RECEIVABLES PURCHASE AGREEMENT
LEISURE HOMES CORPORATION
THIS RECEIVABLES PURCHASE AGREEMENT (the "AGREEMENT") is entered into
effective as of November 15, 2002 by and between LAND FINANCE COMPANY, a
Delaware corporation having its principal place of business at 000 Xxxx Xxxxxx,
Xxxxxxxxxxxx, Xxxxxxxxxxxxx 00000 ("LFC") and LEISURE HOMES CORPORATION, a
Nevada corporation having its principal place of business at 0000 Xxxxxxxxx
Xxxxxx Xxxxx, Xxxxxxxxx, XX 00000, (the "SELLER").
BACKGROUND
A. The Seller now owns certain consumer Receivables (as defined in PARAGRAPH 1
below) representing purchase money indebtedness of purchasers (each a
"PURCHASER") of fee simple lots or acreage ("PROPERTY") located at one or more
projects described on EXHIBIT A attached hereto (each a "PROJECT" and
collectively, the "PROJECTS") originated by the Seller or acquired by the Seller
from the originator (the originator of a Receivable, whether the Seller or
otherwise, is referred to herein as the "ORIGINATOR").
B. The Seller desires to sell certain of the Receivables to LFC in accordance
with the terms and conditions of this Agreement.
C. LFC desires to purchase certain of the Receivables from the Seller in
accordance with the terms and conditions of this Agreement.
NOW THEREFORE, for and in consideration of the foregoing, and the
covenants and agreements hereinafter set forth and other good and valuable
consideration, the legal adequacy and sufficiency of which is hereby
acknowledged, the parties hereto, intending to be legally bound hereby, hereby
agree:
1. DEFINITION OF RECEIVABLE; SALE AND PURCHASE OF RECEIVABLES. (a) As used
herein, the term "RECEIVABLE" shall mean each and every mortgage loan acquired
by LFC pursuant to this Agreement, together with the related promissory note,
instrument, installment sales contract, contract for deed, purchase contract,
or other evidence of indebtedness executed and delivered by the Purchaser or
any other Obligor (defined below) to evidence the obligation to repay
indebtedness, each related mortgage, deed of trust, or other security
instrument, if any, creating a first lien on the related Property (each a
"MORTGAGE"), each other related instrument, document, guarantee, contract, or
agreement of whatever nature evidencing or securing the indebtedness of the
Purchaser and Obligor incurred in connection with the purchase of the related
Property at a Project, and all payments, revenues, proceeds, property, contract
rights, general intangibles, claims, title insurance policies, powers, benefits
and remedies arising from, or in any way related to, any of the foregoing.
(b) Subject to the terms and conditions of this Agreement, the Seller
hereby agrees to sell, transfer, assign and convey to LFC, and LFC hereby agrees
to purchase from the Seller certain Receivables which meet the characteristics
for eligibility set forth in PARAGRAPH 2 of this Agreement. The purchase of any
Receivable by LFC hereunder is at the sole and absolute discretion of LFC. LFC
shall have no obligation to purchase any Receivable or Receivables hereunder (i)
if the Seller is in default of any of its obligations hereunder, (ii) if any of
the representations or warranties of Seller in this Agreement are or become
inaccurate, or (iii) if LFC at its sole and absolute discretion elects not to
purchase any particular Receivable.
(c) Notwithstanding anything herein or elsewhere to the contrary, LFC shall
have no obligation to purchase any Receivables to the extent the aggregate
outstanding principal balance of all Receivables purchased hereunder would
exceed $30,000,000. This Agreement contemplates the purchase of two (2)
portfolios of Receivables to be funded and completed in two (2) closings. The
first closing and funding to occur within seven (7) business days after the date
of this Agreement (or as otherwise agreed to by the Seller and LFC) and the
second to occur on or before December 20, 2002.
(d) Notwithstanding anything herein or elsewhere to the contrary, LFC will
consider for purchase hereunder Receivables which possess the eligibility
criteria and characteristics set forth in PARAGRAPH 2 of this Agreement and such
other criteria and characteristics as LFC may require in its sole discretion.
The approval of each of the Receivables to be purchased by LFC hereunder shall
be at LFC's sole and absolute discretion.
2. ELIGIBLE RECEIVABLES. The Seller hereby represents and warrants to LFC that,
as of the applicable Closing Date (as defined below) of the purchase by LFC,
each of the Receivables will satisfy all of the following criteria and
characteristics, except for the specific items disclosed to LFC by the Seller
and approved by LFC in the applicable Certificate and Request to Purchase
executed by the Seller and approved by LFC:
(a) Each promissory note, purchase and sale agreement, mortgage, guaranty
(if any), disclosure statements and all documents or agreements evidencing,
securing or otherwise used by an Originator or signed by a Purchaser or any
other Obligor (each of the forgoing, a "RECEIVABLE DOCUMENT") for each
Receivable is in the applicable form attached hereto as EXHIBIT B.
(b) Each Receivable Document has been duly executed and/or endorsed by the
Purchaser, the Seller and/or any other person or entity that is obligated under
the Receivable as the maker or otherwise (such Purchaser, maker or other person
or entity obligated under the Receivable being referred to herein as an
"OBLIGOR"). Each Receivable Document represents the genuine, legal, valid and
binding obligation of the applicable Obligor, enforceable against such Obligor
by the holder of the Receivable in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other laws or equitable principles affecting
creditors' rights generally, regardless of whether such enforcement is
considered in a proceeding in equity or at law. Each party to the Receivable
Documents had legal capacity at the time the Receivable was originated to enter
into the Receivable and to execute and deliver the Receivable Documents. No
fraud, omission, misrepresentation or similar occurrence with respect to a
Receivable has taken place on the part of any person.
(c) The Receivable is not subject to any right of rescission, set-off,
recoupment, counterclaim or defense, including the defense of usury, whether or
not arising out of transactions relating to the Receivable, and no Obligor has
asserted either orally (to the best of the Seller's knowledge) or in writing any
illegality, breach, defense, set-off or counterclaim or otherwise disputed,
contested or repudiated the Receivable or the sale of the related Property.
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(d) Immediately prior to the purchase by LFC, the Seller shall be the sole owner
of the Receivable, and the Seller shall have good, indefeasible and marketable
title thereto, and full right to transfer and sell the Receivable to LFC, free
and clear of any encumbrance, equity, participation interest, lien, pledge,
charge, claim or security interest, and full right and authority subject to no
interest or participation of, or agreement with, any other party, to sell and
assign each Receivable pursuant to this Agreement. Upon the sale of each
Receivable, the Seller will have transferred and conveyed all right, title and
interest in and to such Receivable to LFC free and clear of any encumbrance,
equity, participation interest, lien, pledge, charge, claim, or security
interest.
(e) The related Mortgage has been duly executed, notarized and recorded and
creates a first lien on an estate in fee simple in real property and is a
valid, subsisting and enforceable first lien on the related Property, and the
related Property is not subject to any other lien, mortgage, security interest
claim or encumbrance. The related Property has not been released from the lien
of the Mortgage, in whole or in part. The deed conveying fee simple title to
the related Property to the applicable Purchaser has been duly executed,
notarized and recorded.
(f) The solicitation, origination and servicing of the Receivable did not, and
the terms and conditions of the Receivable as of any date do not contravene or
violate any applicable laws, rules or regulations (including, without
limitation, laws, rules and regulations relating to usury, consumer protection,
truth in lending, fair credit billing, fair credit reporting, real estate
settlement procedures, disclosure, equal credit opportunity, fair debt
collection practices and privacy) and no party to the related Receivable
Documents is in violation of any such law, rule or regulation.
(g) The Receivable is denominated and payable in United States dollars in the
United States and relates to a Property located in a Project.
(h) No Obligor is in default under the Receivable Documents and no payment, in
whole or in part, on the Receivable is more than thirty (30) days past due. At
no time has any payment, in whole or in part, on the Receivable been more than
one hundred twenty (120) days past due.
(i) There are no proceedings or investigations pending or, to the best of
Seller's knowledge, threatened (i) asserting the invalidity of the Receivable
or (ii) seeking to enforce the payment of the Receivable.
(j) The Receivable was originated by the Seller or a related Originator in the
ordinary course of its business. Except as described in EXHIBIT C attached
hereto, the Originator and the Seller have fulfilled all of their obligations
in respect thereof. The Receivable evidences a purchase money obligation
incurred by the Purchaser solely for the purpose of financing the Purchaser's
purchase of the related Property.
(k) The Receivable is entitled to be paid pursuant to the terms of the related
Receivable Documents, has not been paid in full, released, cancelled, satisfied
or subordinated. There is no outstanding agreement or commitment by the Seller
to compromise, adjust, extend, satisfy, subordinate, rescind, or modify the
Receivable. The Seller has not waived the performance by the Purchaser of any
action, if the Purchaser's failure to perform such action would cause the
Receivable to be in default, nor has the Seller waived any default resulting
from any action or inaction by the Purchaser. There have been no amendments,
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modification, restatements or recasting of the Receivable which have cured an
existing default under such Receivable or changed, at any time, the payment
terms for the principal balance of such Receivable. The Receivable is not
subject to any exchange or refund right or privilege whatsoever.
(l) No Obligor (i) was at the time the Receivable was originated or, to the
Seller's knowledge, currently is subject to any bankruptcy, insolvency or
reorganization law or proceeding, (ii) to the Seller's knowledge, is insolvent
or unable to meet its financial obligations when due, or (iii) to the Seller's
knowledge, has liabilities in excess of its assets.
(m) The Receivable Documents, including the Mortgage, contain customary and
enforceable provisions such as to render the rights and remedies of the holder
thereof adequate for the practical realization against the related Property of
the benefits of the security provided thereby. There is no homestead or other
exemption available to a Purchaser that would interfere with the right to sell
the related Property at a trustee's sale or the right to foreclose the
Mortgage, except for such homestead exemptions as may be available in respect
of any Receivables secured by Property in Colorado, to the extent that such
Property is then deemed to be occupied as a residence of such owner, under
applicable law. The Mortgage contains an enforceable provision for the
acceleration of the payment of the unpaid principal balance of the Receivable
in the event that the related Property is sold or transferred without the prior
written consent of the mortgagee thereunder.
(n) The related Purchaser paid a minimum cash or paid-in equity down-payment of
at least ten percent (10%) of the originally listed sales price of the
Receivable's corresponding Property.
(o) The Receivable provides for equal monthly payments which will fully amortize
all principal and interest over the stated maturity (which maturity shall not
exceed one hundred forty-four (144) months from the date of origination of the
Receivable). The Receivable is not subject to negative amortization and does
not provide for a "balloon" payment at maturity.
(p) Each Obligor is domiciled in the United States, provided that, no more than
$200,000.00 in the aggregate outstanding principal amount of Receivables
purchased hereunder may consist of Obligors domiciled outside the United
States.
(q) Each Obligor has (i) a FICO score of at least 550, or (ii) if the
outstanding principal balance of the Receivable is 80% or less than the
original sales price of the applicable Property, at least 12 monthly payments
on the Receivable have been made.
(r) Each Obligor is a natural person.
(s) The interest rate accruing and payable on the Receivable is not less than
5% per annum.
(t) The related Purchaser was furnished with a then current property report or
disclosure statement which complied with all applicable disclosure requirements
under applicable federal and state law and was approved by the applicable
federal and state governmental agencies. All representations made by the Seller
and the Originators in connection with the sale of the applicable Property were
accurate and complete.
(u) The document preparation fee charged to the Purchaser was not financed by
the Receivable.
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(v) The trial balance reports for the Receivables delivered by the Seller to LFC
in connection with closing hereunder and the purchase of the Receivables are
true and complete.
(w) With respect to Receivables related to sales in the Projects located in
Colorado, the Seller has not collected or charged late charges in excess of
amounts permitted under applicable law.
(x) Each Mortgage is secured by a valid title insurance policy issued in the
amount of the original principal balance of the applicable Receivable. Such
title insurance policies are substantially in the same form as the policies
attached hereto as EXHIBIT D.
(y) Neither the Seller nor any Originator has collected any betterment fees or
similar charges related to water and sewer services to be provided to any
Property encumbered by a Mortgage securing a Receivable, unless (i) adequate
public water and/or sewer services are actually readily available to the
Property, or (ii) construction and completion of any such water and sewer
services not currently in place and available for use are fully secured by
construction completion bonds for which the required premiums have been paid .
3. CLOSING DATE. The "CLOSING DATE" with respect to each of the two (2)
portfolios of Receivables being purchased by LFC hereunder shall be the date
determined by the Seller and LFC on which the purchase of such portfolio of
Receivables shall occur and be funded, subject to the limitations set forth in
PARAGRAPH 1(C) of this Agreement.
4. CONDITIONS PRECEDENT TO PURCHASE OF FIRST PORTFOLIO OF RECEIVABLES. As a
condition to closing and funding the purchase of the first portfolio of
Receivables, the Seller shall deliver to LFC or its designee, the following
items, all of which shall be in form and content acceptable to LFC:
(a) This Agreement fully executed and delivered by all parties hereto, with
all Exhibits and Schedules attached hereto.
(b) A Guarantee (the "GUARANTEE") fully executed and delivered by Mego
Financial Corp. d/b/a Leisure Industries Corporation, a New York corporation
("GUARANTOR").
(c) A Master Servicing Agreement (the "MASTER SERVICING AGREEMENT") (with
Guarantor to act as servicer) and a Sub-Servicing Agreement (the "SUB-SERVICING
AGREEMENT") (with Concord Servicing Corporation to act as subservicer), fully
executed and delivered by all parties thereto, which shall provide that as of
the Closing Date the collections with respect to each Receivable will be
forwarded in accordance with such Master Servicing Agreement and Sub-Servicing
Agreement and which will provide the terms and conditions for the remarketing
and sale of Properties securing Receivables which have been purchased by LFC and
which are in default and Properties which LFC, or its nominee, have acquired
pursuant to foreclosures, deeds-in-lieu of foreclosure or the exercise of other
rights and remedies under the Receivable Documents.
(d) Pay-off and release letters from FINOVA Capital Corporation, Dorfinco
Corporation and any other persons or entities to whom any of the Receivables
being purchased by LFC are pledged or assigned immediately prior to the Closing
Date, setting forth the pay-off and release payments required to release all
pledges, assignments and liens against such Receivables, together with such
releases, reassignments and reconveyances related to such Receivables and
Receivable Documents as LFC may reasonably require. Such Releases, reassignments
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and reconveyances may be delivered in escrow pursuant to the terms of the Escrow
Agreement described in SUBPARAGRAPH (E) below. The reconveyance documents from
FINOVA Capital Corporation must include a representation and warranty to the
effect that FINOVA Capital Corporation has not assigned, sold, conveyed or
pledged its right to said Receivable to any other person or entity.
(e) Escrow Agreements fully executed and delivered by Seller, LFC, Xxxxx Fargo
Bank, Minnesota, National Association, FINOVA Capital Corporation, Dorfinco
Corporation and First American Title Company (and United Title of Nevada)
setting forth the terms and conditions regarding delivery and release of
applicable Receivables, Receivable Documents and related endorsements,
releases, reconveyances and the Primary Portion of the Purchase Price related
to such Receivables.
(f) All real estate tax report with respect to the Properties listed on EXHIBIT
E hereto and selected by LFC which are encumbered by Mortgages securing the
Receivables being purchased by LFC.
(g) Evidence that Seller maintains general liability insurance coverage
satisfactory to LFC and that LFC has been named as an additional insured
thereon with at least 30 days notice prior to cancellation.
(h) Evidence that Seller and Guarantor are duly organized, validly existing and
in good standing in their jurisdictions of organization, and with respect to
Seller, in Colorado.
(i) Evidence that the execution and delivery of this Agreement by the Seller,
the Guarantee by Guarantor and all documents collateral thereto to which the
Seller and the Guarantor are a party and all transactions contemplated
hereunder have been approved by all necessary corporate action of the Seller
and Guarantor, together with an incumbency certificate for the authorized
signatories of Seller and Guarantor.
(j) An executed attorney opinion letter or letters from counsel or counsels for
the Seller and the Guarantor in form and substance reasonably satisfactory to
LFC, and covering such matters relating to the Seller, the Guarantor, the
Properties, the Projects and the Receivables, as LFC and its counsel may
reasonably require, including, without limitation, the validity and
enforceability of the Receivable Documents and, the status of LFC as
holder-in-due course and mortgagee by assignment, and the "true sale" nature of
the transactions contemplated hereunder.
(k) Except for the specific document deficiencies disclosed to LFC by the Seller
and approved by LFC in the applicable Certificate and Request to Purchase
executed by the Seller and approved by LFC, with respect to each Receivable,
the documents specified on EXHIBIT F hereto and all other Receivables Documents
(l) UCC-1 Financing Statements executed or authorized by Seller in favor of LFC
related to the Receivables being purchased and the Secondary Portion of the
Purchase Price related to such Receivables in proper form for filing in all
appropriate jurisdictions.
(m) Completed judgment, tax lien, UCC, bankruptcy and litigation searches
against Seller, Guarantor, Colorado Land and Grazing Corp. and Southern
Colorado Properties, Inc. in all appropriate jurisdictions, with results
acceptable to LFC.
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(n) Evidence that the Projects are in compliance with applicable zoning,
subdivision and land use requirements.
(o) A Certificate and Request to Purchase duly executed by the Seller and
approved by LFC which shall include a list of all Receivables to be sold to LFC
on the related Closing Date.
(p) Such other certificates, agreements, assurances and documents as may be
required by law or as LFC may reasonably require.
(q) Seller shall have paid LFC all fees and all LFC Expenses then due and
payable hereunder.
5. CONDITIONS PRECEDENT TO PURCHASE OF SECOND PORTFOLIO OF RECEIVABLES. As a
condition to closing and funding the purchase of the second portfolio of
Receivables, the Seller shall deliver to LFC or its designee, the following
items, all of which shall be in form and content acceptable to LFC:
(a) Unless the Master Servicing Agreement and Sub-Servicing Agreement already
cover the second portfolio of Receivables, supplements to the Master Servicing
Agreement and Sub-Servicing Agreement confirming that the Receivables being
purchased by LFC in connection with this second funding are covered by the
terms of such agreements.
(b) Pay-off and release letters from FINOVA Capital Corporation, Dorfinco
Corporation and any other persons or entities to whom any of the Receivables
being purchased by LFC in connection with this second funding are pledged or
assigned immediately prior to the Closing Date, setting forth the pay-off and
release payments required to release all pledges, assignments and liens against
such Receivables, together with such releases, reassignments and reconveyances
related to such Receivables and Receivable Documents as LFC may reasonably
require. Such Releases, reassignments and reconveyances may be delivered in
escrow pursuant to the terms of the Escrow Agreement described in SUBPARAGRAPH
(C) below. The reconveyance documents from FINOVA Capital Corporation must
include a representation and warranty to the effect that FINOVA Capital
Corporation has not assigned, sold, conveyed or pledged its right to said
Receivable to any other person or entity.
(c) An Escrow Agreement fully executed and delivered by Seller, LFC, Xxxxx Fargo
Bank, Minnesota, National Association, FINOVA Capital Corporation, Dorfinco
Corporation and First American Title Company setting forth the terms and
conditions regarding delivery and release of applicable Receivables, Receivable
Documents and related endorsements, releases, reconveyances and the Primary
Portion of the Purchase Price related to such Receivables.
(d) Evidence that Seller continues to maintain general liability insurance
coverage satisfactory to LFC and that LFC continues to be named as an
additional insured thereon with at least 30 days notice prior to cancellation.
(e) Evidence that Seller and Guarantor continue to remain duly organized,
validly existing and in good standing in their jurisdictions of organization,
and with respect to Seller, in Colorado.
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(f) Evidence that the execution and delivery of all documents collateral to this
second funding to which the Seller and the Guarantor are a party and all
transactions contemplated hereunder have been approved by all necessary
corporate action of the Seller and Guarantor, together with an incumbency
certificate for the authorized signatories of Seller and Guarantor.
(g) Updates to the attorney opinion letter or letters from counsel or counsels
for the Seller and the Guarantor in form and substance reasonably satisfactory
to LFC provided in connection with the first funding, confirming the opinions
with respect to the Receivables being purchased in connection with the second
funding.
(h) Except for the specific document deficiencies disclosed to LFC by the Seller
and approved by LFC in the applicable Certificate and Request to Purchase
executed by the Seller and approved by LFC, with respect to each Receivable,
the documents specified on EXHIBIT F hereto and all other Receivables
Documents.
(i) UCC-1 Financing Statements executed or authorized by Seller in favor of LFC
related to the Receivables being purchased and the Secondary Portion of the
Purchase Price related to such Receivables in proper form for filing in all
appropriate jurisdictions.
(j) Updates to the judgment, tax lien, UCC, bankruptcy and litigation searches
against Seller, Guarantor, Colorado Land and Grazing Corp. and Southern
Colorado Properties, Inc. in all appropriate jurisdictions, with results
acceptable to LFC.
(k) A Certificate and Request to Purchase duly executed by the Seller and
approved by LFC which shall include a list of all Receivables to be sold to LFC
in connection with this second funding.
(l) Such other certificates, agreements, assurances and documents as may be
required by law or as LFC may reasonably require.
(m) Seller shall have paid LFC all fees and all LFC Expenses then due and
payable hereunder and not previously paid.
6. PURCHASE PRICE. The purchase price (the "PURCHASE PRICE") for each of the two
(2) portfolios of Receivables to be purchased by LFC shall be comprised of two
(2) component parts. The first portion of the Purchase Price (the "PRIMARY
PORTION") for each of the two (2) portfolios of Receivables to be purchased by
LFC shall be equal to an amount agreed to by the Seller and LFC as set forth in
the applicable Certificate and Request to Purchaser executed by the Seller and
approved by LFC in connection with the portfolio of Receivables being purchased
by LFC pursuant to this Agreement. The Primary Portion shall be payable by LFC
to the Seller on the applicable Closing Date, less the following:
(a) a transaction fee of 1 1/2% of the aggregate principal balance of the
Receivables being purchased by LFC as of the applicable Cut-Off Date, which the
Seller hereby agrees is due and payable to LFC;
(b) all LFC Expenses related to the transactions contemplated hereunder, which
the Seller hereby agrees are due and payable to LFC; and
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(c) a wiring fee payable by the Seller to LFC of $35.00 per each wire transfer
of funds made by LFC to or at the direction of the Seller.
The second portion of the Purchase Price for each of the two (2)
portfolios of Receivables to be purchased by LFC (the "SECONDARY PORTION") shall
be calculated on a quarterly basis as of each Calculation Date, and shall be due
and payable to the Seller within ten (10) days thereafter. Such calculation
shall be in accordance with the following formula:
Secondary Portion = [(10% of the aggregate principal balance of
Receivables purchased hereunder as of the applicable Cut-Off Date - A)
+ B] - [(.15xC) + D]
For the purpose of calculating the Secondary Portion quarterly payments
and as otherwise used in this Agreement, the following terms shall have the
meanings and be determined as follows:
A is the sum of all payments of the Secondary Portion
previously made to the Seller, in accordance with the
provisions of this Agreement, as of the applicable Calculation
Date.
B is an amount equal to accrued interest during each quarter
after the applicable Closing Date and as of the applicable
Calculation Date, on 10% of aggregate principal balance of the
Receivables purchased hereunder as of the applicable Cut-Off
date minus (A + D + E) at the per annum rate of interest
published in the Wall Street Journal (Eastern Edition) under
the designation "Money Rates" and described as "London
Interbank Offered Rates" for a one month period ("30-DAY
LIBOR"). If such rate is no longer published or available, LFC
will choose a substitute rate based upon an index utilizing
reasonably comparable information. Such interest rate shall
fluctuate monthly and be reset on the first day of each
calendar month based on the 30-day LIBOR in effect on such
date.
C is an amount equal to the outstanding principal balance of
the Receivables purchased by LFC as of the applicable
Calculation Date.
D is the cumulative sum, as of the applicable Calculation
Date, of the principal balance of all Delinquent Receivables
which have not been repurchased by the Seller or Guarantor.
E is the cumulative sum, as of the applicable Calculation
Date, of the principal balance of all Ineligible Receivables
which have not been repurchased by the Seller or the
Guarantor.
"CALCULATION DATE" shall mean the last date of each calendar
quarter as of which the applicable servicer or sub-servicer
prepares the trial balance report for the Receivables
purchased by LFC. Seller and LFC will use their best efforts
to cause the applicable servicer or sub-servicer to prepare
the trial balance reports promptly after the last day of each
calendar quarter to enable LFC to calculate the applicable
installment of the Secondary Portion payable to the Seller.
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"CUT-OFF DATE" shall mean the date agreed to by the Seller and
LFC as specified in the applicable Certificate and Request to
Purchase for each of the two (2) closings and fundings of the
purchase of Receivables hereunder, which is the date before
which all payments related to the applicable Receivables are
for the account of the Seller and on and after which all
payments related to the applicable Receivables are for the
account of LFC.
"DELINQUENT RECEIVABLE" means any Receivable purchased by LFC
which becomes at any time more than one hundred twenty (120)
days contractually past due.
"INELIGIBLE RECEIVABLE" means (i) any Receivable purchased by
LFC hereunder with respect to which the representations and
warranties set forth in PARAGRAPH 2 above are not true, and
(ii) any Receivable purchased by LFC hereunder with respect to
which all real estate taxes due and payable with respect to
the related Property have not been paid in full as of the
applicable Closing Date, and with respect to which at any time
after the applicable Closing Date the applicable taxing
authority institutes a proceeding in the nature of a tax sale
of the related Property involving such delinquent real estate
taxes. If any Receivable purchased by LFC hereunder is or
becomes an Ineligible Receivable and also is a Receivable with
respect to which payments at any time become more than one
hundred twenty (120) days past due, such Receivable shall be
deemed to be an Ineligible Receivable with respect to which
the Seller has an obligation to repurchase without any
limitations, including any limitations set forth in PARAGRAPH
10(G).
"MATERIAL DEFAULT" shall mean any of the following: (i) the
failure of the Seller to perform any of its obligations under
PARAGRAPH 10 of this Agreement; (ii) the failure of the Seller
or Guarantor to pay any sums owed to LFC under this Agreement
or the Guarantee, including without limitation, in connection
with any indemnity obligations owed to LFC; (iii) any
representation or warranty made by the Seller or Guarantor in
this Agreement, the Guarantee or any of the Purchase Documents
shall have been false in any material respect; or (iv) the
Seller or Guarantor shall breach any covenant under this
Agreement, the Guarantee or any of the Purchase Documents
(other than the failures described in subparagraphs (i) and
(ii) above), and such breach would reasonably be likely to
have a material adverse affect on the financial condition or
business of the Seller or Guarantor, or their ability to
fulfill their obligations under this Agreement, the Guarantee
or any of the Purchase Documents or the ability of LFC to
collect the sums due under the Receivable.
Notwithstanding anything herein or elsewhere to the contrary,
the aggregate sum of all payments of the Secondary Portion (the "MAXIMUM
AGGREGATE AMOUNT OF SECONDARY PORTION PAYMENTS") shall not exceed 10% of the
aggregate principal balance of the Receivables purchased by LFC pursuant to this
Agreement as of the applicable Cut-Off Date for such Receivables plus B (as
defined above). In no event shall the Seller or any other person or entity be
entitled to accelerate the timing of any payments of the Secondary Portion. In
no event shall any Secondary Portion payments be due and payable if a Material
Default then exists. In the event that the long term unsecured debt rating for
Textron Financial Corporation falls below BBB under the Standard & Poor's rating
system, then LFC agrees that it will deposit an amount equal to the aggregate
amount of the Secondary Portion, as of the date Textron Financial Corporation's
long term unsecured debt rating goes below such BBB level, into an escrow
10
account on terms and conditions reasonably satisfactory to the Seller and LFC,
such escrow arrangement to provide for releases of such funds to LFC based upon
Delinquent Receivables not repurchased by the Seller and in the event of an
uncured Material Default.
The Primary Portion shall be disbursed as provided in the applicable
Escrow Agreement. The Secondary Portion payments shall be disbursed (net of a
$35 per wire fee) by wire transfer in accordance with such instructions as the
Seller shall provide to LFC, or as otherwise agreed to by the Seller and LFC.
The Seller also hereby grants to LFC a security interest in all of the
Seller's right, title and interest in and to all of the Secondary Portion
payments of the Purchase Price for all Receivables purchased by LFC hereunder,
as collateral security for all of the Seller's obligations to LFC now existing
or hereafter arising under this Agreement, and also acknowledges that the
Secondary Portion payments may be reduced by the amounts described in the
definition of D above.
7. WARRANTIES AND REPRESENTATIONS. To induce LFC to execute this Agreement and
to purchase Receivables pursuant to this Agreement, the Seller makes the
following warranties and representations to LFC and its successors and assigns,
each of which is true and correct as of the date of this Agreement and as of
each of the applicable Closing Dates, with the understanding that all of the
warranties and representations contained herein shall survive the closing of the
purchase and sale of Receivables hereunder:
(a) The Seller is duly organized, validly existing and in good standing
under the laws of the state of Nevada and has all licenses necessary to
carry on its business as now being conducted and is licensed, qualified
and in good standing in each state wherein it owns or leases any
material properties or where a Property is located if the laws of such
state require licensing or qualification in order to conduct business
of the type conducted by the Seller, and in any event the Seller and
its business and operations are in compliance in all material respects
with all applicable federal, state and local laws and regulations. The
Seller has the full corporate power, authority and legal right to hold,
transfer and convey the Receivables and to execute and deliver this
Agreement and to perform its obligations hereunder. The execution,
delivery and performance of this Agreement (including all instruments
of transfer to be delivered pursuant to this Agreement) by the Seller
and the consummation of the transactions contemplated hereby and to
which the Seller is a party have been duly and validly authorized by
all necessary corporate action. This Agreement and all agreements
contemplated hereby and to which the Seller is a party have been duly
executed and delivered by the Seller and constitute the valid, legal,
binding and enforceable obligations of the Seller, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other laws or equitable principles
affecting creditors' rights generally, regardless of whether such
enforcement is sought in a proceeding in equity or at law.
(b) The consummation of the transactions contemplated by this Agreement are
in the ordinary course of business of the Seller, and the transfer,
assignment, and conveyance of Receivables by the Seller pursuant to
this Agreement are not subject to the bulk transfer or any similar
statutory provisions in effect in any applicable jurisdiction.
(c) Neither the execution and delivery of this Agreement, the sale of
Receivables to LFC, the consummation of the transactions contemplated
hereby, nor the fulfillment of or compliance with the terms and
11
conditions of this Agreement, conflict with or result in a breach of
any of the terms, conditions or provisions of the Seller's
organizational documents or any injunction, writ, restraining order or
legal restriction or any material agreement or instrument to which the
Seller is now a party or by which it is bound, or constitute a default
or result in an acceleration under any of the foregoing, or result in
the violation of any law, rule, regulation, order, judgment or decree
to which the Seller or its property is subject, or result in the
creation or imposition of any lien, charge or encumbrance that would
have an adverse effect upon any of its properties pursuant to the terms
of any mortgage, contract, deed of trust or other instrument, or impair
the ability of LFC to realize on any Receivables purchased by LFC
pursuant to this Agreement or impair the value of any Receivables
purchased by LFC pursuant to this Agreement.
(d) The Seller does not believe, nor does it have any reason or cause to
believe, that it cannot perform each and every covenant contained in
this Agreement.
(e) The Seller is solvent and the sale of Receivables pursuant to this
Agreement will not cause the Seller to become insolvent. The Seller is
paying its debts as they become due. The Seller, after giving effect to
the transactions contemplated hereby, will have adequate capital to
conduct its business. The sale of the Receivables pursuant to this
Agreement is not undertaken with the intent to hinder, delay or defraud
any of the Seller's creditors.
(f) There is no action, suit, proceeding, or investigation pending or, to
the best of Seller's knowledge, threatened against the Seller which,
either in any one instance or in the aggregate, would, if decided
adversely to the Seller, be reasonably likely to result in any material
adverse change in the business, operations, financial condition,
properties or assets of the Seller, or in any material impairment of
the right or ability of the Seller to carry on its business
substantially as now conducted, or which would draw into question the
validity of this Agreement or any Receivables purchased by LFC pursuant
to this Agreement or of any action taken or to be taken in connection
with the obligations of the Seller contemplated herein, or which would
be likely to impair materially the ability of the Seller to perform
under the terms of this Agreement. EXHIBIT G accurately sets forth the
nature of the claims set forth in and the current status of, that
certain lawsuit filed in the District Court for Xxxxx County, Nevada as
Case A414827 (the "XXXXX LAWSUIT").
(g) No consent of any other person or entity and no consent, approval,
authorization or order of, or registration or filing with, or notice to
any court or governmental agency or body is required for the execution,
delivery or performance by the Seller of or compliance by the Seller
with this Agreement or the sale of the Receivables pursuant to this
Agreement or the consummation of the transactions contemplated by this
Agreement, or if required, such consent, approval, authorization,
order, registration or filing has been obtained or made prior to the
Closing Date.
(h) All information heretofore or contemporaneously herewith furnished by
or on behalf of the Seller or the Guarantor to LFC in connection with
this Agreement or any related document or any transaction contemplated
hereby is true and accurate in every material respect on the date as of
which such information is dated or certified. None of such information
is incomplete by omitting to state any material fact necessary to make
such information not misleading.
(i) The Guarantor has delivered to LFC (or to Textron Financial
Corporation, an affiliate of LFC) (i) the audited, consolidated
financial statements of the Guarantor and its subsidiaries for the
fiscal year ended August 31, 2001 and for the 4-month period ended
December 31, 2001, and (ii) the unaudited, consolidated financial
12
statements of the Guarantor and its subsidiaries for the 6-month period
ending June 30, 2002. All of such financial statements fairly present
the pertinent results of operations and changes in financial position
for such periods and the financial position at the end of each such
period of the Guarantor and the Guarantor's subsidiaries and have been
prepared in accordance with generally accepted accounting principles
consistently applied throughout the periods involved, except as set
forth in the notes thereto. There has been no material adverse change
in the business, operations, financial condition, properties or assets
of the Seller or the Guarantor since June 30, 2002.
(j) The Seller has not dealt with any broker, investment banker, agent or
other person that may be entitled to any commission or compensation in
connection with the sale of the Receivables to LFC pursuant to this
Agreement.
(k) The Seller has determined that the disposition of the Receivables
pursuant to this Agreement will be afforded sale treatment for
accounting and tax purposes.
(l) With respect to each Receivable purchased by LFC pursuant to this
Agreement:
(i) The related Property and Project is undamaged by waste, fire,
earthquake or earth movement, windstorm, flood, tornado or other casualty,
so as to affect materially and adversely the value of the Property as
security for such Receivable or the use for which the Property was
intended;
(ii) There have not been any condemnation proceedings with respect to
the Property or the Project and the Seller has no knowledge that any such
proceedings are reasonably expected to be commenced in the future;
(iii) The Seller has no knowledge of any circumstances existing that
could reasonably be expected to materially and adversely affect the value
or the marketability of such Receivable or the related Property; and
(iv) Except as described on EXHIBIT C attached hereto, any road,
utilities, improvements (including, without limitation, any subdivision) or
amenities to the related Property or Project which the Originator or the
Seller has represented to or covenanted with the Purchaser to complete have
been completed to the full satisfaction of the Purchaser and in compliance
with all applicable laws, rules and regulations.
(m) The Seller or the Originator possesses all permits, authorizations,
licenses, approvals, waivers and consents, without unusual restrictions
or limitations, necessary to own, develop and operate the Projects,
sell lots in the Projects, finance such lot sales and conduct its
business as currently conducted, all of which are in full force and
effect.
(n) To the Seller's knowledge, the ownership and use of each Project has
been conducted in compliance in all material respects with all
applicable federal, state, and local laws, rules, regulations and
ordinances relating to environmental matters ("ENVIRONMENTAL LAWS"). To
the Seller's knowledge, there has been no use, generation, manufacture,
storage, treatment, disposal, release or threatened release of any
hazardous waste or substance by any person on, under, about or from the
13
Projects, or any actual or threatened litigation or claims of any kind
by any person relating to such matters. The Seller hereby (i) releases
and waives any future claims against LFC for indemnity or contribution
in the event the Seller becomes liable for cleanup or other costs under
any Environmental Law which claims are related to the time prior to the
Closing Date, and (ii) agrees to indemnify and hold harmless LFC, its
successors and assigns, against any and all claims, losses,
liabilities, damages, penalties, and expenses which LFC, its successors
and assigns, may directly or indirectly sustain or suffer resulting
from a breach of this section of the Agreement or as a consequence of
any use, generation, manufacture, storage, disposal or release
occurring with respect to the Projects prior to the date hereof,
whether or not the same was or should have been known to the Seller.
The provisions of this paragraph of the Agreement, including the
obligation to indemnify, shall survive the repayment of the
Receivables, termination or expiration of this Agreement and shall not
be affected by LFC's acquisition of any interest in any of the
Property, whether by foreclosure or otherwise.
(o) All tax returns and reports of the Seller that were required to be
filed, have been filed, and all taxes, assessments and other
governmental charges have been paid in full, except those presently
being or to be contested by the Seller in good faith and for which
adequate reserves have been provided.
(p) Each employee benefit plan as to which the Seller may have any
liability complies in all material respects with all applicable legal
requirements and regulations, and (i) no Reportable Event nor
Prohibited Transaction (as defined in the Employee Retirement Income
Security Act, as amended) has occurred with respect to any such plan,
(ii) the Seller has not withdrawn from any such plan or initiated steps
to do so, (iii) no steps have been taken to terminate any such plan,
and (iv) there are no unfunded liabilities other than those previously
disclosed to LFC in writing.
(q) The Seller's principal place of business and chief executive office is
at the address set forth above. The Seller does not conduct and has not
conducted its business through any other name or trade name or been the
surviving corporation of a merger or consolidation or acquired all or
substantially all of the assets of any other person, except Preferred
Equities Corporation, Southern Colorado Properties, Inc. and Colorado
Land and Grazing Corp.
(r) With respect to each Property securing a Receivable purchased by LFC
pursuant to this Agreement and with respect to the applicable Project,
the representations and covenants set forth in EXHIBIT H attached
hereto are true and correct as of the date hereof.
(s) Upon completion of the purchase of any Receivables pursuant to this
Agreement, the Seller will have no material indebtedness for borrowed
money outstanding, except as set forth on EXHIBIT I attached hereto.
Except as described on EXHIBIT I attached hereto, there are no defaults
existing under the terms of such indebtedness.
The Seller understands and agrees that LFC, without independent
investigation, is relying upon the above representations and warranties in
purchasing Receivables from the Seller.
8. PROTECTIVE COVENANTS. So long as any of the Receivables purchased by LFC
pursuant to this Agreement remain outstanding, the Seller shall:
(a) Upon the request of LFC or LFC's assigns, do everything reasonably necessary
or which is commercially reasonable to put LFC in a position to enforce the
payment of all of such Receivables (including the execution of separate
endorsements and absolute assignments) or to exercise all other rights and
remedies with respect to such Receivables;
14
(b) Take no actions which are inconsistent with LFC's purchase of such
Receivables hereunder and take all actions as may reasonably be requested to
further prove and demonstrate LFC's definitive purchase and the Seller's
definitive sale of such Receivables pursuant hereto;
(c) Upon the request of LFC, execute or cause the execution, acknowledgment and
delivery of such further instruments (including, without limitation,
declarations of no set-off) and do such further acts as LFC may reasonably deem
necessary, desirable or proper to carry out more effectively or otherwise
further the purposes of this Agreement;
(d) Not take any action with respect to any Receivable purchased by LFC pursuant
to this Agreement which is inconsistent with the provisions and the purpose of
this Agreement or which would be reasonably likely to impair any of the rights
of LFC in the Receivables purchased by LFC pursuant to this Agreement or any of
the Receivable Documents related thereto;
(e) Not solicit any Purchaser to refinance any performing Receivable purchased
by LFC pursuant to this Agreement with another lender without the express
written consent of LFC;
(f) Cooperate after each Closing Date with LFC in good faith and in accordance
with reasonable commercial standards in connection with any litigation or other
disputes that might arise in connection with or in enforcement of any or all of
the Receivables purchased by LFC pursuant to this Agreement, and take no actions
of whatever nature which might have a negative impact upon the continuing
payment or performance of such Receivables;
(g) Promptly endorse and deliver to LFC any funds received by the Seller as
payment on any Receivable purchased by LFC pursuant to this Agreement subsequent
to the agreed upon Cut-Off Date; and
(h) Satisfy all obligations owed to Purchasers as described on EXHIBIT C
attached hereto.
9. AFFIRMATIVE COVENANTS. As long as any Receivable purchased by LFC hereunder
remains outstanding or the Seller has any indemnity obligations hereunder, the
Seller will, unless LFC shall otherwise consent in writing:
(a) Comply, except to the extent that such failure to comply does not have a
material adverse effect on the financial condition, business or operations of
the Seller or the Seller's ability to fulfill its obligations under this
Agreement, with all laws, rules, regulations and orders applicable to the
Seller, its business or properties, including each Project, and including,
without limitation, to the extent applicable: (i) Nevada and Colorado Statutes
regarding sale of subdivided land licensing and regulation, (ii) the Consumer
Credit Protection Act; (iii) Regulation Z of the Federal Reserve Board; (iv) the
Equal Credit Opportunity Act; (v) Regulation B of the Federal Reserve Board;
(vi) the Federal Trade Commission 3-day cooling off rule for Door-to-Door Sales;
(vii) Section 5 of the Federal Trade Commission Act; (viii) the Interstate Land
Sales Full Disclosure Act; (ix) federal postal laws; (x) all applicable state
and federal securities laws; (xi) applicable usury laws; (xii) all applicable
trade practices, home and telephone solicitation, sweepstakes, anti-lottery and
consumer credit and protection laws; (xiii) all applicable real estate sales
licensing, disclosure, reporting and escrow laws; (xiv) the Americans with
15
Disabilities Act and related accessibility guidelines; (xv) the Real Estate
Settlement Procedures Act; (xvi) all amendments to and rules and regulations
promulgated under the foregoing acts or laws; (xvii) all other applicable
federal statutes and the rules and regulations promulgated thereunder; and
(xviii) all other material legal restrictions, contracts and agreements
governing or affecting each Project, the Seller or its business or operations,
including, without limitation, zoning, environmental and other land use laws and
regulations, subdivision map acts, and real estate syndication acts.
(b) Furnish to LFC: (i) the statements and financial information relating to the
Seller and the Guarantor as set forth on EXHIBIT J hereto and such other
information as LFC may from time to time reasonably request, such information to
be provided within five (5) business days from the date of the request; and (ii)
as soon as possible but in no event later than five (5) days after Seller
receives notice of or has actual knowledge of the occurrence of any Material
Default (as defined in this Agreement) a statement of an authorized officer of
the Seller setting forth the nature and period of existence of such Material
Default and the action which the Seller or the Guarantor has taken and proposes
to take with respect thereto.
(c) Promptly inform LFC in writing of (i) all material adverse changes in the
business, properties or financial condition, of the Seller or the Guarantor,
(ii) all litigation, claims, investigations, administrative proceedings,
arbitrations, alternate dispute resolution proceedings or similar actions
affecting the Seller which, if determined adversely to the Seller, would be
reasonably likely to materially and adversely affect the financial condition,
business or operations of the Seller or its ability to fulfill its obligations
under this Agreement, and (iii) on a quarterly basis, the status of the Xxxxx
Lawsuit.
(d) Maintain at the Seller's principal office and chief executive office at 0000
Xxxxxxxxx Xxxxxx Xxxxx, Xxxxxxxxx, XX 00000, all files, surveys, certificates,
correspondence, appraisals, computer programs, tapes, discs, cards, books,
ledgers, records and other information and data relating to each Project
(collectively, the "RECORDS"). The Seller shall permit employees or agents of
LFC at any reasonable time upon reasonable prior notice to the Seller and during
regular business hours, to (i) examine or audit any and all Records and to make
copies thereof, and (ii) visit and inspect each Project. Provided that no
Material Default has occurred and is then continuing, LFC shall limit such
audits and inspections with respect to which the Seller is obligated to pay the
costs and expenses, to one in each calendar year.
(e) Maintain the Seller's books and records in accordance with generally
accepted accounting principles.
(f) Maintain and keep in full force and effect its separate legal existence and
all material rights, licenses, permits, authorizations, approvals, waivers,
consents and franchises necessary to the proper conduct of its business and not
enter into any merger or consolidation. The Seller shall not change its state of
organization and shall not establish any new place of business or chief
executive office until the Seller shall have given to LFC not less than 45 days'
prior written notice of the Seller's intention to do so.
16
(g) Maintain liability insurance with financially sound and reputable insurance
companies or associations in such amounts and covering such risks as are usually
carried by persons or companies engaged in similar businesses and owning similar
properties as the Seller.
(h) Comply in all material respects with all applicable Environmental Laws. The
Seller shall furnish to LFC promptly but in no event later than ten (10) days
after receipt thereof a copy of any notice, summons, lien, citation, directive,
letter or other material communication from any governmental agency or
instrumentality concerning any intentional or unintentional action or omission
on the Seller's part in connection with any environmental activity whether or
not there is damage to the environment and/or other natural resources.
(i) Pay to LFC all LFC Expenses promptly upon demand therefor. As used herein,
"LFC EXPENSES" means all costs, fees and expenses paid, incurred or advanced by
LFC in connection with this Agreement, the Guarantee and the Certificates and
Requests to Purchase related hereto (collectively, the "PURCHASE DOCUMENTS") or
otherwise required to be paid by the Seller under any Purchase Document or
pursuant to any other agreement executed in connection with any Purchase
Document, whether paid, incurred, advanced or accrued prior to or after any
Closing Date, including, without limitation: fees, costs and expenses incurred
to conduct judgment, tax lien, UCC, bankruptcy and litigation searches and
credit bureau searches; all filing and recording costs and expenses; fees, costs
and expenses incurred by LFC in connection with any title report or title
insurance relating to title problems existing as of the applicable Closing Date
and affecting the Receivables purchased by LFC pursuant to this Agreement as of
such Closing Date; fees, costs and expenses paid or incurred by LFC to correct
any Material Default or enforce any provision of any Purchase Document; fees,
costs and expenses paid or expenses of third party claims or any other suit paid
or incurred by LFC in preparing, enforcing or defending any Purchase Document or
any of the Receivable Documents with respect to which the Seller has a
repurchase obligation which has accrued and which the Seller has not
repurchased; costs and expenses to obtain certified copies of any Mortgages if
the originals of such Mortgages were not delivered by the Seller to LFC in
connection with the purchase of the Receivables by LFC and LFC requires such
certified copies in connection with any sale or pledge by LFC of the applicable
Receivable or in connection with the enforcement of any right or remedy against
the applicable Obligor or Property; and LFC's reasonable attorney's fees, costs
and expenses incurred in advising, structuring, drafting, reviewing,
administering, amending, terminating, enforcing (including reasonable attorney's
fees and expenses incurred in connection with an insolvency proceeding
concerning the Seller or the Guarantor), settling, defending, or concerning any
Purchase Document, irrespective of whether suit is brought. Notwithstanding the
foregoing, the Seller shall have no obligation to reimburse LFC (i) for
attorney's fees, costs and expenses related to enforcement actions by LFC as a
result of an alleged Material Default by the Seller, if it is later determined
by a court of competent jurisdiction that a Material Default did not in fact
then exist, or (ii) for attorney's fees, costs and expenses related to a claim
against the Seller by LFC if Seller prevails on such claim as determined by a
court of competent jurisdiction, or (iii) for attorney's fees, costs and
expenses related to closing against LFC by the Seller if a court of competent
jurisdiction later determines that LFC is liable to the Seller with respect to
such claims.
(j) Comply in all material respects with the terms of any material instrument or
agreement affecting any Project.
17
(k) Account for the transfer of the Receivables purchased by LFC pursuant to
this Agreement as a sale on the books and records of the Seller.
10. RECOURSE TO THE SELLER.
(a) All Receivables purchased by LFC hereunder are sold by the Seller to LFC
without recourse (except to the extent provided herein). To the extent provided
herein and subject to the limitations set forth herein, LFC shall have the right
to require the Seller to repurchase Delinquent Receivables and Ineligible
Receivables at the Repurchase Price. Subject to the notice and cure provisions
for Ineligible Receivables set forth in this PARAGRAPH 10, and to the
limitations of liability also set forth in this PARAGRAPH 10 with respect to
Delinquent Receivables, the Seller shall repurchase the Delinquent Receivable
and the Ineligible Receivable at a price (the "REPURCHASE PRICE") equal to the
then outstanding principal amount of the applicable Delinquent Receivable or
Ineligible Receivable together with all accrued and unpaid interest, late
charges and any charges for checks returned for insufficient funds accrued
through the date of repurchase.
(b) For each Ineligible Receivable, the Seller shall have a period of twenty
(20) days after notice by LFC that a Receivable purchased by LFC pursuant to
this Agreement is an Ineligible Receivable in which to cure, to LFC's reasonable
satisfaction, the circumstances which have caused such Receivable to become an
Ineligible Receivable, provided that, the Seller shall have no right to cure if
such circumstances are not reasonably capable of being cured in LFC's sole
discretion exercised in good faith. In the event that the Seller is unable to
cure such circumstances within the cure period (if applicable), then the Seller
shall repurchase such Ineligible Receivable and pay to LFC the Repurchase Price
for such Ineligible Receivable within ten (10) days after the expiration of such
cure period. If the Seller does not have the right to cure such circumstances,
then the Seller shall repurchase such Ineligible Receivable and pay to LFC the
Repurchase Price for such Ineligible Receivable within ten (10) days after
notice of ineligibility by LFC has been given to the Seller.
(c) For each Receivable which at any time becomes a Delinquent Receivable, the
Seller shall have no right to cure such delinquency by the payment of any sums
due thereon or otherwise, and, subject to the limitations set forth in PARAGRAPH
10(G) of this Agreement, the Seller shall repurchase such Delinquent Receivable
and pay to LFC the Repurchase Price for such Delinquent Receivable within ten
(10) days after the date on which the Seller receives notice from LFC that such
Receivable has become a Delinquent Receivable.
(d) In the event the Seller fails to repurchase a Delinquent Receivable or an
Ineligible Receivable within the applicable time period as provided above, then
the Seller shall thereafter be obligated to pay LFC interest on the unpaid
Repurchase Price until the Delinquent Receivable or the Ineligible Receivable is
repurchased or, in the alternative with respect to Delinquent Receivables, until
LFC reduces the Secondary Portion by the amount of the Repurchase Price for such
Delinquent Receivable, at a rate equal to the prime rate in effect, from time to
time (as reported in the Wall Street Journal) plus 3% compounded monthly, such
interest being separate from the interest included and continuing to accrue as
part of the Secondary Portion of the Repurchase Price. LFC shall be entitled to
take all other actions and to exercise all other remedies in relation to the
Receivables purchased by LFC pursuant to this Agreement and the Seller which
might be available to LFC under this Agreement or which otherwise might be
available under law or at equity. Consistent with the sale and purchase of
Receivables as set forth herein, all sums and/or property realized by LFC
18
through its collection and enforcement of the Receivables purchased by LFC
pursuant to this Agreement shall be the sole and exclusive property of LFC and
the Seller shall have no rights, title and/or interest in and to such proceeds
and recognizes that LFC may resell the subject property without regard to price,
method, place or purchaser.
(e) Upon the repurchase of any Delinquent Receivable or Ineligible Receivable
hereunder (or, with respect to Delinquent Receivables, the reduction of the
Secondary Portion in respect thereto), and assuming that a Material Default does
not then exist, LFC shall convey and transfer the Delinquent Receivable or the
Ineligible Receivable together with all other applicable Receivable Documents
back to the Seller, without recourse or representation or warranty of whatever
nature, (except that LFC is retransferring to the Seller such right, title and
interest in the Delinquent Receivable or Ineligible Receivable as LFC received
from the Seller, free and clear of any liens created by LFC). If a Material
Default exists, LFC may retain all Delinquent Receivables and Ineligible
Receivables with respect to which the Seller has paid the applicable Repurchase
Price (or, with respect to Delinquent Receivables, as to which LFC has reduced
the Secondary Portion by the amount of the Repurchase Price for such Delinquent
Receivables), and all payments thereon and LFC shall apply such payments towards
the obligations of the Seller under this Purchase Agreement or, if no such
obligations are then due and payable, hold such payments as collateral therefor.
Upon the repayment in full of all obligations of the Seller under this Agreement
and the repayment in full of all Receivables (other than the Delinquent
Receivables or Ineligible Receivables with respect to which the Seller has paid
the applicable Repurchase Price or, with respect to Delinquent Receivables, as
to which LFC has reduced the Secondary Portion by the amount of the Repurchase
Price for such Delinquent Receivables), LFC will release to the Seller any
payments then held by LFC as collateral pursuant to the immediately preceding
sentence and shall convey and transfer to the Seller any Delinquent Receivables
and Ineligible Receivables then held by LFC with respect to which the Seller has
paid the applicable Repurchase Price in accordance with the reassignment
provisions of the first sentence of PARAGRAPH 10(E).
(f) The Seller waives notice, protest, demand for payment and all other notices
and demands to which it may otherwise be entitled in connection with its
obligations hereunder and consistent with the sale and purchase of Receivables
as set forth herein, and understands and agrees that LFC may (without the
Seller's consent or notice), but is not obligated to, renew, extend, accelerate,
accept partial payments on, liquidate, postpone, modify, amend, release, settle,
adjust, compromise (in full or in part) any Delinquent Receivable or Ineligible
Receivable (prior to repurchase by the Seller) without affecting the Seller's
repurchase or other obligations under this Agreement. Notwithstanding the
foregoing, if (prior to notice from LFC to the Seller that a Receivable
purchased by LFC pursuant to this Agreement has become a Delinquent Receivable
or an Ineligible Receivable) LFC renews, extends, accelerates, accepts partial
payments on, liquidates, postpones, modifies, amends, releases, settles, adjusts
or compromises such Delinquent Receivable or Ineligible Receivable in a
commercially unreasonable manner, and such action by LFC results in a material
increase in the loss that would reasonably be likely to occur related to such
Receivable, then the Seller shall not be obligated to repurchase such Delinquent
Receivable or Ineligible Receivable and LFC shall not be entitled to and may not
reduce the Secondary Portion by the amount of such loss related to such
Delinquent Receivable. If LFC has requested that the Seller repurchase a
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Delinquent Receivable or Ineligible Receivable with respect to which the Seller
is obligated to repurchase and the Seller fails to repurchase the Delinquent
Receivable or Ineligible Receivable, then any action taken by LFC with respect
to such Delinquent Receivable or Ineligible Receivable shall not adversely
affect the Seller's recourse or repurchase obligations hereunder.
(g) Notwithstanding anything herein to the contrary, the aggregate maximum
amount of Repurchase Prices which the Seller is obligated to pay for Delinquent
Receivables under PARAGRAPH 10 of this Agreement shall be limited to the
"MAXIMUM DELINQUENT RECEIVABLES REPURCHASE AMOUNT" which shall be calculated as
follows:
Maximum Delinquent Receivables Repurchase Amount = 5% of the aggregate
principal balance of the Receivables purchased hereunder as of the
applicable Cut-Off Date + A (as defined in PARAGRAPH 6).
Notwithstanding anything herein to the contrary, the aggregate maximum
amount of (i) Repurchase Prices which the Seller is obligated to pay for
Delinquent Receivables, plus (ii) the amount of Secondary Portion payments which
may be subject to reduction based upon Delinquent Receivables not repurchased by
the Seller (collectively, the "MAXIMUM AGGREGATE DELINQUENT RECEIVABLES
LIABILITY AMOUNT") shall not exceed 15% of the aggregate principal balance of
the Receivables purchased by LFC hereunder as of the applicable Cut-Off Date
plus B (as defined in PARAGRAPH 6 above).
(h) Notwithstanding anything herein or elsewhere to the contrary, there shall be
no limitation with respect to Seller's obligations to repurchase and pay all
Repurchase Prices with respect to Ineligible Receivables. Any repurchases of
Ineligible Receivables shall not reduce or in any way limit Seller's obligations
to repurchase Delinquent Receivables under this PARAGRAPH 10.
(i) In the event that (i) any Purchaser under a Receivable purchased by LFC
pursuant to this Agreement of (A) a lot with respect to which the Seller is
obligated to provide public water and/or sewer service (a "BUILDABLE AREA LOT"),
or (B) a lot that is permitted to use a private well and/or an individual sewage
disposal (septic) system (a "NON-BUILDABLE AREA LOT"), requests an exchange of
the Property purchased by such Purchaser in the Calvada Project because, in the
case of a Buildable Area Lot, public water and/or sewer service is not readily
available to such Property subject to a hookup fee, or, in the case of a
Non-Buildable Area Lot, because a productive well cannot be permitted, drilled
and installed on such Property, and/or because an individual sewage disposal
(septic) system cannot be permitted and installed on such Property; and (ii) the
Seller is unable to satisfy such exchange request with a lot with respect to
which public water and/or sewer service is readily available subject to a hookup
fee or a lot on which a productive well can be permitted, drilled and installed
and/or an individual sewage disposal (septic) system can be permitted and
installed, within 30 days after the exchange request is made by such Purchaser,
then such Receivable shall be deemed to be an Ineligible Receivable and the
Seller shall repurchase such Receivable from LFC in accordance with the
provisions of this PARAGRAPH 10. There shall be no limitation with respect to
the Seller's obligation to or liability for the repurchase of such Ineligible
Receivable. In the event that the Seller is able to make the requested exchange,
the Seller shall provide LFC with such documentation as LFC may reasonably
require to reflect such exchange, including without limitation a new Mortgage or
Deed of Trust encumbering the new Property to be transferred to the Purchaser,
title insurance insuring such new Mortgage or Deed of Trust in favor of LFC and
an exchange agreement duly executed by the Seller and the Purchaser.
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(j) The Seller acknowledges that (i) it has an obligation to repurchase
Delinquent Receivables subject to the limitations set forth in XXXXXXXXX 00 (X),
(xx) the Secondary Portion payments may be reduced by the outstanding balance of
Delinquent Receivables which have not been repurchased by Seller, and (iii)
Seller has an obligation to repurchase Ineligible Receivables subject to no
dollar limitations. With respect to Delinquent Receivables, Seller agrees that
at the request of LFC, it will repurchase such Delinquent Receivables first,
before any reductions are to be made in the Secondary Portion payments based
upon such Delinquent Receivables, until the Seller has paid Repurchase Prices
for Delinquent Receivables up to the Maximum Delinquent Receivables Repurchase
Amount. If the Seller does repurchase a Delinquent Receivable, the Secondary
Portion payments will not be so reduced by the amount of such Delinquent
Receivable. If the Seller breaches its obligation to repurchase a Delinquent
Receivable, then LFC may reduce the Secondary Portion payments as provided in
PARAGRAPH 6 and a Material Default will be deemed to have occurred under this
Agreement. If the Seller has breached its obligations to repurchase a Delinquent
Receivables and the Secondary Portion payments have been reduced to $0, the
Seller shall remain liable to LFC for the defaulted repurchase obligations under
PARAGRAPH 10 with respect to the Delinquent Receivables, subject to the dollar
limitations set forth in PARAGRAPH 10 (G).
(k) The Seller hereby acknowledges that LFC may look to each and every asset of
the Seller for payment of the Seller's obligations under PARAGRAPH 10.
11. RELATIONSHIP OF PARTIES. The relationship between the Seller and LFC is and
shall be that of a seller and purchaser, not a debtor-creditor relationship.
Neither this Agreement nor the performance hereof shall be deemed as creating a
joint venture or a partnership between the Seller and LFC or any
employer-employee, agency or other relationship of any nature. The transfer of
each Receivable to LFC hereunder constitutes an outright sale and assignment,
negotiated at arm's length, by the Seller to LFC of all of the Seller's legal
and equitable ownership interest in such Receivables and in no way shall any
such transfer be construed as an extension of credit by LFC to the Seller or any
Obligor. LFC does not in any respect assume or incur any obligation or liability
of the Seller to any Purchaser, related to access, water services, sewer
services or other matters related to the development of the Projects, including
without limitation those described on EXHIBIT C hereto. LFC shall not be
responsible for the acts or duties of the Seller, its agents or employees, in
soliciting Purchasers or Obligors, taking credit applications or otherwise
whatsoever.
12. NOTICES. Any notice permitted, required or desired to be given in connection
with this Agreement shall be in writing and directed to the parties at the
respective addresses set forth below (or at such other address as a party hereto
may designate in writing) and tendered by personal delivery or by the U.S. mail,
registered or certified, return receipt requested:
For LFC: Land Finance Company
000 Xxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxxx
For the Seller: At the address specified on the
signature page hereto.
13. INDEMNIFICATION. To the fullest extent permitted by law, the Seller agrees
to indemnify and hold harmless LFC, and LFC's officers, directors, shareholders,
21
agents and employees (each an "INDEMNITEE"), from and against any and all
liability, loss, damage, cost, or expense, including court costs and reasonable
attorney's fees, that any Indemnitee may hereafter suffer, incur, pay or lay out
or in any manner be held liable for, by reason of any breach, default,
misstatement or misrepresentation, warranties, or representations of the Seller
contained in this Agreement or any other Purchase Documents, or by reason of any
breach or default by the Seller, or any of the Seller's employees, officers or
agents, in the performance of any duties, covenants or obligations arising under
this Agreement or any other Purchase Documents. In this connection, but without
limitation, the Seller agrees to reimburse any Indemnitee promptly upon demand
for any payments made or losses suffered by such person with respect to any
liability, damage, loss or claim to which the foregoing indemnity relates. The
Seller's obligation to indemnify under this paragraph shall survive payment of
the Receivables purchased by LFC pursuant to this Agreement and the termination
or expiration of this Agreement.
14. RIGHTS OF LFC. The Seller acknowledges that LFC, or any individual or entity
nominated by LFC, may from time to time:
(a) Notify any and all Purchasers that the Receivables purchased by LFC pursuant
to this Agreement have been sold by the Seller to LFC.
(b) Renew, extend, accelerate, accept partial payments on, liquidate, postpone,
modify, amend, release, settle, adjust or compromise, on terms acceptable to
LFC, in whole or in part, the Receivables purchased by LFC pursuant to this
Agreement and any amounts owing thereon or any guaranties or security therefore.
Notwithstanding the foregoing, if (prior to notice from LFC to the Seller that a
Receivable purchased by LFC has become a Delinquent Receivable or Ineligible
Receivable) LFC renews, extends, accelerates, accepts partial payments on,
liquidates, postpones, modifies, amends, releases, settles, adjusts or
compromises such Receivable in a commercially unreasonable manner and such
action by LFC results in a material increase in the loss that would reasonably
be likely to occur related to such Receivable, then the Seller shall not be
obligated to repurchase such Receivable if it becomes a Delinquent Receivable or
an Ineligible Receivable, and with respect to such Receivable if it becomes a
Delinquent Receivable, LFC shall not be entitled to and may not reduce the
Secondary Portion by the amount of such loss. If LFC has requested that the
Seller repurchase a Delinquent Receivable or an Ineligible Receivable with
respect to which the Seller is obligated to repurchase and the Seller fails to
repurchase the Delinquent Receivable or the Ineligible Receivable, then any
action taken by LFC with respect to such Delinquent Receivable or Ineligible
Receivable shall not adversely affect the Seller's recourse or repurchase
obligations hereunder.
(c) Endorse, in the name of Seller, all checks, drafts, money orders,
instruments and other evidences of payment relating to the Receivables purchased
by LFC pursuant to this Agreement.
(d) Receive and open all mail addressed to the Seller related to the Receivables
purchased by LFC and notify the postal authorities to change the address for
delivery thereof to such address as LFC may designate, and retain any and all
materials of any nature whatsoever related to such Receivables.
(e) Exercise all other rights, powers and remedies of an owner of the
Receivables purchased by LFC pursuant to this Agreement.
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The Seller further acknowledges and agrees that LFC, subject to the
terms of the Receivable Documents, has the right, but not the obligation, to
approve the assumption of any Receivable purchased by LFC pursuant to this
Agreement by a new Obligor, with or without releasing one or more of the
original Obligors from liability thereunder, with or without notice to or
consent of the Seller. Any such assumption will be at LFC's sole discretion and
will not alter or diminish the recourse or repurchase provisions of this
Agreement or any related guarantee, if applicable, unless such assumption is not
commercially reasonable.
15. SURVIVAL. All of the Seller's representations, warranties, covenants or
agreements contained herein or pursuant hereto shall survive any Closing Date
and the execution and termination of this Agreement until all amounts owing
under the Receivables purchased by LFC hereunder are paid in full.
Notwithstanding the foregoing, the representations, warranties and indemnities
regarding environmental matters and compliance with Environmental Laws set forth
in PARAGRAPH 7(N) and 9(H) hereof shall survive indefinitely. All of LFC's
rights and privileges contained herein shall continue until all Receivables
purchased by LFC from the Seller have been paid in full.
16. INTENTION AS TRUE SALE. It is the express intention of the parties hereto
that the sale and purchase of Receivables pursuant to this Agreement is to
absolutely be categorized as a true sale of such Receivables rather than a
conveyance as security for the repayment of indebtedness. However, to the extent
that the transfers described herein are subsequently determined or found not to
be a sale under applicable law, it is fully and completely intended that, to
secure repayment of a debt in an amount equal to all payments made or to be made
by LFC to the Seller pursuant to this Agreement, plus all payments of interest
on the Receivables purchased by LFC due after the applicable Cut-Off Date, the
Seller does hereby grant to LFC and shall be deemed to have granted to LFC a
first priority security interest in (a) all of the Seller's right, title and
interest in, to and under such Receivables, including without limitation all
payments of interest and principal related to periods subsequent to the
applicable Cut-Off Date, (b) all of the Seller's right, title and interest in,
to and under the Receivables Documents related to such Receivables, if any,
which are being conveyed and assigned to LFC by the Seller, (c) all of the
Seller's servicing records as they relate to such Receivables which are
contemporaneously being delivered to LFC by the Seller, (d) all other property
rights of whatever nature being conveyed by the Seller to LFC hereunder, and (e)
any interest on or other proceeds from the foregoing and all replacements and
substitutions associated with the foregoing.
17. NO THIRD-PARTY BENEFICIARY. Notwithstanding anything to the contrary
contained herein, the parties hereto hereby expressly acknowledge and agree that
the terms and provisions set forth in this Agreement are intended to inure
solely to the benefit of the parties hereto and their respective successors and
assigns.
18. ENTIRE AGREEMENT; AMENDMENTS. This Agreement and the related Purchase
Documents contain the entire agreement between the parties concerning the sale
and purchase of Receivables hereunder and merge and extinguish all prior
agreements, understandings and negotiations, and no amendments or modifications
hereof shall be valid unless they are in writing and signed by all of the
parties hereto.
19. ASSIGNMENT; BINDING EFFECT. This Agreement and the related Purchase
Documents along with the Receivables purchased by LFC hereunder may be assigned
or sold by LFC to any third party after the Closing Date. The Seller may not
23
assign its interest in, or the obligations under this Agreement except with the
written consent of LFC. Any assignment without such approval shall be null and
void and shall authorize LFC to exercise all of its rights and remedies
hereunder. Subject to the foregoing, all of the terms, covenants, conditions,
representations and warranties hereof shall inure to the benefit of, and be
binding upon, the successors and assigns of the Seller and LFC.
20. MATERIALITY. All covenants, agreements, representations and warranties made
herein and in the other Purchase Documents shall be deemed to have been material
and relied on by LFC and shall survive the execution and delivery of this
Agreement.
21. INTERPRETATION. Whenever the context requires, all words used in the
singular will be construed to have been used in the plural, and vice versa, and
each gender will include any other gender. All paragraph headings are for
convenience only and do not define or limit any terms or provisions. The
invalidity or unenforceability of any one or more provisions of this Agreement
will in no way affect any other term or provision. This Agreement shall not be
construed more strictly against any one party than against any other party,
merely by virtue of the fact that it may have been prepared by counsel for one
of the parties, it being recognized that all of the parties hereto and their
respective counsel have contributed substantially and materially to the
preparation of this Agreement.
22. CHOICE OF LAW. This Agreement and the transactions contemplated hereunder
shall be governed by and interpreted in accordance with the laws of the
Commonwealth of Massachusetts, without regard to the choice-of-law provisions
thereof.
23. WAIVER OF JURY TRIAL; SUBMISSION TO JURISDICTION. EACH OF THE PARTIES HERETO
IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW,
ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY ACTION, SUIT,
COUNTERCLAIM OR OTHER LITIGATION OR OTHER PROCEEDING RELATING TO OR ARISING
DIRECTLY OR INDIRECTLY OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT, ANY
OTHER PURCHASE DOCUMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREUNDER OR
THEREUNDER. THE SELLER COVENANTS AND AGREES NOT TO SEEK TO CONSOLIDATE ANY SUCH
ACTION, SUIT, COUNTERCLAIM OR OTHER LITIGATION OR PROCEEDING IN WHICH A JURY
TRIAL HAS BEEN WAIVED WITH ANY OTHER ACTION IN WHICH A JURY TRIAL CANNOT OR HAS
NOT BEEN WAIVED. SELLER HEREBY IRREVOCABLY AND UNCONDITIONALLY (i) SUBMITS FOR
ITSELF AND ITS PROPERTY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO OR ARISING
OUT OF THIS AGREEMENT OR THE OTHER PURCHASE DOCUMENTS, TO THE NONEXCLUSIVE
GENERAL JURISDICTION OF THE COURTS OF THE COMMONWEALTH OF MASSACHUSETTS, THE
COURTS OF THE UNITED STATES OF AMERICA FOR THE WESTERN DISTRICT OF
MASSACHUSETTS, AND ANY APPELLATE COURTS FROM ANY THEREOF, (ii) CONSENTS THAT ANY
SUCH ACTION OR PROCEEDING MAY BE BROUGHT IN SUCH COURTS AND WAIVES TO THE
FULLEST EXTENT PERMITTED BY LAW ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE
TO THE VENUE OF ANY SUCH ACTION OR PROCEEDING IN ANY SUCH COURT OR THAT SUCH
ACTION OR PROCEEDING WAS BROUGHT IN AN INCONVENIENT COURT AND AGREES NOT TO
PLEAD THE SAME, (iii) AGREES THAT SERVICE OF PROCESS IN ANY SUCH ACTION OR
PROCEEDING MAY BE EFFECTED BY MAILING A COPY THEREOF BY REGISTERED OR CERTIFIED
24
MAIL, POSTAGE PREPAID, TO SELLER AT ITS ADDRESS SET FORTH BELOW AND (iv) AGREES
NOTHING HEREIN SHALL AFFECT THE RIGHT TO EFFECT SERVICE OF PROCESS IN ANY OTHER
MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT OF LFC TO XXX IN ANY OTHER
JURISDICTION.
24. MULTIPLE COUNTERPARTS. This Agreement may be executed in multiple
counterparts, each of which, when read collectively, shall constitute a single
document.
25. FURTHER ASSURANCES. The Seller will from time to time, at the Seller's
expense and in such manner and form as LFC may reasonably require, promptly
execute, deliver, file and record any financing statement, specific assignment
or other paper and take any other action necessary or desirable, or that LFC may
request, in order to create, preserve, perfect or validate any security
interest, or to enable LFC to exercise and enforce its rights hereunder or
better to assure and confirm unto LFC its rights, powers and remedies. The
Seller additionally agrees to do such further reasonable acts and things, and to
execute and deliver such additional conveyances, assignments, agreements and
instruments, as LFC may at any time reasonably request in connection with the
administration or enforcement of this Agreement or to better to assure and
confirm unto LFC its rights, powers and remedies hereunder.
26. CUMULATIVE RIGHTS AND REMEDIES. All remedies afforded to LFC by reason of
this Agreement are separate and cumulative remedies and it is agreed that no one
of such remedies shall be deemed to be in exclusion of any other remedies
available to LFC and shall not in any manner limit or prejudice any other legal
or equitable remedies which LFC may have. The rights, powers and remedies given
to LFC by this Agreement shall be in addition to all rights, powers and remedies
given to LFC by virtue of any statue or rule of law and all such rights, powers
and remedies are cumulative and not alternative, and may be exercised and
enforced successively or concurrently. Any forbearance or failure or delay by
LFC in exercising any right, power or remedy hereunder shall not be deemed to be
a waiver of such right, power or remedy, and any single or partial exercise of
any right, power or remedy hereunder shall not preclude the further exercise
thereof, and every right, power and remedy of LFC hereunder shall continue in
full force and effect until such right, power or remedy is specifically waived
by an instrument in writing executed by LFC.
27. SEVERABILITY. Any provision of this Agreement which is prohibited, deemed
invalid or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition, invalidity or unenforceability
without invalidating the remaining provisions hereof, and any such prohibition,
invalidity or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
28. HEADINGS. Section headings used herein are for convenience only and shall
not affect the construction or interpretation of this Agreement.
25
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered as of the date first above written.
LEISURE HOMES CORPORATION
By: ____________________________
Name/Title: ____________________________
Address: 0000 Xxxxxxxxx Xxxxxx Xxxxx
Xxxxxxxxx, XX 00000
LAND FINANCE COMPANY
By: _________________________________
Xxxxx X. Xxxxxxxx, its President
26
STATE OF )
) :ss.
COUNTY OF )
I certify that on ____________ ___, 2002 _________________________ as
______________________of Leisure Homes Corporation personally appeared before me
and acknowledged under oath to my satisfaction s/he is the person who signed
above as ______________________ on behalf of Leisure Homes Corporation.
[NOTARIAL SEAL Notary Public in and for said State
REQUIRED]
-------------------------------
Notary Public
My commission expires: ___________
