SECOND AMENDMENT TO
CONSTRUCTION LOAN PURCHASE AND SERVICING AGREEMENT
This Second Amendment to Construction Loan Purchase and Servicing Agreement
dated as of June 1, 1997 (this "Amendment"), by and between ▇▇▇▇▇▇▇▇ Financial
Corporation, formerly known as Miles Homes, Inc. ( the "Parent"), ▇▇▇▇▇▇▇▇ Home
Alliance, Inc., formerly known as Miles Homes Services, Inc. ("▇▇▇▇▇▇▇▇"),
Plymouth Capital Company, Inc. ("Plymouth Capital") (the Parent, ▇▇▇▇▇▇▇▇ and
Plymouth Capital being referred to collectively as the "Sellers"), and
Residential Funding Corporation ("RFC") amends certain provisions of that
certain First Amendment to Construction Loan Purchase and Servicing Agreement
dated as of March 1, 1997 and Construction Loan Purchase and Servicing Agreement
dated as of April 14, 1995 (as amended, supplemented or otherwise modified from
time to time, the "Agreement"), by and between the Sellers and RFC.
WHEREAS, RFC and the Sellers have agreed to amend portions of the Agreement
as set forth herein.
In consideration of the mutual promises contained herein and in the
Agreement and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:
1. DEFINITIONS. For purposes of this Amendment, all section references
shall refer to sections of the Agreement and, unless otherwise indicated, all
capitalized terms shall have the meanings assigned to those terms in the
Agreement.
2. AMENDMENTS TO AGREEMENT AND EXHIBITS.
a. The following definitions shall be added in alphabetical order in
Article I:
"BUSINESS DAY": Any day of the week other than
Saturday, Sunday or a national holiday in the United States
of America.
"LIBOR": With respect to the first Business Day of
each month, the rate of interest per annum which is equal to
the arithmetic mean of the U.S. Dollar London Interbank
Offered Rates for three-month periods as of 11:00 a.m.
London time on such day (or, if the London Interbank Market
is not open on such day, on the most recent preceding day on
which the London Interbank Market was open), as published by
▇▇▇▇▇▇-▇▇▇▇▇▇, Inc. on its MoneyCenter system. If such U.S.
Dollar London Interbank Offered Rates are not so offered or
published for any period, then during such period LIBOR
shall mean, with respect to any day, the London Interbank
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Offered Rate for three-month periods published on that day
in the WALL STREET JOURNAL in its regular column entitled
"Money Rates" or, if the WALL STREET JOURNAL is not
published on such day, on the most recent preceding day on
which it was published.
b. Section 2.01(d) shall be deleted in its entirety and the
following shall be substituted in lieu thereof:
(d) During the term of this Agreement, RFC agrees to
purchase from the Sellers pursuant to the terms of this
Agreement, Construction Loans, which, (i) when added to the
unpaid principal balance of the Construction Loans
previously purchased and currently outstanding, do not
exceed $300,000,000, in total unpaid principal balance, and
(ii) meet each of the criteria and underwriting guidelines
specified in Exhibit E hereto (each such loan being referred
to herein as a "Qualifying Loan") submitted to it for
purchase in strict conformity with the requirements of this
Agreement provided that, at the time the complete
Construction Loan File with respect to that Qualifying Loan
is submitted to RFC the Sellers are in compliance with all
terms, conditions and covenants of this Agreement.
c. The phrase "1-1/2% above the Prime Rate" in Section 2.02 (b)(ii),
Section 2.04(c), Section 2.06(b)(iii), Section 2.06(c)(iii) and
Section 3.03(b)(iii) shall be deleted, and the phrase "3% above
LIBOR" shall be substituted in lieu thereof. The definition of
"Prime Rate" found in Section 2.02(b)(ii) shall be deleted in its
entirety.
d. Section 2.03(b) shall be deleted in its entirety and the
following shall be substituted in lieu thereof:
(b) The "HOLDBACK AMOUNT" for a Construction Loan shall
equal the lesser of the amounts calculated pursuant to (A)
and (B) below:
(A) 8% of the Initial Adjusted Principal Amount of
such Construction Loan, plus, with respect to a Construction
Loan to be purchased by RFC with a loan-to-value in excess
of 100% and/or a principal balance in excess of $275,000,
the greater of (i) the amount by which the principal balance
of such Construction Loan exceeds $275,000, multiplied by
92% or (ii) the amount by which the "loan" exceeds the
"value", as such terms are used above in the term "loan-to-
value", multiplied by 92%. The "INITIAL ADJUSTED PRINCIPAL
AMOUNT" of a Mortgage Note shall equal the face amount of
such Mortgage Note (adjusted as set forth in Section
2.02(c)), minus any Pre-purchase Prepayments, plus the
unpaid balance as of the applicable Construction Loan
Purchase Date of any related land
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acquisition loan or other indebtedness secured by the
related Mortgaged Property which is prior to such
Construction Loan and which is not included in the face
amount of such Mortgage Note.
(B) That amount, if any, necessary to bring the
balance of funds then in the Loan Loss Reserve fund up to an
amount equal to the sum of (i) 8% of the aggregate of the
Initial Adjusted Principal Amounts of the Mortgage Notes for
all Construction Loans then held by RFC, (ii) plus, with
respect to a Construction Loan then held by RFC with a loan-
to-value in excess of 100% and/or a principal balance in
excess of $275,000, the greater of (i) the amount by which
the principal balance of such Construction Loan exceeds
$275,000, multiplied by 92% or (ii) the amount by which the
"loan" exceeds the "value", as such terms are used above in
the term "loan-to-value", multiplied by 92%.
e. Section 3.01(b)(i) shall be deleted in its entirety and the
following shall be substituted in lieu thereof:
(i) An initial shipment of building materials to the
Borrower's (or Borrowers') building site on such
Construction Loan has been made.
f. Article V shall be amended by substituting the following
paragraph for paragraph (b):
(b) The Sellers shall have delivered to RFC the
Construction Loan File containing all of the documents set
forth on Exhibit A, all of which shall be in conformity with
the requirements set forth in this Agreement (including,
without limitation, the Mortgage, the Assignment of Mortgage
and the Mortgage Note endorsed in blank with respect to such
Construction Loan) and including any other documents
specifically requested by RFC with respect to such
Construction Loan; provided, however, that exclusively with
respect to the Construction Loans described in Exhibit C
hereto, the Sellers shall be required to deliver to RFC only
those items described in items 1 through 5 of Exhibit A
hereto (it being agreed that all of the other documents in
the Construction Loan Files with respect to such
Construction Loans shall be held by the Sellers as custodian
for RFC and delivered, in whole or in part, to RFC or its
designee at any time or from time to time as RFC may
direct). In the case of a Construction Loan which is
submitted by the Sellers as a Qualifying Loan pursuant to
Section 2.01(d), RFC shall have had the opportunity (within
the seven calendar day period referred to in Section
2.01(a)) to review the Construction Loan File in order to
determine whether such Construction Loan is a Qualifying
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Loan; and in the case of a Construction Loan which is not
submitted by the Sellers as a Qualifying Loan pursuant to
Section 2.01(d), RFC shall have had the opportunity (within
the seven calendar day period referred to in Section
2.01(a)) to review the Construction Loan File in order to
determine whether to approve such Construction Loan for
purchase.
g. Section 6.03 shall be amended by substituting the following
paragraph for paragraph (c):
(c) The Servicer also may, in its discretion and
without consent from RFC, grant an extension of maturity for
a term not to exceed six months when the loan is otherwise
performing as agreed and the construction process is
substantially complete or will be completed in 90 days or
less. The Servicer shall promptly notify RFC in writing of
any such extensions.
h. Section 6.05(c) shall be deleted in its entirety and the
following shall be substituted in lieu thereof:
(c) RFC may remove the Servicer as servicer of a
particular Construction Loan if such Construction Loan has
not been repaid in full by the Borrower or Borrowers within
90 days of its stated due date or its modified due date for
loan maturities extended in accordance with paragraph
6.03(c); provided, however, that the Servicer, upon
receiving notice of such removal, shall have the right for 7
calendar days thereafter to repurchase the Construction Loan
from RFC for a price calculated in accordance with Section
2.06(c), but no such repurchase shall constitute a
withdrawal from the Loan Loss Reserve Fund and the
repurchase price must be paid to RFC in immediately
available funds within such 7-day period.
i. Section 8.01 shall be deleted in its entirety and the following
shall be substituted in lieu thereof:
"Section 8.01 TERM OF AGREEMENT. This Agreement will
terminate on June 1, 1999. In addition, if a Change of
Control occurs, RFC may terminate this Agreement immediately
upon the giving of written notice to the Sellers."
j. Section 8.05(a) and (b) shall be deleted and the following shall
be substituted in lieu thereof:
(a) if to the Sellers:
▇▇▇▇▇▇▇▇ Financial Corporation
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▇▇▇▇▇▇▇▇ Home Alliance, Inc.
Plymouth Capital Company, Inc.
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Telefacsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to :
▇▇▇▇▇▇▇▇ Financial Corporation
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Telefacsimile: (▇▇▇) ▇▇▇-▇▇▇▇
(b) if to RFC:
Residential Funding Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Director
Telefacsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Residential Funding Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: General Counsel
Telefacsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Any such demand, notice or other communication that is delivered
in person shall be effective on the date delivered, on the date
sent if sent by telefacsimile, on the fifth day following mailing
if sent by first class United States mail, and on the date of
delivery if sent by overnight courier.
k. Exhibit E, paragraph 3 shall be amended by adding the following
to the end of that sentence:
"or the Borrower's non-owner occupied residential property."
l. Exhibit E, paragraph 4 shall be deleted in its entirety and the
following shall be substituted in lieu thereof:
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"4. The Construction Loan must have a loan-to-value
ratio of not greater than 100% if a primary residence
(except for those loans in excess of 100% loan-to-value for
which additional amounts have been contributed to the Loan
Loss Reserve Fund in accordance with Section 2.03(b)), and
70% if a non-owner occupied residential property, each based
on the initial appraisal included in the Construction Loan
File and on a loan amount equal to the face amount of the
related Mortgage Note (including the amount of any wrapped
land acquisition loan) less the amount of any reduction in
the amount required to be paid on such Mortgage Note that is
set forth in such Mortgage Note as an incentive for
completion of construction."
m. Exhibit E, paragraph 5, shall be amended by deleting the figure
"$250,000" and substituting in lieu thereof "$275,000, except for
those loans in excess of $275,000 for which additional amounts
have been contributed to the Loan Loss Reserve in accordance with
Section 2.03(b)."
3. CONTINUED EFFECTIVENESS OF AGREEMENT. The Agreement shall continue to
be in full force and effect and is hereby ratified and confirmed in all
respects, and all references to the Agreement in any document shall hereafter be
deemed to refer to the Agreement as amended hereby. This Amendment is hereby
incorporated into, and shall for all purposes be deemed to be a part of, the
Agreement.
4. SECTION HEADINGS. Section headings in this Amendment are for
convenience only and shall not in any way limit or affect the meaning or
interpretation of any of the provisions of this Amendment.
5. ENTIRE AGREEMENT. The Agreement, as amended by this Amendment,
embodies the entire agreement between the parties as to the subject matter
hereof and supersedes all prior agreements and understandings relating to the
subject matter hereof.
6. COUNTERPARTS. This Amendment may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute but one and the same instrument.
7. EFFECTIVENESS. This Amendment shall be of no force or effect unless
and until it has been executed and delivered by RFC and each of the Sellers and,
provided that such execution and delivery takes place on or before June 6, 1997,
the terms of this Amendment shall be effective as of June 1, 1997.
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IN WITNESS WHEREOF, each of the undersigned parties to this Amendment has caused
this Amendment to be duly executed in its corporate name by one of its duly
authorized officers, all as of the date first above written.
▇▇▇▇▇▇▇▇ FINANCIAL CORPORATION
Attest:
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ Name: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------- Its: Senior Vice President and
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ Chief Financial Officer
------------------------------
Its: Vice President and Secretary
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▇▇▇▇▇▇▇▇ HOME ALLIANCE, INC.
Attest:
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ Name: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------- Its: Senior Vice President
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------
Its: Vice President and Secretary
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PLYMOUTH CAPITAL COMPANY, INC.
Attest:
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ Name: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------- Its: President
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------
Its: Vice President and Secretary
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RESIDENTIAL FUNDING CORPORATION
Attest:
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------------
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------- Its: Director
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------
Its: Managing Director
-------------------------------
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