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EXHIBIT 10.12
AMENDED AND RESTATED
MASTER REPURCHASE AGREEMENT
DATED AS OF SEPTEMBER 30, 1998
AMONG
▇▇▇▇▇▇ COMMERCIAL PAPER INC.,
AS BUYER
AND
BLOOMFIELD ACCEPTANCE COMPANY, L.L.C.,
AS SELLER
AND
MHFC, INC.
AS SELLER
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TABLE OF CONTENTS
PAGE
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1. APPLICABILITY.................................................................................................1
2. DEFINITIONS...................................................................................................1
3. CONDITIONS PRECEDENT; INITIATION; CONFIRMATION; TERMINATION; MAXIMUM TRANSACTION AMOUNTS; FEES...............24
4. COLLATERAL MAINTENANCE AMOUNT................................................................................30
5. INCOME PAYMENTS..............................................................................................31
6. SECURITY INTEREST............................................................................................32
7. PAYMENT, TRANSFER AND CUSTODY................................................................................33
8. REHYPOTHECATION OR PLEDGE OF PURCHASED LOANS.................................................................34
9. SUBSTITUTION.................................................................................................35
10. REPRESENTATIONS AND WARRANTIES..............................................................................35
11. NEGATIVE COVENANTS OF THE SELLERS...........................................................................44
12. AFFIRMATIVE COVENANTS OF THE SELLERS........................................................................46
13. EVENTS OF DEFAULT...........................................................................................50
14. REMEDIES....................................................................................................53
15. DUE DILIGENCE...............................................................................................56
16. SINGLE AGREEMENT............................................................................................57
17. NOTICES AND OTHER COMMUNICATIONS............................................................................57
18. ENTIRE AGREEMENT; SEVERABILITY..............................................................................58
19. NON-ASSIGNABILITY...........................................................................................58
20. TERMINABILITY...............................................................................................58
21. GOVERNING LAW...............................................................................................58
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22. CONSENT TO JURISDICTION.....................................................................................58
23. NO WAIVERS, ETC.............................................................................................59
24. INTENT......................................................................................................59
25. SERVICING...................................................................................................59
26. DISCLOSURE RELATING TO CERTAIN FEDERAL PROTECTIONS..........................................................60
27. NETTING.....................................................................................................61
28. INDEMNIFICATION.............................................................................................61
29. ESTABLISHMENT OF COLLECTION ACCOUNT.........................................................................62
30. CONFIDENTIALITY OF AGREEMENT................................................................................64
31. MISCELLANEOUS...............................................................................................64
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EXHIBITS
--------
EXHIBIT I Specific Loan Program Terms and Provisions
Part 1 Fees Payable by Sellers
Part 2 Applicable Purchase Price Percentages, Applicable Collateral Maintenance
Percentages and Pricing Spreads
Part 3 Limitations by Loan Type
Part 4 Allowable Extra Costs
EXHIBIT II Specific Representations and Warranties by Loan Type
Part 1 Representations and Warranties Regarding Mortgage Loans
Part 2 Representations and Warranties Regarding Credit Leases
Part 3 Representations and Warranties Regarding MH Loans
Part 4 Representations and Warranties Regarding Floorplan Loans
EXHIBIT III Seller's Underwriting Guidelines
Part 1 Mortgage Loans
Part 2 MH Loans
Part 3 Floorplan Loans
EXHIBIT IV Loan Eligibility Requirements
Part 1 Conduit Mortgage Loans and Credit Lease Mortgage Loans
Part 2 Interim Mortgage Loans
Part 3 Bridge Mortgage Loans
Part 4 MH Loans
Part 5 Floorplan Loans
EXHIBIT V List of Sellers' Loan Documents
Part 1 Mortgage Loans
Part 2 MH Loans
Part 3 Floorplan Loans
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AMENDED AND RESTATED MASTER REPURCHASE AGREEMENT
This is an AMENDED AND RESTATED MASTER REPURCHASE AGREEMENT dated
as of September 30, 1998, between ▇▇▇▇▇▇ COMMERCIAL PAPER INC. (the "Buyer");
BLOOMFIELD ACCEPTANCE COMPANY, L.L.C. ("BAC"); and MHFC, Inc. ("MHFC",
collectively, with BAC, "Sellers", and each individually a "Seller"), amending
and restating the Master Repurchase Agreement Governing Purchases and Sales of
Mortgage Loans, dated as of March 19, 1998, between Buyer and BAC (the "Original
Agreement").
Whereas, the Buyer and BAC desire to amend and restate the
Original Agreement, which governed Credit Lease Mortgage Loans and Conduit
Mortgage Loans, to provide terms and conditions under which the Buyer is
additionally prepared to purchase (i) Bridge Mortgage Loans, Interim Mortgage
Loans, and Floorplan Loans from BAC, each as defined herein, and (ii) MH Loans,
as defined herein, from MHFC, an Affiliate of BAC;
NOW, THEREFORE, for good and valuable consideration the receipt
and sufficiency of which is hereby acknowledged, the Original Agreement is
hereby amended and restated in its entirety to read as follows, adding MHFC as
party hereto:
1. APPLICABILITY
From time to time, until the Final Repurchase Date applicable to
each type of Loan (as hereinafter defined), the Buyer agrees, subject to the
terms and conditions hereof, to enter into transactions upon the request of a
Seller in which such Seller agrees to transfer to Buyer certain Loans against
the transfer of funds by Buyer, with a simultaneous agreement by Buyer to
transfer to such Seller such Loans at a date specified in the Confirmation,
against the transfer of funds by Buyer. Each such transaction shall be referred
to herein as a "Transaction" and shall be governed by this Agreement and the
related Confirmation, unless otherwise agreed in writing. Buyer shall have the
option, upon the completion of a Transaction and receipt of a Request for
Purchase, to enter into additional Transactions with respect to the related
Loans provided that the maximum aggregate term of any Loan subject to
Transactions shall not exceed the respective Maximum Aggregate Term applicable
to those Loans. Notwithstanding anything in this Agreement to the contrary,
Buyer shall have no obligation to enter into any Transaction hereunder if there
shall have occurred any material adverse change, as determined by Buyer in its
reasonable good faith judgment, in the financial condition of either Seller, the
financial markets generally or the secondary market for Loans. Buyer shall
promptly notify Sellers of any determination by Buyer that any of the foregoing
has occurred. All obligations of either Seller under all Transactions shall be
full recourse to both Sellers.
2. DEFINITIONS
When used in this Agreement, the following capitalized terms have the
meanings given to them in this Section.
"Accepted Servicing Practices" means with respect to any Loan,
those loan servicing practices of prudent lending institutions which service
loans of the same type as such Loan in the jurisdiction where the related
Underlying Asset is located with a view to the
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maximization of timely recovery of principal and interest on such Loan, but
without regard to: (1) any relationship that a Servicer or any Affiliate of a
Servicer has with a Seller or an Affiliate of a Seller; (2) a Servicer's or any
subservicer's obligation to advance expenses with respect to the Loan; (3) a
Servicer's or subservicer's right to receive compensation for its services; or
(4) the ownership, management or servicing for others by a Servicer or
subservicer of any other loans or property.
"Act of Insolvency" means, with respect to any party and its
Affiliates, (i) the filing of a petition, commencing, or authorizing the
commencement of any case or proceeding under any bankruptcy, insolvency,
reorganization, liquidation, dissolution or similar law relating to the
protection of creditors of such party or its Affiliates, or suffering any such
petition or proceeding to be commenced by another which is consented to, not
timely contested or results in entry of an order for relief; (ii) the seeking
the appointment of a receiver, trustee, custodian or similar official for such
party or an Affiliate or any substantial part of the property of either, (iii)
the involuntary appointment of a receiver, conservator, or manager for such
party or an Affiliate by any governmental agency or authority having the
jurisdiction to do so, and that appointment shall not have been dismissed or
stayed within 30 days after its occurrence; (iv) the making or offering by such
party or an Affiliate of a composition with its creditors or a general
assignment for the benefit of creditors, (v) the admission by such party or an
Affiliate of such party of its inability to pay its debts or discharge its
obligations as they become due or mature; or (vi) that any governmental
authority or agency or any person, agency or entity acting or purporting to act
under governmental authority shall have taken any action to condemn, seize or
appropriate, or to assume custody or control of, all or any substantial part of
the property of such party or of any of its Affiliates, or shall have taken any
action to displace the management of such party or of any of its Affiliates or
to curtail its authority in the conduct of the business of such party or of any
of its Affiliates, and that action shall not have been dismissed or stayed
within 30 days after its initiation.
"Additional Costs" has the meaning specified in Section 3(h)
hereof.
"Additional Loans" means Eligible Loans or cash provided by a
Seller to Buyer or its designee pursuant to Section 4(a) hereof.
"Add-ons" means, (A) with respect to new Manufactured Homes,
Dealer-installed equipment, attachments, improvements and related out-buildings
or (B) with respect to Pre-owned Manufactured Homes, existing Dealer-installed
equipment, in each case not to exceed the lesser of (i) actual cost or (ii) 25%
of the lesser of NADA Retail Value or the retail sales price of the Manufactured
Home, the aggregate value of which is consolidated into the principal
outstanding balance of the MH Paper.
"Administration Fee" means a fee on certain types of Loans,
payable by a Seller on or before the initial Purchase Date for such Loan as set
forth in Exhibit I, Part 1 to this Agreement, as may be amended from time to
time upon agreement of the parties hereto.
"Adverse Claim" means any claim of ownership or any lien, or any
rights that under the law could give rise to such liens (including mechanics or
similar liens or claims which have been filed for work, labor or materials
affecting the Manufactured Home securing the MH Loan), security interest, title
retention, trust or other charge or encumbrance, equity, loan, pledge,
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claim, or other type of preferential arrangement having the effect or purpose of
creating a lien or security interest, other than the security interest created
under this Agreement.
"Affiliate" means, with respect to any Person, another Person that
directly or indirectly controls, or is under common control with, or is
controlled by, such Person. As used in this definition, "control" (including,
with its correlative meanings, "controlled by" and "under common control with")
means possession, directly or indirectly, of power to direct or cause the
direction of management or policies (whether through ownership of securities or
partnership or other ownership interests, by contract or otherwise).
"Agreement" means this Amended and Restated Master Repurchase
Agreement among Buyer and Sellers, as amended from time to time.
"ALTA" means the American Land Title Association.
"Applicable Collateral Maintenance Percentage" means the fraction,
expressed as a percentage, the numerator of which is 1, and the denominator of
which is the Applicable Purchase Price Percentage for a given Loan as set forth
in Exhibit I, Part 2 to this Agreement, as may be amended from time to time upon
agreement of the parties hereto. The Applicable Collateral Maintenance
Percentage is multiplied by the Repurchase Price to determine the minimum
Collateral Maintenance Amount, for purposes of determining if a Collateral
Deficit exists for any Transaction.
"Applicable Purchase Price Percentage" has the meaning set forth
in Exhibit I, Part 2 to this Agreement, as may be amended from time to time upon
agreement of the parties hereto.
"Appraised Value" means, (A) with respect to a Mortgage Loan, the
reconciled value of the Mortgaged Property as set forth in the appraisal
prepared in accordance with the Underwriting Guidelines made in connection with
the origination of the related Mortgage Loan; (B) with respect to an MH Loan
secured by a Manufactured Home (i) that was not a Pre-owned Manufactured Home at
the time that the MH Loan was originated, the retail purchase price of the
Manufactured Home, including any Add-ons, (plus, with respect to a Land-and-Home
Loan, the Appraised Value of the Mortgaged Property as determined in accordance
with (A) hereof), or (ii) that was a Pre-owned Manufactured Home at the time the
related MH Loan was originated, the lesser of (i) the total delivered sales
price of the Manufactured Home (except for refinancings), (ii) the acceptable
appraised value determined by an appraisal prepared in accordance with the
Underwriting Guidelines or (iii) the estimate of value determined in accordance
with the NADA Retail Value (plus, with respect to a Land-and-Home Loan, the
Appraised Value of the Mortgaged Property as determined in accordance with (A)
hereof); and (C) with respect to a Floorplan Loan secured by a Manufactured Home
(i) that was not a Pre-owned Manufactured Home at the time the related Floorplan
Loan was originated (or subject to a subsequent Transaction), the manufacturer's
invoice (to the Dealer from the manufacturer) or (ii) that was a Pre-owned
Manufactured Home at the time the related Floorplan Loan was originated (or
subject to a subsequent Transaction), the lesser of the NADA Wholesale Value or
the price paid by the Dealer for such Manufactured Home (including, in both
cases, Add-ons added by Dealer subsequent to Dealer's acquisition of the
Manufactured Home).
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"APR" or "Annual Percentage Rate" means the interest cost of the
loan, i.e. the finance charge, expressed as a percentage rate, which rate is
obtained from computations required by Regulation Z.
"Asset Value Net Worth" means (x) the aggregate sum of the
products of the Book Values for each of the following asset types multiplied by
(y) the percentages indicated below with respect to each asset type:
Asset Type % of Book Value
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Conduit Mortgage Loans - Performing 10.0%
Credit Lease Mortgage Loans - Performing 10.0%
Interim Mortgage Loans - Performing 20.0%
Bridge Mortgage Loans - Performing 35.0%
MH Loans - Performing 17.5%
Floorplan Loans - Performing 20.0%
Residential Mortgage Loans - Performing 8.0%
Mortgage Loans - Non-Performing 50.0%
Residential Mortgage Loans - Non-Performing 50.0%
MH Paper - Non-Performing 50.0%
Cash and Cash Equivalents (as defined herein) 0.0%
Property and Equipment 50.0%
Accounts Receivable - Net 15.0%
Retained Interests in Securitizations-Commercial 25.0%
Retained Interests in Securitizations-Residential and MH Paper 25.0%
Corporate Loans 50.0%
Investments in Marketable Securities (as defined herein) 50.0%
All Other Assets 100.0%
"Assignment and Conveyance" means an assignment of right, title
and interest in either a Mortgage Loan, a Floorplan Loan, or a pool of MH Loans,
substantially in the form of Exhibit 13 to the Custodial Agreement.
"Assignment of Consignment Agreement" means an assignment from
Seller to Buyer of a Consignment Agreement, in form and substance acceptable to
Buyer.
"Assignment of Mortgage" means, with respect to any Mortgage, an
assignment of the mortgage, notice of transfer or equivalent instrument in
recordable form, sufficient under the laws of the jurisdiction wherein the
related property is located to reflect the assignment and pledge of the
Mortgage.
"Back-up Servicer" means ▇▇▇▇▇▇▇▇ Philips Inc. or such other
entity designated by Buyer from time to time.
"Back-up Servicing Agreement" means back-up servicing agreements,
in form and substance satisfactory to Buyer, executed by the Back-up Servicer,
the Buyer and each Seller,
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as such agreements may be amended, supplemented or otherwise modified from time
to time, providing for the assumption of servicing by the Back-up Servicer upon
the Buyer's request.
"Blanket Fidelity Bond and Errors and Omissions Insurance" means
blanket fidelity bond and errors and omissions insurance, both with broad
coverage with insurance companies acceptable to the Buyer, on all officers,
employees or other persons acting in any capacity with regard to the Loans to
handle funds, money, documents and papers or provide professional services
relating to the Loans. Blanket Fidelity Bond and Errors and Omissions Insurance
coverage shall protect and insure the Sellers and all Servicers against losses,
including forgery, theft, embezzlement, fraud, errors and omissions and
negligent acts of such persons, and coverage shall be in an amount that is
customary for servicers that service a portfolio of comparable Loans and that
are generally acceptable as servicers to institutional investors, but the scope
of coverage, amounts and terms shall be at least equal to the FNMA Guidelines
for multifamily mortgage loans, as amended from time to time.
"Blocked Account" has the meaning specified in Section 29 hereof.
"Blocked Account Agreement" means (i) that certain Amended and
Restated Blocked Account Agreement, dated as of September 30, 1998, among Buyer,
NBD Bank and its successors and assigns as Lockbox Bank, BAC and Bloomfield
Servicing, as Servicer, as the same may be amended, supplemented or otherwise
modified from time to time, or (ii) that certain Blocked Account Agreement,
dated as of September 30, 1998, among Buyer, NBD Bank and its successors and
assigns as Lockbox Bank, MHFC and St. ▇▇▇▇▇ Servicing as Servicer, as the same
may be amended, supplemented or otherwise modified from time to time, or such
other Blocked Account Agreements that may be entered from time to time, in which
the respective Lockbox Bank acknowledges the Buyer's lien on the Blocked
Account, and agrees that the Lockbox Bank shall only withdraw and allow
withdrawal of funds from the Blocked Accounts on instruction from the Buyer.
"Bloomfield Blocked Account" has the meaning specified in Section
29(a).
"Bloomfield Servicing" means Bloomfield Servicing Company, L.L.C.
"Book Value" means the net value of the related balance sheet
accounts in accordance with GAAP.
"Breach", as that term relates to any representation, warranty or
covenant in this Agreement, means that such representation or warranty was
incorrect or untrue in any material respect when made or repeated or deemed to
have been made or repeated, or either Seller has failed to comply with a
covenant, and which condition (i.e., untruth or incorrectness or failure to
comply) has a Material Adverse Effect.
"Breakage Costs" has the meaning specified in Section 3(j)(3)
hereof.
"Bridge Mortgage Loan" means a Mortgage Loan which satisfies the
Loan Eligibility Requirements for Bridge Mortgage Loans set forth in Exhibit IV,
Part 3 to this Agreement, as may be amended from time to time upon agreement of
the parties hereto.
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"Business Day" means a day other than (i) a Saturday or Sunday, or
(ii) a day in which the Buyer or the New York Stock Exchange is authorized or
obligated by law or executive order to be closed.
"Buyer" means ▇▇▇▇▇▇ Commercial Paper Inc. and its successors and
assigns.
"Buyer's LTV" means the effective loan-to-value to Buyer
(expressed as a percentage) attributable to the Purchase Price for a Bridge
Mortgage Loan (calculated as the Purchase Price for the related Bridge Mortgage
Loan divided by the market value of the related Mortgaged Property, as
determined in good faith by Buyer in its sole discretion, based upon its due
diligence review), which shall equal one of the Pricing Rate selections
reflected for Bridge Mortgage Loans in Exhibit I, Part 2 to this Agreement, as
may be amended from time to time upon agreement of the parties hereto, and which
shall be chosen by Seller in connection with the fixing of the Pricing Spread.
"Buyer's Underwriter" means ▇▇▇▇▇▇▇▇ Philips Inc. or such other
entity designated by Buyer from time to time.
"Capital Lease Obligations" means, for any Person, all obligations
of such Person to pay rent or other amounts under a lease of (or other agreement
conveying the right to use) Property to the extent such obligations are required
to be classified and accounted for as a capital lease on a balance sheet of such
Person under GAAP, and, for purposes of this Agreement, the amount of such
obligations shall be the capitalized amount thereof, determined in accordance
with GAAP.
"Cash Equivalents" means (i) direct obligations of, and
obligations fully guaranteed as to the full and timely payment of principal and
interest by, the U.S. government or any agency or instrumentality thereof, (ii)
demand deposits, time deposits, bankers' acceptances, repurchase agreements, or
certificates of deposit of depository institutions or trust companies
incorporated under the laws of the U.S. or any state of the U.S. and insured by
the FDIC and which have the highest rating from Standard & Poor's and/or
Moody's, (iii) commercial paper which has an A-1+ or P-1+ rating and (iv) money
market funds or money market savings accounts, which have the highest rating
from Standard & Poor's and Moody's.
"CERCLA" means the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended.
"Code" means the Internal Revenue Code of 1986, as amended from
time to time.
"Collateral" has the meaning specified in Section 6 hereof.
"Collateral Deficit" means either a Market Value Collateral
Deficit or a Securitization Value Collateral Deficit.
"Collateral Information" means, with respect to each Loan, that
information set forth in Exhibits 6-1, 6-2 and 6-3 of the Custodial Agreement,
or as otherwise approved by Buyer, which information is set forth on a Loan
Schedule provided by Seller to Buyer in paper and electronic form.
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"Collateral Maintenance Amount" means, with respect to any
Transaction, the amount obtained by multiplying (i) the Applicable Collateral
Maintenance Percentage, as set forth in Exhibit I, Part 2 to this Agreement, as
may be amended from time to time upon agreement of the parties hereto, by (ii)
the related Repurchase Price for such Transaction.
"Collections" means, with respect to any Loan, all cash
collections and other Proceeds of such Loan (including late charges, fees and
interest arising thereon and all recoveries with respect to Loans that have been
written off as uncollectible.
"Commitment Fee" means the fee or fees by type of Loan, paid or to
be paid, as provided in Exhibit I, Part 1 to this Agreement, as may be amended
from time to time upon agreement of the parties hereto.
"Commonly Controlled Entity" means an entity, whether or not
incorporated, which is under common control with a Seller within the meaning of
Section 4001 of ERISA or is part of a group which includes a Seller and which is
treated as a single employer under Section 414 of the Code.
"Conduit Mortgage Loan" means a Mortgage Loan which satisfies the
Loan Eligibility Requirements set forth in Exhibit IV, Part 1 to this Agreement,
as may be amended from time to time upon agreement of the parties hereto, but
which is not backed by a Credit Lease.
"Confirmation" has the meaning specified in Section 3(e) hereof.
"Consignment Agreement" means the consignment agreement between a
Dealer and a consignee in which Dealer consigns Manufactured Home inventory to
the consignee, which agreement is in form and substance acceptable to Buyer, in
its sole discretion.
"Credit Lease" means a bond type triple net lease to a Credit
Tenant which occupies 100% of the related Mortgaged Property.
"Credit Lease Mortgage Loan" means a Mortgage Loan secured by a
Mortgage backed by a Credit Lease, which satisfies the Loan Eligibility
Requirements set forth in Exhibit IV, Part 1 to this Agreement, as may be
amended from time to time upon agreement of the parties hereto.
"Credit Tenant" means a tenant rated at least Baa3 by Moody's and
BBB- by Standard & Poor's, approved by Buyer, under a Credit Lease.
"Curtailment" means the required periodic repayment, every 90
days, of at least 10% of the outstanding principal balance on the loan amount
advanced to a Dealer by a Seller (or such other periodic payment as may be
approved by Buyer, in its sole discretion) with respect to each Manufactured
Home securing each Floorplan Loan subject to a Transaction as of that date.
"Custodial Agreement" means the Amended and Restated Custodial
Agreement, dated as of the date hereof, by and among Buyer, Sellers and the
Custodian, as amended from time to time.
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"Custodial Delivery" means the form, executed by a Seller and
delivered with the Loan Schedule and the Loan File to Buyer or its designee
(including the Custodian) pursuant to Section 7 hereof, in the form of Exhibit
7-1 to the Custodial Agreement for BAC and Exhibit 7-2 to the Custodial
Agreement for MHFC, as such forms may be amended from time to time.
"Custodian" means the custodian under the Custodial Agreement. The
initial custodian is LaSalle National Bank.
"Dealer" means a dealer in Manufactured Homes held for sale to
third-parties, which Dealer is the Obligor on a Dealer Note secured by such
Manufactured Homes.
"Dealer Financing Agreement" means the agreement between Seller
and a Dealer that provides for the financing of a Floorplan Loan.
"Dealer Note" means, with respect to a Floorplan Loan, the note
executed by the Dealer evidencing indebtedness in connection with the purchase
of Manufactured Homes for inventory pursuant to a Dealer Financing Agreement.
There shall be one Dealer Note for each Floorplan Loan, regardless of the number
of Manufactured Homes financed.
"Default" means an event that with notice or lapse of time or both
would become an Event of Default.
"Delinquent" means, with respect to any Eligible Loan, the period
of time from the date on which an Obligor fails to pay an obligation under the
terms of such Eligible Loan (without regard to any applicable grace periods) to
the date on which such payment is made.
"Delinquent MH Loan" means an MH Loan that is more than 29 days
Delinquent but less than 60 days Delinquent.
"Designated Fax Distributor" means the Person designated to
receive and distribute faxes from the Settlement Agent, which shall initially be
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, a professional corporation of attorneys, located at ▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇.
"Distribution Worksheet" means the monthly worksheet prepared by a
Seller or a Servicer of the Loans and delivered to Buyer which sets forth the
servicing activities for the prior calendar month and the resulting deposits in,
and requested distributions from, a Blocked Account related thereto, in form and
substance satisfactory to Buyer.
"DSCR" shall mean the quotient obtained by dividing (x) Obligor's
consolidated after-tax net operating income, exclusive of extraordinary gains
and losses, interest expense, depreciation and amortization to the extent
included in the calculation of net operating income by (y) debt service (i.e.,
payments of interest and principal scheduled and required under borrowing
facilities) on Indebtedness (excluding balloon loan maturity payments).
"Due Date" means the day of the month on which the Monthly Payment
is due on a Loan, exclusive of any days of grace.
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"Eligible Floorplan Loan" means a Floorplan Loan which conforms to
the Floorplan Loan Eligibility Requirements individually and which, when added
to the aggregate Eligible Floorplan Loans purchased hereunder does not cause
such Eligible Floorplan Loans, as a whole, to fail to conform to the Floorplan
Loan Eligibility Requirements.
"Eligible Loans" means, Eligible Mortgage Loans, Eligible MH
Loans, Eligible Floorplan Loans and any other type of Loans that may be
subsequently added to this Agreement by the mutual written agreement of Buyer
and the applicable Seller.
"Eligible MH Loan" means an MH Loan which conforms to the MH Loan
Eligibility Requirements individually and which, when added to the aggregate
Eligible MH Loans purchased hereunder does not cause such Eligible MH Loans, as
a whole, to fail to conform to the MH Loan Eligibility Requirements.
"Eligible Mortgage Loan" means a Mortgage Loan which conforms to
the Loan Eligibility Requirements for Mortgage Loans, individually, and which,
when added to the aggregate Eligible Mortgage Loans purchased hereunder does not
cause such Eligible Mortgage Loans, as a whole, to fail to conform to the Loan
Eligibility Requirements for Mortgage Loans.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended from time to time.
"Escrow Account" means an account established for receipt of
Escrow Payments, which account is subject to a Blocked Account Agreement.
"Escrow Instructions" means the escrow instructions approved by
Buyer.
"Escrow Payments" means with respect to any Loan, the amounts
constituting ground rents, taxes, assessments, water rates, sewer rents,
municipal charges, mortgage insurance premiums, fire and hazard insurance
premiums, condominium charges, and any other payments required to be escrowed by
the Obligor with the obligee pursuant to a Mortgage or any other document.
"Event of Default" has the meaning specified in Section 13 hereof.
"Executive Bonus Plan" has the meaning set forth in the definition
of Restricted Payment.
"Exit Fee" has the meaning provided in Section 3(j)(4) hereof.
"Extra Costs" means the set-up costs, delivery costs, title fees,
appraisal fees, flood hazard determination fees, Seller, broker, and/or Dealer
closing fees, insurance costs, taxes, and licensing fees, each of which is no
greater than the amount specified in Exhibit I, Part 4 to this Agreement, as may
be amended from time to time upon agreement of the parties hereto, the aggregate
value of which is consolidated into the principal outstanding balance of the MH
Paper.
"Facility Documents" has the meaning specified in Section 3(a)
hereof.
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"FCCR" means, for any calendar quarter, the quotient obtained by
dividing (x) Guarantor's consolidated after-tax net operating income, exclusive
of extraordinary gains and losses, interest expense, depreciation and
amortization to the extent included in the calculation of net operating income
by (y) debt service (i.e., payments of principal and interest scheduled and
required under borrowing facilities, excluding payments due to Buyer solely as a
result of pass-throughs of scheduled amortization, Curtailments and prepayments
on the Loans) on Guarantor's consolidated Indebtedness (excluding balloon loan
maturity payments) plus preferred stock dividends of the Sellers and Guarantor.
"Final Repurchase Date" has the meaning set forth in Exhibit I,
Part 3 to this Agreement, as may be amended from time to time upon agreement of
the parties hereto or such earlier date to which it may be accelerated pursuant
to Section 8 of this Agreement.
"Floorplan Loan" means MH Paper which satisfies the Floorplan Loan
Eligibility Requirements. A Floorplan Loan is made to finance a Dealer's
inventory of Manufactured Homes, in whole or in part.
"Floorplan Loan Eligibility Requirements" means the Loan
Eligibility Requirements with respect to Floorplan Loans as set forth on Exhibit
IV, Part 5 to this Agreement, as may be amended from time to time upon agreement
of the parties hereto.
"GAAP" means generally accepted accounting principles as in effect
from time to time in the United States.
"Governmental Authority" shall mean any nation or government, any
state or other political subdivision thereof, any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government and any court or arbitrator having jurisdiction over the Sellers,
any of its Affiliates or any of its properties.
"Grandfathered Loans" means the Transactions consisting of the
purchase of Loans on the following Properties: (i) ▇▇▇▇▇▇ ▇▇▇▇▇▇ Hotel in Port
Huron, Michigan and (ii) A-Secured Self & Vehicle Storage II in Maricopa County,
Arizona.
"Gross Margin" means with respect to each adjustable rate Loan,
the fixed percentage amount that is added to the Index, as set forth in the
related Note.
"Ground Lease" means a lease for all or any portion of the real
property comprising the Mortgaged Property, the lessee's interest in which is
held by the Mortgagor of the related Mortgage Loan.
"Guarantee" means, as to any Person, any obligation of such Person
directly or indirectly guaranteeing any Indebtedness of any other Person or in
any manner providing for the payment of any Indebtedness of any other Person or
otherwise protecting the holder of such Indebtedness against loss (whether by
virtue of partnership arrangements, by agreement to keep-well, to purchase
assets, goods, securities or services, or to take-or-pay or otherwise); provided
that the term "Guarantee" shall not include (i) endorsements for collection or
deposit in the ordinary course of business, or (ii) obligations to make
servicing advances for delinquent taxes and insurance or other obligations in
respect of a Mortgaged Property, to the extent required by Buyer. The amount of
any Guarantee of a Person shall be deemed to be an amount equal to the
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stated or determinable amount of the primary obligation in respect of which such
Guarantee is made or, if not stated or determinable, the maximum reasonably
anticipated liability in respect thereof as determined in accordance with GAAP.
The terms "Guarantee" and "Guaranteed" used as verbs shall have correlative
meanings.
"Guarantor" means ▇▇▇▇▇▇▇ Financial Services Corporation, the sole
parent of Sellers.
"Guaranty" means that certain Amended and Restated Affiliate
Guaranty dated as of the date hereof.
"Hedge" means, with respect to any or all of the Purchased Loans,
any interest rate swap, cap or collar agreement or similar arrangements
providing for protection against fluctuations in interest rates or the exchange
of nominal interest obligations, either generally or under specific
contingencies, entered into by Sellers with Buyer or its Affiliates, and
reasonably acceptable to the Buyer.
"Index" means with respect to each adjustable rate Loan, the index
set forth in the related Note for the purpose of calculating the interest rate
thereon.
"Income" means, with respect to any Purchased Loan at any time,
any principal thereof then payable and all interest, dividends or other
distributions payable thereon less any related servicing fee(s) charged by a
subservicer as approved by Buyer.
"Indebtedness" means, for any Person: (a) obligations created,
issued or incurred by such Person for borrowed money (whether by loan, the
issuance and sale of debt securities or the sale of Property to another Person
subject to an understanding or agreement, contingent or otherwise, to repurchase
such Property from such Person); (b) obligations of such Person to pay the
deferred purchase or acquisition price of Property or services, other than trade
accounts payable (other than for borrowed money) arising, and accrued expenses
incurred, in the ordinary course of business so long as such trade accounts
payable are payable in accordance with their terms within 60 days of the date
the respective goods are delivered or the respective services are rendered; (c)
Indebtedness of others secured by a Lien on the Property of such Person, whether
or not the respective Indebtedness so secured has been assumed by such Person;
(d) obligations (contingent or otherwise) of such Person in respect of letters
of credit or similar instruments issued or accepted by banks and other financial
institutions for account of such Person; (e) Capital Lease Obligations of such
Person; (f) obligations of such Person under repurchase agreements or like
arrangements; (g) Indebtedness of others Guaranteed by such Person; (h) all
obligations of such Person incurred in connection with the acquisition or
carrying of fixed assets by such Person; and (i) Indebtedness of general
partnerships of which such Person is a general partner.
"Initial Table Funded Loan Documents" means (a) the Mortgage Note,
(b) the Escrow Instructions, (c) the Settlement Agent Trust Receipt (d) the
Insured Closing Letter and (e) the Custodial Delivery.
"Insured Closing Letter" means a letter addressed to BAC and Buyer
from the title insurance underwriter for which the Settlement Agent is serving
as an agent for Table Funded
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Mortgage Loans, which letter shall be in form and substance reasonably
acceptable to BAC and Buyer.
"Intercreditor Agreement" means an agreement between Seller and
other creditors of any Dealer, providing, among other things, for the
subordination of such creditor's security interests to Seller's security
interests and/or the distinguishing between or among security interests so that
such creditor does not claim a security interest in the Property or interests
that are subject to Seller's security interests.
"Interest Period" means, with respect to any Transaction, (i)
initially, the period commencing on the Purchase Date and ending on the day
immediately preceding the next Payment Date (the "Interest Reset Date"), and
(ii) thereafter, each period from and including the day following the
immediately preceding Interest Reset Date up to and including the succeeding
Interest Reset Date or such shorter period as agreed among Buyer and a Seller
when the current LIBOR period expires. Notwithstanding the foregoing, each
Interest Period that commences on the last Business Day of a calendar month (or
on any day for which there is no numerically corresponding day in the
appropriate calendar month when the Interest Period expires) shall end on the
last Business Day of the appropriate calendar month. Notwithstanding the
foregoing: (i) no Interest Period may begin before and end after the Final
Repurchase Date; and (ii) each Interest Period that would otherwise end on a day
that is not a Business Day shall end on the next succeeding Business Day (or, if
such next succeeding Business Day falls in the next succeeding calendar month,
on the next preceding Business Day).
"Interest Reset Date" has the meaning set forth in the definition
of Interest Period.
"Interim Mortgage Loan" means a Mortgage Loan which satisfies the
Loan Eligibility Requirements set forth in Exhibit IV, Part 2 to this Agreement,
as may be amended from time to time upon agreement of the parties hereto.
"Land-and-Home Loan" means an MH Loan secured by a Mortgage on the
Obligor's real property and the Manufactured Home permanently affixed to it.
"LIBOR" means the rate per annum calculated with respect to each
Transaction as set forth below:
(i) Two (2) Business Days prior to each Interest Reset Date,
LIBOR shall be determined by Buyer on the basis of the offered rate for one
month deposits of not less than U.S. $1,000,000, which appears on the date of
determination on Telerate Page 3750 as of 11:00 a.m., London time (or such other
page as may replace the Telerate Page on that service for the purposes of
displaying London interbank offered rates of major banks). If no such offered
rate appears, LIBOR with respect to the relevant Interest Period shall be
determined as described in (ii) below.
(ii) With respect to an Interest Reset Date on which no such
offered rate appears two (2) Business Days prior to each Interest Reset Date on
Telerate Page 3750 as described in (i) above (or the Wall Street Journal, if the
Telerate Page is no longer used for the purposes of displaying London interbank
offered rates of major banks), LIBOR shall be the arithmetic mean, expressed as
a percentage, of the offered rates for one month deposits in U.S. dollars that
appears on the Reuters Screen LIBOR Page as of 11:00 a.m., London time, on the
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date of determination. If, in turn, such rate is not displayed on the Reuters
Screen LIBOR Page at such time, then LIBOR for such date shall be reasonably
determined by Buyer to be the arithmetic mean of the offered quotations to
first-class banks in the Interbank LIBOR Market.
All percentages resulting from any calculations of LIBOR referred
to in this Agreement shall be rounded up to the nearest multiple of 1/100 of 1%
and all U.S. dollar amounts used in or resulting from such calculations shall be
rounded to the next higher cent.
"Lien" means any mortgage, lien, pledge, charge, security interest
or similar encumbrance.
"Lien Certificate" shall mean, with respect to any Manufactured
Home, if applicable, an original certificate of title, certificate of lien or
other notification issued by the Registrar of Titles of the applicable state to
a secured party which indicates that the Lien of the secured party on the
Manufactured Home is recorded on the original certificate of title.
"Loan" means a Mortgage Loan, a Floorplan Loan, or an MH Loan.
"Loan Agreement" means a Dealer Financing Agreement or an MH
Contract.
"Loan Documents" means, with respect to a Loan, the documents
comprising the Loan File for that Loan.
"Loan Eligibility Requirements" means the eligibility requirements
with respect to the particular type of Loan as set forth on Exhibit IV, Parts 1
through 5 to this Agreement and such other additions to Exhibit IV that may be
added from time to time for other Loan types, and any amendments thereto.
"Loan File" means the required documents for each Loan type set
forth in Annex A to the Custodial Agreement (and set forth in table form in
Annex B to the Custodial Agreement), together with any additional documents and
information required to be delivered to Buyer or its designee (including the
Custodian).
"Loan Interest Rate" means the annual rate of interest borne on a
Note, which shall be adjusted from time to time with respect to adjustable rate
Loans.
"Loan Interest Rate Adjustment Date" means with respect to each
adjustable rate Loan, the date, specified in the related Note and Loan Schedule,
on which the Loan Interest Rate is adjusted.
"Loan Interest Rate Cap" means with respect to an adjustable rate
Loan, the limit on each Interest Rate adjustment as set forth in the related
Note.
"Loan Limitations" means the aggregate, type and individual
sublimits and other constraints with respect to Loans, as set forth in Exhibit
I, Part 3 to this Agreement, as may be amended from time to time upon agreement
of the parties hereto.
"Loan Representations" means those representations and warranties
set forth in Exhibit II and in Section 10(c) hereof.
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"Loan Schedule" means a schedule of Loans attached to each Trust
Receipt and Custodial Delivery, and also delivered to Buyer monthly and at other
times, from time to time, containing Collateral Information with respect to each
Loan.
"Loan-to-Value Ratio" or "LTV" means with respect to any Loan, as
of any date, the fraction, expressed as a percentage, the numerator of which is
the principal balance of such Loan at the date of determination and the
denominator of which is the Appraised Value.
"Loan Transfer Agreements" means the repurchase or loan agreements
or other transactions under which a Qualified Originator transfers Eligible
Loans to a Seller.
"Lockbox Bank" means, with respect to the Blocked Accounts under
which Bloomfield Servicing and St. ▇▇▇▇▇ Servicing act as Servicers, NBD Bank, a
Michigan banking corporation, and with respect other Blocked Accounts, the bank
designated as such upon mutual agreement of Buyer and Seller.
"Manufactured Home" means a unit of new, pre-owned, or used
manufactured housing consisting of a pre-fabricated manufactured unit affixed to
a permanent foundation, or a mobile home (including all Add-ons, attachments,
improvements and accessions) which meets the requirements of Section 25(e)(10)
of the Internal Revenue Code of 1986, 26 U.S.C. 25(e)(10) as amended, securing
the indebtedness of the Obligor under the related MH Loan.
"Manufacturer's Floorplan Agreement" means an agreement between a
Seller and a Manufactured Home manufacturer that specifies, among other things,
that such manufacturer will repurchase, at the price and terms described in that
agreement, Manufactured Homes sold to a Dealer by that manufacturer and financed
by a Seller, in the event that the Seller acquires possession of those
Manufactured Homes through repossession, voluntary surrender or otherwise.
"Market Value" means as of any date with respect to any Loan, the
price at which such Loan could readily be sold, as determined in good faith by
Buyer in its sole discretion, provided that, the Market Value shall be deemed to
be zero with respect to each Loan (i) which has been subject to Transactions for
more than the Maximum Aggregate Term; (ii) other than an MH Loan, which is more
than 29 days Delinquent; (iii) which fails to meet the Loan Eligibility
Requirements for that Loan type; (iv) with respect to which there is a Breach
(other than a Breach of a Loan Representations) that has not been cured; (v)
which violates the Loan Limitations established for the applicable Loan type
under Exhibit I, Part 3 to this Agreement; and (vi) which is a Table Funded
Mortgage Loan for which the Custodian has failed to receive the related Mortgage
Loan Documents on the third Business Day following the applicable Purchase Date.
The Market Value of a Loan as to which there has been a Breach of a Loan
Representation that has not been cured, shall be reduced to a value determined
by Buyer in its sole good faith discretion, which value may be zero. The
determination of Market Value will be determined by Buyer based upon its due
diligence review and will include the benefit of ▇▇▇▇▇▇ provided directly by
Buyer or its Affiliate, and in each case pledged as additional collateral to the
Buyer. The Market Value of Purchased Loans shall be determined by the Buyer no
less frequently than monthly. Market Value adjustments as a result of interest
rate movements can be performed daily by the Buyer. Sellers hereby acknowledge
that Market Value will be negatively impacted by the lack of current due
diligence information.
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"Market Value Collateral Deficit" has the meaning specified in
Section 4(a) hereof.
"Marketable Securities" means securities which have an investment
grade rating from a national rating agency, which are registered with and
actively traded on a nationally recognized exchange, and for which a quoted
market price is readily available.
"Material Adverse Effect" means a material adverse effect, as
determined by Buyer in its sole discretion, upon (i) the business operations,
properties, assets, condition (financial or otherwise) or prospects of either
Seller or Guarantor taken as a whole, (ii) the ability of either Seller to
perform its obligations, or of Buyer to enforce any of its rights or remedies,
under this Agreement or any of documents to be executed and/or delivered
hereunder, (iii) the individual or aggregate Market Value or the Securitization
Value of any or all of the Purchased Loans (or other Collateral) or (iv) the
ability of Guarantor to perform its obligations under the Guaranty. Any negative
impact on the value of a Loan, however small such impact may be, shall be
considered a Material Adverse Effect on such Loan, as to which Buyer may adjust
the Market Value and/or Securitization Value.
"Maximum Aggregate Term" has the meaning specified in Exhibit I,
Part 3 to this Agreement, as may be amended from time to time upon agreement of
the parties hereto.
"Maximum Committed Amount" means the total amount committed
hereunder, for each Loan type, or group of Loan types, as set forth in Exhibit
I, Part 3 to this Agreement, as may be amended from time to time upon agreement
of the parties hereto.
"Maximum Leverage Ratio" means, for any calendar quarter, the
quotient obtained by dividing (x) Guarantor's consolidated Indebtedness by (y)
Guarantor's consolidated Tangible Net Worth.
"Maximum Single Park Exposure" means the value of MH Loans that
may be originated in a single Manufactured Home park, as set forth in Exhibit I,
Part 3 to this Agreement, as may be amended from time to time upon agreement of
the parties hereto.
"Maximum Single State Exposure" means the value of MH Loans that
may be originated in a single state, as set forth in Exhibit I, Part 3 to this
Agreement, as may be amended from time to time upon agreement of the parties
hereto.
"MH Contract" means the installment loan agreement or retail
installment sales contract executed by an Obligor evidencing indebtedness in
connection with the financing of a Manufactured Home.
"MH Insurance" means property, casualty, credit life and/or
warranty insurance purchased by an Obligor in connection with the financing of
an MH Loan.
"MH Loan" means MH Paper which satisfies the MH Loan Eligibility
Requirements. The term MH Loan includes Land-and-Home Loans. MH Loans are made
under MH Contracts or MH Notes.
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"MH Loan Eligibility Requirements" means the eligibility
requirements with respect to MH Loans as set forth on Exhibit IV, Part 4 to this
Agreement, as may be amended from time to time upon agreement of the parties
hereto.
"MH Note" means a note or other evidence of indebtedness of an
Obligor (other than a Dealer) secured by a Manufactured Home, and, if a
Land-and-Home Loan, secured by the related Mortgaged Property.
"MH Paper" means a non-securitized whole loan, which shall be a
loan secured by a perfected first priority Lien on a Manufactured Home, and, in
the case of Land-and-Home Loans, secured also by a perfected first priority Lien
on the related Mortgaged Property and the Manufactured Home permanently affixed
to it. The term MH Paper consists of MH Loans and Floorplan Loans.
"MH Servicer" means St. ▇▇▇▇▇ Servicing with respect to the
invoicing and accounting services set forth in the MH Servicing Agreement and
MHFC for all other activities customarily provided by servicers of loans of the
same type as the MH Loans, or any successor Servicer approved by Buyer.
"MH Servicing Agreement" means the Servicing Agreement between
MHFC and the MH Servicer, as may hereafter be amended by the parties thereto
with Buyer's consent.
"MH Side Letter" means that certain letter agreement, the subject
matter of which is MH Paper, dated as of the date hereof, between ▇▇▇▇▇▇
Brothers Inc. and MHFC, as it may hereafter be amended by the parties thereto.
"MHFC" means MHFC, Inc., a Michigan corporation.
"Monthly Payment" means the scheduled Monthly Payment of principal
and/or interest on a Loan, including adjustments made in accordance with changes
in the Loan Interest Rate pursuant to the provisions of the Note for an
adjustable rate Loan.
"Moody's" means ▇▇▇▇▇'▇ Investor Service, Inc.
"Mortgage" means a mortgage, deed of trust, deed to secure debt or
other instrument, creating a valid and enforceable first lien on or a first
priority ownership interest in an estate in fee simple in real property and the
improvements thereon, securing a Mortgage Note or similar evidence of
indebtedness.
"Mortgage Loan" means a non-securitized whole loan, which shall be
a mortgage loan secured by a perfected first priority lien on commercial real
estate assets. The term Mortgage Loan includes Conduit Mortgage Loans, Credit
Lease Mortgage Loans, Bridge Mortgage Loans and Interim Mortgage Loans, any of
which may be Table Funded Mortgage Loans.
"Mortgage Loan Servicer" means Bloomfield Servicing, or any
successor Servicer approved by Buyer.
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"Mortgage Loan Servicing Agreement" means the Servicing Agreement
between BAC and the Mortgage Loan Servicer, as it may hereafter be amended by
the parties thereto with Buyer's consent.
"Mortgage Note" means a note or other evidence of indebtedness of
a Mortgagor secured by a Mortgage.
"Mortgaged Property" means the real property securing repayment of
the debt evidenced by a Mortgage Note (or securing an MH Note, in the case of
Land-and-Home Loans).
"Mortgagee" means the record holder of a Mortgage Note secured by
a Mortgage.
"Mortgagor" means the obligor on a Mortgage Note and the grantor
of the related Mortgage.
"Multiemployer Plan" means a Plan which is a multiemployer plan as
defined in Section 4001(a)(3) of ERISA.
"NADA Retail Value" and "NADA Wholesale Value" means the retail
and wholesale value, respectively, of a Manufactured Home as stated in the then
current N.A.D.A. Manufactured Housing Appraisal Guide ("Blue Book") published by
National Appraisal Guides, Inc., or any successor publication similarly
recognized by the trade and approved by Buyer.
"Non-Use Fee" means the fee for not using this facility, payable
on certain types of Loans, by a Seller to Buyer as set forth in Exhibit I, Part
1 to this Agreement, as may be amended from time to time upon agreement of the
parties hereto.
"Note" means a Mortgage Note, MH Note or Dealer Note.
"Obligor" means, the Dealer on a Dealer Note, the obligor on a MH
Note, or a Mortgagor on a Mortgage Note.
"Officer's Certificate" means, with respect to any Person, a
certificate of the chief executive officer, chief operating officer or vice
president or, with respect to financial matters, a certificate of the chief
financial officer or treasurer of such Person.
"Original Agreement" means that certain Master Repurchase
Agreement Governing Purchases and Sales of Mortgage Loans between Buyer and BAC,
dated as of March 19, 1998.
"Park Concentration Limit" has the meaning specified in Exhibit I,
Part 2 to this Agreement, as may be amended from time to time upon agreement of
the parties hereto.
"Payment Date" means (i) with respect to all Loans other than MH
Loans, the first (1st) calendar day of the month, and (ii) with respect to MH
Loans, the tenth (10th) calendar day of the month, provided in both cases that
if any such calendar day is not a Business Day, the succeeding Business Day.
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"Payoff Letter" means a letter from a Prior Lender, that details
the amount necessary to extinguish indebtedness owed by Dealer to such Prior
Lender, which indebtedness is secured by Manufactured Homes and/or other
Property that will secure a Floorplan Loan, and which provides an automatic
release and/or subordination in favor of Seller (and its successors and/or
assigns) of its security interest in all such Property upon receipt of payment
of such amount.
"PBGC" means the Pension Benefit Guaranty Corporation established
pursuant to subtitle A of Title IV of ERISA.
"Perfection Requirements Memorandum" has the meaning specified in
Section 12(r).
"Periodic Payment" has the meaning specified in Section 5(d)
hereof.
"Permitted Delinquencies" means the sublimit allowed for
Delinquent MH Loans, set forth in Exhibit I, Part 3 to this Agreement, as may be
amended from time to time upon agreement of the parties hereto.
"Person" means an individual, partnership, corporation, limited
liability company, joint stock company, trust or unincorporated organization or
a governmental agency or political subdivision thereof.
"Pipeline Report" means the report, in that form agreed upon by
the parties as amended from time-to-time, provided by a Seller with respect to
all Mortgage Loans being actively processed by that Seller for intended
inclusion in Transactions under this Agreement.
"Plan" means at a particular time, any employee benefit plan which
is covered by ERISA and in respect of which Sellers or a Commonly Controlled
Entity is (or, if such plan were terminated at such time, would under Section
4069 of ERISA be deemed to be) an "employer" as defined in Section 3(5) of
ERISA.
"PMI Policy" or "Primary Mortgage Insurance Policy" means a policy
of primary mortgage guaranty insurance issued by a Qualified Insurer.
"Pre-owned Manufactured Home" means a Manufactured Home that was
previously sold to or leased by a third-party for residential purposes, and, as
referenced in this Agreement, shall include Used Manufactured Homes.
"Price Differential" means, with respect to any Transaction
hereunder as of any date, the aggregate amount obtained by daily application of
the Pricing Rate for such Transaction to the Purchase Price for such Transaction
on a 360 day per year basis for the actual number of days during the period
commencing on (and including) the Purchase Date for such Transaction and ending
on (but excluding) the Repurchase Date (reduced by any amount of such Price
Differential previously paid by a Seller to Buyer with respect to such
Transaction).
"Pricing Rate" means the per annum percentage rate specified in
the Confirmation for determination of the Price Differential which shall not
exceed LIBOR plus the applicable Pricing Spread.
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"Pricing Spread" has the meaning set forth in Exhibit I, Part 2 to
this Agreement, as may be amended from time to time upon agreement of the
parties hereto.
"Prior Lender" means a previous lender to a Dealer, which lender
has financed Manufactured Homes which will secure a Floorplan Loan.
"Proceeds" means, with respect to any Collateral, whatever is
receivable or received when such Collateral is sold, collected, exchanged or
otherwise disposed of, whether such disposition is voluntary or involuntary, and
includes all rights to payment, including returned premiums, with respect to any
insurance relating to such Collateral.
"Property" means any right or interest in or to property of any
kind whatsoever, whether real, personal or mixed and whether tangible or
intangible.
"Purchase Date" means the date on which Purchased Loans are
transferred by a Seller to Buyer or its designee (including the Custodian) as
specified in the Confirmation.
"Purchase Price" means on each Purchase Date, the price at which
Purchased Loans are sold or transferred by a Seller to Buyer or its designee
(including the Custodian), which, with respect to:
(i) Conduit Mortgage Loans, Credit Lease Mortgage Loans,
Interim Mortgage Loans, MH Loans and Floorplan Loans, is
equal to the Applicable Purchase Price Percentage multiplied
by the lowest of (x) the Market Value of such Purchased
Loans, (y) the Securitization Value of such Purchased Loans,
or (z) the outstanding principal amount of such Purchased
Loans on the Purchase Date.
(ii) Bridge Mortgage Loans, is the Buyer's LTV multiplied
by the market value of the Mortgaged Property, as determined
in good faith by the Buyer in its sole discretion, based
upon its due diligence review.
"Purchased Loans" means the Loans sold by a Seller to the Buyer in
a Transaction, any Additional Loans and any Substituted Loans, whether or not
such Loans were in fact Eligible Loans at the time of purchase, or thereafter.
"Qualified Insurer" means an insurance company duly qualified as
such under the laws of the states in which the Underlying Asset is located, duly
authorized and licensed in such states to transact the applicable insurance
business and to write the insurance provided and whose claims paying ability at
the time of determination is (i) rated not less than A3 by ▇▇▇▇▇'▇ or A- or
better by Standard & Poor's or (ii) if such insurance company is not rated by
either ▇▇▇▇▇'▇ or Standard & Poor's, rated A:VII or better by Best's Insurance
Reports.
"Qualified Originator" means either Seller or another originator
of Loans approved by Buyer in writing.
"Registrar of Titles" means, with respect to any state, the
governmental agency or body responsible for the registration of, and the
issuance of certificates of title relating to, motor vehicles, Manufactured
Homes and liens thereon.
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"Reorganization" means, with respect to any Multiemployer Plan,
the condition that such Plan is in reorganization within the meaning of Section
4241 of ERISA.
"Replacement Loans" has the meaning specified in Section 14(b)(ii)
hereof.
"Reportable Event" means any of the events set forth in Section
4043(b) of ERISA, other than those events as to which the thirty day notice
period is waived under Sections .13, .14, .16, .18, .19 or .20 of PBGC Reg. ss.
4043.
"Repurchase Date" means the date on which a Seller is to
repurchase Purchased Loans from Buyer, including any date determined by
application of the provisions of Sections 3 or 14 hereof, as specified in the
Confirmation; provided that in no event shall such date be (i) more than 30 days
after the Purchase Date or (ii) after the expiration of the Maximum Aggregate
Term.
"Repurchase Price" means the price at which Purchased Loans are to
be transferred from Buyer or its designee (including the Custodian) to a Seller
upon termination of a Transaction, which will be determined in each case as the
sum of the Purchase Price and the Price Differential as of the date of such
determination decreased by all cash, Income (including Curtailments and
prepayments) and Periodic Payments actually received by Buyer.
"Request for Purchase" means written notice of a Seller's request
to enter into a Transaction, in a form acceptable to the applicable Seller and
Buyer. Such Request for Purchase shall (i) specify the requested Purchase Date
and Repurchase Date, (ii) include the Loan Schedule containing Collateral
Information with respect to the Loan or Loans that the Seller proposes to sell
to Buyer in connection with such Transaction, and (iii) be for at least the
minimum amount set forth in Exhibit I, Part 3 to this Agreement, as may be
amended from time to time upon agreement of the parties hereto. A Request for
Purchase covering a Floorplan Loan as to which Buyer has already disbursed funds
shall clearly specify this, and shall include BAC's Loan Number and the Dealer
name on the Floorplan Loan as to which an additional purchase is requested.
"Restricted Payments" means any of the following actions: (i)
declaring or paying any dividend (other than dividends payable solely in common
stock of either Seller or Guarantor) on, or making any payment on account of, or
setting apart assets for a sinking or other analogous fund for, the purchase,
redemption, defeasance, retirement or other acquisition of, any shares of any
class of capital stock of the Guarantor or any warrants or options to purchase
any such stock, whether now or hereafter outstanding, or making any other
distribution in respect thereof, either directly or indirectly, whether in cash
or property or in obligations of the Sellers, Guarantor or any Subsidiary, or
(ii) making any payments in excess of the amounts set forth in (A) Sellers'
executive bonus plans (each an "Executive Bonus Plan"), and (B) the employment
agreements as entered into between Guarantor and each of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, as in effect as of the date hereof.
"Restrictions on Transferability" means any material condition to,
or restriction on, the ability of the holder or an assignee of the holder of any
right, title or interest to sell, assign, transfer or otherwise liquidate such
right, title or interest in a commercially reasonable
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time and manner or which would otherwise materially deprive the holder or any
assignee of the holder of the benefits thereof.
"St. ▇▇▇▇▇ Servicing" means St. ▇▇▇▇▇ Servicing Corporation.
"St. ▇▇▇▇▇ Blocked Account" has the meaning specified in Section
29(a).
"Second Side Letter" means that certain letter agreement, the
subject of which is Bridge Mortgage Loans and Interim Mortgage Loans, dated as
of the date hereof, between ▇▇▇▇▇▇ Brothers Inc. and BAC, as may be hereafter
amended by the parties thereto.
"Second Subordination Letter" means that certain letter agreement
dated as of the date hereof, among Buyer, Sellers and Sun Communities, Inc.
"Securitization Value" means as of any date with respect to any
Loan, the price at which such Loan could readily be securitized or sold in a
securitization, as determined in good faith by Buyer in its sole discretion,
provided that, the Securitization Value shall be deemed to be zero with respect
to each Loan (i) which has been subject to Transactions for more than the
Maximum Aggregate Term; (ii) other than an MH Loan, which is more than 29 days
Delinquent; (iii) which fails to meet the Loan Eligibility Requirements for that
Loan type; (iv) with respect to which there is a Breach (other than a Breach of
a Loan Representations) that has not been cured; (v) which violates the Loan
Limitations established for the applicable Loan type under Exhibit I, Part 3 to
this Agreement; and (vi) which is a Table Funded Mortgage Loan for which the
Custodian has failed to receive the related Mortgage Loan Documents on the third
Business Day following the applicable Purchase Date. The Securitization Value of
a Loan as to which there has been a Breach of a Loan Representation that has not
been cured, shall be reduced to a value determined by Buyer in its sole good
faith discretion, which value may be zero. The determination of Securitization
Value will be determined by Buyer based upon its due diligence review and will
include the benefit of ▇▇▇▇▇▇ provided directly by Buyer or its Affiliate, and
in each case pledged as additional collateral to the Buyer. Sellers hereby
acknowledge that Securitization Value will be negatively impacted by the lack of
current due diligence information.
"Securitization Value Collateral Deficit" has the meaning
specified in Section 4(a) hereof.
"Seller" means BAC with respect to Mortgage Loans and Floorplan
Loans, and MHFC with respect to MH Loans.
"Seller's Loan Documents" means the documents identified for each
Loan type as set forth in Exhibit V, Parts 1, 2 and 3 to this Agreement as
approved by Buyer as may be amended from time to time with Buyer's written
consent.
"Servicer" means the Mortgage Loan Servicer and the MH Servicer.
"Servicing Agreement" has the meaning specified in Section 25
hereof.
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"Servicing File" means with respect to each Loan, the file
retained by a Seller or Servicer consisting of originals of all documents
related to a Loan which are not delivered to a Buyer or its designee and copies
of the Loan Documents.
"Servicing Letter" has the meaning specified in Section 25.
"Servicing Records" has the meaning specified in Section 25
hereof.
"Settlement Agent" shall mean, with respect to any Transaction, an
entity satisfactory to the Buyer in its sole discretion (which may be a title
company, escrow company or attorney in accordance with local law and practice in
the jurisdiction where the related Table Funded Mortgage Loan is being
originated), to which the proceeds of such Transaction are to be wired by Buyer.
"Settlement Agent Trust Receipt" means a trust receipt issued by
the Settlement Agent evidencing the Purchased Loans it holds, in the form of
Exhibit 1-6 to the Custodial Agreement, and delivered to the Buyer and the
Custodian by the Designated Fax Distributor.
"Side Letter" means that certain letter agreement, the subject of
which is Conduit Mortgage Loans and Credit Lease Mortgage Loans, dated March 19,
1998, between Buyer and BAC, as may be hereafter amended by the parties thereto.
"Significant Modification" means any modification that would be a
"significant modification" as such term is defined in U.S. Department of the
Treasury Regulations Section 1.1001-3(e) which includes a modification that,
based upon on all the facts and circumstances, is economically significant to
the Purchased Loan in the sole discretion of the Buyer, including, but not
limited to any changes in the interest rate, payment schedule, maturity date,
Obligor, guarantor or Underlying Asset.
"Single Employer Plan" means any Plan which is covered by Title IV
of ERISA, but which is not a Multiemployer Plan.
"Standard & Poor's" means Standard & Poor's Rating Services, a
division of the McGraw Hill Companies, Inc.
"State Concentration Limit" has the meaning specified in Exhibit
I, Part 2 to this Agreement, as may be amended from time to time upon agreement
of the parties hereto.
"Subsidiary" means, with respect to any Person, any corporation,
partnership or other entity of which at least a majority of the securities or
other ownership interests having by the terms thereof ordinary voting power to
elect a majority of the board of directors or other persons performing similar
functions of such corporation, partnership or other entity (irrespective of
whether or not at the time securities or other ownership interests of any other
class or classes of such corporation, partnership or other entity shall have or
might have voting power by reason of the happening of any contingency) is at the
time directly or indirectly owned or controlled by such Person or one or more
Subsidiaries of such Person or by such Person and one or more Subsidiaries of
such Person.
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"Substituted Loans" means any Eligible Loans substituted for
Purchased Loans in accordance with Section 9 hereof.
"Table Funded Mortgage Loan" shall mean a Mortgage Loan which is
sold to the Buyer simultaneously with the origination thereof by the Seller,
which origination is financed in part or in whole with proceeds of Transactions
advanced directly to the Settlement Agent. A Mortgage Loan shall cease to be a
Table Funded Mortgage Loan after the Custodian has delivered a Trust Receipt to
Buyer certifying its receipt of the corresponding Loan File.
"Table Funded Trust Receipt" has the meaning specified in the
Custodial Agreement.
"Tangible Net Worth" means the consolidated Total Assets of
Guarantor minus an amount equal to the sum of (x) consolidated Indebtedness of
Guarantor and (y) consolidated intangible assets (including, without limitation,
goodwill) as set forth in the consolidated financial statement of Guarantor.
"Title Policy" has the meaning specified in Paragraph 2 of Exhibit
II, Part 1.
"Total Assets" of any Person shall mean, at any date, the Book
Value of all its properties and assets, whether real, personal or mixed;
provided that Buyer and the respective Seller shall mutually agree upon the
assumptions to be used to evaluate the Book Value of any residual interest or
interest-only securities owned by that Seller or its Affiliates prior to its
inclusion in the calculation of Book Value.
"Total Committed Amount" has the meaning specified in Exhibit I,
Part 3 to this Agreement, as may be amended from time to time upon agreement of
the parties hereto.
"Transaction" has the meaning specified in Section 1 hereof.
"Trust Receipt" means a trust receipt issued by Custodian to Buyer
confirming the Custodian's possession of certain Loan Files which are the
property of and held by Custodian for the benefit of the Buyer or the registered
holder of such trust receipt.
"Underlying Asset" means the Mortgaged Property with respect to a
Mortgage Loan and Land-and-Home Loan, and a Manufactured Home (including
Add-ons) with respect to an MH Loan and Floorplan Loan.
"Underwriting Guidelines" means the underwriting guidelines for
Mortgage Loans, MH Loans, and Floorplan Loans, substantially in the form of
Exhibit III, Parts 1, 2 and 3, to this Agreement as may be amended from time to
time.
"Uniform Commercial Code" or "UCC" means the Uniform Commercial
Code as in effect on the date hereof in the State of New York; provided that if
by reason of mandatory provisions of law, the perfection or the effect of
perfection or non-perfection of the security interest in any Collateral is
governed by the Uniform Commercial Code as in effect in a jurisdiction other
than New York, "Uniform Commercial Code" shall mean the Uniform Commercial Code
as in effect in such other jurisdiction for purposes of the provisions hereof
relating to such perfection or effect of perfection or non-perfection.
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"Used Manufactured Home" means a Manufactured Home that is older
than the 1996 model year.
3. CONDITIONS PRECEDENT; INITIATION; CONFIRMATION;
TERMINATION; MAXIMUM TRANSACTION AMOUNTS; FEES
(a) Conditions Precedent to Initial Transaction. Buyer's
obligation to enter into the initial Transaction hereunder is subject to the
satisfaction, immediately prior to or concurrently with the making of such
Transaction, of the condition precedent that Buyer shall have received the
Commitment Fee from Sellers and any other fees and expenses payable hereunder,
and all of the following documents with respect to each Loan type that is
eligible for purchase, each of which shall be satisfactory to Buyer and its
counsel in form and substance (together with the Confirmation, collectively, the
"Facility Documents"):
(1) Agreement. This Agreement, duly completed, and executed
and delivered by Sellers;
(2) Amended and Restated Custodial Agreement. Amended and
Restated Custodial Agreement, duly executed and delivered by Sellers
and the Custodian;
(3) Uniform Commercial Code Filings. Any filings requested by
Buyer or required under the Uniform Commercial Code duly completed and
executed and such other actions as Buyer shall have requested in order
to perfect the security interests created pursuant to this Agreement;
(4) Blocked Account Agreements. The two Blocked Account
Agreements, duly executed and delivered, respectively, by (i) BAC,
Bloomfield Servicing and NBD Bank, and (ii) MHFC, St. ▇▇▇▇▇ Servicing,
and NBD Bank;
(5) Opinions of Counsel. An opinion or opinions of counsel to
the Sellers and to the Guarantor regarding corporate authority and
perfection of security interests in Loans, in form and substance
acceptable to the Buyer, including affirmations of the current validity
of previously delivered documents; an opinion or opinions of counsel to
MHFC regarding perfection of security interests in MH Paper, in all
states in which MH Paper will be originated, and a written analysis,
satisfactory to Buyer in its sole discretion, from outside counsel to
MHFC regarding the effect on the validity and enforceability of Buyer's
interests in MH Loans and the related Manufactured Homes in those
states in which MHFC has not yet obtained licensing.
(6) Guaranty. The Guaranty, duly executed and delivered by
Guarantor;
(7) Second Side Letter. The Second Side Letter, duly executed
and delivered by BAC;
(8) MH Side Letter. MH Side Letter, duly executed and
delivered by MHFC;
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(9) Second Subordination Letter. The Second Subordination
Letter, duly executed and delivered by all the parties thereto;
(10) Mortgage Loan Servicing Agreement. The Servicing
Agreement, duly executed and delivered by BAC and Mortgage Loan
Servicer;
(11) MH Servicing Agreement. The MH Servicing Agreement, duly
executed and delivered by MHFC and MH Servicer;
(12) Servicing Letter - Mortgage Loan Servicer. A Servicing
Letter, as required under Section 25(d), duly executed and delivered by
the Mortgage Loan Servicer.
(13) Servicing Letter - MH Servicer. A Servicing Letter, as
required under Section 25(d), duly executed and delivered by the MH
Servicer.
(14) Organizational Documents. For each of BAC, MHFC and the
Guarantor, Buyer shall have received a certificate of good standing and
a certificate of the Secretary or Assistant Secretary of each entity
certifying: (i) a copy of its articles of incorporation, (ii) a copy of
its by-laws; (iii) the names and signatures of the officers authorized
on its behalf to execute, deliver and perform under the Facility
Documents, and any other documents to be delivered by it from time to
time in connection therewith (on which the Buyer conclusively rely
until such time as the Buyer shall receive from the Sellers or the
Guarantor, respectively, a revised certificate); and (iv) resolutions
of the Board of Directors of each entity authorizing that entity to
execute, perform under, and deliver the Facility Documents;
(15) Officer's Certificates. An Officer's Certificate of each
Seller, regarding representations and warranties;
(16) Power of Attorney. Two omnibus powers of attorney in
form and substance satisfactory to Buyer, one duly executed and
delivered by each Seller with respect to all of the Loans delivered or
to be delivered by that Seller to Buyer or its designee (including the
Custodian), irrevocably appointing Buyer its attorney-in-fact with full
power to complete, record and/or file the Assignments of Mortgages and
other assignments, complete the endorsement of the Notes and/or MH
Contracts and take such other steps as may be necessary or desirable to
enforce Buyer's rights against such Loans, the related Loan Files and
the Servicing Records;
(17) Underwriting Guidelines. A copy of Sellers' current
Underwriting Guidelines for MH Loans and a copy of any material changes
to BAC's Underwriting Guidelines made since the Underwriting Guidelines
for Conduit Mortgage Loans and Credit Lease Mortgage Loans were last
delivered to Buyer;
(18) Sellers' Loan Documents. Seller's Loan Documents for MH
Loans, as identified in Exhibit V attached hereto, and confirmation
that the previously delivered Seller's Loan Documents for Conduit and
Credit Lease Mortgage Loans remain the complete and true copies of
those used by BAC for such Loans.
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(19) Financial Statements. Interim unaudited (for the period
ended June 30, 1998) financial statements and financial projections for
the upcoming fiscal year for Sellers and Guarantor, to be replaced by
updated final projections within thirty (30) days of the date hereof ;
(20) Insurance Policies. Insurance policies required by
Section 12(o) hereof;
(21) SMMEA Memo. Memo on status of each Seller's SMMEA
qualification;
(22) Designated Fax Distributor Letter. Letter from the
Designated Fax Distributor in which the Designated Fax Distributor
agrees to act as Designated Fax Distributor.
(23) Other Documents. Such other documents as Buyer may
reasonably request.
(b) Conditions Precedent to all Transactions. Buyer's obligation
to enter into each Transaction (including the initial Transaction) is subject to
the satisfaction of the following further conditions precedent, both immediately
prior to entering into such Transaction and also after giving effect thereto to
the intended use thereof:
(1) Underwriting Summary and Draft Loan Schedule. At least
one (1) week prior to the Purchase Date, Buyer and Buyer's Underwriter
shall have received a materially completed underwriting summary (which
may be updated prior to the Purchase Date) and a draft Loan Schedule
for all Loans in the form mutually agreed to by Buyer and the
applicable Seller with respect to each Mortgage Loan to be purchased on
such Purchase Date;
(2) Completion of Due Diligence. Buyer shall have completed
its due diligence to its satisfaction with respect to each Eligible
Loan to be purchased on such Purchase Date;
(3) Requests for Purchase. With respect to each Loan other
than a Table Funded Mortgage Loan, no later than 12:00 noon (New York
time) three Business Days prior to the specified Purchase Date and
promptly upon rate-locking with respect to any Table Funded Mortgage
Loan, Buyer, and Custodian, shall have received an executed final
Request for Purchase containing an Officer's Certificate of a Seller
certifying that such Seller is in compliance with all covenants,
representations and warranties in the Agreement, including without
limitation, the Loan Representations, and a final Loan Schedule, via
facsimile and in electronic form, with respect to each Loan to be
purchased on the Purchase Date;
(4) Trust Receipts. For each Loan other than a Table Funded
Mortgage Loan, a Trust Receipt and a Loan Schedule, with such
exceptions as are acceptable to Buyer in its sole discretion in respect
of Eligible Loans to be sold hereunder on such Purchase Date, in each
case dated such Purchase Date and duly completed. For each
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Table Funded Mortgage Loan, a Table Funded Trust Receipt and a Loan
Schedule, in each case dated such Purchase Date and duly completed;
(5) Documents. For each Loan other than a Table Funded
Mortgage Loan, the documentation set forth in Annex A and Annex B of
the Custodial Agreement. For each Table Funded Mortgage Loan, Buyer and
Custodian shall have received a fax of the Initial Table Funded Loan
Documents;
(6) No Seller Default. No Event of Default or material
Default shall have occurred and be continuing;
(7) Underwriting Guidelines. The applicable Seller shall have
provided Buyer with any changes to that Seller's Underwriting
Guidelines prior to the effectiveness of any such change;
(8) Payment of Administration Fees. Buyer shall have received
the Administration Fee for each Loan that will be purchased in such
Transaction, as to which an Administration Fee is payable, or the Buyer
may deduct such Administration Fees from the Purchase Price disbursed
on such Purchase Date; and
(9) Loan Transfer Agreements. Any Loan Transfer Agreements
applicable to Loans to be purchased by Buyer hereunder.
(c) Conditions Precedent to Bridge Mortgage Loan and Interim
Mortgage Loan Transactions. Buyer's obligation to enter into each Transaction
that includes Bridge Mortgage Loans or Interim Mortgage Loans (other than the
Grandfathered Loans) is subject to satisfaction of the conditions precedent set
forth in Section 3(b) hereof, as they relate to Bridge Mortgage Loans and
Interim Mortgage Loans, and delivery of the Underwriting Guidelines and Seller's
Loan Documents for Bridge Mortgage Loans and Interim Mortgage Loans. BAC shall
not be assessed a Commitment Fee or Non-Use Fee on Bridge Mortgage Loans or
Interim Mortgage Loans until such time as a Bridge Mortgage Loan or Interim
Mortgage Loan (other than the Grandfathered Loans) becomes subject to a
Transaction, and, at such time, the fees payable with respect to Bridge Mortgage
Loans and Interim Mortgage Loans, respectively, shall be those set forth in
Exhibit I, Part I of this Agreement, as may be amended from time to time by the
parties hereto.
(d) Conditions Precedent to Floorplan Loan Transactions. Buyer's
obligation to enter into each Transaction that includes Floorplan Loans is
subject to the satisfaction of the conditions precedent set forth in Section
3(b) hereof as they relate to Floorplan Loans, delivery of the Underwriting
Guidelines and Seller's Loan Documents for Floorplan Loans, delivery of executed
Consignment Agreements and Assignments of Consignment Agreements with respect to
each consignee of Manufactured Homes, and delivery of opinions and other
documents requested by Buyer to assure that its interests in Floorplan Loans
will be protected.
(e) Initiation and Confirmation. An agreement to enter into a
Transaction shall be initiated by a Seller's delivery of a Request for Purchase
to Buyer. Buyer shall confirm the terms of each Transaction by issuing a written
confirmation (a "Confirmation") to such Seller promptly after the Buyer's
receipt of the Request for Purchase. Such Confirmation shall describe
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the Purchased Loans, identify Buyer and Seller and set forth (i) the Purchase
Date, (ii) the Purchase Price, (iii) the Repurchase Date, (iv) the Pricing Rate
applicable to the Transaction and the Buyer's LTV in the case of Bridge Mortgage
Loans, (v) the Applicable Collateral Maintenance Percentages and (vi) additional
terms or conditions not inconsistent with this Agreement. After receipt of the
Confirmation, the Seller shall sign the Confirmation and promptly return it to
Buyer.
Any Confirmation by Buyer shall be deemed to have been received by
the Seller on the date actually received by the Seller. Each Confirmation,
together with this Agreement, shall be conclusive evidence of the terms of the
Transaction(s) covered thereby unless objected to in writing by the Seller no
more than three (3) Business Days after the date the Confirmation was received
by the Seller or unless a corrected Confirmation is sent by Buyer. An objection
sent by a Seller must specifically state the objection, must specify the
provision(s) being objected to by the Seller, must set forth such provision(s)
in the manner that the Seller believes they should be stated, and must be
received by Buyer no more than three (3) Business Days after the Confirmation
was received by the Seller.
(f) Funding of Transactions. Buyer will only provide funds for
purchase of Table Funded Mortgage Loans to and through the Settlement Agent as
provided in the Request for Purchase approved by Buyer. All other Transactions
will be funded in accordance with the Seller's written instructions in the
Request for Purchase approved by Buyer. All such fundings will be in immediately
available funds in U.S. dollars and effected through wire transfer arrangements
acceptable to both Seller and Buyer.
(g) Minimum and Maximum Transaction Amounts. With respect to all
Transactions hereunder, the aggregate Purchase Price for all Purchased Loans at
any one time subject to then outstanding Transactions under this Agreement shall
not exceed the Total Committed Amount. Further, the aggregate Purchase Price of
all Eligible Loans for which a Request for Purchase is submitted by a Seller
pursuant to this Agreement, and the aggregate outstanding principal balance of
all Purchased Loans at any one time subject to then outstanding Transactions
under this Agreement, shall conform to the amounts and limitations set forth in
Exhibit I, Part 3. Buyer shall have no obligation to enter any Transaction if at
such time a Default or Event of Default shall have occurred and be continuing.
(h) Additional Costs. The Sellers shall pay directly to Buyer
from time to time such amounts as Buyer may determine to be necessary to
compensate Buyer for any costs that Buyer determines are attributable to its
using a LIBOR-based Pricing Rate or its obligation to use a LIBOR-based Pricing
Rate hereunder, or any reduction in any amount receivable by Buyer hereunder in
respect of the Pricing Rate (such increases in costs and reductions in amounts
receivable being herein called "Additional Costs"), resulting from any change
that:
(1) shall subject Buyer to any tax, duty or other
charge in respect of such LIBOR-based Pricing Rate or changes the basis
of taxation of any amounts payable to such Buyer under this Agreement
in respect of any of such LIBOR-based Pricing Rate (excluding changes
in the rate of tax on the overall net income of such Buyer by the
jurisdiction in which Buyer has its principal office); or
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(2) imposes or modifies any reserve, special deposit or
similar requirements relating to any LIBOR-based Pricing Rate; or
(3) imposes any other condition affecting this Agreement or
the transactions contemplated hereby or thereby.
Buyer shall deliver to the Sellers a statement setting forth the
amount and basis of determination of any Additional Costs in such detail as
determined in good faith by Buyer to be adequate, it being agreed that such
statement and the method of its calculation shall be adequate and shall be
conclusive and binding upon the Sellers, absent manifest error.
(i) Limitation on Pricing Rate Used; Illegality. Anything
herein to the contrary notwithstanding, if, on or prior to the determination
of the Pricing Rate:
(1) the Buyer determines, which determination shall be
conclusive, that quotations of interest rates for the relevant deposits
referred to in the definition of "LIBOR" in Section 2 hereof are not
being provided in the relevant amounts or for the relevant maturities
for purposes of determining the Pricing Rates as provided herein; or
(2) the Buyer determines, which determination shall be
conclusive, that the relevant rate of interest referred to in the
definition of "Pricing Rate" in Section 2 hereof upon the basis of
which the Pricing Rate is to be determined is not likely adequately to
cover the cost to the Buyer of purchasing the Purchased Loans using
such Pricing Rate; or
(3) it becomes unlawful for the Buyer to honor its obligation
to purchase Loans hereunder using a Pricing Rate based upon LIBOR;
then the Buyer shall give the Sellers prompt notice thereof and,
so long as such condition remains in effect, the Buyer shall be under no
obligation to enter into additional Transactions, and the Sellers shall, either
repurchase all Purchased Loans then subject to a Transaction or the new Pricing
Rate shall be determined based upon the rate selected by the Buyer in a manner
that is reasonably satisfactory to Buyer so as to adequately reflect the cost to
Buyer of purchasing the Purchased Loans using such substituted Pricing Rate (in
which case Buyer shall continue to be obligated to enter into additional
Transactions using that substituted Pricing Rate).
(j) Termination and Repurchase; Exit Fee.
(1) Notice of Repurchase. A Seller may at any time and from
time to time repurchase the Purchased Loans subject to a Transaction,
in whole or in part, upon at least one (1) Business Day's irrevocable
notice to Buyer, specifying the Repurchase Date of such repurchase and
the Repurchase Price. If any such notice is given, the Repurchase Price
specified in such notice shall be due and payable on the Repurchase
Date specified therein, together with any amounts payable pursuant to
subsection 3(j)(3) hereof. Notice of repurchase pursuant to this
subsection 3(j)(1) shall be made by a Seller by telephone or otherwise,
no later than 1:00 p.m. (New York Time) on the Business Day prior to
the day on which such repurchase will be effected.
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(2) Transfer of Purchased Loans. On the Repurchase Date,
termination of the Transaction will be effected by transfer to a Seller
or its designee of the Purchased Loans (and any Income in respect
thereof received by Buyer not previously credited or transferred to, or
applied to the obligations of, the Seller pursuant to Section 5 hereof)
against the simultaneous transfer of the Repurchase Price plus any
Breakage Costs, as defined below, payable by the Seller to Buyer
pursuant to the succeeding paragraph to an account of Buyer. The Seller
is obligated to obtain the Loan Files from Buyer or its designee at
Seller's expense on the Repurchase Date.
(3) Breakage Costs. If a Seller repurchases the Purchased
Loans on any day which is not a Repurchase Date for such Loans, such
Seller shall indemnify Buyer and hold Buyer harmless from any loss or
expense which Buyer may sustain or incur arising from the reemployment
of funds obtained by Buyer hereunder or from fees payable to terminate
the deposits from which such funds were obtained, but not including
loss of profit ("Breakage Costs"). Buyer shall deliver to the Seller a
statement setting forth the amount and basis of determination of any
Breakage Costs in such detail as determined in good faith by Buyer to
be adequate, it being agreed that such statement and the method of its
calculation shall be adequate and shall be conclusive and binding upon
the Seller, absent manifest error. This Section shall survive
termination of this Agreement and repurchase of all Purchased Loans
subject to Transactions hereunder.
(4) Exit Fee. In the event that a Seller repurchases any
Purchased Loans subject to a Transaction whether on the Repurchase Date
or otherwise, that Seller agrees to pay Buyer an exit fee (the "Exit
Fee"), if such Purchased Loan is subject to an Exit Fee pursuant to
Exhibit I, Part 1 hereof, each such payment to be made in U.S. dollars,
in immediately available funds, without deduction, set-off or
counterclaim, to Buyer at the account designated by Buyer. Without
limiting the generality of the foregoing, any Exit Fee shall accrue and
be payable as a condition to delivery by Buyer of the related Purchased
Loans that are subject to this Agreement at the time of any repurchase
or termination of this Agreement. No Exit Fee shall be payable if the
Seller refinances the Purchased Loan due for repurchase and
simultaneously subjects such refinanced Mortgage Loan to a Transaction.
However, an Exit Fee shall be payable on such refinanced Mortgage Loan
at the earlier of (i) the time of its repurchase or (ii) termination of
this Agreement, at the rates set forth in Exhibit 1, Part 1 depending
on the classification of such Loan.
(k) Non-Use Fee. Seller shall pay Buyer any Non-Use
Fee as and when required, as set forth in Exhibit I, Part 1 to this Agreement.
4. COLLATERAL MAINTENANCE AMOUNT
(a) Collateral Deficit; Additional Loans. If at any time (i) the
aggregate Market Value of all Purchased Loans subject to then outstanding
Transactions is less than the aggregate Collateral Maintenance Amount for all
such Transactions (a "Market Value Collateral Deficit"), or (ii) the aggregate
Securitization Value of all Purchased Loans subject to then outstanding
Transactions is less than the aggregate Collateral Maintenance Amount for all
such Transactions (a "Securitization Value Collateral Deficit"), then Buyer may
by notice to the Seller require the Seller to transfer to Buyer or its designee
(including the Custodian) additional Eligible
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Loans ("Additional Loans") or cash, so that the cash and aggregate Market Value
and aggregate Securitization Value of the Purchased Loans, including any such
Additional Loans, will thereupon equal or exceed the aggregate Collateral
Maintenance Amount. Any cash remitted by a Seller to Buyer pursuant to this
Section 4(a) shall be deemed a payment of all or part of the Repurchase Price
and such Seller shall be liable for and shall pay promptly to Buyer any Breakage
Cost as a result therefrom.
(b) Notice of Deficit and Required Payment or Delivery. Notice
required pursuant to subsection (a) above may be given by means of telecopier or
telegraphic transmission. A notice for the payment or delivery in respect of a
Collateral Deficit received before noon on a Business Day, local time of the
party receiving the notice, must be met not later than 5:00 p.m. (New York time)
on the Business Day following the day upon which the notice was given, local
time of the party receiving the notice. Any notice given on a Business Day after
noon, local time of the party receiving the notice, shall be met not later than
2:00 p.m. (New York time) on the second succeeding Business Day. The failure of
Buyer, on any one or more occasions, to exercise its rights under subsection (a)
of this Section 4 shall not change or alter the terms and conditions to which
this Agreement is subject or limit the right of the Buyer to do so at a later
date. Buyer and Sellers agree that a failure or delay to exercise its rights
under subsection (a) of this Section 4 shall not limit Buyer's rights under this
Agreement or otherwise existing by law or in any way create additional rights
for Sellers.
(c) No Further Transactions Until Deficit Remedied. In the event
that either of the Sellers fail to comply with the provisions of this Section 4,
Buyer shall not be obligated to enter into any additional Transactions under
this Agreement after the date of such failure.
5. INCOME PAYMENTS
(a) Sellers' Limited Right to Income Payments. All Income with
respect to Purchased Loans subject to Transactions shall be held in a segregated
Blocked Account established with respect to that Seller at the Lockbox Bank for
the benefit of Buyer (pursuant to Section 29 of this Agreement) and distributed
under the relevant Blocked Account Agreement. Where a particular Transaction's
term extends over an Income payment date on the Purchased Loans subject to that
Transaction such Income shall be the property of Buyer. Notwithstanding the
foregoing, so long as no Event of Default shall have occurred and be continuing,
each Seller shall be entitled to all Income with respect to that Seller's
respective Purchased Loans subject to Transactions. An Event of Default by
either Seller is considered an Event of Default by both Sellers.
(b) Payments by Obligors. The parties understand and agree that
each Obligor must be instructed to remit payments to a Blocked Account
established at the Lockbox Bank in the name of a Seller subject to the lien of
Buyer, as more particularly addressed in Section 29 of this Agreement.
(c) Curtailments, Principal Payments and Prepayments. BAC must
instruct Dealers to make Curtailment payments, and both Sellers shall instruct
all Obligors on all Loans to make all payments, including prepayment payments,
directly to the appropriate Blocked Account for distribution to the Buyer on the
Payment Date following receipt thereof. Principal prepayments, Curtailments, or
any other payment received in respect of Purchased Loans shall be
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deposited into the Blocked Account, no later than one (1) Business Day following
receipt by a Seller, Mortgage Loan Servicer or MH Servicer thereof, as
applicable. Whenever a Curtailment payment or prepayment on any Loan is made to
the Buyer, the Repurchase Price of the corresponding Loan shall be reduced by
the amount of such payment, or, at Seller's option, and subject to a notice of
repurchase given pursuant to Section 3(j)(1) hereof, the Loans may be
repurchased pursuant to Section 3(j)(2) hereof, subject to any Breakage Cost due
pursuant to Section 3(j)(3) hereof.
(d) Required Periodic Payments to Buyer. Notwithstanding that
Buyer and Sellers intend that the Transactions hereunder be sales to Buyer of
the Purchased Loans, Sellers shall pay by wire transfer to Buyer the accreted
value of the Price Differential (less any amount of such Price Differential
previously paid by Sellers to Buyer) (each such payment, a "Periodic Payment")
on each Payment Date.
(e) Payments on Payment Date. All payments received from Obligors
in respect of Purchased Loans shall be remitted to Buyer on the Payment Date in
accordance with Section 29 to this Agreement. Each Seller shall deliver or cause
to be delivered to Buyer on the second Business Day immediately preceding the
Payment Date (i) a Distribution Worksheet and (ii) the updated Collateral
Information with respect to all of that Seller's Loans then subject to
Transactions.
(f) Deduction from Repurchase Price. Buyer shall deduct from the
Repurchase Price of each such Transaction all Income payments, including
Curtailment payments, and all Periodic Payments related thereto, actually
received by Buyer pursuant to Sections 5(a) through (d) hereof.
6. SECURITY INTEREST
(a) Grant of Security Interest and Cross-Collateralization. Buyer
and the Sellers intend that the Transactions hereunder be sales to Buyer of the
Purchased Loans and not loans from Buyer to Sellers secured by the Purchased
Loans. However, in order to preserve Buyer's rights under this Agreement in the
event that a court or other forum recharacterizes the Transactions hereunder as
loans and as security for the performance by Sellers of all of Sellers'
obligations to Buyer under this Agreement and the Transactions entered into
pursuant to this Agreement, both Sellers grant Buyer, on a cross-collateralized
basis with all outstanding Transactions, a first priority security interest in
the Purchased Loans, including the indebtedness of Obligors and the Underlying
Assets, including all Manufactured Homes now owned or hereafter acquired, as
collateral for Floorplan Loans and MH Loans, and all other collateral provided
as security for the Purchased Loans; Servicing Agreements, Back-up Servicing
Agreements, Servicing Records, insurance, guarantees, indemnities and warranties
and proceeds thereof, financing statements and other agreements or arrangements
of whatever character from time relating to the Purchased Loans, Income, any and
all ▇▇▇▇▇▇, all Insured Closing Letters and the Escrow Instructions covering any
or all of the Loans, all Collections and the Blocked Accounts and all amounts on
deposit therein, any and all collection accounts and escrow accounts relating to
the Purchased Loans, all MH Contracts, Dealer Financing Agreements, and other
Loan Agreements, the Loan Documents, all Consignment Agreements, sale contracts,
security agreements, the right to payment of interest or finance charges and
collateral securing such obligations, and any other contract rights, and other
assets relating to the Purchased Loans
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or any interest in the Purchased Loans, whether constituting real or personal
property, accounts, chattel paper, equipment, goods, instruments, general
intangibles, inventory or proceeds, or securities backed by or representing an
interest in such Loans, and any and all replacements, substitutions,
distributions on or Proceeds of any and all of the foregoing (collectively, the
"Collateral").
(b) Payment of Costs of Perfection. Sellers shall pay all fees
and expenses associated with perfecting Buyer's security interest in the
Collateral, including, without limitation, the cost of filing financing
statements under the Uniform Commercial Code and recording Assignments of
Mortgages and other assignments, as and when required by Buyer in its sole
discretion.
(c) Additional Actions. Sellers covenant to take such further
actions as are necessary in order to perfect Buyer's first priority security
interest in the ▇▇▇▇▇▇ or in any other Collateral.
(d) Joint and Several Liability. Each Seller hereby acknowledges
and agrees that such Seller shall be jointly and severally liable for all
representations, warranties, covenants, obligations and indemnities of the
Sellers hereunder.
7. PAYMENT, TRANSFER AND CUSTODY
(a) Payments by Sellers. Unless otherwise mutually agreed in
writing, all transfers of funds by Sellers hereunder shall be made in
immediately available funds in U.S. dollars, without deduction, set-off or
counterclaim, to Buyer at the account designated by Buyer.
(b) Custodial Delivery. On or before each Purchase Date, the
respective Seller shall deliver or cause to be delivered to Buyer or its
designee the Custodial Delivery in the form of Exhibit 7-1 and Exhibit 7-2 of
the Custodial Agreement. With respect to each Table Funded Mortgage Loan, BAC
shall cause the Settlement Agent or Designated Fax Distributor to deliver to the
Custodian by facsimile the Initial Table Funded Loan Documents. A Designated Fax
Distributor acts as fiduciary on behalf of Buyer in performing its
responsibilities hereunder.
(c) Transfer of Ownership. On the Purchase Date for each
Transaction, ownership of the Purchased Loans shall be transferred to the Buyer
or its designee (including the Custodian) against the simultaneous transfer of
the Purchase Price to an account of the respective Seller specified in the
Confirmation. The Seller, simultaneously with the delivery to Buyer or its
designee (including the Custodian) of the Purchased Loans relating to each
Transaction hereby sells, transfers, conveys and assigns to Buyer or its
designee (including the Custodian) without recourse, but subject to the terms of
this Agreement, all the right, title and interest of the Seller in and to the
Purchased Loans together with all right, title and interest in and to the
proceeds of any related insurance policies.
(d) Delivery of Loan File. In connection with each sale,
transfer, conveyance and assignment, or pledge, (i) three (3) Business Days
prior to each Purchase Date with respect to each Loan other than a Table Funded
Mortgage Loan, and (ii) by no later than 12:00 noon (New York time) on the third
Business Day following the applicable Purchase Date with respect to each Table
Funded Mortgage Loan, the Sellers shall deliver or cause to be delivered and
released to the Custodian the original documents pertaining to each Purchased
Loan set forth in Annex A
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and Annex B of the Custodial Agreement. The Loan Files shall be maintained in
accordance with the Custodial Agreement.
(e) Buyer shall deposit the Loan Files representing the Purchased
Loans, or direct that the Loan Files be deposited directly, with the Custodian.
The Loan Files shall be maintained in accordance with the Custodial Agreement.
(f) Any documents related to a Loan which have not been delivered
to Buyer or its designee (including the Custodian) are and shall be held in
trust by the applicable Seller or its designees for the benefit of Buyer as the
owner thereof. The Seller or its designees shall maintain the related Servicing
File consisting of a copy of the Loan File and the originals of other documents
related to the Loans not delivered to Buyer or its designee. The possession of
the Servicing Files by Sellers or their designees is at the will of the Buyer
for the sole purpose of servicing the related Purchased Loan(s), and such
retention and possession by the Sellers or their designees is in a custodial
capacity only. In addition to copies of the Loan Documents, the Servicing File
shall include, without limitation, (i) the original or copy certified by an
employee of the Seller of the credit application signed by the Obligor and the
Obligor credit bureau report(s) obtained by the Seller during the underwriting
of the Obligor's credit application, (ii) the Seller's credit worksheet together
with the credit score of the Obligor (which may be maintained by the Seller in
its computer database), (iii) in the case of a new Manufactured Home, the
manufacturer's invoice in respect of such Manufactured Home, and in the case of
Mortgage Loans, Pre-owned Manufactured Homes and Land-and-Home Loans, an
appraisal or other acceptable documentation as permitted pursuant to the terms
and conditions of the Underwriting Guidelines, corroborating the indicated value
thereof, (iv) proof of all insurance coverage required hereunder, including
without limitation, hazard insurance or blanket hazard insurance, (v) copies of
the letter or other written instruction delivered to each Obligor directing that
payments be made to the relevant Lockbox Account, (vi) all documents evidencing
origination in accordance with the Underwriting Guidelines and (vii) copies of
all material correspondence. The books and records (including, without
limitation, any computer records or tapes) of each Seller or their designees
shall be marked appropriately to reflect clearly the sale of the related
Purchased Loan to Buyer. Sellers and their designees (including the Custodian)
shall release their custody of Servicing Files only in accordance with written
instructions from Buyer, unless such release is in connection with a repurchase
of any Purchased Loan by a Seller.
8. REHYPOTHECATION OR PLEDGE OF PURCHASED LOANS
Title to all Purchased Loans shall pass to Buyer and Buyer shall
have free and unrestricted use of all Purchased Loans. Nothing in this Agreement
shall preclude Buyer from engaging in repurchase transactions with the Purchased
Loans or otherwise pledging, repledging, hypothecating, or rehypothecating the
Purchased Loans, but no such transaction shall relieve Buyer of its obligations
to transfer Purchased Loans to Sellers pursuant to Section 3 hereof. Nothing
contained in this Agreement shall obligate Buyer to segregate any Purchased
Loans delivered to Buyer by Sellers; provided that Buyer acknowledges that the
Custodian is contractually obligated to segregate the Loan Files pursuant to the
Custodial Agreement. In the event that there is a material adverse change or
other development in the repurchase markets which result in the Buyer being
unable to finance its position through the repurchase market with its
traditional repurchase counterparties, Buyer may accelerate the Final Repurchase
Date of one
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or more, or all, of any Loan or Loans and/or types of Purchased Loans to the
date of such occurrence.
9. SUBSTITUTION
(a) Sellers' Right to Substitute Eligible Loans. Subject to
Section 9(b) below, Sellers may, upon one (1) Business Days' written notice to
Buyer, with a copy to Custodian, substitute other Eligible Loans for any
Purchased Loans. Such substitution shall be made by transfer to Buyer or its
designee (including the Custodian) of the Loan Files of such other Eligible
Mortgage Loans together with a Custodial Delivery and transfer to the Seller or
its designee of the Purchased Loans requested for release. After substitution,
the substituted Eligible Loans shall be deemed to be Purchased Loans subject to
the same Transaction as the released Mortgage Loans.
(b) Limitation on Substitution. Notwithstanding anything to the
contrary in this Agreement, Sellers may not substitute other Eligible Loans for
any Purchased Loans (i) if after taking into account such substitution, a
Collateral Deficit would occur, (ii) such substitution would cause a breach of
any provision of this Agreement or (iii) a Default shall have occurred and be
continuing.
10. REPRESENTATIONS AND WARRANTIES
(a) Mutual Representations and Warranties. Each of Buyer and each
Seller (for itself, not jointly, but severally) represents and warrants to the
other that (i) it is duly authorized to execute and deliver this Agreement, to
enter into the Transactions contemplated hereunder and to perform its
obligations hereunder and has taken all necessary action to authorize such
execution, delivery and performance; (ii) it will engage in such Transactions as
principal; (iii) the person signing this Agreement on its behalf is duly
authorized to do so on its behalf; (iv) this Agreement is legal, valid and
binding obligation of it, enforceable against it in accordance with its terms,
subject to applicable bankruptcy, insolvency, or similar debtor/creditor laws
and general principles of equity and public policy, (v) no approval, consent or
authorization of any Transaction contemplated by this Agreement from any
federal, state, or local regulatory authority having jurisdiction over it is
required or, if required, such approval, consent or authorization has been or
will, prior to the Purchase Date for such Transaction, be obtained; (vi) the
execution, delivery, and performance of this Agreement and the Transactions
hereunder will not violate any law, regulation, order, judgment, decree,
ordinance, charter, by-law, or rule applicable to it or its property or
constitute a default (or an event which, with notice or lapse of time, or both
would constitute a default) under or result in a breach of any material
agreement or other material instrument by which it is bound or by which any of
its assets are affected; (vii) it has received approval and authorization to
enter into this Agreement and each and every Transaction actually entered into
hereunder pursuant to its internal policies and procedures; and (viii) neither
this Agreement nor any Transaction pursuant hereto are entered into in
contemplation of insolvency or with intent to hinder, delay or defraud any
creditor.
(b) Representations and Warranties for Individual Transactions.
BAC and MHFC each represents and warrants to Buyer, with respect to itself, that
as of the Purchase Date for the purchase of any Purchased Loans by Buyer and as
of the date of this Agreement and any
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Transaction hereunder and at all times while this Agreement and any Transaction
hereunder is in full force and effect:
(1) Confirmation. All of the representations and warranties
in this Agreement, including the Loan Representations, are true with
respect to, and all other conditions precedent to the effectiveness of
this Agreement and to each Transaction have been and continue to be met
and satisfied.
(2) Organization. Seller is duly organized, validly existing
and in good standing under the laws and regulations of the state of
Michigan and is duly licensed, qualified, and in good standing in every
state where Seller transacts business and at all times when it held the
Loan in any state where any Underlying Asset is located if the laws of
such state require licensing or qualification in order to conduct
business of the type conducted by Seller therein except where the
failure to be so qualified, licensed or in good standing in such other
jurisdiction could not, individually or in the aggregate, have a
Material Adverse Effect;
(3) No Litigation. There is no action, suit, proceeding,
arbitration or investigation pending or threatened against Seller
which, either in any one instance or in the aggregate, (within the
meaning of Statement of Financial Accounting Standards No. 5), which if
adversely determined would individually or in the aggregate result in
any material adverse change in the business, operations, financial
condition, properties or assets of Seller, or in any material
impairment of the right or ability of Seller to carry on its business
substantially as now conducted, or in any material liability on the
part of Seller, or would affect the validity of this Agreement or any
of the Purchased Loans or of any action taken or to be taken in
connection with the obligations of Seller contemplated herein, or which
would be likely to impair materially the ability of Seller to perform
under the terms of this Agreement;
(4) No Broker. Seller has not dealt with any broker,
investment banker, agent, or other person, except for Buyer, who may be
entitled to any commission or compensation in connection with the sale
of Purchased Loans to Buyer pursuant to this Agreement;
(5) Selection Process. The Purchased Loans were selected from
among the Loans in Seller's portfolio as to which the representations
and warranties set forth in this Agreement could be made and such
selection was not made in a manner so as to result in a Material
Adverse Effect upon Buyer;
(6) Taxes. Seller has filed all Federal income tax returns
and all other material tax returns that are required to be filed by
Seller and have paid all taxes due pursuant to such returns or pursuant
to any assessment received by Seller, except for any such taxes as are
being appropriately contested in good faith by appropriate proceedings
diligently conducted and with respect to which adequate reserves in
accordance with GAAP have been provided. The charges, accruals and
reserves on Seller's books in respect of taxes and other governmental
charges are, in Seller's opinion, adequate;
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(7) No Untrue Statements. To the best of Seller's knowledge,
neither this Agreement nor any written statement made, including
without limitation all financial statements of the Seller or its
Affiliates delivered to Buyer, or any report or other document issued
or delivered or to be issued or delivered by Seller pursuant to this
Agreement, or in connection with, the transactions contemplated hereby
contains any untrue statement of a material fact or omits to state a
material fact necessary to make the statements contained herein or
therein not misleading;
(8) Servicing Practices. The servicing and collection
practices used by Seller, and the origination practices of the related
Qualified Originator, have been in all material respects legal, proper
and prudent and have meet customary industry standards applicable to
similar loans.
(9) Performance of Agreement. Seller does not believe, nor
does it have any reason or cause to believe, that it cannot perform
each and every covenant contained in this Agreement on its part to be
performed;
(10) Seller Not Insolvent. Seller is not, and with the
passage of time does not expect to become, insolvent;
(11) No Event of Default. No Event of Default has occurred
and is continuing under this Agreement;
(12) ERISA. Each Plan to which Seller or its Subsidiaries
make direct contributions, and, to the knowledge of Seller, each other
Plan and each Multiemployer Plan, is in compliance in all material
respects with, and has been administered in all material respects in
compliance with, the applicable provisions of ERISA, the Code and any
other federal or state law;
(13) Requirements for Perfection. The Perfection Requirements
Memorandum required under Section 12(r) is a true, complete, current
and accurate explanation of document and filing requirements necessary
to effect perfection of Buyer's interests Manufactured Homes and the
related MH contracts.
(14) Lending facilities. Neither Seller has a line of credit
or other lending arrangement with any Person other than Sun
Communities, Inc. and/or Guarantor.
(15) Computer Systems The computer systems utilized by each
Seller and Servicer (other than the Mortgage Servicer) in the
performance of their servicing activities under this Agreement and any
Servicing Agreement is capable of properly performing any calculations
and recordkeeping functions with respect to the Loans on and after
January 1, 2000.
(c) Individual Loans. Each Seller makes the following
representations and warranties with respect to each individual Loan it sells in
a Transaction hereunder, as of the related Purchase Date and as of each day such
Transaction is in effect, except as shall be specifically disclosed in the
schedule attached to the related Request for Purchase.
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(1) Good Title; No Adverse Claims. Seller is the sole owner
and holder of the Loan and has good, valid, indefeasible, marketable
title thereto, and full right, power and authority to sell, transfer
and assign such Loan to Buyer, free and clear of any Adverse Claim
(including, with respect to Mortgage Loans, mechanics', materialman's
or other similar liens or claims which have been filed for work, labor
or materials affecting Mortgaged Property which are or may be liens
prior to, or equal or coordinate with, the lien of the Mortgage, unless
such lien is insured against under a Title Policy) or Restrictions on
Transferability. The Loan, if purchased or otherwise acquired by
Seller, was acquired by Seller for fair value and in the ordinary and
regular course of its business, and Seller took possession thereof
without knowledge that the Loan was subject to a security interest. The
Qualified Originator, if any, has not sold, assigned or pledged the
Loan to any Person other than Seller and, prior to the transfer of the
Loan by Qualified Originator to Seller, Qualified Originator had good
and indefeasible title thereto free and clear of any Adverse Claim or
Restrictions on Transferability and was the sole owner and holder
thereof with full right to sell, assign and transfer the Loan to Seller
free and clear of any Adverse Claim, and upon such sale, Seller
acquired a valid ownership interest in such Loan, free and clear of any
Adverse Claim and any other Restriction on Transferability. Neither
Seller or any other party has sold, assigned or pledged the Loan to any
Person other than Buyer (unless a collateral assignment that has been
fully terminated prior to the assignment of that Loan by Seller to
Buyer under this Agreement). Following the purchase by Buyer of each
Loan, the Buyer will hold such Loan free and clear of any Adverse Claim
or Restrictions on Transferability.
(2) Security Interest in the Loan. Although intended as a
sale to Buyer, in the event of recharacterization of the sale of any
Loan to Buyer as a financing, Buyer has a valid, binding, enforceable
first priority perfected security interest therein. The Loan is not and
has not been secured by any collateral except the lien of the
corresponding Underlying Asset.
(3) Origination Practices. The Loan was originated by a
Qualified Originator in the regular course of its business, and, if
purchased by Seller, was purchased in the regular course of its
business. The origination practices used by Seller or by any Affiliate
of Seller with respect to each Purchased Loan (as well as all parties
which have had any interest in the creditor/lender's interest in each
such Loan, during the period in which they held and disposed of such
interest) (i) have been and are in all respects legal and proper in the
mortgage origination business and in compliance with the requirements
of federal and state laws, rules and regulations applicable to each
Loan, including without limitation, truth-in-lending, real estate
settlement procedures, consumer credit protection, equal credit
opportunity and disclosure laws and (ii) are in accordance with the
Underwriting Guidelines attached hereto as Exhibit III and the
documentation is consistent in form and substance with the Seller's
Loan Documents approved by Buyer for use under this Agreement, and each
material deviation therefrom appears on a schedule attached to the
Request for Purchase and no such deviation (regardless of whether or
not considered material by Seller) would be deemed to be imprudent by a
prudent lender experienced in originating Loans of that nature, and in
no event will have a Material Adverse Effect. All Loan Documents
included in the Loan File have been duly executed as required by their
provisions and the provisions of applicable law and are in a
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form generally acceptable to prudent institutional lenders that
regularly originate and purchase Loans of the type subject to each Loan
Transaction.
(4) Loan Eligibility Requirements. Each of the Purchased
Loans and each Eligible Loan delivered hereunder as Additional Loans or
Substituted Loans conforms to the Loan Eligibility Requirements in all
material respects and has a stated maturity and is denominated in
United States Dollars. It is understood and agreed that the Loan
Representations shall survive delivery of the respective Loan File to
Buyer or its designee (including the Custodian).
(5) Conformance with Representations and Warranties. Each
Loan sold hereunder and each pool of Purchased Loans sold by a Seller
in a Transaction hereunder conforms to the applicable representations
and warranties in Exhibit II of this Agreement in all material respects
and each Eligible Loan delivered hereunder as an Additional Loan or
Substituted Loan conforms to those representations and warranties in
all material respects.
(6) Correct Collateral Information. As of the date of its
delivery, the Collateral Information with respect to the Loan in the
Request for Purchase and the Loan Schedule is complete, true and
correct in all material respects.
(7) Enforceability of Loan Documents. (A) The Loan Documents
have been duly and properly executed, and (B) the Loan Documents are
legal, valid and binding obligations of the Obligor, and their terms
are enforceable against the Obligor or other Obligor thereunder,
subject only to bankruptcy, insolvency, moratorium, fraudulent
transfer, fraudulent conveyance and similar laws affecting rights of
creditors generally and to the application of general principles of
equity (regardless of whether such enforcement is considered in a
proceeding at law or in equity). Subject to (B), above, the Loan
Documents contain customary and enforceable provisions such as to
render the rights and remedies of the holder thereof adequate for the
realization against each related Underlying Asset of the material
benefits of the security, including realization by judicial or, if
applicable, non-judicial foreclosure, and there is no homestead of
other exemption under applicable state or federal law that is available
to the Obligor which would materially interfere with such right to
foreclosure. Upon default by an Obligor on a Loan and foreclosure on,
or trustee's sale of, the Underlying Asset pursuant to the proper
procedures, the holder of the Loan will be able to deliver good and
merchantable or marketable title to the Underlying Asset. Any interest
required to be paid by Seller pursuant to state, Federal and local law
has been properly paid and credited.
(8) Legal Capacity. To the best of Seller's knowledge, all
parties to the Note and the related Loan Documents delivered in
connection with the Loan, including individual persons, had the legal
capacity to enter into such documents.
(9) No Limitation Upon Assignment. In connection with the
assignment, transfer or conveyance of any individual Loan or MH
Contract, the Note and other Loan Documents do not contain any
provision limiting the right or ability of the applicable Qualified
Originator to assign, transfer and convey the to any other person or
entity. The Loan was not originated in and is not subject to the laws
of any jurisdiction
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whose laws would make the transfer of the Loan pursuant to any
applicable Loan Transfer Agreement or this Agreement unlawful or render
the Loan unenforceable.
(10) No Usury. The Purchased Loan does not violate or is
exempt from applicable usury laws. All Loan Interest Rate adjustments
have been made in strict compliance with state and Federal law and the
terms of the related Loan.
(11) No Waiver or Modification of Loan Terms. Since the date
of origination of the Loan, the terms of the Loan have not been
impaired, waived, altered, released, rescinded, satisfied, canceled,
extended, subordinated or modified in any respect (except by a written
instrument which has been recorded, if necessary, to protect the
interests of the Buyer, and which has been delivered to the Buyer or
its designee (including the Custodian) for inclusion in the Loan File,
and with respect to which the economic terms of which are reflected in
the Loan Schedule and the Collateral Information), and no portion of
the collateral for the Loan has been released in any manner from the
lien of the encumbrance or security interest created upon the closing
of that Loan in favor of Seller (except if specifically called for
under and pursuant to the Loan Documents and in compliance with the
applicable Underwriting Guidelines, and summarized in the underwriting
summary or other document delivered to Buyer at the time of, or in
connection with, the related Request for Purchase). The substance of
any such waiver, alteration or modification has been approved by the
issuer of any related insurance policy, to the extent required by such
policy.
(12) Full Disbursement; No Additional Services. Except if
specifically permitted under the applicable Loan Eligibility
Requirements and contemplated by the Loan Documents, and the proceeds
of the Loan have been fully disbursed and there is no requirement for
future advances thereunder and Seller covenants that it will not make
any future advances under the Loan to the Obligor. All costs, fees and
expenses incurred by Seller (or which are otherwise payable by the
Obligor under the Loan Documents) in making or closing the Loan and the
recording of the Loan were paid, and the Obligor is not entitled to any
refund of any amounts paid or due under the Loan. Except if
specifically called for under and pursuant to the Loan Documents and in
compliance with the applicable Underwriting Guidelines, and summarized
in the underwriting summary or other document delivered to Buyer at the
time of, or in connection with, the related Request for Purchase, the
Loan is not subject to the performance of additional services by any
Person.
(13) Completion of Improvements. Except for the escrows and
disbursements therefrom, or if specifically permitted under the
applicable Loan Eligibility Requirements, and in each case as
contemplated by the Loan Documents, any Obligor requirements for on or
off-site improvements as to disbursement of any escrow funds therefor
have been complied with.
(14) Commencement of Payments by Obligor. Except for
interest-only Loans (if permitted under the applicable Loan Eligibility
Requirements and Underwriting Guidelines), principal payments on the
Loan commenced, or under the terms of the Loan Documents are to
commence, no more than 60 days after funds were disbursed in connection
with the Loan.
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(15) No Lender Participation. The Loan does not have a shared
appreciation feature or provide for contingent or additional interest
in the form of participation in cash flow, or (except in connection
with Mortgage Loan hyperamortization terms approved by Buyer) negative
amortization. Except in connection with Interim Mortgage Loans and
Bridge Mortgage Loans including "preferred equity" features consistent
with the applicable Underwriting Guidelines approved by Buyer, the
indebtedness evidenced by the Loan is not convertible to an ownership
interest in the Underlying Asset or the Obligor and Seller has not
financed nor does it own directly or indirectly, any equity of any form
in the Underlying Asset or the Obligor, unless otherwise approved in
writing by Buyer.
(16) Whole Loan. The Loan is a whole loan and contains no
equity participation by the lender.
(17) No Fraud. No fraudulent acts were committed by Seller or
its affiliates in connection with the origination process of the Loan.
(18) No Default. To the best knowledge of Seller, and other
than with respect to Permitted Delinquencies in connection with MH
Loans, there is no material default, breach, violation or event of
acceleration existing under any of the Loan Documents and Seller has
not received actual notice of any event (other than payments due but
not yet delinquent) which, with the passage of time or with notice and
the expiration of any grace or cure period, would and does constitute a
default, breach, violation or event of acceleration; no waiver by
Seller of the foregoing exists and no person other than the holder of
the Note may declare any of the foregoing. The first Monthly Payment
shall be made, or shall have been made, with respect to the Loan on its
Due Date or within its grace period, all in accordance with the terms
of the related Loan Documents.
(19) No Breach of Obligor's Representations. Seller has not
taken any action, nor has knowledge that the Obligor has taken any
action, that would cause the representations and warranties made by the
Obligor in the Loan Documents not to be true in any material respect.
(20) No Defenses. The Loan is not subject to (and the
assignment thereof to the Buyer pursuant to this Agreement will not
subject the Loan to) any right of rescission, setoff, counterclaim or
defense, including the defense of usury, nor will the operation of any
of the terms of the Loan or the exercise of any right thereunder will
not render the Loan unenforceable in whole or in material part or
subject to any right of rescission, setoff, counterclaim or defense,
including the defense of usury, and to Seller's knowledge, no such
right of rescission, setoff, counterclaim or defense has been asserted
with respect thereto.
(21) No Pending Proceedings. To the best of Seller's
knowledge, there are no proceedings or investigations pending or
threatened before any Governmental Authority (A) asserting the
invalidity of the Loan, (B) asserting the bankruptcy or insolvency of
the related Obligor, (C) seeking the payment of the Loan or payment and
performance of the Loan (other than with respect to Permitted
Delinquencies, if applicable), or (D) seeking any determination or
ruling that might materially and
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adversely affect the validity or enforceability of the Loan, and no
other material action, suit, proceeding, arbitration or investigation
with respect to any of the Underlying Asset is pending (or to Seller's
knowledge) threatened against Seller.
(22) Funded Escrows. Any escrow accounts for taxes or other
reserves required to be funded on the date of origination of the Loan
pursuant to the Loan documents have been funded and all such escrow
accounts required to have been funded as of the Purchase Date (taking
into account any applicable notice and grace period) have been funded
in accordance with the applicable Underwriting Guidelines. All Escrow
Payments have been collected in full compliance with state and Federal
law. All escrow deposits and Escrow Payments required as of the
Purchase Date are in the possession of, or under the control of, Seller
and there exist no deficiencies in connection therewith for which
customary arrangements for repayment thereof have not been made. No
escrow deposits, Escrow Payments or other charges or payments (other
than Extra Costs) due to either Seller have been capitalized under the
Loans.
(23) No Violation of Environmental Laws. Neither Seller nor
any of its Affiliates has received any notice of violation, alleged
violation, non-compliance, liability or potential liability regarding
environmental matters or compliance with any environmental laws with
regard to any of the Underlying Assets, nor does Seller have knowledge
or reason to believe that any such notice will be received or is being
threatened. Seller has not taken any actions which would cause any
Underlying Asset not to be in compliance with all applicable federal,
state and local laws pertaining to environmental hazards.
(24) Delivery of Loan File. The Loan File Documents have been
delivered to the Custodian (or with respect to Table Funded Mortgage
Loans, will be delivered to the Custodian within the time period
required under Section 7 of this Agreement), and (ii) Seller has
delivered to Buyer or its designee all documents required to be
delivered pursuant to this Agreement. Seller or its designee is in
possession of a complete, true and accurate Loan File with respect to
each Purchased Loan, except for such documents the originals of which
have been delivered to the Custodian. All documentation required to be
delivered to the applicable Servicer has been received by that
Servicer.
(25) No Advance of Funds by Seller or Third Party for Debt
Service. Except insofar as the proceeds of the Loan are to be applied
in satisfaction of payments due under the terms of the Loan, as
provided in the Loan Documents, Seller has not advanced funds, or
knowingly received any advance of funds from a party other than the
Obligor subject to the related Loan, directly or indirectly, for the
payment of any amount required by the Loan, and no provision exists in
the Loan Documents anticipating payments by anyone on behalf of the
Obligor by any source other than the Obligor, except under guarantees
that are in the related Loan File.
(26) Recording and Filing Fees. All applicable recording
taxes and other filing fees have been paid in full or deposited with
the Settlement Agent (or the issuer of the Title Policy issued in
connection with a Mortgage Loan or Land and Home Loan) for payment upon
recordation and/or filing of the relevant documents.
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(27) Collateral Undamaged. To the best of Seller's knowledge,
(i) there is no proceeding pending or threatened for the total or
partial condemnation of the Underlying Asset, if any; (ii) the
Underlying Asset is undamaged by waste, fire, earthquake or earth
movement, windstorm, flood, tornado, explosion, accident, riot, war, or
act of God or the public enemy or other casualty so as to materially
and adversely affect the value of the Underlying Asset as security for
the Loan or the use for which the premises (if applicable) were
intended and each Underlying Asset is in good condition and repair and,
except as disclosed in the engineering report and summarized in the
underwriting summary or other document delivered to the Buyer at the
of, or in connection with, the related Request for Purchase, no
material deferred maintenance exists; and (iii) no Underlying Asset has
suffered damage that is not covered by a Hazard Insurance Policy (if
that insurance coverage is required under this Agreement for that
Underlying Asset).
(28) Due on Sale or Transfer Provisions. The Loan Documents
contain provisions for the acceleration of the payment of the unpaid
principal balance of the Loan if (A) the Obligor voluntarily transfers
or encumbers all or any portion of any related Mortgaged Property, or
(B) any direct or indirect interest in Obligor is voluntarily
transferred or assigned, other than, in each case, as permitted under
the terms and conditions of the Loan Documents.
(29) Acceptable Investment. Sellers have no knowledge of any
circumstances or conditions with respect to the Loan or the Underlying
Asset, the Obligor or the Obligor's credit standing that can reasonably
be expected to cause private institutional investors to regard the Loan
as an unacceptable investment, cause the Loan to become delinquent, or
materially and adversely affect the value or marketability of the Loan.
(30) Payment Instructions. Each Obligor has been directed,
and is required to, remit or wire all payments, including prepayment
payments and Curtailment payments, with respect to each Loan for
deposit directly to the appropriate Blocked Account.
(31) Outstanding Charges. All taxes, governmental
assessments, insurance premiums, water, sewer, park and municipal
charges, leasehold payments or ground rents which previously became due
and owing have been paid, or an escrow of funds has been established in
an amount sufficient to pay for every such item which remains unpaid
and which has been assessed but not yet due and payable.
(32) Loan Eligibility Requirements. The Loan meets all of the
Loan Eligibility Requirements set forth herein for that Loan type.
(33) Knowledge of Defects. Seller has no knowledge of any
fact which would lead a reasonably prudent lender to expect at the time
of origination of such Loan that any scheduled payment on such Loan
would not be paid in full when due or to expect any other material
adverse effect on (A) the performance by Seller of its obligations
under the Facility Documents or Loan Documents (B) the validity or
enforceability of any of the Facility Documents or Loan Documents to
which it is a party, (C) the Loans or the
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interests of Seller or Dealer therein or (D) the federal income tax
attributes of the sale or pledge of the Loans.
(34) Necessary Documentation. Seller has submitted to the
Obligor all necessary documentation (including an invoice for Floorplan
Loans, and for MH Loans, as applicable) for payment of such Loan and
has fulfilled all its other obligations in respect thereof. The Obligor
has submitted to Seller all documentation necessary for disbursement of
such Loan and has fulfilled all its other obligations in respect
thereof.
(d) For the purposes of this Agreement (including the Loan
Representations): (i) the term "to Seller's knowledge," means that the
applicable Seller reasonably believes such representation or warranty to be
true, and has no actual knowledge or notice that such representation or warranty
is inaccurate or incomplete, but that such Seller, consistent with the standard
of care exercised by prudent lending institutions originating Loans of the type
to which that representation or warranty applies, has no knowledge of any facts
or circumstances that would render reliance thereon unjustified without further
inquiry; (ii) the term "to the best of Seller's knowledge," means that to such
Seller's knowledge, the representation or warranty is not incomplete or
inaccurate, and such Seller has conducted a reasonable inquiry (consistent with
the standard of care exercised by prudent lending institutions originating Loans
of the type to which that representation or warranty applies) to assure the
accuracy and completeness of the applicable statement; and (iii) the term "in
reliance on" or "based on," means that such Seller has examined and relied in
whole or in part upon the certificate, report, opinion or other referenced
document, that the information contained in such document is sufficient to
support accurately and in all material respects the substance of the applicable
representation or warranty, that such Seller's reliance on such document is
reasonable, prudent and consistent with the standard of care exercised by
prudent lending institutions originating Loans of the type to which that
representation or warranty applies, and although the Seller is under no
obligation to independently verify the information contained in such document,
the Seller believes the information contained therein to be true and accurate in
all material respects and has no knowledge of any facts or circumstances that
would render reliance thereon unjustified without further inquiry. With respect
to any representations and warranties made by each Seller, in the event that it
is discovered that the circumstances with respect to the related Loan are not
accurately reflected in such representation and warranty notwithstanding the
actual knowledge or lack of knowledge of a Seller, then, notwithstanding that
such representation and warranty is made "to the best of the Seller's
knowledge," or "to Seller's knowledge," or in reliance on or based on other
information, the Market Value and/or Securitization Value of such Loans may, in
the Buyer's sole good faith discretion, be reduced to zero based on such Breach.
11. NEGATIVE COVENANTS OF THE SELLERS
On and as of the date of this Agreement and each Purchase Date and
until this Agreement is no longer in force with respect to any Transaction, each
Seller covenants for itself that:
(a) Impair Value of Loans. It will not take any action which
would directly or indirectly impair or adversely affect Buyer's title and right
to the Market Value or Securitization Value of the Purchased Loans;
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(b) Further Liens. It will not pledge, assign, convey, grant,
bargain, sell, set over, deliver or otherwise transfer any interest in the
Purchased Loans or other Collateral to any person not a party to this Agreement
nor will either Seller create, incur or permit to exist any Lien in or on the
Purchased Loans or other Collateral except as described in Section 6 hereof
without the prior express written consent of Buyer;
(c) Merger or Dissolution. It will not enter into any transaction
of merger or consolidation or amalgamation, or liquidate, wind up or dissolve
itself (or suffer any liquidation or dissolution), sell all or substantially all
of its assets or change its name, identity or corporate structure, provided that
the Seller may merge and consolidate with any Person if the Seller is the
surviving corporation, or the entity into which it merges has equity and a
market value of at least that of the Seller immediately prior to such merger and
such entity expressly assumes the obligations of the Seller at the time of such
merger and, after giving effect thereto, no Default or Event of Default would
exist hereunder;
(d) Engage in Other Lines of Business. It will not engage, to any
substantial extent, in any line or lines of business activity other than the
businesses now generally carried on by it;
(e) Restrictions Upon Other Transactions. It will not enter into
any transaction, including, without limitation, any purchase, sale, lease or
exchange of property or the rendering of any service, with any Affiliate unless
such transaction is (a) otherwise permitted under this Agreement, (b) in the
ordinary course of Seller's business and (c) upon fair and reasonable terms no
less favorable to Seller than it would obtain in a comparable arm's length
transaction with a Person which is not an Affiliate, or make a payment to any
Affiliate that is not otherwise permitted by this Agreement;
(f) Loans and Advances. It will not make any advance (other than
advances made as required in connection with servicing Loans in the ordinary
course as to which it owns the servicing rights), loan, extension of credit or
capital contribution to, or purchase any stock, bonds, notes, debentures or
other securities of or any assets constituting a business unit of, or make any
other investment in, any Person;
(g) No Change in Fiscal Year. Its fiscal year will end on
September 30 and it will not make any changes to its fiscal year;
(h) No Adverse Action. It will not take any action which would
result in a Material Adverse Effect upon its business operations and/or
financial condition;
(i) Relocate Offices. It will not move its chief executive office
from its address as of the date hereof unless it shall have provided Buyer
fifteen (15) days' prior written notice of such change; or
(j) Restrictions On Distributions. It will not, after the
occurrence and during the continuation of any Default of which it has notice or
knowledge, or an Event of Default, make any distribution, payment on account of,
or set apart assets for, a sinking or other analogous fund for the purchase,
redemption, defeasance, retirement or other acquisition of any equity or
partnership interest of Seller, whether now or hereafter outstanding, or make
any other
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distribution in respect thereof, either directly or indirectly, whether in cash
or property or in obligations of Seller.
12. AFFIRMATIVE COVENANTS OF THE SELLERS
For so long as this Agreement is in effect:
(a) Notification of Material Adverse Changes. Each Seller
covenants that it will promptly notify Buyer of any material adverse change in
its business operations and/or financial condition;
(b) Confirming Documents Regarding Representations and
Warranties. Each Seller shall provide Buyer with copies of such documentation as
Buyer may reasonably request evidencing the truthfulness of the representations
set forth in Section 10 hereof, including but not limited to resolutions
evidencing the approval of this Agreement by Seller's board of directors or loan
committee, copies of the minutes of the meetings of Seller's board of directors
or loan committee at which this Agreement and the Transactions contemplated by
this Agreement were approved;
(c) Maintenance of First Lien Position. Each Seller shall, at
Buyer's request, take all action necessary to ensure that Buyer will have a
first priority security interest in the related Collateral, including, among
other things, filing such Uniform Commercial Code financing statements as Buyer
may reasonably request;
(d) Notice of Defaults. Each Seller shall notify Buyer, no later
than one (1) Business Day after obtaining actual knowledge thereof, if any event
has occurred that constitutes a Breach, a Default, or an Event of Default with
respect to either Seller;
(e) Changes to Underwriting Guidelines and Loan Documents. Each
Seller covenants to provide Buyer with a copy of any material changes to that
Seller's Underwriting Guidelines or Seller's Loan Documents prior to the
effectiveness of any such change. Buyer shall use reasonable efforts to review
and approve or disapprove such changes within five (5) Business Days or
otherwise within a reasonable amount of time following receipt thereof. In the
event that Buyer does not approve such change in writing, Buyer shall not be
obligated to enter into any Transactions with respect to Eligible Loans
underwritten to such changed Underwriting Guidelines or relating to such changed
Seller's Loan Documents. Each Seller shall notify Buyer prior to entering into
any Significant Modification or assumption agreements with any Obligor and shall
deliver such documents to the Custodian for inclusion in the related Loan Files.
However, MHFC may act in the ordinary course of business as a prudent lender in
connection with MH Loans in making modifications other than Significant
Modifications (which must have prior approval from Buyer), prior to notifying
Buyer, if any only if, such action will not impair Buyer's interest therein and
MHFC notifies Buyer promptly upon making any such change. Any modification or
assumption agreements shall conform with the Seller's Underwriting Guidelines.
If a change in circumstances results in impairment of the marketability of Loans
that are underwritten pursuant to previously approved Underwriting Guidelines,
Buyer may notify Seller that it objects to continued use of such Underwriting
Guidelines, and Buyer shall thereafter be under no obligation to enter into any
Transactions with respect to Loans underwritten in accordance therewith (other
than Transactions for which Seller has issued a commitment letter,
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as to which Buyer shall use good faith efforts to effect the purchase, but the
Market Value and/or Securitization Values given the Loans subject thereto may be
re-adjusted by Buyer, in Buyer's sole discretion, to reflect the impairment of
marketability).
(f) Hedging. Each Seller shall at all times maintain ▇▇▇▇▇▇,
having a notional amount not less than the aggregate outstanding balance of all
fixed rate Purchased Loans with Buyer or an Affiliate thereof, having terms with
respect to protection against fluctuations in interest rates reasonably
acceptable to Buyer. Buyer acknowledges that Seller's purchases of short sales
on U.S. Treasury Securities of equal duration to the Purchased Loans shall be an
acceptable interest rate protection strategy and Hedge program and Buyer shall
make available to Seller a knowledgeable individual for discussion purposes;
(g) Provision of Collateral Information for Each Loan. Each
Seller covenants to provide or cause to be provided to Buyer, by no later than
12:00 noon (New York time), two Business Days immediately preceding each Payment
Date, either by direct modem electronic transmission or via a computer diskette,
the Collateral Information in computer readable format with respect to all
Purchased Loans then subject to Transactions and covenants to provide Buyer with
access to operating statements, the occupancy status and other property level
information, with respect to the properties, plus any such additional reports as
Buyer may reasonably request with respect to pending originations of mortgage
loans;
(h) BAC's Provision of Pipeline Report. BAC covenants to provide,
or cause to be provided to Buyer, the Pipeline Report by no later than 12:00
noon (New York time) two (2) Business Days immediately preceding each Payment
Date, either by direct modem electronic transmission or via computer diskette;
(i) Seller Financial Reporting. Each Seller covenants to provide
Buyer with the following financial and reporting information with respect to
that Seller:
(i) Annual Statements. Within 90 days after the last day of
its fiscal year, Seller's audited consolidated statements of income and
statements of changes in cash flow for such year and balance sheets as
of the end of such year in each case presented fairly in accordance
with GAAP, and accompanied, in all cases, by an unqualified report of a
nationally recognized independent certified public accounting firm
consented to by Buyer (which consent shall not be unreasonably
withheld);
(ii) Quarterly Statements. Within 45 days after the last day
of the first three fiscal quarters in any fiscal year, Seller's
consolidated statements of income and statements of changes in cash
flow for such quarter and balance sheets as of the end of such quarter
presented fairly in accordance with GAAP and certified by an Officer's
Certificate as being complete and correct and fairly presenting the
results of operations, assets and liabilities and financial condition
of that Seller;
(iii) Compliance Certificates. Upon request and in any event
not more frequently than quarterly, an Officer's Certificate from a
senior officer of each Seller addressed to Buyer certifying that, as of
such calendar month, (x) that Seller is in compliance with all of the
terms, conditions and requirements of this Agreement, and (y) no Event
of Default exists; and
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(iv) Consolidated Statements. Buyer acknowledges that each
Seller is a wholly-owned subsidiary of Guarantor and that its financial
statements are prepared in connection with the preparation of audited
statements for Guarantor. For the purposes of satisfying the foregoing
reporting requirements, Sellers shall provide Buyer with copies of
Guarantor's corresponding consolidated statements with consolidating
information specifically applicable to each Seller and Bloomfield
Servicing;
(j) Servicer Financial Reporting. Each Seller covenants for
itself to cause any Servicer or subservicer of its respective Purchased Loans to
provide Buyer with the following financial and reporting information with
respect to that party:
(i) Annual Statements. Within 90 days after the last day of
its fiscal year, the Servicer's or subservicer's audited consolidated
statements of income and statements of changes in cash flow for such
year and balance sheets as of the end of such year in each case
presented fairly in accordance with GAAP, and accompanied, in all
cases, by an unqualified report of a nationally recognized independent
certified public accounting firm (or other independent certified public
accounting firm for the MH Servicer's annual statements for the 1998
fiscal year only) consented to by Buyer (which consent shall not be
unreasonably withheld);
(ii) Quarterly Statements. Within 45 days after the last day
of the first three (3) fiscal quarters in any fiscal year, the
Servicer's or subservicer's consolidated statements of income and
statements of changes in cash flow for such quarter and balance sheets
as of the end of such quarter presented fairly in accordance with GAAP;
(iii) Compliance Certificates. Within 90 days after the last
day of its fiscal year, an Officer's Certificate of the Servicer or
subservicer addressed to Buyer certifying that, as of such calendar
month, the Servicer or subservicer is in compliance with all of the
terms, conditions and requirements of the Servicing Agreement and no
default exists thereunder; and
(iv) Consolidated Statements. Buyer acknowledges that
Bloomfield Servicing is a wholly-owned subsidiary of Guarantor, and
that its financial statements are prepared in connection with the
preparation of audited statements for Guarantor. For the purposes of
satisfying the foregoing reporting requirements with respect to
Bloomfield Servicing, Sellers shall provide Buyer with copies of
Guarantor's corresponding consolidated statements with consolidating
information specifically applicable to each Seller and Bloomfield
Servicing;
(k) Evidence of Compliance with Legal Requirements. For at least
the term of this Agreement, each Seller shall maintain in its possession,
available for Buyer's inspection, and shall deliver to Buyer promptly upon
written request, evidence of compliance with all legal and organizational
requirements applicable to its existence and the origination, servicing and
collection of all Purchased Loans subject to Transactions at any time.
(l) Accepted Servicing Practices. Each Seller shall cause the
servicing of the Purchased Loans to conform to Accepted Servicing Practices;
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(m) Compliance with Representations, Warranties and Eligibility
Requirements. Each Seller shall continue to comply with the representations and
warranties as provided in this Agreement and with the Loan Eligibility
Requirements in all material respects and shall promptly notify Buyer upon
obtaining notice or knowledge of any Breach;
(n) Notice of Benefit Plan Events. Each Seller shall promptly
give notice to Buyer of the following events, as soon as possible and in any
event within 30 days after Seller knows or has reason to know thereof: (i) the
occurrence or expected occurrence of any Reportable Event with respect to any
Plan, a failure to make any required contribution to a Plan, the creation of any
Lien in favor of the PBGC or a Plan or any withdrawal from, or the termination,
Reorganization or Act of Insolvency of, any Multiemployer Plan or (ii) the
institution of proceedings or the taking of any other action by the PBGC or
Seller or any Commonly Controlled Entity or any Multiemployer Plan with respect
to the withdrawal from, or the terminating, Reorganization or Act of Insolvency
of, any Plan;
(o) Maintenance of Insurance. Each Seller covenants to maintain
with financially sound and reputable insurance companies insurance as set forth
below in at least such amounts and against at least such risks as are usually
insured against in the same general area by companies engaged in the same or a
similar business, which insurance shall name the Buyer as an additional loss
payee, in the case of property or casualty insurance, and shall furnish to
Buyer, a certified true copy of such bond and insurance policies, including
policies for Blanket Fidelity Bond and Errors and Omissions Insurance and
key-man life insurance for ▇▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ in the amount of at
least $1,000,000 each, and upon Buyer's request, shall furnish a statement from
the surety and the insurer that such fidelity bond or insurance policy shall in
no event be terminated or materially modified without 30 days' prior written
notice to the Buyer, and such other information with respect thereto as Buyer
may reasonably request;
(p) GAAP. Each Seller covenants that, unless otherwise expressly
stated to the contrary, all financial representations, warranties, covenants and
calculations shall be made in accordance with GAAP;
(q) Transfer of Servicing Upon Default. Each Seller will, upon
the occurrence of a Default, at the Buyer's instruction, transfer servicing to
the Back-up Servicer in a prudent and prompt manner, safeguarding the Buyer's
interest therein.
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(r) Perfection Requirements Memorandum. Sellers shall provide
Buyer and Custodian with a memorandum (the "Perfection Requirements Memorandum"
of the state requirements for perfection of security interests in MH Paper and
the Underlying Assets, indicating which documents must be delivered to Custodian
in order to evidence perfection of Buyer's interest in the collateral covered
thereby and shall keep that list current to reflect any material changes in
those requirements. MHFC shall not propose any MH Loan for purchase and BAC
shall not propose any Floorplan Loan for purchase if the Perfection Requirements
Memorandum not been delivered to Buyer and Custodian;
(s) Executive Bonus Plans. Each Seller shall provide Buyer with a
copy of any Executive Bonus Plans to be adopted by that Seller, as and when
finalized; and
(t) Monthly Inspections. BAC will conduct, or cause to be
conducted by a qualified third party under contract to BAC or the applicable
Servicer, monthly inspections of each Dealer's Property to verify the existence
and condition of the Manufactured Homes securing all Floorplan Loans and shall
provide copies of the results of such inspection to Buyer after completion.
(u) SMMEA-eligibility for Manufactured Homes. MHFC will
diligently pursue its application to the Secretary of Housing and Urban
Development pursuant to section 1703 of Title 12 (Title 1 of the National
Housing Act), for approval for insurance, and will provide Buyer with a
quarterly update of the status of the application at the time it delivers its
financial reports required under Section 12(i) (ii) hereof.
(v) UCC filing for Change of Address. Promptly upon each Seller's
change of address, such Seller shall file a change of address amendment to the
UCC-1 filing previously made in favor of Buyer, in the appropriate filing
office, and shall send an acknowledgment thereof to Buyer.
(w) Provision of forms for effecting assignment of security
interest in Manufactured Homes. MHFC will obtain all applications, documents and
forms that would be required by state recording officers to record Buyer's
interest in the Manufactured Homes that secure MH Loans subject to Transactions,
and will forward such forms to Custodian, as and when received.
(x) Computer Systems The computer systems utilized by the
Mortgage Servicer in the performance of their servicing activities under this
Agreement and its Servicing Agreement will be capable before June 30, 1999 of
properly performing any calculations and recordkeeping functions with respect to
the Loans on and after January 1, 2000.
13. EVENTS OF DEFAULT
(a) If any of the following events (each an "Event of Default")
occur, Sellers and Buyer shall have the rights set forth in Section 14 hereof,
as applicable:
(i) Either Seller, Buyer, or Guarantor fails to satisfy or
perform either:
(A) Any payment or purchase obligation under this
Agreement including without limitation, the payment of the
Repurchase Price when due; or
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(B) Any other material obligation or covenant under this
Agreement, other than an Event of Default specifically included in
any of the other subsections of this Section 13(a) within five (5)
Business Days after notice of such Breach;
(ii) An Act of Insolvency occurs with respect to either
Seller or Buyer or Guarantor;
(iii) There shall occur a Breach of any representation or
warranty made by either Seller or Guarantor that is not corrected or
cured of its inaccuracy within five (5) Business Days of the earlier of
notice or knowledge of such Breach (other than a Breach of a Loan
Representation, which shall not be considered as a Default or an Event
of Default, and instead shall be considered solely for the purpose of
determining the Market Value and Securitization Value of the Loans,
unless a Seller has made any such representation or warranty with
knowledge that it was materially false or misleading at the time made,
in which case it shall constitute an Event of Default);
(iv) Either Seller or Buyer shall admit its inability to, or
its intention not to, perform any of its obligations hereunder,
Guarantor shall admit is inability to perform under the Guaranty;
(v) Any governmental, regulatory, or self-regulatory
authority, including, but not limited to, the Agencies, takes any
action that removes, limits, restricts, suspends or terminates the
rights, privileges, or operations of either Seller or any of its
Affiliates, including suspension as an issuer, lender or
seller/servicer of mortgage loans, which suspension has a Material
Adverse Effect and which continues for more than 24 hours;
(vi) Either Seller or Guarantor dissolves, merges or
consolidates with another entity (unless (A) it is the surviving party
or (B) the entity into which it merges has equity and a market value of
at least that of the Seller or Guarantor, as the case may be,
immediately prior to such merger and such entity expressly assumes the
obligations of the Seller or Guarantor at the time of such merger), or
sells, transfers, or otherwise disposes of a material portion of its
business or assets without Buyer's prior written consent;
(vii) Buyer, in its good faith judgment, believes that there
has been a material adverse change in the business, operations,
corporate structure or financial condition of either Seller or the
Guarantor or that either Seller or the Guarantor will not meet any of
its obligations under any Transaction pursuant to the Facility
Documents, this Agreement, servicing requirements, the Guaranty or any
other agreement between the parties;
(viii) A final nonappealable judgment by any competent court
in the United States of America for the payment of money in an amount
of at least $250,000 is rendered against either Seller or the
Guarantor, and the same remains undischarged, unbonded or unpaid for a
period of sixty (60) days during which execution of such judgment is
not effectively stayed;
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(ix) This Agreement and the related Facility Documents
shall for any reason cease to create a valid, first priority security
interest in any of the Purchased Loans purported to be covered hereby;
(x) A Market Value Collateral Deficit or Securitization
Value Collateral Deficit occurs with respect to either Seller, as
applicable, and is not eliminated within the time period specified in
Section 4(b) hereof;
(xi) An "event of default" or other material breach has
occurred pursuant to (A) a Hedge entered into upon request of Buyer
pursuant to Section 12(f) hereof, (B) the Custodial Agreement, (C) any
Blocked Account Agreement, (D) the Side Letter, (E) the Second Side
Letter, (F) the MH Side Letter (G) the Second Subordination Letter or
(H) the Guaranty;
(xii) Either Seller or any of its Affiliates shall be in
default under any note, indenture, loan agreement, guaranty, swap
agreement or any other material contract to which it is a party, which
default (i) involves the failure to pay a matured obligation, or (ii)
permits the acceleration of the maturity of obligations by any other
party to or beneficiary;
(xiii) Guarantor's Maximum Leverage Ratio shall exceed 9:1
at any time;
(xiv) Guarantor's Tangible Net Worth shall at any time be
less than the greater of (a) Guarantor's Asset Value Net Worth minus
unsecured subordinated debt of the Guarantor which is subject to a
subordinated agreement acceptable to Buyer and (b) the sum of (x)
$10,300,000, (y) 85% of equity contributions to Guarantor received
since March 19, 1998 and (z) 75% of cumulative positive net income of
Sellers and other Subsidiaries of Guarantor from March 19, 1998;
(xv) Guarantor's FCCR for any calendar quarter shall be
less than 1.25x at any time;
(xvi) Guarantor shall have made a Restricted Payment;
(xvii) Guarantor shall have entered into a line of business
other than the lines of business expressly contemplated in that certain
prospectus, dated November 13, 1997, for 1,200,000 shares of common
stock of Guarantor; or
(xviii) Either Seller shall fail to fully transfer servicing
to the Back-up Servicer within five (5) Business Days of Buyer's
request.
(b) In making a determination as to whether an Event of Default
has occurred, and where more specific information is not reasonably available to
the party making the determination, the parties hereto shall be entitled to rely
on reports published or broadcast by media sources believed by such party to be
generally reliable and on information provided to it by any other sources
believed by it to be generally reliable, provided that such party in good faith
believes such information to be accurate and has taken such steps as may be
reasonable in the circumstances to attempt to verify such information, provided
however, without impairing the
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ability of any party to rely on the above-listed information, the party against
which such information is used shall have the right to establish any disputed
facts or conclusions with evidence from more reliable sources.
14. REMEDIES
(a) Buyer's Remedies. If an Event of Default occurs with respect
to either Seller or Guarantor, the following rights and remedies are available
to Buyer:
(i) Acceleration of Repurchase Date. At the option of Buyer,
exercised by written notice to the Sellers (which option shall be
deemed to have been exercised, even if no notice is given, immediately
upon the occurrence of an Act of Insolvency), the Repurchase Date for
each Transaction hereunder shall be deemed immediately to occur.
(ii) Sellers' Repurchase Obligations. If Buyer exercises or
is deemed to have exercised the option referred to in subsection (a)(i)
of this Section,
(A) Sellers' obligations hereunder to repurchase all
Purchased Loans in such Transactions shall thereupon become
immediately due and payable,
(B) to the extent permitted by applicable law, the
Repurchase Price with respect to each such Transaction shall be
increased by the aggregate amount obtained by daily application of,
on a 360 day per year basis for the actual number of days during
the period from and including the date of the exercise or deemed
exercise of such option to but excluding the date of payment of the
Repurchase Price as so increased, (x) the Pricing Rate for each
such Transaction plus 4.0% to (y) the Repurchase Price for such
Transaction as of the Repurchase Date as determined pursuant to
subsection (a)(i) of this Section (decreased as of any day by (I)
any amounts actually in the possession of Buyer pursuant to clause
(C) of this subsection, (II) any proceeds from the sale of
Purchased Loans applied to the Repurchase Price pursuant to
subsection (a)(xii) of this Section, and (III) any amounts applied
to the Repurchase Price pursuant to subsection (a)(iii) of this
Section), and
(C) all Income actually received by the Buyer or its
designee (including the Custodian) pursuant to Section 5 shall be
applied to the aggregate unpaid Repurchase Price owed by Sellers.
(iii) Sale or Other Disposition of Loans by Buyer. After one
(1) Business Day's notice to the Sellers (which notice need not be
given if an Act of Insolvency shall have occurred, and which may be the
notice given under subsection (a)(i) of this Section 14), Buyer may (A)
immediately sell, without notice or demand of any kind, at a public or
private sale and at such price or prices Buyer may reasonably deem
satisfactory any or all Purchased Loans subject to a Transaction
hereunder or (B) in its sole discretion elect, in lieu of selling all
or a portion of such Purchased Loans, to give Sellers credit for such
Purchased Loans in an amount equal to the Market Value of the Purchased
Loans against the aggregate unpaid Repurchase Price and any other
amounts owing by Sellers hereunder. The proceeds of any disposition of
Purchased Loans shall be
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applied first to the costs and expenses incurred by Buyer in connection
with the Event of Default; second to the actual costs of cover and/or
related hedging transactions; third to the Repurchase Price; and fourth
to any other outstanding obligation of Sellers to Buyer or its
Affiliates.
(iv) Buyer's Discretion in Connection with Liquidation of
Loans. The parties recognize that it may not be possible to purchase or
sell all of the Purchased Loans on a particular Business Day, or in a
transaction with the same purchaser, or in the same manner because the
market for such Purchased Loans may not be liquid. In view of the
nature of the Purchased Loans, the parties agree that liquidation of a
Transaction or the underlying Purchased Loans does not require a public
purchase or sale and that a good faith private purchase or sale shall
be deemed to have been made in a commercially reasonable manner.
Accordingly, Buyer may elect, in its sole discretion, the time and
manner of liquidating any Purchased Loan and nothing contained herein
shall (A) obligate Buyer to liquidate any Purchased Loan on the
occurrence of an Event of Default or to liquidate all Purchased Loans
in the same manner or on the same Business Day or (B) constitute a
waiver of any right or remedy of Buyer. However, in recognition of the
parties' agreement that the Transactions hereunder have been entered
into in consideration of and in reliance upon the fact that all
Transactions hereunder constitute a single business and contractual
relationship and that each Transaction has been entered into in
consideration of the other Transactions, the parties further agree that
Buyer shall use its best efforts to liquidate all Transactions
hereunder upon the occurrence of an Event of Default as quickly as is
prudently possible in the reasonable judgment of Buyer.
(v) Appointment of a Receiver for Collateral. Buyer shall,
without regard to the adequacy of the security for the Sellers'
obligations under this Agreement, be entitled to the appointment of a
receiver by any court having jurisdiction, without notice, to take
possession of and protect, collect, manage, liquidate, and sell the
Collateral or any portion thereof, and collect the payments due with
respect to the Collateral or any portion thereof. Sellers shall pay all
costs and expenses incurred by Buyer in connection with the appointment
and activities of such receiver, including, without limitation, legal
fees.
(vi) Injunction. Sellers agree that Buyer may obtain an
injunction or an order of specific performance to compel Sellers to
fulfill their obligations as set forth in Section 25 hereof, if Sellers
fail or refuse to perform their obligations as set forth therein.
(vii) Joint and Several Obligation. Sellers shall be jointly
and severally liable to Buyer for the amount of all expenses,
reasonably incurred by Buyer in connection with or as a consequence of
an Event of Default, including, without limitation, reasonable legal
fees and expenses and reasonable costs incurred in connection with
hedging or covering transactions.
(viii) Remedies Not Exclusive. Buyer shall have all the
rights and remedies provided herein, provided by applicable federal,
state, foreign, and local laws (including, without limitation, the
rights and remedies of a secured party under the Uniform Commercial
Code of the State of New York, to the extent that the Uniform
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Commercial Code is applicable, and the right to offset any mutual debt
and claim), in equity, and under any other agreement between Buyer and
either or both Sellers.
(ix) Concurrent Remedies. Buyer may exercise one or more of
the remedies available to Buyer immediately upon the occurrence of an
Event of Default and, except to the extent provided in subsections
(a)(i) and (iii) of this Section, at any time thereafter without notice
to Sellers. All rights and remedies arising under this Agreement as
amended from time-to-time hereunder are cumulative and not exclusive of
any other rights or remedies which Buyer may have.
(x) Recourse to Other Assets of Sellers. In addition to its
rights hereunder, Buyer shall have the right to proceed against any
assets of Sellers which may be in the possession of Buyer or its
designee (including the Custodian) including the right to liquidate
such assets and to set off the proceeds against monies owed by Sellers
to Buyer pursuant to this Agreement. Buyer may set off cash, the
proceeds of the liquidation of the Purchased Loans, any Collateral or
its proceeds, and all other sums or obligations owed by Buyer or its
affiliates to Sellers against all of Sellers' obligations to Buyer,
whether under this Agreement, under a Transaction, or under any other
agreement between the parties, or otherwise, whether or not such
obligations are then due, without prejudice to Buyer's right to recover
any deficiency. Any cash, proceeds, or property in excess of any
amounts due, or which Buyer reasonably believes may become due, to it
from Sellers shall be returned to Sellers after satisfaction of all
obligations of Sellers to Buyer.
(xi) Nonjudicial Processes. Buyer may enforce its rights and
remedies hereunder without prior judicial process or hearing, and
Sellers hereby expressly waive any defenses Sellers might otherwise
have to require Buyer to enforce its rights by judicial process.
Sellers also waive any defense Sellers might otherwise have arising
from the use of nonjudicial process, enforcement and sale of all or any
portion of the Collateral, or from any other election of remedies.
Sellers recognizes that nonjudicial remedies are consistent with the
usages of the trade, are responsive to commercial necessity and are the
result of a bargain at arm's length.
(xii) Sales Pursuant to Securities Offerings. Buyer and
Sellers hereby agree that sales of the Purchased Loans shall be deemed
to include and permit the sales of Purchased Loans pursuant to a
securities offering.
(b) Sellers' Remedies. If an Event of Default occurs with respect
to Buyer, the following rights and remedies are available to Sellers:
(i) Repurchase of All Purchased Loans. Upon tender by
Sellers of payment of the aggregate Repurchase Price for all such
Transactions, Buyer's right, title and interest in all Purchased Loans
subject to such Transactions shall be deemed transferred to the
respective Seller, and Buyer shall deliver or cause to be transferred
all such Purchased Loans to Sellers or their designees at Buyer's
expense.
(ii) Replacement Loans. If Sellers exercise the option
referred to in subsection (b)(i) of this Section and Buyer fails to
deliver or cause to be delivered the
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Purchased Loans to the respective Seller or its designee, after one
Business Day's notice to Buyer, such Seller may (A) purchase Loans
("Replacement Loans") that are as similar as is reasonably practicable
in characteristics, outstanding principal amounts (as a pool) and
interest rate to any Purchased Loans that are not delivered by Buyer to
Sellers or its designees as required hereunder or (B) in its sole
discretion elect, in lieu of purchasing Replacement Loans, to be deemed
to have purchased Replacement Loans at a price therefor on such date,
equal to the Market Value of the Purchased Loans.
(iii) Buyer's Liability. Buyer shall be liable to the
Sellers, and Buyer shall pay to the Sellers on demand, (A) with respect
to Purchased Loans (other than Additional Loans), for any excess of the
price paid (or deemed paid) by Sellers for Replacement Loans therefor
over the Repurchase Price for such Purchased Loans and (B) with respect
to Additional Loans, for the price paid (or deemed paid) by Sellers for
the Replacement Loans therefor. In addition, Buyer shall be liable to
Sellers for interest on such remaining liability with respect to each
such purchase (or deemed purchase) of Replacement Loans calculated on a
360-day year basis for the actual number of days during the period from
and including the date of such purchase (or deemed purchase) until paid
in full by Buyer. Such interest shall be at the greater of the Pricing
Rate or the Prime Rate.
(iv) Sellers' Expenses. Buyer shall be liable to Sellers for
the amount of all expenses reasonably incurred by Sellers in connection
with or as a consequence of an Event of Default, including, without
limitation, reasonable legal expenses and reasonable expenses incurred
in connection with covering existing hedging transactions with respect
to the Purchased Loans.
(v) Remedies Not Exclusive. Sellers shall have all the
rights and remedies provided herein, provided by applicable federal,
state, foreign, and local laws, in equity, and under any other
agreement between Buyer and Sellers, including, without limitation, the
right to offset any debt or claim.
(vi) Concurrent Remedies. Sellers may exercise one or more
of the remedies available to Sellers immediately upon the occurrence of
an Event of Default and at any time thereafter without notice to Buyer.
All rights and remedies arising under this Agreement as amended from
time-to-time hereunder are cumulative and not exclusive of any other
rights or remedies which Sellers may have.
15. DUE DILIGENCE
Sellers acknowledge that Buyer has the right to perform continuing
due diligence reviews with respect to the Loans, for purposes of verifying
compliance with the representations, warranties and specifications made
hereunder, or otherwise, and Sellers agree that upon reasonable prior notice to
Sellers, provided that, in the event that a Default shall have occurred, then
without notice, Buyer or its authorized representatives will be permitted during
normal business hours to examine, inspect, and make copies and extracts of, the
Loan Files, Servicing Records and any and all documents, records, agreements,
instruments or information relating to such Loans in the possession or under the
control of Sellers, any Servicer or subservicer and/or the Custodian. Sellers
also shall make available to Buyer a knowledgeable financial or
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accounting officer for the purpose of answering questions respecting the Loan
Files and the Loans. Without limiting the generality of the foregoing, Sellers
acknowledge that Buyer may enter into Transactions with the Sellers based solely
upon the Collateral Information provided by each respective Seller to Buyer and
the representations, warranties and covenants contained herein, and that Buyer,
at its option, has the right at any time to conduct a partial or complete due
diligence review on some or all of the Loans. Buyer may underwrite such Loans
itself or engage a mutually agreed upon third party underwriter to perform such
underwriting. Sellers agree to cooperate with Buyer and any third party
underwriter in connection with such underwriting, including, but not limited to,
providing Buyer and any third party underwriter with access to any and all
documents, records, agreements, instruments or information relating to such
Loans in the possession, or under the control, of Sellers. Sellers further agree
that Sellers shall reimburse Buyer for any and all out-of-pocket costs and
expenses reasonably incurred by Buyer in connection with Buyer's activities
pursuant to this Section 15 hereof.
16. SINGLE AGREEMENT
Buyer and Sellers acknowledge that, and have entered hereunto and
will enter into each Transaction hereunder in consideration of and in reliance
upon the fact that, all Transactions hereunder constitute a single business and
contractual relationship and that each has been entered into in consideration of
the other Transactions. Accordingly, each of Buyer and Sellers agree (i) to
perform all of their respective obligations in respect of each Transaction
hereunder, and that a default in the performance of any such obligations shall
constitute a default in respect of all Transactions hereunder, (ii) that each of
them shall be entitled to set off claims and apply property held by them in
respect of any Transaction against obligations owing to them in respect of any
other Transactions hereunder and (iii) that payments, deliveries, and other
transfers made by either of them in respect of any Transaction shall be deemed
to have been made in consideration of payments, deliveries, and other transfers
in respect of any other Transactions hereunder, and the obligations to make any
such payments, deliveries, and other transfers may be applied against each other
and netted; provided, however, that the parties hereto acknowledge and agree
that each Purchased Loan is identified and unique and nothing in this Agreement
should limit or reduce Buyer's obligation to deliver the Purchased Loans to
Sellers as and when provided herein.
17. NOTICES AND OTHER COMMUNICATIONS
Unless another address is specified in writing by the respective
party to whom any written notice or other communication is to be given
hereunder, all such notices or communications shall be in writing or confirmed
in writing (including without limitation by telex or telecopy) and delivered to
the intended recipient at the "Address for Notices" specified below its name on
the signature page hereof), or, as to any party, at such other address as shall
be designated by such party in a written notice to each other party. All notices
to Buyer's Underwriter shall be made in writing to ▇▇▇▇▇▇▇▇ Philips, ▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attention: P. ▇▇▇▇▇▇ ▇▇▇▇▇▇ (phone: (▇▇▇) ▇▇▇-▇▇▇▇ and fax: (▇▇▇) ▇▇▇-▇▇▇▇).
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18. ENTIRE AGREEMENT; SEVERABILITY
This Agreement together with the applicable Facility Documents and
Confirmations constitute the entire understanding between Buyer and Sellers with
respect to the subject matter it covers and shall supersede any existing
agreements between the parties containing general terms and conditions for
repurchase transactions involving Purchased Loans. By acceptance of this
Agreement, Buyer and Sellers acknowledge that they have not made, and are not
relying upon, any statements, representations, promises or undertakings not
contained in this Agreement. Each provision and agreement herein shall be
treated as separate and independent from any other provision or agreement herein
and shall be enforceable notwithstanding the unenforceability of any such other
provision or agreement.
19. NON-ASSIGNABILITY
The rights and obligations of the parties under this Agreement and
under any Transaction shall not be assigned by Sellers without the prior written
consent of Buyer. Subject to the foregoing, this Agreement and any Transactions
shall be binding upon and shall inure to the benefit of the parties and their
respective successors and assigns. Nothing in this Agreement express or implied,
shall give to any person, other than the parties to this Agreement and their
successors hereunder, any benefit or any legal or equitable right, power, remedy
or claim under this Agreement.
20. TERMINABILITY
This Agreement shall terminate upon the earlier of (i) the Final
Repurchase Date and (ii) written notice from either Seller to Buyer to such
effect, except that this Agreement shall, notwithstanding the above clause,
remain applicable to any Transaction then outstanding and provided however, that
as a condition precedent to any termination by either Seller, the Exit Fee
required pursuant to Section 3(j)(4) hereof shall be paid by BAC to Buyer.
Notwithstanding any such termination or the occurrence of an Event
of Default, all of the representations, warranties and indemnities hereunder
(including the Loan Representations) shall continue and survive.
21. GOVERNING LAW
THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO THE
CONFLICT OF LAW PRINCIPLES THEREOF.
22. CONSENT TO JURISDICTION
The parties irrevocably agree to submit to the personal
jurisdiction of the United States District Court for the Southern District of
New York, the parties irrevocably waiving any objection thereto. If, for any
reason, federal jurisdiction is not available, and only if federal jurisdiction
is not available, the parties irrevocably agree to submit to the personal
jurisdiction of the Supreme Court of the State of New York, the parties
irrevocably waiving any objection thereto.
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23. NO WAIVERS, ETC.
No express or implied waiver of any Event of Default by any party
shall constitute a waiver of any other Event of Default and no exercise of any
remedy hereunder by any party shall constitute a waiver of its right to exercise
any other remedy hereunder. No modification or waiver of any provision of this
Agreement and no consent by any party to a departure herefrom shall be effective
unless and until such shall be in writing and duly executed by both of the
parties hereto. Any such waiver or modification shall be effective only in the
specific instance and for the specific purpose for which it was given.
24. INTENT
The parties understand and intend that this Agreement and each
Transaction hereunder constitute a "repurchase agreement" and a "securities
contract" as those terms are defined under the relevant provisions of Title 11
of the United States Code, as amended.
25. SERVICING
(a) Servicing for Buyer using Accepted Servicing Practices.
Notwithstanding the purchase and sale of the Purchased Loans hereby, the
respective Seller and, pursuant to their respective Servicing Agreement, the MH
Servicer and the Mortgage Loan Servicer, as applicable, shall continue to
service the respective Purchased Loans for the benefit of Buyer and, if Buyer
shall exercise its rights to pledge or hypothecate the Purchased Loan prior to
the related Repurchase Date pursuant to Section 8 hereof, Buyer's assigns;
provided, however, that the obligations of a Seller to service Purchased Loans
shall cease, at that Seller's option, upon the payment by Seller to Buyer of the
Repurchase Price therefor. The respective Seller shall service or cause the
respective Servicer to service the Purchased Loans in accordance with Accepted
Servicing Practices approved by Buyer and maintained by other prudent mortgage
lenders with respect to mortgage loans similar to those Purchased Loans.
(b) Servicing Agreements and Servicing Records. Each Seller
agrees that Buyer is the owner of all servicing records, including but not
limited to any and all servicing agreements (the "Servicing Agreements"), files,
documents, books, records, data bases, computer tapes, disks, copies of computer
tapes, Seller's rights in any data processing software, computer programs and
related property and rights, proof of insurance coverage, insurance policies,
appraisals, other closing documentation, payment history records, and any other
records relating to or evidencing the servicing of Purchased Loans (the
"Servicing Records") so long as the Purchased Loans are subject to this
Agreement. Each Seller grants Buyer a security interest in all the respective
servicing fees and rights relating to the Purchased Loans and all Servicing
Records to secure the obligation of both Sellers or their designees to service
in conformity with this Section and any other obligation of the respective
Seller to Buyer. Sellers covenant to safeguard their respective Servicing
Records and to deliver them promptly to Buyer or its designee (including the
Custodian) at Buyer's request.
(c) Buyer's Options Upon Default by Servicers. Upon the
occurrence and continuance of a Default (including upon the failure of a Seller,
Servicer or any subservicer to meet Accepted Servicing Practices after notice of
default and failure by the Servicer to cure any such default within 15 days
thereafter), Buyer may, in its sole discretion, (i) sell its right to the
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Purchased Loans on a servicing released basis or (ii) terminate the Sellers,
Servicer or any subservicer as servicer of the Purchased Loans with or without
cause, in each case without payment of any termination fee, in which case
Sellers will promptly, within five (5) Business Days, transfer servicing, or
cause servicing to be transferred, to the Back-up Servicer. Buyer agrees that if
Buyer has caused the transfer of servicing to the Back-up Servicer pursuant to a
Default, and such Default does not become an Event of Default within sixty (60)
days, Buyer shall transfer servicing back to the Servicer, at Buyer's expense.
(d) Each Seller shall provide to the Buyer a letter from its
Servicer (the "Servicing Letter") (i) acknowledging Buyer's security interest in
the Loans, (ii) granting Buyer a security interest in all servicing fees and
rights relating to Loans and all Servicing Records related thereto to secure the
obligation of Servicer to service in conformity with this Agreement, (iii)
acknowledging that Buyer is the collateral assignee of all Servicing Records,
(iv) acknowledging that upon a Default, the Seller may terminate any Servicing
Agreement upon request of the Buyer, and Servicer shall transfer servicing to
Buyer's designee, at no cost or expense to the Buyer, it being agreed that the
Seller will pay any and all fees required to terminate the Servicing Agreement
and to effectuate the transfer of servicing to the designee of the Buyer, and
(v) agreeing to allow Buyer to inspect the Servicer's servicing facilities, for
the purpose of satisfying the Buyer that the Servicer has the ability to service
the Loans as provided herein.
(e) No Subservicers Without Buyer Consent. Sellers shall not
employ subservicers to service the Purchased Loans without the prior written
approval of Buyer, which approval shall not be unreasonably withheld. If the
Purchased Loans are serviced by a subservicer, Sellers irrevocably assign all of
their rights, title and interest in any such subservicing agreement, with
respect to the Purchased Loans, to Buyer. The applicable Seller shall cause any
subservicers engaged by or for the benefit of that Seller to execute a letter
agreement with Buyer acknowledging Buyer's security interest and agreeing that,
upon notice from Buyer (or the Custodian on its behalf) that an Event of Default
has occurred and is continuing hereunder, it shall deposit all Income with
respect to the Purchased Loans in the account specified in the third sentence of
Section 5(a) hereof.
(f) Subordination of Servicing Fees. The payment of servicing
fees shall be subordinate to payment of amounts outstanding under any
Transaction and this Agreement.
26. DISCLOSURE RELATING TO CERTAIN FEDERAL PROTECTIONS
The parties acknowledge that they have been advised that in the
case of Transactions in which one of the parties is an "insured depository
institution" as that term is defined in Section 1831(a) of Title 12 of the
United States Code, as amended, funds held by the financial institution pursuant
to a Transaction hereunder are not a deposit and therefore are not insured by
the Federal Deposit Insurance Corporation, the Savings Association Insurance
Fund or the Bank Insurance Fund, as applicable.
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27. NETTING
If Buyer and Sellers are "financial institutions" as now or
hereinafter defined in Section 4402 of Title 12 of the United States Code
("Section 4402") and any rules or regulations promulgated thereunder:
(a) All amounts to be paid or advanced by any one party to or on
behalf of the other under this Agreement or any Transaction hereunder shall be
deemed to be "payment obligations" and all amounts to be received by or on
behalf of one party from the other under this Agreement or any Transaction
hereunder shall be deemed to be "payment entitlements" within the meaning of
Section 4402, and this Agreement shall be deemed to be a "netting contract" as
defined in Section 4402.
(b) The payment obligations and the payment entitlements of the
parties hereto pursuant to this Agreement and any Transaction hereunder shall be
netted as follows. In the event that either party (the "Defaulting Party") shall
fail to honor any payment obligation under this Agreement or any Transaction
hereunder, the other party (the "Nondefaulting Party") shall be entitled to
reduce the amount of any payment to be made by the Nondefaulting Party to the
Defaulting Party by the amount of the payment obligation that the Defaulting
Party failed to honor.
28. INDEMNIFICATION
Each Seller agrees to jointly and severally hold Buyer harmless
from and indemnify Buyer against all liabilities, losses, damages, judgments,
reasonably incurred costs and expenses of any kind which may be imposed on,
incurred by or asserted against Buyer (collectively, the "Costs") relating to or
arising out of the Transactions or this Agreement, including reasonable legal
costs and settlement costs, except if such losses, liabilities, claims, damages
or expenses result from Buyer's gross negligence or willful misconduct. Without
limiting the generality of the foregoing, each Seller agrees to jointly and
severally hold Buyer harmless from and indemnify Buyer against all Costs with
respect to all Loans relating to or arising out of any violation or alleged
violation of any environmental law, rule or regulation or any consumer credit
laws, including without limitation ERISA, the Truth in Lending Act and/or the
Real Estate Settlement Procedures Act, that, in each case, results from anything
other than Buyer's gross negligence or willful misconduct. In any suit,
proceeding or action brought by Buyer in connection with any Loan for any sum
owing thereunder, or to enforce any provisions of any Loan, each Seller will
jointly and severally save, indemnify and hold Buyer harmless from and against
all expense, loss or damage suffered by reason of any defense, set-off,
counterclaim, recoupment or reduction or liability whatsoever of the account
debtor or obligor thereunder, arising out of a breach by either Seller of any
obligation thereunder or arising out of any other agreement, indebtedness or
liability at any time owing to or in favor of such account debtor or obligor or
its successors from Sellers. Each Seller also agrees to reimburse Buyer as and
when billed by Buyer for all Buyer's costs and expenses incurred in connection
with the enforcement or the preservation of Buyer's rights under this Agreement
or any Transaction contemplated hereby, amendments and waivers, including
without limitation the reasonable fees and disbursements of its counsel. Each
Seller hereby acknowledges that, the obligations of both Sellers hereunder are
recourse obligations of each Seller.
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29. ESTABLISHMENT OF COLLECTION ACCOUNT
(a) Each Seller shall, or shall cause each Servicer to, establish
and maintain one or more collection accounts for the Buyer's benefit, which may
be interest-bearing, entitled, as applicable: (i) "Bloomfield Servicing Company,
L.L.C. in trust for Bloomfield Acceptance Company, L.L.C." (the "Bloomfield
Blocked Account") or (ii) "St. ▇▇▇▇▇ Servicing Corporation in trust for MHFC,
Inc." (the "St. ▇▇▇▇▇ Blocked Account") (together, the "Blocked Accounts"). The
Blocked Accounts shall be governed by the terms in this Section 29 and the
Blocked Account Agreements. The provisions of this Section 29 apply separately
to each Blocked Account and to BAC with respect to the Bloomfield Blocked
Account and MHFC with respect to the St. ▇▇▇▇▇ Blocked Account, and to BAC's and
MHFC's respective Servicers.
(b) Sellers shall, or shall cause the Servicers to, deposit all
payments received and all proceeds received from sales of any Loans, within one
(1) Business Day following receipt thereof. BAC must instruct all Obligors on
Mortgage Loans and Floorplan Loans to remit all payments directly to the
Bloomfield Blocked Account. MHFC must instruct all Obligors on MH Loans to remit
all payments directly to the St. ▇▇▇▇▇ Blocked Account.
(c) Permitted Withdrawals
(A) Distributions. Subject to the provisions
hereof, and to the extent available for distribution, all funds
held in the Blocked Accounts, or received by the applicable Seller
or Servicer as of one calendar day prior to two Business Days
immediately preceding each Payment Date during the period in which
there is no Default, shall be distributed on each Payment Date
(subject to any restrictions contained herein or in the Facility
Documents) in the following order of priority:
FIRST: To Escrow Accounts for amounts representing
Escrow Payments as per the Loan Documents;
SECOND: To the Buyer in accordance with the Buyer's
wire transfer instructions as provided herein or as amended from
time to time, in an amount sufficient to pay:
(i) any Periodic Payment due and owing;
(ii) the amount of any Collateral Deficit; and
(iii) the amount of any fees or expenses or
other amounts due and owing to the Buyer hereunder or in the
Facility Documents;
THIRD: To payment to Buyer of Curtailment and other
prepayments received on any Loans;
FOURTH: To the Servicer for any reasonable servicing
fees due and owing;
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FIFTH: To the respective Seller in accordance with its
wire transfer instructions, an amount equal to any proceeds
indicated on that Seller's most recent Distribution Worksheet for
such Payment Date as are remaining in the Blocked Account and
available for distribution to that Seller on such Payment Date.
The relevant Seller or the Servicer, as the case may
be, shall be entitled to transfer funds on deposit in a Blocked
Account to one or more Escrow Accounts for the purpose of holding
funds attributable to Escrow Payments; provided that any Escrow
Account is identified and is subject to a Blocked Account
Agreement.
(B) Distribution in the Event of Default. To the extent
available for distribution to Sellers on each Payment Date, all
funds held in the Blocked Account or received by either Seller or
Servicer during a period in which there is a Default which has
occurred and is known to the Sellers or as to which Buyer has
notified Sellers, and which is continuing, shall be distributed on
each Payment Date in the following order of priority:
FIRST: To payment to the Buyer of amounts as set forth
in the subheadings entitled "SECOND AND THIRD" in Subsection (A)
above;
SECOND: To payment of the Repurchase Price for any then
outstanding Transactions;
THIRD: To any additional amounts owing to the Buyer
hereunder; and
FOURTH: Any surplus then remaining shall be paid to the
respective Sellers or their successors or assigns or to whomsoever
may be lawfully entitled to receive the same or as a court of
competent jurisdiction may direct.
(d) The distributions set forth in subsection (c) of this Section
shall be determined pursuant to the Distribution Worksheet for each respective
Seller. Each Seller shall or shall cause its Servicer to deliver its respective
Distribution Worksheet to that Seller and Buyer by facsimile by no later than
12:00 noon (New York time) on the second preceding Business Day prior to each
Payment Date. Prior to remitting any distributions pursuant to this Section, the
respective Seller and its Servicers shall have received by facsimile, the
written consent of Buyer to the information set forth on a Distribution
Worksheet. In the event that Buyer shall have failed to consent to a
Distribution Worksheet by 5:00 p.m. (New York time) on the Business Day prior to
each Payment Date, the affected Seller or its Servicer shall promptly contact
Buyer and shall use its best efforts to obtain such written consent. In the
event that Buyer disputes any calculation set forth on a Distribution Worksheet,
the affected Servicer shall promptly contact Buyer and the respective Seller,
and all parties shall use their best efforts to resolve such dispute; provided
that, Buyer's good faith determination that accrued interest is due and owing or
that a Collateral Deficit exists under this Agreement shall be conclusive absent
manifest error.
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(e) Reliance on Distribution Worksheets. The Lockbox Bank and the
Servicers may rely upon any Distribution Worksheet which has been consented to
by Buyer, and neither the Lockbox Bank nor the Servicers shall have any
liability to Buyer for actions taken in reliance on such Distribution Worksheet.
All distributions made by a Servicer pursuant to this Section shall be (subject
to any decree of any court of competent jurisdiction) final, and that Servicer
shall have no duty to inquire as to the application by Buyer of any amounts
distributed to it.
(f) Appointment of Third Party Upon Default. In the event a
Default shall occur and be continuing, Buyer may select a third party to prepare
and distribute the Distribution Worksheets to all of the parties.
(g) Accrued Interest and Sellers' Separate Funds. Unless an Event
of Default has occurred and is continuing, all interest accrued on Blocked
Account(s) shall be allocated to the applicable Seller and shall constitute part
of the funds available for distribution to Sellers in accordance with the
foregoing procedure. Any of a Seller's separate funds used to establish any
Blocked Account may be distributed to the relevant Seller at any time prior to
an Event of Default in accordance with the Distribution Worksheet.
30. CONFIDENTIALITY OF AGREEMENT
Sellers and Buyer agree to maintain the confidentiality of this
Agreement and its terms and agree not to disclose this Agreement or its terms to
any other party except as required for the enforcement of its terms, or as
required by law, regulatory requirements or court order or discovery, or to
Affiliates of Sellers or Guarantor or to their respective accountants, attorneys
and similar Persons who provide professional or advisory services to them.
Nonetheless, each Person given confidential information relating to this
Agreement shall be informed by the giver of the confidential nature of this
Agreement, and shall agree to maintain its confidentiality. Sellers shall be
responsible for any breach of this agreement by their Affiliates and any other
Persons to whom this Agreement or information about this Agreement is given. In
the event Sellers determine, in consultation with legal counsel experienced in
securities regulation, that the Agreement must be filed with the Securities and
Exchange Commission pursuant to applicable law, such filing may only be made
after consultation with Buyer and agreement upon redaction of certain terms of
the Agreement (including, without limitation, the Pricing Spread and Commitment
Fee).
31. MISCELLANEOUS
(a) Time is of the essence under this Agreement and all
Transactions and all references to a time shall mean New York time in effect on
the date of the action unless otherwise expressly stated in this Agreement.
(b) Buyer shall be authorized to accept orders and take any other
action affecting any accounts of the respective Seller in response to
instructions given in writing or orally by telephone or otherwise by any person
with apparent authority to act on behalf of that Seller, and the relevant Seller
shall indemnify Buyer, defend, and hold Buyer harmless from and against any and
all liabilities, losses, damages, costs, and expenses of any nature arising out
of, or
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in connection with, any action taken by Buyer in response to such instructions
received or reasonably believed to have been received from such Seller.
(c) If there is any conflict between the terms of this Agreement
or any Transaction entered into hereunder and the Custodial Agreement or any
other Facility Document, this Agreement shall prevail.
(d) If there is any conflict between the terms of a Confirmation
or a corrected Confirmation issued by the Buyer and this Agreement, the
Confirmation and/or corrected Confirmation shall prevail.
(e) This Agreement may be executed in counterparts, each of which
so executed shall be deemed to be an original, but all of such counterparts
shall together constitute but one and the same instrument.
(f) Sellers agree to reimburse Buyer for all reasonable costs and
expenses of Buyer in connection with this Agreement, and the Sellers agree to
reimburse Buyer for all reasonable costs and expenses of Buyer in connections
with any Transactions hereunder including, respectively but without limitation,
(i) the fees, expenses and disbursement of outside counsel to Buyer, (ii) due
diligence expenses, (iii) on-going auditing fees, (iv) custodial fees, (v)
Lockbox Bank fees and (vi) the fees, expenses and disbursements of the Back-up
Servicer, if servicing has been transferred to the Back-up Servicer pursuant to
Section 12(q) hereof.
(g) The headings in this Agreement are for convenience of
reference only and shall not affect the interpretation or construction of this
Agreement.
[SIGNATURE PAGE FOLLOWS.]
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IN WITNESS WHEREOF, THE PARTIES HAVE ENTERED INTO THIS AGREEMENT
AS OF THE DATE SET FORTH ABOVE.
▇▇▇▇▇▇ COMMERCIAL PAPER
INC.,
Buyer
By:
-----------------------------------
Title:
--------------------------------
Date:
--------------------------------
Address for Notices:
▇▇▇▇▇▇ Commercial Paper Inc.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇ Commercial Paper Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇▇
Phone (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
BLOOMFIELD ACCEPTANCE
COMPANY, L.L.C.,
Seller
By: /s/
------------------------------------
Title:
---------------------------------
Date:
---------------------------------
Address for Notices:
Bloomfield Acceptance Company, L.L.C.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, President
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
MHFC, INC.,
By: /s/
------------------------------------
Title:
---------------------------------
Date:
---------------------------------
Address for Notices:
MHFC, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Chief Operating Officer
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
