PURCHASE AND SALE AGREEMENT
THIS AGREEMENT is made and entered into as of May 1, 1997 by and
between MID-STATE HOMES, INC., a Florida corporation ("Mid-State" or the
"Seller"), and Mid-State Trust VI (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 March 1, 1997 (the
"Trust Agreement") between Mid-State, as Depositor, and Wilmington Trust Company
(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 May 1, 1997 (the "Indenture") between the Issuer and
First Union National Bank of Florida, 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 to 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;
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(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:
(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.
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(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
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authority to transfer such Account and to Grant such Account to the
Indenture Trustee.
(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) The 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
87% the Account Notes that have an Economic Balance greater than
zero were originated from January 1995 through February 1997, 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,
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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 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
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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.
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.
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5. Representations, Warranties and Covenants of the Seller. The
Seller hereby represents and warrants to the Pur- chaser 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 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
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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, xxxx- xxxxx and hold
the Purchaser and its successors, assigns, trust- ees, employees, agents and
servants (hereinafter in this Section 8 referred to individually as
"Indemnitee," and collectively as
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"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, 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
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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 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 representa- tions,
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
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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 bene- fit of and be
binding upon the parties hereto and their respec- tive 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.
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 construc- tion, 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 Wilmington Trust Company, 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 Wilmington Trust Company but is made and intended for the purpose
for binding only the Purchaser and (c) under no circumstances shall Wilmington
Trust Company be personally liable for the payment of any
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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.
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 VI
By: WILMINGTON TRUST COMPANY,
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)]
EXHIBIT B
[Letterhead of the Indenture Trustee]
_________________________, 1997
Mid-State Trust VI
c/o Wilmington Trust Company,
as Owner Trustee
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attention: Corporate Trust Administration
Re: Indenture dated as of May 1, 1997
Between First Union National Bank of Florida, as Trustee,
and Mid-State Trust VI, 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]
