Exhibit 10.2
PURCHASE AND SALE AGREEMENT
THIS AGREEMENT is made and entered into as of ______, 199_ by and
between MID-STATE HOMES, INC., a Florida corporation ("Mid-State" or the
"Seller"), and Mid-State Trust 199 - (the "Issuer" or the "Purchaser"), a
statutory Delaware business trust. Capitalized terms used but not defined herein
shall have the meaning ascribed to them in the Indenture or the Trust Agreement
each as defined below.
W I T N E S S E T H :
WHEREAS, the Purchaser is a business trust created under the Delaware
Business Trust Act by a trust agreement dated as of _________, 199_ (the "Trust
Agreement") between Mid-State, as Depositor, and ________________ (in its
capacity as trustee thereunder, the "Owner Trustee"); and
WHEREAS, Xxx Xxxxxx Homes, Inc. ("Xxx Xxxxxx Homes"), an affiliate of
the Seller, is in the business of constructing and selling partially-finished
homes, generally on a deferred, installment sale basis pursuant to a building or
installment sale contract between Xxx Xxxxxx Homes and the purchaser of the home
(the "Obligor"), and Xxx Xxxxxx Homes receives from each such Obligor an Account
Note and a related Mortgage. All Account Notes together with the related
Mortgages are collectively referred to herein as the "Accounts"; and
WHEREAS, the Seller desires to sell and assign all of its right, title
and interest in and to the Accounts listed on the Schedule of Accounts (the
"Mortgage Collateral") and the related Account Files, as defined below, to the
Purchaser and the Purchaser desires to purchase all the Seller's right, title
and interest in and to the Mortgage Collateral and the related Account Files;
and
WHEREAS, the Issuer will issue [ ]% Asset Backed Notes, Class A-1 (the
"Class A-1 Notes"), [ ]% Asset Backed Notes, Class A-2 (the "Class A-2 Notes"),
[ ]% Asset Backed Notes, Class A-3 (the "Class A-3 Notes") and [ ]% Asset Backed
Notes, Class A-4 (the "Class A-4 Notes", and together with the Class A-1 Notes,
Class A-2 Notes and Class A-3 Notes, the "Notes"), secured by related mortgage
and other collateral, as more particularly set forth in the Indenture dated as
of __________, 199_ (the "Indenture") between the Issuer and ________________,
as trustee (the "Indenture Trustee");
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein, the parties hereby do agree as follows:
1. Purchase and Sale of Mortgage Collateral; Registration Instructions.
Subject to the terms and conditions set forth herein, the Seller in its capacity
as such agrees to sell and assign, and hereby does sell and assign, to the
Purchaser all of its right, title and interest in and to (i) the Mortgage
Collateral, including all payments received in respect of the Accounts
comprising the Mortgage Collateral due after the Cut-Off Date and all payments
in respect of such Accounts due prior to the Cut-Off Date but received after the
Cut-Off Date and (ii) all
documents and instruments related to the Accounts comprising the Mortgage
Collateral as specified in Section 3 hereof (the "Account Files") to the
Purchaser, and the Purchaser agrees to purchase, and does hereby purchase from
the Seller, for a purchase price equal to the net proceeds of the sale of the
Notes, all of the Seller's right, title and interest in and to (i) the Mortgage
Collateral, including all payments in respect of the Accounts comprising the
Mortgage Collateral due after the Cut-Off Date and all payments in respect of
such Accounts due prior to the Cut-Off Date but received after the Cut-Off Date
and (ii) the Account Files. The Seller shall direct the Issuer to deposit from
the net proceeds of the sale of the Notes an amount equal to all payments
received on or before five Business Days prior to the Closing Date in respect of
the Mortgage Collateral into the Collection Account on the Closing Date. All
payments received in respect of the Mortgage Collateral subsequent to such date
shall be deposited by the Servicer in the Holding Account.
2. Conditions Sale and Purchase. The sale to the Purchaser of the
Mortgage Collateral and Account Files as provided in Section 1 hereof is subject
to the following conditions: (i) the Seller shall have delivered to the
Purchaser those documents set forth in subsections (i) through (v) of Section 3
hereof and (ii) the Purchaser shall deliver to the Seller the net proceeds from
the sale of the Notes.
3. Account Documents and Files. Except as otherwise disclosed in
writing at the time of delivery, each Account File with respect to each Account
shall consist of the following documents or instruments: (i) the building or
installment sale contract relating to such Account; (ii) the Account Note,
endorsed to the order of the Purchaser, without recourse; (iii) the original of
the recorded Mortgage and the originals of other documents, if any, securing
such Account Note; (iv) unrecorded assignments in recordable form to the
Purchaser, together with originals or certified copies of any recorded
assignment(s) from the originator of such Account to the Seller in respect of
each such Account; (v) the originals of any assumption agreement, written
assurance or substitution agreement relating to any Mortgaged Property conveyed
by an Obligor in respect of any such Account; (vi) all insurance policies,
including without limitation, fire and extended hazard insurance policies,
related to the Accounts, naming the Issuer, the Indenture Trustee, the Servicer
or the Subservicer as the loss payee of such policies; and (vii) any and all
other documents or instruments in the possession of the Seller relating to the
Accounts, which evidence, or were created in connection with the origination of,
or necessary for the administration of the Accounts, including without
limitation any credit reports, copies of deeds, completion certificates, title
search reports and credit applications; provided, however, that if the original
copy of any document described in clause (iii), (iv) or (v) has been retained by
the recording office in which such document was recorded or is otherwise
unavailable, then a copy thereof certified as true and correct by a duly
authorized representative of such local recording office or officer of Mid-State
shall be included as part of the documents for the related Account.
4. Representations, Warranties and Covenants with respect to the
Accounts.
A. Mid-State represents, warrants and covenants as of the date
hereof and as of the Closing Date with respect to each Account comprising the
Mortgage Collateral that:
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(i) The information set forth with respect to such
Account comprising the Mortgage Collateral in the Schedule of
Accounts referred to in the Indenture is true and correct as
of the date as of which such information is given.
(ii) The building or installment sale contract
relating to each Account has been duly executed by the parties
thereto and the duties to be performed thereunder by the
parties thereto and the Seller prior to the date the first
payment in connection with such installment sale contract is
due have been performed.
(iii) The Account Documents have been duly executed
and endorsed to the Purchaser and the Mortgage has been duly
executed by the Obligor and, to the extent required under
local law for recordation or enforcement, properly
acknowledged.
(iv) Each Mortgage has been properly recorded as
required by law. Each such Mortgage shall constitute a valid
first priority lien upon and secure title to the real property
and improvements thereon described therein, which includes a
single family detached dwelling, and such Mortgage and the
Account Note secured thereby are, or shall be, fully
enforceable in accordance with their terms, except as
enforceability thereof may be limited by bankruptcy,
insolvency, moratorium and other laws affecting creditors'
rights generally and by general principles of equity (whether
applied in a proceeding in law or at equity).
(v) All costs, fees, intangible, documentary and
recording taxes and expenses incurred in making, closing and
recording each Account have been paid.
(vi) No part of the Mortgaged Property purporting to
secure any Account Note has been, or shall have been, released
from the lien or security interest of the Mortgage securing
such Account Note, except for Mortgaged Property securing
Account Notes which have been prepaid in full between the
Cut-Off Date and the Closing Date, the amounts of such
prepayments from the Cut-Off Date to the date that is five
business days prior to the Closing Date to be deposited into
the Collection Account on or prior to the Closing Date any
prepayments thereafter to be deposited in the Holding Account
pursuant to Section 2.07 of the Servicing Agreement.
(vii) The Seller is the owner of the Mortgage
Collateral and the Account Files free and clear of all liens,
encumbrances and other interests. After the completion of the
sale contemplated by this Agreement, the Purchaser will be
sole owner of each Account and will have good title to such
Account and full right and authority to transfer such Account
and to Grant such Account to the Indenture Trustee.
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(viii) The Seller acquired title to the Mortgage
Collateral in good faith, for value and without notice of any
adverse claim. Except to the extent permitted by the Servicing
Agreement, no term or provision of any Account has been or
will be altered, changed or modified in any way by the
Purchaser or the Seller.
(ix) he Account Notes evidence obligations bearing a
fixed rate of finance charge and fully amortizing level
monthly payments due on the 5th or the 15th day of each month.
Each Account Note has an original term to maturity not in
excess of 30 years. No less than [ ]% the Account Notes that
have an Economic Balance greater than zero were originated
from _________, 199_ through ___________, 199_ with the
exception of Account Notes which represent the financing of
subsequent resales of repossessed houses that secured Account
Notes originated during such period. Each Account Note bears a
finance charge of not less than [ ]% and not more than [ ]%
per annum.
(x) As of the Closing Date, there is no right of
rescission, setoff, defense or counterclaim to any Account
Note or Mortgage, including both the obligation of the Obligor
to pay the unpaid principal or finance charge on such Account
Note and the defense of usury; furthermore, neither the
operation of any of the terms of the Account Note and the
Mortgage nor the exercise of any right thereunder will render
the Account Note or Mortgage unenforceable, in whole or in
part, or subject such Account Note or Mortgage to any right of
rescission, setoff, counterclaim or defense, including the
defense of usury, and no such right of rescission, setoff,
counterclaim or defense has been asserted with respect
thereto.
(xi) As of the Closing Date, there are no mechanics'
liens or claims for work, labor or material (and to the best
of the Seller's knowledge, no rights are outstanding that
under law could give rise to such lien) affecting any
Mortgaged Property which are or may be a lien prior to, or
equal with, the lien of such Mortgage.
(xii) Each Account Note at origination complied in
all material respects with applicable local, state and federal
laws, including without limitation, usury, equal credit
opportunity, real estate settlement procedures,
truth-in-lending and disclosure laws, and consummation of the
transactions contemplated hereby and by the Indenture will not
involve the violation of any such laws.
(xiii) As of the Closing Date, with respect to each
Mortgage constituting a deed of trust, a trustee, duly
qualified under applicable law to serve as such, is properly
designated, serving and named in such Mortgage.
(xiv) There has been no fraud, dishonesty,
misrepresentation or negligence on the part of the originator
(which is Xxx Xxxxxx Homes) in
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connection with the origination of any Account Note or in
connection with the sale of the related Account.
(xv) To the best knowledge of the Seller, except
Mortgaged Properties for which Insurance Proceeds are
available, each Mortgaged Property is free of damage which
materially and adversely affects the value thereof.
B. If any of the representations and warranties with respect
to any Account set forth in Section 4(A) hereof are found to be incorrect as of
the time made in any respect or if any Account Document is defective in any
material respect which materially and adversely affects the interest of the
Purchaser in the Accounts or if any document required to be delivered to the
Indenture Trustee has not been delivered or if any documents so delivered do not
relate to an Account listed on the Schedule of Accounts, the Seller shall notify
the Purchaser immediately after obtaining knowledge thereof and shall use its
best efforts to eliminate or otherwise cure the circumstances and conditions in
respect of such omission or defect or of which such representation or warranty
was incorrect as of the time made within 90 days of such notice to the
Purchaser. If such breach or omission or defect is not or cannot be cured within
such 90- day period or, with the prior written consent of a Responsible Officer
of the Indenture Trustee if so consented to under the Indenture, such longer
period as specified in such consent, the Seller shall either (i) repurchase such
Account from the Issuer for an amount equal to 100% of the then current Economic
Balance of the affected Account (a "Defective Account") or (ii) substitute for
such affected Account one or more Qualified Substitute Accounts (in which case
the removed Account shall become a "Deleted Account"). The Seller shall promptly
reimburse the Purchaser for any reasonable expenses (including without
limitation reasonable attorney's fees) incurred by the Purchaser, in respect of
any such breach, omission or defect.
As to any Deleted Account for which the Seller substitutes a
Qualified Substitute Account or Qualified Substitute Accounts, the Seller shall
effect such substitution by delivery to the Purchaser for such Qualified
Substitute Account or Qualified Substitute Accounts the Account Note and such
other Account Documents related thereto, with the Account Note endorsed to the
order of the Seller, without recourse, and endorsed by the Seller in blank or to
the order of the Purchaser, without recourse. Monthly Payments due with respect
to Qualified Substitute Accounts in the month of substitution will be retained
by the Seller. Available Funds will include the Monthly Payment due on any
Deleted Account in the month of substitution, and the Seller shall deposit such
amount in the Collection Account if received by it subsequent to the month of
substitution. The Seller shall be entitled to receive all amounts due subsequent
to the month of substitution in respect of such Deleted Account. The Seller
shall give or cause to be given written notice to the Purchaser, the Indenture
Trustee and the Rating Agencies that such substitution has taken place. Upon
such substitution, such Qualified Substitute Account or Qualified Substitute
Accounts shall be subject to the terms of this Agreement in all respects, and
the Seller shall be deemed to have made with respect to such Qualified
Substitute Account or Qualified Substitute Accounts, as of the date of
substitution, the representations and warranties set forth in Section 4A hereof.
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For any month in which the Seller substitutes one or more
Qualified Substitute Accounts for one or more Deleted Accounts, the Seller will
determine the amount (if any) by which the aggregate outstanding Economic
Balance of all such Qualified Substitute Accounts as of the date of substitution
is less than the aggregate outstanding Economic Balance of all such Deleted
Accounts. On the date of such substitution, the Seller will deposit from its own
funds into the Collection Account an amount equal to the amount of such
shortfall, if any, without reimbursement therefor.
It is understood and agreed that the obligations of the Seller
set forth in this Section 4B to cure, substitute for or deposit funds in the
Collection Account in connection with an Account constitute the sole remedies
available to the Purchaser respecting a breach of the representations and
warranties set forth in Section 4A or defect or omission.
5. Representations, Warranties and Covenants of the Seller. The Seller
hereby represents and warrants to the Purchaser that, as of the Closing Date:
(i) The Seller has been duly incorporated and is
validly existing as a corporation in good standing under the
laws of the jurisdiction of its incorporation with full
corporate power and authority to own, lease, operate and sell
its properties and to conduct its business as presently
conducted by it.
(ii) The Seller has the full corporate power and
authority and legal right to own the Mortgage Collateral and
the related Account Files and to transfer and convey the
Mortgage Collateral and the related Account Files to the
Purchaser and has the full power and authority and legal right
to execute and deliver, engage in the transactions
contemplated by, and perform and observe the terms and
conditions of, this Agreement.
(iii) This Agreement has been duly and validly
authorized, executed and delivered by the Seller, all
requisite corporate action has been taken, and this Agreement
constitutes the legal, valid and binding obligation of the
Seller, enforceable in accordance with its terms, except as
enforcement may be limited by bankruptcy, insolvency or
similar laws affecting the enforcement of creditors' rights
generally.
(iv) No consent, approval, authorization or order of,
or filing with, any court or governmental agency or body is
required for the consummation by the Seller of the sale
contemplated by this Agreement except as required under the
Uniform Commercial Code or in respect of recordings under real
estate recording statutes and except as has been obtained and
are in effect.
(v) Neither the sale of the Mortgage Collateral to
the Purchaser nor the execution, delivery or performance of
this Agreement by the Seller conflicts or will conflict with
or results or will result in a breach of or constitutes or
will constitute a default under (i) any term or provision of
the charter or bylaws of the Seller, (ii) any term or
provision of any agreement, contract, instrument or
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indenture of any nature whatsoever, to which the Seller or
any of its subsidiaries is a party or is bound or (iii) any
law, rule, regulation, order, judgment, writ, injunction or
decree of any court or governmental authority having
jurisdiction over the Seller or its subsidiaries, or results
or will result in the creation or imposition of any lien,
charge or encumbrance upon the Mortgage Collateral or any
documents or instrument evidencing or securing the Mortgage
Collateral, except as contemplated by the Indenture.
(vi) The Seller shall keep and maintain, for the
period during which the representations contained in this
Section 5 survive, all records pertaining to the Seller's loss
on account, foreclosure and delinquency experience for the
Mortgage Collateral and shall permit the Purchaser or its
designee, their agents or employees access to such records
upon reasonable notice for the purposes of auditing the same
in order to verify the accuracy and completeness thereof.
(vii) Except as set forth in Exhibit A attached
hereto, there are no actions, suits or proceedings pending or
threatened against or affecting the Seller which if adversely
determined, individually or in the aggregate, would materially
adversely affect the Seller's obligations under this
Agreement.
(viii) The Seller has duly and validly sold and
assigned its entire right, title and interest in and to the
Mortgage Collateral and the related Account Files to the
Purchaser, free and clear of any lien, encumbrance or any
other interests of others (including without limitation any
claim of any creditor of the Seller or any affiliate of the
Seller).
(ix) The Seller agrees to include in its financial
statements a footnote describing the sale of the Mortgage
Collateral and Account Files to the Purchaser and the issuance
and sale of the Notes and indicating that the Purchaser's
assets are not available to satisfy the claims of creditors,
if any, of the Seller.
6. Payment for the Mortgage Collateral. The Seller acknowledges receipt
of payment in full for the Mortgage Collateral and Account Files and the
Purchaser and the Seller agree that subsequent to the date hereof, no
modification or adjustment shall be made in respect of such purchase price.
7. Indemnity. The Seller agrees to indemnify, reimburse and hold the
Purchaser and its successors, assigns, trustees, employees, agents and servants
(hereinafter in this Section 8 referred to individually as "Indemnitee," and
collectively as "Indemnities") harmless from any and all claims, demands,
actions, suits, judgments and any and all costs and expenses (including
reasonable attorneys' fees and expenses) (for the purposes of this Section 8 the
foregoing are collectively called "expenses") of whatsoever kind and nature
imposed on, asserted against or incurred by any of the Indemnities in any way
relating to or arising out of this Agreement or the enforcement of any of the
terms of, or the preservation of any rights hereunder, or in any way relating to
or arising out of the origination, ownership, purchase,
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repossession, sale or other disposition of any of the Accounts, the breach of
any representation or warranty herein, the violation of the laws of any state or
other governmental body or unit, or any tort or contract claim (including
without limitation the claims or off-sets of third parties based on facts that
cause a breach of a representation or warranty herein); provided that no
Indemnitee shall be indemnified pursuant to this Section 8 for losses, damages
or liabilities to the extent caused by the negligence or misconduct of such
Indemnitee. The Seller agrees that upon written notice by any Indemnitee of the
assertion of such a claim, demand, action, judgment or suit, the Seller shall
assume full responsibility for the defense thereof. Each Indemnitee agrees to
use its best efforts to promptly notify Seller of any such assertion of which
such Indemnitee has knowledge.
8. Notices. All demands, notices and communications hereunder shall be
in writing and shall be deemed to have been duly given if personally delivered
to or mailed by registered mail, postage prepaid, or transmitted by telex or
telegraph and confirmed by a similar mailed writing, if to the Purchaser,
addressed to the Purchaser, at such address as the Purchaser may designate in
writing to the Seller; and if to the Seller, addressed to the Seller at such
address as the Seller may designate in writing to the Purchaser.
9. Severability of Provisions. Any part, provision, representation or
warranty of this Agreement which is prohibited or which is held to be void or
unenforceable shall be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof. Any part,
provision, representation or warranty of this Agreement which is prohibited or
unenforceable or is held to be void or unenforceable in any jurisdiction shall,
as to such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction as to any Account shall
not invalidate or render unenforceable such provision in any other jurisdiction.
To the extent permitted by applicable law, the parties hereto waive any
provision of law which prohibits or renders void or unenforceable any provision
hereof.
10. Further Assurances.
(i) The Seller agrees to execute and deliver such
instruments and take such actions as the Purchaser may, from
time to time, reasonably request in order to convey the
Accounts and the Account Files to the Purchaser and to
effectuate the purpose and to carry out the terms of this
Agreement.
(ii) The Seller and the Purchaser intend that, as a
result of the consummation of the transaction contemplated by
this Agreement, the Seller will have transferred all of its
right, title and interest in the Mortgage Collateral and the
Account Files to the Purchaser and that this transaction be a
true sale and agree that their actions have been and will be
consistent with this characterization of the transaction.
(iii) Notwithstanding subsection (ii) hereof, solely
in the event that a court of appropriate jurisdiction were to
recharacterize the transaction as a
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secured loan, the Seller hereby grants a security interest
in and pledges, assigns and transfers to the Purchaser as of
the date hereof (a) all of the right, title and interest of
the Seller in and to the Mortgage Collateral and the related
Account Files, (b) all cash, instruments or other property
owned by the Seller and relating to the Mortgage Collateral
held or required to be deposited on the Closing Date or
thereafter in the Holding Account or the Collection Account,
including all investments made with such funds and all
income from such investments and (c) all proceeds of the
foregoing, including, without limitation, all new Accounts
originated in connection with the sale of property acquired
in respect of the Mortgage Collateral, all insurance
proceeds and condemnation awards. The Seller agrees to
execute any financing statements (including a UCC-1
financing statement naming the Seller as seller/debtor and
the Purchaser as purchaser/secured party) or other
documentation necessary to create, maintain or perfect this
security interest in the Mortgage Collateral and Account
Files. The Seller and the Purchaser acknowledge that in the
event a court were to recharacterize the transaction as a
secured loan, the Indenture Trustee will act as agent of the
Issuer pursuant to the terms of that certain letter between
the Issuer and the Indenture Trustee attached hereto as
Exhibit B.
11. Survival. The Seller agrees that the representations, warranties
and agreements made by it herein and in any certificate or other instrument
delivered pursuant hereto shall be deemed to be relied upon by the Purchaser,
notwithstanding any investigation heretofore or hereafter made by the Purchaser
or on the Purchaser's behalf, and that the representations, warranties and
agreements made by the Seller herein or in any such certificate or other
instrument shall survive the delivery of and payment for the Mortgage Collateral
and the related Account Files.
12. Parties. This Agreement shall inure to the benefit of and be
binding upon the parties hereto and their respective successors and assigns.
13. Entire Agreement. This Agreement contains the entire agreement and
understanding among the parties hereto with respect to the subject matter
hereof, and supersedes all prior agreements and understandings relating to the
subject matter hereof. Neither this Agreement nor any term hereof may be
changed, waived, discharged or terminated orally, but only by an instrument in
writing signed by the party against whom enforcement of the change, waiver,
discharge or termination is sought.
14. Separate Counterparts. This Agreement may be executed by the
parties hereto in separate counterparts, each of which when so executed and
delivered shall be an original, but all such counterparts shall together
constitute but one and the same instrument.
15. Successors and Assigns. All representatives, warranties, covenants
and agreements contained herein shall be binding upon, and inure to the benefit
of the Purchaser and the Indenture Trustee and its successors and assigns and
the Seller and its successors and assigns, all as provided herein.
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16. Headings. The headings of the various Sections herein are for
convenience of reference only and shall not define or limit any of the terms or
provisions hereof.
17. Governing Law. This Agreement shall in all respects be governed by,
and construed in accordance with, the laws of the State of Florida, including
all matters of construction, validity and performance.
18. Liability. It is expressly understood and agreed by the parties
hereto that (a) this Agreement is executed and delivered on behalf of the
Purchaser by __________________, not individually or personally but solely as
Owner Trustee under the Trust Agreement, in the exercise of the powers and
authority conferred and vested in it as the Owner Trustee, (b) each of the
representations, undertakings and agreements herein made on the part of the
Purchaser is made and intended not as personal representations, undertakings and
agreements by ____________ but is made and intended for the purpose for binding
only the Purchaser and (c) under no circumstances shall _____________ be
personally liable for the payment of any indebtedness or expenses of the
Purchaser or be liable for the breach or failure of any obligation,
representation, warranty or covenant made or undertaken by the Purchaser under
this Agreement.
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IN WITNESS WHEREOF, each party has caused this Agreement to be signed
and executed by its proper officer thereunder duly authorized, as of the day and
year first written above.
SELLER:
MID-STATE HOMES, INC.
By: _________________________
Name:
Title:
PURCHASER:
MID-STATE TRUST 199 -
By: ______________________________,
not in its individual capacity
but solely as Owner Trustee
By:________________________________
Name:
Title:
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EXHIBIT A
[Actions, suits, proceedings - See Section 5(vii)]
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EXHIBIT B
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[Letterhead of the Indenture Trustee]
_________________________, 1997
Mid-State Trust 199 -
c/o ___________________,
as Owner Trustee
[Address]
Attention:
Re: Indenture dated as of _________, 199_ Between
________________, as Trustee, and Mid-State Trust 199 - , as
Issuer Relating to [ ]% Asset-Backed Notes, Class A-1, [ ]%
Asset Backed Notes, Class A-2, [ ]% Asset Backed Notes, Class
A-3 and [ ]% Asset Backed Notes, Class A-4
Ladies and Gentlemen:
We are writing in connection with the issuance of your asset-backed
notes pursuant to the Indenture described above. Capitalized terms used in this
letter shall have the meanings assigned to them in the Indenture.
This will confirm that in the event that the Purchase and Sale
Agreement is deemed to transfer to the Issuer a security interest in any portion
of the Trust Estate, we will act as the agent of the Issuer solely for purposes
of perfecting its security interest in any such portion of the Trust Estate in
our possession during the term of the Indenture, subject to the Grant made by
the Issuer in the Indenture and in acting as such agent, we will have all of the
protections given to us as Trustee under the Indenture.
Very truly yours,
[Indenture Trustee]
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