EXECUTION COPY
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STANDARD TERMS
TO
POOLING AND SERVICING AGREEMENT
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Bombardier Capital Mortgage Securitization Corporation
Pass-Through Certificates
January 2000 Edition
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TABLE OF CONTENTS
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ARTICLE I
DEFINITIONS...............................................................................1
Section 1.01. Definitions................................................................1
ARTICLE II
THE ASSETS...............................................................................30
Section 2.01. Assignment of Assets......................................................30
Section 2.02. The Contracts.............................................................31
Section 2.03. The Mortgage Loans........................................................34
Section 2.04. Representations and Warranties of the Trustee.............................37
Section 2.05. Representations and Warranties as to Assets...............................38
Section 2.06. Purchase or Substitution of Certain Assets................................38
ARTICLE III
ADMINISTRATION OF TRUSTS AND SERVICING OF THE ASSETS.....................................43
Section 3.01. The Servicer..............................................................43
Section 3.02. Maintenance of Records; Inspection of Asset Files.........................45
Section 3.03. Collection of Payments on Assets; Servicing Delinquent Accounts...........46
Section 3.04. Advances..................................................................46
Section 3.05. [Reserved]................................................................47
Section 3.06. Certificate Account.......................................................47
Section 3.07. Withdrawals From Certificate Account; Remittance Amounts..................48
Section 3.08. Realization upon Defaulted Assets.........................................49
Section 3.09. Title, Conservation, and Disposition of Repo Property
and REO Property...................................................51
Section 3.10. Full Prepayments and Liquidations; Trustee to Cooperate;
Release of Mortgage Files...........................................54
Section 3.11. Maintenance of Security Interests and Other Liens in
Manufactured Homes..................................................55
Section 3.12. Due-on-Sale Clauses and Assumption Agreements.............................56
Section 3.13. Annual Accountants' Certificate; Annual Statement as to
Compliance...........................................................56
Section 3.14. Servicing Fees............................................................57
Section 3.15. Late Charges; Prepayment Fees or Other Charges............................58
Section 3.16. Maintenance of Standard Hazard Insurance, Primary
Mortgage Insurance, and Errors and Omissions Coverage...............58
Section 3.17. Escrow Accounts...........................................................60
(i)
ARTICLE IV
REMITTANCE AND REPORTING TO CERTIFICATEHOLDERS...........................................61
Section 4.01. Remittance Reports........................................................61
Section 4.02. Distribution Account......................................................63
Section 4.03. Allocation of Available Distribution Amount...............................63
Section 4.04. Compliance with Withholding Requirements..................................64
Section 4.05. Reports of Certificate Principal Balances to the Clearing Agency..........64
Section 4.06. Preparation of Regulatory Reports.........................................65
ARTICLE V
THE POOLING INTERESTS AND THE CERTIFICATES...............................................66
Section 5.01. Pooling REMIC Interests...................................................66
Section 5.02. The Certificates..........................................................66
Section 5.03. Book-Entry Certificates...................................................67
Section 5.04. Registration of Transfer and Exchange of Certificates.....................68
Section 5.05. Restrictions on Transfer..................................................69
Section 5.06. Accrual of Interest on the Certificates...................................71
Section 5.07. Mutilated, Destroyed, Lost or Stolen Certificates.........................71
Section 5.08. Persons Deemed Owners.....................................................72
Section 5.09. Appointment of Paying Agent...............................................72
ARTICLE VI
THE COMPANY AND THE SERVICER.............................................................72
Section 6.01. Liability of the Company and the Servicer.................................72
Section 6.02. The Company's Representations and Warranties..............................72
Section 6.03. Representations, Warranties and Covenants of the Servicer.................74
Section 6.04. Corporate Existence.......................................................76
Section 6.05. Limitation on Liability of the Company, the Servicer and Others...........76
Section 6.06. Servicer Resignation......................................................77
Section 6.07. Assignment or Delegation of Duties by the Servicer and
the Company.........................................................77
Section 6.08. The Company and Servicer May Own Certificates.............................77
Section 6.09. Protection of Trust Estate................................................77
Section 6.10. Performance of Obligations................................................78
ARTICLE VII
EVENT OF DEFAULT; TERMINATION OF SERVICING ARRANGEMENTS..................................79
Section 7.01. Events of Default.........................................................79
Section 7.02. Trustee to Act; Appointment of Successor..................................80
Section 7.03. Notifications to Servicer and to Certificateholders.......................82
(ii)
ARTICLE VIII
CONCERNING THE TRUSTEE...................................................................82
Section 8.01. Duties of Trustee.........................................................82
Section 8.02. Certain Matters Affecting the Trustee.....................................84
Section 8.03. Trustee Not Liable for Certificates or Assets.............................86
Section 8.04. Trustee May Own Certificates..............................................87
Section 8.05. Trustee's Fees and Expenses...............................................87
Section 8.06. Eligibility Requirements for Trustee......................................87
Section 8.07. Resignation and Removal of the Trustee....................................88
Section 8.08. Successor Trustee.........................................................89
Section 8.09. Merger or Consolidation of Trustee........................................89
Section 8.10. Appointment of Co-Trustee or Separate Trustee.............................89
Section 8.11. Appointment of Custodians.................................................90
Section 8.12. Trustee May Enforce Claims Without Possession of Certificates.............91
ARTICLE IX
TERMINATION..............................................................................91
Section 9.01. Termination Upon Repurchase or Liquidation of All Contracts...............91
Section 9.02. Additional Termination Requirements.......................................93
ARTICLE X
REMIC TAX PROVISIONS.....................................................................94
Section 10.01. REMIC Administration......................................................94
Section 10.02. Prohibited Activities.....................................................96
ARTICLE XI
MISCELLANEOUS PROVISIONS.................................................................97
Section 11.01. Amendments................................................................97
Section 11.02. Recordation of Agreement; Counterparts....................................98
Section 11.03. Limitation on Rights of Certificateholders................................98
Section 11.04. Notices...................................................................99
Section 11.05. Severability of Provisions...............................................100
Section 11.06. Sale of Contracts........................................................100
Section 11.07. Notice to Rating Agency..................................................101
(iii)
TABLE OF EXHIBITS
Exhibit 1 Form of Servicer Custodial Certification
Exhibit 2-A Form of Initial Certification
Exhibit 2-B Form of Final Certification
Exhibit 3 Form of Recordation Report
Exhibit 4 Form of Request for Release
Exhibit 5 Form of Rule 144A Agreement
Exhibit 6 Form of Transferee Agreement
Exhibit 7 Form of Benefit Plan Affidavit
Exhibit 8 Form of Residual Transferee Agreement
Exhibit 9 Form of Power of Attorney
(iv)
RECITALS
Bombardier Capital Mortgage Securitization Corporation (the "Company"),
Bombardier Capital Inc. ("BCI") and a banking association or corporation as
trustee (the "Trustee") have entered into a Pooling and Servicing Agreement that
provides for the issuance of manufactured housing contract and/or mortgage
pass-through securities (the "Certificates") that in the aggregate evidence the
entire interest in a pool consisting of retail installment sales contracts
and/or installment loan agreements for units of manufactured housing (the
"Contracts") and/or mortgage loans secured by first liens on one- to four-family
residential real properties (the "Mortgage Loans," and, together with the
Contracts, the "Assets") and other property owned by the Trust (the "Trust")
created by such Pooling and Servicing Agreement. These Standard Terms are a part
of, and are incorporated by reference into, such Pooling and Servicing
Agreement.
STANDARD PROVISIONS
NOW, THEREFORE, in consideration of the mutual promises, covenants,
representations and warranties made in the Pooling and Servicing Agreement and
as hereinafter set forth, the Company, BCI and the Trustee agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01. Definitions.
Except as otherwise specified herein or in a Pooling and Servicing
Agreement or as the context may otherwise require, whenever used in these
Standard Terms, the following words and phrases shall have the meanings assigned
to them in this Article. Unless otherwise specified, all calculations described
herein shall be made on the basis of a 360-day year consisting of twelve 30-day
months.
"Accrual Date": With respect to any Series or Class of Certificates, the
date upon which interest begins accruing on the Certificates of such Series or
Class, which shall be specified in the related Pooling and Servicing Agreement.
"Adjustable Rate Asset": An "adjustable rate" Contract or Mortgage Loan,
the Asset Rate of which is subject to periodic adjustment in accordance with the
terms of the Contract or the related Mortgage Note.
"Advance": Any Servicing Advance or P&I Advance.
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"Affiliate": As to any specified Person, any other Person controlling or
controlled by or under common control with such specified Person. For the
purposes of this definition, "control," when used with respect to any specified
Person, means the power to direct the management and policies of such Person,
directly or indirectly, whether through the ownership of voting securities, by
contract or otherwise; and the terms "controlling" and "controlled" have
meanings correlative to the foregoing.
"Application for Relief": As defined in Section 4.06 hereof.
"Asset": A Contract or Mortgage Loan.
"Asset Documents": Collectively, Contract Documents and Mortgage Loan
Documents.
"Asset File": With respect to any Asset, the related Contract File or
Trustee Mortgage Loan File, as applicable.
"Asset Rate": As to any Asset, the related Contract Rate or Mortgage Rate,
as applicable.
"Asset Schedule": For any Series, the list or lists attached to the related
Pooling and Servicing Agreement consisting of the related Contract Schedule, if
any, and the related Mortgage Loan Schedule, if any.
"Assignment": A document effecting the transfer of all the rights of a
secured party under a Mortgage to a transferee, in recordable form for the
jurisdiction in which the related Mortgaged Property is located.
"Available Distribution Amount": For each Distribution Date for a Series of
Certificates, the amount on deposit in the related Distribution Account at the
commencement of business on such Distribution Date, less the amounts
distributable from the Distribution Account in accordance with clauses (1)
through (4) of Section 4.03 hereof.
"Basis Limit Amount": With respect to any Converted Loan purchased from a
REMIC, an amount equal to the REMIC's adjusted federal income tax basis in such
Converted Loan as of the date on which the purchase occurs as set forth in a
certificate of an Officer of the Servicer, which certificate shall be delivered
to the Trustee in connection with any purchase of a Converted Loan from a REMIC.
"BCI": Bombardier Capital Inc., a Massachusetts corporation.
"Beneficial Owner": With respect to a Book-Entry Certificate, the Person
who is registered as owner of that Certificate in the books of the Clearing
Agency for that Certificate or in the books of a Person maintaining an account
with such Clearing Agency.
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"Benefit Plan Affidavit": An affidavit substantially in the form of Exhibit
7 hereto.
"Benefit Plan Opinion": An Opinion of Counsel to the effect that a proposed
transfer of a Certificate will not (a) cause any of the assets of the Trust to
be regarded as "plan assets" for purposes of the Plan Asset Regulations, (b)
give rise to any fiduciary duty under ERISA on the part of the Company, the
Servicer, the Trustee or the Trust's Tax Matters Person, if any, or (c) be
treated as, or result in, a "prohibited transaction" under section 406 or
section 407 of ERISA or under section 4975 of the Code. The cost of obtaining a
Benefit Plan Opinion shall not be borne by the Company, the Servicer or the
Trustee.
"Board of Directors": The Board of Directors of the Company, BCI or any
other Servicer or any committee of that Board duly authorized to act on behalf
of that Board with respect to any matters arising hereunder.
"Book-Entry Certificates": The Classes of Certificates of a Series, if any,
classified as such in the related Pooling and Servicing Agreement.
"Business Day": Any day that is not a Saturday, Sunday, holiday or other
day on which commercial banking institutions in the city and state in which the
Trustee's Corporate Trust Office is located are authorized or obligated by law
or executive order to be closed.
"Buy-Down Fund": A custodial Eligible Account established by the Servicer
for any BuyDown Loan, which must comply with the standards applicable to the
related Certificate Account, to be funded with an amount which, together with
projected reinvestment earnings thereon at a rate specified in the related
Prospectus Supplement, will provide funds sufficient to support the payments
required on such Buy-Down Loan on a level debt service basis.
"Buy-Down Loan": An Asset the amortization of which includes payments made
by the seller of the related Mortgaged Property or Manufactured Home or by
someone else other than the related Obligor.
"Certificate Account": An account established pursuant to and described in
Section 3.06 hereof. The Certificate Account will be an asset of the Trust but
not an asset of any related REMIC. Solely for federal income tax purposes, the
Servicer will be the owner of the Certificate Account and, thus, any income
earned by the Certificate Account, or any amounts transferred by any related
REMIC to the Certificate Account, shall be treated as income earned by, or
amounts distributed to, the Servicer.
"Certificate Principal Balance": With respect to each Certificate or Class
of Certificates, on any date of determination, the outstanding principal amount,
if any, of such Certificate(s) immediately prior to the most recently preceding
Distribution Date (or in the case of a date of determination on or before the
first Distribution Date, an amount equal to the initial principal amount of such
Certificate(s) as of the Closing
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Date) less the amounts, if any, applied on such preceding Distribution Date
to reduce the principal amount of such Certificate(s) in accordance with Section
4.03 hereof.
"Certificate Register" and "Certificate Registrar": The respective meanings
specified for such terms in Section 5.04 hereof.
"Certificateholder" or "Holder": With respect to any Certificate, the
Person in whose name such Certificate is registered in the Certificate Register.
"Certificates": The certificates authorized by, executed and delivered
under, and issued pursuant to any Pooling and Servicing Agreement.
"Class": With respect to any Series, the classification of different types
of the Certificates within such Series as set forth in the related Pooling and
Servicing Agreement.
"Clearing Agency": The Depository Trust Company, or any successor
organization or any other organization registered as a "clearing agency"
pursuant to Section 17A of the Securities Exchange Act of 1934, as amended, and
the regulations of the Securities and Exchange Commission thereunder.
"Clearing Agency Participant": A broker, dealer, bank, other financial
institution or other Person for whom from time to time a Clearing Agency effects
book-entry transfers and pledges of securities deposited with the Clearing
Agency.
"Closing Date": With respect to any Series, the date specified as the
"Closing Date" in the related Pooling and Servicing Agreement.
"Code": The Internal Revenue Code of 1986, as amended.
"Collection Period": With respect to each Distribution Date for a Series,
the calendar month immediately preceding the calendar month in which such
Distribution Date occurs.
"Commission": The Securities and Exchange Commission, as from time to time
constituted, created under the Securities Exchange Act of 1934, as amended.
"Company" Bombardier Capital Mortgage Securitization Corporation, a Vermont
corporation wholly-owned by BCI.
"Contract": Each retail installment sales contract and security agreement
or installment loan agreement and security agreement relating to the Contracts
(1) that has been executed by an Obligor and pursuant to which such Obligor (A)
purchased the Manufactured Home described therein, (B) agreed to pay the
deferred purchase price or amount borrowed, together with finance charges, as
therein provided
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in connection with such purchase or loan, (C) granted a security interest
in such Manufactured Home to the originator of such contract and (D) undertook
to perform certain other obligations as specified in such contract or loan
agreement and (2) that has been assigned to the Trustee pursuant to the Pooling
and Servicing Agreement.
"Contract Documents": With respect to each Contract:
(a) the original Contract;
(b) either (1) the original title document for the related Manufactured
Home, a duplicate certified by the appropriate governmental authority that
issued the original thereof or, if such original is not yet available, a copy of
the application filed with the appropriate governmental authority pursuant to
which the original title document will issue (which copy may be on microfilm or
optical disk maintained by the Servicer in its records separate from the other
related Contract Documents), or (2) if the laws of the jurisdiction in which the
related Manufactured Home is located do not provide for the issuance of title
documents for manufactured housing units, other evidence of ownership of the
related Manufactured Home that is customarily relied upon in such jurisdiction
as evidence of title to a manufactured housing unit;
(c) unless such Contract is a Land Secured Contract, evidence of one or
more of the following types of perfection of the Seller's or the Trustee's
security interest in the related Manufactured Home granted by such Contract (or,
if such evidence is not yet available, a copy of the application or other filing
used to obtain such security interest (which copy may be on microfilm or optical
disk maintained by the Servicer in its records separate from the other related
Contract Documents)), as appropriate in the applicable jurisdiction: (1)
notation of such security interest on the title document, (2) a financing
statement meeting the requirements of the UCC, with evidence of recording
indicated thereon, (3) a fixture filing in accordance with the UCC, with
evidence of filing indicated thereon, or (4) such other evidence of perfection
of a security interest in a manufactured housing unit as is customarily relied
upon in the jurisdiction in which the related Manufactured Home is located;
(d) an original assignment of the Contract from the initial named payee
thereunder to the Seller (unless the Seller is the initial named payee for such
Contract);
(e) originals of any assumption agreements relating to such Contract,
together with originals of any surety or guaranty agreement relating to such
Contract or to any such assumption agreement, payable to the order of the
Trustee, or, if not so payable, endorsed to the order of, or assigned to, the
Trustee by the holder/payee thereunder without recourse; and
(f) originals of any extension, modification or waiver agreement(s)
relating to such Contract.
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In the case of any Land Secured Contract, the related Contract Documents
shall consist of the following documents in lieu of those listed in clause (c)
of the foregoing paragraph: (i) the original recorded Mortgage for the related
Real Property, with evidence of recordation noted thereon or attached thereto,
or a certified copy thereof issued by the appropriate recording office (or, if
the Mortgage is in the process of being recorded, a photocopy of the Mortgage,
which may be on microfilm or optical disk maintained by the Servicer in its
records separate from the other related Contract Documents); (ii) if the
Mortgage does not name the related Seller as mortgagee therein or beneficiary
thereof, an original recorded assignment or assignments of the Mortgage from the
Persons named as mortgagee in, or beneficiary of, such Mortgage, to the related
Seller, with evidence of recordation noted thereon or attached thereto, or a
certified copy of each such assignment issued by the appropriate recording
office (or, if such an original assignment is in the process of being recorded,
a photocopy of each such assignment, which may be on microfilm or optical disk
maintained by the Servicer in its records separate from the other related
Contract Documents); (iii) a copy of the power of attorney delivered by the
Seller to the Trustee authorizing the Trustee to execute and record assignments
of Mortgages securing Land Secured Contracts from the Seller to the Trustee in
the event that recordation of such assignments becomes necessary for foreclosure
on the related Real Property by or on behalf of the Trustee; and (iv) if such
Land Secured Contract's original principal balance was $40,000 or greater, a
copy of the title search report and bring-down thereof (or evidence of title
insurance) with respect to the related Real Property.
"Contract File": With respect to any Contract, a file containing all of the
related Contract Documents.
"Contract Loan-to-Value Ratio": As to each Contract with respect to which a
lien on land is required for underwriting purposes, the ratio, expressed as a
percentage, of the principal amount of such Contract to the sum of the purchase
price of the home (including taxes, insurance and prepaid finance charges) and
the appraised value of the land and as to each other Contract, the ratio,
expressed as a percentage, of the principal amount of such Contract to the
purchase price of the home (including taxes, insurance and prepaid finance
charges).
"Contract Rate": With respect to a Contract, the annual interest rate
required to be paid by an Obligor under the terms of such Contract.
"Contract Schedule": For any Series, the list attached to the related
Pooling and Servicing Agreement identifying each Contract assigned thereunder
(which may be presented together with any related Mortgage Loan Schedule in a
single Asset Schedule), which list shall (a) identify each Contract and (b) set
forth (or describe the method of determining) as to each such Contract (1) the
Cut-off Date Principal Balance thereof, (2) the amount of each Monthly Payment
due from the Obligor thereunder, (3) the Contract Rate thereof, (4) the original
term to maturity thereof, (5) the date of origination thereof, (6) the original
Contract Loan-to-Value Ratio thereof, (7) the state in which the related
Manufactured Home is located, (8) whether the related Manufactured Home is a
used, repossessed, new or transferred home, (9) whether the Contract is a Land
Secured Contract (10) the Scheduled Principal Balance of each
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Contract, (11) the original principal balance of each Contract and (12) any
other information specified in the related Pooling and Servicing Agreement.
"Converted Loan": An Adjustable Rate Asset with respect to which the
Obligor has complied with the applicable requirements of the related Contract or
Mortgage Note to convert the related Asset Rate to a fixed rate of interest, and
as to which the Servicer has processed such conversion.
"Corporate Trust Office": The principal corporate trust office of the
Trustee at which at any particular time its corporate trust business under a
Pooling and Servicing Agreement shall be administered.
"Credit Insurer": An insurer under any Primary Mortgage Insurance Policy or
pool insurance policy for a Series.
"Custodian": For any Series, the Trustee or an agent of the Trust
identified in the related Pooling and Servicing Agreement, which agent shall
hold all or part of the Trustee Mortgage Loan Files for some or all of the
related Mortgage Loans.
"Cut-off Date": With respect to any Series, the date or dates (a) on and
after which all Monthly Payments due in respect of the Assets sold to the Trust
and (b) on and after which all Principal Prepayments, Net Liquidation Proceeds
and Repurchase Prices received in respect of such Assets, are to be transmitted
to the Certificate Account for the benefit of the Holders of the Certificates.
The Cut-off Date for a Series shall be specified in the related Pooling and
Servicing Agreement.
"Cut-off Date Principal Balance": As to any Asset, the original principal
amount of such Asset, minus the principal portion of all Monthly Payments due on
such Asset before the Cut-off Date and minus all other payments (other than
scheduled payments due on or after the Cut-off Date) applied to reduce such
original principal amount before the Cut-off Date.
"Default": Any occurrence that is, or that with notice or the lapse of time
or both would become, an Event of Default.
"Defaulted Contract": A Contract (a) as to which any related Monthly
Payment has been delinquent and remains delinquent 90 days after the Due Date
therefor or (b) as to which the related Obligor has become bankrupt or
insolvent.
"Defect Discovery Date": With respect to an Asset, the date on which either
a Responsible officer of the Trustee or the Servicer first discovers a
Qualification Defect affecting the Asset.
"Directly Operate": With respect to any REO Property, the furnishing or
rendering of services to the tenants thereof, the management or operation of
such REO Property, the holding of such REO Property primarily for sale to
customers, the performance of any construction work thereon or any use of such
REO
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Property in a trade or business conducted by the Trust, in each case other
than through an Independent Contractor; provided, however, that neither the
Trustee nor the Servicer on behalf of the Trustee shall be considered to
Directly Operate an REO Property solely because the Servicer on behalf of the
Trustee establishes rental terms, chooses tenants, enters into or renews leases,
deals with taxes and insurance, or makes decisions as to repairs or capital
expenditures with respect to such REO Property.
"Disqualified Organization": Either (a) the United States, (b) any state or
political subdivision thereof, (c) any foreign government, (d) any international
organization, (e) any agency or instrumentality of any of the foregoing, (f) any
organization (other than a cooperative described in section 521 of the Code)
that is exempt from federal income taxation (including taxation under the
unrelated business taxable income provisions of the Code), (g) any rural
telephone or electrical service cooperative described in section 1381(a)(2)(C)
of the Code, or (h) any other entity identified as a disqualified organization
by legislation enacted or administrative pronouncement in effect as of the date
of the most recent transfer of the related Residual Certificate. A corporation
will not be treated as an instrumentality of the United States or any state or
political subdivision thereof if all of its activities are subject to tax and,
with the exception of the Federal Home Loan Mortgage Corporation, a majority of
its board of directors is not selected by such governmental unit.
"Distribution Account": As defined in Section 4.02 hereof.
"Distribution Date": Unless otherwise specified in the Pooling and
Servicing Agreement, the 15th day of any month, or the next Business Day after
such 15th day if such 15th day is not a Business Day, commencing in the month
following the month in which the related Closing Date occurs and ending on the
date on which the Trust is terminated.
"Due Date": With respect to any Asset, the date on which a Monthly Payment
is due on such Asset from the Obligor thereunder (without regard to any grace
period).
"Due Date Interest Shortfall": For any Asset that is prepaid in full or
liquidated on other than a Due Date for such Asset, the difference between (a)
the amount of interest that would have accrued on such Asset through the day
preceding the Due Date next following the date of such prepayment or liquidation
had the Asset not been prepaid in full or liquidated (net of any other
administrative fees payable out of such interest had it accrued and been paid)
and (b) the amount of interest that actually accrued on such Asset prior to the
prepayment in full or liquidation thereof (net of an allocable portion of any
other administrative fees payable from interest payments on such Asset in
respect of the related Collection Period).
"Early Payment": As to any Asset and any Due Date on which the principal
and interest payments on such Asset made with respect to such Due Date (not
including any late fees) exceed the sum of the scheduled Monthly Payment for
such Asset and Due Date plus any unpaid Monthly Payments for previous Due Dates,
if the related Obligor has not sent written notice to the Servicer with such
payment asking that the amount by which such payment exceeds the Monthly Payment
then due be treated as a Principal
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Prepayment and the Servicer is unable to determine the Obligor's intended
treatment of such excess payment, the Early Payment shall be the amount by which
(1) payments of principal and interest on such Asset made with respect to such
Due Date exceed (2) the scheduled Monthly Payment for such Asset on such Due
Date plus any unpaid Monthly Payments for previous Due Dates.
"Eligible Account": A segregated trust account maintained (1) at a
depository institution organized under the laws of the United States or any
state, the deposits of which are insured to the full extent permitted by law by
the Federal Deposit Insurance Corporation, whose commercial paper or long-term
unsecured debt has a rating sufficient to support the ratings requested on the
Certificates of the related Series, and which institution is subject to
examination by federal or state authorities; (2) in the corporate trust
department of the Trustee; or (3) at an institution otherwise acceptable to each
applicable Rating Agency.
"Eligible Investments": Any one or more of the following obligations or
securities:
(a) direct obligations of, and obligations fully guaranteed by, the United
States of America;
(b) demand and time deposits in, negotiable certificates of deposit of,
bankers' acceptances issued by, or federal funds sold by, any Qualified Bank;
(c) securities bearing interest or sold at a discount or commercial paper
of any Person other than the Company, the Seller or any Affiliate of the Company
or the Seller; provided, however, that such securities or commercial paper shall
be rated in the highest applicable rating category;
(d) repurchase agreements fully collateralized by possession of obligations
of the type specified in clause (a) above; provided, however, that investments
in such repurchase agreements shall mature within three days of the acquisition
thereof and; provided further, that such agreements shall be entered into with a
Qualified Bank;
(e) money market accounts or money market funds (including, without
limitation, funds for which the Trustee or any Affiliate is investment manager
or advisor), provided, however, that such money market accounts or money market
funds shall be rated in the highest applicable rating category; or
(f) money market accounts or money market mutual funds investing primarily
in obligations of the United States government, and further investing
exclusively in debt obligations (including, without limitation, funds for which
the Trustee or any Affiliate is investment manager or advisor), provided,
however, that such money market accounts or money market mutual funds shall be
rated in the highest applicable rating category.
The foregoing notwithstanding, Eligible Investments that are acquired with funds
in the Certificate Account, the Distribution Account or any Reserve Fund shall
include only such obligations or securities that mature
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on or before the Business Day immediately preceding the next Distribution
Date provided, however, that Eligible Investments specified in clauses (e) and
(f) above may mature on such Distribution Date. In no event shall an instrument
be an Eligible Investment if such instrument evidences (1) a right to receive
only interest payments with respect to the obligations underlying such
instrument or (2) both principal and interest payments derived from obligations
underlying such instrument, if the interest and principal payments with respect
to such instrument provide a yield to maturity at the date of investment of
greater than 120% of the yield to maturity at par of such underlying
obligations.
"Environmental Law": Environmental Law shall mean any and all federal,
state, local and foreign statutes, laws, regulations, ordinances, rules,
judgments, orders, decrees, permits, concessions, grants, franchises, licenses,
agreements or other governmental restrictions relating to the environment or
health or to emissions, discharges, releases or threatened releases of
pollutants, contaminants, chemicals, or industrial, toxic or hazardous
substances or wastes into the environment including, without limitation, ambient
air, surface water, ground water, or land, or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport, or handling of pollutants, contaminants, chemicals, or industrial,
toxic or hazardous substances or wastes.
"ERISA": The Employee Retirement Income Security Act of 1974, as amended.
"ERISA Restricted Certificates": With respect to any Series, any
Certificates of a Class that are subordinated to the Certificates of any other
Class of such Series with respect to the allocation of Writedown Amounts, or, if
the related Pooling and Servicing Agreement does not provide for the allocation
of Writedown Amounts, the Certificates designated as "ERISA Restricted
Certificates" in the related Pooling and Servicing Agreement.
"Event of Default": As defined in Section 7.01 hereof.
"FHA": The Federal Housing Administration.
"FHA Asset": An Asset that is insured by the FHA.
"FHA Insurance": As to any FHA Asset, FHA's agreement to reimburse the
owner of such Asset for the amount of any losses incurred upon the liquidation
of such Asset.
"FHLMC": Federal Home Loan Mortgage Corporation.
"Final Certification": A certification as to the completeness of each
Trustee Mortgage Loan File substantially in the form of Exhibit 2-B hereto
provided by the Trustee (or the Custodian) on or before the first anniversary of
the Closing Date pursuant to Section 2.03(c)(2) hereof.
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"Final Scheduled Distribution Date": With respect to any Class of any
Series, the date specified as such in the related Pooling and Servicing
Agreement.
"FNMA": Federal National Mortgage Association.
"Fraud Loss": A loss incurred on a Contract or Mortgage Loan resulting from
a Credit Insurer's failure to pay a claim with respect to such Contract or
Mortgage Loan on the grounds of fraud in connection with the origination of the
Contract or Mortgage Loan or on the grounds of fraud, dishonesty or
misrepresentation in connection with the application for any insurance obtained
with respect to such Contract or Mortgage Loan.
"GPM Fund": A custodial Eligible Account established by the Servicer for
any GPM Loan, which must comply with the standards applicable to the related
Certificate Account, to be funded with an amount which, together with projected
reinvestment earnings thereon at a rate specified in the related Pooling and
Servicing Agreement, will provide funds sufficient to support the payments
required on such GPM Loan on a level debt service basis.
"GPM Loan": A "graduated payment" Asset the terms of which provide for
Monthly Payments during the initial years of its term that are less than the
actual amount of principal and interest that would be payable on a level debt
service basis.
"Independent": When used with respect to any specified Person, another
Person who (a) is in fact independent of the Company, the Seller, the Servicer,
any obligor upon the Certificates or any Affiliate of the Company, the Seller or
the Servicer or such obligor, (b) does not have any direct financial interest or
any material indirect financial interest in the Company, the Seller or the
Servicer or in any such obligor or in an Affiliate of the Company, the Seller or
the Servicer or such obligor, and (c) is not connected with the Company, the
Seller or the Servicer or any such obligor as an officer, employee, promoter,
underwriter, trustee, partner, director or person performing similar functions.
Whenever it is provided herein that any Independent Person's opinion or
certificate shall be furnished to the Trustee, such Person shall be appointed by
the Company, the Seller or the Servicer in the exercise of reasonable care by
the Company, the Seller or the Servicer, as the case may be, and such opinion or
certificate shall state that the Person executing the same has read this
definition and that such Person is independent within the meaning thereof.
"Independent Contractor": Either (a) any Person (other than the Servicer)
that would be an "independent contractor" with respect to the Trust within the
meaning of Section 856(d)(3) of the Code if the Trust were a real estate
investment trust (except that, in applying that Section, more than 35% of the
outstanding principal balance of any Class shall be deemed to be more than 35%
of the certificates of beneficial interest of the Trust), so long as the Trust
does not receive or derive any income from such Person, the relationship between
such Person and the Trust is at arm's length and such Person is not an employee
of the REMIC, the Trustee or the Servicer, all within the meaning of Treasury
Regulation Section 1.856-4(b)(5), or (b) any other Person (including the
Servicer) upon receipt by the Trustee of an Opinion
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of Counsel, the expense of which shall constitute a Servicing Advance if
borne by the Servicer, to the effect that the taking of any action in respect of
any REO Property by such Person, subject to any conditions therein specified,
that is otherwise herein contemplated to be taken by an Independent Contractor
will not cause such REO Property to cease to qualify as "foreclosure property"
within the meaning of Section 860G(a)(8) of the Code (determined without regard
to the exception applicable for purposes of Section 860D(a) of the Code), or
cause any income realized in respect of such REO Property to fail to qualify as
Rents from Real Property.
"Initial Certification": A certification as to the completeness of each
Trustee Mortgage Loan File substantially in the form of Exhibit 2-A hereto
provided by the Trustee (or the Custodian) on the Closing Date pursuant to
Section 2.03(c)(1) hereof.
"Initial Value": As defined in Section 3.16(b) hereof.
"Insurance Policy": Any insurance policy covering any Asset (or the related
Manufactured Home or Mortgaged Property), including, without limitation, any
Standard Hazard Insurance Policy or Primary Mortgage Insurance Policy or FHA
Insurance or VA Guaranty.
"Insurance Proceeds": Amounts paid or payable (as the context requires)
under any Insurance Policy, to the extent such amounts are not applied to the
restoration or repair of the Manufactured Home or Mortgaged Property in respect
of which such amounts were paid.
"Insured Expenses": Expenses incurred by the Servicer in connection with a
Contract or Mortgage Loan under which the Obligor is in default, which expenses
are covered by a Standard Hazard Insurance Policy and are paid by an insurer
under any such policy.
"Interest Accrual Period": With respect to each Distribution Date (i) for
any Class of Certificates paying interest at a variable rate, the period
commencing on the 15th day of the preceding month through the 14th day of the
month in which such Distribution Date occurs (except that the first Interest
Accrual Period for such Class of Certificates will be the period from the
related Closing Date through the 14th day of the month in which such
Distribution Date occurs) and (ii) for all other Classes of Certificate, the
calendar month preceding the month in which the Distribution Date occurs.
Interest on any Class of Certificates paying interest at a variable rate will be
calculated on the basis of a 360-day year and the actual number of days elapsed
in the applicable Interest Accrual Period. Interest on all other Classes of
Certificates will be computed on the basis of a 360-day year consisting of
twelve 30-day months.
"Interest Deficiency Withdrawal": With respect to any Series, the meaning,
if applicable, specified in the related Pooling and Servicing Agreement.
"Issuing REMIC": If provided for in a Pooling and Servicing Agreement, the
REMIC composed primarily of Regular Interests in the Pooling REMIC, together
with the Distribution Account.
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"Land Secured Contract": A Contract secured at origination by a parcel of
real estate in addition to a Manufactured Home.
"Liquidated Asset": A Defaulted Contract or defaulted Mortgage Loan as to
which all amounts that the Servicer expects to recover through the date of
disposition of the related Manufactured Home or Mortgaged Property have been
received.
"Liquidation Expenses": All reasonable, out-of-pocket costs and expenses
(exclusive of the Servicer's overhead costs) incurred by the Servicer in
connection with liquidation of any Asset or disposition of any related Repo
Property or REO Property, including, but not limited to, the cost of all notices
sent in connection with such liquidation, costs and expenses incurred in
connection with preparation and recordation of assignments of Mortgages relating
to Land Secured Contracts, expenses, including reasonable attorney's fees,
incurred in connection with the commencement and pursuit of Proceedings against
Obligors or guarantors or sureties of Obligors or in the pursuit of foreclosure
or other similar remedies, expenses incurred in repossessing and refurbishing
the related Manufactured Home or preparing the related REO Property for sale and
sales commissions paid in connection with the resale of the related Manufactured
Home or REO Property.
"Liquidation Proceeds": Amounts received and retained in connection with
the liquidation of Liquidated Assets, whether through foreclosure thereon or
repossession and resale of the related Manufactured Home, foreclosure on the
related Mortgaged Property or otherwise (including Insurance Proceeds collected
in connection with such liquidation).
"Loan-to-Value Ratio": The Contract Loan-to-Value Ratio or the Mortgage
Loan-to-Value Ratio of an Asset, as applicable.
"Manufactured Home": A unit of manufactured housing (within the meaning of
Code section 25(e)(10)) together with all accessions thereto securing the
indebtedness of the Obligor under any Contract or constituting a portion of the
Mortgaged Property securing the indebtedness of the Obligor under any Mortgage
Loan.
"Monthly Payment": With respect to any Asset, the scheduled monthly payment
of principal and interest thereon due in any month under the terms thereof.
"Mortgage": A written instrument creating a valid first lien on Real
Property or a Mortgaged Property, in the form of a mortgage, deed of trust, deed
to secure debt or security deed, including any riders or addenda thereto.
"Mortgage Insurer": The insurance company or companies which issue any
Primary Mortgage Insurance Policies with respect to any Mortgage Loans.
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"Mortgage Loan": A mortgage loan (not including any Land Secured Contract)
secured by a first lien on a one- to four-family residential real property
(which may be the real estate to which a Manufactured Home is deemed by the
Seller to have become permanently affixed as of the Cut-off Date for the related
Series).
"Mortgage Loan Documents": With respect to each Mortgage Loan, the
following documents:
(a) the original Mortgage Note bearing a complete chain of endorsements, if
necessary, from the initial payee thereunder to the Seller, with a further
endorsement without recourse from the Seller in blank or to the Trustee or its
Custodian, in a form specified in the related Sales Agreement, together with all
related riders and addenda and any related surety or guaranty agreement, power
of attorney and buy-down agreement;
(b) the original recorded Mortgage (or a copy thereof certified to be a
true and correct reproduction of the original thereof by the appropriate public
recording office) with evidence of recordation noted thereon or attached
thereto, or, if the Mortgage is in the process of being recorded, a photocopy of
the Mortgage, certified by an officer of the related Seller or the originator,
the related title insurance company, the related closing/settlement/escrow agent
or the related closing attorney to be a true and correct copy of the Mortgage
submitted for recordation;
(c) the original recorded assignment of the Mortgage from the related
Seller to the Trustee or its Custodian, in a form specified in the related Sales
Agreement (or a copy thereof certified to be a true and correct reproduction of
the original thereof by the appropriate public recording office) with evidence
of recordation noted thereon or attached thereto, or, if the assignment is in
the process of being recorded, a photocopy of the assignment, certified by an
officer of the Seller to be a true and correct copy of the assignment submitted
for recordation;
(d) each original recorded intervening assignment of the Mortgage as is
necessary to show a complete chain of title from the initial mortgagee (or
beneficiary, in the case of a deed of trust) to the related Seller (or a copy of
each such assignment certified to be a true and correct reproduction of the
original thereof by the appropriate public recording office) with evidence of
recordation noted thereon or attached thereto, or, if an assignment is in the
process of being recorded, a photocopy of the assignment, certified by an
officer of the Seller to be a true and correct copy of the assignment submitted
for recordation;
(e) an original Title Insurance Policy or, if such policy has not yet been
issued or is otherwise not available, (1) a written commitment to issue such
policy issued by the applicable title insurance company and an officer's
certificate of the related Seller certifying that all of the requirements
specified in such commitment have been satisfied, (2) a preliminary title report
if the related Mortgaged Property is located in a state in which preliminary
title reports are acceptable evidence of title insurance; provided, that if a
preliminary title report is delivered initially, a final title insurance policy
or other evidence of the existence of adequate title insurance shall be
delivered within 90 days or (3) a certificate of an officer of the Seller
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certifying that a Title Insurance Policy is in full force and effect as to the
related Mortgage and that such Title Insurance Policy is freely assignable to
and will inure to the benefit of the Trustee (subject to recordation of the
related Assignment of Mortgage);
(f) for each Mortgage Loan identified in the related Agreement as having in
place a Primary Mortgage Insurance Policy, a Primary Mortgage Insurance Policy
or a certificate of primary mortgage insurance issued by the related Mortgage
Insurer or its agent indicating that such a policy is in effect as to such
Mortgage Loan or, if neither a policy nor a certificate of insurance from the
related Mortgage Insurer is available, a certificate of an officer of the
related Seller certifying that a Primary Mortgage Insurance Policy is in effect
as to such Mortgage Loan; and
(g) each related assumption agreement, modification, written assurance or
substitution agreement, if any.
"Mortgage Loan-to-Value Ratio": As to a Mortgage Loan, the ratio, expressed
as a percentage, of the principal amount of such Mortgage Loan at the time of
determination, to the sum of the appraised value of the land and improvements,
and the amount of any prepaid finance charges or closing costs that are
financed.
"Mortgage Loan Schedule": For any Series, the list attached to the related
Pooling and Servicing Agreement identifying each Mortgage Loan assigned
thereunder (which may be presented together with any related Contract Schedule
in a single Asset Schedule), which list shall (a) identify each Mortgage Loan
and (b) set forth (or describe the method of determining) as to each such
Mortgage loan (1) the Cut-off Date Principal Balance thereof, (2) the amount of
each Monthly Payment, (3) the Mortgage Rate thereof, (4) the original term to
maturity thereof, (5) the date of origination thereof, (6) the original Mortgage
Loan-to-Value Ratio thereof, (7) the state in which the related Mortgaged
Property is located (8) the Scheduled Principal Balance of each Mortgage Loan,
(9) the original principal balance of each Mortgage Loan, and (10) any other
information as may be reasonably requested by the Trustee prior to the Closing
Date.
"Mortgage Note": A manually executed written instrument evidencing a
Mortgagor's promise to repay a stated sum of money, plus interest, to the holder
of such instrument on or before a specific date according to a schedule of
principal and interest payments.
"Mortgage Rate": With respect to each Mortgage Loan, the interest rate
specified in the related Mortgage Note.
"Mortgaged Property": The mortgaged property securing a Mortgage Loan.
"Mortgagor": The obligor on a Mortgage Note.
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"Net Insurance Proceeds": With respect to any Asset, Insurance Proceeds
received with respect thereto net of (a) any Insured Expenses incurred in
connection therewith, (b) all reasonable out-of-pocket expenses incurred by the
Servicer in connection with the collection of such Insurance Proceeds and (c)
the amount of any Advances made by the Servicer or any other entity with respect
to such Asset and not previously reimbursed to the Servicer or such other entity
as of the time of the Servicer's receipt of such Insurance Proceeds. Amounts
received by the Servicer as Net Insurance Proceeds will be treated for
accounting purposes as payments received on Assets.
"Net Liquidation Proceeds": With respect to any Asset, the amount of
Liquidation Proceeds received with respect thereto (including any Net Insurance
Proceeds recovered in connection with the liquidation of the related
Manufactured Home or Mortgaged Property) net of the amount of any Liquidation
Expenses incurred and not previously reimbursed to the Servicer or such other
entity as of the time of the liquidation of such Asset. Amounts received by the
Servicer as Net Liquidation Proceeds will be treated for accounting purposes as
payments received on Assets.
"Net Rate": As to any Asset, the Asset Rate thereon minus applicable
servicing, administration and guarantee fees and insurance premiums, if any
(plus reinvestment income thereon if payable to the related Certificateholders),
expressed as a percentage per annum of the principal balance of such Asset.
"New Lease": Any lease of REO Property entered into on behalf of the Trust,
including any lease renewed, modified or extended on behalf of the Trust (if the
Trustee, or the Servicer or its agent, has the right to renegotiate the terms of
such lease).
"Non-Recoverable Advance": As to any Advance that has not yet been made,
any portion of the amount of such prospective Advance which the Servicer
reasonably determines would not ultimately be recoverable from Related Proceeds.
As to any Advance that has been made by the Servicer, any portion of the amount
of such Advance that has subsequently been determined by the Servicer to be not
ultimately recoverable from Related Proceeds. In determining whether an Advance
is or would be a Non-Recoverable Advance, the Servicer need not take into
account the possibility that it might recover any amounts as the result of a
deficiency judgment against the related Obligor.
"Non-U.S. Person": A foreign person within the meaning of Treasury
regulation Section 1.860G-3(a)(1) (i.e., a person other than (a) a citizen or
resident of the United States, (b) a corporation or partnership that is
organized under the laws of the United States or any jurisdiction thereof or
therein, (c) an estate that is subject to United States federal income tax
regardless of the source of its income), or (d) a trust if a court within the
United States is able to exercise primary supervision over the administration of
the trust and one or more United States fiduciaries has the authority to control
all substantial decisions of the trust who would be subject to United States
income tax withholding pursuant to section 1441 or 1442 of the Code on income
derived from a Residual Interest.
"Obligor": The obligor under a Contract.
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"Obligor Bankruptcy Loss": With respect to any Distribution Date as to any
Asset that was the subject of a Principal Cramdown during the preceding
Prepayment Period, the related Principal Cramdown Amount.
"Officer": With respect to any corporation, the Chairman of the Board of
Directors, the President, any Vice President or Assistant Vice President, the
Secretary, the Treasurer, or any Assistant Secretary or Assistant Treasurer of
such corporation (or, in the case of the Trustee, any Responsible Officer
thereof); with respect to any bank or trust company acting as trustee of an
express trust or as custodian, any trust officer or authorized officer thereof.
"Officer's Certificate": For any Person, a certificate that has been signed
on behalf of that Person by an Officer of that Person or any other individual
authorized to execute the certificate.
"Opinion of Counsel": A written opinion of counsel, which counsel is
satisfactory to the Servicer and the Trustee. Whenever an Opinion of Counsel is
required hereunder, the renderer of such Opinion may rely on other Opinions of
Counsel. Any Opinion of Counsel relating to tax matters must be an opinion of
Independent counsel.
"Outstanding": (a) With respect to the Certificates, as of any date of
determination, "Outstanding" refers to all Certificates theretofore executed and
delivered under the Pooling and Servicing Agreement except:
(1) Certificates theretofore canceled by the Certificate Registrar or
delivered to the Certificate Registrar for cancellation;
(2) Certificates or portions thereof for which money in the amount
necessary for the making of a final distribution on such Certificates has
been theretofore deposited with the Trustee or any Paying Agent in trust
for the Holders of such Certificates; provided, that if such Certificates
are to be retired because of termination of the Trust at the option of the
Servicer, notice of such optional termination has been duly given pursuant
to the Pooling and Servicing Agreement;
(3) Certificates in exchange for which other Certificates have been
executed and delivered pursuant to Section 5.04 hereof; and
(4) Certificates alleged to have been destroyed, lost or stolen for
which replacement Certificates have been issued pursuant to Section 5.07
hereof unless proof satisfactory to the Trustee has been presented at or
before the time that the determination of those Certificates that are
Outstanding is made that any such Certificates are held by a holder in due
course.
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(b) With respect to the Assets as of any date, "Outstanding" refers to
Assets with unpaid principal balances greater than zero and that have not
previously been purchased or repurchased pursuant to Section 2.06 hereof or
become Liquidated Assets.
"Outstanding Certificate Writedown Amount": With respect to any Class of
Certificates, the aggregate amount of all Writedown Amounts that have been
allocated to such Class since the Closing Date for the related Series, minus any
amounts that have been distributed on such Class in reduction of such aggregate
amount in accordance with the related Pooling and Servicing Agreement.
"P&I Advance": As defined in Section 3.04(b) hereof.
"Pass-Through Rate": With respect to any Class of Certificates, the annual
rate at which interest accrues on the Certificates of such Class, if any, which
rate is specified or described for each Class in the related Pooling and
Servicing Agreement.
"Paying Agent": Any Person authorized by the Company and the Trustee to
distribute principal or interest on any Certificates on behalf of the Trustee
and appointed pursuant to Section 5.09 hereof.
"Percentage Interest": With respect to a Certificate to which an initial
principal amount is assigned as of the Closing Date, the portion of the Class of
which such Certificate is a part evidenced by such Certificate, expressed as a
percentage, the numerator of which is the denomination represented by such
Certificate and the denominator of which is the initial Certificate Principal
Balance of such Class. With respect to a Certificate to which an initial
principal balance is not assigned as of the Closing Date, the portion of the
Class of which such Certificate is a part evidenced by such Certificate,
expressed as a percentage stated on the face of such Certificate.
"Permitted Encumbrances": In respect of any Mortgaged Property or Real
Property:
(a) the lien of current real property taxes and assessments not yet due and
payable;
(b) covenants, conditions and restrictions, rights of way, easements and
other matters of public record as of the date of recording acceptable to prudent
mortgage lending institutions generally and specifically referred to in the
lender's title insurance policy delivered to the related originator and referred
to or otherwise considered in the appraisal made for the originator; and
(c) other matters to which like properties are commonly subject which do
not materially interfere with the benefits of the security intended to be
provided by the Mortgage or the use, enjoyment, value or marketability of the
related Mortgaged Property or Real Property.
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"Person": Any individual, corporation, limited liability company,
partnership, joint venture, association, joint stock company, trust (including
any beneficiary thereof), unincorporated organization or government or any
agency or political subdivision thereof.
"Plan": Any employee benefit plan or retirement arrangement, including
individual retirement accounts and annuities, Keogh plans and collective
investment funds in which such plans, accounts, annuities or arrangements are
invested, that are described in or subject to the Plan Asset Regulations, ERISA
or corresponding provisions of the Code.
"Plan Asset Regulations": The Department of Labor regulations set forth in
29 C.F.R. 'SS' 2510.3-101.
"Plan Investor": A Plan, a Person acting on behalf of a Plan or a Person
using the assets of a Plan.
"Pool Scheduled Principal Balance": For any Series, on any Distribution
Date, the aggregate of the Scheduled Principal Balances, immediately prior to
the beginning of the related Collection Period, of the related Assets that were
Outstanding at the beginning of such Collection Period, plus the aggregate of
the principal components of any Monthly Payments that were due prior to the
beginning of such Collection Period on such Assets, but which Monthly Payments
were not collected from a related Obligor or advanced by the Servicer and which
were not reflected in a corresponding reduction in the aggregate Certificate
Principal Balance of the related Certificates on the related Distribution Date.
The Pool Scheduled Principal Balance as of any date of determination that is not
a Distribution Date shall be the Pool Scheduled Principal Balance for the next
upcoming Distribution Date. The initial Pool Scheduled Principal Balance as of
the cut-off Date shall be the aggregate of the Cut-off Date Scheduled Principal
Balances.
"Pooling and Servicing Agreement": A Pooling and Servicing Agreement among
the Company, BCI and a Trustee, relating to the issuance of Certificates of a
Series, which shall incorporate these Standard Terms by reference.
"Pooling REMIC": If provided for in a Pooling and Servicing Agreement, the
REMIC consisting primarily of the related Assets.
"Pooling REMIC Regular Interest": A Regular Interest in a Pooling REMIC.
"Prepayment Period": With respect to each Distribution Date, the calendar
month immediately preceding the calendar month in which such Distribution Date
occurs.
"Primary Mortgage Insurance": The insurance provided under any Primary
Mortgage Insurance Policy.
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"Primary Mortgage Insurance Policy": A primary mortgage insurance policy,
if applicable, covering certain conventional Mortgage Loans for which the
initial Mortgage Loan-to-Value Ratios exceeded 80%.
"Principal Cramdown" means, as to any Asset, either (a) a decree by a
bankruptcy court to the effect that the portion of such Asset that is secured by
the underlying Manufactured Home or Mortgaged Property is less than its Unpaid
Principal Balance due to the fact that the value of such Manufactured Home or
Mortgaged Property is less than such Unpaid Principal Balance or (b) the
permanent forgiveness by a bankruptcy court of some or all of the Unpaid
Principal Balance owed by the related Obligor.
"Principal Cramdown Amount" means, with respect to any Prepayment Period as
to any Asset that has been the subject of a Principal Cramdown, the amount by
which (a) the Unpaid Principal Balance of such Asset exceeds (b) as applicable,
depending upon the type of Principal Cramdown that was applied to such Asset,
either (1) the portion of such Unpaid Principal Balance that remains secured by
the related Manufactured Home or Mortgaged Property after taking the related
Principal Cramdown into account or (2) the Unpaid Principal Balance after taking
into account the permanent forgiveness of debt ordered by the bankruptcy court
in connection with the related Principal Cramdown.
"Principal Prepayment": With respect to any Asset, a payment attributable
to principal of such Asset, other than a scheduled principal payment on such
Asset, which may be received (a) from the related Obligor together with a
regular Monthly Payment, (b) from the related Obligor together with an Early
Payment, or (c) in the form of Net Insurance Proceeds received by the Servicer
otherwise than as a component of Liquidation Proceeds.
"Private Certificate": Any Class of Certificates of a Series designated as
such in the related Pooling and Servicing Agreement.
"Proceeding": Any suit in equity, action at law or other judicial or
administrative proceeding.
"Qualification Defect": With respect to an Asset, (a) a defective document
in the related Asset File, (b) the absence of a document in such Asset File, or
(c) the breach of any representation, warranty, or covenant with respect to the
Asset made by the Company, the Seller or the Servicer, but only if, as a result
of any of the foregoing, the affected Asset would cease to qualify as a
"qualified mortgage" for purposes of the REMIC Provisions. With respect to a
REMIC Regular Interest or a participation certificate described in Code section
860G(a)(3), the failure to qualify as a "qualified mortgage" for purposes of the
REMIC Provisions.
"Qualified Bank": Any domestic bank, the deposits of which are insured to
the full extent permitted by law by the Federal Deposit Insurance Corporation,
not affiliated with the Seller or the Company (1) having long-term unsecured
debt obligations rated in one of the two highest rating categories (without
modifiers) of each applicable Rating Agency (and of any other Rating Agency, if
such bank's long-term unsecured debt obligations are rated by such additional
Rating Agency) or short-term unsecured debt
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obligations rated in at least one Rating Agency's highest applicable rating
category (and of any other Rating Agency's highest applicable rating category if
such bank's short-term unsecured debt obligations are rated by such additional
Rating Agency), (2) having commercial paper or short-term unsecured debt
obligations rated in each applicable Rating Agency's highest applicable rating
category, or (3) that is otherwise acceptable to each applicable Rating Agency.
"Qualified Institutional Buyer": Any "qualified institutional buyer" as
defined in clause (a)(1) of Rule 144A.
"Qualified Insurer": Any insurance company or surety or bonding company
licensed to do business and issue insurance in all relevant jurisdictions
(including, in the case of an insurer under a Standard Hazard Insurance Policy,
the jurisdiction in which each Manufactured Home or Real Property or Mortgaged
Property covered by such policy is located).
"Qualified Substitute Asset": An Asset substituted by the Company or the
Seller for a Replaced Asset which must, on the date of such substitution, (a)
have an Unpaid Principal Balance not greater than (and not more than $10,000
less than) the Unpaid Principal Balance of the Replaced Asset, (b) have an Asset
Rate not less than (and not more than one percentage point in excess of) the
Asset Rate of the Replaced Asset, (c) have a Net Rate not less than (and not
more than one percentage point in excess of) the Net Rate of the Replaced Asset,
(d) have a remaining term to maturity not greater than (and not more than one
year less than) that of the Replaced Asset, (e) have a Loan-to-Value Ratio as of
the first day of the month in which the substitution occurs equal to or less
than the Loan-to-Value Ratio of the Replaced Asset as of such date (in each
case, using the appraised value at origination, and after taking into account
the Monthly Payment due on such date), and (f) comply with each representation
and warranty set forth in Section 2.05 hereof and in the related Sales
Agreement. In the event that more than one Asset is substituted for a Replaced
Asset, the amount described in clause (a) hereof shall be determined on the
basis of aggregate Unpaid Principal Balances, the rates described in clauses (c)
(i), (ii), and (iii) hereof shall be determined on the basis of weighted average
Asset Rates and Net Rates, as the case may be, and the term described in clause
(d) hereof shall be determined on the basis of weighted average remaining terms
to maturity, provided that no Qualified Substitute Asset may have an original
term to maturity beyond the latest original term to maturity of any Asset
assigned to the Trust on the Closing Date. In the case of a Trust for which a
REMIC election has been or will be made, a Qualified Substitute Asset also shall
satisfy the following criteria as of the date of its substitution for a Replaced
Asset: (A) the Obligor shall not be 90 or more days delinquent in payment on the
Qualified Substitute Asset, (B) the Asset File for such Asset shall not contain
any material deficiencies in documentation, and shall include an executed
Contract or Mortgage Note, as applicable, and, if it is a Land Secured Contract
or a Mortgage Loan, a recorded Mortgage; (C) the Loan-to-Value Ratio of the
Asset must be 125% or less either (1) on the date of origination of the Asset,
or, if any of the terms of such Asset were modified other than in connection
with a default or imminent default on such Asset, on the date of such
modification, or (2) on the date of the substitution, based on an appraisal
conducted within the 60 day period prior to the date of the substitutions; (D)
no property securing such Asset may be subject to foreclosure, bankruptcy, or
insolvency proceedings; and
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(E) such Asset, if a Land Secured Contract or a Mortgage Loan, must be
secured by a valid first lien on the related Real Property or Mortgaged
Property.
"Rating Agency": As to any Series, any nationally recognized statistical
rating agency, or its successor, that on the Closing Date rated one or more
Classes of the Certificates of such Series at the request of the Company. If
such agency or a successor is no longer in existence, "Rating Agency" shall be
such nationally recognized statistical rating agency, or other comparable
Person, designated by the Company, notice of which designation shall be given to
the Trustee and the Servicer. References herein to any rating category of a
Rating Agency shall mean such rating category without regard to any plus or
minus or numerical designation.
"Real Property": Land and improvements thereon subject to the lien of the
Mortgage securing a Land Secured Contract.
"Realized Interest Loss": A shortfall in interest resulting from the
receipt of Liquidation Proceeds in respect of a Contract or Mortgage Loan in an
amount that is insufficient to pay accrued and unpaid interest thereon.
"Realized Loss": Either (a) with respect to any Liquidated Asset, (1) the
Unpaid Principal Balance of the Liquidated Asset, plus accrued and unpaid
interest on such Liquidated Asset, plus amounts reimbursable to the Servicer for
previously unreimbursed Servicing Advances, minus (2) Net Liquidation Proceeds
collected in respect of the Liquidated Asset or (b) with respect to any Asset
that has been the subject of a Principal Cramdown, an Obligor Bankruptcy Loss
with respect to such Asset.
"Record Date": With respect to each Distribution Date, the close of
business on the last Business Day of the calendar month immediately preceding
the month in which such Distribution Date occurs.
"Recordation Report": A report substantially in the form of Exhibit 3
hereto provided by the Trustee (or the Custodian) pursuant to Section 2.03(c)(4)
hereof identifying those Mortgage Loans for which a Mortgage or an Assignment
remains unrecorded.
"Regular Certificate": A Certificate other than a Residual Certificate and
that is a Regular Interest in a REMIC or a combination of Regular Interests in a
REMIC.
"Regular Interests": Interests in a REMIC that are designated as "regular
interests" under the REMIC Provisions.
"Regulations": The regulations promulgated under the Code by the Treasury.
"Related Proceeds': As defined in Section 3.04(c) hereof.
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"REMIC": A "real estate mortgage investment conduit" within the meaning of
the REMIC Provisions. As to a particular Trust, those assets of the Trust as to
which an election is to be made to be treated as a "real estate mortgage
investment conduit," within the meaning of section 860D of the Code. A REMIC
generally is an elective entity for federal income tax purposes that consists of
a fixed pool of qualifying assets in which investors hold multiple classes of
interests. In order to be treated as a REMIC, such pool will be required to meet
ongoing qualification requirements provided by the Code, Regulations, and
binding pronouncements of the Internal Revenue Service, as in effect from time
to time.
"REMIC Loan-to-Value Ratio": The quotient, expressed as a percentage,
obtained by dividing (a) the original unpaid principal balance of an Asset, plus
the full amount of any other indebtedness secured by the related Manufactured
Home or Mortgaged Property which is senior to, or pari passu with, such Asset by
(b) the sale price of the Manufactured Home or Mortgaged Property that secures
such Asset. Alternatively, the REMIC Loan-to-Value Ratio may be determined by
dividing (a) the unpaid principal balance of an Asset as of the Startup Day plus
the full amount of any other indebtedness secured by the related Manufactured
Home or Mortgaged Property which is senior to, or pari passu with, such Asset by
(b) the fair market value of the Manufactured Home or Mortgaged Property that
secures such Asset on the Startup Day.
"REMIC Provisions": Provisions of the Code relating to real estate mortgage
investment conduits, which appear at sections 860A through 860G of the Code,
related Code provisions, and Regulations (whether in proposed, temporary or
final form), announcements and rulings thereunder, as the foregoing may be in
effect from time to time.
"Remittance Amount": With respect to any Remittance Date and related
Distribution Date, the sum of the following amounts:
(a) the Monthly Payment that was due on each Outstanding Asset on the Due
Date occurring in the related Collection Period and that was received by the
Servicer from the related Obligor;
(b) all amounts received during the related Collection Period in respect of
any Asset that was Outstanding at the beginning of the related Collection Period
representing late payments of principal and interest due on such Asset prior to
the Due Date occurring in the related Collection Period, to the extent such
amounts exceed outstanding unreimbursed P&I Advances made by the Servicer with
respect to such Asset;
(c) each Principal Prepayment (whether full or partial) of any Asset that
was Outstanding at the beginning of the related Prepayment Period received by
the Servicer during the related Prepayment Period;
(d) any amounts received by the Servicer during the related Prepayment
Period as Net Liquidation Proceeds with respect to any Asset that was
Outstanding at the beginning of the related
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Prepayment Period (net of outstanding unreimbursed P&I Advances made by the
Servicer with respect to such Asset); and
(e) all amounts deposited into the Certificate Account during the related
Prepayment Period as a result of any purchase or repurchase of any Asset
pursuant to Section 2.06 hereof (net of outstanding unreimbursed P&I Advances
made by the Servicer with respect to such Asset);
less the Interest Deficiency Withdrawal for the previous Distribution Date.
"Remittance Date": The Business Day preceding each Distribution Date, which
is the date by which funds must be remitted by the Servicer from the Certificate
Account to the Distribution Account or, if the Certificate Account is maintained
by the Trustee, the date on which the Servicer is to notify the Trustee of the
related Remittance Amount, in either case pursuant to Section 3.07(b) hereof.
"Remittance Report": As defined in Section 4.01 hereof.
"Rents From Real Property": With respect to any REO Property, gross income
of the character described in Code section 856(d) and Treasury regulations
thereunder.
"REO Property": A Mortgaged Property acquired by the Servicer in the name
of the Trust on behalf of the Certificateholders through foreclosure or
deed-in-lieu of foreclosure, as further described in Section 3.09 hereof.
"REO Property Disposition": The receipt by the Servicer of Insurance
Proceeds and other payments and recoveries (including Liquidation Proceeds)
which the Servicer recovers from the sale or other disposition of an REO
Property.
"Replaced Asset": An Asset replaced or to be replaced by a Qualified
Substitute Asset.
"Repo Property": A Manufactured Home (and any related Real Property)
acquired by the Servicer in the name of the Trust on behalf of the Trust
pursuant to a repossession, foreclosure, or similar proceeding in connection
with a Defaulted Contract.
"Repurchase Price": With respect to any Asset to be purchased or
repurchased pursuant to Section 2.06 hereof, an amount equal to the Unpaid
Principal Balance of such Asset as of the close of business on the date of such
purchase or repurchase, together with all accrued and unpaid interest thereon to
the end of the Collection Period in which such purchase or repurchase occurs.
"Repurchaser": Any Person that repurchases or purchases a Contract from the
Trust pursuant to Section 2.06 hereof.
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"Request for Release": A release signed by an Officer of the Servicer in
the form attached hereto as Exhibit 4.
"Reserve Fund": Any fund designated as a "Reserve Fund" in a Pooling and
Servicing Agreement.
"Residual Certificate": Any one of the Classes of Certificates of a Series
designated as such in the related Pooling and Servicing Agreement.
"Residual Interest": An interest in a REMIC that is designated as a
"residual interest" under the REMIC Provisions.
"Residual Transferee Agreement": A certification and agreement required to
be executed and delivered by the prospective transferee of a Residual
Certificate pursuant to Section 5.05(c) hereof, which must be substantially in
the form of Exhibit 8 hereto.
"Responsible Officer": With respect to the Trustee of any Series, the
definition specified as "Responsible Officer" is the related Pooling and
Servicing Agreement.
"RESPA": The Real Estate Settlement Procedures Act of 1974, as amended.
"Rule 144A": Rule 144A promulgated by the Securities and Exchange
Commission, as the same may be amended from time to time.
"Rule 144A Agreement": An agreement substantially in the form of Exhibit 5
hereto.
"Rule 144A Certificates": Any Class of Certificates of a Series designated
as such in the related Pooling and Servicing Agreement.
"Sales Agreement": A Sales and Contribution Agreement pursuant to which BCI
(or another Seller) sells Contracts and/or Mortgage Loans to the Company for
inclusion in a Trust.
"Scheduled Principal Balance": As of any date of determination with respect
to any Contract, Repo Property, Mortgage Loan or REO Property, (a) the Cut-off
Date Principal Balance of such Contract or Mortgage Loan (or of the related
Contract or Mortgage Loan, in the case of a Repo Property or REO Property) minus
(b) the sum of (1) the principal components of any Monthly Payments due on such
Contract or Mortgage Loan (or on the related Contract or Mortgage Loan, in the
case of a Repo Property or REO Property) on or after the related Cut-off Date
and on or before the end of the Collection Period preceding such date of
determination (regardless of whether such Monthly Payments were received from
the related Obligor) plus (2) all principal prepayments received by the Servicer
on such Contract or Mortgage Loan (or on the related Contract or Mortgage Loan,
in the case of a Repo Property or REO Property) (including the principal portion
of Net Liquidation Proceeds and the principal portion of all
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amounts paid by the Seller or another party to repurchase such Contract or
Mortgage Loan) on or after the Cut-off Date and on or prior to the end of the
Prepayment Period preceding such date of determination, plus (3) all Realized
Losses incurred on such Contract or Mortgage Loan (or the related Contract or
Mortgage Loan, in the case of a Repo Property or REO Property) on or after the
Cut-off Date and on or prior to the end of the Prepayment Period preceding such
date of determination.
"Securities Act": The Securities Act of 1933, as amended.
"Seller": As to any Contract or Mortgage Loan included in the Trust Estate
for a Series, the entity that sold such Contract or Mortgage Loan to the Company
under a Sales Agreement, which will be BCI unless otherwise specified in the
related Pooling and Servicing Agreement. For purposes of the definitions of
"Contract Documents" and "Mortgage Loan Documents" herein, documents (including,
without limitation, certificates of title, UCC filing instruments, assignments
and endorsements) indicating assignment or endorsement to, or the existence of a
security interest in, a name that is a registered trade name of the Seller in
the relevant jurisdiction shall satisfy any requirement of these Standard Terms
that such documents reflect the name of the "Seller."
"Series": A separate Series of Certificates issued pursuant to a Pooling
and Servicing Agreement, which Series may, as provided therein, be divided into
two or more Classes.
"Servicer": BCI, as servicer of any of the Assets under any Pooling and
Servicing Agreement, and its permitted successors and assigns thereunder.
"Servicer Contract File": As to each Contract, a file maintained by the
Servicer that contains the related loan application and credit report, any
correspondence relating to the Contract, and all other instruments, documents,
papers, ledger cards, accounting records, and computer print-outs maintained by
the Servicer now or hereafter in connection with the servicing of the Contracts,
which may be maintained on microfilm or on computer-readable optical disk or on
any other medium selected by the Servicer.
"Servicer Custodial Certification": A certification executed by an Officer
of the Servicer substantially in the form of Exhibit 1 hereto.
"Servicer File": As to any Asset, the related Servicer Contract File or
Servicer Mortgage Loan File, as applicable.
"Servicer Mortgage Loan File": As to each Mortgage Loan, a file maintained
by the Servicer that contains (1) an original Standard Hazard Insurance Policy
(and flood insurance policy, if required pursuant to Section 3.16 hereof)
relating to the underlying Mortgaged Property or a certificate of insurance
issued by the insurer or its agent indicating that a Standard Hazard Insurance
Policy (and a flood insurance policy, if required pursuant to Section 3.16
hereof) is in effect with respect to such Mortgaged Property, (2) originals or
copies of all documents submitted to a Mortgage Insurer for credit and property
underwriting
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approval, (3) the originals of all RESPA and Regulation Z disclosure
statements executed by the related Mortgagors, (4) the appraisal report made in
connection with the origination of the Mortgage Loan, (5) the settlement
statement for the purchase and/or refinancing of the underlying Mortgaged
Property by the related Mortgagor under the related Mortgage Note and Mortgage,
(6) the originals of any tax service contracts, (7) documentation relating to
any approvals by the Servicer of any modifications of the original related
Mortgage Loan Documents and any releases of collateral supporting the related
Mortgage Loan, together with copies of the documentation effecting any such
modifications or releases, (8) collection notices or form notices sent to the
related Mortgagor, (9) foreclosure correspondence and legal notifications, if
applicable, (10) water and irrigation company stock certificates, if applicable,
and (11) all other documents relating to such Mortgage Loan which would
customarily be maintained in a mortgage loan file by the Servicer in order to
service the mortgage loan properly, as well as any other documents relating to
such Mortgage Loan (other than Mortgage Loan Documents) that come into the
Servicer's possession.
"Servicing Account": As defined in Section 3.05 hereof.
"Servicing Advances": Advances required to be made by the Servicer as
described in Section 3.04(a) hereof, including, but not limited to, advances for
the payment of personal property taxes, real estate taxes and premiums for
Standard Hazard Insurance Policies.
"Servicing Fee": On each Distribution Date, the product obtained by
multiplying (a) one-twelfth of the Servicing Fee Rate by (b) the Scheduled
Principal Balance of the Assets immediately prior to the preceding Collection
Period (without giving effect to any Principal Prepayments, Net Liquidation
Proceeds and Repurchase Prices received (or Realized Losses incurred) on the day
preceding the beginning of such Collection Period).
"Servicing Fee Event": Provided that the Trustee has received a letter from
each Rating Agency from whom the Company requested a rating of any of the
related Certificates stating that such action will not result in a reduction of
the then current rating of the related Certificates rated by such Rating Agency
at the request of the Company, the Servicing Fee in respect of each Contract may
be retained by BCI at the time of the related collection on such Contract (or
may be withdrawn from the Certificate Account in accordance with Section
3.07(a)(2) upon giving written notice to the Trustee of a "Servicing Fee Event"
provided, that a Servicing Fee Event shall no longer be deemed to be occurring
if the Servicer delivers a notice to each Rating Agency from whom the Company
requested a rating of any of the related Certificates and to the Trustee stating
that a Servicing Fee Event shall no longer be occurring.
"Servicing Fee Rate": A per annum rate, to be specified in each Pooling and
Servicing Agreement.
"Shortfall": Due Date Interest Shortfall and Soldiers' and Sailors'
Shortfall.
"Soldiers' and Sailors' Shortfall": Interest losses on a Contract or
Mortgage Loan resulting from application of the Soldiers' and Sailors' Civil
Relief Act of 1940.
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"Special Hazard Insurance Policy": An insurance policy covering a Contract
or Mortgage Loan against Special Hazard Loss.
"Special Hazard Loss": A loss incurred on a Contract or Mortgage Loan
attributable to physical damage to the related Manufactured Home or Mortgaged
Property of a type which is not covered by standard hazard insurance policies
including vandalism and earthquakes and except where the related Obligor is
required to obtain flood insurance, floods and mud flows, and excluding losses
caused by war, nuclear reaction, nuclear or atomic weapons, insurrection or
normal wear and tear.
"Special Tax Consent": The written consent of the Holder of a Residual
Certificate to any tax (or risk thereof) arising out of a proposed transaction
or activity that may be imposed upon such Holder or that may affect adversely
the value of such Holder's Residual Certificate.
"Special Tax Opinion": An Opinion of Counsel that a proposed transaction or
activity will not (a) affect adversely the status of the REMIC as a REMIC or the
related Regular Certificates as the regular interests therein, (b) affect the
timing or amount of distributions of interest or principal on such Regular
Certificates, or (c) result in the encumbrance of the Contracts by a tax lien.
"Standard Hazard Insurance Policy": With respect to each Contract, the
policy of fire and extended coverage insurance (and any federal flood insurance,
if applicable) required to be maintained for the related Manufactured Home as
provided herein, which may be a blanket mortgage impairment policy maintained by
the Servicer in accordance with the terms and conditions of the Pooling and
Servicing Agreement.
"Standard Terms": These Standard Terms to Pooling and Servicing Agreement
and all exhibits, schedules and appendices hereto, as amended and supplemented
from time to time.
"Startup Day": The Startup Day (within the meaning of Code section
860G(a)(9)) is the Closing Date.
"Tax Matters Person": The Person or Persons designated from time to time
hereunder to act as tax matters person (within the meaning of the REMIC
Provisions) of the REMIC.
"Terminating Purchase": The purchase of all Contracts and Mortgage Loans
and each Repo Property and REO Property owned by a Trust pursuant to Section
9.01 hereof.
"Termination Account": An escrow account maintained by the Trustee into
which any Trust funds not distributed on the Distribution Date on which the
earlier of (a) a Terminating Purchase or (b) the final payment or other
liquidation of the last Asset remaining in the Trust or the disposition of the
last Repo Property or REO Property remaining in the Trust is made are deposited.
The Termination Account shall be an Eligible Account.
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"Termination Date": Any Distribution Date fixed for termination of the
Trust pursuant to the provisions of Sections 9.01 and 9.02 hereof.
"Termination Price": With respect to any Terminating Purchase, the greater
of (a) the sum of (1) any Liquidation Expenses incurred by the Servicer in
respect of any Contract that has not yet been liquidated; (2) all amounts
required to be reimbursed or paid to the Servicer in respect of previously
unreimbursed Advances; and (3) the sum of (i) the aggregate Unpaid Principal
Balance of the Contracts, plus accrued and unpaid interest thereon at the
Contract Rates borne by such contracts through the end of the month preceding
the month of the terminating purchase, plus (ii) the lesser of (A) the aggregate
Unpaid Principal Balance of each Contract that had been secured by any Repo
Property remaining in the Trust, plus accrued interest thereon at the Contract
Rates borne by such Contracts through the end of the month preceding the month
of the terminating purchase, and (B) the current appraised value of any such
Repo Property (net of Liquidation Expenses to be incurred in connection with the
disposition of such property estimated in good faith by the Servicer), such
appraisal to be conducted by an appraiser mutually agreed upon by the Servicer
and the Trustee, plus all previously unreimbursed P&I Advances made in respect
of such Repo property, and (b) the aggregate fair market value of the assets of
the Trust (as determined by the Servicer as provided herein) plus all previously
unreimbursed P&I Advances made with respect to the Contracts. The fair market
value of the assets of the Trust as determined for purposes of a Terminating
Purchase shall be deemed to include accrued interest at the applicable Contract
Rate on the Unpaid Principal Balance of each Contract (including any Contract
that has become a Repo Property, which Repo Property has not yet been disposed
of by the Servicer) through the end of the month preceding the month of the
terminating purchase. The basis for any such valuation shall be furnished by the
Servicer to the Certificateholders upon request.
"Terminator": The Person making a Terminating Purchase or causing such
Terminating Purchase to be made.
"TIN": Taxpayer identification number.
"Title Insurance Policy": For any Mortgage Loan, an American Land Title
Association mortgagee's mortgage loan title policy form 1970, or other form of
mortgagee's title insurance acceptable to FNMA or FHLMC for the jurisdiction in
which the subject property is located, including all riders and endorsements
thereto, insuring that the related Mortgage creates a valid first lien on the
underlying Mortgaged Property subject only to Permitted Encumbrances.
"Transferee Agreement": An agreement substantially in the form of Exhibit 6
hereto.
"Treasury": The United States Department of the Treasury.
"Trust": The trust created pursuant to the terms of a Pooling and Servicing
Agreement.
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"Trust Estate": The segregated pool of assets sold and assigned to a
Trustee by the Company pursuant to the conveyance clause of any Pooling and
Servicing Agreement.
"Trustee": The bank or trust company identified as the trustee under any
Pooling and Servicing Agreement.
"Trustee Mortgage Loan File": As to each Mortgage Loan, a file containing
all of the related Mortgage Loan Documents.
"UCC": The Uniform Commercial Code as in effect in any relevant
jurisdiction.
"Unpaid Principal Balance": With respect to any Asset, the outstanding
principal balance payable by the related Obligor pursuant to the terms of such
Asset.
"U.S. Person": A Person other than a Non-U.S. Person.
"USAP": As defined in Section 3.13 hereof.
"VA": The United States Department of Veterans Affairs.
"VA Asset": An Asset guaranteed in whole or in part by the VA.
"VA Guaranty": As to any VA Asset, VA's full or partial guaranty of payment
of amounts due thereunder.
"Voting Rights": With respect to any Certificate, the portion of the voting
rights of all of the Certificates of the related Series which is allocated to
such Certificate. Unless otherwise provided in the related Pooling and Servicing
Agreement, (a) if any Class of Certificates does not have a Certificate
Principal Balance or has an initial Certificate Principal Balance that is less
than or equal to 1% of the aggregate Certificate Principal Balance of all the
Certificates of its Series, then 1% of the Voting Rights for such Series shall
be allocated to each such Class, and the balance of the Voting Rights for such
Series shall be allocated among the remaining Classes of Certificates of such
Series in proportion to their respective Certificate Principal Balances
following the most recent Distribution Date, and (b) if no Class of Certificates
of such Series has an initial Certificate Principal Balance less than 1% of the
aggregate Certificate Principal Balance of all Certificates of such Series, then
all of the Voting Rights for such Series shall be allocated among all the
Classes of Certificates of such Series in proportion to their respective
Certificate Principal Balances following the most recent Distribution Date.
Voting Rights allocated to each Class of Certificates shall be allocated among
the Certificates of such Class in proportion to the respective Percentage
Interests of the Holders thereof.
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"Withholding Agent": The Trustee or its designated Paying Agent or other
Person who is liable to withhold federal income tax from a distribution on a
Residual Certificate under section 1441 or 1442 of the Code and the Regulations
promulgated thereunder.
"Writedown Amount": With respect to any Distribution Date for a Series, the
amount, if any, by which (1) the aggregate Certificate Principal Balance of all
Certificates of such Series, after all distributions have been made on such
Certificates on such Distribution Date, exceeds (2) the Pool Scheduled Principal
Balance of the related Assets for the next Distribution Date.
ARTICLE II
THE ASSETS
Section 2.01. Assignment of Assets.
Pursuant to a Pooling and Servicing Agreement, the Company has sold to the
related Trust without recourse all the right, title and interest of the Company
in and to the Assets identified in such Pooling and Servicing Agreement, any and
all rights, privileges and benefits accruing to the Company under the Sales
Agreement(s) with respect to such Assets (except any rights of the Company to
fees payable by the Seller under such Sales Agreement and provided that the
Company shall retain its rights to indemnification from the Seller under such
Sales Agreement, but shall also convey rights to such indemnification to the
Trustee as its assignee), including the rights and remedies with respect to the
enforcement of any and all representations, warranties and covenants under such
Sales Agreements and assets included or to be included in the related Trust for
the benefit of the related Certificateholders as set forth in the conveyance
clause of the related Pooling and Servicing Agreement. Such assignment includes
all of the Company's rights to payments due with respect to the Assets on and
after the Cut-off Date.
Section 2.02. The Contracts.
(a) Servicer's Custody of Contract Files and Servicer Contract Files. The
parties to the Pooling and Servicing Agreement, by their execution thereof,
acknowledge the Servicer's appointment to serve as custodian of the Contract
Files and the Servicer Contract Files as described herein for the benefit of the
Certificateholders and the Trustee. The Servicer, by its execution of the
Pooling and Servicing Agreement, agrees to, and shall, retain possession of the
Contract File and the Servicer Contract File pertaining to each of the Contracts
on behalf of the Certificateholders and the Trustee.
The Servicer (or a custodian appointed by the Servicer) shall hold each
Contract and any other documents constituting each Contract File and each
Servicer Contract File that are in the possession of the Servicer or that at any
time come into the possession of the Servicer in trust as custodian for the
Holders of the Certificates, and the Servicer hereby acknowledges and declares
that it holds and will hold or has
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agreed to hold such documents as custodian and as the bailee for, and for
the exclusive use and benefit of, the Holders of the Certificates in accordance
with the terms of the Pooling and Servicing Agreement, and shall make
disposition thereof only in accordance with the Pooling and Servicing Agreement.
The Servicer shall segregate and maintain continuous custody of all documents
constituting the Contract Files in its possession in secure and fireproof-rated
locked files or vaults in accordance with customary standards for such custody.
From time to time, the Company or the Seller shall deliver to the Servicer
for inclusion in the appropriate Contract File, the original Contract Documents
for any Contract to the extent that copies of such original documents were
initially included in such Contract File or in the event that only a copy of an
application for an original Contract Document was initially included among the
related Contract Documents. In addition, the Servicer shall add to the
appropriate Contract File any additional original documents received by the
Servicer that evidence a modification of the related Contract approved by the
Company.
The Servicer shall maintain custody of the Contract Files and Servicer
Contract Files for each Series in its possession at its offices where the
Contract Files and Servicer Contract Files are presently maintained or at such
other offices of the Servicer in the State of Florida as the Servicer may
identify to the Trustee by written notice provided at least ten days prior to
the Servicer's change of the location of its custody of the Contract Files and
Servicer Contract Files. The Servicer may not move the location of its custody
of the Contract Files and Servicer Contract Files for any Series outside of the
State of Florida without first giving 30 days' prior written notice of such
relocation to each applicable Rating Agency and the Trustee and obtaining each
such Rating Agency's written confirmation that such relocation will not result
in any downgrading of any Certificates of such Series. Notwithstanding the
foregoing, the Servicer may temporarily move individual Contract Files or any
portions thereof without notice to the Trustee or any Rating Agency as may be
necessary for it to conduct collection and other servicing activities in
accordance with its customary practices and procedures. In acting as custodian
of the Contract Files, the Servicer agrees not to assert any ownership interests
in the Contracts or the Contract Files, and to indicate to any third parties,
promptly upon their inquiry to the Servicer, that the Contracts and the Contract
Files have been sold and assigned to the appropriate Trust.
(b) Review of Contract Files. Prior to the Closing Date, the Servicer's
operations department will complete a review of all of the Contract Files
(including the certificates of title to, or other evidence of a perfected
security interest in, the related Manufactured Homes), confirming the accuracy
of the Contract Schedule delivered to the Trustee. On or before the Closing
Date, the Servicer shall deliver to the Trustee a Servicer Custodial
Certification signed by one of its Officers confirming that it is in possession
of the Contract File for each Contract identified on Schedule I to the Pooling
and Servicing Agreement, subject to any exceptions noted in a schedule to such
certificate. Such certification shall be substantially in the form of Exhibit 1
hereto.
In giving its Servicer's Custodial Certification with respect to a Series,
the Servicer shall be under no duty or obligation (A) to inspect, review or
examine any such documents, instruments, securities or other
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papers to determine that they or the signatures thereon are genuine,
enforceable, or appropriate for the represented purpose or that they have
actually been recorded or that they are other than what they purport to be on
their face or (B) to determine whether any Contract File should include any
assumption agreement, modification agreement or waiver agreement.
If the Servicer discovers any discrepancy between any Contract and the
Contract Schedule, or that any required Contract Document is defective or
missing from the related Contract File, in either case in a manner that is
materially adverse to the interests of the Certificateholders, it shall
immediately provide written notice to the Seller (unless the Seller is the
Servicer) and the Trustee of such discrepancy, incompleteness or defect. If the
Seller does not cure such discrepancy or such incomplete or defective Contract
File within 90 days after discovery or its receipt of written notice of such
discrepancy, incompleteness or defect, the Servicer shall take all steps within
its power to enforce the Trustee's right to require the Seller to repurchase the
affected Contract (or in the alternative to substitute for such Contract, if the
substitution will take place within two years after the Closing Date) pursuant
to the applicable Sales Agreement or, in the alternative (if the discrepancy
consists of an overstatement in the Contract Schedule of the Cut-off Date
Principal Balance of a Contract), to deposit cash into the related Certificate
Account in the amount of such overstatement of the Cut-off Date Principal
Balance of a Contract in the Contract Schedule (as described in the applicable
Sales Agreement).
(c) Security Interests in the Contracts, Manufactured Homes and Real
Property.
(1) Perfection of Trustee's Security Interest in Contracts. On or prior
to the Closing Date, the Servicer shall cause to be filed in all
appropriate UCC filing offices, UCC-1 financing statements describing the
Trust Estate (including the Contracts and payments due thereon after the
Cut-off Date) and proceeds thereof as "collateral" and (1) naming the
Seller as "Debtor," the Company as "Secured Party," and the Trustee on
behalf of the Trust as "Assignee," and (2) naming the Company as "Debtor"
and the Trustee on behalf of the Trust as "Secured Party." The Servicer
shall cause to be filed all necessary continuation statements for each of
the aforementioned UCC-1 financing statements.
(2) Perfection of Trustee's Security Interest in Manufactured Homes. So
long as the Contract Documents for each Contract contain evidence of
perfection of either the Seller's, the Company's or the Trustee's security
interest in the related Manufactured Home, neither the Seller nor the
Company shall be required to cause notations to be made on any certificate
or other document of title relating to such Manufactured Home or to execute
any transfer instrument (including, without limitation, any UCC-3
assignments) relating to such Manufactured Home, except under the limited
circumstances described in Section 2.06(b) below. Subject to the limitation
described in the preceding sentence, the Servicer shall take all steps
necessary, at its own expense, to maintain perfection of the Trustee's lien
on each Manufactured Home to the extent the Servicer receives notice of
relocation, re-registration or sale thereof.
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(3) Real Estate Assignments. The Contract Documents for each Land
Secured Contract are required to contain evidence that the Seller has
record title to the Real Property underlying such Land Secured Contract.
Neither the Seller nor the Company will be required to prepare, deliver or
record any assignments to the Company or the Trustee in recordable form for
the Mortgages related to such Land Secured Contracts. However, on or before
the Closing Date, the Seller shall deliver to the Trustee an executed power
of attorney substantially in the form of Exhibit 9 hereto, authorizing the
Trustee to execute and record assignments of Mortgages securing Land
Secured Contracts from the Seller to the Trustee in the event that
recordation of such assignments becomes necessary for foreclosure on the
related Real Property by or on behalf of the Trustee. Pursuant to such
power of attorney, at the Servicer's instruction, the Trustee shall execute
any such assignments as are provided to the Trustee by the Servicer. After
execution of any such assignments, the Trustee shall redeliver such
assignments to the Servicer at the Servicer's expense. Any expenses
incurred by the Servicer in connection with the foregoing or in connection
with its recordation of assignments in preparation for a foreclosure on a
Land Secured Contract shall constitute Liquidation Expenses.
Section 2.03. The Mortgage Loans.
(a) Custody of Trustee Mortgage Loan Files. In connection with the transfer
and assignment of the Mortgage Loans from the Company to the Trustee, the
Company shall deliver, or cause to be delivered, to the Trustee or its Custodian
on or before the Closing Date, a Trustee Mortgage Loan File containing each of
the documents listed in the definition thereof. If any Mortgage or an Assignment
of a Mortgage to the Trustee or any prior Assignment is in the process of being
recorded on the Closing Date, the Company shall cause each such original
recorded document or certified copy thereof, to be delivered to the Trustee or
its Custodian promptly following its recordation. The Company shall also cause
to be delivered to the Trustee any other original Mortgage Loan Document to be
included in the Trustee Mortgage Loan File if a copy thereof initially was
delivered.
In lieu of recording an Assignment of any Mortgage for any Mortgage Loan,
the Company may deliver or cause to be delivered to the Trust or its Custodian
the Assignment of the Mortgage from the Seller to the Trustee in a form suitable
for recordation, together with an Opinion of Counsel to the effect that
recording is not required to protect the Trustee's right, title and interest in
and to the related Mortgage Loan or, in case a court should recharacterize the
sale of the Mortgage Loans as a financing, to perfect a first priority security
interest in favor of the Trust in the related Mortgage Loan. In the event that
the Servicer receives notice that recording is required to protect the right,
title and interest of the Trust in and to any such Mortgage Loan for which
recordation of an Assignment has not previously been required, the Servicer
shall promptly notify the Trustee and the Trustee shall within five Business
Days of its receipt of such notice deliver, or cause to be delivered, each
previously unrecorded Assignment to the Servicer for recordation.
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By its execution of the Pooling and Servicing Agreement for a Series, the
Trustee acknowledges and declares that it or the Custodian holds and will hold
or has agreed to hold all documents delivered to it from time to time with
respect to a Mortgage Loan underlying such Series and all other assets delivered
to it or its Custodian and that are included in the definition of "Trust Estate"
in the related Pooling and Servicing Agreement in trust for the exclusive use
and benefit of all present and future Certificateholders.
(b) Custody of Servicer Mortgage Loan Files. The Servicer has in its
possession a Servicer Mortgage Loan File for each Mortgage Loan containing each
of the documents listed in the definition thereof. All such documents shall be
held by the Servicer in trust for the benefit of the Trustee on behalf of the
Certificateholders.
(c) Review of Trustee Mortgage Loan Files.
(1) Initial Certification. The Trustee shall, for the benefit of the
Certificateholders for any Series, review each related Trustee Mortgage
Loan File prior to the related Closing Date to ascertain that all documents
required to be included in the Trustee Mortgage Loan File are included
therein, and shall deliver to the Company and the Servicer on such Closing
Date an Initial Certification with respect to each underlying Mortgage Loan
(except any Mortgage Loan that has been liquidated or purchased from the
related Trust prior to such Closing Date) to the effect that, except as
specifically noted on a schedule of exceptions thereto, (A) all documents
required to be contained in the Trustee Mortgage Loan File are in its
possession, (B) such documents have been reviewed by it and appear regular
on their face and relate to such Mortgage Loan, and (C) based on its
examination and only as to the foregoing documents, the information set
forth on the related Mortgage Loan Schedule accurately reflects information
set forth in the Trustee Mortgage Loan File.
It is understood that before making the Initial Certification for any
Series, the Trustee shall examine the related Mortgage Loan Documents to
confirm that:
(A) each Mortgage Note and Mortgage bears an original signature or
signatures purporting to be that of the Person or Persons named as the
maker and mortgagor/trustor or, if photocopies are permitted, that such
copies bear a reproduction of such signature or signatures;
(B) except for the endorsement to the Trustee, neither the Mortgage
nor any Assignment, on the face or the reverse side(s) thereof, contain
evidence of any unsatisfied claims, liens, security interests,
encumbrances or restrictions on transfer;
(C) the principal amount of the indebtedness secured by the related
Mortgage is identical to the original principal amount of the related
Mortgage Note;
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(D) the Assignment of the related Mortgage from the Seller to the
Trustee on behalf of the Trust is in the form required pursuant to
clause (c) of the definition of Mortgage Loan Documents, and bears an
original signature of the Seller and any other necessary party (or
signatures purporting to be that of the Seller and any such other
party) or, if photocopies are permitted, that such copies bear a
reproduction of such signature or signatures;
(E) if intervening Assignments are included in the Trustee Mortgage
Loan File, each such intervening Assignment bears an original signature
of the related mortgagee and/or the assignee (and any other necessary
party) (or signatures purporting to be that of the Seller and any such
other party) or, if photocopies are permitted, that such copies bear a
reproduction of such signature or signatures;
(F) if either a Title Insurance Policy, a preliminary title report
or a written commitment to issue a Title Insurance Policy is delivered,
the address of the real property set forth in such policy, report or
written commitment is identical to the real property address contained
in the related Mortgage; and
(G) if any of a Title Insurance Policy, certificate of title
insurance or a written commitment to issue a Title Insurance Policy is
delivered, such policy, certificate or written commitment is for an
amount not less than the original principal amount of the related
Mortgage Note and such Title Insurance Policy insures that the related
Mortgage creates a first lien, senior in priority to all other deeds of
trust, mortgages, deeds to secure debt, financing statements and
security agreements and to any mechanics' liens, judgment liens or
writs of attachment (or if the Title Insurance Policy or certificate of
title insurance has not been issued, the written commitment for such
insurance obligates the insurer to issue such policy for an amount not
less than the original principal amount of the related Mortgage Note).
(2) Final Certification. Prior to the first anniversary date of the
Closing Date for a Series, the Trustee shall deliver to the Company and the
Servicer a Final Certification evidencing the completeness of the Trustee
Mortgage Loan File for each Mortgage Loan, with any applicable exceptions
noted on such Final Certification.
(3) Certifications Generally. In giving each of the Initial
Certification and the Final Certification with respect to a Series, the
Trustee shall be under no duty or obligation (A) to inspect, review or
examine any such documents, instruments, securities or other papers to
determine that they or the signatures thereon are genuine, enforceable, or
appropriate for the represented purpose or that they have actually been
recorded or that they are other than what they purport to be on their face
or (B) to determine whether any Trustee Mortgage Loan File should
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include any assumption agreement, modification agreement, written assuranc
or substitution agreement.
(4) Recordation Report. No later than the fifth Business Day of each
third month, commencing the fourth month following the month in which the
Closing Date for a Series occurs, the Trustee shall deliver to the Servicer
a Recordation Report for such Series, dated as of the first day of such
month, identifying those Mortgage Loans underlying such Series for which it
has not yet received (A) an original recorded Mortgage or a copy thereof
certified to be true and correct by the public recording office in
possession of such Mortgage or (B) an original recorded Assignment of the
Mortgage to the Trustee and any required intervening Assignments or a copy
thereof certified to be a true and correct copy by the public recording
office in possession of such Assignment; provided, however, that the
Trustee shall not be required to provide a Recordation Report with respect
to the recordation of an Assignment for any Mortgage Loan for which there
has been delivered an Assignment in recordable form pursuant to Section
2.03(a) hereof unless the Trustee has delivered such Assignment to the
Servicer for recordation, in which case, the Trustee shall deliver a
Recordation Report as to the status of such Assignment in accordance with
this paragraph commencing in the fourth month following the delivery of
such Assignment to the Servicer for recordation.
(5) Custodians. In lieu of taking possession of the Trustee Mortgage
Loan Files and reviewing such files itself, the Trustee may, in accordance
with Section 8.11 hereof, appoint one or more Custodians on behalf of the
Trust to hold the Trustee Mortgage Loan Files for a Series on its behalf
and to review them as provided in this Section 2.03. The Company shall,
upon notice of the appointment of a Custodian, deliver or cause to be
delivered all documents to the Custodian that would otherwise be
deliverable to the Trustee. In such event, the Trustee shall obtain from
each such Custodian, within the specified times, the Initial and Final
Certifications and the Recordation Reports with respect to those Mortgage
Loans held and reviewed by such Custodian and may deliver such
Certifications and Reports to the Company and the Servicer in satisfaction
of the Trustee's obligation to prepare such Certification and Reports. The
Trustee shall notify the Custodian of any notices delivered to the Trustee
with respect to those Trustee Mortgage Loan Files.
(6) Recordation with Respect to Mortgage Loans. Notwithstanding any
provisions in these Standard Terms to the contrary, the Company shall cause
Assignments of Mortgages to the Trustee to be prepared and filed with
respect to all Mortgages not later than ninety (90) calendar days following
the Closing Date, which recordation shall be an expense of the Company, or
shall deliver to the Trustee on or before such date an Officer's
Certificate stating that any delay in such filing has been caused by the
applicable recording office and the Company shall take reasonable steps to
cause such Assignments to be filed as soon as practical. For each Mortgage
for which an Assignment of Mortgage is not duly and timely recorded as
provided above (unless such filing was not completed due to a delay caused
by the applicable recording office), the
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Company shall repurchase such Mortgage pursuant to the provisions of
2.06 hereof. As evidence of recordation, the Trustee shall be entitled to
rely upon, among other things (i) a certification from a title insurance
company, (ii) an Opinion of Counsel, (iii) a recorded Assignment or (iv) a
clerk's receipt as to the recordation of any or all of the Assignments.
Section 2.04. Representations and Warranties of the Trustee.
As of the Closing Date, the Trustee on behalf of the Trust, represents and
warrants that (1) it acquired the Assets on behalf of the Trust from the Company
in good faith, for value, and without notice or knowledge of any adverse claim,
lien, charge, encumbrance or security interest (including, without limitation,
federal tax liens or liens arising under ERISA), (2) except as permitted in the
related Pooling and Servicing Agreement and these Standard Terms, it has not and
will not, in its capacity as Trustee hereunder, assert any claim or interest in
the Assets, and (3) it has not knowingly encumbered or transferred its right,
title or interest in the Assets. The representations and warranties made
hereunder are made by the Trustee without any independent investigation and
without recourse, representation or warranty, except that the Trustee believes
such representations and warranties to be true.
Section 2.05. Representations and Warranties as to Assets.
The Company represents and warrants to the Trustee and the related Trust,
effective as of the Closing Date, that the following information is true and
correct in all material respects:
(a) The information pertaining to each Asset set forth in the Asset
Schedule was true and correct at the date or dates respecting which such
information was furnished.
(b) The Company is the owner of, or holder of a perfected first priority
security interest in, each Asset.
(c) The Company acquired its ownership of, or security interest in, each
such Asset in good faith without notice of any adverse claim.
(d) Except for the sale to the Trust the Company has not assigned any
interest or participation in each such Asset (or, if any such interest or
participation has been assigned, it has been released).
(e) The Company has full right to sell the Trust Estate to the Trust.
It is understood and agreed that the representations and warranties set
forth in this Section 2.05 shall survive delivery of the respective Contract
Files to the Servicer as custodian for the Trustee and of the respective Trustee
Mortgage Loan Files to the Trustee or its Custodian and shall inure to the
benefit of the Trustee notwithstanding any restrictive or qualified endorsement
or assignment. Upon the discovery by the Company, the Servicer or the Trustee of
a breach of any of the foregoing representations and
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warranties, the party discovering such breach shall give prompt written
notice to the other parties to the Pooling and Servicing Agreement. It is
understood and agreed that the obligations of the Company set forth in Section
2.06 to cure, substitute for or repurchase a Contract constitute the sole
remedies available to the Certificateholders or to the Trustee on their behalf
respecting a breach of the representations and warranties contained in this
Section 2.05. It is further understood and agreed that the Company shall be
deemed not to have made the representations and warranties in this Section 2.05
with respect to, and to the extent of, representations and warranties made, as
to the matters covered in this Section 2.05, by the Seller in the related Sales
Agreement assigned to the Trustee.
Section 2.06. Purchase or Substitution of Certain Assets.
(a) Breaches of Representations and Warranties and Incomplete or Defective
Asset Files.
(1) Seller Breach. Upon discovery or receipt of notice of any defective
document in an Asset File, or of any breach by the Seller of any
representation, warranty or covenant hereunder or under the Sales
Agreement, which defect or breach materially and adversely affects the
value of any Asset or the interest of the Trust therein (it being
understood that any such defect or breach shall be deemed to have
materially and adversely affected the value of the related Asset or the
interest of the Trust therein if the Trust incurs a loss as a result of
such defect or breach), the Trustee shall promptly notify the Servicer of
such defect or breach and direct the Servicer to request the Seller of such
Asset to cure such defect or breach. The Seller must cure such defect or
breach, or purchase such Asset from the Trustee on behalf of the related
Trust for the benefit of the Certificateholders, within 90 days after the
date on which the Seller was notified of such defect or breach. In lieu of
purchasing any such Asset as provided above, if so provided in the related
Sales Agreement, the Seller may cause such Asset to be removed from the
Trust (in which case it shall become a Replaced Asset) and substitute one
or more Qualified Substitute Assets in the manner and subject to the
limitations set forth in Section 2.06(g) below. Notwithstanding the
foregoing, however, if such breach is a Qualification Defect and one or
more REMIC elections have been made with respect to the related Trust, such
cure, purchase or substitution must take place within 75 days of the Defect
Discovery Date. It is understood and agreed that enforcement of the
obligation of the Seller to cure or to purchase (or to substitute for) any
Asset as to which a material defect in a constituent document exists or as
to which such a breach has occurred and is continuing, shall constitute the
sole remedy respecting such defect or breach available to the Trustee on
behalf of the Certificateholders. The Servicer shall use its best efforts
to enforce the Seller's obligations under its Sales Agreement to repurchase
or substitute for Assets affected by breaches of the Seller's
representations and warranties contained in its Sales Agreement.
(2) Servicer Breach. In addition to taking any action required pursuant
to Section 7.01 hereof, upon discovery or notice of any breach by the
Servicer of any representation, warranty or covenant hereunder not covered
by Section 2.06(a)(1) above which materially and adversely affects the
value of any Asset or the interest of the Trust therein (it being
understood that
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any such defect or breach shall be deemed to have materially and
adversely affected the value of the related Asset or the interest of the
Trust therein if the Trust incurs a loss as a result of such defect or
breach), the Trustee promptly shall notify the Servicer of such breach.
Upon receipt of such notification, the Servicer shall cure such breach or
shall purchase such Asset from the Trustee on behalf of the related Trust
within 90 days after the date on which the Servicer was notified of such
breach. Notwithstanding the foregoing, however, if such breach is a
Qualification Defect and one or more REMIC elections have been made with
respect to the related Trust, such cure or purchase must take place within
75 days of the Defect Discovery Date.
(3) The Company Breach. Within 90 days after the earlier of discovery
or receipt of notice by the Company of the breach of any of its
representations or warranties set forth in Section 2.05 above with respect
to any Asset, which breach materially and adversely affects the value of
the Asset or the interest of the Trust therein (it being understood that
any such breach shall be deemed to have materially and adversely affected
the value of the related Asset or the interest of the Trust therein if the
Trust incurs a loss as a result of such defect or breach), the Company
shall (i) cure such breach in all material respects, (ii) purchase the
Asset from the Trustee on behalf of the related Trust, or (iii) remove such
Asset from the Trust (in which case it shall become a Replaced Asset) and
substitute one or more Qualified Substitute Assets in the manner and
subject to the limitations set forth in Section 2.06(g) below.
Notwithstanding the foregoing, however, if such breach is a Qualification
Defect and one or more REMIC elections have been made with respect to the
related Trust, such cure, purchase or substitution must take place within
75 days of the Defect Discovery Date.
(b) Failure to Retitle Manufactured Homes. Upon the occurrence of either of
the following events:
(1) the rendering of judgment by a court of competent jurisdiction that
the Trustee on behalf of the Trust does not have a perfected first-priority
security interest in a particular Manufactured Home because the Seller has
not caused notations to be made on any certificate or other document of
title relating to such Manufactured Home or has not executed any transfer
instrument (including any UCC financing statement or UCC-3 assignment)
relating to such Manufactured Home, or
(2) the Servicer's receipt of written advice of counsel selected by the
Servicer from among the counsel used by the Servicer in the ordinary course
of its business to the effect that a court of competent jurisdiction
sitting in a jurisdiction in which some of the Manufactured Homes
underlying the Contracts are located has held that, solely because of the
failure of a pledgor or assignor of manufactured housing contracts (whose
pledgee or assignee has perfected its security interest in such contracts)
to cause notations to be made on any certificate or other document of title
relating to a manufactured home underlying the pledged contracts or to
execute any transfer instrument (including any UCC financing statement or
UCC-3 assignment) relating to any such
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manufactured home, a perfected firstpriority security interest was not
created in a manufactured home underlying such contracts located in such
jurisdiction in favor of the pledgee or assignee,
then the Servicer, at the expense of the Seller, must complete all appropriate
remedial action with respect to the affected Manufactured Home(s) within 180
days after the Servicer's receipt of written notice of such judgment or of such
written advice and provide notice to the Trustee of such remedial action. If the
Servicer fails to complete all such remedial action with respect to any affected
Manufactured Home within such 180-day period, the Seller must repurchase each
related Contract at the Repurchase Price therefor on or before the last Business
Day of the Prepayment Period ending on or immediately after the expiration of
such 180-day period in accordance with Section 2.06(f) below.
In connection with the foregoing obligation, the Servicer shall have no
obligation on an ongoing basis to seek any advice of counsel with respect to the
matters described in clause (2) of the preceding paragraph. However, the
Servicer shall seek advice with respect to such matters whenever information
comes to the attention of any of its executive officers which causes such
executive officer to determine that a holding of the type described in such
clause (2) might exist.
(c) Assignment Failure. If an Assignment to the Trustee on behalf of the
Trust of the Seller's interest in a Mortgage securing a Mortgage Loan has not
been recorded within one year after the Closing Date for the related Series of
Certificates (or in the case of Mortgage Loans for which recordation of an
Assignment was initially waived but subsequently required pursuant to Section
2.03(a) hereof, within one year after the Trustee's delivery of the Assignment
to the Servicer for recordation), (1) the Seller shall purchase the related
Mortgage Loan from the Trustee or (2) if there have been no defaults in the
Monthly Payments on such Mortgage Loan, the Seller shall deposit an amount equal
to the Repurchase Price therefor into an escrow account maintained by the
Trustee (which account shall not be an asset of the Trust or any REMIC), or
shall enforce the related Seller's obligation under its Sales Agreement to make
such purchase or deposit. Any such amounts deposited to an escrow account, plus
any earnings thereon, shall (A) be released to the Seller, as the case may be,
upon receipt by the Trustee of satisfactory evidence that the Assignment has
been recorded in the name of the Trustee or (B) be applied to purchase the
related Mortgage Loan in the event that the Servicer notifies the Trustee that
there has been a default thereon. Any amounts in the escrow account may be
invested in Eligible Investments at the written direction of the Seller.
(d) Optional Purchase by Servicer of Defaulted Contracts. At any time after
a Contract has become and remains a Defaulted Contract, the Servicer may, at its
option, purchase such Defaulted Contract from the Trust at the Repurchase Price
therefor in accordance with Section 2.06(e) below.
(e) Manner of Repurchase. Any Asset purchased pursuant to Section 2.06(a),
(b), (c) or (d) hereof shall be purchased at the Repurchase Price for such
Asset. The Seller, the Company or the Servicer, as appropriate (any of the
foregoing, a "Repurchaser"), shall deposit into the Certificate Account, on the
date of purchase, the Repurchase Price for each Asset to be purchased. Upon such
deposit and upon being provided by the Repurchaser with appropriate instruments
of transfer or assignment, the Trustee
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shall execute and deliver such instruments of transfer or assignment, in
each case without recourse, representation or warranty, as shall be necessary to
vest in the Repurchaser any Asset purchased hereunder, and the Trustee shall
deliver to the Repurchaser any Asset Documents relating to the repurchased Asset
that are in the Trustee's possession, whereupon the Trustee shall have no
further responsibility with regard to such Asset. If a Repurchaser shall, in
accordance with the foregoing, purchase any Asset required by it to be
purchased, neither the Trustee nor any Certificateholder shall have any other
remedy against such Repurchaser based on any misrepresentation or breach of
covenant or warranty of such Repurchaser with respect to or resulting from any
such Asset.
The Servicer will be responsible for determining the Repurchase Price for
any Asset (and the related Basis Limit Amount for any Converted Loan) to be
repurchased pursuant to this Section 2.06 and shall certify such amounts to the
Trustee at the time of any such purchase. If, for whatever reason, the Servicer
shall certify to the Trustee that there is a miscalculation of the amount to be
paid to the Trust, the Trustee shall from monies in the Distribution Account
return any overpayment that the Trust received as a result of such
miscalculation to the applicable Repurchaser upon the discovery of such
overpayment, and the Servicer shall collect from the applicable Repurchaser for
payment to the Trustee any underpayment that resulted from such miscalculation
upon the discovery of such underpayment. Recovery may be made either directly or
by set-off of all or any part of such underpayment against amounts owed by the
Trust to such Repurchaser.
(f) Manner of Substitution. Unless otherwise provided in the Pooling and
Servicing Agreement, the right to substitute a Qualified Substitute Asset for
any Replaced Asset that is an asset of the Trust shall be limited to (1) in the
case of substitutions pursuant to Section 2.06(a) or 2.06(c), the two-year
period beginning on the Closing Date and (2) in the case of any other
substitution, the three-month period beginning on the Closing Date.
As to any Replaced Asset for which the Company or the Seller substitutes a
Qualified Substitute Asset or Assets, the Company or the Seller, as the case may
be, shall effect such substitution by delivering to the Trustee for such
Qualified Substitute Asset or Assets a complete Contract File or Trustee
Mortgage Loan File, as appropriate, together with an Officer's Certificate of
the Company or the Seller, as the case may be, to the effect that each such
Qualified Substitute Asset complies with the terms of the Pooling and Servicing
Agreement. Monthly Payments due with respect to Qualified Substitute Assets in
the month of substitution are not part of the Trust and will be retained by the
Company or the Seller, as the case may be. For the month of substitution,
distributions to Certificateholders will reflect the Monthly Payment due on such
Replaced Asset during the month in which the substitution occurs, and the
Company or the Seller, as the case may be, shall thereafter be entitled to
retain all amounts subsequently received in respect of such Replaced Asset. The
Servicer shall amend the Asset Schedule to reflect the removal of such Replaced
Asset from the terms of the Pooling and Servicing Agreement and the substitution
of the Qualified Substitute Asset or Assets. Upon such substitution, such
Qualified Substitute Asset or Assets shall be subject to the terms of the
Pooling and Servicing Agreement in all respects, including, in the case of a
substitution effected by the Seller, the representations and warranties included
in the related Sales Agreement, and in the case
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of a substitution effected by the Company, the representations and
warranties set forth in Section 2.05 above, in each case as of the date of
substitution. The Trustee shall, within five Business Days of its receipt of the
documents referred to above, effect the reconveyance of such Replaced Asset to
the Company or the Seller, as the case may be, in accordance with the procedures
specified above.
For any month in which the Company or the Seller substitutes one or more
Qualified Substitute Assets for one or more Replaced Assets, the Servicer will
determine and notify the Trustee with respect to the amount (if any) by which
the aggregate Unpaid Principal Balance of all such Qualified Substitute Assets
as of the date of substitution is less than the aggregate Unpaid Principal
Balance of all such Replaced Assets (after application of Monthly Payments due
in the month of substitution) (the "Substitution Shortfall"). On the date of
such substitution, the Company or the Seller, as the case may be, will deliver
or cause to be delivered to the Trustee for deposit from its own funds into the
Distribution Account an amount equal to the Substitution Shortfall.
(g) Qualification Defect. If any Person required to cure, purchase, or
substitute under Section 2.06(a) above for an Asset affected by a Qualification
Defect fails to perform within the time limit set forth in those subsections,
the Trustee shall dispose of such an Asset in such manner and for such price as
the Servicer advises the Trustee are appropriate, provided that the removal of
such Asset occurs no later than the 90th day from the Defect Discovery Date. It
is the express intent of the parties that an Asset affected by a Qualification
Defect be removed from the Trust before the 90th day from the Defect Discovery
Date so that the related REMIC or Pooling REMIC will continue to qualify as a
REMIC. Accordingly, the Trustee is not required to sell an affected Asset for
its fair market value nor shall the Trustee be required to make up any shortfall
resulting from the sale of such Asset. The person failing to perform under
Section 2.06(a) above shall be liable to the Trust for (1) any difference
between (A) the Unpaid Principal Balance plus accrued and unpaid interest
thereon at the applicable Asset Rate to the date of disposition and (B) the net
amount received by the Trustee from the disposition (after the payment of
related expenses), (2) interest on such difference at the Asset Rate from the
date of disposition to the date of payment and (3) any legal and other expenses
incurred by or on behalf of the Trust in seeking such payments. Except where the
Servicer is the person failing to perform, the Servicer shall pursue the legal
remedies of the Trust on the Trust's behalf and the Trust shall reimburse the
Servicer for any legal or other expenses of the Servicer related to such pursuit
not recovered from such person. If the Servicer is the person failing to
perform, the Trustee shall pursue the Trust's legal remedies against the
Servicer and the Trust shall reimburse the Trustee for its related legal or
other expenses.
(h) Notices. The Company or Seller, as the case may be, upon becoming aware
of such breach, will promptly notify the Trustee of any breach referred to in
this Section 2.06. Any person required under this Section 2.06 to give notice or
to make a request of another person to give notice shall give such notice or
make such request promptly.
ARTICLE III
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ADMINISTRATION OF TRUSTS AND SERVICING OF THE ASSETS
Section 3.01. The Servicer.
(a) The Servicer agrees to service the Assets for and on behalf of the
Trust and its successors and assigns, and otherwise to perform and carry out the
duties, responsibilities and obligations that are to be performed and carried
out by the Servicer under the Pooling and Servicing Agreement. The Servicer
shall service the Contracts in accordance with the customary and usual
procedures of responsible financial institutions that service manufactured
housing retail installment sales contracts and installment loan agreements for
manufactured housing units located in the jurisdictions in which the
Manufactured Homes are located, except as otherwise expressly provided by the
Pooling and Servicing Agreement; provided, however, that the Servicer shall not
release or waive its right to collect the unpaid principal balance of any
Contract. The Servicer shall service the Mortgage Loans (a) generally in
compliance with FNMA standards and (b) in a manner that is consistent with
prudent residential mortgage loan servicing standards generally accepted within
the residential mortgage loan servicing industry. The manner in which the
Servicer services the Assets shall be consistent with the manner in which the
Servicer services all manufactured housing retail installment sales contracts
and residential mortgage loans in its servicing portfolio, except for any
differences specifically required by the Pooling and Servicing Agreement. The
Servicer shall have full power and authority consistent with the aforementioned
standards, acting alone and/or through agents and designees as permitted by
Section 6.07 hereof, to do any and all things it may deem necessary or desirable
in connection with such servicing and administration; provided, however, that to
the extent the Servicer is prohibited by any applicable rule, regulation,
judicial or administrative determination or other order applicable to it from
carrying out any of its obligations or duties provided for herein or in any
document contemplated herein, such failure shall not constitute a breach of this
Agreement.
(b) The Servicer may enter into subservicing agreements with subservicers
for the servicing and administration of all or part of the Assets. References in
this Agreement to actions taken or to be taken by the Servicer in servicing the
Assets include actions taken or to be taken by a subservicer on behalf of the
Servicer. Each subservicing agreement will be upon such terms and conditions as
are not inconsistent with this Agreement and as the Servicer and the subservicer
have agreed. The Servicer shall notify the Trustee in writing promptly upon the
appointment of any subservicer. For purposes of this Agreement, the receipt by
the subservicer of any amount with respect to a Mortgage Loan or Contract (other
than amounts representing servicing compensation or reimbursement for an
advance) shall be treated as the receipt by the Servicer of such amount.
As part of its servicing activities hereunder, the Servicer, for the
benefit of the Trustee and the Certificateholders, shall enforce the obligations
of each subservicer under the related subservicing agreement. Such enforcement,
including, without limitation, the legal prosecution of claims, termination of
subservicing agreements as appropriate, and the pursuit of other remedies, shall
be in such form and carried out to such an extent and at such time as the
Servicer, in its good faith business judgment, would require
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were it the owner of the related Assets. The Servicer shall pay the costs
of such enforcement at its own expense but shall be reimbursed therefor only (i)
from a general recovery resulting from such enforcement only to the extent, if
any, that such recovery exceeds all amounts due in respect of the related Assets
or (ii) from a specific recovery of costs, expenses or attorneys' fees against
the party against whom such enforcement is directed.
The Servicer shall be entitled to terminate any subservicing agreement that
may exist in accordance with the terms and conditions of such subservicing
agreement and without any limitation by virtue of this Agreement and shall
provide the Trustee with prompt written notice of such termination.
Notwithstanding any subservicing agreement, any of the provisions of this
Agreement relating to agreements or arrangements between the Servicer and a
subservicer or reference to actions taken through a subservicer or otherwise,
the Servicer shall remain obligated and liable to the Trust, the Trustee and
Certificateholders for the servicing and administering of the Assets in
accordance with the provisions of this Agreement without diminution of such
obligation or liability by virtue of such subservicing agreements or
arrangements or by virtue of indemnification from the subservicer and to the
same extent and under the same terms and conditions as if the Servicer alone
were servicing and administering the Assets. The Servicer shall be entitled to
enter into any agreement with a subservicer for indemnification of the Servicer
and nothing contained in this Agreement shall be deemed to limit or modify such
indemnification.
Any subservicing agreement that may be entered into and any other
transactions or services relating to the Assets involving a subservicer in its
capacity as such and not as an originator shall be deemed to be between the
subservicer and the Servicer alone and the Trustee and Certificateholders shall
not be deemed parties thereto and shall have no claims, rights, obligations,
duties or liabilities with respect to the subservicer. The Servicer shall be
solely liable for any fees payable to a subservicer.
If the Servicer shall for any reason no longer be the Servicer hereunder,
the Servicer shall thereupon terminate each subservicing agreement that may have
been entered into and the Trustee, its designee or the successor servicer shall
not be deemed to have assumed any of the Servicer's interest therein or to have
replaced the Servicer as a party to any such subservicing agreement.
Section 3.02. Maintenance of Records; Inspection of Asset Files.
(a) The Servicer shall retain all data relating directly to or maintained
in connection with the servicing of the Assets for any Series at the address of
the Servicer set forth in Section 11.04 hereof or at such other place where the
servicing offices of the Servicer are located.
The Servicer shall permit the Trustee or any authorized agent of the
Trustee reasonable access, upon reasonable prior written notice to the Servicer,
during the Servicer's normal business hours, to the Asset Files, the Servicer
Files, and the Servicer's other records, if any, relating to the Assets for any
related Series. Any such examination of such files or records will be conducted
in a manner that does not
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unreasonably interfere with the Servicer's normal operations or customer or
employee relations. Without otherwise limiting the scope of the examination the
Trustee may make, the Trustee or its authorized agents, using generally accepted
audit procedures, may in their discretion verify the status of each Asset and
review the records relating thereto for conformity to Remittance Reports
prepared pursuant to Article IV hereof and compliance with the standards
represented to exist as to each Asset in the Pooling and Servicing Agreement.
(b) At all times during the term hereof, the Servicer shall keep available
a copy of the Asset Schedule at its principal executive office for inspection by
Certificateholders.
(c) On or before the date of the Servicer's delivery of the Remittance
Report to the Trustee in any month, the Servicer will, upon the written request
of the Trustee, provide to the Trustee a list of outstanding Assets, setting
forth the Scheduled Principal Balance of each such Asset as of the preceding
Distribution Date.
(d) Notwithstanding the provisions of this Section 3.02, the Trustee shall
at no time have any duty or obligation to examine any records of the Servicer or
to recalculate or otherwise verify the accuracy of any certificate or report
prepared by the Servicer, and no implied duty to do so shall be asserted against
the Trustee.
(e) On or before the Closing Date for a Series, the Servicer shall deliver
to the Trustee a list of Officers of the Servicer (each a "Servicing Officer")
involved in, or responsible for, the administration and servicing of the Assets
underlying such Series, which list shall be amended from time to time as
necessary by the Servicer by delivery of an amended list of Servicing Officers
to the Trustee.
Section 3.03. Collection of Payments on Assets; Servicing Delinquent Accounts.
Continuously from the Cut-off Date until the earliest to occur of the
following with respect to each Asset sold to the Trust in connection with the
issuance of the Certificates: (i) the principal and interest on such Asset are
paid in full, (ii) such Asset is foreclosed and the related Manufactured Home or
Mortgaged Property is liquidated pursuant to Section 3.08 hereof, (iii) all of
the proceeds of a liquidating claim under the Standard Hazard Insurance Policy
relating to such Asset have been deposited to the Certificate Account, or (iv)
the Liquidation Proceeds relating to such Asset have been deposited to the
Certificate Account, the Servicer will proceed diligently and in a manner
consistent with its standards for servicing Assets described in Section 3.01
above, to collect all payments due under each Asset when such payments become
due and payable and to apply such payments in accordance with Sections 3.05,
3.06 and 3.07 hereof.
Section 3.04. Advances.
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(a) Servicing Advances. If any Obligor is in default in the payment of
premiums on its Standard Hazard Insurance Policy or Policies, the Servicer may
pay such premiums or taxes out of its own funds. If any Obligor is in default in
the payment of premiums on its Standard Hazard Insurance Policy or Policies and
coverage is not provided in respect of the related Asset under a blanket policy
maintained by the Servicer pursuant to Section 3.16(a) below, or if any Obligor
is in default in the payment of personal property taxes or real estate taxes due
in respect of its Manufactured Home or Mortgaged Property, the Servicer shall
pay such premiums or taxes out of its own funds in a timely manner, as Servicing
Advances, unless the Servicer, in its reasonable judgment, determines that any
such Servicing Advance would be a Non-Recoverable Advance. In addition, the
Servicer shall pay in a timely manner, as Servicing Advances, any and all
personal property taxes and real estate taxes due in respect of any Repo
Property or REO Property it holds on behalf of the Trust and all premiums for
any Standard Hazard Insurance Policy maintained for such Repo Property or REO
Property (except as similar coverage may be provided under a blanket policy
maintained by the Servicer pursuant to Section 3.16 below) unless the Servicer,
in its reasonable judgment, determines that any such Servicing Advance would be
a Non-Recoverable Advance.
(b) P&I Advances. If any Obligor fails to make a Monthly Payment by the
related Remittance Date, the Servicer shall deposit such amount in the
Distribution Account on or before such Remittance Date, as a "P&I Advance,"
unless the Servicer, in its reasonable judgment, determines that any such P&I
Advance would be a Non-Recoverable Advance, or such Monthly Payment can be
offset by Early Payments, as provided in Section 3.07(c) hereof. In addition, if
the Certificate Account is maintained with the Trustee, the Servicer may
instruct the Trustee to use any investment earnings on such account to defray
its P&I Advance obligation, and the Trustee shall honor any such instructions
(including standing instructions).
(c) Recovery of Advances. The Servicer shall be entitled to reimbursement
for any Advances made by it in respect of any Asset out of late collections from
the related Obligor or from Insurance Proceeds, Liquidation Proceeds or a
Repurchase Price recovered by it in respect of such Asset ("Related Proceeds")
and shall be entitled to reimburse itself for unreimbursed Advances made that
have become Non-Recoverable Advances in accordance with Section 3.07(a)(1)
below.
(d) Non-Recoverable Advances. If the Servicer does not make an Advance on
the grounds that it is a Non-Recoverable Advance, or if an Advance previously
made by the Servicer is determined by the Servicer to have become a
Non-Recoverable Advance, then the Servicer shall provide the Trustee with an
Officer's Certificate stating this fact and stating the basis upon which the
Servicer determined that such Advance would be or was a Non-Recoverable Advance.
The Trustee shall not be responsible for determining whether any such
determination was reasonable.
Section 3.05. [Reserved]
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Section 3.06. Certificate Account.
(a) On or before the Closing Date, the Trustee shall establish a collection
account or accounts (the "Certificate Account"), which must be an Eligible
Account. The Certificate Account is to be held by or for the benefit of the
Trustee on behalf of the Certificateholders, and shall be either in the
Trustee's name or designated in a manner that reflects the custodial nature of
the account and that all funds in such account are held for the benefit of the
Trustee. The Trustee shall use a segregated Certificate Account for each Series
of Certificates, and the Servicer shall cause separate accounting and records to
be maintained with respect to each separate Series.
(b) The Servicer shall deposit into the appropriate Certificate Account on
a daily basis, and in no event later than two Business Days following receipt
thereof, all payments and collections received by it on each Outstanding Asset
on or after the effective date of the related Pooling and Servicing Agreement
(including: (1) all Obligor payments in respect of principal, including
principal prepayments, on the Contracts and Mortgage Loans; (2) all Obligor
payments in respect of interest on the Contracts and Mortgage Loans, together
with moneys transferred from any Buy-Down Fund or GPM Fund; (3) all Net
Liquidation Proceeds received and retained in connection with the liquidation or
disposition of defaulted Contracts, Mortgage Loans or property acquired in
respect thereof through repossession, foreclosure or otherwise; (4) all proceeds
received under any title, hazard or other insurance policy covering any Contract
or Mortgage Loan, other than proceeds received as part of Liquidation Proceeds
or such proceeds that are to be applied to the restoration or repair of the
related Manufactured Home or Mortgaged Property or released to the Obligor; (5)
any condemnation awards or settlements which are not released to Obligors in
accordance with normal servicing procedures; (6) all amounts received from
credit enhancement provided with respect to a Series of Certificates; (7) all
proceeds of any Contract or Mortgage Loan (or property acquired in respect
thereof) that is repurchased by the related Seller or by a terminating party;
and (8) all amounts, if any, required to be transferred to the Certificate
Account from a Reserve Fund pursuant to the Agreement, but excluding any
prepayment fees, assumption fees or any fees imposed in connection with the
replacement by such Obligors or the related standard Hazard Insurance Policy),
except amounts collected in respect of Monthly Payments due prior to the Cut-off
Date. On or prior to the Closing Date, the Servicer shall deposit into the
Certificate Account all installments of principal and interest due on the Assets
on or after the Cut-off Date and received by the Servicer prior to the Closing
Date, plus each Principal Prepayment of any Asset (including any related payment
of interest) received by the Servicer on or after the Cut-off Date but prior to
the Closing Date.
(c) Amounts on deposit in the Certificate Account shall be invested at the
written direction of the Servicer in Eligible Investments, and earnings on
amounts deposited in such account shall be credited to the account of the
Servicer as servicing compensation in addition to the Servicing Fee and shall
offset P&I Advances due from the Servicer in respect of the Distribution Date
next succeeding the date on which such earnings were made or, in the alternative
at the Servicer's option, may be released to the Servicer on such Distribution
Date. The amount of any losses incurred in respect of any such investments shall
be
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deposited in the Certificate Account by the Servicer out of its own funds
immediately upon realization of any such losses.
Section 3.07. Withdrawals From Certificate Account; Remittance Amounts.
(a) Withdrawals from Certificate Account. The Servicer may direct the
Trustee in writing (by delivering each Remittance Report) to withdraw funds on
deposit in the Certificate Account for the following purposes:
(1) to reimburse itself for any Advances previously made by the
Servicer, which Advances remain unreimbursed to the Servicer, out of
Related Proceeds or, if such Advances have been determined by the Servicer
to have become Non-Recoverable Advances, out of any funds on deposit in the
Certificate Account;
(2) to pay any Servicing Fees and other servicing compensation provided
for herein due to the Servicer; provided, however, that if BCI is the
Servicer and a Servicing Fee Event is not in effect, it shall only be
entitled to withdraw its Servicing Fee in respect of any Distribution Date
from the Certificate Account in accordance with this clause to the extent
the amounts on deposit in the Certificate Account and attributable to the
Available Distribution Amount for such Distribution Date exceed the sum of
all amounts to be distributed on the Certificates of the related Series on
such Distribution Date prior to the distribution to BCI of its Servicing
Fees as described in the related Pooling and Servicing Agreement in the
Section thereof entitled "Distributions"; and
(3) to enable the Servicer to remit the Remittance Amount on each
Remittance Date, as described in Section 3.07(b) below.
(b) Remittance Dates. On or prior to the Remittance Date for any
Distribution Date, the Servicer shall remit the Remittance Amount for such
Distribution Date, from and to the extent of the funds in the Certificate
Account, plus all required P&I Advances, by wire transfer or otherwise, in
immediately available funds, for distribution in accordance with Section 4.02.
If the Certificate Account is maintained by the Trustee, on each Remittance
Date, the Servicer shall notify the Trustee as to the amount of the related
Remittance Amount and the amount of all required P&I Advances to be covered by
investment earnings on the Certificate Account, and the Trustee shall distribute
such amount in accordance with Section 4.02 on the related Distribution Date. In
such event, the Servicer shall still remit any P&I Advances not covered by
investment earnings on the Certificate Account to the Trustee for distribution
in accordance with Section 4.02 on the Remittance Date.
Notwithstanding the foregoing, if a Terminating Purchase is to be made on
such Distribution Date, and the Servicer shall have received the Termination
Price or shall be the Terminator, the Servicer shall remit the Termination Price
rather than the Remittance Amount to the Trustee for distribution in accordance
with Section 4.02.
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(c) Treatment of Early Payments. Early Payments received by the Servicer
shall be retained in the Certificate Account and transferred to the Distribution
Account when and as if such Early Payments had otherwise been received by the
Servicer as scheduled payments under the Assets. However, Early Payments on any
Assets for a Series on deposit in the Certificate Account that are not yet due
to be passed through to Certificateholders on any Distribution Date may be
remitted to the Distribution Account to offset delinquencies on other Assets for
the same Series. If Early Payments on any Asset are used to offset delinquencies
on other Assets, subsequent late recoveries of such delinquent amounts on such
other Assets shall be treated by the Servicer as a restoration of the Early
Payments used to offset such delinquent amounts and shall be deposited into the
Certificate Account in accordance with Section 3.06(a) hereof. The Servicer
shall maintain records with respect to its application of Early Payments.
Section 3.08. Realization upon Defaulted Assets.
(a) The Servicer shall repossess, foreclose upon or otherwise comparably
convert the ownership of any Manufactured Home and any related Real Property and
any Mortgaged Property securing an Asset that comes into and continues in
default and as to which no satisfactory arrangements can be made for collection
of delinquent payments pursuant to Section 3.03 hereof. In connection with such
repossession, foreclosure or other conversion, the Servicer shall follow such
practices and procedures as it shall deem necessary or advisable and as shall be
normal and usual for responsible holders of retail installment sales contracts
and installment loan agreements for manufactured housing (in the case of
defaulted Contracts) and for responsible holders of residential, one- to
four-family mortgage loans (in the case of defaulted Mortgage Loans) and as
shall be in compliance with all applicable laws; provided, that such practices
and procedures shall be, in all circumstances, undertaken with a view toward
maximizing the amount of principal and interest recovered on the Assets.
(b) The Servicer may commence and prosecute any Proceedings in respect
of any Asset in default in its own name on behalf of the Trust or, if the
Servicer deems it necessary, in the name of the Trust. If the Servicer elects to
commence a Proceeding to enforce an Asset, the act of commencement shall be
deemed to entail an automatic assignment of the Asset to the Servicer for
purposes of collection only. If, however, in any enforcement suit or legal
proceeding in which the Servicer seeks to collect payments due on any Asset, it
is held that the Servicer lacks standing to enforce an Asset (or otherwise is
not permitted to enforce an Asset) on the grounds that it is not a real party in
interest or a holder entitled to enforce the Asset, the Trustee, on behalf of
the Trust, shall take such steps as the Servicer deems necessary to enforce the
Asset, including bringing suit in its name or in the names of the Trust. Any
such action by the Trustee shall be taken at the Servicer's expense, but such
expenses (including, without limitation, attorneys' fees) shall be deemed
Liquidation Expenses which the Servicer shall have no obligation to incur to the
extent it makes a good faith determination that such Liquidation Expenses will
not be recoverable out of Liquidation Proceeds of the related Asset.
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(c) In seeking to enforce the Assets, the Servicer may exercise any rights
of recourse against guarantors or sureties of any Obligor's obligations (or
against any other third parties against whom any rights of recourse exist in
connection with any Asset).
(d) The Servicer's obligations under this Section are subject to the
proviso that, in the case of damage to a Manufactured Home or a Real Property or
a Mortgaged Property, the Servicer shall not be required to expend its own funds
in making Liquidation Expenses to restore such property unless it shall
determine, in its reasonable judgment, (1) that such restoration will increase
the proceeds of liquidation of the related Asset, after reimbursement to the
Servicer for such expenses, and (2) that such Liquidation Expenses, if made,
will be recoverable out of Liquidation Proceeds of such Asset. If the Servicer
recovers any Insurance Proceeds or Liquidation Proceeds in respect of any Asset,
the Servicer may deduct the amount of any Insured Expenses and unreimbursed
Liquidation Expenses incurred by it in respect of such Asset from such gross
Insurance Proceeds and Liquidation Proceeds, respectively, prior to deposit of
such proceeds into the Certificate Account.
(e) Notwithstanding any of the foregoing, the Servicer shall not repossess,
foreclose upon or otherwise comparably convert the ownership of any Manufactured
Home, Real Property or Mortgaged Property securing an Asset in cases where the
Servicer has actual knowledge that the Manufactured Home, Real Property or
Mortgaged Property is situated on a toxic waste site as determined by the United
States Environmental Protection Agency or other comparable federal or state
agency and where, in the good faith judgment of the Servicer, the liabilities
that would be imposed upon the Trust with respect to such toxic waste site would
exceed the Net Liquidation Proceeds that could be realized upon liquidation of
the related Asset. The Servicer shall have no affirmative duty or obligation to
determine whether any Manufactured Home, Real Property or Mortgaged Property is
situated on a toxic waste site. The Servicer shall not be liable to the holders
of any Certificates if the Servicer forecloses on a Mortgaged Property or Real
Property and takes title to a Mortgaged Property or Real Property that is so
contaminated or effected.
Section 3.09. Title, Conservation, and Disposition of Repo Property and REO
Property.
(a) The Servicer shall maintain, protect, and insure any Repo Property or
REO Property acquired pursuant to Section 3.08 hereof, on behalf of the Trust,
in accordance with standard industry practice solely for the purpose of its
prompt disposition and sale and with a view toward maximizing the amount of
principal and interest recovered on the Assets. During any period in which the
Trust holds a Repo Property or REO Property, the Servicer shall not (1) lease
the Repo Property or REO Property, (2) authorize or permit any construction on
the Repo Property or REO Property, other than the completion of a building or
improvement thereon, and then only if more than 10% of the construction of such
building or other improvement was completed before default on the related Asset
became imminent, all within the meaning of section 856(e)(4)(B) of the Code, or
(3) allow the Repo Property or REO Property to be used in any trade or business
conducted by the Trust. If one or more REMIC elections are made with respect to
the assets of the Trust, the Servicer shall use its best efforts to dispose of
such Repo Property or REO Property for its fair market value within 12 months
after its acquisition by the Trust pursuant to the
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Servicer's ordinary commercial practices. If the Servicer is unable to sell
such Repo Property or REO Property in the course of its ordinary commercial
practices within that 12-month period, the Servicer shall (i) purchase such Repo
Property or REO Property at a price equal to such Repo Property's or REO
Property's fair market value or (ii) auction such Repo Property or REO Property
to the highest bidder in an auction reasonably designed to produce a fair price
(an "Auction") that takes place within one month after the end of the 12-month
period. If the Servicer and the Trustee either (1) receive an Opinion of Counsel
indicating that, under then-current law, the REMIC may hold Repo Property or REO
Property associated with a REMIC Asset for a period longer than three years from
the close of the taxable year in which the property was acquired without
threatening the REMIC status of any related REMIC or causing the imposition of a
tax upon any such REMIC or (2) the Servicer applies for and is granted an
extension of such period pursuant to Code sections 860G(a)(8) and 856(e)(3) (the
applicable period provided pursuant to such Opinion of Counsel or such Code
section being referred to herein as an "Extended Holding Period"), upon the
direction of the Company or the Trustee, the Servicer shall continue to attempt
to sell such Repo Property or REO Property pursuant to its ordinary commercial
practices until the date two months prior to the expiration of the Extended
Holding Period. If no REMIC election has been made or is to be made with respect
to the assets of the Trust, the 12-month period for disposing of any Repo
Property or REO Property as described in the preceding two sentences shall be an
eleven-month period. The Servicer shall either sell any Repo Property or REO
Property remaining after such date in an Auction or purchase such Repo Property
or REO Property (at the price set forth in this paragraph) before the end of the
Extended Holding Period. In the event of any such sale of a Repo Property or REO
Property, the Trustee shall, at the written request of the Servicer and upon
being supplied with appropriate forms therefor, within five Business Days after
its receipt of the proceeds of such sale or auction, instruct the Servicer to
release to the purchaser the related Contract File and Servicer Contract File
(in the case of a Repo Property), and the Trustee shall release to the purchaser
the related Trustee Mortgage Loan File and shall instruct the Servicer to
release to the purchaser the related Servicer Mortgage Loan File (in the case of
a Mortgage Loan), and in any event the Trustee shall execute and deliver such
instruments of transfer or assignment provided to it, in each case without
recourse, representation or warranty, as shall be necessary to vest in the
auction purchaser title to the Repo Property or REO Property, and shall deliver
to such purchaser any Asset Documents relating to such Contract that are in the
Trustee's possession, whereupon the Trustee shall have no further responsibility
with regard to any related Asset File or Servicer File. Neither the Trustee nor
the Servicer, acting on behalf of the Trust, shall provide financing from such
Trust to any purchaser of a Repo Property or REO Property.
(b) In the event that title to any Repo Property or REO Property is
acquired, the deed or certificate of sale shall be issued to the Trustee on
behalf of the Trust for the benefit of the Certificateholders. The Servicer
shall, in accordance with Section 3.09(a), use its reasonable efforts to sell
any Repo Property or REO Property as expeditiously as possible, but in all
events within the time period, and subject to the conditions set forth in
Section 3.09(a) hereof. Pursuant to its efforts to sell such Repo Property or
REO Property, the Servicer shall either itself or through an agent selected by
the Servicer protect and conserve such Repo Property or REO Property in the same
manner and to such extent as it
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customarily does in connection with its own repossessed manufactured homes
or mortgaged properties (as applicable), incident to its conservation and
protection of the interests of the Certificateholders.
(c) The Servicer shall deposit all net funds collected and received in
connection with the operation of any Repo Property or REO Property in the
applicable Certificate Account no later than the second Business Day following
receipt of such funds.
(d) The Servicer, upon the final disposition of any Repo Property or REO
Property, shall be entitled to reimbursement of any related unreimbursed
Advances related to the Asset for such Repo Property or REO Property as well as
any unpaid Servicing Fees from Liquidation Proceeds received in connection with
the final disposition of such Repo Property or REO Property, the latter in
accordance with the Sections of the related Pooling and Servicing Agreement that
are entitled "Distributions" and "Limited Right of Servicer to Retain Servicing
Fees from Collections."
(e) The final disposition of any Repo Property or REO Property shall be
carried out by the Servicer at the Repo Property's or REO Property's fair market
value under the circumstances existing at the time of disposition and upon such
terms and conditions as the Servicer shall deem necessary or advisable, and as
are in accordance with accepted servicing practices and in accordance with
Section 3.09(a) above.
(f) The Liquidation Proceeds from the final disposition of any Repo
Property or REO Property shall be deposited into the Certificate Account
promptly following receipt of such Liquidation Proceeds and, subject to such
withdrawals as may be permitted by Section 3.07(a) above, shall be transferred
to the Distribution Account pursuant to Section 3.07(b) above.
(g) The Servicer shall prepare and file reports of foreclosure and
abandonment in accordance with section 6050J of the Code.
(h) Notwithstanding any other provision of this Agreement, the Servicer,
acting on behalf of the Trustee hereunder, shall not rent, lease, or otherwise
earn income or take any action on behalf of the Trust with respect to any REO
Property that might (i) cause such REO Property to fail to qualify as
"foreclosure property" within the meaning of section 860G(a)(8) of the Code or
(ii) result in the receipt by any related REMIC of any "income from
non-permitted assets" within the meaning of section 860F(a)(2) of the Code or
any "net income from foreclosure property" within the meaning of section
860G(c)(2) of the Code, both of which types of income are subject to tax under
the REMIC Provisions, unless the Trustee has received an Opinion of Counsel at
the Trust's expense (the costs of which shall be recoverable out of the
applicable Certificate Account), to the effect that, under the REMIC Provisions
and any relevant proposed legislation, any income generated for any related
REMIC by the REO Property would not result in the imposition of a tax upon such
REMIC.
Without limiting the generality of the foregoing, the Servicer shall not:
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(i) enter into, renew or extend any New Lease with respect to any REO
Property, if the New Lease by its terms will give rise to any income that
does not constitute Rents from Real Property;
(ii) permit any amount to be received or accrued under any New Lease
other than amounts that will constitute Rents from Real Property;
(iii) authorize or permit any construction on any REO Property, other
than the completion of a building or other improvement thereon, and then
only if more than ten percent of the construction of such building or other
improvement was completed before default on the related Mortgage Loan
became imminent, all within the meaning of section 856(e)(4)(B) of the
Code; or
(iv) Directly Operate, or allow any other Person (other than an
Independent Contractor) to Directly Operate, any REO Property on any date
more than 90 days after its acquisition date;
unless, in any such case, the Servicer has requested and received the Opinion of
Counsel described in the preceding sentence, in which case the Servicer may take
such actions as are specified in such Opinion of Counsel.
(i) The Servicer shall not acquire any personal property relating to any
Asset (other than the related Manufactured Home in connection with a Contract)
pursuant to this Section 3.09 unless either:
(1) such personal property is incident to real property (or to the
related Manufactured Home, in the case of a Contract) (within the meaning
of section 856(e)(1) of the Code) so acquired by the Servicer; or
(2) the Servicer shall have requested and received an Opinion of
Counsel, at the expense of the Trust (recoverable out of the Certificate
Account), to the effect that the holding of such personal property by the
related REMIC will not cause the imposition of a tax under the REMIC
Provisions on any REMIC related to the Trust or cause any such REMIC to
fail to qualify as a REMIC at any time that any Certificate is outstanding.
Section 3.10. Full Prepayments and Liquidations; Trustee to Cooperate; Release
of Mortgage Files.
(a) Contracts. The Servicer shall determine when a Contract has been paid
in full. Upon the liquidation of any Contract, the Servicer shall remit the
proceeds thereof to the related Certificate Account in accordance with Sections
3.05 and 3.06 above.
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The Servicer is authorized to execute an instrument in satisfaction of any
Contract that is the subject of a Principal Prepayment in full, final
liquidation or other payment in full (as well as an instrument in satisfaction
of any related Mortgage) and do such other acts and execute such other documents
as the Servicer deems necessary to discharge the Obligor thereunder and
eliminate the security interest in the Manufactured Home and any Real Property
related thereto. Upon the Servicer's request, the Trustee shall, at the expense
of the Servicer, perform such other acts as are reasonably requested by the
Servicer (including, without limitation, the execution of documents) and
otherwise cooperate with the Servicer in enforcement of rights and remedies with
respect to Contracts. No expenses incurred in connection with any instrument of
satisfaction or deed of reconveyance shall be chargeable to a Certificate
Account or Distribution Account.
(b) Mortgage Loans. Upon the liquidation of any Mortgage Loan, the Servicer
shall remit the proceeds thereof to the related Certificate Account in
accordance with Sections 3.05 and 3.06 above and shall deliver to the Trustee a
Request for Release requesting that the Trustee execute such instrument of
release or satisfaction as is necessary to release the related Mortgaged
Property from the lien of the related Mortgage. The Trustee shall, within five
Business Days of its receipt of such a Request for Release, release, or cause
the Custodian to release, the related Trustee Mortgage Loan File to the
Servicer. No expenses incurred in connection with any instrument of satisfaction
or deed of reconveyance shall be chargeable to a Certificate Account or
Distribution Account.
From time to time and as appropriate for the servicing or foreclosure of
any Mortgage Loan, including but not limited to, collection under any Title
Insurance Policy, Primary Mortgage Insurance Policy, flood insurance policy or
Standard Hazard Insurance Policy or to effect a partial release of any Mortgaged
Property from the lien of the related Mortgage, the Servicer shall deliver to
the Trustee a Request for Release. The Trustee shall, within five Business Days
after its receipt of such Request for Release, release, or cause the Custodian
to release, the related Trustee Mortgage Loan File to the Servicer. Any such
Request for Release shall obligate the Servicer to return each and every
document previously requested from the Trustee Mortgage Loan File to the Trustee
by the twenty-first day following the release thereof, unless (a) the Mortgage
Loan has been liquidated and the Liquidation Proceeds relating to the Mortgage
Loan have been deposited in the related Certificate Account or Distribution
Account or the Trustee Mortgage Loan File or such document has been delivered to
an attorney, or to a public trustee or other public official as required by law,
for purposes of initiating or pursuing legal action or other proceedings for the
foreclosure of the Mortgaged Property either judicially or non-judicially, and
the Servicer has delivered to the Trustee a certificate of the Servicer
certifying as to the name and address of the Person to which such Trustee
Mortgage Loan File or such document was delivered and the purpose or purposes of
such delivery. Upon receipt of an Officer's certificate of the Servicer stating
that such Mortgage Loan was liquidated and that all amounts received or to be
received in connection with such liquidation which are required to be deposited
into the applicable Certificate Account or the Distribution Account have been so
deposited, or that such Mortgage Loan has become an REO Property, the Request
for Release shall be released by the Trustee to the Servicer.
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(c) Trustee's Execution of Documents in Connection with Foreclosures. Upon
written certification of the Servicer, the Trustee shall execute and deliver to
the Servicer court pleadings, requests for trustee's sale or other documents
necessary to the foreclosure or trustee's sale in respect of a Mortgaged
Property or Real Property or to any legal action brought to obtain judgment
against any Obligor on a Mortgage Note, Land Secured Contract or Mortgage or to
obtain a deficiency judgment, or to enforce any other remedies or rights
provided by such Mortgage Note, Land Secured Contract or Mortgage or otherwise
available at law or in equity. Each such certification shall include a request
that such pleadings or documents be executed by the Trustee and a statement as
to the reason such documents or pleadings are required and that the execution
and delivery thereof by the Trustee will not invalidate or otherwise affect the
lien of the related Mortgage, except for the termination of such a lien upon
completion of the foreclosure proceeding or trustee's sale.
Section 3.11. Maintenance of Security Interests and Other Liens in
Manufactured Homes.
At its own expense, the Servicer shall take such steps as are necessary to
maintain perfection of the security interest in the Seller, the Company or the
Trust and the validity of any other lien created by each Contract in the related
Manufactured Home to the extent it receives notice of sale or reregistration of
such Manufactured Home. The Trustee hereby authorizes the Servicer to take such
steps as are necessary to reperfect such security interest in the event of the
relocation of a Manufactured Home or for any other reason; provided, that
nothing in this Section 3.11 shall be construed to limit the Servicer's
obligations under Section 3.12 below.
Section 3.12. Due-on-Sale Clauses and Assumption Agreements.
Upon learning of any conveyance or prospective conveyance of a Manufactured
Home or Real Property securing any Contract or of a Mortgaged Property securing
any Mortgage Loan, the Servicer may exercise its rights, subject to state law,
under any "due-on-sale" clause of the Contract, Mortgage Note or Mortgage
relating to such Manufactured Home or Mortgaged Property to demand immediate
payment in full of all amounts due under such Contract or Mortgage Loan. With
respect to Mortgage Loans, the Servicer will exercise such rights to the extent,
under the circumstances, and in the manner in which the Servicer enforces such
clauses with respect to other Mortgage Loans held in its portfolio, but will not
exercise such rights if prohibited by law from doing so.
If the Servicer determines not to enforce a "due-on-sale" clause with
respect to an Asset, the Servicer will enter into an assumption and/or
modification agreement with the person to whom the Manufactured Home or
Mortgaged Property has been conveyed or is proposed to be conveyed in a form
that is customary or appropriate in the Servicer's reasonable business judgment
pursuant to which such person becomes liable under the Asset and pursuant to
which, to the extent permitted by applicable law and deemed appropriate by the
Servicer in its reasonable judgment, the original Obligor remains liable on such
Asset; provided, that (a) the Servicer reasonably determines that permitting
such assumption by such person will not increase materially the risk of
nonpayment of amounts due under the related Asset, (b) such
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action is not prohibited by law and will not affect adversely or jeopardize
any coverage under any Insurance Policy required to be maintained with respect
to such Asset pursuant to the Pooling and Servicing Agreement, (c) neither the
Unpaid Principal Balance nor the Asset Rate of the related Asset may be reduced
and (d) if one or more REMIC elections have been made with respect to the assets
of the Trust, no other material term of the related Asset (including, without
limitation, the amortization schedule or any other term affecting the amount or
timing of payments on such Asset) may be modified without an Opinion of Counsel
to the effect that such modification will not be treated, under the REMIC
Provisions, as an acquisition of the modified Asset by the REMIC in exchange for
the unmodified Asset on the date the modification occurs. The Servicer shall
follow its customary underwriting procedures prior to entering into any such
assumption agreement, including, without limitation, a satisfactory credit
review of any Person assuming such Asset.
Section 3.13. Annual Accountants' Certificate; Annual Statement as to
Compliance.
(a) The Servicer shall deliver to the Trustee, on or before April 30 of
each year, with respect to each Pooling and Servicing Agreement that the
Servicer entered into on or before the preceding December 31, an Officer's
Certificate signed by the President or any Vice President of the Servicer, dated
as of December 31 of the preceding year, stating that (1) a review of the
activities of the Servicer during the preceding 12-month period (or since the
Cut-off Date in the case of the first such Officer's Certificate relating to any
Trust) and of its performance under the Pooling and Servicing Agreement has been
made under such Officer's supervision, (2) to the best of such Officer's
knowledge, based on such review, the Servicer has fulfilled all its obligations
under the Pooling and Servicing Agreement throughout such year, or, if there has
been a default in the fulfillment of any such obligation, specifying each such
default known to such Officer and the nature and status thereof and (3) to the
best of such Officer's knowledge, each subservicer has fulfilled its obligations
under its subservicing agreement in all material respects, or if there has been
a material default in the fulfillment of such obligations, specifying such
default known to such officer and the nature and status thereof. A copy of such
certificate may be obtained by any other Holder who makes a request in writing
to the Trustee addressed to the Corporate Trust Office.
(b) In addition, on or before April 30 of each year, the Servicer, at its
expense, shall cause a firm of Independent public accountants which is a member
of the American Institute of Certified Public Accountants to furnish a
statement, which shall be accompanied with the Officer's Certificate referred to
in subsection (a) above, to each applicable Rating Agency with a copy to the
Trustee to the effect that (1) such firm has audited the financial statements of
the Servicer for the Servicer's most recently ended fiscal year and issued its
report thereon; (2) such audit included tests of the records and documents
relating to manufactured housing installment sale contracts and mortgage loans
serviced by the Servicer for others in accordance with the requirements of the
Uniform Single Attestation Program for Mortgage Bankers, or any successor
program promulgated by the accounting profession ("USAP"); and (3) such other
statements as are contemplated under USAP, including, if called for under USAP,
a statement as to whether the Servicer's management's written assertion to such
firm (which shall be attached to the statement of such firm) that its servicing
during the applicable fiscal year complied with USAP's minimum servicing
standards in all material respects is fairly stated
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in all material respects. The audit tests referred to in clause (2) of the
preceding sentence shall be applied to manufactured housing installment sale
contracts and mortgage loans serviced under the Pooling and Servicing Agreement
and/or, in the sole discretion of such firm, manufactured housing installment
sale contracts and mortgage loans serviced under pooling and servicing
agreements, trust agreements or indentures substantially similar to the Pooling
and Servicing Agreement (hereinafter referred to as "Pooling Agreements"). For
purposes of such statement, such firm may assume conclusively that all Pooling
Agreements under which the Servicer is the servicer of manufactured housing
installment sale contracts and mortgage loans for a trustee relating to
certificates evidencing an interest in manufactured housing installment sale
contracts and mortgage loans are substantially similar to one another except for
any such Pooling Agreement which by its terms specifically states otherwise.
Section 3.14. Servicing Fees.
As compensation for the services provided for a Series (including servicing
of the related Assets and administration of the related Trust) and ordinary
expenses incurred by the Servicer under the Pooling and Servicing Agreement, on
each Distribution Date the Servicer shall be entitled to receive the Servicing
Fee. Except as otherwise expressly provided in the Pooling and Servicing
Agreement, the Servicer shall perform all of the obligations to be performed by
it under the Pooling and Servicing Agreement at its expense and without cost or
charge to the Trustee. The Servicer also shall be entitled to additional
servicing compensation as specified in Sections 3.06(c) and 3.15 hereof. Unless
otherwise provided in the Pooling and Servicing Agreement for a Series, the
Servicer may retain its Servicing Fee and any other servicing compensation
provided for in such Pooling and Servicing Agreement from gross interest
collections on the related Assets prior to depositing such collections into the
related Certificate Account.
Section 3.15. Late Charges; Prepayment Fees or Other Charges.
To the extent permitted by law, the Pooling and Servicing Agreement and the
terms of any Asset, the Servicer may collect and retain as additional
compensation any late charges, extension fees or similar fees provided for in
the Asset.
To the extent reasonable and permitted by the terms of any Asset and by
law, the Servicer may collect from the Obligors, and retain as additional
compensation, prepayment fees, assumption fees or any fees imposed in connection
with the replacement by such Obligor of the related Standard Hazard Insurance
Policy.
Notwithstanding any other provisions of the Pooling and Servicing
Agreement, the Servicer shall not charge or impose upon any Obligor, nor seek to
charge or impose upon any Obligor, or assert a right to receive from any
Obligor, any fee, charge, premium or penalty that, if charged or collected,
would violate or contravene any law, including usury laws, or the terms of the
related Asset.
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Section 3.16. Maintenance of Standard Hazard Insurance, Primary Mortgage
Insurance, and Errors and Omissions Coverage.
(a) Standard Hazard Insurance. Except as otherwise provided in this Section
3.16(a), the Servicer shall cause to be maintained with respect to each Contract
and Mortgage Loan and each Repo Property and REO Property one or more Standard
Hazard Insurance Policies that provide, at a minimum, the same coverage as that
provided by a standard form fire and extended coverage insurance policy that is
customary for manufactured housing or residential real property (as applicable)
and which shall include flood insurance coverage issued by a Qualified Insurer,
providing coverage in an amount at least equal to the lesser of (1) 100% of the
replacement value of the related Manufactured Home or Mortgaged Property and (2)
the Unpaid Principal Balance of such Contract or Mortgage Loan, provided, that
with respect to each Repo Property and REO Property, the amount shall at least
equal the lesser of (1) the maximum insurable value of the related Manufactured
Home or Mortgaged Property or (2) the Unpaid Principal Balance under such
Contract or Mortgage Loan; provided, however, that in any event the amount of
coverage provided by each Standard Hazard Insurance Policy must be sufficient to
avoid the application of any co-insurance clause contained therein. As part of
its collection responsibilities, the Servicer shall proceed to collect the
premiums due on the Standard Hazard Insurance Policies from the Obligors in
accordance with the degree of skill and care that is customarily used for such
purpose in the manufactured home loan servicing industry (in the case of
Contracts) and the residential mortgage loan servicing industry (in the case of
Mortgage Loans). Each Standard Hazard Insurance Policy caused to be maintained
by the Servicer shall contain a standard loss payee clause in favor of the
Servicer and its successors and assigns. Any amounts received under any such
policies (other than amounts applied to restoration or repair or released to the
Obligors) shall be deposited initially into the related Certificate Account and
then deposited into the related Distribution Account pursuant to Sections 3.06
and 3.07 hereof, within the respective time frames specified in such Sections.
In lieu of causing individual Standard Hazard Insurance Policies to be
maintained with respect to each Manufactured Home and Mortgaged Property
pursuant to subsection (a) of this Section 3.16, the Servicer may maintain one
or more blanket insurance policies, each issued by a Qualified Insurer, covering
losses on the Obligors' interests in the Assets relating to such Manufactured
Homes and Mortgaged Properties resulting from the absence or insufficiency of
such individual Standard Hazard Insurance Policies. The Servicer shall pay the
premium for any such policy on the basis described therein and shall pay any
deductible amount with respect to claims under such policy relating to the
Assets covered thereby. All amounts collected by the Servicer under any such
blanket policy and any payments by the Servicer of deductible amounts
thereunder, in each case relating to an Asset covered thereby, shall be
deposited initially into the Certificate Account pursuant to Sections 3.05 and
3.06 hereof (within the respective time frames specified in such Sections),
after payment to (or retention by) the Servicer of all Insured Expenses and
Liquidation Expenses incurred by it with respect to the Manufactured Home or
Mortgaged Property to which such recovery relates, as well as the amount of any
Advances made by the Servicer with respect to the related Asset that have not
been reimbursed to the Servicer.
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(b) Primary Mortgage Insurance. The Servicer must maintain a Primary
Mortgage Insurance Policy in full force and effect on each Mortgage Loan, if
any, which is identified in the related Sales Agreement as being covered by a
Primary Mortgage Insurance Policy. Any such Primary Mortgage Insurance Policy
must insure the portion of the Unpaid Principal Balance of the related Mortgage
Loan that exceeds 75% of the value of the related Mortgaged Property (as set
forth in the appraisal obtained in connection with origination of the Mortgage
Loan) (the Mortgaged Property's "Initial Value") unless such Primary Mortgage
Insurance coverage has been waived in writing by the Company at the time it
purchases the Mortgage Loan or such Primary Mortgage Insurance is canceled under
the circumstances described below. If a covered Mortgage Loan provides for
negative amortization or the potential for negative amortization, the Primary
Mortgage Insurance Policy must also insure any increase in the Unpaid Principal
Balance of the Mortgage Loan from the original principal balance of the related
Mortgage Note. In the event that the rating assigned by any Rating Agency for
any of the related Certificates to the claims-paying ability of any related
Mortgage Insurer is reduced subsequent to the issuance of the related
Certificates, the Servicer will use its best efforts to replace each Primary
Mortgage Insurance Policy issued by the downgraded Mortgage Insurer with a new
Primary Mortgage Insurance Policy issued by an insurer whose claims-paying
ability is acceptable to the Company. The premium for any replacement policy
shall not exceed the premium for any replaced policy.
The Servicer may cancel the Primary Mortgage Insurance Policy maintained
with respect to any Mortgage Loan at the related Mortgagor's request if the
following conditions are met:
(1) The current Mortgage Loan-to-Value Ratio of the Mortgage Loan must
be 80% or less. The current Mortgage Loan-to-Value Ratio must be calculated
by dividing the Unpaid Principal Balance of the Mortgage Loan by the
Initial Value of the related Mortgaged Property; or
(2) After the policy has been in effect for more than two years, if the
Mortgage Loan-to-Value Ratio of such Mortgage Loan is 75% or less based
upon the current fair market value of the related Mortgaged Property.
The Servicer must take all steps necessary to ensure the payment by each
Mortgage Insurer of the maximum benefits available under the terms of the
related Primary Mortgage Insurance Policy. The Servicer must work diligently
with the Mortgage Insurer to determine whether such insurer will settle a claim
under a Primary Mortgage Insurance Policy by taking title to the related
Mortgaged Property or in some other manner. Upon receipt of any proceeds of a
Primary Mortgage Insurance Policy, the Servicer must deposit such proceeds into
the applicable Certificate Account in accordance with Sections 3.05 and 3.06
above.
(c) Errors and Omissions Coverage; Fidelity Bond. The Servicer shall keep
in force throughout the term of the Pooling and Servicing Agreement a policy or
policies of insurance issued by a Qualified Insurer covering errors and
omissions in the performance of its obligations as Servicer hereunder,
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including failure to maintain insurance as required by the Pooling and
Servicing Agreement, and a fidelity bond covering the Servicer's performance
under the Pooling and Servicing Agreement. Such policy or policies and bond
shall be in such form and amount as is generally customary among Persons that
service a portfolio of manufactured housing installment sales contracts and
installment loans having an aggregate principal amount of $100 million or more
and which Persons are generally regarded as servicers acceptable to
institutional investors.
Section 3.17. Escrow Accounts.
The Servicer, either directly or through subservicers, to the extent
permitted by law, may establish and maintain an escrow account (the "Escrow
Account") in which mortgagors under Mortgage Loans may be required to deposit
amounts sufficient to pay taxes, assessments, mortgage insurance premiums and
standard hazard insurance premiums and other comparable items and in which
Obligors under Contracts will be required to deposit amounts sufficient to pay
standard hazard insurance premiums and other comparable items. Withdrawals from
the Escrow Account maintained for mortgagors may be made to effect timely
payment of taxes, assessments, mortgage insurance and hazard insurance, to
refund to mortgagors amounts determined to be overages, to pay interest to
mortgagors on balances in the Escrow Account to the extent required by law, to
repair or otherwise protect the related Mortgaged Properties and to clear and
terminate the Escrow Account. The Servicer will be responsible for the
administration of the Escrow Account and will be obligated to make advances to
such account when a deficiency exists therein, so long as it determines that
such advances will be recoverable from the related Obligors or from Liquidation
Proceeds collected with respect to the related Assets. The Servicer may decline
to establish Escrow Accounts with respect to any Contracts or Mortgage Loans in
its discretion.
ARTICLE IV
REMITTANCE AND REPORTING TO CERTIFICATEHOLDERS
Section 4.01. Remittance Reports.
On or before the third Business Day prior to each Distribution Date, the
Servicer shall prepare a statement containing the information specified below as
to such Distribution Date (a "Remittance Report") and deliver such statement to
the Trustee. The Trustee shall forward such report to the Certificateholders on
the related Distribution Date, by mail to the addresses of such
Certificateholders as listed in the Certificate Register on the preceding Record
Date. A Remittance Report for a Distribution Date for a Series shall identify
the following items:
(1) the aggregate amount of each of the following, stated separately,
with respect to the related Assets: (A) the amount of all scheduled
principal payments on the Assets relating to such Distribution Date, (B)
the principal components and interest components of all Monthly
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Payments made by the Obligors on the Assets during the related
Collection Period, (C) Principal Prepayments (including related Net
Insurance Proceeds) received by the Servicer during the related Prepayment
Period, (D) Liquidation Proceeds (including related Insurance Proceeds) and
Net Liquidation Proceeds (including related Net Insurance Proceeds)
received during the related Prepayment Period, (E) the amount of any
Repurchase Price paid by the Company, the Seller or the Servicer with
respect to any of the Contracts purchased by the Company, the Seller or the
Servicer pursuant to Section 2.06 hereof during the related Prepayment
Period, (F) the aggregate number of Repo Properties and the aggregate
number of REO Properties in the Trust as of the end of the related
Prepayment Period and the aggregate of the unpaid principal balances of the
related Contracts and of the related Mortgage Loans, respectively, (G) the
aggregate number and the aggregate Unpaid Principal Balance of Outstanding
Contracts and Outstanding Mortgage Loans, stated separately, that are (i)
delinquent one month (i.e., 30 to 59 days) as of the end of the related
Prepayment Period, (ii) delinquent two months (i.e., 60 to 89 days) as of
the end of the related Prepayment Period and (iii) delinquent three months
(i.e., 90 days or longer) as of the end of the related Prepayment Period,
(H) the amount of Realized Losses incurred on the Assets during the related
Prepayment Period and on a cumulative basis since the Cut-off Date (the
latter expressed as a dollar amount and as a percentage of the aggregate
Cut-off Date Principal Balance) (separately identifying any Obligor
Bankruptcy Losses, Special Hazard Losses and Fraud Losses, if they are
separately allocated to the related Certificates), (I) the aggregate
Scheduled Principal Balance of the Contracts and the Mortgage Loans, stated
separately, and the number of Outstanding Contracts and Mortgage Loans,
stated separately, in each case at the end of the related Collection Period
and (J) any other information required to be reported by the REMIC
Provisions;
(2) the amount of the Available Distribution Amount for such
Distribution Date;
(3) the amount of funds in the Distribution Account, if any, to be
allocated to pay Servicing Fees, to reimburse the Servicer for Advances
made, to reimburse the Company or the Servicer for expenses pursuant to
Section 6.05 hereof, and to refund any overpayment of a Repurchase Price
for an Asset pursuant to Section 2.06(f) hereof;
(4) the amount of the Servicing Fee for such Distribution Date;
(5) the aggregate amount of P&I Advances required to be made by the
Servicer with respect to such Distribution Date, together with a statement
of the amount, if any, of such required P&I Advances that the Servicer will
not make in respect of such Distribution Date and of any P&I Advances that
will not be made because they are Non-Recoverable Advances;
(6) the aggregate deposits into the Certificate Account relating to
such Distribution Date and the aggregate withdrawals from the Certificate
Account for each category of withdrawal specified in Section 3.07(a) hereof
relating to such Distribution Date; and
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(7) any items relating to a specific Series of Certificates specified
in the related Pooling and Servicing Agreement.
The Trustee shall maintain a telephone number which investors may call to
ascertain, on each Distribution Date, the Certificate Principal Balance of each
Class of Certificates and the then-current Pass-Through Rate applicable to each
such Class. Such number for any Series shall initially be as specified in the
Prospectus Supplement for such Series and may only be changed after the Trustee
notes the change in such number in writing on the Remittance Report it sends to
Certificateholders.
Within a reasonable period of time after the end of each calendar year, the
Trustee shall prepare and furnish a statement, from information provided by the
Servicer, containing the information concerning the amount of distributions of
interest and principal on the Regular Certificates and the amount of
distributions on the Residual Certificates, as well as any other information as
may be required by the Code or Regulations and that customarily would be
provided by a Trustee to Certificateholders in order to enable such
Certificateholders to prepare their federal income tax returns, to each Person
who at any time during the calendar year was a Certificateholder that
constituted a retail investor or other Certificateholder that requests such
statement, aggregated for such calendar year or portion thereof during which
such Person was a Certificateholder. Such obligation of the Trustee shall be
deemed to have been satisfied to the extent that substantially comparable
information shall be provided by the Trustee pursuant to any requirements of the
Code as from time to time are in force.
Section 4.02. Distribution Account; Distribution of Remittance Amount.
(a) The Trustee shall establish and maintain a Distribution Account for the
benefit of the Certificateholders. The Distribution Account shall be an Eligible
Account and shall be either held in the Trustee's name or designated in a manner
that reflects the custodial nature of the account and that all funds in such
account are held in trust for the benefit of the Trustee. The Trustee shall
deposit into the Distribution Account amounts remaining after all other
distributions have been made in accordance with Section 4.02(b)(1) though (4)
below.
(b) The Trustee shall, in accordance with the related Remittance Report,
distribute from the Certificate Account the Remittance Amount in the following
order of priority:
(1) if BCI is not the Servicer or BCI is the Servicer and a Servicing
Fee Event has occurred, to pay the Servicer its monthly Servicing Fee, to
the extent not previously retained or withdrawn from the Certificate
Account by such Servicer or, if BCI is the Servicer and a Servicing Fee
Event is not in effect, to pay BCI its monthly Servicing Fee in respect of
a Distribution Date, but only to the extent that the amounts on deposit in
the Certificate Account and attributable to the Remittance Amount for such
Distribution Date exceed the sum of all amounts to be distributed on the
Certificates of the related Series on such Distribution Date prior to the
distribution to BCI of
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its Servicing Fee, as described in the related Pooling and Servicing
Agreement in the Section thereof entitled "Distributions";
(2) to reimburse the Servicer from any amounts on deposit in the
Distribution Account for any Advance previously made which has become a
Non-Recoverable Advance, or to reimburse the Servicer for any other Advance
out of Related Proceeds on deposit in the Distribution Account, in either
case to the extent not previously retained or withdrawn from the
Certificate Account by the Servicer;
(3) to reimburse the Company or the Servicer for expenses incurred by
or reimbursable to them pursuant to Section 6.05 hereof;
(4) to refund any overpayment of a Repurchase Price for an Asset
pursuant to Section 2.06(f) hereof; and
(5) for deposit into the Distribution Account.
The Servicer shall keep and maintain separate accounting, on an
Asset-by-Asset basis, for the purpose of justifying any payment to and from the
Distribution Account.
Section 4.03. Allocation of Available Distribution Amount.
On each Distribution Date for a Series, the Trustee shall withdraw all
monies on deposit in the related Distribution Account in accordance with the
related Remittance Report and shall distribute to the Certificateholders (or, if
more than one REMIC election has been made with respect to the Trust, to
distribute to the holders of the Regular Interests and the Residual Interest in
the Pooling REMIC), the amount of the Available Distribution Amount in
accordance with the applicable Pooling and Servicing Agreement.
Section 4.04. Compliance with Withholding Requirements.
Notwithstanding any other provisions of the Pooling and Servicing
Agreement, the Trustee shall comply with all federal withholding requirements
respecting payments of interest or principal to the extent of accrued original
issue discount on Certificates to each Holder of such Certificates who (a) is
not a "United States person," within the meaning of Code section 7701(a)(30),
(b) fails to furnish its TIN to the Trustee, (c) furnishes the Trustee an
incorrect TIN, (d) fails to report properly interest and dividends, or (e) under
certain circumstances, fails to provide the Trustee or the Certificateholder's
securities broker with a certified statement, signed under penalties of perjury,
that the TIN provided by such Certificateholder to the Trustee or such broker is
correct and that the Certificateholder is not subject to backup withholding. The
consent of such a Certificateholder shall not be required for such withholding.
In the event the Trustee does withhold the amount of any otherwise required
distribution from interest payments on the Assets
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(including principal payments to the extent of accrued original issue
discount) or P&I Advances thereof to any Certificateholder pursuant to federal
withholding requirements, the Trustee shall indicate with any payment to such
Certificateholders the amount withheld. In addition, if any United States
federal income tax is due at the time a Non-U.S. Person transfers a Residual
Certificate, the Trustee or other Withholding Agent may (1) withhold an amount
equal to the taxes due upon disposition of such Residual Certificate from future
distributions made with respect to such Residual Certificate to the transferee
thereof (after giving effect to the withholding of taxes imposed on such
transferee), and (2) pay the withheld amount to the Internal Revenue Service
unless satisfactory written evidence of payment by the transferor of the taxes
due has been provided to the Trustee or such Withholding Agent. Moreover, the
Trustee or other Withholding Agent may (1) hold distributions on a Residual
Certificate, without interest, pending determination of amounts to be withheld,
(2) withhold other amounts, if any, required to be withheld pursuant to United
States federal income tax law from distributions that otherwise would be made to
such transferee on each Residual Certificate that it holds, and (3) pay to the
Internal Revenue Service all such amounts withheld.
Section 4.05. Reports of Certificate Principal Balances to the Clearing Agency.
If and for so long as any Certificate is held by the Clearing Agency, on
the second Business Day before each Distribution Date, the Trustee shall give
oral notice to the Clearing Agency (and shall promptly thereafter confirm in
writing) the following: (a) the amount of interest and principal to be
distributed on the Certificates of such Class on the upcoming Distribution Date,
as reported in the related Remittance Report, (b) the Record Date for such
distribution, (c) the Distribution Date for such distribution and (d) the
aggregate Certificate Principal Balance of each Class of Certificates reported
pursuant to clause (10) of Section 4.01 hereof in such month.
Section 4.06. Preparation of Regulatory Reports.
(a) Subject to the provisions of subsections (b) and (c) of this Section
4.06, the Servicer shall prepare or cause to be prepared, on behalf of the
Trust, such supplementary and periodic information, documents and reports (such
information, documents or reports are referred to hereinafter as "Periodic
Reports") as may be required pursuant to Section 12(g) or Section 15(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), by the rules
and regulations of the Commission thereunder or as a condition to approval of
any application for relief ("Application for Relief") hereinafter referred to
and, in connection therewith, shall prepare such applications and requests for
exemption and other relief from such provisions as it may deem appropriate. The
Servicer shall be deemed to certify as to each Periodic Report that it conforms
in all material respects to applicable reporting requirements imposed by the
Exchange Act or is otherwise in form and content appropriate for filing with the
Commission. The Servicer is hereby authorized to and shall execute all such
Periodic Reports or Applications for Relief on the Trustee's behalf and file the
same with the Commission and other required filing offices, if any, on behalf of
the Trust.
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(b) Within 30 days after the beginning of the first fiscal year of any
Trust during which its obligation to file Periodic Reports pursuant to the
Exchange Act shall have been suspended, the Servicer shall prepare, or cause to
be prepared, a notice on Commission Form 15 ("Form 15") and is hereby authorized
to and shall execute such Form 15 on the related Trustee's behalf; provided,
however, that the Servicer shall be under no obligation to prepare such notice
if the number of Certificateholders exceeds 300. The Servicer shall file any
notice on Form 15 with the Commission in accordance with the provisions of Rule
15d-6 under the Exchange Act.
(c) Notwithstanding any other provision of the Pooling and Servicing
Agreement, the Trustee has not assumed, and shall not by its performance
hereunder be deemed to have assumed, any of the duties or obligations of the
Company or any other Person with respect to (1) the registration of the
Certificates pursuant to the Securities Act, (2) the issuance or sale of the
Certificates, or (3) compliance with the provisions of the Securities Act, the
Exchange Act, or any applicable federal or state securities or other laws
including, without limitation, any requirement to update the registration
statement or prospectus relating to the Certificates in order to render the same
not materially misleading to investors.
(d) In connection with the Servicer's preparation of any Form 15 or of any
Periodic Report, the Trustee shall provide it with information which it may
reasonably request concerning the number and identity of the Holders appearing
on the Certificate Register maintained by the Certificate Registrar, but the
Trustee shall have no duty or obligation to provide information which does not
appear on the Certificate Register, including any information concerning the
ownership of Persons for whom a nominee is the Holder of record.
ARTICLE V
THE POOLING INTERESTS AND THE CERTIFICATES
Section 5.01. Pooling REMIC Interests.
If an election has been made to treat certain assets of the Trust as a
Pooling REMIC, the Pooling and Servicing Agreement will set forth the terms of
the Regular Interests and Residual Interest of the Pooling REMIC. Unless
otherwise specified in the Pooling and Servicing Agreement, (a) the Pooling
REMIC Regular Interests will be "regular interests" for purposes of the REMIC
Provisions but will not constitute securities or certificates of interest in the
Trust; and (b) the Trustee will be the owner of any such Regular Interests,
which may not be transferred to any person other than a successor trustee
appointed pursuant to Section 8.08 hereof unless the party desiring the transfer
obtains a Special Tax Opinion.
Section 5.02. The Certificates.
The Certificates shall be designated in the Pooling and Servicing
Agreement. The Certificates in the aggregate will represent the entire
beneficial ownership interest in the Trust Estate (or in the Issuing
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REMIC, if any). On the Closing Date, unless otherwise specified in the
related Pooling and Servicing Agreement, the aggregate Certificate Principal
Balance of the Certificates will not be less than the aggregate Unpaid Principal
Balance of the underlying Assets as of the Cut-off Date, after application of
principal payments due on or before such date, whether or not received. The
Certificates will be substantially in the forms annexed to the Pooling and
Servicing Agreement. Unless otherwise provided in the Pooling and Servicing
Agreement, the Certificates of each Class will be issuable in registered form.
Each Certificate will share ratably in all rights of the related Class.
Upon original issue, the Certificates shall be executed and delivered by
the Trustee on behalf of the Trust and the Trustee shall authenticate the
Certificates upon the order of the Company upon receipt by the Trustee of the
Servicer Custodial Certification required by Section 2.02 hereof. The
Certificates shall be executed by manual or facsimile signature on behalf of the
Trust by an authorized Officer of the Trustee. Certificates bearing the manual
or facsimile signatures of individuals who were at any time the proper Officers
of the Trustee shall bind the Trustee, notwithstanding that such individuals or
any of them have ceased to hold such offices prior to the authentication and
delivery of such Certificates or did not hold such offices at the date of such
Certificates. No Certificate shall represent entitlement to any benefit under
the Pooling and Servicing Agreement or be valid for any purpose, unless there
appears on such Certificate a certificate of authentication substantially in the
form provided in the Pooling and Servicing Agreement (in the forms of
Certificates attached thereto as Exhibits) executed by the Trustee by manual
signature, and such certificate of authentication shall be conclusive evidence,
and the only evidence, that such Certificate has been duly authenticated and
delivered hereunder. All Certificates shall be dated the date of their
authentication, except that those Certificates delivered on the Closing Date may
be dated the Accrual Date.
The Trust in issuing the Certificates may use "CUSIP" or "private
placement" numbers (if then generally in use), and, if so, the Trustee shall
indicate the "CUSIP" or "private placement" numbers of the Certificates in
notices of redemption and related materials as a convenience to
Certificateholders; provided that any such notice may state that no
representation is made as to the correctness of such numbers either as printed
on the Certificates or as contained in any notice of redemption and related
materials.
Section 5.03. Book-Entry Certificates.
(a) The Book-Entry Certificates will be represented initially by one or
more certificates registered in the name of CEDE & Co., as nominee of the
Clearing Agency. The Company, the Servicer and the Trustee and its officers,
directors, employees and agents may for all intents and purposes (including the
making of payments on the Book-Entry Certificates) deal with the Clearing Agency
as the authorized representative of the Beneficial Owners of the Book-Entry
Certificates for as long as those Certificates are registered in the name of the
Clearing Agency. The rights of Beneficial Owners of the Book-Entry Certificates
shall be limited to those established by law and agreements between such
Beneficial Owners and the Clearing Agency and Clearing Agency Participants. The
Beneficial Owners of the Book-Entry Certificates shall not be entitled to
certificates for the Book-Entry Certificates as to which they are the Beneficial
Owners, except as provided in subsection (c) below. Requests and directions
from, and votes
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of, the Clearing Agency, as Holder, shall not be deemed to be inconsistent
if they are made with respect to different Beneficial Owners. Without the
consent of the Company, the Servicer and the Trustee, a Book-Entry Certificate
may not be transferred by the Clearing Agency except to another Clearing Agency
that agrees to hold the Book-Entry Certificate for the account of the respective
Clearing Agency Participants and Beneficial Owners.
(b) Neither the Company, the Servicer nor the Trustee will have any
liability for any aspect of the records relating to or payment made on account
of Beneficial Owners of the BookEntry Certificates held by the Clearing Agency,
for monitoring or restricting any transfer of beneficial ownership in a
Book-Entry Certificate or for maintaining, supervising or reviewing any records
relating to such Beneficial Owners.
(c) The Book-Entry Certificates will be issued in fully-registered,
certificated form to Beneficial Owners of Book-Entry Certificates or their
nominees, rather than to the Clearing Agency or its nominee, only if (1) the
Company advises the Trustee in writing that the Clearing Agency is no longer
willing or able to discharge properly its responsibilities as depository with
respect to the Book-Entry Certificates and the Company is unable to locate a
qualified successor within 30 days or (2) the Company, at its option, elects to
terminate the book-entry system operating through the Clearing Agency. Upon the
occurrence of either such event, the Trustee shall notify the Clearing Agency,
which in turn will notify all Beneficial Owners of Book-Entry Certificates
through Clearing Agency Participants, of the availability of certificated
Certificates. Upon surrender by the Clearing Agency of the certificates
representing the Book-Entry Certificates and receipt of instructions for
re-registration, the Trustee will reissue the Book-Entry Certificates as
certificated Certificates to the Beneficial Owners identified in writing by the
Clearing Agency. Such certificated Certificates shall not constitute Book-Entry
Certificates. All reasonable costs associated with the preparation and delivery
of certificated Certificates shall be borne by the Company.
Section 5.04. Registration of Transfer and Exchange of Certificates.
The Trustee shall cause to be kept at its Corporate Trust Office a
Certificate Register in which, subject to such reasonable regulations as it may
prescribe, the Trustee shall provide for the registration of Certificates and of
transfers and exchanges of Certificates as herein provided. The Trustee will
initially serve as Certificate Registrar for the purpose of registering
Certificates and transfers and exchanges of Certificates as herein provided.
If a Person other than the Trustee is appointed by the Trustee as
Certificate Registrar, such Person will give the Trustee prompt written notice
of the location, and any change in the location, of the Certificate Register,
and the Trustee shall have the right to inspect the Certificate Register at all
reasonable times and to obtain copies thereof, and the Trustee shall have the
right to rely upon a certificate executed on behalf of the Certificate Registrar
by an Officer thereof as to the names and addresses of the Holders of the
Certificates and the principal amounts and numbers of such Certificates.
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Subject to Section 5.05 below, upon surrender for registration of transfer
of any Certificate at the Corporate Trust Office of the Trustee or at any other
office or agency of the Trustee maintained for such purpose, the Trustee shall
execute on behalf of the Trust and shall authenticate and deliver, in the name
of the designated transferee or transferees, one or more new Certificates of the
same Class of a like aggregate Percentage Interest.
At the option of the Certificateholders, each Certificate may be exchanged
for other Certificates of the same Class with the same and authorized
denominations and a like aggregate Percentage Interest, upon surrender of such
Certificate to be exchanged at any such office or agency. Whenever any
Certificates are so surrendered for exchange, the Trustee shall execute on
behalf of the Trust and shall authenticate and deliver the Certificates which
the Certificateholder making the exchange is entitled to receive. Every
Certificate presented or surrendered for transfer or exchange shall (if so
required by the Trustee) be duly endorsed by, or be accompanied by a written
instrument of transfer in the form satisfactory to the Trustee duly executed by,
the Holder thereof or his attorney duly authorized in writing.
No service charge to the Certificateholders shall be made for any transfer
or exchange of Certificates, but the Trustee may require payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer or exchange of Certificates.
All Certificates surrendered for transfer and exchange shall be destroyed
by the Trustee.
The Trustee will (or will cause the Certificate Registrar to) provide
notice to the Trustee of each transfer of a Certificate, and will provide the
Trustee and Servicer with an updated copy of the Certificate Register on January
1 and July 1 of each year (or at such other time as the Servicer may request).
Section 5.05. Restrictions on Transfer.
(a) Securities Law Compliance. No transfer of any Private Certificate shall
be made unless that transfer is made pursuant to an effective registration
statement under the Securities Act and effective registration or qualification
under applicable state securities laws, or is made in a transaction that does
not require such registration or qualification. Any Holder of a Private
Certificate shall, and, by acceptance of such Certificate, does agree to,
indemnify the Company, the Trustee and the Servicer against any liability that
may result if any transfer of such Certificates by such Holder is not exempt
from registration under the Securities Act and all applicable state securities
laws or is not made in accordance with such federal and state laws. Neither the
Company, the Trustee nor the Servicer is obligated to register or qualify any
Private Certificate under the Securities Act or any other securities law or to
take any action not otherwise required under these Standard Terms or the related
Pooling and Servicing Agreement to permit the transfer of such Certificates
without such registration or qualification. The Trustee shall not register any
transfer of a Private Certificate (other than a Residual Certificate) unless and
until the prospective transferee provides the Trustee with a Transferee
Agreement or, if the Certificate to be transferred is a Rule 144A Certificate, a
Rule 144A Agreement certifying to facts which, if true, would mean that the
proposed transferee is a
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Qualified Institutional Buyer, and unless and until the transfer otherwise
complies with the provisions of this Section 5.05. If a proposed transfer does
not involve a Rule 144A Certificate or the transferee's Rule 144A Agreement does
not certify to facts which, if true, would mean that the transferee is a
Qualified Institutional Buyer, (i) the Servicer and the Trustee shall require
that the transferor and transferee certify as to the factual basis for the
registration exemption(s) relied upon and (ii) if such transfer is made within
three years after the acquisition thereof by a non-Affiliate of the Company from
the Company or an Affiliate of the Company, the Servicer or the Trustee may also
require an Opinion of Counsel that such transfer may be made without
registration or qualification under the Securities Act and applicable state
securities laws, which Opinion of Counsel shall not be obtained at the expense
of the Company, the Trustee or the Servicer. Notwithstanding the foregoing, no
Rule 144A Agreement, Transferee Agreement or Opinion of Counsel shall be
required in connection with the initial transfer of the Private Certificates and
no Opinion of Counsel shall be required in connection with the transfer of the
Private Certificates by a broker or dealer, if such broker or dealer was the
initial transferee.
The Company shall provide to any transferee Holder of a Rule 144A
Certificate and any prospective transferee designated by such Holder information
regarding the related Certificates and the related Assets and such other
information as shall be necessary to satisfy the condition to eligibility set
forth in Rule 144A(d)(4) for transfer of any such Certificate without
registration thereof under the Securities Act pursuant to the registration
exemption provided by Rule 144A, upon the request for such information by such
Holder.
(b) ERISA Compliance.
(1) Book-Entry Certificates. No transfer of all or any portion of any
Class of Book-Entry Certificates that are ERISA Restricted Certificates
shall be made to a transferee that is a Plan Investor, and each Beneficial
Owner of such a Certificate shall be deemed to have represented, by virtue
of its acquisition of such a Certificate, that it is not a Plan Investor.
(2) Certificated Certificates. No transfer of all or any portion of any
Class of Certificates that (A) are not Book-Entry Certificates and (B) are
ERISA Restricted Certificates shall be made unless and until the
prospective transferee provides the Trustee and the Servicer with a
properly completed and executed Benefit Plan Affidavit, together with a
Benefit Plan Opinion if required in order to comply with such Affidavit.
Notwithstanding anything else to the contrary herein, any purported
transfer of such a Certificate to or on behalf of a Plan Investor without
delivery of a Benefit Plan Opinion shall be null and void.
(c) Residual Certificates. The Trustee shall not register any transfer of a
Residual Certificate (including any beneficial interest therein) unless it shall
have received the written consent of the Servicer. No Residual Certificate may
be transferred to a Disqualified Organization. The Servicer will not consent to
any proposed transfer or sale of a Residual Certificate (1) to any investor that
it knows is a Disqualified Organization or (2) if the transfer involves less
than an entire interest in a Residual Certificate, unless (A)
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the interest transferred is an undivided interest or (B) the transferor or
the transferee provides the Servicer with an Opinion of Counsel obtained at its
own expense to the effect that the transfer will not jeopardize the REMIC status
of any REMIC consisting of assets of the Trust. The Servicer's consent to any
transfer is further conditioned upon the Servicer's receipt from the proposed
transferee of (x) a Residual Transferee Agreement, (y) a Benefit Plan Affidavit,
and (z) either (A) if the transferee is a Non-U.S. Person, an affidavit of the
proposed transferee in substantially the form attached as Exhibit 8-A to Exhibit
8 hereto and a certificate of the transferor stating whether the Residual
Certificate has "tax avoidance potential" as defined in Treasury Regulations
Section 1.860G-3(a)(2), or (B) if the transferee is a U.S. Person, an affidavit
in substantially the form attached as Exhibit 8-B to Exhibit 8 hereto. In
addition, if a proposed transfer involves a Private Certificate, the transfer
shall be subject to the additional restrictions set forth in Section 5.05(a)
above. Notwithstanding the foregoing, no Opinion of Counsel shall be required in
connection with the initial transfer of the Residual Certificates or their
transfer by a broker or dealer, if such broker or dealer was the initial
transferee. Notwithstanding the fulfillment of the prerequisites described
above, the Servicer may withhold its consent to, or the Trustee may refuse to
recognize, a transfer of a Residual Certificate, but only to the extent
necessary to avoid a risk of disqualification as a REMIC of a REMIC consisting
of Trust assets or the imposition of a tax upon a REMIC. Any attempted transfer
in violation of the foregoing restrictions shall be null and void and shall not
be recognized by the Trustee.
If a tax or a reporting cost is borne by a REMIC consisting of Trust assets
as a result of the transfer of a Residual Certificate or any beneficial interest
therein in violation of the restrictions set forth in this Section, the
transferor shall pay such tax or cost and, if such tax or cost is not so paid,
the Trustee, upon notification from the Servicer, shall pay such tax or cost or
may pay such tax or reporting cost with amounts that otherwise would have been
paid to the transferee of the Residual Certificate (or beneficial interest
therein). In that event, neither the transferee nor the transferor shall have
any right to seek repayment of such amounts from the Company, the Trustee, the
REMIC, the Servicer, or the other Holders of any of the Certificates, and none
of such parties shall have any liability for payment of any such tax or
reporting cost. In the event that a Residual Certificate is transferred to a
Disqualified Organization, the Servicer shall make, or cause to be made,
available the information necessary for the computation of the excise tax
imposed under section 860E(e) of the Code.
Section 5.06. Accrual of Interest on the Certificates.
Certificates entitled to receive interest in accordance with the related
Pooling and Servicing Agreement shall accrue interest at the applicable
Pass-Through Rates on the basis of a 360-day year consisting of twelve 30-day
months and on the assumption that each Interest Accrual Period consists of 30
days.
Section 5.07. Mutilated, Destroyed, Lost or Stolen Certificates.
If (a) any mutilated Certificate is surrendered to the Trustee or the
Certificate Registrar, or the Trustee and the Certificate Registrar receive
evidence to their satisfaction of the destruction, loss or theft
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of any Certificate, and (b) there is delivered to the Trustee and the
Certificate Registrar such security or indemnity as may be required by them to
save each of them harmless (the unsecured agreement of an Institutional Holder
being sufficient for such purpose), then, in the absence of notice to the
Trustee or the Certificate Registrar that such Certificate has been acquired by
a bona fide purchaser, the Trustee shall execute and deliver, in exchange for or
in lieu of any such mutilated, destroyed, lost or stolen Certificate, a new
Certificate of the same Class, tenor and denomination or Percentage Interest.
Upon the issuance of any new Certificate under this Section, the Trustee may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other reasonable expenses
(including the fees and expenses of the Trustee and the Certificate Registrar)
connected therewith. Every new Certificate issued pursuant to this Section shall
constitute complete and indefeasible evidence of ownership in the Trust, as if
originally issued on the Closing Date, regardless of whether any destroyed, lost
or stolen Certificate in lieu of which such new Certificate was issued shall be
found at any time.
Section 5.08. Persons Deemed Owners.
Prior to due presentment for registration of transfer of any Certificate,
the Servicer, the Trustee and any agent of the Servicer or of the Trustee may
treat the Person in whose name any Certificate is registered on the Certificate
Register as the owner of such Certificate for the purpose of receiving
distributions on such Certificate and for all other purposes whatsoever (whether
or not such Certificate is overdue), and neither the Servicer, the Trustee nor
any agent of the Servicer or the Trustee shall be affected by notice to the
contrary.
Section 5.09. Appointment of Paying Agent.
The Trustee, at its own expense, may appoint a Paying Agent approved by the
Company for the purpose of making distributions to Certificateholders. The
Trustee shall cause such Paying Agent to execute and deliver to the Trustee an
instrument in which such Paying Agent shall agree with the Trustee that such
Paying Agent will hold all sums held by it for the payment to Certificateholders
in an Eligible Account in trust for the benefit of the Certificateholders
entitled thereto until such sums shall be paid to such Certificateholders. All
funds remitted by the Trustee to any such Paying Agent for the purpose of making
distributions shall be paid to Certificateholders on each Distribution Date and
any amounts not so paid shall be returned on such Distribution Date to the
Trustee.
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ARTICLE VI
THE COMPANY AND THE SERVICER
Section 6.01. Liability of the Company and the Servicer.
The Company and the Servicer each shall be liable in accordance with the
terms of the Pooling and Servicing Agreement only to the extent of the
obligations specifically imposed by the Pooling and Servicing Agreement and
undertaken hereunder by the Company or the Servicer, respectively.
Section 6.02. The Company's Representations and Warranties.
The Company represents and warrants to the Trustee and the related
Trust, as of the date of a Pooling and Servicing Agreement and as of the related
Closing Date, as follows:
(a) The Company has been duly organized and is validly existing as a
corporation under the laws of the State of Vermont, with full power and
authority to own its properties and conduct its business as now conducted by it
and to enter into and perform its obligations under the Pooling and Servicing
Agreement, and has duly qualified to do business under the laws of each
jurisdiction wherein it conducts any material business or in which the
performance of its duties under the Pooling and Servicing Agreement would
require such qualification.
(b) The Company has all requisite power and authority to own its
properties and to conduct any and all business required or contemplated by the
Pooling and Servicing Agreement to be conducted by the Company and to perform
the covenants and obligations to be performed by it hereunder; the execution and
delivery by the Company of the Pooling and Servicing Agreement are within the
power of the Company and have been duly authorized by all necessary action on
the part of the Company; and neither the execution and delivery of the Pooling
and Servicing Agreement by the Company, nor the consummation by the Company of
the transactions herein contemplated, nor compliance with the provisions hereof
by the Company, will (1) conflict with or result in a breach of, or will
constitute a default under, any of the provisions of the articles of
incorporation or bylaws of the Company or any law, governmental rule or
regulation, or any judgment, decree or order binding on the Company or its
properties, or any of the provisions of any indenture, mortgage, deed of trust,
contract or other instrument to which the Company is a party or by which it is
bound or (2) result in the creation or imposition of any lien, charge or
encumbrance upon any of its property pursuant to the terms of any such
indenture, mortgage, deed of trust, contract or other instrument.
(c) The Pooling and Servicing Agreement and all other documents and
instruments required or contemplated hereby to be executed or delivered by the
Company under the Pooling and Servicing Agreement have been duly authorized,
executed and delivered by the Company and, assuming due authorization, execution
and delivery thereof by all other parties thereto, constitute legal, valid and
binding
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agreements enforceable against the Company in accordance with their terms,
subject, as to enforcement of remedies, to applicable bankruptcy,
reorganization, insolvency or other similar laws affecting creditors' rights
generally from time to time in effect and to general principles of equity.
(d) No consent, approval, order or authorization of, or registration,
qualification or declaration with, any state, federal or other governmental
authority by the Company is required in connection with the authorization,
execution or delivery of the Pooling and Servicing Agreement or the performance
by the Company of the covenants and obligations to be performed by it hereunder.
(e) As of the Closing Date, no Proceedings are pending or, to the best
of the Company's knowledge, threatened against the Company that would prohibit
its entering into the Pooling and Servicing Agreement or performing its
obligations under the Pooling and Servicing Agreement, including assisting in
the issuance of the Certificates.
(f) The Company has obtained or made all necessary consents, approvals,
waivers and notifications of stockholders, creditors, lessors and other
nongovernmental persons, in each case, in connection with the execution and
delivery of the Pooling and Servicing Agreement, and the consummation of all the
transactions herein contemplated.
(g) The Company does not believe, nor does it have any reason or cause
to believe, that it cannot perform its obligations under the Pooling and
Servicing Agreement.
Upon discovery by any of the Company, the Servicer or the Trustee of a
breach of any of the foregoing representations, warranties and covenants that
materially and adversely affects the interest of the Certificateholders in any
underlying Asset, the party discovering such breach shall give prompt written
notice thereof (but in no event later than two Business Days following such
discovery) to the other parties hereto.
Section 6.03. Representations, Warranties and Covenants of the Servicer.
The Servicer hereby represents, warrants and covenants to the Trustee
and the related Trust, as of the date hereof and as of the Closing Date, as
follows:
(a) The Servicer has been duly incorporated and is validly existing as a
corporation under the laws of the Commonwealth of Massachusetts (or the state of
its incorporation, if the Servicer is not BCI) and is in good standing under
such laws, with full power and authority to own its properties and conduct its
business as now conducted by it and to enter into and perform its obligations
under the Pooling and Servicing Agreement, and has duly qualified to do business
as a foreign corporation and is in good standing under the laws of each
jurisdiction wherein it conducts any material business or in which the
performance of its duties under the Pooling and Servicing Agreement would
require such qualification, except where the failure so to qualify would not
have a material adverse effect on the performance of its obligations under
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the Pooling and Servicing Agreement. The Servicer holds all material licenses,
certificates, franchises, and permits from all governmental authorities
necessary for the conduct of its business and will have received no notice of
proceedings relating to the revocation of any such license, certificate or
permit, that, singly or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, would affect materially and adversely the conduct
of the business, results of operations, net worth or condition (financial or
otherwise) of the Servicer.
(b) The Servicer has all requisite corporate power and authority to own
its properties and to conduct any and all business required or contemplated by
the Pooling and Servicing Agreement to be conducted by the Servicer and to
perform the covenants and obligations to be performed by it hereunder; the
execution and delivery by the Servicer of the Pooling and Servicing Agreement
are within the corporate power of the Servicer and have been duly authorized by
all necessary corporate action on the part of the Servicer; and neither the
execution and delivery of the Pooling and Servicing Agreement by the Servicer,
nor the consummation by the Servicer of the transactions herein contemplated,
nor compliance with the provisions hereof by the Servicer, will (1) conflict
with or result in a breach of, or will constitute a default under, any of the
provisions of the articles of incorporation or by-laws of the Servicer or any
law, governmental rule or regulation, or any judgment, decree or order binding
on the Servicer or its properties, or any of the provisions of any indenture,
mortgage, deed of trust, contract or other instrument to which the Servicer is a
party or by which it is bound or (2) result in the creation or imposition of any
lien, charge or encumbrance upon any of its property pursuant to the terms of
any such indenture, mortgage, deed of trust, contract or other instrument.
(c) The Pooling and Servicing Agreement and all other documents and
instruments required or contemplated hereby to be executed or delivered by the
Servicer under the Pooling and Servicing Agreement have been duly authorized,
executed and delivered by the Servicer and, assuming due authorization,
execution and delivery thereof by all other parties thereto, constitute legal,
valid and binding agreements enforceable against the Servicer in accordance with
their terms, subject, as to enforcement of remedies, to applicable bankruptcy,
reorganization, insolvency or other similar laws affecting creditors' rights
generally from time to time in effect and to general principles of equity.
(d) No consent, approval, order or authorization of, or registration,
qualification or declaration with, any federal, state or other governmental
authority by the Servicer is required in connection with the authorization,
execution or delivery of the Pooling and Servicing Agreement or the performance
by the Servicer of the covenants and obligations to be performed by it
hereunder.
(e) No Proceedings are pending or, to the best of the Servicer's
knowledge, threatened against the Servicer that would prohibit its entering into
the Pooling and Servicing Agreement or performing its obligations under the
Pooling and Servicing Agreement, including assisting in the issuance of the
Certificates.
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(f) The Servicer maintains an errors and omissions policy and fidelity
bond that covers the Servicer's performance under the Pooling and Servicing
Agreement and such policy and bond are in full force and effect.
(g) The Servicer has obtained or made all necessary consents, approvals,
waivers and notifications of stockholders, creditors, lessors and other
nongovernmental persons, in each case, in connection with the execution and
delivery of the Pooling and Servicing Agreement, and the consummation of all the
transactions herein contemplated.
(h) The Servicer does not believe, nor does it have any reason or cause
to believe, that it cannot perform its obligations under the Pooling and
Servicing Agreement.
Upon discovery by any of the Company, the Servicer or a Responsible
Officer of the Trustee of a breach of any of the foregoing representations,
warranties and covenants that materially and adversely affects the interest of
the Certificateholders in any underlying Asset, the party discovering such
breach shall give prompt written notice thereof (but in no event later than two
Business Days following such discovery) to the other parties hereto.
Section 6.04. Corporate Existence.
Subject to the provisions of the following paragraph, the Company and
the Servicer each will keep in full effect its existence, rights and franchises
under the laws of the jurisdiction in which it is incorporated and will obtain
and preserve its qualification to do business as a foreign entity in each
jurisdiction in which such qualification is or shall be necessary to protect the
validity and enforceability of the Pooling and Servicing Agreement, any
Certificates or any of the Assets included in the Trust Estate, and to perform
its duties under the Pooling and Servicing Agreement.
Any Person (a) into which the Company or the Servicer may be merged or
consolidated, (b) that may result from any merger, conversion or consolidation
to which the Company or the Servicer shall be a party, (c) that may succeed to
the business of the Company or the Servicer, or (d) to which the Company or the
Servicer may transfer all of its assets, shall be the successor to the Company
or the Servicer hereunder, respectively, without the execution or filing of any
document or any further act by any of the parties to the Pooling and Servicing
Agreement, anything herein to the contrary notwithstanding; provided, that any
such successor to the Servicer must agree in writing to be bound by each of the
Servicer's obligations hereunder and that each applicable Rating Agency must
deliver to the Trustee a letter to the effect that such successorship shall not
result in a downgrading of the rating initially assigned by the Rating Agency to
any Class of Certificates as to which the Company has requested a rating from
such Rating Agency.
Section 6.05. Limitation on Liability of the Company, the Servicer and Others.
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Neither the Company, the Servicer nor any of the directors, officers,
employees or agents of any of the Company or the Servicer shall be under any
liability to the Trust or the Certificateholders and all such Persons shall be
held harmless for any action taken or for refraining from the taking of any
action in good faith pursuant to the Pooling and Servicing Agreement, or for
errors in judgment; provided, however, that this provision shall not protect any
such Person against any breach of warranties or representations made herein or
against any liability which would otherwise be imposed by reason of willful
misfeasance, bad faith or gross negligence in the performance of duties or by
reason of reckless disregard of obligations and duties hereunder. The Company,
the Servicer and any of the directors, officers, employees or agents of either
the Company or the Servicer may rely in good faith on any document of any kind
which, prima facie, is properly executed and submitted by any Person respecting
any matters arising hereunder. Neither the Company nor the Servicer shall be
under any obligation to appear in, prosecute or defend any legal action unless
such action is related to its respective duties under the Pooling and Servicing
Agreement and such action in its opinion does not involve it in any expense or
liability, except as provided in Section 10.01(b) hereof; provided, however,
that the Company or the Servicer may each in its discretion undertake any such
action that it deems necessary or desirable with respect to the Pooling and
Servicing Agreement and the rights and duties of the parties thereto and the
interests of the Certificateholders thereunder if the Certificateholders offer
to the Company or the Servicer, as the case may be, reasonable security or
indemnity against the costs, expenses and liabilities that may be incurred
therein or thereby.
Section 6.06. Servicer Resignation.
The Servicer shall not resign from the obligations and duties imposed on
it under the Pooling and Servicing Agreement, except (a) upon appointment of a
successor servicer and receipt by the Trustee of a letter from each applicable
Rating Agency that such a resignation and appointment will not, in and of
itself, result in a downgrading of any rated Certificates or (b) upon
determination by the Servicer's Board of Directors that the performance of its
duties under the Pooling and Servicing Agreement is no longer permissible under
applicable law. Any such determination permitting the resignation of the
Servicer shall be evidenced by a resolution of its Board of Directors and an
Opinion of Counsel to such effect delivered to the Trustee. No such resignation
shall become effective until the Trustee or a successor servicer shall have
assumed the responsibilities and obligations of the Servicer in accordance with
Section 7.02 hereof.
Section 6.07. Assignment or Delegation of Duties by the Servicer and the
Company.
(a) The Servicer may at any time without notice or consent delegate
certain computational, data processing, collection and foreclosure duties
hereunder to any entity. No such delegation shall relieve the Servicer in any
respect of its responsibility with respect to such duties.
(b) Neither the Servicer nor the Company may assign the Pooling and
Servicing Agreement or any of its rights, power, duties or obligations hereunder
(except as provided in Section 6.07(a) above), provided that the Servicer and
the Company may assign the Pooling and Servicing Agreement in connection with a
consolidation, merger, conveyance, transfer or lease made in compliance with
Section 6.04 hereof.
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(c) Except as provided in Sections 6.04 and 6.06 hereof, the duties and
obligations of the Servicer and the Company under the Pooling and Servicing
Agreement shall continue until the Pooling and Servicing Agreement shall have
been terminated as provided in Section 9.01 hereof, and shall survive the
exercise by the Trustee of any right or remedy under the Pooling and Servicing
Agreement, or the enforcement by the Trustee of any provisions of the Pooling
and Servicing Agreement.
Section 6.08. The Company and Servicer May Own Certificates.
The Company, the Servicer and any Affiliate of the foregoing may in its
individual or any other capacity become the owner or pledgee of Certificates
with the same rights as it would have if it were not the Company, the Servicer
or an Affiliate of the Company or the Servicer.
Section 6.09. Protection of Trust Estate.
Except as limited by Section 2.02(c)(2), Section 2.02(c)(3) or Section
2.03(a) above, the Company will execute and deliver from time to time all
amendments to the Pooling and Servicing Agreement and all financing statements,
continuation statements, instruments of further assurance and other instruments
necessary or advisable in order to, and will take such other action as the
Trustee deems necessary or advisable in order to:
(a) grant to the Trustee more effectively all or any portion of the
Trust Estate;
(b) preserve and defend the Trust's title to the Trust Estate and the
rights therein of the Trustee and the Holders of Certificates against the claims
of all persons and parties;
(c) maintain or preserve the lien (and the priority thereof) created by
the Pooling and Servicing Agreement or to carry out more effectively the
purposes hereof (including the filing of continuation statements under the UCC
as necessary);
(d) perfect, publish notice of, or protect the validity of any grant
made or to be made pursuant to the Pooling and Servicing Agreement; or
(e) enforce any of the related Asset Documents.
The Company and the Servicer each hereby designates the Trustee its agent and
attorney-in-fact to execute any financing statement, continuation statement or
other instrument required pursuant to this Section 6.09; provided, that the
Trustee shall have no duty to determine whether the filing of any financing
statement shall be necessary or to file such statements except upon written
request of the Company or the Servicer. After execution of any continuation
statement or other instrument pursuant to this Section, the Trustee shall
deliver such instrument to the Servicer for filing. Promptly after filing any
such instrument or causing any such
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instrument to be filed, the Servicer shall deliver an Officer's Certificate,
signed by an Officer of the Servicer, to the Trustee stating that such
continuation statement or other instrument has been filed.
The Company shall pay or cause to be paid, on behalf of the Trust, any
taxes levied on the account of the ownership by the Trust of the related Assets.
Section 6.10. Performance of Obligations.
The Servicer shall not take any action, and will use its best efforts
not to permit any action to be taken by others, that would release any Person
from any of such Person's covenants or obligations under any of the related
Asset Documents or under any instrument included in the Trust Estate, or that
would result in the amendment, hypothecation, subordination, termination or
discharge of, or impair the validity or effectiveness of, any of the related
Asset Documents or any such instrument, except as expressly provided in the
Pooling and Servicing Agreement or such Asset Documents or other instrument or
unless such action will not adversely affect the interests of the Holders of the
Certificates.
ARTICLE VII
EVENT OF DEFAULT; TERMINATION OF SERVICING ARRANGEMENTS
Section 7.01. Events of Default.
Any of the following acts or occurrences shall constitute an Event of
Default by the Servicer:
(a) any failure by the Servicer to remit funds in the Certificate
Account to the Distribution Account or to make a required P&I Advance that is
not deemed by the Servicer to be a Non-Recoverable Advance, in either case as
required by Section 3.07(b) hereof, and the continuance of such failure
unremedied for a period of five days after the date upon which such deposit,
payment or remittance was due;
(b) any failure on the part of the Servicer duly to observe or perform
in any material respect any of the covenants or agreements on the part of the
Servicer (other than covenants referred to in clause (a) above) contained in the
Certificates or in the Pooling and Servicing Agreement, which failure continues
unremedied for a period of 60 days after the date on which written notice of
such failure, requiring the same to be remedied, shall have been given to the
Servicer by the Trustee, or to the Servicer and the Trustee by the Holders of
Certificates of a Series entitled to at least 25% of the related Voting Rights;
(c) the issuance of a decree or order of a court or agency or
supervisory authority having jurisdiction in the premises in an involuntary case
under any present or future federal or state bankruptcy, insolvency or similar
law or appointing a conservator or receiver or liquidator in any insolvency,
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readjustment of debt, marshalling of assets and liabilities or similar
proceedings, or for the winding-up or liquidation of its affairs, against the
Servicer, and if the Servicer is contesting such decree or order in force, the
remaining of such decree or order in force undischarged or unstayed for a period
of 60 consecutive days;
(d) the Servicer's consent to the appointment of a conservator or
receiver or liquidator in any insolvency, readjustment of debt, marshalling of
assets and liabilities, or similar proceedings of, or relating to, the Servicer
or of, or relating to, all or substantially all of the property of the Servicer;
or
(e) the Servicer's (1) admission in writing of its inability to pay its
debts generally as they become due, (2) filing of a petition to take advantage
of, or commence a voluntary case under, any present or future federal or state
bankruptcy, insolvency or reorganization statute, (3) making of an assignment
for the benefit of its creditors, or (4) voluntarily suspending payment of its
obligations.
If an Event of Default concerning the Servicer shall occur hereunder,
then, and in each and every such case, so long as such Event of Default shall
not have been remedied or waived, the Trustee may, and at the direction of the
Holders of Certificates evidencing greater than 50% of the Voting Rights, shall,
by notice then given in writing to the Servicer, terminate all of the rights and
obligations of the Servicer as servicer. On and after the receipt by the
Servicer of any such written notice, all authority and power of the Servicer
hereunder, whether with respect to the Certificates (except its rights as a
Holder thereof) or the Contracts or otherwise, shall pass to and be vested in
the Trustee or successor servicer pursuant to and under this Section 7.01
(provided, however, that the Servicer shall continue to be entitled to receive
all amounts accrued and owing to it as Servicer under the Pooling and Servicing
Agreement on or prior to the occurrence of a Event of Default specified in
Section 7.01(a) above or, in the case of any other Event of Default, on or prior
to the date of such termination); and, without limitation, the Trustee hereby is
authorized and empowered on behalf of the Servicer, as attorney-in-fact or
otherwise, to execute and deliver any and all documents and other instruments,
and to do or accomplish all other acts or things necessary or appropriate to
effect the purposes of such notice of termination, whether to complete the
transfer and endorsement or assignment of the Contracts and related documents or
otherwise.
The Servicer shall cooperate with the Trustee in effecting the
termination of the responsibilities and rights of the Servicer hereunder,
including, without limitation, (1) transferring to the Trustee for
administration by it of all cash amounts that shall be held at the time by the
Servicer for deposit, shall have been deposited by the Servicer into the
Servicing Account, the Certificate Account or the Distribution Account, or shall
be received thereafter with respect to a Contract, and (2) the prompt provision
to the Trustee (in no event later than ten Business Days subsequent to its
receipt of such notice of termination) of all documents and records, electronic
and otherwise, reasonably requested by the Trustee or its designee in order for
the Trustee or its designee to assume and carry out the duties and obligations
that otherwise were to have been performed and carried out by the Servicer under
the Pooling and Servicing Agreement but for the termination of the Servicer.
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Upon any termination of the Servicer pursuant to this Section, the
Trustee or its designee shall pay over to the Servicer that portion of any
future proceeds of the related Assets that, if it were acting hereunder at such
future time, it would be permitted to retain or withdraw from the Certificate
Account or Distribution Account in consideration of, or in reimbursement for,
previous services performed, or advances made, by it or for other matters for
which it is entitled to reimbursement pursuant hereto or to the terms of the
Pooling and Servicing Agreement. Prior to appointment of any successor Servicer,
the Trustee must notify the Rating Agency in writing of the identity of such
prospective successor.
Section 7.02. Trustee to Act; Appointment of Successor.
On and after the time the Servicer receives a notice of termination
pursuant to Section 7.01 hereof or resigns pursuant to Section 6.06 hereof, the
Trustee shall be the successor in all respects to the Servicer in its capacity
as servicer under the Pooling and Servicing Agreement and in connection with the
transactions provided for herein and shall be subject to all the
responsibilities, duties and liabilities placed on the Servicer by the terms and
provisions hereof. As compensation therefor, the Trustee, except as provided in
Section 7.01 hereof, shall be entitled to such compensation (whether payable out
of the Distribution Account or otherwise) as the Servicer would have been
entitled to receive hereunder if no such notice of termination had been given,
as well as all protections and indemnification afforded the Servicer pursuant to
Section 6.05 above. Notwithstanding the above, the Trustee may, if it shall be
unwilling so to act, or shall, if it is legally unable so to act, appoint, or
petition a court of competent jurisdiction to appoint, any established housing
finance institution having a net worth of not less than $40,000,000 and the
regular business of which shall have included, for at least one year prior to
such appointment, the servicing of a portfolio of manufactured housing
receivables of not less than $100,000,000, as the successor to the Servicer
hereunder in the assumption of all or any part of the responsibilities, duties
or liabilities of the Servicer hereunder. No appointment of a successor to the
Servicer shall be effective until the assumption by the successor of all future
responsibilities, duties and liabilities of the Servicer under the Pooling and
Servicing Agreement. Pending appointment of a successor to the Servicer
hereunder, unless the Trustee is prohibited by law from so acting, the Trustee
or an Affiliate of the Trustee shall act as Servicer hereunder as provided
above. Notwithstanding any of the foregoing, the successor Servicer shall not be
required to purchase any Assets from the Trust pursuant to these Standard Terms
except (i) under Section 2.06(a)(2) hereof to the extent the obligation to
repurchase arose out of a breach of a representation, warranty or covenant by
the successor Servicer and (ii) under Section 2.06(b) hereof to the extent the
Servicer's obligation to effect remedial action as described in such Section
arose after the successor Servicer began serving as Servicer. It is understood
that any predecessor Servicer shall remain liable for any breaches of
representations, warranties and covenants that it committed while it was the
Servicer, and shall remain responsible for effecting remedial actions described
in Section 2.06(b) hereof (and for repurchasing Assets pursuant to such Section
2.06(b)) to the extent the obligation to undertake such remedial action arose
while such predecessor Servicer was the Servicer hereunder.
In connection with the appointment of a successor Servicer, the Trustee
may make such arrangements for the compensation of such successor servicer out
of payments on the related Assets as
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it and such successor shall agree; provided, however, that no such compensation
shall be in excess of that permitted the Servicer under the terms of the Pooling
and Servicing Agreement. The Trustee and such successor servicer shall take such
action, consistent with the Pooling and Servicing Agreement, as shall be
necessary to effectuate any such succession.
Any successor to the Servicer shall maintain in force during the term of
its service as Servicer the policy or policies that the Servicer is required to
maintain pursuant to Section 3.16(c) hereof.
Upon any Event of Default described hereunder, the Trustee, in addition
to the rights specified in this Section, shall have the right, in its own name
and as "Trustee," to take all actions now or hereafter existing at law, in
equity or by statute to enforce its rights and remedies and to protect the
interests of the Certificateholders, and enforce the rights and remedies of the
Certificateholders (including the institution and prosecution of all judicial,
administrative and other proceedings and the filings of proofs of claim and debt
in connection therewith). No remedy provided for by the Pooling and Servicing
Agreement shall be exclusive of any other remedy, and each and every remedy
shall be cumulative and in addition to any other remedy and no delay or omission
to exercise any right or remedy shall impair any such right or remedy or shall
be deemed to be a waiver of any Event of Default. Amounts payable to the Trustee
to reimburse it for any expenses it incurs in connection with any actions taken
by it pursuant to this paragraph are intended to constitute administrative
expenses. Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or vote for or accept or adopt on behalf of any
Certificateholder any plan of reorganization, arrangement, adjustment or
composition affecting the Certificates or the rights of any Holder thereof, or
to authorize the Trustee to vote in respect of the claim of any
Certificateholder in any such Proceeding.
For the purposes of this Section 7.02 and Section 7.03 hereof, the
Trustee shall not be deemed to have knowledge of a Default or an Event of
Default hereunder unless an Officer of the Trustee having direct responsibility
for the administration of the Pooling and Servicing Agreement has actual
knowledge thereof or unless written notice of any Event of Default is received
by the Trustee and such notice references the Certificates or the Trust.
Section 7.03. Notifications to Servicer and to Certificateholders.
(a) Upon obtaining actual knowledge of any Default, the Trustee shall
promptly notify the Servicer and each Certificateholder (at their respective
addresses appearing in the Certificate Register) thereof.
(b) Upon any termination of, or appointment of a successor to, the
Servicer pursuant to Section 7.02 hereof, the Trustee shall give prompt written
notice thereof to the Certificateholders at their respective addresses appearing
in the Certificate Register.
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(c) As soon as practicable after the Trustee's obtaining knowledge of
the occurrence of an Event of Default, the Trustee shall transmit by certified
mail to all Holders of the Certificates (at their respective addresses appearing
in the Certificate Register) notice of such Event of Default or occurrence known
to the Trustee, unless such Event of Default shall have been cured or waived.
ARTICLE VIII
CONCERNING THE TRUSTEE
Section 8.01. Duties of Trustee.
If an Event of Default has occurred and is continuing, the Trustee shall
exercise such of the rights and powers vested in it by the Pooling and Servicing
Agreement, and shall use the same degree of care and skill in their exercise, as
a prudent man would exercise or use under the circumstances in the conduct of
his own affairs. Prior to the occurrence of an Event of Default or after all
Events of Default which may have occurred have been cured or waived, the Trustee
shall exercise such of the rights and powers vested in it by the Pooling and
Servicing Agreement, and shall use the same degree of care and skill in their
exercise, as a corporate trustee would exercise or use under the circumstances
in the administration of a corporate trust agreement.
The Trustee, upon receipt of all resolutions, certificates, statements,
opinions, reports, documents, orders or other instruments furnished to the
Trustee that are specifically required to be furnished pursuant to any provision
of the Pooling and Servicing Agreement, shall examine them to determine whether
they conform to the requirements of the Pooling and Servicing Agreement;
provided, however, that the Trustee shall be under no duty to recalculate,
verify or recompute the information provided to it hereunder by the Company or
the Servicer. If any such instrument is found not to conform to the requirements
of the Pooling and Servicing Agreement in a material manner, the Trustee shall
take action as it deems appropriate to have the instrument corrected, and if the
instrument is not corrected to the Trustee's satisfaction, the Trustee will
provide notice thereof to the related Certificateholders.
No provision of the Pooling and Servicing Agreement shall be construed
to relieve the Trustee from liability for its own negligent action, its own
negligent failure to act or its own willful misconduct; provided, however, that:
(a) prior to the occurrence of an Event of Default with respect to the
Servicer of which the Trustee has notice or knowledge, and after the curing or
waiver of any such Event of Default, the duties and obligations of the Trustee
shall be determined solely by the express provisions of the Pooling and
Servicing Agreement, the Trustee shall not be liable except for the performance
of such duties and obligations as are specifically set forth in the Pooling and
Servicing Agreement, no implied covenants or obligations shall be read into the
Pooling and Servicing Agreement against the Trustee and, in the absence
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of bad faith on the part of the Trustee, the Trustee may conclusively rely, as
to the truth of the statements and the correctness of the opinions expressed
therein, upon any certificates or opinions furnished to the Trustee that conform
to the requirements of the Pooling and Servicing Agreement;
(b) the Trustee shall not be liable in its individual capacity for any
error of judgment made in good faith by an Officer of the Trustee, unless it
shall be proved that the Trustee was negligent in ascertaining the pertinent
facts;
(c) the Trustee shall not be liable with respect to any action taken,
suffered or omitted to be taken by it in good faith in accordance with the
direction of the Holders of Certificates of a Series entitled to at least 25% of
the related Voting Rights relating to the time, method and place of conducting
any proceeding for any remedy available to the Trustee, or exercising any trust
or power conferred upon the Trustee, under the Pooling and Servicing Agreement;
(d) Any determination of negligence or bad faith of the Trustee shall be
made only upon a finding that there is clear and convincing evidence (and not
upon the mere preponderance of evidence) thereof in a proceeding before a court
of competent jurisdiction in which the Trustee has had an opportunity to
defend; and
(e) in no event shall the Trustee be held liable for the actions or
omissions of the Servicer or the Company (excepting the Trustee's own actions as
Servicer), and in connection with any action or claim or recovery sought against
the Trustee based upon facts involving the acts or omissions of the Servicer or
the Company, or involving any allegation or claim of liability or recovery
against the Trustee by the Servicer or by the Company, the Trustee shall not be
held to a greater standard of care than the Servicer or the Company would be
held in such situation.
Except as specifically required herein, the Trustee shall not be
required to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder, or in the exercise
of any of its rights or powers, if it shall have reasonable grounds for
believing that repayment of such funds or indemnity reasonably satisfactory to
it against such risk or liability is not reasonably assured to it.
Section 8.02. Certain Matters Affecting the Trustee.
(a) Except as otherwise provided in Section 8.01 hereof:
(1) In the absence of bad faith, the Trustee may rely, and shall
be protected in acting or refraining from acting in reliance upon, any
resolution, certificate of auditors or any other certificate, statement,
instrument, opinion, report, notice, request, consent, order, appraisal,
bond or other paper or document believed by it to be genuine and to have
been signed or presented by the proper party or parties. Further, the
Trustee may accept a copy of the vote of the Board of
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Directors of any party certified by its clerk or assistant clerk or
secretary or assistant secretary as conclusive evidence of the authority
of any person to act in accordance with such vote, and such vote may be
considered as in full force and effect until receipt by the Trustee of
written notice to the contrary.
(2) The Trustee may rely, in the absence of bad faith on its
part, upon a certificate of an Officer of the appropriate Person
whenever in the administration of the Pooling and Servicing Agreement
the Trustee shall deem it desirable that a matter be proved or
established (unless other evidence be prescribed herein specifically)
prior to taking, suffering or omitting any action hereunder.
(3) The Trustee may consult with counsel and the written advice
of such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken or suffered
or omitted by it hereunder in good faith and in accordance with such
written advice or Opinion of Counsel.
(4) The Trustee shall be under no obligation to exercise any of
the trusts or powers vested in it by the Pooling and Servicing Agreement
or to institute, conduct or defend any litigation hereunder or in
relation hereto at the request, order or direction of any of the
Certificateholders, pursuant to the provisions of the Pooling and
Servicing Agreement, unless such Certificateholders shall have offered
to the Trustee reasonable security or indemnity against the costs,
expenses and liabilities that may be incurred therein or thereby.
(5) The Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval,
bond or other paper or document, unless requested in writing to do so by
the Holders of Certificates of a Series entitled to at least 25% of the
related Voting Rights; provided, however, that if the payment within a
reasonable time to the Trustee of the costs, expenses or liabilities
likely to be incurred by it in the making of such investigation, in the
opinion of the Trustee, is not assured to the Trustee by the security
afforded to it by the terms of the Pooling and Servicing Agreement, the
Trustee may require indemnity against such expense or liability as a
condition to taking any such action. The expense of every such
examination shall be paid by the Servicer or, if paid by the Trustee,
shall be repaid by the Servicer upon demand.
(6) The Trustee may execute any of the trusts or powers under the
Pooling and Servicing Agreement or perform any duties hereunder either
directly or by or through agents, attorneys, custodians or nominees and
the Trustee shall not be responsible for any misconduct or negligence on
the part of or for supervision of, any agent, attorney, custodian or
nominee appointed with due care and in good faith by it under the
Pooling and Servicing Agreement.
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(7) Whenever the Trustee is authorized herein to require acts or
documents in addition to those required to be provided it in respect of
any matter, it shall be under no obligation to make any determination as
to whether such additional acts or documents should be required unless
obligated to do so under Section 8.01 hereof.
(8) The Trustee shall not be deemed to have notice or knowledge
of any matter, including, without limitation, any Event of Default,
unless one of its Officers having direct responsibility for the
administration of the Pooling and Servicing Agreement has actual
knowledge or record thereof or unless written notice thereof is received
by the Trustee at the Corporate Trust Office and such notice references
the Certificates generally, the Company, the Trust or the Pooling and
Servicing Agreement.
(9) The Trustee shall not be personally liable for any action
taken, suffered or omitted by it in good faith and believed by it to be
authorized or within the discretion or rights or powers conferred upon
it by the Pooling and Servicing Agreement.
(10) The permissive right or authority of the Trustee to take any
action enumerated in the Pooling and Servicing Agreement shall not be
construed as a duty or obligation.
(11) In the event that the Trustee is also acting as Custodian,
Paying Agent or Transfer Agent or Certificate Registrar hereunder, the
rights and protections afforded to the Trustee pursuant to this Article
VIII shall also be afforded to the Custodian, Paying Agent, Transfer
Agent and Certificate Registrar.
(12) In no event shall the Trustee be liable for the selection of
Eligible Investments or for investment losses incurred thereon. The
Trustee shall have no liability in respect of losses incurred as a
result of the liquidation of any Eligible Investment prior to its stated
maturity or the failure of the Servicer to provide timely written
investment direction. The Trustee shall have no obligation to invest or
reinvest any amounts held hereunder in the absence of written investment
direction.
(13) The Trustee shall have no duty to monitor the performance of
the Company or the Servicer, nor shall it have any liability in
connection with the malfeasance or nonfeasance by the Company or the
Servicer. The Trustee shall have no liability in connection with
compliance by the Company or the Servicer with statutory or regulatory
requirements related to the Contracts or the Mortgage Loans. The Trustee
shall not make or be deemed to have made any representations or
warranties with respect to the Assets or the validity or sufficiency of
any assignment of the Assets to the Trust or the Trustee.
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Certificateholders shall have rights to institute suits, actions or
proceedings in equity or at law upon or under or with respect to the Pooling and
Servicing Agreement only under the circumstances described in the third
paragraph of Section 11.03 hereof.
(b) All rights of action under the Pooling and Servicing Agreement or
under any of the Certificates enforceable by the Trustee may be enforced by it
without the possession of any of the Certificates, or the production thereof at
the trial or other Proceeding relating thereto, and any such suit, action or
Proceeding instituted by the Trustee shall be brought in its name for the
benefit of all the Holders of the Certificates, subject to the provisions of the
Pooling and Servicing Agreement.
Section 8.03. Trustee Not Liable for Certificates or Assets.
The recitals contained in the Pooling and Servicing Agreement and in the
Certificates (other than the signature and countersignature of the Trustee on
the Certificates) shall be taken as the statements of the Company or the
Servicer and the Trustee assumes no responsibility for their correctness. The
Trustee makes no representations or warranties as to the validity or sufficiency
of the Pooling and Servicing Agreement or of the Certificates (other than the
signature and countersignature of the Trustee on the Certificates) or of any
underlying Asset or related document. The Trustee shall not be accountable for
the use or application by the Company of any of the Certificates or of the
proceeds of such Certificates, or for the use or application of any funds paid
to the Servicer in respect of the underlying Assets or deposited in or withdrawn
from the Servicing Account, the Certificate Account or the Distribution Account
other than any funds held by or on behalf of the Trustee in accordance with the
Pooling and Servicing Agreement.
Section 8.04. Trustee May Own Certificates.
The Trustee, in its individual capacity or any other capacity, may
become the owner or pledgee of Certificates with the same rights it would have
if it were not Trustee.
Section 8.05. Trustee's Fees and Expenses.
The Servicer shall pay to the Trustee from time to time, pursuant to the
Pooling and Servicing Agreement or a separate fee agreement, reasonable
compensation (which shall not be limited by any provision of law in regard to
the compensation of a trustee of an express trust) for all services rendered by
it in the execution of the trusts created under the Pooling and Servicing
Agreement and in the exercise and performance of any of the powers and duties
hereunder of the Trustee, and shall reimburse the Trustee for all reasonable
expenses, disbursements and advances (other than any expenses incurred by the
Trustee in connection with its assumption of the obligations of the Servicer
pursuant to Section 7.02 hereof) incurred or made by the Trustee in accordance
with any of the provisions of the Pooling and Servicing Agreement (including but
not limited to the reasonable compensation and the expenses and disbursements of
its counsel and of all persons not regularly in its employ) except any such
expense, disbursement or advance as may arise from its negligence or bad faith.
The Trustee and any director, officer, employee or agent of the
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Trustee shall be indemnified by the Servicer and held harmless against any loss,
liability or expense, including reasonable attorney's fees and expenses,
incurred as a result of or in connection with the Pooling and Servicing
Agreement or the Certificates, including, but not limited to, any such loss,
liability, or expense incurred in connection with any legal action against the
Trust or the Trustee or any director, officer, employee or agent thereof, the
performance of any of the Trustee's duties under the Pooling and Servicing
Agreement or relating to or arising out of any Environmental Law, including,
without limitation, any judgment, award, settlement, reasonable attorneys' fees
and expenses and other costs or expenses incurred in connection with the defense
of any actual or threatened action, proceeding or claim, other than any loss,
liability or expense incurred by reason of willful misfeasance, bad faith or
negligence in the performance of duties under the Pooling and Servicing
Agreement or by reason of reckless disregard of obligations and duties under the
Pooling and Servicing Agreement. Any payment hereunder made by the Servicer to
the Trustee shall be from the Servicer's own funds without any right to
reimbursement therefor. The obligations of the Servicer under this Section 8.05
shall survive the termination of the Trust and the resignation or removal of the
Trustee.
Section 8.06. Eligibility Requirements for Trustee.
The Trustee shall at all times be a corporation or national banking
association that is not an Affiliate of the Company or the Servicer, organized
and doing business under the laws of any state or the United States of America,
authorized under such laws to exercise corporate trust powers, having a combined
capital and surplus of at least $50,000,000 (or qualifying as a Qualified Bank)
and subject to supervision or examination by federal or state regulatory
authorities. If such corporation or association publishes reports of condition
at least annually, pursuant to law or to the requirements of the aforesaid
supervising or examining authority, then for the purposes of this Section the
combined capital and surplus of such corporation or association shall be deemed
to be its combined capital and surplus as set forth in its most recent report of
conditions so published. In case at any time the Trustee shall cease to be
eligible in accordance with the provisions of this Section, the Trustee shall
resign immediately in the manner and with the effect specified in Section 8.07
hereof. The Servicer and the Company may maintain normal banking relations with
the Trustee if the Trustee is a depository.
Section 8.07. Resignation and Removal of the Trustee.
The Trustee may at any time resign and be discharged from the trusts
created pursuant to the Pooling and Servicing Agreement by giving written notice
of such resignation to the Company, the Servicer and to all related
Certificateholders. Upon receiving such notice of resignation, the Company shall
promptly appoint a successor Trustee by written instrument, in duplicate, which
instrument shall be delivered to the resigning Trustee and to the successor
Trustee. A copy of such instrument shall be delivered to the Certificateholders
and to the Servicer by the Company. If no successor Trustee shall have been so
appointed and have accepted appointment within 30 days after the resigning
Trustee's giving of such notice of resignation, the resigning Trustee may
petition any court of competent jurisdiction for the appointment of a successor
Trustee.
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If at any time the Trustee shall cease to be eligible in accordance with
the provisions of Section 8.06 hereof and shall fail to resign after written
request therefor by the Company, or if at any time the Trustee shall become
incapable of acting, or shall be adjudged bankrupt or insolvent, or a receiver
of the Trustee or of its property shall be appointed, or any public officer
shall take charge or control of the Trustee or of its property or affairs for
the purpose of rehabilitation, conservation or liquidation thereof, then the
Company may remove the Trustee and appoint a successor Trustee by written
instrument, in duplicate, which instrument shall be delivered to the Trustee so
removed and to the successor Trustee. A copy of such instrument shall be
delivered to the Certificateholders and to the Servicer by the Company.
The Holders of Certificates entitled to at least 51% of the Voting
Rights may remove the Trustee at any time and appoint a successor Trustee by
written instrument or instruments, in triplicate, signed by such Holders or
their attorneys-in-fact duly authorized, one complete set of which instruments
shall be delivered to the Company, one complete set to the Trustee so removed
and one complete set to the successor so appointed. A copy of such instrument
shall be delivered to the Certificateholders and to the Servicer by the Company.
If the Holders remove the Trustee otherwise than for reasonable cause based upon
the Trustee's failure to continue to meet the eligibility requirements set forth
in Section 8.06 above or the Trustee's failure to perform its duties as
described herein, then the Holders so removing the Trustee shall bear any and
all costs and expenses arising from such removal and substitution.
Any resignation or removal of the Trustee and appointment of a successor
Trustee pursuant to any of the provisions of this Section shall not become
effective until acceptance of appointment by the successor Trustee as provided
in Section 8.08 hereof.
Section 8.08. Successor Trustee.
Any successor Trustee appointed as provided in Section 8.07 hereof shall
execute, acknowledge and deliver to the Company, the Servicer and to its
predecessor Trustee an instrument accepting such appointment under the Pooling
and Servicing Agreement and thereupon the resignation or removal of the
predecessor Trustee shall become effective and such successor Trustee, without
any further act, deed or conveyance, shall become fully vested with all the
rights, powers, duties and obligations of its predecessor hereunder, with the
like effect as if originally named as Trustee herein. The predecessor Trustee
shall deliver to the successor Trustee all related Asset Documents and related
documents and statements held by it under the Pooling and Servicing Agreement
and the Company, the Servicer and the predecessor Trustee shall execute and
deliver such instruments and do such other things as reasonably may be required
for more fully and certainly vesting and confirming in the successor Trustee all
such rights, powers, duties and obligations.
No successor Trustee shall accept appointment as provided in this
Section unless at the time of such acceptance such successor Trustee shall be
eligible under the provisions of Section 8.06 hereof.
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Upon acceptance of appointment by a successor Trustee as provided in
this Section, the Company shall mail notice of the succession of such Trustee
under the Pooling and Servicing Agreement to all Holders of the Certificates at
their addresses as shown in the Certificate Register. If the Company fails to
mail such notice within ten days after acceptance of appointment by the
successor Trustee, the successor Trustee shall cause such notice to be mailed at
the expense of the Company.
Section 8.09. Merger or Consolidation of Trustee.
Any corporation or association into which the Trustee may be merged or
converted or with which it may be consolidated or any corporation or association
resulting from any merger, conversion or consolidation to which the Trustee
shall be a party, or any corporation or association succeeding to the business
of the Trustee, shall be the successor of the Trustee under the Pooling and
Servicing Agreement provided such corporation or association shall be eligible
under the provisions of Section 8.06 hereof, without the execution or filing of
any paper or any further act on the part of any of the parties hereto, anything
herein to the contrary notwithstanding. Prior to any such merger, conversion or
consolidation, the Trustee shall notify each applicable Rating Agency in writing
of the pendency of such merger, conversion or consolidation.
Section 8.10. Appointment of Co-Trustee or Separate Trustee.
For the purpose of meeting any legal requirements of any jurisdiction in
which any part of the Trust Estate or property securing the same may be located
at any time, the Company, the Servicer and the Trustee, acting jointly, shall
have the power and shall execute and deliver all instruments necessary to
appoint one or more Persons approved by the Trustee to act as co-Trustee or
co-Trustees, jointly with the Trustee, or separate Trustee or Trustees, of all
or any part of the Trust Estate, and to vest in such Person or Persons, in such
capacity, such title to the Trust Estate or any part thereof, and, subject to
the other provisions of this Section 8.10, such powers, duties, obligations,
rights and trusts as the Company, the Servicer and the Trustee may consider
necessary or desirable. If the Company or the Servicer shall not have joined in
such appointment within 15 days after the receipt by it of a request so to do,
the Trustee alone shall have the power to make such appointment. No co-Trustee
or separate Trustee(s) hereunder shall be required to meet the terms of
eligibility as a successor Trustee under Section 8.06 hereof and no notice to
Holders of Certificates of the appointment of co-Trustee(s) or separate
Trustee(s) shall be required under Section 8.08 hereof.
In the case of any appointment of a co-Trustee or separate Trustee
pursuant to this Section 8.10, all rights, powers, duties and obligations
conferred or imposed upon the Trustee shall be conferred or imposed upon and
exercised or performed by the Trustee and such separate Trustee or co-Trustee
jointly, except to the extent that under any law of any jurisdiction in which
any particular act or acts are to be performed (whether as Trustee under the
Pooling and Servicing Agreement or as successor to the Servicer pursuant to
Section 7.02 hereof), the Trustee shall be incompetent or unqualified to perform
such act or acts, in which event such rights, powers, duties and obligations
(including the holding of title to the Trust
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Estate or any portion thereof in any such jurisdiction) shall be exercised and
performed by such separate Trustee or co-Trustee at the direction of the
Trustee.
Any notice, request or other writing given to the Trustee shall be
deemed to have been given to each of the then separate Trustees and co-Trustees,
as effectively as if given to each of them. Every instrument appointing any
separate Trustee or co-Trustee shall refer to the Pooling and Servicing
Agreement and the conditions of this Article VIII. Each separate Trustee and
co-Trustee, upon its acceptance of the trusts conferred, shall be vested with
the estates or property specified in its instrument of appointment, either
jointly with the Trustee or separately, as may be provided therein, subject to
all the provisions of the Pooling and Servicing Agreement, specifically
including every provision of the Pooling and Servicing Agreement relating to the
conduct of, affecting the liability of, or affording protection to, the Trustee.
Every such instrument shall be filed with the Trustee.
Any separate Trustee or co-Trustee may, at any time, constitute the
Trustee its agent or attorney-in-fact, with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of the
Pooling and Servicing Agreement on its behalf and in its name. If any separate
Trustee or co-Trustee shall die, become incapable of acting, resign or be
removed, all of its estates, properties, rights, remedies and trusts shall vest
in and be exercised by the Trustee, to the extent permitted by law, without the
appointment of a new or successor Trustee.
Section 8.11. Appointment of Custodians.
The Trustee may on behalf of the Trust, with the consent of the
Servicer, appoint one or more Custodians to hold all or a portion of the Trustee
Mortgage Loan Files as agent for the Trustee, by entering into a custodial
agreement. The appointment of any Custodian may at any time be terminated and a
substitute Custodian may be appointed. The Trustee shall terminate the
appointment of any Custodian and appoint a substitute custodian upon the request
of the Servicer to the Trustee. Subject to this Article VIII, the Trustee agrees
to comply with the terms of each custodial agreement and to enforce the terms
and provisions thereof against the Custodian for the benefit of the
Certificateholders. Each Custodian shall be a depository institution or trust
company subject to supervision by federal or state authority, shall have
combined capital and surplus of at least $10,000,000 and shall be qualified to
do business in the jurisdiction in which it holds any Trustee Mortgage Loan
File. Any such Custodian may not be an affiliate of the Company or any Seller
with respect to the applicable Trust.
Section 8.12. Trustee May Enforce Claims Without Possession of Certificates.
All rights of action and claims under the Pooling and Servicing
Agreement or the Certificates may be prosecuted and enforced by the Trustee
without the possession of any of the Certificates or the production thereof in
any proceeding relating thereto and any such proceeding instituted by the
Trustee shall be brought in its own name or in its capacity as Trustee. Any
recovery of judgment shall, after provision for the payment of the reasonable
compensation, expenses, disbursements and advances of the Trustee,
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its agents and counsel, be for the ratable benefit of the Certificateholders in
respect of which such judgment has been recovered.
ARTICLE IX
TERMINATION
Section 9.01. Termination Upon Repurchase or Liquidation of All Contracts.
(a) The respective obligations and responsibilities of the Company, the
Servicer and the Trustee under the Pooling and Servicing Agreement (other than
the obligations of the Trustee to make distributions to Certificateholders, to
reimburse the Servicer for outstanding Advances, to pay the Servicer accrued and
previously unpaid Servicing Fees or to provide tax information as provided in
Section 4.01(a) hereof and other than the obligations of the Servicer under
Article X hereof) shall terminate upon distribution to the Certificateholders of
all amounts held by or on behalf of the Trustee and required hereunder to be so
distributed on the Distribution Date coinciding with or following the earlier to
occur of (1) a Terminating Purchase for an amount equal to the Termination Price
and (2) the final payment or other liquidation (or any advance with respect
thereto) of the last Asset remaining in the Trust or the disposition of the last
Repo Property or REO Property remaining in the Trust; provided, however, that in
no event shall the Trust created hereby continue beyond the expiration of 21
years after the death of the last survivor of the descendants of Joseph P.
Kennedy, the late ambassador of the United States to the Court of St. James's,
living on the date hereof.
(b) Unless otherwise provided in the Pooling and Servicing Agreement,
the Servicer may, at its option, make, or cause a Person to make, a Terminating
Purchase on any Distribution Date on or after the earlier to occur of (1) the
Servicer's determination, based upon an Opinion of Counsel, that the REMIC
status of any REMIC related to the Trust has been lost or that a substantial
risk exists that such REMIC status will be lost for the then-current taxable
year, or (2) the Distribution Date on which, after taking into account
distributions of principal to be made on such Distribution Date, the sum of the
Certificate Principal Balances of the Certificates is less than or equal to 15%
of the sum of the original Certificate Principal Balances of the Certificates.
(c) The Servicer shall notify the Trustee and the Certificate Registrar
in writing of its election to make or to cause a Terminating Purchase no later
than the Distribution Date preceding the Distribution Date on which the
Certificates will be retired as a result of such Terminating Purchase. The
Servicer shall advise the Trustee and the Certificate Registrar of the final
payment or other liquidation of the last Asset remaining in the Trust or the
disposition of the last Repo Property or REO Property remaining in the Trust at
least two Business Days prior to the Remittance Date in the month in which the
Trust will terminate as a result thereof.
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Notice of any termination of the Trust shall be given promptly by the
Trustee by letter sent to the Certificateholders by certified mail (1) in the
event such notice is given in connection with a Terminating Purchase, not
earlier than the fifth day of the month preceding the month of such termination
and not later than the first day of the month of such termination or (2)
otherwise not later than the Remittance Date preceding the final Distribution
Date, in each case specifying (A) the Distribution Date upon which the Trust
will terminate and that final payment of the Certificates will be made on such
Distribution Date and (B) the amount of any such final distribution. The Trustee
shall give such notice to the Certificate Registrar at the time such notice is
given to Certificateholders. In the event such notice is given in connection
with a Terminating Purchase, the Terminator shall deliver to the Trustee for
deposit into the Distribution Account on the Business Day immediately preceding
the Distribution Date on which the Terminating Purchase is to take place an
amount in next day funds equal to the Termination Price. Notwithstanding the
foregoing, if the Terminator is the Servicer, the Terminator, upon notice to the
Trustee, shall be entitled to remit the Termination Price net of amounts owed to
the Terminator in respect of unreimbursed outstanding Advances made by such
Terminator or amounts required to be reimbursed or paid to such Terminator
hereunder.
(d) On the final Distribution Date, the Trustee shall distribute to the
Certificateholders as of the related Record Date the amount otherwise
distributable on the Certificates on such Distribution Date (if such final
Distribution Date is not the result of a Terminating Purchase).
Upon any termination of the Trust as the result of a Terminating
Purchase, the Trustee shall distribute the Termination Price as though it were
the amount on deposit in the Distribution Account in accordance with Section
4.03(a) hereof and in accordance with the related Pooling and Servicing
Agreement.
Following such final distribution, the Servicer and the Trustee shall
promptly release to the Terminator the related Asset Files or portions thereof
in their respective possessions for the remaining Assets, Repo Properties and
REO Properties, and the Trustee shall execute all assignments, endorsements and
other instruments provided to it necessary to effectuate transfer of such Asset
Files to such Terminator, whereupon the Trust shall terminate.
(e) In the event that all of the Certificateholders shall not surrender
their Certificates within six months after the date specified in the
above-mentioned written notice, the Trustee shall give a second written notice
to the remaining Certificateholders to surrender their Certificates and receive
the final distribution with respect thereto, net of the cost of such second
notice. If within one year after the second notice all the Certificates shall
not have been surrendered for cancellation, the Trustee may take appropriate
steps, or may appoint an agent to take appropriate steps, to contact the
remaining Certificateholders concerning surrender of their Certificates, and the
cost thereof shall be paid out of the amounts otherwise payable on such
Certificates. Any funds payable to Certificateholders that are not distributed
on the final Distribution Date shall be deposited in a Termination Account, as
the case may be, each of which shall be an Eligible Account, to be held for the
benefit of Certificateholders not presenting and surrendering their Certificates
in the aforesaid manner, and shall be disposed of in accordance with this
Section.
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Section 9.02. Additional Termination Requirements.
(a) In the event of a Terminating Purchase as provided in Section 9.01
hereof, the Trust shall be terminated in accordance with the following
additional requirements, unless the Servicer, the Company, and the Trustee
receive (1) a Special Tax Opinion and (2) a Special Tax Consent from each of the
Holders of the Residual Certificates (unless the Special Tax Opinion
specifically provides that no REMIC-level tax will result from such Terminating
Purchase).
(1) Within 90 days prior to the time of the making of the final
payment on the Certificates, the Company on behalf of each related REMIC
shall adopt a plan of complete liquidation meeting the requirements set
forth in the REMIC Provisions for a qualified liquidation (which plan
may be adopted by the Trustee's attachment of a statement specifying the
first day of the 90-day liquidation period to the REMIC's final federal
income tax return) and the REMIC will sell all of its assets (other than
cash).
(2) At the time of the making of the final payment on the Regular
Certificates or the deposit to the Termination Account, the Trustee
shall distribute or credit, or cause to be distributed or credited, pro
rata, to the Holders of the Residual Certificates, all remaining cash on
hand relating to the REMIC after such final payment (other than cash
retained to meet claims against the Trust) and the REMIC shall terminate
at that time.
(3) In no event may the final payment on the Regular Certificates
or the final distribution or credit to the Holders of the Residual
Certificates be made after the 90th day after the date on which the plan
of complete liquidation relating thereto is adopted. A payment into the
Termination Account with respect to any Certificate pursuant to Section
9.01 hereof shall be deemed a final payment on, or final distribution
with respect to, such Certificate for the purposes of this Section
9.02(a)(3).
(b) By their acceptance of Residual Certificates, the Holders thereof
agree (1) to authorize such action as may be necessary to adopt a plan of
complete liquidation of any related REMIC and (2) to take such action as may be
necessary to adopt a plan of complete liquidation of any related REMIC upon the
written request of the Servicer, which authorization shall be binding upon all
successor Holders of such Residual Certificates.
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ARTICLE X
REMIC TAX PROVISIONS
Section 10.01. REMIC Administration.
Unless otherwise specified in the related Pooling and Servicing
Agreement, an election will be made to treat the Assets and the Distribution
Account underlying a Series as one or more REMICs under the Code. Each Holder of
a Residual Certificate in each REMIC shall, in its Residual Transferee
Agreement, designate the Servicer or an Affiliate of the Servicer, as its agent,
to act as the Tax Matters Person for such REMIC. The Servicer agrees that it or
one of its Affiliates will serve as such Tax Matters Person for each REMIC, and
also will perform various tax administration functions for each REMIC, as its
agent, as set forth in this Section 10.01.
(a) The Trustee shall elect (on behalf of each REMIC to be created) to
have the Trust (or designated assets thereof) treated as a REMIC on Form 1066 or
other appropriate federal tax or information return for the taxable year ending
on the last day of the calendar year in which the Certificates are issued as
well as on any corresponding state tax or information return necessary to have
such assets treated as a REMIC under relevant state law.
(b) The Servicer shall pay any and all tax related expenses (not
including taxes) of the Trust and each related REMIC, including but not limited
to any professional fees or expenses related to audits or any administrative or
judicial proceedings with respect to each such REMIC that involve the Internal
Revenue Service or state tax authorities or related to the adoption of a plan of
complete liquidation.
(c) The Trustee shall prepare any necessary forms for election as well
as all of the Trust's and each related REMIC's federal and state tax and
information returns. The Trustee shall sign and file such returns on behalf of
each such REMIC. The expenses of preparing and filing such returns shall be
borne by the Trustee.
(d) The Trustee shall perform all reporting and other tax compliance
duties that are the responsibility of the Trust and the REMIC under the REMIC
Provisions or state or local tax law. Among its other duties, if required by the
REMIC Provisions, the Trustee, acting as agent of the REMIC, shall provide to
the Treasury or to other governmental authorities such information as is
necessary for the application of any tax relating to the transfer of a Residual
Certificate to any Disqualified Organization.
(e) The Company, the Servicer, the Trustee (to the extent the Trustee
has been instructed by the Company or the Servicer), and the Holders of Residual
Certificates shall take any action or cause each related REMIC to take any
action necessary to create or maintain the status of each such REMIC as a REMIC
under the REMIC Provisions and shall assist each other as necessary to create or
maintain such status.
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(f) The Company, the Servicer, the Trustee (to the extent the Trustee
has been instructed by the Company or the Servicer), and the Holders of the
Residual Certificates shall not take any action or fail to take any action, or
cause each related REMIC to take any action or fail to take any action that, if
taken or not taken, could endanger the status of each such REMIC as a REMIC
unless the Trustee and the Servicer have received an Opinion of Counsel (at the
expense of the party seeking to take or to omit to take such action) to the
effect that the contemplated action or failure to act will not endanger such
status.
(g) Any taxes that are imposed upon the Trust or any related REMIC by
federal or state (including local) governmental authorities (other than taxes
paid by a party pursuant to Section 10.02 hereof or as provided in the following
sentence) shall be allocated to the Certificates (including, for this purpose,
the regular interests in any Pooling REMIC) in the same manner as Writedown
Amounts are so allocated; provided, however, that if the related Pooling and
Servicing Agreement does not provide for the allocation of Writedown Amounts,
such taxes shall be payable out of the Available Distribution Amount before any
distributions are made on the related Certificates on the related Distribution
Date. Any state or local taxes imposed upon the Trust, any related REMIC or any
related Certificateholder that would not have been imposed on the Trust, such
REMIC or such Certificateholder in the absence of any legal or business
connection between the Trustee and the state or locality imposing such taxes
(including any federal, state or local taxes imposed on such Trust, such REMIC
or such Certificateholder as a result of such Trust, such REMIC or such
Certificateholder being deemed to have received income as a result of the
Trustee's payment of state or local taxes) shall be paid by the Trustee, and,
notwithstanding anything to the contrary in these Standard Terms, such taxes
shall be deemed to be part of the Trustee's cost of doing business and shall not
be reimbursable to the Trustee.
(h) If the Servicer (or an Affiliate thereof) is unable for any reason
to fulfill its duties as Tax Matters Person, then the holder of the largest
Percentage Interest of the Residual Certificates, without compensation, shall
become the successor Tax Matters Person for each related REMIC; provided,
however, that in no event shall the Trustee be required to act as Tax Matters
Person (regardless of whether the Trustee is acting as successor Servicer).
Section 10.02. Prohibited Activities.
Except as otherwise provided elsewhere in the Pooling and Servicing
Agreement, neither the Company, the Servicer, the Holders of Residual
Certificates, nor the Trustee shall engage in, nor shall the Trustee permit, any
of the following transactions or activities unless it has received (1) a Special
Tax Opinion and (2) a Special Tax Consent from each of the Holders of the
Residual Certificates (unless the Special Tax Opinion specially provides that no
REMIC-level tax will result from the transaction or activity in question):
(a) the sale or other disposition of, or substitution for, any of the
underlying Assets except pursuant to (1) a foreclosure or default with respect
to such an Asset, (2) a purchase or repurchase
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pursuant to Section 2.06 hereof, (3) the bankruptcy or insolvency of any related
REMIC, or (4) the termination of any related REMIC pursuant to Article IX
hereof;
(b) the acquisition of any Assets for the Trust after the related
Closing Date except (1) during the three-month period beginning on the Closing
Date pursuant to a fixed-price contract in effect on the Closing Date that has
been reviewed and approved by tax counsel acceptable to the Servicer or (2) a
substitution in accordance with Section 2.06 hereof;
(c) the sale or other disposition of any investment in the Distribution
Account at a gain;
(d) the acceptance of any contribution to the Trust except the following
cash contributions: (1) a cash contribution received during the three-month
period beginning on the Closing Date; (2) a cash contribution to facilitate a
Terminating Purchase that is made within the 90-day period beginning on the
date on which a plan of complete liquidation is adopted pursuant to Section
9.02(a)(1) hereof; (3) a contribution to a Reserve Fund owned by a related REMIC
that is made pro rata by the Holders of the Residual Certificates; or (4) any
other contribution approved by the Servicer after consultation with tax counsel;
(e) except in the case of an Asset that is in default, or as to which,
in the reasonable judgment of the Servicer, default is reasonably foreseeable,
neither the Trustee nor the Servicer shall permit any modification of any
material term of an Asset (including, but not limited to, the interest rate, the
principal balance, the amortization schedule (except as provided in the Pooling
and Servicing Agreement), the remaining term to maturity, or any other term
affecting the amount or timing of payments on the Asset) unless the Trustee and
Servicer have received an Opinion of Counsel (at the expense of the party
seeking to modify the Asset) to the effect that such modification would not be
treated as giving rise to a new debt instrument for REMIC purposes;
(f) engage (in the case of the Company, the Servicer or the holders of
the Residual Certificates) or knowingly engage (in the case of the Trustee) in
any other transaction or activity that is inconsistent with the Pooling and
Servicing Agreement;
(g) the sale or other disposition of any asset held in a Reserve Fund
for a period of less than three months (a "Short-Term Reserve Fund Investment")
if such sale or disposition would cause 30% or more of a related REMIC's income
from all of its Reserve Funds for the taxable year to consist of gain from the
sale or disposition of Short-Term Reserve Fund Investments; or
(h) the withdrawal of any amounts from any Reserve Fund except (A) for
the distribution pro rata to the Holders of the Residual Certificates or (B) to
provide for the payment of Trust expenses or amounts payable on the Certificates
in the event of defaults or late payments on the related Assets or lower than
expected returns on funds held in the Distribution Account, as provided under
section 860G(a)(7) of the Code.
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Any party causing the Trust to engage in any of the activities prohibited in
this Section shall be liable for the payment of any tax imposed on the Trust
pursuant to Code section 860F(a)(1) or 860G(d) as a result of the Trust engaging
in such activities.
ARTICLE XI
MISCELLANEOUS PROVISIONS
Section 11.01. Amendments.
The Pooling and Servicing Agreement may be amended or supplemented from
time to time by the Company, the Servicer and the Trustee without the consent of
any of the Certificateholders (a) to cure any ambiguity herein, (b) to correct
or supplement any provisions herein that may be inconsistent with any other
provisions herein, (c) to modify, eliminate or add to any of its provisions to
such extent as shall be necessary or appropriate to maintain the qualification
of any related REMIC as a REMIC and to avoid the imposition of certain taxes on
a REMIC under the Code at all times that any Certificates are outstanding or (d)
to make any other provisions with respect to matters or questions arising under
the Pooling and Servicing Agreement or matters arising with respect to the Trust
that are not covered by the Pooling and Servicing Agreement; provided, that such
action shall not affect adversely the interests of any Certificateholder, as
evidenced by an opinion of counsel independent from the Company, the Servicer
and the Trustee or a letter from each Rating Agency from whom the Company
requested a rating of any of the related Certificates stating that such action
will not result in a downgrading of the rating of any of the related
Certificates rated by such Rating Agency at the request of the Company. Promptly
after the execution of any such amendment, the Trustee shall furnish a copy of
such amendment to each Holder of Certificates.
The Pooling and Servicing Agreement also may be amended from time to
time by the Company, the Servicer and the Trustee with the consent of the
Holders entitled to at least a majority of the Voting Rights of each Class of
Certificates that would be affected by such amendment for the purpose of adding
any provisions to or changing in any manner or eliminating any of the provisions
of the Pooling and Servicing Agreement or of modifying in any manner the rights
of the Holders of the Certificates; provided, however, that no such amendment
shall (a) reduce in any manner the amount of, or delay the timing of, payments
received on Contracts or Mortgage Loans that are required to be distributed on
any Certificate without the consent of the Holder of such Certificate, (b)
affect adversely in any material respect the interests of the Holders of any
Class of Certificates in a manner other than described in clause (a) of this
paragraph, or (c) reduce the aforesaid percentage of Certificates the Holders of
which are required to consent to any such amendment, without the consent of such
Holders of all Certificates then outstanding.
It shall not be necessary for the consent of Certificateholders under
this Section 11.01 to approve the particular form of any proposed amendment, but
it shall be sufficient if such consent shall approve the substance thereof. The
manner of obtaining such consents and of evidencing the authorization of the
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execution thereof by Certificateholders shall be subject to such reasonable
regulations as the Trustee may prescribe.
In executing and delivering any amendment or modification to the Pooling
and Servicing Agreeement, the Trustee shall be entitled to an opinion of counsel
(which may be from in-house counsel) stating that: (i) such amendment is
authorized pursuant to the Pooling and Servicing Agreement and complies
therewith; and (ii) all conditions precedent to the execution, delivery and
performance of such amendment shall have been satisfied in full. The Trustee may
but shall have no obligation to execute and deliver any amendment or
modification which would affect its duties, powers, rights, immunities or
indemnities hereunder.
Section 11.02. Recordation of Agreement; Counterparts.
To the extent permitted by applicable law, the Pooling and Servicing
Agreement is subject to recordation in all appropriate public offices for real
property records in all the counties or other comparable jurisdictions in which
any or all of the Real Property or Mortgaged Properties included in the Trust
Estate and subject to the related Mortgages are situated, and in any other
appropriate public recording office or elsewhere, such recordation to be
effected by the Servicer and at its expense, if such recordation is necessary to
protect the interests of the Certificateholders. The Trustee shall not be
responsible for determining whether the Pooling and Servicing Agreement should
be recorded in any such office.
For the purpose of facilitating the recordation of the Pooling and
Servicing Agreement as herein provided and for other purposes, the Pooling and
Servicing Agreement may be executed simultaneously in any number of
counterparts, each of which counterparts shall be deemed to be an original, and
such counterparts shall together constitute but one and the same instrument.
Section 11.03. Limitation on Rights of Certificateholders.
The death or incapacity of any Certificateholder shall not operate to
terminate the Pooling and Servicing Agreement or the Trust, nor will such death
or incapacity entitle such Certificateholder's legal representatives or heirs to
claim an accounting or to take any action or proceeding in any court for a
partition or winding up of the Trust, nor shall it otherwise affect the rights,
obligations and liabilities of the parties hereto or any of them.
No Certificateholder shall have any right to vote (except as expressly
provided for herein) or in any manner otherwise control the operation and
management of the Trust, or the obligations of the parties hereto, nor shall
anything herein set forth, or contained in the terms of the Certificates, be
construed so as to constitute the Certificateholders from time to time as
partners or members of an association; nor shall any Certificateholder be under
any liability to any third person by reason of any action taken by the parties
to the Pooling and Servicing Agreement pursuant to any provision hereof.
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No Certificateholder shall have any right by virtue of any provision of
the Pooling and Servicing Agreement to institute any suit, action or proceeding
in equity or at law upon or under or with respect to the Pooling and Servicing
Agreement, unless such Holder previously shall have given to the Trustee a
written notice of default and of the continuance thereof, as hereinbefore
provided, and unless also the Holders of Certificates entitled to at least 25%
of the Voting Rights allocated to the Certificates shall have made written
request upon the Trustee to institute such action, suit or proceeding in its own
name as Trustee under the Pooling and Servicing Agreement and shall have offered
to the Trustee such reasonable indemnity as it may require against the costs,
expenses and liabilities to be incurred therein or thereby, and the Trustee, for
15 days after its receipt of such notice, request and offer of indemnity, shall
have neglected or refused to institute any such action, suit or proceeding. It
is understood and intended, and expressly covenanted by each Certificateholder
with every other Certificateholder and the Trustee, that no one or more Holders
of Certificates shall have any right in any manner whatever by virtue of any
provision of the Pooling and Servicing Agreement to affect, disturb or prejudice
the rights of the Holders of any other of such Certificates, or to obtain or
seek to obtain priority over or preference to any other such Holder, or to
enforce any right under the Pooling and Servicing Agreement, except in the
manner herein provided and for the equal, ratable and common benefit of all
Holders of Certificates. For the protection and enforcement of the provisions of
this Section, each and every Certificateholder and the Trustee shall be entitled
to such relief as can be given either at law or in equity.
Section 11.04. Notices.
All demands, instructions, directions, consents, waivers and notices
under the Pooling and Servicing Agreement shall be in writing and shall be
deemed to have been duly given if personally delivered at or mailed by first
class mail, postage prepaid, or by express delivery service, to (a) in the case
of the Company, Bombardier Capital Mortgage Securitization Corporation, 1600
Mountain View Drive, Colchester, Vermont 05446, Attention: President, telecopy
number (802) 654-7200, or such other address or telecopy number as may hereafter
be furnished to each party to the Pooling and Servicing Agreement in writing by
the Company, (b) in the case of the Servicer, Bombardier Capital Inc., Mortgage
Division, 12735 Gran Bay Parkway, West - Suite 1000, Jacksonville, Florida
32258, Attention: Greg Giesen, telecopy number (904) 288-1901, or such other
address or telecopy number as may subsequently be furnished to each party to the
Pooling and Servicing Agreement in writing by the Servicer and (c) in the case
of the Trustee, at its address set forth in the Pooling and Servicing Agreement
or such other address or telecopy number as may subsequently be furnished to
each party to the Pooling and Servicing Agreement in writing by the Trustee. Any
notice required or permitted to be mailed to a Certificateholder shall be given
by registered mail, postage prepaid, or by express delivery service, at the
address of such Holder as shown in the Certificate Register. Any notice so
mailed within the time prescribed in the Pooling and Servicing Agreement shall
be conclusively presumed to have been duly given, whether or not the
Certificateholder receives such notice. A copy of any notice required to be
telecopied hereunder also shall be mailed to the appropriate party in the manner
set forth above. A copy of any notice given hereunder to any other party shall
be delivered to the Trustee.
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Section 11.05. Severability of Provisions.
If any one or more of the covenants, agreements, provisions or terms of
the Pooling and Servicing Agreement shall be held invalid for any reason
whatsoever, then such covenants, agreements, provisions or terms shall be deemed
severable from the remaining covenants, agreements, provisions or terms of the
Pooling and Servicing Agreement and shall in no way affect the validity or
enforceability of the other provisions of the Pooling and Servicing Agreement or
of the Certificates or the rights of the Holders thereof.
Section 11.06. Sale of Contracts.
It is the express intent of the Company and the Trustee that the
conveyance of the Assets underlying a Series by the Company to the Trustee
pursuant to the related Pooling and Servicing Agreement be construed as a sale
of such Assets by the Company to the Trustee. It is, further, not the intention
of the Company or the Trustee that such conveyance be deemed a pledge of such
Assets by the Company to the Trustee to secure a debt or other obligation of the
Company. However, in the event that, notwithstanding the intent of the parties,
such Assets are held to continue to be property of the Company, then (a) the
Pooling and Servicing Agreement also shall be deemed to be a security agreement
within the meaning of Article 9 of the applicable UCC; (b) the conveyance by the
Company provided for in the Pooling and Servicing Agreement shall be deemed to
be a grant by the Company to the Trustee of a security interest in all of the
Company's right, title and interest in and to the Assets and all amounts payable
to the holders of the Assets in accordance with the terms thereof and all
proceeds of the conversion, voluntary or involuntary, of the foregoing into
cash, instruments, securities or other property, including without limitation
all amounts, other than investment earnings, from time to time held or invested
in the related Certificate Account or Distribution Account, whether in the form
of cash, instruments, securities or other property, and including without
limitation all amounts from time to time held or invested in any related Reserve
Fund; (c) the possession by the Trustee or its agent (including the Servicer
pursuant to Section 2.02(a) hereof) of items of property that constitute
instruments, money, negotiable documents or chattel paper shall be deemed to be
"possession by the secured party" for purposes of perfecting the security
interest pursuant to Section 9-305 of the applicable UCC; and (d) notifications
to persons holding such property, and acknowledgments, receipts or confirmations
from persons holding such property, shall be deemed notifications to, or
acknowledgments, receipts or confirmations from, financial intermediaries,
bailees or agents (as applicable) of the Trustee for the purpose of perfecting
such security interest under applicable law. The Company and the Trustee (to the
extent the Trustee has been instructed by the Company or the Servicer) shall
take, to the extent consistent with the Pooling and Servicing Agreement, such
actions as may be necessary to ensure that, if the Pooling and Servicing
Agreement were deemed to create a security interest in the related Assets, such
security interest would be deemed to be a perfected security interest of first
priority under applicable law and will be maintained as such throughout the term
of the Pooling and Servicing Agreement.
-101-
Section 11.07. Notice to Rating Agency.
(a) The Trustee shall use its best efforts promptly to provide notice to
each applicable Rating Agency and each Certificateholder with respect to each of
the following of which a Responsible Officer has actual knowledge, except that
no notice specified below need be sent to any such Certificateholder or each
applicable Rating Agency if already sent pursuant to other provisions of the
Pooling and Servicing Agreement:
(1) any amendment to the Pooling and Servicing Agreement
(including amendment to this Standard Terms) or any agreement assigned
to the Trust;
(2) the occurrence of any Event of Default involving the Servicer
that has not been cured or waived;
(3) the resignation, termination or merger of the Company, the
Servicer or the Trustee;
(4) the purchase or repurchase or substitution of Contracts
pursuant to Section 2.06 hereof;
(5) the final payment to the Certificateholders;
(6) any change in the location of the related Certificate Account
or the Distribution Account;
(7) any event that would result in the inability of the Servicer
to make Advances regarding the related Assets;
(8) any change in applicable law that would require an assignment
of a Mortgage, not previously recorded, to be recorded in order to
protect the right, title and interest of the Trustee in and to the
related Real Property or Mortgaged Property or, in case a court should
recharacterize the sale of the related Asset as a financing, to perfect
a first priority security interest in favor of the Trustee in the
related Asset or the occurrence of either of the circumstances described
in clause (1) or (2) of Section 2.06(b) hereof relating to the
retitling of Manufactured Homes; or
(9) any change in the Company's or the Servicer's name or place
of business or the relocation of the Contract Files or Servicer Contract
Files or the Servicer Mortgage Loan Files to a location outside the
State of Florida or the relocation of the Trustee Mortgage Loan Files to
a location outside of the state where they are originally held by the
Trustee or its Custodian.
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(b) The Servicer shall promptly notify the Trustee of any of the events
listed in Section 11.07(a) hereof of which it has actual knowledge. In addition,
the Trustee shall furnish promptly to each Rating Agency, at its address set
forth in the Pooling and Servicing Agreement, copies of the following:
(i) Each Remittance Report; and
(ii) Each Officer's Certificate supplied by the Servicer to the
Trustee and the Certificateholders pursuant to Section 3.13 hereof.
(c) Any notice pursuant to this Section 11.07 shall be in writing and
shall be deemed to have been duly given if personally delivered or mailed by
first class mail, postage prepaid or by express delivery service to each Rating
Agency at its address specified in the Pooling and Servicing Agreement.
-103-
EXHIBIT 1
FORM OF SERVICER'S CUSTODIAL CERTIFICATION
[DATE]
[NAME AND ADDRESS
OF TRUSTEE]
Pooling and Servicing Agreement, dated
as of ________________, among
Bombardier Capital Mortgage Securitization Corporation (the "Company"),
Bombardier Capital Inc. and
___________________, as Trustee
Ladies and Gentlemen:
In accordance with Section 2.02(b) of the Company's Standard Terms to
Pooling and Servicing Agreement (Janaury 2000 Edition), which are incorporated
by reference into the above-referenced Pooling and Servicing Agreement (the
"Agreement"), Bombardier Capital Inc., as Servicer under the Agreement, hereby
confirms that it is in possession of a complete Contract File for each of the
Contracts identified on Schedule I to the Agreement, subject to those exceptions
identified on the schedule attached hereto. Capitalized terms used and not
otherwise defined herein shall have the respective meanings assigned to such
terms in the Agreement.
BOMBARDIER CAPITAL INC.
By:_________________________________
Name:_______________________________
Title:______________________________
Exhibit 1 - Page 1
EXHIBIT 2-A
FORM OF INITIAL CERTIFICATION
[Date]
Bombardier Capital Mortgage Securitization Corporation
1600 Mountain View Drive
Colchester, Vermont 05446
Attention: [______________]
Bombardier Capital Inc.
1600 Mountain View Drive
Colchester, Vermont 05446
Attention: [______________]
Re: Pooling and Servicing Agreement, dated as of _________1, 20__,
among Bombardier Capital Mortgage Securitization Corporation,
Bombardier Capital Inc., as Servicer,
and _______________, as Trustee,
Pass-Through Certificates, ____________________
BCMSC Trust 20 _____-_____.
Gentlemen:
In accordance with Section 2.03 of the Company's Standard Terms to
Pooling and Servicing Agreement (Janaury 2000 Edition) (the "Standard Terms"),
which are incorporated by reference into the above-referenced Pooling and
Servicing Agreement, the undersigned, as Trustee, hereby certifies that, as to
each Mortgage Loan listed in the Mortgage Loan Schedule to the Pooling and
Servicing Agreement (other than any Mortgage Loan paid in full or listed on the
attachment hereto) it, or a Custodian on its behalf, has reviewed the Trustee
Mortgage Loan File and has determined that, except as noted on the Schedule of
Exceptions attached hereto: (i) all documents required to be included in the
Trustee Mortgage Loan File (as set forth in the definition of "Trustee Mortgage
Loan File" in the Standard Terms) are in its possession or in the possession of
a Custodian on its behalf; (ii) such documents have been reviewed by it, or a
Custodian on its behalf, and appear regular on their face and relate to such
Mortgage Loan; and (iii) based on examination by it, or by a Custodian on its
behalf, and only as to such documents, the information set forth on the Mortgage
Loan Schedule to the Pooling and Servicing Agreement accurately reflects the
information set forth in the Trustee Mortgage Loan File. The undersigned further
certifies that the Trustee's review, or the review of its Custodian, of each
Trustee Mortgage Loan File included each of the procedures listed in Section
2.03(c)(2) of the Standard Terms.
Exhibit 2-A-Page 1
Except as described herein, neither the Trustee, nor any Custodian on
its behalf, has made an independent examination of any documents contained in
any Trustee Mortgage Loan File. The Trustee makes no representations as to: (i)
the validity, legality, sufficiency, enforceability or genuineness of any
documents contained in any Trustee Mortgage Loan File for any of the Mortgage
Loans listed on the Mortgage Loan Schedule to the Pooling and Servicing
Agreement, (ii) the collectibility, insurability, effectiveness or suitability
of any such Mortgage Loan or (iii) whether any Trustee Mortgage Loan File should
include any assumption agreement, modification agreement, written assurance or
substitution agreement.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the above-captioned Pooling and Servicing Agreement
(the "Pooling and Servicing Agreement").
[TRUSTEE]
By:_________________________________
Its:________________________________
Exhibit 2-A - Page 2
EXHIBIT 2-B
FORM OF FINAL CERTIFICATION
[Date]
Bombardier Capital Mortgage Securitization Corporation
1600 Mountain View Drive
Colchester, Vermont 05446
Attention: [________________]
Bombardier Capital Inc.
1600 Mountain View Drive
Colchester, Vermont 05446
Attention: [________________]
Re: Pooling and Servicing Agreement, dated as of _________1, 20__,
among Bombardier Capital Mortgage Securitization Corporation,
Bombardier Capital Inc., as Servicer,
and _______________, as Trustee,
Pass-Through Certificates, ____________________
BCMSC Trust 20 _____-_____.
Gentlemen:
In accordance with Section 2.03 of the Company's Standard Terms to
Pooling and Servicing Agreement (Janaury 2000 Edition) (the "Standard Terms"),
which are incorporated by reference into the above-referenced Pooling and
Servicing Agreement, the undersigned, as Trustee, hereby certifies that, except
as noted on the Schedule of Exceptions attached hereto, for each Mortgage Loan
listed in the Mortgage Loan Schedule to the Pooling and Servicing Agreement
(other than any Mortgage Loan paid in full or listed on the attachment hereto)
it, or a Custodian on its behalf, has received a complete Trustee Mortgage Loan
File which includes each of the documents required to be included in the Trustee
Mortgage Loan File as set forth in the definition of "Trustee Mortgage Loan
File" in the Standard Terms.
Neither the Trustee nor any Custodian on its behalf has made an
independent examination of any documents contained in any Trustee Mortgage Loan
File beyond the review specifically required in the above captioned Pooling and
Servicing Agreement. The Trustee makes no representations as to: (i) the
validity, legality, sufficiency, enforceability or genuineness of any of the
documents contained in any Trustee Mortgage Loan File or any of the Mortgage
Loans listed on the Mortgage Loan Schedule, (ii) the collectibility,
insurability, effectiveness or suitability of any
Exhibit 2-B - Page 1
such Mortgage Loan or (iii) whether any Trustee Mortgage Loan File should
include any assumption agreement, modification agreement, written assurance or
substitution agreement.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the above-captioned Pooling and Servicing Agreement
(the "Pooling and Servicing Agreement").
[TRUSTEE]
By:________________________________________
Its:_______________________________________
Exhibit 2-B - Page 2
EXHIBIT 3
FORM OF RECORDATION REPORT
[Date]
Bombardier Capital Inc.
1600 Mountain View Drive
Colchester, Vermont 05446
Attention: [______________]
Re: Pooling and Servicing Agreement, dated as of _________1, 20__,
among Bombardier Capital Mortgage Securitization Corporation,
Bombardier Capital Inc., as Servicer,
and _______________, as Trustee,
Pass-Through Certificates, ____________________
BCMSC Trust 20 _____-_____.
Gentlemen:
In accordance with Section 2.03 of the Company's Standard Terms to
Pooling and Servicing Agreement (Janaury 2000 Edition) (the "Standard Terms"),
which are incorporated by reference into the above-referenced Pooling and
Servicing Agreement, the undersigned, as Trustee hereby notifies you, that as of
the date hereof with respect to the following Mortgage Loans it has not received
the indicated documents:
Mortgage Loans Documents Not Received
- -------------- ---------------------------------------------------
Original Recorded
Original Recorded Assignment of
Mortgage Mortgage
or certified copy or certified copy
BCI Loan Number thereof thereof*
- --------------- ------- --------
[TRUSTEE]
as Trustee
By:________________________
Its:_______________________
- --------
* Not required for Mortgage Loans for which the Company has waived recordation
of Assignments.
Exhibit 3 - Page 1
EXHIBIT 4
REQUEST FOR RELEASE OF DOCUMENTS AND RECEIPT
TO: [Name and Address of Trustee or Custodian]
RE: Pooling and Servicing Agreement, dated as of ______________1, 20__
among Bombardier Capital Mortgage Securitization Corporation (the
"Company"), Bombardier Capital Inc., as Servicer, and ___________,
as Trustee, which incorporates by reference the Company's
Standard Terms to Pooling and Servicing Agreement (January 2000
Edition) (collectively, the "Pooling and Servicing Agreement").
In connection with the administration of the Mortgage Loans held by you
as the Trustee or Custodian, we request the release and acknowledge receipt, of
the Trustee Mortgage Loan File [specify documents if only a partial Trustee
Mortgage Loan File is being released]) for the Mortgage Loan described below,
for the reason indicated.
Mortgagor's Name and Address & Zip Code:
Mortgage Loan Number:
Reason for Requesting Documents (check one)
___ 1. Mortgage Loan Paid in Full. (The Servicer hereby certifies
that all amounts received in connection therewith have been
deposited into the applicable Certificate Account as provided
in the Pooling and Servicing Agreement.)
___ 2. Mortgage Loan Liquidated by ______________. (The Servicer hereby
certifies that all proceeds of foreclosure, insurance,
condemnation or other liquidation have been finally received.)
___ 3. Mortgage Loan in Foreclosure.
___ 4. Other (explain). _________________________
Exhibit 4 - Page 1
If item 1 or 2 above is checked, and if all or part of the Trustee
Mortgage Loan File was previously released to us, please release to us our
previous request and receipt on file with you, as well as any additional
documents in your possession relating to the specified Mortgage Loan.
If item 3 or 4 above is checked, upon our return of all of the above
documents to you as the Trustee or Custodian, please acknowledge your receipt by
signing in the space indicated below, and returning this form.
Capitalized terms used herein but not defined herein have the meanings
ascribed to them in the Pooling and Servicing Agreement.
BOMBARDIER CAPITAL INC.,
as Servicer
By:_____________________________________
Name:________________________________
Title:_______________________________
Date:________________________________
Acknowledgment of Documents returned to the Trustee or Custodian:
NAME OF TRUSTEE OR CUSTODIAN
By:_____________________________________
Name:________________________________
Title:_______________________________
Date:________________________________
Exhibit 4 - Page 2
EXHIBIT 5
RULE 144A AGREEMENT--QIB CERTIFICATION
BOMBARDIER CAPITAL MORTGAGE SECURITIZATION CORPORATION,
SERIES 20_-_
PASS-THROUGH CERTIFICATES, CLASS__
_________________
(DATE)
[Name and Address of
the Trustee]
Bombardier Capital Mortgage Securitization Corporation
Bombardier Capital Inc.
1600 Mountain View Drive
Colchester, Vermont 05446
Ladies and Gentlemen:
In connection with the purchase on the date hereof of the captioned
securities (the "Purchased Certificates"), the undersigned (the "Transferee")
hereby certifies and covenants to the transferor, Bombardier Capital Mortgage
Securitization Corporation (the "Company"), the Servicer, the Trustee and the
Trust as follows:
1. The Transferee is a "qualified institutional buyer" as that term is
defined in Rule 144A ("Rule 144A") promulgated under the Securities Act of 1933,
as amended (the "1933 Act") and has completed the form of certification to that
effect attached hereto as Annex A1 (if the Transferee is not a registered
investment company) or Annex A2 (if the Transferee is a registered investment
company). The Transferee is aware that the sale to it is being made in reliance
on Rule 144A.
2. The Transferee understands that the Purchased Certificates have not
been registered under the 1933 Act or registered or qualified under any state
securities laws and that no transfer may be made unless the Purchased
Certificates are registered under the 1933 Act and under applicable state law or
unless an exemption from such registration is available. The Transferee further
understands that neither the Company, the Servicer, the Trustee nor the Trust is
under any obligation to register the Purchased Certificates or make an exemption
from such registration available.
Exhibit 5 - Page 1
3. The Transferee is acquiring the Purchased Certificates for its own
account or for the account of a "qualified institutional buyer" (as defined in
Rule 144A, a "QIB"), and understands that such Purchased Certificates may be
resold, pledged or transferred only (a) to a person reasonably believed to be
such a QIB that purchases for its own account or for the account of a QIB to
whom notice is given that the resale, pledge or transfer is being made in
reliance on Rule 144A, or (b) pursuant to another exemption from registration
under the 1933 Act and under applicable state securities laws. In addition, such
transfer may be subject to additional restrictions, as set forth in Section 5.05
of the Standard Terms to the Pooling and Servicing Agreement (the "Standard
Terms") referred to below. By its execution of this agreement, the Transferee
agrees that it will not resell, pledge or transfer any of the Purchased
Certificates to anyone otherwise than in strict compliance with Rule 144A, or
pursuant to another exemption from registration under the 1933 Act and all
applicable state securities laws, and in strict compliance with the transfer
restrictions set forth in Section 5.05 of the Standard Terms. The Transferee
will not attempt to transfer any or all of the Purchased Certificates pursuant
to Rule 144A unless the Transferee offers and sells such Certificates only to
QIBs or to offerees or purchasers that the Transferee and any person acting on
behalf of the Transferee reasonably believe (as described in paragraph (d)(1) of
Rule 144A) is a QIB.
4. The Transferee has been furnished with all information that it
requested regarding (a) the Purchased Certificates and distributions thereon and
(b) the Pooling and Servicing Agreement referred to below.
5. If applicable, the Transferee has complied, will comply in all
material respects with applicable regulatory guidelines relating to the
ownership of mortgage derivative products.
All capitalized terms used but not otherwise defined herein have the
respective meanings assigned thereto in the Pooling and Servicing Agreement,
dated as of _________________1, 20__ , which incorporates by reference the
Standard Terms thereto (Janaury 2000 Edition), among the Company, Bombardier
Capital Inc. and ________________, as Trustee, pursuant to which the Purchased
Certificates were issued.
IN WITNESS WHEREOF, the undersigned has caused this Rule 144A Agreement
to be executed by its duly authorized representative as of the day and year
first above written.
[TRANSFEREE]
By:_____________________________________
Name:___________________________________
Title:__________________________________
Exhibit 5 - Page 2
Annex A1 to Exhibit 5
TRANSFEREES OTHER THAN REGISTERED INVESTMENT COMPANIES
------------------------------------------------------
1. As indicated below, the undersigned is the President, Chief
Financial Officer, Senior Vice President or other executive officer of the
Transferee.
2. The Transferee is a "qualified institutional buyer" as that term is
defined in Rule 144A ("Rule 144A") promulgated under the Securities Act of 1933,
as amended (the "1933 Act"), because (a) the Transferee owned and/or invested on
a discretionary basis at least $____ in securities [Note to reviewer - the
amount in the previous blank must be at least $100,000,000 unless the Transferee
is a dealer, in which case the amount filled in the previous blank must be at
least $10,000,000.] (except for the excluded securities referred to in paragraph
3 below) as of _____________ [specify a date on or since the end of the
Transferee's most recently ended fiscal year] (such amount being calculated in
accordance with Rule 144A) and (b) the Transferee meets the criteria listed in
the category marked below.
_____ Corporation, etc. The Transferee is an organization described in
Section 501(c)(3) of the Internal Revenue Code of 1986, as amended,
a corporation (other than a bank as defined in Section 3(a)(2) of
the 1933 Act or a savings and loan association or other similar
institution referenced in Section 3(a)(5)(A) of the Act), a
partnership, or a Massachusetts or similar business trust.
_____ Bank. The Transferee (a) is a national bank or banking institution
as defined in Section 3(a)(2) of the 1933 Act and is organized
under the laws of a state, territory or the District of Columbia.
The business of the Transferee is substantially confined to banking
and is supervised by the appropriate state or territorial banking
commission or similar official or is a foreign bank or equivalent
institution, and (b) has an audited net worth of at least
$25,000,000 as demonstrated in its latest annual financial
statements as of a date not more than 16 months preceding the date
of this certification in the case of a U.S. bank, and not more than
18 months preceding the date of this certification in the case of a
foreign bank or equivalent institution, a copy of which financial
statements is attached hereto.
_____ Savings and Loan. The Transferee is a savings and loan association,
building and loan association, cooperative bank, homestead
association or similar institution referenced in Section 3(a)(5)(A)
of the 1933 Act. The Transferee is supervised and examined by a
state or federal authority having supervisory authority over any
such institutions or is a foreign savings and loan association or
equivalent institution and has an audited net
Exhibit 5 - Page 3
worth of at least $25,000,000 as demonstrated in its latest annual
financial statements as of a date not more than 16 months preceding
the date of this certification in the case of a U.S. savings and
loan association or similar institution, and not more than 18
months preceding the date of this certification in the case of a
foreign savings and loan association or equivalent institution,
a copy of which financial statements is attached hereto.
_____ Broker-dealer. The Transferee is a dealer registered pursuant
to Section 15 of the Certificates Exchange Act of 1934, as amended
(the "1934 Act").
_____ Insurance Company. The Transferee is an insurance company as
defined in Section 2(13) of the 1933 Act, whose primary and
predominant business activity is the writing of insurance or the
reinsuring of risks underwritten by insurance companies and which
is subject to supervision by the insurance commissioner or a
similar official or agency of a state, territory or the District of
Columbia.
_____ State or Local Plan. The Transferee is a plan established and
maintained by a state, its political subdivisions, or any agency or
instrumentality of a state or its political subdivisions, for the
benefit of its employees.
_____ ERISA Plan. The Transferee is an employee benefit plan within the
meaning of Title I of the Employee Retirement Income Certificate
Act of 1974, as amended.
_____ Investment Adviser. The Transferee is an investment adviser
registered under the Investment Advisers Act of 1940, as amended.
_____ Other. The Transferee qualifies as a "qualified institutional
buyer" as defined in Rule 144A on the basis of facts other than
those listed in any of the entries above. If this response is
marked, the Transferee must certify on additional pages, to be
attached to this certification, to facts that satisfy the Servicer
that the Transferee is a "qualified institutional buyer" as defined
in Rule 144A.
3. The term "securities" as used herein does not include (a) securities
of issuers that are affiliated with the Transferee, (b) securities constituting
the whole or part of an unsold allotment to or subscription by the Transferee,
if the Transferee is a dealer, (c) bank deposit notes and certificates of
deposit, (d) loan participations, (e) repurchase agreements, (f) securities
owned but subject to a repurchase agreement and (g) currency, interest rate and
commodity swaps.
4. For purposes of determining the aggregate amount of securities owned
and/or invested on a discretionary basis by the Transferee, the Transferee used
the cost of such securities to the Transferee and did not include any of the
securities referred to in the preceding paragraph. Further, in
Exhibit 5 - Page 4
determining such aggregate amount, the Transferee may have included securities
owned by subsidiaries of the Transferee, but only if such subsidiaries are
consolidated with the Transferee in its financial statements prepared in
accordance with generally accepted accounting principles and if the investments
of such subsidiaries are managed under the Transferee's direction. However, such
securities were not included if the Transferee is a majority-owned, consolidated
subsidiary of another enterprise and the Transferee is not itself a reporting
company under the 1934 Act.
5. The Transferee acknowledges that it is familiar with Rule 144A and
understands that the Transferor and other parties related to the Purchased
Certificates are relying and will continue to rely on the statements made herein
because one or more sales to the Transferee may be made in reliance on Rule
144A.
6. Will the Transferee be purchasing _____ _____
the Purchased Certificates only YES NO
for the Transferee's own account?
If the answer to the foregoing question is "NO", the Transferee agrees
that, in connection with any purchase of securities sold to the Transferee for
the account of a third party (including any separate account) in reliance on
Rule 144A, the Transferee will only purchase for the account of a third party
that at the time is a "qualified institutional buyer" within the meaning of Rule
144A. In addition, the Transferee agrees that the Transferee will not purchase
securities for a third party unless the Transferee has obtained a current
representation letter from such third party or taken other appropriate steps
contemplated by Rule 144A to conclude that such third party independently meets
the definition of "qualified institutional buyer" set forth in Rule 144A.
7. The Transferee will notify each of the parties to which this
certification is made of any changes in the information and conclusions herein.
Until such notice is given, the Transferee's purchase of the Purchased
Certificates will constitute a reaffirmation of this certification as of the
date of such purchase. In addition, if the Transferee is a bank or savings and
loan as provided above, the Transferee agrees that it will furnish to such
parties updated annual financial statements promptly after they become
available.
IN WITNESS WHEREOF, the undersigned has caused this certificate to be
executed by its duly authorized representative this ___ day of __________,20 __.
________________________________________
Print Name of Transferee
By:_____________________________________
Name:___________________________________
Title:__________________________________
Date:___________________________________
Exhibit 5 - Page 5
Annex A2 to Exhibit 5
REGISTERED INVESTMENT COMPANIES
1. As indicated below, the undersigned is the President, Chief
Financial Officer or Senior Vice President of the entity purchasing the
Purchased Certificates (the "Transferee") or, if the Transferee is part of a
Family of Investment Companies (as defined in paragraph 3 below), is an officer
of the related investment adviser (the "Adviser").
2. The Transferee is a "qualified institutional buyer" as that term is
defined in Rule 144A ("Rule 144A") promulgated under the Securities Act of 1933,
as amended (the "1933 Act"), because (a) the Transferee is an investment company
(a "Registered Investment Company") registered under the Investment Company Act
of 1940, as amended (the "1940 Act") and (b) as marked below, the Transferee
alone, or the Transferee's Family of Investment Companies, owned at least
$__________ [Note to reviewer - the amount in the previous blank must be at
least $100,000,000] in securities (other than the excluded securities referred
to in paragraph 4 below) as of __________ [specify a date on or since the
end of the Transferee's most recently ended fiscal year]. For purposes of
determining the amount of securities owned by the Transferee or the Transferee's
Family of Investment Companies, the cost of such securities to the Transferee
or the Transferee's Family of Investment Companies was used.
___ The Transferee owned $__________ in securities (other than the excluded
securities referred to in paragraph 4 below) as of the end of the
Transferee's most recent fiscal year (such amount being calculated in
accordance with Rule 144A).
___ The Transferee is part of a Family of Investment Companies which owned
in the aggregate $__________ in securities (other than the excluded
securities referred to in paragraph 4 below) as of the end of the
Transferee's most recent fiscal year (such amount being calculated in
accordance with Rule 144A).
3. The term "Family of Investment Companies" as used herein means two
or more Registered Investment Companies except for a unit investment trust whose
assets consist solely of shares of one or more Registered Investment Companies
(provided that each series of a "series company," as defined in Rule 18f-2 under
the 1940 Act, shall be deemed to be a separate investment company) that have the
same investment adviser (or, in the case of a unit investment trust, the same
depositor) or investment advisers (or depositors) that are affiliated (by virtue
of being majority-owned subsidiaries of the same parent or because one
investment adviser is a majority-owned subsidiary of the other).
Exhibit 5 - Page 6
4. The term "securities" as used herein does not include (a) securities
of issuers that are affiliated with the Transferee or are part of the
Transferee's Family of Investment Companies, (b) bank deposit notes and
certificates of deposit, (c) loan participations, (d) repurchase agreements, (e)
securities owned but subject to a repurchase agreement and (f) currency,
interest rate and commodity swaps.
5. The Transferee is familiar with Rule 144A and understands that the
parties to which this certification is being made are relying and will continue
to rely on the statements made herein because one or more sales to the
Transferee will be in reliance on Rule 144A. In addition, the Transferee will
only purchase for the Transferee's own account.
6. The undersigned will notify the parties to which this certification
is made of any changes in the information and conclusions herein. Until such
notice, the Transferee's purchase of the Purchased Certificates will constitute
a reaffirmation of this certification by the undersigned as of the date of such
purchase.
IN WITNESS WHEREOF, the undersigned has caused this certificate to be
executed by its duly authorized representative this ___of _______________, 20__.
____________________________________
Print Name of Transferee or
Adviser
By:_____________________________________
Name:___________________________________
Title:__________________________________
IF AN ADVISER:
____________________________________
Print Name of Transferee
Date:______________________
Exhibit 5 - Page 7
EXHIBIT 6
FORM OF TRANSFEREE AGREEMENT
BOMBARDIER CAPITAL MORTGAGE SECURITIZATION CORPORATION,
SERIES 20__-__
PASS-THROUGH CERTIFICATES
CLASS__
__________________
[Name of Transferee]
___________________
(DATE)
[NAME AND ADDRESS OF TRUSTEE]
Bombardier Capital Mortgage Securitization Corporation
Bombardier Capital Inc.
1600 Mountain View Drive
Colchester, Vermont 05446
Re: Bombardier Capital Mortgage Securitization Corporation,
Series 20__-__ Pass-Through Certificates, Class ____,
representing a [___% Percentage Interest] [$
denomination].
Ladies and Gentlemen:
The undersigned (the "Transferee") proposes to purchase all or some of
the Class _____, Class ____, Class ____ and Class _____ Certificates (the
"Purchased Certificates"), issued by the Trust established pursuant to a pooling
and servicing agreement, dated as of __________ (the "Series Agreement"), among
Bombardier Capital Mortgage Securitization Corporation (the "Company"),
Bombardier Capital Inc. ("BCI") and _________________, as Trustee, which
incorporates by reference the
Exhibit 6 - Page 1
Company's Standard Terms to Pooling and Servicing Agreement (Janaury 2000
Edition) (the "Standard Terms," and, collectively with the Series Agreement, the
"Agreement"). In doing so the Transferee hereby acknowledges and agrees as
follows:
Section 1. Definitions. Each capitalized term used herein and not
otherwise defined herein shall have the meaning ascribed to it in the Agreement.
Section 2. Representations and Warranties of the Transferee. In
connection with the proposed transfer of the Purchased Certificates, the
Transferee represents and warrants to the Company, BCI, the Servicer, the
Trustee and the Trust as follows:
(a) The Transferee is purchasing the Purchased Certificates
for its own account as principal for investment purposes and not with a
view to the distribution of the Purchased Certificates, in whole or in
part, in violation of Section 5 of the Securities Act of 1933, as
amended (the "Act").
(b) The Transferee has knowledge in financial and business
matters and is capable of evaluating the merits and risks of an
investment in the Purchased Certificates; the Transferee has sought
such accounting, legal and tax advice as it has considered necessary to
make an informed investment decision; and the Transferee is able to
bear the economic risk of an investment in the Purchased Certificates
and can afford a complete loss of such investment.
(c) The Transferee confirms that the Company and the Servicer
have made available to the Transferee the opportunity to ask questions
of, and receive answers from, the Company and the Servicer concerning
the Company, the Servicer, the Trust, the purchase by the Transferee of
the Purchased Certificates and all matters relating thereto, and to
obtain additional information relating thereto that the Company or the
Servicer possesses or can acquire without unreasonable effort or
expense.
(d) The Transferee is an "accredited investor" as defined in
paragraph (1), (2), (3) or (7) of Rule 501(a) under the Act.
Section 3. Covenants of the Transferee. In consideration of the
proposed transfer, the Transferee covenants with each of the Company, BCI, the
Servicer, the Trustee and the Trust as follows:
(a) The Transferee will not make a public offering of the
Purchased Certificates, and will not reoffer or resell the Purchased
Certificates in a manner that would render the issuance and sale of the
Purchased Certificates, whether considered together with the resale or
otherwise, a violation of the Act or any state securities or "Blue Sky"
laws or require registration pursuant thereto.
Exhibit 6 - Page 2
(b) The Transferee agrees that, in its capacity as a holder of
the Purchased Certificates, it will assert no claim or interest in the
Contracts by reason of owning the Purchased Certificates other than
with respect to amounts that may be properly and actually payable to
the Transferee pursuant to the terms of the Pooling and Servicing
Agreement and the Purchased Certificates.
(c) The Transferee hereby agrees to abide by the terms of the
Agreement that will be applicable to it as a Certificateholder,
including, without limitation, the indemnification provisions contained
in the second sentence of Section 5.05(a) of the Agreement.
(d) If applicable, the Transferee will comply in all material
respects with applicable regulatory guidelines relating to the
ownership of mortgage derivative products.
Section 4. Transfer of Purchased Certificates.
(a) The Transferee understands that the Purchased Certificates have not
been registered under the Act or any state securities laws and that no transfer
may be made unless the Purchased Certificates are registered under the Act and
under applicable state law or unless an exemption from such registration is
available. If requested by the Servicer or the Trustee, the Transferee and the
Holder of Purchased Certificates who desires to effect this transfer have
certified to the Trustee, the Company and the Servicer as to the factual basis
for the registration or qualification exemption relied upon. The Transferee
further understands that neither the Company, BCI, the Servicer, the Trustee nor
the Trust is under any obligation to register the Purchased Certificates or make
an exemption from such registration available.
(b) In the event that the transfer is to be made within three years of
the date the Purchased Certificates were acquired by a non-Affiliate of the
Company from the Company or an Affiliate of the Company, the Servicer or the
Trustee may require an Opinion of Counsel (which shall not be an expense of the
Company, BCI, the Servicer or the Trustee) that such transfer is not required to
be registered under the Act or state securities laws.
(c) Any Certificateholder desiring to effect a transfer shall, and does
hereby agree to, indemnify the Company, the Servicer and the Trustee against any
liability that may result if the transfer is not exempt under federal or
applicable state securities laws.
(d) The transfer of the Purchased Certificates may be subject to
additional restrictions, as set forth in Section 5.05 of the Standard Terms of
the Pooling and Servicing Agreement, a copy of which is attached hereto as Annex
A.
All capitalized terms used but not otherwise defined herein have the
respective meanings assigned thereto in the Pooling and Servicing Agreement.
Exhibit 6 - Page 3
IN WITNESS WHEREOF, the undersigned has caused this Transferee
Certification and Agreement to be validly executed by its duly authorized
representative this __ day of _____________, 20__.
_________________________________
By:______________________________
Its:_____________________________
Exhibit 6 - Page 4
Annex A to Exhibit 6
ATTACH COPY OF SECTION 5.05 OF THE
STANDARD TERMS TO POOLING AND SERVICING AGREEMENT
Exhibit 6 - Page 5
EXHIBIT 7
BENEFIT PLAN AFFIDAVIT
Re: Bombardier Capital Mortgage Securitization
Corporation, BCMSC Trust _____________ (the "Trust")
Pass-Through Certificates, Class ___,
Class ____ and Class ____
)
) ss:
)
Under penalties of perjury, I, the undersigned, declare that, to the
best of my knowledge and belief, the following representations are true,
correct, and complete.
1. That I am a duly authorized officer of ____________, a ___________
corporation (the "Purchaser"), whose taxpayer identification number is _______,
and on behalf of which I have the authority to make this affidavit.
2. That the Purchaser is acquiring the Class __________ Certificates
("the Purchased Certificates"), each representing an interest in the Trust, for
certain assets of which one or more real estate mortgage investment conduit
("REMIC") elections are to be made under Section 860D of the Internal Revenue
Code of 1986, as amended (the "Code").
3. The Purchaser either:
(i) (A) is not a plan ("Plan") described in or subject to the
Department of Labor regulations set forth in 29 C.F.R. 'SS' 2510.3-101
(the "Plan Asset Regulations"), a person acting on behalf of a Plan, or
a person using the assets of a Plan and (B) either (I) is not an
insurance company or (II) is an insurance company, in which case none
of the funds used by the Purchaser in connection with its purchase of
the Purchased Certificates constitute plan assets as defined in the
Plan Asset Regulations ("Plan Assets") and its purchase of the
Purchased Certificates shall not result in the certificates issued by
or the assets of the Trust being deemed to be Plan Assets;
(ii) is an insurance company and (A) the Purchaser is
acquiring the Purchased Certificates with funds held in an "insurance
company general account" (as defined in Section V(e) of Prohibited
Transaction Class Exemption 95-60 ("PTCE 95-60"), as published in 60
Fed. Reg. 35925 (July 12, 1995)), (B) there is no Plan with respect to
which the amount of such general
Exhibit 7 - Page 1
account's reserves and liabilities for all contracts held by or on
behalf of such Plan and all other Plans maintained by the same
employer, or its affiliates (as defined in Section V(a)(1) of PTCE
95-60), or by the same employee organization exceeds or will exceed 10%
of the total of all reserves and liabilities of such general account
(as such amounts are determined under Section I(a) of PTCE 95-60) at
the date of acquisition, (C) the purchase of the Purchased Certificates
is not part of an agreement, arrangement, or understanding designed to
benefit a party in interest, and (D) the conditions of Prohibited
Transaction Exemption ________________ [INSERT SPECIFIC UNDERWRITER'S
EXEMPTION OR PTE 83-1 (except for the conditions stated in section
II(A)(2) and (3) thereof) are met; or
(iii) has provided a "Benefit Plan Opinion," obtained at the
Purchaser's expense, satisfactory to the Company, the Servicer, and the
Trustee. A Benefit Plan Opinion is an opinion of counsel to the effect
that the proposed transfer will not (a) cause the assets of the Trust
to be regarded as Plan Assets, (b) give rise to a fiduciary duty under
the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), on the part of the Company, the Servicer, or the Trustee, or
(c) be treated as, or result in, a prohibited transaction under Section
406 or 407 of ERISA or Section 4975 of the Code.
Capitalized terms used but not otherwise defined herein shall have the
meanings assigned to such terms in the Pooling and Servicing Agreement, dated as
of __________________ __, ____, which incorporates by reference the Standard
Terms thereto (Janaury 2000 Edition), among the Company, Bombardier Capital
Inc., and _____________________, as Trustee.
Exhibit 7 - Page 2
IN WITNESS WHEREOF, the Purchaser has caused this instrument to be
duly executed on its behalf, by its duly authorized officer this ___ day of
_____________, 20__.
______________________________
[Name of Purchaser]
By: ____________________________________
Its:____________________________________
Personally appeared before me ___________________, known or proved to
me to be the same person who executed the foregoing instrument and to be a
_____________________ of the Purchaser, and acknowledged to me that he executed
the same as his or her free act and deed and as the free act and deed of the
Purchaser.
Subscribed and sworn before me
this _________ day of ______________, ____.
__________________________________________
Notary Public
My commission expires: _______________________________.
Exhibit 7 - Page 3
EXHIBIT 8
FORM OF RESIDUAL TRANSFEREE AGREEMENT
BOMBARDIER CAPITAL MORTGAGE SECURITIZATION CORPORATION,
SERIES 20__-__
PASS-THROUGH CERTIFICATES,
CLASS ___
RESIDUAL TRANSFEREE
___________________
[Name of Transferee]
___________________
(DATE)
[NAME AND ADDRESS OF TRUSTEE]
Bombardier Capital Mortgage Securitization Corporation
Bombardier Capital Inc.
1600 Mountain View Drive
Colchester, Vermont 05446
Re: Bombardier Capital Mortgage Securitization Corporation,
Series 20__-__, Pass-Through Certificates, Class ____,
representing a [___% Percentage Interest] [$
denomination].
Ladies and Gentlemen:
The undersigned (the "Transferee") proposes to purchase all or some of
the captioned Certificates (the "Residual Certificates"), issued by the Trust
established pursuant to a pooling and servicing agreement dated as of
_____________, 20__ (the "Series Agreement"), among Bombardier Capital Mortgage
Securitization Corporation (the "Company"), Bombardier Capital Inc. ("BCI"), and
________________________, as Trustee, which incorporates by reference the
Standard Terms thereto, January 2000 Edition
Exhibit 8 - Page 1
(the "Standard Terms" and, collectively with the Series Agreement, the
"Agreement"). In doing so the Transferee hereby acknowledges and agrees as
follows:
Section 1. Definitions. Each capitalized term used herein and not
otherwise defined herein shall have the meaning ascribed to it in the Agreement.
Section 2. Representations and Warranties of the Transferee. In
connection with the proposed transfer of the Purchased Certificates, the
Transferee represents and warrants to the Company, BCI, the Servicer, the
Trustee and the Trust as follows:
(a) The Transferee has knowledge in financial and business
matters and is capable of evaluating the merits and risks of an
investment in the Residual Certificates; the Transferee has sought such
accounting, legal and tax advice as it has considered necessary to make
an informed decision; and the Transferee is able to bear the economic
risk of an investment in the Residual Certificates and can afford a
complete loss of such investment.
(b) The Transferee represents that (i) it understands that
each of the Residual Certificates represents for federal income tax
purposes a "residual interest" in a real estate mortgage investment
conduit (a "REMIC") and that, as the holder of the Residual
Certificates, it will be required to take into account, in determining
its taxable income, its pro rata share of the taxable income of the
REMIC, (ii) it understands that it may incur federal income tax
liabilities with respect to the Residual Certificates in excess of any
cash flows generated by the Residual Certificates and (iii) it has
historically paid its debts as they became due and has the financial
wherewithall and intends to continue to pay its debts as they come due
in the future, including any tax imposed on the income that it derives
from the Residual Certificates as such taxes become due.
*(c) The Transferee is acquiring the Residual Certificates for
its own account as principal and not with a view to the resale or
distribution thereof, in whole or in part, in violation of Section 5 of
the Securities Act of 1933, as amended (the "Act").
*(d) The Transferee confirms that the Company has made
available to the Transferee the opportunity to ask questions of, and
receive answers from, the Company concerning the Company, the Trust,
the purchase by the Transferee of the Residual Certificates and all
matters relating thereto, and to obtain additional information relating
thereto that the Company possesses or can acquire unreasonable effort
or expense.
Section 3. Covenants. The Transferee covenants:
----------------
*These representations and covenants are to be deleted if the Residual
Securities are not Private Securities.
Exhibit 8 - Page 2
*(a) The Transferee will not make a public offering of the
Residual Certificates, and will not reoffer or resell the Residual
Certificates in a manner that would render the issuance and sale of the
Residual Certificates whether considered together with the resale or
otherwise, a violation of the Act, or any state securities or "Blue
Sky" laws or require registration pursuant thereto.
(b) The Transferee agrees that, in its capacity as a holder of
the Residual Certificates, it will assert no claim or interest in the
Contracts by reason of owning the Residual Certificates other than with
respect to amounts that may be properly and actually payable to the
Transferee pursuant to the terms of the Pooling and Servicing Agreement
and the Certificates.
(c) If applicable, the Transferee will comply with respect to
the Residual Certificates in all material respects with applicable
regulatory guidelines relating to the ownership of mortgage derivative
products.
(d) Upon notice thereof, the Transferee agrees to any future
amendment to the provisions of the Pooling and Servicing Agreement
relating to the transfer of the Residual Certificates (or any interest
therein) that counsel to the Company or the Trust may deem necessary to
ensure that any such transfer will not result in the imposition of any
tax on the Trust.
(e) The Transferee hereby agrees that the Servicer or an
affiliate thereof will (i) supervise or engage in any action necessary
or advisable to preserve the status of the REMIC as a REMIC, (ii) be,
and perform the functions of, the REMIC's tax matters person ("TMP"),
and (iii) employ on a reasonable basis counsel, accountants, and
professional assistance to aid in the preparation of tax returns or the
performance of the above.
(f) The Transferee hereby agrees to cooperate with the TMP and
to take any action required of it by the REMIC Provisions in order to
create or maintain the REMIC status of the REMIC.
(g) The Transferee hereby agrees that it will not take any
action that could endanger the REMIC status of any related REMIC or
result in the imposition of tax on any such REMIC unless counsel for,
or acceptable to, the TMP has provided an opinion that such action will
not result in the loss of such REMIC status or the imposition of such
tax, as applicable.
Section 4. Additional Transfer Restrictions.
(a) No transfer of the Residual Certificates shall be made unless the
Servicer has consented in writing to such transfer. No Residual Certificate may
be transferred to a Disqualified Organization. The Servicer will not consent to
any proposed transfer (i) to any investor that it knows is a Disqualified
Organization or (ii) if the transfer involves less than an entire interest in a
Residual Certificate unless (A) the interest transferred is an undivided
interest or (B) the transferor or the transferee provides the Servicer with
Exhibit 8 - Page 3
an Opinion of Counsel obtained at its own expense to the effect that the
transfer will not jeopardize the REMIC status of any related REMIC. The
Servicer's consent to any transfer is further conditioned the Servicer's receipt
from the proposed transferee of (x) a Residual Transferee Agreement, (y) a
Benefit Plan Affidavit, and (z) either (A) if the transferee is a Non-U.S.
Person, an affidavit of the proposed transferee in substantially the form
attached as Exhibit 8-A to Exhibit 8 to the Standard Terms and a certificate of
the transferor stating whether the Class R Certificate has "tax avoidance
potential" as defined in Treasury Regulations Section 1.860G- 3(a)(2), or (B) if
the transferee is a U.S. Person, an affidavit in substantially the form attached
as Exhibit 8-B to Exhibit 8 to the Standard Terms. In addition, if a proposed
transfer involves a Private Certificate, (1) the Servicer or the Trustee shall
require that the transferor and transferee certify as to the factual basis for
the registration or qualification exemption(s) relied upon to exempt the
transfer from registration under the Act and all applicable state securities or
"blue sky" laws, and (2) if the transfer is to be made within three years after
the acquisition thereof by a non-Affiliate of the Company from the Company or an
Affiliate of the Company, the Servicer or the Trustee also may require an
Opinion of Counsel that such transfer may be made without registration or
qualification under the Act and applicable state securities laws, which Opinion
of Counsel shall not be obtained at the expense of the Company, the Trustee or
the Servicer. Notwithstanding the foregoing, no Opinion of Counsel shall be
required in connection with the initial transfer of the Residual Certificates or
their transfer by a broker or dealer, if such broker or dealer was the initial
transferee. Notwithstanding the fulfillment of the prerequisites described
above, the Servicer may withhold its consent to, or the Trustee may refuse to
recognize, a transfer of a Residual Certificate, but only to the extent
necessary to avoid a risk of disqualification of a related REMIC as a REMIC or
the imposition of a tax upon any such REMIC. Any attempted transfer in violation
of the foregoing restrictions shall be null and void and shall not be recognized
by the Trustee.
(b) If a tax or a reporting cost is borne by a related REMIC as a
result of the transfer of the Residual Certificates or any beneficial interest
therein, in violation of the restrictions referenced herein, the Transferor
shall pay such tax or cost and, if such tax or costs are not so paid, the
Trustee, upon notification from the Servicer, shall pay such tax or reporting
cost with amounts that otherwise would have been paid to the transferee of such
Residual Certificates. In that event, neither the Transferee nor the transferor
shall have any right to seek repayment of such amounts from the Company, the
Servicer, the Trustee, the Trust, the REMIC or the holders of any other
Certificates, and none of such parties shall have any liability for payment of
any such tax or reporting cost. In the event that a Residual Certificate is
transferred to a Disqualified Organization, the Servicer shall make, or cause to
be made, available the information necessary for the computation of the excise
tax imposed under section 860E(e) of the Code.
Section 5. Acknowledgments.
(a) The Transferee acknowledges that, if the Residual Certificates are
Private Certificates, the Residual Certificates have not been registered under
the Act or registered or qualified under any state securities laws and that no
transfer may be made unless the Purchased Certificates are registered under the
Act and under applicable state law or unless an exemption from such registration
is available. The
Exhibit 8 - Page 4
Transferee further understands that neither the Company, the Servicer nor the
Trust is under any obligation to register the Certificate or make an exemption
from such registration available.
(b) The Transferee acknowledges that if any United States federal
income tax is due at the time a Non-U.S. Person transfers a Residual
Certificate, the Trustee or its designated Paying Agent or other person who is
liable to withhold federal income tax from a distribution on a Residual
Certificate under sections 1441 and 1442 of the Code and the regulations
thereunder (the "Withholding Agent") may (i) withhold an amount equal to the
taxes due upon disposition of the Certificate from future distributions made
with respect to the Certificate to the transferee (after giving effect to the
withholding of taxes imposed on such transferee), and (ii) pay the withheld
amount to the Internal Revenue Service unless satisfactory written evidence of
payment of the taxes due by the transferor has been provided to the Withholding
Agent. Moreover, the Withholding Agent may (x) hold distributions on a
Certificate, without interest, pending determination of amounts to be withheld,
(y) withhold other amounts required to be withheld pursuant to United States
federal income tax law, if any, from distributions that otherwise would be made
to such transferee on each Certificate it holds, and (z) pay to the Internal
Revenue Service all such amounts withheld.
(c) The Transferee acknowledges that the transfer of all or part of the
Residual Certificates that have "tax avoidance potential" (as defined in
Treasury Regulations section 1.860G-3(a)(2) or any successor provision) to a
Non-U.S. Person will be disregarded for all federal income tax purposes.
(d) The Transferee acknowledges that the transfer of the Residual
Certificates to a U.S. Person will be disregarded for all federal income tax
purposes if a significant purpose of the transfer is to impede the assessment or
collection of the taxes and expenses associated with the security within the
meaning of Treasury regulation section 1.860E-1(c)(1).
IN WITNESS WHEREOF, the undersigned has caused the Pooling and
Servicing Agreement be validly executed by its duly authorized representative as
of the day and year first above written.
______________________________
[Name of Transferee]
By:_____________________________________
Its:____________________________________
Exhibit 8 - Page 5
EXHIBIT 8-A
BOMBARDIER CAPITAL MORTGAGE SECURITIZATION CORPORATION
FOREIGN PERSON AFFIDAVIT
AND AFFIDAVIT PURSUANT TO SECTIONS
860D(a)(6)(A) and 860E(e)(4)
OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED
Re: Bombardier Capital Mortgage Securitization Corporation
Series ___________________ Trust (the "Trust")
Pass-Through Certificates, Class ___
STATE OF ____________ )
) ss.:
COUNTY OF ___________ )
Under penalties of perjury, I, the undersigned, declare that to the
best of my knowledge and belief, the following representations are true,
correct, and complete:
1. I am a duly authorized officer of ______________ (the "Transferee"),
and on behalf of which I have the authority to make this affidavit.
2. The Transferee is acquiring all or a portion of the securities (the
"Residual Certificates"), which represent a residual interest in one or more
real estate mortgage investment conduits (each, a "REMIC") for which elections
are to be made under Section 860D of the Internal Revenue Code of 1986, as
amended (the "Code").
3. The Transferee is a foreign person within the meaning of Treasury
Regulation Section 1.860G-3(a)(1) (i.e., a person other than (i) a citizen or
resident of the United States, (ii) a corporation or partnership that is
organized under the laws of the United States or any jurisdiction thereof or
therein, (iii) an estate that is subject to United States federal income tax
regardless of the source of its income), or (iv) a trust if a court within the
United States is able to exercise primary supervision over the administration of
the trust and one or more United States fiduciaries has the authority to control
all substantial decisions of the trust who would be subject to United States
income tax withholding pursuant to Section 1441 or 1442 of the Code on income
derived from the Residual Certificates (a "Non-U.S. Person").
Exhibit 8-A - Page 1
4. The Transferee agrees that it will not hold the Residual
Certificates in connection with a trade or business in the United States, and
the Transferee understands that it will be subject to United States federal
income tax under sections 871 and 881 of the Code in accordance with section
860G of the Code and any Treasury regulations issued thereunder on "excess
inclusions" that accrue with respect to the Residual Certificates during the
period the Transferee holds the Residual Certificates.
5. The Transferee understands that the federal income tax on excess
inclusions with respect to the Residual Certificates may be withheld in
accordance with section 860G(b) of the Code from distributions that otherwise
would be made to the Transferee on the Residual Certificates and, to the extent
that such tax has not been imposed previously, that such tax may be imposed at
the time of disposition of any such Residual Certificate pursuant to section
860G(b) of the Code.
6. The Transferee agrees (i) to file a timely United States federal
income tax return for the year in which disposition of a Residual Certificate it
holds occurs (or earlier if required by law) and will pay any United States
federal income tax due at that time and (ii) if any tax is due at that time, to
provide satisfactory written evidence of payment to the Trustee or its
designated paying agent or other person who is liable to withhold federal income
tax from a distribution on the Residual Certificates under sections 1441 and
1442 of the Code and the regulations thereunder (the "Withholding Agent").
7. The Transferee understands that, until such written notice is
provided, the Withholding Agent may (i) withhold an amount equal to the taxes
due upon disposition of a Residual Certificates from future distributions made
with respect to the Residual Certificate to subsequent transferees (after giving
effect to the withholding of taxes imposed on such subsequent transferees), and
(ii) pay the withheld amount to the Internal Revenue Service.
8. The Transferee understands that (i) the Withholding Agent may
withhold other amounts required to be withheld pursuant to United States federal
income tax law, if any, from distributions that otherwise would be made to such
transferee on each Residual Certificates it holds and (ii) the Withholding Agent
may pay to the Internal Revenue Service amounts withheld on behalf of any and
all former holders of each Residual Certificate held by the Transferee.
9. The Transferee understands that if it transfers a Residual
Certificate (or any interest therein) to a United States Person (including a
foreign person who is subject to net United States federal income taxation with
respect to such Residual Certificate), the Withholding Agent may disregard the
transfer for federal income tax purposes if the transfer would have the effect
of allowing the Transferee to avoid tax on accrued excess inclusions and may
continue to withhold tax from future distributions as though the Residual
Certificate were still held by the Transferee.
10. The Transferee understands that a transfer of a Residual
Certificate (or any interest therein) to a Non-U.S. Person (i.e., a foreign
person who is not subject to net United States federal income tax with respect
to such Residual Certificate) will not be recognized unless the Withholding
Agent has received from
Exhibit 8-A - Page 2
the transferee an affidavit in substantially the same form as this affidavit
containing these same agreements and representations.
11. The Transferee understands that distributions on a Residual
Certificate may be delayed, without interest, pending determination of amounts
to be withheld.
12. The Transferee is not a "Disqualified Organization" (as defined
below), and the Transferee is not acquiring a Residual Certificate for the
account of, or as agent or nominee of, or with a view to the transfer of direct
or indirect record or beneficial ownership to, a Disqualified Organization. For
the purposes hereof, a Disqualified Organization is any of the following: (i)
the United States, any State or political subdivision thereof, any foreign
government, any international organization, or any agency or instrumentality of
any of the foregoing; (ii) any organization (other than a farmer's cooperative
as defined in Section 521 of the Code) that is exempt from federal income
taxation (including taxation under the unrelated business taxable income
provisions of the Code); (iii) any rural telephone or electrical service
cooperative described in Section 1381(a)(2)(C) of the Code; or (iv) any other
entity so designated by Treasury rulings or regulations promulgated or otherwise
in effect as of the date hereof. In addition, a corporation will not be treated
as an instrumentality of the United States or of any state or political
subdivision thereof if all of its activities are subject to tax and, with the
exception of the Federal Home Loan Mortgage Corporation, a majority of its board
of directors is not selected by such governmental unit.
13. The Transferee agrees to consent to any amendment of the Pooling
and Servicing Agreement that shall be deemed necessary by the Company (upon the
advice of counsel to the Company) to constitute a reasonable arrangement to
ensure that no interest in a Residual Certificate will be owned directly or
indirectly by a Disqualified Organization.
14. The Transferee acknowledges that Section 860E(e) of the Code would
impose a substantial tax on the transferor or, in certain circumstances, on an
agent for the transferee, with respect to any transfer of any interest in any
Residual Certificate to a Disqualified Organization.
Capitalized terms used and not otherwise defined herein shall have the
meanings assigned to them in the Pooling and Servicing Agreement, dated as of
_______________, 20__, which incorporates by reference the Standard Terms
thereto (Janaury 2000 Edition), among the Company, Bombardier Capital Inc., and
_________________, as Trustee.
Exhibit 8-A - Page 3
IN WITNESS WHEREOF, the Transferee has caused this instrument to be
duly executed on its behalf, by its duly authorized officer as of the ____ day
of ___________, 20__.
_________________________________________
[Name of Transferee]
By:_______________________________________
Its:______________________________________
Personally appeared before me _________________________, known or
proved to me to be the same person who executed the foregoing instrument and to
be a ______________ of the Transferee, and acknowledged to me that he or she
executed the same as his or her free act and deed and as the free act and
deed of the Transferee.
Subscribed and sworn before me this ____day of ________________, 20__.
_________________________________________
Notary Public
My commission expires the ____day of ________________________, 20__.
Exhibit 8-A - Page 4
Exhibit 8-B
BOMBARDIER CAPITAL MORTGAGE SECURITIZATION CORPORATION
AFFIDAVIT PURSUANT TO SECTIONS
860D(a)(6)(A) and 860E(e)(4)
OF THE INTERNAL REVENUE
CODE OF 1986, AS AMENDED
Re: Bombardier Capital Mortgage Securitization Corporation
Series ________ Trust (the "Trust")
Pass-Through Certificates, Class ____
STATE OF ___________)
) ss.:
COUNTY OF ___________)
Under penalties of perjury, I, the undersigned, declare that, to the
best of my knowledge and belief, the following representations are true,
correct, and complete:
1. I am a duly authorized officer of __________________ (the
"Transferee"), on behalf of which I have the authority to make this affidavit.
2. The Transferee is acquiring all or a portion of the securities (the
"Residual Certificates"), which represent a residual interest in one or more
real estate mortgage investment conduits (each, a "REMIC") for which elections
are to be made under Section 860D of the Internal Revenue Code of 1986, as
amended (the "Code").
3. The Transferee either is (i) a citizen or resident of the United
States, (ii) a domestic partnership or corporation, (iii) an estate that is
subject to United States federal income tax regardless of the source of its
income, (iv) a trust if a court within the United States is able to exercise
primary supervision over the administration of the trust and one or more United
States fiduciaries has the authority to control all substantial decisions of the
trust, or (v) a foreign person who would be subject to United States income
taxation on a net basis on income derived from the Residual Certificates (a
"U.S. Person").
Exhibit 8-B - Page 1
4. The Transferee is a not a "Disqualified Organization" (as defined
below), and the Transferee is not acquiring a Residual Certificate for the
account of, or as agent or nominee of, or with a view to the transfer of direct
or indirect record or beneficial ownership to, a Disqualified Organization. For
the purposes hereof, a Disqualified Organization is any of the following: (i)
the United States, any State or political subdivision thereof, any foreign
government, any international organization, or any agency or instrumentality of
any of the foregoing; (ii) any organization (other than a farmer's cooperative
as defined in Section 521 of the Code) that is exempt from federal income
taxation (including taxation under the unrelated business taxable income
provisions of the Code); (iii) any rural telephone or electrical service
cooperative described in 'SS' 1381(a)(2)(C) of the Code; or (iv) any other
entity so designated by Treasury rulings or regulations promulgated or otherwise
in effect as of the date hereof. In addition, a corporation will not be treated
as an instrumentality of the United States or of any state or political
subdivision thereof if all of its activities are subject to tax and, with
the exception of the Federal Home Loan Mortgage Corporation, a majority of
its board of directors is not selected by such governmental unit.
5. The Transferee agrees to consent to any amendment of the Pooling and
Servicing Agreement that shall be deemed necessary by the Issuer (upon advice of
counsel to the Issuer) to constitute a reasonable arrangement to ensure that no
interest in a Residual Certificate will be owned directly or indirectly by a
Disqualified Organization.
6. The Transferee acknowledges that Section 860E(e) of the Code would
impose a substantial tax on the transferor or, in certain circumstances, on an
agent for the transferee, with respect to any transfer of any interest in any
Residual Certificate to a Disqualified Organization.
Capitalized terms used and not otherwise defined herein shall have the
meanings assigned to them in the Pooling and Servicing Agreement, dated as of
____________, 20__, which incorporates by reference the Standard Terms thereto
(Janaury 2000 Edition), among the Company, the Servicer, and
_______________________, as Trustee.
IN WITNESS WHEREOF, the Transferee has caused this instrument to be
duly executed on its behalf by its duly authorized officer this __ day of
________________, 20__.
__________________________________
[Name of Transferee]
By:_______________________________
Its:______________________________
Exhibit 8-B - Page 2
Personally appeared before me __________________, known or proved to me
to be the same person who executed the foregoing instrument and to be a
________________ of the Transferee, and acknowledged to me that he or she
executed the same as his or her free act and deed and as the free act and deed
of the Transferee.
Subscribed and sworn before me this _________day of _________________,
20__.
____________________________________
Notary Public
My commission expires the _____ day of __________________________,
20__.
Exhibit 8-B - Page 3
EXHIBIT 9
FORM OF POWER OF ATTORNEY
Bombardier Capital Inc. (the "Seller"), pursuant to the Pooling and
Servicing Agreement, dated as of ________________, 20 __, among Bombardier
Capital Mortgage Securitization Corporation (the "Company"), Bombardier Capital
Inc., as servicer, and _______________________, as Trustee (the "Trustee"),
which incorporates by reference the Company's Standard Terms to Pooling and
Servicing Agreement (Janaury 2000 Edition) (the "Standard Terms"), hereby
irrevocably constitutes and appoints the Trustee its true and lawful
attorney-in-fact and agent, to execute, acknowledge, verify, swear to, deliver,
record and file, in its name, place and stead, assignments of Mortgages relating
to Loan Secured Contracts from the Seller to the Trustee as contemplated by
Section 2.02 of the Standard Terms. If required, the Seller shall execute and
deliver to the Trustee, upon the Trustee's request therefor, such further
designations, powers of attorney or other instruments as the Trustee may
reasonably deem necessary for the purposes hereof.
Capitalized terms used and not otherwise defined herein shall have the
respective meanings assigned to them in the Agreement.
BOMBARDIER CAPITAL INC.
By:___________________________________________________
Name:_________________________________________________
Title:________________________________________________
Acknowledged and Agreed:
________________________________________
[Name of Trustee]
By:_____________________________________
Name:___________________________________
Title:__________________________________
Exhibit 9 - Page 1