This Agreement is entered into this 1 st day of July, 2008, between Sun Communities Operating Limited Partnership, a Michigan limited partnership (Seller), 21st Mortgage Corporation, a Delaware corporation (Buyer) and also joined herein by Sun Communities, Inc, a Maryland corporation (SCI).
WHEREAS, Seller wishes to sell and Buyer wishes to buy all of Sellers right, title and interest in and to certain Loans (as defined below) secured by first liens on Homes. In consideration of the premises and of the mutual covenants and agreements hereinafter contained, the parties hereto agree as follows:
Whenever used in this Agreement, the following words and phrases, unless the context otherwise requires, will have the following meanings:
Agreement: This Agreement together with all exhibits and schedules hereto and all subsequent written amendments and supplements hereto and thereto.
Business Day: Any day other than a Saturday or Sunday, or a day on which banking institutions in New York are authorized or obligated by law or executive order to be closed.
Closing: The consummation of the transactions contemplated to take place under this Agreement on the Closing Date.
Closing Date: July 1, 2008, or such later date as may be agreed to by the parties to this Agreement.
Contract: A duly executed promissory note, conditional sales contract, installment sales contract, loan agreement, note deed of trust, mortgage, trust deed security agreement or other instrument evidencing the indebtedness of an Obligor under a Loan, together with any modification thereto.
Contract File: The Contract and Security Instrument relating to a Loan.
Customer File: The credit application and investigation, all documents of insurance, and all other documentation in possession of Seller relating to a Loan.
Cut-off Date: The close of business on June 30, 2008.
Home(s): The security for a Loan comprised of a manufactured home.
Initial Repurchase Period: The time period during which an Obligor makes fifteen 15 scheduled monthly payments of principal and interest to Buyer and/or Seller, as the case may be, from the origination date of the Loan.
Loan: Each of the Contracts and all related Security Instruments and security interests created thereby and any and all rights to receive payments or other amounts pursuant thereto from and after the Cut-Off Date and including all rights under any insurance policies relating to any collateral securing such Contracts, the related Contract Files and Customer Files, all rights to collect any advances or unearned forced place insurance premiums, and all proceeds derived from the foregoing.
Loan Rate: The per annum rate of interest to be paid by an Obligor as provided in a Loan.
Obligor: The person or persons obligated to repay the Loan.
Purchase Price: The Purchase Price shall be based upon the Schedule of Loans as of the Cut-Off Date and shall equal the sum of (a) the Purchase Price Percentage multiplied by the aggregate Unpaid Principal Balance of the
Loan, and (b) the Purchase Price Percentage multiplied by the accrued but unpaid interest payable on each Loan, not to exceed more than 30 days accrued interest.
Purchase Price Percentage: The Base Percentage for purposes of this definition is 100%.
Repossession: Judicial or voluntary, non-judicial possession of a home transferred from an Obligor to Buyer.
Schedule of Loans: The schedule listing the Loans to be purchased by Buyer on the Closing Date, in the form attached hereto as Exhibit A.
Security Instrument: A manufacturers certificate or statement of origin, certificate of title, Personal Property Security Act financing statement and/or security deed duly filed and/or recorded, as required, in state and/or town/city/county offices, as appropriate under State law, evidencing Sellers perfected first priority security interest in a manufactured home, and, in addition, if applicable, the real property pledged as security for the Loan.
Unpaid Principal Balance: With respect to a Loan as of the Cut-off Date, the Obligors original principal balance minus (i) the cumulative principal portion of each installment received from the Obligor and applied to reduce such balance, the application of such installment being determined by applying interest at the Loan Rate through and including the date of such payment and the remainder being applied to reduce the principal balance, and minus (ii) any other principal balance that has been written off or otherwise reduced prior to the Cut-Off Date (including any principal prepayments received from the Obligor and applied to reduce such balance). The Unpaid Principal Balance of each Loan as of the Cut-Off Date is shown on Exhibit A. The principal and interest portion of each installment is determined in the manner specified in each Loan. For purposes of the Purchase Price determination, the Unpaid Principal Balance shall not include any force placed insurance premiums or balances therefore or any other amounts advanced by Seller or any servicer or owner that may have been added to the outstanding principal balance of such Loan.
Article 1
Sale of Loans
Subject to the terms and conditions of this Agreement, and in express reliance upon the representations, warranties and covenants set forth herein, Seller agrees to sell, and Buyer agrees to purchase from Seller, all of Sellers rights, title, and interest in the Loans and Contract Files related thereto (including all related lien perfection instruments, guaranties, and related contract documents). Each sale of a Loan by Seller to Buyer constitutes a valid absolute sale, transfer, assignment, set over and conveyance to Buyer of all right, title and interest of Seller in and to such Loan, free and clear of any interest of any party claiming through or under Seller or any of its Affiliates, including the right to service and pledge such Loans without constraint, and, except for the limited recourse to the extent provided in Article 11 hereof, is without recourse. The assignment of the Loans shall be consummated by the parties on the Closing Date. From and after the consummation of the transactions contemplated hereby, Seller shall hold any and all payments received by it with respect to a Loan in trust for the benefit of Buyer and shall promptly remit such payment to Buyer in accordance with such customary procedures as the Parties may establish.
Upon Sellers transfer of the Loans to Buyer, Seller shall have no further obligations or rights with respect to the management, administration, servicing, control or collection of the Loans, with the exception of Sellers obligation to repurchase certain Loans upon the occurrence of designated events specified herein and Buyers election to require such repurchase by Seller pursuant to the terms hereof.
Seller represents and warrants to Buyer that The Bank of New York Trust Company, N.A. ("BONY") is the custodian for all the Contract Files (and requisite documents to be contained therein) prior to Closing and will act as bailee for the benefit of Buyer pursuant to a separate bailee letter agreement. Seller will cause BONY to deliver to Buyer at least one (1) day prior to Closing a complete listing of the Contract Files so held by BONY together with a list of any exceptions to the documents required therein pursuant to this Agreement and Buyer shall have the right to rely on such listing and respective exception report. Notwithstanding such listing or exception report, Seller (i) shall cause complete Contract Files to be delivered to Buyer (or a bailee on behalf of Buyer) at Closing (such bailee arrangement to be acceptable to Buyer), and (ii) to the extent delivered to a bailee at Closing, shall cause such bailee to deliver complete Contract Files to Buyer on or before the close of business on the fifth (5 th ) Business Day
following the Closing, and if such Contract Files are not delivered in a timely manner, Buyer shall be entitled to exercise such rights and remedies available hereunder, at law or in equity, which remedies shall be cumulative and non-exclusive.
The servicing files maintained by Buyer shall be appropriately marked and identified in Buyers computer system to clearly reflect the sale of the related Loan to Buyer and not as a secured borrowing. Seller hereby acknowledges to Buyer that each sale of a Loan hereunder is absolute and irrevocable, without reservation or retention of any interest whatsoever by Seller. It is the intention of Seller and Buyer that the Loans sold by Seller to Buyer pursuant to this Agreement shall not be part of Sellers estate in the event of the filing of a bankruptcy petition by or against Seller under any bankruptcy or similar law.
The sale of each Loan to Buyer shall be reflected on Sellers balance sheet and other financial statements, tax returns and business records as a sale of assets by Seller. Neither Buyer nor Seller will take any action or omit to take any action which would cause the transfer of the Loans to Buyer to be treated as anything other than a sale to Buyer of all of Sellers right, title and interest in and to each Loan and each of the parties hereto will treat the transaction contemplated by this Agreement as such. For so long as Buyer owns a Loan, Buyer shall be responsible for maintaining and shall maintain a set of books and records for each Loan, which shall reflect Buyers ownership of each Loan. Although the parties intend that the conveyance of Sellers right, title and interest in and to the Loans to Buyer pursuant to this Agreement shall constitute a sale thereof and not a financing, if such conveyance is deemed to be a financing, the parties intend that the rights and obligations of the parties to such financing shall be established pursuant to the terms of this Agreement and the parties intend and agree that Seller shall be deemed to have granted to Buyer, and Seller hereby does grant to Buyer, a perfected first priority lien security interest in all of Sellers right, title and interest in, to and under the Loans and all proceeds thereof, and that this Agreement shall constitute a security agreement under applicable law. Buyer shall have the right to file in the office of the Secretary of State of Delaware or other appropriate office, a UCC financing statement (the Financing Statement) describing the Loans being transferred on the Closing Date and naming the Seller as Seller and the Buyer as Purchaser. The financing statement shall bear a statement indicating that the parties intend the financing statement to evidence a true sale of the Loans, but if the transaction is recharacterized as a loan from the described Purchaser to the described Seller, the financing statement is to perfect the described Buyers security interest in the Loans. Buyer is authorized to file all necessary continuation statements for the foregoing described Financing Statement, and Seller shall execute such documents and take such actions as reasonably requested by Buyer to file such continuation statements.
Article 2
Price
The Purchase Price of each Loan will be calculated on the Closing Date and will be equal to Purchase Price Percentage times the Unpaid Principal Balance and the Purchase Price Percentage times accrued interest due on any Loan but not to exceed 30 days of accrued interest on any Loan. Seller assigns to Buyer with each Loan all of Sellers rights and interest in and to any late charges, insurance receivables, partial payments not applied to an Obligors Loan or related receivables. No adjustment in the Purchase Price or Unpaid Principal Balance has been made for any of these receivable balances. Buyer will purchase escrow advances (for applicable taxes and hazard insurance) (Escrow Advances) on each Loan purchased hereunder by Buyer, provided that (a) the related Obligor is repaying and continues to repay the related advances so purchased on a monthly basis in addition to its monthly payment and (b) no such escrow advances exceed $1,400 on any Loan. The purchase price for the Escrow Advances shall be the dollar amount of the Escrow Advances (not to exceed $1,400 on any Loan) multiplied by 100%.
Article 3
Ownership and Security Interest
Seller will reasonably cooperate with Buyer to take the action Buyer deems reasonably necessary to transfer to Buyer all of Sellers right, title and interest in and to the Loans free and clear of all claims, liens and encumbrances, including, but not limited to, notifying the Obligors and others of Buyers ownership of the Loans and first priority
security interest in the manufactured homes, the delivery of all originals of the Loans and Customer Files to Buyer, the execution of assignments, financing statements, and certificates of title.
After the Closing Date, Buyer shall be solely responsible for making all necessary Consumer Disclosures and to notify the Obligors in writing to tender payments due under the Loans directly to Buyer.
Article 4
Representations, Warranties and Covenants of Seller
For each Loan purchased by Buyer, Seller hereby represents warrants and covenants as follows:
Seller has the corporate or other requisite legal power to sell, transfer and assign the Loan and corresponding Security Instrument, and such sale, transfer and assignment has been duly authorized by any necessary corporate or other legal action of Seller and constitutes the legal, valid and binding obligation of Seller, enforceable in accordance with the terms thereof. Seller has obtained any and all necessary consents of third parties required of them in order to accomplish such sale, transfer and assignment, and such sale, transfer, and assignment will not result in Sellers being in default under any of the provisions of its articles of incorporation, by-laws, limited partnership agreement, articles of organization, operating agreement or of any material credit or other agreements to which it is a party.
Seller has good and marketable title to, and is the sole owner of, the Loans and the loan servicing rights thereto with the exception of Origen Servicing, Inc. who is presently servicing the Loans pursuant to the terms and conditions of a certain Servicing Agreement with Origen Servicing, Inc. dated April 1, 2005 which servicing arrangement with Origen Servicing, Inc. will be terminated as of the Closing Date.
As of the Closing Date there are no actions, suits or proceedings existing, pending or threatened against or affecting Seller or any current or prior servicer, owner or originator of such Loan before any court, arbitrator or governmental or administrative body or agency which affect the validity or enforceability of any Loan or which might result in any adverse change in the value of the Loan. The Purchase Price paid to Seller for the Loans is fair market value and constitutes reasonable value.
All information set forth in any Customer File, and all other information furnished to Buyer by Seller with respect to the Loans (including the Schedule of Loans and data tape) is true and correct in all material respects.
For each Loan Seller has a Security Instrument and each Security Instrument upon proper assignment, filing and/or recording, will constitute a perfected first priority security interest in favor of Buyer.
No payment on any Loan is presently delinquent for more than sixty (60) days and there have been no extensions of any payments within the prior four (4) months.
As of the Closing Date, there is no material default, breach, violation or event of acceleration existing under any Loan and no event which, with notice and the expiration of any applicable grace or cure period, would constitute such a default, breach, violation or event of acceleration, and Seller shall not have waived any such default, breach, violation or event of acceleration.
As of the Closing Date there are no mechanics liens or claims for work, labor or material affecting a Home.
As of the Closing Date there is no valid offset, defense or counterclaim to any Contact or Security Instrument, including any defense to the obligation of the Obligor to pay the unpaid principal, interest, or other charges on such Loan.
Payment shown on the pay history provided to Buyer was an actual payment from Obligor to the Loan.
The Home, including any additional accessories and furnishings in the Home described in the Loan, and any improvements thereto, was, at the time it was originally delivered to Obligor free of damage and in good repair, normal wear and tear excepted, and was delivered, set up and installed, as appropriate, to the satisfaction of the Obligor and in compliance with all applicable federal, state and local statutes, regulations, ordinances and requirements.
The amounts and items shown on the Schedule of Loans (Exhibit A) delivered to Buyer at Closing are correct in all material respects.
There is no holder in due course claim or any claim against any third party available to the Obligor which would interfere with the Buyers right to enforce the Loan or Security Instrument, including the right to service, repossess and sell the collateral securing such Loan.
The Loan represents a valid, binding and enforceable obligation on behalf of the Obligor under the related Loan, enforceable in accordance with its terms, subject only to applicable laws relating to insolvency, bankruptcy, and equitable remedies.
There is only one original of each Contract and such original together with the certificate of title noting Sellers first priority lien and security interest in the Home securing such Contract is being delivered to Buyer on the Closing Date.
The Seller has not released the Home from any lien created by the Security Instrument nor have any of the terms of the Security Instrument been modified by Seller. Seller holds a valid first priority lien against the Home identified in the Contract File and the Customer File.
Each Loan complies with, and has been in compliance with, in all material respects all applicable federal, state and local laws, rules and regulations including, without limitation, usury, consumer credit, truth in lending, and disclosure laws.
The origination, collection and origination practices utilized with respect to each Loan, including all actions taken by Seller, the current and any prior servicer and the originator, and all Loan documents and all forms, letters, notices, statements and other materials used by Seller, the current or prior servicer and the originator in connection with the Loans, comply with and have complied with all federal, state and local laws, rules and regulations applicable to such actions.
Other than Seller, no person or entity retains or holds any rights or interests in the Loan, including any rights or options to service such Loan or any rights to share in revenue derived from a Loan, with the exception of Origen Servicing, Inc. who is presently servicing the Loans pursuant to the terms and conditions of a certain Servicing Agreement with Origen Servicing, Inc. dated April 1, 2005 (the Prior Servicing Agreement) which servicing arrangement with Origen Servicing, Inc. will be terminated as of the Closing Date. Pursuant to the Prior Servicing Agreement, Seller has the right with respect to the Loans to effect either a Whole Loan Transfer or a Pass-Through Transfer (as those terms are defined therein) to a third party.
Each Loan carries the fixed rate of interest identified on Schedule A attached to this Agreement.
No Home pledged as collateral for a Loan is vacant on or before the Closing Date; nor has Seller received information from any source of an Obligors intent to vacate the Home; and none of the Loans or related Obligor or collateral securing such Loans were subject to bankruptcy or other similar proceedings as of the Closing Date.
There have been no material omissions or misrepresentations in any documents provided or statements made to Buyer concerning the Loans.
Notwithstanding whether or not the Seller has actual knowledge of any facts, events or occurrences that would or may constitute a breach of any representation or warranty under this Agreement, Seller must repurchase any Loan pursuant to Article 5 hereof and fulfill any other obligations with respect to this Agreement in the event there is any breach, default or misrepresentation in the representations and warranties with respect to such Loan.
Article 5
Breach of Warranty
Upon discovery by Buyer of any material breach of any representation or warranty, Buyer shall give prompt written notice to Seller of said breach. Seller must cure such breach within 30 days of its receipt of written notice. If breach is not cured within 30 days, Seller shall immediately repurchase from Buyer any Loan, with respect to which breach exists. The repurchase price for purposes of this Article 5 shall be the Purchase Price Percentage times the Unpaid Principal Balance plus the Purchase Price Percentage times the accrued interest due on the date of repurchase. Repurchase shall occur by no later than ten (10) days following the expiration of the 30-day right to cure period. In the event of such a repurchase, Buyer must deliver to Seller the related Loan Customer File and assign without recourse to Seller all of Buyers right, title and interest in and to the related Loan free and clear of any and all claims, liens and encumbrances, except for those which existed at the time of Buyers purchase of such Loan or which arise or relate to any breach of any representation, warranty or covenant of Seller contained herein. For avoidance of doubt, the parties acknowledge and agree that in the event a Loan is repurchased by Seller as provided herein, any and all payments and proceeds (including repurchase price proceeds) derived from such Loan prior to or on the effective date of the repurchase shall not be included as part of the Loan that is repurchased by Seller. Seller acknowledges that it shall be responsible for servicing any such Loan after it is repurchased.
Article 6
Representations, Warranties and Covenants of Buyer
Buyer hereby represents warrants and covenants to Seller as follows:
Buyer is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware and has full corporate power and authority to own its properties and carry on its business as it is now being conducted, and is duly qualified to transact business as it is now being conducted as a foreign corporation in all jurisdictions where such qualification is required, unless such failure to qualify would not have a materially adverse effect on Buyers ability to carry out its obligations hereunder.
Buyer has the corporate power to purchase the Loan and corresponding Security Instrument and such purchase has been duly authorized by any necessary corporate action of Buyer and constitutes the legal, valid and binding obligation of Buyer, enforceable in accordance with its terms. Buyer has obtained any and all necessary consents of third parties required of it in order to accomplish such purchase, and such purchase will not result in Buyers being in default under any of the provisions of its certificate of incorporation, by-laws or of any material credit or other agreements to which it is a party.
Buyer has received all necessary federal, state and local licenses, permits, and/or authorizations and approvals required to conduct its business as it is presently being conducted and to perform its functions under this Agreement, except with respect to such licenses, permits, authorizations and approvals which the failure to obtain would not have an adverse effect on Buyers ability to perform its obligations hereunder.
Article 7
Indemnification
Seller and SCI jointly and severally agree to protect, indemnify, and hold Buyer harmless against, and in respect of, any and all claims (including third party claims), damages, losses, costs and expenses (including reasonable attorneys fees and expenses) arising out of, connected with or resulting from any breach of the agreements, representations, covenants or warranties made by Seller herein.
Buyer agrees to protect, indemnify, and hold Seller harmless against and in respect of any and all claims (including third party claims), damages, losses, costs and expenses (including reasonable attorneys fees and expenses) arising out of, connected with or resulting from any breach of the agreements, representations, covenants or warranties made by Buyer herein.
Article 8
Post-Closing Cooperation of Seller and Limited Power of Attorney
In order to facilitate Buyers transfer of the Loans, Seller shall, upon the reasonable request of Buyer or its assigns, do and perform or cause to be done and performed, every reasonable act and reasonable thing necessary or advisable to vest Buyer with rights to enforce the payment of the Loans and to carry out the intent of this Agreement, including the execution of documents such as applications for certificates of title, financing statements assigning Sellers security interests in the Homes, the designation of Loans as satisfied as applicable and to release security interests in Homes as applicable, and the execution of additional documents including separate endorsements and assignments upon request of Buyer. For purposes of the foregoing, Seller hereby grants to Buyer a limited power of attorney as to each Loan, which will not be terminable by Seller without the prior written consent of Buyer until such Loan has been repaid or the Home securing the payment thereof has been liquidated, and hereby authorizes any individual or any person nominated by Buyer to execute such documents on behalf of Seller reasonably necessary to permit Buyer to fully enforce its rights as assignee of the Loans. Seller will execute on the Closing Date, a Master Limited Power of Attorney in the form attached hereto as Exhibit D.
Article 9
Post-Closing Servicing of Loans.
From and after the Closing Date, Buyer shall be responsible for servicing and administering the Loans and shall
have full power and authority, acting alone, to do any and all things in connection with such servicing and administration which the Buyer may deem necessary or desirable.
In servicing and administering the Loans, Buyer agrees to employ procedures (including collection procedures) and exercise in all material respects the same care that it customarily employs and exercises in servicing and administering retail installment contracts and loans for its own account, including using commercially reasonable diligence in collecting payments due under each of the Loans when the same shall be due and payable and servicing the Loans in material compliance with applicable laws, rules and requirements and the requirements of the Loans. For avoidance of doubt, any purported noncompliance of the foregoing covenant by Buyer that is alleged by Seller that arises from or relates to a breach by Seller under this Agreement shall not be deemed a breach by Buyer.
The servicing files maintained by Buyer shall be appropriately marked and identified in Buyers computer system to clearly reflect the sale of the related Loan to Buyer.
Article 10
The Closing
Seller shall provide a Schedule of Loans to Buyer at least two 2 Business Days prior to Closing so a settlement statement can be prepared and accepted by Buyer and Seller at least one day prior to the Closing Date. The settlement statement shall be in the form shown as Exhibit I. The Schedule of Loans must list each Loan to be purchased on the Closing Date and must set forth for each Loan the following information:
A schedule of Contracts (Exhibit A) in EXCEL worksheet format. The schedule of Contracts must list each Contract to be purchased on the Closing Date and must set forth as to each such Contract:
Sellers account number of the Contract,