Exhibit (10)(xx)
MANUFACTURED HOME LOAN PURCHASE AGREEMENT
This MANUFACTURED HOME LOAN PURCHASE AGREEMENT, dated as of
March 10, 1998, is made by and between Green Tree Financial Servicing
Corporation, a Delaware corporation ("Green Tree") and Cavalier Acceptance
Corporation, an Alabama corporation ("CAC").
R E C I T A L S:
Green Tree and CAC, together with certain affiliated companies
of Cavalier and Green Tree, are parties to that certain Financing Alliance
Agreement dated as of February 17, 1998 (the "Financing Alliance Agreement"),
pursuant to which the parties have made arrangements with respect to, among
other things, the purchase or origination and sale by CAC of certain
Manufactured Housing Retail Finance Contracts to Green Tree (as used in this
agreement, capitalized terms that are used but not otherwise defined herein,
shall be used with the same meaning as given to them in the Financing Alliance
Agreement). This Agreement is made and entered into pursuant to Article 5 of the
Financing Alliance Agreement, pursuant to which Green Tree has agreed to
acquire, and CAC has agreed to sell, approximately $25 million of Manufactured
Housing Retail Finance Contracts presently held by CAC, excluding the Carved-Out
CAC Loans, and this Agreement shall further evidence and confirm the agreements
between Green Tree and CAC with respect to the Manufactured Housing Retail
Finance Contracts sold by CAC to Green Tree pursuant to Section 5.1 of the
Financing Alliance Agreement.
NOW, THEREFORE, in consideration of the foregoing premises and
the mutual promises contained herein, the parties hereto, intending to be
legally bound, do hereby agree as follows:
Section 1. Purchase and Sale of Contracts.
Subject to the terms and conditions herein, CAC hereby agrees
to sell, and Green Tree hereby agrees to purchase from CAC, all of the
Manufactured Housing Retail Finance Contracts (including all related lien
perfection instruments, guaranties, dealer agreements and related loan
documents) presently held by CAC which were first purchased by or originated by
CAC after December 31, 1995 and before February 28, 1998, and set forth on
Schedule 1 hereto (the "Contracts Sold Hereunder"), except that Green Tree does
not agree hereby to purchase any of the Carved-Out CAC Loans, and any CAC Loans
originated by CAC on and after the Effective Date of the Financing Alliance
Agreement shall be sold to Green Tree pursuant to Article 3 of the Financing
Alliance Agreement rather than pursuant to this Agreement. The conveyance of the
Contracts Sold Hereunder shall be consummated on March 13, 1998; provided that
all conditions precedent specified in Exhibit X hereto are satisfied (the
"Consummation Date").
Section 2. Price to be Paid.
(a) The Purchase Price for each of the Contracts Sold Hereunder
(individually, a "Contract") to Green Tree by CAC shall be, for each such
Contract, an amount equal to the sum of (i) the then-outstanding principal
balance owing on such Contract and (ii) any accrued but unpaid interest at the
applicable rate of interest on such Contract to and including the effective date
on which the Contracts Sold Hereunder are transferred to Green Tree and (iii) an
acquisition premium equal to the amount specified on Exhibit X hereto. The
Acquisition Premium shall be deemed fully earned by CAC upon conveyance of the
related Manufactured Housing Retail Finance Contract by CAC to Green Tree.
(b) Not later than thirty (30) days after the Consummation
Date, Green Tree shall recalculate the accrued interest for those Contracts Sold
Hereunder which are set forth on Exhibit A to Schedule 1 (the "Adjusted
Contracts") in order to recalculate the accrued interest on each of such
Contracts, and the resultant outstanding principal balance (the "Adjusted
Balance") for such Contracts, effective as of March 12, 1998, under the
assumption that each payment received on such Contracts should be applied
effective as of the scheduled date such payment was due. The Purchase Price for
each of the Adjusted Contracts shall be reduced by the difference, if any,
between the Adjusted Balance and the principal balance originally specified by
CAC for such Contract as of March 12, 1998 (the aggregate amount of reduction to
the Purchase Price is herein referred to as the "Adjustment Amount"). Cavalier
shall be furnished with the supporting data and calculations upon which Green
Tree has based its determination of the Adjustment Amount, and CAC shall have a
reasonable opportunity, of not more than ten (10) days, to audit and verify such
data. CAC and Green Tree shall thereupon agree upon a final determination as to
the Adjustment Amount, and CAC shall remit payment to Green Tree for such
Adjustment Amount within forty-eight (48) hours from agreement as to such
amount. Upon receipt from CAC of the Adjustment Amount, Green Tree shall modify
its records for the Adjusted Contracts to reflect the Adjusted Balance, and
should provide such notice thereof to the applicable obligors as may be deemed
appropriate under the circumstances. If for any reason Green Tree and CAC are
unable to agree upon the final Adjustment Amount for the Adjusted Contracts,
then such dispute shall be resolved, at either party's request, by arbitration
pursuant to the terms provided for in Section 7.13 of the Financing Alliance
Agreement.
Section 3. Designation of Loans.
The CAC Loans evidenced by the Contracts Sold Hereunder shall
be designated on Schedule 1 to this Agreement.
Section 4. Conveyance of Contracts.
Subject to the terms and conditions hereof, and subject to a
customary xxxx of sale and portfolio assignment with terms consistent with this
Agreement, CAC will sell and assign to Green Tree, and Green Tree will acquire
from CAC, without recourse or warranty other than as specifically provided for
or incorporated herein, the following:
(a) all right, title and interest of CAC in and
to the Contracts Sold Hereunder which are listed on Schedule 1 hereto, including
all agreements, instruments and certificates relating thereto (including all
related guaranties and all related Dealer Agreements);
(b) all right, title and interest of CAC in
the lien on and/or the security interest in the manufactured home (including
the related lien perfection instruments) granted pursuant to the applicable
Contracts Sold Hereunder;
(c) the interest of CAC in any proceeds of any
insurance policies to the extend that they relate to the Contracts Sold
Hereunder or the related manufactured home or obligors;
(d) the right to realize on any property
(including the right to receive future liquidation proceeds) that secured a
Contracts Sold Hereunder and has been repossessed by or on behalf of CAC or
Green Tree (without in any way obligating Green Tree to purchase any contracts
sold hereunder where the underlying collateral has been repossessed);
(e) rights and remedies under all dealer
agreements or other similar agreements with respect to the Contracts Sold
Hereunder; and
(f) all proceeds of the foregoing.
At the reasonable request of Green Tree, CAC will take or
cause to be taken such further action as necessary or appropriate to effect or
perfect the sale and conveyance made hereby, including the execution of such
instruments and documents as may be reasonably necessary or appropriate to
facilitate the sale and conveyance of the Contracts Sold Hereunder from CAC to
Green Tree, including UCC-1s in favor of Green Tree as secured party and obtain
releases of all other liens.
Section 5. Terms of Payment.
On the Consummation Date, Green Tree shall pay to CAC, by wire
transfer of immediately available funds to any account specified by CAC, an
amount equal to the aggregate Purchase Price for the Contracts Sold Hereunder.
Section 6. Documents to be Provided.
With respect to the conveyance by CAC of the Contracts Sold
Hereunder, CAC agrees to endorse and deliver such Contracts Sold Hereunder to
Green Tree on the Consummation Date by overnight mail (next business day)
addressed to Green Tree, 500 Landmark Towers, 000 Xx. Xxxxx Xxxxxx, Xx. Xxxx,
Xxxxxxxxx 00000 (Attn: Xxxx Xxxxxxxx), and to provide and execute such
additional documents and instruments as may reasonably be requested by Green
Tree and which are customarily provided in connection with similar transactions,
including but not limited to limited powers of attorney in such forms as Green
Tree may reasonably request from time to time. CAC agrees to provide such notice
to borrowers under Contracts Sold Hereunder as Green Tree may reasonably
request. From and after the consummation of the transactions contemplated
hereby, CAC shall hold any and all payments received by it with respect to a
Contract Sold Hereunder in trust for the benefit of Green Tree and shall
promptly remit such payment to Green Tree in accordance with such customary
procedures as the parties may establish.
Section 7. Representations and Warranties.
With respect to each of the Contracts Sold Hereunder, and the
applicable CAC Loan evidenced thereby, CAC represents and warrants as of the
date hereof to Green Tree that:
(a) each CAC Loan evidenced thereby meets and
satisfies each of the representations and warranties made by CAC in Section 3.10
of the Financing Alliance Agreement with respect to each Available CAC Loan,
except that (i) with respect to the representations and warranties made in
Sections 3.10(e), (g) and (h) of the Financing Alliance Agreement; and (ii)
in substitution for the representations and warranties made in Sections 3.10
(e), (g) and (h), CAC instead represents and warrants solely that none of the
Contracts Sold Hereunder evidence Carved-Out CAC Loans;
(b) each CAC Loan has been originated in
conformity in all material respects with the underwriting guidelines
incorporated as Exhibit A to the Financing Alliance Agreement;
(c) to the knowledge of CAC, each Contract has
been fully and properly executed by the parties thereto;
(d) the forms of Contract and related
documentation relating to each CAC Loan shall be similar in all material
respects to those previously provided to Green Tree;
(e) each CAC Loan purchased by Green Tree
constitutes the legal, valid and binding payment obligation of the related
borrower, is enforceable by the holder thereof in accordance with its terms,
subject to applicable bankruptcy and similar laws, equitable principles and
public policy considerations;
(f) as of the Consummation Date, CAC has taken
no action such that the CAC Loan has been amended, waived, altered or modified
in any respect, except pursuant to a document, instrument or writing included in
the related file;
(g) to the knowledge of CAC, the CAC Loan is not
subject to any right of rescission, set off, counterclaim or defense, including
the defense of usury;
(h) CAC has good title to the Contracts Sold
Hereunder, free and clear of all liens except that in favor of First Commercial
Bank (the "Warehouse Lender"), which lien shall be released in full
contemporaneously with the consummation of the transaction contemplated hereby,
and subject to the Warehouse Lender's consent, CAC has the right to transfer the
Contracts Sold Hereunder;
(i) CAC has a first priority perfected
security interest in the manufactured home which secures each Contract Sold
Hereunder and there are no other nonconsensual liens of record on such
collateral, including liens for work, labor, materials or unpaid state or
federal taxes;
(j) all documents, including the Contracts
Sold Hereunder and the information contained therein, submitted or to be
submitted to Green Tree are true, complete, accurate, correct and genuine in all
material respects to CAC's best knowledge;
(k) all representations of the borrowers with
respect to the loans are true and correct to CAC's knowledge and all information
contained in the Contracts Sold Hereunder and the related documents is true,
accurate, correct, and genuine to CAC's knowledge;
(l) the proceeds of the Contracts Sold Hereunder
have not been used to acquire an interest in real estate and except as disclosed
to Green Tree, the obligations thereunder are not secured by an interest in real
estate;
(m) to the knowledge of CAC, the parties to
Contracts Sold Hereunder are not minors and have the legal capacity to contract;
(n) to the knowledge of CAC, the down payment
shown on each Contracts Sold Hereunder was paid in cash (and was not paid by the
Dealer), unless otherwise shown on the Contracts Sold Hereunder or the related
credit application and does not include any rebates;
(o) to the knowledge of CAC, the related credit
application for each Contracts Sold Hereunder is true and correct;
(p) the manufactured homes which are the subject
of the Contracts Sold Hereunder are each insured by individual or blanket
policies of insurance protecting against loss of or damage to the collateral in
such amounts as may be permitted by law, not to exceed the approximate principal
balance of the related Contract;
(q) any insurance premium or charges included in
the Contracts Sold Hereunder have been or will be paid to the applicable
insurance carrier, net of any lawful commissions that may be retained;
(r) where insurance coverages are included in
any Contracts Sold Hereunder, CAC will notify the applicable insurance carrier
of the assignment of the Contracts Sold Hereunder to Green Tree and request that
Green Tree be named as beneficiary or loss payee, as applicable;
(s) to the knowledge of CAC, no borrower or
guarantor under any Contracts Sold Hereunder has any defense, counterclaim or
right of set-off with respect thereto;
(t) the terms of the Contracts Sold Hereunder
have not been impaired, waived, altered or modified in any material respect by
CAC except by written instruments contained in the Contract file;
(u) to the knowledge of CAC, the Contracts Sold
Hereunder are not subject to any right of rescission;
(v) the Contracts Sold Hereunder are not Carved-
Out Loans;
(w) in connection with the purchase or
origination of each Contract, all applicable State, local and Federal laws and
regulations were observed and all necessary disclosures required by applicable
statutes and regulations were made by Originator or CAC, as the case may be,
including, but not limited to, the Truth-in-Lending Act (including right of
rescission requirements), the Real Estate Settlement Procedures Act, the Federal
Trade Commission Home Solicitation Rule, the Alabama Mini-Code, the Fair Housing
Act, the Fair Credit Reporting Act, the Home Mortgage Disclosure Act, and the
Equal Credit Opportunity Act, except for such matters that would not, as of the
Consummation Date, affect the validity and existence of the CAC Loans or give
rise to any valid defense to payment of the related Contract or to foreclose on
any lien securing such CAC Loan and each Contract complies with the applicable
state, local and federal laws;
(x) Representations and warranties shall survive
execution of this Agreement; and
(y) All Contracts Sold Hereunder, as listed on
Schedule I attached hereto, including all agreements, instruments, certificates,
guaranties, and rights under dealer agreements related thereto, have been
conveyed to Green Tree as of the Consummation Date or within thirty (30) days
thereafter.
Section 8. Repurchase Rights.
CAC agrees to repurchase any Contract Sold Hereunder which is
in breach of any representation or warranty made by CAC under Section 7 at a
price equal to the sum of the outstanding principal balance, acquisition premium
under this Agreement, accrued but unpaid interest, and any other relevant fee,
of such Contract (the "Repurchase Price"); provided that CAC shall have thirty
(30) days during which it may cure such breach, if possible under the law, and
to the reasonable satisfaction of Green Tree. Green Tree and CAC agree that the
sole remedy of Green Tree with respect to a breach of any representation or
warranty by CAC under Section 7 is the repurchase of the related Consumer Loan
by CAC at the Repurchase Price; provided further that after receipt by CAC of a
written request for repurchase from Green Tree stating in reasonable detail the
basis for such request and after the expiration of the thirty (30) day period
within which CAC may cure such breach (if possible to be cured), then if CAC
does not repurchase the related Contract within ten (10) business days
thereafter, CAC shall be liable for any reasonable attorneys fees and related
costs incurred by Green Tree in connection with the related Contract from and
after the date of the related repurchase request by Green Tree.
Section 9. Additional Representations and Warranties.
The representations, warranties and agreements of the parties
made in Sections 4.6 and 4.7 of the Financing Alliance Agreement are hereby
restated herein by the respective parties. CAC represents and warrants that it
had in effect, at the time a related Contract was acquired by CAC, all necessary
and appropriate federal, state and local licenses or permits required to
purchase the Contracts Sold Hereunder and, as of the date hereof, all such
licenses and permits necessary to sell the Contracts Sold Hereunder. Each party
represents to the other that the execution, delivery and performance of this
Agreement does not and will not result in a breach or constitute a default under
any material agreement or instrument to which it is a party or by which it may
be bound or affected, in the case of CAC subject to the consent of the Warehouse
Lender.
Section 10. Covenants.
CAC and Green Tree agree that the covenants and promises
provided for in Section 4.10 and 4.11 of the Financing Alliance Agreement,
pertaining to Transferred CAC Loans, shall apply similarly to the Contracts Sold
Hereunder. CAC agrees to take such actions as may reasonably be necessary under
applicable law, in consultation with Green Tree or as is otherwise requested by
Green Tree, to correct, at CAC's expense, any inadvertent errors that may have
occurred in the computation of interest or disclosure of APR under certain
Contracts Sold Hereunder.
Section 11. Miscellaneous.
Notices between the parties shall be in writing and will be
deemed given upon the terms and circumstances provided for the Financing
Alliance Agreement. The parties agree that Article 7 of the Financing Alliance
Agreement shall apply to this Agreement just as if expressly set forth herein,
including the agreement to arbitrate disputes provided for at Section 7.13 of
the Financing Alliance Agreement.
IN WITNESS WHEREOF, the parties have caused their respective
duly authorized representatives to sign below as of the date first above
written.
CAVALIER ACCEPTANCE CORPORATION
By: /s/ Xxxxx X. Xxxxxx, Xx.
_________________________
Its: President
_________________________
Name: Xxxxx X. Xxxxxx, Xx.
_________________________
GREEN TREE FINANCIAL SERVICING
CORPORATION
By:/s/ Xxxx X. Xxxxxxxxx
_________________________
Its: Senior Vice President
and Secretary
_________________________
Name: Xxxx X. Xxxxxxxxx
_________________________
