pay when due
any taxes, including without limitation, sales, excise or personal property
taxes payable in connection with any of the Contract;
(xiv) any inability to obtain any judgment in or utilize the
court or other adjudication system of, any state in which an Obligor may be
located as a result of the failure of the Seller or HomePride to qualify to do
business or file any notice of business activity report or any similar report;
(xv) any failure of the Seller to give reasonably equivalent
value to HomePride in consideration of the purchase by the Seller from HomePride
of any Receivable, or any attempt by any Person to void, rescind or set aside
any such transfer under statutory provisions or common law or equitable action,
including, without limitation, any provision of the Bankruptcy Code; or
(xvi) any Purchase is, for any reason, characterized as other
than debt for federal or state income tax purposes.
ARTICLE XVII
MISCELLANEOUS
SECTION 17.01. No Waiver; Remedies. No failure on the part of
any Investor, any Bank, the Agent, any Indemnified Party or any Affected Person
to exercise, and no delay in exercising, any right, power or remedy hereunder
shall operate as a waiver thereof; nor shall any single or partial exercise by
any of them of any right, power or remedy hereunder preclude any other or
further exercise thereof, or the exercise of any other right, power or remedy.
The remedies herein provided are cumulative and not exclusive of any remedies
provided by law.
SECTION 17.02. Amendments. No amendment or waiver of any
provision of this Agreement or consent to any departure by the Seller therefrom
shall be effective unless in a writing signed by the Agent, as agent for the
Investors and the Banks (and, in the case of any amendment, also signed by the
Seller and HomePride), and then such amendment, waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given; provided, however, that no amendment, waiver or consent shall, unless in
writing and signed by the Custodian or the Collection Account Bank, as the case
may be, in addition to the Agent, affect the rights or duties of the Custodian
or the Collection Account Bank, as the case may be, under this Agreement;
provided, further, that no amendment, waiver or consent shall affect the rights
or duties of a Servicer Party under this Agreement, unless such amendment,
waiver or consent shall be in writing and signed by such Servicer Party.
SECTION 17.03. Notices, Etc. All notices and other
communications hereunder shall, unless otherwise stated herein, be in writing
(which shall include facsimile communication) and faxed or delivered, to each
party hereto, at its address set forth under its name on the signature pages
hereof or
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at such other address as shall be designated by such party in a written notice
to the other parties hereto. Notices and communications by facsimile shall be
effective when sent, and notices and communications sent by other means shall be
effective when received.
SECTION 17.04. Assignability. (a) This Agreement and the
Investors' rights and obligations herein (including ownership of each Receivable
Interest) shall be assignable by the Investors and their successors and assigns.
Each assignor of a Receivable Interest or any interest therein shall notify the
Agent and the Seller of any such assignment. Each assignor of a Receivable
Interest or any interest therein may, in connection with the assignment,
disclose to the assignee or participant any information relating to the Seller,
HomePride SPV or the Servicer Parties, including the Receivables, furnished to
such assignor by or on behalf of the Seller or by the Agent.
(b) Each Bank may assign to any Eligible Assignee or to any
other Bank all or a portion of its rights and obligations under this Agreement
(including, without limitation, all or a portion of its Bank Commitment and any
Receivables Interests or interests therein owned by it). The parties to each
such assignment shall execute and deliver to the Agent an Assignment and
Acceptance, with a copy thereof to be sent to the Servicer. In addition, CSFB or
any of its Affiliates may assign any of its rights (including, without
limitation, rights to payment of Capital Investment and Yield) under this
Agreement to any Federal Reserve Bank without notice to or consent of the Seller
or the Agent.
(c) This Agreement and the rights and obligations of the Agent
herein shall be assignable by the Agent and its successors and assigns.
(d) The Seller may not assign its rights or obligations
hereunder or any interest herein without the prior written consent of the Agent.
(e) Notice of each assignment made by a Person pursuant to
Sections 17.04(a), (b) and (c) shall be sent by the assignor Person to the
Seller and HomePride.
SECTION 17.05. Costs, Expenses and Taxes. (a) In addition to
the rights of indemnification granted under Section 16.01 hereof, the Seller
agrees to pay on demand all costs and expenses in connection with the
preparation, execution, delivery and administration (including periodic auditing
and the other activities contemplated in Section 9.19) of this Agreement, any
Asset Purchase Agreement and the other documents and agreements to be delivered
hereunder, including, without limitation, the reasonable fees and out-of-pocket
expenses of counsel for the Agent, CSFB, Conduit and their respective Affiliates
with respect thereto and with respect to advising the Agent, CSFB, Conduit and
their respective Affiliates as to their rights and remedies under this
Agreement, and all costs and expenses, if any (including reasonable counsel fees
and expenses), of the Agent, CSFB, the Investors, the Banks and their respective
Affiliates, in connection with the enforcement of this Agreement and the other
documents and agreements to be delivered hereunder.
(b) The Seller also shall pay on demand all other costs,
expenses and taxes (excluding
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the cost of auditing Conduit's books by certified public accountants, the cost
of rating Conduit's commercial paper by independent financial rating agencies
and income taxes) incurred by Conduit or any stockholder of Conduit ("Other
Costs"), including the taxes (excluding income taxes) resulting from Conduit's
operations, and the reasonable fees and out-of-pocket expenses of counsel for
any stockholder of Conduit with respect to advising as to rights and remedies
under this Agreement, the enforcement of this Agreement or advising as to
matters relating to Conduit's operations; provided that the Seller and any other
Persons who from time to time sell receivables or interests therein to Conduit
("Other Sellers") each shall be liable for such Other Costs ratably in
accordance with the usage under their respective facilities; and provided
further that if such Other Costs are attributable to the Seller and not
attributable to any Other Seller, the Seller shall be solely liable for such
Other Costs.
SECTION 17.06. No Proceedings. Each of the Seller, the Agent,
each Investor, each Bank each assignee of a Receivable Interest or any interest
therein and each entity which enters into a commitment to purchase Receivable
Interest or interests therein hereby agrees that it will not institute against
Conduit any proceeding of the type referred to in clause (a) of the definition
of Event of Bankruptcy so long as any commercial paper or other senior
indebtedness issued by Conduit shall be outstanding or there shall not have
elapsed one year plus one day since the last day on which any such commercial
paper or other senior indebtedness shall have been outstanding.
SECTION 17.07. Confidentiality. (a) Each of the Seller and the
Servicer Parties agrees to maintain the confidentiality of this Agreement in
communications with third parties and otherwise; provided that this Agreement
may be disclosed (i) to third parties to the extent such disclosure is made
pursuant to a written agreement of confidentiality in form and substance
satisfactory to the Agent, (ii) to the legal counsel and auditors of such Person
if they agree to hold it confidential and (iii) to the extent required by
applicable law or regulation or by any court, regulatory body or agency having
jurisdiction over such party; and provided, further, that such party shall have
no obligation of confidentiality in respect of any information which may be
generally available to the public or becomes available to the public through no
fault of such party.
(b) Each Investor, each Bank and the Agent agrees to maintain
the confidentiality of all information with respect to the Seller, HomePride,
the Parent, the Custodian, each Servicer Party or the Receivables (including the
Servicer's Certificates) furnished or delivered to it pursuant to this
Agreement; provided, that such information may be disclosed (i) to such party's
legal counsel and auditors and to such party's assignees and participants and
potential assignees and participants and their respective counsel if they agree
to hold it confidential, (ii) to the rating agencies and the providers of credit
enhancement or liquidity for each Investor, and (iii) to the extent required by
applicable law or regulation or by any court, regulatory body or agency having
jurisdiction over such party; and provided, further, that such party shall have
no obligation of confidentiality in respect of any information which may be
generally available to the public or becomes available to the public through no
fault of such party.
SECTION 17.08. Captions and Cross References. The various
captions (including, without limitation, the table of contents) in this
Agreement are provided solely for convenience of reference
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and shall not affect the meaning or interpretation of any provision of this
Agreement. Unless otherwise indicated, references in this Agreement to any
Section, Schedule or Exhibit are to such Section of or Schedule or Exhibit to
this Agreement, as the case may be, and references in any Section, subsection,
or clause to any subsection, clause or subclause are to such subsection, clause
or subclause of such Section, subsection or clause.
SECTION 17.09. Severability. Any provision of this Agreement
which is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions of this Agreement
or affecting the validity or enforceability of such provision in any other
jurisdiction.
SECTION 17.10. GOVERNING LAW. THIS AGREEMENT SHALL, IN
ACCORDANCE WITH SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF
NEW YORK, BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE
OF NEW YORK (WITHOUT GIVING EFFECT TO THE CONFLICT OF LAWS PRINCIPLES THEREOF),
EXCEPT TO THE EXTENT THAT THE PERFECTION OF THE INTERESTS OF THE INVESTORS AND
THE BANKS IN THE RECEIVABLES, THE PURCHASE AND CONTRIBUTION AGREEMENT, OR
REMEDIES HEREUNDER, IN RESPECT THEREOF, ARE GOVERNED BY THE LAWS OF A
JURISDICTION OTHER THAN THE STATE OF NEW YORK.
SECTION 17.11. Execution in Counterparts. This Agreement may
be executed in any number of counterparts, each of which when so executed shall
be deemed to be an original and all of which when taken together shall
constitute one and the same agreement.
SECTION 17.12. WAIVER OF JURY TRIAL. EACH OF THE PARTIES
HERETO HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHTS IT MAY
HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING
OUT OF, UNDER, OR IN CONNECTION WITH, THIS AGREEMENT OR ANY OTHER TRANSACTION
DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER
VERBAL OR WRITTEN) OR ACTIONS OF THE SELLER, THE AGENT, THE INVESTORS OR ANY
OTHER AFFECTED PERSON. THE SELLER ACKNOWLEDGES AND AGREES THAT IT HAS RECEIVED
FULL AND SUFFICIENT CONSIDERATION FOR THIS PROVISION (AND EACH OTHER PROVISION
OF EACH OTHER TRANSACTION DOCUMENT TO WHICH IT IS A PARTY) AND THAT THIS
PROVISION IS A MATERIAL INDUCEMENT FOR THE AGENT AND THE INVESTORS ENTERING INTO
THIS AGREEMENT AND EACH SUCH OTHER TRANSACTION DOCUMENT.
SECTION 17.13. Survival of Termination. The provisions of
Sections 6.01, 6.02, 12.01, 16.01, 17.05 and 17.06 shall survive any termination
of this Agreement.
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SECTION 17.14. ENTIRE AGREEMENT. THIS AGREEMENT AND THE OTHER
TRANSACTION DOCUMENTS EXECUTED AND DELIVERED HEREWITH REPRESENT THE FINAL
AGREEMENT BETWEEN THE PARTIES HERETO AND THERETO AND MAY NOT BE CONTRADICTED BY
EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.
SECTION 17.15. Consent to Jurisdiction. (a) Each party hereto
hereby irrevocably submits to the non-exclusive jurisdiction of any New York
State or Federal court sitting in New York City in any action or proceeding
arising out of or relating to this Agreement, and each party hereto hereby
irrevocably agrees that all claims in respect of such action or proceeding may
be heard and determined in such New York State court or, to the extent permitted
by law, in such Federal court. The parties hereto hereby irrevocably waive, to
the fullest extent they may effectively do so, the defense of an inconvenient
forum to the maintenance of such action or proceeding. The parties hereto agree
that a final judgment in any such action or proceeding. The parties hereto agree
that a final judgment in any such action or proceeding shall be conclusive and
may be enforced in other jurisdictions by suit on the judgment or in any other
manner provided by law.
(b) Each of the Seller, Servicer Parties and the Custodian
consents to the service of any and all process in any such action or proceeding
by the mailing of copies of such process to it at its address specified in
Section 17.03. Nothing in this Section 17.15 shall affect the right of the
Investors, any Bank or the Agent to serve legal process in any other manner
permitted by law.
SECTION 17.16. Lienholder Nominee. (a) The Agent (individually
and on behalf of the Investors and the Banks) and the Seller hereby appoint
HomePride as their nominee lienholder with respect to the Manufactured Homes
related to Receivables included in the Receivables Pool (each, a "Subject
Manufactured Home"), and HomePride hereby agrees to serve in such capacity as
described herein. As stated lienholder on the Titles to all of the Subject
Manufactured Homes, HomePride agrees to take any and all actions as the Seller
(with the consent of the Agent) or the Agent may request in writing including,
without limitation, all actions for which HomePride's consent, waiver, release,
vote or signature (or other action of similar nature) is necessary or advisable
in the judgment of the Seller or the Agent in order to maintain, preserve and
protect the Seller's security interest in the Subject Manufactured Homes and the
Receivable Interest purchased by the Investors and the Banks hereunder
(provided, however, that, prior to the occurrence of a Servicer Termination
Event or a Termination Event and the request by the Agent for the recordation of
the Seller's lien on such Subject Manufactured Homes' Titles, no such
recordation shall be required) and if HomePride fails to take any or all such
actions, the Agent or any designee of the Agent, may take such actions at the
sole expense of HomePride, and HomePride hereby grants to the Agent and any such
designee an irrevocable power of attorney and license to take any and all such
actions in HomePride's name and on behalf of HomePride. The obligations of
HomePride under this Agreement are in addition to, are not limited by, and in no
way limit, the obligations of HomePride in its capacity as Servicer under this
Agreement.
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(b) Notwithstanding the fact that HomePride will remain noted
as the lienholder on the Titles with respect to the Subject Manufactured Homes
on and after the date hereof, HomePride, the Seller and the Agent each hereby
agrees that, on and after the date hereof:
(i) subject to the other terms and provisions of this
Agreement, the Seller is entitled to all incidents, benefits and risks of a
holder of a first priority perfected security interest in and lien on the
Subject Manufactured Homes;
(ii) HomePride has no direct or indirect ownership or other
interest (including any security interest) in any Subject Manufactured Homes;
(iii) except in its capacity as Servicer under this Agreement,
HomePride will take no action with respect to the Subject Manufactured Homes
unless such action is consented to by the Agent or otherwise permitted
hereunder; and
(iv) HomePride shall not represent to any lender, financing
source or other Person, that it has, or in any other manner hold itself out as
having, a direct or indirect ownership interest or any other rights or interests
in the Subject Manufactured Homes, except for any rights it may have as nominee
lienholder or as Servicer hereunder.
[Signature pages to follow]
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IN WITNESS WHEREOF, the parties have caused this Agreement to
be executed by their respective officers thereunto duly authorized, as of the
date first above written.
SELLER: GSS HOMEPRIDE CORP.
By:
--------------------------------------------------
Name:
Title:
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇.
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Suite 1715
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Facsimile No. ▇▇▇-▇▇▇-▇▇▇▇
INVESTOR: GREENWICH FUNDING CORP.
By: Credit Suisse First Boston, New York Branch, as
its Attorney-In-Fact
By:
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Name:
Title:
By:
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Name:
Title:
Eleven ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Asset Finance Dept.
Facsimile No. (▇▇▇) ▇▇▇-▇▇▇▇
114
BANK: CREDIT SUISSE FIRST BOSTON, NEW YORK BRANCH
By:
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Name:
Title:
By:
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Name:
Title:
Eleven ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Asset Finance Dept.
Facsimile No. (▇▇▇) ▇▇▇-▇▇▇▇
AGENT: CREDIT SUISSE FIRST BOSTON, NEW YORK BRANCH, AS AGENT
By:
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Name:
Title:
By:
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Name:
Title:
Eleven ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Asset Finance Dept.
Facsimile No. (▇▇▇) ▇▇▇-▇▇▇▇
115
SERVICER: HOMEPRIDE FINANCE CORP., AS SERVICER
By:
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Name:
Title:
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: General Counsel Office
Facsimile No. (▇▇▇) ▇▇▇-▇▇▇▇
SUB-SERVICER: THE CIT GROUP/SALES FINANCING, INC.
By:
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Name:
Title:
▇ ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇ ▇▇▇▇▇▇▇▇▇
Facsimile No. (▇▇▇) ▇▇▇-▇▇▇▇
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